Albion Enterprise VCT - Dividend Cut and New Policy

[Gostevie]

Albion Enterprise VCT (AAEV) issued its Annual Financial Report RNS after market hours yesterday evening:

https://www.investegate.co.uk/albion-en ... 3934H5075/

It's slightly disappointing but not that surprising that the first interim dividend has been cut by 10% from 3.00p to 2.70p as a result of a new dividend policy:

The Board is aware of the importance of dividends to shareholders and it remains its intention to continue to pay regular dividends, as far as liquidity permits. Given the uncertainty that the current pandemic has created and the volatile nature of investing in small unquoted growth businesses, the Board considers it appropriate to move to a variable dividend policy targeting an annual dividend yield of around 5%. Semi-annual dividends will be paid calculated as 2.5% of the most recently announced net asset value when the dividend is declared (in most cases this will be the net asset value announced in the Half-yearly Financial Report or in the Annual Report and Financial Statements). This has the advantage of avoiding unsustainably high dividends if the net asset value falls, whilst rewarding shareholders more immediately if the net asset value rises.

Hard to fault the logic there I suppose. Stablemate Albion Venture Capital Trust (AAVC) is due to release its own Annual Financial Report soon. It will be interesting to see if it adopts the same policy.

Gostevie

[UncleEbenezer]

Enterprise is not one I hold, nor pay attention to. Where did it stand before covid? Was it already a declining NAV (like Crown Place before its cut a year or two ago)?

[Gostevie]

I only got into it in the fundraise in 2018/19 but It seemed to be doing well enough until the covid-19 restrictions struck.

NAV at year end, 31st March:

2016: 96.4p
2017: 101.79p
2018: 109.46p
2019: 117.76p
2020: 106.54p

[barchid]

goStevie
Fairly predictably AAVC have this evening come out with a similar passage of words as Enterprise announcing a shaving from the divi.
RNS this evening spells it out. However it makes things more understandable as this is the way HHV & AMAT do it, they target 5 to 6% of nav as an annual dividend and adjust the amounts accordingly.
I was wondering if this rather more transparent policy has anything to do with Panmure taking over as the Albion broker ?

[yorkshirelad1]

Albion Enterprise VCT (AAEV) issued its Annual Financial Report RNS after market hours yesterday evening:

https://www.investegate.co.uk/albion-en ... 3934H5075/

It's slightly disappointing but not that surprising that the first interim dividend has been cut by 10% from 3.00p to 2.70p as a result of a new dividend policy:

The Board is aware of the importance of dividends to shareholders and it remains its intention to continue to pay regular dividends, as far as liquidity permits. Given the uncertainty that the current pandemic has created and the volatile nature of investing in small unquoted growth businesses, the Board considers it appropriate to move to a variable dividend policy targeting an annual dividend yield of around 5%. Semi-annual dividends will be paid calculated as 2.5% of the most recently announced net asset value when the dividend is declared (in most cases this will be the net asset value announced in the Half-yearly Financial Report or in the Annual Report and Financial Statements). This has the advantage of avoiding unsustainably high dividends if the net asset value falls, whilst rewarding shareholders more immediately if the net asset value rises.

Hard to fault the logic there I suppose. Stablemate Albion Venture Capital Trust (AAVC) is due to release its own Annual Financial Report soon. It will be interesting to see if it adopts the same policy.

Gostevie

Albion just released their latest Newsletter (Summer 2020)
https://www.albion.capital/publications
(I got advised of this e-mail as I hold some KAY)