Edinburgh Investment Trust plc (LON:EDIN) have announced the annual results for the year ended 31 March 2026.
Highlights
· NAV total return of 7.2% and share price total return of 8.5% for the year, versus the FTSE All-Share Index return of 21.5%
· Share price of 773p at year end (740p as at 31 March 2025)
· Share price discount to NAV reduced to 8.6% at year-end (9.4% as at 31 March 2025)
· Total dividend for the financial year proposed at 32.0p per share, an increase of 11.1% on the prior year and comfortably ahead of UK inflation of 3.3%
· Since March 2020, when Liontrust began managing the Company’s portfolio, the annualised NAV total return was 15.0% and share price total return was 13.9%, versus 13.6% for the FTSE All-Share Index
Elisabeth Stheeman, Edinburgh Investment Trust Chair, said: “The Company’s financial year to 31 March 2026 marks the second consecutive year in which the UK equity index has outperformed both the US equity index and broader global equity indices, with the FTSE All-Share Index recording double digit returns over the two years. In this context, while positive in absolute terms, the Company’s investment returns over the last twelve months have been disappointing relative to the Index. The share price and net asset value total returns were 8.5% and 7.2% respectively compared with the Index at 21.5%. This in turn has impacted the Company’s three and five-year returns.
“However, over the six years since the appointment of the management team, it is encouraging to record that the Company’s share price and NAV total returns were 15.0% per annum and 13.9% per annum respectively. This compares with the UK equity index total return of 13.6% per annum. Of the 17 peer investment trusts in the UK equity income sector over the same period, Edinburgh ranks fourth.
“While we accept that short-term returns for an actively managed portfolio will be volatile, the Board is focused on ensuring that the Company’s returns improve after this challenging twelve-month period. The underperformance last year was a function of three main factors: share price weakness in holdings perceived to be losers from the Artificial Intelligence revolution, some operational underperformance in a small number of holdings, and being underweight in certain companies with a more pronounced value orientation.
“A final dividend of 8.4 pence per share is proposed, to be paid this summer subject to shareholder approval at the July AGM. The total dividend for the financial year will be 32.0 pence per share. This will represent an increase of 11.1% compared with the previous year, comfortably in excess of the rate of UK inflation of 3.3%.
“There is well-founded optimism that the Company’s diversified portfolio of stocks will drive attractive returns in the years ahead.”
Imran Sattar, Portfolio Manager, said: “We remain committed to a flexible and pragmatic investment approach. Over the last year the portfolio had a bias to quality growth stocks. There was, however, a notable derating in a number of portfolio holdings which the market has, we believe erroneously, characterised as ‘Artificial Intelligence losers’. Alongside this, a few holdings underperformed operationally and being underweight in larger value-oriented benchmark companies was a further drag.
“Notable purchases during the year fell into three categories. First, purchases of de-rated data and analytics companies which we judge will turn out to be winners from the AI evolution – this included adding to London Stock Exchange Group and RELX. Second, additions to positions in Renishaw and Oxford Instruments, the specialised instrumentation companies experiencing short-term cyclical weakness in end markets. Finally, new purchases of Marshalls and Ibstock: cyclically depressed and lower valuation stocks that present attractively skewed risk-reward profiles.
“We continue to identify many opportunities to invest in high quality businesses in the UK at attractive valuations. We remain focused on bottom-up stock selection and constructing a diversified portfolio to deliver attractive returns over the long term.”
