Finsbury Growth & Income Trust is taking clear steps to strengthen its appeal to shareholders, with a higher dividend, quarterly payments, lower fees, continued buybacks and greater use of gearing all forming part of a more active plan for the portfolio.
From the financial year beginning 1 October 2026, the annual dividend is expected to rise by at least 50% to around 30p per share, compared with about 20p currently. On current figures, that would lift the yield from around 2.6% to about 3.9%.
The trust also plans to move to quarterly dividend payments in February, May, August and November, giving shareholders a more regular income stream and a clearer basis for assessing the trust against other UK equity income options.
The board has also agreed that the portfolio manager can use gearing up to the full £100m available under the trust’s borrowing arrangements. At the end of March, £29.2m had been drawn from the existing £40m facility, with an accordion option allowing capacity to rise to £100m.
This gives the manager more flexibility at a time when UK equity valuations are viewed as attractive. Gearing can increase both upside and downside, so the move is relevant for investors from a risk perspective. However, it also underlines the manager’s conviction that selected holdings offer long-term return potential above the cost of borrowing.
The portfolio remains focused on established companies with strong market positions. Areas of interest include data, software and platform businesses, consumer brands and stock market-related companies such as asset managers.
Finsbury Growth & Income Trust Plc (LON:FGT) invests in the shares of predominantly UK-listed companies, with the objective of achieving capital and income growth.
