F&C Investment Trust pledges to maintain dividend for 50th consecutive year

In the trust’s half year report it noted its first interim dividend of 2.9 pence for 2020 will be paid on 3 August.

F&C Investment Trust has pledged to increase its dividend for the 50th year in a row.

In the trust’s half year report it noted its first interim dividend of 2.9 pence for 2020 will be paid on 3 August.

This is the same as previous payments, with 2.9 pence per share paid for the year ended 31 December 2019 in February 2020 and a final dividend of 2.9 pence in May.

However, the trust notes that shareholders can expect an increase in pence per share payments in 2020, marking the 50th annual increase in a row. As chairman Beatrice Hollond noted: “Shareholders can expect an increased dividend for 2020 that will not only mark 50 consecutive years of increases, but also 152 years of annual dividend payments.”

Whereas the interim and final payments per share for the previous year were paid out of earnings from dividend paying holdings, to increase their payments this year the trust will have to draw on its reserves.

The report notes that many companies have cut or suspended their dividend payments, resulting in their net revenue return per share declining by 29% in the first six months of 2020 compared to the equivalent period last year. However, the trust notes, thanks to its reserves it still plans to increase its payments this year. According to the report, the trust’s revenue reserve exceeds one year's worth of dividends.

The scale of companies cutting or suspending their dividends due to Covid-19 has seen many investment trusts dip into their reserves to maintain or increase payments. Recently, City of London investment trust confirmed it will increase its dividend for the previous year, continuing its 54-year streak of increasing payments. Similarly, Alliance Trust is on track to deliver a dividend increase of 3% for 2020, which would mark the 54th consecutive year of dividend increases.