Edinburgh New Income targets quality

Date: Thursday 21 Jan 2010

Split-cap trust Edinburgh New Income lifted NAV by 28.6% to 54p in the half year to November, in what it describes as ‘remarkably buoyant’ equity markets.

Including dividends, the total return of the net asset value over the period was 38.0%, while the FTSE All-Share Index increased by 19.7%.

Gearing levels reached 190% in the early part of the period but fell as the market rose strongly. At 30th November 2009 equity investments totalled £19.5m and the ratio of total equity investments to ordinary shareholders funds was 176%.

The capital cover of the ZDPs increased from 1.24 times at the end of May 2009 to 1.39 times at the end of November 2009.

“We are seeing signs of improvement in the domestic economy as conditions in the financial and housing sectors stabilise, but many fundamental problems remain,” the Aberdeen Asset-managed trust said.

“The managers are emphasising good-quality companies, with strong business models and robust balance sheets. These are seen as likely to be the stronger performers as we look ahead,” it added.

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