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Schroder AsiaPacific cuts dividend by 17.5%

Setting out what has been a challenging and resilient year of trading, Schroder AsiaPacific Fund (LON:SDP) Chairman, Nicholas Smith, walked investors through the fund’s 2020 results and dividend payments.

In what will be Mr Smith’s final year at the helm, he stated that the fund’s NAV produced a positive NAV return of 17.7%, outperforming its benchmark of 12.3%.

Meanwhile, having started the financial period between 435p and 440p, the company’s share price finished the year to September 30 at 510.00p a share, up 19.7%. Likewise, having fallen as low as 348.00p in mid-March, its share price now stands at 612.00p, up by 75.9% in nine months.

Organic increases in the in the share prices of Schroder AsiaPacific’s respective holdings, and gaining permission to buyback 14.99% of its own shares, saw that company’s discount narrow from its year-under-review average of 10.7%, to its year-end level of 5.82%.

Other positive news for the Group’s shareholders included the announcement that its management fee would be cut from 1 April 2021, down to 0.75% per year for the first £600 million of net assets and 0.70% per year on net assets thereafter.

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On a less positive note, the fund that several of its portfolio members cut their dividends during the pandemic, causing the Group’s net revenue after tax to fall by 20.1%, down from 9.90p to 7.92p a share. With the directors’ decision to distribute all revenue as dividends, and supplement this total with revenue reserves, Schroder AsiaPacific shareholders will receive a final dividend of 8.00p, down 17.5% from the 9.70p dividend paid at the previous year-end. 

Further, the company also notes that it began the year with 2.4% net cash, and ended the year ’slightly geared’, at 0.2%. Capping off the main points of his statement, Mr Smith added that he will retire at the company’s next AGM, and will be succeeded as Chairman by current Board-member, James Williams.

Giving his thoughts on the future, Mr Smith said that: “After a very hard year for financial markets, the Company is in good shape and is ready to take advantage of the opportunities in the region over the coming years. You, as shareholders, are participating in a region with outstanding prospects and with a team that is second to none.”

“You can look forward to 2021 with some investment optimism. The latest vaccine news is very encouraging but rollout will take time. 2022 and 2023 may be the years when life in Asia returns to normalcy.”

Following the update, Schroder AsiaPacific Fund shares added up to 0.50%, up by 0.33%, to 612.00p, at the time of publication 14/12/20.  

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