To:
RNS
From: European
Assets Trust PLC ("the Company")
LEI:
213800N61H8P3Z4I8726
Date: 9
January 2025
Dividend Announcement
Highlights
· Continued policy
of six per cent dividend per share on year-end net asset value for
annual distribution to shareholders.
· Based on the
unaudited net asset value of 91.8 pence per share as at 31 December
2024, the total dividend declared for 2025 will be 5.52 pence per
share, a decrease from 5.90 pence paid in 2024. The resulting
annual dividend yield is 6.8 per cent(1).
· Dividend to be
paid in four equal instalments of 1.38 pence per share in January,
April, July and October 2025.
(1)
Calculated as the 2025 dividend divided by the 31 December 2024
share price.
Dividend for 2025
The Board confirms that the
Company's stated and long-standing distribution policy of
declaring, barring unforeseen circumstances, an annual dividend
equivalent to six per cent of the net asset value per share at the
end of the preceding year will be continued in 2025.
2024 has been a positive year for
markets overall with falling interest rate expectations again
proving a key influence. Frustratingly, within Europe quality
growth small cap companies underperformed relative to both value
and large cap stocks. However, with valuations at their
lowest for several years, the Manager continues to see high quality
small and mid cap European companies attractively positioned for a
recovery. This was reflected in the higher average level of
gearing employed by the manager during 2024 in comparison to the
prior year.
The net asset value per share as at
31 December 2024 was 91.8 pence (31 December 2023: 98.3 pence). As
the net asset value per share ended the year lower than 2023, this
results in a reduced total dividend payable by the Company for 2025
of 5.52 pence per share (2024: 5.90 pence per share).
The 2025 dividend will be paid in
four equal instalments of 1.38 pence per share on 31 January, 30
April, 31 July and 31 October 2025.
The January dividend payment of 1.38
pence per share will be paid to Shareholders on 31 January 2025, having an ex-dividend
date of 16 January
2025 and a record date of 17 January 2025.
Investment Performance and
Review
The Company's Sterling net asset
value total return (capital performance with dividends reinvested)
per share was -0.8 per cent (unaudited, Euro: 3.9 per cent)) for
the year ended 31 December 2024. Sterling share price total return
for the year was -3.6 per cent (Euro: 1.0 per cent). These figures
compare with the Company's Benchmark(2) which produced a
total return of +2.4 per cent in Sterling (Euro: 7.3 per cent). The
rise in the value of Sterling against the Euro during the year
impacted negatively on the Sterling return to
Shareholders.
Macroeconomics and geopolitics
strongly influenced markets during 2024. Key drivers included
improving inflation, interest rate cuts and generally encouraging
corporate earnings. There was some volatility as the resilience of
the US economy delayed monetary easing. Later, concerns
surfaced that the delay in cutting interest rates could lead to a
recession; the US Federal Reserve responded with a bumper 0.5 per
cent cut in September. The European Central Bank started cutting
interest rates in June, with further reductions in September,
October and December.
France's July parliamentary
elections, where a far-right victory was avoided, supported risk
appetite, but turmoil returned later in the year with government
instability, prompting weakness in French shares as well as
bonds. This was coupled with a collapse of the German
government, and a presidential win for Donald Trump in the US,
which poses risks of tariffs on European goods and restrictions on
trade with China, where economic growth already appears
muted.
The eurozone economy showed signs of
improvement; the PMI escaped contractionary territory, driven by
growth in services, though this retraced as manufacturing remained
weak and the service sector slowed. Eurozone
GDP rose by 0.4% in the third quarter of 2024, beating forecasts,
and Germany avoided a recession.
Against this backdrop, with the
largest companies driving market performance, European smaller
companies struggled to keep up, and the market focused on value
factors more than growth or quality to the detriment of the
Company's investment performance.
Following the manager change
announced in May, changes have been introduced to the portfolio.
These changes have so far been broadly successful at sustaining
performance.
However, returns relative to the
Benchmark slipped disappointingly towards the end of the
year. This was due to the previously mentioned better
performance from value stocks within the small cap universe,
coupled with specific issues at a small number of portfolio
holdings.
The benefits of the integration of
Columbia Threadneedle Investment's businesses are already evident.
Coupled with the improvements this year to the investment
process which are bringing greater focus to the assessment of
new and underperforming positions, the investment team are also
benefiting from the deeper research resources available to them.
In valuation terms, European smaller
companies are attractive, more so than for several years, and for
this reason we are maintaining the increased gearing to benefit
from an expected improvement in market conditions. We believe the
portfolio is well positioned to benefit from a stable economic
backdrop and cheap entry valuations.
I will next be reporting on the
results of the Company in my Chair's Statement contained in the
Annual report and Accounts expected to be published during March
2025.
Stuart Paterson
Chair
9 January 2025
For
further information contact:
Mine Tezgul (Investment
Manager)
Tel 0207 464 5000
Scott McEllen (Company
Secretary)
Tel 0207 464 5000
Columbia Threadneedle Investment Business
Limited
(2)MSCI Europe excluding United
Kingdom Small Mid Cap (Net Return) Index.
