Midas trust cuts dividend amid share price falls
Investor income hit as absolute return trust battens down hatches for challenging environment.
The Midas Income & Growth trust has slashed the level of income per share it provides to investors, as it reported share price falls.
In annual results, the £40.6m trust said it was cutting its dividend to 5.2p a year, compared with the 6.5p per share payout made last year.
The income payment cut comes amid concerns that if the trust continued to make high income payments it could be forced to dip into revenue reserves to make sure the payments complete. The trust’s board said growth was “unlikely for several years” in the results statement, adding that it was facing a “challenging” economic environment.
In the year to April 30, the trust lost 1.4 per cent in net asset value terms, while its shares fell a “disappointing” 4.6 per cent in value. This compares unfavourably with the trust’s benchmark index, which rose 6.9 per cent over the same timeframe.
In January, the trust stopped targeting an absolute return of 8 per cent a year and said it would aim to outperform the three-month London Inter-Bank Offer Rate (Libor) by 3 percentage points over rolling periods of three years.