Foreign & Colonial: we are stronger than six months ago

Jeremy Tigue's Foreign & Colonial investment trust has seen returns boosted in the first half by strong dividend growth across portfolios and rising private equity valuations.

In the first six months to 30 June, the £2.1 billion trust’s net asset value per share was up 3.5% to 358.25p, while the share price rose 3.3% to 319.8p.

The chairman of the trust’s board Simon Fraser said the interim dividend of 3p per share will be maintained and paid on 9 September, adding the firm is also expecting to pay at least the same total dividend for 2011 as 2010, at 6.75p for the year.

The trust’s results over the first half were particularly supported by the firm’s private equity portfolio, which saw was up 11% during the six months. Cash realisations from the private equity portfolio also increased significantly.

Income growth from was also strong across the board. Fraser said all of the top twenty income producers increased their dividends, with the exception of Royal Dutch Shell, while BP resumed its dividend payments.

Fraser said: ‘At the start of the year we were cautious about the prospects for commodity markets and made portfolio sales in Australia and some Asian markets. We spent £45.9m buying back 14,647,000 shares which added 1pence to net asset value per share.’

He added: ‘Foreign & Colonial is in a stronger position than it was six months ago. We are on the cusp of seeing significant cash returns from our private equity funds and our highly diversified listed portfolio gives us exposure to many growth opportunities. We remain confident in our ability to produce long term growth in income and capital.’

The share price for the trust was down 0.22% this morning at 312p.