LONDON -- Witan Investment Trust (LSE: WTAN ) -- one of the largest investment trust listed on the London Stock Exchange, which holds shares in companies such as Diageo, BP, Unilever, and Pearson -- published its annual report for 2012 this morning.
Witan said that it delivered a total return on net asset value (NAV) of 15.6% in 2012, outperforming its benchmark's 13%. It also noted that, "despite the difficulties that have been placed before the global economy over the last 5 years," the company had achieved total return on NAV of 18.7%, which is 3.7% ahead of its benchmark. Perhaps more immediately meaningful for shareholders, Witan's share price has increased 38% over the past five years, compared to the FTSE 100's 13.5%.
Witan reported that its portfolio generated revenue earnings per share of 14.5 pence in 2012, an increase of 9.3% on the previous year. The board has declared a second interim dividend of 7.2 pence per share, bringing the full-year dividend for 2012 to 13.2 pence per share -- a 10% increase over 2011 -- giving a current yield of around 2.2%. Impressively, this is the 38th year in a row that Witan has increased its payout to shareholders.
Commenting on the company's outlook, Witan's chairman Harry Henderson said:
Although the world appears some way from a return to robust economic growth, sentiment is less fearful, as evidenced by the inflows into equity funds in recent months.
2013 seems likely to be a further year of convalescence for the world economy. A necessary correction in the private sector debt overhang in developed economies has been offset by a burgeoning in public sector budget deficits, to levels which are likely to be unsustainable in the longer term.
The other notable feature of investment markets during 2012 was the plunge in government borrowing rates to multi-century lows. ... Bonds being expensive is not itself a reason to buy other assets, such as equities, but it may prompt a broader definition of what is meant by investment risk. If the focus shifts toward investing to preserve real value rather than purely to avoid short-term volatility the outperformance of equities versus bonds in 2012 could have much further to go.
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