Baillie Gifford Japan increases its dividend by 50% despite the drop in net asset value

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Baillie Gifford Japan Trust PLC said on Wednesday it was recommending a significantly higher dividend than a year ago despite the net asset value falling and the total net asset value return turning negative.

The investment management firm has proposed a dividend of 9.00 pence per share for the year to August 31, up 50% from 6.00 pence a year earlier.

Overseas dividend income rose 17% to £20.1m from £17.2m year-on-year.

“Given the difficulties globally and the sharp drop in the share price, it reflects very well on your underlying investments that, overall, they have continued to increase their dividends. Therefore, your business will pay an increased dividend of 9p from 6p the previous year, fully covered by increased portfolio dividend income,” explained Baillie Gifford Japan.

The company said net asset value per share fell 17% to 842.4 pence from 1,012.8 pence. The total net asset value return fell from 21% to minus 16% the previous year. In addition, it moved to an annual pre-tax loss of £153.5m from a profit of £162.4m.

Looking ahead, Chairman David Kidd noted “a great deal of uncertainty facing investors right now,” citing inflation, interest rates and bond yields. However, he added that “the board is optimistic that managers’ long-term stock picking skills will return to the fore”.

Baillie Gifford Japan shares fell 0.4% to 705.00p each in London on Wednesday afternoon.

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