Scottish American Investment Co PLC Coronavirus (Covid-19) -- Update (4229J)
April 09 2020 - 9:09AM
UK Regulatory
TIDMSAIN
RNS Number : 4229J
Scottish American Investment Co PLC
09 April 2020
THE SCOTTISH AMERICAN INVESTMENT COMPANY P.L.C.
Legal Entity Identifier: 549300NF03XVC5IFB447
Coronavirus (Covid-19) - Update
Further to the announcement on 27 March 2020 of payment to
shareholders of a fourth interim dividend (instead of a shareholder
approved final dividend), the Board of The Scottish American
Investment Company P.L.C. (SAINTS) wishes to provide a further
update to shareholders in the light of developments relating to the
Coronavirus (Covid-19).
Operational update
The Board has reviewed the operational resilience of its
Managers and other service providers and is comfortable with the
effectiveness of their business continuity arrangements, and the
stability and robustness of their operations.
Investment update
The Board and the Managers recognise the significant disruption
to the global economy being caused by the coronavirus (Covid-19).
The Board is, however, encouraged by updates from SAINTS' managers.
In the current environment Baillie Gifford's emphasis on
operational resilience and dependability in selecting stocks is
proving helpful. Similarly, the property manager's emphasis on long
leases and strong covenants is providing a good level of
protection, although the Board is also conscious of its
responsibility to act as a responsible landlord in the current
testing circumstances.
Dividend Outlook
Overall, current expectations are that there will be some drop
in SAINTS' revenues in 2020 relative to 2019. SAINTS' own dividend
payments are nonetheless expected to be largely supported by
anticipated revenues and are also underpinned by SAINTS'
significant reserves. At 31 December 2019 SAINTS' revenue reserves
stood at over GBP17m. After deducting the cost of the recently
declared fourth interim dividend, the adjusted revenue reserves are
equivalent to roughly 9 months of dividend payments (based on the
rate of that dividend).
The Board remains confident in the long-term prospects of
SAINTS' investments. Taken with the support available from SAINTS'
reserves, the Board is therefore also confident in SAINTS' ability
to pay a reliable dividend to its shareholders.
Current activity
The Board is encouraging the Managers to be supportive
shareholders, and to continue to take advantage of the three
inherent strengths of their approach:
Long-term perspective - recognising that weakness in the world
economy and its impact on business will allow some companies to
emerge stronger than others from this difficult period.
Growth mindset - which we believe will help to ensure that
growth in earnings and cashflows at SAINTS' holdings will resume,
supporting future growth in the income stream.
Genuinely global - taking advantage of a global universe of more
than 4,000 stocks, which allows them to be highly selective about
the companies in which they invest for SAINTS.
The Board is pleased both that, after a thorough review by the
Managers of the resilience and long-term prospects of SAINTS'
holdings, turnover remains low, but also that the Managers are
taking advantage of some opportunities to purchase new holdings in
businesses they know well at attractive prices.
We would encourage shareholders to monitor SAINTS' website at
www.saints-it.com .
Baillie Gifford & Co Limited
Company Secretaries
9 April 2020
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END
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