Preference shares paying dividends
Shires Income (SHRS) has been weathering the storm of dividend cuts better than many of its peers. Holding a portfolio of preference shares, which contribute over 30% to income generation – and, crucially, have not been affected by regulatory restrictions on dividends – has proved to be a major competitive advantage. SHRS’s manager, Iain Pyle, expects to take a slightly more active approach to managing the portfolio going forward, with the pandemic likely to re-shape a number of industries. SHRS has been recovering ahead of most of its peer-group, with its high dividend yield and exposure to growth companies proving compelling enough for it to be in a position to issue shares over July. As a closed end fund, SHRS can draw on its revenues to maintain the dividend when there is a shortfall in revenue income (a distinct advantage over open-ended funds). In this regard, SHRS dividend remains well protected with revenue reserves of 1.1x the most recent annual dividend.
Shires Income is an investment company, engaged in investing mainly in U.K. equities. Co. invests principally in the ordinary shares of U.K. quoted companies, and in convertible and preference shares with above average yields. Co.'s investment portfolio comprised of a range of sectors including oil and gas, basic materials, industrials, consumer goods, healthcare, consumer services, telecommunications, utilities, financials and technology. Co. is managed by Aberdeen Fund Managers Limited. As of Mar 31 2017, Co.'s total investments was £97.8 million.
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