Brunner Investment Trust PLC (LON:BUT) has increased its interim dividend and said it will use its reserves to maintain payments while payouts from its portfolio recover after the coronavirus (COVID-19) disruption.
The trust's net asset value in the half-year to May declined by 5.9% to 890p due to the volatility caused by the pandemic, though there was a 33% drop in earnings as companies in the portfolio reduced dividends to preserve cash.
Brunner said it had revenue reserves equivalent to 27.6p at the end of May to continue to pay the dividend and sees payment expectations improving though recovery to former levels will take time.
The trust added that Microsoft was its best performer over the half-year as the resilience of the software giant’s corporate cloud revenues has provided a strong underpin to growth during this period.
Digitalisation has been a strong theme for the trust with other good performers including Ecolab a water management and hygiene business that has invested heavily into digital monitoring of its systems.
Visa, meanwhile, is a long-term beneficiary of the trend towards digital payments.
Brunner added that its healthcare holdings had also done well, notably Roche, which is manufacturing a highly automated test for COVID-19.
In a statement, Matthew Tillett, the trust’s manager, said: “The core of the trust's portfolio continues to be invested in companies with high quality and relatively defensive business models that are benefiting from secular trends. It is here where we see the best prospects for longer-term growth in both capital and income.”