The lockdowns mandated by most governments worldwide to halt the spread of the virus clearly affected many businesses severely as did the general uncertainty as to how the situation would develop. This fed through immediately into lower or no dividend payments from companies to their shareholders, thus reducing this Company’s income.
One of the objectives of this Company is to pay a rising dividend to shareholders. Even though its own income has been significantly reduced during the year ended 30 September 2020 because of the COVID-19 pandemic, the Company has a very significant Revenue Reserve, which was accumulated in previous years. A key purpose of the Revenue Reserve is to be able to support dividend payments when conditions are more challenging, such as during this crisis, and therefore the Board was willing to use the Reserve to support the payment of an increased dividend.
In November 2020, the Board announced the payment of a fourth quarterly dividend of 3.75 pence per share. Together with the three dividends already paid, this took the total dividend for the year ended 30 September 2020 to 11.5 pence per share, an increase of 0.9% compared to the previous year. By comparison, the Consumer Prices Index rate of inflation for the year to September 2020 was 0.5%.
The Company is proud to be an AIC Dividend Hero, having increased its dividend every year since launch in 1992 and this is a record the Company will strive to maintain.