Acorn Income Fund Ld Share Discussion Threads

[speedsgh] 17/8/2020 13:55

Interims are out. Q3 dividend payment maintained at 5.75p...

Half-year Report -

Dividend Announcement -

"At 31 December 2019, Acorn had revenue reserves equal to 1.04 times the 2019 dividend. The Directors consider the current situation is one in which it is appropriate to draw on those reserves in order to maintain income levels for investors. The interim results published today show that the revenue reserves at 30 June 2020 stood at 14.6p per share having been 21.6p per share at 31 December 2019.

Acorn will not distribute from capital. Dividends will only be paid out of current period revenues and revenue reserves."

"... the directors believe that 5.75p per share is a reasonable target for the fourth interim dividend that will be paid in December; however shareholders should note that the actual dividend will be set in the light of income earned over the remainder of the year as well as the outlook for 2021 and beyond."

[stueybabes] 13/8/2020 10:37

<< The million dollar question. Will the current level of dividend payout (5.75p per qtr/23.00p annualised) be maintained? >>

The interim results and next dividend announcement should be out in the next week or two I suspect, so not long for a little more info on this.

A little of the John Baron froth seems to be coming off this morning.

[speedsgh] 12/8/2020 16:29

The million dollar question. Will the current level of dividend payout (5.75p per qtr/23.00p annualised) be maintained?

"The first interim dividend for 2020 was increased by 10.57% to 5.75p. The Company's income will inevitably be impacted by recent market developments. However, the board recognises the importance of dividends to shareholders and it is the board's intention to maintain the second interim dividend whilst keeping matters relating to future dividends under close review but noting the availability of a healthy dividend reserve.

Earnings per share for the year of 22.31p covered the dividend distribution by 107% and resulted in an addition to revenue reserves of £239,024."

[stueybabes] 12/8/2020 13:33

Ah, that would do it. Thanks for the info, noiseboy.

Good to see that the spread has narrowed a lot as well. Now 271/274.

[noiseboy] 12/8/2020 09:11

John Baron bought in Yesterday.

[stueybabes] 12/8/2020 08:32

(duplicate deleted)

[stueybabes] 12/8/2020 08:32

Nice jump yesterday. Various resolutions passed at the AGM but not sure any of them justified an 11% price increase. Not complaining though!

[orinocor] 20/7/2020 19:32

Yes indeed a terrible miscalculation! Not nearly as risky as I've suggested.

[biggest bill] 20/7/2020 18:59

Orinocor, I've had a look at ipu. The last time I looked at ipu, the discount was only 5% so it looks much more attractive now. I might buy a few shares there as well.

[biggest bill] 20/7/2020 18:42

Orinocor, the gearing figure of 67% is not 67/100 of the assets; it is 67/167 of the assets which is 40%.

[biggest bill] 20/7/2020 18:34

Orinocor, You have miscalculated badly. The investments would have to fall by 60% to achieve a nav of zero. Since more than a quarter of the investments are fixed interest securities, this seems rather unlikely to put it mildly.

[orinocor] 20/7/2020 18:18

I'm not sure about this one at all. If the value of the investments fall 33% the NAV goes to zero! Very, very unlikely but who knows what could happen in the months ahead.

As a comparison I have been buying Invesco Smaller Companies trust. The epic code is IPU. You can currently buy these shares at around the mid price so the discount is 15%-16% and it has no gearing. On the contrary the latest factsheet to the end of June shows it to have net cash of 1.9%. So a completely different risk profile but the shares were 50% higher at the start of the year so a lot of potential upside and for me a much better proposition.

[biggest bill] 20/7/2020 18:00

I had a look at rmmc but that has recovered much further from its March lows. I think the upside here is much greater. Rmmc also has a much bigger bid/offer spread than aif which is very offputting.

[riverman77] 20/7/2020 17:42

I think this is a lot more geared than any of the other trusts, but I agree the discount looks too wide and I actually picked some up this morning. RMMC is another one that looks far too wide (that's around 30%).

[biggest bill] 20/7/2020 17:29

Riverman, other similar trusts trade at a much lower discount and the points you are making also apply to those trusts. The discount here is anomalous.

[riverman77] 20/7/2020 17:25

I notice that they also have a put option - this should presumably offer some protection if there is another big market fall.

[riverman77] 20/7/2020 17:24

The fixed income portfolio isn't risk free though so should still be included in the gearing calculation.

[biggest bill] 20/7/2020 17:21

I noticed that the shares bottomed out at 215p in March when the ft100 fell under 5000. The current price is not much above that.

[brwo349] 20/7/2020 17:14

This level of gearing is not for the faint of heart. What if FTSE tests 5000 again?

[biggest bill] 20/7/2020 17:13

More than a quarter of the portfolio is in fixed interest securities. This means that the real level of gearing is more like 20 to 25% to the stock market.

[riverman77] 20/7/2020 17:06

Gearing is now 67% after recent market falls - not sure if that's a factor behind the wide discount.

[biggest bill] 20/7/2020 16:47

This trust appears to have fallen under the radar at the moment. I would like to buy a few more tomorrow but the problem is that I am now fully invested in the stock market. I will have to make a decision over what to sell to buy more here. On a two or three year view, this looks like a tremendous buying opportunity.

[2wild] 20/7/2020 16:34

Also added today at 234p a 24% discount to the net asset value on close of play Friday of 307.84p.

[biggest bill] 20/7/2020 16:13

I bought a few shares today. The discount here is absurd. It is way out of line with discounts on other similar trusts.

[2wild] 19/7/2020 17:40

Looking back at my history I paid 226.75p on July 6th about 3 weeks after the last ex div date which may have been The Turning Point.