RM Secured Direct Lending PLC (LON:RMDL) has paid out a total dividend of 6.5p per share for its latest full year, in line with its targets, following an increase in the average yield of its investment portfolio.
The investment trust, which specialises in secured debt investments, reported that in the year ended 31 December 2018 its total loan investments had risen to £102mln from £76.9mln in 2017, while the average yield had increased to 8.55% from 8.23%.
Going forward, RM said it was aiming to pay out the same dividend in 2019, adding that there was a “strong pipeline of attractive opportunities” in sectors that were less exposed to the business cycle and wider equity markets.
RM’s net asset value (NAV) also rose in the year to £95.7mln from £56.3mln, while the NAV per share had fallen to 96.96p from 98.2p.
The total return, counting the ordinary share NAV and dividends, had risen to 5.5% from 2.8%.
The group’s portfolio had also grown to 35 debt investments from 23 in the prior year, while the number of sectors had widened to 14 from 11.
Post-period end, RM said it had made three new investments and one divestment, while the NAV per share had risen to 98.38p by the end of February.
Norman Crighton, RM’s chairman, said in the currently “volatile” market, the company offered shareholders “capacity to preserve capital, guard against inflation and rising rates, while generating attractive risk-adjusted returns”.
“The board remains confident in the long-term future of RMDL and believes the foundations are firmly in place for the portfolio to deliver strong and sustainable performance for our shareholders."
Crighton added that the company’s house view was the market was moving “into the latter stages of the credit cycle” and that they intended to focus on similar sectors which are currently within the portfolio.
“The weaker credit markets globally have allowed returns to increase and we also expect greater levels of investor protections to be included within lending documents as liquidity and credit starts to flow out of the market.”
In early trading on Wednesday, RM's shares were down 1.3% at 100.1p.