Newcastle-based Northern Venture Trust plc said it maintained its total dividend for the year to September 30, 2019, despite its return on ordinary activities falling to £2.848 million from £4.281 million.

Northern Venture Trust, a fund which invests mainly in UK unquoted companies (full list below), said its net asset value (NAV) per share at year-end slipped to 68.9p from 70.8p after paying dividends of 4p, the same as the previous year.

The fund reported £10.3 million of proceeds from realisations, representing a gain of £3.4 million on original cost (2018: £4.9 million).

The fund’s net assets rose to £95.7 million from £93.9 million.

Northern Venture Trust chairman Simon Constantine wrote in the fund’s annual financial report: “The investment rate has been strong throughout the period, with a total of seven new venture capital investments being completed. 

“Three significant investment exits were achieved, supporting the total return for the year.  

“The profile of the unquoted portfolio is evolving as we continue to acquire investments in earlier stage innovative UK companies with high growth potential. 

“As previously indicated, the profile of the new investments will lead to greater volatility in the timing and quantum of returns, and continuing to pay regular dividends whilst seeking to avoid erosion of the NAV per share in the medium term remains a priority for your board.

“In the year ended 30 September 2019 the company achieved a return on ordinary activities of £2,848,000 (2018: £4,281,000) or 2.1 pence per share (2018: 3.3 pence), representing a total return of 3.0% on the opening net asset value (NAV) per share. 

“The NAV per share at 30 September 2019, after deducting dividends paid during the year of 4.0 pence, was 68.9 pence compared with 70.8 pence as at 30 September 2018. 

“The cumulative total return to shareholders increased to 237.4 pence (2018: 235.3 pence) per share, which marks the fourteenth consecutive year of growth. 

“Investment income was slightly lower than in the prior year at £2.2 million (2018: £2.5 million), reflecting the disposal of some income-yielding investments.

“Your directors are aware of the importance to shareholders of receiving a steady stream of tax-free dividends. 

“After careful consideration, the board has proposed a final dividend of 2.0 pence per share, bringing the total dividend for the year to 4.0 pence. 

“This represents a tax-free yield of 5.6% on the opening net asset value per share of 70.8 pence. 

“The full year dividend once again has not been covered by the total return for the period, however your directors have confidence in the potential of the current portfolio to increase NAV per share in the medium to long term and our aim remains to pay a tax-free dividend yield of approximately 5% of opening net assets each year. 

“The final dividend, if approved, will be paid on 20 December 2019 to shareholders on the register on 22 November 2019.”