Baillie Gifford European Growth Trust
Website:
Baillie Gifford European Growth Trust
Index:
FTSE Small Cap
EPIC: BGEU
Supersector:
Financial Services
Sector:
Equity Investment Instruments
Subsector:
Equity Investment Instruments
Market Cap:
£326.36M
Payout Frequency:
Baillie Gifford European Growth Trust Dividend Analysis and Summary
Declared Dividend
- Type: Final dividend (trust pays a single final dividend each year)
- Amount: 0.72p per share (vs 0.60p last year; +20%)
- Ex-dividend date: 08/01/2026
- Record date: 09/01/2026
- Payment date: 13/02/2026
- Currency: GBP (pence per share)
- Yield context: c. 0.7% on the 30 Sep 2025 share price of 103.5p
Coverage and Policy
- Revenue EPS: 0.78p (2024: 0.72p; +8.3%)
- Proposed dividend cost: £2.34m vs revenue available £2.66m (payout c. 88%)
- Revenue reserve: £9.00m, covering the proposed dividend by c. 3.9x
- Stated policy: pay a single final dividend at the minimum required to maintain investment trust status (not a progressive dividend policy)
Brief Financial Context
- NAV TR (FY to 30 Sep 2025): +5.5% vs benchmark +15.5%; Share price TR: +14.5%
- Ongoing charges: 0.66%
- Net gearing: 14.0%; long-dated, fixed-rate euro notes at 1.55–1.57%
- Share buybacks: 27.1m shares repurchased (~7.7% of starting ISC), reducing dividend outflow and supporting per-share metrics
- Unlisted exposure: 15.5% of net assets at year-end
Assessment: Sustainability and Growth Trajectory
- Sustainability: At the current low level, the dividend appears well covered by revenue (c. 88% payout) and strongly underpinned by the £9.0m revenue reserve (~3.9x cover). Fixed low-cost debt and controlled OCF support sustainability.
- Growth: Dividend growth is incidental to policy and driven by income generation rather than a commitment to grow distributions. With a focus on capital growth and higher private/unlisted exposure, the dividend is likely to remain small and variable over time.
- Support from performance/capital allocation: Buybacks shrink the cash cost of the dividend and can boost per-share revenue; however, underlying portfolio tilt toward growth/privates typically delivers modest income. The final-only, “minimum to maintain IT status” policy caps upside to dividend growth.
Structural/Policy Factors Affecting Future Dividends
- Dividend policy: final-only, minimum distribution to retain investment trust status—explicit signal that income is not a primary objective.
- Performance-related tender offer framework in place (four-year cycle) could reduce trust size if triggered; in practice this would lower absolute dividend outflow but does not imply higher cash yield.
- Share buyback authority (up to 14.99%) and issuance authority (10%) maintained—continued flexibility to manage discount/premium; neutral-to-supportive for per-share dividend mechanics.
- Rising private company exposure (up to 20% allowed; 15.5% at YE) may dampen portfolio income, reinforcing a low, policy-led dividend.
Risks and Flags to Dividend Stability
- Policy risk: Dividend is not progressive; management targets the minimum qualifying payout. If revenue falls, the dividend can be reduced.
- Income mix: Growth-oriented, tech-heavy and private holdings typically yield less; income may be sensitive to market cycles and corporate actions in Europe.
- FX and market risks: Predominantly overseas revenues and distributions; currency and economic swings could affect income.
- Performance/tender dynamics: Continued benchmark underperformance could activate the tender mechanism, shrinking assets further (neutral for per-share cover but may affect scale).
- Gearing: While low-cost and fixed, leverage amplifies downside in adverse markets (indirect risk to income stability if positions are adjusted).
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Baillie Gifford European Growth Trust Annual Dividend Yield - 2.66%
Dividends Used in Calculation:
| Ex-Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 05/01/2023 |
10/02/2023 |
|
0.70p |
GBX |
| 17/08/2023 |
15/09/2023 |
|
2.20p |
GBX |
Total (Annual Dividends Per Share):
2.90p
Dividend Yield =
Annual Dividends Per Share (2.90p)
÷ Share Price (109p)
= 2.66%
Baillie Gifford European Growth Trust Dividend History
| Ex Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 08/01/2026 |
13/02/2026 |
|
0.72p |
GBX |
| 09/01/2025 |
14/02/2025 |
|
0.60p |
GBX |
| 04/01/2024 |
02/02/2024 |
|
0.40p |
GBX |
| 17/08/2023 |
15/09/2023 |
|
2.20p |
GBX |
| 05/01/2023 |
10/02/2023 |
|
0.70p |
GBX |
| 06/01/2022 |
11/02/2022 |
|
0.35p |
GBX |
| 06/01/2022 |
11/02/2022 |
Q4 |
0.35 |
|
| 07/01/2021 |
29/01/2021 |
Q4 |
3.50 |
|
| Year |
Total |
Change |
| 2022 |
0.350 |
-90.000 |
| 2021 |
3.500 |
|
Baillie Gifford European Growth Trust Dividend Calculator