Scottish Oriental Smaller Companies Trust

Scottish Oriental Smaller Companies Trust Dividend Analysis and Summary

Key Dividend Details

Declared distribution: Final 2.9p per share and Special 0.5p per share; total proposed payout 3.4p per share for FY to 31 Aug 2025.
Ex-dividend date: 08/01/2026 (derived from record date). Record date: 09/01/2026. Payment date: 06/02/2026.
Year-on-year: ordinary dividend increased (2.9p vs 2.8p), special reduced (0.5p vs 1.6p).
Indicative yield (at 300p share price, 31 Aug 2025): c. 1.1% including special (ordinary c. 1.0%).

Coverage and Cash Resources

Revenue earnings per share: 4.51p (down from 5.55p).
Coverage: ordinary dividend covered 1.55x (4.51p/2.9p); ordinary plus special covered 1.33x (4.51p/3.4p).
Revenue reserve: £11.36m, c. 9.9p per share — ample headroom to support the ordinary dividend (c. 3.4x).

Financial and Capital Allocation Context

NAV total return: -1.6%; share price total return: +3.5%.
Revenue decline driven by lower special dividends received from holdings; ongoing charges 0.99% and no performance fee for the year.
Active discount management: buybacks of 2.77m shares (2.4%) in-year; a further 1.24m post year-end; discount 9.6% at FY end, widened to 13.1% subsequently.
Gearing via loan notes £29.9m; finance costs £0.835m, with covenants monitored.

Dividend Sustainability and Outlook

The ordinary dividend (2.9p) appears well-supported by current-year revenue (1.55x cover) and sizeable revenue reserves (~9.9p/share). The Board’s small uplift to the ordinary signals confidence in repeatable income.
The special dividend (0.5p) is explicitly variable and reflects lower special income received; future specials should be viewed as opportunistic rather than structural.
Ongoing share buybacks modestly enhance per-share earnings/dividend capacity and support NAV/share, though they compete for cash alongside distributions; current scale is manageable given reserves and income.
Near-term income growth may be subdued given the drop in revenue EPS and portfolio underperformance versus benchmarks, but the trust retains flexibility via reserves and conservative balance sheets across holdings.

Structural/Policy Changes and Other Notables

Five-for-one share split implemented in February 2025; all per-share figures are adjusted. No change to dividend policy implied.
Continuation of share buyback programme to manage the discount; no M&A/demerger activity disclosed.
Board succession underway (one director retired; further planned retirements in 2026–2027); no direct implications for dividend policy stated.

Risks and Flags Relevant to Dividend Stability

Lower revenue EPS year-on-year and reduced special income from holdings — a watchpoint for future special dividends and ordinary growth pace.
Portfolio underperformed its small-cap benchmark and remains underweight semis/AI; if relative performance pressure persists, it could indirectly weigh on income growth and capital resources.
Exposure to Asian smaller companies brings FX, geopolitical and regulatory risks; investee company dividends can be cyclical.
Sector-wide pressures on UK investment trusts (discounts, activism, potential tender activity) could influence capital allocation and distribution policy over time.
Moderate gearing adds interest costs; covenants monitored but still a consideration in stressed scenarios.

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
08/01/2026	06/02/2026	Special	0.5000p	GBX
08/01/2026	06/02/2026	Final	2.9000p	GBX

Total (Annual Dividends Per Share): 3.40p

Dividend Yield = Annual Dividends Per Share (3.40p) ÷ Share Price (273p) = 1.25%

Ex Dividend Date	Payment Date	Type	Amount	Currency
08/01/2026	06/02/2026	Special	0.5000p	GBX
08/01/2026	06/02/2026	Final	2.9000p	GBX
09/01/2025	07/02/2025	Special	8.0000p	GBX
09/01/2025	07/02/2025	Final	14.0000p	GBX
30/11/2023	12/01/2024	Final	13.0000p	GBX
01/12/2022	13/01/2023	Special	1.0000p	GBX
01/12/2022	13/01/2023	Final	13.0000p	GBX
02/12/2021	14/01/2022	Final	11.5000p	GBX
02/12/2021	14/01/2022	Q4	11.50

Year	Total
2021	11.500

Number of Shares:

Payment	Paid	Amount
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