Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Scottish Mortgage Investment Trust to spend up to £1bn on buybacks
(Sharecast News) - Scottish Mortgage Investment Trust announced on Friday that it had made available at least £1bn for share buybacks over the next two years, following strong operational results from its public and private portfolio. The FTSE 100 entity said the decision came as its portfolio continued to deliver robust performance, with free cash flow from portfolio companies more than doubling over the last year.
Besides its operational success, the board said it had taken steps to strengthen the company's balance sheet in recent months.
Debt reduction had been a key focus, with invested borrowings now standing at 13% of net assets, at an average interest rate cost of 3.2%.
Scottish Mortgage still continued to provide growth capital, particularly to private companies, which currently represented 26.2% of the portfolio.
Share buybacks had been identified as a strategic tool to address the discount to net asset value and to provide shareholders with significant benefits, the company explained.
It said buybacks would improve liquidity in its shares, and would also immediately enhance the net asset value per share and demonstrate confidence in the underlying valuation of the portfolio.
Over the last two years, Scottish Mortgage had repurchased about £353m of its shares, and with the newly-allocated £1bn, it aimed to further enhance shareholder value.
"We remain committed to using share repurchases strategically to enhance liquidity in our shares and to seek to facilitate trading around net asset value," said chair Justin Dowley.
"Our company has a strong balance sheet, and its portfolio companies are delivering strong operational results.
"We are acting upon this investment opportunity by materially increasing the capital available to our liquidity policy over the next two years with the aim of maximising returns for our shareholders."
At 0846 GMT, shares in Scottish Mortgage Investment Trust were up 1.52% at 792.88p.
Reporting by Josh White for Sharecast.com.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.