TIDMSHIP TIDMSHPP
RNS Number : 8987Z
Tufton Oceanic Assets Ltd.
17 January 2024
17 January 2024
This announcement contains inside information for the purposes
of the UK version of the Market Abuse Regulation ("MAR") which
forms part of UK law by virtue of the European Union (Withdrawal)
Act 2018; as amended. Upon publication of this announcement, the
inside information is now considered to be in the public domain for
the purposes of MAR.
Tufton Oceanic Assets Limited ("SHIP" or the "Company")
4Q23 Net Asset Value, Dividend Declaration and Mid-Term Strategy
Review
The Company announces that as at 31 December 2023, the unaudited
net asset value ("NAV") was $427.1 million (GBP335.0 million*) and
the unaudited NAV per ordinary share was $ 1 .452 (GBP1.139*). The
NAV total return for the quarter was 6.7% and for 2023 was 10%.
The Company is pleased to announce a dividend of $0.02125 per
ordinary share for the quarter ending 31 December 2023. The
dividend will be paid on 9 February 2024 to holders of ordinary
shares recorded on the register as at the close of business on 26
January 2024 with an ex-dividend date of 25 January 2024.
Mid-Term Strategy Review
Since its IPO in December 2017, the Company has delivered strong
results in line with its original objectives, despite the very
challenging economic and operational backdrop during Covid, ongoing
geopolitical events and the impact of inflation.
In light of the ongoing share price discount to NAV and the
Company's forthcoming continuation vote at the AGM in October 2024,
the Board, in consultation with the Investment Manager, has
undertaken a review of the Company's mid-term strategy.
Continuing Investment Opportunity
The Investment Manager anticipates the investment opportunity
set for fuel-efficient secondhand vessels to be very strong for the
next decade as the shipping industry slowly transitions to zero
carbon fuels to meet tightening regulations and decarbonisation
targets. The Board and the Investment Manager believe that strong
supply-side fundamentals will continue to support high yields and
secondhand values, resulting in future IRRs being higher than the
Company's published target.
The Board therefore believes the correct strategy for SHIP over
the medium term through to 2030 is to continue investing in
fuel-efficient secondhand vessels to maximise shareholder returns,
intending to realise the Company's portfolio of assets starting
from 2028, well before the decarbonisation of shipping
accelerates.
Continuation votes will be held as planned in 2024 and 2027 to
reconfirm the opportunity set and the strategy with the Company's
shareholders, before the realisation period starting in 2028.
Revised Capital Allocation Policy
Acknowledging investor feedback and the current discount to NAV,
the Board has also considered its capital allocation policy and use
of investible cash as follows:
-- With effect from 1Q24, SHIP's annual target dividend will be
increased by c.17.6% from $0.085/share to $0.10/share(**) . Based
on this increased target the Company is forecast to have a dividend
cover of c.1.5x over the next 18 months.
-- The Board is evaluating a proposed one-off return of capital
in 2Q24 representing between 5% and 10% of NAV at a price
representing the prevailing NAV/share less attributable costs.
Shareholders will be notified of the terms of the return of capital
accordingly.
* 1 January 2024 closing mid-rate of USD/GBP 0.7844. Source:
Morningstar
** This is a target only and there can be no assurance that the
target can or will be met and it should not be taken as an
indication of the Company's expected or actual future results.
Accordingly, potential investors should not place any reliance on
this target in deciding whether to invest in the Company or assume
that the Company will make any distributions at all and should
decide for themselves whether the target dividend yield is
reasonable or achievable.
-- The Company sees fleet renewal (based on age, technology, and
sector outlook) as a priority. Returns from all new asset
investments over a three-year holding period will be compared to
the benefit from a return of capital given the prevailing share
price at the time of the proposed investment and medium-term market
outlook.
-- The Board will annually evaluate a further return of capital
using excess investible cash if no suitable investment
opportunities are presented.
-- The current buy-back policy is to remain in place (excess
cash may be used, at the discretion of the directors, to repurchase
shares should they trade at a >10% discount to NAV, as set out
in the Company's listing documents).
The Company's quarterly factsheet as at 31 December 2023 will
shortly be available on the Company's website in
the Investor Relations section at www.tuftonoceanicassets.com/quarterly-reports .
Dividend currency declaration
The Company advises that the default payment for dividends
remains in US Dollar, however, dividends are capable of being paid
in GBP Sterling, provided that the relevant shareholder has
registered to receive their dividend in GBP Sterling under the
Company's Dividend Currency Election. A copy of the Dividend
Currency Election form, which should be sent to Computershare
Investor Services plc, The Pavilions, Bridgwater Road, Bristol,
BS99 6BD no later than 29 January 2024, is available on the
Company's website at
http://www.tuftonoceanicassets.com/company-documents/ .
The Dividend Currency Election Form should only be completed by
shareholders who hold shares in certificated form. CREST
shareholders must elect via CREST. Non-CREST shareholders wishing
to receive Company dividends by electronic funds transfer directly
to their bank accounts can register for Computershare's Global
Payment
Service at www.investorcentre.co.uk
For further information, please contact:
Tufton Investment Management Limited +44 (0) 20 7518 6700
("Investment Manager" or "Tufton")
Andrew Hampson
Nicolas Tirogalas
Singer Capital Markets +44 (0) 20 7496 3000
James Maxwell, Alex Bond, Angus Campbell
(Corporate Finance)
Alan Geeves, James Waterlow, Sam Greatrex
(Sales)
Hudnall Capital LLP +44 (0) 20 7520 9085
Andrew Cade
About the Company
Tufton Oceanic Assets Limited invests in a diversified portfolio
of secondhand commercial sea-going vessels with the objective of
delivering strong cash flow and capital gains to investors. The
Company's investment manager is Tufton Investment Management Ltd.
The Company has raised a total of approximately $316.5m (gross)
through its Initial Public Offering on the Specialist Fund Segment
of the London Stock Exchange on 20 December 2017 and subsequent
capital raises.
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END
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