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Donnerstag, 11.07.2024 02:00 von

TwentyFour Income Fund - Final results for the year ended 31 March 2024

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TwentyFour Income Fund Limited


Final results for the year ended 31 March 2024


TwentyFour Income Fund Limited (“TFIF” or “the Company”), the FTSE 250-listed investment Company that invests in less liquid asset-backed securities (“ABS”) in the UK and Europe, is pleased to announce its Final Results for the year ended 31 March 2024.


Financial highlights

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  • Total NAV return per ordinary share of 18.1% (2023: -3.74%)
  • NAV per ordinary share increased 7.7% to 108.97p (2023: 100.97p)
  • Record dividend payment of 9.96p per ordinary share, above the dividend policy of 8p per annum
  • Total net assets rose 12.2% to £813.54 million (2023: £724.98 million)
  • The portfolio returned 16.57% to 31 March 2024 vs (1.17%) to 31 March 2023
  • Share price discount to NAV at 3.67% at the end of the year; a comparatively small discount compared to the overall sector where discounts widened to historic levels


Portfolio highlights


  • European ABS has performed strongly across the board, supported by:
    • Stronger than expected macroeconomic conditions
    • Higher for longer interest rates
    • Improving risk sentiment as investors assumed a soft-landing for Europe and the UK
  • Mezzanine Residential Mortgage-backed Securities (“RMBS”) and Collateralised Loan Obligations (“CLOs”) were the strongest performers whilst Commercial Mortgage-backed Securities (“CMBS”) lagged spread performance.
  • Activity in the primary markets has created opportunities to further diversify and rotate the portfolio e.g. UK and European banks have been tapping the ABS sector for both funding and capital transactions following the end of cheap funding.
  • TwentyFour Asset Management LLP (“the Portfolio Manager”) continues to favour higher-yielding, floating rate ABS, particularly secured assets (RMBS and CLOs) and has increased allocations to the Significant Risk Transfer (“SRT”) market as a source of both yield and diversification.
  • As a result, the portfolio had a book yield of 11.7% and a mark-to-market yield of 12.8% at the end of the period.
  • The Portfolio Manager continues to prefer bonds with short spread durations, liquidity and low levels of gearing, reflecting concerns over market volatility and geopolitical risk.
  • The level of leverage the Company has taken has dropped over the period to -1.6% from -5.4%,



Market expectations for rates to remain higher for longer should continue to support strong demand for ABS and performance over the medium term.


Notwithstanding the benefit of higher rates on the portfolio, the Company has delivered dividends within or above the target range of 6p to 9p per share since launch and is confident that it should be able to maintain that record even if, as anticipated, rates start to fall over the next 12 months.


The Portfolio Manager continues to see strong demand and supply of ABS, particularly in European CLOs.


Over the longer term, geopolitical risk remains a driver of market volatility and, as such, the Portfolio Manager sees value in retaining flexibility within the portfolio and maintaining elevated levels of liquidity.


Commenting on the results, Bronwyn Curtis OBE, Chair, said: “The strategy of investing in higher yielding floating rate ABS in a higher interest rate environment has enabled the Company to produce a record dividend for the year for investors, equivalent to a 10% yield on the share price, alongside a strong return on the portfolio.


“Looking forward, the Board is supportive of the Portfolio Manager’s focus on Western European secured assets with short maturities, keeping one eye on market volatility whilst also offering the potential to benefit from potential market dislocations.”


Aza Teeuwen, Portfolio Manager, TFIF said: “European ABS performed well over the period. Spreads had started the year relatively wide as the market was still recovering from the market impact of the Truss mini-budget and the resulting economic slowdown. However, the sector’s fundamental performance proved better than expected as borrowers coped well with the higher rate environment, helped by solid wage growth and a strong labour market, resulting in spreads narrowing and a strong performance for the year.


“Going forward, we will focus on secured collateral such as mortgages, senior secured corporate loans and auto loans from Western European countries, where governments have a proven track record in supporting consumers and corporates during recessions.


“We expect current strong supply-demand to continue to drive performance over the medium term, whilst longer term we will continue to position the portfolio flexibly, given heightened geopolitical risk.”


For further information please contact:


TwentyFour Income Fund Limited    Tel: +44 (0)20 7260 1000


Deutsche Numis      Tel: +44 (0)20 7015 8900

Hugh Jonathan / Matt Goss


JPES Partners       Tel: +44 (0)20 7520 7620

Miles Donohoe / Charlotte Walsh






For the year ended 31 March 2024


LEI: 549300CCEV00IH2SU369

(Classified Regulated Information, under DTR 6 Annex 1 section 1.1)


The Company has today, in accordance with DTR 6.3.5, released its Report and Audited Financial Statements for the year ended 31 March 2024. The Report will shortly be available via the Company's Portfolio Manager’s website https://www.twentyfouram.com/view/GG00B90J5Z95/twentyfour-income-fund for professional/institutional investors and twentyfourincomefund.com for retail investors, and will shortly be available for inspection online at www.morningstar.co.uk/uk/NSM website.




The Company

TwentyFour Income Fund Limited (the “Company” and “TFIF”) is a closed-ended investment company whose shares (“Ordinary Shares”, being the sole share class) have a Premium Listing on the Official List of the UK Listing Authority. The Company was incorporated in Guernsey on 11 January 2013. The Company has been included in the London Stock Exchange’s FTSE 250 Index since 16 September 2022.


Investment Objective and Investment Policy

The Company’s investment objective is to generate attractive risk adjusted returns principally through income distributions. The Company’s investment policy is to invest in a diversified portfolio (“Portfolio”) of predominantly UK and European Asset-Backed Securities (“ABS”). The Company maintains a Portfolio largely diversified by the issuer, it being anticipated that the Portfolio will comprise at least 50 ABS at all times.


Target Returns*

The Company has a target annual net total NAV return of between 6% and 9% per annum, which, effective from the dividend declared in respect of the 3-month period ended 31 March 2023, has been an annual target each financial year of 8% of the Issue Price (the equivalent of 8 pence per year, per Ordinary Share). Prior to that, the annual target dividend was 7% of the Issue Price. Total NAV return per Ordinary Share is calculated by adding the increase or decrease in NAV per Ordinary Share to the total dividends paid per share during the year and dividing by the NAV per Ordinary Share at the start of the year.


The increases in the annual target dividend have been intended to increase the rate of return to investors following increases in global interest base rates.


Ongoing Charges

Ongoing charges for the year ended 31 March 2024 have been calculated in accordance with the Association of Investment Companies (the “AIC”) recommended methodology. The ongoing charges for the year ended 31 March 2024 were 0.95% (31 March 2023: 0.97%).



As at 5 July 2024, the discount to NAV had moved to 3.73%. The estimated NAV per Ordinary Share and mid-market share price stood at 109.90p and 105.80p, respectively.


Published NAV

Northern Trust International Fund Administration Services (Guernsey) Limited (the “Administrator”) is responsible for calculating the NAV per Ordinary Share of the Company. The unaudited NAV per Ordinary Share will be calculated as at the close of business on the last business day of every week and the last business day of every month by the Administrator and will be announced by a Regulatory News Service the following business day. The basis for determining the Net Asset Value per Ordinary Share can be found in note 6.


* The Issue Price being £1.00. This is an annual target only and not a profit forecast. There can be no assurance that this target will be met or that the Company shall continue to pay any dividends at all. This annual target return should not be taken as an indication of the Company’s expected or actual current or future results. The Company’s actual return will depend upon a number of factors, including the number of Ordinary Shares outstanding and the Company’s total expense ratio, as defined by the AIC’s ongoing charges methodology. Potential investors should decide for themselves whether or not any potential return is reasonable and achievable in deciding whether to invest in or retain or increase their investment in the Company. Further details on the Company’s financial risk management can be found in note 18.


Financial Highlights


NAV per Ordinary Share  
As at 31 March 2024 As at 31 March 2023
108.79p 100.97p
Share price  
As at 31 March 2024 As at 31 March 2023
104.80p 100.50p
Total net assets  
As at 31 March 2024 As at 31 March 2023
£813.54 million £724.98 million
Total NAV return per Ordinary Share  
For the year ended 31 March 2024 For the year ended 31 March 2023
18.10% (3.74%)
Dividends declared per Ordinary Share  
For the year ended 31 March 2024 For the year ended 31 March 2023
9.96p 9.46p
Dividends paid per Ordinary Share  
For the year ended 31 March 2024 For the year ended 31 March 2023
10.46p 7.27p
Ordinary Shares in issue  
As at 31 March 2024 As at 31 March 2023
747.84 million 718.04 million
Portfolio performance  
For the year ended 31 March 2024 For the year ended 31 March 2023
16.57% (1.17%)
Repurchase agreement borrowing  
As at 31 March 2024 As at 31 March 2023
1.73% 6.74%
Number of positions in the portfolio  
As at 31 March 2024 As at 31 March 2023
204 183
Average (discount)/premium  
For the year ended 31 March 2024 For the year ended 31 March 2023
(1.56%) 0.55%



for the year ended 31 March 2024

Bronwyn Curtis OBE


In my capacity as Chair of the Board of Directors of TwentyFour Income Fund Limited, I am pleased to present my report on the Company’s progress for the year ended 31 March 2024 (the “reporting period”).


Investment Performance

In April 2024, the Company announced the fourth quarter dividend for the financial year ended 31 March 2024 at 3.96p per Ordinary Share. This made the overall dividend declared with respect to the reporting period 9.96 pence per Ordinary Share, the highest annual dividend that the Company has paid since its inception in 2013. The strategy of investing in higher yielding floating rate asset-backed securities in a higher interest rate environment has enabled the Company to deliver these attractive dividends, as substantially all excess investment income is paid out each year.


During the reporting period, the NAV per Ordinary Share saw an increase from 100.97p to 108.79p, a rise of 7.74%. The NAV per Ordinary Share total return was 18.10%. The Company traded at a narrow discount to NAV for most of the year, with a discount of 0.47% at the beginning of the reporting period and a discount of 3.67% at the end of March 2024.


The Company issued 29.8 million new Ordinary Shares between April 2023 and the end of June 2023. No shares were bought back during the reporting period.


The Company’s portfolio has not had any defaults in its investments since it was launched in 2013 and the portfolio did not see any material interest deferrals or defaults during this reporting period.


Market Overview

Financial markets have been calmer over the past year following the turmoil created by the US regional banking crisis, the energy crisis, and the UK mini budget in 2022/23. The ongoing war in Ukraine and turmoil in the Middle East have kept investors on alert, but neither has had a large impact on European credit spread volatility. European credit spreads were relatively wide at the beginning of the reporting period but the improved sentiment over the second half of 2023 led to spread tightening, and a healthy level of primary supply in the European ABS market over the period.


The reporting period was once again dominated by the activity of central banks. As the US Federal Reserve (“Fed”) raising the Federal Fund Rate to 5.25-5.5% in 2023– the market was focused on when the rate cutting cycle would begin and then how quickly it would continue. Inflation demonstrated encouraging trends at the end of 2023, leading to the markets pricing in over six rate cuts for 2024. However, with inflation proving to be stickier and US growth remaining robust for the first few months of 2024, the number of cuts expected by the markets for 2024 more than halved. The combination of this “higher for longer” approach by the central banks, and the tightening in credit spreads in the asset classes which the Company invests in, has had a positive impact on the Company’s income, due to the floating rate nature of the Company’s assets.


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