REG - Tufton Oceanic Asset Tufton Oceanic -SHPP - 4Q23 Net Asset Value, Dividend & Strategy Review

Tufton Oceanic AssetsAnnouncement

17/01/2024 07:00

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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 (£335.0 million*) and the unaudited NAV per
ordinary share was $1.452 (£1.139*). 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
(http://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/
(https://gbr01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.tuftonoceanicassets.com%2Fcompany-documents&data=05%7C01%7Ckashyap.swamy%40tufton.com%7C8f86d2edaa5342029cee08da689d4418%7C25b63662790a469f88cd0aaecf159641%7C0%7C1%7C637937321912529957%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000%7C%7C%7C&sdata=I35vc%2FHh1tuwm%2Ffkwp%2FpQi5kYk2SdKNlIWnH7hOC%2Bl4%3D&reserved=0)
.

 

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
(https://gbr01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.investorcentre.co.uk%2F&data=05%7C01%7Ckashyap.swamy%40tufton.com%7C8f86d2edaa5342029cee08da689d4418%7C25b63662790a469f88cd0aaecf159641%7C0%7C1%7C637937321912529957%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000%7C%7C%7C&sdata=qPUyp2e1I83wrCiDdg9VpBHMdEwL%2F4a286TAH9ZXwL0%3D&reserved=0)

 

For further information, please contact:

 Tufton Investment Management Limited ("Investment Manager" or "Tufton")                               +44 (0) 20 7518 6700

 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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