City of London investment trust increases 2014 full year dividend by 3.2%

DividendMax Ltd.

City of London investment trust increases 2014 full year dividend by 3.2%

Net asset value total return of 14.7%

● Dividend per share up 3.2%. The 48th consecutive annual increase

● Ongoing Charges of 0.43%

Performance

Earnings and Dividends

Earnings per share rose by 0.4% with the £4.4 million increase in investment income largely offset by the 25.0 million increase in shares in issue (weighted average). In addition, special dividends taken to income fell by £427,000 to £1,293,000 after an exceptional year in 2013 when they more than doubled.

Our results were significantly impacted by the strength of sterling as the UK economy recovered. Over the year, the pound appreciated by 12.4% against the US dollar. Some 22% of the dividends which City of London receives (from its holdings in UK companies such as HSBC and BP) are declared in dollars. As a result, the dividends actually received from those companies did not fairly reflect the underlying dividend growth at those companies whose profits too have suffered when translated into sterling. Despite this, City of London increased its own dividend by 3.2% over the previous year, ahead of the rate of inflation, and after accounting for the final dividend still added £729,000 to revenue reserves to underpin future dividends. This is the 48th consecutive year of unbroken dividend growth, a record unrivalled by any other investment trust.

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