SBN.PR.A Semi-Annual Report 2014

S Split Corp. has released its Semi-Annual Report to June 30, 2014.

Figures of interest are:

MER: According to the report:

The management expense ratio (“MER”) is the sum of all fees and expenses for the stated period, including federal and provincial sales taxes but excluding transaction fees and Preferred share distributions, divided by the average net asset value, excluding the Redeemable Preferred Share liability.

Given that the NAVPU at the beginning of the period was 19.86, and 20.97 at the end, we may approximate the total assets as double the amount ‘excluding the Redeemable Preferred Share liability’, which results in a MER for analytical purposes of about 1.25%.

Average Net Assets: We need this to calculate portfolio yield.The beginning of period assets is the sum of Capital Unitholders equity and Preferred Share value: ($30.73-million + $31.16-million) = 61.9-million, while end of period assets are (32.11-million + 29.26-million) = 61.4-million. So call the average assets $61.6-million.

Underlying Portfolio Yield: Total Income (dividends, securities lending and interest) of $1.753-million over half a year (but getting three quarterly dividends, due to Scotia’s strange dividend policies, so only multiply by four-thirds!) divided by average net assets of $61.6-million is 3.79% p.a. This is reasonably close to Scotia’s currently quoted yield of 4.19%.

Income Coverage: Two thirds of dividend income (see above) is 1.168-million and expenses are 0.772-million, for net income of 0.396-million to cover preferred dividends of $0.818-million is 48%.

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