Trust changes direction: Murray Enterprise to concentrate on smaller companies

SHARES in Murray Enterprise rose sharply yesterday as the pounds 30m investment trust announced a change in investment policy and prospects for a much better dividend next year.

The trust plans to abandon its policy of investing in technology and unquoted stocks and concentrate on UK smaller companies. Murray Johnstone, the Glasgow firm that manages the trust, is already redirecting the portfolio.

Murray Enterprise's directors believe they will be able to pay a dividend next year of at least 4p. For the year to 30 September they intend to pay at least 1.5p.

Shares in the trust jumped by 25p to 233p. This cut the discount to the newly published net asset value of 246.7p a share from 16 to less than 6 per cent.

The 25.8 per cent of the trust's shares held by Murray International, Murray Smaller Markets and Murray Ventures was placed with other institutions by BZW Securities. Robert Coulter, a Murray Johnstone fund manager, said the board wanted to reduce cross-holdings between the group's trusts.

Murray Enterprise was formed in 1989 from two poorly performing technology trusts managed by Murray Johnstone. Over the past two years it has invested an increasing proportion of its money in large UK companies.

After a poor start, it has performed well. Aided by the flotation of some of its largest US investments, its net asset value has more than trebled from 70p a share in March 1991.

The trust intends to make a bonus issue of warrants to shareholders next year. It has renegotiated its management contract with Murray Johnstone, setting the fee at 0.8 per cent a year.