Tufton Assets Limited (LON:SHPP)

Tufton Assets Limited (LSE: SHIP) is a closed-ended investment company registered in Guernsey and listed on the Specialist Fund Segment of the London Stock Exchange since its IPO on 20 December 2017. It raised about US$316.5 million at launch and in later capital raises. It buys second-hand commercial ships and charters them to operators, aiming for strong cash flow plus capital gains. By the November 2026 payment it will have returned US$219.2 million to shareholders. The manager is Tufton Investment Management Ltd, a maritime, raw-materials and energy specialist founded in 1985, led by chief executive and portfolio manager Nicolas Tirogalas.

The fleet at 30 September 2026 was 21 vessels: eight product tankers (diesel, petrol and jet fuel), eleven bulk carriers (grain, iron ore, bauxite) and two chemical tankers. The company prefers smaller bulkers. Most new ship orders in recent years have been for larger vessels, so small bulkers remain relatively under-invested. The manager buys and sells actively. It has sold 20 vessels since inception at an aggregate 6% above NAV. In April 2026 it added two fuel-efficient Handysize bulkers, Wholesome and Steadfast, for US$33 million, at about 85% of depreciated replacement cost.

The company reports in US dollars, its year ends on 30 June, and NAV is published quarterly. The FY26 accounts showed a profit of US$96m and a NAV total return of 28.3%, after a loss of US$36m (-9.1%) in FY25. The quarterly dividend was 2.5 US cents throughout FY25 and FY26. The target rises to US$0.11 a year from the 3Q26 payment, the fifth increase since launch. Dividends default to US dollars, and holders can elect to receive sterling.

Tufton Assets offers a covered, rising dollar income from a diversified fleet bought below replacement cost, at a share price below the value of the ships. Its timing is good. Tanker rates reached record highs during 2026 after the disruption around the Strait of Hormuz, small-bulker supply is tight, and the company raised its dividend 10% with forecast cover of 2.2x. The record of selling ships above NAV supports the valuation. The weaknesses are those of the asset class. Charters are short (0.8 years on average at 30 June 2026), so income tracks the market in both directions. NAV rests on vessel valuations that fell in FY25, and part of the current strength depends on geopolitics. The shares stood 14.1% below NAV at 30 September 2026 (US$1.40 against US$1.630) and 10.4% below it at the 28 October close of US$1.46. That discount, and the continuation vote at the 2027 AGM, are the other source of return and the main corporate uncertainty.