17th Apr 2019 11:35
LONDON (Alliance News) - Amati AIM VCT PLC on Wednesday reported a sharp increase in net asset value, on a merger with a fellow Amati trust, but saw a negative total return yet managed to outperform its benchmark.
At January 31, the trust's NAV per share stood at 146.1 pence compared to 170.7p a year before, a 14% decrease.
Amati's net asset value more than doubled, however, to GBP125.0 million from GBP61.6 million the year before. The trust's shares in issue increased to 85.5 million from 36.1 million during the year.
The sharp rise in net assets was attributed to the trust merging with Amati VCT.
The trust's NAV total return in the twelve months to January 31 was negative 10.0% compared to its benchmark, the Numis Alternative Markets, losing 13.6% in the same period.
Chair Peter Lawrence said the trust "made gains" in the first half but there were "sharp market corrections" in the second half, leading to the negative total return.
Amati AIM's total dividend for the period decreased 12% to 7.50p from 8.50p paid out for the same period last year. The trust said the dividends pay for financial 2019 are in line with its dividend policy of distributing between 5% and 6% of NAV.
Investment Managers Paul Jourdan, David Stevenson, and Anna Wilson said: "Just as in politics, a year can be a long time in stock markets. At the start of 2018, after a prolonged period of strong gains, discussion was all about synchronised global growth, the continuation of positive momentum and low volatility in capital markets. In fact, the year ended on a sour note, with cash outperforming both equities and bonds for the first time since 1994."
The trust's most significant contributor was AB Dynamics PLC. The company's value gained 93% over 2018 to become Amati AIM's second largest holding.
"This reflected a succession of positive trading announcements by the company, culminating in final results which were significantly ahead of market expectations," the managers added.
US-based provider of water leak detection and remediation solutions Water Intelligence PLC also gained 93% in the period.
Ideagen, the supplier of governance, risk & compliance software to businesses operating in highly regulated industries, "enjoyed another year of combined organic and acquisitive growth", said the investment managers, with its shares gaining 14%.
Other positive contributors to performance over the period included US-based clean water technology company MyCelx Technologies Corp, which gained 90%, and identity verification software provider GB Group PLC and infection prevention product manufacturer Tristel PLC, both up 6%.
"Around three times as many portfolio holdings fell during the year as made gains, reflecting the weak market backdrop for AIM. Technology companies suffered the worst declines, impacted by the late year sell-off amongst the large US NASDAQ stocks," said the investment managers.
Lawrence added: "Whilst many uncertainties remain in the current political and economic climate, the portfolio of 65 stocks held by Amati AIM together with the 66 stocks in the TB Amati UK Smaller Cos Fund provide diverse exposure to many industries and global markets and most of these are now more modestly priced than six months ago.
"The longer established and larger robust holdings are becoming relatively mature companies and this should stand the company in good stead as the UK's pathway becomes clearer over the coming months."
Shares in Amati AIM were down 0.3% Wednesday at 135.04 pence each.
Related Shares:
Amati Aim Vct