25th Nov 2019 11:40
(Alliance News) - Baronsmead Venture Trust PLC and Baronsmead Second Venture Trust PLC both reported on Monday a drop in net asset value over the 12 months ended September 30.
At September Baronsmead's NAV per share stood at 78.1 pence, down 10% compared to the 87.0p reported at the same point the year prior. After dividend payments, the trust's NAV per share stood at 71.6p.
The trust's net assets ended the period at GBP151.1 million compared to GBP175.5 million the year before, a 14% drop. The trust's issued share capital increased by 5.0% during the year, explaining the discrepancy.
Chair Peter Lawrence said: "During the year we have seen steady, positive progress from our unquoted investments including several successful realisations, although the quoted portfolio suffered as a result of falling markets."
Baronsmead Second's NAV per share ended the period at 80.1p, down 8.6% on the 87.6p seen the year prior. After dividend payments, the trust's NAV per share stood at 73.6p.
The trust's net assets ended the period at GBP175.4 million compared to GBP199.4 million the year before, a 12% drop. The trust's issued share capital increased by 5.0% during the year, explaining the discrepancy.
Baronsmead Second Chair John Davies said: "This year has seen a downturn in NAV for the first time in 10 years as a result of the fall in quoted markets. However, we have seen steady, positive progress from our unquoted investments - including successful realisations."
The two trusts paid an interim dividend of 3.0p and are proposing a final dividend of 3.5p, giving a total dividend for the period of 6.5p.
Both trust are managed by Gresham House Asset Management Ltd.
Describing the performance of both trusts, GHAM commented: "It is disappointing to report a decline in the net asset value total return over the year. This has been driven by the underperformance of the quoted portfolio primarily linked to the negative market sentiment towards UK small cap stocks. We continue to believe that there is an attractive long-term investment case for the majority of the large quoted holdings. The unquoted portfolio has seen steady performance with some strong realisations during the year helping offset some of the quoted portfolio decline."
During the period, Baronsmead made GBP13.6 million worth of investments, while Baronsmead Second made GBP15.6 million. Baronsmead's portfolio ended the period valued at GBP96 million, whereas Baronsmead Second's portfolio was valued at GBP120 million.
Looking ahead, GHAM said: "We anticipate further periods of market volatility during the remainder of 2019 and into 2020, given the wider political and macro-economic uncertainties. However, we continue to believe that in an uncertain market environment our focus on investing in a diverse portfolio of companies with strong fundamental attributes has the potential to outperform over the cycle."
Shares in Baronsmead Venture Trust were 1.4% lower in London on Monday at 70.00p each. Baronsmead Second Venture Trust was also 1.4% lower, trading at 72.00p.
By Paul McGowan; [email protected]
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