5th Nov 2019 13:59
(Alliance News) - Chelverton Growth Trust PLC on Tuesday said it substantially underperformed its benchmark in its most recent financial year as "the tortuous Brexit impasse" weighed down its portfolio.
The investor, which focuses on listed companies with a market cap of GBP50 million and below, reported a 26% decline in NAV per share to 44.79 pence as at August 31 - the end of its financial year - versus 60.48p the year before. Its benchmark, the MSCI Small Cap UK Index, experienced a 9.6% decline.
"In the past year the impact of the uncertainty resulting from the grinding 'Brexit' process has finally begun to impact on our companies. The significant reduction in share prices, seen across the entire market, has been amplified in the small company 'value' segment, the area of the market in which this company is largely invested," said asset manager David Horner.
"The tortuous Brexit impasse has created a very negative, indeed toxic, atmosphere which has adversely affected both business and consumer confidence," Horner added.
Chelverton Growth Trust is subscale, invested in only a small number of companies, which makes it more volatile than its benchmark.
Its share price discount to NAV on August 31 was 9.6%, widened from 6.6% the year before. Shares in Chelverton Growth Trust were untraded at 40.50p in London on Tuesday - also a 9.6% discount to the August NAV.
Chair Kevin Allen said: "Hopefully the political stalemate will finally be resolved, in the next three months. It is important to point out that 'the negotiated Brexit Deal' is merely the first stage of a lengthy process that will take several years to complete. It is widely reported that UK and Overseas investors are 'underweight' in UK equities and it is to be hoped, that once there is some certainty and clarity in the UK, investors will begin to realise how underrated UK companies actually are. In time, the board believe this should lead to a meaningful increase in the net asset value per share."
"Despite the continuing uncertain political background, the investee companies within the portfolio have generally continued to make progress over the past year. We hope, and expect, that the investment and development that has taken place during the past few years will begin to bear fruit over the future period."
By Anna Farley; [email protected]
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