1st May 2019 14:25
LONDON (Alliance News) - Chelverton Growth Trust PLC on Wednesday reported a decrease in net asset in the first half and has decided to pursue a strategy of winding up.
Resulting from the trust's recent tender offers and decline in NAV, Chelverton said the "inevitable impact" on its expense ratio has led the company to decide to formally pursue a strategy of winding up the company.
The trust expects the process to take up to two years.
At February 28, the investment trust's NAV per share stood at 49.59 pence compared to 60.48p at August 31, an 18% decrease.
Chelverton Growth's net assets decreased 18% in 2018 to GBP2.7 million from GBP3.3 million the year before.
"Whilst in general the performance of the underlying investments has been as expected the sentiment towards UK publicly quoted equites, and in particular small companies and micro-cap companies, has been very negative," said Chair Kevin Allen.
Over the same six month period, the trust's comparative index, the AIM All-Share Index, lost 17.6%. The MSCI Small Cap UK index shed 9.9% in the period.
Chelverton Growth's largest investment, AIM-listed holding company CEPS PLC, struggled in the period.
"CEPS is being built up by the growth of its underlying investee companies and by strategic 'bolt-on' acquisitions. The results have, in common with any developing company, been difficult for shareholders to interpret, however we are confident that there is significant value that in time will become clearer," said Allen.
Allen continued: "Much the same could be said for Touchstar PLC, Petards Group PLC and Universe Group PLC which are all making progress and appear to be undervalued at this time since the share prices have not risen to reflect this progress."
Chelverton Growth portflio firm Plutus Powergen PLC seen a "significant" reduction in its share price in the period. Allen attributed this to "unexpected changes in the regulated markets in which it operates".
Chelverton Growth's unquoted portfolio had a "solid" six months with its investment manager, Chelverton Asset Management, growing its funds under management and paying a maiden dividend.
Since the period end, Chelverton Growth said its NAV per share has "recovered strongly", rising 13% to 55.81p.
Shares in Chelverton Growth Trust were untraded Wednesday but last closed at 45.07p each.
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