17th Jul 2020 09:51
(Alliance News) - Herald Investment Trust PLC said Friday its net asset value rose over the first half of 2020 due to the company's overseas investment portfolio performing well despite the Covid-19 outbreak.
As at June 30, the trust's net asset value per share was 1,795.52 pence, up 17% from 1,532.61p the same date the year before, and up 7.6% from 1,668.08p at the end of December 2019.
Herald's share price at the end of June was 1,536.0 pence, reflecting a 14% discount to net asset value.
Shares in Herald Investment Trust were down 0.2% at 1,609.38 pence on Friday in London.
The UK portfolio made a negative return of 2.0%, compared to the 20% negative return from the Numis Smaller Companies Index plus AIM, due to a fall from the media sector, nearly offset by returns from BATM Advanced Communications PLC and ITM Power PLC.
In contrast, the North American portfolio returned 25%, outperforming the sterling return of the Russell 2000 Technology Index of 6.3%. There were the takeovers of Mellanox and Adesto, as well as strong returns from Five9, due to VOIP cell centres reaching high levels of demand in a lockdown.
The continental European portfolio returned 12% and the Asian segment returned 26%.
"It is perhaps surprising that the overall returns have been positive when Covid-19 has led to economic havoc, and technology is at the eye of the storm in trade tensions between China and the United States," said Chair Ian Russell.
"Furthermore, analysts' forecasts rarely reflect share-based compensation so valuations are really higher than they have been at any time other than the internet bubble of 2000. However, there is no comparison with that period as most investee companies are solidly generating cash. In addition, the challenge for investors in finding value anywhere makes these valuations less unattractive, and it is evident that there is more interest in the TMT sector. The caveat is that the economic outlook remains precarious, and forecasts are more uncertain than usual," Russell added.
By Dayo Laniyan; [email protected]
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