20th Feb 2019 09:45
LONDON (Alliance News) - FTSE 250-listed Herald Investment Trust PLC on Wednesday reported a drop in annual net asset value in 2018 but managed to outperform its benchmark.
Herald Investments - which invests predominantly in small and mid-cap technology, communications and media companies - said its NAV per share at December 31 stood at 1,307.9 pence compared to 1,374.9p at the end of 2017, a 4.9% decrease.
Shares in Herald Investment Trust were up 0.7% Wednesday at 1,223.70p each.
The Numis Smaller Cos Index plus AIM, which excludes investment companies, shed 18% in 2018 and the FTSE All Share Index lost 9.5%.
The trust's net assets decreased 6.8% in the period to GBP901.2 million from GBP966.7 million.
Herald did not recommend a dividend for 2018, same as in 2017.
The trust noted its NAV per share had increased 9.6% at the interim stage of the year but a fourth quarter correction resulted in the negative performance.
Chair Julian Cazalet said: "It is always disappointing to report negative returns, but the portfolio had been positioned defensively, reflecting the manager's belief that some valuations had become somewhat too ambitious. The performance relative to the wider market is quite pleasing. We enter 2019 more comfortable that valuations now offer scope for good absolute performance once again."
Cazalet said he will step down from the company at the end of annual general meeting in April.
Cazalet also noted Herald shareholders will have an opportunity to vote on the continuation of the trust, as they do every third year. The trust said it "strongly recommends" shareholders vote in favour of continuation.
Cazalet said: "The Herald board believes that the investment manager's focus on smaller capitalisation companies provides exposure to some of the most rapidly growing companies within the company's targeted sectors and that this should continue to provide attractive long term investment opportunities."
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Herald Investment Trust