15th Jan 2021 11:19
(Alliance News) - Independent Investment Trust PLC on Friday said its net asset value declined in its most recently ended financial year, with its dealings in housebuilders "badly wrong-footed" by the Covid-19 pandemic.
The UK and international quoted securities investor reported a net asset value per share, as at November 30, of 547.1 pence, down 4.3% from 571.8p the year before.
Max Ward, the company's managing director, highlighted that the company's "dealings in housebuilders in the year under review were badly wrong-footed by the appearance of Covid-19".
He said Independent Investment had been "slow to recognise" that the prospect of a lockdown was a threat both the supply of and demand for housing and, believing that the scale of its position was an "unacceptable risk", ended up making "substantial sales at what turned out to be distressed prices".
"We ended up buying high and selling low - a textbook example of how not to ply our trade, about which we feel suitably sheepish," said Ward.
The company replaces its final dividend with a second interim dividend of 5p per share, taking the total for 2020 to 8p per share, compared to an 8p per share regular and 5p per share special dividend in financial 2019.
Chair Douglas McDougall said: "The arrival of effective vaccines for Covid-19 has allowed markets to rally, in some cases to new peaks. The likelihood that we shall return to some form of normality in the year ahead may well continue to sustain them for some time, but eventually their unhealthy dependence on freakishly stimulative monetary conditions will have to be addressed. The UK market has, until recently, been a laggard in global terms and perhaps offers better value than some others, but it too is vulnerable to a return to monetary orthodoxy.
"We try to ensure that we are invested in companies strong enough to withstand the inevitable upheavals when this happens, and we believe the constituents of our current portfolio meet that criterion. We do not expect the departure of the UK from the European Union to have a material impact on our portfolio."
Shares in Independent Investment were down 0.8% at 518.98p in London on Friday morning.
By Anna Farley; [email protected]
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