21st Jun 2022 10:18
(Alliance News) - Monks Investment Trust PLC on Tuesday reported a sharp fall in net asset value and profit due to the underperformance of its portfolio in its recent financial year.
The Edinburgh-based investment trust, which focuses on long-term investment growth from equities, reported NAV per share of 1,099.8 pence on April 30, the end of its financial year, down 19% from 1,358.1p a year before.
Monks said NAV total return was negative 19%, underperforming its benchmark, the FTSE World Index, which provided a return of positive 6.1% for the period.
The FTSE 250 firm swung to a net loss before tax of GBP622.0 million from a profit of GBP1.08 billion the year before.
The company blamed this on the underperformance of early-stage growth companies in its portfolio, due to a volatile economic environment throughout the year.
"After five sequential years of outperformance, the Monks portfolio has suffered since more of growth companies' value is in the future," the company said.
Further, Monks blamed Covid-19 restrictions in China. The share prices of a majority of its Chinese holdings fell sharply following the imposition of widespread regulation by central government, Monks explained.
For its single final dividend Monks recommended 2.35p, up 18% from 2.0p the year before.
In its outlook, Monks said it remained confident about the future of its portfolio.
"It is a natural tendency at times of turmoil and uncertainty for time horizons to contract. Our belief in the importance of patience means that we will continue to allocate our time to those areas of research which we think will be most impactful over the long term, focusing on unearthing the gems which may be handed to us at a time when others are being particularly fearful, and which will sow the seeds for future growth," Monks said.
Shares were up 0.8% at 897.16 pence each on Tuesday in London.
By Abby Amoakuh; [email protected]
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