17th Aug 2020 15:39
(Alliance News) - RM Secured Direct Lending PLC on Monday reported a drop in assets over the first half, which it blamed on the pandemic but is pleased with its portfolio's performance.
On June 30, the investment firm - which specialises in secured debt instruments of UK small & medium sized enterprises - recorded a NAV per share of 91.16 pence compared to 97.79p at December 31.
RM Secured's net assets slipped to GBP110.5 million from GBP119.5 million six months earlier. In the first half, the firm repurchased 965,000 shares.
The investment firm declared a dividend of 3.325p, down from 3.625p the year before. RM Secured noted its distributed a 0.375p special dividend the year before.
RM Secured's NAV total return in the six-month period was negative 3.4%
"The period was undoubtedly dominated by the impact on global markets as a result of the worldwide health pandemic and the challenges this presented," Chair Norman Crighton said.
He continued: "The board and the investment manager have taken a number of actions to mitigate the impact of Covid-19 on shareholder value. I am pleased to report that the company continues to meet its income generation targets and has maintained its dividend. The NAV movements over the period demonstrate the defensive characteristics of the portfolio of secured loans which have largely delivered with regard to significant capital protection."
The investment firm said it is "satisfied" with its portfolio's performance.
Crighton added: "Within the portfolio, the company's social infrastructure assets had significant exposure to the effects of the 'lockdown' with several of our portfolio companies having to temporarily cease operations. The company worked closely with its borrowers and in addition to the rapid government support actions, has assisted them where appropriate to support them through this difficult period. This support has mainly taken the form of a roll up of a period of interest or the temporary waiving of covenants, however there are other mechanisms such as the use of an interest reserve account."
The investment manager, RM Secured noted, expects there to be a number of opportunities arising as a result of the pandemic and the constraints on lending across the wider market which it can capitalise on in the second half of the year.
Shares in RM Secured Direct Lending were 0.8% lower in London on Monday afternoon at 78.85 pence each.
By Paul McGowan; [email protected]
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