PLI : Perpetual Income & Growth beats benchmark
Over the six months to the end of September Perpetual Income & Growth generated a 2.2% return on net assets. There was a small widening of the discount so the share price return was 1.6%. By contrast the return on the company’s benchmark was 1.2%. The dividend was upped from 5.4p to 5.6p (two quarterly dividends of 2.8p).
The manager’s report says the most significant positive contributions came from AstraZeneca, BTG, BAE Systems, and Reynolds American.
Mark Barnett says: “The value inherent in AstraZeneca’s drug pipeline was highlighted in April when Pfizer made a bid for the company, which was subsequently rebuffed by the AstraZeneca board. At the time of the company’s half year results in July, the CEO commented that there was `visible momentum’ across their cardiovascular, diabetes and respiratory franchises. He also pointed out the strong revenue growth that had been achieved in emerging markets. AstraZeneca remains a core holding in the portfolio.
BTG saw a sharp rise in its share price over the period on the back of significant positive newsflow. Having previously announced that it had received approval from the US Food and Drug Administration for its Varithena injectable foam medication for the non-surgical treatment of varicose veins, further positive news came during the period under review when the company announced that its DC Bead® oncology product had been approved for sale in China, which represents the largest potential market for patients suffering with liver cancer.
BAE Systems’ share price rose amid growing instability in the Middle East, the ongoing implementation of its GBP1 billion share repurchase programme, and following the successful resolution of its fighter-jet contract negotiations
with Saudi Arabia. Reynolds American saw its share price rise following merger and acquisition activity – the company is currently awaiting final US government approval for its planned merger with Lorillard.
Amongst the detractors to performance over the period were Thomas Cook, GlaxoSmithKline and N Brown. Thomas Cook saw its share price decline sharply when it failed to match last year’s sales growth, and more latterly in reaction to fears that the Ebola outbreak would negatively affect bookings. GlaxoSmithKline was impacted by what it described as intensifying competition and pricing pressure in the US respiratory drugs market. Finally, UK retailer N Brown’s profits were hampered by a weaker performance from its mail-order business as it sought to expand its digital offering.”