Northern Investors says that the orderly realisation strategy adopted by shareholders in 2011 has made significant progress over the past year, with a continuing reduction in the number of remaining holdings in the portfolio and significant further returns to investors. In March 2016 the company completed its fifth tender offer to shareholders, as a result of which GBP15.3 million was distributed. This takes the total cash returns since July 2011 to GBP76.7 million, with a further GBP17.1 million of net assets still on the balance sheet at 31 March 2016.
The net asset value (NAV) per share at 31 March 2016 was 685.4 pence, an increase of 31.1% from the corresponding figure of 522.7 pence at 31 March 2015. Over the past five financial years the NAV per share has increased by 125%. The total return per share for the year as shown in the income statement was 159.5 pence, equivalent to 30.5% of the opening NAV. Gains realised on investment sales during the year amounted to 103.6 pence per share, as value continued to be unlocked by the run-off process. During the year the mid-market share price rose by 25%, from 507.5 pence to 635.0 pence.
The directors propose a dividend for the year ended 31 March 2016 of 24.0 pence per share (last year 17.0 pence).
Successful exits were achieved from Arleigh Group, Control Risks Group Holdings, Direct Valeting, Kitwave One and Wear Inns. A total of GBP20.8 million was realised from sales during the year, representing a satisfactory uplift over the GBP15.8 million carrying value of the relevant investments at the start of the year.
Whilst further tender offers remain a possibility, your directors will give careful consideration to the possibility of adopting an alternative method of distribution which returns cash to all shareholders pro rata to their holding. We are aware that the proportion of the company’s shares held by private investors has increased progressively over the past five years and that, in the light of recent changes to the taxation of dividend income and capital gains, some of these investors may have a strong preference for returns to be taxable as capital rather than income.
NRI : Northern Investors makes progress with disposal programme