North Atlantic Smaller Companies reports that for the six month period to 31 July 2016, the fully diluted adjusted net asset value (with Oryx under the equity method of accounting) rose by +3.0% as compared to a rise in the sterling adjusted Standard & Poor’s 500 Composite Index of +20.6% and the FTSE Small Cap Index of +6.7%.
The biggest impact on the quoted portfolio was the fall in the price of MJ Gleeson Group which reduced the net asset value by GBP6.3m together with a more modest fall in the value of Goals Soccer Centres which cost a further GBP2.0m. In total these two holdings reduced the NAV by approximately 2%. In the UK, Oryx performed broadly in line with the index with the net asset value rising by 6.2% over the period. AssetCo and EKF Diagnostics Holdings also performed well rising by 15% and 25% respectively. BBA Aviation rose 45% and Bioquell (adjusted for a share buyback) rose just over 20%. In the US, the Company’s modest position in AMBAC Financial Group performed well rising by nearly 30% over the period.
Within the unquoted portfolio, the principal disappointment during the six month period was the need to write off two thirds of the investment in Team Rock following results that fell significantly short of the business plan. This was almost offset by Indoor Bowling Equity which continues to perform in excess of expectations.
The company has been very defensively positioned with cash or near cash of around 40% of the value of the investment portfolio. Fortunately, the majority of this was held in US Dollars so North Atlantic Smaller Companies has so far benefitted considerably from the weakness of Sterling following the BREXIT vote.
NAS : North Atlantic Smaller held back by MJ Gleeson and Team Rock