North Atlantic Smaller Companies reports 12 month numbers – During the 12 months to 31st January 2018, the fully diluted NAV of North Atlantic Smaller Companies Investment Trust (NAS) rose by 16.5%, to 3.458p. This compares with a rise in the sterling adjusted S&P’s Composite Index of 9.8%. There are three areas of activity in the portfolio that contributed to performance, the quoted equities portfolios, the unquoted portfolios and liquidity holdings:
UK quoted portfolio
The company reported positive contributors to performance from the UK portfolio. Examples given were the recent purchased holding of Polar Capital, Ten Entertainment Group and MJ Gleeson Group. EKF Diagnostics also performed well rising by 60% following 3 profit upgrades. Bioquell rose by nearly 120% as the new management reduced costs and focused the business. The main detractor to performance on the UK side was Goals Soccer Centres. The company is in the first year of a three year turnaround and performance is improving slowly.
US quoted portfolio
In the report, the company stated that the US bank portfolio (consisting of Mountain Commerce and Metropolitan Bank Group) performed very well during the twelve month period. The company quotes Ambac Financial Group as an example of a detractor to performance. It fell over the period due to exposure to Puerto Rico, which suffered catastrophic structural damage following Hurricane Maria.
Liquidity:
The company held in excess of £100m in cash and liquid assets, down from £129m last year. The chairman stated in his comments that, “In retrospect, our cautious liquidity position mainly held in the US dollars proved wrong as equity markets continued their upward trajectory despite valuations reaching levels where it is difficult to see little, if any, fundamental value. It is a truism that all bull markets are based on “it will be different this time.” In my experience it never is, and preserving capital is critical to securing long term performance.”
NAS : North Atlantic Smaller Companies reports 12 months numbers