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Chelverton UK Dividend hit by Conviviality and Fairpoint

Chelverton UK Dividend hit by Conviviality and Fairpoint

Chelverton UK Dividend hit by Conviviality and Fairpoint – Chelverton UK Dividend Trust has published results for the year ended 30 April 2018. The net asset value as at 30 April 2018 was 249.61p (2017: 248.35p), an increase over the year of 0.51%. The shares benefited from a narrowing of the discount and, at the end of the period the share price was 251p per share (2017: 230p). However, over the same period the MSCI Small Cap Index increased by 10.5%. In the year total dividends were 8.46p (2017: 7.95p), an increase of 6.4% over the previous year. In addition, the board has declared a special dividend of 0.66p.

Holding a couple of stocks that ran into trouble hit returns this year. Conviviality was the owner of Matthew Clark and Bargain Booze. Fairpoint was a legal services business.

Extract from the manager’s report

In the last year we have had only one takeover (2017: 4), which was Cape Industries. Including the takeover of Cape Industries, three holdings (2017: 13) from the portfolio were sold in their entirety, Bioventix, Games Workshop Group and Morgan Sindall Group. Unfortunately, two companies, Fairpoint Group and Conviviality, went into Administration and whilst this is very unusual for this portfolio, it is an occupational hazard of equity investment.

In addition, shareholdings were reduced in twelve companies, including Amino Technologies, Brewin Dolphin Holdings, Curtis Banks Group, DiscoverIE Group, GVC Holdings, Huntsworth, Jarvis Securities, Numis Corporation, Personal Group Holdings, Polar Capital Holdings, Ramsdens and Statpro Group after strong share price performances.

Twelve new shareholdings were added to the Company’s portfolio in the year, including: BCA Marketplace – a used vehicle market place; De La Rue – banknote manufacturing, security printing of passports, tax stamps, brand authentication; Essentra – supplier of plastic and fibre products; Flowtech Fluidpower – distributor of technical fluid power products; Headlam Group – distributes floor coverings throughout Europe; Northgate – specialist in light commercial vehicle hire; Palace Capital – property investment; Premier Asset Management Group – retail asset management; Restaurant Group – operator of restaurants and public houses; Revolution Bars Group – operator of bars, restaurants and party venues; Saga – specialist in services and products for life after 50, and; Strix Group – electrical component manufacture.”

SDV : Chelverton UK Dividend hit by Conviviality and Fairpoint

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