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QuotedData’s morning briefing 30 March 2020

  • EasyJet has grounded its entire fleet on a morning that has also seen the price of crude oil fall below $20 (an 18-year low).
  • Jupiter UK Growth (JUKG) reported interim results to 31 December 2019, with the total return NAV increasing by 7.8%. The focus is of course on covid-19. Chairman, Tom Bartlam, said: “In these turbulent times, when the outlook remains so uncertain, there is only limited comfort to be taken from statements about future prospects. The board believes that Richard Buxton, whom we decided to appoint as our new manager, and who has managed money through both the two worst bear markets of the last 30 years, has the necessary experience and judgement to achieve significant improvement in the trust’s performance, consistent with his long-term performance record. Until his expected arrival at the end of April we will be monitoring the portfolio closely and have put in place interim arrangements with Jupiter intended to enable us to take advantage of opportunities that arise as a result of any dramatic change in current market conditions. The board and the investment manager remain committed to growing the company over time, recognising that the net assets, particularly after the recent dramatic market fall which has reduced our market capitalisation to £28m at 24 March 2020, are now well below the minimum size preferred for prospective investment by many institutional and wealth management investors.  We have already raised this serious issue with Richard Buxton and will work with him and his colleagues to address it once the new arrangements are in place. While we have made our decision about the future management of the trust, we are also conscious that these are exceptional times in the financial markets. Our intention therefore is to keep our management arrangements under review over the coming months while the economic and market backdrop evolves and to remain cognisant of our reduced market capitalisation. If circumstances demand a change of course, we will not hesitate to make that change if we judge that to be in the best interests of shareholders as a whole.”
  • Global smaller companies sector company, Smithson (SSON), released an update: SSON said that  from January 1st 2020 up to and including the 26th March 2020, the NAV of the trust fell (8.4%) while the reference equity index, the MSCI world small and midcap index, is down 20.4%. In the same period, SSON’s share price is down 14.3% and is now trading at a discount to NAV for the first time. Simon Barnard, portfolio manager, commented: “The portfolio has held up well in relative terms during this challenging period. Although we own one travel related company which has been hit hard by the reduction in flights and hotel stays, we also own several healthcare related companies, including a company which makes respiratory equipment, which have benefited from an increase in demand related to Covid-19.”
  • Subsequent to its announcement on 20 February 2020, Greencoat UK Wind (UKW) completed the acquisition of Slieve Divena II wind farm from SSE Renewables for £51m. Slieve Divena II has a capacity of 18.8MW and load factor of 31.3%, receives 0.9 ROCs per MWh, and has been operational since June 2017. The acquisition was funded by UKW’s acquisition facility plus reinvestment of portfolio cash of £24m.
  • Starwood European Real Estate Finance (SWEF) announced the agreement of commercial terms, and significant de-risking, of the largest hospitality asset in its lending portfolio. The borrower of the hotel, Dublin, Ireland, on which the company has a €60m loan, has granted a licence to the Health Service Executive, Ireland’s  public healthcare provider, which allows the HSE to use the hotel and convention centre for accommodation and the provision of healthcare and other important services to the Irish public.

Also, Fair Oaks Income said it was suspending its dividendEuropean Assets is lowering its management fee by 5bps, Macau Property Opportunities provided an update and finally Hipgnosis Songs continues to expand (adding Richie Sambora’s catalogue).

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