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QuotedData’s morning briefing 17 March 2021

UK Mortgages UKML

In QuotedData’s morning briefing 17 March 2021 –

  • UK Mortgages’s (UKML’s) interim results to 31 December 2020 delivered a 7.7% total NAV return. Chairman, Christopher Waldron, said the following in his notes: “Clearly, since those early days of the COVID-19 pandemic our worst fears over the extent of mortgage holidays and the consequences of other forbearance measures have not materialised and, although the pandemic may not be over, with the pace of vaccinations we can see a likely path to recovery through 2021. Despite the general lockdown, house prices have remained resilient and with interest rates unlikely to rise for some time and mortgage lending margins being maintained, the economic background for the Company is positive. At the time of my last chairman’s Statement in October, the Company had only recently rejected the final indicative bid approach from M&G Specialty Finance Fund and was about to begin a strategic review process. This was intended to address the recurring issues of liquidity, the discount to NAV, future expected returns and dividend coverage. Consequently, during late October and early November, the Board and the Portfolio Manager held meetings with the majority of our significant shareholders to outline what was described as “UKML 2.0.”
  • Tech-focused Manchester & London (MNL) reported interim results to 31 January 2021, posting a 2.4 % total NAV return, compared to an increase in the benchmark MSCI UK Investable Market Index of 11.8%. Chairman, David Harris, noted that “it has been a period where small capitalisation stocks, unprofitable Technology hopes, Cryptocurrencies and Reflation Value plays have been in vogue, whilst mega-capitalisation Technology (with the exception of Apple and Tesla) has lagged.”
  • On 16 March 2021, the Apax X fund, in which Apax Global Alpha (AGA) is a limited partner, announced that it has entered into a definitive agreement to acquire a majority stake in Lutech SpA, a leading IT services, software and technology company in Italy. The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions.  On a look-through basis, AGA is expected to invest approximately €8.5m in the company.
  • Empiric Student Property has reported full year results to the end of 2020, in which revenue was down 16% to £59.4m as the group was hit by COVID. Occupancy for the current year (2020/21) was 70% versus a normal rate of 94%, while bookings for the upcoming academic year (2021/22) are just 20% “significantly slower” than previous years. The group’s portfolio was down 2% to £1,005m, which contributed to a fall in EPRA net tangible assets of 4.7% to 105p per share.
  • Residential Secure Income (RESI), which invests in affordable shared ownership, retirement and local authority housing, has acquired 68 income-generating shared ownership homes in Swindon from Metropolitan Thames Valley Housing, for £5.1m. The transaction builds on the partnership between RESI and Metropolitan Thames Valley Housing in London and Cambridgeshire, which delivered 138 shared ownership homes during 2020. Shared ownership allows a purchaser to buy a property with a lower deposit requirement and lower annual costs, making the homes more affordable. RESI said the properties generate an expected inflation-linked leveraged yield in line with its 8% total return and 5% dividend targets.

We also have annual results from JPMorgan ClaverhouseFidelity European, and Baillie Gifford Shin Nippon.

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