News

Herald proves ‘resilient’ through second year of Covid

Herald proves ‘resilient’ through second year of Covid – Herald has published its annual report for the year to 31 December 2021. During the period under review, the NAV increased by 19%, compared to an increase in the comparative total return indices of 17.8% and 15.2%.

The portfolio is focused on growth companies, and only a subset of the portfolio pays a dividend. Net dividends received grew by 41.3% from the previous year although, as noted last year, they were heavily depressed in 2020 by lockdown uncertainty. Nonetheless, dividends have still appreciated 14.8% from pre-Covid 2019. The directors do not recommend a dividend for the year ended 31 December 2021.

Statement from the chair:

2021 has been a mixed year with an unusually small proportion of the portfolio delivering the returns. More positively we are pleased that the portfolio has proved resilient through the second year of Covid. The Net Asset Value per share has appreciated 63.0% over the two years affected by the pandemic. Furthermore, Bloomberg estimates of the P/E (price to earnings) of the portfolio has only increased by a tenth over the two years and has actually declined a little over the last year. This NAV increase reflects takeover premiums, earnings growth, and the highly rated software sector being usefully rerated, while more modestly rated stocks have appreciated as a proportion of the whole. This provides a more solid base from which to go forward.

The fact that we have managed to operate relatively normally during the Covid period is due in large part to the dedication of the Herald Investment Management team. There have been many examples of team members going beyond what could have been reasonably expected and I am immensely grateful to them for their support during this difficult period.

As ever there is much to worry about geo-politically with uncertainties in Russia/Ukraine, China/Taiwan/US and the US/Iran of particular concern. Added to these, this year we have the new challenge of soaring energy prices which, when combined with supply-chain inflation, and inevitable fiscal tightening, seems bound to put pressure on consumer spending. However, much of the technology sector has become non-discretionary spend for consumers, businesses and governments alike and we still see strong growth prospects in our chosen sector. This, combined with the quality of the companies in the portfolio, means that your board remains optimistic about our future prospects.

HRI : Herald proves ‘resilient’ through second year of Covid

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…

Exit mobile version