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QuotedData’s morning briefing 5 August 2022

In QuotedData’s morning briefing 5 August 2022:

  • Fidelity European (FEV) has announced its interim results for the six months ended 30 June 2022. During the period, FEV’s total return was -12.0%, which it says compares to a total return of -15.1% for the FTSE World Europe (ex UK) Index which is the Company’s Benchmark Index. The share price total return was -16.0%, which is below the NAV total return because of a widening of the share price discount to NAV (all figures in UK sterling). FEV’s NAV outperformance was the portfolio being geared (at around 12% throughout the period). The contribution from stock-picking was strong during this period and was boosted, particularly, by takeover bids for two companies in which FEV has significant holdings. Swedish Match has agreed to be acquired by Philip Morris International at a substantial premium to its trading price, while Atlantia is being acquired by its controlling shareholder in partnership with a private equity company. In terms of corporate activity, Société des Bains de Mer de Monaco has also benefited from crystallising its long-held investment in the on-line gaming company Betclic. Deutsche Börse Group was also a strong performer during the period benefiting from heightened volatility which drives higher volumes on its derivatives exchange Eurex and higher interest rates which boost interest income earned on customer balances held at Clearstream.
  • JPMorgan Claverhouse (JCH) has published its interim results for the six months ended 30 June 2022. During the period, JCH provided an NAV total return of -12.8% (with debt at par), while its benchmark, the All Share Index, fell just 4.6%. The investment managers, William Meadon and Callum Abbot, say that, at the start of the period, JCH’s portfolio was positioned for a post-COVID economic bounce and so was cyclically biased with a good representation to consumer stocks which, after two years of lockdown, they thought were well positioned for the opening up of economies which was starting to take place. However, the sudden outbreak of war in Ukraine in February changed all that and necessitated some radical shifts, and a higher turnover than usual, in the portfolio. The managers say that it was difficult to get ahead of the market’s rapid fall and, at times, the move in some share prices bordered on complete panic. The extent to which the market was driven by macro concerns, whilst fundamentals were often neglected, is unusual and reflects the fear present in the market. By the end of the period though, the portfolio was more defensively positioned and had even lower gearing than the start of the period.
  • Ashoka India Equity (AIE) has issued a notice that reminds shareholders that the trust operates a voluntary redemption facility through which shareholders may request the redemption of all or part of their holding of redeemable ordinary shares for cash on the last business day in September each year. There is no requirement for shareholders to take any action should they wish to retain their ordinary shares and none of the companies’ directors will be redeeming any of their shares under the redemption facility.
  • The Renewables Infrastructure Group (TRIG) has published its interim results for the six months ended 30 June 2022. During the period, TRIG’s NAV has increased by 12.5%, driven by increases in wholesale power prices and inflation feeding through into TRIG’s revenues and portfolio valuation. TRIG has provided the following key highlights from the results:
    • 134.2p Net Asset Value (NAV) per share, increased by 12.5% since 31 Dec 2021 (119.3p)
    • £3,236m Directors’ portfolio valuation, up 18.7% since 31 Dec 2021 (£2,726m)
    • 6.84p dividend target reaffirmed for the year to December 2022 (2021: 6.76p)
    • 1.39x dividend cover for the six months to 30 June 2022 (H1 2021: 1.28x)
    • £442m invested year to date (H1 2021: £341m)
    • 17.9p earnings per share (H1 2021: 1.8p)
    • In addition, during the period, TRIG’s activities avoided the emission of 960k tonnes of CO2; its portfolio is capable of powering 1.7m homes with clean energy; it supported 36 community funds with £1.2m budgeted for community contributions in 2021 and had 0.52 reportable lost time accidents per 100,000 hours worked.
  • Fundsmith Emerging Equities Trust (FEET) has published its interim results for the six months ended 30 June 2022. During the period, FEET provided an NAV total return of -16.5% and a share price total return of -20.9%, both of which markedly underperformed the MSCI Emerging and Frontier Markets Index, which provided a total return of -8.2% (all in sterling terms). The Company underperformed the index during the period under review, primarily due to investor sentiment moving away from more expensive ‘growth’ companies. There has also been a net outflow of funds from emerging markets in anticipation of US dollar strength in a rising interest rate environment. India, which had seen strong fund flows in 2021 into overly buoyant capital markets saw a sharp reversal in this trend. In addition, FEET is unlikely to invest in financials, materials, energy and real estate (something that manager has discussed at length in the past) and these were the four areas of the index to perform positively in the first half of the year.
  • Apax Global Alpha (APAX) has published its funds’ valuations as at 30 June 2022. To summarise, all of its holdings in Apax funds are down over the second quarter, with the exception of its holding in Apax X (Euro tranche) which rose 3% (while the US dollar tranche fell by 4%). Otherwise, the falls range from -2% for both Apax VIII (Euro holding) and Apax Europe VI, to -23% for Apax Europe VII. More detail will be included in APAX’s half-year results, which are due to be released on Friday 19 August 2022.
  • ScotGems (SGEM) has announced that the investment manager has now realised 91% of the trust’s portfolio. SGEM says that the majority of the realisation proceeds are being held in sterling.
  • BlackRock Energy and Resources Income (BERI) has published its interim results for the six months ended 30 June 2022. During the period, BERI provided an NAV total return of 35.9% and a share price total return of 49.7%. Although BERI does not have a formal benchmark, to set this in the context of the market backdrop, the EMIX Global Mining (ex Gold) Index rose by 5.1% and the MSCI World Energy Index rose by 59.1% over the same period (all figures in sterling total return terms). BERI had 21.1% of its portfolio invested in stocks with exposure to the Energy Transition sector and the decarbonisation of the energy supply chain as at 31 May 2022. There is no reference index that currently reflects the composition of the investment universe for this sector, but for illustrative purposes, the S&P Global Clean Energy Index decreased by 10.5% and the Wilderhill Clean Energy Index decreased by 34.2% over the same period (both in Sterling terms with dividends reinvested).
  • Literacy Capital (BOOK) has announced that it completed its acquisition of Ashleigh & Burwood, a leading independent UK-based home fragrance manufacturer, on 1 August 2022. BOOK says that it has acquired a majority stake, although further financial terms have not been disclosed. Founded in 1993 by father and son, John and Andrew Nettleton, Ashleigh & Burwood designs and manufactures both branded and white-label fragrance products including candles, room sprays, and reed diffusers, predominantly for the home. Around 40% of sales are international, with a strong and growing presence in Europe, the US, and Japan. Tony Buffin joins the business at completion as Non-Executive Chairman. BOOK says that he brings a wealth of consumer industry experience having successfully led Holland & Barrett as CEO and previously serving as CFO at Travis Perkins and Coles Group in Australia. In addition, Jed Kenrick will join the company as Chief Operating Officer. He will help to scale-up operations; he previously served in similar roles at Dyson and Travis Perkins. The transaction represents Literacy Capital’s twentieth platform investment completed since the inception of the fund in September 2017, its fourth since the fund was listed on the London Stock Exchange in June 2021 and second of this calendar year.

We also have news of a sizable acquisition by Home REIT

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