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QuotedData’s morning briefing 11 November 2022

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In QuotedData’s morning briefing 11 November 2022:

  • Capital Gearing Trust (CGT) has announced its interim results for the six months ended 30 September 2022. At the half-year end, CGT’s net asset value per share was 4,798.4p, compared to 5,025.1p at 31 March 2022. This represents an NAV total return of -3.5% over the previous six months and -1.8% over the previous 12 months. The trust’s chairman, Jean Matterson, comments that whilst this performance is disappointing in absolute terms, it is a relatively satisfactory result when compared to overall market declines. CGT’s returns over the period were boosted by the weak performance of sterling against the dollar as 50% of the Company’s assets are invested overseas, and of these, 25% are dollar denominated. Inflation-linked securities – both government bond and infrastructure asset classes – have performed relatively well, with the latter benefitting from higher power prices, albeit first half strength gave way to weakness towards the end of the period. On the downside, the property holdings were disappointing and the largest detractor from performance, although CGT Company did benefit from the takeover of one investee company.
  • Scottish Mortgage (SMT) has announced its interim results for the six months ended 30 September 2022. During the period, SMT’s NAV fell by 15% versus 7% for its All-World index benchmark. SMT’s board is recommending an interim dividend of 1.60p per share, an increase of 5% over last year’s payment of 1.52p. Moderna remains SMT’s largest holding. It continues to make progress in its infectious disease portfolio. SMT’s manager says that it has always been its contention that Moderna’s technology would have applications well beyond Covid, and commercial partners are now committing serious capital to such developments. Despite the economic headwinds, Tesla has been able to sell every car it can manufacture and continues to scale up its production capabilities rapidly. Its execution in a challenging operating environment has been impressive, as has its ability to control costs whilst growing sales. The Model Y SUV is the crucial volume driver over the next few years, with production ramping up in Berlin and Texas. Scaling the battery cells’ supply chain remains the most significant constraint. A further investment into Northvolt during the period and it is now one of SMT’s largest positions. The manager says that the private European battery producer is looking increasingly well-placed to supply the rapidly growing demand for electric vehicles.
  • Riverstone Credit Opportunities Income (RCOI) says that it has noted the announcement published on 9 November by Harland & Wolff Group Holdings Plc that says that the latter has entered into an exclusive term sheet with Astra Asset Management (Astra) for the proposed refinancing of Harland & Wolff’s credit lines. RCOI says that the completion of the arrangements envisaged by the term sheet with Astra would result in a full and attractive refinancing of the first lien green term loan initially funded by Riverstone Credit Partners in March 2022. RCOI has to date committed US$14.1m of the current US$56m loan. RCOI says that it will update again in due course.
  • Urban Logistics REIT (SHED) has posted half-year results that show a 3% fall in NAV in the six months to 30 September 2022. The market-driven yield erosion within its portfolio (35 basis points in the six months) was largely offset by asset management initiatives – limiting the reduction in EPRA NTA to 3%. Earnings per share was 3.38p, covering its dividend for the period of 3.25p. The portfolio’s like-for-like Estimated Rental Values (ERV) was up by 5.4% in the period, demonstrating the continued strength of the occupational market. The group’s loan to value ratio was 22.3%, with its £310m of debt having a weighted average maturity of 6.4 years. Weighted average debt costs of 3.0% for the period, with 97% hedged or fixed. There is no refinancing required until August 2025.
  • Shareholders in Fundsmith Emerging Equities Trust (FEET) have voted overwhelming in favour of winding up the trust as well as approving the change in investment policy to this effect.

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