The Edinburgh Investment Trust (EDIN) announced its annual results for the period ending 31 March 2023. Net Asset Value (NAV) per share (with debt at fair value) on a total return basis increased by 7.9%, comfortably exceeding the 2.9% return on the FTSE All-Share Index. The share price total return was 8.4%. Dividends for the financial year grew 5.6% compared with the previous year, equivalent to a yield of 4.0%. The company’s discount to NAV narrowed marginally from 7.7% to 7.5%.
Since James de Uphaugh became manager of the company in March 2020, the cumulative NAV return of +65.9% and the share price return of +75.5% have outperformed the FTSE All-Share return of +47.4% (all in total return terms).
Manager, James de Uphaugh, commented on the results:
“It is now just over three years since we became the manager of the company. We took over in the midst of the market sell-off in March 2020, as the full implications of the COVID pandemic began to dawn. Since then, our investment approach has helped us deal with an at times rapidly changing economic and market backdrop. As it turns out, we became stewards of your portfolio towards the lowest levels of the market. Absolute returns have been strong since then.
“In terms of the main stock contributors over the last year, the top three were BAE Systems, NatWest and Centrica. These stocks encapsulate the diversified nature of the portfolio. Other contributions came from Greggs, Standard Chartered and Weir. The better recent returns from the UK equity market strike us as the early stages of a recovery in the market. This recovery is rooted in the undervaluation of UK equities that has built up over time and we remain optimistic about the specific prospects for the Company’s holdings.
“Overall, 2023 could see lower inflation, peaking interest rates and perhaps a slightly better tenor from the consumer. A balanced, diversified portfolio is as important as ever.”
Commenting on the outlook, chair, Elisabeth Stheeman added:
“There is enthusiasm about the underlying prospects for the stocks in the company’s portfolio. Set against this is the ever-uncertain economic outlook. The manager’s approach of maintaining a diversified portfolio is therefore an important feature that should help protect shareholders’ capital over time. Meanwhile, many UK equity market constituents in the portfolio stand at a valuation discount to their international peers. Over time, if these companies deliver the operational results that we believe they can, it seems reasonable to expect this valuation differential to close. Combined with a dividend yield of 4.0%, we believe this leaves the Company well positioned to deliver to shareholders attractive total returns.”
EWI : Edinburgh Investment Trust continues its momentum.