Rights and Issues (RIII) announced its interim results for the six month ended 30 June 2024. The company delivered a strong first half with NAV up 13.2% and total shareholder returns reaching 15.8%, outperforming the index which gained 7.4% on a total return basis. The company’s discount narrowed to 8.2% at the end of the period.
During the period, RIII also announced that lead investment manager Dan Nickols has decided to retire from the industry and formally left Jupiter Asset Management on 30 June. The board noted his support in helping RIII navigate the transition from a self-managed company, and some of the most challenging market conditions for UK smaller companies. As part of the succession process, Matt Cable, who began his investment career in 2001 and has been co-manager of RIII since Jupiter’s appointment in October 2022 working with Dan for over four years, has been appointed as lead manager for the company with effect from 30 June. He will be supported by Tim Service and the other members of Jupiter’s UK small and mid-cap team.
Regarding the performance, the positive returns achieved over the review period were the result of the company’s strategic approach. This is an actively managed fund with a highly concentrated portfolio. Two portfolio holdings were acquired during the period while the company made the decision to divest from Carr’s Group. Additionally, the portfolio was enhanced with additions of Jet2 and GB Group. This continues the work started 18 months ago to diversify and modestly reduce the concentration of the portfolio, whilst maintaining the company’s traditional approach to UK listed smaller companies.
Discussing the outlook, chairman Andrew Hosty commented:
“With the recent change in government following the UK general election, we are closely monitoring policy developments. With inflation appearing to steady and the potential for interest rate reductions to occur, we think this should provide an improved environment for investors. That said, there remain significant global headwinds with the continuing conflicts in Ukraine and the Middle East, plus the uncertainty around an election in the USA. While we are aware of these factors, we will continue to encourage our investment manager to seek out opportunities to invest in differentiated companies operated by good management that they believe to be fundamentally underpriced. There may also now be stronger macroeconomic forces that would result in a fundamental reassessment of the pricing of the UK’s smaller companies sector. Our commitment to rigorous risk management and disciplined investment practices remains steadfast. The board believes that our investment managers at Jupiter have the skills and knowledge to identify these opportunities and continue to be well-placed to deliver value for your company into the future.”
RIII Rights and Issues fast out of the gates in 2024.