Biotech Growth (BIOG) has hailed its recovery from its sector’s bear market of the past three years, posting a 36.9% total investment return for the six months to 30 September. The rebound, which smashed the 10.6% in the Nasdaq Biotechnology index, reflected “exceptional returns” from the likes of Mineralys Therapeutics, Alnylam Pharmaceuticals and Avidity Biosciences as each benefited from positive clinical data, regulatory progress or acquisition interest. Increased exposure to Chinese biotech companies also helped, as did lifting gearing, or borrowing, from zero to 9% to elevate market exposure. However, the former was later reduced to 15.7% of the portfolio to mitigate political risks. It was not all plain sailing as the weak dollar crimped returns from the largely US portfolio and Vertex Pharmaceuticals and Gilead Sciences fell due to regulatory setbacks and weaker-than-expected product launches.
James Carthew, QuotedData’s head of investment company research, said: “The pick up in Biotech Growth’s performance is very welcome but there is a long way to go before it catches up with rival International Biotechnology (IBT). With the discount now in single figures, hopefully the pace of buybacks will ease. However, the target is for a discount of 6%, which – given the focus on small caps – feels a bit too ambitious to me. I’d rather not see BIOG go the way of Bellevue Healthcare (BBH). Radically shrinking the trust to narrow the discount by a further three percentage points when the NAV has just jumped 37% in six months and the biotech rally may just be getting going seems like overkill to me.”
Grainger (GRI) has published good annual results following its recent conversion to a real estate investment trust. The £1.4bn rental home provider said 98.1% of its properties were occupied in the six months to 30 September with the portfolio generating 12% rises in net rental income and earnings per share that supported a 10% uplift to dividends. Net asset value was unchanged at 298p per share although the overall portfolio valuation gained 0.7%. Chief executive Helen Gordon said: “Our asset class is characterised by strong fundamentals and is low-risk. Both residential rents and capital values have outperformed commercial real estate for the past twenty years. Residential rents, on average, outperform inflation. The net asset value of our portfolio has proven resilient again this period, backed up by disposals, and over the past five years despite increased interest rates the net asset value of our portfolio has increased +5%.”
Supermarket Income (SUPR) and joint venture (JV) partner Blue Owl have bought 10 omnichannel Asda stores for £196m on a net initial yield of 7.4%. Terms have also been agreed to transfer five of SUPR’s assets into the partnership for £232m at 3% above valuation. This follows the JV’s initial seeding with £403m of assets transferred from the real estate investment trust in April. The transactions are in line with SUPR’s strategy of deploying capital into more attractive opportunities and growing the JV to £833m and 23 assets.
LondonMetric Property (LMP), the acquisitive listed logistics fund that recently bought an 11% stake in Schroder Real Estate (SREI), has shown the benefit of this year’s takeover of Urban Logistics with net rental income rising 14.6% to £221.2m in the six months to 30 September. Earnings per share rose to 6.7p from 6.6p to cover dividends of 6.1p per share, up from 5.7p. Net tangible assets (NTA) per share edged 0.2% higher to 199.5p.
Utilico Emerging Markets (UEM) celebrated its 20th anniversary with a strong half-year result despite the challenge of US tariffs and volatile markets. Net asset value rose 10.8% in the six months to 30 September with a total underlying return of 12.7% from the global portfolio of utilities and infrastructure providers with dividends included. These rose 6% to 4.75p per share, fully covered by earnings which leaped 24.6% to 8.15p per share. Chair Mark Bridgeman said: “Looking at the company’s long term performance, over a five year period and since inception, UEM has returned 67.8% and 494.3% (9.2% per annum) respectively, outperforming the MSCI EM total return index, which was up 34.6% and 379.5% (8.1% per annum) over the same periods.”
