SQN on target as it prepares to deploy C share cash

SQN Asset Finance Income paid dividends totalling 6.26p during the second half of 2015 while its NAV edged off a little, falling from 99.93p to 99.84p. The share price rose by a quarter of a penny to 108p. the weighted average yield of the portfolio remains above 9.5% and the average term of their leases is off a little from 72.3 months to 71.3 months.

At 31 December 2015, investments in the portfolio were spread over eleven different industries and asset classes with manufacturing and manufacturing equipment accounting for both the largest single asset class and industry concentration at 15.38% and 11.15% respectively on a consolidated basis as a percent of NAV. Energy assets and un-leveraged marine vessels accounted for 11.60% and 7.39% of the portfolio respectively and rounded out the top three asset classes. Together with the manufacturing industry, the transportation and agricultural industries had respective exposures of 10.67% and 8.15% and made up the top three industry exposures in the portfolio.

Project financings for anaerobic digestion plants are a meaningful part of the portfolio and pipeline. These investments fall under either agricultural or the waste processing industries, dependant on feedstock and are expected to increase as a percent of the overall Group’s assets as commitments are drawn down and the  ‘C’ Share proceeds are invested.

Portfolio risk was spread over more than 30 companies with an average investment size of over £5m. The performance of the underlying investments in the portfolio has been strong with no defaults over the period.

SQN Asset Finance held a significant amount of cash at the half year end as a result of partially drawn project financings and the ‘C’ Share proceeds raised in November 2015. They intend to deploy the cash on hand throughout 2016 and convert the ‘C’ Shares when appropriate within that time scale. They expect some rebalancing among the portfolio concentrations including currency.

SQN : SQN on target as it prepares to deploy C share cash