Liontrust’s Edinburgh Investment Trust endured a testing financial H1, but its prospects have brightened since 30 September 2022. During the six-month period, it saw net asset value (NAV) fall 8.2%, while the value of its shares dropped 11% to end the period at 553p.
The trust’s NAV only marginally outstripped its benchmark, the FTSE All Share index, which returned -8.3% during the timeframe. Though the refinancing of its debenture at the end of September gave a boost of around 4% to NAV during the period, it only slightly offset what the report deemed to be “underperformance at the portfolio level”.
On 30 September the trust was also trading at a discount of over 10%, a fall from 7.7% at the end of March.
Despite the company’s middling performance during the half, it has since rallied. Edinburgh IT’s share price has rebounded to 632p as of 23 November, an increase of around 14% from 30 September’s figure, and the discount at which it trades has since softened to 6.5%.
The trust invests primarily in UK securities and had just less than £1.1bn worth of assets on 30 September. According to the trust’s website, this has since grown to £1.2bn.
The company also announced a first interim dividend of 6.4p per share, which will be paid to shareholders on 25 November. This first interim dividend is 6.7% higher than the 6p that the trust declared this time last year.
Its revenue return per ordinary share is also up 7.3% on last year, sitting at 14.77p for 2022.
Shell is the trust’s largest holding, amounting to 8.2% of the portfolio, while Tesco, Natwest, HSBC, and Astrazeneca are also in its top 10.
The chair of Edinburgh Investment Trust, Elisabeth Stheeman, said that there were many reasons to be positive, and that the company is in a strong position to take advantage of the attractive opportunities that are now arising.
“Things are in good health, and this should support attractive returns to shareholders in the years ahead”, she said.
James de Uphaugh (pictured), a manager of the portfolio, said: “Equity markets gave up some ground over this six-month period. Part of that is the general weakness of global equity markets, part was self-made problems in the UK owing to the political uncertainty.”
Uphaugh was hopeful, however, that the worst has passed: “The good news is that inflationary pressures are easing as commodity prices come off their highs. Supply problems are also easing. The UK economy is slowing, but a deep recession is not a certainty, especially if the job market can remain robust.”
On this basis, he said, the trust’s portfolio is “well-placed” to deliver on its objectives in the years ahead.
Since manager inception in March 2020, the trust has posted a cumulative NAV return of 41.2%, compared to 31.3% for the FTSE All Share