Nick Train has initiated a stake in a UK company for the first time in nine years despite remarking on the “sobering” reality of the dearth of valuable British-owned brands.
Train’s eponymous investment boutique now owns a £12.2m stake in British consumer goods firm PZ Cussons, data from Refinitiv shows, representing a 1.6% stake in the business.
Annual results for Train’s Finsbury Growth & Income trust published yesterday show him having built up a £4.2m position in the FTSE 250 company by the end of September.
Train teased the new investment in his portfolio manager’s review, telling shareholders he had been “slowly building a position in a company that has been deeply out of favour for a number of years” but stopped short of naming the stock.
The acquisition of shares in Imperial soap maker PZ Cussons marks Train’s first investment in a UK-listed company since purchasing pub group Greene King in 2010.
Train who is known for his buying and holding a concentrated crop of stocks over the long term hasn’t invested in a new company since 2017 when he bought shares in Manchester United. Before that he picked up shares in spirits maker Remy Cointreau in 2015 and four years before that snapped up a stake in Heineken.
Lack of valuable UK brands makes for ‘sobering reading’
Train’s investment in PZ Cusson is surprising considering comments he made about the lack of valuable UK brands at a roundtable event at the Association of Investment Companies earlier this month.
Train pointed out there are only five British-owned brands in Interbrand’s 2019 rankings of the top 100 global brands, a fact he said was “disappointing” and made for “sobering reading”.
“I know what you’re saying about the value in UK small cap and manufacturing, I think it’s absolutely right,” he told fellow presenter Laura Foll, who is co-manager on the UK-focused Lowland Investment Company.
“And yet for us as franchise brand investors, I just think it’s so disappointing that there’s only five British brands in what Interbrand thinks are the world’s top 100 most valuable.”
Train said the problem is historically British companies have been too quick to sell.
“Partly it’s because we sold Rowntree’s to the Swiss; partly it’s because we sold Cadbury too cheaply to the Americans,” said Train. “We haven’t understood the value of these brands, but it’s sobering reading to realise how few brands we have quoted in the London market.”
Train grows own stake in FGT
Elsewhere the FGT annual results revealed Train had upped his personal stake in the investment company to £25m after snapping up over 620,000 worth of shares over the year ended 30 September.
FGT “significantly outperformed” its benchmark the FTSE All Share during the time period with its share price up 17.4% against the index’s gains of 2.7%.
And yet recently Train has warned that the rotation away from growth into value stocks and cyclical areas of the market means his trust “could lag for longer”.
A November factsheet for the trust released alongside the annual results showed FGT underperformed the FTSE All Share for the third month in a row with shares in the company rising 1.4% against the index’s 2.2%.
