2023-06-13 12:42:07
(Alliance News) – Baronsmead Venture Trust PLC said on Tuesday its net asset value was down from the six months and the prior year, as Baronsmead Second Venture Trust PLC also reported, with both companies citing a turbulent macroeconomic environment in the UK as affecting the performance of their portfolios.
Both Baronsmead and Baronsmead Second Venture are investment firms focused on early-stage UK businesses.
For Baronsmead, the net asset value per share at March 31 was 57.96 pence, down 5.4% from 61.29 pence at September 30 and down 18% from 70.37 pence a year earlier.
Baronsmead shares fell 2.7% to 54.00 pence apiece in London on Tuesday followingnoon.
This despite a reduced pre-tax loss to £2.4 million in the six months to March 31, from £25.0 million a year earlier, as the number of ordinary shares outstanding was increased from 316.5 million to 350.9 million during the same period.
Total net assets also decreased by 8.7% from £222.7m to £203.4m.
However, the company noted that the net asset value per share improved by 1.9% from 59.1 pence on March 31 to May 31, thanks to stronger stock markets and further price increases. the value of the company’s listed investments.
During this turbulent six-month period, the company’s net asset value declined slightly… The continued weakness in the value of the company’s unlisted investments was largely, but not completely, offset by the slightly positive performance of the listed portfolio,” said chairman Fiona Miller Smith.
“This highlights the benefits of the company’s investment policy of combining unlisted and listed assets with the aim of providing a more consistent total return to shareholders over the medium to long term.
Miller Smith also noted high inflation in the UK during the half-year, as well as steadily rising interest rates.
“As a result, economic conditions in the UK remained difficult, which generated a great deal of uncertainty in the financial markets. This situation was aggravated in the first quarter of 2023 by the successive collapses of Silicon Valley Bank and Credit Suisse. , which raised fears of more widespread contagion from the banking sector,” Miller Smith continued.
Looking ahead, Miller Smith noted that the investment manager continues to believe that “the fundamentals of the companies underlying the portfolio remain robust and the growth outlook for the majority of the companies invested in remains positive at middle term”.
For Baronsmead Second Venture, the net asset value per share at 31 March was 61.0 pence, down 6.3% from 65.1 pence at 30 September and down 18% from 74.2 pence from the previous year.
Shares of Baronsmead Second Venture were down 3.4% at 57.00 pence apiece in London on Tuesday followingnoon.
This despite a reduced pre-tax loss to £3.8m in the six months to March 31 from £29.9m a year earlier. As with Baronsmead, the number of Baronsmead Second Venture shares outstanding also rose 5.5% to 345.6 million from 327.6 million a year earlier.
Total net assets also fell by 13% from £243.1m to £211.0m.
Like Baronsmead, Baronsmead Second Venture also recorded a 2.6% rise in its net asset value per share, from 62.6 pence on March 31 to 62 pence on May 31.
Baronsmead Second Venture President Sarah Fromson cited macro challenges similar to those faced by Baronsmead.
“Against this backdrop, the listed portfolio experienced strong growth in the last quarter of 2022 as markets recovered from the declines seen earlier in the year. This continued into the first quarter of 2023 with some hopes for easing inflation and the cost of living crisis,” said Fromson.
“This partially offset the declines due to the uncertainty generated by worries in the banking sector and fears of recession.
Looking ahead, Baronsmead Second Venture echoed Baronsmead in saying the investment manager continues to believe in the “fundamentals” of its portfolio.
“The board expects market conditions to remain volatile throughout 2023. UK inflation is likely to decline, but still above Bank of England forecasts. Nevertheless, the possibility of a recession in the UK remains significant,” Mr Fromson added.
“However, the portfolio is well-diversified and broadly positioned in sectors of the economy that the board believes will benefit from long-term structural growth headwinds. If the geopolitical and economic backdrop in the year ahead may be difficult, experience shows that investing through the cycle can often produce superior returns, it can also be an opportunity for the company to make high quality investments and take strategic stakes in companies with great potential for the future”.
By Greg Rosenvinge, reporter at Alliance News
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