(Alliance News) - UK small cap investor Gresham House Strategic PLC on Tuesday saw net assets fall in the first half of its financial, but it was able to outperform its benchmark on a solid rise in interim dividends.
At September 30, the company's NAV per share stood at 1,251.40 pence, slightly lower than the 1,258.60p seen at March 31. Total net assets slipped to GBP44.5 million from GBP44.7 million.
GHS proposed an interim dividend of 10.1p, up 15% year on year, giving the company a marginal positive total return. The company previously has guided for a 15% annual increase in its dividend for the next two years.
GHS's NAV total return for the first half was 0.3%, compared to the FTSE Small Cap total return losing 0.3%. The FTSE All Share gained 4.5%, however.
GHS Chair David Potter said: "I am pleased to report a satisfactory start to the year, despite the rising uncertainty around Brexit during the period. Our investment manager continues to believe the UK markets and many smaller companies in particular are undervalued and this market segment stands to benefit from a meaningful re-rating if and when the Brexit uncertainty is resolved."
The company's manger, Graham Bird from Gresham House Asset Management Ltd, added: "NAV has held steady during the first half of the year amidst an uncertain market, political and weakening economic backdrop. Nevertheless, we believe there are a number of factors which make the outlook for SPE investing and the near-term opportunities within the portfolio attractive. We therefore continue to view the opportunity set and outlook for GHS with cautious optimism."
Also from GHAM, Richard Staveley said: "The opportunity to invest in over-looked and unloved UK small companies has rarely been greater. Structural factors combined with the current market backdrop have created a uniquely exciting time for dedicated, longer-term investors. Gresham House's Strategic Public Equity strategy is a truly active approach, delivering a clear concentration of best ideas, a passion for value and the platform to follow through on this opportunity."
GHAM also acts as investment manager to London-listed Gresham House PLC, LMS Capital PLC, Gresham House Energy Storage Fund PLC, Baronsmead Venture Trust PLC and Baronsmead Second Venture Trust PLC.
The investment manager, separately, announced it has successfully integrated recent acquisition Livingbridge VC LLP into the company.
Last November, the asset manager proposed an acquisition of investment company Livingbridge for up to GBP40 million.
GHAM said this integration will help Gresham House Strategic.
"The potential for combining the fund management, analyst, research plus support areas for strategic public equity, equity funds and private equity-ventures team is quite clear," the asset manager said.
"This will bring benefits to the existing funds managed by these teams, including Gresham House Strategic, providing a broader investment management resource base with direct access to private equity experience and networks. This unit has plans to scale across a number of product lines and business development areas," GHAM added.
Tony Dalwood, Gresham House PLC chief executive and chair of SPE investing at GHAM, said: "We are pleased to be able to bring our specialist equity teams closer together for the benefit of our clients to whom we believe this will provide significant future benefits. The ability for Graham Bird to focus on his specialisms augments the changes as we continue to see opportunities to grow our presence in the strategic public equities space."
Shares in Gresham House Strategic were 2.2% higher in London on Tuesday at 1,231.15 pence each. Gresham House PLC was 0.7% higher at 614.50p.
By Paul McGowan; paulmcgowan@alliancenews.com
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