(Alliance News) - Seneca Global Income & Growth PLC on Tuesday reported a sharp drop in net assets over financial 2020 due to significant falls in stock market following the Covid-19 outbreak.
At April 30, the trust's NAV per share stood at 133.10 pence, down 26% from the 179.08p at the same point the year before.
Net assets dropped 25% to GBP63.5 million from GBP84.9 million.
Seneca Global declared a total dividend of 6.72p, up 1.8% on the 6.60p distributed the year before. Going forward, the trust said its quarterly dividend rate will be maintained at 1.68p due to the coronavirus pandemic.
The trust's NAV total return in the period was negative 22.7%, drastically behind its benchmark which added 6.8%.
Chair Richard Ramsay said: "The outbreak of Covid-19 has, in effect, divided the year into two distinct periods. Before the global impact of Covid-19, Seneca Global Income & Growth Trust had been performing reasonably well. The portfolio responded positively to the Conservative Party's election victory in December, and indeed to Brexit finally happening at the end of January."
Ramsey said the world is "now a very different place".
The trust's investment manager said the company is likely to "significantly" underperform its benchmark during periods of "extreme equity market distress" due to its value investment strategy.
"The key turning point was the end of February as markets realised that Covid-19 was rapidly becoming a serious global problem. In March many regions around the world imposed lockdowns. For those brief few weeks in March there were extreme levels of uncertainty. There were few places to hide with most asset valuations being trampled underfoot in a flight to safety which favoured only government bonds and the dollar," the manager added.
From the four weeks from late February to late March, the trust's NAV fell by 37%.
Since then, and to Seneca Global's year-end, the NAV recovered by 21%, although this is still an overall decline of 24% from late February to the year-end.
"The damage done to the company's performance record by these four weeks is clear but the board and manager are conï¬dent that the portfolio's recovery potential is significant," the trust added.
Shares in Seneca Global Income & Growth were down 0.1% in London on Tuesday at 140.10p each.
By Paul McGowan; paulmcgowan@alliancenews.com
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