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(Alliance News) - Schroder Income Growth Fund PLC on Wednesday said that valuations in the UK remain supportive despite uncertainty regarding the conflict in Iran, as net asset value grew comfortably in the first financial half.

The fund aiming to achieve income growth higher than inflation and capital growth said net asset value was 398.71 pence as at February 28, up 15% from 347.32p at August 31.

NAV total return was 17.4% in the six months to February 28, underperforming against its benchmark, the FTSE All-Share index, which had a total return of 18.9%.

Schroder Income Growth said construction firm Balfour Beatty PLC as well as energy firm SSE PLC performed well, alongside bank Standard Chartered PLC.

Meanwhile, specialist lender ICG PLC "was among the largest detractors" as the share price came under pressure due to concerns about a downturn in the private credit cycle, Schroder Income Growth said. Further, financial markets intermediary and data provider TP ICAP Group PLC "was also weak" as the firm stepped back from plans to spin off its division, amid more uncertain market conditions for data businesses.

Schroder Income Growth said luxury clothing company Burberry Group PLC was another detractor amid volatile sentiment towards luxury goods brands. However, Schroder Income Growth said it is confident that Burberry's "operational recovery remains on track".

Hospitality firm Whitbread PLC meanwhile "came under pressure following further UK budget initiatives which will significantly impact its cost base", Schroder Income Growth said.

The company said it paid a first and second interim dividend of 3.25p per share, unchanged from a year prior.

Looking ahead, Chair Ewen Cameron Watt said he was mindful of "significant uncertainty" regarding the conflict in Iran having an impact on inflation, interest rates and ongoing market volatility. Despite this, he said the board is confident in its investment manager's "disciplined" and selective approach, adding that it believes that valuations in the UK remain supportive.

He added: "The market continues to offer a diverse range of opportunities across sectors and structural growth drivers."

Schroder Income Growth shares were up 0.9% at 348.02p each on Wednesday afternoon in London.

By Tom Budszus, Alliance News slot editor

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