(Alliance News) - UK Mortgages Ltd on Tuesday said it has conducted a strategic review and will put two options on its future to shareholders, with one proposal being an orderly wind-down of the closed-ended investment company.
UK Mortgages shares were 4.4% higher at 65.00 pence each in London on Tuesday afternoon. The company on Tuesday also reported its annual results, with numbers showing a fall in net asset value and a reduced payout.
The company, which invests in UK residential mortgages, concluded a review of strategy which it kicked off back in August after M&G Investment Management Ltd abandoned its takeover bid of the firm.
"The review has identified two potential options that would, in the view of the board and its advisors, provide a clear path to the company's objectives announced in August of enhanced liquidity as well as a narrowing and removal of the discount at which UKML shares trade versus UKML's net asset value," UK Mortgages said.
"The options are to either: continue operating as a publicly traded investment company under a revised mandate offering increased focus on enhancing liquidity and returns; or to proceed with an orderly wind-down of the company and returns of capital to its shareholders."
UK Mortgages said prospects for 2021 "remain uncertain" due to a resurgence of Covid-19 infections, growth in unemployment, and the end of the stamp duty holiday in the UK.
It will consult with shareholders again before making a recommendation on its future.
In the year to June 30, UK Mortgages said its NAV per share fell 1.8% to 80.50 pence from 82.06p. Its NAV total return improved to 2.7% from 1.6%.
UK Mortgages declared 4.5p worth of dividends for the year, down 20% from 5.625p.
By Eric Cunha; ericcunha@alliancenews.com
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