(Alliance News) - Capital Gearing Trust PLC on Monday said net asset value declined to produce a "disappointing" but small negative return in its latest half year, and expects the backdrop to remain challenging throughout the current period.
The Belfast-based investment trust said its NAV at September 30 was 4,674.3 pence per share, down from 4,797.3p at March 31.
Capital Gearing shares were up 0.6% at 4,496.00 pence in London on Monday.
The company's NAV total return for the six months that ended September 30 was negative 1.3%, up from negative 3.5% the prior year. Capital Gearing also outperformed the Global Aggregate Bond and Investment Trust indices, which delivered negative 3.8% and negative 1.7% returns respectively.
"Whilst it is always disappointing to report negative returns the defensive orientation of the portfolio did provide some protection from simultaneously weak bond and equity markets," commented Chair Jean Matterson.
Capital Gearing also announced that it has taken direct control over the process of having its share premium account reclassified as a distributable reserve. Gaining court approval for this change will, it said, support its discount control policy designed to minimise the gap between stock price and NAV.
The trust said that previously reported significant delays, thanks to technical and administrative issues, were caused by "a series of errors and omissions on the part of third parties."
Matterson said the firm "is extremely frustrated by the delay caused in the process and the fact that it was not made aware of this until very recently," adding that Capital Gearing intends to further investigate the problem and seek compensation.
Matterson commented that the second half year is likely to remain "challenging" due to "a deteriorating geopolitical backdrop, high interest rates and lingering inflation".
However, she added: "Against this backdrop the company remains defensively positioned, with a relatively constrained allocation to equities and significant exposure to short duration high quality bonds.
"However, with volatile markets come opportunities and the investment manager will seek to exploit falling prices in the bond and equity markets when values become compelling."
By Emma Curzon, Alliance News reporter
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Capital Gearing Trust (CGT)