LONDON (Alliance News) - Investment company CIP Merchant Capital Ltd on Monday reported a loss in its maiden year, blaming Brexit negotiations for the lower than expected deployment of the funds raised from its initial public offering.
In the period from incorporation, September 13, to the end of 2018, CIP Merchant recorded net investment losses of GBP3.0 million, resulting in a loss for the period of GBP4.4 million.
At December 31, CIP Merchant had net assets of GBP48.1 million, or 0.87 NAV per share, a 13% decrease from its inception price. At March 22, the company's NAV per share stood at 86.67p.
The investment company, which was incorporated in September 2017, was admitted to AIM in December 2017, raising GBP55 million in its IPO.
Non-Executive Chair Adrian Collins said: "Whilst taking longer than envisaged to invest its funds, the company remains focused on investing the remainder of its cash and short term holdings in accordance with its investment policy and will keep shareholders updated in this regard."
"I would also note, however, that the general market sentiment has not improved significantly since the company's 2018 interim accounts. The Brexit negotiations have not progressed significantly throughout the year 2018 and uncertainty regarding the final outcome of the relationship between the UK and the EU persists, with the material risk of a hard Brexit."
At the end of 2018, CIP Merchant had completed four investments worth GBP16.4 million, representing about 34% of the company's NAV.
CIP Merchant did not declare any dividends in the period but intends to reinvest the net proceeds of any realisation from its portfolio.
Investment Manager Carlo Sgarbi added: "The prolonged market uncertainties, especially the Brexit negotiations, give us reason to believe that it is prudent and in CIP's shareholders' best interests to wait, where applicable, until negative news affects the share price of a potential investment instead of investing too early before potential negative macroeconomic impacts are experienced by such targets. Accordingly, given this prudent approach to investing, the company is not yet fully invested and it is now unclear as to how long this will take."
Shares in CIP Merchant Capital were untraded Monday but last closed at 68.00 pence each.