LONDON (Alliance News) - Octopus AIM VCT 2 PLC on Monday said its net asset value per share fell in its most recent year, with its holding in energy supplier Yu Group PLC proving the "biggest disappointment".
As at November 30, the end of the venture capital trust's year, its net asset value had fallen to 80.8 pence per share from 87.1p per share the year before.
"The biggest disappointment in the year was Yu Group," said Octopus Investments Ltd, the trust's investment manager.
"It had reported strong growth in revenue and profits, and had produced a confident statement with its interim results in September. However, this was followed by a statement that the accounts and accounting practices were being reviewed at the instigation of the newly appointed finance director and that the group would be loss-making for the year to December. A further announcement in December did not clarify the extent of the problem and in view of headwinds being reported by other alternative suppliers we sold the shares at a loss post the period end," Octopus Investments added.
Octopus Investments also noted that "heightened uncertainty" around international trade and possible Brexit repercussions had hurt the performance of smaller companies "with investors
favouring the relative security of the FTSE 100".
The company has maintained its final dividend at 2.1p per share, taking the total for the year to 4.2p per share versus 4.1p in its previous year.
Adding back the 4.2p per share dividend, which takes the trust's net asset value to 85.0p per share, the Octopus AIM VCT 2 total negative return was 2.4% for its year. This compares to a 1.5% fall in the FTSE All Share Index of 1.5% and an 8.2% fall for the FTSE SmallCap (excluding investment companies) Index and FTSE AIM All Share Index.
"Volatility is likely to continue at least until the Brexit position becomes clearer although it is encouraging that UK economic growth has remained positive if unexciting in 2018, with a similar outlook currently being forecast for 2019," said Chair Keith Mullins.
"The portfolio now contains 77 holdings across a range of sectors and many of them have already demonstrated their management's ability to grow their businesses successfully in difficult economic conditions. The balance of the portfolio towards profitable companies remains, and the cash available for new investments will allow us to take advantage of any future lowering of valuations resulting from the current period of share price weakness," Mullins added.
Shares in Octopus AIM VCT 2 were untraded at 74.00 pence on Monday.
Octopus Aim 2 (OSEC)
Yu Energy (YU.)