(Alliance News) - Small cap companies investor ScotGems PLC on Monday reported a drop in net asset value with five major detractors, most notably Unilever Nigeria.
As at December 31, the company's NAV per share came to 87.01 pence, down 6.5% from 93.10p the previous year.
Unilever Nigeria, local subsidiary of consumer goods firm Unilever PLC, struggled in Nigeria's " harsh and prolonged downturn", making a 2.4% negative contribution to return in 2019.
The other four major detractors were Indian software engineering firm Cyient, garment maker Youngone Corp, South Africa consumer goods firm RCL Foods Ltd, and GlaxoSmithKline Nigeria. The latter is a consumer goods-focused local subsidiary of pharmaceutical giant GlaxoSmithKline PLC.
ScotGems's investment manager, Stewart Investors, said: "South Africa, perhaps for the third or fourth year in a row, feels like the place where a small-cap investor (not concerned with making spectacular short-term returns) would have the most exceptional opportunities."
The manager added: "One of the riskiest areas of value is traditional banks...We have never owned many banks, given their lack of downside protection in a crisis. However, we are keen to add to one or two of the most conservatively-run financial institutions, especially those where higher interest rates would lead to higher profits without blowing up the loan book."
Shares in ScotGems were untraded in London on Monday, last closing at 66.75p.
By Anna Farley; annafarley@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.