Edinburgh Investment Trust plc (LON:EDIN) has announced the interim results for the period ended 30 September 2023.
Highlights:
· Net Asset Value (NAV) per share (with debt at fair value) on a total return basis increased by 4.5% compared to the 1.4% return on the FTSE All-Share Index
· The share price total return was 3.3%
· First interim dividend declared on 25 October 2023, up 4.7% from the same period in 2022, at 6.7p per share
· Net gearing (debt at fair value) at 30 September 2023 of 4.1%
· Share price discount to NAV moved from 7.5% to 8.7% in the six months to 30 September 2023
· Since James de Uphaugh became Manager of the Company in March 2020, the cumulative NAV return of 73.3% and the share price return of 81.2% have outperformed the FTSE All-Share return of 49.5 (all in total return terms)
Elisabeth Stheeman, Edinburgh Investment Trust Chair, said: “Your Company has produced a Net Asset Value (NAV) total return of 4.5% over the period, and a share price return of 3.3%. These compare with 1.4% for the comparator FTSE All-Share Index. It is pleasing to be able to record that the NAV return now also exceeds that of the index over five and ten years, reflecting the strong progress on many fronts in recent years.
“We announced last month that James de Uphaugh, the Company’s Portfolio Manager, will retire in February 2024 after 36 years in the industry. James will be replaced as Portfolio Manager by his colleague Imran Sattar. As part of the succession, Imran has been appointed the Company’s deputy Portfolio Manager, replacing Chris Field who has recently retired from Liontrust. I would like to thank James and Chris for their careful stewardship of the Company’s portfolio and strong investment results since the appointment of the investment management team in March 2020.
“Once in place as the Company’s Portfolio Manager, Imran will continue to apply the same flexible investment process that has been the hallmark of the portfolio for the last three and a half years. The rest of the Board and I look forward to working with Imran. We would like to see Edinburgh considered as a natural ‘core’ equity investment for savers in the UK and beyond. There is much to be done to achieve this objective, but we are confident that we are making strides towards that goal.”
James de Uphaugh, Edinburgh Investment Trust Portfolio Manager, said: “The equity market backdrop improved over the period, principally because inflation has dropped from the previous elevated double-digit levels, but the higher level of interest rates looks likely to persist for some years to come. This means a changed environment for investing when compared with the very low levels of interest rates that have prevailed for most of the period since the 2008/09 global financial crisis.
“On a three-year view, we believe there is potential for a pleasant surprise from UK equities. While it is hard to identify in advance a specific catalyst that will ignite a rerating of UK equities, we do note that the market has absorbed a lot of selling since 2016. At the same time, we observe a pick-up in interest in UK companies by overseas corporates.
“To meet the Company’s two investment objectives, we take a total return approach. Within the Company’s investment portfolio, we aim to deliver exposure to a diversified range of economic and market themes. Reflecting the diversified portfolio, the contributors to returns came from a broad selection of holdings. Prominent stocks included Centrica (gas supply), Marks & Spencer (retail) and Admiral (insurance).
“Being the Portfolio Manager of your Company for the last three and a half years has been a highlight of my career. While I will miss the engagement with shareholders and the Board alike, I am delighted that my longstanding colleague Imran Sattar will be the next Portfolio Manager. The same investment process and collegiate team approach will remain in place once Imran takes over next year.”
