Economic and political pressures weighing on P2P Global Investments

Market newcomer P2P Global Investments talked up its shareholder returns in its annual report on Friday, though it did admit to some strong headwinds in the markets heading into 2016.

During 2015, the company invested in more than £1bn of loans directly and indirectly, allowing the deployment of more than £500m of new equity capital on behalf of both the ordinary and C shares, as well as the deployment of more than £300m of new debt on behalf of ordinary shares.

P2P said it achieved positive net asset value returns in every month of 2015, delivering a total NAV return of 6.56% for the ordinary shares.

The capital raised for the C shares issued in late July was deployed in the third and fourth quarters, the board confirmed. Total net asset value return for those shares was 0.99%.

P2P delivered 6.12% in dividends to ordinary shareholders on the average net asset value return for the year.

“2015 has proved to be a challenging year for both equity and debt markets with the FTSE All Share Index declining by 2.5% since the start of the year and most market commentators revising downward their dividend expectations for 2016,” said chairman Stuart Cruickshank.

“Geopolitical tensions, an economic slowdown in emerging markets, China's devaluation of its currency, a decline in commodity prices and uncertainties over US interest rates contributed to heightened volatility in the markets.”

Cruickshank said the company’s ordinary share price declined by 14.7% over the year, closing at 1007p, with the C shares declining by 5.1% and closing at 978p.

He confirmed the company paid a total dividend of 59.2p per ordinary share in 2015.

“The company looks forward to delivering incremental returns to its shareholders as it achieves its target gearing during 2016, and will continue to execute its leverage strategy with a view to diversify its sources of funding.

“To further its objectives, in December 2015 the company entered into a £150m secured 3-year multicurrency corporate debt facility with a consortium of institutional lenders. This facility will add valuable diversity and flexibility to P2P’s funding options in 2016,” Cruickshank added.