Gresham House Strategic confident following 'unique year' for markets
Investment firm Gresham House Strategic said on Friday that its confidence after "a unique year" for UK stock markets and significant portfolio evolution was reflected in its decision to raise dividends by 20% for a third straight year.
Gresham House said total shareholder returns came to 59.1% in the year ended 31 March, while unaudited net asset value returns were 44.3%, compared to FTSE All-Share Index and the FTSE Small Cap (ex-ITs) Index total returns of 27.1% and 75.0%, respectively.
The AIM-listed group share price discount to unaudited NAV reduced from 15.0% to 6.3% and, as a result of both the discount narrowing and NAV growth, its five-year total return to GHS shareholders was 99.6%, marking an approximate compound annual growth rate of 15%.
Looking forward, GHS said it had "an exciting pipeline" of potential investments in the under-researched UK smaller companies' universe where it believes value opportunities exist.
GHS fund manager Richard Staveley said: "With regards to Covid-19 compared to our initial expectations, we have been surprised by the severity and length of the lockdowns but not by the ability of the motivated and innovative pharmaceutical industry to develop vaccines rapidly.
Whilst the UK now appears on track for re-opening, Europe and many other countries continue to face challenges. The scale of both huge monetary support and fiscal stimulus cannot be ignored though and, quite rightly, concerns over the medium-term inflationary outlook have surfaced. This development is very new to many market participants weaned on deflationary forces and ever lower bond yields. This dynamic has already been positive for shares considered to be 'value' and may become a healthy 'following wind' for the portfolio."
As of 0910 BST, Gresham House Strategic shares were down 0.28% at 1,426.05p.