Income & Growth VCT PLC on Wednesday said net asset value per share fell over six months, while it cautioned that it expects all sectors to be ‘vulnerable’ to tough market conditions.
The London-based venture capital trust said its NAV per share at March 31 was 79.38 pence each, falling 5.2% from 83.73p on September 30.
Over the half-year period, the NAV total return was negative 0.4%, compared to a rise of 2.3% in the equivalent period a year earlier.
This was largely due to unrealised declines in the value of investments, Income & Growth VCT said. It added that two successful portfolio exits generated realised gains for the company, but these were partially offset by impairments applied to the holdings of two other companies.
Income & Growth VCT opted to declare a half-year dividend of 4.00p per share, unchanged from a year earlier.
Shares in Income & Growth VCT were up 2.1% to 73.50p each in London on Wednesday afternoon.
‘The first six months of the company’s financial year occurred against a backdrop of challenging UK economic conditions. Increasing inflation and rising interest rates have both impacted consumer and business confidence which has pulled down market valuation benchmarks and caused a general softening of trading performance,’ said Chair Maurice Helfgott.
Looking ahead, Helfgott cautioned that all sectors will be ‘vulnerable’ and that the geopolitical and economic context for the next year ‘is liable to be challenging’.
‘So far in 2023, despite the wider market concerns, stock market multiples appeared to stabilise following the material downward re-rating of growth stocks experienced over much of 2022. However, the collapse of Silicon Valley Bank and other similar failures mean that confidence remains fragile,’ said Helfgott.
‘The ongoing threat of a potential UK recession will likely result in additional challenges for your portfolio companies. However, the portfolio is well diversified and the company is well-prepared for most scenarios via its strong liquidity available to support the winners in the portfolio.’
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