Temple Bar Investment Trust PLC on Friday said its net asset value saw a moderate half-year increase, and that its ‘fundamentally sound’ portfolio will eventually bear fruit despite the tough backdrop.

The London-based company, which primarily invests in UK equities, said its net asset value (with debt, at fair value) was 236.8 pence per share at June 30, up 1.5% from 226.7p at December 31 and 1.4% from 233.5p at June 30, 2022.

Temple Bar shares were down 1.1% at 226.00p in London on Friday morning.

The NAV total return for the first half of 2023 was positive 3.4% - outperforming the FTSE All-Share index, which returned positive 2.6%.

Temple Bar declared a second interim dividend of 2.3p per share, unchanged from the first. It repurchased 15.4 million shares during the half-year for £31.1 million in total.

Portfolio Managers Ian Lance and Nick Purves said Temple Bar’s NAV outperformance was helped by strong gains from several portfolio companies including Marks & Spencer Group PLC, easyJet PLC and Centrica PLC. However, this was countered by weaker performances from Anglo American PLC, Pearson PLC and TotalEnergies SE.

Lance and Purves noted that UK equities are still ‘very out of favour’ with investors with its stock market delivering much smaller positive returns than other countries’.

This was, they said, despite the fact that ‘most companies continue to enjoy the benefits of relatively benign economic conditions and corporate profitability is generally strong,’ in defiance of market fears around potential rate hikes.

However, they reassured shareholders that ‘Whilst it is somewhat frustrating that UK listed shares continue to attract such miserly valuations, the attraction for the long-term investor is significant.’

Historically, they added, ‘those that have invested in lowly valued, but fundamentally sound businesses...have enjoyed outsized [long-term] gains.’

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