Smithson Investment Trust PLC on Monday said its share price performance continues to disappoint as the company underperformed in the first half of the year.
The London-headquartered trust, which focuses on long-term investments in small to mid-sized companies worldwide, said in the six months that ended June 30, net asset value per share stood at 1,569.5 pence, down 0.4% from 1,575.4p last year.
Smithson shares were up 0.6% to 1,444.60 each in London on Monday morning.
NAV total return declined 1.8%, therefore the trust underperformed its benchmark, the MSCI World SMID Cap Index, which in contrast rose 3.4%.
Chair Diana Bartlett said: ‘Despite the efforts of the board to try to reduce the discount to NAV at which the company’s shares trade though its buyback programme, the share price performance continues to be disappointing.’
Smithson’s share price stood at a 12% price discount to NAV on June 30.
During the first half, Smithson spent £206.4 million on buybacks, representing 8.3% of the issued share capital before the buyback programme commenced in April 2022. This brings the total spent on the programme to £439.7 million.
Investment Manager Simon Barnard said: ‘While we have had a couple of stock specific issues in the portfolio... there is no doubt that this is a tough time in the market for smaller companies. As has happened in the past, large and ’glamourous’ stocks have outperformed strongly this year, while small and medium sized companies as an asset class have struggled.’
Barnard further highlighted the adverse impact of the headwind of rising interest rates but stressed it will not last forever.
Over the period, Smithson took advantage of opportunities being offered by the price weaknesses of smaller-sized companies.
The trust added to its portfolio the hotel franchisor Choice Hotels International Inc, sensor designer Melexis NV, IT consultant Reply Spa, instrument maker Inficon Holding AG and network connectivity firm HMS Networks AB.
These purchases were funded by selling out of Australian franchisor Domino’s Pizza Enterprises Ltd, laser manufacturer IPG Photonics Corp, and banking software company Temenos AG.
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