Witan Investment Trust PLC on Tuesday reported net asset value growth and a higher payout, noting that investors ‘largely shrugged off disappointments in the timing of interest rate cuts.’
Witan is a London-based investment company with diverse holdings including in Apax Global Alpha Ltd, Unilever PLC, Microsoft Corp, Diageo PLC and Nvidia Corp.
Net asset value per share climbed 9.7% to 282.6 pence as at June 30, from 257.6p at December 31.
NAV total return was 11.0% in the first half of 2024, an improvement from 8.7% a year prior but below its composite global benchmark, which had a return of 11.7%. It also underperformed against the MSCI ACWI index, which had a total return of 12.5%, but performed better than the MSCI UK IMI index, which posted a total return of 7.3%.
‘One of the company’s key performance indicators is for its shares to trade at a sustainable low discount or a premium to NAV, subject to market circumstances. This has been elusive in recent years, given the successive shocks of the pandemic, wars, rising inflation, higher interest rates and worries about recession, all of which have subdued demand for equity investments. Given these background uncertainties, investors appeared wary of committing additional funds to their investment trust holdings, despite markets rising during the first half of 2024,’ Witan said.
The company declared a second quarter dividend of 1.75 pence per share, up 21% from 1.45p a year prior. This brings dividends paid in the first half of the year to 3.26p, up 12% from 2.90p.
Witan said: ‘Investors have largely shrugged off disappointments in the timing of interest rate cuts, unwelcome developments in global conflict hotspots and uncertainty generated by 2024’s wide swathe of national elections. Notwithstanding a sharp bout of volatility in early August, equity markets as a whole seem to have taken the view that, whatever flies there may be in their proverbial soup, they are focused on the substance, not the swimmer.’
Looking ahead, Witan said: ‘If the government lives up to its ’New New Labour‘ credentials the low valuation of the UK market could find the catalyst it needs to be more positively rated.’
Witan and Alliance Trust PLC in June announced plans to combine creating a firm with assets under management of more than £5 billion. The combined vehicle will offer improved secondary market liquidity, with expected eligibility for promotion to FTSE 100 Index in due course.
The deal is expected to be completed in the third or fourth quarter of 2024. In July, Witan said its Chief Executive officer Andrew Bell will step down from the board, and that his retirement will take effect just before the completion of Witan’s combination with Alliance Trust, currently expected to be in early October.
Witan shares were flat at 264.00 pence each on Tuesday morning in London.
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