Literacy Capital PLC on Monday said its net asset value for the third quarter of 2024 has fallen, due to a reduction in the carrying value of two assets.
Literacy Capital is a London-based investment company that donates 0.9% of its net assets every year in cash to UK literacy charities.
The company said net asset value per share was 504.7 pence on September 30, down 3.4% from 522.6p on June 30 but up 2.4% from 492.8p a year before. Total NAV declined 3.2% to £303.7 million on September 30 from £313.6 million on June 30 but increased 2.7% from £295.7 million a year ago.
Literacy Capital invested £14.2 million during the three months that ended September 30, which included a minority stake in influencer marketing agency Campfire.
It also refinanced a revolving credit facility with OakNorth Bank PLC during the three-month period. The new £30 million facility has a three-year term and is due to expire in September 2027, with an incremental £10 million also available for use within the term.
Chief Executive Officer Richard Pindar said: ‘Whilst the modest decline in net asset value in the third-quarter was disappointing, it is worth noting that this is the first adverse movement in any quarter since the first quarter of 2020, which was heavily impacted by Covid-19. The majority of Literacy Capital’s largest holdings continue to perform in line or ahead of plan, despite business confidence and macroeconomic growth across many sectors remaining noticeably subdued.
‘The net asset value decline was primarily due to a reduction in the carrying value of two assets, which were relatively large holdings at the end of the previous quarter (21% of the net asset value on June 30). Both remain highly profitable investments, which have traded very strongly historically and retain significant potential.
‘Prior to the UK general election in July, many expected that sentiment and confidence amongst businesses would improve. Despite the hope for greater certainty, many corporates have evidently chosen to defer decision-making or spending until they digest the [UK government] budget statement on October 30.’
Shares in Literacy Capital were down 4.5% at 450.00 pence each in London on Monday morning.
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