The Hardman & Co Monthly: September 2023

Feature article: Equity Income – UK or Global? Should investors widen their horizons? Introduction: ► The UK Equity Income sector (UKEI) is the fourth-largest investment company (IC) sector in the Association of Investment Companies’ (AIC) universe, with £12.5bn of assets (as at August 2023), and is the traditional home for investors looking for income in the equity market. ► The UKEI not only provides investors with a better dividend yield than the ge

Hardman & Co Insight: Equity Income – UK or Global? Should investors widen their horizons?

Introduction ► The UK Equity Income sector (UKEI) is the fourth-largest investment company (IC) sector in the Association of Investment Companies’ (AIC) universe, with £12.5bn of assets (as at August 2023), and is the traditional home for investors looking for income in the equity market. ► The UKEI not only provides investors with a better dividend yield than the general UK market, but also has a strong track record of dividend growth. Indeed, many funds feature on the AIC’s “dividend heroes”

Invesco Select: UK Equity

IVPU’s resilient dividend and wide discount makes it stand out relative to peers…

Invesco Select: UK Equity

IVPU’s managers aim to provide a differentiated, all-weather option for equity income investors…

Invesco Select: UK Equity

A new force getting recognition in the UK Equity Income sector

Invesco Select: UK Equity - Overview

Invesco Select: UK Equity (IVPU) trust's shares merged with Invesco Income Growth (IVI) at the end of April this year. As a result, the combined entity now has critical mass, but more significantly has a new management team with Ciaran Mallon having joined as co-manager with James Goldstone. It is a new constituent of the UK Equity Income sector. IVPU is one of four share classes which sit under the umbrella of Invesco Select Trust (the others offering global equities, multi-asset and cash expo

A better class of travel

A family office, particularly after the year we have just had, means different things to different people. For the less fortunate, it’s the kitchen – where mum and dad spent a large part of last year at the same table, each trying to block out the noise of the other’s zoom meeting while the children smeared peanut butter on the dog. In the more traditional – and entirely more desirable – sense, the term family office covers a range of multi-faceted organisations which, at their core, provide pr

Invesco Perpetual Select Trust: UK Equity Share Portfolio - Overview

IP Select UK Equity Shares portfolio (IVPU) invests in UK equities with a highly active value strategy. The manager, James Goldstone, takes a contrarian approach, aiming to identify companies which in his view are under-appreciated by the market. James’ current main focus has been on companies exposed to the UK economy and consumer, which he thinks have been egregiously undervalued thanks to worries about Brexit, particularly among overseas investors, leading to indiscriminate selling of UK-faci

Invesco Perpetual Select Trust: Balanced Risk Allocation Shares - Overview

IP Select Balanced Risk Allocation share’s (IVPB) objective is to provide an attractive total return in differing economic and inflationary environments, with low correlation to equity and bond markets. The trust has a benchmark of LIBOR +5% per annum, which has been met over almost all periods, with volatility of around two-thirds of that of equity markets since the strategy was adopted in 2012. In contrast to ‘active’ total return funds (such as Ruffer, Personal Assets etc.) the managers have

A fund for all seasons

Invesco Perpetual (IP) Select Trust has an unusual structure, which is almost unique in the investment trust universe. It has four different share classes which shareholders can periodically (every 3 months) convert between without crystallising a taxable event. In practical terms, this means that any capital gains can be rolled up, whilst enabling investors to change the risk profile of their investment over time. In this way, and used accordingly, IP Select Trust and its four underlying share

Invesco Perpetual Select Trust plc: UK Equity Share Portfolio - Overview

IP Select UK Equity shares owns an actively managed portfolio of UK equities held for the long term, with the manager, James Goldstone, aiming to identify undervalued companies and take advantage of the under-pricing. James has repositioned the UK equity portfolio since taking over in October 2016, and the focus is on companies exposed to the UK economy and consumer, which James thinks are currently undervalued. However, this exposure is balanced out by holdings with international earnings, alth

We can be heroes

Income has for a long time been top priority for British investors, stripped of the traditional source of income that a savings account once represented by a decade of negligible interest rates. But with bonds in a parlous state and the wheels finally coming off the buy-to-let bubble, the range of options available is increasingly narrow. Equities have for some time now been the beneficiary of this search for yield and equity income funds have done very well on the back of this, attracting huge

Backing Blighty

UK equities are among the most unloved investments globally, with domestic-facing stocks particularly out of favour. Valueorientated investors may be asking themselves if there is an opportunity here, or if the ‘Brexit discount’ is justified. The Bank of America Merrill Lynch fund manager’s survey of global allocators saw weightings to the UK reach a historic low in March, and the country has been one of the least favourite locations all year amongst respondents. James Goldstone, manager of the

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

Bluefield Solar Income Fund – Fundamentals shine despite discount

The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual

LSL Property Services (LSL LN) - Transformation & market recovery

2023 results are, as indicated in its February pre-close update, “slightly ahead of market expectations”. Current trading continues to improve, with 1Q24 underlying operating profit up yoy, “reflecting the benefits of the Group’s transformation programme completed in 2023 as well as improving market conditions.” With net cash of £35m at end 2023, the Board approved 7.4p final DPS and £7m buy back.

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

LIBERUM: PensionBee: Strong start to the new financial year

International Public Partnerships - Consistently and responsibly delivering

International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th

LIBERUM: NewRiver: Q4 trading update: Continued operational momentum

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

Witan

Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25