The handover of Witan Pacific (WPC) to Baillie Gifford (BG) on 16 September 2020, following the board’s decision and favourable shareholders’ vote, marks the trust’s transition to the new asset manager. BG won the mandate with its proposal to transform the Asia Pacific growth and income trust into a pure China equity growth strategy. The manager considers that ‘still misunderstood and underinvested’ China (a c 2.5% allocation in 2019 global portfolios) is the key global growth market of the 21st century, and that global investors who miss out on the present China opportunity run the major risk of being left behind.
Companies: Witan Pacific Investment Trust
Witan Pacific Investment Trust (WPC) offers broad exposure to the Asia Pacific region (including Japan), employing a multi-manager strategy. The board remains confident that the current line-up of four complementary managers is capable of good long-term outperformance; however, it has a contingency measure in place. If WPC does not outperform its benchmark in the two years ending 31 January 2021, investors will be given the opportunity to realise their holdings close to NAV, so either relative performance will improve or the trust’s discount will narrow. WPC has a progressive dividend policy; its annual distribution has increased for the last 14 consecutive years and the trust currently offers a 2.1% yield.
Witan Pacific Investment Trust (WPC) employs a multi-manager strategy, offering investors broad exposure to pan-Asian equities. The board recently announced a renewed commitment to improving the trust’s investment performance. If WPC’s NAV total return lags its benchmark over the period from 31 January 2019 to 31 January 2021, the board will put forward proposals that include a full cash exit at close to NAV. As a result, shareholders should enjoy NAV performance ahead of the benchmark or share price outperformance versus NAV as the discount is closed. In its recently released FY19 results, WPC proposed a meaningful 27.3% increase in its annual dividend; the fully covered 7.0p distribution, to be approved at the June 2019 AGM, equates to a 2.1% yield.
Witan Pacific Investment Trust (WPC) offers investors broad exposure to Asian equities, including Japan. While global equities, and emerging markets in particular, have sold off in recent months, the trust’s managers consider that this has created an attractive buying opportunity, and they remain very constructive on the outlook for WPC’s holdings. They believe that there is a disconnect between Asian equity prices and corporate earnings, which continue to grow at a healthy pace. The managers are finding what they consider to be exciting investment opportunities in the region, including in Japan and China, where its stock market has suffered disproportionately due to concerns about global trade as a result of the US’s ‘America First’ policy.
Witan Pacific Investment Trust (WPC) has outperformed its MSCI AC Asia Pacific Free benchmark since adopting a multi-manager strategy at end-May 2005. However, following a period of relative weakness (particularly since mid-2016), the board has changed the external manager line-up (effective from end-September 2017). It is enthusiastic about the two new managers: Dalton Investments and Robeco Institutional Asset Management (and has continued confidence in incumbent managers Aberdeen and Matthews). The board is hopeful that the new line-up can build on WPC’s long-term record of outperformance. WPC aims to generate long-term growth in both capital and income, and the regular annual dividend has increased in each of the last 13 years.
Witan Pacific Investment Trust (WPC) employs an active multi-manager strategy, aiming to generate long-term growth in capital and income from a diversified portfolio of Asia Pacific equities, which includes Japan, Australia and India. Since adopting the multi-manager approach in 2005, WPC has outperformed its benchmark, the MSCI AC Asia Pacific Free index, in eight out of 12 financial years, but has lagged since mid-2016. The board changed the manager line-up from end-September 2017, dropping Gavekal and appointing Dalton Investments and Robeco Institutional Investment Management. WPC has a progressive dividend policy, aiming to grow the annual distribution in real terms. The regular dividend has increased in each of the last 12 years.
Witan Pacific Investment Trust (WPC) has a multi-manager approach, aiming to generate capital and income growth from a diversified portfolio of primarily Asian equities, including Japan and Australia. WPC currently has three external managers: Aberdeen, GaveKal and Matthews; they follow different investment strategies but are all unconstrained versus the benchmark (MSCI AC Asia Pacific Free Index). WPC has a competitive fee structure and aims to generate real growth in annual dividends; its current dividend yield is 1.5%. In FY17, investment performance was strong in absolute terms but lagged the index and its peers. However, so far in FY18 all three external managers are outperforming the benchmark. Since adopting the multi-manager approach in 2005, WPC has outperformed in eight out of 12 financial years.
Witan Pacific Investment Trust (WPC) offers broad exposure to Asian markets including Japan and Australia, adopting a multi-manager approach which tends to smooth the performance fluctuations of individual managers. Current managers Aberdeen, Matthews and Gavekal, all invest across the region pursuing distinct, unconstrained strategies. Although weaker over six months, NAV total returns have been largely consistent with the MSCI AC Asia Pacific Free index benchmark over three years and WPC has outperformed over 10 years. Fees are competitive versus peers, with the board aiming to contain ongoing charges at 1% of net assets per annum. WPC aims to grow annual dividends above the rate of UK inflation; the current dividend yield is 1.7%.
Witan Pacific Investment Trust (WPC) is a well-established investment trust differentiated by its broad Asian exposure and multi-manager approach adopted in 2005.The three investment managers – Aberdeen, Matthews and Gavekal – employ different investment styles but all have a remit to invest in the Asia-Pacific region including Japan and Australia. WPC has outperformed its benchmark over the longer term and achieved its aim of growing annual dividends at a higher rate than UK inflation. Investors may be attracted by the forward P/E valuation of the Asia-Pacific region, which is currently at the low end of the historic range relative to global markets.
Witan Pacific Investment Trust (WPC) has followed a broad Asian multi-manager approach since 2005. It has outperformed its benchmark over this period and is now unique among Asia-Pacific investment trusts in retaining a mandate that includes Japan and Australia. Macro uncertainties have contributed to a market setback during the summer, but this may provide a more attractive entry point for investors in terms of market valuation and, for WPC, a wider than average discount.
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Cenkos’s first half results demonstrated the benefits of its flexible operating model and strength of its client relationships. While challenges related to COVID-19 are set to continue, Cenkos’s focus is on growth companies and its fund-raising year-to-date has had a greater emphasis on corporates financing M&A and growth opportunities rather than for defensive purposes. This should prove more sustainable although, as always, the timing of transactions in the encouraging pipeline reported remains uncertain.
Companies: Cenkos Securities plc
Avation is a lessor of 46 commercial aircraft to a diversified airline client base. This morning, the group has released results for the 12-months to 30 June 2020, which illustrate the challenges faced by its customer base as a result of Covid-19, as well as the corrective actions taken by the Board that have resulted in profitability being maintained in the year as a whole. Loan repayment deferrals of c.$24.4m were obtained in the period, in comparison to $13.1m short-term rent deferrals being granted to airline customers and thus emphasising management's focus on liquidity during an unprecedented period for global airlines. Avation again reports that it is currently reviewing alternatives in relation to the 6.5% senior notes due in May 2021. Whilst at this point our forecasts remain under review, and near term challenges remain across the industry, we believe that demand for aircraft from lessors such as Avation will increase in time as a result of airlines being even more reliant upon aircraft leasing firms due to the retirement of older aircraft during 2020 in combination with much weaker balance sheets that are unable to support direct aircraft purchases.
Companies: Avation PLC
Record’s Q221 trading update confirmed that its new $8bn dynamic hedging mandate has started and that, prior to this, assets under management equivalent (AUME) expanded by 4% in the quarter. The group continues to work on developing new products and is deploying technology to enhance its ability to deliver these and existing products cost effectively.
Companies: Record plc
Primary Health Properties (LON:PHP) is a real estate investment trust (REIT) that holds a portfolio of 510 primary health facilities in the UK (92% of the portfolio by value) and Ireland (8%). The business model is to manage the properties for rental income and to grow the portfolio over time. The
Companies: PHP PP51 PHPRF
In another upbeat update, GHT has confirmed that the business is tracking in line, in turn being driven by strong traction with key customer, ANZ. Here, new sales have driven a 20% increase in contracted customer revenue to >£11m in FY21. As a strategic partner (deeply involved with GHT in bringing new Clareti banking services to market) this extra investment is very encouraging, as it’s indicative of these services‘ strong future potential. Also announced today – GHT state that its transition to a recurring subscription model (commenced just two years ago) is now complete and that ARR now stands at £11.9m, ~+16% annualised organic growth since FY20 y/e. In a tough new business environment, we view this as a highly credible performance. It’s also worth noting that management reference remaining pipeline opportunities, these would further benefit strong forwards visibility – already £22.4m for FY21. Given this – and also as sign of confidence – today we reinstate FY21 forecasts. We look for a reacceleration in top-line growth: +16% y/y to £28.7m at a Group level, in turn driven by c.+24% organic growth in Clareti, to £20m. For valuation – with Clareti still in its relative infancy – we continue to view a sales multiple as most appropriate. Here, we note that peers typically trade in a 5-7x range vs. GHT at 4x our FY21 estimate. This suggests 25-75% upside to fair value for this disruptive company, with a multi-year growth opportunity still ahead.
Companies: Gresham House
As expected following the US banks’ releases, Barclays’ third quarter results saw a sharp reduction in provisions build-up while the emergence of delinquencies has been delayed by the State’s supporting measures. Management continues to expect a reduction in the cost of risk next year. It remains to be seen if this guidance is capable of withstanding new lockdowns or a no-deal Brexit.
Companies: Barclays PLC
Following on quickly from its impressive full year results, these interim results confirm that our confidence for growth in the Program Management business was not misplaced.Contracted Premium increased 95% YoY (and 12% ahead of December 2019) to $925m –a stone's throw away from the $1bn 2020 guidance set in 2018. At the same time, Gross Written Premium (GWP) grew 42.6% to £247.2m, resulting in Economic EBITDA turning positive, at £0.8m compared to a loss of £0.3m in 1H19
Companies: Randall & Quilter Investment Holdings Ltd.
Tatton has reported an in-line H1 financial performance: revenue totalled £11.0m (vs N+1Se £10.9m) and £5.0m adj. EBIT (50% N+1S FY21e). AuM grew by 3.4% to £7.8bn as net inflows continued throughout H1 (+£328m) – a positive performance given the backdrop. Paradigm, particularly in Mortgages, has been resilient post-lockdown. Having delivered 50% of our earnings forecast for FY21e, there is potential for upside. However, we leave our forecasts unchanged and a margin for safety as we remain alive to potential external risks/volatility.
Companies: Tatton Asset Management Plc
The interims confirmed that Covid-19 was minimally disruptive operationally in H1 20 and, ironically, may have improved both of R&Q’s divisions’ mediumterm trading outlooks. As the pandemic and other industry events have generated significant losses for insurers, they have created the current ‘hardening’ market driving demand for Legacy and Program Management.
Agronomics has announced it has conditionally raised £10.0m gross from an equity issue at a price of 6.0p, which represents a 6.8% premium to the most recently reported NAV per share of 5.62p. Assuming the company's post-raise cash balance is £8.15m, after repaying a £1.9m bridging facility, we estimate the new NAV per share to be c5.7p. We see significant potential in the cultivated meat sector and believe Agronomics is well positioned to support this developing sector and generate strong returns from these investments. We see upside in Agronomics' portfolio and have today initiated coverage with a Buy recommendation.
Companies: Agronomics Limited
ANGLE plc (AGL.L): Acceptance of FDA submission | Feedback plc (FDBK.L*): Partnership agreement | Open Orphan (ORPH.L): Human Challenge Study Model contract with UK Government
Companies: AGL FDBK ORPH
Agronomics is an investment company building a portfolio of investments in the developing alternative protein sector. The company is focused on early stage investments, offering attractive valuations and significant upside potential. Importantly, we believe Agronomics represents an opportunity for public investors to gain access to early stage private companies, which might not otherwise be available. We expect the cultivated meat sector to be driven by a number of global mega trends that will increase public awareness of the issues the sector is aiming to overcome. We see strong upside in Agronomics' existing portfolio and initiate coverage with a Buy recommendation.
Secure Trust Bank (STB) reported H120 PBT of £5.1m (vs £18.1m a year ago) and a 3.0% ROE. Income grew 4% y-o-y, but impairments almost doubled, and payment holiday charges also hurt. STB notes that since the lockdown ended, business has been rebounding. Its robust capital (CET 13.5%), business model and proven agility allow it to react to the changing lending environment. STB currently trades on a P/BV of 0.49x, reflecting sentiment more than fundamentals given its profitability track record and successful model. Our fair value estimate is 1,704p per share, down from 2,428p..
Companies: Secure Trust Bank Plc
Litigation Capital Management has announced FY20 results with gross profit up 7% to A$21.7m and PBT of A$9.2m, slightly behind expectations albeit the Group had already flagged that delays to 3 cases during the year would result in resolutions in FY21, thereby impacting FY20 results. That said, excellent strategic progress through the year and good news flow as well as increasing scale suggests more value to come. Reiterate buy
Companies: Litigation Capital Management Ltd
There was an eclectic mix of property companies to feature in the top price movers for September. Top of the tree was private rented sector and residential development specialist Sigma Capital Group, with a 34.2% rise. The group launched a £1bn joint venture with EQT Real Estate, the real estate platform of global investment firm EQT, to deliver 3,000 private rental homes in Greater London. Micro-cap investor Panther Securities also hit double-digit gains, while Macau Property Opportunities saw an uplift in its share price after announcing debt refinancing and a disposal. CLS Holdings, the investor in offices in Germany, France and the UK, continued to see a recovery in its share price – which has risen 15.1% in the last three months. Off the back of solid results, Berlin residential landlord Phoenix Spree Deutschland saw its share price gain 7.2%. Schroder REIT’s share price rose 6.6% in the month as it embarked on a share buyback programme, while Irish commercial property investor Yew Grove REIT also saw positive shareholder reaction to amending its investment strategy to increase its target loan to value ratio to 40%.
Companies: SUPR DIGS CRC PSDL ASEI TPON RLE UKCM BREI BCPT RGL SIR SLI TOWN CAL