Companies whose year-end mirrors that of the official financial year may be feeling nervous about reporting their results to the market despite the FCA allowing firms to delay reporting given the chaotic conditions caused by COVID 19. However, companies who have done well mayl be keen to report this and Gresham House Strategic (GHS) falls in to this category.
GHS total shareholder return was minus 5.19 percent to the year ending 31 March, smashing its benchmark which was down 17.95 percent. Although the company was down, given that its reporting period covers the time when the pandemic hit, its performance is laudable in a market which has seen some firms drop by over 50 percent.
Unaudited yearly NAV total return performance was minus 14.3 percent, again not something one would think a firm would want to shout about but given the FTSE Small Cap Index lost 24.7 percent in the same period is again another example of the resilience of GSH’s portfolio.
It’s the four year anniversary of GSH being managed by Gresham and since inception the strategy has returned 31.6 percent, this includes the large market losses seen with the COVID outbreak. Again this compares favourably with its benchmark which has returned 13.9 percent in the same time frame.
The company returned £1.6 million of cash to GHS shareholders via a buy-back of 74,446 shares and dividends of £751,900 during year, funded by net profitable realisations of £2.3 million and dividend income in the year of £717,000. This comes in an environment when many traditional dividend paying firms are cancelling their coupon payments to shore up their balance sheets.
The trust had managed to reduce its discount to NAV from 22.6 percent to just 3.4 percent in December, an amazing accomplishment. However, given the recent sell-off, the discount has moved out again to 15 percent by 31 March.
This closed-ended fund entered the year with around a 16 percent cash position, something not seen in the open-ended space. It has now, quite sensibly increased to 19 percent. Given that many investors are moving to cash, this trust has taken a similar stance and its portfolio contains companies not hugely indebted. Given the leeway the FCA has given the companies freedom to delay reporting to the market, those that choose to do so most likely have some good news to share. Relatively in this case.
