Gresham House Strategic plc (LON:GHS) today announced its unaudited half year results for the period ended 30 September 2018.
GHS invests primarily in UK and European smaller public companies, applying private equity techniques and due diligence alongside a value investment philosophy to construct a focused portfolio expected to be comprised of 10-15 companies.
The Investment Manager aims for a considerably higher level of engagement with investee company stakeholders, including management, shareholders, customers, suppliers and competitors, with the aim of identifying market pricing inefficiencies and supporting a clear equity value creation plan and targeting above market returns over the longer-term.
Investment Management highlights
Three-year anniversary of management by Gresham House marked with strong NAV growth of 31.5% since inception and operational milestones achieved
Portfolio significantly re-balanced: IMImobile stake reduced by 57% generating £7.3m realised profit
Strong share price performances in key investments Northbridge, IMImobile, Augean and Tax Systems
£1.6m return of cash to shareholders via £1m buy back and £0.6m dividend (17.25p per share; versus 16.0p per share in 2017)
Share price total returns of 22.9% in the period and 34.3% since inception1
NAV per share total return of 8.1% in the first half of the year following the 10.1% NAV per share total return in the six months to 31 March 2018
NAV per share total return of 31.5% since inception1 – outperforming comparator indices2 by 5.0% and 2.5% respectively
Realised profits of £7.9m in the period:
– Profitable partial realisation of investment in IMImobile, generating a 28.3% IRR and 2.1x Money Multiple
– Successful exits from Miton and Revolution Bars generating money multiples of 1.6x and 1.5x and IRR’s of 26% and 144% respectively
NAV discount to share price reduced from 30.2% at 31 March 2018 to 20.9% at 30 September 2018
The Board has determined to propose a minimum 15% per annum dividend increase (from cumulative retained profits) over each of the next three years with an initial interim dividend of 8.75p per share (payable on 21 December 2018 to shareholders on the register on 30 November 2018) and future policy for returns to shareholders under review
1 Measured from 14 August 2015, the date of the first NAV publication after Gresham House Asset Management became Investment Manager
2 FTSE Small Cap total return (excluding investment trusts) and FTSE All Share total return
Post-period end highlights
Redeployment of capital commenced including two new initial investments post-period end
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (“MAR”). Upon the publication of this announcement, this inside information is now considered to be in the public domain. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of GHS by David Potter, Chairman.
The full version of the GHS interim report will be available on its website shortly at www.ghsplc.com.