LONDON – Schroder British Opportunities Trust (SBO) has released its interim results for the six-month period ending September 30, 2024, reporting a 2.4% decrease in Net Asset Value (NAV) per share on a total return basis. The trust’s management team, which invests in both private and public equities, noted that despite underlying positive performances from companies, the unquoted portfolio detracted 2.7% from the NAV due to factors such as foreign exchange and transactional activities.
The trust’s unquoted holdings, which form the majority of the investments and are considered long-term, are currently valued at 1.5 times cost. This is despite the conservative approach to valuation adopted by the trust. During the reported period, two new private companies were added to the portfolio, Headfirst and Acturis, with Headfirst already making a positive contribution to the NAV.
A completed sale of Graphcore, a portfolio company, was executed at a value higher than its carrying value, which could suggest the conservative nature of the trust’s valuation methods. At the end of the period, the portfolio included nine private companies, making up 64% of the NAV, and cash equivalent to 9% of the NAV.
The public equity segment of the portfolio, consisting of 22 holdings or 27% of the NAV, showed a broadly flat performance with some recoveries balanced by weaker stocks. The trust made two new investments and one disposal in the public equities space following a merger and acquisition approach.
Despite the varied performance, the trust’s discount rate remained at 27.8%, with the board opting not to engage in share buybacks. The trust also announced the upcoming retirement of one of its four management team members in early 2025.
Justin Ward, the new Chairman of Schroder British Opportunities Trust, commented on the operational performance, stating that the portfolio of innovative growth businesses is performing well and that the pipeline for attractive investment opportunities remains strong.
The trust’s results come at a time when the economic environment has seen falling inflation and lower interest rates, which could potentially set the trust up for a more favorable second half of the year, according to Kepler Trust Intelligence’s analysis.
This summary is based on a press release statement and provides an overview of the key points from Schroder British Opportunities Trust’s interim results.
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