Monks Investment Trust's tech investments shape growth and outlook

(Alliance News) - Monks Investment Trust PLC on Friday reported increased net asset value and ...

Alliance News 18 June, 2021 | 10:38AM
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(Alliance News) - Monks Investment Trust PLC on Friday reported increased net asset value and returns in its most recently ended financial year with the help of its investments in technology companies.

The Edinburgh-based investment trust, which focuses on long-term investment growth from equities, reported a net asset value per share of 1,358.1 pence for the financial year ending April 30, up from 875.6p the year before. The company's net asset value has recovered considerably since it dropped to a low of 721.3p in mid-March last year.

Net return before finance tax for the financial year was GBP1.07 billion, up sharply from GBP60.3 million a year prior.

The FTSE-250 listed company said that its investments in technology companies allowed it to weather the disruption caused by the Covid-19 pandemic. In particular, Monks benefited from the accelerated switch towards online retail.

The company's top performing companies included online retail behemoth Amazon.com, Singapore-based internet provider Sea Ltd, Chinese shopping platform Meituan-Dianping, and California-based electric car company Tesla Inc, among many others.

For its final dividend Monks recommended 2.0p, down 20% from 2.5p the year before. Monks noted that the most recent dividend is the minimum amount required to maintain the company's investment trust status, indicating that its priority is "capital growth".

The trust celebrates successfully removing its share discount, a company goal since 2015. With its shares trading at a "consistent premium" through the most recent financial year. Specifically, the company's stock price rose by 56% between April 30, 2020 and the same date this year. As such the company was able to issue 12.9 million new shares with prices in excess of net asset value, enabling it to raise over GBP168.0 million in new investment funds.

Monk emphasises that it sees the current pandemic not as a turning point, but rather as an accelerator of current trends, which the company said it has backed "through careful stock selection".

In coming years, the investment trust plans to extend its commitment to innovative and ambitious technology companies. The company wants to engage in areas where it considers technology can make significant new contributions - such as the healthcare, education, real estate and energy sectors - as well as proven technologies like cloud services.

"We are growth investors, we concede we have enjoyed a tailwind in the last few years but we also feel strongly that ambitious companies will continue to drive stock market returns and our focus should be on identifying those that have that potential," said investment manager Spencer Adair and his deputy Malcolm MacColl.

Chair Karl Sternberg added: "Returns will not be linear - we should expect greater volatility as policy responds to economic recovery - but it is during just such periods that many opportunities come to light."

Monks Investment shares were trading up 0.4% at 1,339.09 pence each in London on Friday morning.

By Scarlett Butler; scarlettbutler@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Monks Ord 1,394.00 GBX -0.85

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