BP Marsh, the venture capital provider to early stage financial services, has seen net asset value far outstrip the value of the company over the last year.
As at May 28th, the company's shares were trading at a 48.2% discount to the net asset value (NAV) per share of the company, a substantial discount, even for investment companies, which often trade at a discount to asset value.
The stoical statement from company Chairman Brian Marsh seemed to hint that the market's apparent indifference to the company might have something to do with its particular area of operation - financial services - lying at the heart of the storm which has engulfed Europe and North America.
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While the company's share price has been mired, the net asset value of the group has been rising steadily, and stood at£50.1m at the end of January, up 7.8% from £46.5m a year earlier, after making allowance for deferred corporation tax. This equates to a net asset value of 171p per ordinary share as at 31st January 2012 (2011: 159p).
In the year to 31st January, the group booked unrealised gains on the revaluation of its investment portfolio of £4.59m, versus gains of £2.97m the year before, which contributed to an operating income of £6.45m, up from £4.89m the year before.
In terms of cash income - dividends, interest and fees received - this rose to £2.11m from 2.02m the year before.
Profit before tax and an extraordinary charge of £30,000 improved to £4.38m from £3.01m the year before. Excluding portfolio movement, the group made a pre-tax profit of £0.11m (2011: profit of £0.15m). The group aims each year to at least break even on an underlying basis, before taking into account any portfolio movement.
The company currently has £3.5m of cash currently available for further investments, plus a further £4.325m of funds at its disposal from a loan facility made available by the directors. giving it a total war-chest of £5.5m, excluding commitments to existing investments.
Focusing on one winner and one loser in the company's portfolio, Marsh said its largest holding, Hyperion Insurance Group has forged ahead "with enviable momentum" but, proving that the company is "not immune to the pressure of the global financial outlook," the company's 27.72% stake in HQB Partners now looks worthless, after the proxy solicitation and corporate governance advisory partnership went into administration back in January.
By 31st January 2011, the group had written off its investment value in HQB from an investment cost of £35,000 in February 2005. The outstanding loan of £140,000 (at 31st January 2011) was repaid in full prior to HQB entering administration.
The group announced its maiden dividend of 1p along with its full year results.
While not putting much of a dent in the share price's discount to NAV per share, the shares rose 2.5p to 91.5p on the announcement.
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