NAV Performance
The Company's NAV
% Total Return for the month of December was
-0.44%, which brings the NAV % Total Return for the quarter to
-0.70%. The NAV % Total Return over the last twelve months was
3.54% and inception to date (ITD) 46.57%.
The NAV as at 31st
December 2024 was 85.50 pence per Ordinary Share. This negative NAV
return of -0.376 pence per share in December arose primarily from
mark to market valuation adjustments, namely, (1) an increase in
the discount rate for investment loan Ref #39, and (2) a reduction
in the valuation of investment loan Ref #76.1, the Company's
quasi-equity holding in the gym franchise business led by
challenging trading conditions.
Said valuation adjustments were
offset by a strong net interest income of +0.947 pence per share.
This higher-than-expected net interest income was predominantly
derived from a partial year-end accounting reversal of the
liquidation cost accruals (which had been fully accounted for in
the year-end NAV of FY23) of circa 0.65 pence per share.
Disregarding this, the net interest income was circa 0.30 pence per
share - roughly in line with previous months.
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Summary
for December 2024 (pence per share)
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Net interest income
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+0.947p
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Change in portfolio
valuations
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-1.393p
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Other
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0.070p
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Net NAV Movement
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-0.376p
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Portfolio Activity
As at 31st December 2024,
the Company's invested portfolio had an aggregate nominal
outstanding of circa £79 million across 18 investments. The average
yield was 12.50%, with a weighted average loan life remaining of
circa 0.73 years. Overall, the portfolio is 94% invested in private
market assets and 6% in public bonds.
Q4-2024 was an active and successful
quarter for the Company in terms of portfolio realisation with a
total of 2 repayments totalling circa £6m, which resulted in full
exits of said investment loans - both of which had been on the
Company's watch list for quite some time and it is therefore
pleasing to report to Shareholders a successful exit. Equally as
important, both repayments were achieved in line with the Company's
assumptions and slightly ahead of the latest valuation.
· Investment Loan Ref
#80 - c.£4.00m
· Investment Loan Ref
#92 - c.£1.96m
In line with the realisation
mandate, there was limited activity in terms of drawdowns, with
only one drawdown under existing committed facilities:
· Investment Loan Ref
#96 - c.£225k
During the reporting period, a
number of extensions were granted, as outlined below:
· Investment Loans Ref #66
& Ref #67 - a short-term 2-month
extension was provided to enable the Borrower to complete on its
refinancing transaction, which is currently underway. There can be
no assurances that said refinancing process will successfully
complete.
· Investment Loan Ref
#39 - a 3-year extension was
provided to the Borrower to have our junior secured facility
co-terminus with the senior facility. However, it is worth noting
that the Sponsor has a legal requirement to initiate an exit
process of said investment during 2025 and so our base case
scenario at present is therefore a full repayment in early 2026,
circa 1.5 years ahead of the extended legal maturity.
· Investment Loan Ref
#73 - a 6-month extension was
provided to the Borrower to enable a refinancing of the current
lending group.
At period end, the Company had no
outstanding debt with cash balances standing at circa £8.5m of
which circa £1.5m will be retained by the Company largely to fund
undrawn committed facilities and for working capital
purposes.
Finally, further updates regarding
the Company's Managed Wind-Down process and subsequent return(s) of
capital to Shareholders will be announced by the Board as and when
appropriate.
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