Capital Gearing Trust shares gained 0.2% to 5,163p in early morning trading on Monday, following the firm’s reported pre-tax net return revenue growth to £10.3 million in FY 2022 from £6.7 million in FY 2021.
The trust announced a pre-tax net return capital increase to £58.4 million against £57.3 million in the previous year, alongside a net return attributable to equity shareholders revenue uptick to £9.8 million compared to £6.3 million and a net return attributable to equity shareholders capital rise to £58.4 million from £57.3 million.
Capital Gearing Trust mentioned a share price dip to 10% from 10.6% year-on-year, with a NAV per share decline to 10.5% from 10.7% against the MSCI UK Index 18.7% rate against 19.1% the year before.
Its share price relative to the MSCI UK Index slid 7.3% in 2022 compared to 7.1% in 2021.
The group closed the fiscal year on a NAV per share of 5,025p with a share price total return of 5,140p, marking a reportedly decent year of returns for the firm despite a volatile market.
Portfolio in FY 2022
Capital Gearing Trust attributed its results to the outperformance of the equity and bond portions of its portfolio, with its percentage of inflation-linked assets climbing in the past year, including government-index linked stocks, property exposure, and investments in renewables and infrastructure opportunities.
The group confirmed investments in power and energy plans, which performed to a satisfactory extent in Q1 2022, with investments in ETFs and direct investment in companies, under the heading of risk assets, which accounted for 44% of the portfolio along with other equity investments.
Capital Gearing Trust said 50% of its portfolio was held predominantly in government index-linked stocks, with a small proportion of its holdings placed in short-dated conventional bonds, preference shares and treasury bills.
The company confirmed it had lined these options up as a contingency measure to deploy if the market failed, with 6% invested in gold and cash to buy into equities at attractive valuations.
The trust commented that this strategy had historically made a difference to long term returns for the company.
Gearing up for challenging 2023
Capital Gearing Trust mentioned the gloomy macroeconomic picture going into FY 2023, however it commented that the firm held a range of near-cash investments which it could deploy if the markets fell to more attractive levels, alongside its selection of inflation-linked assets which are set to protect the company from “the worst ravages of inflation.”
The group said it would focus its risk assets on sectors including rented accommodation, renewable infrastructure, energy, materials and commodities investments across FY 2023.
Capital Gearing Trust noted a revenue return per share post-tax and expenses of 56.8p, in light of higher levels of equity income, especially from infrastructure and property shares.
The board recommended a dividend of 46p per share, against a payment of 45p in FY 2021.