Witan Press Release

Witan Investment Trust’s NAV total return in the first half of 2022 was -14.3%

Tuesday 16th August 2022

A summary of the results is below:

• Witan’s NAV total return was -14.3%, 4.7% behind its benchmark
• Since the period end, the NAV has risen 11.4% and the share price 14.1% (to 12 August), outperforming the 9.9% rise in the benchmark
• Most of the underperformance was during Q1, when the markets began to react to the consequences of the Russian invasion of Ukraine
• The discount widened, along with others in the sector; 4.2% of our shares were bought into treasury, at an average discount of 7.6%
• Our revenue earnings for the first half rose 39% on the corresponding period of 2021
• A second interim quarterly dividend of 1.40p per ordinary share will be paid in September. Total dividends paid in respect of the period are 2.80p per ordinary share (2021:2.72p)

Andrew Ross, Chairman of Witan Investment Trust plc said:

“The first half of 2022 was an unusually tough environment for investors, with both equity and bond markets registering significant falls. US equities on Wall Street exceeded the 20% fall often viewed as defining a “bear” market. In these circumstances, Witan’s employment of gearing, while historically beneficial, proved a drag on returns, while our managers’ expectations for a post-pandemic reopening of economies were stymied by the impact of higher inflation and interest rates.

As a result, Witan experienced a total NAV return of -14.3% and a share price total return of -17.1%, compared with a return of -9.6% in our benchmark. For perspective, the AIC’s Global Equity sector experienced an average -19% NAV total return, or -24% weighted for the size of the constituents (source: Morningstar).

For Witan, the underperformance was concentrated in Q1, with a 6.3% fall compared with a 1.9% fall in Witan’s benchmark. In Q2 Witan’s NAV total return performance of -8.6% was closer to the benchmark’s -7.8%, with the managers performing in line at the portfolio level, offset by the impact of our gearing.

Revenue earnings per share for the period were 2.51 pence, a rise of 39% from the level of 1.80 pence per share seen in the first half of 2021. We expect a significant rise in revenue earnings this year and further progress towards restoring full dividend cover. The Company has increased its dividend every year since 1974 (a 47-year record of increases). The Board’s policy remains to grow the dividend each year and the full year’s dividend for 2022 is expected to show another year of growth.

The Company has been active (in absolute terms and relative to its peers) in buying back shares, buying 30.7m shares (4.2% of the total) into treasury in the period, at an average discount of 7.6%. This added £5.7m to the net asset value which, for perspective, more than offset the Company’s investment management costs for the period.

Witan’s managers continue to seek out companies with sound business strategies, resilient finances, and good management, firmly believing that companies that grow the fundamental value of their business will eventually see their share prices follow that growth.

The mid-year period end coincided with a low point in market sentiment and performance. Between then and 12 August (the latest practicable date before the publication of the report), the NAV rose by 11.4% to 252p and the share price by 14.1% to 235p, ahead of the benchmark’s return of 9.9%. While noting that there remains ground to make up, there is reassurance for shareholders that absolute performance significantly recovered and the Company outperformed during the summer rally.”

A video interview with Andrew Bell, Chief Executive Officer of Witan Investment Trust, discussing the 2022 half year results and the current outlook is available on the Company’s website here.

For further information please contact:

Andrew Bell, Chief Executive Officer
Witan Investment Trust plc
Tel: 020 7227 9770
[email protected]

James Hart, Investment Director
Witan Investment Trust plc
Tel: 020 7227 9770
[email protected]

Alexis Barling, Director of Marketing
Witan Investment Trust plc
Tel: 020 7227 9770
[email protected]

Notes to Editors 

Witan Investment Trust plc

Established in 1909, Witan is one of the UK's largest investment trusts, managing £1.7bn (source: Witan, as at 30.06.2022) on behalf of over 25,000 investors. Witan operates a multi-manager structure and currently has 8 principal managers. For further details please visit www.witan.com.

Issued and approved by Witan Investment Services Limited. Witan Investment Trust is an equity investment. Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of currency and market fluctuations and you may not get back the amount originally invested.

Investment trusts and closed-ended funds are allowed to borrow. This is known as ‘gearing’. In a rising market, it will tend to enhance returns because of the investment fund’s increased exposure to the market. By the same token, however, it will tend to increase losses triggered by a falling market and a sufficiently large fall in value could mean you get nothing back at all. Funds may, however, increase or decrease their levels of gearing to suit market conditions. The share price may trade above and below the NAV per share representing either a premium or discount to the share price respectively.