Last Updated January 20, 2012
The UKVI fund was down 6.48% this month compared to our iShares FTSE 100 benchmark. This was due to a large 7.04% gain in the benchmark which completely trounced my holdings over this short period. What upside we had was mostly thanks to French Connection and their sale of Nicole Farhi, which prompted a raft of activity from institutional owners perhaps helping the share to its 23% gain from last month. On the downside, Luminar continued to slide another 16% but now it is such a small part of the fund that any further losses will be barely noticeable overall.
The six monthly figures are not much better (down 3.4% relative to benchmark), but six months is too short a time to make any meaningful judgments on performance. The goal for the fund is to outperform the benchmark in any given five year period so I am not sweating the small stuff just yet.
Other events of note
M J Gleeson sold off their property maintenance and emergency respose unit, Powerminster. I have no idea how this sale to Morgan Sindall for £6.6M cash will affect things other than to give Gleeson a boost to their already huge £20M cash balance.
In addition to French Connection’s share price increase, the fund received its first FCUK dividend which puts their total realised returns at 1.1% which is 0.8% annualised. Not exactly Earth shattering but at least it is a start.
Victoria’s latest interim management statement said of their three geographic regions that Australia was good, the UK was bad and Ireland was ugly. In summary they said that;
Overall, the trading environment will continue to be challenging. However, the Group remains confident that it has a financially strong position, a solid and geographically diverse business model which is well positioned to support future growth when the markets in which it operates start to strengthen.
Notice the all important word, “when”. The “when” may be sooner than with some other holdings as Victoria has a lot of exposure to Australia which may well return to boom long before the UK can even dream of such things.
Titon Holdings also produced an interim management statement but a much happier one than Victoria’s with revenues are up by 19%. However, uncertainty and caution continue to loom large on the horizon and so the champagne remains on ice.
600 Group have just released their preliminary results for the year but I’ll leave any comment on that for next month, except to say that they are still making a loss overall, book value is down slightly but they at least made an operating profit in the second half.
How goes it for the market?
Currently the FTSE 100 has a real PE10 of about 12.7 which is slightly below my long term average estimate of 13.8. This is pretty close to a sensible value and if I were rebalancing an index tracker account between stocks and bonds today I’d put 72% into stocks.
Some signs of weakness have started to appear, but as ever with the market that acts like a super tanker it may take a long time to find out which direction we’re headed. Currently the PE is still about 5.5 according to Nationwide, which is over 30% above my estimated sensible ceiling of 4.