REG - GCP Asset Backed Inc - Half-Yearly Report & Financial Statements

GCP Asset Backed Income FundAnnouncement

19/09/2024 07:00

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RNS Number : 7754E  GCP Asset Backed Income Fund Ltd  19 September 2024

GCP Asset Backed Income Fund Limited

(the "Company" or "GCP Asset Backed")

LEI: 213800FBBZCQMP73A815

 

Half-yearly report and unaudited interim condensed financial statements

for the period ended 30 June 2024

 

19 September 2024

GCP Asset Backed, which invests in asset backed loans, is pleased to announce
the publication of its unaudited half-yearly report and financial statements
for the period ended 30 June 2024 ("Interim Financial Statements") which are
now available on the Company website at: Gravis | Literature
(graviscapital.com)
(https://www.graviscapital.com/funds/gcp-asset-backed/literature) .

 

Highlights for the period include:

 

·    Dividends of 3.16(1) pence per share declared for the period.
Aggregate dividend payments over the last twelve months represent a 9.2% yield
on the Company's closing share price at 30 June 2024.

 

·    All resolutions put to the AGM and EGM held in May 2024 were duly
passed, which resulted in a change in the Company's investment objective to
undertake a managed wind-down and realise all existing portfolio assets.

 

·    Strong progress was made on the Company's managed wind-down with a
total of 159.6 million shares redeemed, representing 37.5% of the Company's
issued share capital at a price of 89.67(2) pence per share.

 

·    Total NAV return(3) for the period of 1.0% (30 June 2023: 2.7%) and
total NAV return(3) since IPO of 56.5%.

 

·    Profit for the period of £1.7 million (30 June 2023: £8.0 million).
The reduction primarily reflects net unrealised valuation losses on the
portfolio. Further information on financial performance is included on pages
18 to 21 of the Interim Financial Statement.

 

·    NAV per share of 90.92(4) pence at 30 June 2024, a decrease of 2.5%
from the year end, primarily reflecting valuation losses as detailed above.
Further information is included in the Investment Manager's report on pages 8
to 17 of the Interim Financial Statements.

 

·    Repayments of £122.3 million received in the period. Interest
amounts of £2.6 million were capitalised in accordance with contractual
terms.

 

·    Exposure to a diversified, partially inflation and/or interest rate
protected portfolio of 31 asset backed loans with a third-party valuation of
£232.9 million(5) at 30 June 2024.

 

·    Post period end, the Company received repayments totalling £25.1
million.

 

1.      Total dividends of 3.1625 pence per share includes a quarterly
dividend of 1.58125 pence per share for the quarter to 30 June 2024, which was
declared post period end.

2.      The shares were redeemed at 89.66875 pence per share.

3.      Alternative performance measure - refer to pages 52 to 54 for
definitions and calculation methodology.

4.      Does not include a provision for the dividend in respect of the
quarter to 30 June 2024, which was declared and paid post period end.

5.      Valuation of the loan portfolio held by the Subsidiary. The
Company makes its investments through its wholly owned Subsidiary. Refer to
note 1 for further information.

 

On the release of the Interim Financial Statements, Alex Ohlsson, Chairman of
GCP Asset Backed, commented:

 

The Company has historically offered investors an attractive alternative to
fixed income during a period of enduring low interest rates. However, rising
yields from traditional income sources have led to a flight of capital away
from alternative assets, reducing demand for the Company's shares and
contributing to the persistent discount to NAV at which the shares have been
trading.

 

In May 2024, the Board was pleased that all resolutions put forward at the AGM
and EGM were successfully passed. These resolutions mark a significant shift
for the Company, as it embarks on a managed wind-down of the portfolio. I want
to thank shareholders for their active engagement in this process. As part of
the wind-down, an initial capital distribution was made in June 2024,
redeeming 159.6 million ordinary shares, representing 37.5% of the Company's
issued share capital.

 

Despite market challenges, the portfolio generated £13.8 million in interest
income and £1.7 million in profit. The Company declared dividends of 3.16(1)
pence per share for the period, and it remains the Board's intention to
sustain the current annual dividend target of 6.235 pence(2) for as long as
practicable, while the Company remains substantially invested.

 

As we move forward, no new investment activity is planned, and the focus
remains firmly on the orderly wind-down of the portfolio. The Investment
Manager continues to actively manage the portfolio with the aim of
accelerating redemptions and disposals in line with the realisation plan.

 

Thank you to our stakeholders for their ongoing support during this
transitional period. We remain committed to delivering value as we move
through the managed wind-down process.

 

1.      Total dividends of 3.1625 pence per share includes a quarterly
dividend of 1.58125 pence per share for the quarter to 30 June 2024, which was
declared post period end.

2.      This is a target only and does not constitute a profit forecast.

 

For further information, please contact:
 

 Gravis Capital Management Ltd       +44 (0)20 3405 8500
 Philip Kent

 Cameron Gardner

 Anthony Curl

 Barclays Bank plc                   +44 (0)20 7623 2323
 Dion Di Miceli
 Stuart Muress
 James Atkinson

 Burson Buchanan                     +44 (0)20 7466 5000
 Helen Tarbet

 Henry Wilson

 George Beale

 Samuel Adams

 

Notes to editors

 

GCP Asset Backed Income Fund Limited is a closed-ended investment company. Its
shares are traded on the Main Market of the London Stock Exchange. Its
investment objective is to undertake a managed wind-down of the Company and
realise all existing assets in the Company's portfolio in an orderly manner.

 

The Company's portfolio comprises a diversified portfolio of predominantly UK
based asset back loans which have contracted, predictable medium to long term
cash flows and/or physical assets.

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