Scottish Mortgage Investment Trust has reported that during the year to 31 March 2024, it delivered a share price and net asset value (NAV) return of 32.5 % and 11.5%, respectively.
The strength of the share price, relative to the NAV, reflects a narrowing of the discount from 19.6% to 4.5%, after hitting a mid-year low of 22.7%.
This resulted in total assets of £14.1bn, with the share price gaining 46% at year end, from that mid-year low.
The trust, managed by Baillie Gifford, aims to invest in growth companies – such as Nvidia, Spotify and SpaceX – and patiently own them over long periods of time.
Over the last decade, its managers have delivered a NAV per share increase of 381.9%, compared to a 218.2% increase in the FTSE All-World index.
Manager Tom Slater said: “Artificial intelligence, digitalisation, scientific and engineering progress and the opportunities presented by transitioning our energy model will provide fertile investment territory for years to come.”
Managers added five new companies to the portfolio during the year, including the re-introduction of Meta, alongside Insulet – which manufactures tubeless pumps that integrate with glucose monitors for type-1 diabetics – and Sea – a digital entertainment, e-commerce and financial services business.
Lawrence Burns, deputy manager, added: “We’re greatly encouraged by the founders of our portfolio companies telling us that, to them, the pace and magnitude of technological-driven change has never appeared greater.
“The possibility of such change is a crucial enabler of the outlier outcomes we seek and aim to deliver for our shareholders.”
Scottish Mortgage also provided follow-on funding to eight private companies, totalling £109.4m. Holdings included Stripe, Redwood Materials and Tempus – the latter of which has now filed for an IPO in the US.
Scottish Mortgage has been investing in private companies since 2012. During that period, it has invested in 96 private companies, 36 of which have subsequently listed.
It is focused on investing in late stage private companies that are scaling up and becoming profitable. Private companies made up 26.2% of the portfolio at the end of March.
Also in March, the board took action to narrow the discount and announced it would make at least £1bn available for share buybacks over the following two years.
Since 1 April 2023 to date, the company has bought back 68.5 million shares at a total cost of £592m, representing 4.9% of the share capital in issue at the start of the year.
At the end of the year gearing was 11%, a reduction from 14% at 31 March 2023. As part of that process, the company paid back debt most sensitive to rising interest rates. The average interest rate cost of the debt remains low at 3.18%.
The board recommended the total dividend be increased by 3.4% to 4.24 pence per share.
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