Bellevue Healthcare Trust PLC (LSE:BBH) said its managers have reported, for the first time, that Covid pandemic-era disruptions are no longer an issue as it highlighted a net asset value (NAV) total return from 1 December 2019 to 30 November 2022 of 31.8% in its annual results.
In the results statement, Randeep Grewal, the FTSE 250-listed firm's chairman commented: "Whilst not everything has yet returned to pre-pandemic norms, I remain satisfied that both as a board and a company we have continued to operate effectively alongside our service providers."
Over the financial year, the company's total NAV return - including reinvestment of dividends - was -4.1%. In contrast, the MSCI World Healthcare total return Index produced a positive total return of 14.1%, representing an underperformance of 18.2% over the year. One of the trust's specific return objectives is to beat the total return of the MSCI World Healthcare Index (in sterling) on a rolling three-year period.
Grewal noted: "This is the second annual report where I have to acknowledge underperformance of the company against the index and the first where the absolute total return was negative. As per last year, I will refer readers to the longer-term track record. However, this not to minimise any potential concerns that investors may have".
"Nevertheless," he added, "some of my comments from last year's statement bear repeating in what has remained a challenging macro environment for active equity managers: 'Short-term variations should never change an investment process'; the 'Investment Manager remains true to its investment process' and 'continues to focus on bottom-up fundamental analysis to drive stock selection predicated on superior long-term returns.'"
Bellevue Healthcare pointed out that its portfolio remains US-centric, with particular exposure to the Small/Mid Cap end of the market capitalisation spectrum, and the investment mandate has few constraints beyond liquidity (at both the portfolio and individual company level), giving the investment manager free rein to pursue a 'best ideas' approach and optimise the risk/return potential of the company's concentrated investment portfolio over the long term, in line with the company's stated investment objectives.
The Trust highlighted that its active share versus the comparator Index at the end of November 2022 was 95.9% and has averaged 93.4% since inception, nothing that "such a highly active strategy will inevitably result in a return profile that does not correlate to that comparator in the short-to-medium term, for better and for worse".
Bellevue Healthcare's revenue return after tax for the year amounted to a loss of £1,655,000 (2021: profit of £357,000). The company's capital return after tax for the year amounted to a loss of £36,769,000 (2021: profit of £86,893,000). Therefore, the total return after tax for the company was a loss of £41,424,000 (2021: profit of £87,250,000).
The company targeted a total dividend for the year ended 30 November 2022 of 6.47p per ordinary share, and paid an interim dividend of 3.235p on 2 September 2022, with a final dividend of 3.235p to be paid on 5 May 2023 to shareholders on the register at the close of business on 17 March 2023, subject to shareholder approval at the 2023 AGM.
As announced by the company on 21 December 2022, for the financial year ending 30 November 2023, the target total dividend will be 5.99p per ordinary share, this being 3.5% of the audited net asset value per ordinary share of 171.16p, including current financial year revenue items; as at 30 November 2022.