Equities made further progress over the month despite mixed Covid news. Tensions over vaccines remain and many parts of Europe are entering further lockdowns. Further wrangling over the safety profile of the Astra/Oxford vaccine risks undermining vaccination efforts in Europe and elsewhere. Infection rates also continue to rise in places such as India and Brazil where it had been thought there was a reasonable element of herd immunity. In spite of such concerns, investors continued to focus on the bigger picture: the vaccine roll-out is ongoing and recent economic data has highlighted the scope for a significant acceleration in economic activity. The fund gained +4.3% versus +4.0% for the MSCI UK Index.

Economic activity continued to rebound across the globe. Hiring is picking up aggressively and there is little evidence that either business or consumers have been significantly scarred by the pandemic. House prices in the US and elsewhere are rising at the fastest rate since the global financial crisis. President Biden’s stimulus was passed by US lawmakers and Europe is moving ahead with its recovery fund despite an attempted intervention by the German constitutional court. With monetary policy also extremely supportive, economic and profit forecasts for the next twelve to eighteen months look unduly conservative.

The fund’s consumer cyclical stocks performed well as investors looked forward to the reopening of the economy. Many of them were buoyed by strong updates. Bathroom and kitchen supplier, Norcros, even managed to release two positive trading updates in just one month. These resulted in the house broker raising forecasts for over 30% for the current year to the end of April and over 20% for the following year. Importantly, the impressive profit performance has been mirrored by the group’s cash generation and the business will be in a net cash position at year-end, providing significant scope for further acquisitions. Norcros has successfully acquired and integrated a number of smaller suppliers over the last couple of years and these acquisitions have generated material revenue synergies. As long-term shareholders, we look forward to the benefits of further acquisitions. Despite the management’s impressive track record the shares continue to languish at a material discount to both the sector and the market.

Vistry delivered full-year results that confirmed the strength of the ongoing recovery in the housebuilding division and strength in the partnerships business. In the twelve months since it acquired Linden Homes and the Partnerships & Regeneration business from Galliford Try, the group has made excellent progress in integrating the businesses and reducing debt. Management’s confidence in the outlook for the business was evidenced by significant share purchases by the CEO, Greg Fitzgerald.

Volution rose post impressive full-year results. Revenue grew at high-single digits in constant currency and adjusted profits grew in excess of 20%. Despite the sharp move in the share price over the last six months we believe there is further upside. Ventilation and air handling are of increasing importance in both new build and refurbished properties and look set to deliver robust growth for many years.

The fund’s energy holdings were generally weaker as the oil price retreated. Jadestone Energy fell as investors continued to digest the implications of the recent update. While some short-term disappointment is understandable, the resilience of the group’s financial and operating performance is underappreciated. Jersey Oil & Gas declined as the company raised additional equity.

New positions were initiated in 888 Holdings and ActiveOps. The fund added to its holding in Jadestone. DCC was top-sliced.

Equities made further progress over the month despite mixed Covid news. Tensions over vaccines remain and many parts of Europe are entering further lockdowns. Further wrangling over the safety profile of the Astra/Oxford vaccine risks undermining vaccination efforts in Europe and elsewhere. Infection rates also continue to rise in places such as India and Brazil where it had been thought there was a reasonable element of herd immunity. In spite of such concerns, investors continued to focus on the bigger picture: the vaccine roll-out is ongoing and recent economic data has highlighted the scope for a significant acceleration in economic activity. The fund gained +4.3% versus +4.0% for the MSCI UK Index.

Economic activity continued to rebound across the globe. Hiring is picking up aggressively and there is little evidence that either business or consumers have been significantly scarred by the pandemic. House prices in the US and elsewhere are rising at the fastest rate since the global financial crisis. President Biden’s stimulus was passed by US lawmakers and Europe is moving ahead with its recovery fund despite an attempted intervention by the German constitutional court. With monetary policy also extremely supportive, economic and profit forecasts for the next twelve to eighteen months look unduly conservative.

The fund’s consumer cyclical stocks performed well as investors looked forward to the reopening of the economy. Many of them were buoyed by strong updates. Bathroom and kitchen supplier, Norcros, even managed to release two positive trading updates in just one month. These resulted in the house broker raising forecasts for over 30% for the current year to the end of April and over 20% for the following year. Importantly, the impressive profit performance has been mirrored by the group’s cash generation and the business will be in a net cash position at year-end, providing significant scope for further acquisitions. Norcros has successfully acquired and integrated a number of smaller suppliers over the last couple of years and these acquisitions have generated material revenue synergies. As long-term shareholders, we look forward to the benefits of further acquisitions. Despite the management’s impressive track record the shares continue to languish at a material discount to both the sector and the market.

Vistry delivered full-year results that confirmed the strength of the ongoing recovery in the housebuilding division and strength in the partnerships business. In the twelve months since it acquired Linden Homes and the Partnerships & Regeneration business from Galliford Try, the group has made excellent progress in integrating the businesses and reducing debt. Management’s confidence in the outlook for the business was evidenced by significant share purchases by the CEO, Greg Fitzgerald.

Volution rose post impressive full-year results. Revenue grew at high-single digits in constant currency and adjusted profits grew in excess of 20%. Despite the sharp move in the share price over the last six months we believe there is further upside. Ventilation and air handling are of increasing importance in both new build and refurbished properties and look set to deliver robust growth for many years.

The fund’s energy holdings were generally weaker as the oil price retreated. Jadestone Energy fell as investors continued to digest the implications of the recent update. While some short-term disappointment is understandable, the resilience of the group’s financial and operating performance is underappreciated. Jersey Oil & Gas declined as the company raised additional equity.

New positions were initiated in 888 Holdings and ActiveOps. The fund added to its holding in Jadestone. DCC was top-sliced.