Manager's Monthly Report

The Trust produced a Net Asset Value total return of +3.0% during the month and a price total return of +1.9%, compared to a return of +2.7% for the FTSE All-Share Index (TR).

We recently met with one of the Trust’s largest holdings, Experian. The stock is unusual in the portfolio given its modest (1.5%) dividend yield and above-average price to earnings valuation (27x). Thus, it seems appropriate to dedicate a few lines to this rare UK technology stock.

At its core, Experian remains the credit bureau business meaning it is a crucial provider of the data that underpin the basic societal need to access fairly priced credit. What is perhaps less visible is its evolution from a simple data supplier to a developer of sophisticated software analytics tools, in the process becoming one of the largest software vendors in the world.

The digital age has led consumers to expect (demand!) frictionless, instant transacting. Experian has enabled institutions such as banks, utilities and telcos to automate the mission-critical credit, compliance, and anti-fraud processes that power their customer transactions. The outward simplicity to the end user belies an extraordinary level of complexity in modelling vast and ever-growing datasets. The company now sits at the cutting edge of big data analytics.

With material growth in earnings and cash flow projected in the coming years, coupled with high margins that underpin returns on equity above 30%, we are happy to forgo a more generous dividend pay-out to hold such a high-quality and financially productive jewel of the UK stock market.

Shareholders are warmly invited to the Troy Investment Trust Seminar, which will be held on 3rd July 2019 at the Royal Academy of Arts, 6 Burlington Gardens, W1S 3ET. Please email troy@taml.co.uk for more information and to register your interest.

 

 

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