London investment company "optimistic" after 45% revenue decline

A London investment company has reported that its gross revenue declined by 45 per cent as a result of the challenges posed by the political climate and the pandemic.

Lowland Investment Company saw revenues drop from £20.8m to £11.3m in the year to the end of September, which it said was “particularly disappointing” as the first half of the year had gone “very well”.

The company, which has stocks in firms such as GlaxoSmithKline, National Grid and HSBC, said that in addition to the outbreak of coronavirus, the main challenges posed to it were the US election and Brexit.

Robert Robertson, chairman of Lowland, commented: “Hopefully it is safe to believe that the US presidential election has been resolved, and that the roll-out of vaccines will enable the Covid-19 virus to be brought substantially under control over the course of 2021.

“We shall know soon whether good sense from the EU and the UK will prevail in bringing about an orderly Brexit.

“The resolution of so much serious uncertainty should make us optimistic.

“Reflecting a reversal of the pattern experienced during the financial year, the company’s net asset value has increased by 23.3 per cent compared with an increase of 13.3 per cent in the benchmark since the year end (both on a total return basis).

“Whilst asset prices generally are at elevated valuations, the exception is the UK equity market.

“Our approach to investment will remain bottom-up, but in looking at the prospects for individual companies, the prominence of macroeconomic challenges will be unusually apparent.

“It is impossible to foresee how governments will deal with the massive levels of debt incurred by their reactions to the pandemic.

“We face the prospect of increasing unemployment and bankruptcies. We cannot yet know which of these contrary influences will prevail.

“Assuming that the very immediate dangers which have preoccupied the last months are overcome, markets’ initial relief may soon be displaced by a new focus on the more medium-term concerns of this sort.”