The Church House UK Equity Growth Fund had a very active November, with four positions being exited and numerous top-ups on the back of the market volatility during the thinly traded Thanksgiving Day holiday.
Soft drinks is a theme we have invested in over the past few years. We like drinks with strong global brands and customer loyalty. In March 2020, in the midst of the market panic, we picked up London-listed Coca-Cola Hellenic at a 50% discount to its previous highs. Manufacturing, bottling and distribution of all the Coca-Cola products (including Sprite & Fanta) through Scandinavia down to Turkey, the Middle East and West Africa, we felt it was a great opportunity to pick up a strong global leading brand that is London-listed, but Swiss incorporated, in the portfolio. It has performed as we expected, with sales picking up as economies and travel & leisure industries open up and, on the back of a recovered share price, we decided to sell the position and put the proceeds to use elsewhere. We also sold our holding in Irn-Bru producer, AG Barr, deciding to redeploy the capital elsewhere. The business has struggled recently, with coronavirus, sugar-tax and the loss of their canning and sales agreement with Rockstar Energy. It is a well-run business with a management team we admire and is one we will keep on the watchlist. It remains in our UK Smaller Companies Fund portfolio.
We sold our position in Avast following shareholder approval for their takeover by Norton LifeLock. As mentioned before, we didn’t approve of the takeover, believing that it was far too cheap for what Norton were buying. We made this clear in dialogue with management and other shareholders and wish the company luck in the future. We also sold our holding in Derwent London, putting our proceeds into Shaftesbury (who we have now owned for 15 years).
With the aforementioned proceeds, the fund currently has just over 4% cash. We deployed a chunk in November, topping up Kainos and Genus. We remain active and we have opportunities in our sights over the winter season.
Wishing you all a very Merry Christmas.
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