31st July SIPP Review

Another interesting month for the SIPP.

Performance continues to be solid and the value is now over £174,000.  With just 4 more contributions (on 7^th of August, September, October and November) before the annual performance “cut-off” on my birthday on 8^thNovember, the SIPP only has to find another 3% of growth to beat the annual target of 15% and hit £186,000.

The big gainers in the month were GVC - who secured a major deal with America-based MGM Resorts, and which may (at some time in the near future) be taken over by that company. Also, Homeserve (HSV) which continues to secure a strong hold on domestic repair markets in the USA. Both companies increased their Share Price (SP) by over 11% in the month.

There have been several changes to the constituents of the SIPP with sales of Croda (CRDA), SSP Group (SSP) and XL Media (XLM). 

I felt both Croda and SSP Group didn’t fit the profile of my SIPP as they are both “slow & steady” growers.  I run an ISA alongside the SIPP (to provide the funds to repay the mortgage) and I fill that with companies holding that "strong & steady" profile and I retain Croda in my ISA.  

XL Media is a different kettle of fish: I think this company is inherently a good one although the recent scrutiny of internet manipulation of markets and “fake-news” may put some of its business strategy under the microscope. That could mean a change in future strategy is required which I think has lead to the recent significant downturn in the SP, and it’s not helped by the company being based in Israel. The location doesn’t bother me, if it did I would not have bought shares in it in the first place, but on reflection I don’t think it is helping the SP recover lost ground.

Unfortunately, the gains on Croda and SSP Group were obliterated (and more) by the loss sustained on XL Media; but the sales released £16,000 for reinvestment elsewhere.      

That when into Genus (GNS), FDM Group (FDM); Legal & General (LGEN) and Segro (SGRO).

Genus is an animal genetics company specialising in pigs and cattle, and my shareholding is already up 5% in a month.

I’ve increased my holding in FDM Group as I think the company SP is due a significant re-rating as after a period of sustained growth the SP has remained at about the 1000 level for about 10 months. With revenue growing, profits growing, and a healthy dividend yield of 2.70% for an IT company, there is plenty of scope there – I will just have to wait for the market to come to the same conclusion.

Brexit is now starting to be more a reality and so I’m strengthening my defensive aspects of the SIPP.  The probability of a "hard" Brexit is - in my opinion - about 70%, and so we have to start making provision.  Regards defensive shares, I think Legal & General fits that bill as well as Segro. Both have strong dividend yields, both have strong profit growth, and both should be able to continue to proper – in the short term at least – once the UK leaves the EU next March.   

Current holdings in the SIPP
British Aerospace (BA.) holding now = 731 (n/c); Value = £4,790

Blackrock Smaller Co IT (BRSC) div-reinvest of 12; holding now = 1200; Value = £18,120

Croda (CRDA) holding now = nil : SOLD

FDM Group (FDM) Bought 355 shares; holding now = 855; Value = £8,122 

GB Group (GBG) holding now = 1505 (n/c); Value = £8,127 
Genus (GNS) Bought 160 shares; holding now = 160; Value = £4,592
GVC Holdings (GVC) holding now = 1390 (n/c); Value = £16,253 - up 11% in month
HG Capital Trust IT (HGT) holding now = 840 (n/c); Value = £15,960
Homeserve (HSV) holding now = 1040 (n/n); Value = £10,524 - up 12% in month
JPM Emerging Markets IT (JMG) holding now = 918 (n/c); Value = £8,078
Keywords Studios (KWS) holding now = 455 (n/c); Value = £8,272
Legal & General (LGEN) Bought 2920 shares, holding now = 6500; Value = £17,088
Safecharge Group (SCH) holding now = 2464; Value = £8,623
Sage (SGE) div-reinvest of 12; holding now = 1532; Value = £9,510
Schroders Asia/Pac (SDP) holding now = 1817 (n/c); Value = £8,158
Segro PLC (SGRO) Bought 452 shares; holding now = 2600; Value = £17,284
Senior PLC (SNR) holding now = 2625 (n/c); Value = £8,363
SSP Group (SSPG) holding now = nil : SOLD
XL Media (XLM) holding now = nil : SOLD
Cash: holding now = £2,939
Portfolio Value = £174,203 up £2,109 or 1.22%