SVM losses continue but lessen

SVM, the 25 year-old firm that is 98 per cent owned by Colin McLean and his partner Margaret Lawson, reported that loses for the last 12 months were similar to the pre-tax loss of £1.46m loss registered in 2013, to stand at a slightly improved £1.39m on turnover of £3.4m.

The performance in 2013, along with the £1.66m hit in 2012, came in years when SVM’s two flagship investment trusts were grabbed by other managers, costing it a third of turnover.

But writing in the accounts now lodged at Companies House, Mr McLean admitted it has taken “longer than expected” to turn the tide and said that while net revenues were up (by £37,000) and costs down (by £206,000) a £126,000 loss on disposal of investments meant the overall loss for 2014 was “similar to the previous year”.

The balance sheet saw a £2 million fall to £16.3m but Mr McLean said the group “remains in a strong position to face the future”.

Director remuneration rose from £447,000 to £482,000 including a rise from £196,000 to £229,000 for the highest-paid, assumed to be Mr McLean.

The group has deferred a potential tax asset of £1.3m to reduce its tax bill on future trading profits.

Mr McLean did stress that assets under management had risen to £480m and 2015 had seen a financial turnaround as strong performance across its funds triggered new net inflows.

The asset upturn follows a slide from £700m in 2010 to £450m in 2013.

He said: “The profit and loss account is one measure, but the only one that matters for us and for our clients is obviously the track records of our funds which are now very strong over five years, and in the case of Margaret’s SVM UK growth fund 10 years.”

Mr McLean said trading losses were being comfortably offset by returns on the company’s “proprietary assets” including its SVM Highlander hedge fund.

“We didn’t make progress last year with the hedge fund but in three out of the last four years the proprietary assets have performed very strongly. That essentially funds the continuing development of the business and the investment we make in marketing.” The assets were currently 15 per cent ahead of last year, he said.

Mr McLean, who said SVM was largely focused on the retail market, though it had attracted some new institutional money this year, added: “The trading position is improving fairly sharply, it has taken longer than we thought, we thought we might have closed it by now but is closing and we are drawing in funds.”