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Pharma exposure helps Keystone post market-beating figures

KIT : Pharma exposure helps Keystone post market-beating figures

Keystone has published its annual results. these cover the year that ended on 30 September 2014. Over that period the fund’s net asset value total return was 12.5%. The share price though returned just 7.4% as the discount widened from 0.8% to 5.4%. Both measures outperformed the FTSE All-Share Index which returned 6.1%. The dividend rose, but only slightly, from 50p to 50.5p. However there is also a special 8p dividend to take into account, an improvement on last year’s 7p special dividend.

Mark Barnett’s manager’s report says the most significant individual positive contributions came from the holdings in AstraZeneca and BTG. Astra was subject to a bid from Pfizer during the period and Mark says this remains a core holding following the demise of that bid. BTG benefited from FDA approval for its Varithena injectable foam medication for the non-surgical treatment of varicose veins and its DC Bead® oncology product getting approved for sale in China (the largest potential market for patients suffering with liver cancer).

He says other notable contributions to performance came from Beazley, Reynolds American, and BT Group.

On the downside Rolls-Royce surprised the market in February by announcing a one-off ‘pause’ in revenue growth, the causes of which were seen by the company’s chief executive as being unique to 2014, with the long term earnings outlook remaining intact. UK retailer N Brown’s profits were hampered by weaker performance from its mail order business as it sought to expand its digital offering. Finally, the share price of Serco was negatively impacted by a series of profit warnings after winning fewer contracts than expected.

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