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Sep 30, 2020
Gladstone Capital Q4 2020 Earnings Report
Announced earnings for its fourth quarter and fiscal year ended September 30, 2020.
Key Takeaways
Gladstone Capital Corporation reported a 7.2% increase in investment income to $12.6 million for the fourth quarter, driven by higher average earning assets, stable investment yields, and increased fee income. Net asset value increased by 3.1% to $7.40 per share. The company invested $20.7 million in a new portfolio company and $1.3 million in existing ones, while receiving $22.6 million in repayments and net proceeds.
Investment income increased by 7.2% to $12.6 million due to higher average earning assets, stable investment yields, and higher fee income.
Invested $20.7 million in one new portfolio company and $1.3 million in existing portfolio companies.
Non-accruals decreased to 1.4% of the portfolio at fair value, indicating strong company performance.
Net asset value increased 3.1% from June 30, 2020, to $7.40 per share as of September 30, 2020.
Gladstone Capital
Gladstone Capital
Forward Guidance
Gladstone Capital's President, Bob Marcotte, stated that the portfolio performed well despite the unprecedented impact of Covid-19, closing the fiscal year on a strong note with favorable earnings momentum, and the company is well-positioned to grow its earning asset base and net interest income as it transitions into fiscal 2021.
Positive Outlook
- Portfolio performed well on balance.
- Closing fiscal year on a strong note with favorable earnings momentum.
- Investment principles and strategies are intact.
- Modest leverage provides a solid foundation.
- Well-positioned to grow earning asset base and net interest income as it transitions into fiscal 2021.
Challenges Ahead
- The ramifications and impact of Covid-19 were certainly unprecedented.
- There may be additional challenges ahead.
- The company has a ways to go to fully recover the unrealized losses of fiscal 2020.
- U.S. loan market has exhibited a heightened level of volatility and wider credit spreads associated with the uncertainty and potentially adverse economic ramifications of the spread of COVID-19.
- Unrealized depreciation of investments for year ended September 30, 2020.