We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Aberdeen Frontier Markets Investment Company Limited | LSE:AFMC | London | Ordinary Share | GG00B1W59J17 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 41.30 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAFMC
RNS Number : 0556R
Aberdeen Frontier Mkts Inv Co Ltd
18 September 2017
ABERDEEN FRONTIER MARKETS INVESTMENT COMPANY LIMITED
LEGAL ENTITY IDENTIFIER ('LEI'): 213800X9N731I4IPK361
ANNOUNCEMENT OF RESULTS FOR THE YEARED 30 JUNE 2017
INVESTMENT OBJECTIVE
The investment objective of the Company is to generate long-term capital growth primarily from investment in equity and equity related securities of companies listed in, or operating in, Frontier Markets.
Frontier Market countries may include constituents of the MSCI Frontier Markets Index or additional countries that the Investment Manager deems to be, or displays similar characteristics to, Frontier Market countries.
MANAGEMENT
The Company is managed by Aberdeen Fund Managers Limited (the 'Manager'), which is a wholly owned subsidiary of Aberdeen Asset Management PLC and is authorised and regulated by the Financial Conduct Authority ('FCA'). The Manager has delegated day-to-day investment management services to Aberdeen Asset Managers Limited ('AAML' or the 'Investment Manager').
DIVIDS
Interim dividend paid 1.0000c Final dividend proposed 1.0000c
PERFORMANCE
Hot Features
Premium
For the year ended 30 June 2017
Net Asset Value ("NAV") per share
(in US dollar terms)
Total return, NAV to NAV, gross
income reinvested. 13.7%
Share price (in US dollar terms)
Share price total return is on
a mid-to-mid basis. 16.7%
As at 30 June 2017
NAV per share $0.9295
Share price (in GB pounds) GBP0.6663
Share price (in US dollars) $0.8678
Net Assets $79.4m
CHAIRMAN'S STATEMENT
A period of change
The year has seen a number of material changes for the Company, a summary of which is set out below.
Investment objective and policy
The Directors began the tender process in November 2016 which was subsequently terminated in December 2016. Following further consultation with shareholders on 14 March 2017 shareholders were given the opportunity to vote on the proposed change in Investment Objective and Policy for investment in Frontier Markets using a direct equity investment strategy. The resolution proposed was duly passed and our revised investment objective is now:
- to generate long-term capital growth primarily from investment in equity and equity related securities of companies listed in, or operating in, Frontier Markets.
- Frontier Market countries may include constituents of the MSCI Frontier Markets Index or additional countries that the Investment Manager deems to be, or displays similar characteristics to, Frontier Market countries.
As a result of the change, our portfolio is now managed by Aberdeen's Global Emerging Markets Team overseen by Devan Kaloo with Mark Gordon James and Gabriel Sacks as lead managers. The full text of the new Investment Policy, the new portfolio and further information on our Manager's investment process can be found in the Annual Report.
Tender offer
In addition to this change, shareholders were offered the opportunity to tender up to 100% of their holdings in the Company as indicated back in 2012. This resulted in 97,307,392 Ordinary Shares being tendered. Of these 13,750,000 Ordinary Shares were sold to Aberdeen Asset Management leaving a balance of 83,557,392 Ordinary Shares being bought back by the Company for cancellation. The Board were encouraged by the remaining number of shareholders wishing to remain invested in Frontier Markets and Aberdeen's commitment to purchase GBP10m of shares.
Management fees
At the same time as these fundamental changes to the Company, Aberdeen Asset Management agreed to reduce their management fee to 1.0% per annum of the Company's net asset value ('NAV') as well as the removal of the performance fee. The Board is aware of the Company's reduced size, following the tender offer, and the need to carefully manage the Company's expenses to minimise the ongoing charges ratio.
Tender Pool
Following shareholder approval the portfolio was split into two separate pools of assets; one for ongoing shareholders in which assets were realigned with the new investment policy ('Continuing Pool') and the other for the realisation of assets to raise cash to pay to those shareholders who elected to tender ('Tender Pool').
A first interim distribution of 64.0 pence was paid to exiting holders on 25 April 2017 with a second payment of 6.5 pence made on 30 June 2017. At the time of writing there remains a very small element of cash and one asset subject to foreign exchange restrictions with a value of approximately 0.6 pence per Ordinary Share which will be distributed as soon as the asset can be realised.
Discount control
The discount to NAV at which the Company's shares trade narrowed from 8.9% to 6.8% at year end. Outside of the tender offer, the Company bought back 450,000 Ordinary Shares over the twelve month period at a cost of $353,000 with those shares placed in treasury.
The Board recognises the importance to investors of the Ordinary Shares not trading at a significant discount to the prevailing NAV. Accordingly, as part of the proposals put to shareholders in February 2017 the Board stated its intention to operate a policy whereby should the average Ordinary Share price discount to the underlying ex-income NAV over the three month period immediately prior to the Company's year-end exceed 10% then, at the discretion of the Board, the Company would, subject to any legal or regulatory requirements, implement a tender offer. Such tender offer will be for up to 15% of the issued share capital of the Company (excluding Ordinary Shares held in treasury) at a tender price equal to 98% of the prevailing NAV (less the direct costs, including any realisation costs of underlying investments, of implementing such tender offer).
Over the three months ended 30 June 2017, the average ex-income discount stood at 7.0%. With effect from the change in investment objective in March 2017, this discount control policy, incorporating a tender offer mechanism, replaced the pre-existing five-yearly return of capital as the Company's primary discount control.
Performance
For the year ended 30 June 2017, the Company's NAV per Ordinary Share had risen 13.7% in total return terms with the share price rising 16.7% as the discount narrowed. This compared to a gain of 19.7% for the MSCI Frontier Markets Index (the "Index"), all figures in US Dollar terms.
The positive NAV absolute return over the year was driven by strong performances in certain markets. However, relative performance against the Index was held back by a number of factors including the realignment of the portfolio away from funds to direct equities over the last three months of the financial year and the requirement to hold more liquid assets, such as Frontier Market ETFs, in the period leading up to the tender offer.
Dividend
An attractive dividend yield has been a consistent feature of the asset class over time and the Board considers that dividends are an increasing part of the rationale for investing in Frontier Markets. At today's market levels, the current portfolio is expected to yield approximately 3.3% gross (before expenses). The Board believes that dividends are an important part of shareholders overall return and intends to continue to pay semi-annual dividends in line with previous guidance.
An interim dividend for the year ended 30 June 2017 of 1 cent (0.766947 pence) was paid to Ordinary shareholders on 11 August 2017. With the new portfolio providing a decent yield, the Board is recommending to shareholders the payment of a final dividend for the year of 1 cent. If approved by shareholders at the next Annual General Meeting, this dividend will be paid on 13 December 2017 to those shareholders who are on the register on 17 November 2017. The ex-dividend date will be 16 November 2017. The dividend will be paid in sterling and the sterling dividend rate will be announced in due course.
Board composition
We were sad to see Richard Hotchkis retire from the Board on 31 March 2017. Richard had been on the Board of the Company since its launch and we thank him for his efforts on behalf of shareholders. We shall miss his wise counsel and enthusiasm for Frontier Markets and wish him well for his retirement.
As the Company begins a new chapter, well-positioned for the future but smaller in size, the Board will remain comprised of three non-executive directors until such time as it is deemed prudent to recruit again. The Board considers that, collectively, the current Directors demonstrate a breadth and depth of skills and experience required to steward the Company.
Aberdeen Asset Managers Limited
The Investment Manager is a subsidiary of Aberdeen Asset Management PLC which merged with Standard Life plc on 14 August 2017 to form Standard Aberdeen plc. Assets under the management of the combined investment division of Aberdeen Standard Investments were equivalent to GBP581bn at 31 December 2016. Further information about the Investment Manager can be found in the Annual Report.
Aberdeen savings plans
Aberdeen has a long history in managing closed-ended funds and provides a wealth of experience and a wide infrastructure towards their management and promotion. Investors may access low cost investment in the Company through Aberdeen's Share Plan, Investment Trust ISA and Investment Plan for Children which provide full voting and other rights of share ownership. Further details may be found on our website at: aberdeenfrontiermarkets.co.uk.
Future prospects
There is an increasing recognition by investors of the attractive qualities that Frontier Markets possess as an investment destination. This follows a period of several years during which the asset class has been comprehensively overlooked. Valuations of frontier equity markets and currencies are undemanding and the prospect of further gains is supported by an improving global economic outlook, which should provide a supportive backdrop for corporate earnings.
From a bottom up perspective, the Company's portfolio, now managed by Aberdeen's well regarded Global Emerging Markets team using their disciplined and meticulous stock-picking approach, is now invested in a high conviction selection of companies that we believe provide diversified exposure to Frontier Markets. Our Manager believes in the fundamentally sound nature of our investments with healthy cash flows, strong management and promising prospects for sustained long-term growth.
John Whittle
18 September 2017
INVESTMENT MANAGER'S REPORT
Market environment
Frontier Markets were swept up in the global equity rally, gaining more than 19% in US dollar terms in the year to the end of June 2017. It was very much a tale of two halves, with several longstanding laggards in Frontier Africa enjoying a rebound in sentiment late in the period. The asset class was relatively range-bound in the final six months of 2016, as investors found plenty of cause for restraint amid a series of political shocks. The UK's vote to leave the EU sparked a widespread, though short-lived, sell-off while Donald Trump's unexpected victory in the US presidential election provoked fears of a new era of protectionism. However, OPEC's December 2016 agreement to cut production, which fuelled the subsequent spike in oil prices, spurred renewed interest in frontier commodity exporters in particular. Investors even shrugged off two, admittedly well-signalled, US interest rate hikes. The oil price rally lost steam toward the end of the period as a ramp up in US shale oil production prompted oversupply concerns. Nonetheless, many Frontier Markets remained in favour, while the weaker US currency also boosted US dollar returns.
In Africa, Nigerian equities were subdued for the most part as the economy slipped into recession and ratings firm Fitch downgraded the country's outlook to negative from stable. Investors also grew frustrated at the central bank's continued currency intervention. However, a new foreign exchange window for investors and exporters restored some much needed confidence in the country's markets, while encouraging economic signals suggested a near-term recovery. Against this, equities picked up markedly, gaining just over 14% by the period's end. Kenya also enjoyed a late influx of capital, which boosted markets by more than 17%. This capped a mostly volatile year, in which it grappled with a serious drought as well as the impact of a government cap on bank loan charges.
Middle Eastern oil exporters Kuwait and Bahrain posted solid returns, of 23% and 16% respectively, following the much-anticipated agreement between oil producers to cut output. However, both markets relinquished some of their early gains alongside the oil price retreat.
In Latin America, Argentine equities climbed by almost 28% buoyed by the country's successful return to international debt markets together with signs that President Macri was making inroads against the national deficit. However, the market suffered a late sell-off after failing to win back its emerging market status in the MSCI's benchmark index review with the next review scheduled for June 2018.
Sri Lanka was the top performing market in Asia over the twelve month review period, returning 24%, as investors took advantage of attractive valuations following protracted outflows. The country's equities had previously come under pressure amid economic challenges and a disappointing reform process. Pakistan's stock market also advanced on growing momentum ahead of its upgrade to the MSCI emerging markets index at the end of May. However, it succumbed to some profit-taking in the immediate aftermath of its promotion. Vietnamese equities were the poorest performers over the period, after President Trump abandoned the newly-negotiated Trans-Pacific Partnership trade agreement. While it later recouped the losses, the market failed to keep pace with its peers, finishing up by just 2%.
Frontier Europe outperformed all other regions on generally robust economic signals and positive sentiment following Emmanuel Macron's presidential victory in France. Oil exporter Kazakhstan was the asset class' top performer, returning just over 44%, while Romanian equities rose by almost 35%. That said, the latter fared less well late in the period after the prime minister of just six months was ousted in a no-confidence vote by his own political party. The political upheaval came in the wake of one of the country's largest anti-corruption demonstrations since the fall of communism.
Performance
During the half year to December 2016, and prior to the transition to direct equity investment, the Company saw increased net asset value ('NAV') per Ordinary Share and share price total returns, all in US dollar terms, of 3.7% and 6.3%, respectively. This compared to the MSCI Frontier Markets Net Total Return Index's 3.2% gain. The Company's outperformance over the six month period was due to the solid performance of certain underlying managers, as well as discount narrowing. In particular, the managers in Vietnam, Argentina and Kazakhstan did well, while individual funds in Romania and Vietnam also contributed to relative returns following a narrowing of their discounts. In particular, the managers in Vietnam all enjoyed significant outperformance over the MSCI Vietnam Index (which comprised just 9 companies), with VinaCapital Vietnam Opportunity Fund the best performer (NAV +10.0%). Strong relative performance was also delivered by the Company's managers in Argentina (Copernico) and Kazakhstan (Sturgeon). Asset allocation was a detractor during the period, with low levels of exposure to Morocco, where the market rose by 20.1% and Kuwait which posted a 12.9% gain, accounting for much of this. In terms of discount movement, VinaCapital Vietnam Opportunity Fund and our core Romanian holding Fondul Proprietatea, contributed to relative performance as their discounts narrowed in absolute terms by 4.5% and 2.8% respectively.
With regard to the management of the portfolio during the transitional period, the period from January to March saw the sale of certain closed-ended holdings and redemptions of open-ended funds rotated into more liquid market proxies, including the MSCI Frontier Markets ETF, in anticipation of the upcoming tender offer, following which the remaining portfolio would migrate to a direct equity approach.
By the end of April the Company was 52% invested in direct equities, rising to 66% by the end of May and 94% by the end of June. Liquidity did not prove to be an issue, but opening domestic share dealing accounts in certain countries such as Egypt, Bangladesh, Romania and Vietnam did take longer than expected. During this period, market exposure was retained through the use of legacy third-party funds and ETFs.
Aberdeen Frontier Markets Investment Company
USD for periods ended 30 June 2017
Cumulative performance
6 months 1 year 3 years 5 years
% % % %
------------------------ --------- ------- -------- --------
Share Price 9.9 16.7 -12.7 33.2
NAV 9.8 13.7 -12.8 28.6
MSCI Frontier Markets 15.9 19.7 -8.6 54.0
------------------------ --------- ------- -------- --------
Notes:
Total return; NAV to NAV, gross income reinvested,
USD.
Share price total return is on a mid-to-mid
basis.
Dividends are reinvested as at the ex-dividend
date.
NAV returns based on NAVs with debt valued
at fair value.
Source: Aberdeen Asset Managers
Limited and Morningstar
The period between January and June 2017 was a strong one for Frontier Markets, with the MSCI Frontier Markets Index rising 15.9% in US dollar terms. Given the restructuring of the portfolio and higher cash levels up until mid-March, performance lagged the benchmark. Nevertheless, the Company still reported a 9.8% increase in NAV and 9.9% share price return for the 6-month period, buoyed by some of the portfolio's new largest direct equity holdings, including conglomerate John Keells in Sri Lanka, Kenyan mobile-operator Safaricom and Coca-Cola Icecek, a Turkish-based bottler with a significant presence in Pakistan, Iraq and Kazakhstan. The key detractor to performance was the portfolio's underweight position to Argentina, which notably rallied on hopes that MSCI would announce its upgrade to emerging market status following its review in June; although this was ultimately not the outcome. It is also worth highlighting that we deemed it prudent to value our Nigerian holdings using NAFEX, a new exchange rate in Nigeria, which was roughly 20% lower than the official rate at the end of the period, but one that we believe reflects the currency's true market-determined value. MSCI continued to use the official exchange rate, which also negatively impacted the portfolio's relative performance.
Fund positioning
As at the end of June 2017 the portfolio had largely transitioned to a direct equity strategy, in line with the new investment policy, holding 48 assets with the following country allocations relative to the MSCI Frontier Markets Index:
Relative country
positions
Fund Benchmark Difference
Country % % %
------------------- ------ ---------- -----------
Africa and Middle
East 39.5 55.9 -16.4
------------------- ------ ---------- -----------
Bahrain - 4.0 -4.0
Egypt 2.9 - +2.9
Ghana 1.6 - +1.6
Ivory Coast - 0.2 -0.2
Jordan 2.2 1.3 +0.9
Kenya 13.3 4.9 +8.4
Kuwait - 17.3 -17.3
Lebanon 1.4 2.7 -1.3
Mauritius - 3.9 -3.9
Morocco 2.0 8.2 -6.2
Nigeria 5.6 8.6 -3.0
Oman 2.0 3.3 -1.3
Senegal - 0.9 -0.9
South Africa 3.3 - +3.3
Tanzania 1.5 - +1.5
Tunisia - 0.5 -0.5
Turkey 3.7 - +3.7
Asia Pacific
ex Japan 43.6 14.2 +29.4
------------------- ------ ---------- -----------
Bangladesh 8.5 2.5 +6.0
Myanmar 2.4 - +2.4
Pakistan 12.1 - +12.1
Sri Lanka 10.5 1.6 +8.9
Thailand 2.1 - +2.1
Vietnam 8.0 10.1 -2.1
Europe ex UK 9.4 9.7 -0.3
------------------- ------ ---------- -----------
Belarus 3.3 - +3.3
Croatia - 1.5 -1.5
Estonia - 0.4 -0.4
Georgia 2.9 - +2.9
Kazakhstan - 2.0 -2.0
Lithuania - 0.1 -0.1
Romania 3.2 3.9 -0.7
Serbia - 0.2 -0.2
Slovenia - 1.6 -0.3
Latin America 4.8 20.2 -15.4
------------------- ------ ---------- -----------
Argentina 2.4 20.2 -17.8
Panama 2.4 - +2.4
North America 1.5 - +1.5
------------------- ------ ---------- -----------
United States 1.5 - +1.5
Total 100.0 100.0
------------------- ------ ---------- -----------
At 30 June 2017, the benchmark index had an adjusted market cap of US$111.6bn and was composed of 116 companies across 23 countries (source MSCI).
Shareholders will be aware of the new investment objective and policy, resulting in a portfolio that will likely diverge significantly from the benchmark as we look to invest in a relatively concentrated portfolio of quality companies across a diverse set of markets. Some of the largest differences relative to the benchmark relate to the portfolio's underweight position in Argentina (-17.8%) and Kuwait (-17.3%) and an overweight allocation in frontier Asian markets (+29.4%), with countries such as Pakistan (+12.1%) and Sri Lanka (+8.9%) featuring prominently.
We continue to seek new opportunities to invest and are encouraged by the pick-up in corporate activity in local equity markets in countries such as Argentina and Vietnam. We see limited investable opportunities in Kuwait, however, and will continue to invest in Pakistan as a Frontier Market - despite the country's upgrade to the MSCI Emerging Markets Index - given its attractive prospects and, as yet, insignificant representation in the emerging markets universe.
ABERDEEN FRONTIER MARKETS INVESTMENT COMPANY LIMITED
Top 10 holdings as at 30 June 2017
----------------------------------------------------------------------------------------------------
Percentage
Market Value of net
Company Country cap Description $'000 assets
---------------- ---------- -------- -------------------------------------- ------- -----------
Sri Lanka's Largest listed
conglomerate with a diverse
portfolio of interests ranging
from container ports, hotels,
Sri property development and
John Keells Lanka $1.3bn food & retail. 4,432 5.6%
---------------- ---------- -------- -------------------------------------- ------- -----------
Biggest dairy company in
Vietnam, manufacturing and
distributing products derived
from milk, and also coffee
Vinamilk Vietnam $9.1bn and fruit. 4,219 5.3%
---------------- ---------- -------- -------------------------------------- ------- -----------
The Leading mobile network
operator in Kenya, with an
innovative alternative payments
Safaricom Kenya $7.0bn platform called M-Pesa. 4,093 5.2%
---------------- ---------- -------- -------------------------------------- ------- -----------
Largest private sector bank
Habib in Pakistan with a global
Bank Pakistan $3.8bn presence in over 25 countries. 3,307 4.2%
---------------- ---------- -------- -------------------------------------- ------- -----------
The fifth-largest bottler
in the Coca-Cola System in
terms of sales volume, with
operations in Pakistan, Kazakhstan,
Azerbaijan, Iraq and Libya,
Coca-Cola as well as their home market,
Icecek Turkey $2.5bn Turkey. 2,740 3.5%
---------------- ---------- -------- -------------------------------------- ------- -----------
Global provider of software
engineering and IT consulting
services out of Belarus,
Epam Systems Belarus $4.2bn Ukraine and Russia. 2,480 3.1%
---------------- ---------- -------- -------------------------------------- ------- -----------
Guaranty
Trust One of the leading private
Bank Nigeria $2.3bn sector banks in Nigeria. 2,455 3.1%
---------------- ---------- -------- -------------------------------------- ------- -----------
Private sector bank in Romania:
BRD Romania $2.0bn subsidiary of Societe Generale. 2,393 3.0%
---------------- ---------- -------- -------------------------------------- ------- -----------
Commercial Leading private-sector bank
International in Egypt with a universal
Bank Egypt $4.9bn banking model. 2,165 2.7%
---------------- ---------- -------- -------------------------------------- ------- -----------
Diversified group in Georgia
with the leading private
sector bank and a healthcare
BGEO Group Georgia $4.6bn / hospitals business. 2,137 2.7%
---------------- ---------- -------- -------------------------------------- ------- -----------
Top ten holdings 30,421 38.4%
---------------------------- ----------------------------------------------- ------- -----------
Other holdings 44,451 55.9%
---------------------------- ----------------------------------------------- ------- -----------
Total
holdings 74,872 94.3%
------------------------------------------------------------------------------ ------- -----------
Cash and other
net assets 4,554 5.7%
-------------------------------------- -------------------------------------- ------- -----------
Net assets 79,426 100.0%
------------------------------------------------------------------------------ ------- -----------
Outlook
Frontier equities had a good year to June 2017. Structural improvements in specific markets have been well-received, including further steps towards currency liberalisation in Nigeria. A more encouraging global growth environment, alongside improving corporate earnings and better sentiment towards Frontier Markets more broadly, have all contributed to slowing outflows to the asset class. We believe this is set to continue over the next few months.
We are particularly excited about Asia, which represents more than 40% of the portfolio, given robust growth, modest inflation and attractive stock-picking opportunities; while Africa is well-positioned for a recovery on the back of significant currency adjustment and a return to growth. Although upcoming elections in Kenya could bring some volatility in the coming months we remain upbeat about the outlook for our Kenyan corporates and valuations remain undemanding.
By their very nature Frontier Markets represent a riskier investment proposition than more developed markets. Resource-rich countries' markets remain heavily influenced by fluctuating commodity prices, while liquidity issues are prevalent across the board. However, even with the recent rally, frontier equities still represent an attractive risk-reward opportunity for investors given their lower correlation to mainstream asset classes, as well as a discounted valuation of roughly 30% to developed market equities. Frontier Markets tend to be under-researched and we see compelling opportunities to find new investment prospects. At the portfolio level, the Company offers exposure to a diverse range of markets and is invested in companies that we believe to be of a high-quality, given their lower debt to equity ratios, higher levels of return on equity (ROE), higher dividend yields and stronger balance sheets than their emerging market counterparts and the MSCI Frontier Markets Index. Whilst volatility can be a feature of these markets we are positive about the prospects for the asset class over the long term.
Aberdeen Fund Managers Limited
18 September 2017
PRINCIPAL RISKS AND UNCERTAINTIES
There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has identified the principal risks and uncertainties facing the Company at the current time in the table below together with a description of the mitigating actions taken by the Board. The principal risks associated with an investment in the Company's shares are published monthly on the Company's factsheet or they can be found in the pre-investment disclosure document published by the Manager, both of which are on the Company's website. The Board reviews the risks and uncertainties faced by the Company in the form of a risk matrix and heat map which is reviewed regularly by the Audit and Risk Committee and a summary of the principal risks are set out below.
An explanation of other risks relating to the Company's investment activities, specifically market risk including interest rate risk, foreign currency risk and other price risk, liquidity risk, credit risk, gearing risk and a note of how these risks are managed, is contained in the Annual Report and Financial Statements.
Description Mitigating action
Investment strategy The Board keeps the
and objectives - the level of discount at
setting of an unattractive which the Company's
strategic proposition Ordinary shares trade
to the market and the as well as the investment
failure to adapt to objective and policy
changes in investor under review and the
demand may lead to the Board is updated at
Company becoming unattractive each Board meeting on
to investors, a decreased the makeup of, and any
demand for Ordinary movements in, the Shareholder
shares and a widening register.
discount at which the
Ordinary shares trade
relative to their NAV.
--------------------------------- --------------------------------------
Investment portfolio, The Board sets, and
investment management monitors, its investment
- restrictions and guidelines,
investing outside of and receives regular
the investment restrictions reports which include
and guidelines set by performance reporting
the Board could result on the implementation
in poor performance of the investment policy,
and inability to meet the investment process
the Company's objectives. and application of the
guidelines.
--------------------------------- --------------------------------------
Financial obligations The Board sets a gearing
- the ability of the limit and receives regular
Company to meet its updates on the actual
financial obligations, gearing levels the Company
or increasing the level has reached from the
of gearing, could result Investment Manager together
in the Company becoming with the assets and
over-geared and therefore liabilities of the Company
unable to take advantage and reviews these at
of potential opportunities each Board meeting.
and result in a loss
of value of the Company's
Shares.
--------------------------------- --------------------------------------
Financial and regulatory The financial risks
- the financial risks associated with the
associated with the Company include market
portfolio could result risk, liquidity risk
in losses to the Company. and credit risk, all
In addition, failure of which are managed
to comply with relevant by the Investment Manager.
regulation (including Further details of the
the Companies (Guernsey) steps taken to mitigate
Law, the Financial Services the financial risks
and Markets Act, the associated with the
Alternative Investment portfolio are set out
Fund Managers Directive, in note xx to the financial
Accounting Standards statements. The Board
and the AIM listing relies upon Aberdeen
rules, disclosure and to ensure the Company's
prospectus rules) may compliance with applicable
have a negative impact regulations and from
on the Company. time to time employs
external advisers to
advise on specific concerns.
--------------------------------- --------------------------------------
Operational - the Company The Board receives regular
is dependent on third reports from the Manager
parties for the provision on internal controls
of all systems and services and risk management
(in particular, those and receives assurances
of the Manager) and from its significant
any control failures service providers. Further
and gaps in these systems details of the internal
and services could result controls which are in
in a loss or damage place are set out in
to the Company. the Directors' Report
in the Annual Report
and Financial Statements.
Discount - factors which
affect the discount
to NAV at which the The Board keeps under
Ordinary shares of the review the discount
Company trade. These and may consider selective
may include the popularity buyback of shares where
of the investment objective to do so would be in
of the Company, the the best interests of
popularity of investment shareholders, balanced
trust shares in general against reducing the
and the ease with which overall size of the
the Company's Ordinary Company. Any shares
shares can be traded bought back would be
on the London Stock either cancelled or
Exchange. held in treasury.
--------------------------------- --------------------------------------
Political risk and exchange Given the nature of
controls - investments the risks to which the
in less developed markets Company's investments
are subject to a greater are subject, which are
degree of political those inherently associated
risk than that with with less developed
which investors might markets, there are limited
be familiar. options available to
the Board for mitigating
In addition, investments these risks. The Board
purchased by the Company believes that mitigation
may be subject, in the is best effected by
future, to exchange careful selection of
controls or withholding the constituents of
taxes. In the event the Company's portfolio
that exchange controls with high-calibre, financially-sound
or withholding taxes companies, with good
are imposed with respect management and excellent
to any of the Company's growth potential.
investments, the effect
will generally be to Investment in Frontier
reduce both the income Markets involves a greater
received by the Company degree of risk than
from its investments that usually associated
and/or the capital value with investment in major
of the affected investments. securities markets.
Through regular interaction
with the Manager and
other commentators,
the Board stays up-to-date
with the latest political
and economic news in
these markets.
--------------------------------- --------------------------------------
Market risk - being The Investment Manager
the risk that the portfolio, seeks to diversify market
managed by the Investment risk by investing in
Manager, suffers a fall a wide variety of companies
in its market value with strong balance
which would have an sheets and the earnings
adverse effect on shareholders' power to pay increasing
funds. The Company's dividends. In addition,
investments are subject investments are made
to normal market fluctuations across various countries
and the risks inherent in order to reduce the
in the purchase, holding risk of a single concentrated
or selling of equity exposure; at present
securities and there the Investment Manager
can be no assurance may not invest more
that appreciation in than 10% of the Company's
the value of those investments total assets in any
will occur. single stock at the
time of investment and
The Investment Manager's the Company will invest
investment process concentrates in between 30 to 80
on a company's business holdings.
strategy, management,
financial strength, The Investment Manager
ownership structure believes that diversification
as well as corporate should be looked at
governance, with a view in absolute terms rather
to seeking companies than relative to an
that it can invest in index. The performance
for the long term. This of the portfolio relative
quality test means that to the MSCI Frontier
there may be stocks Markets Index and the
which the Investment underlying stock weightings
Manager will not invest in the portfolio against
in due to a perceived their index weightings
lack of transparency are monitored closely
or poor corporate governance. by the Board.
--------------------------------- --------------------------------------
Liquidity risk - the Liquidity risk is not
Company, and/or its considered to be significant
Investment Manager may as, whilst liquidity
accumulate investment is limited in certain
positions which represent stocks which the Company
more than normal daily holds, the majority
trading volumes which of the Company's assets
may make it difficult comprise readily realisable
to realise investments securities which can
quickly. be sold to meet funding
requirements if necessary.
The Board reviews the
liquidity profile of
the Company's investment
portfolio at each quarterly
Board meeting.
--------------------------------- --------------------------------------
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the year and of the profit or loss for the year and are in accordance with The Companies (Guernsey) Law, 2008. In preparing these accounts, the directors are required to:
-- Select suitable accounting policies and then apply them consistently; -- Make judgements and estimates which are reasonable and prudent;
-- State whether applicable International Financial Reporting Standards ('IFRS') as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and
-- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for ensuring that proper accounting records are kept which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the accounts have been properly prepared in accordance with The Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
In accordance with The Companies (Guernsey) Law, 2008, there is no relevant audit information of which the Company's auditor is unaware. The directors also confirm that they have taken all steps they ought to have taken as directors to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The financial statements are published on the Company's website (website address: www.aberdeenfrontiermarkets.co.uk) and on the Investment Manager's website (website address: www.aberdeen-asset.com). The maintenance and integrity of the Investment Manager's website, so far as it relates to the Company, is the responsibility of the Investment Manager. The work carried out by the auditor does not involve consideration of the maintenance and integrity of these websites and accordingly, the auditor accepts no responsibility for any changes that have occurred to the financial statements since they were initially presented on these websites. Visitors to the websites need to be aware that legislation in Guernsey governing the preparation and dissemination of the financial statements may differ from legislation in their jurisdiction.
The directors confirm that to the best of their knowledge and belief the annual report and accounts taken as a whole, is fair, balanced and understandable and provides the information necessary to assess the Company's position and performance, business model and strategy.
STATEMENT OF COMPREHENSIVE INCOME
Year ended 30 Year ended 30
June 2017 June 2016
Revenue Capital Total Revenue Capital Total
$'000 $'000 $'000 $'000 $'000 $'000
Gains/(losses)
on investments - 16,695 16,695 - (20,189) (20,189)
Capital gains/(losses)
on currency movements - 1,973 1,973 - (38) (38)
-------- -------- -------- -------- --------- ---------
Net investment
gains/(losses) - 18,668 18,668 - (20,227) (20,227)
Investment income 1,573 - 1,573 915 - 915
-------- -------- -------- -------- --------- ---------
Total income/(loss) 1,573 18,668 20,241 915 (20,227) (19,312)
Investment management
fees (476) (952) (1,428) (554) (1,107) (1,661)
Other expenses (754) - (754) (771) - (771)
-------- -------- -------- -------- --------- ---------
Net profit/(loss)
from operations
before finance
costs and taxation 343 17,716 18,059 (410) (21,334) (21,744)
Finance costs (47) (94) (141) (119) (227) (346)
Net profit/(loss)
before taxation 296 17,622 17,918 (529) (21,561) (22,090)
Taxation (91) - (91) (61) - (61)
-------- -------- -------- -------- --------- ---------
Net profit/(loss)
after taxation 205 17,622 17,827 (590) (21,561) (22,151)
-------- -------- -------- -------- --------- ---------
Earnings/(loss)
per Ordinary Share 0.14c 12.16c 12.30c (0.35c) (12.72c) (13.07c)
The total column of this statement represents the Company's Statement of Comprehensive Income, prepared under IFRS as adopted by the European Union. The revenue and capital columns, including the revenue and capital earnings per share data, are supplementary information prepared under guidance published by the Association of Investment Companies. The Company does not have any income or expenses that are not included in the profit/(loss) for the year and therefore the "Net profit/(loss) after taxation" is also the total comprehensive income for the year.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.
The notes form an integral part of these financial statements
STATEMENT OF FINANCIAL POSITION
As at As at
30 June 30 June
2017 2016
$'000 $'000
Non-current assets
Investments at fair value
through profit or loss 74,872 142,990
--------------- ------------------
Current assets
Cash and cash equivalents 4,847 1,524
Sales for future settlement 7,313 -
Receivables 390 758
--------------- ------------------
12,550 2,282
--------------- ------------------
Total assets 87,422 145,272
--------------- ------------------
Current liabilities
Purchases for future settlement 7,112 -
Loans payable - 4,500
Other payables 158 298
Tender offer liabilities 726 -
--------------- ------------------
7,996 4,798
--------------- ------------------
Total assets less current
liabilities 79,426 140,474
--------------- ------------------
Capital and reserves attributable
to equity holders
Share premium account 12,254 88,788
Capital reserve 66,135 50,854
Revenue reserve 1,037 832
Total equity 79,426 140,474
--------------- ------------------
Net assets per Ordinary
Share (US cents) 92.95c 82.90c
Exchange rate GBP/USD (mid
market) 0.7678 0.7512
Net assets per Ordinary
Share (pence) 71.37p 62.27p
The notes form an integral part of these financial statements
STATEMENT OF CHANGES IN EQUITY
Share Share
premium purchase Capital Revenue
For the year ended account reserve reserve reserve Total
30 June 2017 $'000 $'000 $'000 $'000 $'000
--------------------------- ---------- ------------- ------------- ------------- -----------
Opening equity 88,788 - 50,854 832 140,474
Tender offer (76,534) - - - (76,534)
Purchase of own shares - - (310) - (310)
Profit for the year - - 17,622 205 17,827
Equity dividends paid - - (2,031) - (2,031)
---------------------------- ---------- ------------- ------------- ------------- -----------
Closing equity 12,254 - 66,135 1,037 79,426
---------------------------- ---------- ------------- ------------- ------------- -----------
Share Share
premium purchase Capital Revenue
account reserve reserve reserve Total
For the year ended $'000 $'000 $'000 $'000 $'000
30 June 2016
--------------------------- ---------- ------------- ------------- ------------- -----------
Opening equity 88,788 82,319 (9,904) 1,422 162,625
Transfer between reserves - (82,319) 82,319 - -
Loss for the year - - (21,561) (590) (22,151)
---------------------------- ---------- ------------- ------------- ------------- -----------
Closing equity 88,788 - 50,854 832 140,474
---------------------------- ---------- ------------- ------------- ------------- -----------
The notes form an integral part of these financial statements
STATEMENT OF CASH FLOW
Year ended Year ended
30 June 30 June
2017 2016
$'000 $'000
Operating activities
Cash inflow from investment
income and bank interest 1,900 953
Cash outflow from management
expenses (2,273) (2,437)
Cash inflow from disposal
of investments 176,972 40,807
Cash outflow from purchase
of investments (89,796) (38,433)
Cash outflow from foreign
exchange costs (363) (37)
Cash outflow from taxation (91) (61)
----------- -----------
Net cash flow from operating
activities 86,349 792
----------- -----------
Financing activities
Repayments of bank borrowings (4,500) (4,500)
Finance charges and interest
paid (150) (341)
Equity dividends paid (2,031) -
Purchase of own shares (310) -
Proceeds from on-sale shares 12,129 -
Tender offer costs (228) -
Tender offer distributions (87,936) -
paid
----------- -----------
Net cash flow from financing
activities (83,026) (4,841)
----------- -----------
Net increase/(decrease) in
cash and cash equivalents 3,323 (4,049)
----------- -----------
Cash and cash equivalents
opening balance 1,524 5,573
Cash inflow/(outflow) 3,323 (4,049)
----------- -----------
Cash and cash equivalents
balance as at 30 June 4,847 1,524
----------- -----------
The notes form an integral part of these financial statements
NOTES
1. ACCOUNTING POLICIES
Basis of Preparation
The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ('IFRS'), approved by the International Accounting Standards Board and as adopted by the European Union.
The financial statements give a true and fair view of the state of affairs of the Company as at the end of the year and of the profit or loss for the year and are in accordance with The Companies (Guernsey) Law, 2008.
Under IFRS, the Statement of Recommended Practice ('SORP') issued by the Association of Investment Companies has no formal status, but the Company has taken the guidance of the SORP into account to the extent that it is deemed appropriate and compatible with IFRS and the Company's circumstances.
The particular accounting policies adopted are described below:
(a) Accounting convention
The accounts are prepared under the historical cost convention, except for the measurement of investments at fair value.
(b) Investments
As the Company's business is investing in financial assets with a view to profiting from their total return in the form of increases in fair value, financial assets are designated as fair value through profit or loss on initial recognition in accordance with International Accounting Standard ('IAS') 39. These investments are recognised on the trade date of their acquisition. At this time, fair value is the cost of investment.
After initial recognition such investments are valued at fair value which is determined by reference to:
(i) primarily market bid price for investments quoted on recognised stock exchanges (market mid or last trade price will be used where deemed to more appropriately reflect fair value);
(ii) net asset value per individual investee funds' administrators for unquoted open-ended funds; and
(iii) by using other valuation techniques to establish fair value for any other unquoted investments.
Investments are derecognised on the trade date of their disposal. Gains or losses are recognised in the capital column of the Statement of Comprehensive Income.
Transaction costs incurred on the acquisition and disposal of investments are charged to capital and included in the 'Gains/(losses) on investments' on the Statement of Comprehensive Income.
(c) Income from Investments
Dividend income from Ordinary Shares and units in open-ended funds deemed equivalent to Ordinary Shares is accounted for on the basis of ex-dividend dates. Income from fixed interest shares and securities is accounted for on an accruals basis using the effective interest method. Special dividends are assessed on their individual merits and are credited to the capital column of the Statement of Comprehensive Income if the substance of the payment is a return of capital; with this exception all other investment income is taken to the revenue column of the Statement of Comprehensive Income. Bank interest receivable is accounted for on a time apportionment basis.
(d) Capital Reserves
Profits and losses on disposals of investments and gains and losses on revaluation of investments held are allocated to the capital reserve via the capital column of the Statement of Comprehensive Income. Dividends may be distributed from Capital Reserves.
(e) Revenue Reserves
The balance of all items allocated to the revenue column of the Statement of Comprehensive Income in each year is transferred to the Company's revenue reserves. Dividends may be distributed from Revenue Reserves.
(f) Investment Management Fees
Two thirds of the basic investment management fee is allocated to the capital column of the Statement of Comprehensive Income. The entirety of any performance fee is allocated to the capital column of the Statement of Comprehensive Income. Fees allocated to the capital column are taken to the capital reserve.
(g) Foreign Currency
The Company's shares were issued in US dollars and the majority of the Company's investments are priced in US dollars and this is considered to be the functional currency of the Company. Therefore, it is the Company's policy to present the accounts in US dollars. The Company's shares are traded in sterling on AIM.
Assets and liabilities held in currencies other than US dollars are translated into US dollars at the official market rates of exchange prevailing at the reporting date apart from Nigerian Naira where the index window rate was used due to the restrictions applied to the currency and consequential illiquidity. Currency gains and losses arising on retranslating investments are allocated to the capital column of the Statement of Comprehensive Income. All other currency gains and losses are allocated to the capital or revenue columns of the Statement of Comprehensive Income depending on the nature of the transaction.
(h) Finance costs
Finance costs include interest payable and direct loan costs. In line with the Company's policy for investment management fees, two thirds of finance costs are allocated to the capital column of the Statement of Comprehensive Income. Fees allocated to the capital column are taken to the capital reserve. Loan arrangement costs are amortised over the term of the loan on an effective interest rate basis.
(i) Financial liabilities
The Company's financial liabilities include borrowings and other payables. Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted for transaction costs. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Financial liabilities are measured subsequently at amortised cost using the effective interest method. At the year end, the Company do not have any borrowings.
(j) Cash and Cash Equivalents
Cash and Cash Equivalents in the Statement of Cash Flows comprise cash held at the bank or by the custodian.
(k) Operating segments
IFRS 8, 'Operating segments' requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. The Board, as a whole, has been determined as constituting the chief operating decision maker of the Company. The Board has considered the requirements of the standard and is of the view that the Company is engaged in a single segment of business, which is to generate long-term capital growth for its shareholders by investing in a diversified portfolio of funds and other investment products which derive their value from Frontier Markets.
The Board of directors is responsible for ensuring that the Company's investment objective is followed. The day-to-day implementation of this has been delegated to the Investment Manager but the Board retains responsibility for the overall direction of the Company. The Board reviews the investment decisions of the Investment Manager at regular Board meetings. The Investment Manager has been given full authority to make investment decisions on behalf of the Company in accordance with the investment objective.
(l) Unconsolidated structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. A structured entity often has some or all of the following features or attributes; (a) restricted activities, (b) a narrow and well-defined objective, such as to provide investment opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to investors, (c) insufficient equity to permit the structured entity to finance its activities without subordinated financial support and (d) financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks.
The Company holds shares, units or partnership interests in the funds or investment products held in the Company's portfolio. The Company does not consider its investments in listed funds to be structured entities but does consider its investments in unlisted funds to be investments in structured entities because the voting rights in such entities are limited to administrative tasks and are not the dominant factor in deciding who controls those entities.
Changes in fair value of investments, including structured entities, are included in the Statement of Comprehensive Income.
(m) New standards, Interpretations and amendments
There are no new standards, interpretations or amendments, which became effective during the year that have had a material impact on the Company.
At the date of approval of these financial statements, the following standard, which has not been applied in these financial statements, was in issue but not yet effective:
-- IFRS 9, 'Financial instruments', effective for annual periods beginning on or after 1 January 2018, specifies how an entity should classify and measure financial assets and liabilities, including some hybrid contracts. The standard improves and simplifies the approach for classification and measurement of financial assets compared with the requirements of IAS 39. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged. The standard applies a consistent approach to classifying financial assets and replaces the numerous categories of financial assets in IAS 39, each of which had its own classification criteria.
The Board is currently considering the impact of the above standard.
(n) Critical accounting estimates and judgements in applying accounting policies
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from such estimates. These financial statements have been prepared on a going concern basis which the directors of the Company believe to be appropriate.
The most critical judgements and estimates that management have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are the functional currency of the Company (see note 1(g)) and the fair value estimation of financial assets designated as at fair value through profit or loss (see note 1(b) ).
(o) Going concern
The directors have adopted the going-concern basis in preparing the financial statements.
2. Investments at fair value through
profit or loss
2017 2016
$'000 $'000
Quoted closed-end fund shares and
warrants 1,699 36,467
Quoted direct equity investments 69,900 7,440
Quoted open-ended fund holdings 1,624 7,108
Open-ended fund and limited liability
partnership investments 1,649 91,975
---------- ---------
Total fixed asset investments at
fair value 74,872 142,990
---------- ---------
Investments at cost
Opening balance of investments at
cost 149,508 155,606
Additions at cost 96,909 38,433
Disposals at cost (170,097) (44,531)
---------- ---------
Cost of investments at 30 June 76,320 149,508
---------- ---------
Revaluation of investments to fair
value
Opening balance (6,518) 9,376
Unrealised gains / (losses) taken
to Capital reserve 5,070 (15,894)
---------- ---------
Balance at 30 June (1,448) (6,518)
---------- ---------
Fair value of investments at 30
June 74,872 142,990
---------- ---------
Gains/(losses) on investments per Statement of Comprehensive Income
Gains/(losses) on disposal of investments 11,625 (4,295)
Movement on valuation of investments
held 5,070 (15,894)
16,695 (20,189)
------- ---------
3. Investment income
2017 2016
$'000 $'000
Dividends from investments 1,573 915
Total investment income 1,573 915
------- -------
4. Investment management fees and other expenses
2017 2016
Revenue Capital Total Revenue Capital Total
$'000 $'000 $'000 $'000 $'000 $'000
------------------------ -------- -------- ------- -------- -------- -------
Investment management
fees 476 952 1,428 554 1,107 1,661
Total investment
management fees 476 952 1,428 554 1,107 1,661
------------------------ -------- -------- ------- -------- -------- -------
Administration fees 198 - 198 164 - 164
Directors' fees 162 - 162 177 - 177
Depository and custody
fees 172 - 172 129 - 129
Legal fees 2 - 2 42 - 42
Broker fees 32 - 32 37 - 37
Registrar's fees 32 - 32 39 - 39
Auditor's fees 27 - 27 28 - 28
Nominated adviser
fees 26 - 26 30 - 30
Promotion 56 - 56 14 - 14
Other expenses 47 - 47 111 - 111
------------------------ -------- -------- ------- -------- -------- -------
Total other expenses 754 - 754 771 - 771
------------------------ -------- -------- ------- -------- -------- -------
Total expenses 1,230 952 2,182 1,325 1,107 2,432
------------------------ -------- -------- ------- -------- -------- -------
Further details on the management agreement are provided in the Director's Report in the Annual Report. The Company has agreed to pay a fee to Aberdeen Asset Managers Limited for the provision of promotional activities at an annual rate of GBP43,000 with effect from April 2016 and an annual rate of GBP43,000 with effect from April 2017. The $14,000 for 30 June 2016 relates to the period from 1 April 2016 to 30 June 2016.
The Company's ongoing charges for the year ended 30 June 2017 calculated in accordance with the AIC methodology were 1.66% (2016: 1.67%). The ongoing charges figure does not include performance fees or finance costs.
5. Finance costs
In accordance with directors' expectations of the split of future returns being mostly of a capital nature, two thirds of finance costs are charged as capital items in the Statement of Comprehensive Income.
2017 2016
Revenue Capital Total Revenue Capital Total
$'000 $'000 $'000 $'000 $'000 $'000
--------------------- -------- -------- ------- -------- -------- -------
Facility costs and
arrangement fees 15 30 45 97 45 142
Interest charges 32 64 96 22 182 204
--------------------- -------- -------- ------- -------- -------- -------
Total finance costs 47 94 141 119 227 346
--------------------- -------- -------- ------- -------- -------- -------
6. Directors' fees
The fees paid or accrued were $161,910 (2016: $176,868). There were no other emoluments. Full details of the fees of each director are given in the Directors' Remuneration Report in the Annual Report and Financial Statements.
7. Taxation
The Company is resident for tax purposes in Guernsey.
The Company is exempt from Guernsey income tax under the Income Tax (Exempt Bodies) (Guernsey) Ordinances 1989 and 1992 and was charged an annual exemption fee of GBP1,200 (2016: GBP1,200) during the year.
During the year, the Company suffered foreign withholding tax on income from investments totalling in aggregate $91,256 (2016: $61,271).
8. Earnings per Ordinary Share
Earnings per share is based on the net profit of $17,827,000 (2016: loss of $22,151,000) attributable to the weighted average of 144,898,182 (2016: 169,460,000) Ordinary Shares of no par value in issue during the year to 30 June 2017.
Supplementary information is provided as follows: revenue per share is based on the net revenue profit of $205,000 (2016: loss of $590,000) and capital profit per share is based on the net capital profit of $17,622,000 (2016: net capital loss of $21,561,000) attributable to the Ordinary Shares.
9. Loans payable
During the period, the Company had a $6,000,000 revolving loan facility with Investec Bank Plc. The facility was fully repaid and the agreement terminated in January 2017.
The Company had a $5,000,000 temporary overdraft facility with Northern Trust (Guernsey) Limited ('NT') from 17 March 2017 to 6 July 2017. As at 30 June 2017, the 'Cash and cash equivalents' figure of GBP4,847,000 credit position shown on the Statement of Financial Position, includes an overdraft position of $438,205 on the NT USD bank account.
10. Share capital
Movement in Ordinary Shares of no par value
Allotted,
issued
For the year ended 30 and fully Treasury
June 2017 Authorised paid shares
-------------------------- ------------ ------------- ---------
Opening number of shares Unlimited 169,460,000 -
Purchase of own shares - (450,000) 450,000
Validly tendered shares
for cancellation - (97,307,392) -
On-sale shares - 13,750,000 -
Closing number of shares Unlimited 85,452,608 450,000
-------------------------- ------------ ------------- ---------
Allotted,
issued
For the year ended 30 and fully Treasury
June 2016 Authorised paid shares
-------------------------- ------------ ------------- ---------
Opening number of shares Unlimited 169,460,000 -
Closing number of shares Unlimited 169,460,000 -
-------------------------- ------------ ------------- ---------
Voting rights
At General Meetings of the Company, every member present in person or proxy shall have one vote for every Ordinary Share of which they are the registered holder.
Tender offer
On 14 March 2017 the Company received valid tender acceptances of 97,307,392 Ordinary Shares. Aberdeen Asset Management bought 13,750,000 of such tendered Ordinary Shares ('On-sale Shares') at the Investment Price of 72.5748 pence per Ordinary Share and therefore the number of Exit Shares which have been repurchased for cancellation by the Company was 83,557,392.
Following the Tender Offer the Company has 85,452,608 Ordinary Shares in issue (excluding shares held in treasury) attributable to the continuing shareholders.
Proceeds equivalent to $12,129,000 were received from the On-sale Shares and two tender offer distributions were made returning an aggregate amount equivalent to $87,937,000 in respect of validly tendered shares resulting in a net cost to the Company equivalent to $75,808,000. The residual value of the tender pool as at 30 June 2017 was $726,000.
Other purchases of own shares
There were 450,000 Ordinary Shares re-purchased during the year at an aggregate cost to the Company of $310,000, all of which are held in treasury.
11. Net assets per Ordinary Share
Net assets per Ordinary Share of $0.9295 (2016: $0.8290) is based on net assets of $79,426,000 (2016: $140,474,000) divided by 85,452,608 (2016: 169,460,000) Ordinary Shares in issue (excluding shares held in treasury) as at the year end date.
12. Related party transactions
Details of the management contract can be found in the Directors' Report contained in the Annual Report and Financial Statements. Fees payable to the Investment Manager are detailed in note 4. Other payables include accruals of basic management fees of $66,284 (2016: $136,707) and a performance fee provision of $nil (2016: $nil).
On 16 March 2017, Aberdeen Asset Management bought 13,750,000 of the validly tendered Ordinary Shares (On-sale Shares) at the Investment Price of 72.5748 pence per Ordinary Share.
The Director's fees are disclosed in note 4 and the Director's Remuneration Report of the Annual Report and Financial Statements.
13. Dividends
In June 2016 the Company announced the introduction of a dividend with the base level of dividend set with reference to the Investment Manager's calculation of the yield on the underlying portfolio, less relevant costs.
A final dividend for the year ended 30 June 2016 of 1.2 cents (sterling equivalent is 0.96432 pence) per Ordinary Share was paid out of the Capital Reserve on 19 December 2016.
An interim dividend for the year ended 30 June 2017 of 1 cent (sterling equivalent is 0.766947 pence) per Ordinary Share was paid out of the Capital Reserve on 11 August 2017.
The Board is recommending to shareholders the payment of a final dividend of 1 cent in respect of the year ended 30 June 2017. If approved by shareholders at the next Annual General Meeting, this dividend will be paid on 13 December 2017 to those shareholders who are on the register on 17 November 2017. The ex-dividend date will be 16 November 2017.
Dividends are paid in sterling.
14. Post balance sheet events
There have been no post balance sheet events other than as disclosed in this report.
15. Financial information
The financial information in this announcement is derived from the audited financial statements for the year ended 30 June 2017.
The Annual Report for the year ended 30 June 2017 was approved by the Board of directors on 18 September 2017. It is available on the Company's website www.aberdeenfrontiermarkets.co.uk and will be posted to shareholders. It will also be available from the registered office of the Company.
16. Annual General Meeting
The Annual General Meeting of Aberdeen Frontier Markets Investment Company Limited will be held at 11 New Street, St Peter Port, Guernsey at 11:00 a.m. on 6 December 2017.
Registered office
11 New Street
St Peter Port
Guernsey
GY1 2PF
Enquiries:
Aberdeen Fund Managers Limited (Investment Manager to Aberdeen Frontier Markets Investment Company Limited)
William Hemmings / Gary Jones
Tel: +44 (0)20 7463 6000
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett
Tel: +44 (0)20 7383 5100
Numis Securities Limited (Nominated Broker)
David Benda
Tel: +44 (0) 20 7260 1275
18 September 2017
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFSFDAFWSEDU
(END) Dow Jones Newswires
September 18, 2017 09:43 ET (13:43 GMT)
1 Year Aberdeen Frontier Market... Chart |
1 Month Aberdeen Frontier Market... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
