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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Artemis Alpha Trust Plc | LSE:ATS | London | Ordinary Share | GB0004355946 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 6.00 | 1.73% | 352.00 | 348.00 | 356.00 | 354.00 | 348.00 | 354.00 | 940 | 16:35:09 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 2.72M | 807k | 0.0247 | 143.32 | 115.8M |
From Apr 2019 to Apr 2024
TIDMATS TIDMATSS
RNS Number : 0636C
Artemis Alpha Trust PLC
16 January 2018
ARTEMIS ALPHA TRUST PLC (the "Company")
Half-Yearly Financial Report for the six months ended 31 October 2017
This announcement contains regulated information
Chairman's Statement
Performance
In the six months to 31 October 2017 the Company's net asset value per share rose by 2.7% and its share price by 4.6%, compared with an increase in the FTSE All-Share Index of 5.9% (on a total return basis).
The UK market performed less strongly than some other major world markets over the period largely due to the continuing political uncertainty surrounding Brexit and the result of the General Election in June.
Our investments in financial services, and in particular fund management companies, performed well over the half year. Overall, the performance was held back by some individual stocks, most notably Hurricane Energy, an oil exploration company. I am pleased to report that some of our overseas holdings have performed well and that we have added to this part of the portfolio. More detailed information on performance is set out in the Investment Manager's Review which follows.
Unquoted investments
The unquoted portfolio was largely unchanged over the reporting period, representing an exposure of 25.0% at 31 October 2017. There were no significant transactions or valuation changes in the period. Our fund managers will continue to look for realisation opportunities and remain committed to reducing the overall exposure to unquoted investments.
Earnings & dividends
Revenue earnings per share for the six months to 31 October 2017 were 2.66p, an increase of 3.9% (2016: 2.56p). On 14 December 2017 we declared a first interim dividend of 1.75p per ordinary share (2016: 1.55p) which will be paid on 26 January 2018, to shareholders on the register at 29 December 2017. This is an increase of 12.9% over the equivalent dividend last year; the Board continues to target a 10% annual increase in the dividend.
Discount & share buy backs
The discount continued to narrow, albeit only slightly, and stood at 17.6% at the end of the reporting period.
As I have indicated previously, the Company will buy back shares tactically to address imbalances between supply and demand; on this basis 152,500 ordinary shares were bought back during the period.
Continuation vote
As shareholders are aware, the Company is due to have a continuation vote at its annual general meeting in 2018. This is an important matter for the Company and its shareholders and we will be consulting our larger shareholders over the next few months, as we did in the autumn of 2016.
Subscription shares
The final exercise date for the subscription shares was 29 December 2017. Following this, 2,707 subscription shares were exercised and the same number of ordinary shares were issued. The independent trustee determined that there was no value attributable to the unexercised subscription shares as the exercise price of 345p per share was higher than the prevailing ordinary share price. Therefore the subscription shares lapsed with no value. The London Stock Exchange listing of the unexercised subscription shares was suspended on 2 January 2018 and this listing, together with the subscription shares themselves, will be cancelled in due course.
Change of independent auditor
Following a competitive tender process, the Board has approved the appointment of PricewaterhouseCoopers LLP as the Company's auditor for the year ending 30 April 2018, replacing KPMG LLP.
Shareholder approval of the appointment of PricewaterhouseCoopers LLP as auditor will be sought at the Company's next annual general meeting.
KPMG LLP's appointment ended on 16 January 2018. As required by the Companies Act 2006, a copy of the auditor's resignation letter, including its statement regarding the reasons for its ceasing to hold office, has been circulated to shareholders with the half-yearly financial report.
Outlook
The uncertainty surrounding Brexit and unsettled political conditions are likely to continue for some time to come. However, as I explained in my statement in July 2017, our fund managers follow a stock-specific investment approach which, while having regard to markets, seeks to deliver returns by identifying promising companies at attractive valuations.
Duncan Budge
Chairman
16 January 2018
Investment Manager's Review
Performance
In the six months under review, the Company's net asset value rose by 2.7% versus a rise of 5.9% in the FTSE All-Share Index.
This performance is disappointing, after improved relative performance in the previous reporting period. It was, to a large extent, the result of particular stocks, together with a drag from the Company's unquoted investments against a rising equity market.
Review
Global stock markets performed strongly over the period, led in particular by the US as investors bet on a large 'reflation trade' following Donald Trump's election. This was seen particularly in financials and technology, with the Nasdaq hitting regular new highs.
In the UK there was continued nervousness around the shape of Brexit and indeed whether Brexit can be delivered at all. Theresa May has now struck a deal with the EU that enables her to move on to the all-important question of our future trading arrangement with Europe once we have formally left the EU.
This undoubtedly created uncertainty for the UK consumer; and certain domestically-focused stocks were notably weak over the period, as they were immediately following the vote for Brexit.
Portfolio
The fund management companies in the portfolio continued to perform strongly, in particular Liontrust following its acquisition and smooth integration of Alliance Trust's unit trust business; and Polar Capital, which benefited from strong investment performance across its product range and very strong fund flows.
Elsewhere, and also within the financials sector, strong performances were seen from both Ramsdens and Plus500. Ramsdens, a pawnbroker and foreign currency business, floated successfully early in 2017 and has substantially exceeded its own expectations, as the sale of foreign currency through its stores has grown substantially. The company currently has 127 stores, predominately in the north-west and Scotland, but there is a strong pipeline of potential new openings.
Plus500, an online trading platform for retail clients, was our top contributor in the period as the shares more than doubled. The company's half-year results significantly exceeded expectations. The company has consistently demonstrated an ability to deploy its marketing spend efficiently to attract new customers across a number of geographic markets; and has benefited from the appetite for trading in crypto-currencies.
Two overseas holdings that performed strongly were Rocket Internet, a conglomerate of internet businesses, and Nintendo, a video games company. Rocket benefited from the successful IPO of one of its largest holdings, Delivery Hero, an online food delivery business. The listing allowed Rocket to realise some of its holding at a significant profit and has also increased the transparency of Rocket's value. Despite a strong year for its portfolio companies, Rocket continues to trade at a material discount to the sum of its parts with more than half of its market value represented by cash.
Nintendo rose by nearly 50% in the period, as demand for its new Switch console surpassed expectations. The company has also continued to demonstrate a renewed vigour for monetising its intellectual property and it announced its first expansion into China and plans for more mobile games.
Sports Direct was also a strong performer in the period as its full year results showed evidence that its strategy to improve its stores was gaining traction with both consumers and suppliers, and generating robust financial returns.
Five largest stock contributors
Hot Features
Premium
Contribution
Market %
Plus500 AIM 1.2
Ramsdens Holdings AIM 0.8
Liontrust Asset Management LSE 0.8
Rocket Internet FWB 0.8
Gresham Technologies LSE 0.7
Five largest stock detractors
Contribution
Market %
Hurricane Energy AIM (2.3)
Vectura Group LSE (0.8)
Mporium Group AIM (0.5)
Gaming Realms AIM (0.5)
LumX Group SSX (0.4)
On the negative side Hurricane Energy was the weakest performer following a significant issuance of both equity and convertible debt which should see the company through to first oil production at the beginning of 2019. In spite of its weak share price performance, the prospects for the company are looking positive. For example, there has been the recent publication of an independent "competent person's report" showing a large increase in the company's resource base to well over 2 billion barrels of oil. We have taken advantage of the weak share price to add to our position, having taken profits earlier in the year.
Another weak performer was Vectura Group, the inhaled airways disease business, which suffered from delays among some of its customers - as well as from a delay in its plans to launch a generic copy of GlaxoSmithKline's popular lung drug, Advair, in the US. We expect this approval to be granted in early 2018 and have been increasing our holding accordingly.
Another disappointment over the period was Augean, which was hit by a large tax claim relating to the classification of the waste it had been disposing of over several years. The company strongly disputes this assessment and we await further developments.
Transactions
The three largest purchases in the period were all oil-related stocks chosen mainly for stock specific reasons, but also because we felt the oil price had fallen too far. The largest of these was BP, where we bought a holding because the company appeared to be at an inflection point above which it would be generating free cash, even at $50 per barrel.
The second largest purchase (as noted above) was Hurricane Energy, where we participated in the equity fund-raising, and the company should now be funded through to first oil production. The other oil related investment was Igas Energy, the owner of a number of onshore oil and gas projects as well as a number of shale licences whose development is funded by the chemical giant Ineos. We made an investment in this business at the time of its financial restructuring which left the company with considerably reduced debt and a valuation that is underpinned by the onshore oil and gas projects - leaving a free option on its shale assets. Igas Energy is the only listed company operating in the UK shale industry. All of the other companies in this space are privately owned.
Other purchases included Mountview Estates, a family-controlled business that owns a large portfolio of assured tenancies which will unwind over time, crystallising value well in excess of the company's stated net asset value; and Revolution Bars, a bar operator whose share price had fallen sharply following a profit warning and which was subsequently the subject of two rejected bid approaches.
We made two new purchases of overseas companies during the period: Dick's Sporting Goods and Fitbit. Dick's Sporting Goods is the dominant sporting goods retailer in the US. The shares were weak as the broader industry suffered from excess inventory leading to a number of bankruptcies. Yet the company has a strong balance sheet, a management team with a large shareholding in the company, and operates in a fragmented market. Our view is that supplier relationships provide an unusual barrier to entry in this industry as supply and product innovation is dominated by Nike and Adidas. Dick's seems well positioned to emerge stronger than before and in a position to consolidate its market share.
Fitbit is the leading provider of wearable fitness devices globally. We purchased a holding following persistent share price weakness, which resulted in almost half of the company's market value being represented by cash and trading on 0.5x sales, less than a quarter of the valuation of peer Garmin. Fitbit has a strong brand and installed base of over 50 million devices which, in our view, should command strategic value. The company has been working on applications of its devices in areas such as diabetes and mental health treatment with very encouraging results. This should drive the long term adoption of wearable devices that currently stands at less than 20% in the US and significantly less internationally. If this were to occur, Fitbit would be well placed to succeed and generate significant profits.
On the sell side, we sold St Modwen Properties and Telford Homes in their entirety, following strong performances. Amongst the financials we took profits across the board by executing partial sales in Liontrust, Polar Capital, City of London, Brewin Dolphin and Charles Stanley.
In addition, two companies were taken over in the period: Market Tech, a Camden property company, which was taken private by its majority shareholder, Teddy Sagi; and Quantum Pharma, a personalised medicine business, which was taken over by Clinigen.
Unquoted investments
There was limited activity in the unquoted portfolio in the period. RateSetter had positive news as it was granted FCA authorisation; and Reaction Engines won a significant contract with the US government. Elsewhere, detracting from performance were two smaller holdings, Lamp Group and Houseology Design Group, where funds were raised at lower prices resulting in a write-down. The impact of these changes was -0.5%.
Although it has been a relatively quiet period in terms of reducing our unquoted holdings, we are continuing to pursue our strategy of reducing exposure and will continue to work with investee companies to achieve this at valuations which we consider fair and in shareholders' best interests.
Outlook
We have continued to make progress over the period in reducing the overall number of stocks in the portfolio and increasing the overall level of liquidity in the portfolio. This has been achieved by recycling the cash from selling some of the more illiquid positions into larger companies, including some listed overseas.
At the time of writing, the UK government has now reached agreement to move to phase two of the talks on Brexit. So the risk of a 'no deal' Brexit looks to have diminished substantially. That a number of concessions on previous 'red lines' were made during the negotiations increases our belief that an agreement on a new trade deal can be reached.
Sterling has rallied in response to the talks' progress, taking it to a six-month high versus the euro and a 12-month high versus the dollar. The pound's strength should start to feed through into lower inflation over the next few months, reducing the squeeze on real wages. We will be watching economic data from the UK closely for any signs of an improvement in corporate and consumer confidence. At a stock level, current foreign exchange rates should see the relative earnings momentum between the UK market's overseas and domestic earners reversing at the next reporting season.
The portfolio retains its focus on domestic stocks with a strong franchise, that face a limited threat of disruption and that often pay us a growing yield while we wait for sentiment to improve. Going into 2018, we remain confident about the Company's positioning. In an environment where economic growth globally is strong - and where central banks are starting to withdraw liquidity - we believe that our holdings in financials, and our clear bias towards value, will aid relative performance.
John Dodd & Adrian Paterson
Fund managers
Artemis Fund Managers Limited
16 January 2018
Condensed income statement
For the six months ended 31 October 2017
Six months ended Six months ended Year ended
31 October 2017 31 October 2016 30 April 2017
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
income 1,387 - 1,387 1,317 - 1,317 3,184 - 3,184
Other income 1 - 1 4 - 4 - - -
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total revenue 1,388 - 1,388 1,321 - 1,321 3,184 - 3,184
Gains on
investments - 3,624 3,624 - 1,887 1,887 - 24,515 24,515
Currency
gain - 11 11 - - - - 7 7
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total income 1,388 3,635 5,023 1,321 1,887 3,208 3,184 24,522 27,706
Expenses
Investment
management
fee (46) (410) (456) (37) (332) (369) (76) (688) (764)
Other expenses (218) (16) (234) (210) (8) (218) (420) (13) (433)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Profit before
finance costs
and tax 1,124 3,209 4,333 1,074 1,547 2,621 2,688 23,821 26,509
Finance costs (20) (179) (199) (18) (159) (177) (36) (323) (359)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Profit before
tax 1,104 3,030 4,134 1,056 1,388 2,444 2,652 23,498 26,150
Tax (13) - (13) 14 - 14 (37) - (37)
Profit for
the period
per ordinary
share 1,091 3,030 4,121 1,070 1,388 2,458 2,615 23,498 26,113
======== ======== ======== ======== ======== ======== ======== ======== ========
Earnings
for the period 2.66p 7.39p 10.05p 2.56p 3.33p 5.89p 6.31p 56.70p 63.01p
======== ======== ======== ======== ======== ======== ======== ======== ========
The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.
Condensed statement of financial position
As at 31 October 2017
31 October 31 October 30 April
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Investments 158,864 134,117 156,756
Investment in subsidiary
undertaking 3,094 2,528 2,719
------------- ------------ ----------
161,958 136,645 159,475
Current assets
Other receivables 206 244 645
Cash and cash equivalents 1,401 719 4,012
------------- ------------ ----------
1,607 963 4,657
------------- ------------ ----------
Total assets 163,565 137,608 164,132
============= ============ ==========
Current liabilities
Other payables (1,822) (2,132) (1,129)
Bank loan (10,000) (8,500) (13,000)
------------- ------------ ----------
(11,822) (10,632) (14,129)
------------- ------------ ----------
Net assets 151,743 126,976 150,003
============= ============ ==========
Equity attributable
to equity holders
Share capital 481 498 492
Share premium 667 647 657
Special reserve 50,202 50,647 50,646
Capital redemption
reserve 109 92 98
Retained earnings
- revenue 2,072 2,020 2,928
Retained earnings
- capital 98,212 73,072 95,182
------------- ------------ ----------
Total equity 151,743 126,976 150,003
============= ============ ==========
Net asset value
per ordinary share
(undiluted) 370.30p 308.76p 364.72p
============= ============ ==========
Net asset value
per ordinary share
(diluted) 366.67p - 361.90p
============= ============ ==========
Condensed statement of changes in equity
For the six months ended 31 October 2017
Six months ended 31 October 2017 (unaudited)
------------------------------------------------------------------------
Retained earnings
-------- -------- -------- ----------- --------
Capital
Share Share Special redemption
capital premium reserve reserve Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- ----------- --------- -------- --------
At 1 May 2017 492 657 50,646 98 2,928 95,182 150,003
Total comprehensive
income:
Profit for the
period - - - - 1,091 3,030 4,121
Transactions
with owners
recorded directly
to equity:
Repurchase of
ordinary shares
into treasury - - (444) - - - (444)
Cancellation
of ordinary
shares from
treasury (11) - - 11 - - -
Conversion of
subscription
shares - 10 - - - - 10
Dividends paid - - - - (1,947) - (1,947)
-------- -------- -------- ----------- --------- -------- --------
At 31 October
2017 481 667 50,202 109 2,072 98,212 151,743
======== ======== ======== =========== ========= ======== ========
Six months ended 31 October 2016 (unaudited)
------------------------------------------------------------------------
Retained earnings
-------- -------- -------- ----------- --------
Capital
Share Share Special redemption
capital premium reserve reserve Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- ----------- --------- -------- --------
At 1 May 2016 498 645 53,022 92 2,000 71,684 127,941
Total comprehensive
income:
Profit for the
period - - - - 1,070 1,388 2,458
Transactions
with owners
recorded directly
to equity:
Repurchase of
ordinary shares
into treasury - - (2,375) - - - (2,375)
Conversion of
subscription
shares - 2 - - - - 2
Dividends paid - - - - (1,050) - (1,050)
-------- -------- -------- ----------- --------- -------- --------
At 31 October
2016 498 647 50,647 92 2,020 73,072 126,976
======== ======== ======== =========== ========= ======== ========
Year ended 30 April 2017 (audited)
------------------------------------------------------------------------
Retained earnings
-------- -------- -------- ----------- --------
Capital
Share Share Special redemption
capital premium reserve reserve Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- ----------- --------- -------- --------
At 1 May 2016 498 645 53,022 92 2,000 71,684 127,941
Total comprehensive
income:
Profit for the
year - - - - 2,615 23,498 26,113
Transactions
with owners
recorded directly
to equity:
Repurchase of
ordinary shares
into treasury - - (2,376) - - - (2,376)
Cancellation
of ordinary
shares from
treasury (6) - - 6 - - -
Conversion of
subscription
shares - 12 - - - - 12
Dividends paid - - - - (1,687) - (1,687)
-------- -------- -------- ----------- --------- -------- --------
At 30 April
2017 492 657 50,646 98 2,928 95,182 150,003
======== ======== ======== =========== ========= ======== ========
Condensed statement of cash flows
For the six months ended 31 October 2017
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ ----------
Operating activities
Profit before tax 4,134 2,444 26,150
Interest paid 199 177 359
Gains on investments (3,624) (1,887) (24,515)
Currency gains (11) - (7)
Decrease/(increase) in other
receivables 211 61 (150)
Increase/(decrease) in other
payables 211 3 (144)
------------ ------------ ----------
Net cash inflow from operating
activities before interest and
tax 1,120 798 1,693
------------ ------------ ----------
Interest paid (199) (177) (359)
Irrecoverable overseas tax (13) 14 (37)
------------ ------------ ----------
Net cash inflow from operating
activities 908 635 1,297
------------ ------------ ----------
Investing activities
Purchase of investments (24,051) (18,917) (45,795)
Sales of investments 25,904 20,891 46,574
------------ ------------ ----------
Net cash inflow from investing
activities 1,853 1,974 779
------------ ------------ ----------
Financing activities
Repurchase of ordinary shares
into treasury (444) (2,447) (2,593)
Conversion of subscription shares 10 2 12
Dividends paid (1,947) (1,050) (1,687)
(Decrease)/increase in inter-company
loan (2) 18 110
------------ ------------ ----------
Net cash outflow from financing
activities (2,383) (3,477) (4,158)
------------ ------------ ----------
Net decrease/(increase) in net
debt 378 (868) (2,082)
------------ ------------ ----------
Net debt at the start of the
period (8,988) (6,913) (6,913)
Effect of foreign exchange rate
changes 11 - 7
------------ ------------ ----------
Net debt at the end of the period (8,599) (7,781) (8,988)
------------ ------------ ----------
Bank loan (10,000) (8,500) (13,000)
Cash and cash equivalents 1,401 719 4,012
------------ ------------ ----------
(8,599) (7,781) (8,988)
============ ============ ==========
Notes to the half-yearly financial report
1. Accounting policies
The Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', the provisions of the Companies Act 2006 and with the guidance set out in the Statement of Recommended Practice for Investment Trust Companies and Venture Capital Trusts ("SORP") issued by the Association of Investment Companies in November 2014.
The Half-Yearly Financial Report has been prepared under the same accounting policies as the Annual Financial Statements for the year ended 30 April 2017.
2. Earnings per ordinary share
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2017 2016 2017
----------- ----------- ----------
Earnings per ordinary share
is based on:
Revenue earnings (GBP'000) 1,091 1,070 2,615
Capital earnings (GBP'000) 3,030 1,388 23,498
----------- ----------- ----------
Total earnings (GBP'000) 4,121 2,458 26,113
=========== =========== ==========
Weighted average number of ordinary
shares in issue during the period
(basic and diluted) 41,006,257 41,750,646 41,443,082
=========== =========== ==========
3. Net asset value per ordinary share
As at As at As at
31 October 31 October 30 April
2017 2016(1) 2017
----------- ----------- ----------
Net asset value per ordinary
share is based on:
Net assets (GBP'000) 151,743 126,976 150,003
----------- ----------- ----------
Number of shares in issue at
the end of the period (basic) 40,978,267 41,125,090 41,127,975
Number of shares in issue at
the end of the period (diluted) 47,834,613 41,125,090 47,987,113
=========== =========== ==========
(1) There was no dilution to the Net Asset Value for the period ended 31 October 2016 relating to the Company's issued subscription shares.
During the period the Company bought back 152,500 shares into treasury (six months ended 31 October 2016: 1,040,706; year ended 30 April 2017: 1,040,706). 2,792 subscription shares were exercised during the period and the same number of ordinary shares were issued in respect of these (six months ended 31 October 2016: 645; year ended 30 April 2017: 3,539).
4. Dividends
Six months Six months
ended ended Year ended
31 October 31 October 30 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
----------- ----------- ----------
Second interim dividend for the
year ended 30 April 2016 - 2.50p - 1,050 1,050
First interim dividend for the
year ended 30 April 2017 - 1.55p - - 637
Second interim dividend for the
year ended 30 April 2017 - 2.75p 1,127 - -
Special dividend for the year ended
30 April 2017 - 2.00p 820 - -
----------- ----------- ----------
1,947 1,050 1,687
=========== =========== ==========
A first interim dividend for the year ending 30 April 2018 of GBP717,000 (1.75p per ordinary share) has been declared. This will be paid on 26 January 2018 to those shareholders on the register at close of business on 29 December 2017.
5. Analysis of retained earnings - capital
As at As at As at
31 October 31 October 30 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
----------- ----------- ---------
Retained earnings - capital (realised) 90,297 85,339 87,314
Retained earnings - capital (unrealised) 7,915 (12,267) 7,868
----------- ----------- ---------
98,212 73,072 95,182
=========== =========== =========
6. Comparative information
The financial information for the six months ended 31 October 2017 and 31 October 2016 has not been audited and does not constitute statutory financial statements as defined in Section 234 of the Companies Act 2006.
The information for the year ended 30 April 2017 has been extracted from the Audited Financial Statements for the year ended 30 April 2017. These financial statements contained an unqualified auditor's report and have been lodged with the Registrar of Companies and did not contain a statement required under Section 498 of the Companies Act 2006.
7. Principal risks and uncertainties
Pursuant to DTR 4.2.7R of the Disclosure Guidelines and Transparency Rules, the principal risks faced by the Company include general market price risk, liquidity risk, regulatory, and financial risks.
These risks, which have not materially changed since the Annual Financial Report for the year ended 30 April 2017, and the way in which they are managed, are described in more detail in the Annual Financial Report for the year ended 30 April 2017 which is available on the website artemisalphatrust.co.uk.
8. Related party transactions
There were no related party transactions during the period. The existence of an independent Board of Directors demonstrates that the Company is free to pursue its own financial and operating policies and therefore, under IAS 24: Related Party Disclosures, the Investment Manager is not considered to be a related party.
9. Valuation of investments
IFRS 7 'Financial Instruments: Disclosures' requires an entity to provide an analysis of investments held at fair value through profit and loss using a fair value hierarchy that reflects the significance of the inputs used in making the measurements of fair value. The hierarchy used to analyse the fair values of financial assets is set out below.
Level 1 - investments with quoted prices in an active market;
Level 2 - investments whose fair value is based directly on observable current market prices or is indirectly derived from market prices; and
Level 3 - investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices, or are not based on observable market data.
The investments held at the balance sheet date fell in to the categories, Level 1, Level 2 and Level 3. The values in these categories are summarised as part of this note. Any investments that are delisted or suspended from a listed stock exchange are transferred from Level 1 to Level 3.
As at As at As at
31 October 31 October 30 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
----------- ----------- ---------
UK quoted investments (Level
1)
- UK listed 54,083 46,233 52,370
- AIM quoted 46,580 43,428 53,732
- Preference shares - 235 -
Overseas quoted investments
(Level 1) 14,920 5,766 7,802
Mutual funds (Level 2) 5,318 4,416 4,364
Forward currency contracts (Level
2) 100 - 147
Unquoted investments (Level
3)
- Equities and warrants 33,609 29,677 34,200
- Fixed interest 700 3,043 587
- Preference shares 3,554 655 3,554
- Other - 664 -
----------- ----------- ---------
158,864 134,117 156,756
=========== =========== =========
The valuation of the Level 3 investments would not be significantly different had reasonably possible alternative valuation bases been applied.
Details of the movements in Level 3 assets during the six months ended 31 October 2017 are set out in the table below.
GBP'000
-------
Level 3 investments
Opening book cost 41,065
Opening fair value adjustment (2,724)
-------
Opening valuation 38,341
=======
Movements in the period:
Purchases at cost 552
Sales - proceeds (217)
Sales - realised gains on sales (857)
Increase in fair value adjustment 44
-------
Closing valuation 37,863
-------
Closing book cost 40,780
Closing fair value adjustment (2,917)
-------
37,863
=======
Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report
The Directors confirm that to the best of their knowledge, in respect of the Half-Yearly Financial Report for the six months ended 31 October 2017:
- the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' issued by the International Accounting Standards Board as adopted by the EU;
- having considered the expected cash flows and operational costs of the Company for the 18 months from the period end, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the going concern basis of accounting continues to be used in the preparation of the Half-Yearly Financial Report;
- the interim management report includes a fair review of the information required by:
(a) Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months; and a description of the principal risks and uncertainties for the remaining six months of the year); and
(b) Disclosure Guidance and Transparency Rule 4.2.8R (related party transactions).
The Half-Yearly Financial Report for the six months ended 31 October 2017 was approved by the Board and the above responsibility statement was signed on its behalf by:
Duncan Budge
Chairman
16 January 2018
Copies of the Half-Yearly Financial Report for the six months ended 31 October 2017 will be sent to shareholders shortly and will be available from the registered office at Cassini House, 57 St James's Street, London SW1A 1LD as well as on the website, artemisalphatrust.co.uk.
Artemis Fund Managers Limited
Company Secretary
For further information, please contact:
Artemis Fund Managers Limited
Telephone: 0131 225 7300
16 January 2018
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFLTLSIRLIT
(END) Dow Jones Newswires
January 16, 2018 13:16 ET (18:16 GMT)
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