European Assets Trust NV Interim Management Statement (1230Y)

TIDMEAT

RNS Number : 1230Y

European Assets Trust NV

13 May 2016

European Assets Trust NV

Interim Management Statement

For the three month period from 31 December 2015 to 31 March 2016

Investment Objective

The investment objective of the Company is to achieve growth of capital through investment in quoted small and medium-sized companies in Europe, excluding the United Kingdom.

A high distribution policy has been adopted and dividends have been paid mainly out of other reserves.

 
                                    Three month             Year ended 
   Total return#                         period            31 December 
                                 ended 31 March                   2015 
                                           2016 
 
                              Euro     Sterling      Euro     Sterling 
 
 Net asset value per 
  share                      -7.4%        -0.4%     26.9%        20.5% 
 Market price per share      -7.7%        -0.7%     26.8%        20.4% 
 Euromoney European 
  Smaller Companies 
  (ex UK) Index              -4.9%         2.3%     23.4%        17.2% 
 

Dividends

The Board has announced dividends of Euro 0.912 per share for the year to 31 December 2016 payable in three instalments in January, May and August. The January dividend was paid on 29 January 2016 and amounted to Euro 0.304 per share (GBP0.234 per share in Sterling terms). The May dividend has been announced at a rate of Euro 0.304 per share and will be paid on 31 May 2016.

 
                                  As at       As at       As at       As at 
                                 31 Mar      31 Dec      31 Mar      31 Dec 
                                   2016        2015        2016        2015 
   Capital return                  Euro        Euro    Sterling    Sterling 
 
 Net assets (shareholders' 
  funds)                      EUR450.8m   EUR483.9m   GBP357.4m   GBP356.6m 
 Net asset value 
  per share                    EUR13.77    EUR15.20    1,091.5p    1,120.1p 
 Market price per 
  share                                                1,095.0p    1,127.0p 
 Euromoney European 
  Smaller Companies 
  (ex UK) Index                  525.64      553.88      416.75      408.24 
 
 Premium to net asset 
  value                                                    0.3%        0.6% 
 
 Gearing (100% = 
  nil geared position)++                                   101%         98% 
 
 

Sources: F&C Investment Business Limited, Datastream.

++ - Gearing: The gearing ratio is total assets (less cash and cash equivalents) divided by shareholders' funds expressed as a percentage.

# - Total return means capital performance with dividends reinvested.

Review of the period to 31 March 2016

The first quarter of 2016 has been challenging for equity investors with the year starting with an aggressive sell off driven by deteriorating global economic news, with a particular focus on the Chinese economy and further deterioration in the oil price. Much of this weakness was however not felt in its entirety by Sterling holders of Euro denominated assets, as the Pound weakened in reaction to the UK's potential exit from the European Union. Overall though, it was a disappointing quarter for European Assets Trust.

The market weakness has, nevertheless, provided opportunities for new investments. Towards the end of 2015 we had looked at a number of high quality companies but did not invest as they were too expensive. We have used the first quarter to add a number of these names as their prices became more attractive. Examples include Marr, the Italian food distributor, IMCD, the Dutch specialist chemical distributor, and IMA, the Italian manufacturer of packaging machines. We have also, through our systematic review process, cast a critical eye on areas of the portfolio that have been struggling. Our new buys have been funded by a combination of increased gearing and the sale of one of our position, EFG, the Swiss private bank.

Our philosophy, process and outlook remains unchanged. We see the European equity market as finely balanced with the slow improvement in economic activity in Europe not yet translating into meaningful profit growth. Valuations look reasonable to us, but we would be more comfortable in aggregate if we had more confidence in corporate Europe's earnings recovery.

Over the three month period ended 31 March 2016 the Company issued 900,000 new Ordinary Shares for a total consideration of GBP9.4 million representing 2.8% of the Ordinary Shares in issue at 31 December 2015. During the period the Company also issued 9,178 Ordinary Shares via scrip dividend. To facilitate this issuance the Company published a prospectus in July 2015. This prospectus allows the Company to issue up to 9 million new Ordinary shares at an issue price of at least net asset value and a premium to cover the commissions of

issuance.   Of this amount, as at 31 March 2016, 5,318,124 shares have been issued. 

Top Ten Holdings

 
                                         31 March 
                                             2016 
                                       percentage 
   Company               Country           of net 
                                           assets 
 
 Irish Continental     Ireland                4.2 
 Gerresheimer          Germany                3.7 
 CTT Correios de 
  Portugal             Portugal               3.6 
 Forbo                 Switzerland            3.6 
 Amer Sports           Finland                3.5 
 Origin Enterprises    Ireland                3.5 
 Plastic Omnium        France                 3.5 
 Cerved Information 
  Solutions            Italy                  3.5 
 Glanbia               Ireland                3.3 
 Grafton Group         Ireland                3.0 
 
 Total                                       35.4 
                                     ------------ 
 

Geographical Analysis

 
 
                                        31 Mar         31 Dec 
                                          2016           2015 
   Country                          percentage     percentage 
                                        of net         of net 
                                        assets         assets 
 
 Ireland                                  20.7           21.3 
 Germany                                  17.9           17.6 
 Italy                                    12.6           12.3 
 Spain                                     8.5            8.1 
 Sweden                                    7.4            6.6 
 Denmark                                   7.2            7.1 
 Switzerland                               6.4            7.6 
 Norway                                    5.0            4.9 
 Netherlands                               5.0            2.2 
 Portugal                                  3.6            3.1 
 Finland                                   3.6            3.4 
 France                                    3.5            3.7 
 
 Net (current liabilities 
  includes borrowings)/ assets           (1.4)            2.1 
 
 Total                                   100.0          100.0 
                                 -------------  ------------- 
 

Summarised Balance Sheet

 
 
                                             31 Mar         31 Dec 
                                               2016           2015 
                                         EURmillion     EURmillion 
                                        (unaudited)      (audited) 
 
 Investments                                  456.6          473.8 
 Net current assets/(liabilities)             (5.8)           10.1 
 
 Net assets (shareholders' 
  funds)                                      450.8          483.9 
                                     --------------  ------------- 
 
 Shareholders' funds comprising 
  of: 
 Issued share capital                          15.1           14.6 
 Share premium and other reserves*            435.7          469.3 
 
 Total shareholders' funds                    450.8          483.9 
                                     --------------  ------------- 
 

* Share premium and other reserves are freely distributable

Daily and Key Information

Since 1 April 2016 the Company has issued a further 205,000 Ordinary Shares for a total consideration of GBP2.2 million. Of the prospectus capacity of 9 million shares as at 11 May 2016 3.5 million remain available for issuance.

The Boards are not aware of any other significant events or transactions which have occurred since 31 March 2016 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.europeanassets.eu, or at www.fandc.com.

For further information please contact:

Sam Cosh (Fund Manager)

Tel: [phone]

Scott McEllen (Company Secretary)

Tel: [phone]

Wilbert van Twuijver (representing the Management Board Director)

Tel [phone]

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 13, 2016 02:00 ET (06:00 GMT)