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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Gabelli Value Plus+ Trust Plc | LSE:GVP | London | Ordinary Share | GB00BTLJYS47 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 158.00 | 158.00 | 163.00 | 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
TIDMGVP
RNS Number : 0234X
Gabelli Value Plus+ Trust PLC
21 November 2017
21 November 2017
Half-Yearly Financial Report (Unaudited)
For the six months ended 30 September 2017
Financial highlights
Performance (unadjusted for distributions)
Hot Features
Premium
As at As at As at
30 September 30 September 31 March
2017 2016 2017
Net asset value
per share (cum income) 136.3p 120.2p 139.7p
Net asset value
per share (ex income) 135.9p 119.5p 138.4p
Share price 128.9p 112.9p 134.3p
Discount relative
to the NAV
(cum income) 5.4% 6.1% 3.9%
Total returns
Half year Half year Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
Net asset value
per share(#) (1.6%) 17.2% 36.2%
S&P 500 Index (GBP) 0.8% 18.1% 34.4%
Share price (3.1%) 25.1% 48.8%
Income
Revenue return
per share 0.27p 0.40p 1.31p
Ongoing charges*
Annualised ongoing
charges** 1.34% 1.34% 1.33%
Source: Investment Manager (Gabelli Funds, LLC), verified by the Administrator State Street Bank and Trust Company.
# The net asset value ("NAV") total return for the respective periods reflects the movement in the NAV, after taking account of the 1.2p dividend paid during the period.
The total share price return for the respective periods reflects the movement in the share price during these periods, after taking account of the 1.2p dividend paid during the period.
* Ongoing charges are calculated as a percentage of shareholders' funds using the average net assets over the respective periods and calculated in line with the AIC's recommended methodology.
** The annualised ongoing charges figures are the recurring operating and investment management costs of the Company, expressed as a percentage of the average net assets.
Chairman's statement
Introduction
The first half of the Company's financial year saw positive stock market returns, amid a broadening of global economic growth. Markets clearly paid closer attention to economic trends and the improvement in corporate earnings than to political trends, which were less reassuring. Other than in Europe, where a series of elections reassuringly resulted in victories for mainstream parties, politics generally added to investor uncertainty over future policy developments. Aside from geopolitical restiveness in the Far and Middle East, the UK general election went badly for the incumbent Conservative government, while the U.S. political system seemed characterised by generally irritable gridlock, despite the Republican tenure of the White House and majorities in both Houses of Congress. There have so far been no achievements of note on either healthcare or tax reform, although market disappointment over the latter has been assuaged by good news on corporate earnings and economic growth.
Inflation has remained subdued, with a strengthening economic cycle offset by quiescent commodity prices and the disruptive effects of new technology on business models and pricing power in many sectors. Consequently, although a number of central banks have indicated plans to reduce the degree of monetary policy stimulus, the pace of any interest rate rises is expected to be slow and gradual. However, given the experimental nature of the quantitative easing policies implemented since 2009, modelling the effects of their being tapered or reversed is uncertain. The significant projected change in central bank demand for government bonds could lead to a greater than expected rise in yields, which would have a direct effect on financial conditions in the economy, as well as on the valuation of equity markets, which have been boosted by low interest rates. In the absence of a recession (which is not expected), the stock market should find support from the positive growth environment, but a more selective approach may be called for than if valuations were generally cheap.
Performance
The U.S. stock market delivered a total return of [+7.7%] in dollar terms, which was eroded by sterling strength to a return of 0.8% in sterling terms. This unwound some of the currency-driven gains in 2016, which had boosted the sterling return in the wake of the post-Brexit fall in the value of the pound. The Company's net asset value (NAV) total return in sterling terms was -1.6%, while the share price total return was -3.1%, affected by a widening of the discount during the period. In comparison, therefore, the Company's NAV total return lagged the broad market index. However, the Company's portfolio is constructed on the basis of the attractions of individual investments, not the construction of an index, so performance can be expected to vary, sometimes significantly, from the U.S. market index, which is used as a comparator, although the Investment Manager seeks to add value relative to market indices over time. It is also worth appreciating that approximately [30%] of the portfolio is invested in merger arbitrage stocks, intended to deliver positive returns that are little correlated with the general market direction. As such, the tendency of the portfolio to move with the market ("beta") is relatively low (approximately 0.7), driven by this factor as well as the stock-selective construction of the portfolio. This can be expected to mute returns in stronger markets and assist in weak markets.
Dividend
A dividend of 1.2 pence per share was paid in July in respect of the 2016-2017 financial year. As stated in the Annual report, dividends are expected to be declared annually, so no dividend will be paid at the interim stage. Revenue earnings during the six month period were 0.27 pence per share (2016: 0.40 pence per share).
Share price rating and buybacks
The share price started the period at a 3.08% discount to NAV and traded between a small premium during May and a 6% discount for much of September. Despite the rise in U.S. equities as a whole, the NAV was little changed in sterling terms during the summer months, owing to weakness in the dollar. The U.S. market's weak relative performance compared with other regions in 2017 has contributed to reduced investor appetite for U.S. exposure, leading to widening discounts on U.S.-invested investment companies. The Company responded to the wider discount on its shares by recommencing share buybacks, with a total of 90,000 shares being purchased into treasury during the period and a further 60,000 since the period end, making a total of 150,000 shares held in treasury. Shares held in treasury may only be reissued at a premium to the prevailing net asset value.
The Company will continue to buy back shares when they are on an anomalous discount to NAV and when this is in shareholders' interests, taking account of market conditions. It should also be noted that the investment management fee paid to the Investment Manager is calculated on market capitalisation, which aligns their interest with that of other shareholders.
In view of the reduced demand for U.S. equity assets during 2017, the Company has not progressed its earlier announced plan to seek an expansion of its capital and shareholder base, but the situation will remain under review. Any such equity issue would be structured to be non-dilutive to existing investors (while allowing them to participate), and the Company believes there are potential benefits from such an issue in terms of increased liquidity in the shares and spreading costs over a wider base, leading to a reduced ongoing charges figure.
Gearing
One of the attributes of the Investment Trust structure is the ability to use borrowings in order to amplify investment returns, although of course the potential to boost gains is tempered by the risk of augmenting losses. The Company continues to evaluate the merits of putting gearing facilities in place and the best structure for such arrangements and will announce any decisions made to the market at a future date. The use of gearing will be selective and dependent upon the availability of attractive investment opportunities. At the period end, the Company held a net cash position of 19.7% of assets.
Outlook
Although the U.S. Federal Reserve is tightening policy (via rate increases and sales of its bond holdings), the objective seems to be to normalise rates rather than to induce a slowdown in the economy, which has historically been the usual reason for tightening (usually in response to late cycle inflationary pressures). In the absence of such pressures, the authorities are taking baby steps towards recreating conditions in which the market sets the cost of capital and the ratings of financial assets, rather than central banks determining prices as a result of unusually liberal monetary policy.
A backdrop of slowly rising interest rates may be consistent with continued economic growth, but it increases the risk of fragile links in the economy being put under stress. Although at this stage they are probably just taking some pressure off the accelerator, when the Fed hits the brakes, those without seatbelts risk hitting the windscreen.
With this in mind, our Investment Manager continues to take a selective approach to investing in undervalued stocks in the market, as well as mispriced merger arbitrage opportunities. Even when wider market indices are towards the high end of historical valuation ranges, the same does not apply for all stocks, and a market as deep as the U.S. offers opportunities for a research driven approach to discover attractively valued shares.
Andrew Bell
Chairman
20 November 2017
Investment Manager's review
Gabelli Methodology
Gabelli Funds would like to thank our investors for allocating a portion of their assets to the Gabelli Value Plus+ Trust ("GVP"). We appreciate the confidence and trust you have offered our organisation through your investment in GVP. Today, as we have for over forty years, we remain vigilant in the application of our investment philosophy and in our search for opportunities. In this context, let us outline our investment methodology and the investment environment through 30 September 2017.
We at Gabelli are active, bottom up, value investors who seek to achieve real capital appreciation relative to inflation over the long term, regardless of market cycles. We achieve returns through investing in businesses, utilising our proprietary Private Market Value ("PMV") with a Catalyst(TM) methodology. PMV is the value that we believe an informed buyer would be willing to pay to acquire an entire company in a private transaction. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from our comprehensive, accumulated knowledge of a variety of sectors. We focus on the balance sheet, earnings, free cash flow, and the management of prospective companies. We are not index benchmarked, and we construct portfolios agnostic of market capitalisation and index weightings. We have invested this way since 1977.
Our research process identifies differentiated franchise businesses, typically with strong organic cash flow characteristics, balance sheet opportunities, and operational flexibility. We seek to identify businesses whose securities trade in the public markets at a significant discount to our estimates of their PMV, or "Margin of Safety." Having identified such securities, we look to identify one or more "catalysts" that will narrow or eliminate the discount associated with that "Margin of Safety." Catalysts can come in many forms, including, but not limited to, corporate restructurings (such as de-mergers and asset sales), operational improvements, regulatory or managerial changes, special situations (such as liquidations), and mergers and acquisitions.
It is through this process of bottom-up stock selection and the implementation of disciplined portfolio construction that we expect to create value for our shareholders.
Observations
Although we usually do not discuss the weather on these pages, a total of three hurricanes recently impacted the United States: Harvey, which hit Texas; Irma, which hit Florida; and Maria, which hit Puerto Rico. All three hurricanes were major events that caused tens of billions of dollars in damages and impacted millions of people. The Federal government agreed to pay billions of dollars in emergency funds to help the affected areas, and we hope this will serve as a catalyst to help a new infrastructure bill pass Congress over the next year.
In Washington, D.C., the Trump administration was not able to move forward with any legislation related to health care reform, but, right at quarter end, the administration did propose an outline for much needed tax reform. We are hopeful that Congress will come together in a bipartisan manner and pass most, although probably not all, of the reforms proposed by the administration.
Specifically, the Trump administration is proposing that corporate tax rates come down dramatically, from 35% under current law to 20%. Right now, the 35% corporate tax rate of U.S.-based companies is the highest in the developed world, and it is a major reason why many companies are choosing to relocate to different countries. However, due to the large number of tax deductions, U.S. companies in aggregate usually only pay an effective tax rate just below 25%. The administration hopes to get rid of most of those tax loopholes and make the statutory rate much closer to the effective tax rate, which most economists agree would be good for the economy.
The Economy
The U.S. economy continues to grow at a modest pace. The days of 4% real gross domestic product (GDP) growth are over, and it has been a long time since we saw a year of 3% growth, although we are happy to report that second quarter 2017 real gross domestic product was calculated to be 3.1% versus the 1.2% that was calculated for the first quarter of 2017. Part of the slowdown in real GDP growth can be attributed to demographics - slower population growth and an aging workforce. We seem to be stuck in an annual real growth range of 1.5% to 2.5%. That has been the case since this recovery commenced in July 2009. Although the Trump administration would like to get the economy growing at a 3% real rate once again, the odds of that happening in 2017 are very dim. Growth this year will once again probably be about 2.0%. The bad news is this is the slowest expansion on record. The good news is that it is one of the longest. Slow and steady is a recipe for enduring growth. There are certainly policy prescriptions that could elevate us out of this 2% growth range, some of which the Trump administration is advancing, such as tax reform and infrastructure spending, but the likelihood of achieving such legislation through Congress remains to be seen.
The Markets
The Federal Reserve has been on a path of raising short term interest rates slowly to a more normalized level. After the financial crisis, the Fed slashed short term interest rates down to near zero, but now rates are at 1.25% after three increases over the past four quarters by the Fed. We expect that gradual increases will continue, and, that by this time next year, short term rates will be around 2.0%. In addition to raising short term interest rates gradually, the Fed is also beginning to unwind its massive $4.5 trillion asset portfolio, which it built up during the quantitative easing, or QE period. We expect the unwinding will be very gradual, whereby some maturing securities will not be reinvested, and the whole process will go on for many years.
Investors are facing an acute shortage of good income generating opportunities. While not a realistic choice for some investors, stocks must play a larger role overall in meeting investors' income needs. At this writing, 37% of the stocks in the S&P 500 Index have dividend yields that are higher than the ten year U.S. Treasury yield, which is currently about 2.3%. Stocks offer compelling current income and growth of income for investors who can tolerate stock market volatility. Stocks also offer the potential for growth in capital over time. It is hard to imagine growing capital by investing in bonds at historically low interest rates. We are probably in the final innings of a thirty-five year bull market in bonds.
Select Portfolio Holdings, as at 30 September 2017
Bank of New York Mellon Corp. (BK - $53.00 - NYSE) is a global leader in providing financial services to institutions and individuals. The company operates in more than one hundred markets worldwide, and strives to be the global provider of choice for investment management and investment services. As of June 2017, the firm had $31.1 trillion in assets under custody and $1.8 trillion in assets under management. Going forward, we expect BK to benefit from rising global incomes and the cross border movement of financial transactions. We also believe BK is well positioned to grow earnings in a rising interest rate environment, given its large customer cash deposits and significant loan book.
HERC Holdings Inc. (HRI - $49.13 - NYSE), based in Bonita Springs, Florida, is the third largest equipment rental company in the United States, after United Rentals and Sunbelt Rentals (owned by Ashtead). HRI was spun out of former parent Hertz on June 30, 2016. Underemphasized as part of a significantly larger car rental company, HRI now has the opportunity to improve profitability to levels more commensurate with peers as a standalone entity. Ultimately, we view HRI as an attractive acquisition candidate.
Navistar International Corp. 4(NAV - $44.06 - NYSE), based in Lisle, Illinois, manufactures Class 4-8 trucks, buses, and defense vehicles, as well as diesel engines and parts for the commercial trucking industry. NFC, a wholly-owned subsidiary, provides financing of products sold by the company's truck segment. In September 2016, Navistar and Volkswagen (VW) Truck & Bus announced a long anticipated strategic alliance, in which the two truck manufacturers would share technology and purchasing efforts in exchange for VW taking a $256 million stake (16.6%) in Navistar. The deal, which closed on March 1, 2017, confirms our thesis that NAV would eventually be targeted by a larger global capital equipment manufacturer. We believe this initial investment should lead to an eventual full purchase in the years ahead.
PNC Financial Services Group Inc. (PNC - $134.73 - NYSE) is one of the nation's largest diversified financial services organizations, providing retail and business banking, residential mortgage banking, specialized services for corporations and government entities including corporate banking, real estate finance, and asset backed lending, wealth management, and asset management. As of June 30, 2017, the asset management division had approximately $141 billion under management. The firm has a strong corporate leadership, with a conservative approach to balance sheet management.
Republic Services Inc. (RSG - $66.05 - NYSE), based in Phoenix, Arizona, became the second largest solid waste company in North America after its acquisition of Allied Waste Industries in December 2008. Republic provides nonhazardous solid waste collection services for commercial, industrial, municipal, and residential customers in 39 states and Puerto Rico. Republic serves more than 2,800 municipalities, and operates 192 landfills, 204 transfer stations, 333 collection operations, and 64 recycling facilities. Since the Allied merger, Republic has benefited from synergies driven by route density, beneficial use of acquired assets, and reduction in redundant corporate overhead. Republic is committed to its core solid waste business. While other providers have strayed into alternative waste resource technologies and strategies, we view Republic's plan to remain steadfast in the traditional solid waste business positively. We expect continued solid waste growth acquisitions, earnings improvement, and incremental route density and organic growth in already established markets to generate real value in the near to medium term, highlighting the company's potential.
Ryman Hospitality Properties Inc. (RHP - $62.50 - NYSE) is the owner/operator of four large convention-centric hotels under the Gaylord brand. It also owns the Opryland brand and entertainment complex in Nashville, the city of its origin. As such, it has benefited from the growth in country music and consumer preference for live entertainment. The company's hotels are group-centric, and revenues and bookings have remained strong due to its long and steady economic expansion in the United States. Future growth should come from new hotels (probably established as joint ventures), as well as development of additional live entertainment venues, one of which will open in Times Square in New York City later this year. The company operates as a REIT (real estate investment trust), providing an extra level of tax efficiency to enhance its investment attraction. Given the low level of interest rates, the company's tax efficient dividend stream provides significant investor protection, as does the consistency of its cash flow.
Investing in Announced Takeovers
As we have written in the past, we believe we are in what we refer to as the "fifth wave" of merger deal activity since World War II, and that the environment for more deals will remain robust. Total deal volume for the first nine months ended September 30, 2017 stands at $2.4 trillion. This represents an increase of 3% over the same period last year. If one looks at only deals that are worth greater than $1 billion, then that number stands at $1.5 trillion, which is flat compared with last year's first nine months. In summary, corporate confidence is strong and (y)our portfolio stands to benefit from this deal activity.
We set out some examples of our merger arbitrage positions that have recently completed or are pending.
Select Deals that have been completed through 30 September 2017:
Premium
Value Paid
Date
Announced Target Entity Acquirer ($ millions) (%)
Internet
24/07/17 WebMD Brands 2,594 15.8
04/07/17 Monogram Residential GIC Pte 3,404 22.5
Trust
Koninklijke
28/06/17 Spectranetics Philips NV 2,001 33.2
09/01/17 VCA Inc. Mars Inc. 8,793 37.9
Bass Pro
03/10/16 Cabela's Outdoor 5,000 22.2
World
Select Pending Deals as at 30 September 2017:
Premium
Value Paid
Date
Announced Target Entity Acquirer ($ millions) (%)
Calgon Carbon
21/09/17 Corp. Kuraray Co. 1,329 68.3
Bob Evans Post Holdings
19/09/17 Farms Inc. Inc. 1,614 14.9
Northrop
18/09/17 Orbital ATK Grumman 9,168 24.5
Corp.
06/09/17 Landauer Fortive Inc. 728 10.1
03/07/17 Bankrate Inc. Red Ventures 1,366 21.1
Summary
The Gabelli process of securities selection - identifying and valuing businesses from the perspective of an owner or strategic buyer - orients the portfolio to a variety of catalyst-driven situations that may eventually lead to a takeover or merger. In this context, after a merger or acquisition is announced, we may deem it attractive to remain invested in the announced merger transaction. We also actively seek announced transactions that meet our criteria as independent investments that we hold until closure. This approach is known as traditional merger arbitrage investing, with the return potential based on the "spread" - the announced acquisition price relative to the current market price. We believe that these announced merger investments offer an attractive return component to our investment programme, with returns contingent on the closing of a transaction and generally unrelated to the broader market conditions. Our approach to traditional merger investing is a natural extension of our long standing, research-driven investment process, and is utilized in the Company as we seek capital appreciation independent of broad market movements. Investing in announced takeovers has historically provided consistent returns, uncorrelated with traditional equities and bonds, while preserving capital in volatile equity markets. Additionally, since the "spread" or return in a given transaction is based upon the risk free rate plus the transaction's risk premium, a rising interest rate environment should lead to wider "spreads," and thus a more attractive return profile.
Portfolio summary
Largest holdings
(Unaudited)
As at 30 September
2017
Market % of
value total
GBP000 portfolio
Republic Services Inc. 6,154 4.5
Bank of New York Mellon Corp. 5,017 3.7
PNC Financial Services Group 4,670 3.4
Herc Holdings Inc. 4,577 3.3
The E W Scripps Co. 3,988 2.9
Navistar International Corp. 3,711 2.7
Myers Industries Inc. 2,904 2.1
State Street Corp. 2,847 2.1
Mueller Industries Inc. 2,761 2.0
Ryman Hospitality Properties 2,562 1.9
Viacom Inc. 2,349 1.7
Hertz Global Holdings Inc. 2,232 1.6
Tredegar Corp. 2,119 1.6
Westar Energy Inc. 1,996 1.5
Discovery Communications 1,984 1.5
National Fuel Gas Co. 1,856 1.4
Liberty Media Corp. Braves 1,836 1.4
Time Warner Inc. 1,679 1.2
Morgan Stanley 1,652 1.2
Harris Corp. 1,619 1.2
Sub-total 58,513 42.9
Other holdings 50,951 37.4
Net cash & Equivalents 26,836 19.7
Total holdings 136,300 100.0
Portfolio distribution (%)*
(Unaudited)
As at 30 September
2017
========= ==================== =======
Russell
3000
Portfolio Russell
of GVP S&P 500 3000 Value
Consumer Discretionary 24.0 11.9 12.3 7.1
Industrials 23.5 10.2 10.8 8.7
Financials 22.2 14.6 15.0 26.2
Materials 6.6 3.0 3.5 3.1
Information Technology 6.2 23.2 22.3 8.2
Utilities 3.8 3.1 3.1 6.2
Health Care 3.5 14.5 13.9 13.3
Consumer Staples 3.0 8.2 7.3 8.2
Real Estate 2.3 3.0 4.1 5.6
Energy 1.6 6.1 5.7 10.4
Telecommunication
Services 1.4 2.2 2.0 3.0
Other 1.9 0.0 0.0 0.0
Total 100.0 100.0 100.0 100.0
* Excludes cash and short term investments.
By asset class (%)
As at
As at 30 September 31 March
2017 2017
Equities 80.4 83.3
Fixed income investments - 0.3
Cash and short term
investments 19.6 16.4
Total 100.0 100.0
Regulatory disclosures
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company were explained in detail within the Annual Report for the period ended 31 March 2017. In the Board's opinion, the result of the UK referendum on 23 June 2016, when the UK resolved to leave the European Union, presents a new risk factor, given the lack of precedent to act as a guide. Given this uncertainty, the volatility in the markets could continue until clarity emerges on the future relationship between the UK and Europe. Other than this, the Directors are not aware of any other new risks or uncertainties, or any changes to those risks and uncertainties stated within the Annual Report, which are applicable to the remaining six months of the financial year, as they were to the period under review.
Related Party Transactions
Details of related party transactions can be found in Note 8 of the financial statements. Other than this, there have been no changes to related party transactions detailed in the Company's Annual Report for the period ended 31 March 2017, nor have there been any related party transactions during the period under review, which have materially affected the financial position or performance of the Company.
Going Concern
The Directors believe, having considered the Company's investment objectives, risk management policies, capital management policies and procedures, nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure, and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least twelve months from the date of the approval of this half-yearly financial report. For these reasons, the Directors consider there is reasonable evidence to continue to adopt the going concern basis in preparing the accounts.
Directors' Responsibility Statement
The Board of Directors confirms that, to the best of its knowledge:
-- the condensed financial statements have been prepared in accordance with Financial Reporting Standard (FRS 104) applicable in the UK and Republic of Ireland, which forms part of the revised Generally Accepted Accounting Practice (New UK GAAP) issued by the Financial Reporting Council (FRC) in 2015; and
-- the half-yearly management report includes a fair review of the information required by section 4.2.7R and 4.2.8R of the UK Listing Authority's Disclosure Guidance and Transparency Rules.
In order to provide these confirmations, and in preparing these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards 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.
and the Directors confirm that they have done so.
For and on behalf of the Board
Andrew Bell
Chairman
20 November 2017
Condensed statements of comprehensive income
(Unaudited)
Half year ended
30 September
2017
Revenue Capital Total
Note GBP000 GBP000 GBP000
Dividend income 828 - 828
Interest on fixed
income securities 5 - 5
Interest on deposits 10 - 10
Total dividends
and interest 843 - 843
Net realised and
unrealised
(losses)/gains
on investments 3 - (1,308) (1,308)
Net realised and
unrealised
currency (losses)/gains (8) (670) (678)
Investment management
fee (164) (491) (655)
Other expenses (250) (7) (257)
Net return on ordinary
activities
before finance
costs and taxation 421 (2,476) (2,055)
Interest expense
and similar
charges (29) - (29)
Net return on ordinary
activities
before taxation 392 (2,476) (2,084)
Taxation on ordinary
activities 4 (118) - (118)
Net returns attributable
to
shareholders 274 (2,476) (2,202)
Net returns per
ordinary share
-
basic and diluted 6 0.27p (2.47p) (2.20p)
The total columns of these statements are the profit and loss accounts of the Company for respective periods.
The revenue and capital items are presented in accordance with the AIC's Statement of Recommended Practice ('SORP') 2014.
All revenue and capital items in the above statements derive from continuing operations.
No operations were acquired or discontinued in the half year ended 30 September 2017.
The following notes form part of these financial statements.
(Unaudited) (Audited)
Half year ended
30 September Year ended
2016 31 March 2017
Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
895 - 895 2,443 - 2,443
5 - 5 10 - 10
- - - 2 - 2
900 - 900 2,455 - 2,455
- 17,376 17,376 - 36,249 36,249
13 196 209 19 344 363
(127) (381) (508) (287) (861) (1,148)
(231) - (231) (483) - (483)
555 17,191 17,746 1,704 35,732 37,436
(8) - (8) (13) - (13)
547 17,191 17,738 1,691 35,732 37,423
(143) - (143) (383) - (383)
404 17,191 17,595 1,308 35,732 37,040
0.40p 17.19p 17.59p 1.31p 35.75p 37.06p
Condensed statements of changes in equity
Half year ended 30 September 2017 (Unaudited)
Special
Called
up Distributable Capital Revenue
Share
Capital Reserve* Reserve Reserve* Total
Note GBP000 GBP000 GBP000 GBP000 GBP000
Net assets as
at 1 April 2017 1,001 98,200 39,223 1,394 139,818
Realised gains
on investments
at fair value - - 2,972 - 2,972
Capital distributions
received - - 23 - 23
Unrealised losses
on
investments
at fair value - - (4,303) - (4,303)
Realised currency
losses - - (670) - (670)
Capital expenses - - (498) - (498)
Ordinary shares
bought back
into treasury 7 - (115) - - (115)
Transfer to
revenue reserve
for
the period - - - 274 (274)
Dividends paid 5 - - - (1,201) (1,201)
Net assets as
at
30 September
2017 6 1,001 98,085 36,747 467 136,300
Half year ended 30 September 2016 (Unaudited)
Net assets as at 1 April 2016 1,001 98,099 3,491 386 102,977 Realised gains on investments at fair value - - 4,707 - 4,707 Capital distributions received - - 23 - 23 Unrealised gains on investments at fair value - - 12,646 - 12,646 Realised currency gains - - 196 - 196 Capital expenses - - (381) - (381) Ordinary shares bought back into treasury 7 - (225) - - (225) Transfer to revenue reserve for the period - - - 404 404 Dividends paid 5 - - - (300) (300) Net assets as at 30 September 2016 61,001 97,874 20,682 490 120,047
Year to 31 March 2017 (Audited)
Special
Called
up Distributable Capital Revenue
Share
Capital Reserve* Reserve Reserve* Total
Note GBP000 GBP000 GBP000 GBP000 GBP000
Net assets as
at 1 April 2016 1,001 98,099 3,491 386 102,977
Realised gains
on investments
at fair value - - 11,767 - 11,767
Capital distributions
received - - 25 - 25
Unrealised gains
on investments
at fair value - - 24,457 - 24,457
Realised currency
gains - - 344 - 344
Capital expenses - - (861) - (861) Ordinary shares bought back into treasury 7 - (431) - - (431) Sale of treasury shares 7 - 532 - - 532 Transfer to revenue reserve for the year - - - 1,308 1,308 Dividends paid 5 - - - (300) (300) Net assets as at 31 March 2017 6 1,001 98,200 39,223 1,394 139,818
*These reserves are distributable.
The following notes form part of these financial statements.
Condensed statements of financial position
(Unaudited) (Unaudited) (Audited)
As at 30 As at 30
September September As at 31
2017 2016 March 2017
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Fixed assets
Investments
at fair
value through
profit
or loss 3 109,464 119,510 116,671
Current
assets
Cash 26,770 (1,490) 22,848
Receivables 536 4,101 732
27,306 2,611 23,580
Current
liabilities
Payables (470) (2,074) (433)
Net current
assets 26,836 537 23,147
Net assets 136,300 120,047 139,818
Capital
and reserves
Called-up
share
capital 7 1,001 1,001 1,001
Special
distributable
reserve* 98,085 97,874 98,200
Capital
reserve 36,747 20,682 39,223
Revenue
reserve* 467 490 1,394
Total shareholders'
funds 136,300 120,047 139,818
Net asset
value per
ordinary
share of
1p 6 136.3p 120.2p 139.7p
* These reserves are distributable.
Gabelli Value Plus+ Trust Plc is registered in England and Wales under company number 9361576.
The condensed financial statements were approved by the Board of Directors on 20 November 2017 and signed on its behalf by
Andrew Bell
Chairman
The following notes form part of these financial statements.
Notes to the condensed financial statements
1 Condensed financial statements
The half yearly report has not been audited by the Company's auditors.
2 Accounting policies
Basis of preparation - For the half years ended 30 September 2017 and 2016, the Company applied FRS 104 - Interim Financial Reporting and for the year ended 31 March 2017, the Company applied FRS 102 - The Financial Reporting Standard applicable in the UK and Republic of Ireland, which forms part of the revised Generally Accepted Accounting Practice (New UK GAAP) issued by the Financial Reporting Council ('FRC') in 2015.
These condensed financial statements have been prepared on a going concern basis in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority (FRS 102 and FRS 104), the revised Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (SORP) issued by the AIC in November 2014 and Companies Act 2006.
The accounting policies applied for the condensed set of financial statements are set out in the Company's Annual Report for the year ended 31 March 2017.
Statement of estimation uncertainty - In the application of the Company's accounting policies, the Investment Manager is required to make judgements, estimates, and assumptions about carrying values of assets and liabilities that are not always readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may vary from these estimates. There have been no significant judgements, estimates, or assumptions for the period.
Cash flow statement - The statement of cash flows has not been included in the financial statements as the Company meets the conditions set out in paragraph 7.1A of FRS 102, which state that a statement of cashflows is not required to be provided by investment funds that meet all of the following conditions:
(i) substantially all of the entity's investments are highly liquid;
(ii) substantially all of the entity's investments are carried at market value; and
(iii) the entity provides a statement of changes in net assets.
3 Investments at fair value through profit or loss
(Unaudited) (Unaudited)
As at As at (Audited)
30 September 30 September As at
31 March
2017 2016 2017
GBP000 GBP000 GBP000
Opening valuation 116,671 88,466 88,466
Opening unrealised
gains/(losses) on
investments (23,249) 1,208 1,208
Opening cost 93,422 89,674 89,674
Add: additions at
cost 2,526,452 97,523 1,039,912
Less: disposals at
cost (2,529,356) (79,125) (1,036,164)
Closing cost 90,518 108,072 93,422
Closing unrealised
gains on investments 18,946 11,438 23,249
Closing valuation 109,464 119,510 116,671
Fair value hierarchy
The Company has adopted the 'Amendments to FRS 102 - Fair value hierarchy disclosure', where an entity is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:
-- Level 1 - The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.
-- Level 2 - Inputs other than quoted prices included within Level 1 that are observable, i.e., developed using market data, for the asset or liability, either directly or indirectly.
-- Level 3 - Inputs are unobservable, i.e., for which market data are unavailable, for the asset or liability.
The financial assets measured at fair value through profit or loss in the financial statements are grouped into the fair value hierarchy as follows:
As at 30 September
2017 (Unaudited)
Level Level
1 Level 2 3 Total
GBP000 GBP000 GBP000 GBP000
Financial assets
at fair value
through profit
or loss
Quoted equities 109,464 - - 109,464
Net fair value 109,464 - - 109,464
As at 30 September
2016 (Unaudited)
Level Level
1 Level 2 3 Total
GBP000 GBP000 GBP000 GBP000
Financial assets
at fair value
through profit
or loss
Quoted equities 119,510 - - 119,510
Net fair value 119,510 - - 119,510
As at 31 March
2017 (Audited)
Level Level
1 Level 2 3 Total
GBP000 GBP000 GBP000 GBP000
Financial assets
at fair value
through profit
or loss
Quoted equities 116,262 - - 116,262
Fixed income
investments - 409 - 409
Net fair value 116,262 409 - 116,671
3 Investments at fair value through profit or loss continued
Net realised and unrealised (losses)/gains on investments
(Unaudited) (Unaudited) (Audited)
Half
year Half year Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
Realised gains on
investments 2,972 4,707 11,767
Capital distributions
received from
investments 23 23 25
Movement in unrealised
(losses)/gains on
investments (4,303) 12,646 24,457
Net realised and unrealised
(losses)/gains on
investments (1,308) 17,376 36,249
Transaction costs
During the respective periods, commissions (paid mostly to G.research, LLC, an affiliate of the Investment Manager) and other expenses were incurred in acquiring or disposing of investments classified at fair value through profit or loss. These have been expensed through capital and are within gains/(losses) in the Condensed Statements of Comprehensive Income. The total costs were as follows:
(Unaudited) (Unaudited) (Audited)
As at As at As at
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
Purchases 37 36 63
Sales 12 10 29
Total 49 46 92
4 Taxation on ordinary activities
(Unaudited)
Half year ended 30
September 2017
Revenue Capital Total
Analysis of the charge
in the period GBP000 GBP000 GBP000
Foreign withholding
taxes on dividends 118 - 118
(Unaudited)
Half year ended 30
September 2016
Revenue Capital Total
Analysis of the charge
in the period GBP000 GBP000 GBP000
Foreign withholding
taxes on dividends 143 - 143
(Audited)
Year ended 31
March 2017
Revenue Capital Total
Analysis of the charge
in the year GBP000 GBP000 GBP000
Foreign withholding
taxes on dividends 383 - 383
5 Equity dividends
(Unaudited) (Unaudited) (Audited)
Half
year Half year Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
Final dividend of
0.3p for the year
ended
31 March 2016 - 300 -
Final dividend of
1.2p for the year
ended
31 March 2017 1,201 - -
Total 1,201 300 -
6 Return per ordinary share and net asset value
The return and net asset value per ordinary share are calculated with reference to the following amounts:
(Unaudited) (Unaudited) (Audited)
Half
Half year year Year
ended ended ended
30 September 30 September 31 March
2017 2016 2017
Revenue return
Revenue return attributable
to ordinary
shareholders GBP274,000 GBP404,000 GBP1,308,000
Weighted average
number of shares
in issue
during period 100,098,146 100,012,749 99,946,262
Total revenue return
per ordinary share 0.27p 0.40p 1.31p
Capital return
Capital return attributable
to ordinary
shareholders (GBP2,476,000) GBP17,191,000 GBP35,732,000
Weighted average
number of shares
in issue
during period 100,098,146 100,012,749 99,946,262
Total capital return
per ordinary share (2.47p) 17.19p 35.75p
Total return
Total return per
ordinary share (2.20p) 17.59p 37.06p
Net asset value per
share
(Unaudited) (Unaudited) (Audited)
As at As at As at
30 September 30 September 31 March
2017 2016 2017
Net assets attributable GBP136,300,000
to shareholders GBP120,047,000 GBP139,818,000
Number of shares
in issue at the period
end 100,011,001 99,881,001 100,101,001
Net asset value per
share 136.3p 120.2p 139.7p
7 Called up share capital
(Unaudited) (Unaudited) (Audited)
As at As at As at
30 September 30 September 31 March
2017 2016 2017
GBP000 GBP000 GBP000
Authorised:
250,000,000
Ordinary shares of
1p each - equity 2,500 2,500 2,500
Allotted, called up
and fully paid:
100,011,001 (30.09.2016
- 99,881,001;
31.03.2017 - 100,101,001)
Ordinary shares of
1p each - equity 1,000 999 1,001
Treasury shares:
90,000 (30.09.2016
- 220,000; 31.03.2017
- Nil)
Ordinary shares of
1p each - equity 1 2 -
Total shares 1,001 1,001 1,001
During the half year ended 30 September 2017, the Company bought back 90,000 shares into treasury at a cost of GBP114,502. During the half year ended 30 September 2016, the Company bought back 220,000 shares into treasury at a cost of GBP224,643. During the year ended 31 March 2017, the Company bought back 390,000 shares into treasury at a cost of GBP431,105, and the Company sold 390,000 shares from treasury at GBP532,347.
8 Related party transactions
With the exception of Investment Management fees, Directors' remuneration, secretarial fees, and other administrative fees, the Company paid G.research, LLC, an affiliate of the Investment Manager, brokerage commissions on security trades of GBP45,703 during the half year ended 30 September 2017, GBP44,882 during the half year ended 30 September 2016, and GBP86,935 during the year ended 31 March 2017.
9 Contingent liabilities and commitments
As at 30 September 2017, the Company had no contingent liabilities or commitments (30 September 2016: Nil, 31 March 2017: Nil).
10 Half-Yearly report
The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in s434-436 of the Companies Act 2006. The financial information for the half year ended 30 September 2017 has not been audited.
11 Post balance sheet event
Between 1 October and 9 October 2017, 60,000 ordinary shares were bought back into treasury at a cost of GBP79,733.
Company information
Please visit us on the Internet. Our homepage at www.gabelli.co.uk contains information about Gabelli Value Plus+ Trust Plc and Gabelli Funds, LLC.
We welcome your comments and questions at +44 (0) 20 3206 2100 or via e-mail at info@gabelli.co.uk.
Registered Name
Gabelli Value Plus+ Trust Plc
Registered Office
5th Floor, 6 St. Andrew Street London EC4A 3AE
Board of Directors
Andrew Bell
Rudolf Bohli
Jonathan Davie
Richard Fitzalan Howard
Kasia Robinski
Investment Manager
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
Company Secretary
TMF Corporate Administration Services Limited 5th Floor, 6 St. Andrew Street
London EC4A 3AE gabellicompany.secretary@tmf-group.com
Independent Auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
Administrator and Custodian
State Street Bank and Trust Company
20 Churchill Place
Canary Wharf
London E14 5HJ
Depositary
State Street Trustees Limited
20 Churchill Place
Canary Wharf
London E14 5HJ
Broker
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Shareholder Communications
Kepler Partners LLP
9/10 Saville Row
London W1S 3PF
Registrar and Receiving Agent
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS13 8AE
The Company is a member of The Association of Investment Companies ("AIC"), which publishes a number of useful fact sheets and email updates for investors interested in investment trust companies.
The AIC 9th Floor
24 Chiswell Street London EC1Y 4YY 0207 282 5555 www.theaic.co.uk
FOR FURTHER INFORMATION
GAMCO UK
Carter Austin (tel: 020 3206 2100)
TMF Corporate Administration Services Limited
Email: GabelliCompany.Secretary@tmf-group.com
Phone: +44 (0) 207 832 8914
Legal Entity Identifier: 213800FZFN1SD1GNNZ11
Date: 21 November 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QBLFLDFFEFBD
(END) Dow Jones Newswires
November 21, 2017 02:00 ET (07:00 GMT)
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