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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Sanditon Investment Trust Plc | LSE:SIT | London | Ordinary Share | GB00BMPHJ807 | ORD �0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 90.00 | 88.00 | 92.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMSIT
SANDITON INVESTMENT TRUST PLC
Annual Results for the year ended to 30 June 2016
Performance Highlights
As at As at
30 June 2016 30 June 2015
Share price 106.40p 106.50p
Premium to net asset value 1.0% 3.4%
per share
Dividends per ordinary share 1.10p 0.45p
Ongoing charges 1.27% 1.20%
Period since launch
Year ended on 27 June 2014
Total Return Performance 30 June 2016 to 30 June 2015
NAV per ordinary share +2.7% +3.0%
(including dividend)
Share price -0.1% +6.5%
Hurdle rate (RPIX + 2%) +3.7% +3.1%
FTSE All-Share Index (Total +2.2% +2.5%
Return)
RPIX +1.7% +1.1%
Commenting on the results, the Chairman, Rupert Barclay said:
"After a poor first six months of your Company's financial year, I am pleased
to report that your Company finished the year with a Net Asset Value ("NAV") of
105.3p including the first uplift in valuation for the Company's holding in
Sanditon Asset Management Limited ("SAM") which I discuss below. Combined with
the dividend paid in December of 0.45p, this represented a return of 2.7% for
the year.
The Company's primary objective is to preserve the real value of your capital,
which so far it has achieved, but also to try to grow it by 2% above the Retail
Price Index excluding mortgage interest payments ("RPIX"). June 2016 RPIX was
1.7% per annum, so your Company is just behind its minimum objective since
launch, with a total return of 5.8% against its minimum benchmark return of
6.9%. Its secondary objective is to provide low correlation with traditional
equity portfolios and the correlation of the Company's share price to the FTSE
All Share index remains an encouragingly low 0.19x since launch.
Your Company's share price finished the year at 106.4p, a modest premium to
NAV, but it should be noted that the stake in SAM was revalued on the last day
of your Company's financial year and reported to the market on 1 July. The
shares have traded at a modest premium throughout the year and due to the
broadly market neutral structure of the portfolio have exhibited materially
lower volatility than the European and UK equity markets.
The investment manager gives a thorough review of performance in his report
that follows.
Stake in Sanditon Asset Management
The Board have agreed the valuation methodology for the Company's holding in
SAM which it believes to be straightforward, conservative and fair. The Board
has decided to use a simple average of 1% of SAM's year end assets under
management ("AUM") and 5x after tax profits (adjusted to exclude any
performance fees earned and any associated staff bonuses paid - SAM's policy is
to pay out a maximum of 50% of performance fees earned to staff).
SAM finished its financial year (31/03/16) with AUM of just over GBP595m and
adjusted after tax profits of GBP1.515m. This resulted in the Directors approving
an uplift in your Company's holding in SAM from the book cost of GBP200,000 to GBP
1,353,000. Whilst SAM has had an encouraging first two years, evidenced by
dividends received from SAM to your Company amounting to 85% of the initial
capital deployed, the last six months have been more challenging and have seen
assets under management fall from a peak of over GBP630m to GBP568m at 30 June
2016. 2016 has been a very challenging period for the investment industry with
the Brexit referendum acting as a constraint on buying UK funds in particular.
Time will tell, now the referendum is out of the way, whether conditions get
any easier.
The Directors plan to keep the valuation methodology constant but we will
annually review the multiples used to ensure that they remain appropriate.
Charges and fees
Our total ongoing charges at 30 June 2016 were 1.27% per annum. Performance
fees are only accrued if the lower of NAV or the share price exceeds the hurdle
rate of RPIX +2%. No performance fees were accrued as at 30 June 2016.
Share buy back
As the shares have traded for most of the year at a modest premium to NAV, the
Board will not be asking shareholders for permission to buy back shares this
year. The Board will continue to review this decision annually.
Dividends
The yield of your Company's long book has continued to trade at a significant
premium to the yield of the short book, so despite a broadly market neutral
structure through the year, the portfolio has generated a useful income surplus
of 1.19p per share and the Board is pleased to recommend an annual dividend of
1.10p per share, which is a 144.4% increase on last year. The GBP150,000 dividend
received from your Company's holding in SAM represented about 15% of total
income. Your Company also benefitted from some special dividends which may not
be repeated next year.
Providing an income is not an objective for your Company and there remains no
assurance that your Company will always generate surplus income to allow a
dividend to be paid.
Outlook
Negative interest rates, elevated asset prices and anaemic global growth remain
a significant hurdle for all investors. The United Kingdom's decision to vote
to leave the EU at the end of the period has created another layer of
uncertainty which is likely to create extra volatility as governments and
investors work out the implications. We can but hope that common sense prevails
and this vote does not usher in a period of protectionism but as the Investment
Manager discusses in his report, Brexit or no Brexit, these are very
challenging times for all investors. We all have to get used to an era of low
(or no) returns.
The U.K. equity market has gyrated in a 10% range since your Company launched
in 2014, with the FTSE All Share Index at year end down 2.5% since launch.
Against this backdrop, your Board is encouraged that your Company has delivered
modest positive returns with low correlation to the market and believes that
your Company has the structure to adapt to different market conditions."
Principal risks associated with the Company (also see note 18 on pages 36 to 42
of the Annual report).
Investment and strategy risk
The Board regularly reviews the investment mandate and long-term investment
strategy in relation to the market and economic conditions. The Board also
regularly monitors the Company's investment performance against the objective
to deliver at least 2% return above inflation, and monitors its compliance with
the investment guidelines.
Accounting, legal and regulatory risk
In order to qualify as an investment trust, the Company must comply with the
provisions contained in Section 1158 of the Corporation Taxes Act 2010. A
breach of Section 1158 in an accounting period could lead to the Company being
subject to corporation tax on gains realised in that accounting period. Section
1158 qualification criteria are monitored by the Investment Manager and any
adverse results reported to the Board at its regular meetings. The Company must
also comply with the Companies Act and the UKLA Listing Rules. The Board relies
on the services of the administrator, Northern Trust Global Services Limited
and its professional advisers to ensure compliance with the Companies Act and
the UKLA Listing Rules.
Loss of investment team or Investment Manager SAM
A sudden departure of the Investment Manager or several members of the
investment management team could result in a deterioration in investment
performance.
Discount
A disproportionate widening of the discount relative to the Company's peers
could result in loss of value for shareholders.
Operational risk
Like most other investment trust companies, the Company has no employees and
therefore relies upon the services provided by third parties and is dependent
on the control systems of the Investment Manager, the Custodian, the
Administrator and the Company's other service providers. The security, for
example, of the Company's assets, dealing procedures, accounting records and
maintenance of regulatory and legal requirements, depend on the effective
operation of these systems. The Custodian and the Administrator produce reports
on their internal controls which are reviewed by their auditors and give
assurance regarding the effective operation of controls. These reports are
reviewed by the Board. Details of material contracts entered into by the
Company can be found on pages 14 and 15 of the Annual Report.
Financial risk
The financial risks faced by the Company are disclosed in note 18 on pages 36
to 42 of the Annual Report.
The Board considers these risks to have remained unchanged throughout the year
under review.
Statement under the Disclosure & Transparency Rules 4.1.12
The Directors each confirm to the best of their knowledge that:
a) the financial statements, prepared in accordance with applicable accounting
standards, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company; and
b) the Strategic Report contained in the Annual Report includes a fair review
of the development and performance of the business and the position of the
Company, together with a description of the principal risks and uncertainties
that it faces.
The 2014 UK Corporate Governance Code also requires Directors to ensure that
the Annual Report and financial statements are fair, balanced and
understandable. In order to reach a conclusion on this matter, the Board has
requested that the Audit Committee advise on whether it considers that the
Annual Report and financial statements fulfil these requirements. The process
by which the Committee has reached these conclusions are set out in the Audit
Committee's report on pages 18 and 19 of the Annual Report. As a result, the
Board has concluded that the Annual Report and financial statements for the
year ended 30 June 2016, taken as a whole, are fair, balanced and
understandable, and provide the information necessary for shareholders to
assess the Company's performance, business model and strategy.
For and on behalf of the Board
Rupert Barclay
Chairman
21 September 2016
Portfolio as at 30 June 2016
Country Breakdown Long Short Net Gross
(% of NAV)*
United Kingdom 39.1 -30.9 8.2 70.0
Denmark 1.2 0.0 1.2 1.2
France 0.0 -3.9 -3.9 3.9
Germany 0.0 -2.0 -2.0 2.0
Italy 1.1 -2.2 -1.1 3.3
Netherlands 4.8 0.0 4.8 4.8
____ ____ ____ ____
Total 46.2 -39.0 7.2 85.2
==== ==== ==== ====
Business Cycle Long Short Net Gross
Groupings (% of
NAV)*
Commodity Cyclical 5.5 -2.8 2.7 8.3
Consumer Cyclical 6.3 -2.0 4.3 8.3
Industrial 5.2 -10.1 -4.9 15.3
Cyclical
Growth 1.5 -17.1 -15.6 18.6
Financial 7.6 -1.0 6.6 8.6
Growth Defensive 14.6 -3.6 11.0 18.2
Value Defensive 5.5 -2.4 3.1 7.9
____ ____ ____ ____
Total 46.2 -39.0 7.2 85.2
==== ==== ==== ====
Top 20 Long Positions (% of NAV)** %
TM Sanditon UK Select Fund 9.9
Babcock International 6.0
Reed Elsevier NV 4.8
Diageo 3.0
ITV 2.7
Sanditon Asset Management 2.6
Ashmore 2.5
Laird 2.4
Man Group 2.2
J Sainsbury 2.0
BHP Billiton 2.0
BT Group 1.8
HSBC 1.8
Mothercare 1.7
Glaxosmithkline 1.7
GKN 1.6
Inmarsat 1.5
Ophir Energy 1.5
AP Moeller-Maersk 'B' 1.2
Halfords 1.2
Total ________
54.1***
========
Total number of positions (long and short)* 50
*
* Excluding holdings in Sanditon Asset Management and TM Sanditon UK Select
Fund
** Including holdings in Sanditon Asset Management and TM Sanditon UK Select
Fund
*** The top 20 long positions are presented based on the notional value of CFD
holdings and the actual value of equity holdings
Income Statement
for the year ended 30 June 2016
Year Year Year Period from Period Period
ended ended ended from from
30 June 30 June 30 June 14 May 2014 14 May 14 May
2016 2016 2016 to 30 June 2014 to 2014 to
2015 30 June 30 June
2015 2015
Revenue Capital Total Revenue Capital Total
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gains on
investments held
at fair value
through profit or - 1,038 1,038 - 2,177 2,177
loss
Income 2 993 - 993 571 - 571
Management fee 3 (96) (287) (383) (95) (286) (381)
Other expenses 4 (268) - (268) (220) - (220)
Return on ordinary
activities
before taxation 629 751 1,380 256 1,891 2,147
Taxation on (32) 30 (2) (11) - (11)
ordinary
activities
Return for the ____ ____ _____ ____ ____ _____
year/period 597 781 1,378 245 1,891 2,136
==== ==== ==== ==== ==== ====
Return per 8 1.19 1.57 2.76 0.49 3.78 4.27
Ordinary Share
(pence):
The total column of this statement is the profit and loss account of the
Company. All the revenue and capital items in the above statement derive from
continuing operations.
The supplementary revenue and capital columns are both prepared under guidance
from the Association of Investment Companies.
There is no other comprehensive income and therefore the return for the year is
also the total comprehensive income for the year.
Statement of Financial Position
as at 30 June 2016
30 June 30 June
2016 2015
Notes GBP000 GBP000
Fixed assets
Investments held at 12,255 12,772
fair value through
profit or loss
Current assets
Debtors 99 25
Amounts due in respect 2,466 1,157
of contracts for
difference
Collateral paid in 10,306 11,844
respect of contracts
for difference
UK Treasury Bills 22,969 21,481
Cash and short term 8,421 8,457
deposits
Total current assets 44,261 42,964
Current liabilities
Creditors (147) (133)
Amounts payable in (3,708) (4,095)
respect of contracts
for difference
Total current (3,855) (4,228)
liabilities
Net current assets 40,406 38,736
Total assets less 52,661 51,508
current liabilities
Net assets ______ ______
52,661 51,508
====== ======
Capital and reserves
Share capital 6 500 500
Share premium 48,872 48,872
Capital reserve 2,672 1,891
Revenue reserve 617 245
Total shareholders' ______ ______
funds 52,661 51,508
====== ======
Net asset value per 105.32 103.02
share - Ordinary Share
(pence)
Statement of Changes in Equity
for the year ended 30 June 2016
Share
Share Premium Capital Revenue
Capital Account Reserve Reserve Total
For the year GBP000 GBP000 GBP000 GBP000 GBP000
ended 30 June
2016
Balance at 1 500 48,872 1,891 245 51,508
July 2015
Return for the - - 781 597 1,378
year
Dividends paid - - - (225) (225)
Balance at 30 ______ ______ ______ ______ ______
June 2016 500 48,872 2,672 617 52,661
====== ====== ====== ====== ======
Share
Share Premium Capital Revenue
Capital Account Reserve Reserve Total
For the period GBP000 GBP000 GBP000 GBP000 GBP000
from 14 May
2014 to 30
June 2015
Balance at 14 - - - - -
May 2014
Return for the - - 1,891 245 2,136
period
Issue of 500 49,500 - - 50,000
Ordinary
Shares
Launch costs - (628) - - (628)
Balance at 30 ______ ______ ______ ______ ______
June 2015 500 48,872 1,891 245 51,508
====== ====== ====== ====== ======
Cash Flow Statement
for the year ended 30 June 2016
Period from
Year ended 14 May 2014
30 June to 30 June
2016 2015
GBP000 GBP000
Return on ordinary activities 1,380 2,147
before taxation*
Capital return before finance (751) (1,891)
costs and taxation
Increase in accrued income (74) (25)
and prepayments
Increase in other creditors 14 133
Investment management fee (287) (286)
capitalised
Net movement in collateral 1,538 (11,844)
pledged to broker
Gains on futures and CFDs 667 695
realised during the period
Increase in amounts due in (1,309) (1,157)
respect of CFDs
(Increase)/decrease in (387) 4,095
amounts payable in respect of
CFDs
Tax paid (2) (11)
Net cash inflow/(outflow) ______ ______
from operating activities 789 (8,144)
====== ======
Cashflow from investing
activities
Purchases of investments (7,190) (23,634)
Sales of investments 8,078 12,344
Net cashflow provided by/ 888 (11,290)
(used in) investing activity
Net cash inflow/(outflow) ______ ______
before financing activities 888 (11,290)
====== ======
Cashflow from financing
activities
Issue of Ordinary Shares - 50,000
Payment of issue costs - (628)
Equity dividends paid (225) -
Net cash (outflow)/inflow (225) 49,372
from financing activities
Increase in cash and cash ______ ______
equivalents 1,452 29,938
====== ======
Cash and cash equivalents at 29,938 -
the start of the year
Cash and cash equivalents at 31,390 29,938
the end of the year
Comprised of:
UK Treasury Bills 22,969 21,481
Cash and cash equivalents 8,421 8,457
Cash and cash equivalents ______ ______
31,390 29,938
====== ======
*Cash inflow from dividends was GBP783,000 (2015: GBP437,000) and cash inflow from
interest was GBP130,000 (2015: GBP109,000).
Notes to the Financial Statements
for the year ended 30 June 2016
1. ACCOUNTING POLICIES
(a) Basis of accounting
The financial statements have been prepared under the historical convention as
modified to include the revaluation of investments and in accordance with
applicable UK Accounting Standards and with the Statement of Recommended
Practice "Financial Statements of Investment Trust Companies and Venture
Capital Trusts" (issued in November 2014).
The financial statements have been prepared for the first time in accordance
with FRS 102 ("the Financial Reporting Standard applicable in the UK and
Republic of Ireland" issued by the Financial Reporting Council). Previously,
the financial statements were prepared in accordance with previously extant UK
Generally Accepted Accounting Practice ("UK GAAP"). The transition to FRS 102
did not result in any significant changes to the accounting policies.
Restatement of opening balances relating to equity values, assets and
liabilities and profits and losses of the Company between previously extant UK
GAAP as previously reported and under FRS 102 as restated have not been
presented as there have been no required changes to the reported amounts.
Therefore restatement tables have not been prepared for any of the primary
statements.
The Company's cashflow statement reflects the presentational requirements of
FRS 102, which are different from those of FRS 1.
They have also been prepared on the assumption that approval as an investment
trust will continue to be granted. The financial statements have been prepared
on a going concern basis.
2. INCOME
Year ended Period ended
30 June 2016 30 June 2015
GBP000 GBP000
Income from investments
UK franked dividends 803 437
UK treasury bills interest 96 82
Overseas dividends 54 25
Other income 40 27
_____ _____
993 571
===== =====
3. INVESTMENT MANAGEMENT FEE
Year ended Period ended
30 June 2016 30 June 2015
GBP000 GBP000
Basic fee:
25% charged to revenue 96 95
75% charged to capital 287 286
____ ____
383 381
==== ====
Performance fee charged 100%
to capital:
Performance fee accrual - -
____ ____
- -
==== ====
The Company's investment manager is Sanditon Asset Management Limited (the
"Manager"). The Manager shall be entitled to receive from the Company in
respect of its services provided under the Management Agreement, a management
fee accrued daily and payable monthly in arrears calculated at the rate of
one-twelfth of 0.75 per cent per calendar month of the Company's Net Asset
Value. In accordance with the Directors' policy on the allocation of expenses
between income and capital, in each financial period 75 per cent of the
management fee payable is expected to be charged to capital and the remaining
25 per cent to revenue.
The Manager is also entitled to a performance fee which equals 15 per cent of
the amount by which the Reference Amount at the end of a Performance Period
exceeds the higher of (a) the Hurdle (the "Hurdle" means the Initial Gross
Proceeds adjusted for the total amount of any dividends paid or payable)
increased by RPIX plus 2 per cent per annum, compounded annually (on a pro-rata
basis where applicable) and (b) the High Watermark (the "High Watermark" means,
as at the end of the relevant Performance Period, the highest of (i) the
Reference Amount of the previous Performance Period, (ii) the Reference Amount
of the most recent Performance Period in respect of which a performance fee was
paid; and (iii) the Initial Gross Proceeds; and in each case adjusted for any
repurchases by the Company of Ordinary Shares or any dividends paid or payable
during the relevant Performance Period be multiplied by the time weighted
average of the total number of Shares in issue during that Performance Period).
The first "Performance Period" is the period from 27 June 2014 (the date of
Admission to the London Stock Exchange) to the end of the Company's third
accounting period and each subsequent Performance Period begins immediately
after the previous Performance Period and ends at the end of the Company's
third accounting period thereafter; provided that where the Management
Agreement is terminated the date of such termination shall be the end of the
then current Performance Period.
The Company may invest in other funds operated by the Manager and where it does
the management fee is credited back to the Company by the Manager and any gain
on the funds is excluded from the performance fee calculation. At 30 June 2016
GBP40,000 (2015: GBP18,000) was due to be credited back and is included within
Other Income (note 2).
4. OTHER EXPENSES
Year ended Period ended
30 June 2016 30 June 2015
GBP000 GBP000
Secretarial services and fund 55 56
administration fees
Other administration expenses 18 14
Registrar's fees 13 8
Printing and postage 6 10
Custody fees 49 8
Subscription and listing fees 17 11
Auditor's remuneration - 23 18
audit services
- tax compliance services 8 7
Directors' fees 69 78
Irrecoverable VAT 10 10
____ ____
268 220
==== ====
5. DIVID
The dividend relating to the year ended 30 June 2016 which is the basis on
which the requirements of Section 1159 of the Corporation Tax Act 2010 are
considered is detailed below:
Year ended 30 Year ended 30 Period ended 30 Period ended 30
June 2016 June 2016 June 2015 June 2015
Pence Per Pence Per
Ordinary Share GBP000 Ordinary Share GBP000
Annual dividend - 1.10p 550 0.45p 225
payable on 19
December 2016*
*Not included as a liability in the year ended 30 June 2016 accounts.
The annual dividend will be paid on 19 December 2016 to members on the register
at the close of business on 18 November 2016. The shares will be marked
ex-dividend on 17 November 2016.
6. SHARE CAPITAL
Year ended 30 Year ended 30 Period ended 30 Period ended 30
June 2016 June 2016 June 2015 June 2015
Number of Shares GBP000 Number of Shares GBP000
Allotted, issued
& fully paid:
Opening balance 50,000,000 500 50,000,000 500
Ordinary Shares
of GBP0.01
__________ ____ __________ ____
50,000,000 500 50,000,000 500
========== ==== ========== ====
7. FINANCIAL COMMITMENTS
At 30 June 2016 there were no commitments in respect of unpaid calls and
underwritings (2015: none).
8. RETURN PER SHARE - BASIC
Total return per Ordinary Share is based on the total comprehensive income for
the year after taxation of GBP1,378,000 (period to 30 June 2015: GBP2,136,000).
These calculations are based on the 50,000,000 Ordinary Shares in issue during
the year to 30 June 2016 (period to 30 June 2015: 50,000,000 Ordinary Shares).
The return per Ordinary Share can be further analysed between revenue and
capital as below:
Year ended 30 Year ended 30 Period ended 30 Period ended 30
June 2016 June 2016 June 2015 June 2015
Pence Pence
per share GBP000 per share GBP000
Net revenue 1.19p 597 0.49p 245
return
Net capital 1.57p 781 3.78p 1,891
return
Net total return 2.76p 1,378 4.27p 2,136
9.?RELATED PARTY TRANSACTIONS AND TRANSACTIONS WITH THE INVESTMENT MANAGER
Details of the investment management fee charged by Sanditon Asset Management
Limited is set out in note 3. At 30 June 2016 GBP12,138 (2015: GBP13,790) of this
fee remained outstanding after taking into account the GBP19,564 (2015: GBP18,000)
to be credited to the Company from Sanditon Asset Management Limited in
relation to the management fee on the Company's investment in TM Sanditon UK
Select Fund.
Fees paid to the Directors are disclosed in note 4 above. There have been no
material transactions between the Company and its Directors during the year and
the only amounts paid to them were in respect of Directors' remuneration.
The Company has an investment in TM Sanditon UK Select Fund of GBP5,227,200 at 30
June 2016 (GBP5,259,000 at 30 June 2015).
The Company has a 20% holding in the Investment Manager, Sanditon Asset
Management Limited.
10. Fair Value Measurements of Financial Assets and Financial Liabilities
The financial assets and liabilities are either carried in the balance sheet at
their fair value, or the balance sheet amount is a reasonable approximation of
fair value (due from brokers, dividends receivable, accrued income, due to
brokers, accruals and cash and cash equivalents).
The valuation techniques used by the Company are explained in the accounting
policies note 1(b) on page 28 of the Annual Report.
The table below sets out fair value measurements using fair value hierarchy.
Financial assets Level 1 Level 2 Level 3 Total
at fair value
through profit or
loss
at 30 June 2016 GBP000 GBP000 GBP000 GBP000
Assets:
Equity 10,902 - 1,353 12,255
investments
Contracts for - 2,466 - 2,466
difference - fair
value gains
Liabilities:
Contracts for - (3,708) - (3,708)
difference - fair
value losses
Total ______ ______ ______ ______
10,902 (1,242) 1,353 11,013
====== ====== ====== ======
Financial assets Level 1 Level 2 Level 3 Total
at fair value
through profit or
loss
at 30 June 2015 GBP000 GBP000 GBP000 GBP000
Assets:
Equity 12,572 - 200 12,772
investments
Contracts for - 1,157 - 1,157
difference - fair
value gains
Liabilities:
Contracts for - (4,095) - (4,095)
difference - fair
value losses
Total ______ ______ ____ _____
12,572 (2,938) 200 9,834
====== ====== ==== ======
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset as follows:
Level 1 - valued using quoted prices in active markets for identical assets.
Level 2 - valued by reference to valuation techniques using observable inputs
including quoted prices.
Level 3 - valued by reference to valuation techniques using inputs that are not
based on observable market data.
In preparing these financial statements the Company has early adopted
"Amendments to FRS 102: fair value hierarchy disclosure (March 2016)" published
by the FRC.
Level 3 fair values are determined by the Directors using valuation
methodologies in accordance with the IPEVC Guidelines and as detailed in note 1
(b) of the Annual Report. Significant inputs include investment cost, the value
of the most recent capital raising, the adjusted net asset value of funds and
the Pricing Committee's valuations. In accordance with IPEVC Guidelines, new
investments are carried at cost, the price of the most recent investment being
a good indication of fair value. Thereafter, fair value is the amount deemed to
be the price that would be received upon sale of an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date. At 30 June 2016 and at 30 June 2015, the Company's Level 3
investments relates to the investment in Sanditon Asset Management Limited. The
Board have agreed the valuation methodology for the Company's holding in SAM
which it believes to be straightforward, conservative and fair. The Board has
decided to use a simple average of 1% of SAM's year end assets under management
("AUM") and 5x after tax profits (adjusted to exclude any performance fees
earned and any associated staff bonuses paid - SAM pay out a maximum of 50% of
performance fees earned to staff). This resulted in the Directors approving an
uplift in your Company's holding in SAM from the book cost of GBP200,000 to GBP
1,353,000.
A reconciliation of fair value measurements in Level 3 is set out below.
Level 3 financial assets at fair value through profit or loss
As at
30 June 2016
Investments
GBP000
Opening fair value 200
Increase in fair value of investment in 1,153
Sanditon Asset Management Limited
Closing fair value 1,353
Level 3 financial assets at fair value through profit or loss
As at
30 June 2015
Investments
GBP000
Opening fair value -
Investment in Sanditon Asset Management 200
Limited
Closing fair value 200
11. Publication of non-statutory accounts
The financial information contained in this announcement does not constitute
statutory accounts as defined in the Companies Act 2006. The 2016 annual
report and financial statements will be filed with the Registrar of Companies
shortly.
The report of the Auditor for the year ended 30 June 2016 contains no
qualification or statement under section 498(2) or (3) of the Companies Act
2006. This announcement was approved by the Board of Directors on 21 September
2016.
12. Annual results
Copies of the annual report will be sent to members shortly and will be
available from the registered office, c/o Northern Trust Global Services
Limited, 50 Bank Street, Canary Wharf, London E14 5NT.
13. Annual General Meeting
The Annual General Meeting of the Company will be held at the offices of
Northern Trust, 50 Bank Street, Canary Wharf, London E14 5NT on Monday 5
December 2016, at 12:00 noon.
END
(END) Dow Jones Newswires
September 22, 2016 02:00 ET (06:00 GMT)
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