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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tr European Growth Trust Plc | LSE:TRG | London | Ordinary Share | GB00BMCF8689 | ORD 1.5625P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 175.00 | 175.00 | 175.40 | 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
TIDMTRG
RNS Number : 3022X
TR European Growth Trust PLC
20 February 2017
TR EUROPEAN GROWTH TRUST PLC
Unaudited Results for the Half Year ended 31 December 2016
This announcement contains regulated information
Investment objective
To achieve capital growth by investing predominantly in smaller and medium sized companies in Europe (excluding the UK).
Performance highlights for the six months
-- The net asset value ("NAV") total return(1) (including dividends reinvested) was 22.0% compared to a total return from the benchmark index(2) of 16.9%.
-- The share price(3) total return (including dividends reinvested) was 26.9%.
-- The discount(4) decreased from 18.0% to 14.9% compared with a decrease in the sector(6) discount from 15.4% to 13.7%(5) .
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Total return performance (including dividends reinvested and excluding
transaction costs)
6 months 1 year 3 years 5 years 10 years
% % % % %
------------------------ ----------- --------- --------- --------- ----------
NAV(1) 22.0 30.0 57.1 177.4 119.5
Share price(3) 26.9 19.7 49.9 208.0 115.9
Benchmark index(2) 16.9 23.3 41.8 128.0 104.0
Average sector
NAV(6) 13.6 17.1 43.5 139.5 116.7
Average sector
share price 15.5 6.0 33.8 149.3 106.8
1 Net asset value total return per ordinary share with income reinvested for six months, 1, 3 and 5 years and capital NAV plus income reinvested for 10 years.
2 Euromoney European Smaller Companies Index (ex UK) total return and expressed in Sterling
3 Share price total return using mid-market closing price
4 Calculated using published daily NAVs including current year revenue
5 Sector discount is sourced from the AIC
6 The sector is the AIC European Smaller Companies sector
Sources: Henderson, Morningstar for the AIC, Datastream
Financial highlights
At 31 December At 30 June 2016
2016
----------------------------------------- --------------- ----------------
Shareholders' funds
Net assets attributable to ordinary
shareholders (GBP'000) 452,289 377,683
Net asset value ("NAV") per ordinary
share 909.8p 755.7p
Mid-market price per ordinary share 774.5p 620.0p
Half year ended Year ended
31 December 2016 30 June 2016
---------------------------------------------------------- ----------------
Total return to equity shareholders
Revenue return after taxation (GBP'000) 501 6,739
Capital return after taxation (GBP'000) 81,869 38,043
---------- -----------
Total return 82,370 44,782
====== ======
Total return per ordinary share
Revenue 1.00p 13.48p
Capital 164.18p 76.12p
----------- -----------
Total return 165.18p 89.60p
====== ======
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Performance
Over the six months to 31 December 2016 the net asset value per share total return was 22.0% compared to a total return of 16.9% from our benchmark, the Euromoney European Smaller Companies Index (ex UK) expressed in Sterling. Our share price total return was 26.9%. The Company's shares were trading at a discount of 14.9% as at 31 December 2016 (30 June 2016: 18.0%).
Gearing
During the period gearing averaged 11.2%, which has been beneficial to performance due to rising markets. Gearing finished the period at 10.7% (30 June 2016: 9.5%).
Share buy-backs
As part of its remit the Board monitors the discount on an ongoing basis and believes that the key to its sustained reduction over the long term is good performance and investor appetite for European equities. It may, though, sometimes be necessary to manage the discount in the shorter term. We did so over the course of the last six months by repurchasing for cancellation, 262,500 shares at a discount which we determined to be particularly good value. Subject to regular evaluation of the discount and that of our peers, we may continue to buy back shares in the Company if this situation persists in the future.
Prospects
In the coming months we continue to expect politics around the world to dominate the headlines as it did in 2016. As the second half of 2016 shows political noise does not necessarily inhibit the performance of equity markets. The global economic data continues to improve and in this environment European smaller companies can flourish. Our area of investment currently offers stand-out value versus other regions (particularly the US) and asset classes. Our Fund Managers continue to find compelling investment opportunities and I look forward to reporting our progress in the Annual Report.
Audley Twiston-Davies
Chairman
Fund Managers' Report
The Company had a very good first half to the 2016/17 financial year with marked out-performance versus the benchmark index and the peer group. Some of this out-performance was due to a recovery in valuations - particularly those exposed to the UK post the knee-jerk fall that followed 'Brexit'. The Company opportunistically increased its gearing through greater exposure to those stocks hit hard by the UK referendum result, including Dalata, the Irish hotel chain, Kingspan, the Irish insulation company, DFDS, the Danish ferry operator, and Sopra Steria, the Anglo-French IT services provider. We believe that the market significantly over-reacted to the UK's decision to leave the European Union. Any economic impact was never likely to be immediate.
The Company's absolute returns have been helped by the weakness of Sterling versus the Euro.
Towards the end of 2016 we saw the emergence of some inflation for the first time in a number of years. This led to a change in leadership within equity markets, favouring stocks with more 'value' characteristics, which broadly helped the Company's underlying portfolio. Preceding the emergence of some inflation, equity markets had been dominated by momentum trading, with little regard for underlying valuation. A large number of participants believed that we would not see inflation, and that interest rates would stay near zero, for years to come, and that ever lower discount rates should be used to value equities. It was not a view we shared; we have always believed that the underlying valuation of a company is relevant. Our emphasis on valuation led us to being overweight banks in 2016 with holdings such as Van Lanschot in the Netherlands and Aareal, the German provider of property loans. This proved particularly fruitful towards the end of the calendar year. We expect this emphasis on value to continue into 2017.
After the unexpected result of the UK referendum, we had the surprise election of Donald Trump as the next President of the United States of America. The initial reaction of stock markets has been positive due to the expected tax cuts that will hopefully boost the US economy. Until now the stock market has not appeared overly concerned by his 'America first' protectionist rhetoric. That may change. In Continental Europe, Spain finally saw the re-election of a government, led by the centrist Prime Minister Rajoy, ending a ten month political impasse in the country. During that period, the economy improved and the equity market progressed. In Italy, equity markets suffered on the back of their undercapitalised banks and their referendum on political reform. The government lost a constitutional referendum at the start of December and Prime Minister Renzi subsequently resigned.
Political noise is likely to continue in 2017, with general elections in France, the Netherlands and Germany. It is this noise that seems to put off Anglo-Saxon investors from investing their money into the European smaller company space. In Continental Europe we do not expect a populist revolt similar to that seen in the UK and US. Either way, what 2016 has taught us is that the state of the economy is likely to remain of paramount importance for equity markets. For the time being, the global economy is improving, led by the US and China.
Whilst the Company's performance broadly benefited from a post "Brexit" bounce over the summer, the drivers of performance were very diverse and very much led by individual stock picking. Fyffes, a distributor of bananas and pineapples, was a major contributor, with Sumitomo bidding for the company at a 49% premium. Gaztransport et Technigaz, which provides technology in containment systems for the transport and storage of liquid natural gas, confounded analysts by picking up a number of new orders. Evotec, the German drug development firm, signed a number of alliances with major pharmaceutical companies, including an agreement with Celgene to tackle neurodegenerative diseases.
Other positive contributors over the period have included our small Greek holdings in Jumbo, the discount retailer, and Mytilineos, an aluminium producer. The market finally seems willing to judge the companies on their own merits, rather than focusing purely on country-level risks. The Company was also helped by the strong performance of Lisi, which provides fasteners for the aerospace and automotive industries, and Criteo, which provides targeted online advertising. We added Lisi to the portfolio at the start of the financial year.
The biggest negative contributor was SLM Solutions, a maker of additive manufacturing machines, which saw its share price hit after GE ended its acquisition bid on what it deemed to be excessive price demands from large shareholder Elliot. We had reduced the size of our holding, but have maintained a position, as prospects remain very exciting. Shares in Heijmans, the Dutch construction company, performed poorly after badly executed projects led to concerns surrounding the balance sheet. Whilst not ideal, we think the issue is manageable and that the shares offer an interesting risk/reward profile. Livanova, the medical technology company, and Technicolor, a technology licensing and manufacturer of set top boxes, also fell on disappointing operational results. We continue to hold both due to their attractive valuations.
The turnover of the portfolio increased during the review period, reflecting particularly volatile market conditions. In addition to Lisi, we added a position in Ion Beam Applications, which is leading a revolution in cancer treatment through proton therapy. We introduced a couple of new holdings through initial public offerings; Ahlsell, a Scandinavian building materials distributor, and VA-Q-TEC, which provides hi-tech insulation products for transportation. In very old technology we added Corticiera Amorim, which manufactures cork products, predominantly for wine bottles. The firm's growth prospects look very good and the valuation was attractive. Elsewhere, we initiated a position in Also Holding, a Swiss IT provider on valuation grounds.
We also revisited a couple of previous holdings where we now believe the market is undervaluing their prospects; Tomra, the manufacturer of sorting and collection equipment for recyclables, and Str er, the German outdoor advertising services provider.
We sold a number of holdings that have been very rewarding which we now believe to be fully valued. These included defence contractors Rheinmetall and Saab. We also sold out of natural ingredients manufacturer Naturex and perfume manufacturer Interparfums. We locked in profits in VAT Group, a supplier of valves to the semiconductor market, and Prosegur, which supplies security services. These are all 'good companies', yet the valuations seem to be making heroic assumptions.
Finally, we sold out of a number of companies that have not progressed as well as we hoped. This included Schaltbau, a manufacturer of rail equipment, and Swiss radiator maker Zehnder.
In a world where the global economy is growing, the European smaller companies arena should remain a relatively attractive place to be invested. European equities offer some very good value compared to their US counterparts. In the UK and US, firms have already seen massive margin progression since the financial crisis. In Europe, by comparison, huge margin potential remains. Our job is to find the businesses that can deliver on that potential. The Company will continue to invest in areas of structural growth. However, we must remain cognisant of valuations in a world where inflation is finally seeing some traction. We would urge investors to look beyond the global political noise and focus more on the economic data. If the economy continues to grow, we are confident the Company can deliver healthy returns for our investors.
Ollie Beckett and Rory Stokes
Henderson Investment Funds Limited
Sector Exposure (% of portfolio excluding cash)
31 December 2016 31 December 2015
-------------------- ----------------- -----------------
Industrials goods 24.6 37.4
Financial 15.4 15.0
Technology 14.8 13.7
Business providers 14.1 3.9
Basic materials 13.3 5.5
Consumer goods 10.2 16.9
Retail providers 6.3 6.5
Natural resources 1.3 1.1
------- -------
100.0 100.0
==== ====
Geographical Exposure (% of portfolio excluding cash)
31 December 2016 31 December 2015
------------- ----------------- -----------------
Germany 21.3 20.8
France 14.7 15.7
Netherlands 10.7 7.9
Italy 10.3 8.8
Switzerland 9.2 11.0
Sweden 6.6 7.8
Belgium 4.9 4.3
Finland 4.9 4.7
Norway 4.5 3.7
Denmark 3.8 3.9
Spain 3.2 2.2
Austria 2.0 1.6
Ireland 1.8 5.4
Greece 1.0 1.2
Portugal 0.7 0.8
Other 0.4 0.2
------- -------
100.0 100.0
==== ====
3.2% of the portfolio is invested in unquoted securities
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the Company's business can be divided into the following main areas:
* Investment activity and performance risks;
* Portfolio and market price risks;
* Tax and regulatory risks; and
* Operational risks.
Information on these risks and how they are managed is given in the Annual Report to 30 June 2016. In the view of the Board these principal risks and uncertainties were unchanged over the last six months and are as applicable to the remaining six months of the financial year as they were to the six months under review.
Statement of Directors' Responsibilities
Each of the Directors (as set out in note 12) confirms that, to the best of their knowledge:
-- the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting', gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Group;
-- this report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
-- this report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
For and on behalf of the Board
Audley Twiston-Davies
Chairman
Consolidated Statement of Comprehensive Income
Half year ended Half year ended Year ended
31 December 2016 31 December 2015 30 June 2016
(unaudited) (unaudited) (audited)
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ----------- ----------- ---------- ----------- ----------- ---------- ----------- ---------- -----------
Investment
income 1,240 - 1,240 1,089 - 1,089 8,215 - 8,215
Other income - - - - - - 43 - 43
Gains on
investments
held at fair
value through
profit or
loss - 84,519 84,519 - 25,886 25,886 - 41,583 41,583
---------- ---------- --------- ---------- ---------- --------- ---------- --------- ----------
Total income 1,240 84,519 85,759 1,089 25,886 26,975 8,258 41,583 49,841
---------- ---------- --------- ---------- ---------- --------- ---------- --------- ----------
Expenses
Management and
performance
fees
(note 7) (270) (2,441) (2,711) (203) (2,159) (2,362) (427) (3,099) (3,526)
Other
operating
expenses (298) - (298) (297) - (297) (591) - (591)
---------- ---------- --------- ---------- ---------- --------- ---------- --------- ----------
Profit before
finance costs
and taxation 672 82,078 82,750 589 23,727 24,316 7,240 38,484 45,724
Finance costs (52) (209) (261) (47) (193) (240) (110) (441) (551)
---------- ---------- --------- ---------- ---------- --------- ---------- --------- ----------
Profit before
taxation 620 81,869 82,489 542 23,534 24,076 7,130 38,043 45,173
Taxation (119) - (119) (79) - (79) (391) - (391)
---------- ---------- --------- ---------- ---------- --------- ---------- --------- ----------
Profit for the
period and
total
comprehensive
income 501 81,869 82,370 463 23,534 23,997 6,739 38,043 44,782
====== ====== ====== ====== ====== ====== ====== ===== ======
Return per
ordinary
share - basic
and diluted
(note 2) 1.00p 164.18p 165.18p 0.93p 47.09p 48.02p 13.48p 76.12p 89.60p
====== ====== ====== ====== ====== ====== ===== ===== ======
The total column of this statement represents the Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS, as adopted by the European Union. The revenue and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.
All income is attributable to the equity holders of TR European Growth Trust PLC, the Parent Company. There are no minority interests.
The net profit of the Parent Company for the half year was GBP82,370,000 (31 December 2015: profit of GBP23,997,000; 30 June 2016: profit of GBP44,782,000).
The Group does not have any other comprehensive income and hence the net profit for the period as disclosed above is the same as the Group's total comprehensive income.
The accompanying notes are an integral part of these financial statements.
Consolidated Statement of Changes in Equity
Called
up Share Other
Half year ended share premium capital
31 December 2016 Capital
redemption Revenue
capital account reserve reserves reserve Total
(unaudited) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------------ ------------ ------------ ------------- ------------- -------------
Total equity at
1 July 2016 6,247 115,451 13,931 218,118 23,936 377,683
Total comprehensive
income:
Profit for the period - - - 81,869 501 82,370
Transactions with
owners,
recorded directly
to equity:
Ordinary dividends
paid - - - - (5,717) (5,717)
Buy-backs of ordinary
shares (33) - 33 (2,047) - (2,047)
---------- ---------- ---------- ---------- --------- -----------
Total equity at
31 December 2016 6,214 115,451 13,964 297,940 18,720 452,289
====== ====== ====== ====== ===== ======
Called Share Capital Other
up share redemption
reserve
Half year ended capital premium GBP'000 capital Revenue
reserve
31 December 2015 GBP'000 account reserves GBP'000 Total
(unaudited) GBP'000 GBP'000 GBP'000
------------------------ ------------ ------------ ------------ ------------- ------------- -------------
Total equity at
1 July 2015 6,247 115,451 13,931 180,075 21,941 337,645
Total comprehensive
income:
Profit for the period - - - 23,534 463 23,997
Transactions with
owners,
recorded directly
to equity:
Ordinary dividends
paid - - - - (4,748) (4,748)
---------- ---------- ---------- ---------- --------- -----------
Total equity at
31 December 2015 6,247 115,451 13,931 203,609 17,656 356,894
====== ====== ====== ====== ===== ======
Share Other
Called
up share premium capital
Capital
Year ended 30 June redemption Revenue
2016 capital account reserve reserves reserve Total
(audited) GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------------ ------------ ------------ ------------- ------------- -------------
Total equity at
1 July 2015 6,247 115,451 13,931 180,075 21,941 337,645
Total comprehensive
income:
Profit for the
year - - - 38,043 6,739 44,782
Transactions with
owners, recorded
directly to equity:
Ordinary dividends
paid - - - - (4,748) (4,748)
Refund of unclaimed
dividends over 12
years old - - - - 4 4
----------- ----------- ----------- ------------ ------------ ------------
Total equity at
30 June 2016 6,247 115,451 13,931 218,118 23,936 377,683
======= ======= ======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
Consolidated Balance Sheet
At 31 December At 31 December At 30 June
2016 2015 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------- ---------------- ---------------- -----------
Non-current assets
Investments held at fair value
through profit or
loss 500,482 396,630 413,379
----------- ----------- -----------
Current assets
Receivables 547 881 1,442
Cash and cash equivalents 38 119 73
----------- ----------- -----------
585 1,000 1,515
----------- ----------- -----------
Total assets 501,067 397,630 414,894
----------- ----------- -----------
Current liabilities
Payables (2,313) (2,158) (3,686)
Bank overdrafts (46,465) (38,578) (33,525)
------------ ------------ -----------
(48,778) (40,736) (37,211)
------------ ------------ -----------
Net assets 452,289 356,894 377,683
======= ======= =======
Equity attributable to equity
shareholders of the parent
company
Called up share capital (note
3) 6,214 6,247 6,247
Share premium account 115,451 115,451 115,451
Capital redemption reserve 13,964 13,931 13,931
Retained earnings:
Other capital reserves 297,940 203,609 218,118
Revenue reserve 18,720 17,656 23,936
----------- ----------- -----------
Total equity 452,289 356,894 377,683
====== ====== ======
Net asset value per ordinary
share - basic and diluted
(note 4) 909.79p 714.13p 755.73p
====== ====== ======
The accompanying notes are an integral part of these financial statements.
Consolidated Cash Flow Statement
Half year
Half year ended ended Year ended
31 December 31 December
2016 2015 30 June 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
----------------------------------- --------------- ------------ -------------
Operating activities
Profit before taxation 82,489 24,076 45,173
Add back: interest payable 261 240 551
(Less): gains on investments
held at fair value through
profit and loss (84,519) (25,886) (41,583)
Sales of investments held
at fair value through profit
or loss 122,366 128,069 246,136
Purchases of investments held
at fair value through profit
or loss (124,698) (117,388) (232,013)
Withholding tax on dividends
deducted at source (186) (79) (990)
Decrease/(increase) in prepayments
and accrued income 102 17 (89)
Decrease in amounts due from
brokers 641 1,394 1,181
Increase/(decrease) in accruals
and deferred income 119 (460) (291)
Decrease in amounts due to
brokers (1,524) (1,506) (153)
---------- ---------- -----------
Net cash (outflow)/inflow
from operating activities
before interest and taxation (4,949) 8,477 17,922
---------- ---------- -----------
Interest paid (227) (240) (551)
Taxation recovered 216 119 482
---------- ---------- -----------
Net cash (outflow)/inflow
from operating activities (4,960) 8,356 17,853
---------- ---------- -----------
Financing activities
Buy-backs of ordinary shares (2,047) - -
Equity dividends paid (net
of refund of unclaimed dividends) (5,717) (4,748) (4,744)
---------- ---------- -----------
Net cash outflow from financing (7,764) (4,748) (4,744)
---------- ---------- -----------
(Decrease)/increase in cash
and cash equivalents (12,724) 3,608 13,109
Cash and cash equivalents
at the start of the period (33,452) (40,325) (40,325)
Exchange movements (251) (1,742) (6,236)
---------- ---------- ---------
Cash and cash equivalents
at the period end (46,427) (38,459) (33,452)
====== ====== ======
The accompanying notes are an integral part of these financial statements.
Notes
1. Accounting policies
a) Basis of preparation
The condensed consolidated financial statements comprise the unaudited results of the Company and its subsidiary, TREG Finance Limited, for the half year ended 31 December 2016. They have been prepared on a going concern basis and in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union and with the Statement of Recommended Practice for Investment Trusts ("SORP") issued by the Association of Investment Companies dated November 2014, where the SORP is consistent with the requirements of IFRS.
For the period under review the Company's accounting policies have not varied from those described in the Annual Report for the year ended 30 June 2016. These financial statements have been neither audited nor reviewed by the Company's auditors.
The Group accounts comprise the accounts of the Company and its subsidiary drawn up to the balance sheet date. The Statement of Comprehensive Income is only presented in consolidated form, as provided by Section 408 of the Companies Act 2006.
b) Basis of consolidation
The Group financial statements consolidate the accounts of the Company and of its sole subsidiary undertaking, TREG Finance Limited.
2. Return per ordinary share
The return per ordinary share is based on the profit for the half year of GBP82,370,000 (half year ended 31 December 2015: profit GBP23,997,000; year ended 30 June 2016: profit GBP44,782,000) and on 49,866,085 ordinary shares (half year ended 31 December 2015: 49,975,897; year ended 30 June 2016: 49,975,897), being the weighted average number of ordinary shares in issue during the period.
The return per ordinary share detailed above can be further analysed between revenue and capital, as below.
Half year
ended Half year ended Year ended
31 December
2016 31 December 2015 30 June 2016
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Net revenue profit 501 463 6,739
Net capital profit 81,869 23,534 38,043
---------- ---------- ----------
Net profit 82,370 23,997 44,782
====== ====== ======
Weighted average number
of ordinary shares in issue
during the period 49,866,085 49,975,897 49,975,897
Half year
ended Half year ended Year ended
31 December
2016 31 December 2015 30 June 2016
(unaudited) (unaudited) (audited)
pence pence pence
Revenue return per ordinary
share 1.00 0.93 13.48
Capital return per ordinary
share 164.18 47.09 76.12
---------- ---------- ----------
Total return per ordinary
share 165.18 48.02 89.60
====== ====== ======
3. Ordinary share capital
At 31 December 2016 there were 49,713,397 ordinary shares in issue (31 December 2015: 49,975,897; 30 June 2016: 49,975,897). During the half year ended 31 December 2016 the Company bought back 262,500 ordinary shares for cancellation (31 December 2015: nil; 30 June 2016: nil) at a cost of GBP2,047,000 (31 December 2015: nil; 30 June 2016: nil).
4. Net asset value per ordinary share
The net asset value per ordinary share is based on the net assets attributable to equity shareholders of GBP452,289,000 (31 December 2015: GBP356,894,000; 30 June 2016: GBP377,683,000) and on 49,713,397 ordinary shares (31 December 2015: 49,975,897; 30 June 2016: 49,975,897), being the number of ordinary shares in issue at the period end.
5. Dividends
The Company has not declared an interim dividend (2015: nil). A final dividend of 9.00p and a special dividend of 2.50p were paid on 5 December 2016 from the Company's revenue account.
6. Transaction costs
Purchase transaction costs for the half year ended 31 December 2016 were GBP168,000 (half year ended 31 December 2015: GBP171,000; year ended 30 June 2016: GBP315,000). These comprise mainly stamp duty and commission. Sales transaction costs for the half year ended 31 December 2016 were GBP115,000 (half year ended 31 December 2015: GBP126,000; year ended 30 June 2016: GBP238,000).
7. Management and performance fees
The base management fee payable to the Manager is 0.6% per annum and is calculated as 0.15% of net assets at each quarter end. Management fees are allocated 20% to revenue and 80% to capital.
The Manager may also be eligible to receive a performance related fee. In order to determine whether a performance is payable, performance is measured against, and expressed relative to, the benchmark, the Euromoney European Smaller Companies Index (ex UK) expressed in Sterling. Performance of both the Company and the benchmark is measured on a NAV total return (with gross income reinvested) basis and is measured over three years.
In any given year in which a performance fee is payable, the performance fee rate is 15% of the positive difference between the average annual NAV total return and the average annual total return of the benchmark. The upper limit on the total fee, including the base fee and any performance fee, for any given accounting year is 2.0% of the NAV of the Company as at the last day of the relevant calculation period. A performance fee hurdle over the benchmark of 1.0% has to be reached before any performance fee can be earned. For clarity, performance is measured solely on the basis of NAV total return relative to the total return of the benchmark index; no account is taken of whether the NAV grows or shrinks in absolute terms. Any performance fee payable is allocated to capital.
A performance fee of GBP1,362,000 has been accrued as at 31 December 2016 (31 December 2015: GBP1,346,000; 30 June 2016: GBP1,389,000).
8. Financial Instruments
At the period end the carrying value of financial assets and financial liabilities approximates their fair value.
Financial instruments carried at fair value
Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset or liability. The different levels are defined 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 other than quoted prices included within level 1
Level 3: Valued by reference to valuation techniques that are not based on observable market data.
The valuation techniques used by the Company are explained in the accounting policies set out in the Company's annual report for the year ended 30 June 2016.
Financial assets and financial liabilities Level Level Level
at fair value 1 2 3 Total
through profit or loss at 31 December
2016 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------- -------------- ------------- -------------- --------------
Investments including derivatives:
Equity securities designated at fair
value through profit or loss 484,513 - 15,969 500,482
------------- ------------ ------------- -------------
Total financial assets and liabilities
carried
at fair value 484,513 - 15,969 500,482
======= ======= ======= =======
Level 3 investments at fair value
through profit or loss GBP'000
--------------------------------------- -----------
Opening balance 17,009
Acquisitions -
Disposal proceeds (1,781)
Transferred into Level 3 -
----------
15,228
---------
Total gains included in the Statement
of Comprehensive Income
On assets sold 1,003
On assets held at period end (262)
----------
741
----------
Closing balance 15,969
======
There have been no transfers between levels of the fair value hierarchy during the period. Transfers between levels of fair value hierarchy are deemed to have occurred at the date of the event or change in circumstances that caused the transfer.
9. Going concern
Having reassessed the principal risks, the Directors consider that it is appropriate to continue to adopt the going concern basis and confirm that there are no material uncertainties of which they are aware. The assets of the Group consist mainly of securities, most of which are readily realisable and, accordingly, the Group has adequate financial resources to continue in operational existence for at least twelve months from the date of approval of the financial statements.
10. Related party transactions
The Company's transactions with related parties in the period were with the Directors, the subsidiary and Henderson. There have been no material transactions between the Company and its Directors during the period and the only amounts paid to them were in respect of expenses and remuneration for which there were no outstanding amounts payable at the period end. In relation to the provision of services by Henderson, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services there have been no material transactions with Henderson affecting the financial position of the Company during the period under review.
11. Comparative information
The financial information contained in this half year report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the half years ended 31 December 2016 and 31 December 2015 have not been audited or reviewed by the Company's auditors. The figures and financial information for the year ended 30 June 2016 are an extract based on the latest published accounts and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the Independent Auditors' Report which was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006.
12. General
Company Status
TR European Growth Trust PLC is registered in England and Wales, No. 2520734, has its registered office at 201 Bishopsgate, London EC2M 3AE and is listed on the London Stock Exchange. The SEDOL/ISIN number is 0906692/GB0009066928. The London Stock Exchange (EPIC) code is TRG. The Company's Global Intermediary Identification Number (GIIN) is JX9KYH.99999.SL.826 and the Legal Entity Identifier (LEI) number is 213800N1B1HCQG2W4V90.
Directors and Secretary
The Directors of the Company are Audley Twiston-Davies (Chairman), Christopher Casey (Chairman of the Audit Committee), Andrew Martin Smith, Alexander Mettenheimer and Simona Heidempergher. The Corporate Secretary is Henderson Secretarial Services Limited, represented by Colleen Sutcliffe FCIS.
Website
Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at www.treuropeangrowthtrust.com
Half Year Report
The Half Year Report will be available in typed format on the Company's website or from the Company's registered office, 201 Bishopsgate, London EC2M 3AE. An update, extracted from the Company's report for the half year ended 31 December 2016, will be posted to shareholders in late February and will be available on the website thereafter.
For further information please contact:
Ollie Beckett Sarah Gibbons-Cook Fund Manager Investor Relations and PR Manager TR European Growth Trust PLC Henderson Global Investors Telephone: 020 7818 4331 Telephone: 020 7818 3198
Top 40 investments as at 31 December 2016
Ranking Company Sector Geographical Valuation Percentage
area GBP'000 of portfolio
--------- -------------------------- ------------------- ------------- ---------- --------------
Industrial
1. Brainlab* goods Germany 13,524 2.7
2. Van Lanschot Financial Netherlands 10,324 2.1
3. FinecoBank Financial Italy 8,618 1.7
Industrial
4. OC Oerlikon goods Switzerland 7,252 1.4
5. Aareal Bank Financial Germany 6,852 1.4
6. EVS Broadcast Equipment Technology Belgium 6,704 1.3
7. DFDS Business providers Denmark 6,389 1.3
8. Verkkokauppa Technology Finland 6,126 1.2
9. Anima Financial Italy 6,044 1.2
10. Comet Technology Switzerland 6,000 1.2
-------------------------- ------------------- ------------- ---------- --------------
10 largest 77,833 15.5
Industrial
11. Gaztransport et Technigaz goods France 5,909 1.2
12. ASM International Technology Netherlands 5,857 1.2
13. Nobia Consumer goods Sweden 5,661 1.1
14. Origin Enterprises Consumer goods Switzerland 5,654 1.1
Industrial
15. Lisi goods France 5,619 1.1
16. Sopra Steria Technology France 5,430 1.1
Industrial
17. Nexans goods France 5,388 1.1
18. Europcar Business providers France 5,360 1.1
19. CFE Basic materials Belgium 5,349 1.1
20. Lenzing Basic materials Austria 5,202 1.0
-------------------------- ------------------- ------------- ---------- --------------
20 largest 133,262 26.6
21. Borregaard Basic materials Norway 5,195 1.0
22. Aurelius Financial Germany 5,186 1.0
23. Puma Consumer goods Germany 5,152 1.0
24. NKT Technology Denmark 5,131 1.0
Cerved Information
25. Solutions Business providers Italy 4,921 1.0
26. Credito Emiliano Financial Italy 4,755 1.0
Industrial
27. Dometic goods Sweden 4,666 0.9
28. SGL Basic materials Germany 4,584 0.9
29. Criteo Technology France 4,583 0.9
Industrial
30. TKH goods Netherlands 4,475 0.9
-------------------------- ------------------- ------------- ---------- --------------
30 largest 181,910 36.2
Industrial
31. Ahlsell goods Sweden 4,362 0.9
32. Technicolor Business providers France 4,348 0.9
Industrial
33. Sif goods Netherlands 4,243 0.8
34. Dalata Hotel Retail providers Ireland 4,212 0.8
35. Sixt Leasing Business providers Germany 4,177 0.8
Industrial
36. Nordic Waterproofing goods Sweden 4,049 0.8
37. Fugro Business providers Netherlands 4,020 0.8
38. Dialog Semiconductor Technology Germany 4,000 0.8
39. ADVA Optical Networking Technology Germany 3,974 0.8
40. S&T Technology Germany 3,958 0.8
-------------------------- ------------------- ------------- ---------- --------------
40 largest 223,253 44.4
*Unquoted investment
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LIFEAFDIIFID
(END) Dow Jones Newswires
February 20, 2017 05:01 ET (10:01 GMT)
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