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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| New Star Investment Trust PLC | AQSE:NSI.GB | Aquis Stock Exchange | Ordinary Share | GB0002631041 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.80 | 1.57% | 116.80 | 112.00 | 118.00 | 116.80 | 115.00 | 115.00 | 2,996 | 08:04:51 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2022 to Apr 2024
New Star Investment Trust PLC (NSI) New Star Investment Trust PLC: Interim ANNOUNCEMENT for the Six Months to 31 12 2022 21-March-2023 / 11:29 GMT/BST
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NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS FOR THE SIX MONTHSED 31st DECEMBER 2022 INVESTMENT OBJECTIVE
The Company's objective is to achieve long-term capital growth.
FINANCIAL HIGHLIGHTS
Hot Features
Premium
30th June %
31st December 2022
2022 Change
PERFORMANCE
Net assets (GBP '000) 123,225 123,978 (0.61)
Net asset value per Ordinary share 173.50p 174.56p (0.61)
Mid-market price per Ordinary share 124.50p 125.00p (0.40)
Discount of price to net asset value 28.6% 28.4% n/a
Six months ended Six months ended
31st December 2022 31st December 2021
Total Return* 0.19% 2.59% n/a
IA Mixed Investment 40-85% Shares (total return) 0.89% 4.18% n/a
MSCI AC World Index (total return, sterling adjusted)
3.50% 7.86% n/a
MSCI UK Index (total return) 5.39% 7.42% n/a
Six months ended
Six months ended 31st December
31st December
2022
2021
REVENUE
Return (GBP'000) 735 405
Return per Ordinary share 1.04p 0.57p
Proposed dividend per Ordinary share 0.90p -
Dividend paid per Ordinary share 1.40p 1.40p
TOTAL RETURN
Return (GBP'000) 241 3,584
Net assets (dividend added back) 0.19% 2.59%
Net assets (0.61)% 1.88% * The total return figure for the Group represents the revenue and capital return shown in the consolidated statement of comprehensive income plus dividends paid.
INTERIM REPORT
CHAIRMAN'S STATEMENT
PERFORMANCE
Your Company generated a positive total return of 0.19% over the six months to 31st December 2022, taking the net asset value (NAV) per ordinary share to 173.50p. By comparison, the Investment Association's Mixed Investment 40-85% Shares Index rose 0.89%. The MSCI AC World Total Return Index rose 3.50% in sterling over the period, the MSCI UK Total Return Index rose 5.39% while UK government bonds fell 12.06%. Further information is provided in the investment manager's report.
Your Company made a revenue profit for the six months of GBP735,000 (2021: GBP405,000).
GEARING AND DIVIDS
Your Company has no borrowings. It ended the period under review with cash representing 14.63% of its NAV and is likely to maintain a significant cash position. In recent years, your Company has invested in income-yielding assets with the aim of increasing its revenue and dividend. Its revenue and retained earnings are now sufficient for your Directors to pay a maiden interim dividend of 0.9p per share (2021: nil). Your Directors intend to maintain this policy of paying an interim dividend and recommending a final dividend to shareholders. Your Company paid a dividend of 1.4p per share (2021: 1.4p) in November 2022 in respect of the previous financial year.
DISCOUNT
Your Company's shares continued to trade at a significant discount to their NAV during the period under review. The Board keeps this issue under review.
OUTLOOK Although inflationary pressures have reduced, the lagged impact of rising interest rates may lead to recessions in the US and Europe over the coming months. This will affect corporate profits but equity markets may benefit from easing inflation as investors anticipate a turn downwards in the interest rate cycle. Your Company entered 2023 with above-average holdings in emerging market equities relative to collective funds with the same benchmark. Emerging markets are trading on relatively-low valuations and have the potential to outperform as China relaxes its zero-Covid-19 policies. Your Company's significant cash holdings have benefitted from rising deposit rates in recent months and can be deployed should other attractive opportunities emerge.
NET ASSET VALUE
Your Company's unaudited NAV at 28th February 2023 was 178.10p.
Geoffrey Howard-Spink
Chairman
21st March 2023
INVESTMENT MANAGER'S REPORT
MARKET REVIEW
The leading central banks increased interest rates on four occasions over the six months to 31 December 2022 to combat inflation. The Federal Reserve and the Bank of England raised their policy rates to 4.25-4.5% and 3.5% respectively while the European Central Bank lifted the rate on its main refinancing operations to 2.5%. In February 2023, all three central banks increased rates again, the Fed by a quarter point and the BoE and the ECB by half a point. Investors were, however, anticipating a turn downwards in policy rates further ahead on expectations that inflation would reduce significantly.
US headline inflation peaked at 9.1% in June 2022 and declined every month thereafter, falling to 6.4% in January 2023. Eurozone and UK headline inflation proved more obdurate, standing at 10.6% and 11.1% respectively in October 2022 before falling to 8.6% and 10.1% respectively in January 2023. Oil prices fell 16.85% in sterling over the period under review, easing inflationary pressures. UK and eurozone inflation may have peaked later partly because of the impact of elevated gas prices following Russia's invasion of Ukraine.
Fed hawkishness was founded on the strength of the labour market, with unemployment just 3.4% in January 2023, and the resilience of consumer spending. Unemployment tends, however, to be a lagging indicator and is typically low at the start of a recession. Inflation is widely regarded as "sticky" when it becomes entrenched in pay increases but real wages fell over the period despite the strength of the labour market.
Rising interest rates proved a headwind for global bonds, which fell 1.78% in sterling. UK government bonds were particularly weak, falling 12.06%. The government's September announcement of unfunded tax cuts led to some pension funds becoming forced sellers of gilts. The BoE intervened, announcing UK government bond purchases of up to GBP65 billion to ensure financial stability.
PORTFOLIO REVIEW
Your Company's total return over the period was 0.19%. By comparison, the Investment Association (IA) Mixed Investment 40-85% Shares sector, a peer group of funds with a multi-asset approach to investing and a typical investment in global equities in the 40-85% range, rose 0.89%. The MSCI AC World Total Return Index rose 3.50% in sterling while the MSCI UK Total Return Index rose 5.39%. Your company benefited from holding value-oriented equity investments and investments in gold miners and Indian stocks. A low overall exposure to bonds also helped performance. Performance suffered, however, from weakness among US and Chinese technology stocks, which resulted in falls for Polar Capital Global Technology and Matthews Asia ex Japan Dividend.
Your Company's allocation to equity increased from October to December 2022 by approximately GBP6 million at the expense of cash because inflation appeared to be close to peaking, increasing expectations that easier monetary policy could be on the horizon. In October, your Company invested GBP2 million in Redwheel Global Equity Income, which has a disciplined approach to income-investing. All investments must yield at least 25% more than the market average at the time of purchase and profits are taken on stocks that appreciate to the point where they yield less than the market average. The managers aim to select high-quality stocks while excluding stocks that may be at risk of cutting dividends. The addition of holdings managed in accordance with an income mandate should support your Company's ability to pay dividends.
More accommodative monetary policy may result in outperformance for growth-oriented investments and approximately GBP1 million was invested in the iShares S&P 500 exchange-traded fund, which tracks the US market, and GBP1 million was added to Lindsell Train Japanese Equity, which holds a concentrated portfolio of growth stocks including consumer-related companies that should benefit from increased Chinese tourism as China's zero-Covid-19 policies are relaxed.
The remaining GBP2 million was invested in emerging markets, with GBP1 million added to Vietnam Enterprise Investments in October and GBP1 million added to Somerset Asia Income in November. Some emerging markets trade on low valuations relative to developed markets and dollar strength, which has proved a headwind for emerging markets, may subside in anticipation of easier monetary policy. In December, Beijing relaxed its zero-Covid policies, leading to gains for Chinese stocks.
Value stocks typically outperformed growth stocks over the period because rising interest rates affected longer-duration assets. Technology stocks were hurt because future cash flows from these high-growth stocks are discounted more aggressively at higher interest rates. US technology stocks fell 5.39% in sterling over the period, contributing to an 8.86% fall by Polar Capital Global Technology, but your Company's largest holding, Fundsmith Equity, rose 3.49%, despite its growth style and significant technology holdings. Gains by Novo Nordisk, one of its 10 largest holdings, fuelled the rise as investors warmed to the potential of its anti-obesity drugs.
UK equities modestly outperformed, rising 5.39%, but smaller companies lagged, gaining 2.97%. Amongst value-oriented investments, Man GLG Income and Aberforth Split Level Income, a small-company investment trust, gained 9.60% and 11.22% respectively. Aberforth Split Level Income also benefited from the gearing provided by its zero-dividend preference shares. Chelverton UK Equity Income, another small-cap specialist, gained 2.99%. Trojan Income rose 2.30%, underperforming because of its focus on consumer-related stocks such as Diageo, Procter & Gamble, Reckitt Benckiser and Unilever. All these investments delivered income in excess of global equities, contributing to your Company's ability to pay dividends.
Equities in Europe excluding the UK outperformed, rising 9.35% in sterling. BlackRock Continental European Income and Crux European lagged, however, up 7.82% and 8.55% respectively although both benefited from holding Novo Nordisk among their 10 largest investments.
Equities in Asia excluding Japan and emerging markets fell 2.91% and 1.81% respectively in sterling, with Chinese stocks, which account for the largest proportion of both indices, falling 11.10%. Chinese equities were hurt by Covid lockdowns, political interference in companies to promote wealth redistribution, so-called common prosperity, and high property sector debts. Within your Company's portfolio, the most resilient performers were JP Morgan Global Emerging Markets Income Trust, JP Morgan Emerging Market Income Fund and Somerset Asia Income, up 3.87% and down 1.88% and 2.20% respectively. Their income mandates proved defensive during a period in which lower-yielding Chinese technology stocks such as Tencent and Alibaba fell significantly. Matthews Asia ex Japan Dividend, however, fell 10.21%. Its mandate permitted it to hold lower-yielding Chinese technology stocks provided it had an above-market yield overall. Indian stocks rose 9.99% against the trend in sterling although Stewart Investors Indian Subcontinent Sustainability gained only 8.00%.
Your Company achieves diversification through its allocations to cash, including dollar cash, gold equities and low-risk multi-asset holdings. Interest income rose as your Company benefited from higher interest rates on its deposits. BlackRock Gold & General rose 5.85% as gold prices increased 1.77% in sterling. Trojan and EF Brompton Global Conservative, both lower-risk holdings, fell 0.20% and 1.17% respectively. OUTLOOK
Inflationary pressure from higher oil prices subsided somewhat in early 2023 but global economic growth is likely to slow over the year. Employment data were strong but falls in real incomes imply inflation had not become entrenched. Economic data in January and February 2023 were stronger than anticipated but the lagged transmission of tighter monetary policy may mean the full impact of tightening is yet to come. In March 2023, higher interest rates led to the collapse of Silicon Valley Bank in the US and the forced takeover of Credit Suisse by UBS. Central banks moved swiftly to contain the fallout and protect depositors. Banks are generally more tightly regulated and have higher levels of capital adequacy than at the time of the credit crisis in 2007 - 2008 but these signs of distress may militate against tighter monetary policy. At the end of the period under review, prospects for equities overall appeared positive despite the likely deterioration in some companies' earnings because monetary policy easing was on the horizon. Emerging market equities appeared particularly attractive because of low valuations relative to some developed markets, signs of an end to zero-Covid polices and potential respite from dollar strength.
Your Company holds a diversified portfolio of assets including sterling and dollar cash, gold equities and lower-risk multi-asset investments. Investment in private equity is currently low. At the period end, your Company had more cash at the expense of bonds and higher allocations to emerging market equities at the expense of US and European equities than the average for the IA Mixed Assets 40-85% Shares peer group.
Portfolio diversification provides some protection in falling markets when dollar cash and other low-risk investments may be sought by investors as safe havens. At the period end, your Company had approximately GBP18 million in cash. This cash is benefitting from higher deposit interest rates and is available for investment should attractive opportunities arise. Higher interest income and a bias towards income-oriented equity investments support the growth in your Company's dividend.
Brompton Asset Management Limited 21st March 2023
DIRECTORS' REPORT
PERFORMANCE
In the six months to 31st December 2022 the total return per Ordinary share was 0.19% (2021: 2.59%) and the NAV per ordinary share decreased slightly to 173.50p, whilst the share price decreased by 0.40% to 124.50p. This compares to an increase of 0.89% in the IA Mixed Investment 40-85% Shares Index.
DIVID
The Directors propose an interim dividend of 0.90p per Ordinary share in respect of the six months ended 31st December 2022 (2021: GBPnil). The dividend will be paid on 28th April 2023 to shareholders on the register at the close of business on 31st March 2023 (ex-dividend 30th March 2023).
INVESTMENT OBJECTIVE
The Company's investment objective is to achieve long-term capital growth.
INVESTMENT POLICY
The Company's investment policy is to allocate assets to global investment opportunities through investment in equity, bond, commodity, real estate, currency and other markets. The Company's assets may have significant weightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded funds, futures, options, limited partnerships and direct investments in relevant markets. The Company may invest up to 15% of its net assets in direct investments in relevant markets.
The Company will not follow any index with reference to asset classes, countries, sectors or stocks. Aggregate asset class exposure to any one of the United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or Emerging Markets and to any individual industry sector will be limited to 50% of the Company's net assets, such values being assessed at the time of investment and for funds by reference to their published investment policy or, where appropriate, their underlying investment exposure.
The Company may invest up to 20% of its net asset value in unlisted securities (excluding unquoted pooled investment vehicles) such values being assessed at the time of investment.
The Company will not invest more than 15% of its net assets in any single investment, such values being assessed at the time of investment.
Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. Derivatives may also be used outside of efficient portfolio management to meet the Company's investment objective. The Company may take outright short positions in relation to up to 30% of its net assets, with a limit on short sales of individual stocks of up to 5% of its net assets, such values being assessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company's total assets may be invested in other closed-ended investment funds except where such funds have themselves published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.
SHARE CAPITAL
The Company's share capital comprises 305,000,000 Ordinary shares of 1p each, of which 71,023,695 (2021: 71,023,695) have been issued and fully paid. No Ordinary shares are held in treasury, and none were bought back or issued during the six months ending 31st December 2022.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks identified by the Board, and the steps the Board takes to mitigate them, are discussed below. The audit committee reviews existing and emerging risks on a six monthly basis. The Board has closely monitored the geopolitical, societal, economic and market focused implications of the events in 2021 and 2022.
Investment strategy: Inappropriate long-term strategy, asset allocation and fund selection could lead to underperformance. The Board discusses investment performance at each of its meetings and the Directors receive reports detailing asset allocation, investment selection and performance.
Business conditions and general economy: The Company's future performance is heavily dependent on the performance of different equity and currency markets. The Board cannot mitigate the risks arising from adverse market movements. However, diversification within the portfolio should reduce the impact. Further information is given in portfolio risks below.
Macro-economic event risk: The Covid pandemic was felt globally in 2021 and 2022 although economies and markets have recovered. The scale and potential adverse impact of a macro-economic event, such as the Covid pandemic, has highlighted the possibility of a number of identified risks such as market risk, currency risk, investment liquidity risk and operational risk having an adverse impact at the same time. The risk may impact on: the value of the Company's investment portfolio, its liquidity, meaning investments cannot be realised quickly, or the Company's ability to operate if the Company's suppliers face financial or operational difficulties. The Directors closely monitor these areas and currently maintain a significant cash balance.
Portfolio risks - market price, foreign currency and interest rate risks: The largest investments are listed below. Investment returns will be influenced by interest rates, inflation, investor sentiment, availability/cost of credit and general economic and market conditions in the UK and globally. A significant proportion of the portfolio is in investments denominated in foreign currencies and movements in exchange rates could significantly affect their sterling value. The Investment Manager takes all these factors into account when making investment decisions but the Company does not normally hedge against foreign currency movements. The Board's policy is to hold a spread of investments in order to reduce the impact of the risks arising from the above factors by investing in a spread of asset classes, geographic regions and through investment funds.
Net asset value discount: The discount in the price at which the Company's shares trade to net asset value means that shareholders cannot realise the real underlying value of their investment. Over a number of years, the Company's share price has been at a significant discount to the Company's net asset value. The Directors review regularly the level of discount, however given the investor base of the Company, the Board is very restricted in its ability to influence the discount to net asset value.
Investment Manager: The quality of the team employed by the Investment Manager is an important factor in delivering good performance and the loss of key staff could adversely affect returns. A representative of the Investment Manager attends each Board meeting and the Board is informed if any major changes to the investment team employed by the Investment Manager are proposed. The Investment Manager regularly informs the Board of developments and any key implications for either the investment strategy or the investment portfolio.
Tax and regulatory risks: A breach of The Investment Trust (Approved Company) (Tax) Regulations 2011 (the 'Regulations') could lead to capital gains realised within the portfolio becoming subject to UK capital gains tax. A breach of the FCA Listing Rules could result in suspension of the Company's shares, while a breach of company law could lead to criminal proceedings, financial and/or reputational damage. The Board employs Brompton Asset Management Limited as Investment Manager, and Maitland Administration Services Limited as Secretary and Administrator, to help manage the Company's legal and regulatory obligations.
Operational: Disruption to, or failure of, the Investment Manager's or Administrator's accounting, dealing or payment systems, or the Custodian's records, could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service. The Board monitors its service providers, with an emphasis on their business interruption procedures.
The Directors confirm that they have carried out a robust assessment of the risks and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity.
INVESTMENT MANAGEMENT ARRANGEMENTS AND RELATED PARTY TRANSACTIONS
In common with most investment trusts the Company does not have any executive directors or employees. The day-to-day management and administration of the Company, including investment management, accounting and company secretarial matters, and custodian arrangements are delegated to specialist third party service providers.
Details of related party transactions are contained in the Annual Report. There have been no unusual material transactions with related parties during the period which have had a significant impact on the performance of the Company.
GOING CONCERN AND VIABILITY
The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the interim report as the assets of the Company consist mainly of securities that are readily realisable or cash and it has no significant liabilities and limited financial commitments. Investment income has exceeded annual expenditure and current liquid net assets cover current annual expenses for many years. Accordingly, the Company is of the opinion that it has adequate financial resources to continue in operational existence for the foreseeable future which is considered to be in excess of five years. Five years is considered a reasonable period for investors when making their investment decisions. In reaching this view the Directors reviewed the anticipated level of annual expenditure against the cash and liquid assets within the portfolio. The Directors have also considered the risks the Company faces.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
As disclosed in note 1, the annual consolidated financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".
The Chairman's statement and the Investment Manager's report include a fair review of important events that have occurred during the first six months of the financial year and their impact on the financial statements;
The Chairman's statement, the Investment Manager's report and the Directors' report include a fair review of the potential risks and uncertainties for the remaining six months of the year;
The Director's report and note 8 to the interim financial report include a fair review of the information concerning transactions with the investment manager and changes since the last annual report.
By order of the Board
Maitland Administration Services Limited
21st March 2023
SCHEDULE OF TOP TWENTY INVESTMENTS at 31st December 2022
30th June 2022 Purchases/
Market Movement 31st Dec 2022 GBP'000 % of Net Assets
GBP'000 (Sales)
Fundsmith Equity Fund 8,562 - 419 8,981 7.29
Polar Capital Global Technology 7,277 - (628) 6,649 5.40
iShares Core S&P 500 UCITS ETF 3,828 991 39 4,858 3.94
Matthews Asia Ex Japan Fund 5,158 - (563) 4,595 3.73
MI Chelverton UK Equity Inc Fund 4,581 - (25) 4,556 3.70
EF Brompton Global Conservative Fund (49)
4,454 - 4,405 3.57
First State Indian Subcontinent Fund 3,943 - 303 4,246 3.45
BlackRock Continental European Inc Fund 300
3,916 - 4,216 3.42
Aquilus Inflection Fund 4,242 - (130) 4,112 3.34
Baillie Gifford Global Income Growth 3,876 - 148 4,024 3.27
BlackRock Gold & General 3,710 - 223 3,933 3.19
MI Somerset Asia Income Fund 2,849 1,000 (150) 3,699 3.00
Vietnam Enterprise Investments 2,944 968 (451) 3,461 2.81
EF Brompton Global Equity Fund 3,361 - 75 3,436 2.79
Aberforth Split Level Income Trust 3,144 - 187 3,331 2.70
EF Brompton Global Opportunities Fund 65
3,198 - 3,263 2.65
EF Brompton Global Growth Fund 3,044 - 55 3,099 2.51
MI Brompton UK Recovery Unit Trust 101
2,798 - 2,899 2.35
Lindsell Train Japanese Equity Fund 2,650 1,000 (845) 2,805 2.28
TM Crux European Special Sits Fund 2,460 - 233 2,693 2.19
Man GLG UK Income Fund 2,468 - 157 2,625 2.13
82,463 3,959 (536) 85,886 69.70
Balance not held in investments above 16,987 2,483 (58) 19,412 15.75
Total investments (excluding cash) 99,450 6,442 (594) 105,298 85.45
Cash 24,530 (6,347) (159) 18,024 14.63
Other net current liabilities (2) (95) - (97) (0.08)
Net Assets
123,978 - (753) 123,225 100.00
All of the above investments are investment funds with the exception of Aberforth Split Level Income Trust and Vietnam Enterprise Investments which are investment companies.
The investment portfolio, excluding cash, can be further analysed as follows: GBP'000
Investment funds 94,942
Unquoted investments including loans of GBP1.2m 2,187
Investment companies and exchange traded funds 7,617
Other quoted investments 552
105,298
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2022 (unaudited)
Six months ended
31st December 2022
(unaudited)
Total
Revenue Return Capital Return
GBP '000 Return
GBP '000 GBP '000
Notes
INCOME
Investment income 1,101 - 1,001
Other operating income 191 - 191
Total income 2 1,292 - 1,292
GAINS AND LOSSES ON INVESTMENTS
Losses on investments at fair value through profit or loss 5
- (594) (594)
Legal and professional costs - - -
Other exchange gains - 99 99
Trail rebates - 1 1
1,292 (494) 798
EXPENSES
Management fees 3 (385) - (385)
Other expenses (163) - (163)
(548) - (548)
PROFIT/(LOSS) BEFORE FINANCE COSTS AND TAX
744 (494) 250
Finance costs - - -
PROFIT/(LOSS) BEFORE TAX 744 (494) 250
Tax (9) - (9)
PROFIT/(LOSS) FOR THE PERIOD 735 (494) 241
EARNINGS/(LOSS) PER SHARE
Ordinary shares (pence) 4 1.04p (0.70)p 0.34p
The total return column of this statement represents the Group's profit and loss account, prepared in accordance with IFRS. The supplementary Revenue Return and Capital Return columns are both 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 the parent company. There are no minority interests.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2021 and the year ended 30th June 2022
Six months ended Year ended
31st December 2021 30th June 2022
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
Notes Return Return Return Return Return Return
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
INCOME
Investment income 1,001 - 1,001 1,837 - 1,837
Other operating income - - - 20 - 20
Total income 2 1,001 - 1,001 1,857 - 1,857
GAINS AND LOSSES ON INVESTMENTS
Gains/(losses) on investments at fair value
through profit or loss
5 - 3,114 3,114 - (15,188) (15,188)
Legal and professional costs - (60) (60) (60) (60)
Other exchange gains - 121 121 - 1,382 1,382
Trail rebates - 4 4 - 6 6
1,001 3,179 4,180 1,857 (13,860) (12,003)
EXPENSES
Management fees 3 (437) - (437) (837) - (837)
Other expenses (158) - (158) (320) - (320)
(595) - (595) (1,157) - (1,157)
PROFIT/(LOSS) BEFORE TAX 406 3,179 3,585 700 (13,860) (13,860)
Tax (1) - (1) - - -
PROFIT/(LOSS) FOR THE PERIOD 405 3,179 3,584 700 (13,860) (13,160)
EARNINGS PER SHARE
Ordinary shares (pence) 4 0.57p 4.48p 5.05p 0.98p (19.51)p (18.53)p
The total return column of this statement represents the Group's profit and loss account, prepared in accordance with IFRS. The supplementary Revenue Return and Capital Return columns are both 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 periods.
All income is attributable to the equity holders of the parent company. There are no minority interests.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2022 (unaudited)
Share
Share premium Special reserve Retained earnings
capital Total
GBP '000 GBP '000 GBP '000
GBP '000 GBP '000
At 30th JUNE 2022 710 21,573 56,908 44,787 123,978
Total comprehensive income for the period - - - 241 241
Dividend paid - - - (994) (994)
At 31st DECEMBER 2022 710 21,573 56,908 44,034 123,225
Included within retained earnings were GBP1,407,000 of Company reserves available for distribution.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2021 (unaudited)
Share
Share premium Special reserve Retained earnings
capital Total
GBP '000 GBP '000 GBP '000
GBP '000 GBP '000
At 30th JUNE 2021 710 21,573 56,908 58,941 138,132
Total comprehensive income for the period - - - 3,584 3,584
Dividend paid - - - (994) (994)
At 31st DECEMBER 2021 710 21,573 56,908 61,531 140,722
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th June 2021 (audited)
Share
Share premium Special reserve Retained earnings
capital Total
GBP '000 GBP '000 GBP '000
GBP '000 GBP '000
At 30th JUNE 2021 710 21,573 56,908 58,941 138,132
Total comprehensive income for the year - - - (13,160) (13,160)
Dividend paid - - - (994) (994)
At 30th JUNE 2022 710 21,573 56,908 44,787 123,978
CONSOLIDATED BALANCE SHEET
at 31st December 2022
31st December 31st December 30th June
2022 2021 2022
Notes
(unaudited) (unaudited) (audited)
GBP '000 GBP '000 GBP '000
NON-CURRENT ASSETS
Investments at fair value through profit or loss
5 105,298 135,726 99,450
CURRENT ASSETS
Other receivables 152 126 258
Cash and cash equivalents 18,024 5,139 24,530
18,176 5,265 24,788
TOTAL ASSETS 123,474 140,991 124,238
CURRENT LIABILITIES
Other payables (249) (269) (260)
TOTAL ASSETS LESS CURRENT LIABILITIES
123,225 140,722 123,978
NET ASSETS 123,225 140,722 123,978
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Called-up share capital 710 710 710
Share premium 21,573 21,573 21,573
Special reserve 56,908 56,908 56,908
Retained earnings 6 44,034 61,531 44,787
TOTAL EQUITY 123,225 140,722 123,978
NET ASSET VALUE PER ORDINARY SHARE (PENCE) 7 173.50p 198.13p 174.56p
The interim report was approved and authorised for issue by the Board on 21st March 2023.
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2022
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP '000 GBP '000 GBP '000
NET CASH INFLOW FROM OPERATING ACTIVITIES 831 517 673
INVESTING ACTIVITIES
Purchase of investments (6,442) (2,885) (11,861)
Sale of investments - - 26,950
Legal and professional costs - (60) (60)
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES
FINANCING (6,442) (2,945) 15,029
Equity dividend paid (994) (994) (994)
NET CASH (OUTFLOW)/INFLOW AFTER FINANCING
(6,605) (3,422) 14,708
(DECREASE)/INCREASE IN CASH (6,605) (3,422) 14,708
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(Decrease)/increase in cash resulting from cash flows (6,605) (3,422) 14,708
Exchange movements 99 121 1,382
Movement in net funds (6,506) (3,301) 16,090
Net funds at start of period/year 24,530 8,440 8,440
NET FUNDS AT OF PERIOD/YEAR 18,024 5,139 24,530
RECONCILIATION OF PROFIT BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES
Profit/(loss) before finance costs and taxation * 250 3,585 (13,160)
Losses/(gains) on investments 594 (3,114) 15,188
Exchange gains (99) (121) (1,382)
Legal and professional costs - 60 60
Capital trail rebates (1) (4) (6)
Revenue profit before finance costs and taxation 744 406 700
Decrease/(increase) in debtors 106 109 (30)
Decrease in creditors (11) (1) (10)
Finance costs - (1) -
Taxation (9) - 7
Capital trail rebates 1 4 6
NET CASH INFLOW FROM OPERATING ACTIVITIES 831 517 673
* Includes dividends received in cash of GBP1,012,000 (30th June 2022: GBP1,653,000) (2021: GBP963,000), accumulation income of GBP188,000 (30th June 2022: GBP149,000) (2021: GBP140,000) and interest received of GBP189,000 (30th June 2022: GBP20,000) (2021: GBP1,000).
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 31st December 2022
1. ACCOUNTING POLICIES
The condensed consolidated interim financial statements comprise the unaudited results of the Company and its subsidiary, JIT Securities Limited (together "the Group"), for the six months ended 31st December 2022. The comparative information for the six months ended 31st December 2021 and the year ended 30th June 2022 are a condensed set of accounts and do not constitute statutory accounts under the Companies Act 2006. Full statutory accounts for the year ended 30th June 2022 included an unqualified audit report, did not contain any statements under section 498 of the Companies Act 2006, and have been filed with the Registrar of Companies.
The half year financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', and are presented in pounds sterling, as this is the Group's functional currency.
The same accounting policies have been followed in the interim financial statements as applied to the accounts for the year ended 30th June 2022, which were prepared in accordance with IFRSs.
No segmental reporting is provided as the Group is engaged in a single segment.
2. TOTAL INCOME
Year ended 30th June
Six months ended 31st December 2022
Six months ended 31st December 2021 2022
GBP'000
GBP'000
GBP'000
Income from Investments
UK net dividend income 952 900 1,581
Unfranked investment income 125 85 219
UK fixed interest 24 16 37
1,101 1,001 1,837
Other Income
Bank interest receivable 191 - 20
191 - 20
Year ended 30th June
Six months ended 31st December 2022
Six months ended 31st December 2021 2022
GBP'000
GBP'000
GBP'000
Total income comprises
Dividends 1,101 985 1,800
Other income 191 16 57
1,292 1,001 1,857
3. MANAGEMENT FEES
Year ended 30th June
Six months ended 31st December 2022
Six months ended 31st December 2021 2022
GBP'000
GBP'000
GBP'000
Investment management fee 385 437 837
385 437 837
The Investment Manager receives a management fee, payable quarterly in arrears, equivalent to an annual 0.75 per cent of total assets after the deduction of the value of any investments managed by the Investment Manager or its associates (as defined in the investment management agreement).
4. RETURN PER ORDINARY SHARE
Year ended 30th
Six months ended 31st December June
2022 Six months ended 31st December
2021 2022
GBP'000
GBP'000
GBP'000
Revenue return 735 405 700
Capital return (494) 3,179 (13,860)
Total return 241 3,584 (13,160)
Weighted average number of Ordinary 71,023,695 71,023,695 71,023,695
shares
Revenue return per Ordinary share 1.04p 0.57p 0.98p
Capital return per Ordinary share (0.70)p 4.48p (19.51)p
Total return per Ordinary share 0.34p 5.05p (18.53)p
5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
At
At At
30th June
31st December 2022 31st December 2021
2022
GBP'000 GBP'000
GBP'000
GROUP AND COMPANY 105,298 135,726 99,450
ANALYSIS OF INVESTMENT
PORTFOLIO
Six months ended 31st December 2022
Total
Quoted* Unquoted**
(level 1 and 2) (level 3)
GBP'000
GBP'000 GBP'000
Opening book cost 70,896 10,099 80,995
Opening investment holding gains/(losses) 25,941 (7,486) 18,455
Opening valuation 96,837 2,613 99,450
Movement in period:
Purchases at cost 6,092 350 6,442
Sales
- Proceeds - - -
- Realised gains on sales - - -
Movement in investment holding gains/(losses) 182 (776) (594)
Closing valuation at 31 December 2022 103,111 2,187 105,298
Closing book cost 76,988 10,449 87,437
Closing investment holding gains/losses 26,123 (8,262) 17,861
Closing valuation 103,111 2,187 105,298
* Quoted investments include unit trust and OEIC funds which are valued at quoted prices. Included within Quoted Investments is one monthly valued investment fund of GBP4,112,000 (30th June 2022 GBP4,242,000) (2021: GBP4,632,000).
** The Unquoted investments, representing just under 2% of the Company's NAV, have been valued in accordance with IPEVC valuation guidelines. The largest unquoted investment amounting to GBP700,000 (30th June 2022: GBP957,000) (2021: GBP14,842,000) was valued at recent transaction price. The second largest investment has also been valued at recent transaction price. A 10% increase or decrease in the earnings of any of these investments would not have a material impact on the valuation of those investments.
There were no reclassifications for assets between Level 1, 2 and 3.
5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS continued
Year
ended
Six months ended Six months ended
30th
31st December 2022 31st December 2021
June
GBP'000 GBP'000
2022
GBP'000
ANALYSIS OF CAPITAL (LOSSES)/GAINS
Realised gains on sales of investments - - 18,375
(Decrease)/increase in investment holding gains (594) 3,114 (33,563)
(594) 3,114 (15,188)
6. RETAINED EARNINGS
At At
At
31st December 2022 30th June
31st December 2021
GBP'000 2022
GBP'000
GBP'000
Capital reserve - realised 24,766 5,381 24,666
Capital reserve - revaluation 17,861 55,132 18,455
Revenue reserve 1,407 1,018 1,666
44,034 61,531 44,787 7. NET ASSET VALUE PER ORDINARY SHARE
31st December 2022 30th June
31st December 2021
GBP'000 2022
GBP'000
GBP'000
Net assets attributable to Ordinary shareholders
123,225 140,722 123,978
Ordinary shares in issue at end of period
71,023,695 71,023,695 71,023,695
Net asset value per Ordinary share 173.50p 198.13p 174.56p
8. TRANSACTIONS WITH THE INVESTMENT MANAGER
During the period there have been no new related party transactions that have affected the financial position or performance of the Group.
Since 1st January 2010 Brompton has acted as Investment Manager to the Company. This relationship is governed by an agreement dated 17 May 2018.
Mr Duffield is the senior partner of Brompton Asset Management Group LLP the ultimate parent of Brompton. Mr Duffield owns a majority (59.14%) of the shares in the Company.
Mr Gamble has an immaterial holding in Brompton Asset Management Group LLP.
The total investment management fee payable to Brompton for the half year ended 31st December 2022 was GBP385,000 (30th June 2022: GBP837,000) (2021: GBP437,000) and at the half year GBP192,000 (30th June 2022: GBP193,000) (2021: GBP219,000) was accrued.
The Group's investments include seven funds managed by Brompton or its associates valued at GBP21,697,000 (30th June 2022: GBP24,451,000) (2021: GBP24,194,000). No investment management fees were payable directly by the Company in respect of these investments.
----------------------------------------------------------------------------------------------------------------------- Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
ISIN: GB0002631041 Category Code: IR TIDM: NSI Sequence No.: 231525 EQS News ID: 1588237 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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March 21, 2023 07:29 ET (11:29 GMT)
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