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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Abrdn Asia Focus Plc | LSE:AAS | London | Ordinary Share | GB00BMF19B58 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1.00 | 0.38% | 265.00 | 265.00 | 269.00 | 265.00 | 265.00 | 265.00 | 26,059 | 10:56:43 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 45.3M | 35.19M | 0.2249 | 11.78 | 414.61M |
From Apr 2019 to Apr 2024
TIDMAAS
RNS Number : 4979T
Aberdeen Standard Asia Focus PLC
21 March 2019
ABERDEEN STANDARD ASIA FOCUS PLC
Legal Entity Identifier (LEI): 5493000FBZP1J92OQY70
ANNOUNCEMENT OF UNAUDITED HALF YEARLY RESULTS
for the six months ended 31 January 2019
INTERIM BOARD REPORT
Background
Stock markets worldwide had a bumpy ride in the period under review and Asia was no exception. There was considerable volatility in the face of an escalating threat of a trade war between China and the US, alongside worries about slowing global growth and further US Federal Reserve interest rate hikes. However, the New Year has so far marked a reversal of that bearish sentiment, with Asian stock markets including China rallying on a more emollient outlook on trade, as well as the Fed indicating that rate hikes might be deferred.
Against this challenging backdrop, I am pleased to report that your Company's underlying holdings performed better than the comparative indices - a consequence of our long-standing focus on investing in companies with strong management, resilient balance sheets and good prospects. In the six months to 31 January 2019 the Company's net asset value (NAV) fell by 4.5% against a drop in the MSCI Asia (ex-Japan) Smaller Companies Index of 8.6% on a total return basis. During the period, the share price remained flat, with the discount to NAV per share narrowing from 14.8% to 11.2%.
The narrowing of the discount is encouraging and, I believe, a sign that shareholders have welcomed last year's restructuring efforts. The appointment of Hugh Young as named manager and a sharpening of the focus of your portfolio to his highest conviction ideas should help perpetuate the Company's track record of delivering value to shareholders over the long term.
Over the past three years, the Company's NAV has risen by 43.6%, equivalent to an annualised return of 12.8%. The 5-year and 10-year annualised returns stand at 8.2% and 17.1% respectively. In testimony to Hugh's underlying long-term philosophy, according to a recent press release from the Association of Investment Companies, if an investor had invested each year's maximum ISA limit since 1999 in the Company's shares the Company would be placed second best out of the investment company universe over this 20 year period. This is clear evidence of a true investment approach.
Overview
In the six months to January 2019, markets faced several obstacles. At a global level, geopolitical concerns took centre stage as the ongoing US-China trade dispute deepened, while tightening liquidity and volatile commodity prices contributed to an overall sense of unease against arguably excessive equity market valuations. In Asia, concerns over slowing growth in China and the potential disruption to technology supply chains hampered equity markets in North Asia and Australia, including the large export markets of China, Korea and Taiwan, where the Trust has comparatively less exposure.
The markets of South-East Asia proved more resilient despite the headwind of a strengthening US dollar amid successive Fed rate increases. Indonesia rallied after the Central Bank hiked rates to support the rupiah, while Thailand - another large market for the company - held up thanks to its current account surplus, stable currency and rising domestic demand. The Indian stock market was the notable exception. Despite reaching new highs in August, the market succumbed to a liquidity crunch in the financial sector, triggered by the default of a non-banking-financial-company's debt obligations. However, the central bank's quick remedial actions mitigated some of the losses.
What we have done in the portfolio and how it has performed
The restructuring of the management last year and the change of Company name was based on the Board's belief that investing in smaller companies requires specialist knowledge which can best be achieved by a dedicated team with clear responsibilities for identifying and managing investments in smaller companies.
Considerable progress is being made on the actions we outlined. Hugh Young leads a small dedicated team whose primary function is to identify and research new opportunities, monitor existing holdings and arrange exits at the optimal moment. They have at their disposal the formidable resources of Aberdeen Standard with 14 offices across the region and a huge range of contacts.
The number of stocks in the portfolio is being reduced to improve focus, increase opportunity and enhance shareholder value. To this effect, 10 holdings were exited during the period where their businesses had become more mature and the growth outlook less exciting. These include Castrol India and Heineken Malaysia, both investments that have meaningfully contributed to the value of your Company over the years. The portfolio still has around 10% of its holdings that need tidying up, but it is important to emphasise that this is no fire sale. Over the years, great care has been taken to invest in well-financed companies, often in market leading positions. They continue to prosper but it is important to seek out new opportunities, particularly in a fast-changing environment, where disruptive new approaches are challenging traditional well-established incumbents. To this end, new holdings have been initiated in the largest online retailer in Taiwan, momo.com, and in Singapore's AEM Holdings, a test-handler manufacturer that has embedded itself in chipmaker Intel's global supply chain.
Often, the small-cap sector is overlooked in favour of better-known large-cap stocks. This results in a greater likelihood for market mispricing, providing opportunities to buy quality holdings at attractive valuations. This is especially the case in such volatile times. Your Manager's approach to investing in quality stocks at reasonable valuations was evident from the few other additions to the portfolio. These were Indonesian fuel trader and distributor AKR Corporindo and Godrej Agrovet, a diversified agri-business in India. The former has a robust retail-fuel distribution business and integrated port and industrial estate in East Java. Godrej Agrovet is backed by the reputable conglomerate Godrej Group. It has a good track record in animal feed and crop protection, with distribution advantage, good farmer relationships and effective research and development capabilities. Both companies contributed to the overall performance of your Company in the review period.
Smaller companies also provide the potential for superior returns as they become targets for acquisition upon achieving scale and efficiency within their niche markets. In the portfolio, there are two or three potential take-over situations, one of which concerns Indonesian cement company Holcim Indonesia. The Trust intends to accept the acquirer's offer in March. News of the acquisition boosted the stock price, bolstering the relative performance of the Trust.
The long-term focus on quality companies has clearly helped the portfolio. Its largest exposure, Indonesia's Bank OCBC NISP, held for over two decades, continues to prosper as Indonesia develops and grows. Your Manager expects Indonesia to be the world's fifth largest economy in 20 years' time and Bank OCBC NISP is one of its highest quality banks. Similarly, Thailand's diversified financial company Aeon Thana, another core holding, rose on robust earnings and improved asset quality. Another long-term holding, Hana Microelectronics, an electronics manufacturing company, rose despite the poor short-term outlook for the technology sector from the ongoing US-China trade dispute. The company is well positioned, given its diversified products and plant locations, to weather the storm in the sector. Likewise, Philippines port operator Asian Terminals advanced on solid results, driven by higher volumes and margins.
Directorate
As I indicated in the last Annual Report, as part of the continuing process of succession planning the Board was delighted to welcome Charlotte Black and Deborah Guthrie as independent non-executive Directors of the Company on 16 January 2019. Charlotte has experience in various non-executive roles and as a board member within financial services, in both commercial and infrastructure companies and trade associations and is an experienced champion of major changes in the market's infrastructure. Debby is an equity research sales specialist with many years' experience of the Japanese equity market as well as a wider understanding of Asian markets having lived and worked in the region.
The appointment of two new Directors to the Board will allow us to refresh the Board in line with corporate governance guidelines. Chris Maude will retire from the Board on 31 March 2019 and I would like to reiterate our thanks to him for his considerable contribution over the last 11 years.
Share Capital Management and Gearing
During the period 652,000 Ordinary shares were purchased in the market at a discount to the prevailing ex income NAV and transferred to treasury. Subsequent to the period end a further 52,500 Ordinary shares have been purchased into treasury. Your Board continues to use share buy backs in periods of market uncertainty to both reduce the volatility of any discount as well as to modestly enhance the NAV for shareholders. Conversely, in times of market optimism, shares have been issued to the market at a premium to NAV.
The Company's net gearing at 31 January 2018 was 9.8%. The majority of the gearing is provided by the Convertible Unsecured Loan Stock redeemable in 2025, of which approximately GBP37m million remains outstanding. The Company also has a three-year multicurrency revolving loan facility and a term loan facility in an aggregate amount of $25 million with The Royal Bank of Scotland International Limited. Under the term loan facility $12.5 million has been drawn down and fixed until June 2020 at an all-in rate of 2.506%. The remaining $12.5 million has been drawn down under the $12.5m revolving credit facility. The Directors monitor the Company's gearing on a regular basis in accordance with the Company's investment policy and with advice from the Manager.
Outlook
Volatility is likely to remain the watchword as stock markets react to political and economic developments. It is also clear that Asia's economies and companies are seeing a lower rate of growth than that experienced in recent reporting periods. Moreover, 2019 is a crucial election year for Indonesia, India and Thailand, all countries in which the Trust has material exposure. That said, while uncertainty remains, these markets are expected to be supported by government spending and expansionary policies, in the run-up to the elections. The big picture for growth remains compelling, underpinned by a young population and an expanding middle class. Moreover, Asia remains the fastest growth region in the world and Asian smaller companies, in which we invest, are trading at the lower end of their historical valuation range. Given the underlying strength of our holdings' businesses and given their financials, we are confident of riding through the inevitable day-to-day gyrations of stock markets.
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Company are set out in detail on pages 10 and 11 of the Annual Report and Financial Statements for the year ended 31 July 2018 and have not changed. They can be summarised under the following headings:
- Investment Strategy and Objectives; - Investment Portfolio and Investment Management Risks; - Financial Obligations; - Financial and Regulatory; - Operational; and, - Investment in Unlisted Securities.
In addition to these risks, the outcome and potential impact of the UK Government's Brexit discussions with the European Union are still unclear at the time of writing, and the potential for significant resultant currency volatility remains an economic risk for the Company in the meantime. In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of the 2018 Annual Report.
Going Concern
The Company's assets consist of a diverse portfolio of listed equities which in most circumstances are realisable within a short timescale. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Directors' Responsibility Statement
The Directors are responsible for preparing this half-yearly financial report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting);
- the Interim Board Report (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the UK Listing Authority Disclosure Guidance and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could so do).
Nigel Cayzer
Chairman
20 March 2019
FINANCIAL HIGHLIGHTS
Hot Features
Premium
31 January 31 July 2018 % change
2019
Total assets{A} (GBP'000) 454,972 486,044 -6.4
Net asset value per Ordinary
share 1,159.42p 1,231.83p -5.9
Share price per Ordinary share
(mid) 1,030.00p 1,050.00p -1.9
Discount to net asset value per
Ordinary share{B} 11.2% 14.8%
Net gearing{B} 9.8% 9.5%
Ongoing charges ratio{B} 1.17% 1.22%
{A} Total assets as per the Statement of Financial Position less
current liabilities (excluding prior charges such as bank loans).
{B} Considered to be an Alternative Performance Measure as defined
below.
PERFORMANCE {A} Six months Year
ended ended
31 January 31 July 2018
2019
Share price{A} -0.2% +0.4%
Net asset value per Ordinary share{A} -4.5% +4.6%
MSCI AC Asia Pacific ex Japan Index (currency
adjusted) -4.8% +6.1%
MSCI AC Asia Pacific ex Japan Small Cap
Index (currency adjusted) -8.6% +6.6%
{A} Considered to be an Alternative Performance Measure as defined
below.
Condensed Statement of Comprehensive Income (unaudited)
Six months ended Six months ended
31 January 2019 31 January 2018
Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Losses on investments - (21,136) (21,136) - (3,425) (3,425)
Income 2 4,912 - 4,912 5,976 - 5,976
Exchange (losses)/gains - (91) (91) - 1,008 1,008
Investment management
fees (1,941) - (1,941) (2,002) - (2,002)
Administrative expenses (539) - (539) (529) - (529)
______ ______ ______ ______ ______ ______
Net return/(loss)
before finance costs
and taxation 2,432 (21,227) (18,795) 3,445 (2,417) 1,028
Finance costs (776) - (776) (876) - (876)
______ ______ ______ ______ ______ ______
Net return/(loss)
before taxation 1,656 (21,227) (19,571) 2,569 (2,417) 152
Taxation 3 (249) (529) (778) (301) (9) (310)
______ ______ ______ ______ ______ ______
Return/(loss) attributable
to equity shareholders 1,407 (21,756) (20,349) 2,268 (2,426) (158)
______ ______ ______ ______ ______ ______
Return/(loss) per
share (pence) 4
Basic 4.05 (62.67) (58.62) 6.57 (7.03) (0.46)
______ ______ ______ ______ ______ ______
Diluted n/a n/a n/a n/a n/a n/a
______ ______ ______ ______ ______ ______
The total column of the Condensed Statement of Comprehensive Income
is the profit and loss account of the Company.
There is no other comprehensive income and therefore the return
attributable to equity shareholders is also the total comprehensive
income for the period.
All revenue and capital items in the above statement derive from
continuing operations.
The accompanying notes are an integral part of the condensed financial
statements.
Condensed Statement of Financial Position (unaudited)
As at As at
31 January 31 July 2018
2019
Notes GBP'000 GBP'000
Non-current assets
Investments at fair value
through profit or loss 442,186 476,097
Current assets
Debtors and prepayments 2,471 3,037
Cash and short term deposits 14,507 9,398
_________ _________
16,978 12,435
_________ _________
Creditors: amounts falling
due within one year
Bank loans 6 (9,503) (7,623)
Other creditors (4,192) (2,488)
_________ _________
(13,695) (10,111)
_________ _________
Net current assets/(liabilities) 3,283 2,324
_________ _________
Total assets less current
liabilities 445,469 478,421
Non-current liabilities
Bank loans 6 (9,485) (9,506)
2.25% Convertible Unsecured
Loan Stock 2025 7 (35,306) (35,209)
_________ _________
(44,791) (44,715)
_________ _________
Net assets 400,678 433,706
_________ _________
Capital and reserves
Called-up share capital 8 10,429 10,429
Capital redemption reserve 2,062 2,062
Share premium account 60,110 60,076
Equity component of 2.25%
Convertible Unsecured Loan
Stock 2025 7 1,054 1,054
Capital reserve 9 317,533 346,123
Revenue reserve 9,490 13,962
_________ _________
Equity shareholders' funds 400,678 433,706
_________ _________
Net asset value per share
(pence) 10 1,159.42 1,231.83
_________ _________
Condensed Statement of Changes in Equity (unaudited)
Six months ended
31 January 2019
Capital Share Equity
Share redemption premium component Capital Revenue
capital reserve account CULS 2025 reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 July
2018 10,429 2,062 60,076 1,054 346,123 13,962 433,706
Purchase of own
shares to treasury - - - - (6,817) - (6,817)
Conversion of 2.25%
Convertible Unsecured
Loan Stock 2025
(note 7) - - 34 - - - 34
Issue costs of 2.25%
Convertible Unsecured
Loan Stock 2025 - - - (17) - (17)
(Loss)/return after
taxation - - - - (21,756) 1,407 (20,349)
Dividends paid (note
5) - - - - - (5,879) (5,879)
_____ _____ _____ _____ _____ _____ _____
Balance at 31 January
2019 10,429 2,062 60,110 1,054 317,533 9,490 400,678
_____ _____ _____ _____ _____ _____ _____
Six months ended
31 January 2018
Capital Share Equity
Share redemption premium component Capital Revenue
capital reserve account CULS 2019 reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 July
2017 9,796 2,062 39,695 1,361 365,765 11,426 430,105
Purchase of own
shares to treasury - - - - (6,024) - (6,024)
Conversion of 3.5%
Convertible Unsecured
Loan Stock 2019
(note 7) 81 - 2,607 - - - 2,688
Return/(loss) after
taxation - - - - (2,426) 2,268 (158)
Dividends paid (note
5) - - - - - (5,508) (5,508)
_____ _____ _____ _____ _____ _____ _____
Balance at 31 January
2018 9,877 2,062 42,302 1,361 357,315 8,186 421,103
_____ _____ _____ _____ _____ _____ _____
Condensed Statement of Cash Flows (unaudited)
Six months ended Six months ended
31 January 2019 31 January 2018
GBP'000 GBP'000
Operating activities
Net (loss)/return before finance
costs and taxation (18,795) 1,028
Adjustments for:
Dividend income (4,884) (5,960)
Interest income (25) (2)
Other income (3) -
Dividends received 5,371 5,928
Interest received 22 2
Other income received 3 -
Interest paid (673) (757)
Losses on investments 21,136 3,425
Currency losses/(gains) 91 (1,008)
Increase in prepayments (15) (14)
Decrease in other debtors 52 18
(Decrease)/increase in accruals (124) 365
Stock dividends included in investment
income (152) (14)
Withholding tax suffered (288) (301)
__________ __________
Net cash flow from operating activities 1,716 2,710
Investing activities
Purchases of investments (79,021) (8,088)
Sales of investments 93,708 10,881
Capital Gains Tax on sales (339) (9)
__________ __________
Net cash flow from investing activities 14,348 2,784
Financing activities
Purchase of own shares to treasury (6,817) (6,210)
Issue costs of 2.25% Convertible (17) -
Unsecured Loan Stock 2025
Drawdown of loan 1,966 7,031
Equity dividends paid (5,883) (5,508)
__________ __________
Net cash flow used in financing
activities (10,751) (4,687)
__________ __________
Increase in cash and cash equivalents 5,313 807
__________ __________
Analysis of changes in cash and cash equivalents
during the period
Opening balance 9,398 4,009
Increase in cash and cash equivalents
as above 5,313 807
Effect of exchange rate fluctuations
on cash held (204) 315
__________ __________
Closing balance 14,507 5,131
__________ __________
Notes to the Financial Statements
For the period ended 31 January 2019
1. Accounting policies
Basis of accounting
The condensed financial statements have been prepared in accordance
with Financial Reporting Standard 104 (Interim Financial Reporting)
and with the Statement of Recommended Practice for 'Financial
Statements of Investment Trust Companies and Venture Capital
Trusts'. They have also been prepared on a going concern basis
and on the assumption that approval as an investment trust will
continue to be granted.
The interim financial statements have been prepared using the
same accounting policies as the preceding annual financial statements.
Six months Six months
ended ended
31 January 31 January
2019 2018
2. Income GBP'000 GBP'000
Income from investments
Overseas dividends 4,407 5,808
Overseas interest 192 4
REIT income 49 64
Stock dividends 152 14
UK dividend income 84 84
__________ __________
4,884 5,974
__________ __________
Other income
Other income 3 -
Deposit interest 25 2
__________ __________
Total income 4,912 5,976
__________ __________
3. Taxation
The taxation charge for the period within revenue represents
withholding tax suffered on overseas dividend income. The taxation
charge for the period within capital represents capital gains
tax on Indian equity sales.
4. Six months Six months
ended ended
31 January 31 January
2019 2018
Return/(loss) per Ordinary share p p
Basic
Revenue return 4.05 6.57
Capital loss (62.67) (7.03)
__________ __________
Total return (58.62) (0.46)
__________ __________
The figures above are based on the
following:
Six months Six months
ended ended
31 January 31 January
2019 2018
GBP'000 GBP'000
Revenue return 1,407 2,268
Capital loss (21,756) (2,426)
__________ __________
Total return (20,349) (158)
__________ __________
Weighted average number of shares
in issue{A} 34,715,441 34,534,682
__________ __________
Six months Six months
ended ended
31 January 31 January
2019 2018
Diluted{B} p p
Revenue return n/a n/a
Capital return n/a n/a
__________ __________
Total return n/a n/a
__________ __________
The figures above are based on the
following:
GBP'000 GBP'000
Revenue return 1,965 2,841
Capital loss (21,756) (2,426)
__________ __________
Total return (19,791) 415
__________ __________
Number of dilutive shares 2,524,983 3,890,186
__________ __________
Diluted shares in issue{AB} 37,240,424 38,424,868
__________ __________
{A} Calculated excluding shares held in treasury.
{B} The calculation of the diluted total, revenue and capital
returns per Ordinary share are carried out in accordance with
IAS 33, "Earnings per Share". For the purpose of calculating
total, revenue and capital returns per Ordinary share, the number
of Ordinary shares used is the weighted average number used
in the basic calculation plus the number of Ordinary shares
deemed to be issued for no consideration on exercise of all
2.25% Convertible Unsecured Loan Stock 2025 (CULS). The calculations
indicate that the exercise of CULS would result in an increase
in the weighted average number of Ordinary shares of 2,524,983
(31 January 2018 - 3,890,186) to 37,240,424 (31 January 2018
- 38,424,868 ) Ordinary shares.
As at 31 January 2019, the CULS conversion has a positive impact
on the revenue and capital return per Ordinary share, therefore
there is no dilution (31 January 2018 - no dilution to the revenue
return per Ordinary share). Where dilution occurs, the net returns
are adjusted for items relating to the CULS. Accrued CULS finance
costs for the period and unamortised issue expenses are added
back. Total earnings for the period are tested for dilution.
Once dilution has been determined individual revenue and capital
earnings are adjusted.
Six months Six months
ended ended
31 January 31 January
2019 2018
5. Dividends GBP'000 GBP'000
Final dividend for 2018 - 13.00p (2017
- 12.00p) 4,499 4,131
Special dividend for 2018 - 4.00p
(2017 - 4.00p) 1,384 1,377
Overpaid dividends (4) -
__________ __________
5,879 5,508
__________ __________
6. Bank loans
The Company currently has a $25,000,000 revolving facility agreement
with The Royal Bank of Scotland International Limited. At the
period end, $12,500,000 (31 July 2018 - $12,500,000) was drawn
down from the term loan facility at a fixed interest rate of
2.506% until 8 June 2020. As at 22 January 2019 $12,500,000
(31 July 2018 - $10,000,000) was drawn down from the revolving
facility at a rate of 3.560% and matured on 22 February 2019.
The terms of the loan facilities contain covenants that the
minimum net assets of the Company are GBP300,000,000, the percentage
of borrowings against net assets is less than 20%, and the portfolio
contains a minimum of forty-five eligible investments (investments
made in accordance with the Company's investment policy). All
covenants were met during the period.
7. Non-current liabilities - 2.25% Convertible Unsecured Loan Stock
2025 ("CULS")
Liability Equity
Nominal component component
GBP'000 GBP'000 GBP'000
Balance at beginning of period 37,000 35,209 1,054
Conversion of CULS into Ordinary
shares (34) (34) -
Notional interest on CULS - 77 -
Amortisation of issue expenses - 54 -
__________ __________ __________
Balance at end of period 36,966 35,306 1,054
__________ __________ __________
The 2.25% Convertible Unsecured Loan Stock 2025 ("CULS") can
be converted at the election of holders into Ordinary shares
during the months of May and November each year throughout their
life until 31 May 2025 at a rate of one Ordinary share for every
1,465.0p nominal of CULS. Interest is paid on the CULS on 31
May and 30 November each year. 100% of the interest is charged
to revenue in line with the Board's expected long-term split
of returns from the investment portfolio of the Company.
In the event of a winding-up of the Company the rights and claims
of the Trustee and CULS holders would be subordinate to the
claims of all creditors in respect of the Company's secured
and unsecured borrowings, under the terms of the Trust Deed.
During the period ended 31 January 2019 the holders of GBP34,482
of 2.25% CULS 2025 exercised their right to convert their holdings
into Ordinary shares. Following the receipt of the exercise
instructions, the Company converted GBP34,482 (31 July 2018-
GBP2,687,937 of 3.5% CULS 2019) nominal amount of CULS into
2,348 (31 July 2018 - 323,835) Ordinary shares.
As at 31 January 2019, there was GBP36,965,518 (31 July 2018
- 37,000,000) nominal amount of CULS in issue.
8. Called-up share capital
During the six months ended 31 January 2019 652,000 (31 January
2018 - 570,500) Ordinary shares were bought back to be held
in treasury at a total cost of GBP6,821,000 (31 January 2018
- GBP6,024,000). During the six months ended 31 January 2019
an additional 2,348 (31 July 2018 - 2,531,685) Ordinary shares
were issued after GBP34,482 nominal amount of 2.25% Convertible
Unsecured Loan Stock 2025 were converted at 1,465.0p each (31
July 2018 - GBP21,012,985 3.5% Convertible Unsecured Loan Stock
2019 were converted at 830.0p each). The total consideration
received was GBPnil (31 July 2018 - GBPnil). At the end of the
period there were 41,717,632 (31 July 2018 - 41,715,284) Ordinary
shares in issue, of which 7,159,012 (31 July 2018 - 6,507,012)
were held in treasury.
Subsequent to the period end, a further 52,500 Ordinary shares
were bought back to be held in treasury at a total cost of GBP550,000.
9. Capital reserve
The capital reserve reflected in the Condensed Statement of
Financial Position at 31 January 2019 includes gains of GBP144,868,000
(31 July 2018 - gains GBP220,407,000), which relate to the revaluation
of investments held at the reporting date.
As at As at
10. Net asset value per equity share 31 January 31 July 2018
2019
Basic
Net assets attributable GBP400,678,000 GBP433,706,000
Number of Ordinary shares in issue{A} 34,558,620 35,208,272
Net asset value per Ordinary share 1,159.42p 1,231.83p
__________ __________
Diluted{B}
Net assets attributable GBP435,984,000 GBP468,915,000
Number of Ordinary shares 37,081,864 37,733,869
Net asset value per Ordinary share n/a n/a
__________ __________
{A} Excludes shares in issue held in treasury.
{B} The diluted net asset value per Ordinary share has been
calculated on the assumption that the GBP36,965,518 2.25% Convertible
Unsecured Loan Stock 2025 ("CULS") are converted at 1,465.0p
per share (31 July 2018 - GBP37,000,000 3.5% Convertible Unsecured
Loan Stock 2019 are converted at 830.0p each), giving a total
of 37,081,864 (31 July 2018 - 37,733,869) Ordinary shares. Where
dilution occurs, the net assets are adjusted for items relating
to the CULS.
Net asset value per share - debt converted
In accordance with the Company's understanding of the current
methodology adopted by the AIC, convertible bond instruments
are deemed to be 'in the money' if the cum income (debt at fair
value) net asset value ("NAV") exceeds the conversion price
of 1,465.0p per share. In such circumstances a net asset value
is produced and disclosed assuming the convertible debt is fully
converted. At 31 January 2019 the NAV was 1,159.42p and thus
the CULS were not 'in the money' (31 July 2018 - 1231.83p, not
'in the money').
11. Transaction costs
During the period expenses were incurred in acquiring or disposing
of investments classified as fair value through profit or loss.
These have been expensed through capital and are included within
gains on investments in the Condensed Statement of Comprehensive
Income. The total costs were as follows:
Six months Six months
ended ended
31 January 31 January
2019 2018
GBP'000 GBP'000
Purchases 171 27
Sales 261 19
__________ __________
432 46
__________ __________
12. Fair value hierarchy
FRS 102 requires an entity to classify fair value measurements
using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy
has the following classifications:
Level 1: unadjusted quoted prices in an active market for identical
assets or liabilities that the entity can access at the measurement
date.
Level 2: inputs other than quoted prices included within Level
1 that are observable (ie developed using market data) for the
asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (ie for which market data is
unavailable) for the asset or liability.
The financial assets and liabilities measured at fair value in
the Condensed Statement of Financial Position are grouped into
the fair value hierarchy at the reporting date as follows:
Level Level Level Total
1 2 3
As at 31 January 2019 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets/(liabilities) at fair
value through profit or loss
Quoted equities 437,557 - - 437,557
Quoted bonds - 4,629 - 4,629
______ _______ ______ _______
Net fair value 437,557 4,629 - 442,186
_______ _______ _______ _______
Level Level Level Total
1 2 3
As at 31 July 2018 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets/(liabilities) at fair
value through profit or loss
Quoted equities 476,097 - - 476,097
______ _______ ______ _______
Net fair value 476,097 - - 476,097
______ _______ ______ _______
Quoted equities
The fair value of the Company's investments in quoted equities
has been determined by reference to their quoted bid prices at
the reporting date. Quoted equities included in Fair Value Level
1 are actively traded on recognised stock exchanges.
Quoted bonds
The fair value of the Company's investments in quoted preference
shares and bonds has been determined by reference to their quoted
bid prices at the reporting date. Investments categorised as
Level 2 are not considered to trade in active markets.
13. Related party disclosures
Mr Gilbert is a director of Standard Life Aberdeen plc. Both
Mr Gilbert and his alternate, Mr Young are directors of its
subsidiary ASI Asia which has been delegated, under an agreement
with ASFML, to provide management services to the Company. Neither
Mr Gilbert nor Mr Young are directors of ASFML.
Mr Yea is chairman of Equiniti Group plc which acts as Registrar
and Receiving Agent to the Company. Mr Yea is excluded from
participation in all discussions relating to the appointment
of Equiniti.
Transactions with the Manager
From 1 August 2018 until 31 October 2018 the investment management
fee was payable monthly in arrears based on an annual amount
of 1.0% calculated on the average net asset value of the Company
over a 24 month period, valued monthly. The fee was calculated
by reference to the value of the Company's net assets (gross
assets less liabilities excluding the amount of any loan facilities
or overdraft facilities drawn down). With effect from 01 November
2018 the investment management fee has been payable monthly
in arrears at 0.08% based on the market capitalisation of the
Company multiplied by the number of shares in issue (less those
held in Treasury) at the month end. During the period GBP1,941,000
(31 January 2018 - GBP2,002,000) of investment management fees
were charged, with a balance of GBP565,000 (31 January 2018
- GBP684,000) being payable to ASFML at the period end. Investment
management fees are charged 100% to revenue.
The Company also has a management agreement with ASFML for,
inter alia, the provision of both administration and promotional
activities services which are, in turn, delegated to AAM and
Aberdeen Asset Managers Limited ('AAML') respectively.
The administration fee is payable quarterly in advance and is
adjusted annually to reflect the movement in the Retail Price
Index. It is based on a current annual amount of GBP95,000 (31
January 2018 - GBP93,000). During the period GBP47,000 (31 January
2018 - GBP45,000) of fees were charged, with a balance of GBP24,000
(31 January 2018 - GBP23,000) payable to AAM at the period end.
The promotional activities costs are based on a current annual
amount of GBP219,000 (31 January 2018 - GBP250,000), payable
quarterly in arrears. During the period GBP110,000 (31 January
2018 - GBP125,000) of fees were charged, with a balance of GBP73,000
(31 January 2018 - GBP21,000) being payable to AAML at the period
end.
14. Segmental information
The Company is engaged in a single segment of business, which
is to invest in equity securities and debt instruments. All
of the Company's activities are interrelated, and each activity
is dependent on the others. Accordingly, all significant operating
decisions are based on the Company as one segment.
Half-Yearly Report
The financial information in this Report does not comprise statutory
accounts within the meaning of Section 434 - 436 of the Companies
Act 2006. The financial information for the year ended 31 July
2018 has been extracted from published accounts that have been
delivered to the Registrar of Companies and on which the report
of the auditors was unqualified and contained no statement under
Section 498 (2), (3) or (4) of the Companies Act 2006. The interim
accounts have been prepared using the same accounting policies
as the preceding annual accounts.
Ernst & Young LLP has reviewed the financial information for
the six months ended 31 January 2019 pursuant to the Auditing
Practices Board guidance on Review of Interim Financial Information.
16. This Half-Yearly Report was approved by the Board and authorised
for issue on 20 March 2019.
Copies of the Company's Half Yearly Report for the six months ended 31 January 2019 will be posted to shareholders in April 2019 and will be available thereafter on the Company's website:
asia-focus.co.uk* and from the registered office, Bow Bells House, 1 Bread Street, London EC4M 9HH.
Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.
* Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.
Aberdeen Asset Management PLC
Secretaries
20 March 2019
Alternative Performance Measures
Alternative Performance Measures ("APMs") are numerical measures
of the Company's current, historical or future performance, financial
position or cash flows, other than financial measures defined
or specified in the applicable financial framework. The Company's
applicable financial framework includes FRS 102 and the AIC SORP.
The Directors assess the Company's performance against a range
of criteria which are viewed as particularly relevant for closed-end
investment companies.
Total return
Total return is considered to be an alternative performance measure.
NAV and share price total returns show how the NAV and share price
has performed over a period of time in percentage terms, taking
into account both capital returns and dividends paid to shareholders.
NAV total return involves investing the same net dividend in the
NAV of the Company with debt at fair value on the date on which
that dividend was earned. Share price total return involves reinvesting
the net dividend in the month that the share price goes ex-dividend.
The tables below provide information relating to the NAVs and
share prices of the Company on the dividend reinvestment dates
during the six months ended 31 January 2019 and 31 January 2018
and total return for the period.
Dividend Share
2019 rate NAV price
31 July 2018 N/A 1,231.83p 1,050.00p
20 December 2018 17.00p 1,159.30p 1,000.00p
31 January 2019 N/A 1,159.42p 1,030.00p
----- ----- -----
Total return -4.5% -0.2%
----- ----- -----
Dividend Share
2018 rate NAV price
31 July 2017 N/A 1,192.49p 1,062.00p
2 November 2017 16.00p 1,273.76p 1,065.00p
31 January 2018 N/A 1,180.08p 1,030.00p
----- ----- -----
Total return +0.2% -1.6%
----- ----- -----
Discount to net asset value
per Ordinary share
The difference between the share price of 1,030.00p (31 July 2018
- 1,050.00p) and the net asset value per Ordinary share of 1,159.42p
(31 July 2018 - 1,231.83p) expressed as a percentage of the net
asset value per Ordinary share.
Net gearing
Net gearing measures the total borrowings of GBP54,294,000 (31
July 2018 - GBP52,338,000) less cash and cash equivalents of GBP14,891,000
(31 July 2018 - GBP11,250,000) divided by shareholders' funds
of GBP400,678,000 (31 July 2018 - GBP433,706,000), expressed as
a percentage.
Ongoing charges
Ongoing charges is considered to be an alternative performance
measure. The ongoing charges ratio has been calculated in accordance
with guidance issued by the AIC as the total of investment management
fees and administrative expenses and expressed as a percentage
of the average net asset values with debt at fair value throughout
the year. The ratio for 31 January 2019 is based on forecast ongoing
charges for the year ending 31 July 2019.
31 January 31 July
2019 2018
Investment management fees (GBP'000) 3,649 4,155
Administrative expenses (GBP'000) 1,099 1,092
Less: non-recurring charges (3) -
(GBP'000)
----- -----
Ongoing charges (GBP'000) 4,745 5,247
----- -----
Average net assets (GBP'000) 404,247 429,584
----- -----
Ongoing charges ratio 1.17% 1.22%
----- -----
The ongoing charges ratio provided in the Company's Key Information
Document is calculated in line with the PRIIPs regulations.
Independent Review Report to Aberdeen Standard Asia Focus PLC
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 January 2019 which comprises a Condensed Statement of Comprehensive Income, Condensed Statement of Financial Position, Condensed Statement of Changes in Equity, Condensed Statement of Cash Flows and the related Notes 1 to 16. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the company are prepared in accordance with United Kingdom Generally Accepted Accounting Practice. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting).
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 January 2019 is not prepared, in all material respects, in accordance with the Financial Reporting Standard 104 (Interim Financial Reporting) and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Conduct Authority.
Ernst & Young LLP
London
20 March 2019
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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