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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Aberdeen Frontier Markets Investment Company Limited | LSE:AFMC | London | Ordinary Share | GG00B1W59J17 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 41.30 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMAFMC
RNS Number : 3231F
Aberdeen Frontier Mkts Inv Co Ltd
20 February 2018
19 February 2018
ABERDEEN FRONTIER MARKETS INVESTMENT COMPANY LIMITED
HALF YEARLY FINANCIAL REPORT
For the six months ended 31 December 2017
Investment objective
The investment objective of the Company is to generate long-term capital growth primarily from investment in equity and equity related securities of companies listed in, or operating in, Frontier Markets.
Frontier Market countries may include constituents of the MSCI Frontier Markets Index or additional countries that the Manager deems to be, or displays similar characteristics to, Frontier Market countries.
Management
The Company is managed by Aberdeen Fund Managers Limited (the 'Manager'), which is a wholly owned subsidiary of Aberdeen Asset Management PLC, which is itself a wholly owned subsidiary of Standard Life Aberdeen plc, and is authorised and regulated by the Financial Conduct Authority ('FCA'). The Manager has delegated day-to-day investment management services to Aberdeen Asset Managers Limited ('AAML' or the 'Investment Manager').
Performance
For the six months ended 31 December 2017
Net Asset Value ("NAV") per share (in US dollar terms) +1.67% Total return, NAV to NAV, gross income reinvested. ----------------------------------- ------- Share price (in US dollar terms) +0.37% Share price total return is on a mid-to-mid basis. ----------------------------------- -------
As at 31 December 2017
NAV per share $0.9248 Share price (in GB pounds) GBP0.6300 Share price (in US dollars) $0.8510 Net Assets $79.0m
CHAIRMAN'S STATEMENT
On behalf of your Board, I present to you the Half-Yearly Financial Report for Aberdeen Frontier Markets Investment Company Limited (the 'Company') for the six months ended 31 December 2017.
Performance
Global stock markets raced ahead in 2017, supported by a range of factors including favourable US political and corporate taxation developments and a firming demand for oil and commodities. A year of strong inflows into emerging markets was balanced by more neutral flows into frontier markets generally, after two years of outflows, suggesting the investment environment is turning positive.
During the period under review, the Company reported net asset value ("NAV") per share and share price total returns of 1.7% and 0.4%, respectively, in US Dollar terms. This compared to a gain of 14.1% for the MSCI Frontier Markets Net Total Return Index.
The Company's under-performance against the benchmark reflected unusual volatility in frontier markets driven by particular events at a country-specific level. Strong performance from stock markets in Argentina and Vietnam, where the Company was underweight, and an overweight position in Pakistan, both held back performance. Whilst our Manager's underweights have cost performance over the period concerns remain over stretched valuations and political issues. We are overweight Frontier Asian markets, particularly in Bangladesh, Pakistan and Sri Lanka where our Manager believes the outlook for earnings is strong. This is further explained in the Manager's report.
Discount
The discount to NAV at which the Company's shares trade widened from 6.8% to 8.0% over the period. The Company's issued share capital was unchanged over the period, comprising 85,452,608 Ordinary shares with voting rights and an additional 450,000 shares in treasury. The Board keeps the share price discount to net asset value under constant review and the Company may purchase its own shares through the market for cash where the Directors believe that such purchases will enhance Shareholder value and are likely to assist in narrowing any discount to NAV at which the Ordinary shares may trade.
Dividend
The Board believes that a sustainable dividend is attractive to investors and, further to approval at the Company's Annual General Meeting on 6 December 2017, a final dividend of 0.761832p per Ordinary share was paid on 13 December 2017 to shareholders on the register on 17 November 2017. This was the Sterling equivalent of a dividend of 1.0 cent per share previously announced for the year ended 30 June 2017 based on a USD/ GBP exchange rate of 1.312625. The Board expects to declare in May 2018 an interim dividend, for the year ended 30 June 2018, payable in June.
Aberdeen Asset Managers Limited
The merger on 14 August 2017 between Aberdeen Asset Management PLC and Standard Life plc, to create Standard Life Aberdeen plc, resulted in a new investment division under the banner of Aberdeen Standard Investments. A highly experienced and dedicated integration team has been set up to ensure that our Manager remains focused on the best interests of the Company and its shareholders. The Board will monitor developments closely and ensure that excellent client service is maintained. The Board do not expect these developments to have any material impact on the management of your Company's investment portfolio.
Aberdeen ISA and Share plans
Aberdeen has a long history in managing closed-ended funds and provides a wealth of experience in their management and promotion. Investors may access low cost investment in the Company through Aberdeen's Share Plan, Investment Trust ISA and Investment Plan for Children. Further details may be found in the Annual Report or via our website at: aberdeenfrontiermarkets.co.uk.
PRIIPS (Packaged Retail and Insurance-based Investment Products)
Investors should be aware that the PRIIPS Regulation requires the Manager, as PRIIP manufacturer, to prepare a key information document ("KID") in respect of the Company. This KID must be made available by the Manager to retail investors prior to them making any investment decision and is available on the Company's website. The Company is not responsible for the information contained in the KID and investors should note that the procedures for calculating the risks, costs and potential returns are prescribed by the law. The figures in the KID may not reflect the expected returns for the Company and anticipated performance returns cannot be guaranteed.
Future prospects
As noted in the Manager's Report, we believe that the case for investment in frontier markets becomes ever stronger. Looking further into 2018, corporate earnings are improving across frontier markets while macroeconomic concerns are falling away. As institutional investors rotate away from fully-valued equities in other global stock markets, frontier markets offer compelling opportunities.
The Manager has a firm belief in its fundamental, stock-picking approach, balanced by positive views on Vietnam, Bangladesh, Pakistan and Sri Lanka with mild caution expressed over Argentina. Whilst our Manager remains benchmark aware, it is never benchmark driven and seeks to minimise risk through its in-depth company research. Despite recent performance through this momentum-led rally, the Manager believes that the Company has a well-constructed portfolio of companies that offers the opportunity for reliable returns over time with lower volatility. Some of the very large weightings to individual countries seen in the index in markets that offer limited market depth means that our portfolio will at times diverge, often substantially, from those weightings.
I conclude by thanking my colleagues on the Board for their diligence and professionalism, the Manager for its continued efforts and importantly our shareholders for their continued support and belief in the improving prospects for frontier markets and our relative portfolio positioning.
John Whittle
19 February 2018
MANAGER'S REPORT
Market environment
Global equity market sentiment was generally constructive over the period, supported by a robust global growth outlook and hopes that the passage of US tax legislation would give a boost to the world's largest economy. Oil prices found further support amid tensions in the Middle East and supply constraints in the face of firming demand, while hard commodity prices traded higher on more balanced supply-demand dynamics despite a cooling property market in China.
After two years of consecutive outflows, the Frontier Markets asset class saw a stabilisation in investment flows, with only a small net outflow registered for the calendar year. This compares to a year of very strong inflows into emerging markets. In our view, continued export-led growth in Frontier Asia, progress with the economic reform programme in Argentina, and economic recovery taking root in Frontier Africa, bodes well for flows into our asset class in 2018. Frontier markets capital flows usually follow emerging markets with a lag; we see no reason why this time should be different.
Frontier markets generally performed better during the period under review, with two large index constituents seeing notable strength: Argentina and Vietnam. Vietnamese equities finished the year on a 10-year high as GDP growth accelerated to 6.8%, its fastest annual pace in a decade, supported by sustained export growth and FDI inflows. Argentina also gained as Moody's upgraded its credit rating in recognition of President Macri's far-reaching reform programme.
Frontier Africa also made progress, albeit to a lesser extent, as economies there recover from recent currency adjustments. Egypt and Nigeria both grappled with high inflation after devaluing their currencies, however we expect domestic demand to pick up as inflationary forces are tamed and interest rates are brought down. Kenyan equities were volatile going into the election cycle and finished the period under review ahead on relief that elections passed without undue disruption.
There was one notable exception, however. Pakistan was a marked laggard over the period, despite annual GDP growth reaching a decade high as a result of the much improved security situation and very substantial investments in infrastructure. Three factors worked to undermine confidence in the market. Following, the upgrade of the country to the MSCI Emerging Markets index at the end of May significant selling pressure over several weeks ensued as Emerging Market investors stood on the side-lines given Pakistan's insignificant weighting in its new index. Secondly, political noise created governance uncertainties as former Prime Minister Nawaz Sharif and his Finance Minister were disqualified from office by Pakistan's Supreme Court for failing to properly declare assets. Thirdly, pressure built on the central bank to allow the currency to devalue in order to reign in a widening current account deficit, which also had the effect of undermining confidence in the equity market. At the end of the year the central bank allowed a 5% devaluation of the Rupee, but we expect a further adjustment closer to parliamentary elections in July. While the upcoming elections in July will no doubt be a source of conversation, we believe they should pass relatively uneventfully, although potentially resulting in a coalition government under the current leadership of the business-friendly PMLN party. Meanwhile the country's investments in infrastructure, particularly in the power sector, should work to lessen constraints on industrial productivity and support employment creation, which we believe could be transformational for the economy in the longer term.
Performance review
Aberdeen Frontier Markets Investment Company USD for periods ended 31 December 2017 Cumulative performance
6 Months 1 Year 3 Year 5 Year Inception % % % % to date % --------------- --------- ------- ------- ------- ---------- NAV Total Return 1.67 11.67 -2.49 19.18 -1.04 Share Price Total Return 0.37 10.27 1.38 27.35 -11.55 --------------- --------- ------- ------- ------- ----------
Notes
Source: Aberdeen Fund Managers Limited, Bloomberg
Returns assume dividends are reinvested. All performance numbers are total returns with dividends reinvested as of the ex-dividend date.
Inception was 15 June 2007 (initial NAV per share after share issue expenses was USD 0.9685).
During the six months to 31 December 2017 the Company's NAV per share and share price total returns were 1.7% and 0.4% respectively. As a point of reference, the MSCI Frontier Markets Net Total Return Index gained 14.1% over the period while the MSCI Emerging Markets Net Total Return Index rose by 15.9%. The discount to NAV at which the Company's shares trade stood at 8.0% at the end of the period, having widened from 6.8% at the end of June 2017.
The period under review was an unusually volatile one for the asset class from two perspectives. Firstly, the narrowness of the rally, being primarily driven by just two countries: Argentina and Vietnam. More than half (53%) of index performance during the period derived from index constituents in these two markets alone. Without them, the index would have risen just 6.6%. Secondly, with respect to the upgrade of one of the asset class' larger markets, namely Pakistan, to EM status; this event lifted the Pakistan market in the first half of the year, followed by a material retrenchment in the second half post the upgrade. Our investment style, established upon diligent buy-and- hold investments into carefully selected companies across a geographically diversified portfolio lagged the index in this narrow and event-driven environment.
Pakistan was the major performance detractor from a country attribution perspective during the period as the market collapsed post upgrade to EM status as foreign investor outflows precipitated local selling. Political noise from the disqualification of Nawaz Sharif from the prime minister's office, negative remarks from Trump about his commitment to the US-Pakistan bilateral relationship, and concerns about the widening current account deficit, further weighed on the market. We continue to categorise Pakistan as a frontier market and see great potential in the country and its companies, so will maintain exposure despite the benchmark change. In that vein, we have been actively adding to our positions there as the market declined. Operationally speaking, our companies in Pakistan have delivered good results this year. Valuations are at highly attractive levels, more than discounting any risk of a currency adjustment. As at the end of December, our basket of six names in Pakistan trade on a weighted average historical PE of just 11x and offer a weighted average dividend yield of more than 5%. All exhibit a good earnings growth profile, supported by a still promising macroeconomic outlook.
Argentina was a negative contributor as the market surged to record levels. Whilst we had three Argentinian securities in the portfolio through this period, we remain significantly underweight the market given what we perceive to be stretched valuations as well as the politically exposed nature of certain key listed businesses in the country.
Vietnam was the other significant detractor, as the index rose rapidly in the fourth quarter on mounting portfolio inflows into what remains a relatively shallow equity market. Investor interest in Vietnam has risen considerably, attracted by the country's robust economic expansion and accelerating export sector, which has kept the trade balance in check and backstopped the currency. At the stock level, those that have benefited most from the capital surge have been the liquid index heavyweights, which have foreign ownership headroom available to incoming investors. These names rose dramatically and now trade on what we consider to be excessive valuations. While our holdings delivered robust third quarter results, two of the three have no remaining foreign ownership headroom, namely Mobile World Group and FPT Corp, and therefore lagged the market considerably. That said, both names are likely to benefit from convergence in valuations over time as local shareholders see the opportunity to rotate into these less expensive yet higher quality companies.
The noteworthy positive relative contribution at the country level came from the fund's underweight to Kuwait, whose market lagged the index.
Market outlook
The outlook for frontier markets provides plenty of cause for optimism, in our view. We continue to believe in a research led investment approach with regular company and country visits made by the wider team. Our investee companies, we believe, continue to display strong balance sheets and earnings potential with strong management capable of guiding their companies through different market cycles. While corporate earnings rebounded throughout emerging markets in 2017, that is likely to moderate in 2018; meanwhile, earnings across several frontier markets have begun to accelerate, especially in Frontier Africa. In Frontier Asia, where the fund has significant exposure, we expect another good year for Vietnam and Bangladesh, while Pakistan and Sri Lanka are due a recovery, given both markets now lie in value territory. We anticipate institutional investors will become increasingly interested in the asset class over the coming year, particularly as macroeconomic concerns recede in Africa and economies there return to growth. Furthermore, investors will likely be keen to participate directly in the rise of Asian frontier markets, most notably Vietnam.
Aberdeen Fund Managers Limited
19 February 2018
TOP TWENTY HOLDINGS AS AT 31 DECEMBER 2017
Percentage Value of net Company Country $'000 assets -------------------------- ------------ ------- ----------- Vinamilk Vietnam 3,895 4.9% -------------------------- ------------ ------- ----------- BBVA Banco Frances Argentina 3,508 4.4% -------------------------- ------------ ------- ----------- John Keells Sri Lanka 3,230 4.1% -------------------------- ------------ ------- ----------- Safaricom Kenya 3,215 4.1% -------------------------- ------------ ------- ----------- Guaranty Trust Bank Nigeria 2,928 3.7% -------------------------- ------------ ------- ----------- FPT Corporation Vietnam 2,635 3.3% -------------------------- ------------ ------- ----------- Grameenphone Bangladesh 2,511 3.2% -------------------------- ------------ ------- ----------- BGEO Group Georgia 2,157 2.7% -------------------------- ------------ ------- ----------- IRSA Propiedades Argentina 2,007 2.5% -------------------------- ------------ ------- ----------- Coca-Cola Icecek Turkey 1,965 2.5% -------------------------- ------------ ------- ----------- Mobile World Investment Corp Vietnam 1,961 2.5% -------------------------- ------------ ------- ----------- South MTN Group Africa 1,958 2.5% -------------------------- ------------ ------- ----------- BRD-Groupe Societe Generale Romania 1,898 2.4% -------------------------- ------------ ------- ----------- Yoma Strategic Holdings Myanmar 1,872 2.4% -------------------------- ------------ ------- ----------- Commercial International Bank GDR Egypt 1,747 2.2%
-------------------------- ------------ ------- ----------- Fan Milk Ghana 1,721 2.2% -------------------------- ------------ ------- ----------- Packages Ltd Pakistan 1,653 2.1% -------------------------- ------------ ------- ----------- Commercial Bank of Ceylon Sri Lanka 1,561 2.0% -------------------------- ------------ ------- ----------- Shell Pakistan Pakistan 1,558 2.0% -------------------------- ------------ ------- ----------- Square Pharmaceuticals Bangladesh 1,508 1.9% -------------------------- ------------ ------- ----------- Top twenty holdings 45,488 57.6% ---------------------------------------- ------- ----------- Other holdings 31,862 40.3% ---------------------------------------- ------- ----------- Total holdings 77,350 97.9% ---------------------------------------- ------- ----------- Cash and other net assets 1,674 2.1% ---------------------------------------- ------- ----------- Net assets 79,024 100.0% ---------------------------------------- ------- ----------- Relative country positions Fund Benchmark Difference % % % ----------------------- ------ ---------- ----------- Africa & Middle East 38.5 48.8 -10.3 ----------------------- ------ ---------- ----------- Bahrain - 3.5 -3.5 Egypt 4.9 - +4.9 Ghana 2.2 - +2.2 Ivory Coast - 0.2 -0.2 Jordan 1.3 1.2 +0.1 Kenya 10.7 4.6 +6.1 Kuwait - 16.0 -16.0 Lebanon 1.3 2.3 -1.0 Mauritius - 2.7 -2.7 Morocco 0.9 7.6 -6.7 Nigeria 10.0 7.1 +2.9 Oman 0.8 2.4 -1.6 Senegal - 0.8 -0.8 South Africa 2.9 - +2.9 Tanzania 1.0 - +1.0 Tunisia - 0.4 -0.4 Turkey 2.5 - +2.5 Asia Pacific ex Japan 41.0 17.6 +23.4 ----------------------- ------ ---------- ----------- Bangladesh 7.8 2.7 +5.1 Myanmar 2.3 - +2.3 Pakistan 9.3 - +9.3 Sri Lanka 8.5 1.2 +7.3 Thailand 1.9 - +1.9 Vietnam 11.2 13.7 -2.5 Europe ex UK 6.8 9.6 -2.8 ----------------------- ------ ---------- ----------- Belarus 1.1 - +1.1 Croatia - 1.6 -1.6 Estonia - 0.4 -0.4 Georgia 2.7 - +2.7 Kazakhstan - 2.2 -2.2 Lithuania - 0.2 -0.2 Romania 3.0 3.5 -0.5 Serbia - 0.2 -0.2 Slovenia - 1.5 -1.5 Latin America 11.0 24.0 -13.0 ----------------------- ------ ---------- ----------- Argentina 8.5 24.0 -15.5 Panama 1.5 - +1.5 Costa Rica 1.0 - +1.0 Cash 2.3 - +2.3 ----------------------- ------ ---------- ----------- Other 0.4 - +0.4 ----------------------- ------ ---------- ----------- Total 100.0 100.0 ----------------------- ------ ---------- -----------
At 31 December 2017, the benchmark index had an adjusted market cap of US$ 131.27 billion and was composed of 111 companies across 23 countries (source MSCI).
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
Notes Six months Six months Six months Six months Six months Six months to to 31 to 31 to 31 to 31 to 31 31 December December December December December December 2016 2017 2017 2017 2016 2016 Revenue Capital Total Revenue Capital Total $'000 $'000 $'000 $'000 $'000 $'000 Gains on investments - 1,149 1,149 - 5.666 5,666 Capital gains/(losses) on currency movements - 115 115 - (21) (21) ------------- ------------- ------------- ------------- ------------- -------------- Net investment gains - 1,264 1,264 - 5,645 5,645 ------------- ------------- ------------- ------------- ------------- -------------- Investment income 641 - 641 771 - 771 ------------- ------------- ------------- ------------- ------------- -------------- Total income 641 1,264 1,905 771 5,645 6,416 ------------- ------------- ------------- ------------- ------------- -------------- Investment management fees (131) (261) (392) (281) (563) (844) Other expenses (411) - (411) (351) (129) (480) ------------- ------------- ------------- ------------- ------------- -------------- Net profit from operations before finance costs and taxation 99 1,003 1,102 139 4,953 5,092 Finance costs (15) - (15) (42) (84) (126) ------------- ------------- ------------- ------------- ------------- -------------- Net profit before taxation 84 1,003 1,087 97 4,869 4,966 Taxation 5 (84) - (84) (31) - (31) ------------- ------------- ------------- ------------- ------------- -------------- Net profit after taxation - 1,003 1,003 66 4,869 4,935 ------------- ------------- ------------- ------------- ------------- -------------- Earnings per ordinary share 4 - 1.17c 1.17c 0.04c 2.87c 2.91c
The total column of this statement represents the Company's Statement of Comprehensive Income, prepared under IFRS as adopted by the European Union. The revenue and capital columns, including the revenue and capital earnings per share data, are supplementary information prepared under guidance published by the Association of Investment Companies. The Company does not have any income or expenses that are not included in the profit for the period and therefore the "Net profit after taxation" is also the total comprehensive income for the period.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.
The notes form an integral part of these financial statements.
UNAUDITED STATEMENT OF FINANCIAL POSITION
Note As at As at As at 31 December 31 December 30 June 2017 2016 2017 $'000 $'000 $'000 ----------------------------- ----- ------------- ------------- --------- Non-current assets Investments at fair value through profit or loss 77,350 137,956 74,872 ------------------------------ ----- ------------- ------------- --------- Current assets Cash and cash equivalents 2,240 4,579 4,847 Sales for future settlement - - 7,313 Other receivables 87 754 390 ------------------------------ ----- ------------- ------------- --------- 2,327 5,333 12,550 ----------------------------- ----- ------------- ------------- --------- Total assets 79,677 143,289 87,422 ------------------------------ ----- ------------- ------------- --------- Current liabilities
Purchases for future settlement 27 - 7,112 Other payables 203 264 158 Tender offer liabilities 423 - 726 ------------------------------ ----- ------------- ------------- --------- 653 264 7,996 Total assets less current liabilities 79,024 143,025 79,426 ------------------------------ ----- ------------- ------------- --------- Capital and reserves attributable to equity holders Share premium account 12,557 88,788 12,254 Capital reserve 66,284 53,339 66,135 Revenue reserve 183 898 1,037 Total Equity 79,024 143,025 79,426 ------------------------------ ----- ------------- ------------- --------- Net assets per ordinary share (US cents) 6 92.48c 84.63c 92.95c Exchange rate GBP/USD (mid market) 0.74030 0.81024 0.76780 Net assets per ordinary share (pence) 68.46p 68.57p 71.37p ------------------------------ ----- ------------- ------------- ---------
The notes form an integral part of these financial statements.
UNAUDITED STATEMENT OF CHANGES IN EQUITY
Note Share premium Capital Revenue Six months to 31 December account reserve reserve Total 2017 $'000 $'000 $'000 $'000 --------------------------- ----- --------- --------- --------- --------- Opening equity 12,254 66,135 1,037 79,426 Tender offer 303 - - 303 Profit for the year - 1,003 - 1,003 Equity dividends paid 7 - (854) (854) (1,708) --------------------------- ----- --------- --------- --------- --------- Closing equity 12,557 66,284 183 79,024 --------------------------- ----- --------- --------- --------- --------- Share premium Capital Revenue Six months to 31 December account reserve reserve Total 2016 $'000 $'000 $'000 $'000 --------------------------- ----- --------- --------- --------- --------- Opening equity 88,788 50,854 832 140,474 Profit for the period - 4,869 66 4,935 Equity dividends paid - (2,031) - (2,031) Purchase of own shares - (353) - (353) --------------------------- ----- --------- --------- --------- --------- Closing equity 88,788 53,339 898 143,025 --------------------------- ----- --------- --------- --------- --------- Share premium Capital Revenue For the year ended account reserve reserve Total 30 June 2017 $'000 $'000 $'000 $'000 --------------------------- ----- --------- --------- --------- --------- Opening equity 88,788 50,854 832 140,474 Tender offer (76,534) - - (76,534) Purchase of own shares - (310) - (310) Profit for the year - 17,622 205 17,827 Equity dividends paid - (2,031) - (2,031) --------------------------- ----- --------- --------- --------- --------- Closing equity 12,254 66,135 1,037 79,426 --------------------------- ----- --------- --------- --------- ---------
The notes form an integral part of these financial statements.
UNAUDITED STATEMENT OF CASH FLOWS
Note Six months Six months to to 31 December 31 December 2017 2016 $'000 $'000 --------------------------------- ----- -------------- -------------- Operating activities Cash inflow from investment income and bank interest 974 1,368 Cash outflow from management expenses (771) (1,195) Cash inflow from disposal of investments 26,805 25,502 Cash outflow from purchase of investments (27,907) (15,572) Cash outflow from foreign exchange costs 99 (21) Cash outflow from taxation (84) (31) --------------------------------- ----- -------------- -------------- Net cash flow (used in)/from operating activities (884) 10,051 --------------------------------- ----- -------------- -------------- Financing activities Repayments of bank borrowings - (4,500) Finance charges and interest paid (15) (112) Equity dividends paid 7 (1,708) (2,031) Purchase of own shares - (353) --------------------------------- ----- -------------- -------------- Net cash flow used in financing activities (1,723) (6,996) --------------------------------- ----- -------------- -------------- Net (decrease)/increase in cash & cash equivalents (2,607) 3,055 --------------------------------- ----- -------------- -------------- Cash and cash equivalents opening balance 4,847 1,524 Cash (outflow)/inflow (2,607) 3,055 --------------------------------- ----- -------------- -------------- Cash and cash equivalents balance at 31 December 2,240 4,579 --------------------------------- ----- -------------- --------------
The notes form an integral part of these financial statements.
NOTES
1. Company information
The Company is a closed ended investment company incorporated and resident in Guernsey. Its ordinary shares are quoted on AIM.
2. Basis of preparation
The interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They are unaudited and do not include all of the information required for full annual financial statements. These interim financial statements should be read in conjunction with the financial statements of the Company as at and for the year ended 30 June 2017. The financial statements of the Company as at and for the year ended 30 June 2017 were prepared in accordance with International Financial Reporting Standards ("IFRS") and received an unqualified audit report. The accounting policies used by the Company are the same as those applied by the Company in its financial statements for the year ended 30 June 2017.
Under IFRS, the Statement of Recommended Practice (SORP) issued by the Association of Investment Companies has no formal status, but the Company has taken the guidance of the SORP into account to the extent that it is deemed appropriate and compatible with IFRS and the Company's circumstances.
The total column of the income statement is the Statement of Comprehensive Income of the Company. The capital and revenue columns provide supplementary information.
Investments have been classified as "fair value through profit and loss".
After initial recognition such investments are valued at fair value which is determined by reference to:
i) primarily market bid price for investments quoted on recognised stock exchanges (market mid or last trade price will be used where deemed to more appropriately reflect fair value);
ii) net asset value per individual investee funds' administrators for unquoted open-end funds; and
iii) by using other valuation techniques to establish fair value for any other unquoted investments.
The Company's shares were issued in US dollars and this is considered to be the functional currency of the Company. Therefore, it is the Company's policy to present the accounts in US dollars. The Company's shares are traded in sterling on AIM.
Unless otherwise stated the comparative figures for the prior year stated in these notes are in respect of the six months ended 31 December 2016.
3. Going concern status
The directors have adopted the going-concern basis in preparing these interim financial statements. The directors formally considered the Company's going concern status at the time of the publication of these interim financial statements and a summary of the assessment is provided below.
The directors have a reasonable expectation that the Company has adequate operational resources to continue in existence for at least twelve months from the date of approval of the interim financial statements. In reaching this conclusion, the directors have considered the liquidity of the Company's portfolio of investments as well as its cash position, income, expenses and other outflows. The Company has substantial operating expenses cover.
The directors are satisfied that it is appropriate to adopt the going concern basis of accounting in preparing these interim financial statements.
4. Earnings per share
Earnings per share is based on the gain of $1,003,000 (2016: gain of $4,935,000) attributable to the weighted average of 85,452,608 ordinary shares in issue in the six months to 31 December 2017 (2016: 169,343,640).
5. Taxation
The charge for taxation relates to tax suffered on dividends received from overseas investments.
6. Net asset value per share
Undiluted net asset value per ordinary share is based on net assets of $79,024,000 (2016; $143,025,000) divided by 85,452,608 (2016: 169,010,000) ordinary shares in issue (excluding shares held in treasury) at the period end.
7. Dividends
An interim dividend for the year ended 30 June 2017 of 1.0 cents (sterling equivalent of 0.766947 pence) per Ordinary Share was paid out of the capital reserve on 11 August 2017.
A final dividend for the year ended 30 June 2017 of 1.0 cents (sterling equivalent of 0.761832 pence) per Ordinary Share was paid to shareholders on 13 December 2017 to shareholders on the register at the close of business on 17 November 2017. The dividend was funded from the Company's revenue reserves.
Dividends are paid in sterling.
8. Investment management fees
Fees payable to the Manager are shown in the Unaudited Statement of Comprehensive Income. At 31 December 2017, Manager's fees of $67,577 (2016: $138,226) were accrued in the Statement of Financial Position.
9. Tender offer
On 14 March 2017 the Company received valid tender acceptances of 97,307,392 Ordinary Shares. Aberdeen Asset Management bought 13,750,000 of such tendered Ordinary Shares ('On-sale Shares') at the Investment Price of 72.5748 pence per Ordinary Share and therefore the number of Exit Shares which have been repurchased for cancellation by the Company was 83,557,392.
Following the Tender Offer the Company has 85,452,608 Ordinary Shares in issue (excluding shares held in treasury) attributable to the continuing shareholders.
Proceeds equivalent to $12,129,000 were received from the On-sale Shares. During the financial year ended 30 June 2017 two tender offer distributions were made returning an aggregate amount equivalent to $87,937,000 in respect of validly tendered shares resulting in a net cost to the Company equivalent to $75,808,000.
On 26 January 2018 the Company announced that a third and final distribution equivalent to $423,000 would be made to Tendering Shareholders on 9 February 2018.
10. Status of this report
These interim financial statements are not the Company's statutory accounts. They are unaudited. This report will be sent to shareholders and copies will be made available to the public at the registered office of the Company. It is also available on the Company's website, aberdeenfrontiermarkets.co.uk.
The Half-yearly financial report was approved by the Board of directors on 19 February 2018.
Registered office
11 New Street
St Peter Port
Guernsey
GY1 2PF
Enquiries:
Aberdeen Fund Managers Limited (Investment Manager to Aberdeen Frontier Markets Investment Company Limited)
William Hemmings / Gary Jones
Tel: +44 (0)20 7463 6000
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett
Tel: +44 (0)20 7383 5100
Numis Securities Limited (Nominated Broker)
David Benda
Tel: +44 (0) 20 7260 1275
END
This information is provided by RNS
The company news service from the London Stock Exchange
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February 20, 2018 02:00 ET (07:00 GMT)
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