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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Alliance Trust Plc | LSE:ATST | London | Ordinary Share | GB00B11V7W98 | ORD 2.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -6.00 | -0.49% | 1,222.00 | 1,218.00 | 1,222.00 | 1,232.00 | 1,216.00 | 1,232.00 | 76,989 | 11:31:34 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 609.05M | 599.67M | 2.1118 | 5.79 | 3.49B |
TIDMATST
Steady performance and increased dividend
Results for six months ended 30 June 2022
Financial highlights
Hot Features
Premium
As at / 6 months As at / 12 months As at / 6 months
to 30 June 2022 to 31 Dec 2021 to 30 June 2021
Share Price 904.0p 1032.0p 993.0p
NAV per Share(1) 964.0p 1090.0p 1064.6p
NAV Total Return(2) -10.5% 18.6% 14.8%
Total Shareholder
Return(2) -11.3% 16.5% 11.1%
Total Dividend(1) 12.000p 19.050p 7.404p
MSCI ACWI -11.0% 19.6% 11.1%
Performance Highlights
-- For the six months to 30 June 2022, the Company's Net Asset Value (NAV)
Total Return was -10.5% outperforming its benchmark, the MSCI All Country
World Index (MSCI ACWI) which returned -11.0%
-- Along with others in the sector, the Company's discount widened; this
resulted in the Company's Total Shareholder Return (TSR) being lower than
the NAV Total Return at -11.3%
-- Interim dividend of 6.0p, an increase of 62% year on year and reflecting
the significant increase in the dividend introduced in 2021
Gregor Stewart, Chairman of Alliance Trust PLC, commented:
"Our diversified, high conviction approach protected shareholders from the worst of the first half falls, resulting in performance slightly ahead of our benchmark and significantly ahead of the AIC global sector average."
(1) GAAP Measure
(2) Alternative Performance Measure
-S-
About Alliance Trust PLC
Alliance Trust aims to deliver long-term capital growth and rising income from investing in global equities at a competitive cost. We blend the top stock selections of some of the world's best active managers, as rated by Willis Towers Watson, into a single diversified portfolio designed to outperform the market while carefully managing risk and volatility. Alliance Trust PLC is an AIC Dividend Hero with 55 consecutive years of rising dividends.
https://www.alliancetrust.co.uk
For more information, please contact:
Mark Atkinson Head of Marketing and Sarah Gibbons-Cook
Investor Relations
Alliance Trust PLC Quill PR
Tel: 07918 724303 Tel: 020 7466 5050 /
sarah@quillpr.com
Alliance Trust PLC Interim Report 2022
INVESTING FOR GENERATIONS
Catering for every generation, Alliance Trust aims to grow your capital over time and provide rising income by investing in global equities.
Investment objective
The Company's objective is to be a core investment for investors that delivers a real return over the long term through a combination of capital growth and a rising dividend. The Company invests primarily in global equities across a wide range of different sectors and industries to achieve its objective.
A CORE HOLDING FOR ALL GENERATIONS
We believe that our portfolio's unique blend of Stock Pickers and their customised stock selections make Alliance Trust a strong, core holding for long-term investors seeking capital growth and rising income. For investors with a medium to long-term financial goal, be it saving for university or a first home, building a pension or leaving a legacy, we're built to help you achieve this.
Proven resilience
Established in 1888, we've successfully navigated two world wars, multiple economic crises, the Covid-19 pandemic and numerous political upheavals.
Low maintenance
Our ready-made portfolio does all the hard work for you. With thousands of funds to choose from, it can be daunting finding the time and having the confidence to be your own wealth manager. By using experts to select and monitor a team of top-rated(1) Stock Pickers, who in turn choose the most attractive stocks, we provide a simple, high-quality way to invest in global equities at a competitive cost.
Diversified by country, industry and style
Our approach doesn't depend on the skill of a single high-profile individual. It's a team effort which means the portfolio can add value through varying stock market cycles and deliver more consistent returns.
All nine of our Stock Pickers have different but complementary approaches to investing. This means our holdings are well diversified across countries, industries and investment styles to seek a wide range of opportunities while minimising risk.
Focused stock picking
Although well diversified, we avoid hugging the index by asking the Stock Pickers to choose no more than 20 stocks(2) in which they have the highest level of conviction.
When combined, our portfolio's country and sector exposures resemble the index(3) but its individual holdings are very different. This high level of divergence is designed to maximise potential for outperformance.
Expert manager selection
All the Stock Pickers are chosen by our Investment Manager, Willis Towers Watson (WTW), a leading global investment business.
WTW researches thousands of managers globally, before selecting a diverse team of best-in-class(1) Stock Pickers for Alliance Trust.
To control risk, WTW then balances the amount of capital allocated to each of them. And, thanks to the modular construction of the portfolio, if a Stock Picker needs to be replaced, this can be done smoothly.
Alliance Trust is the only way private investors in the UK can gain direct access to WTW's vast depth of resources and expertise.
Responsible ownership
Our approach to investment is forward-thinking. To help protect the returns of the next generations, we include consideration of environmental, social and governance factors in the selection of our Stock Pickers who in turn include these factors in their investment processes. We place particular emphasis on engaging with companies to drive change in harmful business practices that may threaten long-term profitability or society as a whole.
Rising dividend
We're proud of our 55-year track record of dividend growth, which is one of the longest in the investment trust industry.
1. As rated by Willis Towers Watson. 2. Apart from GQG Partners, which also manages a dedicated emerging markets mandate with up to 60 stocks. 3. MSCI All Country World Index.
OUR PERFORMANCE
FINANCIAL HIGHLIGHTS AS AT 30 JUNE 2022
KEY PERFORMANCE INDICATORS
In the tables below we set out the Key Performance Indicators (KPIs) the Board uses to measure performance. The benchmark we use is the Sterling Net Dividend Reinvested variant of the MSCI All Country World Index (MSCI ACWI).
Share Price
30 June 2020 783.0p ---------------- ------- 30 June 2021 993.0p ---------------- ------- 31 December 2021 1032.0p ---------------- ------- 30 June 2022 904.0p ---------------- -------
NAV Total Return(1)
6 months to 30 June 2020 -3.5% -------------------- ------ 6 months to 30 June 2021 14.8% -------------------- ------ Year to 31 December 2021 18.6% -------------------- ------ 6 months to 30 June 2022 -10.5% -------------------- ------
Total Dividend(2)
First 2 Interim Dividends 7.190p for 2020 ------------------------- ------- First 2 Interim Dividends 7.404p for 2021 ------------------------- ------- Year to 31 December 2021 19.050p ------------------------- ------- First 2 Interim Dividends 12.000p for 2022 ------------------------- -------
NAV TOTAL RETURN (%)(1)
This measures the performance of our assets. It combines any change in the NAV with dividends paid by the Company.
MSCI ACWI Alliance Trust
--------- --------- --------------
6 months -11.0 -10.5
--------- --------- --------------
1 year -4.2 -7.6
--------- --------- --------------
3 years 25.6 21.5
--------- --------- --------------
5 years 50.0 41.8
--------- --------- --------------
Source: Morningstar and MSCI Inc.
NAV Total Return based on NAV including income with debt at fair value and after Stock Picker and WTW investment fees.
TOTAL SHAREHOLDER RETURN (%)(1)
This demonstrates the return our shareholders receive through dividends and capital growth of the Company.
MSCI ACWI Alliance Trust
--------- --------- --------------
6 months -11.0 -11.3
--------- --------- --------------
1 year -4.2 -6.9
--------- --------- --------------
3 years 25.6 20.3
--------- --------- --------------
5 years 50.0 41.9
--------- --------- --------------
Source: Morningstar and MSCI Inc.
COMPARISON AGAINST PEERS (%)
This shows our NAV Total Return against that of the Morningstar universe of UK retail global equity funds (open ended and closed ended).
Morningstar Global
Equity Median Alliance Trust
--------- ------------------ --------------
6 months -13.5 -10.5
--------- ------------------ --------------
1 year -7.2 -7.6
--------- ------------------ --------------
3 years 20.5 21.5
--------- ------------------ --------------
5 years 42.7 41.8
--------- ------------------ --------------
Source: Morningstar.
NET ASSET VALUE (PENCE)(2)
This shows the value per share of the investments held by the Company less its liabilities (including borrowings).
31 December 2018 723.6 ----------------- ------ 31 December 2019 875.8 ----------------- ------ 31 December 2020 933.9 ----------------- ------ 31 December 2021 1090.0 ----------------- ------ 30 June 2022 964.0 ----------------- ------
Source: BNY Mellon Performance & Risk Analytics Europe Limited.
Net Asset Value includes income and with debt at fair value.
1. Alternative Performance Measure (refer to Glossary on page 34 of the Interim Report 2022). 2.GAAP Measure.
CHAIRMAN'S STATEMENT
"Our diversified, high conviction approach protected shareholders from the worst of the first half falls, resulting in performance slightly ahead of our benchmark and significantly ahead of the AIC global sector average."
MARKETS AND PERFORMANCE
Thankfully it appears that, through the increasingly global rollout of effective Covid-19 vaccines and easing of restrictions in Europe and America, we are now closer to what we previously described as 'normal'. Sadly, this improvement has been tempered by the effects of the conflict between Russia and Ukraine which, as well as creating untold levels of human suffering, is impacting economies around the world. Due to these and other macro factors, such as some of the highest rates of inflation seen in a generation, in the first six months of this year equity markets have been very volatile. In particular, we have seen a reversal of fortune for some of the largest technology companies. For the last few years, these have skewed the performance of the global market index to which, historically, our portfolio has been relatively underweight.
As market returns have become less concentrated, our diversified portfolio has fared better than those biased towards larger growth stocks. Against a background in which most markets fell, we delivered a Net Asset Value (NAV) Total Return for the six months to 30 June 2022 of -10.5%, which was marginally ahead of the -11.0% return of the Company's benchmark index. Encouragingly, in terms of a peer comparison, this performance was 8.1% ahead of the Association of Investment Companies' (AIC) global sector average return.
The average discount increased to 6.3% for the period, slightly above the 5.9% average for the year to 31 December 2021.
AN ATTRACTIVE AND SUSTAINABLE DIVID
We have announced a second interim dividend for 2022 of 6.0p (2021: 3.702p). The total of the first two interim dividends paid for 2022 is 12.0p, representing an increase of 62% on the same payments for 2021.
This continues the increase in the level of our dividend announced in 2021. The dividend yield as at 30 June 2022 was 2.4%. This level of dividend is well supported by the Company's investment strategy and significant distributable reserves which stood at over GBP3.3 billion at 30 June 2022. We are one of a handful of investment trusts that has been able to increase its total ordinary dividend for 55 consecutive years. This is a record of which the Board continues to be proud and expects to extend.
INVESTING RESPONSIBLY
In its report, our Investment Manager, WTW, provides information on how we encourage positive change regarding responsible business practices in the companies in which the Company invests.
We have maintained the limited number of investment exclusions that we had in place at the end of 2021, adding a restriction preventing investment in Russia and Belarus. The few Russian holdings that were held in the portfolio at the start of the year were all sold by 1 March 2022, before the market for those stocks closed.
SHAREHOLDER ENGAGEMENT
I chaired my third Annual General Meeting (AGM) of the Company in April this year, but this was the first where I was able to meet our shareholders in person. I was pleased that so many managed to come along to the meeting and that those who were not able to attend personally were able to watch the meeting remotely and ask questions. We will continue to hold meetings that shareholders can attend in person and we will also provide the opportunity for shareholders, if they so choose, to participate in the meeting remotely.
We held an investor forum immediately after the AGM and a second virtual forum in July. We plan to hold a further investor event in October to allow you to hear directly from our Investment Manager and several of our Stock Pickers.
BOARD CHANGES AND SUCCESSION PLANNING
Chris Samuel, who joined the Board in 2015 stepped down from the Board at the conclusion of the AGM. I would like to reiterate my thanks to Chris for the significant contribution he made and wish him well.
In keeping with ongoing succession planning, we have started the search for at least one new Director to enhance the Board's existing skills and help us to achieve a more ethnically diverse Board by 2024.
POSITIONING AND OUTLOOK
While the outlook remains challenging, with pressures from inflation and global political risks, we expect the resilient companies identified by our Stock Pickers to prosper. Our portfolio is characterised by companies that are fundamentally sound with attractive valuations and stronger and more stable prospects of growth than the index. We, and WTW, believe that our diversified, high conviction approach will deliver steady returns over the longer term with less volatility than many single manager strategies.
Gregor Stewart
Chairman
27 July 2022
INVESTMENT MANAGER'S REPORT
TURBULENT MARKET BACKDROP
There was no respite in the first half of 2022 from the volatile markets that prevailed at the end of 2021. Investors experienced challenging market conditions and the Company's benchmark, the MSCI ACWI, fell by 11.0%.
Supply chain disruption and labour shortages due to Covid-19, and restrictions in the Energy sector and in the supply of other commodities exacerbated by the Russia/Ukraine conflict, have been driving inflation materially higher. Interest rates have risen steeply both in the UK and other regions and are now at rates not seen for a generation. The view that rates cannot go as high as historic norms given the indebtedness of governments may be tested.
Company earnings have recovered strongly from their pandemic lows. Given the rebound in growth and demand, many companies now hold healthy dividend cover ratios. Despite strong margins, the key risks to future corporate earnings are cost inflation, wage inflation or labour shortages, rising cost of debt and downward pressure on economic growth.
We have seen a pull back in the valuations of "blue-sky" growth companies, including the very large-cap technology stocks, many of which previously dominated markets. Despite value outperforming growth over the period, not all value managers have seen a strong performance as a significant driver of the rotation has been a switch from technology to energy stocks. Those value investors that avoided the Energy sector for various reasons, including sustainability concerns, have fared less well.
The MSCI UK Index (GBP) outperformed the MSCI ACWI by 12.7% in the six months to 30 June 2022. Europe led equity market falls, with the MSCI Europe ex UK Index (GBP) down 15.4%, partly driven by the Russia/Ukraine conflict. In Emerging Markets, investor concerns over regulatory and geo-political risks in China continued. The indebtedness of the Real Estate sector and the lockdowns associated with the Chinese government's zero-Covid policy dampened markets through most of the period. However, as lockdown measures eased, June saw a sharp rebound in Chinese equities, leading to an outperformance relative to the MSCI ACWI for the first half of 2022.
STEADY INVESTMENT PERFORMANCE
In the calendar year to 30 June 2022, the Company's NAV Total Return was -10.5% and the Total Shareholder Return was -11.3%, versus the MSCI ACWI return of -11.0%. The Company's NAV Total Return performed strongly relative to its investment trust peers, outperforming the global sector(1) investment trust average NAV Total Return(2) by 8.1%, and those investment trusts which focused on growth and high technology stocks by a much higher margin. The Company also outperformed a wider peer group of retail global equity funds, beating the Peer Group Median return by 3% for the six months to 30 June 2022.
The diversified and more balanced, risk managed profile of the portfolio, where the focus is on long-term company fundamentals rather than which style, sector or region will dominate returns, provides a smoother and steadier performance journey than some single manager strategies, as illustrated in the recent turbulent market. Although in this volatile period, the negative equity market momentum also impacted shareholders, we were able to preserve capital better than some of the Company's peers. Market corrections can be a distressing period, but it is important to maintain a long-term investor mind frame throughout all the noise. Equity investors have benefitted from very strong equity returns over the last decade and should continue to reap these benefits over the long term, despite shorter-term corrections.
1. As defined by the AIC global sector constituents.
2. NAV Total Return based on NAV including income with debt at fair value.
COMPARISON OF RETURNS
PERFORMANCE FROM 1 JANUARY 2022 TO 30 JUNE 2022 (%)
Performance %
------------------------------------------------ -------------
Alliance Trust -- Total Shareholder Return -11.3
------------------------------------------------ -------------
Alliance Trust -- NAV Total Return -10.5
------------------------------------------------ -------------
Benchmark -- MSCI ACWI Net Dividends Reinvested -11.0
------------------------------------------------ -------------
Others -- Passive alternative -- iShares ETF -11.0
------------------------------------------------ -------------
Peers -- Peer Group Median(1) -13.5
------------------------------------------------ -------------
Peers -- Global Sector(2) Average NAV -18.6
------------------------------------------------ -------------
Notes: All figures are measured from 1 January 2022 with data provided as at 30 June 2022. All figures may be subject to rounding differences. The benchmark shown is the MSCI ACWI Net Dividends Reinvested. The passive alternative iShares is the BlackRock iShares MSCI ACWI ETF. The Peer Group is the Morningstar universe of UK retail global equity funds (open ended and closed ended). The performance of the passive alternative iShares ETF, Global Sector Average NAV and Peer Group median are after fees. The NAV Total Return is after all manager fees (including Willis Towers Watson's fees) and allow for any tax reclaims when they are achieved. The NAV Total Return is based on NAV including income with debt at fair value. The Global Sector Average NAV is based on NAV including income with debt at fair value.
Sources: Investment performance data is provided by BNY Mellon Performance & Risk Analytics Europe Limited, Morningstar and MSCI Inc. The Peer Group and Global Sector data source is Morningstar.
1. Calculated as the median stock return. 2. Global Sector as defined by the Association of Investment Companies (AIC).
DRIVERS OF PERFORMANCE
In the Annual Report for 2021 we expressed the view that the portfolio was well positioned to outperform and the market dominance by a small number of companies was unlikely to persist in the longer term. Although the start of the year was dominated by a risk-off sentiment and less driven by long term company fundamentals, the mega cap dominance was not as strong a headwind, although it has not yet turned into a tailwind either. The MSCI ACWI Large Cap Index outperformed the MSCI ACWI SMID(1) Cap Index by 2.6% in the first half of 2022. If mid and smaller cap companies start to edge ahead and fundamentals come back into focus, we believe the portfolio will do even better.
Within the Company's portfolio, gross gearing was maintained at approximately 9% over the six months to 30 June 2022, below our target level of 10%. This hurt returns given the sharp market sell off over this period. Gearing had a negative impact on the NAV Total Return but this was mostly offset by the favourable revaluation of the Company's long-dated loans.
Our overweight position to the UK contributed positively to performance relative to the benchmark given the stronger returns of the UK stock market. We also saw some good stock selection within the Industrials sector. In particular our overweight position in BAE Systems, the second biggest contributor to performance, and Booz Allen Hamilton, added value, with the stocks up 55% and 20% respectively over the period. Our underweight versus the benchmark to Consumer Discretionary, one of the worst performing sectors, and overweight to Energy, the best performing one, added value, while our overweight to Communication Services, was a detractor, with the sector down 18%. Like Technology, Communications Services stocks typically see their share prices fall when monetary policy tightens.
We saw some negative stock selection within Communication Services and Financials. From a regional perspective, the Pacific region was challenged by weakness in some of our Japanese stocks, as well as underperformance from Sea Ltd (Sea), a Singaporean consumer internet company, which was the biggest detractor to portfolio relative returns. Sea, held in the portfolio by Sands Capital, was down 67% over the period. Sea's shares have contended with several headwinds over the past several months, although in Sands Capital's view it is still the best-positioned business to capture the growth opportunity in South East Asia over the next decade.
The second biggest detractor from performance was e-commerce company Mercado Libre Inc. with its shares also suffering from the broad-based rout in technology stocks and rising concerns about the weakening macro-economic backdrop. Mercado Libre is held in the portfolio by SGA and Sands Capital. While SGA acknowledges less certainty around the company's near-term growth trajectory, it continues to see a very attractive long-duration growth opportunity for the company given still low e-commerce penetration in Latin America and Mercado Libre's significant competitive advantages in key areas such as logistics, fulfilment and payments.
GQG's investments in large oil and gas companies, Petroleo Brasileiro (Petrobras) and ExxonMobil Corporation (Exxon), were the first and third biggest contributors to performance, up 43% and 59% respectively, in the calendar year to 30 June 2022. Their shares have climbed on the back of higher oil prices. GQG shifted from some of its more expensive growth and technology investments in 2021 towards energy, where it sees strong growth potential and resilient free cash flow generation, given the supply/demand dynamics. GQG also views many of these energy companies as well positioned to be part of the environmental solution. Large integrated oil companies are among the few entities with the research, technical and project management skills to develop decarbonising technologies at scale. GQG believes that Petrobras and Exxon are taking the right steps to contribute towards an orderly energy transition, although there is still more work to do.
1. Small and mid-cap companies.
INVESTING RESPONSIBLY
We have previously discussed how our consideration of sustainability and Environmental, Social and Governance (ESG) risks and opportunities feature in our investment approach, as well as our commitment to managing the Company's portfolio in a way that is aligned with the Paris goals of Net Zero by 2050 and limiting global warming to below two degrees. This commitment is a long-term aim and, in the course of reaching that end point, there will be times when circumstances mean that the portfolio may seem to be moving away from the stated target.
The last 12 months has been such a period as the portfolio's allocation to energy (oil and gas) and materials (steel, mining etc.) increased which in turn increased its carbon footprint. This seems at odds with what we are trying to achieve. However, our Stock Pickers are recognising that the valuations placed on these companies by the market appeared too cheap, even after factoring in the financially material ESG risks posed by the energy transition. Some of the Stock Pickers took advantage of the investment opportunity, and whilst the companies are held in the portfolio, we seek to vote and engage with them on these issues to ensure they move towards alignment with the Paris Agreement pathways to Net Zero. Changes in stock holdings can have a very significant impact on the carbon footprint and are more significant in a concentrated portfolio.
More than 60% of the portfolio's emissions come from just three stocks, Petrobras, NRG Energy, both relatively recent additions to the portfolio which have contributed positively to performance, and HeidelbergCement.
The biggest contributor to the portfolio's carbon footprint is HeidelbergCement, with the cement industry being one of the higher emitting industry sectors. However, demand for cement is unlikely to reduce materially and HeidelbergCement is an industry leader, with solid ESG credentials(2) , working on finding solutions to the many challenges. We are continuing to monitor progress and balancing medium term outperformance expectations with long term decarbonisation.
We favour engagement over exclusions, as simple decarbonisation through exclusions and divestment provide a limited way to manage risks and do not achieve the desired impact in terms of decarbonisation across the wider economy. At the start of the year the only exclusions in the portfolio related to shares in WTW, the Company and other investment companies, companies with significant exposure to tar sands or thermal coal and those involved in the production of controversial weapons. We introduced new exclusions in March this year to prevent investment in Russian and Belarussian companies. Progress towards Net Zero is gradual but, our actions including voting and engagement, should contribute to positive momentum in this area, at a portfolio and real economy level.
2. https://www.heidelbergcement.com/en/rating-und-rankings
https://www.heidelbergcement.com/en/sustainability-report
In the six months to 30 June 2022, EOS at Federated Hermes engaged with 97 companies held in the portfolio on a range of over 275 issues and objectives. Key areas of engagement included climate change, human rights, executive remuneration, and board diversity, skills and experience. Over the same period, the Company's Stock Pickers cast 2857 votes at 170 company meetings. They voted on all the proposals that could be voted on in the period. The Company's Stock Pickers voted against management on 261 proposals and abstained on 78 proposals. Of the votes exercised against company management, the most frequently recurring themes were remuneration and director-related votes.
HOW WE VOTED
Number of votes exercised with management on each topic 88.1% ----------------------------------------------- ----- Number of eligible votes exercised that were against management 9.2% ----------------------------------------------- ----- Number of eligible votes that were abstentions 2.7% ----------------------------------------------- -----
Source: EOS at Federated Hermes, WTW. Data to 30 June 2022.
REASONS FOR VOTING AGAINST MANAGEMENT
Anti-takeover Related 0.8% ----------------------------------- ----- Capitalisation 4.2% ----------------------------------- ----- Directors Related 33.7% ----------------------------------- ----- Miscellaneous 1.1% ----------------------------------- ----- Non-Salary Compensation 21.8% ----------------------------------- ----- Reorganisation and Mergers 0.8% ----------------------------------- ----- Routine/Business 4.2% ----------------------------------- ----- Shareholder -- Compensation 0.8% ----------------------------------- ----- Shareholder -- Corporate Governance 3.1% ----------------------------------- ----- Shareholder -- Director Related 6.1% ----------------------------------- ----- Shareholder -- Health/Environment 7.3% ----------------------------------- ----- Shareholder -- Other/Miscellaneous 10.0% ----------------------------------- ----- Shareholder -- Routine/Business 2.3% ----------------------------------- ----- Shareholder -- Social/Human Rights 3.8% ----------------------------------- -----
Percentage figures above are of eligible votes exercised that were against management.
Source: EOS at Federated Hermes, WTW. Data to 30 June 2022.
Note: vote categories starting with 'Shareholder' indicate resolutions brought forward by shareholders. As such 'Shareholder -- Director Related', indicates a shareholder proposal on director related matters.
COMMODITY HOLDINGS BOOSTED RETURNS
GQG was amongst the strongest performing Stock Pickers over the period, and the one with the highest allocation in the portfolio. GQG focuses on large-cap quality companies capable of compounding double digit returns in the long run. Historically, GQG has been focused on quality growth companies (often in the Technology sector) and generated meaningful outperformance as a result. From early last year, GQG began rotating into energy and materials companies, on the expectation of better growth in those sectors and this has materially benefited performance, in particular in the six months to 30 June 2022. Some of our other value-oriented Stock Pickers outperformed over the period, while the performance of growth-oriented Stock Pickers lagged.
STOCK PICKER ALLOCATIONS
The most notable change to the portfolio structure in the first half of the year, was the termination of River and Mercantile's (R&M) mandate. The investment team at R&M was stable but the business had gone through significant change. We expected more corporate activity in the future and a focus on business growth. We believed that this did not provide the best environment for the manager of one of our concentrated stock-picking mandates.
R&M's allocation (approx. 6% of the portfolio) was re-distributed amongst the other nine Stock Pickers, with the bulk of the allocation going to Black Creek and Jupiter, who both have a smaller cap and value bias, similar to R&M. We were able to rebalance the portfolio whilst maintaining a balanced exposure to styles, sectors and regions, not taking any significant macro or factor bets and ensuring that stock selection and our Stock Pickers' unwavering focus on company fundamentals remained the key driver to portfolio returns. This risk managed focus on stock selection, as opposed to factor bets, allows us to deliver a smoother return profile relative to other single manager strategies and some of our peers.
REGION
North America 56.2% ------------------ ----- Asia & Emerging Markets 17.8% ------------------ ----- Europe 11.8% ------------------ ----- UK 11.7% ------------------ ----- Stock Picker Cash 2.5% ------------------ -----
Source: The Bank of New York Mellon (International) Ltd and MSCI Inc.
SECTOR
Information Technology 23.4% ----------------------- ----- Industrials 13.2% ----------------------- ----- Communication Services 12.1% ----------------------- ----- Health Care 11.1% ----------------------- ----- Consumer Discretionary 9.9% ----------------------- ----- Financials 9.6% ----------------------- ----- Consumer Staples 6.2% ----------------------- ----- Energy 6.2% ----------------------- ----- Materials 4.3% ----------------------- ----- Stock Picker Cash 2.5% ----------------------- ----- Utilities 1.3% ----------------------- ----- Real Estate 0.2% ----------------------- -----
Source: The Bank of New York Mellon (International) Ltd and MSCI Inc.
OUR STOCK PICKERS
A list of all Stock Pickers as of 30 June 2022 is provided below. We monitor and continuously review the performance of each Stock Picker. Changes can be made at any time if we believe there is the potential to improve expected risk-adjusted returns. Changes in our views on the Stock Pickers are driven by factors that impact on their sustainability of competitive advantage, such as changes to key personnel or company culture and to corporate activity or investment style drift. The Company will usually announce any changes of Stock Pickers once the transition of assets to the new appointee(s) has been completed.
Stock Picker Background Investment Style % of portfolio by
value at 30 June
2022
Black Creek Investment Black Creek is based Long-term contrarian 13% (11% at 31 Dec
Management in Toronto and was value-orientated 2021)
founded in 2004. buyers of leading
Assets under management businesses across
as at 30 June 2022 the market cap spectrum.
were $9.5bn.
------------------------ -------------------------- --------------------------- -----------------------
GQG Partners GQG is a boutique Seeks high-quality 21% (19% at 31 Dec
investment management sustainable businesses 2021)
firm focused on at reasonable prices (Includes both global
global and emerging whose strengths and emerging markets
markets equities. should outweigh mandate)
Headquartered in the macro environment.
Fort Lauderdale,
Florida USA, it
managed assets of
$86.7bn as at 30
June 2022.
------------------------ -------------------------- --------------------------- -----------------------
Jupiter Asset Management Jupiter was established Looks for out-of-favour 11% (7% at 31 Dec
(1) in London in 1985 and under valued 2021)
as a specialist businesses with
investment boutique. prominent franchises
Since then it has and sound balance
expanded beyond sheets.
the UK and managed
GBP55.3bn as at
31 March 2022 (latest
available figure).
------------------------ -------------------------- --------------------------- -----------------------
Lyrical Asset Management Lyrical Asset Management Looks for US companies 7% (7% at 31 Dec
is a boutique advisory in cheapest decile 2021)
firm based in New of valuation with
York, with 250 clients high returns on
and discretionary invested capital
assets under management and ability to grow
(AUM) of over $6.8bn profitability.
as at 30 June 2022.
------------------------ -------------------------- --------------------------- -----------------------
Metropolis Capital Metropolis is a Focuses on long-term 10% (10% at 31 December
UK-based firm with market recognition 2021)
a value-based investment of the fundamental
style. It had $2.41bn value of their investments
assets under management and income generated
at 30 June 2022. from those investments.
------------------------ -------------------------- --------------------------- -----------------------
Sands Capital Sands is an independent, Focuses on finding 5% (8% at 31 Dec
employee-owned firm high-quality businesses 2021)
based in Greater that are innovative
Washington DC, USA. and can sustain
As at 30 June 2022, above-average growth
it had assets under over the long term.
management of $47.3bn.
------------------------ -------------------------- --------------------------- -----------------------
Sustainable Growth SGA is based in Seeks differentiated 10% (11% at 31 Dec
Advisers (SGA) Stamford, Connecticut, companies that have 2021)
USA, and manage strong pricing power
US, global, emerging with recurring revenue,
markets and international strong cash flow
large-cap growth generation and long
portfolios. As at runways of growth.
30 June 2022 it
had assets under
advisement of $20.4bn
------------------------ -------------------------- --------------------------- -----------------------
Veritas Asset Management Veritas was established Aims to grow real 15% (13% at 31 Dec
in 2003 and is run wealth over five-year 2021)
with a partnership periods by researching
structure and culture. thematic trends
They have offices that drive medium-term
in London and Hong growth.
Kong. As at 30 June
2022 it managed
GBP21.8bn.
Vulcan Value Partners Vulcan is based Focuses on protecting 8% (8% at 31 Dec
in Birmingham, Alabama, capital by investing 2021)
USA, and was founded in companies with
in 2007. As at 30 high-quality business
June 2022 it managed franchises trading
$11.0bn for a range at attractive prices.
of clients including
endowments, foundations,
pension plans and
family offices.
------------------------ -------------------------- --------------------------- -----------------------
1. 'JUPITER' and the Jupiter logo are the trade marks of Jupiter Investment Management Group Ltd.
River and Mercantile's mandate was terminated in March 2022. As at 31 December 2021 it managed 6% of the Company's portfolio.
PORTFOLIO CHANGES
Having maintained gearing at around our target 10% through most of 2021, we reduced gearing slightly to 9% in January 2022. This is a reflection of the very strong absolute returns achieved by equity markets in recent years, in part supported by central bank stimulus. We expect more volatility as markets adjust to shifting expectations of inflation and interest rates, along with continuing geopolitical risks. Portfolio gross gearing was at 8.8% as of 30 June 2022.
Turnover in the portfolio for the first six months of the year was 32.7%. This was slightly higher than typically expected due mostly to rebalancing driven by the removal of R&M. Prior to the start of the Russia/Ukraine conflict, the portfolio's overall exposure to Russia was approximately 0.5%. The Russian stocks, which were held by GQG, were sold by 1 March 2022. At no point did the portfolio hold any Belarussian or Ukrainian companies.
In terms of examples of stock purchases, during the first 6 months of the year, Jupiter took the opportunity to purchase Kyndryl, the newly renamed IT services company spun out of IBM. The shares trade on 2x earnings before tax, interest, and depreciation and amortisation, and are the lowliest rated IT services company of a material size in the world based on price to sales ratio. Jupiter believes the company's prospects are much brighter than justified by the deeply depressed share price and is confident that its intrinsic value will be recognised by investors over time.
Lyrical sold Crown Holdings, the second largest global producer of beverage and food cans. It is a stable business with attractive growth that Lyrical was able to purchase at just a 9x Prices to Earnings (P/E) multiple in January 2019. The attractive nature of the business has been recognised by the market, and the P/E multiple has expanded more than 50% to 14x. The business became more fairly valued, so Lyrical sold it, using the proceeds to purchase stock in Global Payments, one of the largest global processors of credit card transactions. Global Payments is a technology company benefiting from the growth trend of electronic payments replacing cash.
SGA sold its holdings in PayPal and Walt Disney to purchase more attractively valued growth opportunities in Recruit Holdings and Danaher. Recruit Holdings owns the leading job search engine Indeed.com as well as a variety of other online media and staffing businesses. Indeed.com benefits from a dominant market share in the mass-market job search field and has established a reputation for reliability with employers leading to repeat customers and recurring revenues. SGA's research indicates a strong runway for growth in the online hiring market over time, and the ability of the firm to gain market share through its Media & Solutions business. Danaher manufactures and sells scientific instruments and consumables used for testing/manufacturing across multiple industries. Danaher benefits from the increased testing of food and drugs due to regulatory requirements, increased demand for biological manufacturing, and increased investments into life sciences research.
MARKET OUTLOOK
The outlook at this point is challenging. The key will be whether interest rate hikes and "quantitative tightening" are enough to contain inflation at reasonable levels. Differences in policy and stimulus across regions will influence outcomes. Further, the extent of pressure on the consumer will be key to any changes to long-term demand trends. It is not uncommon for recessions to follow oil price spikes. Europe has clearly been more affected thus far by the Russian/Ukrainian conflict and the European economy is likely to be most exposed to the unfolding energy crisis. That said, valuations in Europe tend to have a lower starting point than elsewhere. We believe inflation and commodity prices will remain high for the time being and will see further upward pressure unless there is an early end to the conflict in Ukraine. Our outlook is for inflation to gradually fall back close to central bank targets in the second half of 2023; the risk around this, however, is tilted towards higher inflation. Whilst we do not make predictions, it is hard at this point to see a return to sustained low interest rates.
The discussion of whether globalisation is going in reverse started with the Donald Trump administration's stance on trade with China and was further challenged by Covid-19 related disruption to supply chains. Now, with energy challenges to contend with as well, it seems inevitable that supply chains will need to be redesigned with closer proximity between energy and production sources and the end customers. This will be a cost to companies and will likely increase margin pressure for those businesses not able to pass these costs through to consumers. Pricing power has been the topic of discussion with our Stock Pickers and generally they feel confident that the businesses in which the Company is invested are well positioned.
We are seeing big swings and volatility as the market tries to absorb new information and adjust to a new reality. Whilst this short-term volatility is not helpful, the companies we own in the portfolio are fundamentally sound businesses that should endure and prosper even in difficult environments. We want our Stock Pickers to stick to their investment beliefs and continue to focus on the companies' fundamentals for long-term growth as we believe this brings consistent long-term returns. We maintain a high conviction in our approach and believe the portfolio is well positioned to provide resilient and steady returns in what may continue to be a choppy market.
INVESTMENT PORTFOLIO
OUR LARGEST 30 INVESTMENTS AT 30 JUNE 2022
The following are the largest 30 investments representing 40% of the portfolio. The portfolio comprises 185 companies of which 163 are held by only one Stock Picker, representing 69.2% of the portfolio. You can find the full list of the holdings on our website www.alliancetrust.co.uk
Selected Value of
Country of by Stock Holding % of
Name Sector Listing Pickers GBPm Total Assets
---------------------- --------------- ----------- --------- -------- -------------
Communication United
1 Alphabet, Inc. Services States 5 118.6 3.8
---------------------- --------------- ----------- --------- -------- -------------
Alphabet, Inc. is a holding company
that engages in the acquisition and
operations of different firms. It is
best known as a parent company for Google,
but holds other subsidiaries as well.
The company, through its subsidiaries,
provides web-based search, advertisements,
maps, software applications, mobile
operating systems, consumer content,
enterprise solutions, commerce and hardware
product.
---------------------------------------------------- --------- -------- -------------
Information United
2 Visa, Inc. Technology States 5 100.4 3.2
---------------------- --------------- ----------- --------- -------- -------------
Visa, Inc. is an American multinational
financial services corporation. It describes
itself as a global payments technology
company that works to enable consumers,
businesses, banks and governments to
use digital currency. It facilitates
electronic funds transfers throughout
the world, most commonly through Visa
branded credit cards, debit cards and
prepaid cards across a broad clientele
from retail to corporate use.
---------------------------------------------------- --------- -------- -------------
Information United
3 Microsoft Corporation Technology States 5 95.9 3.1
---------------------- --------------- ----------- --------- -------- -------------
Microsoft Corporation develops, manufactures,
licenses, sells, and supports software
products. The company offers operating
system software, server application
software, business and consumer applications
software, software development tools
and internet and intranet software.
Microsoft also develops video game consoles
and digital music entertainment devices.
---------------------------------------------------- --------- -------- -------------
Information United
4 Mastercard Technology States 3 54.9 1.8
---------------------- --------------- ----------- --------- -------- -------------
Mastercard Incorporated is an American
technology company in the global payments
business. It works with a wide range
of consumers across individuals to corporations
to governments to enable and facilitate
electronic forms of payment. It provides
technological solutions and enablement
of electronic payment solutions.
---------------------------------------------------- --------- -------- -------------
Amazon.com, Consumer United
5 Inc. Discretionary States 3 54.6 1.7
---------------------- --------------- ----------- --------- -------- -------------
Amazon.com, Inc. is an American multinational
technology company that focuses on e-commerce,
cloud computing, digital streaming and
artificial intelligence. Amazon offers
personalised shopping services, webbased
credit card payment, direct shipping
to customers, as well as operating a
cloud platform offering services globally.
---------------------------------------------------- --------- -------- -------------
United
6 ExxonMobil Energy States 1 53.8 1.7
---------------------- --------------- ----------- --------- -------- -------------
ExxonMobil explore for, produce and
sell crude oil, natural gas and petroleum
products, holding an industry-leading
inventory of global oil and gas resources.
Headquartered in Texas, ExxonMobil is
the world's largest refiner and marketer
of petroleum products.
---------------------------------------------------- --------- -------- -------------
7 Petroleo Brasileiros Energy Brazil 1 52.7 1.7
---------------------- --------------- ----------- --------- -------- -------------
Petroleo Brasileiro S.A. - Petrobras
explores for and produces oil and natural
gas. It also refines, markets and supplies
oil products. Petrobras operates oil
tankers, distribution pipelines, marine,
river and lake terminals, thermal power
plants, fertilizer plants and petrochemical
units.
---------------------------------------------------- --------- -------- -------------
UnitedHealth United
8 Group Health Care States 2 52.6 1.7
---------------------- --------------- ----------- --------- -------- -------------
UnitedHealth Group describes itself
as a health and well-being company,
offering health care coverage and benefits
through UnitedHealthcare, and technology
and data-enabled care delivery through
Optum. It also manages organised health
systems across the United States and
provides employers products and resources
to plan and administer employee benefit
programs.
---------------------------------------------------- --------- -------- -------------
Information United
9 salesforce.com Technology States 2 46.6 1.5
---------------------- --------------- ----------- --------- -------- -------------
Salesforce.com designs and develops
enterprise software whose purpose is
to serve as an effective customer relationship
management tool to bring companies and
customers closer together. This software
is provided to businesses worldwide
as an integrated technology platform
for customers and developers to build
and run business applications.
---------------------------------------------------- --------- -------- -------------
10 HDFC Bank Financials India 2 36.6 1.2
---------------------- --------------- ----------- --------- -------- -------------
HDFC Bank Ltd. offers a wide range of
services to the global corporate sector.
It also provides corporate banking and
custodial services and is active in
the treasury and capital markets. HDFC
markets project advisory services and
capital market products such as Global
Deposit Receipts, Euro currency loans,
and Euro currency bonds.
---------------------------------------------------- --------- -------- -------------
11 DBS Financials Singapore 1 34.6 1.1
---------------------- --------------- ----------- --------- -------- -------------
United
12 BAE Systems Industrials Kingdom 1 33.8 1.1
---------------------- --------------- ----------- --------- -------- -------------
Communication United
13 Charter Communications Services States 1 33.8 1.1
---------------------- --------------- ----------- --------- -------- -------------
Canadian Pacific
14 Railway Industrials Canada 1 32.8 1.1
---------------------- --------------- ----------- --------- -------- -------------
15 Bureau Veritas Industrials France 1 31.2 1.0
---------------------- --------------- ----------- --------- -------- -------------
Communication
16 Baidu Services China 1 31.0 1.0
---------------------- --------------- ----------- --------- -------- -------------
Booz Allen United
17 Hamilton Industrials States 1 30.6 1.0
---------------------- --------------- ----------- --------- -------- -------------
Information United
18 Intuit Technology States 2 30.5 1.0
---------------------- --------------- ----------- --------- -------- -------------
Interpublic Communication United
19 Group of Companies Services States 1 29.8 1.0
---------------------- --------------- ----------- --------- -------- -------------
United
20 AstraZeneca Health Care Kingdom 1 29.7 1.0
---------------------- --------------- ----------- --------- -------- -------------
21 Vale Materials Brazil 1 29.5 0.9
---------------------- --------------- ----------- --------- -------- -------------
22 TotalEnergies Energy France 1 26.9 0.9
---------------------- --------------- ----------- --------- -------- -------------
United
23 GlaxoSmithKline Health Care Kingdom 1 26.5 0.8
---------------------- --------------- ----------- --------- -------- -------------
Philip Morris Consumer United
24 International Staples States 1 26.3 0.8
---------------------- --------------- ----------- --------- -------- -------------
Consumer
25 Adidas Discretionary Germany 1 26.1 0.8
---------------------- --------------- ----------- --------- -------- -------------
26 Safran Industrials France 1 25.5 0.8
---------------------- --------------- ----------- --------- -------- -------------
United
27 Convatec Group Health Care Kingdom 1 25.4 0.8
---------------------- --------------- ----------- --------- -------- -------------
Information
28 Murata Manufacturing Technology Japan 1 25.1 0.8
---------------------- --------------- ----------- --------- -------- -------------
29 AIA Group Financials Hong Kong 2 24.4 0.8
---------------------- --------------- ----------- --------- -------- -------------
30 VINCI SA Industrials France 1 24.3 0.8
---------------------- --------------- ----------- --------- -------- -------------
Source: The Bank of New York Mellon (International) Ltd, Bloomberg L.P and FactSet.
OTHER INFORMATION
RISKS AND UNCERTAINTIES
In pursuit of its strategic objectives the Company faces the following principal risks and uncertainties:
-- Investment, Counterparty and Financial Risks -- Market, Investment
Performance, Credit and Counterparty, Capital Structure and Financial
-- Operational -- Cyber Attack and Outsourcing
-- Environmental, Social and Governance (ESG) factors and Climate Change
-- Legal and Regulatory Non-Compliance
These risks, and the way in which they are managed, are described in more detail within the How We Manage Our Risks section on pages 45 to 50 of the Annual Report for the year ended 31 December 2021, which is available on the Company's website at www.alliancetrust.co.uk. The Board believes these principal risks and uncertainties are applicable to the remaining six months of the financial year, as they were to the six months ended 30 June 2022.
Most of 2021 was marked by the impact of Covid-19 on people's lives and the global economy. While in many parts of the world the effects are receding, its impact is still being felt and continues to cause disruption to economies in 2022. The events in Ukraine have fuelled volatility in the first half of 2022 compounding the inflationary aspects of the rise in commodity prices. These events are considered by the Board alongside its other investment and operational risks. The Board remains of the view that active management of the concentrated 'best ideas' approach employed by the Company will be able to take advantage of any volatility
as it creates opportunities. The Board believes that our globally diversified multi-manager portfolio will be able to provide a less volatile and, hopefully, a more rewarding investment.
RELATED PARTY TRANSACTIONS
There were no transactions with related parties during the six months ended 30 June 2022 which have a material effect on the results or the financial position of the Company.
GOING CONCERN STATEMENT
As at 30 June 2022, while there have been market changes over the period the Board does not consider that in relation to its ability to continue as a going concern that there have been any significant changes to these factors. The Directors, who have reviewed budgets, forecasts and sensitivities, consider that the Company has adequate financial resources to enable it to continue in operational existence for the foreseeable future. Accordingly, the Directors believe it is appropriate to continue to adopt the going concern basis.
The factors impacting on going concern are set out in detail in the Company's Viability Statement on page 68 of the Annual Report for the year ended 31 December 2021. Factors considered included Financial Strength, Investment, Liquidity, Dividends, Discount, Significant Risks, Borrowings, Reserves, Security and Operations.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
-- The condensed set of financial statements have been prepared in
accordance with IAS 34 "Interim Financial Reporting" as adopted by the UK,
and give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company;
-- The interim management report includes a fair review of the information
required by:
a) DTR 4.2.7R of the Disclosure 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 year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.
Signed on behalf of the Board
Gregor Stewart Chairman 27 July 2022
FINANCIAL STATEMENTS
CONDENSED INCOME STATEMENT (UNAUDITED) FOR THE PERIODED 30 JUNE 2022
Year to
6 months to 30 6 months to 30 31 December 2021
June 2022 June 2021 (audited)
GBP000 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
---------------------- ---- ------- --------- --------- ------- ------- ------- ------- -------- --------
Revenue
Income 3 46,907 - 46,907 28,770 - 28,770 62,282 - 62,282
Change in the fair
value through profit
or loss - (422,539) (422,539) - 413,205 413,205 - 500,959 500,959
Change in fair value
of debt - 38,274 38,274 - 9,810 9,810 - 11,957 11,957
Total Revenue 46,907 (384,265) (337,358) 28,770 423,015 451,785 62,282 512,916 575,198
Investment management
fees (1,671) (5,010) (6,681) (1,697) (5,092) (6,789) (3,532) (10,595) (14,127)
Administrative
expenses (2,921) (452) (3,373) (2,528) (504) (3,032) (5,003) (919) (5,922)
Finance costs 4 (1,018) (3,050) (4,068) (954) (2,865) (3,819) (1,958) (5,876) (7,834)
Foreign exchange
gains/(losses) - 3,291 3,291 - (2,881) (2,881) - (3,999) (3,999)
Profit/(loss) before
tax 41,297 (389,486) (348,189) 23,591 411,673 435,264 51,789 491,527 543,316
Taxation 5 (3,565) (233) (3,798) (1,547) - (1,547) (3,110) (183) (3,293)
Profit/(loss) for
the period/year 37,732 (389,719) (351,987) 22,044 411,673 433,717 48,679 491,344 540,023
---------------------- ---- ------- --------- --------- ------- ------- ------- ------- -------- --------
All profit/(loss) for the period/year is attributable to equity holders.
-------------------------------------------------------------------------------------------------------------------
Earnings per share
attributable to
equity holders
Basic (p per share) 7 12.46 (128.65) (116.19) 6.93 129.49 136.42 15.48 156.23 171.71
Diluted (p per share) 7 12.46 (128.65) (116.19) 6.93 129.49 136.42 15.48 156.22 171.70
The Company does not have any other comprehensive income and hence profit/(loss) for the period/year, as disclosed above, is the same as the Company's total comprehensive income.
CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE PERIODED 30 JUNE 2022
Distributable reserves
--------------------------------- ---------------------
Capital Realised Unrealised
Share redemption Merger Capital Capital Revenue Total distributable
GBP000 Note capital reserve reserve reserve reserve reserve reserves Total
At 1 January
2021 8,040 10,958 645,335 1,850,043 389,750 99,174 2,338,967 3,003,300
Total Comprehensive
income:
Profit for
the year - - - 399,917 91,427 48,679 540,023 540,023
Transactions
with owners,
recorded
directly
to equity:
Ordinary
dividend
paid 6 - - - - - (52,680) (52,680) (52,680)
Unclaimed
dividends
returned - - - - - 49 49 49
Own shares
purchased (337) 337 - (131,512) - - (131,512) (131,512)
Transfer
to capital
reserves - - (645,335) 645,335 - - (645,335) 645,335
------------- ----------- --------------------- -----------
At 31 December
2021 7,703 11,295 - 2,763,783 481,177 95,222 3,340,182 3,359,180
--------------------- ---- -------- ------------- --------- ----------- ---------- -------- --------------------- -----------
At 1 January
2021 8,040 10,958 645,335 1,850,043 389,750 99,174 2,338,967 3,003,300
Total Comprehensive
income
Profit for
the year - - - 231,825 179,848 22,044 433,717 433,717
Transactions
with owners,
recorded
directly
to equity:
Ordinary
dividend
paid 6 - - - - - (23,126) (23,126) (23,126)
Unclaimed
dividends
returned - - - - - 14 14 14
Own shares
purchased (183) 183 - (68,138) - - (68,138) (68,138)
At 30 June
2021 7,857 11,141 645,335 2,013,730 569,598 98,106 2,681,434 3,345,767
--------------------- ---- -------- ------------- --------- ----------- ---------- -------- --------------------- -----------
At 1 January
2022 7,703 11,295 - 2,763,783 481,177 95,222 3,340,182 3,359,180
Total Comprehensive
income
Profit for
the year - - - 73,334 (463,053) 37,732 (351,987) (351,987)
Transactions
with owners,
recorded
directly
to equity:
Ordinary
dividend
paid 6 - - - - - (35,673) (35,673) (35,673)
Unclaimed
dividends
returned - - - - - 18 18 18
Own shares
purchased (259) 259 - (100,322) - - (100,322) (100,322)
------------- ----------- --------------------- -----------
At 30 June
2022 7,444 11,554 - 2,736,795 18,124 97,299 2,852,218 2,871,216
--------------------- ---- -------- ------------- --------- ----------- ---------- -------- --------------------- -----------
The GBP18.1m of Capital reserve (GBP569.6m at 30 June 2021 and GBP481.2m at 31 December 2021) arising on the revaluation of investments is subject to fair value movements and may not be readily realisable at short notice. As such it may not be entirely distributable.
CONDENSED BALANCE SHEET (UNAUDITED) AS AT 30 JUNE 2022
30 June 31 December
GBP000 Note 2022 30 June 2021 2021 (audited)
----------- --------------- -----------------
Non-current assets
Investments held at fair value 9 3,042,835 3,650,476 3,650,282
Right of use asset 403 496 504
------------------------------------- ----------- --------------- -----------------
3,043,238 3,650,972 3,650,786
Current assets
Outstanding settlements and other
receivables 29,166 8,820 14,624
Cash and cash equivalents 73,547 67,223 88,579
------------------------------------- ----------- --------------- -----------------
102,713 76,043 103,203
Total assets 3,145,951 3,727,015 3,753,989
Current liabilities
Outstanding settlements and other
payables (23,189) (13,640) (15,863)
Bank loans 10 (91,500) (167,000) (180,500)
Lease liability (250) (213) (251)
------------------------------------- ----------- --------------- -----------------
(114,939) (180,853) (196,614)
Total assets less current
liabilities 3,031,012 3,546,162 3,557,375
Non-current liabilities
Unsecured fixed rate loan notes
held at fair value 10 (159,549) (199,970) (197,823)
Lease liability (247) (425) (372)
------------------------------------- ----------- --------------- -----------------
(159,796) (200,395) (198,195)
------------------------------------- ---- ----------- --------------- -----------------
Net assets 2,871,216 3,345,767 3,359,180
------------------------------------- ---- ----------- --------------- -----------------
Equity
Share capital 11 7,444 7,857 7,703
Capital redemption reserve 11,554 11,141 11,295
Merger reserve - 645,335 -
Capital reserve 2,754,919 2,583,328 3,244,960
Revenue reserve 97,299 98,106 95,222
Total Equity 2,871,216 3,345,767 3,359,180
------------------------------------- ---- ----------- --------------- -----------------
All net assets are attributable
to the equity holders.
Net asset value per ordinary share
attributable to equity holders
Basic and diluted (GBP) 8 9.64 10.65 10.90
CONDENSED CASH FLOW STATEMENT (UNAUDITED) FOR THE PERIODED 30 JUNE 2022
Year to
6 months 6 months 31 December
to to 2021
GBP000 30 June 2022 30 June 2021 (audited)
--------------- --------------- --------------
Cash flows from operating activities
(Loss)/profit before tax (348,189) 435,264 543,316
Adjustments for:
Losses/(gains) on investments 422,539 (413,205) (500,959)
Gains on fair value of debt (38,274) (9,810) (11,957)
Foreign exchange (gains)/losses (3,291) 2,881 3,999
Depreciation 101 98 203
Finance costs 4,068 3,819 7,834
Scrip dividends (344) (713) (854)
Operating cash flows before movements
in working capital 36,610 18,334 41,582
Increase in receivables (5,010) (1,924) (1,074)
Decrease in payables (178) (165) (1,206)
--------------------------------------------- --------------- --------------- --------------
Net cash inflow from operating activities
before income tax 31,422 16,245 39,302
Taxes paid (4,280) (1,856) (3,454)
--------------------------------------------- --------------- --------------- --------------
Net cash inflow from operating activities 27,142 14,389 35,848
Cash flows from investing activities
Proceeds on disposal at fair value of
investments through profit and loss 1,687,322 2,854,326 3,817,847
Purchases of fair value through profit
and loss investments (1,504,000) (2,840,460) (3,717,464)
Net cash inflow from investing activities 183,322 13,866 100,383
Cash flows from financing activities
Dividends paid -- equity (35,673) (23,126) (52,680)
Unclaimed dividends returned 18 14 49
Purchase of own shares (100,064) (66,002) (131,512)
Net drawdown of bank debt - 22,000 35,500
Net repayment of bank debt (89,000) - -
Principal paid on lease liabilities (126) (122) (250)
Interest paid on lease liabilities (11) (14) (25)
Finance costs paid (3,931) (3,631) (7,465)
Net cash outflow from financing activities (228,787) (70,881) (156,383)
Net increase in cash and cash equivalents (18,323) (42,626) (20,152)
Cash and cash equivalents at beginning
of period/year 88,579 112,730 112,730
Effect of foreign exchange rate changes 3,291 (2,881) (3,999)
--------------------------------------------- --------------- --------------- --------------
Cash and cash equivalents at the end
of period/year 73,547 67,223 88,579
Notes to the financial statements
1 GENERAL INFORMATION
The information contained in this report for the period ended 30 June 2022 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 31 December 2021 has been delivered to the Registrar of Companies. The auditor's report on those financial statements was prepared under s495 and s496 of the Companies Act 2006. The report was not qualified, did not contain an emphasis of matter paragraph and did not contain statements under section 498(2) or (3) of the Companies Act.
The interim results are unaudited and have not been reviewed by the Company's auditors. They should not be taken as a guide to the full year.
2 ACCOUNTING POLICIES
Basis of preparation
These condensed interim financial statements for the six months to 30 June 2021 have been prepared in accordance with IAS 34 'Interim financial reporting' and also in accordance with the measurement and recognition principles of UK adopted international accounting standards but are not the Company's statutory accounts. They include comparators extracted from the Company's statutory accounts but do not include all of the information required for full annual financial statements and should be read in conjunction with the 2021 Annual Report and Accounts, which were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with UK-adopted international accounting standards (IASs). Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The Association of Investment Companies (AIC) issued a Statement of Recommended Practice: Financial Statements of Investment Companies (SORP) in April 2021. The Directors have sought to prepare the financial statements in accordance with this SORP where the recommendations are consistent with IFRS.
Going concern
The Directors have a reasonable expectation that the Company has sufficient resources to continue in operational existence for the foreseeable future. Accordingly the financial statements have been prepared on a going concern basis. In reaching this conclusion, the Directors have regard to the potential impact on the economy and the Company of the current Covid-19 pandemic, the factors likely to affect its future development and performance, are set out in the Strategic Report of the Annual Report.
Segmental reporting
The Company has identified a single operating segment, the investment trust, which aims to maximise shareholders returns. As such no segmental information has been included in these financial statements.
Application of accounting policies
The same accounting policies, presentations and methods of computation are followed in these financial statements as were applied in the Company's last annual audited financial statements.
3 INCOME
Year to
6 months to 6 months to 31 December
GBP'000 30 June 2022 30 June 2021 2021
Other interest 12 52 54
Dividend income 46,727 28,539 61,874
Property rental income 165 125 321
Other income 3 54 33
Total income 46,907 28,770 62,282
4 FINANCE COSTS
6 months to 30 June 6 months to 30 June
2022 2021 Year to 31 December 2021
------------------------ ------------------------
GBP000 Revenue Capital Total Revenue Capital Total Revenue Capital Total
----------------- ------- ------- ------ ------- ------- ------ ------- ------- ------
Bank loans
interest and
associated
costs 237 712 949 200 600 800 377 1,133 1,510
4.28% unsecured
fixed rate
notes 535 1,605 2,140 535 1,605 2,140 1,070 3,210 4,280
2.657% unsecured
fixed rate
notes 66 198 264 66 198 264 133 399 532
2.936% unsecured
fixed rate
notes 73 219 292 73 219 292 147 440 587
2.897% unsecured
fixed rate
notes 72 216 288 72 216 288 145 435 580
Interest on lease
liabilities 4 7 11 4 10 14 6 19 25
Other finance
costs 31 93 124 4 17 21 80 240 320
Total 1,018 3,050 4,068 954 2,865 3,819 1,958 5,876 7,834
The Company attributes finance costs, 25% to revenue and 75% to capital profits.
5 TAXATION
In the six months to 30 June 2022 the Company incurred a tax charge of GBP3.8m relating to withholding tax on dividends received.
6 DIVIDS PAID
6 months to 6 months to Year to 31
GBP000 30 June 2022 30 June 2021 December 2021
2020 fourth interim dividend of
3.5950p per share - 11,411 11,411
2021 first interim dividend of
3.7020p per share - 11,715 11,714
2021 second interim dividend of
3.7020p per share - - 11,593
2021 third interim dividend of
5.8250p per share - - 17,962
2021 fourth interim dividend of
5.8250p per share 17,752 - -
2022 first interim dividend of
6.0000p per share 17,921 - -
35,673 23,126 52,680
7 EARNINGS PER SHARE
6 months to 30 June 2022 6 months to 30 June 2021 Year to 31 December 2021
--------------------------------------------------------- ----------------------------- ------------------------- --------------------------
GBP000 Revenue Capital Total Revenue Capital Total Revenue Capital Total
--------------------------------------------------------- ------- --------- --------- ------- ------- ------- ------- ------- --------
Ordinary shares
Earnings for the purposes of basic earnings per share
being net profit attributable to equity holders 37,732 (389,719) (351,987) 22,044 411,673 433,717 48,679 491,344 540,023
--------------------------------------------------------- ------- --------- --------- ------- ------- ------- ------- ------- --------
Number of shares
Weighted average number of ordinary shares for the
purposes of:
-----------------------------------------------------------------------------------------------------------------------------------------------
Basic earnings per share 302,936,193 317,922,887 314,504,909
--------------------------------------------------------- ----------------------------- ------------------------- --------------------------
Diluted earnings per share 302,936,655 317,929,421 314,508,968
--------------------------------------------------------- ----------------------------- ------------------------- --------------------------
The basic earnings figure is arrived at by reducing the number of ordinary shares by nil (1,611 at 30 June 2021 and at 31 December 2021) for the number of ordinary shares held in a trust that was set up to satisfy awards made under historic share award schemes (no new awards will be made).
8 NET ASSET VALUE PER ORDINARY SHARE
The calculation of the net asset value per ordinary share is based on the following:
30 June 31 December
30 June 2022 2021 2021
Equity shareholder funds (GBP000) 2,871,216 3,345,767 3,359,180
Number of shares at period end --
Basic 297,760,600 314,276,070 308,115,570
Number of shares at period end --
Diluted 297,760,600 314,277,681 308,117,181
9 HIERARCHICAL VALUATION OF FINANCIAL INSTRUMENTS
Accounting Standards recognise a hierarchy of fair value measurements, for financial instruments measured at fair value in the Balance Sheet, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The classification of financial instruments depends on the lowest significant applicable input.
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
Level 1 Unadjusted, fully accessible and current quoted prices
in active markets for identical assets or liabilities.
Included within this category are investments listed
on any recognised stock exchange.
Level 2 Quoted prices for similar assets or liabilities or
other directly or indirectly observable inputs which
exist for the period of investment. Examples of such
instruments would be forward exchange contracts and
certain other derivative instruments.
Level 3 Valued by reference to valuation techniques using
inputs that are not based on observable market data.
The value is the Directors' best estimate, based on
advice from relevant knowledgeable experts, use of
recognised valuation techniques and on assumptions
as to what inputs other market participants would
apply in pricing the same or similar instrument. Included
within this category are direct or pooled private
equity investments.
All fair value measurements disclosed are recurring fair value measurements.
Company valuation hierarchy fair value through income statement:
As at 30 June 2022
GBP000 Level 1 Level 2 Level 3 Total
Assets
Listed investments 3,042,801 - - 3,042,801
Unlisted investments
Other - - 34 34
----------------------------------
Total assets 3,042,801 - 34 3,042,835
Liabilities
Unsecured fixed rate Loan notes - - (159,549) (159,549)
----------------------------------
Total liabilities - - (159,549) (159,549)
As at 30 June 2021
GBP000 Level 1 Level 2 Level 3 Total
Assets
Listed investments 3,650,202 - - 3,650,202
Unlisted investments
Private Equity - - 240 240
Other - - 34 34
----------------------------------
Total assets 3,650,202 - 274 3,650,476
Liabilities
Unsecured fixed rate Loan notes - - (199,970) (199,970)
----------------------------------
Total liabilities - - (199,970) (199,970)
As at 31 December 2021
GBP000 Level 1 Level 2 Level 3 Total
Assets
Listed investments 3,650,248 - - 3,650,248
Unlisted investments
Other - - 34 34
----------------------------------
Total assets 3,650,248 - 34 3,650,282
Liabilities
Unsecured fixed rate Loan notes - - (197,823) (197,823)
----------------------------------
Total liabilities - - (197,823) (197,823)
There have been no transfers during the year between Levels 1, 2 and 3.
The following table shows the reconciliation from the beginning balances to the ending balances for fair value measurement in Level 3 of the fair value hierarchy.
30 June 30 June 31 December
GBP000 2022 2021 2021
----------------------------------- ------- ------- -----------
Balance at 1 January 34 605 605
Sales proceeds - - (607)
(Losses)/gains on investments - (331) 36
Balance at 30 June / 31 December 34 274 34
Investments in subsidiary companies (Level 3) are valued in the Company's accounts at GBP34.2k (GBP34.2k at 30 June 2021 and at 31 December 2021).
No interrelationships between unobservable inputs used in the above valuations of Level 3 investments have been identified.
10 BANK LOANS AND UNSECURED FIXED RATE LOAN NOTES
As at
As at As at 31 December
GBP000 30 June 2022 30 June 2021 2021
Bank loans repayable within one year 91,500 167,000 180,500
-------------------------------------------- ------------- ------------- ------------
Analysis of borrowings by currency:
Bank loans -- Sterling 91,500 167,000 180,500
The weighted average % interest rates
payable:
Bank loans 1.21% 0.77% 0.81%
The Directors' estimate of the fair value
of the borrowings:
Bank loans 91,500 167,000 180,500
In the six months to 30 June 2022 the Company repaid GBP89m of bank borrowings.
UNSECURED FIXED RATE LOAN NOTES
As at As at As at
GBP000 30 June 2022 30 June 2021 31 December 2021
4.28 per cent. Unsecured fixed rate loan notes due
2029 106,644 124,910 122,178
------------------------------------------------------ ------------- ------------- -----------------
2.657 per cent. Unsecured fixed rate loan notes due
2033 18,288 23,108 22,844
2.936 per cent. Unsecured fixed rate loan notes due
2043 17,544 25,194 25,309
2.897 per cent. Unsecured fixed rate loan notes due
2053 17,073 26,758 27,492
159,549 199,970 197,823
GBP100m of unsecured fixed rate loan notes were drawn down in July 2014, over 15 years at 4.28%.
On 28 November 2018 the Company issued GBP60m unsecured fixed rate loan notes each of GBP20m and with maturities of 15, 25 and 35 years and coupons for each respective tranche of 2.657%, 2.936% and 2.897%.
The fair value of unsecured debt is estimated by discounting future cash flows using quoted benchmark interest yield curves as at the end of the reporting period and by obtaining lender quotes for borrowings of similar maturity to estimate credit risk margin. Any change to these unobservable inputs, or the comparative borrowings used, would result in a change in the fair value. The fair value of the items classified as loans and borrowings are classified as Level 3 under the hierarchical fair value hierarchy.
The total weighted average % interest rates payable: 2.98% 2.82% 2.26%
11 SHARE CAPITAL
As at As at As at
GBP000 30 June 2022 30 June 2021 31 December 2021
Allotted, called up and fully paid:
297,760,600 (314,277,681 at 30 June 2021 and 308,117,181
at 31 December 2021) ordinary shares of 2.5p each 7,444 7,857 7,703
Share Buybacks
As at As at As at
GBP000 30 June 2022 30 June 2021 31 December 2021
Ordinary shares of 2.5p each
Opening share capital 7,703 8,040 8,040
Share buybacks (259) (183) (337)
Closing share capital 7,444 7,857 7,703
GLOSSARY, PERFORMANCE MEASURES AND OTHER TERMS
Throughout this document we use several defined terms including specific terms to describe performance. Where not described in detail elsewhere we set out here what these terms mean.
Active Share is a measure of how actively a portfolio is managed; is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index. For the Company's portfolio as at 30 June 2022 this was calculated as 77% in relation to the MSCI ACWI benchmark.
Alpha is commonly used as a measure of performance to indicate when a strategy or manager has managed to beat the market return over some period. Alpha is thus often referred to as excess return of an investment relative to the return of the benchmark index.
Beta is a measure of the risk, defined as the volatility of a stock or portfolio, compared to a benchmark. It is calculated through regression analysis, a statistical analysis that examines the relationship between two or more variables. In general, a Beta less than 1 indicates that the investment is less volatile than the benchmark, while a Beta greater than 1 indicates that the investment is more volatile than the benchmark. For example, if a stock has a Beta of 0.5, you would expect it to increase or decline in value, half as much as the benchmark increases or declines. The Company's portfolio had a Beta of 1.03 as at 30 June 2022.
Discount is where the share price of an investment trust is below its Net Asset Value. As of the 30 June 2022 the Company's shares traded at a discount of 6.2%.
Gearing, at its simplest, is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But, if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets.
Gearing (Gross) = Total Gearing and is a measure of the Company's financial leverage. It is calculated by dividing the Company's total borrowings (unless otherwise indicated these are valued at par) by its Net Asset Value. The Gross Gearing calculation includes any cash and cash equivalents or non-equity holdings. As at 30 June 2022, the Company had Gross Gearing of 8.8%.
Gearing (Net) is a measure of the Company's financial leverage and calculated by dividing the Company's net borrowings (ie total borrowings minus cash and cash equivalents) by its Net Asset Value. Unless otherwise indicated, borrowings are valued at par. As at 30 June 2022, the Company had Net Gearing of 6.2%.
Greenhouse gas (GHG) emissions are categorised into three groups or 'Scopes' by the most widely-used international standards, the Greenhouse Gas (GHG) Protocol:
Scope 1 emissions: all direct emissions from the activities of an entity or the activities under its control.
Scope 2 emissions: indirect emissions from electricity purchased and used by an entity which are created during the production of energy which the entity uses.
Scope 3 emissions: all indirect emissions from the activities of the entity, other than scope 2 emissions, which occur from sources that the entity does not directly control.
Investment Manager means the investment manager appointed by the Company to manage its portfolio. As at 30 June 2022, this was Towers Watson Investment Management Limited, a member of the WTW group of companies.
Leverage for the purposes of the Alternative Investment Fund Managers Directive (AIFMD), is a term used to describe any method by which the Company increases its exposure, whether through borrowing (gearing) or through leverage embedded in derivative positions, or by any other means. As required by AIFMD, the Company's leverage is calculated using two methods: the gross method which gives the overall total exposure, and the commitment method which takes into account hedging and netting offsetting positions. As the leverage calculation includes exposure created by the Company's investments, it is only described as 'leveraged' if its overall exposure is greater than its Net Asset Value. This is shown as a leverage ratio of greater than 100%. Details of the Leverage employed for the Company is disclosed annually by WTW in its AIFMD Disclosure which can be found on the Company's website.
Manager or Stock Picker means a manager selected and appointed by WTW to invest the Company's portfolio.
MSCI means MSCI Inc. which provides information relating to the benchmark, the MSCI All Country World Index (MSCI ACWI), against which the performance target for the equity portfolio has been set. MSCI's disclaimer regarding the information provided by it and referenced by the Company can be found on the Company's website.
MSCI All Country World Index (MSCI ACWI) is a market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. It is comprised of stocks from both developed and emerging markets. This measures performance in Sterling. The variant of the MSCI ACWI used is the Net Dividend Reinvested (NDR) variant of the MSCI ACWI. This variant gives the return that a shareholder could expect to actually receive because it includes the effects of foreign withholding tax on dividend payments.
MSCI ACWI Equal Weighted Index represents an alternative weighting scheme to its market cap weighted parent index, MSCI ACWI. The index includes the same constituents as its parent, however, at each quarterly rebalance date, all index constituents are weighted equally.
NAV (Excluding Non-core Assets) Total Return is a measure of the performance of the Company's Net Asset Value (NAV) that excludes the impact of the Non-core Assets held by the Company, over a specified time period.
NAV Total Return is a measure of the performance of the Company's Net Asset Value (NAV) over a specified time period. It combines any change in the NAV and dividends paid. The comparator used for the Company's NAV Total Return is the MSCI ACWI total return. The Company's NAV Total Return for the first six months of 2022, after fees and including income with debt at fair value, was -10.5%.
Net Asset Value (NAV) is the value of the Company's total assets less its liabilities (including borrowings). The Company's NAV per share is calculated by dividing this amount by the number of ordinary shares in issue and is stated on an 'including income' basis with debt at fair value. The Company's balance sheet Net Asset Value as at 30 June 2022 was GBP2.9bn which, divided by 297,760,600 ordinary shares in issue on that date, gave a NAV per share of 964.0p.
Non-core Assets are the assets the Company holds aside from the global equity portfolio. At 30 June 2022 there was one interest in a private equity investment which has now sold all of its assets but is not able to complete its liquidation for two years, any further return on this investment will be insignificant. The total value of these Non-core Assets as at 30 June 2022 was GBP34,225 (30 June 2021: GBP274,261).
Ongoing Charges Ratio (OCR) is the total expenses (excluding borrowing costs) incurred by the Company as a percentage of the Company's average NAV (with debt at fair value). We calculate the OCR in line with the industry standard using the average of Net Asset Values at each NAV calculation date. The OCR for year to 31 December 2021 was 0.60%.
Ongoing Charges represent the Company's total ongoing costs and are calculated in accordance with the guidelines issued by the Association of Investment Companies (AIC).
Peer Group Median is the median of the Morningstar universe of UK retail global equity funds (open ended and closed ended). The number of members of the peer group varies from time to time depending on funds entering or leaving that sector.
Responsible or Sustainable Investment is an investment strategy that integrates financial-driven strategies with non-financial Environmental, Social and Governance (ESG) factors and stewardship for the purpose of managing long-term risk and/or enhancing long-term returns.
Stewardship represents active ownership practices, such as engagement and voting, aimed at achieving positive change in a company's ESG practices and delivering improved risk management and long-term investment returns outcomes, as well as a more sustainable outcome for society and all stakeholders.
Total Assets represents non-current assets plus current assets, before deduction of liabilities and borrowings.
Total Shareholder Return (TSR) is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend. The comparator used for the Company's TSR is the MSCI ACWI total return. This measure shows the actual return received by a shareholder from their investment. The Company's TSR for the six months to 30 June 2022 was -11.3%.
Turnover is the lesser of the value of stocks sold or purchased in the year expressed as a percentage of the value of the equity portfolio. Turnover can be affected by the investment activity of the Stock Pickers, rebalancing of the Company's portfolio between the Stock Pickers, the appointment of a new Stock Picker, additional funds being made available for investment or the need to realise cash for the Company. In the six month period ending 30 June 2022 turnover was 32.7%.
The Interim Report will be available on the Company's website later today.
(END) Dow Jones Newswires
July 28, 2022 02:00 ET (06:00 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
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