Share Name Share Symbol Market Type Share ISIN Share Description
Artemis Alpha Trust Plc LSE:ATS London Ordinary Share GB0004355946 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +1.50p +0.53% 285.00p 283.00p 287.00p 286.00p 286.00p 286.00p 10,121 16:35:24
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 3.3 2.8 6.4 44.3 117

Artemis Alpha Trust PLC Annual Financial Report to 30 April 2019

19/07/2019 7:00am

UK Regulatory (RNS & others)

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RNS Number : 0489G

Artemis Alpha Trust PLC

19 July 2019

Artemis Alpha Trust plc (the 'Company')

LEI: 549300MQXY2QXEIL3756

Annual Financial Report for the year ended 30 April 2019

Financial Highlights

Investment Objective

To provide long-term capital and income growth by investing predominantly in listed companies and to achieve a net asset value total return greater than the total return of the FTSE All-Share Index.

Investment policy

The Investment Manager follows an unconstrained and opportunistic approach with the aim of generating sustainable outperformance of the FTSE All-Share Index. The Investment Manager will seek to identify and invest in companies with the following characteristics: attractive valuations, strong business models, favourable long-term industry fundamentals and high quality management teams.

As a result of this approach, stock market capitalisations and sector and geographic weightings are of secondary consideration. Accordingly, there are no pre-defined maximum or minimum exposure levels for each individual sector, country or geographic region, but these exposures are reported to, and monitored by, the Board in order to ensure that the Company's portfolio is invested and managed in a manner consistent with spreading investment risk.

Given the Investment Manager's particular focus on the UK market, the majority of the portfolio is expected to be invested in UK listed companies. However, the overall geographical profile of the portfolio will change from time to time depending on where opportunities are found. The Company's policy is not to invest more than 10 per cent of net assets in any one investment. The total number of holdings in the portfolio will vary over time but the top positions will have a proportionally larger weighting.

There is no restriction on the amount of cash or cash equivalent instruments that the Company may hold and there may be times when the Investment Manager considers it appropriate for the Company to have a significant cash or cash equivalent position instead of being fully invested.

The Company may, but normally does not, invest up to 15 per cent of its total assets in other listed closed-ended investment funds.

Unquoted Investments*

The Company will not invest more than 10 per cent of its total assets in unquoted companies, excluding follow-on investments that may be made in existing unquoted investments in order to preserve the Company's economic interests in such investments. Any new or follow-on investments in unquoted companies require the prior approval of the Board.

Derivatives and Hedging

The Company may use derivatives and similar instruments for the purpose of capital preservation, hedging currency risk and gearing.


The Company may employ gearing of up to 25 per cent of net assets. The effect of gearing may be achieved without borrowing by investing in a range of different types of instruments, including derivatives.


Limits referred to in the investment policy are measured at the time of investment or, in the case of gearing, at the time of draw-down or/and when derivative transactions are entered into.

*At a shareholder meeting in June 2018, the Board and the Investment Manager committed to reduce the exposure to unquoted investments to no more than 10 per cent of total assets. No new unquoted investments will be made unless in exceptional circumstances.

Dividend policy

The Company will seek to grow dividends paid in respect of each financial year at a rate greater than inflation, as defined by the UK Consumer Prices Index, in respect of the immediately preceding financial year of the Company.

Triennial tender offers/liquidity events

The obligation to propose a continuation resolution at each fifth AGM was removed from the Company's Articles of Association as approved by shareholders on 7 June 2018. In its place, the Company will arrange tender offers every three years, starting in 2021, with each tender offer being for up to 25 per cent of the issued ordinary shares, which will be subject to shareholder approval at the relevant AGM. The Board may, at its sole discretion, decide not to proceed with a tender offer if the ordinary shares are trading at a premium to the estimated tender price. The tender price will be the prevailing NAV (cum-income) per ordinary share (or, if the Board elects to use a tender realisation pool, the net proceeds of realising the assets in that pool) less the tender offer costs and less a discount of 3 per cent.

Capital structure

The capital structure of the Company as at 30 April 2019 consisted of 40,980,974 ordinary shares of 1p each.

Returns for the year ended 30 April 2019 
                                                     Year ended   Year ended 
Total returns                                          30 April     30 April 
                                                           2019         2018 
Net asset value per ordinary share*                      (8.6)%        11.0% 
Ordinary share price*                                    (8.9)%        13.2% 
FTSE All-Share Index                                       2.6%         8.2% 
Revenue and dividends 
Revenue earnings per ordinary share                       6.44p        6.35p 
Dividends per share** 
  Ordinary                                                5.00p        4.75p 
  Special                                                 0.50p        1.60p 
                                              -----------------  ----------- 
  Total                                                   5.50p        6.35p 
Ongoing charges*                                           0.9%         0.9% 
                                                          As at        As at 
Capital                                                30 April     30 April 
                                                           2019         2018 
Net asset value per ordinary share                      354.47p      394.62p 
Ordinary share price                                    290.00p      325.00p 
Net gearing*                                               0.0%         7.1% 
Total returns to 30 April 2019       3 years  5 years  10 years  1 June 2003 
Net asset value per ordinary 
 share*                                22.7%    13.7%    111.1%       496.9% 
Ordinary share price*                  31.0%     5.9%     87.9%       410.6% 
FTSE All-Share Index                   33.3%    35.2%    167.9%       232.3% 

*Alternative Performance Measure

** The final dividend for the year to 30 April 2019 will, if approved by shareholders, be paid on 13 September 2019. A special dividend of 0.50p per share for the year to 30 April 2019 will also be paid to shareholders on 13 September 2019.

Chairman's Statement


Over the year to 30 April 2019 the Company's net asset value and share price declined by 8.6% and 8.9% respectively on a total return basis. The FTSE All-Share Index increased by 2.6% over the same period.

The disappointing performance of some of our unquoted investments played a large part in our results, detracting 5.5% from our performance. I commented on these investments in my Statement in the latest interim report. The decline in value of our holdings in listed companies which are sensitive to the UK economy detracted an additional 2.7%.


Significant progress has been made in implementing the revised policy approved by shareholders in June 2018. Unquoted investments have been reduced to 8.7%, down from 21.6% at the previous year end (albeit involving some write-downs), and there is a clear plan to reduce this further. The portfolio has been rationalised to reflect the revised strategy and this has seen a reduction in holdings from 91 to 49. The overall exposure to mid and large cap stocks has been increased materially and the modest gearing has been removed. These changes have improved significantly the liquidity of the underlying portfolio and have increased the Investment Manager's flexibility to react both to opportunity and to risk.

More details can be found in the Investment Manager's Review section of the Annual Financial Report.

Earnings and dividends

The Company's revenue earnings for the year ended 30 April 2019 were 6.44p per share, slightly ahead of the previous year's earnings (6.35p). Our dividend policy is to increase dividends each financial year at a rate greater than inflation, as defined by the UK Consumer Prices Index (CPI). In line with this, dividends declared for the year total 5.00p per share (2018: 4.75p), including a proposed final dividend of 3.00p (2018: 3.00p) per share, an increase of 5.3%. The CPI increased by 2.0% over the year.

As the Company's revenue earnings are higher than the level of dividends paid and declared, the Board has approved the payment of a special dividend of 0.50p per share. Total dividends declared for the year to 30 April 2019 will therefore be 5.50p per share.

The final dividend, if approved by shareholders, will be paid on Friday, 13 September 2019 to those shareholders on the register as at Friday, 16 August 2019, with an ex-dividend date of Thursday, 15 August 2019. A special dividend of 0.50p per share will also be paid on 13 September 2019.

Share buy backs / discount

Within guidelines set and regularly reviewed by the Board, the Company will consider buying back shares to address imbalances between supply and demand or when we believe this the best use of available capital to increase NAV per share. This is most likely to occur when the Investment Manager considers that the underlying portfolio holdings have been unfairly marked down and when the Company's share price is at a significant discount to NAV.

Shortly after the year end, the prices of many UK assets had weakened again and the discount had widened to 20%, prompting a share repurchase of 218,500 shares at an average price of 278.94p. Given the repositioning of the Company's portfolio that has been completed and the liquidity available, acquiring our own equity at a substantial discount represents an attractive opportunity to add value for shareholders.

Board changes

Following the retirement of Tom Cross Brown as a director of the Company after the Annual General Meeting ("AGM") in October 2018, the Board is pleased to welcome Victoria Stewart to the Board. She brings extensive and valuable experience within the fund management area. Victoria will be proposed for election at the AGM in September.

Annual General Meeting

The Company's AGM will take place on Thursday, 5 September 2019 at 12.30 p.m. at the offices of Artemis Fund Managers Limited, Cassini House, 57-59 St James's Street, London, SW1A 1LD. The fund managers will make a short presentation at the meeting.

The Board welcomes your attendance at the AGM, as it provides shareholders with an opportunity to learn more about the Company and to ask questions of both the Board and the fund managers. For those shareholders who are unable to attend, I would encourage you to make use of your proxy votes by completing and returning the form enclosed with this report.

Throughout the year, shareholders can keep themselves informed by visiting the Company's website,


The continuing uncertainty within the UK political scene and the tension between USA and China over trade will continue to create a challenging investment environment.

However, we remain focused on ensuring that the rationalisation of the portfolio and the implementation of the new investment policy bears fruit. We remain resolute in achieving our goal of delivering consistent and improving returns to shareholders.

Duncan Budge


18 July 2019

Investment Manager's Review


Last year, we outlined a revised investment strategy that would focus on investing in companies with an emphasis on the following characteristics: observable competitive advantages and attractive industry characteristics (quality); compelling valuations (value); and outstanding management.

We indicated that the resulting strategy would carry a long-term focus - on companies' performance over years, not quarters, with a relatively low turnover of investments. The resulting portfolio structure would be more liquid - to allow us to be responsive to changes in business fundamentals and overall investment conditions; concentrated - to allow us to focus more efficiently on threats and opportunities in existing investments; and internationally exposed - to allow us to take advantage of a wider opportunity set and provide diversification.

One year on, we have made substantial progress. We have reduced our exposure to unquoted equities from 21.6% to 8.7% and increased the portfolio's exposure to mid and large cap equities from 35.1% to 60.3%. 75.5% of the portfolio was turned over in the year as we sold GBP64.3m worth of equities. We reduced the number of holdings in the portfolio from 91 to 49 by investing further capital in conviction positions and initiated new holdings only after extensive diligence. Our top 10 holdings now account for 44.1% of the portfolio compared to 36.6% a year ago. Overall, we reduced our gearing from 7.1% to a net cash position of 3.1%.

Our revised strategy has had an impact on both the structure and the composition of the portfolio. Where we have made new investments, it has been in stronger businesses - for example, our new holdings in Facebook, Just Eat and Domino's Pizza are companies with world-class intangible assets and with resilient and growing end-demand. When we have made new investments, we have been unemotional and patient to invest in tough times. We sat on our hands for much of the year, being a net seller of assets before making significant investments in the fourth quarter of 2018 when volatility was high and sentiment low. Our more measured approach means that we have so far made only one new investment in the calendar year to date, compared to a historic run-rate of close to 20.

A significant proportion of the costs of our transformation were borne in this period, whilst the benefits will accrue over time to come. Our NAV declined by 8.6% against a 2.6% rise in the FTSE All-Share Index. Our unquoted portfolio detracted 5.5%, partly due to write-downs in valuation and partly our decision not to invest in companies requiring funding when we believed our capital to be better invested elsewhere. Our decision to invest further in companies sensitive to the UK economy detracted 2.7% as share prices continued to weaken. We continue to believe that the uncertainty created by Brexit has excessively suppressed valuations.

We have further work to do to complete the repositioning of the portfolio. However, we are confident the changes made this year will be reflected in time with improved returns for shareholders. The changes in liquidity and structure of the portfolio are easy to see.

What is more difficult to observe is the impact of our revised process where we are concentrating our capital on businesses where we think share prices are most detached from underlying value. In the short run discrepancies can exist, but in the long run share prices tend to catch up.

Our current optimism stems from what we perceive to be a particularly large discrepancy due to heightened investor uncertainty. Given this view and the transition occurring, the remainder of this report focuses on developments in the Company's holdings, activity, our current positioning and outlook.

Selected Portfolio Developments

Tesco (5.9% of NAV), our largest holding, had a strong year, growing its sales by 11.5% and profits by 34.5%. The company has regained its investment grade status and made further investments in price and range. This has resulted in a sustained recovery in volumes and led to a restoration in the brand's health. Together with Booker, the company has a uniquely low cost distribution platform in the UK due to its scale both on and offline, with resilient end-demand. The next leg of management's strategy is to exploit "untapped value opportunities" in areas such as loyalty and own-label products. Such opportunities, with minimal additional capital required, should enhance both returns on capital and consequent returns to shareholders.

Sports Direct (5.5% of NAV), the UK apparel retailer, detracted 0.8% as its share price declined 26.1% over the year due to concerns over the UK retail environment. On an underlying basis, we think the company is performing well - for example, cash flow in the first half of 2019 increased by 15% as the UK sports franchise remains resilient and profitability was improved in the international businesses. In the past year the company acquired House of Fraser, Evans Cycles and at heavily distressed prices. Sports Direct has a low cost distribution platform and so in our view, such acquisitions are a good use of capital. House of Fraser's footprint also represents a substantial opportunity to expand the group's growing luxury retail presence. Sports Direct is a good example in our view of a share price falling when we estimate business value to be improving. We increased our position significantly in the year.

Rocket Internet (5.4% of NAV), the conglomerate of internet businesses, was a seller of assets through the year. It listed three of its assets successfully and realised investments in existing public companies. The company's net cash increased from 50% to over 90% of its market cap at EUR3.4bn - meaning that on a 'look-through basis', this holding in the portfolio is substantially backed by cash assets. We estimate that the company is trading on a large discount to its net assets as it has over 200 stakes in private companies. This 'hidden value' and the considerable optionality in management being able to deploy its cash counter-cyclically make for attractive prospects.

IWG (4.7% of NAV), an operator of serviced offices globally under the Regus and Spaces brands, has continued to expand its footprint. It has made significant progress in its strategy to shift to a capital-light, franchised model, akin to that of the large hotel groups such as IHG or Marriott. In April 2019, the company announced the sale of its Japanese operations. Although this accounted for only 4% of group sales, the price received (c.GBP320m) represented over 13% of its market cap. This has served to reduce the company's debt by over 60%. The company's share price has responded well, rising by over 37% over the year, contributing 1.5% to our NAV. We think investors are still underestimating the value that would emerge as a result of a successful refranchising in other parts of the business: the company is trading at just over 1x sales compared to the multiple achieved in Japan of 3.4x sales, and franchising is likely to accelerate growth and improve returns on capital.

Dignity (4.3% of NAV), the UK funeral services operator, was a large detractor (1.5%) as its share price fell 33.4% in response to the announcement of a full investigation by the Competition Markets Authority (CMA) into the sector. We increased our position materially as we believe the company is well placed to prosper sustainably under a number of possible outcomes from the regulatory process. The business commands a unique position in the industry, with a national network of funeral directors and crematoria. For example, this means that it is able to provide simple, low-cost funerals entirely through its own network, likely at the lowest marginal cost in the industry. In the growing low-cost offering, the company's market share is more than double its share in the traditional area, which we view as an indicator of further gains to come and the company's ability to adapt to change.

Polar Capital (4.1% of NAV) and Liontrust (2.6% of NAV) have continued to grow their assets under management due to positive market tailwinds and growth in market share. Collectively these holdings contributed 1% to performance with their share prices rising by 15% and 21% respectively. Polar hired a new Emerging Markets team from Nordea demonstrating the potential for these boutique managers to expand into new verticals.

Hurricane Energy (4.0% of NAV), the oil exploration company, achieved several milestones towards commercialising and monetising its prospective resource base in the West of Shetland basin. Following the completion of the offshore installation phase and a successful vessel hook-up, the company is due to produce first oil in the Greater Lancaster Area (GLA) imminently. This will provide cash flow but more importantly, long-term production data to establish the commercial viability of a full field development. Given the company's current market capitalisation of GBP1.1bn against resources in the GLA alone of over 1bn barrels, the potential is significant.

Reaction Engines, our largest unquoted holding (3.5% of NAV), announced a positive test result for its pre-cooler technology which was able to cool airflow from an engine replicating thermal conditions corresponding to Mach 3.3 flight in less than 1/20th of a second. The technology will now be tested at higher speeds. Further progress should enable the company to accelerate commercialisation of the technology.

Nintendo (3.2% of NAV) announced its intention to enter the Chinese market, which has for some time been a region where Nintendo's franchises are popular but provide limited commercial benefits. The opportunity to partner with Tencent and introduce mobile games may change this. Google and Microsoft announced plans to introduce cloud gaming - allowing consumers to play games without the upfront costs of consoles. This would be similar to what Netflix did to set top boxes - democratising and increasing usage of content, thereby increasing its value. Nintendo seems well placed in this environment given the universal appeal and popularity of its franchises and hence we have been increasing our holding.

Hornby (3.1% of NAV) made solid progress in its turnaround under new Chief Executive Lyndon Davies. The company has streamlined its cost base and is working through legacy issues that led to a suppression in gross margins. The renewed energy in the business is being focused on revenue initiatives such as the signing of an agreement with Warner Brothers to bring its franchises to Hornby products. The holding contributed 0.8% to NAV in the period as its share price rose by 50%.

Delivery Hero (3.0% of NAV) announced a transaction in December to sell its German business to for a multiple representing close to 10x sales. This has allowed the business to invest further in growing its positions in markets where it is a clear leader. This seems to be working as in the first quarter of 2019 revenue growth accelerated to 93%. We had increased our position in December as the company's multiple contracted sharply in the wider sell-off of technology shares in the absence of any change to company fundamentals.

The year was characterised by abnormal activity as we sought to implement our revised investment policy. In aggregate we sold GBP64.3m worth of equities, reinvesting GBP27.1m into existing holdings and GBP22.7m into new holdings. In total we sold out of 49 holdings and started 7 new holdings.

We invested the majority of our realised capital in existing holdings. The most significant additions were to our retail holdings - in Sports Direct and Dixons Carphone. In our view, investors are failing to distinguish between a traditional capital cycle and industries in structural decline, resulting in depressed valuations for market leaders. Arguably this is similar to what took place in the grocery industry in 2015/2016, allowing us to invest in Tesco at attractive prices. However, we have been too early in some of our investments where current market prices are below our entry levels. We are constantly reappraising our valuations and continue to believe in the prospects for these companies.

We increased our holding in Plus500, the online trading platform. Our first investment in this company was in December 2016 amidst regulatory uncertainty and we have followed it since its flotation in 2013. We had reduced our holding following a large appreciation in its shares in 2018 but we misjudged the extent that new regulation would impact near-term trading. Following a negative trading statement in January and a sharp fall in its share price we increased our holding. We believe that the company continues to possess strong competitive advantages over its peers with a lower cost to serving customers and strong balance sheet. As the industry consolidates following the impact of new regulation, we expect Plus500 to benefit.

Our new investments in the year broadly fell into two categories: companies with strong intangible assets such as Just Eat, Domino's Pizza and Facebook, and cyclically exposed companies such as Barclays, easyJet and Ryanair.

We made investments in Just Eat and Facebook in the second half of the financial year. Both companies have strong network effects in their businesses which we expect to endure. Given heightened investor demand for such assets, it required some sort of negative public issue to create a compelling investment opportunity - in the case of Facebook, the Cambridge Analytica scandal, and in Just Eat, its corporate governance issues and fears over competition in the UK market.

As for our other investments, we do not mind cyclicality so long as its impact can be understood, quantified and reflected in the price paid; and as long as there is a fundamental aspect of the company that is competitively-advantaged.

We have invested in European budget carriers as the airline industry has been pressured by high oil prices and weak consumer confidence. In easyJet and Ryanair we have two industry leaders with market values that are underpinned by their asset bases. Each has their own unique attractions: Ryanair has leading scale and low-cost operations, and easyJet has a strong brand and capacity constrained network positions.

Legacy carriers (e.g. Air France/Alitalia) still command a 60% market share of intra-European flights which represents an attractive opportunity for low cost carriers, given their relative cost base advantages and efficient operations. In the US market, the top four airlines have an 80% market share vs. 43% in Europe and so, in tough times, we expect consolidation to accelerate.

Our new investment in Barclays is the first bank investment in the Company's portfolio for over 10 years. We think the core UK deposit/mortgage, payments and credit card franchises are strong, consistent cash-generative businesses. The value of these businesses has historically been suppressed by regulation, complexity and the bank's investment banking operations. We believe the pressure on management from activist Ed Bramson will result in introspection that will release value.

In terms of sales, we reduced a number of holdings that did not fit our revised investment criteria. Our sales were largely in small caps and unquoted equities. We sold five unquoted holdings realising 8.2% of NAV - most notably, Metapack and Gundaline. Metapack was sold at a 25% premium to carrying value, representing an attractive 5.4x return on investment. Our investment in URICA was impaired following a one-off event that restricted the company's prospects for raising funds. For further details see our most recent Half-Yearly Report.

We have further rationalisation to do and expect our number of holdings and unquoted exposure to continue to decline, albeit at a slower pace and, as already stated, new unquoted investments will only be made in exceptional circumstances. Commensurately, the underlying portfolio liquidity will continue to improve, giving us more flexibility.

Sector exposure

The table provided further depicts our current positioning based on our sector classification. We have increased advantageously diversification across geographies and sectors, despite now having a more concentrated portfolio. This has reduced the portfolio's sensitivity to any one given risk. For example, historically we had large exposures to oil and asset prices, with positions in oil exploration companies and asset managers. These two sectors now account for 14.4% of our assets vs. 22.0% last year. We have reduced our exposure to asset managers, in particular to reduce sensitivity to global asset prices. As a result, we can now expect returns to come from a broader set of industries with the aim of generating more consistent returns.

We have a bias towards the UK as, on a bottom-up basis, we are finding good evidence to suggest that concerns over the outcome of Brexit has created myopic pricing of UK assets. On our estimates, 46% of the portfolio has revenues derived from the UK and 54% from overseas. Looking at the UK exposure, we estimate that 40% of this is sensitive to the economic cycle - such as our exposure to commercial property (Helical/Capital & Counties), travel (easyJet/Ryanair), and discretionary retail (Dixons Carphone).

However, this means that we judge the majority (60%) of our UK assets to be relatively resilient in tough times. For example, 9% of the portfolio is centred on the provision of food (Tesco/Just Eat/Domino's Pizza). This balance should mean that the portfolio can prosper under a variety of economic outcomes, and we retain scope to alter the balance of our exposures, based on changes in the environment.


In the UK market, the recent period has continued to be characterised by uncertainty because of Brexit, which has resulted in elevated volatility and certain sectors underperforming materially. We think that the premium being placed on good, predictable businesses that are seemingly insensitive to political outcomes is, on the whole, 'sky high'.

By contrast, the aversion to uncertainty means that businesses which are economically sensitive or perceived to be challenged are very lowly valued. In this environment we are aiming to adopt an approach that is both patient and rational. We are using the opportunity to invest as bargains are unlikely to remain once obscurities clear. Our liquidity is strong and we have an unutilised gearing facility - meaning we are well-placed to capitalise on further opportunities as they arise.

John Dodd and Kartik Kumar

Fund managers

Artemis Fund Managers Limited

18 July 2019

 Top 15 holdings 
                                                                                  Valuation   % of 
 Name                           Sector                       Shares      Price    (GBP'000)    NAV 
 Tesco                          UK grocery retail         3,450,000    GBP2.50    8,618,100    5.9 
 Sports Direct International    UK apparel retail         2,696,014    GBP2.98    8,028,730    5.5 
 Rocket Internet                Global consumer             385,000   EUR23.48    7,771,184    5.4 
                                Global serviced 
 IWG                             offices                  2,000,000    GBP3.40    6,798,000    4.7 
 Dignity                        UK funerals                 870,000    GBP7.12    6,190,050    4.3 
 Polar Capital Holdings         UK asset management       1,005,000    GBP5.86    5,889,300    4.1 
                                Oil exploration 
 Hurricane Energy                &                       12,475,917    GBP0.47    5,863,681    4.0 
 Reaction Engines               Intellectual property       160,833   GBP32.00    5,146,656    3.5 
 Gleeson (M.J.) Group           UK housebuilding            620,000    GBP8.30    5,146,000    3.5 
 Nintendo                       Consumer intellectual       139,262     $43.08    4,602,008    3.2 
 Hornby                         Consumer intellectual    11,640,584    GBP0.38    4,446,703    3.1 
                                Global online 
 Delivery Hero                   food                       125,000   EUR41.13    4,419,774    3.0 
 Dixons Carphone                UK general retailers      2,650,000    GBP1.45    3,845,150    2.6 
 Liontrust Asset Management     UK asset management         550,000    GBP6.78    3,729,000    2.6 
 Barclays                       UK banking                2,250,000    GBP1.64    3,696,300    2.6 
 Purchases                        % of NAV   Sales                        % of NAV 
 Sports Direct International           3.9   Metapack                          4.5 
 Dixons Carphone                       2.8   Avation                           2.7 
 Plus500                               2.5   Ramsdens                          2.2 
 Dignity                               2.4   Gundaline                         1.9 
 Barclays                              2.4   Liontrust Asset Management        1.9 
 easyJet                               1.8   Augean                            1.9 
 Nintendo                              1.8   BP                                1.8 
                                             Samarang Asian Prosperity 
 Facebook                              1.5    Fund                             1.7 
 Just Eat                              1.5   Criteo                            1.6 
 Capital & Counties Properties         1.5   Oxford Sciences Innovation        1.5 
 Sector exposure 
 Sector                            2019    2018   Current positions 
 UK asset management               8.8%   14.1%   Polar, Liontrust, Miton 
 Global consumer technology        7.1%    5.7%   Rocket Internet, Fitbit 
 Consumer intellectual 
  property                         6.3%    3.0%   Hornby, Nintendo 
 UK grocery retail                 5.9%    4.6%   Tesco 
 Oil exploration & production      5.6%    8.0%   Hurricane, IGas, Trinity 
 UK apparel retail                 5.5%    2.4%   Sports Direct International 
 UK housebuilding                  5.1%    3.9%   MJ Gleeson, Springfield 
 Global online food delivery       4.8%    1.4%   Delivery Hero, Just Eat 
 Global serviced offices           4.7%    2.2%   IWG (Regus) 
 UK property                       4.3%    5.3%   Capital & Counties, Helical 
 UK funerals                       4.3%    3.0%   Dignity 
 Financial technology              3.8%    8.9%   Plus500, Gresham Technologies 
 UK banking                        3.7%    2.2%   Barclays, N1 Singer 
 Intellectual property             3.7%    5.0%   Reaction Engines, Physiolab 
 European airlines                 3.6%    0.0%   easyJet, Ryanair 
 UK general retail                 3.1%    4.8%   Dixons Carphone, Houseology 
 Global healthcare                 2.9%    3.5%   Glaxosmithkline, Vectura 
                                  83.2%   78.0% 
 Five largest stock contributors      Five largest stock detractors 
 Company               Contribution   Company                Contribution 
                                  %                                     % 
 IWG                            1.5   URICA                         (3.5) 
 Hornby                         0.8   Plus500                       (2.1) 
 Augean                         0.8   Starcount                     (1.6) 
 Inmarsat                       0.8   Dignity                       (1.5) 
 Metapack                       0.7   Gresham Technologies          (1.2) 

Strategy and Business Review

Corporate strategy & policy

The Company is incorporated in England as a public company limited by shares. Its business as an investment trust is to buy and sell investments with the aim of achieving the objective and in accordance with the policy set out in the Annual Financial Report.

Gearing & Leverage

The Company uses gearing as part of its investment strategy. Shareholders approved amendments to the Articles of Association on 7 June 2018 which changed the borrowing limit from 25 per cent to 50 per cent of the Company's net assets. However, the investment policy limits this to 25 per cent of net assets. Subject to this being complied with, the level of borrowing is a matter for the Board, whilst the utilisation of borrowings is delegated to the Investment Manager. This utilisation may be subject to specific guidelines established by the Board from time to time. The current guidelines permit the Investment Manager to employ borrowings of up to 20 per cent of net assets. The Company has a GBP20.0m (2018: GBP30.0m) borrowing facility with The Royal Bank of Scotland plc, of which GBPnil (2018: GBP11.0m) was drawn down at the year end. The use of gearing by the Investment Manager will vary from time to time, reflecting its views on the potential returns from stock markets. The Company's gearing is reviewed by the Board and Investment Manager on an ongoing basis.

Leverage is defined in the Alternative Investment Fund Manager Directive ("AIFMD") as any method by which the Company can increase its exposure by borrowing cash or securities, or from leverage that is embedded in derivative positions. The Company is permitted by its Articles to borrow up to 50 per cent; however the Company's investment policy restricts this to 25 per cent. The Company is permitted to have additional leverage of up to 100 per cent of its net assets, which results in permitted total leverage of 225 per cent under both ratios. Artemis as the Alternative Investment Fund Manager ("AIFM"), monitors leverage limits on a daily basis and reviews them annually. No changes have been made to these limits during the period. At 30 April 2019, the Company's leverage was 101.24 per cent as determined using the gross method and 96.51 per cent under the commitment method.

The Investment Manager requires prior Board approval to:

   (i)               enter into any stocklending agreements; 
   (ii)               to borrow money against the security of the Company's investments; or 
   (iii)              create any charges over any of the Company's investments. 

Operating environment

The Company operates as an investment trust company and is an investment company within the meaning of section 833 of the Companies Act 2006 (the "Act").

The Company has been approved as an investment trust in accordance with the requirements of section 1158 of the Corporation Taxes Act 2010 which remains subject to the Company continuing to meet the eligibility conditions and ongoing requirements of the regulations. The Board will manage the Company so as to continue to meet these conditions.

The Company has no employees and delegates most of its operational functions to service providers.

Current & future developments

A summary of the Company's developments during the year ended 30 April 2019, together with its prospects for the future, is set out in the Chairman's Statement and Investment Manager's Review included in the Annual Financial Report. The Board's principal focus is the delivery of positive long-term returns for shareholders and this will be dependent on the success of the investment strategy. The investment strategy, and factors that may have an influence on it, such as economic and stock market conditions, are discussed regularly by the Board and the Investment Manager. The Board regularly considers the ongoing development and strategic direction of the Company, including its promotion and the effectiveness of communication with shareholders.

Key Performance Indicators ("KPIs")

The performance of the Company is reviewed regularly by the Board and it uses a number of KPIs to assess the Company's success in meeting its objective. The KPIs which have been established for this purpose are:

Discrete annual total 
                        Net asset    Share  All-Share 
Year ended 30 April         value    price      Index 
2015                       (0.9)%   (6.9)%       7.5% 
2016                       (6.1)%  (13.2)%     (5.7)% 
2017                        20.9%    26.7%      20.1% 
2018                        11.0%    13.2%       8.2% 
2019                       (8.6)%   (8.9)%       2.6% 

Source: Artemis/Datastream

 Dividends per ordinary share 
                                    pence per                   Total 
 Year ended                          ordinary   Ordinary    increase/ 
 30 April      Ordinary   Special       share   increase   (decrease) 
 2015             3.55p         -       3.55p      10.9%        10.9% 
 2016             3.90p         -       3.90p       9.9%         9.9% 
 2017             4.30p     2.00p       6.30p      10.4%        61.5% 
 2018             4.75p     1.60p       6.35p      10.4%         0.8% 
 2019             5.00p     0.50p       5.50p       5.3%      (13.4)% 
Ongoing charges as a proportion of shareholders' 
As at 30 April                      Ongoing charges 
2015                                           0.9% 
2016                                           0.9% 
2017                                           0.9% 
2018                                           0.9% 
2019                                           0.9% 

In addition to the above KPIs, the Board monitors the discount to the underlying net asset value at which the shares trade. No specific discount target has been set, but the Board sets the share buy-back policy and has given the Investment Manager discretion to exercise the Company's authority to buy-back its own shares from time to time to address any imbalances between the supply and demand in the Company's shares or at times where we believe this the best use of available capital to increase NAV per share. This is reviewed regularly by the Board. The Board will also use its authority to issue new ordinary shares from time to time should there be excess demand for the Company's shares. The Company will now also provide tender offers every three years commencing in 2021, for 25 per cent of the ordinary shares then in issue.

Principal risks and risk management

The Board, in conjunction with the Investment Manager, has developed a risk map which sets out the principal risks faced by the Company. It is used to monitor these risks and to review the effectiveness of the controls established to mitigate them. This is reviewed and assessed by the Board on a six monthly basis. Further information on the Company's internal controls is set out in the corporate governance section included in the Annual Financial Report. As an investment company the main risks relate to the nature of the individual investments and the investment activities generally. These include market price risk, foreign currency risk, interest rate risk, credit risk and liquidity risk.

A summary of the key areas of risk is set out below:

- Strategic: investment objective and policy are not appropriate in the current market and not favoured by investors.

The investment objective and policy of the Company is set by the Board and is subject to ongoing review and monitoring in conjunction with the Investment Manager. Views expressed by the Company's shareholders are taken into account.

- Investment: the Company's investments are selected on their individual merits and the performance of the portfolio is not likely to track the wider UK market (FTSE All-Share Index). The Company invests in small cap (listed), AIM traded and unquoted investments which can be subject to a higher degree of risk than larger quoted investments. The Company may also have significant exposure to particular industry sectors from time to time.

As a result of the new investment objective and policy, the Company's portfolio has become more concentrated due to the Investment Manager's higher conviction approach. A concentrated portfolio carries a higher degree of stock-specific risk than a more diversified portfolio as a material decline in an investment may have a significantly adverse effect on the Company's overall performance, financial condition and prospects.

The Company's exposures to unquoted investments reduced to under 10% of total assets during the year, in line with the new investment objective and policy.

The Board considers that this risk is justified by the longer term nature of the investment objective and the Company's closed-ended structure, and that such investments should be a source of positive returns for shareholders. Risk will be diversified through having a broad range of investments in the portfolio. The Board discusses the investment portfolio with the Investment Manager at each Board meeting and part of this discussion includes a detailed review of the Company's unquoted investments, their valuations and future prospects.

The Company's functional and reporting currency is Sterling. However, the new investment objective and policy may result in a greater proportion of the Company's portfolio being invested in overseas equities denominated in currencies other than Sterling and in Sterling-denominated securities of companies which may conduct all or much of their business in currencies other than Sterling. As a result, movements in exchange rates may affect the Sterling value of these investments and their returns and the Company's overall performance, favourably or unfavourably. Foreign exchange rate risk may also increase the volatility of the NAV per Ordinary Share.

The Company may borrow money for investment purposes. If the investments fall in value, any borrowings will magnify the extent of the losses. If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings.

All borrowing arrangements entered into require the prior approval of the Board and gearing levels are regularly discussed by the Board and Investment Manager.

- Regulatory: failure to comply with the requirements of a framework of regulation and legislation, within which the Company operates.

The Company relies on the services of the Company Secretary and Investment Manager to monitor ongoing compliance with relevant regulations and legislation.

- Operational: disruption to, or failure of, the Investment Manager's and/or any other third party service providers' systems which could result in an inability to report accurately and monitor the Company's financial position.

Both the Investment Manager and the Administrator have established business continuity plans to facilitate continued operation in the event of a major service disruption or disaster.

-- Economic Risk: in addition to the above risks, at the date of this report the outcome of the UK Government's Brexit negotiations with the European Union remain unclear. The risk for the Company is principally in relation to the potential impact of Brexit on the UK companies within the investment portfolio. Although the majority of the investment portfolio is based in the UK, many companies have overseas operations and may potentially be impacted. The Investment Manager continues to monitor the situation and will respond to any economic fluctuations as required.

Further information on risks and the management of them are set out in the notes to the financial statements included in the Annual Financial Report.

Other Matters

Viability Statement

In accordance with the UK Corporate Governance Code, the Board has considered the longer term prospects for the Company beyond the twelve months required by the going concern basis of accounting. The period assessed is for five years to 30 April 2024. The Board has concluded that this period is appropriate, carefully taking into account the inherent risk with equities and the long term investor outlook.

As part of its assessment of the viability of the Company, the Board has discussed and considered each of the principal risks, as stated in the Annual Financial Report, and the impact on the Company's portfolio of a significant fall in markets and changes in regulation. The Board has also considered the liquidity of the Company's portfolio to ensure that it will be able to meet its liabilities, as they fall due. They have concluded, given the realisable nature of the majority of the investments, the level of ongoing expenses and the availability of gearing (currently unutilised), that the Company will continue to be in a position to cover its liabilities.

There will be a tender offer in 2021 of up to 25% of the share capital; this has been taken into account by the Board when assessing the continuing viability of the Company.

Taking into account the results of the above review, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to 30 April 2024.

Life of the Company

At a shareholder general meeting held on 7 June 2018, a resolution was passed which amended the Company's Articles to, amongst other things, remove the requirement to hold a continuation vote at the 2019 AGM and each fifth AGM thereafter.

This was replaced by a triennial liquidity event commencing in 2021. The tender offers will be made every three years, commencing in 2021, with each tender offer being for up to 25 per cent of the Ordinary Shares then in issue (excluding Treasury Shares), save that the Board may, at its sole discretion, decide not to proceed with a tender offer if the Ordinary Shares are trading at a premium to the estimated tender price.

Share Capital

Shareholders authorised the Company to buy back up to 14.99 per cent of the shares in issue at the 2018 AGM.

During the year the Company did not buy back any ordinary shares (2018: 152,500). The 152,500 ordinary shares bought back in the prior year were repurchased and cancelled from treasury on 27 June 2018.

Post year end, as at 15 July 2019, the Company repurchased 218,500 ordinary shares to be held in treasury.

A resolution to renew the Company's buy back authority will be put to shareholders at the AGM on 5 September 2019.

No ordinary shares were issued during the year. As a result of the prior year exercise of subscription shares 5,499 ordinary shares were issued during the year to April 2018.

The Company's remaining subscription shares were converted to deferred shares and immediately cancelled on 18 June 2018.


The Directors of the Company and their biographical details are set out in the Annual Financial Report.

No Director has a contract of service with the Company.

The Board supports the principles of diversity in the boardroom and acknowledges the benefits of having greater diversity, including gender, and considers this in seeking to ensure that the overall balance of skills and knowledge that the Board has remains appropriate so that it can continue to operate effectively. The Board's director selection policy will, first and foremost, seek to identify the person best qualified to become a director of the Company, but in so doing, consideration will be given to diversity, including gender. The Board is currently comprised of three male directors and two female directors.

Modern Slavery Act 2015

The Company does not fall within the scope of the Modern Slavery Act 2015 as its turnover is less than GBP36m. Therefore no slavery and human trafficking statement is included in the Annual Financial Report.

Social and environmental matters

The Company has no employees and has delegated the management of the Company's investments to Artemis which, in its capacity as Investment Manager, has a Corporate Governance and Shareholder Engagement document which sets out a number of principles that are intended to be considered in the context of its responsibility to manage investments in the financial interests of shareholders. Artemis undertakes extensive evaluation and engagement with company managements on a variety of matters such as strategy, performance, risk, dividend policy, governance and remuneration. All risks and opportunities are considered as part of the investment process in the context of enhancing the long-term value of shareholders' investments. This will include matters relating to material environmental, human rights and social considerations that will ultimately impact the profitability of a company or its stock market rating and hence these matters are an integral part of Artemis' thinking as investors.

As the Company has delegated the investment management and administration of the Company to third party service providers, and has no fixed premises, there are no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013, including those within the underlying investment portfolio.

Financial Statements

The financial statements of the Company are included in the Annual Financial Report.

For and on behalf of the Board

Duncan Budge


18 July 2019

Statement of Directors' Responsibilities in respect of the Annual Financial Report

Management Report

Listed companies are required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (the "Rules") to include a management report in their annual financial statements. The information required to be in the management report for the purpose of the Rules is included in the Strategic Report. Therefore no separate management report has been included in the Annual Financial Report.

Statement of Directors' Responsibility

The Directors are responsible for preparing the Annual Financial Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with IFRS as adopted by the EU and applicable law.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of their profit or loss for that period. In preparing each of the financial statements, the Directors are required to:

   -      select suitable accounting policies and then apply them consistently; 
   -      make judgements and estimates that are reasonable and prudent; 
   -      state whether they have been prepared in accordance with IFRS as adopted by the EU; and 

- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The financial statements are published on a website,, maintained by the Company's Investment Manager, Artemis. Responsibility for the maintenance and integrity of the corporate and financial information relating to the Company on this website has been delegated to the Investment Manager by the Directors. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

We confirm that to the best of our knowledge:

(a) the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities and financial position of the Company as at 30 April 2019, and of the profit or loss of the Company for the year then ended; and

(b) the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

Duncan Budge


18 July 2019

 Statement of Comprehensive Income 
 For the year ended 30 April 2019 
                                 Year ended                     Year ended 
                                30 April 2019                  30 April 2018 
                        Revenue    Capital      Total   Revenue   Capital     Total 
                        GBP'000    GBP'000    GBP'000   GBP'000   GBP'000   GBP'000 
 Investment income        3,347          -      3,347     3,250         -     3,250 
                       --------  ---------  ---------  --------  --------  -------- 
 Total revenue            3,347          -      3,347     3,250         -     3,250 
 investments                  -   (15,072)   (15,072)         -    13,454    13,454 
 Currency losses              -       (41)       (41)         -      (46)      (46) 
                       --------  ---------  ---------  --------  --------  -------- 
 Total income/(loss)      3,347   (15,113)   (11,766)     3,250    13,408    16,658 
 management fee            (95)      (854)      (949)      (92)     (829)     (921) 
 Other expenses           (451)      (101)      (552)     (433)      (24)     (457) 
                       --------  ---------  ---------  --------  --------  -------- 
 finance costs 
 tax                      2,801   (16,068)   (13,267)     2,725    12,555    15,280 
 Finance costs             (28)      (253)      (281)      (39)     (352)     (391) 
                       --------  ---------  ---------  --------  --------  -------- 
 tax                      2,773   (16,321)   (13,548)     2,686    12,203    14,889 
 Tax                      (132)          -      (132)      (83)         -      (83) 
 for the year             2,641   (16,321)   (13,680)     2,603    12,203    14,806 
                       --------  ---------  ---------  --------  --------  -------- 
                       --------  ---------  ---------  --------  --------  -------- 
 ordinary share           6.44p   (39.83)p   (33.39)p     6.35p    29.77p    36.12p 
                       --------  ---------  ---------  --------  --------  -------- 

The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance with International Financial Reporting Standards. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

All items in the above statement derive from continuing operations.

All income is attributable to the equity shareholders of Artemis Alpha Trust plc. There are no minority interests.

Statement of Financial Position 
As at 30 April 2019 
                                           2019      2018 
                                        GBP'000   GBP'000 
Non-current assets 
Investments                             139,179   169,206 
Investments in subsidiary undertaking     3,193     3,213 
                                        -------  -------- 
                                        142,372   172,419 
                                        -------  -------- 
Current assets 
Other receivables                           908       734 
Cash and cash equivalents                 4,556     1,126 
                                        -------  -------- 
Total assets                            147,836   174,279 
                                        -------  -------- 
Current liabilities 
Other payables                          (2,570)   (1,559) 
Bank loan                                     -  (11,000) 
                                        -------  -------- 
Total liabilities                       (2,570)  (12,559) 
                                        -------  -------- 
Net assets                              145,266   161,720 
                                        -------  -------- 
Equity attributable to equity holders 
Share capital                               410       480 
Share premium                               676       676 
Special reserve                          50,133    50,202 
Capital redemption reserve                  180       110 
Retained earnings - revenue               2,803     2,867 
Retained earnings - capital              91,064   107,385 
                                        -------  -------- 
Total equity                            145,266   161,720 
                                        -------  -------- 
Net asset value per ordinary share      354.47p   394.62p 
                                        -------  -------- 

These financial statements were approved by the Board of Directors and signed on its behalf on 18 July 2019 by:

Duncan Budge


Statement of Changes in Equity 
For the year ended 30 April 2019 
                           Share    Share  Special  redemption   Retained earnings 
                         capital  premium  reserve     reserve   Revenue    Capital      Total 
                         GBP'000  GBP'000  GBP'000     GBP'000   GBP'000    GBP'000    GBP'000 
For the year ended 
30 April 2019 
At 1 May 2018                480      676   50,202         110     2,867    107,385    161,720 
Total comprehensive 
Profit/(loss) for 
 the year                      -        -        -           -     2,641   (16,321)   (13,680) 
Transactions with 
recorded directly 
Cancellation of 
shares from treasury         (1)        -        -           1         -          -          - 
Conversion of 
subscription shares 
deferred shares             (69)        -        -          69         -          -          - 
Repurchase of deferred 
shares                         -        -     (69)           -         -          -       (69) 
Dividends paid                 -        -        -           -   (2,705)          -    (2,705) 
-----------------------  -------  -------  -------  ----------  --------  ---------  --------- 
At 30 April 2019             410      676   50,133         180     2,803     91,064    145,266 
-----------------------  -------  -------  -------  ----------  --------  ---------  --------- 
For the year ended 
30 April 2018 
At 1 May 2017                492      657   50,646          98     2,928     95,182    150,003 
Total comprehensive 
Profit for the year            -        -        -           -     2,603     12,203     14,806 
Transactions with 
recorded directly 
Repurchase of ordinary 
shares into treasury           -        -    (444)           -         -          -      (444) 
Cancellation of 
shares from treasury        (12)        -        -          12         -          -          - 
Conversion of 
subscription shares            -       19        -           -         -          -         19 
Dividends paid                 -        -        -           -   (2,664)          -    (2,664) 
-----------------------  -------  -------  -------  ----------  --------  ---------  --------- 
At 30 April 2018             480      676   50,202         110     2,867    107,385    161,720 
-----------------------  -------  -------  -------  ----------  --------  ---------  --------- 

Statement of Cash Flows

For the year ended 30 April 2019

                                                       2019      2018 
                                                    GBP'000   GBP'000 
Operating activities 
(Loss)/profit before tax                           (13,548)    14,889 
Interest payable                                        281       391 
Losses/(gains) on investments                        15,072  (13,454) 
Currency losses                                          41        46 
Increase in other receivables                           (2)     (179) 
(Decrease)/increase in other payables                  (13)       252 
                                                   --------  -------- 
Net cash inflow from operating activities before 
 interest and tax                                     1,831     1,945 
                                                   --------  -------- 
Interest paid                                         (281)     (391) 
Irrecoverable overseas tax suffered                   (132)      (83) 
                                                   --------  -------- 
Net cash inflow from operating activities             1,418     1,471 
                                                   --------  -------- 
Investing activities 
Purchases of investments                           (49,775)  (52,510) 
Sales of investments                                 64,347    53,337 
                                                   --------  -------- 
Net cash inflow from investing activities            14,572       827 
                                                   --------  -------- 
Financing activities 
Repurchase of ordinary shares into treasury               -     (444) 
Conversion of subscription shares                         -        19 
Repurchase of deferred shares                          (69)         - 
Dividends paid                                      (2,705)   (2,664) 
Increase/(decrease) in intercompany loan              1,255      (49) 
                                                   --------  -------- 
Net cash outflow from financing activities          (1,519)   (3,138) 
                                                   --------  -------- 
Net decrease/(increase) in net debt                  14,471     (840) 
                                                   --------  -------- 
Net debt at the start of the year                   (9,874)   (8,988) 
Effect of foreign exchange rate changes                (41)      (46) 
                                                   --------  -------- 
Net funds/(debt) at the end of the year               4,556   (9,874) 
                                                   --------  -------- 
Bank loans                                                -  (11,000) 
Cash and cash equivalents                             4,556     1,126 
                                                   --------  -------- 
                                                      4,556   (9,874) 
                                                   --------  -------- 

Notes to the Financial Statements

   1.   Accounting policies 

The financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union including interpretations issued by the IFRS Interpretations Committee and the Companies Act 2006 as applicable to companies reporting under IFRS. The principal accounting policies adopted by the Company are set out within the Notes to the Annual Financial Report.

Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts and venture capital trusts issued by the Association of Investment Companies ("AIC") in November 2014 and updated in February 2018 is consistent with the requirements of IFRS, the financial statements have been prepared in accordance with the SORP.

The accounting policies which apply in preparing the financial statements for the year ended 30 April 2019 have been applied consistently, other than where new policies have been adopted.

The financial statements are presented in Sterling, which is the currency of the primary environment in which the Company operates. All values are rounded to the nearest thousand pounds (GBP'000) except where otherwise indicated.

   2.   Income 
                                   Year ended     Year ended 
                                30 April 2019  30 April 2018 
                                      GBP'000        GBP'000 
Investment income* 
UK dividend income                      2,659          2,615 
UK fixed interest                          24            104 
Overseas dividend income                  625            529 
                                -------------  ------------- 
                                        3,308          3,248 
                                -------------  ------------- 
Other income 
Bank interest                              39              2 
                                -------------  ------------- 
                                           39              2 
                                -------------  ------------- 
Total income                            3,347          3,250 
                                -------------  ------------- 
Income from investments 
UK quoted investments                   2,844          2,376 
UK unquoted investments                   333            343 
Overseas quoted investments               101            529 
Overseas unquoted investments              30              - 
                                -------------  ------------- 
                                        3,308          3,248 
                                -------------  ------------- 

* All investments are designated at fair value through profit or loss on initial recognition, therefore all investment income arises on investments at fair value through profit or loss.

   3.   Investment management fees 
                        Year ended                 Year ended 
                       30 April 2019              30 April 2018 
                 Revenue  Capital    Total  Revenue  Capital    Total 
                 GBP'000  GBP'000  GBP'000  GBP'000  GBP'000  GBP'000 
management fee        95      854      949       92      829      921 

Details of the terms of the investment management fee are set out in the Directors' Report included within the Annual Financial Report. Following the June 2018 update to the investment management agreement, performance fees are no longer applicable. No performance fee was paid in the year ended 30 April 2018. As at 30 April 2019 GBP289,000 was outstanding in respect of amounts due to the Investment Manager (2018: GBP308,000).

   4.   Dividends paid and proposed 

Set out below are the total dividends recognised in respect of the financial year ended 30 April 2019.

                                                     Year ended  Year ended 
                                                       30 April    30 April 
                                                           2019        2018 
                                                        GBP'000     GBP'000 
2018 second interim dividend of 3.00p per ordinary 
 share (2017: 2.75p)                                      1,229       1,127 
2019 first interim dividend of 2.00p per ordinary 
 share (2018: 1.75p)                                        820         717 
Special dividend of 1.60p per ordinary share 
 (2017: 2.00p)                                              656         820 
                                                     ----------  ---------- 
                                                          2,705       2,664 
                                                     ----------  ---------- 

Dividends are recognised in the period in which they are due to be paid and are shown through the Statement of Changes in Equity. Therefore, the Statement of Changes in Equity for the year ended 30 April 2019 reflects the second interim dividend for the year ended 30 April 2018 which was paid on 24 August 2018 together with a special dividend of 1.60p. For the year ended 30 April 2019, a first interim dividend of 2.00p has been paid on 25 January 2019 and a final dividend of 3.00p together with a special dividend of 0.50p has been proposed for payment on 13 September 2019. The final dividend is proposed for approval by shareholders at the forthcoming AGM to be paid on 13 September 2019.

Set out below are the total dividends paid/proposed in respect of the financial year ended 30 April 2019.

                                                    Year ended  Year ended 
                                                      30 April    30 April 
                                                          2019        2018 
                                                       GBP'000     GBP'000 
First interim dividend of 2.00p per ordinary 
 share (2018: 1.75p)                                       820         717 
Final dividend of 3.00p per ordinary share (2018: 
 3.00p)                                                  1,229       1,229 
Special dividend of 0.50p per ordinary share 
 (2018: 1.60p)                                             205         656 
                                                    ----------  ---------- 
                                                         2,254       2,602 
                                                    ----------  ---------- 

5. Earnings per share

The revenue earnings per ordinary share is based on the revenue profit for the year of GBP2,641,000 (2018: GBP2,603,000) and on 40,980,974 (2018: 40,992,533) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

The capital loss per ordinary share is based on the capital loss for the year of GBP16,321,000 (2018: GBP12,203,000 capital return) and on 40,980,974 (2018: 40,992,533) ordinary shares, being the weighted average number of ordinary shares in issue during the year.

   6.   Share capital 

(a) Share capital

                                        2019     2019        2018     2018 
                                      Shares  GBP'000      Shares  GBP'000 
Allotted, called up and fully 
Ordinary shares of 1p each        40,980,974      410  40,980,974      410 
Ordinary shares of 1p each held 
 in treasury                               -        -     152,500        1 
Subscription shares of 1p each             -        -   6,853,639       69 
                                  ----------  -------  ----------  ------- 
                                  40,980,974      410  47,987,133      480 
                                  ----------  -------  ----------  ------- 

(b) Ordinary shares

                                                    Shares  GBP'000 
Movements in ordinary shares during the year: 
Ordinary shares in issue on 1 May 2018          40,980,974      410 
Ordinary shares in issue on 30 April 2019       40,980,974      410 
                                                ----------  ------- 

The movements in ordinary shares held in treasury during the year are as follows:

                                       2019     2019         2018     2018 
                                     Shares  GBP'000       Shares  GBP'000 
Balance brought forward             152,500        1    1,223,706       12 
Repurchases of ordinary shares            -        -      152,500        1 
Cancellation of ordinary shares   (152,500)      (1)  (1,223,706)     (12) 
                                  ---------  -------  -----------  ------- 
Balance carried forward                   -        -      152,500        1 
                                  ---------  -------  -----------  ------- 

During the year ended 30 April 2019, the Company cancelled 152,500 shares from treasury (2018: 152,500 ordinary shares were repurchased for placement in treasury for GBP444,000).

(c) Subscription shares

                                                        Shares  GBP'000 
Movements in subscription shares during the year 
Subscription shares in issue on 1 May 2018           6,853,639       69 
Conversion of subscription shares into deferred 
 shares                                            (6,853,639)     (69) 
                                                   -----------  ------- 
Subscription shares in issue on 30 April 2019                -        - 
                                                   -----------  ------- 

(d) Deferred shares

                                                     Shares  GBP'000 
Movements in deferred shares during the year 
Deferred shares in issue on 1 May 2018                    -        - 
Conversion of subscription shares to deferred 
 shares                                           6,853,639       69 
Repurchases of deferred shares                  (6,853,639)     (69) 
                                                -----------  ------- 
Deferred shares in issue on 30 April 2019                 -        - 
                                                -----------  ------- 

During the year ended 30 April 2019, 6,853,639 subscription shares were converted into deferred shares, repurchased for par value and immediately cancelled (2018: 5,499 subscription shares were exercised and the same number of ordinary shares were issued in respect of these).

7. Net asset value per ordinary share

The net asset value per share is based on the net assets of GBP145,266,000 (2018: GBP161,720,000) and on 40,980,974 (2018: 40,980,974) ordinary shares, being the number of ordinary shares in issue at the year end.

8. Transactions with the Investment Manager and related parties

The amounts paid to the Investment Manager and amounts outstanding at the year end are disclosed in notes to the Annual Financial Report.

However, the existence of an independent Board of Directors demonstrates that the Company is free to pursue its own financial and operating policies and therefore, under IAS 24: Related Party Disclosures, the Investment Manager is not considered to be a related party.

Fees payable during the year to the Directors and their interest in shares of the Company are considered to be related party transactions and are disclosed within the Directors Remuneration Report.

The Company surrendered excess management expenses without payment to Alpha Securities Trading Limited of GBPnil (2018: GBP495,000). All other transactions with subsidiary undertakings were on an arms length basis. During the year transactions in securities between the Company and its subsidiary undertakings amounted to GBPnil (2018: GBPnil).

9. Post balance sheet events

Following the year end, as at 15 July 2019, 218,500 ordinary shares have been bought back to be held in Treasury.

10. Annual Financial Report

This Annual Financial Report announcement does not constitute the Company's statutory accounts for the years ended 30 April 2019 and 30 April 2018 but is derived from those accounts. Statutory accounts for the year ended 30 April 2018 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 30 April 2019 and the year ended 30 April 2018 both received an audit report which was unqualified and did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not include statements under section 498 of the Companies Act 2006. The statutory accounts for the year ended 30 April 2019 have not yet been delivered to the Registrar of Companies and will be delivered following the Annual General Meeting.

The audited Annual Financial Report for the year ended 30 April 2019 will be available to shareholders shortly. Copies may be obtained from the Company's registered office at Cassini House, 57-59 St James's Street, London SW1A 1LD or at the website at

The Annual General Meeting of the Company will be held on Thursday, 5 September 2019 at 12.30 pm.

For further information, please contact:

Artemis Fund Managers Limited

Company Secretary

Telephone: 0131 225 7300

19 July 2019


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact or visit



(END) Dow Jones Newswires

July 19, 2019 02:00 ET (06:00 GMT)

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