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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Blackrock Throgmorton Trust Plc | LSE:THRG | London | Ordinary Share | GB0008910555 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -4.00 | -0.68% | 583.00 | 583.00 | 585.00 | 588.00 | 582.00 | 584.00 | 248,793 | 16:35:20 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | -10.2M | -15.75M | -0.1654 | -35.31 | 556.21M |
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TIDMTHRG
BlackRock Throgmorton Trust plc
(Legal Entity Identifier: 5493003B7ETS1JEDPF59)
Information disclosed in accordance with Article 5 Transparency Directive and
DTR 4.2
Half Yearly Financial Report 31 May 2021
Performance record
31 May 2021 30 November 2020
(unaudited) (audited)
Net assets (£'000)1 826,371 596,215
Net asset value per ordinary share 883.45p 681.24p
Ordinary share price (mid-market) 891.00p 682.00p
Benchmark Index2 19,451.94 15,232.31
Premium to cum income net asset value3 0.9% 0.1%
Average premium to cum income net asset value for 1.2% 0.2%
the period/year3
--------------- ---------------
Performance
Net asset value per share (with dividends +31.0% +9.1%
reinvested)3
Benchmark Index (with dividends reinvested)2 +27.7% +3.8%
Ordinary share price (with dividends reinvested)3 +31.9% +8.2%
======== ========
For the six For the six
months ended months ended
31 May 2021 31 May 2020 Change
(unaudited) (unaudited) %
Revenue
Net profit after taxation (£'000) 4,749 1,724 +175.5
Revenue earnings per ordinary share 5.24p 2.16p +142.6
Dividends per ordinary share
Interim 2.50p 2.50p -
======== ======== ========
Sources: BlackRock and Datastream.
1 The change in net assets reflects market movements, dividends paid and
share issues during the period.
2 The Company's Benchmark Index is the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index.
3 Alternative Performance Measures, see Glossary contained within the Half
Yearly Financial Report.
CHAIRMAN'S STATEMENT
Dear Shareholder
PERIOD HIGHLIGHTS
· NAV rose by 31.0%, outperforming the benchmark index by 3.3%
· Share price rose by 31.9%, outperforming the benchmark index by 4.2%
· 6,020,108 new shares issued, raising £48.2m
· Interim dividend declared of 2.50p per share (2020: 2.50p)
OVERVIEW
As was the case this time last year, it has been another remarkable and
challenging first half to the financial year, dominated by the continuing
disruption caused by the COVID-19 pandemic. At the time of writing, there have
been several new variants of the COVID-19 virus identified in the UK and this
has contributed to uncertainty around the speed and extent of the reopening of
our economy. However, on 19 July 2021 the UK Government implemented the final
stage of its roadmap to reopening, removing the vast majority of the lockdown
restrictions in place. This action has been well received by markets in
anticipation of increased economic activity and productivity.
We have seen a surge in inflation, as prices of fuel, energy and commodities
have all risen. This spike is believed to be largely due to a combination of
supply chain bottlenecks, resulting from operational disruption caused by the
effects of the lockdown, and the speed at which economic activity is restarted,
and is currently considered to be temporary. Nonetheless, there are signs that
certain supply chains may have been temporarily or even permanently altered as
a result of COVID-19.
As COVID-19 restrictions have eased, we have seen increasing activity across
many sectors and industries. The latest data on economic activity, productivity
and employment is promising and consumer confidence is returning, demonstrated
by a spike in retail spending which has risen sharply in recent months and
which has provided a much-needed boost to the UK economy. Fiscal and monetary
policy remain supportive and the Bank of England has forecast that growth will
exceed 7% in 2021. This would represent the strongest expansion in over 70
years. It is based on lockdown restrictions being permanently removed.
Nonetheless, as we move into a more stable environment and our successful
vaccination programme takes effect, the near term outlook is bright.
Against this backdrop your portfolio manager remains optimistic and believes
our portfolio is well positioned to benefit from the many opportunities
available as the economy returns to growth. It is also clear that our portfolio
manager's longstanding focus on financially strong companies, with innovative
and disruptive business models, has served the Company well during this period
and will hopefully stand the portfolio in good stead in the second half of the
year and beyond.
PERFORMANCE RECORD TO 31 MAY 2021 (WITH DIVIDS REINVESTED)
% change since
BlackRock was
appointed
1 Year change 3 Year change % 5 Year change on 1 July 2008
% %
NAV per share 62.4 54.9 143.9 645.4
Share price 63.1 73.9 193.1 748.8
Benchmark 55.6 27.2 64.9 220.5
PERFORMANCE
Over the six months to 31 May 2021, the Company's Net Asset Value (NAV) return
was +31.0% compared to a return of +27.7% from the Company's benchmark index,
an outperformance of 3.3%. The Company's share price rose by 31.9%, an
outperformance of 4.2% ending the period on a premium to NAV of 0.9% (30
November 2020: a premium of 0.1%). Since the period end and up to the close of
business on 21 July 2021, the Company's NAV has risen by 3.6%, and the
benchmark index has fallen by 2.8% (all figures in sterling terms with
dividends reinvested).
Further information on portfolio activity, the factors that contributed to
performance during the period and the outlook for the second half of the
financial year are set out in the Investment Manager's Report below.
REVENUE RETURN AND DIVIDS
The revenue return per share for the period amounted to 5.24 pence per share,
compared to 2.16 pence per share earned during the same six-month period last
year. This represents an increase of 142.6% and results from increases in both
the ordinary and special dividends received during the period, predominantly as
a result of the impact of the COVID-19 pandemic.
In the comparative period many companies suspended their dividend payments due
to the uncertain outlook and this marks the resumption of normal dividend
receipts.
The Board recognises that, although the Company's objective is capital growth,
shareholders value consistency of dividends paid by the Company; an interim
dividend of 2.50p per share (2020: 2.50p per share) payable on 27 August 2021
to shareholders on the register on 6 August 2021 (the ex-dividend date is 5
August 2021) has therefore been declared.
Consistent with this approach, the Board will continue to consider the use of
brought forward distributable reserves to support the full year dividend if
deemed appropriate to do so at the time.
CORPORATE GOVERNANCE
As I mentioned in the Company's Annual Report, the Board hopes to continue to
grow your Company which may result in membership of the FTSE 250, which would
bring with it some additional governance requirements. Having considered the
provisions and application of the UK Code, in February 2021 the Board resolved
to appoint an existing Director, Louise Nash, as the Company's Senior
Independent Director and also established a new Remuneration Committee which is
chaired by Angela Lane. The Remuneration Committee will make its first report
to shareholders on its activities in this year's Annual Report.
As part of the Board's succession plans, we also welcomed two new Directors to
the Board during the period; Nigel Burton and Merryn Somerset Webb who were
appointed on 21 December 2020 and 24 March 2021 respectively.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
The Board recognises that ESG issues can present both opportunities and risks
to long term investment performance. An assessment of these issues forms an
important part of the decision making process of the Investment Manager, which
determines whether the Company will invest in, or divest of, the securities of
a company. These considerations also guide BlackRock, the Investment Manager,
in its reviews of portfolio companies and its assessment of the issues on which
to engage with investee companies, how this is best done and whether or not to
support proposals put to shareholders.
BlackRock therefore incorporates material ESG information and consideration of
sustainability risks into investment decisions in order to seek to enhance
risk-adjusted returns. ESG insights and data, including sustainability risks,
are considered as part of the investment process, including company research
and portfolio construction. These ESG insights are not the sole consideration
when making investment decisions; ESG integration does not change the Company's
investment objective and the extent to which ESG insights are considered during
investment decision making will also be determined by other factors including, for example, the portfolio company's sector and operations. OPERATIONAL RESILIENCE As I reported in last year's Annual Report, throughout the COVID-19 outbreak the Board has been working closely with your Manager, BlackRock, and the Company's key suppliers to minimise the risk the virus poses to the health and wellbeing of all those engaged in the management and administration of the Company. I am pleased to report that there has been no adverse impact on the Company's operations which have continued to be unaffected. As a Board, we have continued to meet regularly, via video conference, and I am hopeful that we can all return to some form of normality, meeting in person, in the near future. SHARE PRICE PREMIUM/DISCOUNT During the six months to 31 May 2021, the Company's share price premium/ discount to NAV ranged between a discount of 1.5% and a premium of 2.8%, ending the period at a premium of 0.9%. As at 21 July 2021 the Company's shares were trading at a premium of 1.4%. The Company is once again one of very few investment companies in the UK smaller companies' sector that has been trading at a premium to NAV during the majority of the period. The Board believes that the best way of addressing any discount over the longer-term is to continue to generate good performance and to create demand for the Company's shares in the secondary market through broadening awareness of the Company's unique structure and other attractions. The Board also believes that it is in shareholders' interests that the share price does not trade at an excessive premium or discount to NAV. Therefore, where deemed to be in shareholders' long-term interests, it may exercise its powers to issue shares or buy back shares with the objective of ensuring that an excessive premium or discount does not arise. As a result, the Board will seek to renew the authority from shareholders to buy back shares when it believes that it is in the interests of shareholders to do so. During the period the Company issued a total of 6,020,108 new Ordinary shares for a total consideration of £48,189,000. Since 31 May 2021 and up to the latest practicable date of 21 July 2021, a further 2,122,504 shares have been issued for a total consideration of £19,606,961. All share issuance is conducted at a sufficient premium to the prevailing NAV such that it is accretive to NAV. The issue of new shares, where demand cannot be met in the market, is beneficial to existing shareholders as it often aids liquidity in the Company's shares and may help to avoid any excessive premium to NAV at which the existing shares trade arising. It also broadens the shareholder base over which the fixed operational costs of the Company are shared. OUTLOOK COVID-19 has clearly damaged the global economy in the short term and disrupted our way of life. There is little doubt that its impact will have far reaching consequences for many years to come and will change how companies operate and how people interact. In response to the pandemic, governments have deployed fiscal stimulus measures and monetary easing the like of which has not been seen in modern times. More recently, central banks in the US, Europe and the UK have indicated that they will continue with this supportive policy, in the near term at least, and appear willing to allow the global economy and inflation to run a little hotter as the world recovers from COVID-19. This should provide a helpful economic backdrop for our portfolio manager and one within which the high-quality growth companies in our portfolio can continue to prosper. The pandemic has accelerated changes in industries to which we were already exposed. We expect that the financially strong businesses in which we invest will thrive and take greater market share as weaker competitors fall. Overall, our portfolio manager, Dan Whitestone, believes the outlook for the UK market looks very favourable and that our portfolio of fast growing, innovative and differentiated companies are well placed to prosper as the economy returns to growth. SHAREHOLDER COMMUNICATION We appreciate how important access to regular information is to our shareholders. To supplement our Company website, we now offer shareholders the ability to sign up to the Trust Matters newsletter which includes information on the Company as well as news, views and insights. Further information on how to sign up is set out at the foot of this announcement. CHRISTOPHER SAMUEL Chairman 23 July 2021 INVESTMENT MANAGER'S REPORT MARKET REVIEW AND OVERALL INVESTMENT PERFORMANCE The first six months of the Company's financial year have been characterised by the ongoing recovery in the UK stock market, as vaccination programmes and stimulus-boosted optimism around the recovery trumped concerns around virus variants. The steepening yield curve amidst much discussion of the recent pick-up in inflation drove some extreme style rotations, notably away from "growth" shares and into "value" areas of the market. On Brexit, there were swings in trade negotiations during December, but finally an agreement was reached at the very end of the month. Having been out of favour since the referendum, clarity over Brexit removed the huge cloud that had been hanging over the UK market for the last four years, eliminating the Brexit 'no-deal' risk premium. As a result, interest in the UK equity market has risen, both in terms of institutional and retail demand, but also corporate interest with many M&A transactions occurring over the period. Small and mid-cap shares have performed strongly through the period. PERFORMANCE REVIEW The outperformance of the value factor has naturally created a headwind to our growth focused investment style but despite this backdrop the Company has delivered a positive result during the first half of our financial year, returning 31.0% and outperforming the benchmark by 3.3%. This we believe is very creditable performance and an indicator of just how much opportunity we are seeing even in an environment where the UK equity market is less favourable to differentiated growth companies. Underlying trading across the companies in our long book has for the most part been very strong. Many of our holdings have delivered very positive updates, a continuation of the trends that drove performance last year, beating estimates and raising guidance on both revenues and profits. This has reaffirmed our faith in the differentiation of these business models, and their ability to continue delivering on their strategies. Once again, our focus on the micro has triumphed over the macro challenges of the current environment and gives us confidence in the outlook for Company returns going forward. Unsurprisingly the strong outperformance of the Company versus our benchmark during the first half of the year has been driven by the long book. This reflects firstly, the strong delivery across a number of our long positions and secondly, the fact that we have been operating with a lower than usual short exposure. This demonstrates our optimism in stock markets, the outlook for UK plc more broadly and the structural and industrial trends to which the Company is exposed. During the year to date, it has been pleasing to see that the largest contributors to performance have come from a broad range of companies across different industries with the common feature being continuous delivery (and upgrades) against their clear business strategies, which, in most cases, are benefiting from strong secular growth drivers. The largest positive contributor during the period was the sustainable-focused fund manager, Impax Asset Management. The business has continued to show impressive growth in assets under management for a sustained period and this growth looks well set to continue given the strength of their franchise, market-leading investment performance and the structural growth/interest in sustainability which underpins the company's investment philosophy. Watches of Switzerland (WOSG) once again contributed positively to performance. This is a retailer that has provided multiple strong updates with upgrades to forward guidance as its multi-channel approach has enabled the business to meet customer demand through successfully transitioning sales to online, while also benefiting as retail stores reopen post COVID-19 closures. The outlook for the group remains strong with demand for luxury watches far outweighing supply and the company's long-standing relationships with key brands such as Rolex provides WOSG with exclusive supply which is a key differentiating feature for any retailer. Treatt, the manufacturer of flavour and fragrance ingredients rose after delivering profits ahead of expectations. Positive organic revenue growth and an improving product mix has resulted in progress on margins and with this current momentum the group upgraded full year guidance. One key feature in the UK market in recent months has been an increase in takeover activity, notably from private equity and overseas bidders. Strategic buyers have been willing to look through the period of current uncertainty and focus on what is perceived as the undervaluation of UK equities versus their global peers, particularly in smaller companies. One of our holdings which benefited from this dynamic was IMIMobile, a leading player in communications software, which soared after the company agreed to a takeover approach from US-listed IT giant Cisco Systems. We were very excited by the long-term secular growth prospects for this company so we were sorry to see it go, but we understand the strategic rationale. Similarly, industrial tape manufacturer Scapa added to performance after the company was acquired by US materials group Schweitzer-Mauduit International Inc. Another feature of the period has been the increase in IPO activity in the UK
market since the beginning of 2021. This has presented us with the opportunity to invest in several exciting new businesses which have contributed positively to performance. One example is Auction Technology Group, a market leader in digital auction marketplaces, which made a positive start to life as a public company and rose further after delivering very strong results in May. The shares have now doubled since we purchased at IPO earlier this year and the outlook for the business remains attractive for the foreseeable future. On the negative side it was reassuring to see that detractors to performance were primarily driven by the market rotation away from growth and the outperformance of value, rather than disappointments at the stock level. A common theme across the detractors was that they were shares that performed very well during 2020, for example Masimo, Team 17 and Trade Desk. We think they have only suffered in the very short term for no other reason than they have been such great performers so have succumbed to some profit taking. The fundamentals for all three remain very strong and we retain high conviction in the positions. Chegg, another of our US positions, reported a strong update, in our opinion, but fell back after some great share price performance in the last year. In our mind, the company is so much more than a "COVID-19 trade". It delivered growth that exceeded analyst forecasts for several years pre-dating COVID-19 due to the strength of its offering and the huge underlying changes occurring in the education market. While Chegg clearly saw an acceleration of these trends during COVID-19 we believe it has the potential for many more years of growth. One stock specific detractor to highlight was Avon Rubber. The shares fell on the disappointing news that some US Army body armour contracts would not be signed as quickly as anticipated and as a result revenue would be delayed. While this is disappointing, we continue to believe in the long-term attractions of the business and the steps taken to increase its focus on the protection business. ACTIVITY Since the end of the financial year in November 2020 we have modestly added to our total number of holdings which is now 139. The number of short positions remains low at 8 and we have 131 long holdings. Consequently, the net gearing of the Company remains towards the upper end of our range at 120.3%, with the gross at 123.3%. This positioning reflects the opportunity that we believe is ahead for many differentiated emerging companies given the high level of industrial change that we are witnessing across our investable universe. A number of companies have listed on the UK market during the first half of the year. This has presented some really interesting opportunities for the Company to take part in. We have taken a selective approach to these companies as they have not all been of the quality we seek but two purchases in Moonpig and Auction Technology Group (ATG) are worth highlighting. Moonpig is the UK's leading online greetings card retailer. During the pandemic they substantially strengthened their market position as more people shopped online for gift cards. Their very attractive unit economics mean customers are highly profitable once acquired. Since listing, they have released a positive trading update showing all the main drivers of customer lifetime value moving in the right direction. ATG provides auction houses with a scalable technology platform to take their auctions online. This is another industry that has seen digitalisation accelerate during the COVID-19 pandemic and where we believe the shift will be permanent and therefore there is a sizeable opportunity for ATG to capitalise on this trend. We also used volatility caused by the rotation away from growth companies that had been deemed "COVID-19 winners" to add selectively to high conviction ideas at attractive valuations. In March, for example, we significantly added to our position in Gamma Communications, a leading cloud communications provider in both the UK and Europe, as the shares fell to their cheapest valuation in several years, despite a materially better outlook and positive accelerating structural changes in the markets they operate in. This proved to be an opportune time to add to our holding as shortly thereafter the shares rose to new highs on the back of another upgrade to forecasts accompanying their strong trading update. PORTFOLIO POSITIONING As a reminder, portfolio positioning is driven by stock and industry specific analysis and our focus on two types of company. First are what we define as quality differentials, essentially differentiated long-term growth investments. These we characterise as companies that have strong management teams, with a strong market position, a unique and compelling product offering and an attractive route to market, often benefiting from structural growth, and that are well-financed with clean accounting. The second type of company are those that are leading industry change, the 'disruptors' and alternatively on the short side it is the victims of industry change, the 'disrupted'. Given the conviction in our holdings and the long-term secular trends that the Company is exposed to, portfolio positioning does not change materially from period to period. Digital Transformation is one secular area of spend where growth rates have meaningfully accelerated during COVID-19 as corporates continue to invest in their digital capabilities to drive demand and win market share, adapt to changes in consumer behaviour and remove costs and complexity from their operations. It remains a key focus for every board globally. We have deliberately sought exposure to these trends in recent years and have increased our exposure recently as we think the growth outlook has improved, notably in digital payments, software-as-a-service, online learning, and cloud enabled audio and visual communications. COVID-19 has also driven an acceleration of profound seismic market share shifts intra-industry, which we think of as "Corporate Darwinism", as the well-capitalised leaders benefit from a confluence of changing consumer and corporate behaviours and structural withdrawal of capacity as weakened peers exit the market. Across a range of industries, we have witnessed many differentiated businesses solidify their market position through accelerated organic market share gains or through acquisition e.g. omni-channel retailers, veterinary services and component distribution. One sector where we have increased exposure is the UK construction market. This may not initially seem the most high quality place to invest, but within a broad sector there are several differentiated businesses run by long-standing and trustworthy management teams e.g. Morgan Sindall, Grafton Group or Breedon. We believe the sector is set to see an extended period of strong trading as, for the first time since the Global Financial Crisis, all three major areas of construction (new build housing, repairs & maintenance and, infrastructure) are growing at the same time. The industry structure has also changed for the better, with a great deal of capacity having left the market and those left standing able to negotiate more favourable contractual terms with their customers. OUTLOOK Our outlook remains broadly unchanged and if anything we feel that the opportunity for this Company is more exciting than ever before. We are always positive on the prospect for truly differentiated growth companies to deliver amazing results, regardless of the macro environment. Clearly the biggest reservation that investors might have for a company like BlackRock Throgmorton Trust plc is the ongoing debate about 'value vs growth', and this is certainly a question that we have faced regularly in recent months. However, as mentioned in the past, and perhaps surprisingly, we really do not see the 'value vs growth' discussion as a critical issue in investment returns. Rather we see the high level of ongoing industrial change as creating many more opportunities for emerging companies to generate strong performance and this is far more important in delivering good returns to our investors. In summary, the outperformance that we have delivered during the period and the strength of trading across many of our holdings continues to validate our positioning and provides us with confidence that our strategy of focusing on stock and industry analysis is the right one. We thank shareholders for their ongoing support. DAN WHITESTONE BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED 23 July 2021 PORTFOLIO OF INVESTMENTS 1 GAMMA COMMUNICATIONS* Mobile Telecommunications Market value1: £26,622,000 Share of net assets: 3.2% Provider of communication services to UK businesses. 2 IMPAX ASSET MANAGEMENT* Financial Services Market value: £23,562,000 Share of net assets: 2.9% Provider of asset management services. 3 ELECTROCOMPONENTS Support Services Market value1: £22,504,000 Share of net assets: 2.7% Distributor of industrial and electronics products. 4 YOUGOV* Media Market value: £21,427,000 Share of net assets: 2.6% Provider of survey data and specialist data analytics. 5 WATCHES OF SWITZERLAND Personal Goods Market value: £21,424,000 Share of net assets: 2.6% Retailer of luxury watches. 6 MOONPIG General Retailers Market value1: £20,209,000 Share of net assets: 2.4% Internet based provider of personalised cards and gifts. 7 OXFORD INSTRUMENTS Electronic & Electrical Equipment Market value: £17,932,000 Share of net assets: 2.2% Designer and manufacturer of tools and systems for industry and research. 8 PETS AT HOME General Retailers Market value1: £17,601,000 Share of net assets: 2.1% Retailer of pet supplies. 9 BREEDON* Construction & Materials Market value: £16,929,000 Share of net assets: 2.0% British construction materials group. 10 GAMES WORKSHOP
Leisure Goods
Market value: £16,770,000
Share of net assets: 2.0%
Developer, publisher and manufacturer of miniature war games.
1 Includes long derivative positions.
* Traded on the Alternative Investment Market (AIM) of the London Stock
Exchange.
# Company £'000 % Description
11 CVS Group* 15,992 1.9 Operator of veterinary surgeries
General Retailers
12 Treatt 15,173 1.8 Development and manufacture of
Chemicals ingredients for the flavour and
fragrance industry
13 Qinetiq Group 15,0351 1.8 Provider of scientific and
Aerospace & Defence technological services to the
defence, security and aerospace
markets
14 IntegraFin 14,781 1.8 UK savings platform for financial
Financial Services advisors
15 Ergomed* 14,6441 1.8 Provider of pharmaceuticals
Pharmaceuticals & Biotechnology services
16 Grafton Group 14,471 1.8 Builders merchants in the UK,
Support Services Ireland and Netherlands
17 Dunelm Group 13,7281 1.7 Retailer of homeware products
General Retailers
18 Learning Technologies* 12,652 1.5 Provider of e-learning services
Software & Computer Services
19 Computacenter 12,637 1.5 Computer services
Software & Computer Services
20 Dechra Pharmaceuticals 12,563 1.5 Developer and supplier of
Pharmaceuticals & Biotechnology pharmaceutical and other products
focused on the veterinary market
21 XP Power 12,472 1.5 Leading provider of power
Electronic & Electrical Equipment solutions
22 Workspace Group 12,4551 1.5 Supply of flexible workspace to
Real Estate Investment Trusts businesses in London
23 4imprint Group 12,361 1.5 Supplier of promotional
Media merchandise in the US
24 Sumo Group* 12,124 1.5 Provider of creative and
Leisure Goods development services to the video
games and entertainment industries
25 OSB Group 12,066 1.5 Specialist lending business
Financial Services
26 Spectris 11,447 1.4 Supplier of productivity enhancing
Electronic & Electrical Equipment instrumentation and controls
27 Howden Joinery Group 11,3891 1.4 Kitchen and joinery product
General Retailers supplier
28 Liontrust Asset Management 10,794 1.3 Provider of asset management
Financial Services services
29 Morgan Sindall 10,493 1.3 Supplier of office fit out,
Construction & Materials construction and urban
regeneration services
30 DiscoverIE 10,3511 1.3 International designer,
Electronic & Electrical Equipment manufacturer and supplier of
customised electronics
31 WH Smith 10,300 1.2 British retailer of books,
General Retailers stationery, magazines and
confectionary
32 Tyman 10,061 1.2 Supplier of engineered components
Support Services and access solutions to the
construction industry
33 Robert Walters 9,954 1.2 Provider of specialist recruitment
Support Services services
34 Diploma 9,787 1.2 Supplier of specialised technical
Support Services products and services
35 Next Fifteen Communications* 9,654 1.2 Provider of digital communication
Media products and services
36 Jet2* 9,288 1.1 UK airline and tour operator
Travel & Leisure
37 Sirius Real Estate 9,066 1.1 Owner and operator of business
Real Estate Investment & Services parks, offices and industrial
complexes in Germany
38 Safestore Holdings 9,056 1.1 Provider of self-storage units
Real Estate Investment Trusts
39 Johnson Service Group* 8,759 1.1 Provider of textile services
Support Services
40 Team 17* 8,7321 1.1 Video game developer and publisher
Leisure Goods
41 Spirent 8,695 1.1 Multinational telecommunications
Technology Hardware & Hardware testing
Equipment
42 Greggs 8,597 1.0 Bakery chain
Food & Drug Retailers
43 Clipper Logistics 8,364 1.0 Retail logistics business
Support Services
44 Alliance Pharma* 8,364 1.0 Distributor of pharmaceutical and
Pharmaceuticals & Biotechnology healthcare products
45 Vistry Group 8,164 1.0 UK housebuilder
Household Goods & Home Construction
46 GB Group* 8,001 1.0 Developer and supplier of identity
Software & Computer Services verification solutions
47 TT Electronics 7,939 1.0 Global manufacturer of electronic
Electronic & Electrical Equipment components
48 Bytes Technology 7,924 1.0 Specialist in software, security
Software & Computer Services and cloud services
49 Sanne Group 7,8861 1.0 Provider of alternative asset and
Financial Services corporate services
50 Chegg 7,820 0.9 Provider of education related
General Retailers services
51 Tatton Asset Management* 7,818 0.9 Provider of discretionary fund
Financial Services management services to financial
advisors
52 Polar Capital Holdings* 7,7521 0.9 Provider of investment management
Financial Services services
53 Kainos Group 7,7321 0.9 Provider of digital technology
Software & Computer Services solutions
54 Joules* 7,708 0.9 Clothing retailer inspired by
General Retailers British country lifestyles
55 Balfour Beatty 7,7041 0.9 Multinational infrastructure group
Construction & Materials
56 Luceco 7,662 0.9 Supplier & manufacturer of high
Electronic & Electrical Equipment quality LED lighting products
57 Avon Rubber 7,662 0.9 Producer of safety masks
Aerospace & Defence
58 Young & Co's Brewery* 7,632 0.9 Owner and operator of pubs mainly
Travel & Leisure in the London area
59 Auction Technology Group 7,564 0.9 Operator of marketplaces for
General Retailers curated online auctions
60 NCC Group 7,363 0.9 Cyber security business
Software & Computer Services
61 Restaurant Group 7,2161 0.9 Operator of restaurants and pubs
General Retailers
62 Euronext 6,9911 0.8 European stock exchange
Financial Services
63 Xero 6,980 0.8 Software company specialising in
Software & Computer Services accounting for small businesses
64 Cranswick 6,798 0.8 Producer of premium, fresh and
Food Producers added-value food products
65 Chrysalis Investments 6,420 0.8 Closed end investment company
Financial Services investing in later stage private
companies with long-term growth
potential
66 Dr. Martens 6,311 0.8 Supplier and manufacturer of
Leisure Goods footwear
67 Vesuvius 6,228 0.8 British engineered ceramics
Industrial Engineering company
68 Serco Group 6,221 0.8 Provider of public services across
Support Services health, transport, immigration,
defence, justice and citizen
services
69 SThree 6,215 0.8 Provision of specialist
Support Services professional recruitment services
70 DSV 6,0071 0.7 Danish transport and logistics
Industrial Transportation company
71 Londonmetric Property 5,9281 0.7 Investor in, and developer of,
Real Estate Investment Trusts property
72 Boku* 5,846 0.7 Digital payments platform
Support Services
73 S4 Capital 5,648 0.7 Digital advertising and marketing
Media services business
74 Draper Esprit* 5,491 0.7 Technology-focused venture capital
Financial Services firm
75 Helios Towers 5,321 0.6 Provider of telecommunications
Mobile Telecommunications infrastructure
76 Hollywood Bowl Group 5,1551 0.6 Operator of ten-pin bowling
General Retailers services
77 Masimo 5,119 0.6 Developer and manufacturer of
Health Care Equipment & Services non-invasive patient monitoring
technologies
78 Close Brothers Group 5,0231 0.6 Provider of lending, deposit
Banks taking, wealth management services
and securities trading
79 888 4,915 0.6 Operator and platform for online
Travel & Leisure gaming
80 Mattioli Woods* 4,859 0.6 Provider of wealth management
Financial Services services
81 Marshalls 4,856 0.6 British construction materials
Construction & Materials group
82 Redrow 4,765 0.6 UK housebuilder
Household Goods & Home Construction
83 The Pebble Group* 4,648 0.6 Designer and manufacturer of
Media promotional goods
84 Activeops* 4,602 0.6 Provider of management process
Software & Computer Services automation solutions
85 Eckoh* 4,4851 0.5 Global provider of secure payments
Software & Computer Services products
86 Zotefoams 4,4361 0.5 Manufacturer of polyolefin foams
Chemicals used in sport, construction,
marine, automation, medical
equipment and aerospace
87 Judges Scientific* 4,382 0.5 Designer and producer of
Electronic & Electrical Equipment scientific instruments
88 Ascential 4,297 0.5 Specialist information, data and
General Retailers analytics company
89 GlobalData* 4,2511 0.5 Data analytics and consulting
Media
90 AB Dynamics* 4,209 0.5 Developer and supplier of
Industrial Engineering specialist automotive testing
systems
91 Accesso Technology* 4,1761 0.5 Provider of ticketing and virtual
Software & Computer Services queuing solutions
92 Future 4,133 0.5 Multi-platform media business
Media covering technology,
entertainment, creative arts, home
interest and education
93 Synthomer 4,104 0.5 Supplier and manufacturer of
Chemicals plastics and industrial
specialities
94 Domo 4,0931 0.5 US based operator of mobile,
Software & Computer Services cloud-based operating systems
95 Renishaw 4,090 0.5 Engineering and scientific
Electronic & Electrical Equipment technology company
96 Anpario* 4,009 0.5 Manufacturer and distributor of
Pharmaceuticals & Biotechnology natural animal feed additives for
animal health, nutrition and
biosecurity
97 Worldline 3,9471 0.5 Digital payments company
Software & Computer Services
98 Aptitude Software 3,946 0.5 Provider of specialist finance
Software & Computer Services software and technology
99 Porvair 3,812 0.5 Specialist filtration and
Industrial Engineering environmental technology
100 Craneware* 3,761 0.5 Provider of financial business
Software & Computer Services software for US hospitals
101 Adyen 3,7171 0.4 Digital payments company
Support Services
102 Frontier Developments* 3,642 0.4 British video game developer and
Leisure Goods publisher
103 Gooch & Housego* 3,641 0.4 Designer and manufacturer of
Electronic & Electrical Equipment advanced photonic systems
104 Axon Enterprise 3,6331 0.4 US based provider of technology
Support Services and weapons products
105 Shoals Technologies 3,5051 0.4 Provider of electrical balance of
Support Services system solutions
106 MongoDB 3,4861 0.4 Global cloud-based database
Software & Computer Services
107 Five9 3,475 0.4 Provider of cloud-based contact
Software & Computer Services centre software
108 Fevertree Drinks* 3,362¹ 0.4 Developer and seller of soft
Beverages drinks and mixers
109 Freshpet 3,3461 0.4 Producer of fresh, refrigerated
Food Producers food and treats for dogs and cats
110 St. Modwen Properties 3,302 0.4 Investor in, and developer of,
Real Estate Investment & Services property
111 Keywords Studios* 3,2441 0.4 Provider of video games technical
Support Services services
112 Foresight Group Holdings 3,2291 0.4 Infrastructure and private equity
Financial Services manager
113 AJ Bell 3,169 0.4 UK savings platform for financial
Financial Services advisors & individual investors
114 Fuller Smith & Turner - A Shares 3,149 0.4 Owner and operator of pubs mainly
Travel & Leisure in the London area
115 Bellway 3,1451 0.4 UK housebuilder
Household Goods & Home Construction
116 MaxCyte* 3,098 0.4 Clinical-stage global cell-based
Pharmaceuticals & Biotechnology therapies and life sciences
company
117 Alfa Financial Software 3,079 0.4 Provider of software to the
Software & Computer Services finance industry
118 ITM Power* 2,997 0.4 British manufacturer of polymer
Alternative Energy electrolyte membrane electrolyzers
for hydrogen production via
electrochemical splitting of water
into hydrogen and oxygen
119 Medpace Holdings 2,9601 0.4 Clinical research organization
Health Care Equipment & Services (CRO) conducting global clinical
research for the development of
drugs and medical devices
120 Etsy 2,745 0.3 Operator of online marketplaces
General Retailers
121 Trade Desk 2,7131 0.3 Digital advertising software
Media
122 Coupa Software 2,521 0.3 Provider of cloud-based platform
Software & Computer Services for business spend
123 2U 2,5061 0.3 Digital provider of educational
General Retailers offerings and infrastructure
124 Clarkson 2,399 0.3 Provider of shipping services
Industrial Transportation
125 Okta 2,3381 0.3 Identity and access management
Software & Computer Services company
126 Pegasystems 2,2381 0.3 Provider of innovative software
Software & Computer Services and automation solutions
127 Chapel Down? 2,197 0.3 UK producer of sparkling and still
Beverages wines, and Curious beers and
ciders
128 Wix.com 2,1721 0.3 Cloud-based web development
Software & Computer Services business
129 MarketAxess 2,0351 0.2 International electronic trading
Financial Services platform for institutional credit
markets
130 Kier Group 179 - UK construction, services and
Support Services property group
131 Kier Group Rights 14/06/2021 41 - UK construction, services and
Support Services property group
----------------- --------------
Long investment positions (excluding 1,006,573 121.8
BlackRock's Institutional Cash Series
plc - Sterling Liquid Environmentally
Aware Fund)
========== ========
Short investment positions (12,071) (1.5)
========== ========
1 Includes long derivative positions.
* Traded on the Alternative Investment Market (AIM) of the London Stock
Exchange.
? Traded on NEX exchange.
Percentages shown are the share of net assets.
At 31 May 2021, the Company held equity interests in three companies comprising
more than 3% of a company's share capital as follows: Tatton Asset Management
(3.5%), Anpario (3.1%) and Activeops (3.1%).
FAIR VALUE AND GROSS MARKET EXPOSURE OF INVESTMENTS AS AT 31 MAY 2021
Gross market Gross market exposure as a %
Fair value1 exposure2 of net assets2
£'000 £'000 31 May 2021 31 May 2020 30 November 2020
Long investment positions 812,979 1,006,573 121.8 118.6 120.7
(excluding BlackRock's
Institutional Cash Series
plc - Sterling Liquid
Environmentally Aware Fund)
Short investment positions 136 (12,071) (1.5) (4.4) (1.9)
Cash and cash equivalents1,3 850 (180,537) (21.8) (16.3) (19.1)
BlackRock's Institutional 25,697 25,697 3.1 4.1 1.9
Cash Series plc - Sterling
Liquid Environmentally Aware
Fund
Other net current (13,291) (13,291) (1.6) (2.0) (1.6)
liabilities
----------------- ----------------- ----------------- ----------------- -----------------
Net assets 826,371 826,371 100.0 100.0 100.0
========== ========== ========== ========== ==========
The Company uses gearing through the use of long and short CFD positions. Gross
and Net Gearing as at 31 May 2021 were 123.3% and 120.3% respectively (31 May
2020: 123.1% and 114.2%; 30 November 2020: 122.6% and 118.8%). Gross and Net
Gearing are Alternative Performance Measures, see Glossary contained within the
Half Yearly Financial Report for further details.
1 Fair value is determined as follows:
- Listed and AIM quoted investments are valued at bid prices where
available, otherwise at published price quotations.
- The sum of the fair values of the long and short investment positions
above is determined based on the difference between the purchase or transaction
price and value of the underlying shares in the contract (in effect the
unrealised gains/(losses) on the exposed positions). The cost of purchasing the
securities held through long derivative positions directly in the market would
have amounted to £193,594,000 at the time of purchase and subsequent market
rises in prices have resulted in unrealised gains on the long derivative
positions of £3,343,000, resulting in the value of the total market exposure to
the underlying securities increasing to £196,937,000 as at 31 May 2021.
- The notional price of selling the securities to which exposure was gained
via the short derivative positions would have been £12,207,000 at the time of
entering into the contract, and subsequent price rises have resulted in
unrealised gains on the short derivative positions of £136,000 and the value of
the market exposure of these investments decreasing to £12,071,000 at 31 May
2021. If the short derivative positions had been closed on 31 May 2021 this
would have resulted in a gain of £136,000 for the Company.
2 Market exposure in the case of equity investments is the same as fair
value. In the case of long and short derivative positions it is the market
value of the underlying shares to which the portfolio is exposed via the
contract.
3 The gross market exposure column for cash and cash equivalents has been
adjusted to assume the Company traded direct holdings rather than exposure
being gained through long and short derivative positions.
DISTRIBUTION OF INVESTMENTS AS AT 31 MAY 2021
% of % of % of net
Sector long portfolio short portfolio portfolio
Chemicals 2.4 (0.2) 2.2
----------------- ----------------- -----------------
Basic Materials 2.4 (0.2) 2.2
========== ========== ==========
Aerospace & Defence 2.3 0.0 2.3
Alternative Energy 0.3 0.0 0.3
Construction & Materials 4.0 0.0 4.0
Electronic & Electrical Equipment 8.1 0.0 8.1
Industrial Engineering 1.4 0.0 1.4
Industrial Transportation 0.8 0.0 0.8
Support Services 11.7 0.0 11.7
----------------- ----------------- -----------------
Industrials 28.6 0.0 28.6
========== ========== ==========
Beverages 0.6 0.0 0.6
Food Producers 1.0 0.0 1.0
Household Goods & Home Construction 1.7 0.0 1.7
Leisure Goods 4.8 0.0 4.8
Personal Goods 2.2 0.0 2.2
----------------- ----------------- -----------------
Consumer Staples 10.3 0.0 10.3
========== ========== ==========
Health Care Equipment & Services 0.8 0.0 0.8
Pharmaceuticals & Biotechnology 4.3 (0.2) 4.1
----------------- ----------------- -----------------
Health Care 5.1 (0.2) 4.9
========== ========== ==========
Food & Drug Retailers 0.9 0.0 0.9
General Retailers 13.5 (0.3) 13.2
Media 6.5 0.0 6.5
Travel & Leisure 2.5 0.0 2.5
----------------- ----------------- -----------------
Consumer Discretionary 23.4 (0.3) 23.1
========== ========== ==========
Banks 0.5 0.0 0.5
Financial Services 11.7 0.0 11.7
Real Estate Investment & Services 1.2 0.0 1.2
Real Estate Investment Trusts 2.8 (0.2) 2.6
----------------- ----------------- -----------------
Financials 16.2 (0.2) 16.0
========== ========== ==========
Software & Computer Services 11.2 (0.4) 10.8
Technology Hardware & Hardware Equipment 0.9 0.0 0.9
----------------- ----------------- -----------------
Technology 12.1 (0.4) 11.7
========== ========== ==========
Mobile Telecommunications 3.2 0.0 3.2
----------------- ----------------- -----------------
Telecommunications 3.2 0.0 3.2
========== ========== ==========
Total Investments 101.3 (1.3) 100.0
========== ========== ==========
The above percentages are calculated on the net portfolio as at 31 May 2021.
The net portfolio is calculated as long equity and derivative positions less
short derivative positions as at 31 May 2021.
ANALYSIS OF THE PORTFOLIO
Market capitalisation as at 31 May 2021
Long Positions1 Short Positions
£2bn+ 35.0% -0.8%
£1bn - £2bn 35.0% -0.2%
£400m - £1bn 24.1% 0.0%
£0m - £400m 7.2% -0.3%
1 The above investments may comprise exposures to long equity and long
derivative positions.
Source: BlackRock.
Position size as at 31 May 2021
Long Positions1 Short Positions
£10m+ 32 0
£5m - £10m 46 0
£2.5m - £5m 45 0
£0m - £2.5m 8 -8
1 The above investments may comprise exposures to long equity and long
derivative positions.
Source: BlackRock.
Gross Basis1
FTSE 250 41.9%
FTSE AIM 27.4%
FTSE Small Cap 14.8%
International 10.7%
Other 4.2%
FTSE 100 1.0%
Net Basis2
FTSE 250 41.7%
FTSE AIM 27.7%
FTSE Small Cap 14.9%
International 11.0%
Other 3.7%
FTSE 100 1.0%
The above tables include holdings that are included within the Benchmark Index
of 59.1% on a Gross Basis and 58.2% on a Net Basis.
Source: BlackRock.
1 Long exposure plus short exposure as a percentage of the portfolio in
aggregate excluding investment in BlackRock's Institutional Cash Series plc -
Sterling Liquid Environmentally Aware Fund.
2 Long exposure less short exposure as a percentage of the portfolio
excluding investment in BlackRock's Institutional Cash Series plc - Sterling
Liquid Environmentally Aware Fund.
INTERIM MANAGEMENT REPORT AND RESPONSIBILITY STATEMENT
The Chairman's statement and the Investment manager's report give details of
the important events which have occurred during the period and their impact on
the financial statements.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks faced by the Company can be divided into various areas as
follows:
· Performance;
· Market;
· Income/dividend;
· Financial;
· Operational; and
· Regulatory.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 30
November 2020. A detailed explanation can be found in the Strategic Report on
pages 41 to 44 and in note 16 on pages 103 to 114 of the Annual Report and
Financial Statements which are available on the website maintained by BlackRock
at www.blackrock.com/uk/thrg.
An outbreak of an infectious respiratory illness caused by a novel coronavirus
known as COVID-19 has developed into a global pandemic and has resulted in
travel restrictions, closed international borders, enhanced health screenings
at ports of entry and elsewhere, disruption of and delays in health care
service preparation and delivery, prolonged quarantines, cancellations, supply
chain disruptions, and lower consumer demand, as well as general concern and
uncertainty. The impact of COVID-19 has adversely affected the economies of
many nations across the entire global economy, individual issuers and capital
markets, and could continue to an extent that cannot necessarily be foreseen.
In addition, the impact of infectious illnesses in emerging market countries
may be greater due to generally less established health care systems. Public
health crises caused by the COVID-19 outbreak may exacerbate other pre-existing
political, social and economic risks in certain countries or globally. The
duration of the COVID-19 outbreak and its effects cannot be determined with
certainty.
While the impact of the COVID-19 pandemic has been substantially reduced by the
efficiency of the vaccination programmes in many of the world's developed
economies, there remains some uncertainty as to the number and diversity of new
strains of the disease and the speed at which these new strains are spreadable.
However, in the view of the Board, there have been no substantial changes to
the fundamental nature of the principal risks and uncertainties since the
previous report and these are equally applicable to the remaining six months of
the financial year as they were to the six months under review.
RELATED PARTY DISCLOSURE AND TRANSACTIONS WITH THE INVESTMENT MANAGER
BlackRock Fund Managers Limited (BFM) was appointed as the Company's
Alternative Investment Fund Manager (AIFM) with effect from 2 July 2014. BFM
has (with the Company's consent) delegated certain portfolio and risk
management services, and other ancillary services, to BlackRock Investment
Management (UK) Limited (BIM (UK)). Both BFM and BIM (UK) are regarded as
related parties under the Listing Rules. Details of the fees payable are set
out in note 4 and note 11 of the financial statements.
The related party transactions with the Directors are set out in note 12 of the
financial statements.
GOING CONCERN
The Board is mindful of the uncertainty surrounding the potential duration of
the COVID-19 pandemic and its impact on the global economy, the Company's
assets and the potential for the level of revenue derived from the portfolio to
reduce versus the prior year. The Board believes that the Company and its key
third party service providers have in place appropriate business continuity
plans and will be able to maintain service levels through the COVID-19
pandemic.
The Directors, having considered the nature and liquidity of the portfolio, the
Company's investment objective and the Company's projected income and
expenditure, are satisfied that the Company has adequate resources to continue
in operational existence for the foreseeable future (being a period of at least
twelve months from the date that this Half Yearly Financial Report is approved)
and is financially sound. For this reason, they continue to adopt the going
concern basis in preparing the financial statements. The Company has a
portfolio of investments which is considered to be readily realisable and is
able to meet all of its liabilities from its assets and the income generated
from these assets. Ongoing charges (excluding finance costs, performance fees,
direct transaction costs, custody transaction charges, VAT recovered, taxation
and certain non-recurring items) for the year ended 30 November 2020 were
approximately 0.60%1 of average daily net assets.
DIRECTORS' RESPONSIBILITY STATEMENT
The Disclosure Guidance and Transparency Rules (DTR) of the UK Listing
Authority require the Directors to confirm their responsibilities in relation
to the preparation and publication of the Interim Management Report and
Financial Statements.
The Directors confirm to the best of their knowledge that:
· the condensed set of financial statements contained within the Half
Yearly Financial Report has been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting'; and
· the Interim Management Report, together with the Chairman's Statement
and Investment Manager's report, include a fair review of the information
required by 4.2.7R and 4.2.8R of the FCA's Disclosure Guidance and Transparency
Rules.
The Half Yearly Financial Report has not been audited or reviewed by the
Company's Auditor.
The Half Yearly Financial Report was approved by the Board on 23 July 2021 and
the above responsibility statement was signed on its behalf by the Chairman.
CHRISTOPHER SAMUEL
FOR AND ON BEHALF OF THE BOARD
23 July 2021
1 Alternative Performance Measures, see Glossary contained within the Half
Yearly Financial Report.
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHSED 31 MAY 2021
Six months ended Six months ended Year ended
31 May 2021 31 May 2020 30 November 2020
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Income from investments 3 5,017 - 5,017 2,394 - 2,394 6,387 - 6,387
held at fair value through
profit or loss
Net income/(expense) from 3 644 - 644 (135) - (135) 323 - 323
derivatives
Other income 3 3 - 3 49 - 49 60 - 60
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Total revenue 5,664 - 5,664 2,308 - 2,308 6,770 - 6,770
======== ======== ======== ======== ======== ======== ======== ======== ========
Net profit/(loss) on - 173,076 173,076 - (63,284) (63,284) - 25,656 25,656
investments and options
held at fair value through
profit or loss
Net loss on foreign - (43) (43) - (151) (151) - (234) (234)
exchange
Net profit from - 18,289 18,289 - 7,381 7,381 - 26,495 26,495
derivatives
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Total 5,664 191,322 196,986 2,308 (56,054) (53,746) 6,770 51,917 58,687
======== ======== ======== ======== ======== ======== ======== ======== ========
Expenses
Investment management fee 4 (399) (7,115) (7,514) (244) (5,536) (5,780) (524) (6,463) (6,987)
and performance fees
Other operating expenses 5 (492) (14) (506) (336) (17) (353) (822) (33) (855)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Total operating expenses (891) (7,129) (8,020) (580) (5,553) (6,133) (1,346) (6,496) (7,842)
======== ======== ======== ======== ======== ======== ======== ======== ========
Net profit/(loss) on 4,773 184,193 188,966 1,728 (61,607) (59,879) 5,424 45,421 50,845
ordinary activities before
finance costs and taxation
Finance costs (1) (3) (4) (2) (4) (6) (2) (5) (7)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Net profit/(loss) on 4,772 184,190 188,962 1,726 (61,611) (59,885) 5,422 45,416 50,838
ordinary activities before
taxation
Taxation (23) - (23) (2) - (2) (43) - (43)
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Profit/(loss) for the 4,749 184,190 188,939 1,724 (61,611) (59,887) 5,379 45,416 50,795
period
======== ======== ======== ======== ======== ======== ======== ======== ========
Earnings/(loss) per 7 5.24 203.20 208.44 2.16 (77.28) (75.12) 6.57 55.45 62.02
ordinary share (pence)
======== ======== ======== ======== ======== ======== ======== ======== ========
The total column of this statement represents the Company's Statement of
Comprehensive Income, prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union (EU). The
supplementary revenue and capital columns are both prepared under guidance
published by the Association of Investment Companies (AIC). All items in the
above statement derive from continuing operations. No operations were acquired
or discontinued during the period. All income is attributable to the equity
holders of the Company.
The Company does not have any other comprehensive income/(loss). The net profit
/(loss) for the period disclosed above represents the Company's total
comprehensive income/(loss).
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHSED 31 MAY 2021
Called Share Capital
up share premium redemption Special Capital Revenue
capital account reserve reserve reserves reserve Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000
For the six
months ended 31
May 2021
(unaudited)
At 30 November 4,376 101,368 11,905 44,580 425,140 8,846 596,215
2020
Total
comprehensive
income:
Net profit for - - - - 184,190 4,749 188,939
the period
Transactions with
owners, recorded
directly to
equity:
Ordinary shares 301 47,936 - - - - 48,237
issued
Share issue costs - (48) - - - - (48)
Dividends paid1 6 - - - - - (6,972) (6,972)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 May 2021 4,677 149,256 11,905 44,580 609,330 6,623 826,371
======== ======== ======== ======== ======== ======== ========
For the six
months ended 31
May 2020
(unaudited)
At 30 November 4,026 26,169 11,905 36,525 379,724 11,708 470,057
2019
Total
comprehensive
income:
Net (loss)/profit - - - - (61,611) 1,724 (59,887)
for the period
Transactions with
owners, recorded
directly to
equity:
Ordinary shares - 34,741 - 8,099 - - 42,840
issued from
treasury
Ordinary shares 153 14,346 - - - - 14,499
issued
Share issue costs - - - (44) - - (44)
- treasury
Share issue costs - (14) - - - - (14)
Dividends paid2 6 - - - - - (6,150) (6,150)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 May 2020 4,179 75,242 11,905 44,580 318,113 7,282 461,301
======== ======== ======== ======== ======== ======== ========
For the year
ended 30 November
2020 (audited)
At 30 November 4,026 26,169 11,905 36,525 379,724 11,708 470,057
2019
Total
comprehensive
income:
Net profit for - - - - 45,416 5,379 50,795
the year
Transactions with
owners, recorded
directly to
equity:
Ordinary shares - 34,741 - 8,099 - - 42,840
issued from
treasury
Ordinary shares 350 40,683 - - - - 41,033
issued
Share issue costs - - - (44) - - (44)
- treasury
Share issue costs - (225) - - - - (225)
Dividends paid3 - - - - - (8,241) (8,241)
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 30 November 4,376 101,368 11,905 44,580 425,140 8,846 596,215
2020
======== ======== ======== ======== ======== ======== ========
1 Final dividend of 7.70p per share for the year ended 30 November 2020,
declared on 10 February 2021 and paid on 1 April 2021.
2 Final dividend of 7.70p per share for the year ended 30 November 2019,
declared on 6 February 2020 and paid on 2 April 2020.
3 Final dividend of 7.70p per share for the year ended 30 November 2019,
declared on 6 February 2020 and paid on 2 April 2020 and interim dividend of
2.50p per share for the year ended 30 November 2020, declared on 23 July 2020
and paid on 28 August 2020.
For information on the Company's distributable reserves, please refer to note
9.
STATEMENT OF FINANCIAL POSITION AS AT 31 MAY 2021
31 May 2020 30
31 May 2021 (unaudited) November 2020
(unaudited) (restated)1 (audited)
Notes £'000 £'000 (restated)1
£'000
Non current assets
Investments held at fair value through 10 809,636 449,989 590,225
profit or loss
Current assets
Other receivables 4,437 4,456 5,767
Current tax asset 16 53 27
Derivative financial assets held at fair 3,632 4,890 4,108
value through profit or loss
Cash collateral held with brokers - 3,177 1,050
Cash and cash equivalents 26,547 18,810 11,642
-------------- -------------- --------------
Total current assets 34,632 31,386 22,594
======== ======== ========
Total assets 844,268 481,375 612,819
======== ======== ========
Current liabilities
Other payables (13,714) (14,812) (14,289)
Derivative financial liabilities held at (153) (3,272) (105)
fair value through profit or loss
Cash collateral received (4,030) (1,990) (2,210)
-------------- -------------- --------------
Total current liabilities (17,897) (20,074) (16,604)
======== ======== ========
Net assets 826,371 461,301 596,215
======== ======== ========
Equity attributable to equity holders
Called up share capital 8 4,677 4,179 4,376
Share premium account 149,256 75,242 101,368
Capital redemption reserve 11,905 11,905 11,905
Special reserve 44,580 44,580 44,580
Capital reserves 609,330 318,113 425,140
Revenue reserve 6,623 7,282 8,846
-------------- -------------- --------------
Total equity 7 826,371 461,301 596,215
======== ======== ========
Net asset value per ordinary share 7 883.45 551.87 681.24
(pence)
======== ======== ========
1 See note 2 "Restatement of 2020 comparatives" below for further details.
CASH FLOW STATEMENT FOR THE SIX MONTHSED 31 MAY 2021
Six Six Year ended
months ended months ended 30
31 May 2021 31 May 2020 November 2020
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Net profit/(loss) on ordinary activities 188,962 (59,885) 50,838
before taxation
Add back finance costs 4 6 7
(Profit)/loss on investments and (191,593) 55,820 (52,573)
derivatives held at fair value through
profit or loss (including transaction
costs)
Net loss on foreign exchange 43 151 234
Special dividends allocated to capital - 83 83
Sales of investments held at fair value 190,761 141,170 274,350
through profit or loss
Purchases of investments held at fair value (237,096) (208,893) (394,398)
through profit or loss
Net receipts on closure of derivatives 19,041 8,599 25,472
(Increase)/decrease in other receivables (732) (431) 604
Increase in other payables 2,340 738 362
Decrease/(increase) in amounts due from 2,062 (2,845) (3,966)
brokers
(Decrease)/increase in amounts due to (2,915) 5,199 5,052
brokers
Net movement in cash collateral held with 2,870 (3,497) (1,150)
brokers in respect of derivatives
-------------- -------------- --------------
Net cash outflow from operating activities (26,253) (63,785) (95,085)
before taxation
Taxation (12) (2) (18)
-------------- -------------- --------------
Net cash outflow from operating activities (26,265) (63,787) (95,103)
======== ======== ========
Financing activities
Interest paid (4) (6) (7)
Cash proceeds from ordinary shares issued - - 44,021
from treasury
Cash proceeds from ordinary shares issued 48,189 58,506 40,808
Dividends paid (6,972) (6,150) (8,241)
-------------- -------------- --------------
Net cash inflow from financing activities 41,213 52,350 76,581
======== ======== ========
Increase/(decrease) in cash and cash 14,948 (11,437) (18,522)
equivalents
Effect of foreign exchange rate changes (43) (151) (234)
======== ======== ========
Change in cash and cash equivalents 14,905 (11,588) (18,756)
Cash and cash equivalents at start of 11,642 30,398 30,398
period
-------------- -------------- --------------
Cash and cash equivalents at end of the 26,547 18,810 11,642
period
======== ======== ========
Comprised of:
Cash at bank 850 129 101
Cash Fund1 25,697 18,681 11,541
-------------- -------------- --------------
26,547 18,810 11,642
======== ======== ========
1 Cash Fund represents funds held on deposit with the BlackRock
Institutional Cash Series plc - Sterling Liquid Environmentally Aware Fund.
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHSED 31 MAY 2021
1. PRINCIPAL ACTIVITY
The principal activity of the Company is that of an investment trust company
within the meaning of Section 1158 of the Corporation Tax Act 2010.
2. BASIS OF PRESENTATION
The Half Yearly Financial Statements for the period ended 31 May 2021 have been
prepared in accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the Financial Conduct Authority and with International Accounting
Standard 34 (IAS 34), 'Interim Financial Reporting', as adopted by the European
Union (EU). The Half Yearly Financial Statements should be read in conjunction
with the Company's Annual Report and Financial Statements for the year ended 30
November 2020, which have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
Insofar as the Statement of Recommended Practice (SORP) for investment trust
companies and venture capital trusts, issued by the Association of Investment
Companies (AIC) in October 2019, is compatible with IFRS, the financial
statements have been prepared in accordance with guidance set out in the SORP.
Adoption of new and amended standards and interpretations:
Amendments to IFRS 3 - Definition of a business (effective 1 January 2020).
This amendment revised the definition of a business.
This standard did not have any impact on the Company.
Amendments to IAS 1 and IAS 8 - Definition of material (effective 1 January
2020). The amendments to IAS 1, 'Presentation of Financial Statements', and IAS
8, 'Accounting Policies, Changes in Accounting Estimates and Errors' and
consequential amendments to other IFRSs require companies to:
(i) use a consistent definition of materiality throughout IFRSs and the
Conceptual Framework for Financial Reporting;
(ii) clarify the explanation of the definition of material; and
(iii) incorporate some of the guidance of IAS 1 about immaterial
information.
This standard did not have any impact on the Company.
Amendments to IFRS 9, IAS 39 and IFRS 7 - Interest rate benchmark reform
(effective 1 January 2020). These amendments provide certain reliefs in
connection with the interest rate benchmark reform. The reliefs relate to hedge
accounting and have the effect that the Inter Bank Offer Rate (IBOR) reform
should not cause hedge accounting to terminate.
This standard did not have any significant impact on the Company.
IFRS standards that have yet to be adopted:
IFRS 17 - Insurance contracts (effective 1 January 2021). This standard
replaces IFRS 4, which currently permits a wide range of accounting practices
in accounting for insurance contracts. IFRS 17 will fundamentally change the
accounting by all entities that issue insurance contracts and investment
contracts with discretionary participation features.
This standard is unlikely to have any impact on the Company as it has no
insurance contracts.
Restatement of 2020 comparatives
The Company has restated presentation of the current tax asset on the face of
the Statement of Financial Position separately from Other Receivables. The
current tax asset was previously included within Other Receivables in the
Statement of Financial Position.
3. INCOME
Six Six Year ended
months ended months ended 30
31 May 2021 31 May 2020 November 2020
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Investment income:
UK dividends 3,736 1,950 4,535
UK special dividends 251 - 427
UK stock dividends 21 - 207
UK REIT dividends 135 256 491
Overseas dividends 704 188 491
Overseas special dividends 170 - 236
-------------- -------------- --------------
Total investment income 5,017 2,394 6,387
======== ======== ========
Net income/(expense) from derivatives 644 (135) 323
Other income:
Deposit interest - 2 4
Interest from Cash Fund 3 47 56
-------------- -------------- --------------
3 49 60
======== ======== ========
Total income 5,664 2,308 6,770
======== ======== ========
Dividends and interest received in cash in the six months ended 31 May 2021
amounted to £4,435,000 and £2,000 (six months ended 31 May 2020: £3,507,000 and
£45,000; year ended 30 November 2020: £6,985,000 and £60,000) respectively.
No special dividends have been recognised in capital in the six months ended 31
May 2021 (six months ended 31 May 2020: £83,000; year ended 30 November 2020: £
83,000).
4. INVESTMENT MANAGEMENT AND PERFORMANCE FEES
Six months ended Six months ended Year ended
31 May 2021 31 May 2020 30 November 2020
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment management 399 1,198 1,597 244 731 975 524 1,573 2,097
fee
Performance fee - 5,917 5,917 - 4,805 4,805 - 4,890 4,890
-------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
Total 399 7,115 7,514 244 5,536 5,780 524 6,463 6,987
======== ======== ======== ======== ======== ======== ======== ======== ========
The performance fee is 15% of Net Asset Value total return outperformance of
the Benchmark Index measured on a two year rolling basis and is applied on the
average Gross Assets over two years. The performance fee is calculated and
accrued on a daily basis and payable on 30 November each year. Gross Assets are
defined as the gross asset value of the long only portfolio plus the gross
value of the underlying equities, long and short, to which the Company is
exposed through CFDs. There is a cap on total management and performance fees
of 1.25% of average Gross Assets over a two year period which has the effect of
capping performance fees at circa 0.9% of average Gross Assets over two years.
On the first day of the financial year, outperformance from the previous
financial year (if any) is carried forward and accrued in the daily NAV
released to the London Stock Exchange on that day.
Performance fees have been wholly allocated to the capital column of the
Statement of Comprehensive Income as the performance has been predominantly
generated through capital returns from the investment portfolio. For the six
months ended 31 May 2021, a performance fee of £5,917,000 has been accrued (six
months ended 31 May 2020: £4,805,000; year ended 30 November 2020: £4,890,000).
The investment management fee is calculated at the rate of 0.35% per annum on
month end Gross Assets. The management fee is charged 25% to revenue and 75% to
capital. There is no additional fee for company secretarial and administration
services.
5. OTHER OPERATING EXPENSES
Six Six Year ended
months ended months ended 30
31 May 2021 31 May 2020 November 2020
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Allocated to revenue:
Custody fee 8 9 15
Auditor's remuneration1 26 18 44
Registrar's fee 22 22 43
Directors' emoluments 90 56 137
Broker fees 26 21 54
Depositary fees 39 26 55
Marketing fees 72 70 174
FCA fees 8 7 16
Printing and postage fees 51 12 25
AIC fees 8 8 22
Stock exchange listing fees 87 52 134
Other administrative costs 55 35 103
-------------- -------------- --------------
492 336 822
======== ======== ========
Allocated to capital:
Custody transaction charges2 14 17 33
-------------- -------------- --------------
506 353 855
======== ======== ========
1 No non-audit services were provided by the auditors.
2 For the six month period ended 31 May 2021, expenses of £14,000 (six
months ended 31 May 2020: £17,000; year ended 30 November 2020: £33,000) were
charged to the capital column of the Statement of Comprehensive Income. These
relate to transaction costs charged by the custodian on sale and purchase
trades.
The transaction costs incurred on the acquisition of investments amounted to £
880,000 for the six months ended 31 May 2021 (six months ended 31 May 2020: £
823,000; year ended 30 November 2020: £1,501,000). Costs relating to the
disposal of investments amounts to £134,000 for the six months ended 31 May
2021 (six months ended 31 May 2020: £83,000; year ended 30 November 2020: £
180,000). All transaction costs have been included within capital reserves.
6. DIVIDS
The Board has declared an interim dividend of 2.50p per share payable on 27
August 2021 to shareholders on the register at 6 August 2021 (six months ended
31 May 2020: interim dividend of 2.50p per share paid on 28 August 2020 to
shareholders on the register at 31 July 2020). This dividend has not been
accrued in the financial statements for the six months ended 31 May 2021 as,
under IFRS, interim dividends are not recognised until paid. Dividends are
debited directly to reserves.
7. EARNINGS AND NET ASSET VALUE PER ORDINARY SHARE
Total revenue, capital return and net asset value per ordinary share are shown
below and have been calculated using the following:
Six months ended Six months ended Year ended
31 May 2021 31 May 2020 30 November 2020
(unaudited) (unaudited) (audited)
Net revenue profit attributable to ordinary 4,749 1,724 5,379
shareholders (£'000)
Net capital profit/(loss) attributable to 184,190 (61,611) 45,416
ordinary shareholders (£'000)
---------------- ---------------- ----------------
Total profit/(loss) attributable to ordinary 188,939 (59,887) 50,795
shareholders (£'000)
========= ========= =========
Equity shareholders' funds (£'000) 826,371 461,301 596,215
========= ========= =========
The weighted average number of ordinary shares 90,644,426 79,721,039 81,902,632
in issue during the period on which the
earnings per ordinary share was calculated
was:
The actual number of ordinary shares in issue 93,539,037 83,588,462 87,518,929
at the end of each period on which the net
asset value per ordinary share was calculated
was:
Earnings per share
Revenue earnings per share (pence) 5.24 2.16 6.57
Capital earnings/(loss) per share (pence) 203.20 (77.28) 55.45
---------------- ---------------- ----------------
Total earnings/(loss) per share (pence) 208.44 (75.12) 62.02
========= ========= =========
As at As at As at
31 May 2021 31 May 2020 30
(unaudited) (unaudited) November 2020
(audited)
Net asset value per ordinary share (pence) 883.45 551.87 681.24
Ordinary share price (pence) 891.00 554.00 682.00
======== ======== ========
8. CALLED UP SHARE CAPITAL
Ordinary
shares Treasury Total Nominal
in issue shares shares value
number number number £'000
Allotted, called up and fully paid share capital
comprised:
Ordinary shares of 5 pence each:
At 30 November 2020 87,518,929 - 87,518,929 4,376
New ordinary shares issued 6,020,108 - 6,020,108 301
---------------- ---------------- ---------------- ----------------
At 31 May 2021 93,539,037 - 93,539,037 4,677
========= ========= ========= =========
During the six months ended 31 May 2021, the Company issued no shares from
treasury (six months ended 31 May 2020: 6,400,000; year ended 30 November 2020:
6,400,000) for a total consideration of £nil (six months ended 31 May 2020: £
42,796,000; year ended 30 November 2020: £42,796,000) including costs.
During the six months ended 31 May 2021, the Company issued 6,020,108 new
shares (six months ended 31 May 2020: 3,058,136; year ended 30 November 2020:
6,988,603) for a total consideration of £48,189,000 (six months ended 31 May
2020: £14,485,000; year ended 30 November 2020: £40,808,000) including costs.
Since 31 May 2021 and up to the latest practicable date of 21 July 2021, a
further 2,122,504 shares have been issued for a total consideration of £
19,606,961.
The ordinary shares give shareholders voting rights, the entitlement to all of
the capital growth in the Company's assets and to all income from the Company
that is resolved to be distributed.
9. RESERVES
The share premium and capital redemption reserve are not distributable profits
under the Companies Act 2006. In accordance with ICAEW Technical Release 02/
17BL on Guidance on Realised and Distributable Profits under the Companies Act
2006, the special reserve and capital reserve may be used as distributable
profits for all purposes and, in particular, the repurchase by the Company of
its ordinary shares and for payments as dividends. In accordance with the
Company's Articles of Association, net capital returns may be distributed by
way of dividend. The £609,330,000 of capital reserve is made up of a gain on
capital reserve arising on investments sold of £339,924,000 and a gain on
capital reserve arising on revaluation of investments held of £269,406,000. The
£269,406,000 of capital reserve 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.
10. VALUATION OF FINANCIAL INSTRUMENTS
Market risk arising from price risk
While the impact of the COVID-19 pandemic has been substantially reduced by the
efficiency of the vaccination programmes in many of the world's developed
economies, there remains some uncertainty over the effect of new strains and
the continuing movement of people across international borders. As a result,
although economies are beginning to recover from the various lockdowns, there
are occasions when markets react, sometimes erratically, to news that might be
interpreted as having adverse or favourable effects on share prices of
individual companies or market segments. This may often result in higher than
normal levels of price volatility.
Valuation of financial instruments
Financial assets and financial liabilities are either carried in the Statement
of Financial Position at their fair value (investments and derivatives) or at
an amount which is a reasonable approximation of fair value (due from brokers,
dividends and interest receivable, due to brokers, accruals, cash at bank and
bank overdrafts). IFRS 13 requires the Company to classify fair value
measurements using a fair value hierarchy that reflects the significance of
inputs used in making the measurements. The valuation techniques used by the
Company are explained in the accounting policies note 2(g) as set out on pages
93 and 94 in the Company's Annual Report and Financial Statements for the year
ended 30 November 2020.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset.
The fair value hierarchy has the following levels:
Level 1 - Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted
prices are readily available from an exchange, dealer, broker, industry group,
pricing service or regulatory agency and those prices represent actual and
regularly occurring market transactions on an arm's length basis. The Company
does not adjust the quoted price for these instruments.
Level 2 - Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for similar
instruments in markets that are considered less than active, or other valuation
techniques where all significant inputs are directly or indirectly observable
from market data.
Valuation techniques used for non-standardised financial instruments such as
options, currency swaps and other over-the-counter derivatives include the use
of comparable recent arm's length transactions, reference to other instruments
that are substantially the same, discounted cash flow analysis, option pricing
models and other valuation techniques commonly used by market participants
making the maximum use of market inputs and relying as little as possible on
entity specific inputs.
As at the period end the long and short derivative positions were valued using
the underlying equity bid price (offer price in respect of short positions) and
the contract price at the inception of the trade or at the trade reset date.
There have been no changes to the valuation technique since the previous year
or as at the date of this report.
Level 3 - Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes
inputs not based on market data and these inputs could have a significant
impact on the instrument's valuation.
This category also includes instruments that are valued based on quoted prices
for similar instruments where significant entity determined adjustments or
assumptions are required to reflect differences between the instruments and
instruments for which there is no active market. The Investment Manager
considers observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary and
provided by independent sources that are actively involved in the relevant
market.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability. The determination of what constitutes 'observable' inputs
requires significant judgement by the Investment Manager.
Contracts for difference have been classified as Level 2 investments as their
valuation has been based on market observable inputs represented by the market
prices of the underlying quoted securities to which these contracts expose the
Company.
Fair values of financial assets and financial liabilities
The table below sets out fair value measurements using the IFRS 13 fair value
hierarchy.
Level 1 Level 2 Level 3 Total
Financial assets/(liabilities) at fair value through £'000 £'000 £'000 £'000
profit or loss at 31 May 2021 (unaudited)
Assets:
Equity investments 809,636 - - 809,636
Contracts for difference (fair value) - 3,632 - 3,632
Liabilities:
Contracts for difference (fair value) - (153) - (153)
-------------- -------------- -------------- --------------
809,636 3,479 - 813,115
======== ======== ======== ========
Level 1 Level 2 Level 3 Total
Financial assets/(liabilities) at fair value through £'000 £'000 £'000 £'000
profit or loss at 31 May 2020 (unaudited)
Assets:
Equity investments 449,989 - - 449,989
Contracts for difference (fair value) - 4,890 - 4,890
Liabilities:
Contracts for difference (fair value) - (2,114) - (2,114)
Futures contracts (fair value) (1,158) - - (1,158)
-------------- -------------- -------------- --------------
448,831 2,776 - 451,607
======== ======== ======== ========
Level 1 Level 2 Level 3 Total
Financial assets/(liabilities) at fair value through £'000 £'000 £'000 £'000
profit or loss at 30 November 2020 (audited)
Assets:
Equity investments 590,225 - - 590,225
Contracts for difference (fair value) - 4,108 - 4,108
Liabilities:
Contracts for difference (fair value) - (105) - (105)
-------------- -------------- -------------- --------------
590,225 4,003 - 594,228
======== ======== ======== ========
There were no transfers between levels for financial assets and financial
liabilities during the period recorded at fair value as at 31 May 2021 and 31
May 2020 or the year ended 30 November 2020. The Company did not hold any Level
3 securities during the period ended 31 May 2021.
11. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months'
notice. BFM has (with the Company's consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock Investment
Management (UK) Limited (BIM (UK)). Further details of the investment
management contract are disclosed on pages 55 and 56 of the Directors' Report
in the Company's Annual Report and Financial Statements for the year ended 30
November 2020.
The investment management fee due for the six months ended 31 May 2021 amounted
to £1,597,000 (six months ended 31 May 2020: £975,000; year ended 30 November
2020: £2,097,000). In addition, a performance fee of £5,917,000 (six months
ended 31 May 2020: £4,805,000; year ended 30 November 2020: £4,890,000) was
accrued for the six months ended 31 May 2021.
At the period end, £2,183,000 was outstanding in respect of management fees (31
May 2020: £1,437,000; 30 November 2020: £1,113,000). Any final performance fee
for the full year ending 30 November 2021 will not crystallise and fall due
until the calculation date of 30 November 2021.
In addition to the above services, BlackRock has provided the Company with
marketing services. The total fees paid or payable for these services to 31 May
2021 amounted to £72,000 excluding VAT (six months ended 31 May 2020: £70,000;
year ended 30 November 2020: £174,000). Marketing fees of £203,000 excluding
VAT (31 May 2020: £192,000; 30 November 2020: £132,000) were outstanding at 31
May 2021.
The Company has an investment in BlackRock Institutional Cash Series plc -
Sterling Liquid Environmentally Aware Fund of £25,697,000 as at 31 May 2021 (31
May 2020: £18,681,000; 30 November 2020: £11,541,000).
As at 31 May 2021, an amount of £155,000 (31 May 2020: £110,000; 30 November
2020: £127,000) was payable to the Manager in respect of Directors' fees.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc. a company incorporated in Delaware USA.
12. RELATED PARTY DISCLOSURE
Directors' emoluments
The Board consists of six non-executive Directors, all of whom are considered
to be independent of the Manager by the Board. None of the Directors has a
service contract with the Company. With effect from 1 December 2020, the
Chairman receives an annual fee of £41,000, the Chairman of the Audit Committee
receives an annual fee of £32,500 and each of the other Directors receives an
annual fee of £28,000.
As at 31 May 2021, an amount of £15,000 (31 May 2020: £10,000; 30 November
2020: £13,000) was outstanding in respect of Directors' fees.
At the period end, members of the Board, including any connected persons, held
ordinary shares in the Company as set out below:
Ordinary shares Ordinary shares
31 May 2021 30
November 2020
Christopher Samuel (Chairman) 63,206 62,647
Nigel Burton 16,000 n/a
Loudon Greenlees 15,000 15,000
Angela Lane 9,427 5,253
Jean Matterson1 n/a 46,000
Louise Nash 2,100 1,000
Merryn Somerset Webb2 3,727 n/a
1 Retired as a non-executive Director on 24 March 2021.
2 Appointed as a non-executive Director on 24 March 2021.
13. CONTINGENT LIABILITIES
There were no contingent liabilities as at 31 May 2021 (31 May 2020 and 30
November 2020: nil).
14. PUBLICATION OF NON STATUTORY ACCOUNTS
The financial information contained in this Half Yearly Financial Report does
not constitute statutory accounts as defined in Section 435 of the Companies
Act 2006. The financial information for the six months ended 31 May 2021 and 31
May 2020 has not been audited.
The information for the year ended 30 November 2020 has been extracted from the
latest published audited financial statements, which have been filed with the
Registrar of Companies. The report of the auditor on those financial statements
contained no qualification or statement under Sections 498(2) or 498(3) of the
Companies Act 2006.
15. ANNUAL RESULTS
The Board expects to announce the annual results for the year ending 30
November 2021 in February 2022. Copies of the results announcement can be
obtained from the Secretary on 020 7743 3000 or by email at
cosec@blackrock.com. The Annual Report and Financial Statements should be
available by the beginning of February 2022, with the Annual General Meeting
expected to be held in March 2022.
For further information, please contact:
Simon White, Managing Director, Closed End Funds, BlackRock Investment
Management (UK) Limited
Tel: 020 7743 3000
Press Enquiries:
Ed Hooper, Lansons Communications - Tel: 0207 294 3620
E-mail: edh@lansons.com; BlackRockInvestmentTrusts@lansons.com 23 July 2021 12 Throgmorton Avenue London EC2N 2DL END The Half Yearly Financial Report will also be available on the BlackRock website at http://www.blackrock.com/uk/thrg. Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement. Should you wish to receive investment trust related news and insights you can subscribe to BlackRock's Investment Trust Matters newsletter at: https:// go.blackrock.com/LP=2142. END
(END) Dow Jones Newswires
July 23, 2021 09:54 ET (13:54 GMT)
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