BlackRock Throgmorton Trust Plc - Half-year Report

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 for period ended 31 May 2017

PERFORMANCE RECORD

Financial Highlights

Attributable to ordinary shareholders	31 May 2017  (unaudited)	30 November 2016  (audited)	Change  %
Assets
Net assets	£381.53m	£301.55m	+26.5
Net asset value per share	521.71p	412.34p	+26.5
– with income reinvested			+28.3
Ordinary share price (mid-market)	436.00p	325.00p	+34.2
– with income reinvested			+36.4
Numis Smaller Companies excluding AIM (excluding Investment Companies) Index	21,545.19	18,157.95	+18.7

   

	For the six  months ended  31 May 2017  (unaudited)	For the six  months ended  31 May 2016  (unaudited)	Change  %
Revenue
Net revenue return after taxation (£'000)	3,977	2,743	+45.0
Revenue return per ordinary share	5.44p	3.75p	+45.1
	------	------	------
Dividend per ordinary share
Interim	2.00p	1.25p	+60.0
	======	======	=====

CHAIRMAN’S STATEMENT

PERFORMANCE
For the six months ended 31 May 2017 the Company’s net asset value per share (NAV) returned 28.3% compared with a return of 18.7% for the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index. The FTSE All-Share Index returned 13.6% over the same period (all figures in sterling terms with income reinvested). It is encouraging to see that the portfolio has performed strongly, outperforming the benchmark index by 9.6% and generating a return of more than twice that of the wider UK stock market (as measured by the FTSE All-Share Index). 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.

PERFORMANCE RECORD TO 31 MAY 2017 (WITH INCOME REINVESTED)
 

	Benchmark (with income reinvested)	Share price (with income reinvested)	NAV per share (with income reinvested) – undiluted
1 Year change %	23.9%	34.0%	35.1%
3 Year change %	34.6%	58.4%	63.4%
5 Year change %	106.4%	172.6%	162.8%
Since 1 July 2008 change %1	140.8%	288.1%	312.7%

¹ Date of BlackRock's appointment as Manager.

Since the period end and up to the close of business on 20 July 2017, the NAV has fallen by 1.8%, and the benchmark index has fallen by 1.2%. (All figures in sterling terms with income reinvested.)

REVENUE RETURN AND DIVIDENDS
The revenue return per share for the period amounted to 5.44 pence compared to 3.75 pence earned during the comparative period last year. This is an increase of 45.1% and results from increases in the level of both the ordinary and special dividends received during the period. The Board is pleased to declare an interim dividend of 2.00 pence per share (2016: 1.25 pence per share) payable on 23 August 2017 to shareholders on the register on 4 August 2017 (ex-dividend date is 3 August 2017).

MARKET OVERVIEW
The period under review was characterised by stronger performance with episodes of market volatility. Sentiment in the UK has been dominated by political uncertainty with some highly publicised political rhetoric from the initial negotiations on the terms of the UK’s exit from the European Union (EU). The negative effect of the uncertainty around Brexit was tempered somewhat by the outcome of the Dutch and French elections, as victories by both moderate candidates were well received by the market, helping to quell some of the political risk present. It was somewhat pleasing, therefore, that the International Monetary Fund twice revised its UK growth forecast upwards in the period.

The Brexit process officially began on 29 March 2017 as Article 50 of the Lisbon Treaty was triggered. The Prime Minister’s intention to do so had been well communicated and the market’s reaction was somewhat muted. On 18 April the Government called a snap general election to be held on 8 June and Sterling rallied against both the US Dollar and the Euro. It was anticipated that a Conservative victory with an increased majority would strengthen the UK’s negotiating position with the EU. However, the outcome of the general election was not as expected, with no party commanding an outright majority and resulting in a hung parliament. Sterling fell on this result but has since stabilised. The Conservatives remain as the largest party and have since formed a minority government with the support of the Democratic Unionist Party (DUP) enacted through a confidence and supply agreement. The agreement reached with the DUP is likely to strengthen the UK Government’s ability to negotiate effectively with the EU on the terms of the UK’s exit and which markets may view as a positive development under the circumstances.

In the US, President Trump’s victory in the US Presidential elections saw markets rally in anticipation of promised protectionist policies, business friendly corporation tax cuts, streamlined regulation and increased infrastructure investment. The Federal Reserve increased interest rates in March and June of this year following improving economic data. However, more recent data has been mixed and the ability of the Trump administration to implement their policies has come into question with certain policies only partially delivered and others abandoned entirely.

INVESTMENT MANAGEMENT ARRANGEMENTS
As I mentioned in the Company’s Annual Report for the year to 30 November 2016, although performance has been strong in both relative and absolute terms – as set out in the performance chart above – the Company’s shares have persistently traded at a significant discount to NAV. Although this discount has not been out of line with the overall sector, the Board felt it important to consult with major shareholders and the Company’s advisors on this issue.

As announced to the market on 24 July 2017, following shareholder consultation and negotiation with the Manager, the Board has agreed a revised management fee structure. I am pleased to report that with effect from 1 August 2017, the annual management fee will be calculated at 0.35% of month end gross assets (previously 0.70% of month end gross assets), representing a 50% reduction. Effective 1 December 2017, the performance fee will increase from 10% to 15% of any NAV total return outperformance over the benchmark and will be calculated on a 2 year rolling average basis which will be applied to average  gross assets over two years. With effect from 1 December 2017, the total management and performance fees paid to BlackRock will be subject to a maximum aggregate cap of 1.25% of average gross assets over a two year period. The Board believes that the new fee structure is appropriately aligned to the Company’s activities, investment objective and shareholder interests. The low base fee minimises the costs borne by shareholders whilst the performance fee is designed to reward the Manager at a level acceptable to shareholders for the generation of superior performance. The Board believes that these changes will result in improved performance, further enhancing shareholder return, increasing the Company’s attractiveness and potentially narrowing the discount at which the Company’s shares trade in the market, thereby increasing liquidity for shareholders. Further information on management and performance fees during the period can be found in note 4.

In addition, the Board has amended the investment parameters within which the Manager must operate, increasing the existing maximum permitted exposure to equities or collective investment vehicles traded on the AIM market of the London Stock Exchange from 25% of gross assets (at the time of acquisition) to 35% of gross assets (at the time of acquisition). The rationale for this change is that we increasingly find that many more companies are choosing to remain on the AIM Market rather than seeking a Main Market listing. The change is being made to afford the investment managers greater flexibility to continue to hold strongly performing AIM stocks where it would otherwise be necessary to divest when the aggregate portfolio exposure limit of 25% was reached.

The Board intends to continue its review of the Company’s investment strategy and this may result in a further increase to the AIM exposure limit. If deemed to be appropriate, this change would be undertaken in tandem with a change to the Company’s benchmark index, the Numis Smaller Companies ex AIM (excluding Investment Companies) Index to the Numis Smaller Companies plus AIM (excluding Investment Companies) Index to reflect the portfolio’s greater potential AIM market exposure. The changes being considered would, in aggregate, require shareholder approval in a general meeting. Therefore, should the Board reach a decision on these matters, suitable resolutions would be put to shareholders seeking your approval at the Company’s Annual General Meeting (AGM) which is expected to be held in March 2018.

The changes being contemplated would be made with the intention of optimising investment performance and would not represent a significant shift in the Company’s investment approach, with the focus remaining on providing shareholders with capital growth and an attractive total return by investing in UK smaller and mid-capitalisation companies.

BOARD COMPOSITION
As I mentioned in my Chairman’s Statement to the Annual Report, I have been Chairman of the Company since March 2012, following my appointment to the Board in March 2007. I believe it is now the right time to step down both as Chairman of the Board and as a Director. I will therefore retire from the Board with effect from 24 July 2017. As previously announced, as part of the Board’s succession plans, Christopher Samuel will succeed me as Chairman of the Board with effect from the date of my retirement. Mr Samuel has extensive investment company experience and financial sector expertise and I have no doubt that he will provide strong and diligent leadership of this Company, ensuring that it continues to achieve its objective of providing shareholders with capital growth and an attractive total return.

OUTLOOK
Overall, the outlook for the UK and global economy appears to be generally positive, with improving economic data generated by the UK, Europe and the US. However, there are still a number of significant risks and headwinds present, not least the effect of US President Trump’s protectionist policies and the impact of sustained uncertainty around Brexit negotiations. In the UK, economists have forecast rising inflation and a fall in consumer spending as the effect of Sterling’s depreciation and the rise in import costs are passed on to the UK consumer through price increases. With UK inflation now above the Bank of England’s 2% target, a rise in interest rates this year may be seen, although any increase is expected to be gradual to avoid unsettling markets.

Against this backdrop, our investment managers will continue to seek to identify opportunities to add to existing holdings or to introduce new stocks into the portfolio which appear well positioned to benefit as the economy adjusts. The investment strategy is unchanged, focusing on companies with robust business models, strong cash flows and favourable industry characteristics, led by management teams capable of ‘self-help’. The investment process remains focused on bottom-up stock selection, assembling a portfolio of individual companies which, taken as a whole, should provide capital growth and an attractive total return, regardless of short term economic fluctuations. Your Board is fully supportive of this approach.

Crispin Latymer
Chairman
24 July 2017

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 2016. A detailed explanation can be found in the Strategic Report on pages 11 to 14 and in note 17 on pages 60 to 69 of the Annual Report and Financial Statements which are available on the website maintained by BlackRock at blackrock.co.uk/thrg.

In the view of the Board, there have been no 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 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 10.

The related party transactions with the Directors are set out in note 11.

GOING CONCERN
The Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future (being a period of at least 12 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 performance fee and finance costs) for the year ended 30 November 2016 were approximately 1.1% of net assets.

DIRECTORS’ RESPONSIBILITY STATEMENT
The Disclosure 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 and Transparency Rules.

The half yearly financial report has been reviewed by the Company’s Auditor.

The half yearly financial report was approved by the Board on 24 July 2017 and the above responsibility statement was signed on its behalf by the Chairman.

Crispin Latymer
For and on behalf of the Board
24 July 2017

INVESTMENT MANAGER’S REPORT
for the six months ended 31 May 2017

MARKET REVIEW AND OVERALL INVESTMENT PERFORMANCE
The first half of our financial year corresponded to a period of strong markets. Markets performed well despite numerous political uncertainties including tensions involving North Korea, the French Presidential election and at the end of the period, the calling of a surprise general election in the UK. Global GDP growth has been firm with notable signs of improvement in the EU, although UK GDP growth slowed in the first quarter.

PERFORMANCE REVIEW
The Company’s NAV per share has performed well in the first six months of the financial year, increasing by 28.3% to 521.71p on a total return basis. This compares to an increase in the benchmark of 18.7% and the FTSE 100 of 13.1%.

Both the long only equity and the long/short portfolios contributed positively during the period. The long/short book contributed 3.1% to NAV.

Starting with the long/short portfolio, it was encouraging to see that despite the strong market return which acted as a headwind for the short book, one of the top three positive contributors to the performance of the total Company return was from one of our short positions where a restructuring resulted in a significant writedown of the company’s assets.

Other notable contributors in the long/short portfolio included Melrose Industries and JD Sports. Melrose has demonstrated strong progress in profit growth as the timing and magnitude of improvements at Nortek, its recent acquisition, continue ahead of the original plan. JD Sports delivered excellent full year results with earnings per share up 55%, helped by strong like-for-like sales growth in the UK. European development accelerated with 54 additional JD Fascia stores opened and the first stores opened in Asia. JD Sports operates with net cash and continues to look well placed.

Turning to the long-only equity portfolio, the largest positive contributors to performance were our holdings in Warpaint, Morgan Sindall, Fever-Tree and Dechra Pharmaceuticals. Warpaint reported a 24% increase in 2016 earnings and announced a maiden final dividend of 1.5p and we believe the outlook for the company remains good. The shares have performed well since IPO and the outlook for the company remains strong. Morgan Sindall’s recent AGM statement showed continued strong trading across the group resulting in further broker upgrades while Fever-Tree continues to grow strongly, reporting 73% organic revenue growth in 2016. Dechra Pharmaceuticals’ interim results for the 6 months to December came in ahead of expectations, with the integration of recent acquisitions supplementing strong revenue growth from existing operations.

Our holding in plastic packaging engineer RPC was the largest detractor during the period. RPC fell as the market grew concerned around the company’s acquisition strategy following the announced acquisition of Letica for $490m funded by a 1 for 4 rights issue. RPC’s management have an excellent track record and remain ambitious.

ACTIVITY
Within the long only equity portfolio we have been increasing the concentration of the portfolio by adding to our highest conviction positions and reducing the total number of holdings.

We sold our holding in Hansteen after it announced the sale of its Continental European operations and the holding in Topps Tiles which has seen weakening like-for-like sales since the EU referendum.

We have added positions in a number of best in class mid-cap companies, which the Company has held in the past including Berkeley Group, Derwent London, Bellway and Rightmove.

We purchased a new holding in Countryside Properties. Countryside builds houses both on land owned or controlled by itself, and also on land owned by public bodies including local authorities. The latter approach avoids the need to buy land in these situations and helps Countryside generate good returns on investment on such long term developments, and also provides visibility of revenues. We believe the Company looks set for good earnings growth.

We continue to find opportunities in initial public offerings, and recently took part in the IPOs of Medica, UP Global Sourcing and Xafinity. Medica is a leading independent UK provider of radiology reporting delivering more than 1.3 million reports per annum, mainly to the NHS. UP Global Sourcing is a leading product development, sourcing and merchandising company owning brands such as Salter, Russell Hobbs, Beldray and Constellation. Xafinity is a UK specialist in pensions actuarial, consulting and administration, providing a wide range of advisory and compliance services to over 550 pension scheme clients.

We have also used strong share price performance to take some profits in a number of long term holdings which have performed well and where valuations are now quite high. Our view on many of these companies remains unchanged and we would add to many of these on any setback.

Within the long/short portfolio, a few new holdings have been added from promising IPOs, as outlined above. We’ve also been increasing our short positions in certain UK domestics in recent months, where we see scope for disappointment in valuation, rising risks to earnings and cashflow from falling demand and rising costs pressures. Recent political events leading to more uncertainty will continue to exert further pressure on some of these business models.

PORTFOLIO POSITIONING
Relative to our benchmark index we remain overweight media companies, housebuilders, construction companies, industrial engineers and miners. Our media stocks include 4imprint and Next Fifteen which are both heavily US and business to business focused. Our housebuilders include Bellway and Berkeley Group. Within the construction sector our holdings having a more infrastructure and public housing focus, including Morgan Sindall, Marshalls and Costain. Our engineering holdings include Hill & Smith, Avon Rubber, Bodycote, Gooch & Housego and Trifast. All these companies are very internationally focused and generally supplying attractive end markets.

We remain underweight support services companies, food producers, software companies and challenger banks.

We estimate that around half of the revenues of our portfolio originate in the UK and these include defensive consumer companies such as CVS Group and Cineworld. More cyclical consumer companies include JD Sports and Headlam.

Within the long/short portfolio, there has been little change to the overall shape of the portfolio, because we believe the key shares and sectors where we see good long investment opportunities are the same, and the short book still targets the same areas that we see as generating unsustainable returns or under structural or cyclical pressure. The long book remains exposed to specific investment cases, often where companies have harnessed the power and convenience of technology in a capital light model that disrupts mature profit pools. Many of our short positions are within Consumer Services, either facing structural headwinds (digital disruption, low cost or specialised formats) or cyclical pressures (weakening consumer demand, rising costs).

OUTLOOK
Markets have remained firm based on generally good economic data around the world, however the most recent UK GDP growth has been weaker than expected, whilst wage growth remains lower than inflation. Political developments have continued to be at the forefront, with the unexpected call for a snap general election in the UK and subsequent outcome of a hung parliament.

The unexpected result in the election has undoubtedly increased the uncertainty around Brexit negotiations and may have an impact on business investment decisions and could damage consumer confidence.

Meanwhile, valuations are not cheap and although earnings growth has been good for many of our holdings, and they remain well set, an increasingly large number of companies trade on more than 20 times forecast earnings. Given this and the potential for further political surprise or economic setback, the share prices of UK small and mid-caps may find it difficult to make further progress over the coming months.

Despite these concerns, we believe our portfolio is suitably diversified and comprised of many market-leading businesses, run by strong management teams and is therefore well placed for the current environment, although it could suffer in any de-rating or momentum correction. We also have the additional benefit through the long/short portfolio to short companies with weaker fundamentals and to vary our overall exposure to the market.

Mike Prentis and Dan Whitestone
BlackRock Investment Management (UK) Limited
24 July 2017

TWENTY LARGEST INVESTMENTS
as at 31 May 2017

Company		Market value  £’000	% of net  assets	Description
CVS Group*	Ordinary shares Long CFD position	10,141 2,768	3.4	Operation of veterinary surgeries
Dechra Pharmaceuticals	Ordinary shares Long CFD position	9,070 1,604	2.8	Development and supply of pharmaceutical and other products focused on the veterinary market
4imprint Group	Ordinary shares Long CFD position	7,835 1,484	2.4	Supply of promotional merchandise in the US
JD Sports Fashion	Ordinary shares Long CFD position	6,509 2,518	2.4	Retail supply of sports and leisure footwear and clothing
Cineworld Group	Ordinary shares Long CFD position	6,332 2,336	2.3	Operation of cinemas
Ascential	Ordinary shares Long CFD position	4,963 2,454	1.9	Connection of businesses through international exhibitions and festivals
Hill & Smith	Ordinary shares Long CFD position	6,683 719	1.9	Production of infrastructure products and supply of galvanizing services
Big Yellow	Ordinary shares	7,355	1.9	Provision of self-storage services
Ibstock	Ordinary shares Long CFD position	5,879 1,402	1.9	Manufacture of clay bricks and concrete products
Bellway	Ordinary shares Long CFD position	6,373 756	1.9	UK housebuilding
Berkeley Group Holdings	Ordinary shares Long CFD position	5,713 1,393	1.9	Development of residential property in London
Derwent London	Ordinary shares Long CFD position	5,947 952	1.8	Development and ownership of office property in Central and North London
Avon Rubber	Ordinary shares	6,734	1.8	Production of safety masks and dairy related products
Accesso Technology*	Ordinary shares Long CFD position	5,039 1,468	1.7	Development and supply of ticketing and virtual queuing solutions
Advanced Medical Solutions*	Ordinary shares Long CFD position	5,542 888	1.7	Development and manufacture of wound care and closure products
Melrose Industries	Ordinary shares Long CFD position	2,330 3,944	1.7	Purchase and improvement of manufacturing businesses
Workspace Group	Ordinary shares Long CFD position	5,717 542	1.6	Supply of flexible workspace to businesses in London
Johnson Service Group*	Ordinary shares Long CFD position	4,227 1,966	1.6	Provision of textile related services
Bodycote	Ordinary shares Long CFD position	5,579 504	1.6	Provision of thermal processing services
Marshalls	Ordinary shares Long CFD position	5,084 965	1.6	Manufacture and sale of concrete stone paving and related products
		-------	------
20 largest investments		151,715	39.8
		======	=====

* Traded on the Alternative Investment Market (AIM) of the London Stock Exchange.
At 31 May 2017, the Company did not hold any equity interest representing more than 3% of each investee company’s share capital.
A list of the Company’s long only equity portfolio and long CFD portfolio is available on the Company’s website.

ANALYSIS OF INVESTMENTS
as at 31 May 2017

Portfolio	Fair  value1  £’000	Gross market  exposure2  £’000	Gross market  exposure  as a % of net assets
Equity investments	374,659	374,659	98.2
	--------	--------	--------
Total long CFD positions	1,799	74,865	19.6
	--------	--------	--------
Total short CFD positions	(415)	(23,250)	(6.1)
	--------	--------	--------
Short index futures position	(209)	(3,663)	(1.0)
	--------	--------	--------
Total Investments	375,834	422,611	110.7
	--------	--------	--------
Cash and cash equivalents3	8,452	(38,325)	(10.0)
	--------	--------	--------
Other net current liabilities	(2,757)	(2,757)	(0.7)
	--------	--------	--------
Net assets	381,529	381,529	100.0
	========	========	========

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 value column above includes CFD and futures contracts at their fair value, which is determined based on the difference between the purchase 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 CFD positions directly in the market would have amounted to £73,066,000 at the time of purchase, and subsequent market rises in prices have resulted in unrealised gains on the CFD contracts of £1,799,000 resulting in the value of the total market exposure to the underlying securities rising to £74,865,000 as at 31 May 2017. The notional price of selling the securities to which exposure was gained via the short CFD and index futures positions would have been £22,835,000 and £3,454,000 respectively at the time of entering into the contract, and subsequent price increases have resulted in unrealised losses on the short CFD and index futures positions of £415,000 and £209,000 respectively and the value of the market exposure of these investments increasing to £23,250,000 and £3,663,000 respectively at 31 May 2017. If the short positions had been closed on 31 May 2017 this would have resulted in a loss of £624,000 for the Company.
2. Market exposure in the case of equity investments is the same as fair value. In the case of CFDs and futures it is the market value of the underlying shares to which the portfolio is exposed via the contract.
3. Cash and cash equivalents include investment in BlackRock’s Institutional Cash Series plc – Sterling Liquidity Fund of £8,370,000. The gross market exposure column for Cash and cash equivalents has been adjusted to assume the Company purchased direct holdings rather than exposure being gained through CFDs or futures.

DISTRIBUTION OF INVESTMENTS
as at 31 May 2017

Sector	equity  portfolio  %	long CFD  portfolio  %	short CFD  & future  portfolio  %	net  portfolio  %
Oil & Gas
Oil & Gas Producers	2.3	–	(0.1)	2.2
Oil Equipment, Services & Distribution	–	0.1	–	0.1
	------	------	------	-----
	2.3	0.1	(0.1)	2.3
	------	------	------	-----
Basic Materials
Chemicals	2.2	0.4	(0.3)	2.3
Industrial Metals & Mining	0.6	–	–	0.6
Mining	3.8	–	–	3.8
	------	------	------	-----
	6.6	0.4	(0.3)	6.7
	------	------	------	-----
Industrials
Construction & Materials	8.1	2.1	–	10.2
Aerospace & Defence	2.6	–	–	2.6
General Industrials	2.5	0.8	–	3.3
Electronic & Electrical Equipment	1.3	0.6	(0.4)	1.5
Industrial Engineering	4.4	0.7	(0.3)	4.8
Industrial Transportation	2.0	0.2	(0.1)	2.1
Support Services	5.7	1.5	(1.0)	6.2
	------	------	------	-----
	26.6	5.9	(1.8)	30.7
	------	------	------	-----
Consumer Goods
Beverages	0.9	0.2	(0.1)	1.0
Food Producers	–	–	(0.1)	(0.1)
Household Goods & Home Construction	8.7	1.5	–	10.2
Leisure Goods	1.0	0.2	–	1.2
Personal Goods	1.1	0.1	(0.1)	1.1
	------	------	------	-----
	11.7	2.0	(0.3)	13.4
	------	------	------	-----
Health Care
Health Care Equipment & Services	2.0	0.2	–	2.2
Pharmaceuticals & Biotechnology	2.5	0.4	–	2.9
	------	------	------	-----
	4.5	0.6	–	5.1
	------	------	------	-----
Consumer Services
Food & Drug Retailers	–	0.4	(0.5)	(0.1)
General Retailers	6.1	2.2	(0.6)	7.7
Media	8.9	2.1	(0.2)	10.8
Travel & Leisure	5.1	2.1	(0.9)	6.3
	------	------	------	-----
	20.1	6.8	(2.2)	24.7
	------	------	------	-----
Financials
Banks	–	0.2	–	0.2
Financial Services	5.0	0.4	(0.9)	4.5
Non-life Insurance	0.9	0.5	(0.1)	1.3
Real Estate Investment & Services	2.0	0.2	–	2.2
Real Estate Investment Trusts	4.9	0.5	–	5.4
	------	------	------	-----
	12.8	1.8	(1.0)	13.6
	------	------	------	-----
Technology
Software & Computer Services	3.6	0.5	(0.4)	3.7
Technology Hardware & Equipment	–	–	(0.2)	(0.2)
	------	------	------	-----
	3.6	0.5	(0.6)	3.5
	------	------	------	-----
Total Investments	88.2	18.1	(6.3)	100.0
	=====	=====	=====	=====

The above percentages are calculated based on the portfolio at 31 May 2017. The net portfolio is calculated as long only equity portfolio plus long CFD portfolio less short CFD portfolio.

ANALYSIS OF THE PORTFOLIO

	Gross Basis1	Net Basis2
FTSE 250	44.1%	44.5%
FTSE AIM	27.6%	29.8%
FTSE Small Cap	21.2%	21.8%
Other	7.1%	3.9%

Source: BlackRock.

1. Long and short CFD portfolio in aggregate plus futures and long only equity portfolio excluding investments in BlackRock's Institutional Cash Series plc – Sterling Liquidity Fund.
2. Long CFD portfolio less short CFD portfolio and futures portfolio plus long only equity portfolio excluding investments in BlackRock's Institutional Cash Series plc – Sterling Liquidity Fund.

MARKET CAPITALISATION AS AT 31 MAY 2017

	Long positions (including the long equity portfolio and long CFD portfolio)	Short positions
£1bn+	45.1%	-2.1%
£400m-£1bn	29.9%	-2.5%
£100m-£400m	31.4%	-0.9%
£0m-£100m	0.0%	-0.9%

Source: BlackRock.

Weighted average market capitalisation as at 31 May 2017: £1,091.3 million (Benchmark Index: £919.7 million).

POSITION SIZE AS AT 31 MAY 2017

	Long positions (including the long equity portfolio and long CFD portfolio)	Short positions
£2m+	85	-1
£1m-2m	51	-2
£0m-£1m	50	-42

Source: BlackRock.

STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 May 2017

	Notes	Revenue £’000			Capital £’000			Total £’000
		Six  months  ended  31.05.17  (unaudited)	Six  months  ended  31.05.16  (unaudited)	Year  ended  30.11.16  (audited)	Six  months  ended  31.05.17  (unaudited)	Six  months  ended  31.05.16  (unaudited)	Year  ended  30.11.16  (audited)	Six  months  ended   31.05.17  (unaudited)	Six  months  ended  31.05.16  (unaudited)	Year  ended  30.11.16  (audited)
Income from investments held at fair value through profit or loss	3	4,335	3,313	6,794	–	–	–	4,335	3,313	6,794
Net income from contracts for difference	3	254	(20)	76	–	–	–	254	(20)	76
Other income	3	13	–	1	–	–	–	13	–	1
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Total revenue		4,602	3,293	6,871	–	–	–	4,602	3,293	6,871
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Profit on investments held at fair value through profit or loss		–	–	–	76,456	517	10,419	76,456	517	10,419
Loss on foreign exchange		–	–	–	(40)	–	(24)	(40)	–	(24)
Net profit from contracts for difference		–	–	–	9,887	3,040	6,746	9,887	3,040	6,746
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Total		4,602	3,293	6,871	86,303	3,557	17,141	90,905	6,850	24,012
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Expenses
Investment management and performance fees	4	(377)	(306)	(621)	(5,718)	(1,152)	(2,630)	(6,095)	(1,458)	(3,251)
Operating expenses	5	(236)	(238)	(519)	(8)	(8)	(18)	(244)	(246)	(537)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Total operating expenses		(613)	(544)	(1,140)	(5,726)	(1,160)	(2,648)	(6,339)	(1,704)	(3,788)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit on ordinary activities before finance costs and taxation		3,989	2,749	5,731	80,577	2,397	14,493	84,566	5,146	20,224
Finance costs		–	–	(1)	(1)	(2)	(3)	(1)	(2)	(4)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit on ordinary activities before taxation		3,989	2,749	5,730	80,576	2,395	14,490	84,565	5,144	20,220
Taxation		(12)	(6)	(7)	–	–	–	(12)	(6)	(7)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Profit for the period	7	3,977	2,743	5,723	80,576	2,395	14,490	84,553	5,138	20,213
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Earnings per ordinary share	7	5.44p	3.75p	7.83p	110.18p	3.28p	19.81p	115.62p	7.03p	27.64p
		========	========	========	========	========	========	========	========	========

The total column of this statement represents the 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 disposed of during the period.

The Company does not have any other comprehensive income. The net profit disclosed above represents the Company’s total comprehensive income.

STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 May 2017

		Called up  share  capital  £’000	Share  premium  account  £’000	Special  reserve  £’000	Capital  redemption  reserve  £’000	Capital  reserves  £’000	Revenue  reserve  £’000	Total  £’000
For the six months ended 31 May 2017 (unaudited)
At 30 November 2016		4,026	21,049	35,272	11,905	219,011	10,284	301,547
Total comprehensive income:
Net profit for the period		–	–	–	–	80,576	3,977	84,553
Transactions with owners, recorded directly to equity:
Dividends paid*		–	–	–	–	–	(4,571)	(4,571)
		--------	--------	--------	--------	--------	--------	--------
At 31 May 2017		4,026	21,049	35,272	11,905	299,587	9,690	381,529
		--------	--------	--------	--------	--------	--------	--------
For the six months ended 31 May 2016 (unaudited)
At 30 November 2015		4,026	21,049	35,272	11,905	204,521	9,570	286,343
Total comprehensive income:
Net profit for the period		–	–	–	–	2,395	2,743	5,138
Transactions with owners, recorded directly to equity:
Dividends paid**		–	–	–	–	–	(4,095)	(4,095)
		--------	--------	--------	--------	--------	--------	--------
At 31 May 2016		4,026	21,049	35,272	11,905	206,916	8,218	287,386
		--------	--------	--------	--------	--------	--------	--------
For the year ended 30 November 2016 (audited)
At 30 November 2015		4,026	21,049	35,272	11,905	204,521	9,570	286,343
Total comprehensive income:
Net profit for the year		–	–	–	–	14,490	5,723	20,213
Transactions with owners, recorded directly to equity:
Dividends paid***		–	–	–	–	–	(5,009)	(5,009)
		--------	--------	--------	--------	--------	--------	--------
At 30 November 2016		4,026	21,049	35,272	11,905	219,011	10,284	301,547
		--------	--------	--------	--------	--------	--------	--------

*    Final dividend of 6.25p per share for the year ended 30 November 2016, declared on 17 February 2017 and paid on 29 March 2017.
**   Final dividend of 5.60p per share for the year ended 30 November 2015, declared on 12 February 2016 and paid on 5 April 2016.
*** Final dividend of 5.60p per share for the year ended 30 November 2015, declared on 12 February 2016 and paid on 5 April 2016 and interim dividend of 1.25p per share for the year ended 30 November 2016, declared on 18 July 2016 and paid on 19 August 2016.
The transaction costs incurred on the acquisition and disposal of investments are included within the capital reserves. Purchase and sale costs amounted to £337,000 and £91,000 respectively for the period ended 31 May 2017 (six months ended 31 May 2016: £250,000 and £64,000; year ended 30 November 2016: £492,000 and £129,000).

STATEMENT OF FINANCIAL POSITION
as at 31 May 2017

	Notes	31 May 2017  £’000  (unaudited)	31 May 2016  £’000  (unaudited)	30 November 2016  £’000  (audited)
Non current assets
Investments held at fair value through profit or loss	9	374,659	285,676	297,072
		--------	--------	--------
Current assets
Other receivables		7,158	1,961	1,346
Cash and cash equivalents		8,452	2,331	5,509
Cash held on margin deposit with brokers		414	–	152
Derivative financial assets held at fair value through profit or loss		3,213	1,411	1,934
		--------	--------	--------
		19,237	5,703	8,941
		--------	--------	--------
Total assets		393,896	291,379	306,013
		--------	--------	--------
Current liabilities
Other payables		(7,887)	(2,633)	(3,024)
Collateral held in respect of contracts for difference		(2,442)	(1,360)	(1,423)
Derivative financial liabilities held at fair value through profit or loss		(2,038)	–	(19)
		--------	--------	--------
		(12,367)	(3,993)	(4,466)
		--------	--------	--------
Net current assets		6,870	1,710	4,475
		--------	--------	--------
Net assets		381,529	287,386	301,547
		======	======	======
Equity attributable to equity holders
Called up share capital	8	4,026	4,026	4,026
Share premium account		21,049	21,049	21,049
Capital redemption reserve		11,905	11,905	11,905
Special reserve		35,272	35,272	35,272
Capital reserves		299,587	206,916	219,011
Revenue reserve		9,690	8,218	10,284
		======	======	======
Total equity	7	381,529	287,386	301,547
		======	======	======
Net asset value per ordinary share	7	521.71p	392.98p	412.34p
		======	======	======

CASH FLOW STATEMENT
for the six months ended 31 May 2017

	Six months ended  31 May 2017  £’000  (unaudited)	Six months ended  31 May 2016  £’000  (unaudited)	Year ended  30 November 2016  £’000  (audited)
Net cash inflow from operating activities	7,781	4,312	8,663
	-----	-----	-----
Financing activities
Interest paid on CFDs	(226)	(227)	(462)
Interest paid	(1)	(3)	(3)
Dividends paid	(4,571)	(4,095)	(5,009)
	-----	-----	-----
Net cash outflow from financing activities	(4,798)	(4,325)	(5,474)
	-----	-----	-----
Increase/(decrease) in cash and cash equivalents	2,983	(13)	3,189
Effect of foreign exchange rate changes	(40)	–	(24)
	-----	-----	-----
Change in cash and cash equivalents	2,943	(13)	3,165
Cash and cash equivalents at the start of period	5,509	2,344	2,344
	-----	-----	-----
Cash and cash equivalents at the end of the period	8,452	2,331	5,509
	=====	=====	=====
Comprised of:
Cash at bank	82	255	119
BlackRock's Institutional Cash Series plc – Sterling Liquidity Fund	8,370	2,076	5,390
	-----	-----	-----
	8,452	2,331	5,509
	=====	=====	=====

RECONCILIATION OF NET PROFIT BEFORE TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES
for the six months ended 31 May 2017

	Six months ended  31 May 2017  £’000  (unaudited)	Six months ended  31 May 2016  £’000  (unaudited)	Year ended  30 November 2016  £’000  (audited)
Operating activities
Net profit before taxation	84,565	5,144	20,220
Add back interest paid on CFDs	226	227	462
Add back finance cost	1	3	4
Profits on investments and CFDs held at fair value through profit or loss (including transaction costs)	(86,514)	(3,759)	(17,512)
Net losses on foreign exchange	40	–	24
Sales of investments held at fair value through profit or loss	91,950	56,366	110,936
Purchases of investments held at fair value through profit or loss	(93,081)	(54,307)	(110,369)
Realised losses on closure of CFDs	(11,393)	(13,719)	(28,282)
Realised gains on closure of CFDs	22,396	16,670	35,038
Net realised losses on closure of futures	(205)	–	(461)
Collateral received in respect of CFDs	1,019	126	189
Net movement in cash held on margin deposit with brokers	(262)	–	(152)
(Increase)/decrease in other receivables	(1,376)	(495)	65
(Increase)/decrease in amounts due from brokers	(4,436)	1,602	1,655
Increase in amounts due to brokers	364	172	106
Increase/(decrease) in other payables	4,499	(3,712)	(3,253)
Taxation paid	(12)	(6)	(7)
	------	------	------
Net cash inflow from operating activities	7,781	4,312	8,663
	======	======	======

NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 May 2017

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 PREPARATION
The half yearly financial statements have been prepared using the same accounting policies as set out in the Company’s Annual Report and Financial Statements for the year ended 30 November 2016 which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and applied in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’.

Insofar as the Statement of Recommended Practice (SORP) for investment trust companies and venture capital trusts issued by the Association of Investment Companies (AIC), revised in November 2014 is compatible with IFRS, the Financial Statements have been prepared in accordance with the guidance set out in the SORP.

The Company’s investment in BlackRock’s Institutional Cash Series plc – Sterling Liquidity Fund of £8,370,000 (31 May 2016: £2,076,000; 30 November 2016: £5,390,000) is managed as part of the Company’s cash management policy and, accordingly, at 30 November 2016 this investment along with purchases and sales of this investment has been classified in the Statement of Financial Position and Cash Flow Statement as cash and cash equivalents. The comparative figures as at 31 May 2016 in the Statement of Financial Position and for the six months period ended 31 May 2016 in the Cash Flow Statement have been amended to reflect this change.

3. INCOME
 

	Six months ended  31 May 2017  £’000  (unaudited)	Six months ended  31 May 2016  £’000  (unaudited)	Year ended  30 November 2016  £’000  (audited)
Investment income:
UK listed dividends	2,984	2,662	5,835
UK listed dividends – special	326	294	403
UK scrip dividends	17	11	36
Overseas listed dividends	831	346	474
Overseas listed dividends – special	177	–	46
	------	------	------
	4,335	3,313	6,794
	------	------	------
Income from contracts for difference	254	(20)	76
	------	------	------
	254	(20)	76
	------	------	------
Interest receivable and other income:
Deposit interest	–	–	1
Underwriting commission	13	–	–
	------	------	------
	13	–	1
	------	------	------
Total income	4,602	3,293	6,871
	=====	=====	=====

Dividends and interest received in the period amounted to £3,233,000 and £nil (six months ended 31 May 2016: £2,975,000 and £nil; year ended 30 November 2016: £6,364,000 and £1,000) respectively.

4. INVESTMENT MANAGEMENT AND PERFORMANCE FEES
 

	Six months ended 31 May 2017 (unaudited)			Six months ended 31 May 2016 (unaudited)			Year ended 30 November 2016 (audited)
	Revenue  £’000	Capital  £’000	Total  £’000	Revenue  £’000	Capital  £’000	Total  £’000	Revenue  £’000	Capital  £’000	Total  £’000
Investment management fee	377	1,131	1,508	306	917	1,223	621	1,862	2,483
Performance fee	-	4,587	4,587	-	235	235	–	768	768
	-----	-----	-----	-----	-----	-----	-----	-----	-----
Total	377	5,718	6,095	306	1,152	1,458	621	2,630	3,251
	=====	=====	=====	=====	=====	=====	=====	=====	=====

BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a contract which is terminable on six months’ notice.

Up to 31 July 2017, the terms of the existing investment management agreement with BFM provide for a basic management fee, payable quarterly in arrears, of 0.7% per annum on the gross asset value of the Company’s long only portfolio plus the gross value of the underlying equities, long and short (Performance Fee Market Value), to which the Company is exposed through the CFD portfolio. In addition, BFM is entitled to a performance fee of 10% of the net asset value (total return) outperformance against the Numis Companies excluding AIM (excluding Investment Companies) Index (the benchmark index) subject to a cap of 1% of Performance Fee Market Value.

The investment management fee is allocated 75% to the capital column and 25% to the revenue column of the Statement of Comprehensive Income in line with the Board’s expected long term split of returns, in the form of capital gains and income, respectively, from the investment portfolio. A performance fee of £4,587,000 was accrued for the six months ended 31 May 2017 (six months ended 31 May 2016: £235,000; year ended 30 November 2016: £768,000). The performance fee has been wholly allocated to the capital column of the Statement of Comprehensive Income, as performance has been predominantly generated through the capital returns on the investment portfolio.   

As announced on 24 July 2017, the Company has agreed revised management and performance fee arrangements with BFM which are effective from 1 August 2017 for management fees and from 1 December 2017 for performance fees and the aggregate cap on total fees. For further details, refer to the Chairman’s Statement.

5. OTHER OPERATING EXPENSES
 

	Six months ended  31 May 2017  £’000  (unaudited)	Six months ended  31 May 2016  £’000  (unaudited)	Year ended  30 November 2016  £’000  (audited)
Allocated to revenue:
Custody fee	3	4	7
Auditor’s remuneration:
– audit services	18	18	36
– other assurance services	6	6	6
Registrar’s fee	14	16	33
Broker fees	19	19	37
Depositary fees	23	19	39
Marketing fees	50	64	126
Marketing fee accrual written back	(41)	(34)	(34)
Directors’ emoluments	87	68	150
Other administrative costs	57	58	119
	--------	--------	--------
	236	238	519
	--------	--------	--------
Allocated to capital:
Transaction charges	8	8	18
	--------	--------	--------
	244	246	537
	========	========	========

6. DIVIDENDS
The Board has declared an interim dividend of 2.00p per share payable on 23 August 2017 to shareholders on the register at 4 August 2017 (six months ended 31 May 2016, interim dividend of 1.25p per share paid on 19 August 2016 to shareholders on the register at 29 July 2016.) This dividend has not been accrued in the financial statements for the six months ended 31 May 2017 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 and capital returns and per share are shown below and have been calculated using the following:

	Six months ended  31 May 2017  £’000  (unaudited)	Six months ended  31 May 2016  £’000  (unaudited)	Year ended  30 November 2016  £’000  (audited)
Net revenue profit attributable to ordinary shareholders (£’000)	3,977	2,743	5,723
Net capital profit attributable to ordinary shareholders (£’000)	80,576	2,395	14,490
	--------	--------	--------
Total profit attributable to ordinary shareholders (£’000)	84,553	5,138	20,213
	--------	--------	--------
Equity shareholders’ funds (£’000)	381,529	287,386	301,547
	--------	--------	--------
The weighted average number of ordinary shares in issue during each period, on which the return per ordinary share was calculated was:	73,130,326	73,130,326	73,130,326
	--------	--------	--------
The actual number of ordinary shares in issue at the end of each period, on which the net asset value per ordinary share was calculated was:	73,130,326	73,130,326	73,130,326
	--------	--------	--------
Returns per share:
Revenue earnings per ordinary share	5.44p	3.75p	7.83p
Capital profit per ordinary share	110.18p	3.28p	19.81p
	--------	--------	--------
Total earnings per ordinary share	115.62p	7.03p	27.64p
	========	========	========

   

	As at  31 May 2017  (unaudited)	As at  31 May 2016  (unaudited)	As at  30 November 2016  (audited)
Net asset value per ordinary share – basic and diluted	521.71p	392.98p	412.34p
	--------	--------	--------
Ordinary share price	436.00p	332.00p	325.00p
	========	========	========

The Company does not have any dilutive securities.

8. CALLED UP SHARE CAPITAL
 

	Ordinary  shares in  issue  number	Treasury  shares  number	Total  shares  number	Nominal  value  £’000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 5p each:
At 1 December 2016 and 31 May 2017	73,130,326	7,400,000	80,530,326	4,026

There has been no change in the Company’s share capital during the period or as at the date of this report.

9. 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(c) and 2(d) as set out in the Company’s Annual Report and Financial Statements for the year ended 30 November 2016.

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 in an active market for an identical instrument. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly 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.

Level 2 – Valuation techniques used to price securities based on observable inputs. 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.

Level 3 – Valuation techniques using significant unobservable inputs other than quoted prices within Level 1. This category includes all instruments where the valuation technique includes inputs not based on observable market data and unobservable inputs could have a significant impact on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The level in the hierarchy within 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.

If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 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 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.

There has been no change to the valuation techniques during the period under review or as at the date of this report.

CFDs have all 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 and relevant foreign currency exchange rates.

The table below sets out fair value measurements using IFRS 13 fair value hierarchy.

Financial assets/(liabilities) at fair value through profit or loss at 31 May 2017	Level 1  £’000	Level 2  £’000	Level 3  £’000	Total  £’000
Assets:
Equity investments	374,659	–	–	374,659
Contracts for difference – long (gross exposure)	–	74,865	–	74,865
Liabilities:
Index futures – short (gross exposure)	–	(3,663)	–	(3,663)
Contracts for difference – short (gross exposure)	–	(23,250)	–	(23,250)
	--------	--------	--------	--------
	374,659	47,952	–	422,611
	========	========	========	========

   

Financial assets at fair value through profit or loss at 31 May 2016	Level 1  £’000	Level 2  £’000	Level 3  £’000	Total  £’000
Assets:
Equity investments	285,676	–	–	285,676
Contracts for difference – long (gross exposure)	–	44,988	–	44,988
Liabilities:
Index futures – short (gross exposure)	–	–	–	–
Contracts for difference – short (gross exposure)	–	(24,038)	–	(24,038)
	--------	--------	--------	--------
	285,676	20,950	–	306,626
	========	========	========	========

   

Financial assets/(liabilities) at fair value through profit or loss at 30 November 2016	Level 1  £’000	Level 2  £’000	Level 3  £’000	Total  £’000
Assets:
Equity investments	297,072	–	–	297,072
Contracts for difference – long (gross exposure)	–	56,467	–	56,467
Liabilities:
Index futures – short (gross exposure)	–	(2,452)	–	(2,452)
Contracts for difference – short (gross exposure)	–	(23,260)	–	(23,260)
	--------	--------	--------	--------
	297,072	30,755	–	327,827
	========	========	========	========

There were no transfers between levels for financial assets and financial liabilities during the period recorded at fair value as at 31 May 2017, 31 May 2016 and 30 November 2016. The Company did not hold any level 3 securities throughout the financial period under review or as at 31 May 2017, 31 May 2016 or 30 November 2016.

10. TRANSACTIONS WITH THE AIFM AND 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)).

The investment management fee due to BFM for the six months ended 31 May 2017 amounted to £1,508,000 (six months ended 31 May 2016: £1,223,000; year ended 30 November 2016: £2,483,000). In addition the performance fee accrued for the six months ended 31 May 2017 amounted to £4,587,000 (six months ended 31 May 2016: £235,000; year ended 30 November 2016: £768,000).

At the period end £1,508,000 was outstanding in respect of the investment management fee (31 May 2016: £607,000; 30 November 2016: £656,000) and £4,587,000 was accrued in respect of performance fees (31 May 2016: £235,000; 30 November 2016: £768,000). Any final performance fee for the full year ending 30 November 2017 will not crystallise and fall due until the calculation date of 30 November 2017.

In addition to the above services, the Manager provides the Company with marketing services. The total fees paid or payable for these services for the six months to 31 May 2017 amounted to £9,000 including VAT (six months ended 31 May 2016: £30,000; year ended 30 November 2016: £92,000). Marketing fees of £37,000 including VAT (31 May 2016: £165,000; 30 November 2016: £113,000) were outstanding at 31 May 2017.

The Company has an investment in BlackRock’s Institutional Cash Series plc - Sterling Liquidity Fund of £8,370,000 at 31 May 2017 (31 May 2016: £2,076,000; 30 November 2016: £5,390,000).

11. RELATED PARTY DISCLOSURE
The Board consisted of six non-executive Directors at 31 May 2017, all of whom are considered to be independent by the Board. Mr Stobart retired with effect from 22 March 2017 and Mr Greenlees succeeded him as Chairman of the Audit Committee on this date. The Chairman receives an annual fee of £36,000, the Chairman of the Audit Committee receives an annual fee of £28,000 and each other Director receives an annual fee of £24,000.

As at 31 May 2017 an amount of £13,000 (31 May 2016: £11,000; 30 November 2016: £12,000) was outstanding in respect of Directors’ fees.

At the period end and at 20 July 2017, the interests of the Directors in the ordinary shares of the Company were as follows:

	Ordinary shares  31 May 2017	Ordinary shares  20 July 2017
Crispin Latymer	31,369	31,404
Simon Beart	43,522 1	43,869 2
Loudon Greenlees	10,000	10,000
Jean Matterson	46,000	46,000
Christopher Samuel	6,500	6,500
Andrew Pegge	Nil	Nil

1. Including 13,964 shares held by Mrs Beart.

2. Including 14,137 shares held by Mrs Beart.

12. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 May 2017, 31 May 2016 or 30 November 2016.

13. 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 2017 and 31 May 2016 has not been audited.

The information for the year ended 30 November 2016 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.

14. ANNUAL RESULTS
The Board expects to announce the annual results for the year ending 30 November 2017 in February 2018. Copies of the results announcement can be obtained from the Secretary on 020 7743 3000 or by email at: [e-mail]. The Annual Report and Financial Statements should be available by the beginning of February 2018, with the Annual General Meeting expected to be held in March 2018.

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INDEPENDENT REVIEW REPORT TO BLACKROCK THROGMORTON TRUST PLC

INTRODUCTION
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 May 2017 which comprises the Statement of comprehensive income, Statement of changes in equity, Statement of financial position, Cash flow statement, Reconciliation of net profit before taxation to net cash flow from operating activities and the related notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

DIRECTORS’ RESPONSIBILITIES
The half yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting”, as adopted by the European Union.

OUR RESPONSIBILITY
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

SCOPE OF REVIEW
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 May 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

Ernst & Young LLP
London
24 July 2017

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For further information, please contact:

Simon White, Managing Director, Investment Companies, BlackRock Investment Management (UK) Limited
Tel: [phone]

Mike Prentis, Fund Manager, BlackRock Investment Management (UK) Limited
Tel: [phone]

Press enquiries:

Lucy Horne, Lansons Communications – Tel:  [phone]
E-mail:  [e-mail]

24 July 2017

12 Throgmorton Avenue
London EC2N 2DL

END

The Half Yearly Financial Report will also be available on the BlackRock website at http://www.blackrock.co.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.

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