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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Brunner Investment Trust Plc | LSE:BUT | London | Ordinary Share | GB0001490001 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
15.00 | 1.16% | 1,305.00 | 1,300.00 | 1,305.00 | 1,310.00 | 1,300.00 | 1,310.00 | 126,743 | 16:35:06 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Unit Inv Tr, Closed-end Mgmt | 46.66M | 40.63M | 0.9517 | 13.66 | 555.01M |
TIDMBUT
RNS Number : 9018F
Brunner Investment Trust PLC
18 July 2019
17 July 2019
THE BRUNNER INVESTMENT TRUST PLC
HALF-YEARLY FINANCIAL REPORT
For the six months ended 31 May 2019
Highlights
-- Net asset value (debt at fair value) per share up by +1.8% (2018: +3.1%) -- Net asset value (debt at par) per share up by +2.6% (2018: +2.4%) -- Earnings per ordinary share 12.6p (2018: 10.6p) +18.9% -- Dividends for the half year 9.32p(1) (2018: 8.1p) +15.1% -- Net asset value total return (debt at fair value) per share up by +2.9% (2018: +4.0%) -- Net asset value total return (debt at par) per share up by +3.7% (2018: +3.4%) -- Share price up by 3.9% to 774.0p (2018: 745.0p)
-- Discount of net asset value (debt at fair value) to share price 10.1% and an average of 9.6% over the period (2018: 11.9%, average over the year 9.5%)
-- Benchmark Index increased by 3.4% (2018: +4.5%) Six months Six months % ended ended change Revenue 31 May 2019 31 May 2018 Available for ordinary dividend GBP5,372,000 GBP4,502,000 +19.3 Earnings per ordinary share 12.6p 10.6p +18.9 Quarterly dividends per ordinary share 9.32p(1) 8.1p +15.1 Retail price index 289.2 280.7 +3.0 (1) First quarterly 4.66p, second quarterly 4.66p At 31 May At 30 Nov % Assets 2019 2018 change Net asset value per ordinary share (debt at fair value) 861.2p 845.8p +1.8 Net asset value per ordinary share (debt at par) 865.8p 843.9p +2.6 Ordinary share price 774.0p 745.0p +3.9 Total net assets (debt at fair value) GBP367,656,000 GBP361,105,000 +1.8 Total net assets (debt at par) GBP369,616,000 GBP360,273,000 +2.6 Performance relative to the benchmark for the six months to 31 May 2019 Net Asset Capital Total Return(2) Value with Return debt at fair value relative to Benchmark* Change in net asset value 1.8% 2.9% Change in benchmark 1.7% 3.4% Percentage point performance against benchmark* 0.1 -0.5
*The benchmark applied is 70% FTSE World Ex UK Index and 30% FTSE All-Share Index.
(2) Total returns are calculated with net dividends reinvested
Reconciliation of Benchmark performance to total return to shareholders Equity portfolio return (excluding cash) 4.1% Impact of gearing 0.2% Finance costs -0.1% Increase in fair value of debt -0.8% Effect of gearing -0.7% Management fee -0.2% Administration expenses -0.1% Other -0.2% Total of above factors -0.5% Return to shareholders 2.9% Change in benchmark 3.4% Relative performance -0.5
Interim Management Report
Performance
The Net Asset Value per ordinary share of the company increased by 2.9% on a total return basis; the difference between this and the portfolio return of 4.1% is explained in the table above. The benchmark (70% FTSE Word Index Ex UK and 30% FTSE All-Share Index) rose by 3.4% over the period.
Earnings
Earnings increased by 18.9% to 12.6p per ordinary share in the six months to 31 May 2019 (2018: 10.6p).
Dividends
In continuation of the policy to distribute income more evenly throughout the year, the board declared a first quarterly dividend of 4.66p per ordinary share which is payable on 25 July 2019. The board has now declared a second quarterly dividend of 4.66p per ordinary share payable on 19 September 2019 to holders on the register of members at the close of business on 9 August 2019. A Dividend Reinvestment Plan (DRIP) is available for this dividend and the relevant Election Date is 23 August 2019.
The board is continuing to balance quarterly payments to bring them in line with the final. It is anticipated, subject to there being no unforeseen circumstances, that the third quarterly dividend will be maintained at this rate, and an unchanged final dividend of 6.00p will be proposed for the year ending 30 November 2019, giving a dividend for the year of 19.98p, a 10% increase on the previous year. The third quarterly payment will be made in December and the final dividend will be proposed for payment in March 2020.
Material events and transactions
In the six month period ended 31 May 2019 the following material events and transactions have taken place.
-- At the annual general meeting of the company held on 4 April 2019, all the resolutions put to shareholders were passed.
There were no share buy backs, share issuances and no related party transactions in the period or since the period end.
Principal Risks
The principal risks facing the company over the next six months are broadly unchanged from those described in the Annual Financial Report for the year ended 30 November 2018. These are set out in a table in the Strategic Report on page 16 of the annual report, together with commentary on the board's approach to mitigating the risks, under the following headings: Portfolio Risk; Business Risk; and Operational Risk.
In addition to the principal risks, the company faces the risks associated with the provision of services by third parties and general business risks including accounting, legal and regulatory matters. The board oversees a detailed review of the principal risks by the audit committee at least twice a year to ensure the risk assessment is current and relevant, adjusting mitigating factors and procedures as appropriate.
Going concern
The directors believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the company consist mainly of securities which are readily realisable and accordingly, the company has adequate financial resources to continue in operational existence for the foreseeable future.
Responsibility Statement
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 FRS 102 and FRS 104, as set out in Note 2, and the Accounting Standards Board's Statement 'Half-Yearly Financial Reports'; and
-- The interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7 R of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
-- The interim management report includes a fair review of the information concerning related parties transactions as required by the Disclosure and Transparency Rule 4.2.8 R.
The half-yearly financial report was approved by the board on 17 July 2019 and the above responsibility statement was signed on its behalf by the Chairman.
Carolan Dobson
Chairman
Enquiries:
For further information, please contact:
Allianz Global Investors GmbH, UK Branch
Stephanie Carbonneil
Head of Investment Trusts
Tel: 020 3246 7256
Investment Manager's Review
Market Review
Our expectation for the equity market to provide moderate returns with higher volatility has been borne out in the past six months. Overall, global equity markets as measured by the MSCI All Country World Index, are up 3 per cent in GBP terms over the period. However, this modest return has encompassed a sharp correction followed by a rapid recovery. In May, markets experienced yet another, albeit more modest, correction.
The catalysts for this increased volatility have been US trade and monetary policy. Escalating trade tensions between the US and its trading partners and the potential impact on global growth have been a major source of concern. At the end of 2018, data revealed that President Trump's tariffs were starting to create a material economic drag. However, promising trade talks soon erased the equity market's losses and sustained markets for some months. Market sentiment was dented once more in May, with both the US and China imposing higher tariffs on each other's exports. Technology stocks were particularly hit after the US administration effectively banned US companies from using equipment made by China's Huawei, raising fears that Beijing would target US tech companies in return.
The US Federal Reserve's (Fed) about turn in policy has been the other defining influence on all asset markets. Over the period, the central bank has gone from raising interest rates and pursuing quantitative tightening to pausing and hinting at lower interest rates. This has led to a fall in bond yields and support for bond proxy investments in the equity markets. Against a background of weakening global growth and slumping financial markets, the Fed announced it would not raise rates for the remainder of 2019, and slowed the pace of its balance sheet reductions. Similarly, the European Central Bank (ECB) pledged to hold rates until the end of 2020 and reinstated its offer of cheap long-term loans to banks. The People's Bank of China also injected a record amount of liquidity into China's economy and cut the reserve requirement ratio for banks.
At a sector level, Real Estate, Utilities and Information Technology have made the most impressive gains. The latter has continued to demonstrate its ability to generate meaningful earnings growth amidst market volatility. Meanwhile, Real Estate and Utilities have benefited from lower bond yields. Conversely, Health Care has come under consistent pressure as Democratic nominees for the US Presidency push for greater state medical provision.
In terms of currencies, sterling has remained a Brexit bellwether, consistently reflecting investors' fluctuating concerns over the likelihood, timing and nature of the UK's exit from the European Union (EU). As a result, sterling strengthened steadily until March, in line with the prospects of either a soft Brexit or second referendum. Since then, the currency has weakened to December levels, reflecting Theresa May's departure and the likelihood of her being replaced by Boris Johnson, who is more vocal about leaving the EU without a deal.
Portfolio Review
Between December 2018 and May 2019 inclusive, the Trust's portfolio returned 4.1 per cent against a benchmark return of 3.4 per cent. The main driver of performance over this period has been stock selection. Holdings in the Consumer Goods, Utilities and Financials sectors have all contributed positively to returns.
Adidas, the maker of sports apparel, has made the strongest contribution to the portfolio. Its CEO, Kasper Rorsted, has made clear cultural and operational changes to the company, and these continue to bear fruit. In its Q1 results, the company reported strong growth, particularly in Russia and Asia Pacific. The company's focus on digitalisation is central to our investment case and e-commerce grew 40 per cent. Earlier in the year, some slowdown in sales growth led us to test our investment case by commissioning a report from Grassroots Research, our proprietary market research division. Using on the ground interviews and big data web-scraping, the report found that this slowdown was due to Adidas exercising its pricing power over retailers, leading to improved margin and profitability. This has since been borne out in the results, with margins clearly rising and Adidas maintaining a positive outlook for 2019.
Iberdrola, the Spanish based power company, is delivering revenue and net income growth of 9 and 15 per cent, respectively. Renewables are a key growth area, and the company has seen pricing, production and capacity all rise as countries try to move away from fossil fuels. Looking ahead, the company is optimistic about full year earnings and dividends, aided further by lower debt and tax costs.
In Financials, our positions in Munich Re, Visa and Ashmore have all distinguished themselves by virtue of their ability to generate fee-based revenues. Visa in particular continues to benefit from a structural move away from cash, and its strategic investment in new payment technologies.
Conversely, stock selection in Industrials and Health Care sectors was weaker.
Wabtec detracted from performance. We believe this has been mostly driven by arbitrage around the closure of Wabtec's General Electric deal, as well as the relatively high leverage this incurred. However, as rail companies move towards Precision Scheduled Railroading (PSR), Wabtec's merger with GE makes it the leading Original Equipment Manufacturer (OEM) supplier of the most efficient diesel-electric locomotives in the world and thus well positioned to benefit from this modernisation. Moreover, while economic weakness remains a potential risk, industry order backlog remains strong. With the company expecting to reduce leverage to 2.5 times net debt / EBITDA* by the end of the year thanks to its strong free cash flow, the company looks oversold.
UnitedHealth Group has had the largest negative impact on returns over this period. Shares in the integrated healthcare provider weakened following calls for universal state provision from US Democrats in the run up to 2020's presidential election. We regard this as a very low probability event and more of an excuse for profit-taking given the company's success in recent years. We believe that some reform of drug pricing and rebates is likely to emerge, and that rhetoric is likely to rise over the next year. However, we view the concerns towards the healthcare providers, who are drivers of lower healthcare costs, as overdone. Indeed, the stock has rebounded with recent results showing strong growth in premiums, services and products, with healthy medical loss ratios and good cost control.
*Earnings before interest, tax, depreciation and amortisation
Significant Transactions
Overall we have continued the strategic shift in the portfolio, concentrating the holdings on higher conviction, higher quality investments. The restructured balance sheet has provided higher dividend cover, allowing greater flexibility in stock selection.
Having monitored St James's Place for some time, we initiated a position in the UK financial services company in January. Brexit-induced weakness has made the shares increasingly cheap. However, the business has an exceptional growth record and there is substantial valuation support underpinned by its existing book of business.
In March, we initiated positions in Bright Horizons, Assa Abloy and Intuit. These are a provider of childcare and educational services, a manufacturer of door locking services and a developer of financial management software, respectively. Each company has demonstrated the ability to generate sustainable earnings growth at a time when this is in short supply and, at the time of purchase, the shares were reasonably valued.
More recently we have started a position in Intuitive Surgical, the manufacturer of the da Vinci surgical system. Growth is being driven by new product launches and increased adoption of robotic surgery in different procedures beyond its traditional areas of Gynaecology and Urology. A Grassroots study in the month showed strong intent among Chinese hospitals to buy or upgrade their systems, and a growing awareness of the product among surgeons and patients. The stock is likely to exhibit higher volatility than average but this is balanced by higher growth potential.
To fund these new holdings, we have continued to exit positions with lower medium term conviction, using short term strength where possible. Greene King, the UK pub company, was held primarily for yield, while growth was pedestrian. However, the shares rallied sharply following a strong Christmas trading statement, so we used the recovery to exit our holding. Similarly Ameriprise and Apple were sold after sharp recoveries in the first quarter.
Across the portfolio, we have also taken advantage of several bouts of market volatility to increase positions in favoured stocks. In December, despite good overall numbers, slightly weaker new business figures for Accenture caused the consultancy firm's share price to decline to overly pessimistic levels, so we took the position up. In January, we took the opportunity to add to TSMC, which was trading at a depressed valuation with earnings starting to stabilise.
Outlook
Monetary policy and trade are likely to remain key drivers of market behaviour in the foreseeable future.
US/China trade tensions and tariffs have the potential for further negative impacts on growth. At the micro level, the more uncertain operating environment for the corporate sector is increasingly hindering decision making and reducing visibility on demand. On balance, our base case assumption remains that some partial deal with be reached between US and China, potentially rolling back some of the recently increased tariffs. We are, however, expecting long term friction to feature in the technology sector with ongoing tension around state control, intellectual property and cyber security.
Global growth has slowed in the last six months as the stimulus from US tax reform faded and trade frictions hold back investment. The considerable stimulus being applied in China should lead to stabilisation later this year, but domestic demand is weaker in the meantime. Within Europe, the recent elections, with no further shift towards populism, have removed some risk but growth remains sluggish. Italy continues to be a long term source of instability, as now does the UK.
Monetary policy remains a source of uncertainty. In the US, the Fed has paused and is mulling over recent mixed data while conducting a major review of its tools, policies and communication methods, including what targets to aim for going forward. In Europe, the ECB also faces a potential shift when its President, Mario Draghi departs at the end of October. US ten-year treasury yields are at their lowest level in two years, lifting bond proxies in the equity markets as a result. Whether growth or value stocks are more likely to outperform in this event is a constant source of debate.
Our expectation of more moderate returns with higher volatility is therefore still a central case, with slight gains and considerable movement in between. With monetary policy on hold and optimistic rate expectations already embedded, earnings growth decelerating and valuations towards the upper end of historic ranges, there is no reason to expect equity markets overall to deliver strong nominal returns. Therefore, an active approach such as ours, driven by superior stock selection, is going to be required to provide additional upside.
Lucy Macdonald
Allianz Global Investors
BRUNNER INVESTMENT TRUST PLC
INVESTMENT PORTFOLIO AS AT 31 MAY 2019
Listed Equity Holdings
Value % of Invested Name GBP'000s Funds Sector Microsoft 17,763 4.51 Software & Computer Services Health Care Equipment & United Health 13,127 3.34 Services Royal Dutch Shell 'B' Shares 11,452 2.90 Oil & Gas Producers Accenture 10,440 2.65 Support Services Visa 10,108 2.56 Financial Services Health Care Equipment & The Cooper 9,923 2.52 Services Ecolab 9,639 2.44 Chemicals Muenchener Rueckver 9,407 2.39 Non-Life Insurance Roche Holdings 9,087 2.30 Pharmaceuticals & Biotechnology Taiwan Semiconductor 8,877 2.25 Technology Hardware & Equipment BP 8,850 2.24 Oil & Gas Producers Estée Lauder 'A' Shares 8,327 2.11 Personal Goods Electronic & Electrical Agilent 8,315 2.11 Equipment AIA 8,015 2.03 Life Insurance Adidas 7,914 2.01 Personal Goods GlaxoSmithKline 7,634 1.94 Pharmaceuticals & Biotechnology AbbVie 7,244 1.84 Pharmaceuticals & Biotechnology Amadeus 6,934 1.76 Software & Computer Services Informa 6,601 1.67 Media Unilever 6,578 1.67 Personal Goods Electronic & Electrical Schneider Electric 6,448 1.63 Equipment Compass 6,446 1.63 Travel & Leisure Electronic & Electrical AMETEK 6,435 1.63 Equipment Microchip Technology 6,418 1.63 Technology Hardware & Equipment Itochu 6,221 1.58 General Industrials Charles Schwab 6,045 1.53 Financial Services HSBC 5,870 1.49 Banks Nestle 5,714 1.45 Food Producers Booking Holdings 5,690 1.44 Travel & Leisure Iberdrola 5,524 1.40 Electricity Cie Financiere Richemont 5,416 1.37 Personal Goods Tyman 5,333 1.35 Construction & Materials Senior 5,290 1.34 Aerospace & Defence St. James's Place 5,230 1.33 Life Insurance Rio Tinto 4,990 1.27 Mining Prudential 4,733 1.20 Life Insurance SThree 4,697 1.19 Support Services Jiangsu Express 4,659 1.18 Industrial Transportation Enel 4,649 1.18 Electricity Citigroup 4,583 1.16 Banks Electronic & Electrical Amphenol 4,492 1.14 Equipment Ashmore 4,488 1.14 Financial Services Sirius Real Estate 4,466 1.13 Real Estate Partners Group 4,444 1.13 Financial Services Wabtec 4,415 1.12 Industrial Engineering Brambles 4,413 1.12 General Industrials Howden Joinery 4,396 1.11 Support Services Value % of Invested Name GBP'000s Funds Sector Bright Horizons Family Solutions 4,335 1.10 General Retailers EOG Resources 4,199 1.06 Oil & Gas Producers United Internet 4,090 1.04 Software & Computer Services Atlas Copco 3,881 0.98 Industrial Engineering Intuit 3,860 0.98 Software & Computer Services Health Care Equipment Intuitive Surgical 3,826 0.97 & Services Lloyds Banking Group 3,722 0.94 Banks Assa Abloy 3,660 0.93 Construction & Materials UBS 3,606 0.91 Banks TP ICAP 3,567 0.90 Financial Services Nielsen 3,554 0.90 Media China Mobile 3,503 0.89 Mobile Telecommunications Health Care Equipment Fresenius 3,480 0.88 & Services Merlin Properties 3,422 0.87 Real Estate Astellas Pharma 3,416 0.87 Pharmaceuticals & Biotechnology Australia & New Zealand Bank 3,354 0.85 Banks Covestro 2,942 0.75 Chemicals Albemarle 2,766 0.70 Chemicals Helical 1,469 0.37 Real Estate ----------- -------------- 394,392 100.00 ----------- -------------- Unlisted Equity Holdings Fintrust Debenture 4 - Financial Services ----------- -------------- 4 - ----------- --------------
GEOGRAPHICAL ANALYSIS AS AT 31 MAY 2019
% North America 39.44 United Kingdom 26.81 Europe 22.98 Pacific Basin 8.32 Japan 2.45 Total 100.00 ---------------- -------
SECTORAL ANALYSIS AS AT 31 MAY 2019
% Financials 21.93 Industrials 21.06 Health Care 14.66 Technology 12.17 Consumer Goods 8.61 Consumer Services 6.74 Oil & Gas 6.20 Basic Materials 5.16 Utilities 2.58 Telecommunications 0.89 Total 100.00 -------------------- -------
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31 May 2019
Revenue Capital Total Return GBP'000s GBP'000s GBP'000s (Note 2) Gains on investments held at fair value through profit or loss - 9,227 9,227 Losses on foreign currencies - (52) (52) Income from investments 6,615 - 6,615 Other income 11 - 11 Investment management fee (258) (601) (859) Administration expenses (340) - (340) --------- --------- ------------- Profit before finance costs and taxation 6,028 8,574 14,602 Finance costs: interest payable and similar charges (148) (318) (466) --------- --------- ------------- Profit on ordinary activities before taxation 5,880 8,256 14,136 Taxation (508) - (508) --------- --------- ------------- Profit after taxation attributable to ordinary shareholders 5,372 8,256 13,628 ========= ========= ============= Earnings per ordinary share (Note 1) (basic and diluted) 12.58p 19.34p 31.92p
BALANCE SHEET
as at 31 May 2019
GBP'000s Investments held at fair value through profit or loss (Note 3) 394,396 Net current assets 280 ----------- Total assets less current liabilities 394,676 Creditors: amount falling due after more than one year (25,060) Total net assets 369,616 ----------- Called up share capital 10,673 Capital redemption reserve 5,327 Capital reserves 336,741 Revenue reserve 16,875 Equity Shareholders' funds 369,616 ----------- Net asset value per ordinary share 865.8p The net asset value is based on 42,692,727 ordinary shares in issue at 31 May 2019
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31 May 2018
Revenue Capital Total Return GBP'000s GBP'000s GBP'000s (Note 2) Gains on investments held at fair value through profit or loss - 10,156 10,156 Losses on foreign currencies - (72) (72) Income from investments 5,945 - 5,945 Other income 10 - 10 Investment management fee (272) (636) (908) Administration expenses (349) (1) (350) --------- --------- ------------- Profit before finance costs and taxation 5,334 9,447 14,781 Finance costs: interest payable and similar charges (415) (939) (1,354) --------- --------- ------------- Profit on ordinary activities before taxation 4,919 8,508 13,427 Taxation (417) - (417) --------- --------- ------------- Profit after taxation attributable to ordinary shareholders 4,502 8,508 13,010 ========= ========= ============= Earnings per ordinary share (Note 1) (basic and diluted) 10.55p 19.93p 30.48p
BALANCE SHEET
as at 31 May 2018
GBP'000s Investments held at fair value through profit or loss (Note 3) 405,108 Net current assets 2,282 ----------- Total assets less current liabilities 407,390 Creditors: amount falling due after more than one year (30,422) Total net assets 376,968 ----------- Called up share capital 10,673 Capital redemption reserve 5,327 Capital reserves 345,618 Revenue reserve 15,350 Equity Shareholders' funds 376,968 ----------- Net asset value per ordinary share 883.0p The net asset value is based on 42,692,727 ordinary shares in issue at 31 May 2018
BALANCE SHEET
as at 30 November 2018
GBP'000s Investments held at fair value through profit or loss (Note 3) 381,787 Net current assets 3,541 ----------- Total assets less current liabilities 385,328 Creditors: amount falling due after more than one year (25,055) Total net assets 360,273 ----------- Called up share capital 10,673 Capital redemption reserve 5,327 Capital reserves 328,485 Revenue reserve 15,788 Equity shareholders' funds 360,273 ----------- Net asset value per ordinary share 843.9p The net asset value is based on 42,692,727 ordinary shares in issue at 30 November 2018
STATEMENT OF CHANGES IN EQUITY
Called Capital up Redemption Capital Revenue Share Reserve Reserve Reserve Total Capital GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s Six months ended 31 May 2018 Net assets at 1 December 2017 10,673 5,327 337,110 14,904 368,014 Revenue profit - - - 4,502 4,502 Dividends on ordinary shares (Note 4) - - - (4,056) (4,056) Capital profit - - 8,508 - 8,508 Net assets at 31 May 2018 10,673 5,327 345,618 15,350 376,968 ------------------- ------------------- ----------- ----------- ----------- Six months ended 31 May 2019 Net assets at 1 December 2018 10,673 5,327 328,485 15,788 360,273 Revenue profit - - - 5,372 5,372 Dividends on ordinary shares (Note 4) - - - (4,291) (4,291) Unclaimed Dividends - - - 6 6 Capital profit - - 8,256 - 8,256 Net assets at 31 May 2019 10,673 5,327 336,741 16,875 369,616
CASH FLOW STATEMENT
Six months Six months ended ended 31 May 31 May 2019 2018 GBP000's GBP000's ----------- ----------- Operating activities Profit before finance costs and taxation 14,602 14,781 Less: Gains on investments at fair value through profit or loss (9,227) (10,156) Add: Special dividends credited to capital 257 - Less: Losses on foreign currency 52 72 Less: Overseas tax suffered (508) (417) Increase in other receivables (288) (36) Decrease in other payables (96) (31) Purchases of fixed asset investments held at fair value through profit or loss (35,004) (32,244) Sales of fixed asset investments held at fair value through profit or loss 31,365 23,312 Net cash inflow (outflow) from operating activities 1,153 (4,719) Financing activities Interest paid (451) (2,333) Repayment of Stepped Rate Interest Loan - (18,200) Dividends paid on cumulative preference stock (11) (11) Dividends paid on ordinary shares (4,291) (4,056) Unclaimed dividends 6 - ----------- ----------- Net cash outflow from financing activities (4,747) (24,600) Decrease in cash and cash equivalents (3,594) (29,319) ----------- ----------- Cash and cash equivalents at the start of the period 11,133 30,998 Effect of foreign exchange rates (52) (72) Cash and cash equivalents at the end of the period 7,487 1,607 Comprising: Cash at bank 7,487 1,607 ----------- -----------
NOTES
Note 1
The returns per ordinary share have been calculated using a weighted average number of shares in issue of 42,692,727 (31 May 2018: 42,692,727 shares).
Note 2
The total column of this statement is the profit and loss account of the company.
All revenue and capital items derive from continuing operations. No operations were acquired or discontinued in the period.
Purchases for the half year ended 31 May 2019 were GBP35,004,000 (31 May 2018: GBP31,682,000) and sales for the half year ended 31 May 2019 were GBP31,365,000 (31 May 2018: GBP19,687,000).
Included in the cost of investments are transaction costs on purchases which amounted to GBP69,000 (31 May 2018: GBP29,000) and transaction costs on sales which amounted to GBP7,000 (31 May 2018: GBP8,000).
Note 3
Investments are designated as held at fair value through profit or loss in accordance with FRS 102 sections 11 and 12. Investments are initially recognised at fair value, which is determined to be their cost. Subsequently, investments are revalued at fair value which is the bid market price for listed investments.
FRS 102 fair value hierarchy disclosures (March 2016) sets out three fair value levels.
Level 1: The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e., developed using market data) for the asset or liability, either directly or indirectly
Level 3: Inputs are unobservable (i.e., for which market data is unavailable) for the asset or liability
As at 31 May 2019, the financial assets at fair value through profit and loss of GBP394,396,000 (30 November 2018: GBP381,787,000) are categorised as follows:
Six months Year ended ended 30 November 31 May 2019 2018 GBP'000s GBP'000s Level 1 394,392 381,783 Level 2 - - Level 3 4 4 ------------ ------------ 394,396 381,787 ------------ ------------
Note 4
In accordance with section 32 FRS102 ' Events After the end of the Reporting Period', dividends declared after the end of the reporting period shall not be recognised as a liability.
Dividends payable on ordinary shares in respect of earnings for each period are as follows:
Six months Six months Year ended ended ended 30 November 31 May 2019 31 May 2018 2018 GBP'000s GBP'000s GBP'000s Final dividend 6.00p paid 5 April 2019 (2018: 6.00p) 2,562 2,562 2,562 First quarterly dividend 4.05p paid 27 July 2018 (2017: 3.50p) - - 1,729 Second quarterly dividend 4.05p paid 21 September 2018 (2017: 3.50p) - - 1,729 Third quarterly dividend 4.05p paid 14 December 2018 (2017: 3.50p) 1,729 1,494 1,494 4,291 4,056 7,514 ------------- ------------- -------------
Dividends declared after the period end are not recognised as a liability under section 32 FRS 102 'Events after the end of the reporting period'. Details of these dividends are set out below.
Six months Six months Year ended ended ended 30 November 31 May 2019 31 May 2018 2018 GBP'000s GBP'000s GBP'000s First quarterly dividend 4.66p payable 25 July 2019 (2018: 4.05p) 1,989 1,729 - Second quarterly dividend 4.66p payable 19 September 2019 (2018: 4.05p) 1,989 1,729 - Third quarterly dividend 4.05p - - 1,729 Final dividend 6.00p - - 2,562 -------------- -------------- --------------------- 3,978 3,458 4,291 -------------- -------------- ---------------------
The final and quarterly dividends above are based on the number of shares in issue at the period end. However, the dividend payable will be based upon the number of shares in issue on the record date and will reflect any purchase or cancellation of shares by the company settled subsequent to the period end.
Note 5
The directors believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements, as the assets of the company consist mainly of securities which are readily realisable and accordingly, that the company has adequate financial resources to continue in operational existence for the foreseeable future.
Note 6
The half-yearly report has neither been audited nor reviewed by the company's auditors. The financial information for the year ended 30 November 2018 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies and restated by reference to the changes in the accounting policies detailed above. The auditor's report on those accounts was unqualified and did not contain a statement under either section 498(2) or (3) of the Companies Act 2006.
The half-yearly financial report will be sent to shareholders in late July 2019 and will be available to members of the public from the company's registered office at 199 Bishopsgate, London EC2M 3TY.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR LLFFDDLIDLIA
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July 18, 2019 02:00 ET (06:00 GMT)
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