European Assets Trust NV Interim Management Statement (1462D)

TIDMEAT

RNS Number : 1462D

European Assets Trust NV

25 April 2017

European Assets Trust NV

Interim Management Statement

For the three month period from 31 December 2016 to 31 March 2017

Investment Objective

The investment objective of the Company is to achieve growth of capital through investment in quoted small and medium-sized companies in Europe, excluding the United Kingdom.

A high distribution policy has been adopted and dividends have been paid mainly out current year net profits and other reserves.

 
                                   Three month            Year ended 
   Total return#                        period           31 December 
                                ended 31 March                  2016 
                                          2017 
 
                             Euro     Sterling     Euro     Sterling 
 
 Net asset value per 
  share                      9.0%         9.2%    -7.3%         7.4% 
 Market price per share     15.0%        15.3%   -16.1%        -2.7% 
 Euromoney European 
  Smaller Companies 
  (ex UK) Index              7.6%         7.8%     6.4%        23.3% 
 

Dividends

The Board has announced dividends of Euro 0.7884 per share for the year to 31 December 2017 payable in three instalments in January, May and August. The January dividend was paid on 31 January 2017 and amounted to Euro 0.2628 per share (GBP0.228 per share in Sterling terms in comparison to GBP0.234 paid in January 2016 - a reduction of 2.6%).

 
                                  As at       As at       As at       As at 
                                 31 Mar      31 Dec      31 Mar      31 Dec 
                                   2017        2016        2017        2016 
   Capital return                  Euro        Euro    Sterling    Sterling 
 
 Net assets (shareholders' 
  funds)                      EUR466.2m   EUR436.2m   GBP398.8m   GBP372.3m 
 Net asset value 
  per share                    EUR14.04    EUR13.14    GBP12.01    GBP11.22 
 Market price per                                      GBP11.53    GBP10.22 
  share 
 Euromoney European 
  Smaller Companies 
  (ex UK) Index                  617.80      576.09      528.40      491.75 
 
 Discount to net 
  asset value                                              4.0%        8.9% 
 
 Gearing (100% = 
  nil geared position)++                                   100%         96% 
 
 

Sources: F&C Investment Business Limited, Datastream.

As at 21 April 2017, the latest practicable date prior to publication the net asset value per share was GBP11.98, the share price GBP11.84 and the discount 1.2%.

++ - Gearing: The gearing ratio is total assets (less cash and cash equivalents) divided by shareholders' funds expressed as a percentage.

# - Total return means capital performance with dividends reinvested.

Review of the period to 31 March 2017

Following a challenging year in 2016 we achieved a much improved performance in a buoyant market during the first quarter. Our NAV delivered a total return in Sterling terms of +9.2% against an index return of +7.8%. The year started particularly well for smaller companies who outperformed their larger counterparts. This is perhaps because the European economy, to which they are principally exposed, made good progress through the first quarter offsetting investor concerns over political uncertainty in the region. It is particularly encouraging for European investors that this economic performance appears to be filtering through to company results with earnings expectations now rising. In contrast to the US, European profits on aggregate have made little progress since the crisis, however with leading indicators continuing to be supportive, we see an opportunity for sustained profit progress delivering further good equity returns for investors.

We must however balance this optimism with a note of caution. Europe faces a number of political hurdles this year, and whilst it appears that these concerns may be overdone, recent history suggests that predicting political outcomes, or indeed the impact on markets of these outcomes, is not a sensible course of action. Additionally valuations are not obviously attractive and do need profit recovery to be sustained. We will therefore continue to execute our process of selecting good businesses on their individual merits and trust that this is the best way to deliver long term returns for shareholders. Following the challenges of 2016, our belief is bolstered by a positive start to 2017. We are also particularly pleased that the stocks added to the portfolio since the start of 2016 have in aggregate contributed positively to the portfolio's performance, demonstrating the strength of our idea generation.

Over the three month period ended 31 March 2017 the Company issued 8,807 Ordinary Shares via scrip dividend. Of its current blocklisting facility as at 31 March 2017, 3.3 million shares remain available for issuance.

Top Ten Holdings

 
                                         31 March 
                                             2017 
                                       percentage 
   Company               Country           of net 
                                           assets 
 
 Cerved Information 
  Solutions            Italy                  4.3 
 Gerresheimer          Germany                4.1 
 Forbo                 Switzerland            3.8 
 Origin Enterprises    Ireland                3.7 
 CTS Eventim           Germany                3.5 
 ASM International     Netherlands            3.5 
 IMCD Group            Netherlands            3.4 
 Glanbia               Ireland                3.4 
 Storebrand            Norway                 3.2 
 Irish Continental     Ireland                3.2 
 
 Total                                       36.1 
                                     ------------ 
 

Geographical Analysis

 
 
                                     31 Mar         31 Dec 
                                       2017           2016 
   Country                       percentage     percentage 
                                     of net         of net 
                                     assets         assets 
 
 Germany                               20.3           19.3 
 Ireland                               14.4           15.2 
 Italy                                 12.8           12.9 
 Spain                                  8.6            6.9 
 Norway                                 7.9            7.6 
 Sweden                                 7.8            7.3 
 Switzerland                            7.4            6.6 
 Netherlands                            6.9            6.5 
 Denmark                                4.6            4.2 
 France                                 4.2            2.8 
 Finland                                3.0            3.6 
 Portugal                               2.2            3.1 
 Net (current liabilities)/ 
  assets                              (0.1)            4.0 
 
 Total                                100.0          100.0 
                              -------------  ------------- 
 

Daily and Key Information

The Board is not aware of any other significant events or transactions which have occurred since 31 March 2017 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.europeanassets.eu, or at www.fandc.com.

For further information please contact:

Sam Cosh (Fund Manager)

Tel: [phone]

Scott McEllen (Company Secretary)

Tel: [phone]

Wilbert van Twuijver (representing the Management Board Director)

Tel [phone]

This information is provided by RNS

The company news service from the London Stock Exchange

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April 25, 2017 02:00 ET (06:00 GMT)