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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Fidelity Asian Values Plc | LSE:FAS | London | Ordinary Share | GB0003322319 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -0.19% | 536.00 | 534.00 | 540.00 | 536.00 | 536.00 | 536.00 | 58,662 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | 0 | 881k | 0.0123 | 435.77 | 385.01M |
Hot Features
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TIDMFAS
Fidelity Asian Values PLC
Half-Yearly Report for the 6 months ended 31 January 2018
Financial Highlights:
* Over the six-month review period ended 31 January 2018, the Company's net
asset value ("NAV") increased by 0.9%, while the Company's share price
increased by 0.8%.
* The Board will adopt Fidelity's new Variable Management Fee which will take
effect from 1 August 2018.
* Fidelity has agreed to cover the costs of external research under its
existing management agreements rather than pass them onto investors. This
represents an estimated ongoing saving to the Company of between 0.02% and
0.03% per annum.
Contacts
For further information, please contact:
Natalia de Sousa - Company Secretary
01737 837846
Portfolio Manager's Half-Yearly Review
Performance Review
Over the six-month review period ended 31 January 2018, the Company's net asset
value ("NAV") increased by 0.9%, compared with a 9.2% return for the MSCI All
Countries Asia ex Japan Index (the Company's Comparative Index) (all figures
are in Sterling terms and on a total return basis). The Company's share price
increased by 0.8% over the review period.
My investment process is driven by stock selection and generating absolute
returns for you, the Company's shareholders. A central pillar of this process
is to minimise losses by investing in good businesses that have good balance
sheets and buying them at a price that leaves enough margin of safety. These
kinds of companies can lag the market in big upswings in investor sentiment
such as we have experienced over the past 18 months. As mentioned in the Annual
Report, performance over the preceding 12 months had lagged the market
primarily due to not owning technology companies, which have been the market
darlings. This trend has continued in the last six months as well, although it
seems to be reversing in some cases, such as Hon Hai Precision and Samsung
Electronics, which have corrected after their recent gains.
Along with the research team at Fidelity, I am fully focused on owning
businesses that can help us compound your money at a reasonable rate over 3-5
years. Six months' performance is therefore only a milestone in that journey
and we would advise that it be treated that way. In the last six months, the
main losses suffered by the Company were from Power Grid Corporation of India,
WPG Holdings and G8 Education as these companies lagged the broader market
after recent gains. I see these as temporary losses and have therefore not
changed the Company's holdings in these three companies significantly in light
of their strong long term earnings growth prospects.
While the Company underperformed its Comparative Index over the last six
months, it has outperformed during my tenure as Portfolio Manager and since the
change in strategy in 2015 to focus more on small cap companies (see table
below).
Fidelity Asian Comparative
Values PLC Index
(NAV)
Tenure (since 1 Jul 2015) +56.3 +51.8
1 Year +9.3 +27.0
6 Month +0.9 +9.2
3 Month -0.7 3.8
--------------- --------------------
Source: Fidelity International. All returns in Sterling terms
Five Key Contributors and Detractors
Average Contribution
Active Gain/ to Relative
(Loss)
Weight (%) Returns (%)
(%)
Top five companies
Hon Hai Precision -1.2 -24.6 +0.5
Samsung Electronics -5.7 +1.9 +0.4
Yihai International +0.3 +85.5 +0.2
LT Group +2.7 +16.6 +0.2
Interojo +1.1 +29.6 +0.2
----------------------
Total +1.5
============
Bottom five companies
Tencent Holdings -6.0 +36.9 -1.4
Power Grid Corporation of India +2.9 -16.9 -0.8
Alibaba Group -4.5 +22.2 -0.5
WPG Holdings +3.0 -5.1 -0.4
G8 Education +1.6 -15.4 -0.4
----------------------
Total -3.5
============
There are two primary sources of errors in investing - errors of omission,
namely companies that we do not own and go up in value (technology stocks such
as Tencent Holdings and Alibaba Group shown in the table above), and errors of
commission, namely companies we own that go down in value (Power Grid
Corporation of India and WPG Holdings shown in the table above). As our
objective is to compound absolute returns over time, my primary pre-occupation
stays with errors of commission over the medium term. We endeavour to avoid
businesses where we can lose a lot of money (such as businesses with high debt,
high multiples, unsustainable earnings, poor management teams and fragile
business models), but sometimes the markets choose a different focus and
changes happen very rapidly, whereas at other times we may make errors in our
analysis and we suffer losses. In such situations, we try our best to stay
objective, and if the facts change, we are ready to change our minds and act
accordingly.
Investment strategy
As mentioned earlier, the Company continues to be managed from an absolute
returns perspective. Each company is owned for what it can contribute to
returns, irrespective of whether it is a part of an index or not. I actively
seek companies with strong competitive advantages, good management, and try to
buy them at a reasonable price. The core to the investment philosophy is the
idea that if we lose less money during corrections in the market, we should be
able to compound money at higher rates in the longer term. The key to this is
to avoid risky companies. Hence, the Company continues to avoid unproven
business models, highly geared companies, cyclical businesses on peak margins
and stocks trading on high multiples to earnings and/or cash flows. Given that
Asia has more than 18,000 listed companies, the opportunity to find hidden gems
remains immense.
Having said this, after the markets strong run over the last two years, I do
feel the need to be more cautious as many stocks have much less margin of
safety today than they had two years ago. Consequently, we have bought some
protection in the form of put options.
I feel comfortable with the companies we own today, and the analyst teams at
Fidelity continue to strive to find other interesting ideas.
Outlook
Over the long term, I continue to be optimistic on Asia as the economic
composition of the region continues to evolve with a more educated work force,
more investment in science and productivity, and continued improvement in
standards of living. This will continue to generate opportunities for us and I
can promise you that the research team at Fidelity, who are amongst the best in
the industry, will continue to work hard to take advantage of opportunities as
they arise.
Nitin Bajaj
Portfolio Manager
20 April 2018
Interim Management Report and Responsibility Statement
Management Fee Arrangements
The Board would like to inform shareholders that, following Fidelity's
announcement in October last year to offer its clients a variable management
fee, the Board has accepted a new fee proposal from the Manager. The new model
will replace the Company's current tiered fee structure (0.90% of gross assets
up to GBP200 million; 0.85% on gross assets over GBP200 million). The new fee will
reduce the headline base management fee from 0.90% of gross assets to 0.70% of
net assets per annum with a +/- 0.20% variation based on performance relative
to the Comparative Index. The maximum fee that the Company will pay will be
0.90% of net assets, but if the Company underperforms against the Comparative
Index, the overall fee could fall as low as 0.50% of net assets. This new fee
arrangement will be effective from 1 August 2018. There will be no change in
the investment process as a result of the new fee arrangement.
Markets in Financial Instruments Directive ("MiFID II")
With effect from 3 January 2018, the MiFID II regulation changed the way that
external research is paid for. Previously this research was paid for on a
commission basis as part of the costs of transaction, but this is no longer
allowed. Fidelity uses external research to access specific technical expertise
for the benefit of the portfolio, and the Board is pleased to confirm that
Fidelity has agreed to cover these costs under its existing management
agreements rather than pass them onto investors. This represents an estimated
ongoing saving to the Company of between 0.02% and 0.03% per annum which will
be directly reflected in the NAV of the Company. There will be no change in the
research capability of the Manager as a result of the change in the payment for
external research.
Bonus Issue of Subscription Shares
Following the approval of the bonus issue of subscription shares on the basis
of one subscription share for every five ordinary shares held by qualifying
investors at the Company's Annual General Meeting on 2 December 2016, 1,181,189
ordinary shares of 25 pence were issued on 30 November 2017. This was the first
exercise date of the conversion rights attached to the subscription shares. As
at the date of this Half-Yearly Report, there are 12,316,033 subscription
shares remaining which can be exercised annually in the 25 business days
preceding the last business day in November in this year and in 2019. The
exercise price is equal to the published NAV of 366.88 pence per ordinary share
on 2 December 2016 plus a premium of 4% if exercised this year (381.75 pence)
and a premium of 7% if exercised in 2019 (392.75 pence).
Share Repurchases and Treasury Shares
Repurchases of ordinary shares and subscription shares are made at the
discretion of the Board and within guidelines set by it from time to time and
in light of prevailing market conditions. Shares will only be repurchased when
it results in an enhancement to the NAV of the ordinary shares for the
remaining shareholders. In order to assist in managing the discount, the Board
has shareholder approval to hold in Treasury any ordinary shares repurchased by
the Company, rather than cancelling them. Any shares held in Treasury would
only be re-issued at NAV per share or at a premium to NAV per share. Any
subscription shares repurchased would be cancelled.
During the six months to 31 January 2018, no ordinary shares were repurchased
for cancellation or for holding in Treasury and no subscription shares were
repurchased for cancellation. As at the date of this report no shares have been
repurchased.
Principal Risks and Uncertainties
The Board, with the assistance of the Manager, has developed a risk matrix
which, as part of the risk management and internal controls process, identifies
the key risks that the Company faces. The Board believes that the principal
risks and uncertainties faced by the Company continue to fall in the following
categories: market risk; performance risk; discount control risk; gearing risk;
derivatives risk; and currency risk. Other risks facing the Company include
cybercrime risk; tax and regulatory risk; operational risk (including service
providers); and the risk that the continuation vote, when due, may not be
approved. Information on each of these risks can be found in the Strategic
Report section of the Annual Report for the year ended 31 July 2017. A copy of
the Annual Report can be found on the Company's pages of the Manager's website
at www.fidelityinvestmenttrusts.com.
These risks and uncertainties have not materially changed during the six months
to 31 January 2018 and are equally applicable to the remaining six months of
the Company's financial year.
Transactions with the Manager and Related Parties
FIL Investment Services (UK) Limited is the Company's Alternative Investment
Fund Manager and has delegated the Company's portfolio management and the role
of Company Secretary to FIL Investments International. The transactions with
the Manager and related party transactions with the Directors are disclosed in
Note 12 of the Half-Yearly Report.
Going concern
The Directors have considered the Company's investment objective, risk
management policies, liquidity risk, credit risk, capital management policies
and procedures, the nature of its portfolio (being mainly securities which are
readily realisable) and its expenditure and cash flow projections, and have
concluded that the Company has adequate resources to continue in operational
existence for the foreseeable future. Thus they continue to adopt the going
concern basis of accounting in preparing these Financial Statements.
Continuation votes are held every five years and the next continuation vote
will be put to shareholders at the Annual General Meeting in 2021.
By Order of the Board
FIL Investments International
20 April 2018
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:
a) the condensed set of Financial Statements contained within the
Half-Yearly Report has been prepared in accordance with the Financial Reporting
Council's Standard, FRS 104: Interim Financial Reporting; and
b) the Interim Management Report, together with the Portfolio Manager's
Half-Yearly Review of the Half-Yearly Report, includes a fair review of the
information required by DTR 4.2.7R and 4.2.8R.
The Half-Yearly Report has not been audited or reviewed by the Company's
Independent Auditor.
The Half-Yearly Report was approved by the Board on 20 April 2018 and the above
responsibility statement was signed on its behalf by Kate Bolsover, Chairman.
Twenty Largest Holdings
as at 31 January 2018
The Gross Asset Exposures shown below measure exposure to market price
movements as a result of owning shares and derivative instruments. The Balance
Sheet Value is the actual value of the portfolio. Where a contract for
difference ("CFD") is held, the value reflects the profit or loss on the
contract since it was opened and is based on how much the share price of the
underlying share has moved.
Gross Asset Exposure Balance
Sheet
Value
GBP'000 %1 GBP'000
Long exposures - shares unless otherwise stated
Taiwan Semiconductor Manufacturing (shares and long CFD)
Developer, manufacturer and distributor of integrated circuit related 8,595 3.0 6,911
products
WPG Holdings
Distributor of semiconductor and core components 8,475 3.0 8,475
LT Group
Banking, beverages, spirits, tobacco and property development group 8,233 2.9 8,233
Power Grid Corporation of India
Operator of the Indian national electricity grid 8,039 2.8 8,039
Redington India
Distributor of information technology products, mobile handsets and 6,117 2.2 6,117
accessories
Cognizant Technology Solutions
Information technology consultancy 5,903 2.1 5,903
Housing Development Finance Corporation
Provider of housing finance to individual households and corporates in 5,857 2.1 5,857
India
China Mobile (shares and long CFD)
Provider of mobile voice and multi-media services in China 5,814 2.1 2,829
HDFC Bank
Private sector bank 4,871 1.7 4,871
Ascendas India Trust
Real estate investment company 4,661 1.6 4,661
Cleanaway Company
Hazardous waste treatment and waste management operator 4,061 1.4 4,061
Interojo
Contact lens manufacturer 3,795 1.3 3,795
G8 Education
Operator of day care centres 3,736 1.3 3,736
Huaneng Renewables (shares and long CFD)
Developer and operator of renewable power plants 3,665 1.3 2,921
Zhaopin
Careers website operator 3,487 1.2 3,487
Convenience Retail Asia
Convenience store chain operator 3,472 1.2 3,472
WT Microelectronics
Semiconductor products distributor 3,435 1.2 3,435
Sinopharm Group (shares and long CFD)
Developer, manufacturer and distributor of medicines and health 2,893 1.0 1,561
products
Sebang Global Battery
Battery manufacturer 2,829 1.0 2,829
Advanced Semiconductor
Semiconductor developer and manufacturer 2,810 1.0 2,810
----------------- ----------------- -------------------
Twenty largest long exposures 100,748 35.4 94,003
Other long exposures 179,627 63.2 179,627
----------------- ----------------- -------------------
Total long exposures before hedges (166 holdings) 280,375 98.6 273,630
========= ========= ==========
Less: hedging exposures
KOSPI 200 Index December 2018 (put option) (1,384) (0.5) 125
Hang Seng China Enterprises Index December 2018 (put option) (1,372) (0.5) 191
S&P CNX Nifty Index December 2018 (put option) (249) (0.1) 5
S&P CNX Nifty Index March 2018 (put option) (75) - -
KOSPI 200 Index December 2018 (put option) (60) - -
KOSPI 200 Index September 2018 (put option) (13) - -
Hang Seng Index December 2018 (put option) (7) - 37
----------------- ----------------- -------------------
Total hedging exposures (3,160) (1.1) 358
========= ========= ==========
Total long exposures after the netting of hedges 277,215 97.5 273,988
Add: short exposures
Short CFDs (18 holdings) 13,933 4.9 (1,924)
Short future February 2018 (1 holding) 833 0.3 (6)
----------------- ----------------- -------------------
Total short exposures 14,766 5.2 (1,930)
========= ========= ==========
Gross Asset Exposure2 291,981 102.7
========= =========
Portfolio Fair Value3 272,058
Net current assets (excluding derivative assets and liabilities) 12,204
-------------------
Total Shareholders' Funds/Net assets 284,262
==========
1 Gross Asset Exposure is expressed as a percentage of Total
Shareholders' Funds
2 Gross Asset Exposure comprises market exposure to investments of GBP
271,760,000 plus market exposure to derivative instruments of GBP20,221,000
3 Portfolio Fair Value comprises investments of GBP271,760,000 plus
derivative assets of GBP2,312,000 less derivative liabilities of GBP2,014,000 (per
the Balance Sheet of the Half-Yearly Report)
Financial Statements
Income Statement
for the six months ended 31 January 2018
six months ended six months ended year ended
31 January 2018 31 January 2017 31 July 2017
unaudited unaudited audited
revenue capital total revenue capital total revenue capital total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on investments - 5,213 5,213 - 21,935 21,935 - 44,906 44,906
(Losses)/gains on - (2,279) (2,279) - 17 17 - (2,376) (2,376)
derivative instruments
Income 4 3,466 - 3,466 4,455 - 4,455 8,439 - 8,439
Investment management fees 5 (1,314) - (1,314) (1,167) - (1,167) (2,500) - (2,500)
Other expenses (362) - (362) (403) (165) (568) (725) (165) (890)
Foreign exchange (losses)/ - (1,037) (1,037) - 49 49 - (616) (616)
gains on cash and cash
equivalents
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net return on ordinary 1,790 1,897 3,687 2,885 21,836 24,721 5,214 41,749 46,963
activities before finance
costs and taxation
Finance costs (289) - (289) (163) - (163) (407) - (407)
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net return on ordinary 1,501 1,897 3,398 2,722 21,836 24,558 4,807 41,749 46,556
activities before taxation
Taxation on return on 6 (343) 11 (332) (338) (96) (434) (707) (166) (873)
ordinary activities
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Net return on ordinary 1,158 1,908 3,066 2,384 21,740 24,124 4,100 41,583 45,683
activities after taxation
for the period
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Basic return per ordinary 7 1.71p 2.81p 4.52p 3.53p 32.21p 35.74p 6.08p 61.62p 67.70p
share
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Diluted return per 7 1.70p 2.80p 4.50p n/a n/a n/a 6.06p 61.43p 67.49p
ordinary share
=========== =========== =========== =========== =========== =========== =========== =========== ===========
The Company does not have any other comprehensive income. Accordingly the net
return on ordinary activities after taxation for the period is also the total
comprehensive income for the period and no separate Statement of Other
Comprehensive Income has been presented.
The total column of this statement represents the Income Statement of the
Company. The revenue and capital columns are supplementary and presented for
information purposes as recommended by the Statement of Recommended Practice
issued by the AIC.
No operations were acquired or discontinued in the year and all items in the
above statement derive from continuing operations.
Statement of Changes in Equity
for the six months ended 31 January 2018
share capital other non- total
share premium redemption distributable other capital revenue shareholders'
capital account reserve reserve reserve reserve reserve funds
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months ended 31 January 2018
(unaudited)
Total shareholders' funds at 31 16,872 20,232 3,197 7,367 8,613 218,423 5,487 280,191
July 2017
Net return on ordinary activities - - - - - 1,908 1,158 3,066
after taxation for the period
Issue of ordinary shares on the 10 295 4,084 - - - - - 4,379
exercise of rights attached to
subscription shares
Dividend paid to shareholders 8 - - - - - - (3,374) (3,374)
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total shareholders' funds at 31 17,167 24,316 3,197 7,367 8,613 220,331 3,271 284,262
January 2018
=========== =========== =========== =========== =========== =========== =========== ===========
Six months ended 31 January 2017
(unaudited)
Total shareholders' funds at 31 16,872 20,232 3,197 7,367 8,613 176,840 4,424 237,545
July 2016
Net return on ordinary activities - - - - - 21,740 2,384 24,124
after taxation for the period
Dividend paid to shareholders 8 - - - - - - (3,037) (3,037)
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total shareholders' funds at 31 16,872 20,232 3,197 7,367 8,613 198,580 3,771 258,632
January 2017
=========== =========== =========== =========== =========== =========== =========== ===========
Year ended 31 July 2017 (audited)
Total shareholders' funds at 31 16,872 20,232 3,197 7,367 8,613 176,840 4,424 237,545
July 2016
Net return on ordinary activities - - - - - 41,583 4,100 45,683
after taxation for the year
Dividend paid to shareholders 8 - - - - - - (3,037) (3,037)
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Total shareholders' funds at 31 16,872 20,232 3,197 7,367 8,613 218,423 5,487 280,191
July 2017
=========== =========== =========== =========== =========== =========== =========== ===========
Balance Sheet
at 31 January 2018
Company number 3183919
31.01.18 31.07.17 31.01.17
unaudited audited unaudited
Notes GBP'000 GBP'000 GBP'000
Fixed assets
Investments 9 271,760 264,076 241,312
-------------------- -------------------- --------------------
Current assets
Derivative instruments 9 2,312 2,829 1,882
Debtors 2,097 1,766 1,820
Amounts held at futures clearing houses and brokers 2,645 1,937 1,302
Cash at bank 11,395 14,822 14,901
-------------------- -------------------- --------------------
18,449 21,354 19,905
=========== =========== ===========
Creditors
Derivative instruments 9 (2,014) (1,554) (632)
Other creditors (3,933) (3,685) (1,953)
-------------------- -------------------- --------------------
(5,947) (5,239) (2,585)
=========== =========== ===========
Net current assets 12,502 16,115 17,320
=========== =========== ===========
Net assets 284,262 280,191 258,632
=========== =========== ===========
Capital and reserves
Share capital 10 17,167 16,872 16,872
Share premium account 24,316 20,232 20,232
Capital redemption reserve 3,197 3,197 3,197
Other non-distributable reserve 7,367 7,367 7,367
Other reserve 8,613 8,613 8,613
Capital reserve 220,331 218,423 198,580
Revenue reserve 3,271 5,487 3,771
-------------------- -------------------- --------------------
Total shareholders' funds 284,262 280,191 258,632
=========== =========== ===========
Net asset value per ordinary share 11 413.96p 415.17p 383.23p
Diluted net asset value per ordinary share 11 409.06p 407.77p 381.15p
-------------------- -------------------- --------------------
Notes to the Financial Statements
1 Principal Activity
Fidelity Asian Values PLC is an Investment Company incorporated in England and
Wales with a premium listing on the London Stock Exchange. The Company's
registration number is 3183919, and its registered office is Beech Gate,
Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP. The Company has
been approved by HM Revenue & Customs as an Investment Trust under Section 1158
of the Corporation Tax Act 2010 and intends to conduct its affairs so as to
continue to be approved.
2 Publication of Non-statutory Accounts
The Financial Statements in this half-yearly financial report have not been
audited by the Company's Independent Auditor and do not constitute statutory
accounts as defined in section 434 of the Companies Act 2006 (the "Act"). The
financial information for the year ended 31 July 2017 is extracted from the
latest published financial statements of the Company. Those financial
statements were delivered to the Registrar of Companies and included the
Independent Auditor's Report which was unqualified and did not contain a
statement under either section 498(2) or 498(3) of the Act.
3 Basis of Preparation
The Company prepares its financial statements on a going concern basis and in
accordance with UK Generally Accepted Accounting Practice ("UK GAAP") and FRS
102: The Financial Reporting Standard applicable in the UK and Republic of
Ireland, issued by the Financial Reporting Council. The financial statements
are also prepared in accordance with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts
("SORP") issued by the Association of Investment Companies ("AIC"), in November
2014 and updated in January 2017 with consequential amendments. FRS 104:
Interim Financial Reporting has also been applied in preparing this condensed
set of Financial Statements. The accounting policies followed are consistent
with those disclosed in the Company's Annual Report and Financial Statements
for the year ended 31 July 2017.
4 Income
six months six months year
ended ended ended
31.01.18 31.01.17 31.07.17
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Investment Income
Overseas dividends 3,277 4,382 8,112
Overseas scrip dividends 130 49 207
UK dividends - 11 -
-------------------- -------------------- --------------------
3,407 4,442 8,319
=========== =========== ===========
Derivative income
Dividends on long CFDs - - 90
Interest on short CFDs 38 8 13
-------------------- -------------------- --------------------
38 8 103
=========== =========== ===========
Other income
Deposit interest 21 5 17
-------------------- -------------------- --------------------
Total income 3,466 4,455 8,439
=========== =========== ===========
5 Investment Management Fees
six six year
months months
ended ended ended
31.01.18 31.01.17 31.07.17
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Investment management fees 1,314 1,167 2,500
========= ========= ========
== == ===
FIL Investment Services (UK) Limited is the Company's Alternative Investment
Fund Manager and has delegated portfolio management to FIL Investments
International ("FII"). Both companies are Fidelity group companies. FII charges
fees at an annual rate of 0.90% on the first GBP200 million of gross assets and
0.85% on gross assets over GBP200 million. Fees are payable quarterly in arrears
and are calculated on the last business day of March, June, September and
December.
6 Taxation on Return on Ordinary Activities
six months six months year
ended ended ended
31.01.18 31.01.17 31.07.17
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Revenue - taxation on overseas dividends 343 338 707
Capital - Indian capital gains tax (received)/paid in the (11) 96 166
period
-------------------- -------------------- --------------------
Total taxation charge for the period 332 434 873
=========== =========== ===========
7 Return per Ordinary Share
six months six months year
ended ended ended
31.01.18 31.01.17 31.07.17
unaudited unaudited audited
Revenue return per ordinary share - basic 1.71p 3.53p 6.08p
Capital return per ordinary share - basic 2.81p 32.21p 61.62p
-------------------- -------------------- --------------------
Total return per ordinary share - basic 4.52p 35.74p 67.70p
=========== =========== ===========
Revenue return per ordinary share - diluted 1.70p n/a 6.06p
Capital return per ordinary share - diluted 2.80p n/a 61.43p
-------------------- -------------------- --------------------
Total return per ordinary share - diluted 4.50p n/a 67.49p
=========== =========== ===========
The basic return per ordinary share is based on the net return on ordinary
activities after taxation for the period divided by the weighted average number
of ordinary shares in issue held outside Treasury during the period.
GBP'000 GBP'000 GBP'000
Net revenue return on ordinary activities after taxation for 1,158 2,384 4,100
the period
Net capital return on ordinary activities after taxation for 1,908 21,740 41,583
the period
-------------------- -------------------- --------------------
Net total return on ordinary activities after taxation for 3,066 24,124 45,683
the period
=========== =========== ===========
number number number
Weighted average number of ordinary shares in issue during 67,892,642 67,488,213 67,488,213
the period
=========== =========== ===========
The diluted returns per ordinary share reflect the notional dilutive effect
that would have occurred if the rights attached to the subscription shares had
been exercised and additional ordinary shares had been issued. The returns on
ordinary activities after taxation for the period used in the diluted
calculation are the same as those for the basic returns above. These returns
are divided by the notional weighted average number of ordinary shares in issue
during the period of 68,222,167. This number of shares reflects the additional
number of ordinary shares that could have been purchased at the average
ordinary share price for the period with the proceeds from the excess of the
subscription share rights exercise price over the average ordinary share price.
8 Dividends Paid to Shareholders
six months six months year
ended ended ended
31.01.18 31.01.17 31.07.17
unaudited unaudited audited
Dividend of 5.00 pence per ordinary share paid for the year 3,374 - -
ended 31 July 2017
Dividend of 4.50 pence per ordinary share paid for the year - 3,037 3,037
ended 31 July 2016
-------------------- -------------------- --------------------
3,374 3,037 3,037
=========== =========== ===========
No dividend has been declared in respect of the six months ended 31 January
2018.
9 Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies
its financial instruments measured at fair value at one of three levels,
according to the relative reliability of the inputs used to estimate the fair
values.
Classification Input
Level 1 Valued using quoted prices in active markets for identical assets
Level 2 Valued by reference to valuation techniques using observable inputs other than
quoted prices included within level 1
Level 3 Valued by reference to valuation techniques using inputs that are not based on
observable market data
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 table below sets out the Company's fair value hierarchy:
31 January 2018 31 July 2017 31 January 2017
unaudited audited unaudited
level 1 level 2 level 1 level 2 level 1 level 2
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Financial assets at fair value
through profit or loss
Investments 265,905 5,855 259,508 4,568 237,711 3,601
Derivative instrument assets 358 1,954 789 2,040 808 1,074
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
266,263 7,809 260,297 6,608 238,519 4,675
=========== =========== =========== =========== =========== ===========
Financial liabilities at fair value
through profit or loss
Derivative instrument liabilities (6) (2,008) (60) (1,494) (78) (554)
=========== =========== =========== =========== =========== ===========
10 Share Capital
31 January 2018 31 July 2017 31 January 2017
unaudited audited unaudited
number of number of number of
shares GBP'000 shares GBP'000 shares GBP'000
Ordinary shares of 25 pence each -
issued, allotted and fully paid
Held outside Treasury
Beginning of the period 67,488,213 16,872 67,488,213 16,872 67,488,213 16,872
Ordinary shares issued 1,181,189 295 - - - -
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
End of the period 68,669,402 17,167 67,488,213 16,872 67,488,213 16,872
=========== =========== =========== =========== =========== ===========
Subscription shares of 0.001 pence
- issued, allotted and fully paid
Beginning of the period 13,497,222 - - - - -
Subscription shares issued - - 13,497,222 - 13,497,222 -
Cancellation of subscription shares (1,181,189) - - - - -
on the exercise of rights
-------------------- -------------------- -------------------- -------------------- -------------------- --------------------
End of the period 12,316,033 - 13,497,222 - 13,497,222 -
=========== =========== =========== =========== =========== ===========
Total share capital 17,167 16,872 16,872
=========== =========== ===========
A bonus issue of subscription shares to ordinary shareholders on the basis of
one subscription share for every five ordinary shares held took place on 5
December 2016. Each subscription share gives the holder the right, but not the
obligation, to subscribe for one ordinary share upon payment of the
subscription price. The subscription price is based on the published unaudited
NAV per ordinary share at 2 December 2016, plus a premium depending upon the
year in which the right is exercised. The exercise dates, subscription prices
and premiums are as follows:
Exercise date Exercise price Premium
First exercise date 30 November 2017 370.75p 1%
Second exercise date 30 November 2018 381.75p 4%
Final exercise date 29 November 2019 392.75p 7%
After the final exercise date of 29 November 2019, the Company will appoint a
trustee who will exercise any rights remaining that have not been exercised by
shareholders, providing that by doing so a profit can be realised. To realise a
profit the sale proceeds from selling the resulting ordinary shares in the
market would need to be in excess of the 392.75 pence per share price of
exercising the rights, plus any related expenses and fees. Any resulting profit
will be paid to the holders of those outstanding subscription shares, unless
the amount payable to an individual holder is less than GBP5, in which case such
sum shall be retained for the benefit of the Company.
Subscription shares carry no rights to vote, to receive a dividend or to
participate in the winding up of the Company.
During the period the Company issued 1,181,189 ordinary shares (year ended 31
July 2017 and six months ended 31 January 2017: nil) on the exercise of rights
attached to subscription shares. The subscription share price of 370.75 pence
per ordinary share issued represented a premium of 345.75 pence per share over
the 25 pence nominal value of each share. The total premium received in the
period on the issue of ordinary shares of GBP4,084,000 (year ended 31 July 2017
and six months ended 31 January 2017: nil) was credited to the share premium
account.
11 Net Asset Value per Ordinary Share
The net asset value per ordinary share is based on net assets of GBP284,262,000
(31 July 2017: GBP280,191,000 and 31 January 2017: GBP258,632,000) and on
68,669,402 (31 July 2017: 67,488,213 and 31 January 2017: 67,488,213) ordinary
shares, being the number of ordinary shares in issue at the period end.
The diluted net asset value per ordinary share reflects the potential dilution
in the net asset value per ordinary share that would have resulted if the
rights of the 12,316,033 subscription shares in issue had been exercised on 31
January 2018 at the next exercise date price of 381.75 pence per share. The
basis of the calculation is in accordance with the guidelines laid down by the
AIC.
The net asset value per ordinary share and the diluted net asset value per
ordinary share are published by the London Stock Exchange on a daily basis.
12 Transactions with the Manager and Related Parties
FIL Investment Services (UK) Limited is the Company's Alternative Investment
Fund Manager and has delegated portfolio management and the role of company
secretary to FIL Investments International ("FII"). Both companies are Fidelity
group companies. Details of the fee arrangements are given in Note 5. During
the period fees for portfolio management services of GBP1,314,000 (six months
ended 31 January 2017: GBP1,167,000 and year ended 31 July 2017: GBP2,500,000) and
fees for secretarial and administration services of GBP38,000 (six months ended
31 January 2017: GBP37,000 and year ended 31 July 2017: GBP75,000) were payable to
FII. At the Balance Sheet date fees for portfolio management services of GBP
197,000 (31 January 2017: GBP206,000 and 31 July 2017: GBP220,000) and fees for
secretarial and administration services of GBP6,000 (31 January 2017: GBP6,000 and
31 July 2017: GBP5,000) were accrued and included in other creditors. FII also
provides the Company with marketing services. The total amount payable for
these services during the period was GBP65,000 (six months ended 31 January 2017:
GBP98,000 and year ended 31 July 2017: GBP144,000). At the Balance Sheet date GBP
32,000 (31 January 2017: GBP7,000 and 31 July 2017: GBP3,000) for marketing
services was accrued and included in other creditors.
As at 31 January 2018, the Board consisted of five non-executive Directors, all
of whom are considered to be independent by the Board. None of the Directors
have a service contract with the Company. The Chairman receives an annual fee
of GBP32,000, the Audit Committee Chairman an annual fee of GBP26,500 and each
other Director an annual fee of GBP24,000. The following members of the Board
held shares in the Company: Kate Bolsover 15,250 ordinary shares and 3,050
subscription shares, Timothy Scholefield 10,000 ordinary shares and 2,000
subscription shares, Philip Smiley 2,500 ordinary shares and 500 subscription
shares, Grahame Stott 20,000 ordinary shares and 11,000 subscription shares and
Michael Warren, 4,000 ordinary shares and 800 subscription shares.
13. PUBLICATION OF NON STATUTORY ACCOUNTS
The financial information contained in this Half Yearly 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 January 2018 and 31
January 2017 has not been audited or reviewed.
The information for the year ended 31 July 2017 has been extracted from the
latest published audited financial statements, which have been filed with the
Registrar of Companies, unless otherwise stated. The report of the Auditor on
those financial statements contained no qualification or statement under
sections 498(2) or (3) of the Companies Act 2006.
14. ANNUAL RESULTS
The Board expects to announce the annual results for the year ending 31 July
2018 as prepared under UK GAAP in October 2018. The Annual Report should be
available by early November 2018, with the Annual General Meeting being held in
December 2018.
For further information, please contact:
Natalia de Sousa - Company Secretary
01737 837846
ENDS
A copy of the Half-Yearly Report will shortly be submitted to the National
Storage Mechanism and will be available for inspection at www.morningstar.co.uk
/uk/NSM
The Half-Yearly Report will also be available on the Company's website at
www.fidelityinvestmenttrusts.com where up to date information on the Company,
including daily NAV and share prices, factsheets and other information can also
be found. 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.
END
(END) Dow Jones Newswires
April 23, 2018 02:00 ET (06:00 GMT)
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