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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Majedie Investments Plc | LSE:MAJE | London | Ordinary Share | GB0005555221 | 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 246.00 | 242.00 | 250.00 | 4,993 | 08:00:28 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Mgmt Invt Offices, Open-end | 21.27M | 16.27M | 0.3071 | 8.01 | 130.38M |
From May 2019 to May 2024
TIDMMAJE
RNS Number : 9836N
Majedie Investments PLC
27 May 2020
Majedie Investments PLC
Half-Yearly Financial Report
31 March 2020
Financial Highlights for the half year ended 31 March 2020
Total shareholder return (including dividends): -30.2% Net asset value (NAV) total return (debt at par including dividends): -22.4% NAV total return (debt at fair value including dividends): -23.2% NAV per share (debt at par value): 221.5p NAV per share (debt at fair value): 212.3p Revenue Return per share: 6.5p Interim Dividend: 4.4p Directors' valuation of investment in Majedie GBP30.6m Asset Management Limited: Total assets*: GBP138.0m * Total assets are defined as total assets less current liabilities.
Investment Objective and Policy Statement
Investment Objective
The Company's investment objective is to maximise total shareholder return whilst increasing
dividends by more than the rate of inflation over the long term.
General
The Company invests principally in securities of publicly quoted companies worldwide and in funds managed by its investment manager, though it may invest in unquoted securities up to levels set periodically by the Board, including its investment in Majedie Asset Management Limited (MAM). Investments in unquoted securities, other than those managed by its investment manager or made prior to the date of adoption of this investment policy, (measured by reference to the Company's cost of investment) will not exceed 10% of the Company's gross assets.
Risk Diversification
Whilst the Company will at all times invest and manage its assets in a manner that is consistent with spreading investment risk, there will be no rigid industry, sector, region or country restrictions. The overall approach is based on an analysis of global economies sector trends with a focus on companies and sectors judged likely to deliver strong growth over the long term. The number of investments held, together with the geographic and sector diversity of the portfolio, enable the Company to spread its risks with regard to liquidity, market volatility, currency movements and revenue streams.
The Company will not invest in any holding that would, at the time of investment, represent more than 15% of the value of its gross assets save that the Company may invest up to 25% of its gross assets in any single fund managed by its investment manager where the Board believes that the investment policy of such funds is consistent with the Company's objective of spreading investment risk.
The Company may utilise derivative instruments including index-linked notes, contracts for difference, covered options and other equity-related derivative instruments for efficient portfolio management and investment purposes.
Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments, as described above.
Asset Allocation
The assets of the Company will be allocated principally between investments in publicly quoted companies worldwide, in investments intended to provide an absolute return (in each case either directly or through other funds or collective investment schemes managed by the Company's investment manager) and the Company's investment in MAM itself.
Benchmark
The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently. Any investments made into funds managed by the Company's investment manager will be measured against the benchmark or benchmarks, if any, whose constituent investments appear to the Company to correspond most closely to those investments. It is important to note that in all cases investment decisions and portfolio construction are made on an independent basis. The Board however sets various specific portfolio limits for stocks and sectors in order to restrict risk levels from time to time, which remain subject to the investment restrictions set out in this section.
Gearing
The Company uses gearing currently via long term debentures. The Board has the ability to borrow up to 100% of adjusted capital and reserves. The Board also reviews the level of net gearing (borrowings less cash) on an on-going basis and sets a range at its discretion as appropriate. The Company's current debenture borrowings are limited by covenant to 662/3%, and any additional indebtedness is not to exceed 20%, of adjusted capital and reserves.
Chief Executive's Report
In the six months ended 31 March 2020 the NAV at par and NAV at FV (net asset value with debt at par and at fair value) fell by 22.4% and 23.2% respectively on a total return basis. The share price fell by 30.2% over the period, also on a total return basis. Over the six months the FTSE All-Share index fell by 22.0% and the MSCI All Country World Index fell by 14.9% in sterling terms.
The year started with a positive outlook for UK markets with a new, stable Government and an end to the Brexit chaos in sight. The COVID-19 pandemic and the subsequent lockdowns of economies in February and March caused the Global economy a massive demand shock and stock markets fell heavily. Governments around the world have intervened on an unprecedented scale, and stock markets have recovered from the lows in March, but are likely to remain volatile. At an operational level the Company and Majedie Asset Management (MAM) have adapted to a remote working environment and are functioning well.
Results and Dividend
The Company had a capital loss for the six months to 31 March 2020 of GBP37.3m including a reduction in value for the Company's holding in MAM of GBP7.2m to GBP30.6m. The Directors have amended the basis on which they value MAM following advice from an external advisor. Further details can be found in the section on MAM.
Total income received from investments was GBP4.0m compared to GBP4.8m in the six months to 31 March 2019. The dividend received from MAM was GBP2.9m compared to GBP3.5m in the 6 months to 31 March 2019 and the income from MAM Funds decreased by GBP0.2m to GBP1.1m. Total administration costs and management fees reduced by GBP0.1m to GBP0.8m and finance costs were unchanged at GBP0.8m.
The net revenue return after tax was GBP3.4m compared to GBP4.3m in the six months to 31 March 2019.
The Board has declared an interim dividend of 4.4p (2019: 4.4p) which will be paid on 19 June 2020 to shareholders on the register on 5 June 2020.
Asset Allocation
The Company invests through a number of equity investment strategies managed by MAM and retains an equity holding in MAM of 17.2%. The Company has no overall benchmark; rather each Fund has its own benchmark and it is expected that performance will be driven by stock picking at the Fund level. The Company's total assets were GBP138.0m at 31 March 2020.
There were no sales of MAM shares over the period. The Company's holding in MAM's Global Focus Fund was redeemed in December 2019 and the proceeds reinvested into the newly launched International Equity Fund. In March 2020, in order to reduce gearing, GBP10m was raised from the MAM Funds.
MAM Funds and Investment Performance
The UK Equity Fund launched in March 2003. Its objective is to produce a total return in excess of the FTSE All-Share Index over the long term. Since its inception to 31 March 2020 it has returned 9.2% per annum net of fees, with a relative outperformance of 2.2% against its benchmark. The Company's assets are invested in a segregated mandate that is managed pari passu to the UK Equity Fund. The funds are invested primarily in UK equities with overseas equities limited to 20%. At 31 March 2020 the Company had an allocation to it of GBP36.1m, which represents 26.2% of total assets. In the six months to 31 March 2020 the mandate returned -22.9% net of fees, which is an underperformance of 0.9% against its benchmark. At the sector level the largest positive contributors were Aerospace and Defence, Mining (Gold) and Food Retail (all overweight) and the detractors were Pharmaceuticals and Utilities (both underweight) and Media (overweight). At the stock level the largest positive contributors were Barrick Gold, Tesco, QinetiQ (all overweight) and Glencore and Compass (neither held). The largest detractors were AstraZeneca (underweight), BAT and National Grid (neither held) and Pearson and FirstGroup (both overweight).
The Table below shows the principal overweight and underweight sector positions of the UK Equity Segregated Portfolio at 31 March 2020 relative to the FTSE All-Share Index in %
Support Services 7.8 Overweight Aerospace & Defence 4.1 Overweight Food & Drug Retailers 3.4 Overweight Forestry & Paper 2.7 Overweight Health Care Equipment & 2.1 Overweight Services Household Goods & Home Construction -3.3 Underweight Banks -4.2 Underweight Tobacco -4.4 Underweight Pharmaceuticals & Biotechnology -4.5 Underweight Equity Investment Instruments -5.8 Underweight
The Table below shows the principal overweight and underweight stock positions of the UK Equity Segregated Portfolio at 31 March 2020 relative to the FTSE All-Share Index in %
Tesco 3.2 Overweight Electrocomponents 2.7 Overweight Barrick Gold 2.7 Overweight Mondi 2.6 Overweight Associated British Foods 2.3 Overweight Royal Dutch Shell -2.5 Underweight Diageo -3.4 Underweight AstraZeneca -3.6 Underweight British American Tobacco -4.6 Underweight HSBC -4.1 Underweight
The UK Income Fund launched in December 2011. Its objective is to maintain an attractive yield whilst outperforming the FTSE All-Share Index over the long term, with up to 20% invested in overseas equities. Since inception to 31 March 2020, the UK Income Fund has returned 7.4% per annum net of fees, with a relative outperformance of 2.2% against its benchmark. At 31 March 2020 the Company had an allocation to the UK Income Fund of GBP9.1m which represents 6.6% of total assets. In the six months to 31 March 2020 the Fund returned -23.1% net of fees, which is an underperformance of 1.1% against its benchmark. The largest positive contributors at a sector level were Personal Goods and Non-life Insurance (both overweight) and Travel and Leisure (underweight). At a stock level the largest positive contributors were Roche, Direct Line, BAE Systems and Domino Pizza (all overweight) and Unilever (underweight). The largest detractors were Meggitt, Lloyds Bank, Pearson and International Consolidated Airlines (all overweight) and AstraZeneca (not owned).
The Table below shows the principal overweight and underweight sector positions of the UK Income Fund at 31 March 2020 relative to the FTSE All-Share Index in %
Non-life Insurance 7.9 Overweight Aerospace & Defence 6.3 Overweight Support Services 6.0 Overweight Life Insurance 5.4 Overweight Media 4.2 Overweight Banks -3.1 Underweight Household Goods & Home Construction -3.7 Underweight Beverages -3.8 Underweight Tobacco -4.4 Underweight Equity Investment Instruments -6.0 Underweight
The Table below shows the principal overweight and underweight stock positions of the UK Income Fund at 31 March 2020 relative to the FTSE All-Share Index in %
Direct Line Insurance 6.3 Overweight BAE Systems 5.2 Overweight Legal & General 4.8 Overweight Roche 4.7 Overweight Lloyds Banking 3.4 Overweight Rio Tinto -2.3 Underweight Diageo -3.4 Underweight British American Tobacco -3.6 Underweight HSBC -4.5 Underweight AstraZeneca -5.4 Underweight
The Global Equity and Global Focus funds launched in June 2014. Their objectives are to provide a total return in excess of the MSCI All Country World Index over the long term through investment in a diversified portfolio (Global Equity Fund) or concentrated portfolio (Global Focus Fund) of global equities including emerging markets. The holding in the Global Focus Fund was sold in December 2019 and the proceeds immediately reinvested in the International Equity Fund at launch. Since inception to 31 March 2020 the Global Equity Fund has returned 9.1% per annum net of fees for the sterling share class, with a relative outperformance of 0.7% per annum against its benchmark. At 31 March 2020 the Company had an allocation of GBP18.1m to the Global Equity Fund which represents 13.1% of the Company's total assets. In the six months to 31 March 2020 the Fund returned -13.0%, which is an outperformance of 1.8% against its benchmark. At the sector level the largest positive contributors were Mining (Gold) and Interactive Media and Services (both overweight) and Banks (underweight) whilst the detractors were Technology Hardware (underweight) and Airlines and Semiconductors (both overweight). Positive stock contributors were Barrick Gold, Kao, M3, Sartorius Stedim Biotech and Amazon (all overweight), whilst the detractors were Tullow Oil, US Foods, Frontdoor and ON Semiconductor (all overweight) and Apple (underweight).
The Table below shows the principal overweight and underweight sector positions of the Global Equity Fund at 31 March 2020 relative to the MSCI All Country Index in %
Communication Services 12.5 Overweight Consumer Discretionary 5.2 Overweight Health Care 3.9 Overweight Materials 3.6 Overweight Energy -2.3 Underweight Consumer Staples -3.1 Underweight Real Estate -3.1 Underweight Utilities -3.6 Underweight Industrials -4.4 Underweight Financials -5.1 Underweight Information Technology -5.3 Underweight
The Table below shows the principal overweight and underweight stock positions of the Global Equity Fund at 31 March 2020 relative to the MSCI All Country Index in %
Barrick Gold 3.3 Overweight Fiserv 2.7 Overweight Kao 2.4 Overweight Electronic Arts 2.4 Overweight Frontdoor 2.2 Overweight JPMorgan Chase -0.7 Underweight Nestle -0.8 Underweight Alibaba -0.8 Underweight Johnson & Johnson -0.9 Underweight Apple -2.8 Underweight
The International Equity Fund launched in December 2019. The objective of the Fund is to produce a total return in excess of the MSCI All Country ex US Index. Since inception to 31 March 2020 the International Equity Fund has returned -9.7% net of fees, with a relative outperformance of 8.4% against its benchmark. At 31 March 2020 the Company had an allocation to the International Equity Fund of GBP7.2m which represents 5.2% of total assets. At the sector level the largest positive contributors were Healthcare, Consumer Discretionary, and Materials (all overweight) whilst the detractors were Industrials, Consumer Staples and Utilities (all underweight). Positive stock contributors were Ambu, Prosus, Sartorius Stedim Biotech, Barrick Gold and Novo Nordisk (all overweight), whilst detractors were Copa, Anglo American, Royal Dutch Shell and Creditcorp (all overweight) and Tencent (underweight).
The Table below shows the principal overweight and underweight sector positions of the International Equity Fund at 31 March 2020 relative to the MSCI All Country ex US Index in %
Health Care 11.7 Overweight Consumer Discretionary 9.7 Overweight Communication Services 5.8 Overweight Materials 5.7 Overweight Information Technology 1.4 Overweight Real Estate -3.0 Underweight Energy -3.1 Underweight Utilities -3.7 Underweight Consumer Staples -6.9 Underweight Industrials -9.1 Underweight Financials -10.5 Underweight
The Table below shows the principal overweight and underweight stock positions of the International Equity Fund at 31 March 2020 relative to the MSCI All Country ex US Index in %
Prosus 5.3 Overweight New Oriental Education & Technology 4.6 Overweight Novozymes 4.1 Overweight MercadoLibre 3.7 Overweight SoftBank 3.4 Overweight Novartis -1.0 Underweight Roche -1.3 Underweight Tencent -1.6 Underweight Nestle -1.8 Underweight Alibaba -2.0 Underweight
The US Equity Fund was launched in June 2014. Its objective is to produce capital growth over the long term through investment in a diversified portfolio of primarily US equities. Since inception to 31 March 2020 the Fund has returned 11.2% per annum net of fees for the sterling share class, with a relative underperformance of 1.2% against its reference benchmark, the S&P 500 Index. At 31 March 2020 the Company had an allocation of GBP6.8m to the US Equity Fund which represents 4.9% of total assets. In the six months to 31 March 2020 the US Equity Fund returned -16.4% net of fees, which is an underperformance of 3.3% against its benchmark. At the sector level the largest positive contributors were Banks (underweight) and Wireless Telecoms and Aerospace (both overweight), whilst the detractors were Food Retailing (overweight) and Technology Hardware and Semiconductors (both underweight). Positive stock contributors were T-Mobile US, Microsoft, Electronic Arts and Amazon (all overweight) and Boeing (underweight) whilst the detractors were US Foods, Parsley Energy, Frontdoor, Zimmer Biomet (all overweight) and Apple (underweight).
The Table below shows the principal overweight and underweight sector positions of the US Equity Fund at 31 March 2020 relative to the S&P 500 Index in %
Communication Services 7.2 Overweight Consumer Discretionary 5.4 Overweight Financials 3.4 Overweight Industrials 2.9 Overweight Materials 2.6 Overweight Health Care -2.0 Underweight Energy -2.6 Underweight Real Estate -3.0 Underweight Utilities -3.6 Underweight Consumer Staples -4.4 Underweight Information Technology -7.6 Underweight
The Table below shows the principal overweight and underweight stock positions of the US Equity Fund at 31 March 2020 relative to the S&P 500 Index in %
T-Mobile US 3.8 Overweight Fiserv 3.8 Overweight Electronic Arts 3.7 Overweight Intercontinental Exchange 3.5 Overweight Aon 3.5 Overweight Visa -1.3 Underweight JPMorgan Chase -1.3 Underweight Johnson & Johnson -1.6 Underweight Berkshire Hathaway -1.7 Underweight Apple -5.0 Underweight
The Tortoise Fund is a global equity absolute return fund which was launched in August 2007. Its objective is to achieve positive absolute returns in all market conditions, over rolling three year periods, with less volatility than conventional long only equity funds, through investing in long and synthetic short positions in equities. Since inception to 31 March 2020 the Fund has returned 3.9% per annum net of fees. At 31 March 2020 the Company had an allocation to the Fund of GBP19.8m which represents 14.4% of total assets. In the six months to 31 March 2020 the Fund returned -14.5%. At the sector level the positive contributors were Consumer Discretionary and Real Estate (both short) and Consumer Staples (long), whilst the detractors were Energy, Communication Services and Banks (all long). Positive stock contributors were Compass, Hilton, Boeing and CarMax (all short) and Newmont (long) whilst detractors were Tullow Oil, Exxon Mobil, Royal Bank of Scotland, Societe Generale and Centrica (all long).
The Table below shows the principal long and short sector positions of the Tortoise Fund at 31 March 2020 in %.
Materials 12.3 Long Communication Services 9.2 Long Energy 7.4 Long Financials 5.6 Long Health Care 4.9 Long Consumer Staples 3.5 Long Utilities 1.0 Long Consumer Discretionary 0.5 Long Industrials 0.0 Information Technology -1.0 Short Real Estate -1.1 Short
The Table below shows the principal long and short stock positions (on a net basis) of the Tortoise Fund at 31 March 2020 in %.
Newmont 4.4 Long Tesco 3.7 Long Orange 3.5 Long Sanofi 3.2 Long Barrick Gold 3.1 Long Experian -1.2 Short Sika -1.3 Short Starbucks -1.4 Short Union Pacific -1.5 Short Home Depot -1.5 Short
Majedie Asset Management (MAM)
For the last ten years MAM has been valued using a backward looking methodology based on historic earnings. As AUM increased the valuation was deemed to be conservative. However, due to the evolving outlook for the asset management industry, a fall in AUM at MAM and its strategic decision to lower costs for investors by both reducing annual management charges and absorbing all UK OEIC administration costs, a discount has been applied to the formula in the last two years.
The Board, having taken external advice, has decided to adopt a new valuation methodology which, it believes, is a more appropriate basis for valuing the Company's holding in MAM going forward.
The revised basis for valuation annualises the most recent quarterly earnings of MAM, applies a median of a peer group price earnings multiple with an unlisted liquidity discount of 20% (although the Directors may adjust the discount depending on market conditions). Performance fee earnings multiples are further discounted by 50%. Surplus net assets are then added, having deducted 200% of Regulatory Capital.
It is intended that the valuation is updated each quarter and will be announced to the market. The Board believes the new valuation methodology will enhance the disclosure and transparency of the Company's investment in MAM for investors.
In the six months to 31 March 2020 MAM's AUM declined from GBP10.8bn to GBP8.1bn, reflecting lower stock market levels and a modest net outflow of funds. The most recent quarter saw a return to net inflows, including MAM's appointment to manage the Edinburgh Investment Trust PLC.
The revised valuation methodology values the Company's stake at GBP30.6m, comprised as follows:
Earnings after tax (last 3 months, annualised) GBP13.0m Peer group PE multiple 12.7x Liquidity discount 20% Peer group PE multiple after liquidity discount 10.2x Performance fee earnings after tax GBP0.4m 50% of peer group PE multiple 6.4x 50% of peer group PE multiple after liquidity discount 5.1x Surplus net assets having deducted 200% GBP43.7m of Regulatory Capital Valuation of MAM GBP178.2m Valuation of the Company's 17.2% holding GBP30.6m in MAM
Summary and outlook
This first quarter of the financial year was relatively strong for stock markets and in particular the UK, which was emerging from three years of Brexit chaos with a newly elected Government whose mandate was to fiscally pump prime the economy. The low valuation of the UK market was attracting the attention of international asset allocators. It seemed the patience of retaining an overweight UK stance would be rewarded. The chaos of COVID-19 and the resulting lockdowns across the world hit markets hard. The UK market was particularly hard hit for two reasons; its heavy exposure to banks which are now discouraged from paying dividends and secondly the collapse in the oil price as Saudi Arabia and Russia increased supply just as demand was falling heavily. Investors reacted to the chaos by buying the large technology stocks in the US, thereby ensuring the UK market underperformed its Global peers.
Markets have recovered some composure, but the shape of any recovery is difficult to judge. It does seem that in the new investment world good stock picking based on fundamental analysis will come to the fore. This plays to the core strengths of MAM, as shown by good relative performance in previous market dislocations and its distinctive long-term track record.
Development of Net Asset Value
The chart below outlines the change in the Company's Net Asset Value (debt at par) over the six months ended 31 March 2020. In aggregate, the NAV has decreased by GBP37.7m, comprised of net investment losses at the MAM Funds, including the UK Equity Segregated Portfolio, of GBP24.9m, a net write down of the investment in MAM by GBP7.4m, expenses and interest of GBP1.6m, share buybacks of GBP0.1m and dividends paid to shareholders of GBP3.7m.
NAV 30.09.19 GBP155.1m ------------------------------- ---------- UK Equity Segregated Portfolio -GBP12.1m MAM -GBP7.4m MAM Funds -GBP12.8m Admin Costs and Other -GBP0.8m Finance Costs -GBP0.8m Share Buybacks -GBP0.1m Dividend Paid -GBP3.7m NAV 31.03.20 GBP117.4m
Allocation of Total Assets at 31 March 2020
Hot Features
Premium
Value % of Total
GBP000s Assets
--------------------------------- --------- -----------
UK Equity Segregated Portfolio 36,094 26.2
UK Income Fund 9,084 6.6
Global Equity Fund 18,096 13.1
International Equity Fund 7,211 5.2
US Equity Fund 6,760 4.9
Tortoise Fund 19,846 14.4
MAM 30,594 22.2
Net cash/realisation portfolio* 10,303 7.4
--------- -----------
137,988 100.0
--------- -----------
* Net Cash and realisation fund does not include cash held in the UK Equity Segregated Portfolio or MAM funds.
MAM Fund Performance
6 months to 31 March 2020 Since MI invested (per annum)
% % % % % %
Fund Benchmark Relative Fund Benchmark Relative
return return performance return return performance
---------------------- -------- ----------- ------------- -------- ----------- -------------
UK Equity Segregated
Portfolio (22.9) (22.0) (0.9) (0.4) 1.2 (1.6)
UK Income Fund (23.1) (22.0) (1.1) 1.1 1.8 (0.7)
Global Equity
Fund (13.0) (14.8) 1.8 9.3 8.4 0.9
International
Equity Fund (9.7) (18.1) 8.4
Global Focus
Fund 11.7 12.3 (0.6)
US Equity Fund (16.4) (13.1) (3.3) 11.2 12.5 (1.3)
Tortoise Fund (14.5) (4.5)
Notes:
All Fund returns are quoted in Sterling, net of fees.
The initial investment in the UK Equity Segregated Portfolio was made on 22 January 2014.
The initial investment in the UK Income Fund was made on 29 January 2014.
The initial investments in the Global Equity Fund, Global Focus Fund and US Equity Fund were made on 30 June 2014 and 26 June 2014 respectively, at the inception of each fund. The Company is invested in the Sterling share classes.
The initial investment in the Tortoise Fund was made on 29 January 2014.
The Company's investment in the Global Focus Fund was redeemed on 12 December 2019 and the proceeds were invested in the International Equity Fund.
William Barlow
Chief Executive
For and on behalf of the Board
26 May 2020
Fund Analysis
at 31 March 2020
Geographic and Sector Analysis at 31 March 2020
% % % % %
Europe United Emerging Asia North % %
Kingdom Markets Pacific America Cash Total
-------------------- -------- --------- ---------- --------- --------- ------- --------
Basic Materials 0.1 3.3 1.1 4.6 9.1
Consumer Goods 0.3 3.7 0.1 0.9 1.4 6.4
Consumer Services 1.0 8.7 1.6 0.4 3.6 15.3
Financials 1.3 8.3 0.6 0.4 2.1 12.7
Health Care 4.3 3.6 3.1 11.0
Industrials 0.6 9.6 0.4 0.3 1.9 12.8
Oil & Gas 0.8 4.1 0.6 5.5
Technology 0.4 0.9 2.3 3.5 7.1
Telecommunications 3.4 1.3 0.7 0.5 5.9
Utilities 0.3 0.3
Cash 4.4 4.4
Fixed Income 6.8 6.8
-------- --------- ---------- --------- --------- ------- --------
12.2 43.8 6.1 2.7 21.3 11.2
-------- --------- ---------- --------- --------- -------
Notes:
The assets analysed above are the net exposure of the UK Equity Segregated Portfolio, UK Income Fund, Global Equity Fund, International Equity Fund, the US Equity Fund and Tortoise Fund. The Tortoise Fund, as an absolute return fund, invests through CFDs and the net exposure of the fund is shown in the table. The aggregate of the funds represents a total of 70.4% of the Company's total assets.
Exposures are classified by the stock exchange on which the underlying investment is listed and by the relevant FTSE sector classification.
Twenty Largest Portfolio Holdings
at 31 March 2020
Fair Value % of Total Assets
Company GBP000
----------------------------- ----------- ------------------
Majedie Asset Management
Limited 30,594 22.2%
Tesco PLC 2,973 2.2%
Barrick Gold Corporation 2,596 1.9%
GlaxoSmithKline plc 2,174 1.6%
Royal Dutch Shell plc 2,153 1.6%
BP plc 1,772 1.3%
BAE Systems plc 1,734 1.3%
Orange SA 1,617 1.2%
Unilever PLC 1,424 1.0%
Mondi plc 1,381 1.0%
Amazon.com Inc 1,308 0.9%
Elecrocompoents plc 1,295 0.9%
Direct Line Insurance Group
Plc 1,233 0.9%
Royal KPN NV 1,228 0.9%
Legal & General Plc 1,212 0.9%
Newmont Corporation 1,197 0.9%
Associated British Foods
plc 1,126 0.8%
3i Group plc 1,054 0.8%
Alphabet Inc. 987 0.7%
Microsoft Corporation 940 0.7%
Total 59,998 43.7%
----------- ------------------
The assets analysed above show the Company's largest twenty holdings on a look through basis across all MAM Funds.
Interim Management Report
The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal uncertainties for the remaining six months of the financial year are set out in the Chief Executive's Report above. This Half-Yearly Financial Report has not been audited or reviewed by the Company's auditor.
The financial statements continue to be prepared on a going concern basis. The approach used for the Annual Report is applied, giving proper consideration to financial and cashflow forecasts, including any COVID-19 impacts, and it is believed that the Company has adequate financial resources to continue to operate for the foreseeable future.
The principal risks facing the Company remain unchanged since the date of the Annual Report for the year ended 30 September 2019, as set out in the Business Review section of the Strategic Report (pages 20 to 21). COVID-19 has introduced heightened uncertainty in global equity markets, both economically and politically, and the impact on the Company is set out in the Chief Executive's Report. The Company and its service providers have implemented Business Continuity Plans and operations and service levels have been maintained. Risks faced by the Company include, but are not limited to, market risk, discount volatility, compliance risk (including non-compliance with Section 1158 of the Corporation Tax Act 2010), operational risk and financial risk.
Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report
In accordance with the Disclosure Guidance and Transparency Rules 4.2.7R and 4.2.8R, we confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the European Union, as required by the Disclosure Guidance and Transparency Rule 4.2.4R, and gives a true and fair view of the assets, liabilities and financial position of the Company;
(b) the Chief Executive's Report includes a fair review of the information required to be disclosed under the Disclosure Guidance and Transparency Rule 4.2.7R, interim management report. This includes (i) an indication 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 presented in the Half-Yearly Financial Report and (ii) a description of the principal risks and uncertainties for the remaining six months of the financial year; and
(c) there were no changes in the transactions or arrangements with related parties as described in the Annual Report for the year ended 30 September 2019 that would have had a material effect on the financial position or performance of the Company in the first six months of the current financial year.
David Henderson
Chairman
For and on behalf of the Board
26 May 2020
Condensed Statement of Comprehensive Income
for the half year ended 31 March 2020
Half year ended Half year ended Year ended
31 March 2020 31 March 2019 30 September 2019
(unaudited) (unaudited) (audited)
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investments
Losses on
investments at
fair
value through
profit or loss (36,287) (36,287) (10,805) (10,805) (21,342) (21,342)
-------- --------- --------- -------- --------- --------- -------- --------- ---------
Net investment
result (36,287) (36,287) (10,805) (10,805) (21,342) (21,342)
-------- --------- --------- -------- --------- --------- -------- --------- ---------
Income
Income from
investments 2 3,981 3,981 4,805 4,805 7,995 7,995
Other income 2 55 55 33 4 37 54 4 58
-------- --------- --------- -------- --------- --------- -------- --------- ---------
Total income 4,036 4,036 4,838 4 4,842 8,049 4 8,053
Management fees (41) (122) (163) (46) (138) (184) (94) (279) (373)
Administration
expenses (350) (324) (674) (327) (340) (667) (663) (655) (1,318)
-------- --------- --------- -------- --------- --------- -------- --------- ---------
Return/(loss)
before finance
costs and
taxation 3,645 (36,733) (33,088) 4,465 (11,279) (6,814) 7,292 (22,272) (14,980)
Finance costs (190) (571) (761) (190) (571) (761) (381) (1,142) (1,523)
-------- --------- --------- -------- --------- --------- -------- --------- ---------
Net
return/(loss)
before
taxation 3,455 (37,304) (33,849) 4,275 (11,850) (7,575) 6,911 (23,414) (16,503)
Taxation 3 (7) (7) (10) (10) (22) (22)
-------- --------- --------- -------- --------- --------- -------- --------- ---------
Net
return/(loss)
after taxation
for the period 3,448 (37,304) (33,856) 4,265 (11,850) (7,585) 6,889 (23,414) (16,525)
-------- --------- --------- -------- --------- --------- -------- --------- ---------
Return per
ordinary share: pence pence pence pence pence pence pence pence pence
Basic 4 6.5 (70.4) (63.9) 8.0 (22.2) (14.2) 12.9 (43.9) (31.0)
The total column of this statement is the Statement of Comprehensive Income of the Company, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The supplementary revenue return and capital return columns are prepared under guidance published by the Association of Investment Companies (AIC).
See notes 1 to 16.
Condensed Statement of Changes in Equity
for the half year ended 31 March 2020
Capital
Share Share redemption Capital Retained
capital premium reserve reserve earnings Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- -------------------- --------- ---------- -------------------
Half year ended 31
March 2020
(unaudited)
30 September 2019 5,305 3,054 95 120,046 26,574 155,074
Net return/(loss)
after taxation for
the period (37,304) 3,448 (33,856)
Shares buybacks for
cancellation 12 (2) 2 (66) (66)
Dividends declared
and paid in period 6 (3,713) (3,713)
--------- --------- -------------------- --------- ---------- -------------------
31 March 2020 5,303 3,054 97 82,676 26,309 117,439
--------- --------- -------------------- --------- ---------- -------------------
Half year ended 31
March 2019
(unaudited)
30 September 2018 5,344 3,054 56 144,395 25,777 178,626
Net return/(loss)
after taxation for
the period (11,850) 4,265 (7,585)
Share buybacks for
cancellation 12 (1) 1 (10) (10)
Dividends declared
and paid in period 6 (3,741) (3,741)
--------- --------- -------------------- --------- ---------- -------------------
31 March 2019 5,343 3,054 57 132,535 26,301 167,290
--------- --------- -------------------- --------- ---------- -------------------
Year ended 30
September
2019 (audited)
30 September 2018 5,344 3,054 56 144,395 25,777 178,626
Net return/(loss)
after taxation for
the period (23,414) 6,889 (16,525)
Share buybacks for
cancellation 12 (39) 39 (935) (935)
Dividends declared
and paid in period 6 (6,092) (6,092)
--------- --------- -------------------- --------- ---------- -------------------
30 September 2019 5,305 3,054 95 120,046 26,574 155,074
--------- --------- -------------------- --------- ---------- -------------------
Condensed Balance Sheet
at 31 March 2020
31 March 31 March 30 September
2020 2019 2019
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------- ------------- -------------
Non-current assets
Property and equipment 14 30 21
Investments at fair value
through profit or loss 7, 8 126,422 184,984 172,914
------------- ------------- -------------
126,436 185,014 172,935
Current assets
Trade and other receivables 503 475 389
Cash and cash equivalents 12,228 3,441 3,398
------------- ------------- -------------
12,731 3,916 3,787
Total assets 139,167 188,930 176,722
------------- ------------- -------------
Current liabilities
Trade and other payables (1,170) (1,104) (1,101)
Total assets less current
liabilities 137,997 187,826 175,621
------------- ------------- -------------
Non-current liabilities
Debentures 14 (20,558) (20,536) (20,547)
------------- ------------- -------------
Total liabilities (21,728) (21,640) (21,648)
------------- ------------- -------------
Net assets 117,439 167,290 155,074
------------- ------------- -------------
31 March 31 March 30 September
2020 2019 2019
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------- ------------- -------------
Represented by:
Ordinary share capital 12 5,303 5,343 5,305
Share premium account 3,054 3,054 3,054
Capital redemption reserve 97 57 95
Capital reserve 82,676 132,535 120,046
Revenue reserve 26,309 26,301 26,574
Equity Shareholders' Funds 117,439 167,290 155,074
------------- ------------- -------------
Net asset value per share pence pence pence
Basic 221.5 313.1 292.3
Condensed Cash Flow Statement
for the half year ended 31 March 2020
Half year Half year
ended ended Year ended
31 March 31 March 30 September
2020 2019 2019
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
------------- ------------- ---------------
Net cash inflow from operating
activities 13 13,360 4,453 8,447
------------- ------------- ---------------
Investing activities
Purchase of tangible assets (1) (4) (4)
------------- ------------- ---------------
Net cash outflow from investing
activities (1) (4) (4)
------------- ------------- ---------------
Financing activities
Interest paid (750) (750) (1,501)
Dividends paid (3,713) (3,741) (6,092)
Share buybacks for cancellation 12 (66) (935)
------------- ------------- ---------------
Net cash outflow from financing
activities (4,529) (4,491) (8,528)
------------- ------------- ---------------
Increase/(decrease) in cash
and cash equivalents for
the period (8,830) (42) (85)
------------- ------------- ---------------
Cash and cash equivalents
at start of period 3,398 3,483 3,483
------------- ------------- ---------------
Cash and cash equivalents
at end of period 12,228 3,441 3,398
------------- ------------- ---------------
Notes to the Accounts
as at 31 March 2020
1. Accounting Policies
The Condensed Financial Statements above comprise the unaudited results of the Company for the six months to 31 March 2020 and are presented in pounds sterling, as this is the functional currency of the Company.
The Condensed Financial Statements have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all financial information required for full financial statements. The Condensed Financial Statements have been prepared using the accounting policies adopted in the audited financial statements for the year ended 30 September 2019.
New standards, interpretations and amendments adopted by the Company
The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 30 September 2019. Since 1 October 2019, IFRS 16 Leases; has been adopted by the Company. As was detailed in the Company's financial statements for the year ended 30 September 2019, the adoption of IFRS 16 has had no material impact on the Company's financial performance or position.
2. Income
Half year
Half year ended ended Year ended
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
Income from investments
Dividend income* 3,809 4,571 7,409
Accumulation dividend
income 119 170 435
Overseas dividend
income 53 64 151
3,981 4,805 7,995
---------------- ---------- --------------
Other income
Interest income 2 2
Sundry income 55 35 56
---------------- ---------- --------------
55 37 58
---------------- ---------- --------------
Total income 4,036 4,842 8,053
---------------- ---------- --------------
Income from investments
Listed UK 652 815 2,070
Listed overseas 53 64 151
Unlisted - MAM Funds 400 475 1,172
Unlisted 2,876 3,451 4,602
---------------- ---------- --------------
3,981 4,805 7,995
---------------- ---------- --------------
* Includes MAM dividend income of GBP2,876,000 (half year to 31 March 2019: GBP3,451,000 and the year ended 30 September 2019: GBP4,602,000) and Property Income Distribution (PID) dividend income of GBP12,000 (half year to 31 March 2019: GBP20,000 and the year ended 30 September 2019: GBP24,000).
3. Taxation
The charge for the half year to 31 March 2020 is GBP7,000 (half year to 31 March 2019: GBP10,000; year ended 30 September 2019: GBP22,000). These amounts represent irrecoverable withholding tax paid on overseas investment income.
The Company has an effective corporation tax rate of 0%. As investment gains are exempt from tax owing to the Company's status as an approved Investment Trust, and as there is currently an excess of management expenses over taxable income, there is no charge for corporation tax.
4. Calculation of returns per ordinary share
Basic returns per ordinary share in each period are based on the return on ordinary activities after taxation attributable to equity shareholders. Basic return per ordinary share for the period is based on 53,035,310 shares (half year ended 31 March 2019: 53,438,956 shares, and the year ended 30 September 2019: 53,332,302), being the weighted average number of shares in issue.
5. Business segments
For management purposes the Company is organised into one principal activity, being investing activities, as described below:
Investing activities
The Company's investment objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. The Company operates as an investment trust company and its portfolio contains investments in companies listed in a number of countries. Geographical information about the portfolio is provided above.
6. Dividends
In accordance with IAS 10: Events After the Balance Sheet Date, interim dividends are not accounted for until paid. The following table summarises the amounts recognised as distributions to equity holders in the relevant period:
Half year Half year
ended 31 ended 31 Year ended
March March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
---------- ---------- --------------
2019 Final dividend of 7.00p
paid on 28 January 2020 3,713
2019 Interim dividend of
4.40p paid on 14 June 2019 2,351
2018 Final dividend of 7.00p
paid on 23 January 2019 3,741 3,741
---------- ---------- --------------
3,713 3,741 6,092
---------- ---------- --------------
Distributable reserves of the Company comprise the Capital and Revenue Reserves.
Dividends for the half year ended 31 March 2020 (and for the half year ended 31 March 2019 and the year ended 30 September 2019) have been solely made from the Revenue Reserve.
7. Investments
All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price for listed securities, depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or open ended investment companies are valued at the closing price, the bid price or the single price as appropriate, released by the relevant fund administrator.
Fair values for unquoted investments, or investments for which the market is inactive, are established by using various valuation techniques in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEV). These may include recent arm's length market transactions, the current fair value of another instrument which has substantially the same earnings multiples, discounted cash flow analysis and option pricing models. Where there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised.
8. Fair Value Hierarchy
Except for the Company's 7.25% 2025 Debenture Stock, which is measured at amortised cost under the effective interest rate method, financial assets and liabilities of the Company (re investments) are carried in the Balance Sheet at their fair value. Additionally the balance sheet amount is a reasonable approximation of fair value (re amounts in respect of sales for future settlement, dividends receivable, cash at bank, and purchases for future settlement). The fair value is the amount at which the asset could be sold or the liability transferred in a current transaction between market participants, other than a forced or liquidation sale.
The table below sets out fair value measurements of financial assets in accordance with the IFRS 13 fair value hierarchy:
Half year ended 31 March 2020
Level 1 Level 2 Level 3 Total
Financial assets GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------
Financial assets
held at fair value
through profit
or loss
Equities and managed
funds
Listed equity securities 32,555 32,555
Unlisted equity
securities (MAM
Funds) 63,235 63,235
Unlisted equity
securities 30,632 30,632
32,555 63,235 30,632 126,422
-------- -------- -------- --------
Half year ended 31 March 2019
Level 1 Level 2 Level 3 Total
Financial assets GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------
Financial assets
held at fair value
through profit
or loss
Equities and managed
funds
Listed equity securities 48,338 48,338
Unlisted equity
securities (MAM
Funds) 84,203 84,203
Unlisted equity
securities 52,443 52,443
48,338 84,203 52,443 184,984
-------- -------- -------- --------
Year ended 30 September 2019
Level 1 Level 2 Level 3 Total
Financial assets GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------
Financial assets
held at fair value
through profit
or loss
Equities and managed
funds
Listed equity securities 48,389 48,389
Unlisted equity
securities (MAM
Funds) 83,639 83,639
Unlisted equity
securities 40,886 40,886
48,389 83,639 40,886 172,914
-------- -------- -------- --------
There have been no transfers during the period between Levels 1, 2 and 3.
Investments whose values are based on quoted market prices in active markets, and are therefore classified as Level 1, include active listed equities. The Company does not adjust the quoted price for these instruments in normal market conditions (although it may invoke its fair value pricing policy in times of market disruption - this was not the case for 31 March 2020, 31 March 2019 or 30 September 2019).
Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified as Level 2. As Level 2 instruments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information (the MAM funds are priced daily, remain highly liquid and are not subject to any such adjustments).
Instruments classified within Level 3 have significant unobservable inputs. Level 3 instruments include private equity and corporate debt securities. As observable prices are not available for these securities, the Company has used valuation techniques to derive fair value. In respect of unquoted instruments, or where the market for a financial instrument is not active, fair value is established by using recognised valuation methodologies, in accordance with IPEV Valuation Guidelines. These include valuing instruments at the price of the most recent investment in the investee. These prices are reviewed to check if they are still suitable for use at the reporting date. If required, any such prices will be discounted to reflect changes in the investee subsequent to the relevant most recent investment price date. This is in accordance with IPEV Guidelines as the cost of recent investments will generally provide a good indication of fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The Company's current level 3 classified investments comprise certain individually immaterial unlisted investments, which total in aggregate GBP38,000, and the investment in MAM valued at GBP30,594,000. The Board, having taken external advice, has decided to adopt a new valuation methodology which, it believes, better reflects the recent trading performance of MAM and is a more appropriate basis for valuing the Company's holding in MAM going forward. The revised basis for valuation annualises the most recent quarterly earnings of MAM, applies a median of a peer group price earnings multiple with a liquidity discount of 20% (although the Directors may adjust the discount depending on market conditions). Performance fee earnings multiples are further discounted by 50%. Surplus cash is then added having deducted 200% of Regulatory Capital. Further details are in the Chief Executive's Report. The significant input in assessing the price is the earnings of MAM and a 5.0% increase/decrease in MAM's earnings would result in an increase/decrease of 4.0% in the carrying value of MAM.
The table below sets out the movement in Level 3 instruments for the period:
31 March 2020
Total Equity investments
GBP'000 GBP'000
----------- -------------------
Opening balance 40,886 40,886
Total net loss for the period
included in the Condensed
Statement of Comprehensive
Income (10,254) (10,254)
----------- -------------------
30,632 30,632
----------- -------------------
The fair value of the Company's debenture stock is calculated using a standard present value methodology and by reference to the market yields of a comparable UK Treasury Bond instrument with a 2.50% risk premium being added.
Year ended
Half year ended Half year ended 30 September
31 March 2020 31 March 2019 2019
Financial liabilities Book Fair Book Fair Fair
value value value value Book value value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP20.7m (2019:
GBP20.7m) 7.25%
2025 debenture
stock 20,558 25,094 20,536 25,172 20,547 25,415
--------- --------- --------- --------- ----------- ---------
20,558 25,094 20,536 25,172 20,547 25,415
--------- --------- --------- --------- ----------- ---------
The above financial liabilities would be classified as Level 2 financial investments in the IFRS 13 Fair Value Hierarchy.
9. Principal financial risks
The principal financial risks which the Company faces include exposure to:
-- Market risk
-- Foreign currency risk
-- Interest rate risk
-- Other price risk
-- Credit risk
-- Liquidity risk
Further details of the Company's management of these risks and the exposure to them are set out in Note 22 of the Company's Annual Report for the year ended 30 September 2019, as issued on 10 December 2019. There have been no changes to the management of these risks since that date.
10. Majedie Asset Management Limited (MAM)
As at 31 March 2020, the Company had a 17.2% equity shareholding in MAM, which provides investment management and advisory services across a range of UK and global equity strategies.
The carrying value of the investment in MAM is included in the Condensed Balance Sheet as part of investments at fair value through profit or loss:
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
Cost of investment 540 540 540
Holding gains 30,054 51,806 40,301
--------- --------- -------------
Fair value at period end 30,594 52,346 40,841
--------- --------- -------------
The carrying value of MAM in the 31 March 2020 Condensed Financial Statements is its fair value as assessed by the Audit Committee and approved by the Board as at that date.
11. Net Asset Value
The net asset value per share has been calculated based on Equity Shareholders' Funds and on 53,027,638 (31 March 2019: 53,435,000 and 30 September 2019: 53,055,483) ordinary shares, being the number of shares in issue at the relevant period end.
12. Share capital
Half year
Half year ended ended Year ended
31 March 31 March 30 September
2020 2019 2019
---------------- ----------- --------------
Opening balance 53,055,483 53,439,000 53,439,000
Shares purchased for
cancellation (27,845) (4,000) (383,517)
Closing balance 53,027,638 53,435,000 53,055,483
Share buybacks are debited against the Capital Reserve in accordance with the Company's articles.
13. Reconciliation of Operating Profit to Operating Cash Flow
Half year
Half year ended ended Year ended
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP'000 GBP'000
---------------- ---------- --------------
Net loss before taxation (33,849) (7,575) (16,503)
Adjustments for:
Losses on investments 36,287 10,805 21,342
Accumulation dividends (119) (170) (435)
Depreciation 6 12 20
Foreign exchange losses 1 4
Purchases of investments (23,233) (3,975) (10,574)
Sales of investments 33,534 4,697 13,069
12,626 3,795 6,923
Finance costs 761 761 1,523
---------------- ---------- --------------
Operating cash flows
before movements in working
capital 13,387 4,556 8,446
Increase/(decrease) in
trade and other payables (34) 19 30
(Increase)/decrease in
trade and other receivables 10 (102) 12
---------------- ---------- --------------
Net cash flow from operating
activities before tax 13,363 4,473 8,488
Tax recovered 8
Tax on overseas dividends (11) (20) (41)
---------------- ---------- --------------
Net cash inflow from
operating activities 13,360 4,453 8,447
---------------- ---------- --------------
14. Reconciliation of changes in liabilities arising from financing activities
Amortisation
30 September of expenses 31 March
2019 Cash flows (non cash) 2020
GBP000 GBP000 GBP000 GBP000
Long term borrowings
GBP20.7m 7.25%
2025
debenture stock 20,547 11 20,558
Interest payable (750) 750
------------- ----------- ------------- -----------
Total liabilities
from
financing activities 20,547 (750) 761 20,558
------------- ----------- ------------- -----------
Amortisation
30 September of expenses 31 March
2018 Cash flows (non cash) 2019
GBP000 GBP000 GBP000 GBP000
Long term borrowings
GBP20.7m 7.25%
2025
debenture stock 20,525 11 20,536
Interest payable (750) 750
------------- ----------- ------------- -----------
Total liabilities
from
financing activities 20,525 (750) 761 20,536
------------- ----------- ------------- -----------
Amortisation
30 September of expenses 30 September
2018 Cash flows (non cash) 2019
GBP000 GBP000 GBP000 GBP000
Long term borrowings
GBP20.7m 7.25%
2025
debenture stock 20,525 22 20,547
Interest payable (1,501) 1,501
------------- ----------- ------------- ---------------
Total liabilities
from
financing activities 20,525 (1,501) 1,523 20,547
------------- ----------- ------------- ---------------
15. Related Party Transactions
Majedie Asset Management (MAM)
MAM is the Company's Investment Manager providing investment management services under an Investment Agreement. The agreement provides for MAM to manage the Company's investment assets on both a segregated portfolio basis and also by investments into various MAM collective investment vehicles or funds. Details of the Investment Agreement are contained in the material contracts section of the Directors' Report in the Company's Annual Report for the year ended 30 September 2019. As Investment Manager, MAM is entitled to receive investment management fees. In respect of the Segregated Portfolio these are charged directly to the Company and are shown as an expense in its accounts. Any management fees due in respect of the investments made into any MAM funds are charged in the fund and are therefore included as part of the investment value of the relevant holding. MAM is also entitled to performance fees in respect of the investment in the MAM Tortoise fund. The fees crystallise annually on 30 September and are calculated and charged against each individual investor. As such these are also shown as an expense in the Company's accounts and are charged wholly to capital. Details concerning the Company's investments in the period in the MAM funds are shown in the Chief Executive's Report above.
In addition to the above, the Company retains an investment in MAM itself. Mr JWM Barlow is a non-executive director of MAM but receives no remuneration for this role. MAM is accounted for as an investment in the Company accounts and is valued at fair value through profit or loss. Details concerning the Company's investment in MAM are included in the Chief Executive's Report above.
The table below discloses the transactions and balances between those entities:
Half year Half year
ended ended Year ended
31 March 31 March 30 September
2020 2019 2019
GBP'000 GBP0'000 GBP'000
Transactions during
the period:
Dividend income received
from MAM 2,876 3,451 4,602
Management fee income
due to MAM (Segregated
Portfolio only) 163 184 373
Balances outstanding
at the period end:
Between the Company
and MAM (Segregated
Portfolio investment
management fees) 75 93 93
Value of the Company's
investment in MAM 30,594 52,346 40,841
---------- ---------- -------------
Transactions between related party companies during the period were made on terms equivalent to those that occur in arm's length transactions.
16. Financial Information
The financial information contained in this Half-Yearly Financial Report does not constitute full statutory accounts as defined in section 434 of the Companies Act 2006.
The information for the year ended 30 September 2019 has been extracted from the latest published audited accounts. Those accounts have been filed with the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. Those statutory accounts were prepared in accordance with IFRS, as adopted by the European Union.
Company Information
Board of Directors Depositary
R D C Henderson, Chairman The Bank of New York Mellon (International)
Limited
P D Gadd 1 Canada Square
J M Lewis London E14 5AL
J W M Barlow (Executive)
A M J Little
All Directors are non-executive The Depositary acts as global custodian
unless indicated and may delegate safekeeping to one
or more global sub-custodians. The
Registered Office Depositary has delegated safe keeping
1 King's Arms Yard of the assets of the Company to The
London EC2R 7AF Bank of New York Mellon SA/NV and
Telephone: 020 7382 8170 the Bank of New York Mellon.
E-mail: majedie@majedieinvestments.com
Registered number: 109305 AIFM
England Majedie Investments PLC
Company Secretary Registrars
Link Company Matters Limited Computershare Investor Services PLC
The Registry The Pavilions
34 Beckenham Road Bridgwater Road
Beckenham Bristol BS99 6ZZ
Kent BR3 4TU Telephone: 0370 707 1159
Investment Manager Auditors
Majedie Asset Management Ernst & Young LLP
Limited 25 Churchill Place
10 Old Bailey Canary Wharf
London EC4M 7NG London E14 5EY
Telephone: 020 7618 3900
E-mail: info@majedie.com Stockbrokers
J.P. Morgan Cazenove
Solicitor 25 Bank Street
London E14 5JP
Dickson Minto W.S. Website
16 Charlotte Square www.majedieinvestments.com
Edinburgh EH2 4DF
Financial Calendar
Year end 30 September
Annual results December
Half year results May
Annual General Meeting January
Dividends paid January and June
2020 Interim Dividend Timetable
The interim dividend for the period ended 31 March 2020 is 4.4p
per share.
Ex-dividend date 4 June
Record date 5 June
Payment date 19 June
, 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.
IR KKABKABKDDPB
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