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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
New Star Investment Trust Plc | LSE:NSI | London | Ordinary Share | GB0002631041 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 115.00 | 112.00 | 118.00 | 116.00 | 115.00 | 115.00 | 3,550 | 16:22:49 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Unit Inv Tr, Closed-end Mgmt | 4.74M | 3.25M | 0.0457 | 25.16 | 81.68M |
New Star Investment Trust PLC (NSI) New Star Investment Trust PLC: Half Year Results of the six months ended 31st December 2019 20-March-2020 / 16:53 GMT/BST Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. NEW STAR INVESTMENT TRUST PLC HALF YEAR RESULTS FOR THE SIX MONTHSED 31st DECEMBER 2019 FINANCIAL HIGHLIGHTS INVESTMENT OBJECTIVE The Company's objective is to achieve long-term capital growth. 31st December 30th June % 2019 2019 Change PERFORMANCE Net assets (GBP '000) 117,559 113,971 3.1 Net asset value per 165.52p 160.47p 3.1 Ordinary share Mid-market price per 117.00p 111.00p 5.4 Ordinary share Discount of price to 29.31% 30.83% n/a net asset value Six months ended Six months ended 31st December 31st December 2019 2018 Total Return* 4.02% -4.63% n/a IA Mixed Investment 4.41% -6.62% n/a 40-85% Shares (total return) MSCI AC World Index 4.89% -5.47% n/a (total return, sterling adjusted) MSCI UK Index (total 3.03% -10.04% n/a return) Six months ended Six months ended 31st December 31st December 2019 2018 REVENUE Return (GBP'000) 792 607 Return per Ordinary share 1.1p 0.85p Proposed dividend per Ordinary - - share Dividend paid per Ordinary 1.40p 1.00p share TOTAL RETURN Return (GBP'000) 4,582 (5,154) Net assets 3.1% -5.3% Net assets (dividend added 4.0% -4.6% back) * The total return figure for the Group represents the revenue and capital return shown in the consolidated statement of comprehensive income plus dividends paid (the alternative performance measure). INTERIM REPORT CHAIRMAN'S STATEMENT PERFORMANCE Your Company generated a positive total return of 4.02% over the six months to 31st December 2019, taking the net asset value (NAV) per ordinary share to 165.52p. By comparison, the Investment Association's Mixed Investment 40-85% Shares Index rose 4.41%. The MSCI AC World Total Return Index rose 4.89% while the MSCI UK Total Return Index rose 3.03%. Over the same period, UK government bonds returned 2.05%. Further information is provided in the investment manager's report. Your Company made a revenue profit for the six months of GBP792,000 (2018: GBP607,000). GEARING AND DIVIDS Your Company has no borrowings and ended the period under review with cash representing 14.28% of its NAV. Your Company has small retained revenue reserves and your Directors do not recommend the payment of an interim dividend (2018: nil). Your Company paid a dividend of 1.4p per share (2018: 1.0p) in November 2019 in respect of the previous financial year. DISCOUNT During the period, your Company's shares continued to trade at a significant discount to their NAV. The Board keeps this issue under review. PERFORMANCE FEE In November 2019, your Company announced that the current performance fee arrangement was not appropriate in a low interest rate environment. The current performance fee arrangements ceased from 1 January 2020. A performance fee of GBP622,000 (2018: GBPnil) was payable in respect of the period under review. OUTLOOK Risky assets fell sharply in the early spring of 2020 as the Covid-19 virus spread. Equity markets bore the brunt but corporate bonds and property also registered declines. Central Banks have responded with unprecedented interest rate reductions, increased quantitative easing and measures to stimulate lending. Monetary policy alone, however, is unlikely to be sufficient to address the downturn because the virus impact is a supply-side shock, causing work place closures and supply chain disruption. As a result, governments have moved to alleviate the impact on businesses and families to shield the economy from serious long-term harm. Risky assets are likely to remain weak and volatile until the Covid-19 outbreak moderates. Your Company, however, entered this difficult period with substantial cash holdings. Over the coming weeks, your Company's defensive assets may provide some capital protection. There should also be opportunities for your Company to deploy cash in investments with attractive long-term potential, including in equity markets. NET ASSET VALUE Your Company's unaudited NAV per share at 29th February 2020 was 156.62p. Your Company's unaudited NAV per share at 19th March 2020 was 136.12p. Geoffrey Howard-Spink Chairman 20th March 2020 INVESTMENT MANAGER'S REPORT MARKET REVIEW Global equities rose 4.89% and bonds fell 2.77% in sterling over the six months to 31st December 2019 as central banks maintained policies of monetary easing. Returns in overseas stock markets were stronger but sterling investors were adversely affected as the pound rose against the euro, yen and dollar by 5.60%, 4.99% and 4.09% respectively. The Federal Reserve reduced interest rates by three-quarters of a percentage point to 1.5-1.75%. Jobs data were strong but inflation remained below its 2% target. The European Central Bank increased further its negative interest rate by 10 basis points to -0.5%, said interest rates would not rise until inflation was closer to 2% and resumed asset purchases. The Bank of England left its bank rate unchanged. UK government and sterling corporate bonds rose 2.05% and 3.52% respectively over the period. Gold and gold securities rose 3.07% and 10.92% respectively in sterling as the opportunity cost of holding this nil-yielding asset remained low. The Conservatives won December's UK election, averting a shift to the left. UK stocks rose 3.03% but smaller companies, typically more sensitive to domestic conditions, outperformed, rising 13.28%. Sterling briefly rose above $1.35 but retreated as investors decided the risk of a "no deal" Brexit had not disappeared, with the government legislating that a trade deal had to be agreed during 2020, setting a demanding timetable. UK assets are likely to prove sensitive to news about the talks. Progress in Sino-US trade talks was confirmed when an interim deal was signed in January 2020. Equities in emerging markets and Asia excluding Japan benefited from end-of-year optimism but still lagged, up 3.11% and 2.74% respectively in sterling. Under the deal, China will increase purchases of US goods and improve the protection of intellectual property. In return, December's planned tariff increases were cancelled. The thornier issues of national security and technology are outside the deal's scope and may never be resolved. Protectionism is likely to remain a feature of US trade policy. US equities outperformed, rising 6.56% in sterling, with technology stocks, up 13.57%, leading the way. Steady US jobs data supported consumer spending but business investment and exports were weak. The Sino-US agreement may, however, provide a fillip to exports in the longer term. China's economy expanded 6% year-on-year during the period, the lowest growth rate since 1992. PORTFOLIO REVIEW Your Company's total return over the period under review was 4.56% before performance fees and 4.02% after performance fees. By comparison, the Investment Association's Mixed Investment 40-85% Shares sector, comprising a peer group of multi-asset funds that typically invest 40-85% of their assets in global equities, rose 4.41%. The MSCI AC World Total Return Index rose 4.89% in sterling while the MSCI UK Total Return Index rose 3.03%. Your Company benefited from investments in funds invested in UK smaller companies, gold securities and technology stocks. The high allocation to dollar cash, however, hurt performance as sterling strengthened. The Aberforth Split Level Income investment trust was the portfolio's best performer, rising 26.09%, partly as a result of the leverage provided by its zero-dividend preference shares. The manager takes a value-oriented approach to investing in UK smaller companies. Such companies performed strongly as the Tories' election victory reduced domestic political risk and strengthened the government's hand in its EU trade negotiations. Chelverton UK Equity Income, which also invests in smaller companies, rose 14.67%. Your Company's holding was increased in November. The Aberforth and Chelverton funds have above-average dividend yields and their income is derived from a broad range of sectors in contrast to the income from the FTSE 100 Index, which is dominated by financial and resources stocks. Man GLG UK Income and MI Brompton UK Recovery outperformed, benefitting from gains among small and medium-sized companies. Trojan Income and Schroder Income focus on larger companies but both outperformed, gaining 7.79% and 5.32% respectively. BlackRock Gold & General gained 6.24%, beating the return from physical gold
but lagging the returns from gold miners. A minimum of 70% of the portfolio is held in miners of precious metals. Miners typically offer a geared return on gold because gold price changes are magnified in their share prices as a result of operational gearing and financial leverage. The sector consolidated in 2019 through mergers that will generate operational efficiencies and scale benefits on top of any rise in the gold price. At the period end, BlackRock Gold & General's two largest holdings were Barrick and Newmont, which each represented about 10% of the portfolio as a result of mergers. Regulatory reasons prevent the fund manager from increasing these holdings yet these businesses account for a larger proportion of the sector. This may at times lead the fund's performance to diverge from the sector. During the period, your Company had no direct investments in US equity funds. This hurt performance because US equities outperformed, driven by the technology sector. Within your Company's global holdings, Polar Capital Global Technology rose 9.73%, benefitting from its holdings in US technology companies such as Microsoft, Alphabet, Apple and Facebook. Fundsmith Equity underperformed, however, rising 2.79%. Amongst your Company's emerging market equity holdings, the HSBC Russia Capped exchange-traded fund did best, rising 11.68% in line with the gain from Russian stocks. Stewart Investors Indian Subcontinent was, however, the weakest holding, falling 3.22% as Indian stocks fell 4.04% in sterling in response to slower economic growth. Emerging market debt outperformed global bonds over the period. Franklin Templeton Emerging Markets Bond lagged, however, down 5.24% as a result of its holdings in Argentine bonds, which fell as politics shifted to the left. Bond market weakness held back returns within EF Brompton Global Conservative, which returned 3.37%, while the Aquilus Inflection hedge fund returned 0.61%. The valuation of your Company's unquoted portfolio rose 13.59% to GBP8.39 million over the period. This was solely due to a revaluation of the shareholding in the largest unquoted holding, Embark, to the price paid by new external investors in a GBP45 million fundraising in November. Embark has continued to grow its assets under administration aggressively, both organically and through acquisition. OUTLOOK Risky assets fell sharply across the world in the early spring of 2020 as the Covid-19 virus spread outside China. Equity markets bore the brunt of the falls but other asset classes including corporate bonds and commercial property also registered significant declines. Major Central Banks across the developed world and in emerging markets have responded to the economic shock with sweeping measures. These included unprecedented interest rate reductions in the US and the UK, as official rates were cut to near zero. Other initiatives included increased quantitative easing and measures designed to stimulate bank lending. Monetary policy alone, however, is unlikely to be sufficient to address the global downturn because the virus impact is a supply-side shock, with work places closing and supply chains disrupted. Government measures targeted at alleviating the economic impact on businesses and families are, therefore, likely to be critical in ensuring the economy emerges strongly once this temporary shock subsides. In the meantime, equities and other risky assets are likely to remain weak and volatile until the numbers of new coronavirus cases moderate across the world. This may take some months. Your Company entered this period of turmoil with substantial investments in cash, in particular in dollars. Some of the defensive assets in your Company's portfolio such as gold and lower-risk multi-asset funds may provide some capital protection over the coming weeks. There should also be opportunities for long-term investors such as your Company to deploy its cash in investments with attractive long-term potential, in particular in equity markets. Brompton Asset Management LLP, 20th March 2020 DIRECTORS' REPORT PERFORMANCE In the six months to 31st December 2019 the total return per Ordinary share was 4.0% (2018: negative 4.6%) and the NAV per ordinary share increased to 165.52p, whilst the share price increased by 5.4% to 117.00p. This compares to an increase of 4.4% in the IA Mixed Investment 40-85% Shares Index. INVESTMENT OBJECTIVE The Company's investment objective is to achieve long-term capital growth. INVESTMENT POLICY The Company's investment policy is to allocate assets to global investment opportunities through investment in equity, bond, commodity, real estate, currency and other markets. The Company's assets may have significant weightings to any one asset class or market, including cash. The Company will invest in pooled investment vehicles, exchange traded funds, futures, options, limited partnerships and direct investments in relevant markets. The Company may invest up to 15% of its net assets in direct investments in relevant markets. The Company will not follow any index with reference to asset classes, countries, sectors or stocks. Aggregate asset class exposure to any one of the United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or Emerging Markets and to any individual industry sector will be limited to 50% of the Company's net assets, such values being assessed at the time of investment and for funds by reference to their published investment policy or, where appropriate, their underlying investment exposure. The Company may invest up to 20% of its net asset value in unlisted securities (excluding unquoted pooled investment vehicles) such values being assessed at the time of investment. The Company will not invest more than 15% of its net assets in any single investment, such values being assessed at the time of investment. Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. Derivatives may also be used outside of efficient portfolio management to meet the Company's investment objective. The Company may take outright short positions in relation to up to 30% of its net assets, with a limit on short sales of individual stocks of up to 5% of its net assets, such values being assessed at the time of investment. The Company may borrow up to 30% of net assets for short-term funding or long-term investment purposes. No more than 10%, in aggregate, of the value of the Company's total assets may be invested in other closed-ended investment funds except where such funds have themselves published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds. SHARE CAPITAL The Company's share capital comprises 305,000,000 Ordinary shares of 1p each, of which 71,023,695 (2018: 71,023,695) have been issued and fully paid. No Ordinary shares are held in treasury, and none were bought back or issued during the six months to 31st December 2019. PRINCIPAL RISKS AND UNCERTAINTIES The principal risks identified by the Board, and the steps the Board takes to mitigate them, are as follows: Investment strategy: Inappropriate long-term strategy, asset allocation and fund selection could lead to underperformance. The Board discusses investment performance at each of its meetings and the Directors receive reports detailing asset allocation, investment selection and performance. Business conditions and general economy: The Company's future performance is heavily dependent on the performance of different equity and currency markets. The Board cannot mitigate the risks arising from adverse market movements. However, diversification within the portfolio will reduce the impact. Further information is given in portfolio risks below. Portfolio risks - market price, foreign currency and interest rate risks: The twenty largest investments are listed above. Investment returns will be influenced by interest rates, inflation, investor sentiment, availability/cost of credit and general economic conditions in the UK and globally. A proportion of the portfolio is in investments denominated in foreign currencies and movements in exchange rates could significantly affect their sterling value. The Investment Manager takes all these factors into account when making investment decisions but the Company does not normally hedge against foreign currency movements. The Board's policy is to hold a spread of investments in order to reduce the impact of the risks arising from the above factors by investing in a spread of asset classes and geographic regions. Net asset value discount: The discount in the price at which the Company's shares trade to net asset value means that shareholders cannot realise the real underlying value of their investment. For a number of years the Company's share price has been at a significant discount to the Company's net asset value. The Directors review regularly the level of discount, however given the investor base of the Company, the Board is very restricted in its ability to influence the discount to net asset value. Investment Manager: The quality of the team employed by the Investment Manager is an important factor in delivering good performance and the loss of key staff could adversely affect returns. A representative of the Investment Manager attends each Board meeting and the Board is informed if any changes to the investment team employed by the Investment Manager are
proposed. Tax and regulatory risks: A breach of The Investment Trust (Approved Company) (Tax) Regulations 2011 (the 'Regulations') could lead to capital gains realised within the portfolio becoming subject to UK capital gains tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of company law could lead to criminal proceedings, financial and/or reputational damage. The Board employs Brompton Asset Management LLP as Investment Manager, and Maitland Administration Services Limited as Secretary and Administrator, to help manage the Company's legal and regulatory obligations. Operational: Disruption to, or failure of, the Investment Manager's or Administrator's accounting, dealing or payment systems or the Custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service. The Company receives regular reports from its contracted third parties. INVESTMENT MANAGEMENT ARRANGEMENT AND RELATED PARTY TRANSACTIONS In common with most investment trusts the Company does not have any executive directors or employees. The day-to-day management and administration of the Company, including investment management, accounting and company secretarial matters, and custodian arrangements are delegated to specialist third party service providers. Details of related party transactions are contained in the Annual Report. There have been no unusual material transactions with related parties during the period which have had a significant impact on the performance of the Company. GOING CONCERN AND VIABILITY The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the accounts as the assets of the Company consist mainly of securities that are readily realisable or cash and it has no significant liabilities. Investment income exceeds annual expenditure and current liquid net assets cover current annual expenses for many years. Accordingly, the Company is of the opinion that it has adequate financial resources to continue in operational existence for the foreseeable future which is considered to be in excess of five years. Five years is considered a reasonable time for investors when making their investment decisions. In reaching this view the Directors reviewed the anticipated level of annual expenditure against the cash and liquid assets within the portfolio. The Directors have also considered the risks the Company faces. AUDITORS The half year financial report has been reviewed, but not audited, by Ernst & Young LLP pursuant to the Auditing Practices Board guidance on the Review of Interim Financial Information. RESPONSIBILITY STATEMENT The Directors confirm that to the best of their knowledge: - The financial statements contained within the half year financial report to 31st December 2019 has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'; - The Chairman's statement, Directors' report or the Investment Manager's report include a fair review of important events that have occurred during the first six months of the financial year and their impact on the financial statements; - The Chairman's statement, Directors' report or the Investment Manager's report include a fair review of the potential risks and uncertainties for the remaining six months of the year; and - The Director's report and note 8 to the half year financial report include a fair review of the information concerning transactions with the investment manager and changes since the last annual report. By order of the Board Maitland Administration Services Limited, 20th March 2020 SCHEDULE OF TOP TWENTY INVESTMENTS at 31st December 2019 Holding Investment Type Bid-market Value % of Net Assets GBP '000 Fundsmith Equity Investment Fund 7,952 6.76 Fund Embark Group Unquoted 6,990 5.95 Investment Polar Capital - Investment Fund 5,728 4.87 Global Technology Fund FP Crux European Investment Fund 5,267 4.48 Special Situations Fund Schroder Income Investment Fund 4,945 4.21 Fund Aberforth Split Investment 4,506 3.83 Level Income Company Trust MI Chelverton UK Investment Fund 4,405 3.75 Equity Income Fund EF Brompton Investment Fund 4,355 3.70 Global Conservative Fund BlackRock Investment Fund 3,926 3.34 Continental European Income Fund Artemis Global Investment Fund 3,925 3.34 Income Fund BlackRock Gold & Investment Fund 3,735 3.18 General Fund Aquilus Investment Fund 3,721 3.17 Inflection Fund Lindsell Train Investment Fund 3,364 2.86 Japanese Equity Fund EF Brompton Investment Fund 2,981 2.53 Global Equity Fund Man GLG UK Investment Fund 2,973 2.53 Income Fund EF Brompton Investment Fund 2,962 2.52 Global Opportunities Fund MI Brompton UK Investment Fund 2,851 2.42 Recovery Unit Trust EF Brompton Investment Fund 2,830 2.41 Global Growth Fund Liontrust Asia Investment Fund 2,758 2.35 Income Fund First State Investment Fund 2,628 2.23 Indian Subcontinent Fund 82,802 70.43 Balance held in 18,716 15.92 21 investments Total 101,518 86.35 investments (excluding cash) 16,041 13.65 Net current assets (including cash) 117,559 100.00 Net Assets The investment portfolio, excluding cash, can be further analysed as follows: GBP'000 Investment funds 84,023 Unquoted investments 8,390 Investment companies and exchange traded 8,086 funds 1,019 Other quoted investments 101,518 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the six months ended 31st December 2019 (unaudited) Six months ended 31st December 2019 (unaudited) Revenue Return Capital Return Total GBP '000 GBP '000 Return GBP '000 Notes INCOME Investment income 1,127 - 1,127 Other operating 167 - 167 income Total income 2 1,294 - 1,294 GAINS AND LOSSES ON INVESTMENTS Losses on 5 - 5,022 5,022 investments at fair value through profit or loss Other exchange - (612) (612) losses Trail rebates - 2 2 1,294 4,412 5,706 EXPENSES Management and 3 (364) (622) (986) performance fees Other expenses (138) - (138) (502) (622) (1,124) PROFIT /LOSS) 792 3,790 4,582 BEFORE TAX Tax - - - PROFIT /(LOSS) FOR 792 3,790 4,582 THE PERIOD EARNINGS PER SHARE Ordinary shares 4 1.11p 5.34p 6.45p (pence) The total return column of this statement represents the Group's profit and loss account, prepared in accordance with IFRS. The supplementary Revenue Return and Capital Return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period. All income is attributable to the equity holders of the parent company. There are no minority interests. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the six months ended 31st December 2018 and the year ended 30th June 2019 Six months ended Year ended 31st December 2018 30th June 2019 (unaudited) (audited) Notes Revenue Capital Total Revenue Capital Total Return Return Return Return Return Return GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 INCOME Investment 930 - 930 1,890 - 1,890 income Other 147 - 147 349 - 349 operating income Total 2 1,077 - 1,077 2,239 - 2,239 income GAINS AND LOSSES ON INVESTMENT S Gains on investment s at fair value through 5 - (6,168) (6,168) - 1,992 1,992 profit or loss
Other - 405 405 - 443 443 exchange losses Trail - 2 2 - 5 5 rebates 1,077 (5,761) (4,684) 2,239 2,440 4,679 EXPENSES Management 3 (339) - (339) (668) (410) (1,098 and ) performanc e fees Other (131) - (131) (266) - (266) expenses (470) - (470) (954) (410) (1,364 ) PROFIT 607 (5,761) (5,154) 1,285 2,030 3,315 BEFORE TAX Tax - - - - - - PROFIT FOR 607 (5,761) (5,154) 1,285 2,030 3,315 THE PERIOD EARNINGS PER SHARE Ordinary 4 0.85p (8.11)p (7.26)p 1.81p 2.86p 4.67p shares (pence) The total return column of this statement represents the Group's profit and loss account, prepared in accordance with IFRS. The supplementary Revenue Return and Capital Return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the periods. All income is attributable to the equity holders of the parent company. There are no minority interests. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 31st December 2019 (unaudited) Share Share Special Retained premium reserve earnings capital Total GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 At 30th JUNE 710 21,573 56,908 34,780 113,971 2019 Total - - - 4,582 4,582 comprehensive income for the period Dividend paid - - - (994) (994) At 31st 710 21,573 56,908 38,368 117,559 DECEMBER 2019 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months ended 31st December 2018 (unaudited) Share Share Special Retained premium reserve earnings capital Total GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 At 30th JUNE 710 21,573 56,908 32,175 111,366 2018 Total - - - (5,154) (5,154) comprehensive income for the period Dividend paid - - - (710) (710) At 31st 710 21,573 56,908 26,311 105,502 DECEMBER 2018 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30th June 2019 (audited) Share Share Special Retained premium reserve earnings capital Total GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 At 30th JUNE 710 21,573 56,908 32,175 111,366 2018 Total - - - 3,315 3,315 comprehensive income for the year Dividend paid - - - (710) (710) At 30th JUNE 710 21,573 56,908 34,780 113,971 2019 CONSOLIDATED BALANCE SHEET at 31st December 2019 Notes 31st December 31st December 30th June 2019 2018 2019 (unaudited) (unaudited) (audited) GBP '000 GBP '000 GBP '000 NON-CURRENT ASSETS Investments at fair value through profit or loss 5 101,518 83,561 93,782 CURRENT ASSETS Other receivables 100 213 220 Cash and cash 16,786 21,938 20,605 equivalents 16,886 22,151 20,825 TOTAL ASSETS 118,404 105,712 114,607 CURRENT LIABILITIES Other payables (845) (210) (636) TOTAL ASSETS LESS CURRENT LIABILITIES 117,559 105,502 113,971 NET ASSETS 117,559 105,502 113,971 EQUITY ATTRIBUTABLE TO EQUITY HOLDERS Called-up share 710 710 710 capital Share premium 21,573 21,573 21,573 Special reserve 56,908 56,908 56,908 Retained earnings 6 38,368 26,311 34,780 TOTAL EQUITY 117,559 105,502 113,971 NET ASSET VALUE PER 7 165.52p 148.54p 160.47p ORDINARY SHARE (PENCE) The interim report was approved and authorised for issue by the Board on 20th March 2020. CONSOLIDATED CASH FLOW STATEMENT for the six months ended 31st December 2019 Six months Six months Year ended ended ended 31st December 31st December 30th June 2019 2018 2019 (unaudited) (unaudited) (audited) GBP '000 GBP '000 GBP '000 NET CASH INFLOW FROM 501 644 1,334 OPERATING ACTIVITIES INVESTING ACTIVITIES Purchase of investments (2,722) (2,023) (4,340) Sale of investments 8 8,595 8,851 NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES (2,714) 6,572 4,511 FINANCING Equity dividend paid (994) (710) (710) NET CASH INFLOW/(OUTFLOW) (3,207) 6,506 5,135 AFTER FINANCING INCREASE /(DECREASE) IN (3,207) 6,506 5,135 CASH RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Increase/(Decrease) in (3,207) 6,506 5,135 cash resulting from cash flows Exchange movements (612) 405 443 Movement in net funds (3,819) 6,911 5,578 Net funds at start of 20,605 15,027 15,027 period/year NET FUNDS AT OF 16,786 21,938 20,605 PERIOD/YEAR RECONCILIATION OF (LOSS)/PROFIT BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES Profit/( Loss) before 4,582 (5,154) 3,315 finance costs and taxation * (Gains)/Loss on (5,022) 6,168 (1,992) investments Exchange differences 612 (405) (443) Management fee rebates (2) (2) (5) Revenue profit before 170 607 875 finance costs and taxation Decrease in debtors 120 59 43 Increase/(Decrease) in 209 (24) 402 creditors Taxation - - 9 Management fee rebates 2 2 5 NET CASH INFLOW FROM 501 644 1,334 OPERATING ACTIVITIES * Includes dividends received in cash of GBP1,013,000 (30th June 2019: GBP1,599,000) (2018: GBP788,000), accumulation income of GBP222,000 (30th June 2019: GBP278,000) (2018: GBP255,000) and interest income of GBP167,000 (30th June 2019: GBP408,000) (2018: GBP84,000) NOTES TO THE INTERIM FINANCIAL STATEMENTS for the six months ended 31st December 2019 1. ACCOUNTING POLICIES The condensed consolidated interim financial statements comprise the unaudited results of the Company and its subsidiary, JIT Securities Limited (together "the Group"), for the six months to 31st December 2019. The comparative information for the six months to 31st December 2018 and the year to 30th June 2019 are a condensed set of accounts and do not constitute statutory accounts under the Companies Act 2006. Full statutory accounts for the year to 30th June 2019 included an unqualified audit report, did not contain any statements under section 498 of the Companies Act 2006, and have been filed with the Registrar of Companies. The half year financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', and are presented in pounds sterling, as this is the Group's functional currency. The same accounting policies have been followed in the interim financial statements as applied to the accounts for the year ended 30th June 2019, which were prepared in accordance with IFRSs as adopted by the European Union. No segmental reporting is provided as the Group is engaged in a single segment. 2. TOTAL INCOME Six months Six months Year ended 30th ended 31st ended 31st June December 2019 December 2018 2019 GBP'000 GBP'000 GBP'000 Income from Investments UK net dividend 1,045 792 1,691 income Unfranked 82 138 199 investment income 1,127 930 1,890 Other Income Bank interest 167 140 336 receivable Loan interest - 7 13 income
167 147 349 Six months Six months Year ended 30th ended 31st ended 31st June December 2019 December 2018 2019 GBP'000 GBP'000 GBP'000 Total income comprises Dividends 1,127 930 1,890 Other income 167 147 349 1,294 1,077 2,239 3. MANAGEMENT FEES Six months Six months Year ended ended 31st ended 31st 30th June December 2019 December 2018 2019 GBP'000 GBP'000 GBP'000 Investment 364 339 688 management fee Performance fee 622 - 410 986 339 1,098 The Investment Manager receives a management fee, payable quarterly in arrears, equivalent to an annual 0.75 per cent of total assets after the deduction of the value of any investments managed by the Investment Manager or its associates (as defined in the investment management agreement). The Investment Manager was also entitled to a performance fee of 15% of the growth in net assets over a hurdle of 3-month Sterling LIBOR plus 1% per annum, payable six monthly in arrears, subject to a high water mark. The aggregate of the Company's management fee and any performance fee is subject to a cap of 4.99% of net assets in any financial year (with any performance fee in excess of this cap capable of being earned in subsequent periods). The performance fee will be charged 100% to capital, in accordance with the Board's expectation of how any out-performance will be generated. A performance fee of GBP622,000 was payable in respect of the period. The Company has agreed with the Investment Manager that the existing performance fee was not appropriate in a low interest rate environment. Accordingly the current performance fee agreement ceased with effect from 1st January 2020. 4. RETURN PER ORDINARY SHARE Six months Six months ended Year ended ended 31st 31st December 30th June December 2019 2018 2019 GBP'000 GBP'000 GBP'000 Revenue return 792 607 1,285 Capital return 3,790 (5,761) 2,030 Total return 4,582 (5,154) 3,315 Weighted average 71,023,695 71,023,695 71,023,695 number of Ordinary shares Revenue return 1.11p 0.85p 1.81p per Ordinary share Capital return 5.34p (8.11)p 2.86p per Ordinary share Total return per 6.45p (7.26)p 4.67p Ordinary share 5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS At At At 31st December 31st December 2018 30th June 2019 GBP'000 2019 GBP'000 GBP'000 GROUP AND COMPANY 101,518 83,561 93,782 ANALYSIS OF INVESTMENT PORTFOLIO - GROUP AND COMPANY Six months ended 31st December 2019 Listed* Unlisted** Total (level 1 and 2) (level 3) GBP'000 GBP'000 GBP'000 Opening book cost 60,372 8,448 68,820 Opening investment 26,024 (1,062) 24,962 holding gains/(losses) Opening valuation 86,396 7,386 93,782 Movement in period: Purchase at cost 2,722 - 2,722 Sales - Proceeds (8) - (8) - Realised gains 8 - 8 on sales Movement in 4,010 1,004 5,014 investment holding gains/(losses) Closing valuation 93,128 8,390 101,518 at 31 December 2019 Closing book cost 63,094 8,448 71,542 Closing investment 30,034 (58) 29,976 holding gains/(losses) Closing valuation 93,128 8,390 101,518 * Listed investments include unit trust and OEIC funds which are valued at quoted prices. Included within Listed Investments is one monthly valued investment of GBP3,721,000 (30th June 2019: GBP3,698,000) (2018: GBP3,562,000). ** The Unlisted investments, representing just over 7% of the Company's NAV, have been valued in accordance with IPEVC valuation guidelines. The largest unquoted investment amounting to GBP6,990,000 (30th June 2019: GBP5,942,000) (2018: GBP3,268,000) was valued at the latest transaction price. The second largest investment has been valued based on cost and is in its development phase. A 10% increase or decrease in the earnings of the largest investment would not have a material impact on the valuation of the investment. This investment has not reached maturity and is not valued on the basis of its current earnings. There were no reclassifications for assets between Level 1, 2 and 3. Six months ended Six months ended Year 31st December 31st December ended 2019 2018 30th June GBP'000 GBP'000 2019 GBP'000 ANALYSIS OF CAPITAL GAINS AND LOSSES Realised gains on 8 4,168 4,175 sales of investments Increase in 5,014 (10,336) (2,183) investment holding gains/( losses) 5,022 (6,168) 1,992 6. RETAINED EARNINGS At At At 31st December 31st December 30th 2019 2018 June GBP'000 GBP'000 2019 GBP'000 Capital reserve - 6,769 8,339 7,977 realised Capital reserve - 29,959 16,809 24,962 revaluation Revenue reserve 1,640 1,163 1,841 38,368 26,311 34,780 7. NET ASSET VALUE PER ORDINARY SHARE 31st December 31st December 30th June 2019 2018 2019 GBP'000 GBP'000 GBP'000 Net assets 117,559 105,502 113,971 attributable to Ordinary shareholders Ordinary shares in 71,023,695 71,023,695 71,023,69 issue at end of 5 period Net asset value 165.52p 148.54p 160.47p per Ordinary share 8. TRANSACTIONS WITH THE INVESTMENT MANAGER During the period there have been no new related party transactions that have affected the financial position or performance of the Group. Since 1st January 2010 Brompton has acted as Investment Manager to the Company. This relationship is governed by an agreement dated 23rd December 2009. Mr Duffield is the senior partner of Brompton Asset Management Group LLP the ultimate parent of Brompton. Mr Duffield owns a majority (59.14%) of the shares in the Company. Mr Gamble has an immaterial holding in Brompton Asset Management Group Limited LLP. The total investment management fee payable to Brompton for the half year ended 31st December 2019 was GBP364,000 (30th June 2019: GBP688,000) (2018: GBP339,000) and at the half year GBP183,000 (30th June 2019: GBP177,000) (2018: GBP164,000) was accrued. The performance fee payable in respect of the six months ended 31st December 2019 was GBP622,000 (30th June 2019: GBP410,000) (2018: GBPnil). The existing performance fee arrangements ceased with effect from 1 January 2020. The Group's investments include seven funds managed by Brompton or its associates valued at GBP20,551,000 (30th June 2019: GBP19,680,000) (2018: GBP18,001,000). No investment management fees were payable directly by the Company in respect of these investments. 9. POST BALANCE SHEET EVENTS Coronavirus and the current pandemic has resulted in a significant fall in the market and introduced significant market volatility. Further details are provided in the Chairman's Statement and Investment Manager's Report above. The Company's unaudited NAV per share was 136.12p and the share price was 95p at close of business on 19th March 2020. ISIN: GB0002631041 Category Code: IR TIDM: NSI
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews Sequence No.: 53855 EQS News ID: 1003555 End of Announcement EQS News Service
(END) Dow Jones Newswires
March 20, 2020 12:53 ET (16:53 GMT)
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