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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| The Schiehallion Fund Limited | LSE:MNTN | London | Ordinary Share | GG00BJ0CDD21 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.96 | 0.90 | 0.96 | 0.95 | 0.93 | 0.93 | 153,253 | 16:35:13 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -309.14M | -319.33M | -0.3104 | -3.00 | 956.81M |
From Apr 2019 to Apr 2024
TIDMMNTN
RNS Number : 4971Z
Schiehallion Fund Limited (The)
21 September 2020
RNS Announcement
The Schiehallion Fund Limited
Legal Entity Identifier: 213800NQOLJA1JCWXQ56
Regulated Information Classification: Half Yearly Financial Report
The following is the unaudited Interim Financial Report for the six months to 31 July 2020 which was approved by the Board on 18 September 2020.
Summary of Unaudited Results*
Hot Features
Premium
31 July 31 January %
2020 2020 change
=================================== =========== ============== ========
Shareholders' funds US$514.65m US$493.08m
Net asset value per ordinary share 107.81c 103.32c 4.3
Share price 131.50c 121.50c 8.2
Premium 22.0% 17.6%
Number of shares in issue 477,350,002 477,250,002
Market capitalisation US$627.72m US$579.86m
Period from 4
Six months January 2019(#)
to 31 July 2020 to 31 July 2019
=========================== ================= ================
Revenue earnings per share 0.13c 0.78c
31 July 27 March %
2020 2019 (++) change
=================================== ========= =========== ========
Performance since inception
Net asset value per ordinary share 107.81c 99.66c 8.20
Share price 131.50c 100.00c 31.50
Notes
* For a definition of terms see Glossary of Terms and Alternative Performance Measures at the end of this announcement.
Alternative performance measure, see Glossary of Terms and Alternative Performance Measures at the end of this announcement .
(#) Date of incorporation of the Company.
++ 27 March 2019, the date the Company's ordinary shares were admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange.
All investment strategies have the potential of profit and loss.
Past performance is not a guide to future performance.
Interim Management Report
The global spread of COVID-19 has brought about a quantum of societal change that we would normally expect to see over years or decades in just a few monumental months. Baillie Gifford changed overnight from the office-based firm of the last 112 years to being a distributed organisation working from kitchen tables and spare bedrooms. The change was a shock, to be sure!
Surprisingly, then, our transition was seamless. With members in three time zones, the Private Companies team had a head start on adapting to a world of dispersed working and Zoom calls. The team was able to maintain a high standard of investment research and analytical insight despite the disruptions. I want to thank them for all their efforts.
As the world went into lockdown, we reviewed each of the companies held in the portfolio to determine their resiliency. We categorised them as Red, Amber, or Green based on how well placed we thought they were for weathering the storm.
Like many others, we braced ourselves for short term pain. And some companies felt that pain. Holdings in the travel industry in particular saw their revenues decline rapidly. However, most of our holdings did not miss a beat! Those that suffered have now largely bounced back, far quicker than we might have feared back in the dark days of March and April, and during the six months to 31 July 2020, the Company's NAV increased by 4.3%.
We thus find ourselves wondering whether we have not overestimated the near-term impact of COVID-19. As long-term investors, one of the behavioural inefficiencies we seek to exploit is the propensity for humans to overestimate the pace of change in the short-term, but to underestimate it in the long-term. It is thus natural that we now find ourselves pondering what the longer-term and as yet underappreciated ramifications may be.
In the meantime, many of our portfolio companies are flourishing. Scopely and Epic Games, both social gaming companies, are seeing strong user engagement and corresponding revenue growth as we all find new ways to spend time with our friends and families in a world of social distancing. Other companies are thriving for more idiosyncratic reasons. Whether it is Allbirds' successful launch of their new running shoe, The Dasher; or SpaceX's eagerly anticipated Crew Dragon mission to launch people into space, it is reassuring to be reminded that the whole world does not revolve around COVID-19.
Certainly, looking at the flow of new opportunities over recent months, you would never guess that we were operating during a pandemic. Since the end of January, we have invested in seven new companies. The diversity of what these companies do, and by extension the lack of correlation between the success or failure of each, is striking. To pick out a few, Grail is developing blood tests to detect early stage cancer when it is easier to treat and survival rates are higher; Graphcore is developing chips on which to run cutting edge artificial intelligence algorithms; and Epic Games is changing the nature of digital entertainment with Fortnite and the Unreal Engine.
Of equal focus has been supporting existing holdings in the portfolio. In the last six months we have made nine follow-on investments. Many of these were a result of companies bolstering their balance sheets to remove any financing risk given the uncertainty caused by COVID-19. This has enabled us to build on our positions in some exceptional companies such as Stripe, Tempus, TransferWise and Warby Parker, to name but a few. Initial construction of the portfolio has been deliberately flat, with initial holdings in companies being largely the same size. However, this will change as the portfolio matures, with larger positions emerging to reflect both underlying performance and our growing conviction in those opportunities.
As of the end of July, 62% of the capital raised in Schiehallion had been invested in high growth private companies. Over the coming months, we will likely have the opportunity to deploy more capital into some holdings as they enter public markets.
Schiehallion was founded on the belief that we could deliver attractive returns by investing shareholders' capital in great private companies, that we could then own for the long-term once they became public. With Airbnb and Grail both filing to go public, we are likely to get our first taste of this within Schiehallion. We are not approaching the IPOs of these companies as liquidity events. They are merely the next steps on the journeys of great companies that have the potential to grow over decades. The long-term structure of Schiehallion and patience of its shareholders make this possible, and we thank you for your continued support.
The principal risks and uncertainties facing the Company are set out in note 10.
Peter Singlehurst
Investment Objective and Policy
Investment Objective
The Schiehallion Fund Limited seeks to generate capital growth for investors through making long-term minority investments in later stage private businesses that the Company considers to have transformational growth potential and to have the potential to become publicly traded.
Responsibility Statement
The Directors of The Schiehallion Fund Limited confirm that to the best of their knowledge:
a) the Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Directors have elected to prepare financial statements that comply with International Financial Reporting Standards as issued by the International Accounting Standards Board;
b) the Interim Management Report includes a fair review of the information required by:
i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being 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, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the enterprise during that period.
By Order of the Board
Linda Yueh
Chairperson
18 September 2020
Statement of Comprehensive Income (unaudited)
For the six months For the period from For the period from
to 31 July 2020 4 January 2019 to 4 January 2019 to
31 July 2019 31 January 2020
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
========================== ======== ======== ======== ======== ======== ======== ======== ======== ========
Gains on investments - 20,809 20,809 - 1,896 1,896 - 11,068 11,068
Currency gains - 24 24 - 7 7 - 10 10
Income 2 2,191 - 2,191 4,064 - 4,064 7,747 - 7,747
Investment management
fee 3 (1,252) - (1,252) (203) - (203) (929) - (929)
Other administrative
expenses 4 (331) - (331) (154) - (154) (458) - (458) ========================= ======== ======== ======== ======== ======== ======== ======== ======== ======== Operating profit before taxation 608 20,833 21,441 3,707 1,903 5,610 6,360 11,078 17,438 ========================== ======== ======== ======== ======== ======== ======== ======== ======== ======== Tax on ordinary activities - - - - - - - - - ========================== ======== ======== ======== ======== ======== ======== ======== ======== ======== Profit and total comprehensive income for the period 608 20,833 21,441 3,707 1,903 5,610 6,360 11,078 17,438 ========================== ======== ======== ======== ======== ======== ======== ======== ======== ======== Earnings per ordinary share 5 0.13c 4.37c 4.50c 0.78c 0.40c 1.18c 1.33c 2.32c 3.65c ========================= ======== ======== ======== ======== ======== ======== ======== ======== ========
The total column of this Statement represents the Statement of Comprehensive Income of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing operations.
Statement of Financial Position (unaudited)
At 31 July At 31 July At 31 January At 31 January
Notes 2020 2020 2020 2020
US$'000 US$'000 US$'000 US$'000
================================ ========== =========== ============= =============
Fixed assets
Investments held at fair value
through profit or loss 7 320,854 175,046
=============================== ========== =========== ============= =============
Current assets
US Treasury Bills 179,614 308,135
Cash and cash equivalents 14,970 10,133
Debtors 68 271
=============================== ========== =========== ============= =============
194,652 318,539
================================ ========== =========== ============= =============
Current liabilities
================================ ========== =========== ============= =============
Amounts falling due within one
year (854) (505)
================================ ========== =========== ============= =============
Net current assets 193,798 318,034
================================ ========== =========== ============= =============
Net assets 514,652 493,080
================================ ========== =========== ============= =============
Capital and reserves
Share capital 8 475,773 475,642
Capital reserve 31,911 11,078
Revenue reserve 6,968 6,360
=============================== ========== =========== ============= =============
Shareholders ' funds 514,652 493,080
================================ ========== =========== ============= =============
Net asset value per ordinary
share 107.81 c 103.32 c
=============================== ========== =========== ============= =============
Ordinary shares in issue 8 477,350,002 477,250,002
=============================== ========== =========== ============= =============
Statement of Changes in Equity (unaudited)
Six months to 31 July 2020
Share Capital Revenue Shareholders'
capital reserve reserve funds
Notes US$'000 US$'000 US$'000 US$'000
===================================== ======== ======== ======== =============
Shareholders' funds at 31 January
2020 475,642 11,078 6,360 493,080
Ordinary shares issued 8 131 - - 131
Total comprehensive income for the
period - 20,833 608 21,441
===================================== ======== ======== ======== =============
Shareholders ' funds at 31 July 2020 475,773 31,911 6,968 514,652
===================================== ======== ======== ======== =============
For the period from 4 January 2019 to 31 July 2019
Share Capital Revenue Shareholders'
capital reserve reserve funds
US$'000 US$'000 US$'000 US$'000
====================================== ======== ======== ======== =============
Shareholders' funds at 4 January 2019 - - - -
Ordinary shares issued 475,642 - - 475,642
Total comprehensive income for the
period - 1,903 3,707 5,610
====================================== ======== ======== ======== =============
Shareholders ' funds at 31 July 2019 475,642 1,903 3,707 481,252
====================================== ======== ======== ======== =============
Statement of Cash Flows (unaudited)
Six months to Period from 4 January
31 July 2020 2019
to 31 July 2019
Notes US$'000 US$'000 US$'000 US$'000
========================================== ========= ======== =========== ==========
Cash flows from operating activities
Operating profit before taxation 21,441 5,610
US Treasury Bills interest (2,394) (3,936)
Net gains on investments (20,809) (1,896)
Currency gains (24) (7)
Changes in debtors and creditors 552 218
========================================== ========= ======== =========== ==========
Net cash used in operating activities* (1,234) (11)
========================================== ========= ======== =========== ==========
Cash flows from investing activities
Acquisitions of US Treasury Bills (120,028) (583,906)
Disposals of US Treasury Bills 250,943 197,825
Acquisitions of investments (124,999) (80,546)
Disposals of investments - -
========================================== ========= ======== =========== ==========
Net cash from/(used in) investing
activities 5,916 (466,627)
========================================== ========= ======== =========== ==========
Cash flows from financing activities
Ordinary shares issued 131 475,643
========================================== ========= ======== =========== ==========
Net cash from financing activities 131 475,643
========================================== ========= ======== =========== ==========
Net increase in cash and cash equivalents 4,813 9,005
Effect of exchange rate fluctuations
on cash and cash
equivalents 24 7
Cash and cash equivalents at start
of period 10,133 -
========================================== ========= ======== =========== ==========
Cash and cash equivalents at 31
July 14,970 9,012
========================================== ========= ======== =========== ==========
* Cash from operations includes interest received of US$17,000 (2019 - US$194,000)
List of Investments as at 31 July 2020 (unaudited)
==================================================
2020 2020 2020
Value Value % of
net
assets*
Name Business Country US$'000 US$'000
=============================== =============================== ================= ======== ======== =========
Warby Parker (JAND Inc) Online and physical corrective
Series A eyewear
Preferred retailer United States 9,930
Warby Parker (JAND Inc) Online and physical corrective
Series C eyewear
Preferred retailer United States 8,393
Warby Parker (JAND Inc) Online and physical corrective
Series F eyewear
Preferred retailer United States 12,143
30,466 5.9
Scopely Inc Common Online gaming company United States 6,237
Scopely Inc Series D Preferred Online gaming company United States 16,192
========
22,429 4.4
Online international
money transfer
TransferWise Limited Ordinary service United Kingdom 12,690
Online international
TransferWise Limited Seed money transfer
Preferred service United Kingdom 3,220
Online international
TransferWise Limited Series money transfer
A Preferred service United Kingdom 4,191
Online international
TransferWise Limited Series money transfer
B Preferred service United Kingdom 918
Online international
TransferWise Limited Series money transfer
C Preferred service United Kingdom 522
Online international
TransferWise Limited Series money transfer
D Preferred service United Kingdom 141
Online international
TransferWise Limited Series money transfer
E Preferred service United Kingdom 15
========
21,697 4.2
Oncological records aggregator
Tempus Labs Inc Series and
E Preferred diagnostic testing provider United States 7,447
Oncological records aggregator
Tempus Labs Inc Series and
F Preferred diagnostic testing provider United States 11,877
Oncological records aggregator
Tempus Labs Inc Series and
G Preferred diagnostic testing provider United States 1,095
========
20,419 4.0
Epic Games Inc Video game developer United States 20,000 3.9
Stripe Inc Series G Preferred Online payment platform United States 19,843 3.9
List of Investments as at 31 July 2020 (unaudited)
2020 2020 2020
Value Value % of
net
assets*
Name Business Country US$'000 US$'000
================================ =============================== ================ ======== ======== =========
Microbial seed treatments
to increase
Indigo Agriculture Inc crop yields and grain
Common marketplace United States 1,077
Microbial seed treatments
Indigo Agriculture Inc to increase
Warrants March crop yields and grain
2020 marketplace United States 1,931
Microbial seed treatments
to increase
Indigo Agriculture Inc crop yields and grain
Series F Preferred marketplace United States 12,979
Microbial seed treatments
to increase
Indigo Agriculture Inc crop yields and grain
Series F Warrants marketplace United States 418
16,405 3.2
Designs, manufactures
Space Exploration Technologies and launches
Corp advanced rockets and
Series K Preferred spacecraft United States 13,235 2.6
Jobs marketplace for
RigUp Inc Series D Preferred the energy sector United States 10,500
Jobs marketplace for
RigUp Inc Series D-1 Preferred the energy sector United States 2,000
========
12,500 2.4
Social media and news
ByteDance Limited Series aggregation
E Preferred company China 11,678 2.3
Cohesity Inc Series E
Preferred Data storage United States 11,057 2.1
FlixMobility GmbH Series
F2 Preferred European mobility provider Germany 10,694 2.1
Online platform which
Affirm Holdings Inc Convertible provides point of
Promissory Note sale consumer finance United States 4,000
Online platform which
Affirm Holdings Inc Series provides point of
A Preferred sale consumer finance United States 6,131
========
10,131 2.0
Graphcore Limited Series
D Preferred Computer chip developer United Kingdom 10,000 1.9
Grail Inc Series D Preferred Oncology testing United States 10,000 1.9
Mulberry Health Inc Series Healthcare insurance
A11 Preferred provider United States 10,000 1.9
Zymergen Inc Synthetic biology United States 10,000 1.9
Sustainable direct-to-customer
Allbirds Inc Series Seed footwear
Preferred brand United States 2,817
Sustainable direct-to-customer
Allbirds Inc Series D footwear
Preferred brand United States 6,984
========
9,801 1.9
Develops software for
cardiovascular
HeartFlow Inc Series E disease diagnosis and
Preferred treatment United States 9,794 1.9
Marketplace for truckers
Convoy Inc Series D Preferred and shippers United States 9,727 1.9
Manufactures and develops
Carbon Inc Series E Preferred 3D printers United States 9,477 1.8
Tanium Inc Class B Common Online security management United States 9,166 1.8
List of Investments as at 31 July 2020 (unaudited)
2020 2020 2020
Value Value % of
net
assets*
Name Business Country US$'000 US$'000
============================== ======================== ================ ======== ======== =========
Away (JRSK Inc) Convertible
Promissory Travel and lifestyle
Note brand United States 2,500
Away (JRSK Inc) Series Travel and lifestyle
Seed Preferred brand United States 2,012
Away (JRSK Inc) Series Travel and lifestyle
D Preferred brand United States 4,227
========
8,739 1.7
Online market place for
travel
Airbnb Inc Class A Common accommodation United States 3,229
Online market place for
travel
Airbnb Inc Series D Preferred accommodation United States 238
Online market place for
travel
Airbnb Inc Series E Preferred accommodation United States 129
3,596 0.7
======================================================================== ======== ======== =========
Total unlisted securities 320,854 62.3
========================================================================== ======== ======== =========
US Treasury Bill 10/09/2020 29,810
US Treasury Bill 03/12/2020 29,737
US Treasury Bill 28/01/2021 29,427
US Treasury Bill 25/02/2021 29,819
US Treasury Bill 20/05/2021 31,260
US Treasury Bill 17/06/2021 29,561
========
Total US Treasury Bills 179,614 34.9
Cash 14,970 2.9
Other current assets and liabilities (786) (0.1)
======================================================== ================ ======== ======== =========
Net current assets 193,798 37.7
======================================================== ================ ======== ======== =========
Net assets 514,652 100.0
======================================================== ================ ======== ======== =========
* See Glossary of Terms and Alternative Performance Measures at the end of this announcement
Distribution of Net Assets (unaudited)
Geographical
As at As at
31 July 31 January
2020
2020 %
%
==================== ============== =================
United States 51.8 29.2
United Kingdom 6.1 2.0
China 2.3 2.0
Germany 2.1 2.3
US Treasury Bills 34.9 62.5
Net Current Assets 2.8 2.0
Total 100.0 100.0
==================== ============== =================
Sectoral
As at As at
31 July 31 January
2020
2020 %
%
======================== ============== =================
Communication Services 2.3 2.0
Consumer Discretionary 10.2 7.8
Consumer Staples 3.2 3.3
Financials 12.0 4.3
Healthcare 7.8 5.6
Industrials 9.0 8.5
Information Technology 15.9 4.0
Materials 1.9 -
US Treasury Bills 34.9 62.5
Net Current Assets 2.8 2.0
Total 100.0 100.0
======================== ============== =================
The above sectoral distribution is not derived from any index.
Notes to the Financial Statements (unaudited)
=============================================
1. Basis of Accounting
The condensed Financial Statements for the six months to 31 July 2020 comprises the statements
set out on the previous pages together with the related notes below. They have been prepared
in accordance with International Financial Reporting Standards (IFRS). The Financial Statements
for the six months to 31 July 2020 have been prepared on the basis of the same accounting
policies as set out in the Company's Annual Report and Financial Statements for the period
from 4 January 2019 to 31 January 2020.
Going Concern
In accordance with The Financial Reporting Council's guidance on going concern and liquidity
risk, including its COVID-19 guidance, the Directors have undertaken a rigorous review of
the Company's ability to continue as a going concern and specifically in the context of the
coronavirus pandemic.
Having considered the Company's principal risks and uncertainties, as set out below, together
with its current position, investment objective and policy, its assets and liabilities, and
projected income and expenditure, it is the Directors' opinion that the Company has adequate
resources to continue in operational existence for the foreseeable future. The Directors have
considered the Company's principal and emerging risks as detailed on pages 6 and 7 of the
Company's Annual Report and Financial Statements for the period from 4 January 2019 to 31
January 2020 and the Investment Manager ensures that the Company holds at all times a proportion
of assets that is sufficiently liquid to enable it to discharge its payment obligations. Accordingly,
the Directors consider it appropriate to adopt the going concern basis of accounting in preparing
these Financial Statements and confirm that they are not aware of any material uncertainties
which may affect the Company's ability to continue to do so over a period of at least twelve
months from the date of approval of the Financial Statements.
=================================================================================================================
2. Income
6 months to Period from 4 January 2019 to 31 Period from 4 January 2019 to 31
31 July 2020 July 2019 January 2020
US$'000 US$'000 US$'000
=========================== ============== ================================= =================================
US Treasury Bills interest 2,394 3,742 7,292
Overseas interest (220) 128 251
Deposit interest 17 194 204
=============================== ============== ================================= =================================
Total income 2,191 4,064 7,747
=============================== ============== ================================= =================================
Notes to the Financial Statements (unaudited) (Ctd)
===================================================
3. Investment Management Fee
6 months to Period from 4 January 2019 to 31 Period from 4 January 2019 to 31
31 July 2020 July 2019 January 2020
US$'000 US$'000 US$'000
================ =============== ================================== ==================================
Investment
Management Fee 1,252 203 929
================ =============== ================================== ==================================
The Company has appointed Baillie Gifford & Co Limited as its Investment Manager (the 'Investment
Manager'). As the entity appointed to be responsible for risk management and portfolio management,
the Investment Manager has also been appointed as the Company's Alternative Investment Fund
Manager ('AIFM'). Baillie Gifford & Co Limited has delegated portfolio management services
to Baillie Gifford Overseas Limited. The Investment Management Agreement is terminable on
not less than six months' notice.
Under the terms of the Investment Management Agreement, the Investment Manager will be entitled
to an annual fee (exclusive of VAT, which shall be added where applicable) of: 0.9% on the
net asset value excluding cash or cash equivalent assets up to and including US$650 million;
0.8% on the net asset value excluding cash or cash equivalent assets exceeding US$650 million
up to and including US$1.3 billion; and 0.7% on the net asset value excluding cash or cash
equivalent assets exceeding US$1.3 billion. Management fees are calculated and payable quarterly.
4. Other Administrative Expenses
Period from 4
6 months to January 2019 to 31 Period from 4 January 2019 to 31
31 July 2020 July 2019 January 2020
US$'000 US$'000 US$'000
================= =============== ================================== ==================================
General
administrative
expenses 168 79 184
Administrator's
fee 47 28 63
Auditor's
remuneration for
audit services 46 - 93
Directors' Fees 70 47 118
================= =============== ================================== ==================================
331 154 458
================= =============== ================================== ==================================
In the period from 4 January 2019 to 31 July 2019 and 4 January 2019 to 31 January 2020 non-audit
fees paid to KPMG Channel Islands Limited amounted to US$74,000 in respect of procedural services
related to the initial listing of the Company. As these costs related to the initial listing
of the Company, they are capital in nature and included within the costs of issuing shares.
There were no non-audit fees incurred during the six months to 31 July 2020.
==========================================================================================================
5. Earnings per Ordinary Share
==========================================================================================================
Period from 4
6 months to January 2019 to 31 Period from 4 January 2019 to 31
31 July 2020 July 2019 January 2020
================= =============== ================================== ==================================
US$'000 c US$'000 c US$'000 c
================= ======= ====== ================ ================ ================ ================
Revenue return on
ordinary
activities after
taxation 608 0.13 3,707 0.78 6,360 1.33
Capital return on
ordinary
activities after
taxation 20,833 4.37 1,903 0.40 11,078 2.32
================= ======= ====== ================ ================ ================ ================
Total net return 21,441 4.50 5,610 1.18 17,438 3.65
Weighted average
number of shares
in issue 477,267,310 277,250,002 277,250,002
================= =============== ================================== ==================================
Net return per ordinary share is based on the above totals of revenue and capital and the
weighted average number of ordinary shares in issue during each period. There are no dilutive
or potentially dilutive shares in issue.
Notes to the Financial Statements (unaudited) (Ctd)
===================================================
6. Ordinary Dividends
There were no dividends paid or proposed in respect of the six months (2019 - none).
============================================================================================================
7. Financial Instruments
Fair Value Hierarchy
The fair value hierarchy used to analyse the fair values of financial assets is described
below. The levels are determined by the lowest (that is the least reliable or least independently
observable) level of input that is significant to the fair value measurement for the individual
investment in its entirety as follows:
Level 1 - using unadjusted quoted prices for identical instruments in an active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that are directly
or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is unavailable).
============================================================================================================
Level 1 Level 2 Level 3 Total
As at 31 July 2020 US$'000 US$'000 US$'000 US$'000
======================================================= ============ =========== =========== ===========
Unlisted ordinary shares/warrants - - 64,748 64,748
Unlisted preference shares * - - 249,606 249,606
Unlisted convertible promissory notes - - 6,500 6,500
======================================================= ============ =========== =========== ===========
Total financial asset investments - - 320,854 320,854
======================================================= ============ =========== =========== ===========
Level 1 Level 2 Level 3 Total
As at 31 January 2020 US$'000 US$'000 US$'000 US$'000
======================================================= ============ =========== =========== ===========
Unlisted ordinary shares/warrants - - 10,817 10,817
Unlisted preference shares * - - 149,902 149,902
Unlisted convertible promissory notes - - 14,327 14,327
======================================================= ============ =========== =========== ===========
Total financial asset investments - - 175,046 175,046
====================================================== ================= =========== =========== ===========
* The investments in preference shares are not classified as equity holdings as they include
liquidation preference rights that determine the repayment (or multiple thereof) of the original
investment in the event of a liquidation event such as a take-over.
There have been no transfers between levels of fair value hierarchy during the six months
to 31 July 2020 or during the period from 4 January 2019 to 31 January 2020.
The valuation techniques used by the Company are explained in the accounting policies on page
35 of the Company's Annual Report and Financial Statements for the period from incorporation
on 4 January 2019 to 31 January 2020. Listed investments are categorised as Level 1 if they
are valued using unadjusted quoted prices for identical instruments in an active market and
as Level 2 if they do not meet all these criteria but are, nonetheless, valued using market
data. The Company's holdings in unlisted investments are categorised as Level 3 as unobservable
data is a significant input to their fair value measurements.
Notes to the Financial Statements (unaudited) (Ctd)
===================================================
8. Share Capital
iii) 2020 2020 2019 2019
Number US$'000 Number US$'000
================================================ ============ ========== =========== ==========
Allotted, called up and fully paid ordinary
shares of US$1 each 477,350,002 475,773 477,250,002 475,642
================================================ ============ ========== =========== ==========
By way of a special resolution dated 15 March 2019 the Directors have a general authority
to allot up to 720,000,000 ordinary shares or C shares, such figure to include the ordinary
shares issued at the initial placing. 477,250,000 ordinary shares were issued at the Company's
initial placing hence the Company has the ability to issue a further 242,750,000 shares under
this existing authority which expires at the end of the period concluding immediately prior
to the Annual General Meeting of the Company to be held in 2024 (or, if earlier, five years
from the date of the resolution). During the six months to 31 July 2020 the Company issued
100,000 ordinary shares raising net proceeds of US$131,000. As at 31 July 2020 the Company
has the authority to issue 242,650,000 ordinary shares. In the period from 1 August 2020 to
18 September 2020 the Company issued a further 100,000 shares raising net proceeds of US$131,000.
By way of an ordinary resolution passed on 19 May 2020 the Directors of the Company have general
authority to make market purchases of up to 71,539,775 ordinary shares, being 14.99% of the
ordinary shares in issue. This authority will expire at the conclusion of the Annual General
Meeting of the Company to be held in respect of the year ending 31 January 2021. No shares
have been bought back during the six months ended 31 July 2020 (period from 4 January 2019
to 31 July 2019 - nil) hence the authority remains at 71,539,775 ordinary shares.
9. Transaction Costs
During the period the Company incurred transaction costs on purchases of investments of US$nil
(period 4 January 2019 to 31 July 2019 - US$50,000; period 4 January 2019 to 31 January 2020
- US$50,000) and transaction costs on sales of US$ nil (period 4 January 2019 to 31 July 2019
- US$nil; period 4 January 2019 to 31 January 2020 - US$nil).
================================================================================================================
10. Principal Risk and Uncertainties
The principal risks facing the Company are financial risk, investee companies risk, valuation
risk, investment strategy risk, discount risk, legal and regulatory risk, custody and depositary
risk, operational risk and political and associated economic risk. An explanation of these
risks and how they are managed is set out on pages 6 and 7 of the Company's Annual Report
and Financial Statements for the period from 4 January 2019 to 31 January 2020 which is available
on the Company's website: www.schiehallionfund.com. The principal risks and uncertainties
have not changed since the date of the Annual Report and Financial Statements with the exception
of the current unprecedented situation surrounding the COVID-19 pandemic.
The Board of The Schiehallion Fund Limited and the Investment Manager are actively working
together to monitor the effect of COVID-19 on the Company and its investee companies. The
Investment Manager has measures in place to safeguard the health of its employees whilst remaining
fully operational and providing business continuity to its clients. In particular, the Board
and Investment Manager are monitoring closely the following:
- the valuation and liquidity of Schiehallion's portfolio companies;
- the operational arrangements in place at Baillie Gifford & Co; and
- the ability of Schiehallion's third-party service providers to continue to provide contracted
services.
The Investment Manager and third-party service providers remain fully operational and business
continuity plans are working as expected.
Political developments are closely monitored and considered by the Board. The Board continues
to monitor developments as they occur following the UK's departure from the European Union
but believes that the Company's global portfolio, with only a modest exposure to the United
Kingdom, positions the Company to be suitably insulated from Brexit-related risks.
================================================================================================================
11. Transactions with Related Parties and the Investment Manager and Administrator
There have been no transactions with related parties during the first six months of the current
financial year that have materially affected the financial position or the performance of
the Company during that period and there have been no changes in the related party transactions
described in the last Annual Report and Financial Statements that could have such an effect
on the Company during that period.
None of the views expressed in this document should be construed as advice to buy or sell
a particular investment.
Glossary of Terms and Alternative Performance Measures ('APM')
Total Assets
The total value of all assets held less all liabilities (other than liabilities in the form
of borrowings).
Shareholders' Funds and Net Asset Value
Shareholders' Funds is the value of all assets held less all liabilities, with borrowings
deducted at book cost. Net Asset Value (NAV) is the value of all assets held less all liabilities,
with borrowings deducted at either fair value or par value as described below. Per share amounts
are calculated by dividing the relevant figure by the number of ordinary shares in issue.
Net Liquid Assets
Net liquid assets comprise current assets less current liabilities (excluding borrowings).
Discount/Premium (APM)
As stock markets and share prices vary, an investment trust's share price is rarely the same
as its NAV. When the share price is lower than the NAV per share it is said to be trading
at a discount. The size of the discount is calculated by subtracting the share price from
the NAV per share and is usually expressed as a percentage of the NAV per share. If the share
price is higher than the NAV per share, it is said to be trading at a premium.
Ongoing Charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a percentage of
the average net asset value (with debt at fair value).
None of the views expressed in this document should be construed as advice to buy or sell a particular investment.
You can find up to date performance information about The Schiehallion Fund on the Schiehallion Fund page of the Managers' website at wwww.schiehallionfund.com (++)
The Schiehallion Fund Limited is managed by Baillie Gifford, the Edinburgh based fund management group with around GBP280 billion under management and advice in active equity and bond portfolios for clients in the UK and throughout the world (as at 18 September 2020). The Administrator, Secretary and Designated Manager is Alter Domus (Guernsey) Limited.
++ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.
Past performance is not a guide to future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares.
21 September 2020
For further information please contact:
Alex Blake, Baillie Gifford & Co
Tel: 0131 275 2859 or 07773 246035
Mark Knight, Four Communications
Tel: 0203 697 4200 or 07803 758810
- ends -
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