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Share Name Share Symbol Market Type Share ISIN Share Description
Tr European Growth Trust Plc LSE:TRG London Ordinary Share GB0009066928 ORD 12.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 1,280.00 1,265.00 1,280.00 1,290.00 1,260.00 1,280.00 52,861 16:29:55
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 8.2 6.7 11.9 107.2 1,570

TR European Growth Trust PLC Half-year Report

23/02/2021 7:00am

UK Regulatory (RNS & others)


TIDMTRG

RNS Number : 9552P

TR European Growth Trust PLC

23 February 2021

 
                     Legal Entity Identifier: 213800N1B1HCQG2W4V90 
 
                              TR EUROPEAN GROWTH TRUST PLC 
               Unaudited results for the half-year ended 31 December 2020 
 
                    This announcement contains regulated information 
 
                                  Investment Objective 
       The Company seeks capital growth by investing in smaller and medium sized 
       companies which are quoted, domiciled, listed or have operations in Europe 
                                        (ex UK). 
 
             Performance highlights for the six months to 31 December 2020 
                *    Net asset value per share total return(1) was 37.1% 
                        compared to a total return from the benchmark 
                                      index(2) of 23.2% 
 
 
 
               *    Share price total return(3) was 54.4% compared to the 
                                  sector average(4) of 41.2% 
 
 
 
                *    The shares were trading at a discount(5) of 9.1% at 
                     the period end, narrowing from 19.2% at 30 June 2020 
 
 
 
                 *    Interim dividend of 8.20 pence per ordinary share 
                         declared (2019: 7.80p), an increase of 5.1% 
 
 
 Total return performance (including dividends reinvested and excluding 
  transaction costs) 
                                6 months    1 year    3 years   5 years   10 years 
                                       %         %          %         %          % 
----------------------------  ----------  --------  ---------  --------  --------- 
 NAV(1)                             37.1      33.2       26.0     116.3      230.9 
 Benchmark index(2)                 23.2      18.9       25.2      90.4      168.2 
 Average sector(4) NAV              30.3      30.0       38.9     107.0      228.4 
 Share price(3)                     54.4      36.4       14.5     115.9      277.5 
 Average sector(4) share 
  price                             41.2      32.6       38.9     109.1      267.9 
 

Financial highlights

 
                                                  at 31 December 2020       at 30 June 2020 
--------------------------------------------  -----------------------  -------------------- 
 Shareholders' funds 
 Net assets (GBP'000)                                         708,689               523,374 
 Net asset value per ordinary share                         1,414.31p             1,044.48p 
 Mid-market price per ordinary share                        1,285.00p               844.00p 
 
                                                      Half-year ended            Year ended 
                                                     31 December 2020       30 June 2020(6) 
                                                              GBP'000               GBP'000 
 Total return to equity shareholders 
 Revenue return after taxation                                    680                 6,954 
 Capital return after taxation                                191,750                 6,571 
                                                        -------------           ----------- 
 Total return                                                 192,430                13,525 
                                                              =======                ====== 
 Total return per ordinary share 
 Revenue                                                        1.36p                13.88p 
 Capital                                                      382.67p                13.11p 
                                                        -------------           ----------- 
 Total return per ordinary share                              384.03p                26.99p 
                                                              =======                ====== 
 
 
        1. Net asset value per share total return (including dividends reinvested 
        and excluding the cost of reinvestment) 
        2. The benchmark index is the Euromoney Smaller European Companies Index 
        (ex UK) expressed in Sterling 
        3. Share price total return (with dividends reinvested) using mid-market 
        closing price 
        4. The sector is the AIC European Smaller Companies sector 
        5. The discount is calculated using published daily net asset values including 
        current year revenue 
        6. The figures have been prepared on a Company only basis following the 
        liquidation of the Company's subsidiary during the year ended 30 June 
        2020. These figures have previously been reported on a consolidated basis. 
 
        Sources: Janus Henderson, Morningstar Direct, Refinitiv Datastream 
 
 
 INTERIM MANAGEMENT REPORT 
 
  Chairman's statement 
 
  Performance 
  The six month period to 31 December 2020 has been a strong one for your 
  Company. The NAV total return performance for the period was 37.1% against 
  the benchmark of 23.2% for the same period. The share price increased 
  by 54.4% on a total return basis over the period, ending the calendar 
  year at GBP12.85 having started the six months at GBP8.44 per share. 
 
  The backdrop of the Covid-19 pandemic has dominated the period and sadly 
  a large second wave of infection swamped the Continent in the latter months 
  of the half-year. The stock market continued its bifurcation into very 
  expensive 'quality growth' names and cheap 'value' names, but with significant 
  bouts of style rotation occasionally happening. Our Fund Manager's balanced 
  approach to investing, with a combination of sensibly priced growth and 
  self-help cheap stocks has navigated these tricky waters very well. 
 
  Dividend 
  Having considered performance over the period, the Company's overall financial 
  position and the outlook for the remainder of the financial year, the 
  Board has declared an interim dividend of 8.20 pence per ordinary share. 
  This will be paid on 23 April 2021 to shareholders on the register on 
  26 March 2021, with shares trading ex-dividend on 25 March 2021. 
 
  Outlook 
  The opening weeks of 2021 showed some alarming developments in the progress 
  of Covid-19. Winter plus new and more infectious variants of the virus 
  have driven the substantial second wave of infection and a distressing 
  increase in deaths. However, with the advent of multiple vaccines potentially 
  offering a light out of the darkness of the pandemic, it is a reasonable 
  supposition that the market will increasingly begin to worry about the 
  inflationary effects of stimulus and that valuation may well matter once 
  again. A constructive US administration will make for a more stable backdrop. 
  Positively, the uncertainties of Brexit are largely behind us. There is 
  definite cause for cautious optimism. Although our Fund Manager is wary 
  of valuation in certain pockets of the market, his team continue to find 
  undervalued investment opportunities in which to invest your capital. 
 
  Christopher Casey 
  Chairman 
  22 February 2021 
 
 
 Fund Manager's report 
 
  The first half of the financial year saw the Company outperform the benchmark 
  in a market that was recovering from the shock of the Covid-19 pandemic, 
  aided by an enormous monetary and fiscal response. Performance was driven 
  by a combination of structural growth stories that have benefited from 
  the accelerant of the coronavirus, early cycle value names anticipating 
  a recovery, the rerating of hidden ESG stories in the portfolio and the 
  resolution of the Brexit dilemma. 
 
  The impact of the pandemic will be with us for some time to come. There 
  are, however, notes of optimism, despite the mixed handling of the health 
  crisis across Europe; the Next Generation EU recovery fund breaks the 
  taboo of fiscal transfers within the European Union, the mantra of austerity 
  economics has been dealt a serious blow which should provide relief to 
  southern EU members and the Trump Twitter account will no longer cause 
  the market volatility and trans-Atlantic trade tensions that characterised 
  much of the last few years. The strong technology offering in the European 
  small cap market has been highlighted by the discovery of the vaccine 
  by German (formerly) small cap BioNtech which, to our shame, we did not 
  own! 
 
  The volatility of 2020 has highlighted the benefits of investing across 
  the corporate lifecycle, with a mix of early stage growth businesses, 
  quality growth, mature cash cows and turnaround stories. Westwing, an 
  extremely cheap early stage growth investment in the portfolio saw a share 
  price increase of 352.9% in the period when its online interior living 
  offer saw enormous growth as consumers stayed at home and purchased online. 
  Similarly, more mature Swedish-listed online DIY and furniture store BHG 
  Group was a big contributor to performance as Covid-19 accelerated the 
  shift to online. The contribution of these growth names was supplemented 
  with good performance from the more value-oriented names in the portfolio. 
  Van Lanschot Kempen, a very attractively priced Dutch bank/wealth manager, 
  was a contributor to performance as the market rotated into more value 
  names and the potential prospect of inflation highlighted the attraction 
  of well capitalised financials. The end of the Brexit drama helped with 
  the rerating of Danish listed channel ferry operator, DFDS. Some of the 
  neglected 'hidden ESG' names in the portfolio saw substantial rerating 
  as the broader market woke up to the contribution made by stocks such 
  as circular economy waste recycling company Befesa. 
 
  Detractors from performance were a combination of stock specific errors 
  and not owning some of the winners in the period. While it is unusual 
  for non-holdings to impact performance to such a large extent, seven out 
  of ten of the biggest detractors in the portfolio versus the index were 
  names that we did not own. Of the seven, one (Swedish listed cloud communication 
  platform Sinch AB ) was a name that we held, but sold too soon. Two were 
  active decisions which detracted from performance. German-listed specialist 
  pharmaceutical distributor, Medios , which having historically been a 
  source of terrific return for the Company, had a profit warning after 
  struggling to access the drug ingredients it needed during the pandemic. 
  The market has now looked past the one-off impact and the shares are back 
  to where they were before the profit warning. VIA Optronics was a poorly 
  executed initial public offering that fell dramatically but has subsequently 
  recovered. 
 
  We opened new positions in German-listed wind farm developer EnergieKontor 
  , that has a materially undervalued pipeline of onshore projects to execute 
  upon. We purchased Danish housebuilder HusCompagniet that is exploiting 
  its scale economies to take market share in its domestic market. We reopened 
  a position in Dutch-listed seismic data specialist, Fugro , that is increasingly 
  being driven by the transition to renewable energy. 
 
  We exited positions in French semiconductor materials supplier S.O.I.T.E.C 
  and Swiss-listed online pharmacy Zur Rose due to valuation concerns. We 
  sold into the takeover approaches for specialist paper manufacturer Ahlstrom-Munksjo 
  , French-listed media company Mediawan and Italian capital equipment provider 
  IMA . All three takeover bids were validation of our focus on valuation. 
 
  As we head into 2021, we see opportunity in a vaccine-driven, stimulus 
  loaded, global economic recovery, though have reservations about pockets 
  of valuation in the market and the risk of unanticipated events relating 
  to the Covid-19 virus. We continue to find exciting opportunities across 
  the investment universe in which we operate, but remain disciplined on 
  the price we pay for companies. 
 
  Ollie Beckett and Rory Stokes 
  22 February 2021 
 

Sector Exposure (% of portfolio excluding cash)

 
                       at 31 December   at 30 June 2020 
                                 2020 
                                    %                 % 
--------------------  ---------------  ---------------- 
 Industrial Goods                25.2              25.2 
 Consumer Goods                  23.0              19.5 
 Technology                      15.8              17.2 
 Financial                       14.8              15.1 
 Business Providers               7.6               7.4 
 Basic Materials                  6.8               8.6 
 Retail Providers                 3.3               5.1 
 Natural Resources                2.6               1.1 
 Telecommunications               0.9               0.8 
--------------------  ---------------  ---------------- 
                                100.0             100.0 
 

Geographical Exposure (% of portfolio excluding cash)

 
                at 31 December    at 30 June 2020 
                          2020 
                             %                  % 
-------------  ---------------  ----------------- 
 Austria                   0.8                0.7 
 Belgium                   4.0                4.3 
 Denmark                   3.2                2.3 
 Finland                   3.8                5.0 
 France                   11.5               13.6 
 Germany                  22.4               22.4 
 Greece                    0.8                0.6 
 Ireland                   3.7                1.5 
 Italy                     8.8               10.6 
 Netherlands               9.0                9.1 
 Norway                    4.8                3.5 
 Portugal                  1.2                1.6 
 Spain                     4.5                2.6 
 Sweden                   12.9               12.0 
 Switzerland               8.6               10.2 
                         100.0              100.0 
 

Top 40 investments at 31 December 2020

 
                                                    Geographical   Valuation      Percentage 
 Rank   Company                Sector                area            GBP'000    of portfolio 
-----  ---------------------  -------------------  -------------  ----------  -------------- 
    1   Van Lanschot Kempen    Financial            Netherlands       18,746             2.5 
    2   DFDS                   Business Providers   Denmark           17,714             2.3 
    3   TKH                    Industrial Goods     Netherlands       16,458             2.1 
    4   Aareal Bank            Financial            Germany           15,451             2.0 
    5   Westwing               Consumer Goods       Germany           14,874             2.0 
    6   Recticel               Basic Materials      Belgium           12,802             1.7 
    7   Nexans                 Industrial Goods     France            11,421             1.5 
    8   eDreams ODIGEO         Consumer Goods       Spain             11,290             1.5 
    9   HelloFresh             Retail Providers     Germany           10,682             1.4 
   10   Befesa                 Industrial Goods     Germany           10,321             1.3 
-----  ---------------------  -------------------  -------------  ----------  -------------- 
        10 largest                                                   139,759            18.3 
 
   11   Criteo                 Technology           France            10,146             1.3 
   12   Kindred                Retail Providers     Sweden             9,737             1.3 
        Cerved Information 
   13    Solutions             Industrial Goods     Italy              9,660             1.3 
   14   Kaufman & Broad        Consumer Goods       France             9,648             1.3 
   15   Banca Farmafactoring   Financial            Italy              9,426             1.2 
   16   Deutz                  Industrial Goods     Germany            9,401             1.2 
   17   PVA                    Technology           Germany            8,788             1.2 
   18   Basware                Technology           Finland            8,766             1.1 
   19   Karnov                 Consumer Goods       Sweden             8,660             1.1 
   20   Nobia                  Consumer Goods       Sweden             8,067             1.1 
-----  ---------------------  -------------------  -------------  ----------  -------------- 
        20 largest                                                   232,058            30.4 
 
   21   Conzzetta              Industrial Goods     Switzerland        7,879             1.0 
   22   Bonava                 Consumer Goods       Sweden             7,678             1.0 
   23   OC Oerlikon            Industrial Goods     Switzerland        7,673             1.0 
   24   Boskalis Westminster   Basic Materials      Netherlands        7,661             1.0 
   25   EnergieKontor          Natural Resources    Germany            7,645             1.0 
   26   ALSO                   Business Providers   Switzerland        7,475             1.0 
   27   Mersen                 Industrial Goods     France             7,404             1.0 
   28   Credito Emiliano       Financial            Italy              7,176             1.0 
        Gaztransport et 
   29    Technigaz             Industrial Goods     France             7,127             0.9 
   30   Vertropack             Industrial Goods     Switzerland        7,000             0.9 
-----  ---------------------  -------------------  -------------  ----------  -------------- 
        30 largest                                                   306,776            40.2 
 
   31   HusCompagniet          Consumer Goods       Denmark            6,929             0.9 
   32   Finecobank             Financial            Italy              6,767             0.9 
   33   Fugro                  Business Providers   Netherlands        6,656             0.9 
   34   Manz                   Technology           Germany            6,580             0.9 
   35   Grafton                Technology           Ireland            6,553             0.9 
   36   Daetwyler              Industrial Goods     Switzerland        6,403             0.8 
   37   Plastic Omnium         Consumer Goods       France             6,295             0.8 
   38   FLEX LNG               Natural Resources    Norway             6,154             0.8 
   39   Nobina                 Industrial Goods     Sweden             6,128             0.8 
   40   Fjordkraft             Industrial Goods     Norway             6,076             0.8 
-----  ---------------------  -------------------  -------------  ----------  -------------- 
        40 largest                                                   371,317            48.7 
 
 
      Principal Risks and Uncertainties 
       The principal risks facing the Company, and the action taken to mitigate 
       these, are set out below: 
 
       Investment strategy and objective 
       Risk: The investment objective or policy is not appropriate in the prevailing 
       market or sought by investors, leading to a wide discount and hostile 
       shareholders. Investment performance over an extended period of time is 
       poor. 
 
       Mitigation: The Board with the assistance of the Manager periodically 
       reviews the investment objective and policy in line with best practice 
       and taking account of investor appetites. The Board maintains oversight 
       of performance and investor sentiment by reviewing the Key Performance 
       Indicators, movements on the share register and the brokers report at 
       each Board meeting. The Board also receives updates on professional and 
       retail investor activity and interest. The Fund Manager maintains a diversified 
       portfolio with a view to spreading risk and balancing performance. 
 
       Operational 
       Risk: Failure of, disruption to or inadequate service levels provided 
       by principal third-party service providers leading to loss of shareholder 
       value or reputational damage. 
 
       Mitigation: The Board engages reputable third-party service providers 
       and formally evaluates their performance, and terms of appointment, at 
       least annually. The Manager provides dedicated professionals to coordinate 
       the provision of services provided by the Company's third-party service 
       providers, monitoring delivery to agreed service levels and flagging issues 
       to the Board for decision. 
 
       Legal & regulatory 
       Risk: Loss of approved investment trust status or changes to existing 
       tax regimes leading to loss of shareholder value. Breach of the Companies 
       Act 2006, Listing Rules, Prospectus Rules and/or Disclosure Guidance and 
       Transparency Rules leading to criminal proceedings, suspension of the 
       Company's shares and/or financial and reputational damage. 
 
       Mitigation: The Manager provides investment, company secretarial, marketing, 
       sales and day-to-day administration services, as well as fund accounting 
       and administration services through qualified professionals and to agreed 
       service levels. The Board maintains oversight of the control environment 
       in place at third-party service providers by reviewing the independently 
       audited reports on the effectiveness of these controls and receives quarterly 
       reports on the operation of the Manager's internal control environment. 
 
       Financial 
       Risk: Market risk (market price risk, currency risk, interest rate risk), 
       credit risk and valuation risk leading to loss of shareholder value. 
 
       Mitigation: The Board determines the investment parameters within the 
       Company's overall risk appetite and monitors compliance with these at 
       each meeting. The Board reviews the portfolio liquidity, the Company's 
       financial position and the valuation of the portfolio at each meeting. 
       The Board, supported by the Audit Committee, receives regular reporting 
       from the Company's principal third-party service providers on the effectiveness 
       of the internal controls in place which seek to ensure that transactions 
       are undertaken with reputable counterparties and the Company's assets 
       are appropriately valued. 
 
       Statement of Directors' Responsibilities 
       Each director (as set out in note 16) confirms, to the best of their knowledge, 
       that: 
 
        *    the condensed set of financial statements has been 
             prepared in accordance with International Accounting 
             Standard 34 'Interim Financial Reporting' and gives a 
             true and fair view of the assets, liabilities, 
             financial position and profit or loss of the Company 
             as required by Disclosure and Transparency Rule 
             ('DTR') 4.2.4 R; 
 
 
 
        *    the interim management report includes a fair review 
             of the information required: 
 
 
        *    by DTR 4.2.7 R (indication of important events during 
             the first six months and a description of principal 
             risks and uncertainties for the remaining six months 
             of the year); and 
 
 
        *    by DTR 4.2.8 R (disclosure of related party 
             transactions and changes therein). 
 
 
 
 
       For and on behalf of the Board 
       Christopher Casey 
       Chairman 
 

Statement of Comprehensive Income

 
                              Half-year ended                            Half-year ended                            Year ended 
                              31 December 2020                            31 December 2019                          30 June 2020 
                                 (unaudited)                                (unaudited)                              (audited) 
                     Revenue        Capital          Total      Revenue        Capital          Total     Revenue      Capital        Total 
                      return         return         return       return         return         return      return       return       return 
                     GBP'000        GBP'000        GBP'000      GBP'000        GBP'000        GBP'000     GBP'000      GBP'000      GBP'000 
---------------  -----------  -------------  -------------  -----------  -------------  -------------  ----------  -----------  ----------- 
 
 Investment 
  income               1,640              -          1,640        3,078              -          3,078       9,123            -        9,123 
 Other income              -              -              -            -              -              -           1            -            1 
 Gains on 
  investments 
  held at fair 
  value through 
  profit or 
  loss                     -        194,547        194,547            -         29,701         29,701           -        9,464        9,464 
                  ----------   ------------   ------------   ----------    -----------    -----------   ---------   ----------   ---------- 
 Total income          1,640        194,547        196,187        3,078         29,701         32,779       9,124        9,464       18,588 
                  ----------    -----------    -----------   ----------    -----------    -----------   ---------    ---------    --------- 
 Expenses 
 Management and 
  performance 
  fees 
  (note 7)             (371)        (2,539)        (2,910)        (312)        (1,248)        (1,560)       (582)      (2,329)      (2,911) 
 Other 
  operating 
  expenses             (367)              -          (367)        (373)              -          (373)       (716)            -        (716) 
                  ----------    -----------    -----------   ----------    -----------    -----------   ---------    ---------    --------- 
 Profit before 
  finance costs 
  and taxation           902        192,008        192,910        2,393         28,453         30,846       7,826        7,135       14,961 
 
 Finance costs          (63)          (258)          (321)         (76)          (306)          (382)       (141)        (564)        (705) 
                  ----------   ------------   ------------   ----------   ------------   ------------   ---------     --------    --------- 
 Profit before 
  taxation               839        191,750        192,589        2,317         28,147         30,464       7,685        6,571       14,256 
 
 Taxation              (159)              -          (159)        (146)              -          (146)       (731)            -        (731) 
                  ----------   ------------   ------------   ----------   ------------   ------------   ---------    ---------   ---------- 
 Profit for the 
  period and 
  total 
  comprehensive 
  income                 680        191,750        192,430        2,171         28,147         30,318       6,954        6,571       13,525 
                      ======         ======         ======       ======         ======         ======       =====        =====       ====== 
 
 Return per 
  ordinary 
  share - basic 
  and diluted 
  (note 2)             1.36p        382.67p        384.03p        4.33p         56.18p         60.51p      13.88p       13.11p       26.99p 
 
   The total column of this statement represents the Statement of Comprehensive 
   Income, prepared in accordance with IFRS, as adopted by the European Union. 
   The revenue and capital return columns are supplementary to this and are 
   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 Company. 
 
   The Company does not have any other comprehensive income and hence the 
   net profit for the period as disclosed above is the same as the Company's 
   total comprehensive income. 
 
   The figures have been prepared on a Company only basis following the liquidation 
   of the Company's subsidiary during the year ended 30 June 2020. For the 
   year ended 30 June 2020 and half-year ended 31 December 2019, these figures 
   have previously been reported on a consolidated basis. 
   The accompanying notes are an integral part of these condensed financial 
   statements. 
 

Statement of Changes in Equity

 
                                      Called 
                                          up         Share                        Other 
  Half-year ended                      share       premium                      capital 
   31 December 2020                                              Capital 
                                                              redemption                       Revenue 
                                     capital       account       reserve       reserves        reserve          Total 
   (unaudited)                       GBP'000       GBP'000       GBP'000        GBP'000        GBP'000        GBP'000 
-------------------------------  -----------  ------------  ------------  -------------  -------------  ------------- 
 
 Total equity at 1 July 
  2020                                 6,264       120,364        13,964        358,759         24,023        523,374 
 Total comprehensive income: 
  Profit for the period                    -             -             -        191,750            680        192,430 
 Transactions with owners 
  recorded 
  directly to equity: 
  Ordinary dividends paid                  -             -             -              -        (7,115)        (7,115) 
                                  ----------    ----------    ----------     ----------     ----------    ----------- 
 Total equity at 31 December 
  2020                                 6,264       120,364        13,964        550,509         17,588        708,689 
                                      ======        ======        ======         ======         ======         ====== 
 
 
 
                                      Called 
                                          up         Share                        Other 
  Half-year ended                      share       premium                      capital 
   31 December 2019                                              Capital 
                                                              redemption                       Revenue 
                                     capital       account       reserve       reserves        reserve          Total 
   (unaudited)                       GBP'000       GBP'000       GBP'000        GBP'000        GBP'000        GBP'000 
-------------------------------  -----------  ------------  ------------  -------------  -------------  ------------- 
 
 Total equity at 1 July 
  2019                                 6,264       120,364        13,964        352,188         28,243        521,023 
 Total comprehensive income: 
  Profit for the period                    -             -             -         28,147          2,171         30,318 
 Transactions with owners 
  recorded 
  directly to equity: 
  Ordinary dividends paid                  -             -             -              -        (7,266)        (7,266) 
                                  ----------    ----------    ----------     ----------     ----------    ----------- 
 Total equity at 31 December 
  2019                                 6,264       120,364        13,964        380,335         23,148        544,075 
                                      ======        ======        ======         ======         ======         ====== 
 
 
 
                                                     Share                        Other 
                                      Called 
                                    up share       premium                      capital 
                                                                 Capital 
                                                              redemption                       Revenue 
 Year ended 30 June 2020             capital       account       reserve       reserves        reserve          Total 
  (audited)                          GBP'000       GBP'000       GBP'000        GBP'000        GBP'000        GBP'000 
-------------------------------  -----------  ------------  ------------  -------------  -------------  ------------- 
 
 Total equity at 1 July 
  2019                                 6,264       120,364        13,964        352,188         28,243        521,023 
 Total comprehensive income: 
  Profit for the year                      -             -             -          6,571          6,954         13,525 
 Transactions with owners 
  recorded directly to equity: 
 Ordinary dividends paid                   -             -             -              -       (11,174)       (11,174) 
                                   ---------   -----------   -----------   ------------   ------------   ------------ 
 Total equity at 30 June 
  2020                                 6,264       120,364        13,964        358,759         24,023        523,374 
                                       =====       =======        ======        =======        =======        ======= 
 
   The accompanying notes are an integral part of these condensed financial 
   statements. 
 

Balance Sheet

 
 
                                      at 31 December      at 31 December   at 30 June 2020 
                                                2020                2019 
                                         (unaudited)         (unaudited)         (audited) 
                                             GBP'000             GBP'000           GBP'000 
------------------------------------  --------------  ------------------  ---------------- 
 
Non-current assets 
Investments held at fair value 
 through profit or loss                      762,635             595,572           573,086 
                                         -----------         -----------       ----------- 
Current assets 
Receivables                                    3,730               1,700             4,453 
Cash and cash equivalents                          -                   -                57 
                                         -----------         -----------       ----------- 
                                               3,730               1,700             4,510 
                                         -----------         -----------       ----------- 
Total assets                                 766,365             597,272           577,596 
                                         -----------         -----------       ----------- 
Current liabilities 
Payables                                     (4,511)             (1,146)           (5,941) 
Bank overdrafts                             (53,165)            (52,051)          (48,281) 
                                         -----------         -----------       ----------- 
                                            (57,676)            (53,197)          (54,222) 
                                         -----------         -----------       ----------- 
Net assets                                   708,689             544,075           523,374 
                                              ======              ======            ====== 
 
 
Equity attributable to equity shareholders 
 
Called up share capital (note 
 3)                                            6,264               6,264             6,264 
Share premium account                        120,364             120,364           120,364 
Capital redemption reserve                    13,964              13,964            13,964 
Retained earnings: 
Other capital reserves                       550,509             380,335           358,759 
Revenue reserve                               17,588              23,148            24,023 
                                         -----------         -----------       ----------- 
Total equity                                 708,689             544,075           523,374 
                                              ======              ======            ====== 
 
Net asset value per ordinary 
 share - basic and diluted (note 
 4)                                        1,414.31p           1,085.80p         1,044.48p 
                                            ========            ========           ======= 
 
 

The accompanying notes are an integral part of these condensed financial statements.

Cash Flow Statement

 
 
                                              Half-year ended  Half-year ended      Year ended 
                                                  31 December      31 December 
                                                         2020             2019    30 June 2020 
                                                  (unaudited)      (unaudited)       (audited) 
                                                      GBP'000          GBP'000         GBP'000 
-------------------------------------------  ----------------  ---------------  -------------- 
Operating activities 
Profit before taxation                                192,589           30,464          14,256 
Add back: interest payable                                321              382             705 
Less: gains on investments held at 
 fair value through profit or loss                  (194,547)         (30,670)        (10,433) 
Sales of investments held at fair value 
 through profit or loss                               220,075          153,981         341,928 
Purchases of investments held at fair 
 value through profit or loss                       (215,858)        (142,072)       (324,358) 
Withholding tax on dividends deducted 
 at source                                              (232)            (225)         (1,354) 
Decrease/(increase) in prepayments 
 and accrued income                                       578              525            (35) 
Decrease in amounts due from brokers                      138            2,488             559 
Increase/(decrease) in accruals and 
 deferred income                                        1,506             (34)             687 
Decrease in amounts due to brokers                    (2,936)          (5,537)         (1,464) 
                                                   ----------       ----------     ----------- 
Net cash inflow from operating activities 
 before interest and taxation                           1,634            9,302          20,491 
                                                   ----------       ----------     ----------- 
Interest paid                                           (321)            (382)           (705) 
Taxation recovered                                          2             (42)             271 
                                                   ----------       ----------     ----------- 
Net cash inflow from operating activities               1,315            8,878          20,057 
                                                   ----------       ----------     ----------- 
 
Financing activities 
Equity dividends paid (net of refund 
 of unclaimed dividends)                              (7,115)          (7,266)        (11,174) 
Net drawdown/(repayment) of bank overdraft              5,743          (1,612)         (8,826) 
                                                   ----------       ----------     ----------- 
Net cash outflow from financing activities            (1,372)          (8,878)        (20,000) 
                                                   ----------       ----------     ----------- 
(Decrease)/increase in cash and cash 
 equivalents                                             (57)                -              57 
Cash and cash equivalents at the start 
 of the period                                             57                -               - 
                                                   ----------       ----------       --------- 
Cash and cash equivalents at the period 
 end                                                        -                -              57 
                                                       ======           ======          ====== 
 

The accompanying notes are an integral part of these condensed financial statements.

 
 Notes to the condensed financial statements 
 
  1. Accounting policies 
  a) Basis of preparation 
  The condensed financial statements comprise the unaudited results of the 
  Company, for the half-year ended 31 December 2020. They have been prepared 
  on a going concern basis and in accordance with International Accounting 
  Standard 34, 'Interim Financial Reporting', as adopted by the European 
  Union and with the Statement of Recommended Practice for Investment Trusts 
  ("SORP"), 'Financial Statements of Investment Trust Companies and Venture 
  Capital Trusts', issued in October 2019 where the SORP is consistent with 
  the requirements of IFRS. 
 
  For the period under review the Company's accounting policies have not 
  varied from those described in the annual report for the year ended 30 
  June 2020. These financial statements have not been audited or reviewed 
  by the Company's auditors. 
 
  The figures have been prepared on a Company only basis following the liquidation 
  of the Company's subsidiary during the year ended 30 June 2020. For the 
  year ended 30 June 2020 and half-year ended 31 December 2019, these figures 
  have previously been reported on a consolidated basis . 
 
  2. Return per ordinary share 
  The return per ordinary share is based on the profit for the half-year 
  of GBP192,480,000 (half-year ended 31 December 2019: profit of GBP30,318,000; 
  year ended 30 June 2020: profit of GBP13,525,000) and on 50,108,397 ordinary 
  shares (half-year ended 31 December 2019 and year ended 30 June 2020: 
  same), being the weighted average number of ordinary shares in issue during 
  the period. 
 
  The return per ordinary share detailed above can be further analysed between 
  revenue and capital, as below. 
 
 
                                        Half-year ended   Half-year ended      Year ended 
                                            31 December       31 December 
                                                   2020              2019    30 June 2020 
                                            (unaudited)       (unaudited)       (audited) 
                                                GBP'000           GBP'000         GBP'000 
 Net revenue profit                                 680             2,171           6,954 
 Net capital profit/(loss)                      191,750            28,147           6,571 
                                             ----------        ----------      ---------- 
 Net profit/(loss)                              192,430            30,318          13,525 
                                                 ======            ======          ====== 
 
 Weighted average number of 
  ordinary shares in issue during 
  the period                                 50,108,397        50,108,397      50,108,397 
 
 
                                       Half-year ended   Half-year ended      Year ended 
                                           31 December       31 December 
                                                  2020              2019    30 June 2020 
                                           (unaudited)       (unaudited)       (audited) 
                                                 pence             pence           pence 
 Revenue return per ordinary 
  share                                           1.36              4.33           13.88 
 Capital return per ordinary 
  share                                         382.67             56.18           13.11 
                                            ----------        ----------      ---------- 
 Total return per ordinary share                384.03             60.51           26.99 
                                                ======            ======          ====== 
 
 
 3. Share capital 
  At 31 December 2020 there were 50,108,397 ordinary shares in issue (31 
  December 2019 and 30 June 2020: same). 
 
  During the half-year ended 31 December 2020 the Company did not issue 
  any ordinary shares (31 December 2019 and 30 June 2020: same). 
 
  In the current financial year to date, the Company has not repurchased 
  any shares for cancellation. 
 
  4. Net asset value per ordinary share 
  The net asset value per ordinary share is based on the net assets attributable 
  to equity shareholders of GBP708,739,000 (31 December 2019: GBP544,075,000; 
  30 June 2020: GBP523,374,000) and on 50,108,397 ordinary shares (31 December 
  2019 and 30 June 2020: same), being the number of ordinary shares in issue 
  at the period end. 
 
  5. Dividends 
  The Company has declared an interim dividend of 8.20 pence per ordinary 
  share (31 December 2019: 7.80p) payable on 23 April 2021 to members on 
  the register as at 26 March 2021. The shares will trade ex-dividend on 
  25 March 2021. 
 
  A final dividend of 14.20p per ordinary share was paid on 27 November 
  2020 from the Company's revenue account in respect of the year ended 30 
  June 2020. 
 
  6. Transaction costs 
  Purchase transaction costs for the half-year ended 31 December 2020 were 
  GBP275,000 (half-year ended 31 December 2019: GBP132,000; year ended 30 
  June 2020: GBP282,000). These comprise mainly stamp duty and commission. 
  Sales transaction costs for the half-year ended 31 December 2020 were 
  GBP86,000 (half-year ended 31 December 2019: GBP60,000; year ended 30 
  June 2020: GBP131,000). 
 
  7. Management and performance fees 
  The base management fee payable to Janus Henderson Investors is 0.6% of 
  net assets up to GBP500m, reducing to 0.5% thereafter. Fees are charged 
  quarterly in arrears. Management fees are allocated 20% to revenue and 
  80% to capital. 
 
  The Manager may also be eligible to receive a performance related fee. 
  In order to determine whether a performance fee is payable, performance 
  is measured against, and expressed relative to, the benchmark, the Euromoney 
  Smaller European Companies Index (ex UK) expressed in Sterling. Performance 
  of both the Company and the benchmark is measured on a NAV total return 
  (with gross income reinvested) basis and is measured over three years. 
 
  In any given year in which a performance fee is payable, the performance 
  fee rate is 15% of the positive difference between the average annual 
  NAV total return and the average annual total return of the benchmark. 
  The upper limit on the total fee, including the base fee and any performance 
  fee, for any given accounting year is 2.0% of the NAV of the Company as 
  at the last day of the relevant calculation period. A performance fee 
  hurdle over the benchmark of 1.0% has to be reached before any performance 
  fee can be earned. For clarity, performance is measured solely on the 
  basis of NAV total return relative to the total return of the benchmark 
  index; no account is taken of whether the NAV grows or shrinks in absolute 
  terms. Any performance fee payable is allocated to capital. 
 
  A performance fee of GBP1,055,000 has been accrued as at 31 December 2020 
  (31 December 2019: GBPnil; 30 June 2020: GBPnil). 
 
  8. Financial instruments 
  At the period end the carrying value of financial assets and financial 
  liabilities approximates their fair value. 
 
  Financial instruments carried at fair value 
  Fair value hierarchy 
  The table below analyses recurring fair value measurements for financial 
  assets and financial liabilities. These fair value measurements are categorised 
  into different levels in fair value hierarchy based on the inputs to valuation 
  techniques used. Categorisation within the hierarchy has been determined 
  on the basis of the lowest level of input that is significant to the fair 
  value measurement of the relevant asset or liability. The different levels 
  are defined as follows: 
 
  Level 1: Valued using quoted prices in active markets for identical assets; 
  Level 2: Valued by reference to valuation techniques using observable 
  inputs other than quoted prices included within Level 1; and 
  Level 3: Valued by reference to valuation techniques that are not based 
  on observable market data. 
 
 
 Financial assets and financial liabilities         Level        Level         Level 
  at fair value                                         1            2             3        Total 
 through profit or loss at 31 December 
  2020                                            GBP'000      GBP'000       GBP'000      GBP'000 
--------------------------------------------  -----------  -----------  ------------  ----------- 
 Investments including derivatives: 
 Equity securities designated at fair 
  value through profit or loss                    762,560            -            75      762,635 
                                               ----------   ----------   -----------   ---------- 
 Total financial assets and liabilities 
  carried 
  at fair value                                   762,560            -            75      762,635 
                                                   ======       ======        ======       ====== 
 
 
 Level 3 investments at fair value through 
  profit or loss                                   GBP'000 
-------------------------------------------     ---------- 
 Opening balance                                        77 
 Acquisitions                                            - 
 Disposal proceeds                                       - 
 Transferred into Level 3                                - 
                                                 --------- 
                                                        77 
                                                 --------- 
 Total losses included in the Statement 
  of Comprehensive Income 
 On assets sold                                          - 
 On assets held at period end                          (2) 
                                                 --------- 
                                                       (2) 
                                                 --------- 
 Closing balance                                        75 
                                                     ===== 
 
 
    There have been no transfers between levels of fair value hierarchy during 
     the period. Transfers between levels of fair value hierarchy are deemed 
     to have occurred at the date of the event or change in circumstances that 
     caused the transfer. 
 
     9. Going concern 
     The assets of the Company consist of securities that are readily realisable. 
     The directors have considered the impact of the Covid-19 pandemic, including 
     cash flow forecasting, a review of covenant compliance covering the headroom 
     above the most restrictive covenants and an assessment of the liquidity 
     of the portfolio. Having done so, the directors have concluded that the 
     Company has adequate resources to meet its financial obligations, including 
     the repayments of the bank overdraft, as they fall due for a period of 
     at least twelve months from the date of approval of the financial statements. 
     Taking account of these factors and the principal risks, the Board has 
     determined that it is appropriate for the financial statements to be prepared 
     on a going concern basis and confirm that there are no uncertainties of 
     which they are aware that should be conveyed to shareholders. 
 
     10. Related party transactions 
     The Company's transactions with related parties in the period were with 
     the directors and Janus Henderson Investors. There were no material transactions 
     between the Company and its directors during the period, with the only 
     amounts paid to them being in respect of expenses and remuneration for 
     which there were no outstanding amounts payable at the period end. 
 
     In relation to the provision of services by Janus Henderson Investors, 
     other than fees payable by the Company in the ordinary course of business 
     and the provision of marketing services there have been no material transactions 
     with Janus Henderson Investors affecting the financial position of the 
     Company during the period under review. 
 
     During the year to 30 June 2020, the wholly owned subsidiary, TREG Finance 
     Limited, paid a dividend to the Company of GBP969,000 from its reserves 
     prior to being placed in liquidation. 
 
     11. Comparative information 
     The financial information contained in this half-year report does not 
     constitute statutory accounts as defined in section 434 of the Companies 
     Act 2006. The financial information for the half-years ended 31 December 
     2020 and 31 December 2019 have not been audited or reviewed by the Company's 
     auditors. The figures and financial information for the year ended 30 
     June 2020 are an extract based on the latest published accounts and do 
     not constitute statutory accounts for that year. Those accounts have been 
     delivered to the Registrar of Companies and included the Independent Auditors' 
     Report which was unqualified and did not contain a statement under either 
     section 498(2) or 498(3) of the Companies Act 2006. 
 
     12. Voting at Annual General Meeting 
     At the 30(th) Annual General Meeting held on 23 November 2020, the Company 
     received votes against Resolution 5, relating to the reappointment of 
     Mr Christopher Casey, representing 23.8% of the shares voted at the meeting 
     and 10.3% of the voting rights in issue. At that time, the Board stated 
     that it understood the majority of the votes against this resolution were 
     from a single shareholder and related to the number of directorships held 
     by the Chairman of the Board. The Board has engaged with this shareholder 
     to understand its concerns and explained that the Board is aware of the 
     Chairman's other commitments, all of which are non-executive and the majority 
     of which relate to investment company board positions, and believe that 
     he has sufficient capacity to devote to the Company's affairs. The Board 
     has agreed to continue to engage with this shareholder in advance of the 
     next annual general meeting and will provide a further update in the Company's 
     next annual report. 
 
     13. Website 
     Details of the Company's share price and net asset value, together with 
     general information about the Company, monthly factsheets and data, copies 
     of announcements, reports and details of general meetings can be found 
     at www.treuropeangrowthtrust.com 
 
     14. Half-year report 
     The Company's half-year report will be available on the Company's website. 
     An update extracted from the Company's report for the half-year ended 
     31 December 2020, will be posted to shareholders in March 2021 and will 
     be available on the website thereafter. 
 
     15. Company status 
     TR European Growth Trust PLC is registered in England and Wales, No. 2520734, 
     has its registered office at 201 Bishopsgate, London EC2M 3AE and is listed 
     on the London Stock Exchange. 
 
     SEDOL/ISIN: 0906692/GB0009066928 
     London Stock Exchange (TIDM) code: TRG 
     Global Intermediary Identification Number (GIIN): JX9KYH.99999.SL.826 
     Legal Entity Identifier (LEI): 213800N1B1HCQG2W4V90 
 
     16. Directors and Secretary 
     At the date of this report, the directors of the Company are Christopher 
     Casey (Chairman), Daniel Burgess (Chairman of the Audit Committee), Ann 
     Grevelius, Simona Heidempergher, Andrew Martin Smith and Alexander Mettenheimer. 
     The Corporate Secretary is Henderson Secretarial Services Limited. 
 
 
 For further information please contact: 
 Ollie Beckett, Fund Manager                 Laura Thomas, Investment Trust PR 
  TR European Growth Trust PLC                Manager 
  Telephone: 020 7818 4331                    Janus Henderson Investors 
                                              Telephone: 020 7818 2636 
 
   Neither the contents of the Company's website nor the contents of any 
   website accessible from hyperlinks on the Company's website (or any other 
   website) are incorporated into, or form part of, this announcement. 
 

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