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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Witan Investment Trust Plc | LSE:WTAN | London | Ordinary Share | GB00BJTRSD38 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.50 | -0.60% | 249.00 | 249.00 | 249.50 | 250.50 | 248.50 | 249.00 | 712,486 | 16:25:42 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 188.76M | 181.48M | 2.9265 | 0.85 | 154.41M |
From Apr 2019 to Apr 2024
TIDMWTAN
RNS Number : 6712X
Witan Investment Trust PLC
14 August 2018
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
HIGHLIGHTS
-- During the first half of 2018, the Company's net asset value (NAV) total return was +1.11% in line with the benchmark return of +1.06%.
-- The share price total return was +2.0%, as the discount narrowed from 1.6% at the end of 2017 to 0.7% at the end of June.
-- A second interim quarterly dividend of 5.25p per ordinary share will be paid in September. Total dividends paid in respect of the period are 10.5p per ordinary share (2017: 9.5p).
-- Eight of the ten external managers outperformed, as did the portfolio of direct holdings.
FINANCIAL HIGHLIGHTS
Hot Features
Premium
Key data
(Unaudited) (Unaudited) Change since
30 June 30 June (Audited) 31 December
31 December
2018 2017 2017 2017
Share price 1088.0p 1001.0p 1079.0p 0.8%
Net asset value per ordinary share(4)
(debt at par value) 1110.3p 1042.7p 1109.8p 0.0%
Net asset value per ordinary share(4)
(debt at fair value) 1096.2p 1029.1p 1096.2p 0.0%
Dividends per ordinary share 10.5p 9.5p 21.0p
Discount (debt at fair value)(4) 0.7% 2.7% 1.6%
Share buybacks 0.1% 1.3% 1.5%
Ongoing charges excluding performance
fees(4) 0.38% 0.37% 0.76%
Ongoing charges including performance
fees(4) 0.42% 0.38% 0.78%
Total return performance
6 months 1 year 3 years 5 years
return return return return
% % % %
Total shareholder return (1)(4) 2.0 10.9 47.3 105.8
Net asset value total return
(2)(4) 1.1 8.7 49.3 86.3
Benchmark (1)(4) 1.1 8.3 43.0 69.4
FTSE All-Share Index(3) 1.7 9.0 31.6 52.8
FTSE World (ex UK) Index(3) 2.1 9.4 53.3 85.3
(1) Source: Morningstar.
(2) Source: Morningstar/Witan
(3) Source: Morningstar. See also FTSE International for conditions
of use (www.ftse.com).
(4) Alternative performance measures*
*Alternative performance measures
The financial statements (on page 10 to 17) set out the required statutory reporting measures of the Company's financial performance. In addition, the Board assesses the Company's performance against a range of criteria which are viewed as particularly relevant for investment trusts. Definition of the terms used and the Witan benchmark are set out in the Half Year Report.
Page 2 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Other financial information
(Unaudited) (Unaudited) (Audited) Change since
30 June 30 June 31 December 31 December
2018 2017 2017 2017
Net assets GBP1,979m GBP1,865m GBP1,981m (0.1)%
Shares with full voting
rights (i.e. excluding
treasury shares) (1) 178,233,760 178,872,058 178,449,589 (0.1)%
Revenue earnings per ordinary
share 15.69p 14.48p 23.82p
Gearing 10.2% 11.0% 9.7%
Notes
1. Total number of ordinary shares in issue, including treasury shares: 200,071,000 (June 2017: 200,071,000; December 2017 200,071,000).
PORTFOLIO INFORMATION
Portfolio by geographical classification
as at 30 June 2018 %
United Kingdom 35.5
North America 22.6
Continental Europe 21.3
Asia Pacific (ex Japan) 14.6
Japan 3.9
Other Emerging 2.1
----------
100.0
======
Sector breakdown of the portfolio as
at 30 June 2018 %
Financials* 28.0
Consumer Services 16.3
Industrials 14.6
Technology 12.6
Consumer Goods 11.8
Health Care 6.7
Oil & Gas 3.0
Basic Materials 2.6
Telecommunications 2.5
Utilities 1.1
Open-ended Funds 0.8
----------
100.0
======
* includes 8.8% in Investment Companies
Page 3 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
INTERIM MANAGEMENT REPORT
Summary
Equity markets travelled a long way to go almost nowhere during the first half of 2018. The mood proved changeable, ranging from New Year euphoria over US tax cuts and synchronised global growth, concerns about renascent inflation and Fed tightening, growth disappointment, strong earnings, renewed growth optimism, concern about energy prices and, latterly, political worries centred on US trade policy and European cohesion.
This period of consolidation, which follows two years of very strong gains in sterling terms, appears healthy, provided that the adverse influences do not tip the world into growth disappointment or recession. It allows the rise in corporate earnings to catch up with the optimism already built into valuations, while enabling investors to assess the risks posed by rising oil prices, the threat of trade tariffs and the gradual rise in global interest rates.
Market background
The year started strongly, with global equities taking their cue from the US, where a strengthening economic recovery during 2017 was supplemented by significant tax cuts for both the corporate sector and the consumer. This proved a heady cocktail, with the US market up 7% in late January, before dropping 10% in the following 10 days. Concerns grew that the economy, already in its ninth year of recovery, might overheat, forcing the Federal Reserve to raise rates more rapidly than expected, posing a threat either to the valuation of equity markets or to the growth that underlay them. A number of economies experienced a slow start to the year, amid uncertainty whether this was due to severe winter weather or a fizzling out of the recovery that had taken hold, in Europe especially, during 2017.
The sharp fall in equity markets in early February, as investors tried to factor in the perceived risks to growth and inflation, was exacerbated by risk reduction on the part of some leveraged investors, such as hedge funds, introducing significantly more volatile market conditions than during the preceding two years.
By the spring, corporate earnings became a more dominant factor. They were generally strong, restoring confidence to equities and leading to a significant recovery of earlier losses. However two other factors obstructed a full return to earlier confidence. The first was a 20% rise in the oil price, linked to disruption in Venezuela's oil industry and an expected reduction in Iranian oil exports, after the US Administration said it would reimpose economic sanctions on Tehran. The second was an increasing risk of a trade war, as the US threatened to introduce tariffs on imports, prompting reciprocal threats from China and other trading partners. Although economic growth showed evidence of renewed momentum after the winter slowdown, this was not sufficient to shake off the worries about higher oil prices (which have in the past often led to recessions) and a trade war (of which most investors have little knowledge, given that the flow of history in recent decades has been towards lower tariffs and freer trade). Hence by mid-year the FTSE World Index showed a gain of just 2.1% in sterling terms, with a wide spread between the US (+5.2%) and emerging markets (-4.5%). The UK, down over 7% in the first quarter, was up over 9% in the second, for a six month gain of 1.7%. Despite the continued uncertainty over the Brexit process, lower UK valuations appear to have attracted some seekers after value.
Page 4 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
INTERIM MANAGEMENT REPORT, continued
Investment performance
During the first half of 2018, Witan's net asset value (NAV) total return was 1.14% taking the par value of our debt and 1.11% taking debt at fair value. This was marginally ahead of the benchmark's return of 1.06% during the period. Over the longer term, performance is more significantly ahead, with a 5 year NAV total return performance of 86.3%, compared with 69.4% for the benchmark.
Our combined investment portfolio's total return was 1.5 %, with NAV performance also assisted by the use of gearing. The modest investment outperformance was mostly offset by costs during the period. Eight of the external managers outperformed their benchmarks, while two underperformed. The strongest gains came from the three UK managers (up by between 4% and 7%), with Veritas (+3%) the strongest of the overseas managers. The Direct Holdings portfolio also outperformed, with a gain of 3%. Performance figures for all of the managers are shown in the table on page 9.
The share price total return of 2.0% was ahead of the NAV total return, due to a further narrowing of the discount, to 0.7%.
Portfolio changes
In January, the remaining GBP23m European index futures holding was sold and GBP10m each allocated to our two European managers, CRUX and SW Mitchell. This reflected our preference for stock-picking rather than market index investment.
In April, following an extended due diligence process, GBP14m was allocated to Latitude Investment Management to invest in global equities. This was the first investment under a new initiative to invest using newly-established or more specialist managers viewed as having strong potential to add value. This portfolio has outperformed global equities by 3.3% in the period since appointment. It forms part of the portfolio managed by the Executive team, which can invest up to 10% in specialist collective funds and (since 2018) up to 2.5% in smaller investment mandates as described.
In May, index futures to a value of GBP20m (1% of assets) were sold short, as a liquid means of reducing Witan's gearing without incurring the transaction costs of selling underlying investments. This was in response to a recovery in markets, which appeared at some risk from the rising oil price and the threat of a trade war. These index futures were bought back during May and June for a small investment gain, as incoming economic news improved and the risk of a further spike in oil prices was felt to have diminished. There was a GBP0.4m gain on futures investment in the first half of 2018.
This is the first time in recent years that Witan has used equity index futures to reduce equity exposure, although their use for efficient portfolio management is an established part of Witan's investment activity.
Gearing
The Company began the year with gearing of 9.7%. This was maintained in a range of 9% to 10.5% for most of the period, ending June at 10.2%. Although there are shadows in the form of high oil prices and the threat of a trade war, corporate earnings and economic growth have been robust (particularly in the US), providing support for equities.
Page 5 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
INTERIM MANAGEMENT REPORT, continued
The Company has a GBP125m short-term facility, in addition to its fixed-rate borrowings. The drawn balance at the end of June 2018 was GBP87m.
Investment income and expenses
Revenue earnings per share for the period were 15.7 pence per share, a rise of 8% from the 14.5 pence per share for the first half of 2017. Investment income benefited from higher company pay-outs, which offset a moderate headwind from a firmer level of sterling against overseas currencies.
Base investment management fees paid to external delegated managers were 17% higher than those in the first half of 2017, owing to 8% growth in average assets, the shift of earlier futures investments into managers' portfolios and changes in managers during 2017.
Other operational expenses were up 2.6% at GBP3.2m. Finance costs rose by 15%, due to the rise in interest rates, higher borrowings and the part switch from short-term to long-term fixed rate borrowings.
The ongoing charges figure (OCF) for the six months was 0.38% compared with 0.37% in the first half of 2017. Including performance fees, the OCF was 0.42% for the first half of 2018, compared with 0.38% for the same period in 2017. These figures apply for the first half and are not annualised. The OCF for the whole of 2017 was 0.76% excluding performance fees and 0.78% including performance fees.
Dividend
The Board's policy (subject to circumstances) is to grow the dividend ahead of inflation (measured by the UK CPI). The first three interim dividends of the financial year (paid in June, September and December) are, in the absence of unforeseen events, paid at the rate of one quarter of the total payment made in respect of the previous year.
Accordingly, following the first interim dividend of 5.25p per ordinary share that was paid on 18 June 2018 (being one quarter of the total of 21.0p paid in respect of 2017) a second interim dividend of 5.25p per ordinary share will be paid on 18 September 2018. The ex-dividend date will be 23 August 2018. The fourth payment (in March 2019) will be a balancing amount, reflecting the difference between the first three quarterly dividends and the payment decided for the full year.
The Company has increased its dividend every year since 1974 (a 43 year record of increases), recognising the importance for its investors of a reliable and growing income.
In the absence of unforeseen developments, the full year's dividend for 2018 is expected to show a further year of growth significantly ahead of inflation, fully funded from current year revenue earnings, with a further addition to revenue reserves.
Discount and buybacks
One of the Company's key performance indicators is for its shares to trade at a sustainable low discount or a premium to NAV, subject to market circumstances. Witan's shares ended 2017 on a 1.6% discount, which narrowed to a discount of 0.7% at the end of June 2018.
Page 6 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
INTERIM MANAGEMENT REPORT, continued
During the first half of 2018, the Company has continued to buy back shares into Treasury, purchasing 0.2m shares at an average discount (after purchase costs) of 1.7%. This added modestly to the net asset value but, just as important, showed that the Company was willing to continue buying back shares on tight discounts because of the benefit for shareholders of the shares trading at or near to net asset value.
The long-term objective is for shareholders to enjoy sustainable liquidity in Witan's shares at or near to net asset value. The Company remains prepared to buy back shares, taking account of prevailing market conditions (which are not under the Board's control), the level of the discount and the impact on the NAV per share. The Company will only issue shares at a premium to NAV.
Board composition
Following a review of the skills represented on the Board, Paul Yates joined the Board in May 2018. Paul has 37 years of investment management experience and was CEO of UBS Global Asset Management UK Limited prior to 2007, experience which will be particularly helpful with the Board's selection of new managers and evaluation of existing ones. He is also a non-executive director of a number of other investment companies.
Outlook
The economic backdrop mid-year shows relatively strong growth in the US and moderate growth elsewhere, with inflation higher than a year ago but not seemingly accelerating. In isolation, these are positive conditions for global equities.
The main global uncertainties of oil prices and trade policy are both compounded by their connection with unpredictable policy formation emanating from Washington. If the headlines about trade tariffs ultimately prove to be a form of negotiation by foghorn, the fears that tariffs will raise inflation, disrupt global supply chains and deter investment will recede. Similarly, if other oil producers can replace the lost production from Iran and others, the drag on growth from higher oil prices will peak and may reverse.
In the UK, the Brexit process appears to be inching erratically towards a limited separation that maintains important industrial links with an extended transition period for changes in other areas. As the end-point for negotiations looms closer, economic considerations appear to be pushing policy in a more pragmatic direction, despite the protests of zealots on both sides of the Channel.
2018 appears to mark a general turning point in global monetary policy, although tightening remains gradual. The US is steadily raising rates, the UK raised rates in August, having deferred a move from May, and a number of emerging markets have increased rates in response to higher US rates and upward pressure on inflation due to oil prices. However, the ECB appears set to keep rates low for another year, while Japan continues to target near-zero interest rates.
The combination of gradually rising interest rates and reducing central bank demand for bonds is a slow-burn fuse for bond markets, given their dependence on central bank buying since 2009. Consequently, the risks appear to lie in the direction of higher yields.
Page 7 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
INTERIM MANAGEMENT REPORT, continued
Equities remain relatively lowly valued compared with bonds and absolute valuations have moderated due to the rise in corporate earnings in 2018. If the reason for rising rates is that the world economy is moving out of the convalescent ward towards greater health, higher rates are more reassuring than otherwise. The main proviso is the avoidance of recession, whether caused by rates rising too high due to central bank misjudgement or because of a trade war initiated by the US.
We are attentive to, but do not exaggerate the importance of, the various political risks. We remain focused on active stock-selection and a prudent but opportunistic attitude to risk in order to add value for Witan's shareholders.
For and on behalf of the Board
Harry Henderson
Chairman
13 August 2018
Page 8 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
REGULATORY DISCLOSURES
Going concern
The assets of the Company consist mainly of securities that are readily realisable and, accordingly, the Company has adequate financial resources to continue in operational existence for the foreseeable future. Therefore, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. In reviewing the position as at the date of this report, the Board has considered the guidance on this matter issued by the Financial Reporting Council.
Related party transactions
During the first six months of the year, no transactions with related parties have taken place which have materially affected the financial position or performance of the Company. Details of related party transactions during 2017 are contained in the Company's Annual Report for the year ended 31 December 2017.
Principal risks and uncertainties
The principal risks and uncertainties associated with the Company's business can be divided into various areas:
-- a fall in equity prices;
-- the appropriateness of the corporate objective and strategy;
-- the application of investment strategy: country, currency, industrial sector, stock selection, choice of investment manager;
-- operational and regulatory risks.
Information on these risks and other risks is given in the Strategic Report and in the Notes to the Financial Statements in the Company's Annual Report for the year ended 31 December 2017.
In the view of the Board, these principal risks and uncertainties are applicable to the remaining six months of the financial year, as they were to the six months under review.
Directors' responsibility statement
The Directors confirm that, to the best of their knowledge:
(a) the condensed set of financial statements has been prepared in accordance with IAS 34;
(b) the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (an indication of important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the financial year); and
(c) the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
For and on behalf of the Board
Harry Henderson, Chairman
13 August 2018
Page 9 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Investment managers: Assets under management and investment performance as at 30 June 2018
% of Witan's Benchmark Benchmark
assets Performance performance Performance performance
under in the in the since since
Appointment management half year half year appointment appointment
Investment manager date at 30.06.18(1) (%) (%) (%)(2) (%)(2)
Artemis Investment
Management (UK) 06.05.08 8.3 4.3 1.7 10.0 6.6
Heronbridge
Investment
Management
(UK) 17.06.13 6.5 4.9 1.7 11.1 8.4
Lindsell Train
(UK) 01.09.10 8.4 7.2 1.7 16.7 9.6
Lansdowne Partners
(Global) 14.12.12 14.5 0.0 4.5 20.5 15.5
Pzena Investment
Management
(Global) 02.12.13 13.6 (1.6) 2.1 11.8 13.2
Veritas Asset
Management
(Global) 11.11.10 13.8 3.3 2.1 14.0 11.8
CRUX Asset
Management
(Europe ex-UK) 26.10.17 4.7 (1.1) (1.4) (0.5) (2.8)
S.W. Mitchell
Capital (Europe
ex-UK) 26.10.17 4.9 1.4 (1.4) 0.2 (2.8)
Matthews
International
Capital Management
(Asia Markets) 20.02.13 11.5 (0.5) (0.8) 11.4 9.8
GQG Partners
(Emerging Markets) 16.02.17 4.0 (3.8) (4.2) 8.9 8.0
Witan Direct
Portfolio
(Directly-held
investments) 19.03.10 9.8 3.0 1.1 12.5 9.5
Notes:
1 Percentage of Witan's assets managed, excluding central
cash balances.
2 Percentages are annualised where the appointment date was
before June 2017.
Source: BNP Paribas Securities Services
Page 10 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Consolidated Statement of Comprehensive Income
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 June 2018 30 June 2017 31 December 2017
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment
income 34,458 - 34,458 31,701 - 31,701 54,425 - 54,425
Other income 743 - 743 905 - 905 1,318 - 1,318
Gains on
investments
held at fair
value through
profit or loss
(Note 2) - 2,410 2,410 - 161,140 161,140 - 289,268 289,268
Foreign exchange
losses on cash
and cash
equivalents - (543) (543) - (661) (661) - (1,686) (1,686)
--------- ---------- ----------- --------- ---------- ----------- --------- ----------- -----------
Total income 35,201 1,867 37,068 32,606 160,479 193,085 55,743 287,582 343,325
Expenses
Management and
performance
fees (1,255) (4,547) (5,802) (1,075) (3,309) (4,384) (2,255) (7,294) (9,549)
Other expenses (3,121) (51) (3,172) (3,041) (51) (3,092) (6,361) (101) (6,462)
--------- ---------- ----------- --------- ---------- ----------- --------- ----------- -----------
Profit/(loss)
before finance
costs and
taxation 30,825 (2,731) 28,094 28,490 157,119 185,609 47,127 280,187 327,314
Finance costs (1,087) (3,130) (4,217) (948) (2,714) (3,662) (1,967) (5,651) (7,618)
--------- ---------- ----------- --------- ---------- ----------- --------- ----------- -----------
Profit/(loss)
before taxation 29,738 (5,861) 23,877 27,542 154,405 181,947 45,160 274,536 319,696
Taxation (1,754) - (1,754) (1,516) - (1,516) (2,493) - (2,493)
--------- ---------- ----------- --------- ---------- ----------- --------- ----------- -----------
Profit/(loss)
attributable
to equity
shareholders
of the parent
company 27,984 (5,861) 22,123 26,026 154,405 180,431 42,667 274,536 317,203
===== ====== ====== ===== ====== ====== ===== ====== ======
Earnings/(loss)
per ordinary
share (Note
3) 15.69p (3.29)p 12.40p 14.48p 85.92p 100.40p 23.82p 153.24p 177.06p
===== ====== ====== ===== ====== ====== ===== ====== ======
The total column of this statement represents the Group's Statement of Comprehensive Income, prepared in accordance with IFRSs as adopted by the European Union.
The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
The Group does not have any other comprehensive income and hence the total profit, as disclosed above, is the same as the Group's total comprehensive income.
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of Witan Investment Trust plc, the parent company. There are no non-controlling interests.
Page 11 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Consolidated Statement of Changes in Equity
(Unaudited)
Half year ended 30 June 2018
Ordinary Share Capital Other
share premium redemption capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2017 50,018 99,251 46,498 1,712,019 72,735 1,980,521
Total comprehensive income:
(Loss)/profit for the
period - - - (5,861) 27,984 22,123
Transactions with owners,
recorded directly to
equity:
Ordinary dividends paid - - - - (21,395) (21,395)
Buybacks of ordinary
shares into treasury
(note 5) - - - (2,272) - (2,272)
----------- ----------- ------------- ------------- ----------- -------------
At 30 June 2018 50,018 99,251 46,498 1,703,886 79,324 1,978,977
======= ======= ======== ======== ======= ========
(Unaudited)
Half year ended 30 June 2017
Ordinary Share Capital Other
share premium redemption capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2016 50,018 99,251 46,498 1,464,105 66,765 1,726,637
Total comprehensive income:
Profit for the period - - - 154,405 26,026 180,431
Transactions with owners,
recorded directly to
equity:
Ordinary dividends paid - - - - (19,755) (19,755)
Buybacks of ordinary
shares into treasury
(note 5) - - - (22,221) - (22,221)
----------- ----------- ------------- ------------- ----------- -------------
At 30 June 2017 50,018 99,251 46,498 1,596,289 73,036 1,865,092
======= ======= ======== ======== ======= ========
(Audited)
Year ended 31 December 2017
Ordinary Share Capital Other
share premium redemption capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2016 50,018 99,251 46,498 1,464,105 66,765 1,726,637
Total comprehensive income:
Profit for the year - - - 274,536 42,667 317,203
Transactions with owners,
recorded directly to
equity:
Ordinary dividends paid - - - - (36,697) (36,697)
Buybacks of ordinary
shares into treasury
(note 5) - - - (26,622) - (26,622)
----------- ----------- ------------- ------------- ----------- -------------
At 31 December 2017 50,018 99,251 46,498 1,712,019 72,735 1,980,521
======= ======= ======== ======== ======= ========
Page 12 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Consolidated Balance Sheet
(Unaudited) (Unaudited)
30 June 30 June (Audited)
31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Non current assets
Investments held at fair value
through profit or loss 2,180,715 2,036,591 2,149,267
--------------- --------------- -------------
Current assets
Other receivables 13,117 23,465 5,217
Cash and cash equivalents 52,823 66,199 75,795
--------------- --------------- -------------
65,940 89,664 81,012
--------------- --------------- -------------
Total assets 2,246,655 2,126,255 2,230,279
Current liabilities
Other payables (10,255) (13,621) (6,393)
Bank loans (87,000) (107,000) (73,000)
--------------- --------------- -------------
(97,255) (120,621) (79,393)
--------------- --------------- -------------
Total assets less current liabilities 2,149,400 2,005,634 2,150,886
--------------- --------------- -------------
Non current liabilities
At amortised cost:
6.125 per cent. Secured Bonds
due 2025 (63,581) (63,464) (63,538)
3.29 per cent. Secured Notes
due 2035 (20,875) (20,871) (20,871)
3.47 per cent. Secured Notes
due 2045 (53,659) (53,652) (53,652)
2.74 per cent. Secured Notes
due 2054 (29,753) - (29,749)
3.4 per cent. cumulative preference
shares of GBP1 (2,055) (2,055) (2,055)
2.7 per cent. cumulative preference
shares of GBP1 (500) (500) (500)
--------------- --------------- -------------
(170,423) (140,542) (170,365)
--------------- --------------- -------------
Net assets 1,978,977 1,865,092 1,980,521
========= ========= ========
Capital and reserves
Ordinary share capital (Note 5) 50,018 50,018 50,018
Share premium account 99,251 99,251 99,251
Capital redemption reserve 46,498 46,498 46,498
Retained earnings:
Other capital reserves 1,703,886 1,596,289 1,712,019
Revenue reserve 79,324 73,036 72,735
--------------- --------------- -------------
Total equity 1,978,977 1,865,092 1,980,521
========= ========= ========
Net asset value per ordinary share
(Note 6) 1110.33p 1042.70p 1109.85p
========= ========= ========
Page 13 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Consolidated Cash Flow Statement
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Dividend income received 31,931 31,649 55,464
Interest received 76 13 29
Other income received 760 1,293 2,105
Operating expenses paid (9,056) (5,764) (12,644)
Taxation on overseas income (2,036) (1,692) (3,014)
Taxation received 258 290 412
------------- ------------- -------------
Net cash inflow from operating
activities 21,933 25,789 42,352
------------- ------------- -------------
Cash flows from investing activities
Purchases of investments (395,022) (558,660) (1,097,207)
Sales of investments 364,108 553,891 1,113,894
Realised gain on futures 437 5,237 7,593
------------- ------------- -------------
Net cash (outflow)/inflow from
investing activities (30,477) 468 24,280
------------- ------------- -------------
Cash flow from financing activities
Equity dividends paid (21,395) (19,755) (36,697)
Issue of secured notes net
of issue expenses - - 29,748
Buybacks of ordinary shares (2,318) (22,609) (27,413)
Interest paid (4,172) (3,589) (7,345)
Drawdown of bank loans 14,000 36,000 2,000
------------- ------------- -------------
Net cash outflow from financing (13,885) (9,953) (39,707)
------------- ------------- -------------
(Decrease)/increase in cash
and cash equivalents (22,429) 16,304 26,925
Cash and cash equivalents at
the start of the period 75,795 50,556 50,556
Effect of foreign exchange
rate changes (543) (661) (1,686)
------------- ------------- -------------
Cash and cash equivalents at
the end of the period 52,823 66,199 75,795
======== ======== ========
Page 14 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Notes to the Financial Statements
1 Basis of preparation
The condensed set of financial statements for the half year
ended 30 June 2018 has been prepared on the basis of the
accounting policies set out in the consolidated financial
statements for the year ended 31 December 2017.
2 Transaction costs
The gains on investments held at fair value through profit
or loss include purchase transaction costs of GBP801,000
(half year ended 30 June 2017: GBP1,089,000; year ended
31 December 2017: GBP2,306,000) and sale transaction costs
of GBP354,000 (half year ended 30 June 2017: GBP398,000;
year ended 31 December 2017: GBP869,000). The purchase transaction
costs comprise mainly stamp duty and commissions. The sale
transaction costs comprise mainly commissions and research
fees.
3 Earnings per ordinary share
The earnings per ordinary share figure is based on the net
profit for the half year of GBP22,123,000 (half year ended
30 June 2017: GBP180,431,000; year ended 31 December 2017:
GBP317,203,000) and on 178,301,840 ordinary shares (half
year ended 30 June 2017: 179,691,544; year ended 31 December
2017: 179,149,747) being the weighted average number of
ordinary shares in issue during the period.
The earnings per ordinary share figure detailed above can
be further analysed between revenue and capital, as below.
(Unaudited) (Unaudited) (Audited)
Half year Half year Year ended
ended ended 31 December
30 June 30 June 2017
2018 2017 GBP'000
GBP'000 GBP'000
Net revenue profit 27,984 26,026 42,667
Net capital (loss)/profit (5,861) 154,405 274,536
-------------- -------------- --------------
Net total profit 22,123 180,431 317,203
======== ======== ========
Weighted average number
of ordinary shares in
issue during the period 178,301,840 179,691,544 179,149,747
Pence Pence Pence
Revenue earnings per ordinary
share 15.69 14.48 23.82
Capital (loss)/earnings
per ordinary share (3.29) 85.92 153.24
-------------- -------------- --------------
Total earnings per ordinary
share 12.40 100.40 177.06
======== ======== ========
4 Interim dividend
The Directors have declared a second interim dividend of
5.25p per ordinary share (2017: 4.75p), payable on 18 September
2018 to shareholders registered on 24 August 2018. The shares
will be quoted ex-dividend on 23 August 2018. A first interim
dividend of 5.25p (2017: 4.75p) was paid on 18 June 2018.
Page 15 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Notes to the Financial Statements (continued)
5 Ordinary share capital
At 30 June 2018 there were 178,233,760 ordinary shares in
issue (30 June 2017: 178,872,058; 31 December 2017: 178,449,589)
and 21,837,240 shares held in treasury (30 June 2017: 21,198,942;
31 December 2017: 21,621,411). During the half year ended
30 June 2018 the Company bought back 215,829 of its own
ordinary shares (half year ended 30 June 2017: 2,338,681;
year ended 31 December 2017: 2,761,150). The costs of the
share buybacks were GBP2,272,000 (half year ended 30 June
2017: GBP22,221,000; year ended 31 December 2017: GBP26,622,000).
6 Net asset value per ordinary share
The net asset value per ordinary share is based on the net
assets attributable to the equity shareholders of GBP1,978,977,000
(30 June 2017: GBP1,865,092,000; 31 December 2017: GBP1,980,521,000)
and on 178,233,760 (30 June 2017: 178,872,058; 31 December
2017: 178,449,589) ordinary shares, being the number of
ordinary shares in issue at the period end.
7 Subsidiary undertaking
The Company has an investment in the issued ordinary share
capital of its wholly owned subsidiary undertaking, Witan
Investment Services Limited, which is registered in England
and Wales, operates in the United Kingdom and is regulated
by the Financial Conduct Authority.
8 Financial instruments
Balance sheet amount versus fair value
At the period end, the carrying value of financial assets
and financial liabilities approximates their fair value
with the exception of the non current liabilities as detailed
below:
Balance
Sheet amount
Fair value GBP'000
Financial liabilities measured GBP'000
at amortised cost
Non current liabilities
Preference shares 1,354 2,555
Secured bonds 80,732 63,581
Secured notes 113,573 104,287
-------------- --------------
195,659 170,423
-------------- --------------
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 the fair value hierarchy based on the inputs to valuation techniques used. The different levels are defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability.
Page 16 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Notes to the Financial Statements (continued)
8 Financial instruments (continued)
Financial assets and financial Level Level Level Total
liabilities at fair value through 1 2 3 GBP'000
profit or loss at 30 June 2018 GBP'000 GBP'000 GBP'000
Investments including derivatives:
Equity securities designated
at fair value through profit
or loss 2,165,892 - - 2,165,892
Investments in other funds - 14,823 - 14,823
------------- ----------- --------- ------------
Total financial assets carried
at fair value 2,165,892 14,823 - 2,180,715
======== ====== ===== =======
There were no Level 3 investments during the six months
to 30 June 2018.
There have been no transfers between levels of the 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.
Categorisation within the hierarchy has been determined
on the basis of the lowest level input that is significant
to the fair value measurement of the relevant asset 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 in Level
1.
Included in Level 2 is an investment in Somerset Emerging
Markets Small Cap Fund.
Level 3: valued by reference to valuation techniques using
inputs that are not based on observable market data.
The valuation techniques used by the Group are explained
in the accounting policies in the year end accounts.
9 Segment reporting
As detailed in the Company's Annual Report for the year
ended 31 December 2017, geographical segments are considered
to be the Group's primary reporting segment and business
segments the secondary reporting segment. The Group has
two business segments: (i) its activity as an investment
trust, which is the business of the parent company; and
(ii) the provision of alternative investment fund manager,
executive and marketing management services and the management
of savings schemes, which is the business of the subsidiary,
Witan Investment Services Limited, and recorded in the accounts
of that company. The investment trust is managed by reference
to a geographical benchmark; the geographical allocation
of the portfolio, as at 30 June 2018, is set out on page
2 above. The schedule on page 9 above summarises the assets
under management and investment performance relating to
each investment manager. This information is updated and
reviewed regularly for internal management purposes and
is essential for assessing the structure of the overall
portfolio and the performance of each investment manager.
Page 17 of 17
WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2018
Notes to the Financial Statements (continued)
9 Segment reporting (continued)
Half year ended Half year ended Year ended
30 June 2018 30 June 2017 31 December 2017
Investment Management Investment Management Investment Management
trust services trust services trust services
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue* 34,641 560 32,059 547 54,649 1,094
Interest
expense 4,217 - 3,662 - 7,618 -
Net result 22,123 - 180,431 - 317,203 -
Carrying
amount
of assets 1,977,764 1,213 1,863,363 1,729 1,979,169 1,352
*The investment and other income of the parent company.
10 Comparative information
The financial information contained in this half year financial
report does not constitute statutory accounts as defined
in section 434 of the Companies Act 2006. The financial
information for the half years ended 30 June 2018 and 30
June 2017 has been neither audited nor reviewed by the auditors.
The figures and financial information for the year ended
31 December 2017 are extracted from the latest published
audited financial statements of the Company and do not constitute
the statutory accounts for that year. The audited financial
statements for the year ended 31 December 2017 have been
filed with the Registrar of Companies. The report of the
independent auditors on those accounts contained no qualification
or statement under section 498(2) or section 498(3) of the
Companies Act 2006.
Financial report for the half year ended 30 June 2018
The financial report for the half year ended 30 June 2018 will
be filed with the UK Listing Authority by 31 August 2018 and
will be made available on the Company's website. Printed copies
or electronic notification will be sent to shareholders in August
2018 and will be available thereafter from the Secretary at
the Company's registered office, 14 Queen Anne's Gate, London
SW1H 9AA.
For further information please contact:
Andrew Bell Alexis Barling Chief Executive Officer Director of Marketing Witan Investment Trust plc Witan Investment Trust plc Telephone: 020 7227 9770 Telephone: 020 7227 9770
- ENDS -
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) is incorporated into, or forms part of, this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR SFIFWDFASESA
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