Blue Planet Investment Trust plc
Half Yearly Report and Accounts
For the six months ended 31 October
2016
Officers and Advisors |
Directors
John Tyce (Non-Executive Chairman)
Victoria Killay (Non-Executive)
Kenneth Murray (Non-Executive) |
Investment Manager, Administrator and Secretary
Blue Planet Investment Management Ltd
18a Locker Street
Sliema
SLM 3124, Malta
Telephone No: +356 2131 4309
Facsimile No: +356 2131 5219 |
Local call rate from UK 0845 527 7588, plus
Service Charge of 5p per call
E-mail: info@blueplanet.eu |
|
www.blueplanet.eu |
Registered Office
Greenside House
25 Greenside Place
Edinburgh EH1 3AA
Telephone No: +44 131 466 6666
Facsimile No: +44 131 466 6677
E-mail: info@blueplanet.eu |
Registrars
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Shareholder Helpline No: 0871 664 0300 (calls cost 10p |
www.blueplanet.eu |
per minute plus
network extras, lines are open 8.30am-5.30pm (Mon-Fri)) |
|
Overseas:
+44 208 639 3399
E-mail: ssd@capitaregistrars.com
www.capitaassetservices.com |
Chartered Accountants & Statutory Auditors
Deloitte LLP
Saltire Court
20 Castle Terrace
Edinburgh EH1 2DB |
Bankers
Lloyds Banking Group
1st Floor
48 Chiswell Street
London EC1Y 4XX |
Custodians
KAS Bank N.V.
Westferry House, 11 Westferry Circus
London E14 4HD |
Custodians
Interactive Brokers (U.K.) Ltd
Level 20 Heron Tower, 110 Bishopsgate
London EC2N
4AY |
Registered Number
SC192153 |
|
Blue Planet Investment Trust plc is a member of the Association of
Investment Companies.
Investment Policy and Objectives
The Company’s objective is to provide investors with a
combination of capital growth and income. In order to achieve
this it invests in securities (including equities, exchange traded
funds, equity-related securities, bonds and derivatives) issued by
companies, Governments and other types of issuers located
throughout the world.
The Company has not set maximum exposures for any type of
issuer, geographical regions or sectors. How the Company’s
investments are allocated depends on market conditions and the
judgement of the Board as to what is in the best interests of
Shareholders. This is to provide it with the flexibility that
is necessary to deal with an ever changing economic
environment. It would, however, normally be expected that
most of the Company’s investments will be in equities, exchange
traded funds, equity-related securities, preference shares, bonds
and derivatives. However, the Company is not prohibited from
investing in other types of securities. No more than 15 per
cent of the Company’s portfolio may be invested in any one
investment at the time the investment is made. There is no
restriction on the amount that may be invested in any one
country.
The Company may use derivatives (including, but not limited to,
contracts for differences, futures and options), principally, but
not exclusively, for efficient portfolio management, that is to
reduce, transfer or eliminate investment risk in its investments,
including protection against currency risks.
The Company’s Articles permit borrowing up to an amount not
exceeding 75% of Shareholders’ funds. The Board may utilise
borrowing up to this limit from time to time to enhance income and
capital returns over the long term and may borrow in Sterling and
other currencies.
Financial
Record |
Six
months ended 31
October 2016
(unaudited) |
Six
months ended 31
October 2015
(unaudited) |
Year
ended 30
April 2016
(audited) |
Shareholders’ funds (£’000) |
27,331 |
23,640 |
23,193 |
Net asset value per share (p) |
55.24 |
47.78 |
46.88 |
Share price (p) (Bid) |
35.00 |
34.00 |
34.00 |
Discount (%) |
36.64 |
28.84 |
27.50 |
Gearing (%)* |
31.29 |
50.54 |
47.60 |
|
|
|
|
Return available for shareholders
(£’000) |
1,447 |
961 |
1,487 |
Capital return in the period
(£’000) |
4,176 |
(4,361) |
(5,334) |
|
|
|
|
Revenue return per share (p) |
2.92 |
1.94 |
3.00 |
Total return per share (p) |
11.36 |
(6.87) |
(7.78) |
Dividend per share (p) |
- |
- |
3.00 |
Dividend yield on our shares
(%) |
N/A |
N/A |
8.82 |
Ongoing Charges (%) ** |
3.71 |
3.72 |
3.91 |
* Net debt as a percentage of shareholders’ funds
** Ongoing charges figure has been prepared in accordance with the
AIC’s recommended methodology.
The Investment
Manager
Under the Alternative Investment Fund Management Directive
legislation, the Trust has elected to be its own AIF manager but
has delegated the day to day management of the investment portfolio
and administration to Blue Planet Investment Management Ltd.
It is an independent firm that specialises in advising and managing
investment and family trusts. It has a great deal of
expertise in managing investments on a worldwide basis. It is
regulated by the Malta Financial Services Authority.
Blue Planet Investment Management Ltd is the investment manager
of the Company and receives an annual fee of 1.50% per annum of the
total assets of the company which is paid monthly. Blue Planet
Investment Management Ltd also receives £196,000 per annum in
respect of administration and secretarial services. The
investment management, administration and secretarial services
agreements may only be terminated on receipt of two years
notice.
Website Information
Please take the time to visit our website:
www.blueplanet.eu
Subscribe to our monthly fact sheet service:
http://www.blueplanet.eu/blueplanet_downloads.136.html
To download historical Annual and Interim reports and past monthly
fund fact sheets:
http://www.blueplanet.eu/blueplanet_downloads.124.html
To view stock market RNS announcements:
http://www.blueplanet.eu/blueplanet_news.8.html
Retail Distribution of Investment Company Shares
Blue Planet Investment Trust plc currently conducts its affairs
so that the shares issued by the Company can be recommended by
Independent Financial Advisers to ordinary retail investors in
accordance with the Financial Conduct Authority’s rules in relation
to non-mainstream investment products and intends to continue to do
so for the foreseeable future.
The shares are excluded from the Financial Conduct Authority’s
restrictions which apply to non-mainstream investment products
because they are shares in an investment trust.
Interim Management Report – Portfolio Information
As at 31 October 2016 |
|
|
|
|
Country |
Valuation
(£) |
% of
Portfolio |
Ordinary
Shares |
|
|
|
ETRACS 2x Leveraged
Long WFC BDCI ETN |
United States |
1,924,762 |
5.3 |
Delta Lloyd NV |
Netherlands |
1,531,928 |
4.3 |
HSBC Holdings plc |
United Kingdom |
1,420,957 |
4.0 |
National Grid plc |
United Kingdom |
995,308 |
2.8 |
Bank of Ireland |
Eire |
851,704 |
2.4 |
General Motors Co |
United States |
851,423 |
2.4 |
Aegean Airlines SA |
Greece |
814,362 |
2.3 |
Direct Line Insurance Group |
United Kingdom |
813,335 |
2.3 |
Allianz SE |
Germany |
765,202 |
2.1 |
Enagas SA |
Spain |
727,040 |
2.0 |
SSE plc |
United Kingdom |
700,040 |
1.9 |
AXA SA |
France |
552,511 |
1.5 |
TrovaGene Inc. |
United States |
345,688 |
1.0 |
KCAP Financial Inc. |
United States |
229,970 |
0.6 |
|
|
|
|
|
|
12,524,230 |
34.9 |
|
|
|
|
Preference Shares |
|
|
|
Lloyds Banking Group 9.25% |
United Kingdom |
1,122,095 |
3.1 |
NatWest Bank 9% |
United Kingdom |
670,000 |
1.9 |
Santander UK plc 10.375% |
United Kingdom |
438,780 |
1.2 |
Standard Chartered 8.25% |
United Kingdom |
378,000 |
1.1 |
Santander UK plc 8.625% |
United Kingdom |
274,000 |
0.7 |
RSA Insurance 7.375% Cumulative
Preference Share |
United Kingdom |
62,125 |
0.2 |
|
|
|
|
|
|
2,945,000 |
8.2 |
|
|
|
|
Debt
Securities |
|
|
|
Republic of Brazil 10%
01/01/2025 |
Brazil |
5,046,920 |
14.0 |
LEBAC ARS VTO. 28/12/2016 |
Argentina |
2,480,316 |
6.9 |
Gulf Keystone Variable 18/10/21 |
Bermuda |
1,496,205 |
4.2 |
Bono Nacion ARS 01/03/2020 |
Argentina |
1,419,332 |
3.9 |
Genel Energy 7.5% 14/05/19 |
United Kingdom |
1,222,227 |
3.4 |
BBVA 8.875% 29/12/49 |
Spain |
965,543 |
2.7 |
Erste Bank 8.875% 29/12/49 |
Austria |
953,184 |
2.6 |
Petrobras 6.625% 16/01/34 |
Brazil |
871,419 |
2.4 |
Aviva plc 6.875% 20/05/58 |
United Kingdom |
812,239 |
2.3 |
Lloyds Bank plc 7.625% 22/04/25 |
United Kingdom |
788,969 |
2.2 |
Bank of Ireland 13.375%
Perpetual |
Eire |
698,535 |
1.9 |
Co-operative Bank 11% 20/12/23 |
United Kingdom |
647,512 |
1.8 |
Phoenix Group 6.625% 18/12/25 |
United Kingdom |
603,925 |
1.7 |
Bono Nacion ARS 18.2%
03/10/2021 |
Argentina |
582,735 |
1.6 |
Santander UK 10.0625% 29/10/49 |
United Kingdom |
543,375 |
1.5 |
Bono Nacion ARS 22.75%
05/03/2018 |
Argentina |
506,783 |
1.4 |
Sea Trucks Group 9% 26/03/18 |
Nigeria |
382,750 |
1.1 |
LEBAC ARS VTO. 04/01/2017 |
Argentina |
31,647 |
0.1 |
|
|
|
|
|
|
20,053,616 |
55.7 |
|
|
|
|
Listed Investments |
|
35,522,846 |
98.8 |
|
|
|
|
Cash |
|
444,557 |
1.2 |
|
|
|
|
Total |
|
35,967,403 |
100.0 |
Interim Management Report
Performance
The Fund generated a NAV total return of +24.2% in the six months
to 31st October 2016 and paid a dividend of 3.00p per
share to shareholders on the 23rd August
2016. By comparison, the FTSE 100 generated a total return
of +13.6% over the same period, so we outperformed that by a
considerable margin. Indeed, we outperformed all major,
international equity indices by a considerable margin. The FTSE 100
was one of the best performing indices over the period and is
perhaps not representative of the wider market. For example, the
total return on the Eurostoxx 50 was just +2.9% over the period. In
the case of the German DAX it was +6.2%, +4.6% for the French CAC,
+4.1% for the S&P 500, and +9.3% for the Nasdaq. Given the
extent of our outperformance and our high and increasing dividend
payments, it is disappointing that our share price has yet to fully
reflect this and our share price total return over the period was
+11.8%. This was good but not as good as it could have been.
Over the course of the six months, we continued to reduce our
exposure to equities while increasing our exposure to mispriced,
higher yielding, less volatile assets, principally bonds and
treasury bills. To be more precise, the equity element of the
portfolio was reduced by 20.6 percentage points to 34.9% while the
bond and treasury bill element was increased by 22.2 percentage
points to 55.7%. The remainder of the fund is invested in
preference shares (8.2%) and cash (1.2%).
In terms of equities, we sold all of our investments in the
technology sector. While we continue to like the companies we were
invested in, they are nonetheless volatile and produce no yield. It
is also a sector that is vulnerable to sharp sell offs in the event
of a bear market, the probability of which is rising. So, we
decided to exit it in favour of safer, less volatile,
higher-yielding assets and our investments in Arista Networks,
Infinera Corp, NXP Semiconductors, Mobileye and Synchronoss
Technologies were all sold.
As part of this strategy we increased our investments in
Argentina, purchasing a floating
rate Government bond denominated in Pesos in June/July with a yield
to maturity of 32.5% at the time of purchase. Argentina is now governed by its first
competent government in many decades and confidence in its new
President, Mauricio Macri, seems
well placed. Since his appointment Argentina has regained access to the world’s
bond markets and we expect the Argentinian Peso to appreciate over
the coming months as a consequence of President Macri’s
policies.
In October, we bought two more Argentine Government bonds
denominated in Pesos with fixed coupons of 18.2% and 22.75%,
further boosting our income. We also bought fixed rate, perpetual
bonds from two strong European banks, BBVA and Erste Group, on
yields of 8.78% and 8.72% respectively and some fixed-rate bonds
issued by the London listed oil
company, Genel Energy, with a yield to maturity of over 19%.
There were a number of significant contributors to our
performance over the first half of the year, one of which was our
geographic asset allocation and foreign exchange hedging
strategies. In June, the impact of the Brexit vote hit markets,
that had by and large taken a vote to remain in the EU as a forgone
conclusion, hard. We, however, never shared that view and went into
the vote with our currency exposures largely unhedged in
anticipation of Sterling weakness in the event of a vote in favour
of Brexit. We also increased our holdings of overseas assets ahead
of the vote. Those decisions have benefitted us greatly as Sterling
(“GBP”) has collapsed, falling 22.2% against the Brazilian Real
(“BRL”), 16.2% against the US Dollar (“USD”), 12.6% against Euro
(“EUR”) and 11.1% against the Argentinian Peso (“ARS”) in the first
six months of this financial year. However, we, now see more upside
than downside in Sterling, and have been steadily increasing our
currency hedges in order to lock in those profits. At the
31st October 2016, we had around one
fifth of our foreign currency positions hedged and we intend to
increase that further.
The largest contributions to our performance in terms of our
equity holdings came from ETRACS 2x Long WFC BDC ETN, Delta Lloyd
NV and HSBC Holdings plc which produced total returns of 39.4%,
43.9% and 39.5% respectively. In terms of our bond portfolio, the
largest contributor was our Brazilian Government bonds which
produced a total return of 43.6%. This was and remains our single
largest investment. Our Gulf Keystone guaranteed notes and
Argentinian treasury bills also did very well, producing total
returns of 109.4% and 28.7% respectively. Whilst the majority of
our portfolio performed well during the period, these six
investments contributed almost 60% of our total return.
Specific situations worth highlighting in relation to our top
performers were the restructuring of Gulf Keystone’s capital base
in July and the all-cash offer for Delta
Lloyd from NN Group in October. The restructuring of Gulf
Keystone’s capital base was made inevitable following the fall in
the price of oil that left the company unable to service its debts.
This effectively left the guaranteed noteholders owning the company
with ordinary shareholders and subordinated debt holders all but
wiped out. We saw that opportunity at the time of purchase and our
Gulf Keystone guaranteed notes have done very well for us,
providing a total return of 109.4% in the six months to 31st
October. Similarly, after Delta Lloyd’s capital issues last year,
we felt the stock was oversold and again saw value in it. So, it
came as no surprise to us when NN Group made a bid for the Company.
We had been forecasting that it might be subject to a takeover bid
for some time and mentioned this in last year’s annual report.
Despite producing a total return for us of 43.9% over the six month
period, we still expect more from the shares as the current offer
from NN Group is too low and we would expect them to increase it to
between 5.80 and 6.00 euros per
share, with the added benefit that another bidder may yet emerge
for the company.
Income and Dividends
A dividend of 3.00p per share was paid on 23rd August
2016 in respect of the financial year ended 30th April
2016. This represented a 6.4% increase on the 2.82p per
share dividend paid for the financial year ended 30th April
2015. As the table below shows we have increased the
dividend we pay to shareholders by 119% over the last four years.
We have also increased it in every one of those years. We
expect that trend to continue and on the basis of our current
financial projections we anticipate that the dividend for the
current year will be materially higher than that paid last
year.
Financial Year |
Dividend Amount
per share |
% Change |
Ex-date |
Record date |
Pay date |
2016 |
3.00p |
+6.4% |
14/07/2016 |
15/07/2016 |
23/08/2016 |
2015 |
2.82p |
+22.6% |
23/07/2015 |
24/07/2015 |
28/08/2015 |
2014 |
2.30p |
+67.9% |
16/07/2014 |
18/07/2014 |
25/08/2014 |
2013 |
1.37p |
- |
26/06/2013 |
28/06/2013 |
29/07/2013 |
In accordance with established policy no interim dividend has
been declared for the first half of the year.
Outlook
The outlook from an economics point of view is very interesting.
The printing of new money at a rate that is well in excess of the
growth in real goods and services (so called “monetary easing”)
will have to end soon to avoid a sharp rise in the inflation rate,
at which point markets/private investors will regain control over
the setting of interest rates from central banks. Central banks
cannot go on printing huge amounts of money in order to buy bonds
and suppress interest rates for ever without it having inflationary
consequences. Indeed, they have only been able to avoid those
pressures in recent years by trick or design. They all devalued
their currencies simultaneously thereby suppressing relative
inflation but nonetheless devaluing money on a global basis. The
corollary of this is that once one major central bank stops
printing money that is not backed by rises in real GDP the others
will be forced to follow suit otherwise their economies will see
inflationary pressures build. And the most important central bank
in this equation is the Federal Reserve as most globally traded
goods and services are priced in US Dollars (“USD”). If the USD
appreciates faster than other currencies, it creates inflation in
those countries. Once the Federal Reserve tightens monetary policy
all others will come under pressure to do the same.
Unwinding quantitative easing will be challenging. Central
Banks have embarked on programmes of quantitative easing that
always carried the risk of inflation. Employing multiple
programmes involving huge sums of money has compounded this
risk. We do not believe that central bankers understand the
risks entailed in their policy and as a result they are not
prepared for its consequences. Central bankers can and do
make serious mistakes.
As quantitative easing comes to an end it will, in our opinion,
lead to sharply higher interest rates and while central banks will
try to dampen the rate of increase, rates are going to rise faster
and further than many in the markets anticipate. We would not be
surprised to see yields on 10-year Sterling U.K. Government bonds
rise to in excess of 3.5% or possibly even 4.0% by the end of 2018.
They are at the date of writing 1.5% having been as low as 0.6% in
August 2016. The impact of these
rises will be significant and will result in serious losses for
financial institutions and others. They will also put already weak
government finances under strain.
Most exposed are holders of very low yielding, long dated, fixed
rate bonds; typically developed world government debt, an area we
have stayed well clear of. Perpetual bonds and preference shares
are also at risk and we have a limited exposure to them although
the ones we have are on high yields which will afford us some
protection. But choppy waters do lie ahead. Equity markets
are also vulnerable and that is why we have been reducing our
exposure to them. Emerging markets will also be affected but by
being highly selective in what we buy we have done our best to
mitigate that risk.
Other factors that are likely to have a bearing on the direction
of markets are Brexit, what happens next in Europe and the Trump presidency.
As regards Brexit, we expect this to have a moderately negative
short term impact on the UK economy lasting about two to three
years followed by a larger beneficial impact over the long run
provided politicians aggressively remove all of the red tape and
legislation imposed on business and individuals by the EU, cut
government expenditure and taxes and negotiate good free trade
deals with other economies. Essentially, we believe Brexit has the
potential to be very beneficial to the UK economy provided the
correct economic policies are pursued. We will, however, have to
wait to see if they are.
The consequences of Brexit for the EU, however, run far deeper
than the simple economic ones. The EU is now clearly very unstable
with growing discontent across the whole continent and we do not
believe that the UK will be the last country to leave. Denmark, Sweden, Holland, Hungary and possibly even Germany may follow suit. The EU is in the
process of disintegrating. If other countries do peel off, the EU
will further destabilise and the Euro is likely to lose much of its
value. In recognition of those risks, we have fully hedged
all of our Euro investments. Perhaps, ironically, the only hope for
the EU is if it re-invents itself as a less bureaucratic, more
people and business friendly organisation that leaves much more
discretion and power with individual member states. Essentially,
returning to the original concept of a single market.
The implications of a Trump presidency are at this stage
unclear. His pledges to cut taxes and increase infrastructure
spending would clearly benefit the US economy and investors in US
companies but beyond that his economic policies are essentially
unknown. He has espoused protectionist policies during the election
campaign but how that will play out is anybody's guess. Until such
time as we have a clearer idea of what his economic policies will
be, we will be adopting a wait and see approach.
Finally, it is worth noting that the current bull market which
started in March, 2009 has been the second longest and fourth
strongest on record in terms of percentage change in history. From
a purely statistical point of view this means that the probability
of a bear market is high and rising. That risk along with our
own economic assessment of events has and continues to colour our
investment strategy hence our focus on high yielding investments
and divestment of low or no yielding investments. We are battening
down the proverbial hatches.
Gearing and Capital Allocation
At the end of the six month period to 31st October
2016 the Trust had gearing, net of cash, equal to 31.3% of
NAV and its portfolio was allocated as follows: 55.7% was
invested in bonds; 34.9% in ordinary shares; 8.2% in preference
shares and 1.2% in cash. Figure 1 shows the movement in the
allocation of our capital across those four different asset
classes, ordinary shares, bonds, preference shares and cash, since
our year end 30th
April 2016.
Figure 1: Portfolio movements – by asset class
Asset Class |
Oct-16 |
Apr-16 |
|
|
|
Bonds |
55.7% |
33.5% |
Ordinary Shares |
34.8% |
55.5% |
Preference Shares |
8.3% |
11.0% |
Cash |
1.2% |
0.0% |
Total |
100.0% |
100.0% |
Figure 2: Disposition of assets by currency
Currency |
Oct-16 |
Apr-16 |
|
|
|
GBP |
33.9% |
35.9% |
EUR |
19.9% |
15.5% |
USD |
18.2% |
31.3% |
BRL |
14.0% |
10.9% |
ARS |
14.0% |
5.7% |
AUD |
0.0% |
0.8% |
Total |
100.0% |
100.0% |
Principal risks and going concern
Your Company is, and will continue to be, exposed to a number of
risks which are detailed in full in the Strategic Report on page 5
of the Annual Report and have not changed up to the date of this
report. The key market risk arises from the uncertainty regarding
the future price performance of the listed securities held by your
Company. If gearing is employed this risk is magnified.
The prices of the individual listed securities in the portfolio
are monitored on a daily basis and the Board, which meets
quarterly, imposes borrowing limits to ensure gearing levels are
appropriate to market conditions. When gearing is employed the
potential impact of changes in interest rates is taken into
consideration. The securities dealt in are all listed on recognised
exchanges and are readily realisable.
The Fund is exposed to currency risk, due to the range of
currencies in which investments are held. A substantial proportion
of the Company’s assets are held in assets denominated in foreign
currencies and movements in these currencies can significantly
affect the Sterling value of the Company’s foreign denominated
income and assets. The fund manager tracks currency movements on a
regular basis and hedging is considered on a case-by-case
basis.
Where investments are made in emerging markets there is a risk
of higher volatility in the price performance of these equities and
their associated currencies. Political risk and adverse economic
circumstances are more likely to arise, putting the value of the
investment at a higher risk. The registration and settlement
arrangements in emerging markets may be less developed than in more
mature markets so operational risks of investing are higher.
The Company’s business model and strategy, together with the
risk factors likely to affect its future position are set out in
the Strategic Report on page 4 of the Annual Report and Accounts.
The Directors consider that the Company has adequate financial
resources in the form of readily realisable listed securities,
including cash and credit facilities to continue in operational
existence for the foreseeable future. For this reason, they
continue to use the going concern basis in preparing the
accounts
Borrowings, Gearing and Liquidity
The Fund ended the period with gearing net of cash of 31.3%. The
Company financed its gearing by means of credit facilities with KAS
Bank N.V. and Interactive Brokers Group.
Generally, gearing beneficially affects the Company’s NAV when
the value of its investments is rising, but adversely affects it
when the value of investments is falling.
Blue Planet Services and Price Information Sources
Shareholders can view the Company’s share price and additional
information about the Fund on the website of Blue Planet Investment
Management Ltd (www.blueplanet.eu) and the London Stock Exchange
(www.londonstockexchange.com). To find the Company’s share price on
the London Stock Exchange website go to the Home page and type
“BLP” in the “Price Search” field.
I would like to thank all shareholders for your continuing
support.
John Tyce
Chairman
24 November 2016
Balance Sheet
|
At 31
October
2016
£
(unaudited) |
At 31
October
2015
£
(unaudited) |
At 30
April
2016
£
(audited) |
Fixed assets |
|
|
|
Listed
equity investments |
15,469,230 |
25,135,503 |
22,576,051 |
Listed non - equity
investments |
20,053,616 |
8,836,050 |
11,381,454 |
|
35,522,846 |
33,971,553 |
33,957,505 |
Current assets |
|
|
|
Debtors |
530,095 |
1,714,265 |
381,756 |
Cash at bank and in
hand |
444,557 |
17,623 |
6,510 |
Creditors: amounts falling due within one year (note 6) |
(9,166,059) |
(12,063,235) |
(11,152,578) |
Net
current liabilities |
(8,191,407) |
(10,331,347) |
(10,764,312) |
Net
assets |
27,331,439 |
23,640,206 |
23,193,193 |
Capital and reserves |
|
|
|
Called-up
share capital |
497,820 |
497,820 |
497,820 |
Share
premium account |
18,426,406 |
18,426,406 |
18,426,406 |
Other reserves |
|
|
|
Capital reserve – realised |
(5,910,252) |
(2,681,701) |
(4,273,389) |
Capital reserve – investment holding gains |
4,535,654 |
(1,896,522) |
(1,277,145) |
Capital redemption reserve |
8,167,389 |
8,167,389 |
8,167,389 |
Revenue
reserve |
1,614,422 |
1,126,814 |
1,652,112 |
Shareholders’ funds |
27,331,439 |
23,640,206 |
23,193,193 |
Net
asset value per ordinary share (note 4) |
55.24p |
47.78p |
46,.88p |
Statement of Directors’
responsibilities
The Directors confirm that this set of condensed financial
statements has been prepared in accordance with FRS 104 “Interim
Financial Reporting” and that the interim management report herein
includes a fair review of the information required by DTR 4.2.7R
and DTR 4.2.8R.
On behalf of the Board
John Tyce
Chairman
24 November 2016
Statement of Changes in Equity
For the
six months ended 31 October 2016 (unaudited) |
|
Called-up Share capital
(£) |
Share
premium
(£) |
Capital
reserve-realised
(£) |
Capital
reserve- investment holding losses
(£) |
Capital
Redemption reserve
(£) |
Revenue
reserve
(£) |
Total shareholders’ funds
(£) |
Shareholders’ funds at
1 May 2016 |
497,820 |
18,426,406 |
(4,273,389) |
(1,277,145) |
8,167,389 |
1,652,112 |
23,193,193 |
Return on ordinary
activities after taxation |
- |
- |
(1,636,863) |
5,812,799 |
- |
1,446,556 |
5,622,492 |
Dividend paid during
the period |
- |
- |
- |
- |
- |
(1,484,246) |
(1,484,246) |
Shareholders’ funds at
31 October 2016 |
497,820 |
18,426,406 |
(5,910,252) |
4,535,654 |
8,167,389 |
1,614,422 |
27,331,439 |
|
|
|
|
|
|
|
|
For the
six months ended 31 October 2015 (unaudited) |
|
Called-up Share capital
(£) |
Share
premium
(£) |
Capital
reserve-realised
(£) |
Capital
reserve- investment holding losses
(£) |
Capital
Redemption reserve
(£) |
Revenue
reserve
(£) |
Total shareholders’ funds
(£) |
Shareholders’ funds at
1 May 2015 |
497,820 |
18,426,406 |
(4,526,388) |
4,309,452 |
8,167,389 |
1,560,717 |
28,435,396 |
Return on ordinary
activities after taxation |
- |
- |
1,844,687 |
(6,205,974) |
- |
961,288 |
(3,399,999) |
Dividend paid during
the period |
- |
- |
- |
- |
- |
(1,395,191) |
(1,395,191) |
Shareholders’ funds at
31 October 2015 |
497,820 |
18,426,406 |
(2,681,701) |
(1,896,522) |
8,167,389 |
1,126,814 |
23,640,206 |
For the
year ended 30 April 2016 (audited) |
|
Called-up Share capital
(£) |
Share
premium
(£) |
Capital
reserve-realised
(£) |
Capital
reserve- investment holding losses
(£) |
Capital
Redemption reserve
(£) |
Revenue
reserve
(£) |
Total shareholders’ funds
(£) |
Shareholders’ funds at
1 May 2015 |
497,820 |
18,426,406 |
(4,526,388) |
4,309,452 |
8,167,389 |
1,560,717 |
28,435,396 |
Return on ordinary
activities after taxation |
- |
- |
252,999 |
(5,586,597) |
- |
1,486,586 |
(3,847,012) |
Dividend paid during
the period |
- |
- |
- |
- |
- |
(1,395,191) |
(1,395,191) |
Shareholders’ funds at
30 April 2016 |
497,820 |
18,426,406 |
(4,273,389) |
(1,277,145) |
8,167,389 |
1,652,112 |
23,193,193 |
Income Statement
|
For the six months ended 31 October 2016
(unaudited) |
For the six months ended 31 October 2015
(unaudited) |
For the year ended 30 April 2016
(audited) |
|
Revenue
£ |
Capital
£ |
Total
£ |
Revenue
£ |
Capital
£ |
Total
£ |
Revenue
£ |
Capital
£ |
Total
£ |
Capital gains /
(losses) on investment |
|
|
|
|
|
|
|
|
|
Net realised gains /
(losses) |
- |
(322,749) |
(322,749) |
- |
2,387,759 |
2,387,759 |
- |
1,171,228 |
1,171,228 |
Unrealised gains /
(losses) |
- |
5,979,944 |
5,979,944 |
- |
(6,534,638) |
(6,534,638) |
- |
(5,579,801) |
(5,579,801) |
Exchange losses |
- |
(1,319,130) |
(1,319,130) |
- |
(44,308) |
(44,308) |
- |
(597,011) |
(597,011) |
Net capital gains /
(losses) on investment |
- |
4,338,065 |
4,338,065 |
- |
(4,191,187) |
(4,191,187) |
- |
(5,005,584) |
(5,005,584) |
Income from
investments |
1,850,624 |
- |
1,850,624 |
1,389,304 |
- |
1,389,304 |
2,338,304 |
- |
2,338,304 |
Bank interest
receivable |
40 |
- |
40 |
111 |
- |
111 |
117 |
- |
117 |
Gross revenue and
capital gains / (losses) |
1,850,664 |
4,338,065 |
6,188,729 |
1,389,415 |
(4,191,187) |
(2,801,772) |
2,338,421 |
(5,005,584) |
(2,667,163) |
Administrative
expenses |
(336,213) |
(133,754) |
(469,967) |
(338,591) |
(141,145) |
(479,736) |
(682,909) |
(269,633) |
(952,542) |
Net
return before interest payable and taxation |
1,514,451 |
4,204,311 |
5,718,762 |
1,050,824 |
(4,332,332) |
(3,281,508) |
1,655,512 |
(5,275,217) |
(3,619,705) |
Interest payable |
(28,375) |
(28,375) |
(56,750) |
(28,955) |
(28,955) |
(57,910) |
(58,381) |
(58,381) |
(116,762) |
Return
on ordinary activities before taxation |
1,486,076 |
4,175,936 |
5,662,012 |
1,021,869 |
(4,361,287) |
(3,339,418) |
1,597,131 |
(5,333,598) |
(3,736,467) |
Taxation on ordinary
activities (note 3) |
(39,520) |
- |
(39,520) |
(60,581) |
- |
(60,581) |
(110,545) |
- |
(110,545) |
Return on ordinary
activities after taxation |
1,446,556 |
4,175,936 |
5,622,492 |
961,288 |
(4,361,287) |
(3,399,999) |
1,486,586 |
(5,333,598) |
(3,847,012) |
Return per ordinary
share (note 4) |
2.92p |
8.44p |
11.36p |
1.94p |
(8.82)p |
(6.87)p |
3.00p |
(10.78)p |
(7.78)p |
The Total column of the income statement represents the profit
& loss account of the Company.
All revenue and capital items in the above statement derive from
continuing operations.
There were no recognised gains and losses other than those
disclosed above. Accordingly, a statement of total recognised gains
and losses is not required.
Notes
1. The financial statements for the six
months to 31st October
2016 have been prepared on the basis of the accounting
policies set out in the Company’s Annual Report and Accounts as at
30th April 2016 and in
accordance with FRS 104 “Interim Financial Reporting” and
applicable to UK law and accounting standards.
2. All expenses are charged to the
revenue account with the exception of management fees and interest
charges on borrowings, one half of which less the appropriate tax
relief is charged to capital. Investment Management and
Administrators fees totalled £365,508 in the period (Full year to
30 April 2016 - £735,266)
3. The taxation charge arises wholly
from overseas withholding tax on investment income.
4. The return per ordinary share is
based upon the following figures:
|
31
October 2016
(unaudited) |
31
October 2015
(unaudited) |
30 April
2016
(audited) |
Revenue return |
£1,446,556 |
£961,288 |
£1,486,586 |
Capital
return |
£4,175,936 |
£(4,361,287) |
£(5,333,598) |
Weighted
average number of ordinary shares in issue during the period |
49,474,863 |
49,474,863 |
49,474,863 |
The net asset value per ordinary share is calculated on
49,474,863 ordinary shares in issue at the end of the period after
deducting treasury shares.
5. No interim dividend is proposed.
6. The Company has credit facilities with KAS Bank N.V and
Interactive Brokers Group Incorporated. Loans are secured
against the investments held in custody accounts with the
respective lender. As at 31st October 2016 the prevailing rate of interest on
KAS Bank N.V facility was 1.0% and on Interactive Brokers Group
Incorporated the rate was 1.6%. At 31
October 2016, the amount outstanding with these facilities
was £8,996,353 (2015 - £11,965,059)
7. The total number of shares held in treasury
is 307,125. These shares have no voting rights, do not rank for
dividend and are excluded from the calculation of net asset value
and return per ordinary share. At 31 October
2016, the Company had the authority to purchase a further
7,467,000 of its own shares. A resolution to renew this
authority will be proposed at the Annual General Meeting in
2017.
8. The figures and financial information for
the period ended 30th April
2016 are extracted from the latest published accounts of the
Company and do not constitute statutory accounts for the period as
defined in section 434 of the Companies Act 2006. Those
accounts have been delivered to the Registrar of Companies and
include the report of the auditors which was unqualified and did
not contain a statement either under section 498(2) or 498(3) of
the Companies Act 2006. The half yearly Report and Account have not
been audited or reviewed by the Company’s Auditors.