TIDMASIT
Aberforth Split Level Income Trust plc
Audited Annual Results for the year to 30 June 2023
The following is an extract from the Company's Annual Report and Financial
Statements for the year to 30 June 2023. The Annual Report is expected to be
posted to shareholders by 7 August 2023. Members of the public may obtain
copies from Aberforth Partners LLP, 14 Melville Street, Edinburgh EH3 7NS or
from its website: www.aberforth.co.uk. A copy will also shortly be available for
inspection at the National Storage Mechanism at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
FINANCIAL HIGHLIGHTS (SUMMARY)
Performance (Total Return) Year
to
30
June
2023
------
------
Total Assets +9.7%
Ordinary Share NAV +12.2
%
Ordinary Share Price +20.0
%
ZDP Share NAV +3.6%
ZDP Share Price +3.0%
Refer to Note 2, Alternative Performance Measures, and
Glossary.
Dividends Declared
Second Interim Dividend per Ordinary Share 3.30p
Together with the first interim dividend of 1.70p, the
total underlying dividend for the year to 30 June 2023 is
5.00p per Ordinary Share. This is an increase of 16%
compared to last year's underlying dividend of 4.30p,
which represents the total dividend of 4.55p less the
special dividend of 0.25p per Ordinary Share.
The second interim dividend has an ex-dividend date of 10
August 2023, record date of 11 August 2023 and pay date of
31 August 2023.
INVESTMENT OBJECTIVE
The investment objective of Aberforth Split Level Income Trust plc (ASLIT) is to
provide Ordinary Shareholders with a high level of income, with the potential
for income and capital growth, and to provide Zero Dividend Preference (ZDP)
Shareholders with a pre-determined final capital entitlement of 127.25p on the
planned winding-up date of 1 July 2024.
CHAIRMAN'S STATEMENT
Introduction
This is the sixth annual report of Aberforth Split Level Income Trust (the
Company), which covers the financial year to 30 June 2023.
Many of the significant challenges highlighted in my recent reports remain
firmly in focus. Elevated geopolitical tensions, persistently high inflation,
especially in the UK, and rising interest rates continue to influence the
direction of stockmarkets. With consumer budgets and profit margins under
pressure, recession is a realistic threat either in this or next year.
The financial year started well as the initial shock of Russia's invasion of
Ukraine and the impact on energy prices eased. M&A activity also contributed to
positive returns, but the UK's well documented Budget debacle in September 2022
led to weak share prices, higher bond yields and sterling approaching parity
with the US dollar. Calm was restored towards ASLIT's half year with the change
of Prime Minister and Chancellor. Share prices responded well to this
development and further impetus was provided by the emergence of more benign
inflation data in the US. However, enthusiasm about the prospects of lower
interest rates in the US was interrupted by the rapid demise of Silicon Valley
Bank and Credit Suisse, which provoked a sharp reappraisal of risk in March.
Swift regulatory action reassured the markets that these bankruptcies were
isolated cases and enabled stockmarkets to shift their focus back to subsiding
rates of inflation. The exception was the UK, where stubbornly persistent
inflation is requiring the Bank of England to continue to raise interest rates
and, by extension, the risk of recession.
Given this `wall of worry' it was pleasing to see positive index returns for UK
equities during the period, albeit marginal ones for mid and small cap
companies, who underperformed their large cap brethren. However, UK indices
remain deeply unpopular from a global perspective, which is reflected in lower
returns generated during the year compared to most international peers.
Performance
I appreciate that it doesn't really feel like it but in fact, over the financial
year as a whole, UK equities generated positive returns. The Numis Smaller
Companies Index (excluding Investment Companies) ("the Index" or "NSCI (XIC)"),
which defines ASLIT's investment opportunity base, generated a positive total
return of 4.4% over the twelve months to 30 June 2023. Larger companies in the
UK, in the form of the FTSE All-Share Index, recorded a total return of 7.9%.
It is pleasing to report that ASLIT's total assets total return, which measures
its ungeared portfolio performance, was up 9.7% during the year. When geared by
the Zero Dividend Preference (ZDP) Shares, the net asset value total return of
the Ordinary Shares was 12.2%. This reflects the return attributable to equity
Shareholders of 8.87p per Ordinary Share together with the effect of the
reinvestment of previously declared dividends. The Ordinary Share price total
return of 20.0% was helped by a narrowing of the share price's discount to net
asset value from 12.1% to 6.7%.
As the capital value of the portfolio has increased, the projected cumulative
cover of the ZDP shares increased to 3.2 times at 30 June 2023 from 3.0 times
twelve months earlier.
Turning to the longer-term perspective from ASLIT's inception in 2017 to 30 June
2023, the cumulative total assets total return and net asset value total return
are 5.8% and 1.8% respectively. These modest returns are clearly not what the
Board envisaged when ASLIT launched but in its short life, ASLIT has had to
battle with the fraught aftermath of the EU referendum, the pandemic and the war
in Ukraine, as well as the macro-economic headwinds of the past year. Any one of
these events would have been challenging enough for a company with ASLIT's
geared structure, let alone all four. Detail about the effect of these
challenges on ASLIT's valuation opportunity is provided in the Managers' Report.
Earnings and Dividends
The twists and turns of share prices over the year to 30 June 2023 contrast with
the steady progress of ASLIT's revenue stream. The upward trend from the
pandemic lows has continued, which reflects positively on how well investee
companies' boards stewarded capital during what was a very challenging period.
ASLIT's dividend experience in the twelve months was enhanced by the receipt of
seven special dividends.
ASLIT's revenue return per Ordinary Share was 5.35p in the year to 30 June 2023,
which is 11% higher than the 4.81p earned in the year to 30 June 2022. Special
dividends from investee companies represent 0.42p per Ordinary Share of the
5.35p of revenue generated for this financial year.
The Board is pleased to declare a second interim dividend of 3.30p per Ordinary
Share for the year to 30 June 2023, which represents an increase of 18% compared
to the 2.79p in respect of the previous year. Together with the first interim
dividend of 1.70p paid on 8 March 2023, the total underlying ordinary dividend
with respect to the year to 30 June 2023 is 5.00p per Ordinary Share. This is an
increase of 16% compared to last year's ordinary underlying dividend of 4.30p,
which represents the total dividend of 4.55p less the special dividend of 0.25p
per Ordinary Share.
After accounting for the second interim dividend, retained revenue reserves were
1.32p per Ordinary Share at 30 June 2023. There are two reasons for the Board's
decision to increase revenue reserves. First, notwithstanding the resilience of
the investee companies, an economic downturn could affect the dividend
performance of the portfolio. Second, prudent portfolio and liquidity management
activities in the run-up to the end of ASLIT's planned life might affect
dividend receipts. Retained revenue reserves give the Board scope to offset such
factors and sustain dividends paid by ASLIT. Any revenue reserves not utilised
will be distributed to Ordinary Shareholders before or at the end of ASLIT's
planned life next year.
The second interim dividend of 3.30p per Ordinary Share will be paid on 31
August 2023 to Ordinary Shareholders on the register on 11 August 2023. The ex
-dividend date is 10 August 2023. The Company operates a Dividend Reinvestment
Plan. Details of the plan, including the Form of Election, are available from
Aberforth Partners LLP or on the website, www.aberforth.co.uk.
Stewardship
As part of its stewardship responsibilities, the Board regularly reviews the
Managers' approach to environmental, social and governance issues. Pages 13 to
15, of the Annual Report, describe the Board's and Managers' oversight and
activities in the year to 30 June 2023. The Board endorses the Managers'
stewardship policy, which is set out in their submission as a signatory to the
UK Stewardship Code. This, together with examples relating to voting and
engagement with investee companies, can be found in the "About Aberforth"
section of the Managers' website.
Annual General Meeting ("AGM")
The AGM will be held at 14 Melville Street, Edinburgh EH3 7NS at 11.00 a.m. on
30 October 2023 and details of the resolutions to be considered by Shareholders
are set out in the Notice of the Meeting on page 62 of the Annual Report.
Shareholders are encouraged to submit their votes by proxy in advance of the
meeting. An update on performance and the portfolio will be available on the
Managers' website following the meeting.
Conclusion
The Board is conscious that ASLIT's capital performance over its life so far has
not matched expectations at the time of launch. However, despite the various top
-down challenges along the way, the investee companies have made underlying
progress, as may be gauged from the growth in ASLIT's dividend over the six
years. The upshot of muted capital returns and resilient profits is that the
portfolio's valuations today appear even more attractive than was the case at
inception. The consequent opportunity is addressed in detail in the Managers'
Report and influences the Board's thinking as it contemplates the end of ASLIT's
planned life.
That planned life ends on 1 July 2024, on which date or in the three months
prior, the Board is obliged by the Company's Articles to convene a general
meeting to propose that the Company be wound up. The spectre of recession and
the general apathy towards UK assets mean that the upside in ASLIT's portfolio
is unlikely to be fully realised by 1 July 2024. Therefore, before then, the
Board intends to examine means whereby holders of both classes of Share will be
given the opportunity to continue their investment in some form, alongside the
option to realise their investment in cash.
The Board is working with the Managers and at this stage nothing has yet been
decided or, indeed, ruled out. We shall seek specialist advice in due course and
shall also take account of feedback received from Shareholders when developing
proposals, which we would expect to finalise during the second calendar quarter
of 2024.
My fellow directors and I would welcome the views of Shareholders about these or
any other matters pertinent to the Company, to which end my email address is
noted below.
Angus Gordon Lennox
Chairman
27 July 2023
Angus.GordonLennox@aberforth.co.uk
Managers' Report
Introduction
Equity returns over the twelve months to 30 June 2023 were positive. The FTSE
All-Share index, which is representative of large UK companies, recorded a total
return of +7.9%. The gain from smaller companies was more modest. The total
return of the NSCI (XIC), which is ASLIT's investment universe, was +4.4%.
ASLIT's total asset total return, which is a measure of the portfolio's ungeared
performance, was +9.7%. This backdrop of rising share prices benefited both
classes of shareholder: the Ordinary Shares' net asset value total return was
+12.2%, while the final cumulative cover of the ZDP Shares rose from 3.0x to
3.2x.
The positive returns from equity markets around the world in the twelve months
to 30 June 2023 contrast with the falling share prices that characterised
ASLIT's previous financial year. Several factors contributed to the improved
mood. The initial shock of Russia's war in Ukraine has subsided, while some of
the worst fears about energy supplies and prices have so far proved misplaced.
The reopening of China's economy, following strict pandemic lockdowns, should
contribute to global economic activity and promises to ease pressure on supply
chains. Related to these points, inflationary forces appear to be abating: in
most major economies, the rate of change in consumer prices is declining, though
it remains elevated in comparison with the period before the pandemic.
The response to inflation has been the large and rapid increases in interest
rates over the past 18 months. These have complicated economic activity and
asset valuations. They have also precipitated financial accidents, such as the
UK's brief LDI crisis in the autumn followed by the spring's regional bank
failures in the US. The markets' calculation is that subsiding inflation will
soon allow the Federal Reserve to signal that the all-important US Fed Funds
rate has peaked. In stockmarket terms, the main beneficiaries so far of this
expectation of falling interest rates have been the large technology companies
in the US: their valuations thrived in the low inflation and low interest rate
environment preceding the pandemic and they are perceived as being best placed
to exploit the emerging fascination with artificial intelligence.
The likelihood of the UK's monetary policy following suit seems more distant.
Consumer price inflation is proving more persistent, forcing the Bank of England
to raise interest rates to 5% and bringing recession closer as higher mortgage
rates bite. Reawakened memories of a British problem with inflation have
contributed to a pervasive and thorough pessimism about the UK's prospects.
Domestic politics of recent years have not helped. A succession of prime
ministers has struggled with the additional challenges that the country's
departure from the EU has presented to economic activity. Ideology has too often
won out over pragmatism, culminating only nine months ago in Liz Truss's
extraordinary and short-lived premiership.
These concerns have affected investment in the UK. Open-ended equity funds have
experienced persistent outflows for several years and institutional asset
allocation decisions appear influenced more by what has been rather than what
will be. Valuations attributed to UK assets languish. Against the dollar and
euro, sterling remains 15% or so below its levels before the EU referendum. Gilt
yields are on a wide premium to government bond yields in the US and Europe. And
UK stockmarket valuations are towards their lowest in over 30 years when
compared with global equity market averages.
Equity valuations are examined in greater detail later in this report, but the
important point is that they contrast sharply with the recent performance of the
underlying businesses. The majority of small UK quoted companies and of the
portfolio's holdings increased profits and dividends over the past year,
notwithstanding the slew of macro-economic challenges. Cost inflation was passed
on successfully, which confounds a recurring concern that small companies lack
pricing power. Balance sheets were strengthened and are as strong as they have
been in Aberforth's 32 years history. This underlying progress and resilience
have persisted through the first part of 2023.
Performance and portfolio analysis
The following paragraphs describe the main influences on ASLIT's performance
over the twelve months to 30 June 2023, as well as some of the significant
characteristics of the portfolio.
Style
The Managers' value investment style has often been a significant influence on
ASLIT's returns, and that was again the case in the twelve months to 30 June
2023. Over this period, the value cohort of the NSCI (XIC) significantly out
-performed the index's growth stocks, according to data from the London Business
School. Continuing the trend since the pandemic recovery started, investment
style was therefore beneficial to ASLIT's returns. It is notable that most of
this benefit came in the earlier part of the twelve month period. Over recent
months, the glamour of artificial intelligence has contributed to a strong
rebound in the share prices of the American technology leviathans, which has
been to the advantage of the growth style.
Size
The NSCI (XIC) is formed from companies in the bottom ten per cent by value of
the entire UK stockmarket. This meant that the largest company in the index on
its 1 January 2023 rebalancing had a market capitalisation of £1.6bn and that
the index has a significant overlap with the FTSE 250. ASLIT's portfolio has a
relatively low exposure to companies in this overlap. It has relatively high
exposure to the NSCI (XIC)'s smaller constituents. This reflects these "smaller
small" companies' much more attractive valuations, which are set out later in
this report. Over the twelve months to 30 June 2023, the portfolio's size
positioning was modestly unhelpful to investment performance, as can be gauged
by the fact that the FTSE 250 out-performed the FTSE SmallCap by 3%.
Balance sheets
The table below shows the balance sheet profile of the portfolio and of the
Tracked Universe at 30 June 2023, which is the subset of the NSCI (XIC) that the
Managers follow closely and which represents 98% by value of the total index.
Weight in Net cash Net debt/EBITDA < 2x Net debt/EBITDA > 2x Others*
companies
with:
Portfolio 47% 42% 5% 5%
2023
Tracked 34% 36% 23% 8%
Universe
2023
*Includes
loss-makers
and lenders
The portfolio's balance sheet profile compares well with that of the index,
having a relatively high exposure to companies with net cash and a relatively
low exposure to those with higher leverage. This profile has emerged from the
Managers' bottom-up stock selection - the stockmarket is not giving small
companies credit in their valuations for balance sheet strength.
The other important point to make about small companies' balance sheets is that
they have not been so strong since around 2014. Companies had entered the 2009
recession with too much leverage and spent the next five years repairing their
balance sheets. Today, in contrast, companies would be entering a slowdown or
recession with healthy balance sheets. Clearly, there are exceptions, but the
broad-based balance sheet resilience is an under-appreciated feature of small
companies at present.
Income
ASLIT's aim to generate income growth from its portfolio was impeded by the
pandemic, which forced many small companies to pass their dividends and
necessitated a cut in ASLIT's dividend two years ago. However, since the
pandemic recovery started, smaller companies have displayed their resilience and
their commitment to their shareholders by promptly resuming dividend payments.
The rebound has been surprisingly and pleasingly quick, which has allowed
ASLIT's revenue return attributable to Equity Shareholders in the twelve months
to 30 June 2023 to exceed its pre-pandemic level.
The table below illustrates the dividend performance of the portfolio over the
past year. It splits the 63 holdings into five categories, which are determined
by each company's most recent dividend action.
Nil Payer Cutter Unchanged Payer Increased Payer New / Returner
4 8 8 40 3
The majority of the holdings increased their most recent dividends. A further
boost to the income performance comes from the New / Returners category. Its
constituents are companies that are paying dividends for the first time or that
have resumed payments, having paid nothing through the pandemic. It is
anticipated that three of the current Nil Payers will move into the New /
Returner category over the next twelve months. ASLIT's income also benefited
from seven special dividends announced by investee companies in the year to 30
June 2023.
The average historical yield of the portfolio's holdings at 30 June 2023 was
5.2%, while the average dividend cover was 2.4x. An economic downturn would
threaten dividend forecasts, but its impact should be mitigated by the
portfolio's high dividend cover and strong balance sheets.
Corporate Activity
There was a flurry of M&A activity in the first part of 2022, but this petered
out as interest rates and the cost of corporate debt rose through the second
half of the year. Entering 2023, the Managers believed that the volatility of
debt markets would continue to discourage takeovers. In the event, however, six
new bids were announced for constituents of the NSCI (XIC) in the six months to
30 June 2023, with ASLIT owning two of them. The average EV/EBITA of the six at
their deal prices was 16.2x, while the average premium to the pre-announcement
share prices was 67%.
More surprising than the rebound in M&A has been the nature of the bidders: in
five of the six deals, the buyers have been private equity firms. The surprise
reflects the fact that debt is the lifeblood of private equity and debt markets
have not yet settled down amid on-going tightening of monetary policy. However,
it would appear that the very low valuations of small UK quoted companies mean
that private equity does not need debt at the outset to make their M&A models
work. This is a stark illustration of the opportunity currently embedded in the
valuations of small UK quoted companies.
ASLIT may benefit from further takeover premiums for its holdings as long as
stockmarket valuations remain at their present low levels. However, in these
circumstances, it remains important to guard against opportunism on the part of
the buyers. Large takeover premiums may still not bring valuations to
appropriate levels and the Managers are prepared to vote against deals where
this is the case. The best M&A experiences are often those in which boards of
directors consult shareholders well in advance. Such consultation reduces the
risk of embarrassment, should shareholders find proposed terms unacceptable, and
can lead to better outcomes, which may be that the company in question retains
its independence. The Managers make it clear to the boards of the investee
companies that they should be consulted in such situations and that they are
willing to be insiders for extended periods.
Active share
Active share is a measure of how different a portfolio is from an index. The
ratio is calculated as half of the sum of the absolute differences between each
stock's weighting in the index and its weighting in the portfolio. The higher a
portfolio's active share, the higher its chance of performing differently from
the index, for better or worse. The Managers target an active share ratio of at
least 70%. At 30 June 2023, it stood at 78%.
Portfolio turnover
Portfolio turnover is defined as the lower of purchases and sales divided by
average portfolio value. Over the twelve months to 30 June 2023, turnover was
18%. This relatively subdued rate of turnover is due to the low stockmarket
valuations of the portfolio's holdings - discounts to the Managers' target
prices have not generally narrowed, so the opportunity for "value roll" within
the portfolio has been limited. "Value roll" is the term that the Managers use
to describe the recycling of capital from companies with less upside to target
prices into those with greater upside.
Some of the turnover in the period reflected investment in companies that
entered the NSCI (XIC) on 1 January 2023. As described in the last Interim
Report, this was the largest ever rebalancing of the index. The 29 companies
that were injected into the index offered the Managers additional opportunity:
the portfolio owned three of these so-called "fallen angels" at 30 June 2023.
Valuations
The table below sets out the forward valuations of the portfolio, the Tracked
Universe and certain subdivisions of the Tracked Universe. The metric displayed
is enterprise value to earnings before interest, tax and amortisation
(EV/EBITA), which the Managers use most often in valuing companies. The
forecasts underlying the ratios are the Managers'. The bullet points following
the table summarise its main messages.
EV/EBITA 2022 2023 2024
ASLIT 6.7x 7.6x 6.0x
Tracked Universe (234 stocks) 9.4x 9.6x 8.7x
- 40 growth stocks 14.5x 13.6x 13.7x
- 194 other stocks 8.7x 9.0x 7.9x
- 78 stocks > £600m market cap 11.0x 10.8x 10.2x
- 156 stocks < £600m market cap 7.4x 7.9x 6.6x
· The average EV/EBITA multiples of the portfolio are much lower than those of
the Tracked Universe. This has been a consistent feature over ASLIT's history
and is consistent with the Managers' value investment style.
· The portfolio's 7.6x EV/EBITA ratio for 2023 is considerably lower than the
average multiple of 16.2x at which this year's M&A deals in the NSCI (XIC) have
been struck.
· The profit forecasts underlying the EV/EBITA multiples for 2023 and 2024 are
subject to uncertainty about the timing and intensity of an economic downturn.
It can be inferred from the progression of the multiple across the three years
that the Managers presently expect a slowdown in 2023, followed by a recovery in
2024.
· The growth stocks within the Tracked Universe are on much higher multiples
than both the portfolio and the rest of the Tracked Universe.
· The "smaller small" companies within the index - here illustrated by those
with market capitalisations less than
£600m - are on vast valuation discounts to their larger peers. The Managers
identify no reason for this beyond a
general concern about liquidity and so the portfolio has a relatively high
exposure to these "smaller small" companies.
The table below set out some of the main characteristics of ASLIT's diversified
portfolio of smaller companies. The point above about exposure to "smaller
small" companies is reinforced in the weighted average market capitalisation
row.
Portfolio characteristics 30 June 2023 30 June 2022
ASLIT NSCI (XIC) ASLIT NSCI (XIC)
Number of companies 63 339 66 323
Weighted average market capitalisation £630m £945m £622m £795m
Price earnings (PE) ratio (historical) 8.0x 10.8x 8.3x 9.8x
Dividend yield (historical) 5.2% 3.5% 4.5% 3.1%
Dividend cover 2.4x 2.6x 2.7x 3.3x
Alongside the 5.2% dividend yield, the portfolio's most notable feature of the
table is average historical price earnings ratio (PE). It has fallen from 8.3x
to 8.0x over the twelve months to 30 June 2023. Given ASLIT's positive total
assets total return in this period, it can be inferred that the reduction in the
PE was due to growth in the earnings per share of the portfolio's holdings. An
advantage of historical valuation measures, particularly when a recession looms,
is that they are not susceptible to forecast uncertainties. To give a longer
term perspective than ASLIT's six years, the chart below plots the historical PE
ratio for the Managers' longest standing portfolio, which shares many of ASLIT's
holdings.
[image]
The messages from the chart are that PE ratios are unusually low at present and
that they fall so low when recession threatens: the earlier low-points in the
chart were the early 1990s recession, the global financial crisis and the
pandemic. It is therefore possible that much of the risk of an economic downturn
is already embedded within share prices. Taking this argument further, small
company profits typically fall by around 30% in a recession. A repeat of this
would take the historical PE ratio of ASLIT's portfolio of 8.0x to a forward
ratio of 11.4x. This multiple of what can be thought of as trough profits would
still be below the long term average PE multiple shown in the chart of 12.1x.
An influence on the portfolio's low valuation at present is its exposure to UK
equities. These are out of favour with global investors for reasons previously
set out in this report. Data from Panmure Gordon help quantify the scale of this
disenchantment. The PE of the UK stockmarket is presently 27% lower than the PE
of global equities, which is much more than the average discount of 15% over
Aberforth's 32 year history. Comparing ASLIT's portfolio directly with global
equities, the current PE discount is 46%, whereas the 32 year average for
Aberforth's longest standing portfolio has been 24%. The valuation elastic is
therefore extremely stretched at present, with ASLIT on a triple discount by
virtue of its value investment style, its exposure to small companies and its
Britishness. This appears incongruous given the resilience of the portfolio's
investee companies and the fact 42% of their revenues on average are generated
outside the UK. An easing of the tension in valuations, as one or more of these
relationships returns towards the normal levels of the past 32 years, should
bode well for ASLIT's returns.
Outlook
Stockmarkets' immediate obsession is US interest rates - each data release is
scrutinised exhaustively for a hint of what the Federal Reserve might do next.
The positive start to 2023 for equities indicates an expectation that US
interest rates are close to their peak. However, there are important caveats.
The speed and extent of the interest rate increases threaten further accidents -
the financial world has grown used to more than a decade of almost costless
money. Moreover, it is not clear that inflation will return conveniently and
reliably to its pre-pandemic levels - the rate of increase will subside, but
underlying inflationary pressures from labour markets and from forces such as de
-globalisation linger.
While equity investors are presently enthused by the outlook for US monetary
policy, they remain nervous about prospects for UK politics and economics over
the next couple of years. On the political front, there will be a UK General
Election within the next eighteen months. This will come at a time when the
influence of the more extreme elements of both main political parties appears to
be waning. However, a change of government looks likely, which brings
incremental risk.
Meanwhile, the UK economy is blighted by more persistent inflation than are its
peers. This threatens a more aggressive monetary response by the Bank of England
and potentially a more severe downturn in economic activity. Recessions are
unpleasant. They increase hardship faced by households and businesses. They
reduce incomes and profits. But they are also inevitable and even necessary in
order to address the effects of past policy mistakes and of unforeseeable
developments such as the pandemic.
The near term risks are undeniable. But so is the attractiveness of the
valuations attributed to the portfolio's holdings by the stockmarket.
Importantly, the stress-testing of today's valuations described above suggests
that much of the risk of a recession may already be embedded in share prices.
Ironically, therefore, there is less uncertainty about the medium and long term
outlook for returns from the companies in ASLIT's portfolio. History is rather
convincing: when valuations have reached today's levels in the past, total
returns over the next five years have been strong.
Conclusion
Herein lies the frustration for ASLIT. By virtue of its closed end structure and
its gearing, it is well suited to take advantage of today's valuations, but it
has just one year of its planned life left. It is not clear that the qualities
of ASLIT's portfolio - its strong balance sheets, resilient income profile and
very low valuations - will be recognised widely by investors within this time
frame. Further takeover activity will help close value gaps, but more time is
likely to be necessary to benefit fully from the opportunity in today's
valuations. Therefore, the Managers are working with the Board to offer
Shareholders the option, no later than 1 July 2024, either to realise their
investment in cash or to continue their exposure to the Managers' investment
approach in some form.
Aberforth Partners LLP
Managers
27 July 2023
FINANCIAL HIGHLIGHTS
TOTAL RETURN PERFORMANCE
Ordinary ZDP
Share Share
Total NAV2 Share NAV4 Share
Assets1 Price3 Price5
Year to 30 9.7% 12.2% 20.0% 3.6% 3.0%
June 2023
Annualised 14.8% 20.0% 22.1% 3.6% 4.1%
3 years
5 years 0.1% -0.9% -0.7% 3.6% 2.3%
Since 0.9% 0.3% -0.5% 3.5% 3.0%
inception14
Cumulative 51.1% 72.9% 82.2% 11.2% 12.7%
3 years
5 years 0.3% -4.2% -3.6% 19.3% 12.2%
Since 5.8% 1.8% -2.9% 22.8% 19.5%
inception14
The total
return per
Ordinary
Share2 for
the year to
30 June
2023 was
8.87p
(2022:
(18.98)p).
ORDINARY SHARE
Net Share Discount / Revenue Ordinary Special Ongoing
Gearing7
Asset Price (Premium) Return per Dividends per Dividends
Charges6
Value Share Share
per per Share
Share
----- ----- ---------- ----------- ------------ --------- -------
- --------
----- ----- -- --- ----
----
-
30 77.2p 72.0p 6.7% 5.35p 5.00p - 1.3%
39.8%
June
2023
30 73.0p 64.2p 12.1% 4.81p 4.30p 0.25p 1.2%
40.6%
June
2022
30 95.7p 87.2p 8.8% 2.90p 3.05p - 1.2%
29.9%
June
2021
At inception14 an Ordinary Share had a NAV of 100p and a gearing7 level of 25%.
ZERO DIVID PREFERENCE SHARE (ZDP SHARE)
Net Asset Share Discount / Return Projected Final Redemption
Value per Price (Premium) Cumulative Yield9
Share per Cover8
Share
------------ ------ ---------- ------ ------------ ----------
----- -- ---- --
30 122.8p 119.5p 2.7% 4.3p 3.2x 6.4%
June
2023
30 118.6p 116.0p 2.2% 4.1p 3.0x 4.7%
June
2022
30 114.5p 114.0p 0.4% 4.0p 3.6x 3.7%
June
2021
At inception14 a ZDP Share had a NAV of 100p, a Projected Final Cumulative
Cover8 of 3.4x, and a Redemption Yield9 of 3.5%.
HURDLE RATES10
Ordinary ZDP Shares
Shares
Annualised Hurdle Rates to return
Annualised
Hurdle
Rates to
return
100p Share Zero 127.25p Zero Value
Price Value
At ---------- ------ ------ ------------ ------------
-- ------ ------
30 June 28.4% 1.3% -68.6% -68.6% -99.7%
2023
30 June 16.2% -0.7% -42.6% -42.6% -94.8%
2022
Inception14 1.5% n/a -17.0% -17.0% -57.2%
REDEMPTION YIELDS & TERMINAL NAVs (ORDINARY SHARES)
As at 30 June 2023
Annualised
Ordinary
Share
Redemption
Yields11
Dividend
Growth
(per
annum)
Capital -20.0% -10.0% +0.0% +10.0% +20.0% Terminal
Growth (per NAV12
annum)
------ ----- ------ ------ ------ --------
------ ----- ------ ------ ------ ----
--
-20.0% -23.8% -22.6% -21.3% -19.9% -18.4% 50.0p
-10.0% -9.0% -7.7% -6.4% -4.9% -3.3% 60.3p
+0.0% 5.8% 7.1% 8.6% 10.1% 11.7% 70.7p
+10.0% 20.5% 22.0% 23.5% 25.1% 26.8% 81.0p
+20.0% 35.3% 36.8% 38.4% 40.0% 41.8% 91.3p
The valuation statistics in the tables above are projected, illustrative and do
not represent profit forecasts. There is no guarantee these returns will be
achieved.
1-14 Refer to Note 2, Alternative Performance Measurement, and Glossary.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors who were in office at the date of approving the financial
statements confirm to the best of their knowledge that:
(a) the financial statements, which have been prepared in accordance with
applicable accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit/loss of the Company;
(b) the Strategic Report includes a fair review of the development and
performance of the business and financial position of the Company, together with
a description of the principal risks and uncertainties that it faces; and
(c) the Annual Report and Financial Statements, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
Shareholders to assess the Company's performance, business model and strategy.
On behalf of the Board
Angus Gordon Lennox
Chairman
27 July 2023
PRINCIPAL RISKS AND RISK MANAGEMENT
The Board carefully considers the risks faced by the Company and seeks to manage
these risks through continual review, evaluation, mitigating controls and action
as necessary. A risk matrix for the Company is maintained. It groups risks into
the following categories: portfolio management; investor relations; regulatory
and legal; and financial reporting. Further information regarding the Board's
governance oversight of risk, its review process and the context for risks can
be found in the Corporate Governance Report (page 30 of the Annual Report). The
Audit Committee Report (pages 31 to 33 of the Annual Report) details matters
considered and actions taken on internal controls and risks during the year. The
Company outsources all the main operational activities to recognised, well
-established firms and the Board receives internal control reports from these
firms, where available, to review the effectiveness of their control frameworks.
Emerging risks are those that could have a future impact on the Company. The
Board regularly reviews them and, during the year, it considered the effects of
economic and political developments within the risk category of market risk. The
Board regularly monitors how the Managers integrate such risks into the
investment decision making.
Principal risks are those risks derived from the matrix that have the highest
risk ratings based on likelihood and impact. They tend to be relatively
consistent from year to year given the nature of the Company and its business.
Monitoring by the Board did not give rise to any changes during the year to the
risk ratings applied to each of the principal risks. On a forward looking basis,
the principal risks faced by the Company, together with the approach taken by
the Board towards them, are summarised below.
To indicate the extent to which the principal risks change during the year and
the level of monitoring required, each principal risk has been categorised as
either dynamic risk, requiring detailed monitoring as it can change regularly,
or stable risk.
(i) Investment policy/performance risk (a portfolio management risk) - The
Company's investment policy and strategy expose the portfolio to share price
movements. The performance of the investment portfolio will be influenced by
stock selection, liquidity and market risk (see Market risk below and Note 19 of
the Annual Report for further details). Investment in small companies is
generally perceived to carry more risk than investment in large companies. While
this is reasonable when comparing individual companies, it is much less so when
comparing the risks inherent in diversified portfolios of small and large
companies. The Board's aim is to achieve the investment objective by ensuring
the investment portfolio is managed in accordance with the policy and strategy.
The Board has outsourced portfolio management to experienced investment managers
with a clearly defined investment philosophy and investment process. The Board
receives regular and detailed reports on investment performance including
detailed portfolio and risk profile analysis. Senior representatives of
Aberforth Partners attend each Board meeting. This remains a dynamic risk, with
detailed consideration during the year. The Managers' Report contains
information on portfolio investment performance and risk.
(ii) Market risk (a portfolio management risk) - Investment performance is
affected by a number of market risk factors, which cause uncertainty about
future price movements of investments. The Board delegates consideration of
market risk to the Managers to be carried out as part of the investment process.
The Managers regularly assess the exposure to market risk when making investment
decisions and the Board monitors the results via the Managers' reporting. The
Board and Managers closely monitor economic and political developments. This
remained a dynamic risk during the year, in which the Managers reported on
market risks including inflation and supply-chain pressures and other
geopolitical issues referred to in the Managers' Report.
(iii) Structural conflicts of interest (an investor relations risk) - The
different rights and expectations of the holders of Ordinary Shares and the
holders of ZDP Shares may give rise to conflicts of interest between them. While
the Company's investment objective and policy seek to strike a balance between
the interests of both classes of Shareholder, there can be no guarantee that
such a balance will be achieved and maintained during the life of the Company.
The Board acts in a manner that it considers fair, reasonable and equitable to
both classes of Shareholder. This is a stable risk.
(iv) Significant fall in investment income (a portfolio management risk)- A
significant fall in investment income could lead to the inability to provide a
high level of income and income growth. The Board receives regular and detailed
reports from the Managers on income performance together with income forecasts.
The Board and Managers monitor investment income and it is considered a dynamic
risk.
(v) Loss of key investment personnel (a portfolio management risk) - The Board
believes that a risk exists in the loss of key investment personnel at the
Managers. The Board recognises that the collegiate approach employed by the
Managers mitigates this risk. Board members are in regular contact with the
partners and staff of the Managers and monitor personnel changes. This is a
stable risk.
(vi) Regulatory risk (a regulatory and legal risk) - Breach of regulatory rules
could lead to suspension of the Company's share price listings, financial
penalties or a qualified audit report. Breach of Section 1158 of the Corporation
Tax Act 2010 could lead to the Company losing investment trust status and, as a
consequence, any capital gains would then be subject to capital gains tax. The
Board reviews regular reports from the Secretaries to monitor compliance with
regulations. This is a stable risk.
The Income Statement, Reconciliation of Movements in Shareholders' Funds,
Balance Sheet and Cash Flow Statement are set out below.
INCOME STATEMENT
Year to 30 June 2023
(audited)
Year to Year to
30 June 30 June 2022
2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Net gains / (losses) - 10,052 10,052 - (41,748) (41,748)
on investments
Investment income 10,985 20 11,005 10,024 - 10,024
Other income 14 - 14 - - -
Investment management (443) (1,034) (1,477) (521) (1,216) (1,737)
fee
Portfolio transaction - (313) (313) - (329) (329)
costs
Other expenses (357) - (357) (335) - (335)
------- ------- ------- -------- -------- --------
- - -
Net return before 10,199 8,725 18,924 9,168 (43,293) (34,125)
finance costs and tax
Finance costs:
Appropriation to ZDP - (2,024) (2,024) - (1,956) (1,956)
Shares
Interest expense and (3) (7) (10) (3) (6) (9)
overdraft fee
------- ------- ------- -------- -------- --------
- - -
Return on ordinary 10,196 6,694 16,890 9,165 (45,255) (36,090)
activities before tax
Tax on ordinary (24) - (24) (22) - (22)
activities
------- ------- ------- -------- -------- --------
- - -
Return attributable 10,172 6,694 16,866 9,143 (45,255) (36,112)
to Equity
Shareholders
====== ====== ======= ====== ======= =======
Returns per Ordinary 5.35p 3.52p 8.87p 4.81p (23.79)p (18.98)p
Share
The Board declared on 27 July 2023 a second interim dividend of 3.30p per
Ordinary Share. The Board also declared on 26 January 2023 a first interim
dividend of 1.70p per Ordinary Share.
The total column of this statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the
period. A Statement of Comprehensive Income is not required as all gains and
losses of the Company have been reflected in the above statement.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Year to 30 June 2023
(audited)
Share Special Capital Revenue
capital reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000
Balance as at 30 1,902 187,035 (57,620) 7,635 138,952
June 2022
Return on ordinary - - 6,694 10,172 16,866
activities after
tax
Equity dividends - - - (9,018) (9,018)
paid
-------- -------- -------- -------- --------
Balance as at 30 1,902 187,035 (50,926) 8,789 146,800
June 2023
====== ====== ====== ====== ======
Year to 30 June
2022
Share Special Capital Revenue
capital reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000
Balance as at 30 1,902 187,035 (12,365) 5,417 181,989
June 2021
Return on ordinary - - (45,255) 9,143 (36,112)
activities after
tax
Equity dividends - - - (6,925) (6,925)
paid
-------- -------- -------- -------- --------
Balance as at 30 1,902 187,035 (57,620) 7,635 138,952
June 2022
====== ====== ====== ====== ======
BALANCE SHEET
As at 30 June 2023
(audited)
30 June 2023 30 June 2022
£'000 £'000
Fixed assets
Investments at fair value 202,150 193,062
through profit or loss
---------- ----------
Current assets
Debtors 782 755
Cash at bank 2,949 1,590
---------- ----------
3,731 2,345
Creditors (amounts falling (664) (62)
due within one year)
---------- ----------
Net current assets 3,067 2,283
---------- ----------
Total Assets less Current 205,217 195,345
Liabilities
Creditors (amounts falling
due after more than one
year)
ZDP Shares (58,417) (56,393)
---------- ----------
TOTAL NET ASSETS 146,800 138,952
======= =======
Capital and Reserves: Equity
Interests
Share capital:
Ordinary Shares 1,902 1,902
Reserves:
Special reserve 187,035 187,035
Capital reserve (50,926) (57,620)
Revenue reserve 8,789 7,635
---------- ----------
TOTAL SHAREHOLDERS' FUNDS 146,800 138,952
======= =======
Net Asset Value per Ordinary 77.16p 73.04p
Share
Net Asset Value per ZDP 122.82p 118.57p
Share
CASH FLOW STATEMENT
For the year to 30 June 2023
(audited)
Year to Year to
30 June 2023 30 June 2022
£'000 £'000
Operating activities
Net revenue before finance costs and tax 10,199 9,168
Receipt of special dividend taken to capital 20 -
Tax (withheld) from income (24) (20)
Investment management fee charged to capital (1,034) (1,216)
(Increase) in debtors (27) (421)
(Decrease)/increase in creditors (7) 9
-------- --------
Cash inflow from operating activities 9,127 7,520
===== =====
Investing activities
Purchases of investments excluding transaction costs (36,395) (41,203)
Sales of investments excluding transaction costs 37,655 41,007
-------- --------
Cash inflow/(outflow) from investing activities 1,260 (196)
===== =====
Financing activities
Equity dividends paid (9,018) (6,925)
Interest and fees paid (10) (9)
-------- --------
Cash outflow from financing activities (9,028) (6,934)
===== =====
Change in cash during the period 1,359 390
===== =====
Cash at the start of the period 1,590 1,200
Cash at the end of the period 2,949 1,590
====== ======
SUMMARY NOTES TO THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been presented under Financial Reporting Standard
102 (FRS 102) and the AIC's Statement of Recommended Practice "Financial
Statements of Investment Trust Companies and Venture Capital Trusts" (SORP).
The financial statements have been prepared on a going concern basis under the
historical cost convention, modified to include the revaluation of the Company's
investments as described below. The Directors' assessment of the basis of going
concern is described on page 24 of the Annual Report. In particular the
Directors considered the implications of the proximity to the planned winding-up
date of 1 July 2024 and that Shareholders will have a vote on proposals relating
to the Company's planned life, on or within the three months prior to 1 July
2024. The Directors may be released from the obligation to call a general
meeting to wind up the Company if a special resolution has been passed to that
effect not later than 1 July 2024. The Directors also considered the investment
outlook, the objectives of both classes of Shareholder, potential sources of
funding to finance the repayment of the entitlement due to the ZDP Shareholders
and other future cash flows of the Company. The nature of any proposals that may
be presented by the Directors relating to the Company's planned life on which
the Shareholders will be required to vote and the outcome of the vote on any
such proposals represent a material uncertainty in the context of assessing the
prospects of the Company beyond 1 July 2024. This may cast significant doubt on
the ability of the Company to continue preparing its financial statements on a
going concern basis to the extent that they include, and Shareholders vote for,
a winding-up of the Company. If at some point in the future the Directors
conclude it is not appropriate to prepare the financial statements on a going
concern basis then adjustments would be required to reclassify all assets as
current, and a provision for further liabilities, including liquidation costs,
would be made. Consideration would also be given to valuing the portfolio on a
discounted bid basis to reflect the cost of liquidating the portfolio in a
shorter time frame.
The functional and presentation currency is pounds sterling, which is the
currency of the environment in which the Company operates. The Board confirms
that no significant accounting judgements or estimates have been applied to the
financial statements and therefore there is not a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next financial year. Given the nature of the Company, the Board does not
consider climate change material to the presentation of the financial
statements.
2. ALTERNATIVE PERFORMANCE MEASURES
Alternative Performance Measures (APMs) are measures that are not defined under
the requirements of FRS 102 and are unaudited. The Company believes that APMs,
referred to within "Financial Highlights", provide Shareholders with important
information on the Company and are appropriate for an investment trust company.
These APMs are also a component of reporting to the Board. A glossary including
APMs can be found below and in the 2023 Annual Report.
3. INVESTMENT MANAGEMENT FEE
The Managers, Aberforth Partners LLP, receive an annual management fee, payable
quarterly in advance, equal to 0.75% of the Company's Total Assets. The
management fee is allocated 70% to capital reserves and 30% to revenue reserves.
4. DIVIDS PAID
Amounts recognised as Year to Year to
distributions to equity
holders: 30 June 2023 30 June 2022
£'000 £'000
In respect of the year to 30
June 2021:
Second interim dividend of - 4,052
2.13p (paid on 27 August
2021)
In respect of the year to 30 - 2,873
June 2022
First interim dividend of
1.51p (paid on 8 March
2022)
Second interim dividend of 5,308 -
2.79p (paid on 26 August
2022)
Special dividend of 0.25p 475 -
(paid on 26 August 2022)
3,235 -
In respect of the year to 30
June 2023:
First interim dividend of
1.70p (paid on 8 March
2023)
------------ ------------
Total 9,018 6,925
------------ ------------
The second interim dividend for the year ended 30 June 2023 of 3.30p (2022:
2.79p) per Ordinary Share is payable on 31 August 2023 and has not been
recognised in the financial statements as at 30 June 2023. Deducting the second
interim dividend from the Company's revenue reserves at 30 June 2023 leaves
revenue reserves equivalent to 1.32p per Ordinary Share.
5. RETURNS PER
SHARE
Year to
Year to
30 June
30 June 2022
2023
Ordinary Shares
Net return for the year £16,866,000
£(36,112,000)
Weighted average Ordinary Shares in issue during the year 190,250,000
190,250,000
Return per Ordinary 8.87p
(18.98)p
Share
ZDP Shares
Appropriation to ZDP Shares for the year £2,024,000
£1,956,000
Weighted average ZDP Shares in issue during the year 47,562,500
47,562,500
Return per ZDP Share 4.26p
4.11p
There are no dilutive or potentially dilutive shares in issue.
6. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
Year to Year to
30 June 2023 30 June 2022
£'000 £'000
Investments at fair value through profit or loss
Opening fair value 193,062 235,448
Opening fair value adjustment 38,832 (9,102)
------------ ------------
Opening book cost 231,894 226,346
Purchases at cost 36,734 40,342
Sale proceeds (37,698) (40,980)
Realised gains on sales 3,543 6,186
------------ ------------
Closing book cost 234,473 231,894
Closing fair value adjustment (32,323) (38,832)
------------ ------------
Closing fair value 202,150 193,062
------------ ------------
All investments are in ordinary shares listed on the London Stock Exchange.
Year to Year to
30 June 2023 30 June 2022
£'000 £'000
Gains/(losses) on investments:
Net realised gains on sales 3,543 6,186
Movement in fair value adjustment 6,509 (47,934)
------------ ------------
Net gains/(losses) on investments 10,052 (41,748)
------------ ------------
In accordance with FRS 102, fair value measurements have been classified using
the fair value hierarchy:
Level 1 - using unadjusted quoted prices for identical instruments in an active
market;
Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is
unavailable).
All investments are held at fair value through profit or loss, have been
classified as Level 1 and are traded on a recognised stock exchange.
7. NET ASSET VALUE ("NAV") PER SHARE
The Net Assets and the Net Asset Value per share attributable to the Ordinary
Shares and ZDP Shares are as follows.
30 June 2023 30 June 2022
Ordinary ZDP Total Ordinary ZDP
Total
Shares Shares Shares Shares
Net assets £146,800,000 £58,417,000 £205,217,000 £138,952,000 £56,393,000
£195,345,000
attributable
Number of 190,250,000 47,562,500 237,812,500 190,250,000 47,562,500
237,812,500
Shares at
the
reporting
date
------------ ----------- ------------ ------------ -----------
------------
- -
NAV per 77.16p 122.82p 86.29p 73.04p 118.57p
82.14p
Share (a)
Dividend 1.319066 - 1.226413 1.242432 -
1.174303
reinvestment
factor13 (b)
------------ ----------- ------------ ------------ -----------
------------
- -
NAV per 101.78p 122.82p 105.83p 90.75p 118.57p
96.46p
Share on a
total return
basis
at the end
of the
period (c) =
(a) x
(b)
------------ ----------- ------------ ------------ -----------
------------
- -
NAV per 90.75p 118.57p 96.46p 114.43p 114.46p
113.40p
Share on a
total return
basis
at the start
of the
period (d)
------------ ----------- ------------ ------------ -----------
------------
- -
Total Return 12.2% 3.6% 9.7% -20.7% 3.6%
-14.9%
performance
(c) / (d) -
1
------------ ----------- ------------ ------------ -----------
------------
- -
13 Refer to Glossary
8. SHARE CAPITAL
Shares £'000
As at 30 June 2023
Ordinary Shares of 1p each 190,250,000 1,902
ZDP Shares of 1p each 47,562,500 476
------------ ------------
Total issued and allotted 237,812,500 2,378
------------ ------------
There have been no changes in the issued share capital since the launch of the
Company on 3 July 2017.
9. ZERO DIVIDEND PREFERENCE SHARES
Year ended: 30 June 30 June
2023 2022
£'000 £'000
Opening Balance 56,393 54,437
Issue costs amortised during the period 48 46
Capital growth of ZDP Shares 1,976 1,910
------------ ------------
Closing Balance 58,417 56,393
------------ ------------
10. RELATED PARTY TRANSACTIONS
The Directors have been identified as related parties and their fees and
interests have been disclosed in the Directors' Remuneration Report contained in
the Annual Report. During the year no Director or entity controlled by a
Director was interested in any contract or other matter requiring disclosure
under section 412 of the Companies Act 2006.
11. FURTHER INFORMATION
The foregoing do not constitute statutory accounts (as defined in section 434(3)
of the Companies Act 2006) of the Company. The statutory accounts for the year
ended 30 June 2022, which contained an unqualified Report of the Auditors, have
been lodged with the Registrar of Companies and did not contain a statement
required under section 498(2) or (3) of the Companies Act 2006.
Certain statements in this announcement are forward looking statements. By
their nature, forward looking statements involve a number of risks,
uncertainties or assumptions that could cause actual results or events to differ
materially from those expressed or implied by those statements. Forward looking
statements regarding past trends or activities should not be taken as
representation that such trends or activities will continue in the future.
Accordingly, undue reliance should not be placed on forward looking statements.
The Annual Report is expected to be posted to shareholders by 7 August 2023.
Members of the public may obtain copies from Aberforth Partners LLP, 14 Melville
Street, Edinburgh EH3 7NS or from its website: www.aberforth.co.uk.
GLOSSARY:
1 Total Assets Total Return - the theoretical return of the combined funds of
the Ordinary Shareholders and ZDP Shareholders assuming that dividends paid to
Ordinary Shareholders were reinvested at the NAV per Ordinary Share at the close
of business on the day the Ordinary Shares were quoted ex dividend.
2 Ordinary Share NAV Total Return - the theoretical return on the NAV per
Ordinary Share assuming that dividends paid to Ordinary Shareholders were
reinvested at the NAV per Ordinary Share at the close of business on the day the
Ordinary Shares were quoted ex dividend.
3 Ordinary Share Price Total Return - the theoretical return to an Ordinary
Shareholder, on a closing market price basis, assuming that all dividends
received were reinvested, without transaction costs, into the Ordinary Shares at
the close of business on the day the shares were quoted ex dividend.
4 ZDP Share NAV Total Return - represents the return on the entitlement of a ZDP
Share. The ZDP Share NAV as at 30 June 2023 was 122.82p (30 June 2022: 118.57p).
5 ZDP Share Price Total Return - the theoretical return to a ZDP Shareholder, on
a closing market price basis.
6 Ongoing Charges - represents the percentage per annum of investment management
fees and other operating expenses to the average published Ordinary
Shareholders' NAV over the period.
7 Gearing - calculated by dividing the asset value attributable to the ZDP
Shares by the asset value attributable to the Ordinary Shares.
8 Projected Final Cumulative Cover - the ratio of the total assets of the
Company as at the calculation date, to the sum of the assets required to pay the
final capital entitlement of 127.25p per ZDP Share on the planned winding-up
date, the future estimated management fees charged to capital, and estimated
winding-up costs.
9 Redemption Yield (ZDP Share) - the annualised rate at which the total
discounted value of the planned future payment of capital equates to its share
price at the date of calculation.
10 Hurdle Rate - the rate of capital growth per annum in the Company's
investment portfolio to return a stated amount per Share at the planned winding
-up date.
11 Redemption Yield (Ordinary Share) - the annualised rate at which projected
future income and capital cash flows (based on assumed future capital and
dividend growth rates) is discounted to produce an amount equal to the share
price at the date of calculation.
12 Terminal NAV (Ordinary Share)- the projected NAV per Ordinary Share at the
planned winding-up date at a stated rate of capital growth in the Company's
investment portfolio after taking into account the final capital entitlement of
the ZDP Shares, future estimated costs charged to capital and estimated winding
-up costs.
13 Dividend reinvestment factor - is calculated on the assumption that dividends
paid by the Company were reinvested into Ordinary Shares of the Company at the
NAV per Ordinary Share or the share price, as appropriate, on the day the
Ordinary Shares were quoted ex dividend.
14 Inception Date - 30 June 2017.
CONTACT:
Euan Macdonald / Christopher Watt - Aberforth Partners LLP - 0131 220 0733
Aberforth Partners LLP
Managers and Secretaries
28 July 2023
ANNOUNCEMENT ENDS
This information was brought to you by Cision http://news.cision.com
END
(END) Dow Jones Newswires
July 28, 2023 05:11 ET (09:11 GMT)
Aberforth Split Level In... (LSE:ASIT)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Aberforth Split Level In... (LSE:ASIT)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024
