Blue Planet Investment Trust plc
Half Year Report and Accounts
For the six months ended 31 October
2022
Officers and Advisors
Directors
Investment Manager, Administrator and Secretary
Russell Frith (Non-Executive
Chairman)
Blue Planet Investment Management Ltd
Victoria Killay
(Non-Executive)
17 Grosvenor Crescent
Kenneth Murray
(Non-Executive)
Edinburgh
EH12 5EL
Telephone No: 0131 466 66 66
E-mail:
info@blueplanet.eu
www.blueplanet.eu
Registered Office
Registrars
17 Grosvenor
Crescent
Link Group
Edinburgh
10th Floor, Central Square
EH12
5EL
29 Wellington Street
Telephone No: 0131 466
6666
Leeds
E-mail:
info@blueplanet.eu
LS1 4DL
www.blueplanet.eu Email:
shareholderenquiries@linkgroup.co.uk
www.linkgroup.eu
Shareholder
Helpline No: 0371 664 0300 (calls are charged at the standard
geographic rate and will vary by provider. Calls outside the UK
will be charged
at
the applicable international rate. Lines are open 9am-5.30pm, Mon-Fri)
Statutory
Auditors
Custodians
Johnston Carmichael
LLP
Caceis Investor Services
7-11 Melville
Street
Broadwalk House, 5 Appold Street
Edinburgh EH3
7PE
London
EC2A 2AG
Bankers
Interactive Brokers
(U.K.) Ltd
Lloyds Banking
Group
Level 20 Heron Tower, 110 Bishopsgate
1st
Floor
London EC2N 4AY
48 Chiswell Street
London EC1Y 4XX
Registered
Number
SC192153
Blue Planet Investment Trust plc is a member of the Association
of Investment Companies.
Investment Policy
The investment policy of the Company is to invest 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.
Investment Objective
The investment objective of the Company is to provide
shareholders with a combination of capital growth and income.
The Company has not set maximum exposures for any type of
issuer, geographical regions or sectors. How the Company’s
investments are allocated will depend 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, bills and
derivatives. However, the Company is not prohibited from investing
in other types of securities including unlisted investments and
property. 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.
Financial Record
including Key Performance Indicators |
Six
months ended 31
October 2022
(unaudited) |
Six
months ended 31
October 2021
(unaudited) |
Year
ended 30
April 2022
(audited) |
Total return per share
(p)1 |
(4.04) |
(3.64) |
(20.23) |
NAV total return per share
(%)2 |
(25.8) |
(10.0) |
(56.4) |
Share price total return (%)
3 |
(35.7) |
(13.6) |
(45.0) |
Total return on Benchmark Index
4 (%) |
1.2 |
5.8 |
n/a |
Revenue return available for
shareholders (£’000) |
(244) |
(246) |
(517) |
Revenue return per share
(p)1 |
(0.49) |
(0.49) |
(1.05) |
Capital return per share
(p)1 |
(3.54) |
(3.15) |
(19.18) |
|
|
|
|
Total assets less current
liabilities (excluding loans) (£’000) |
8,962 |
20,561 |
12,240 |
Loans (£’000) |
(3,238) |
(4,635) |
(4,520) |
Shareholders’ funds (£’000) |
5,724 |
15,926 |
7,720 |
Net asset value per share
(p)5 |
11.57 |
32.19 |
15.60 |
Share price (p) – (Bid) |
9.00 |
22.00 |
14.00 |
Share price discount to NAV
(%)A |
22.2 |
31.7 |
10.3 |
Gearing (%)A |
15.4 |
27.7 |
57.8 |
Ongoing Charges (%)A |
9.1 |
4.6 |
5.2 |
The Board assesses the Company’s performance in meeting its
objectives against the above KPIs, they also believe the above KPIs
are of most relevance to shareholders in monitoring the performance
of the Company and therefore the return on their investment in the
Company.
- Returns per share are calculated by taking the figure for
“Return on ordinary activities after taxation and total
comprehensive income” for each column as stated on the Income
Statement and dividing by the weighted average number of ordinary
shares in issue during the period. (Note 3)
- NAV total return per share is calculated as the percentage
change in net asset value per share in the period with dividend
paid during the period reinvested at the time of distribution.
- Share price total return is calculated as the percentage change
in share price in the period with dividend paid during the period
reinvested at the time of distribution.
- The Company’s benchmark index is the NASDQ Composite index on a
GBP basis. The percentage change in value between each period end
is shown above.
- Net asset value per share is calculated as shareholders’ funds
divided by the number of ordinary shares in issue at the period
end.
- Considered to be an Alternative Performance Measure.
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
Financial Conduct 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 and download past
monthly fact sheets:
https://www.blueplanet.eu/monthly-factsheets
To download historical Annual and Interim reports:
https://www.blueplanet.eu/reportandaccounts
To view stock market RNS announcements:
https://www.blueplanet.eu/corporateinformation
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.
PRIIPS Key Information Documents
We are required by regulations to provide investors with a Key
Information Document (“KID”) which includes performance projections
which are the product of prescribed calculations based on the
Company’s past performance. Whilst the content and format of the
KID cannot be amended under the applicable regulations, the Board
does not believe that these projections are an appropriate or
helpful way to assess the Company’s future prospects. Accordingly,
the Board urges shareholders to also consider the more complete
information set out in the Annual Report and Accounts, together
with the Company’s interim report and accounts, monthly fact sheets
and net asset value announcements, when considering an investment
in the Company’s shares. These documents are published on the
investment managers website at www.blueplanet.eu
Interim Management Report – Portfolio
Information
As at 31 October
2022 |
|
|
|
|
Country |
Valuation (£) |
% of
Portfolio |
Equities |
|
|
|
Repligen
Corporation |
United States |
543,550 |
6.2 |
Dynatrace Inc |
United States |
528,097 |
6.1 |
Arista Networks
Inc |
United States |
521,812 |
6.0 |
PubMatic Inc |
United States |
366,542 |
4.2 |
Taiwan Semiconductor
ADR |
United States |
345,189 |
4.0 |
DigitalOcean Holdings
Inc |
United States |
338,217 |
3.9 |
Revance Therapeutics
Inc |
United States |
330,691 |
3.8 |
STAAR Surgical Co |
United States |
282,083 |
3.2 |
CareCloud Inc |
United States |
245,615 |
2.8 |
Microsoft Corp |
United States |
238,414 |
2.7 |
Palantir Technologies
Inc |
United States |
228,583 |
2.6 |
Moovly Media Inc |
Canada |
221,621 |
2.5 |
Texas Instruments
Inc |
United States |
206,518 |
2.4 |
ASML Holding NV |
Netherlands |
194,892 |
2.2 |
Keysight Technologies
Inc |
United States |
177,739 |
2.0 |
NVIDIA
Corporation |
United States |
170,640 |
2.0 |
United
Microelectronics ADR |
United States |
155,114 |
1.8 |
Alphabet Inc - A |
United States |
146,366 |
1.7 |
Mogo Inc |
United States |
145,213 |
1.7 |
Digital Turbine
Inc |
United States |
138,712 |
1.6 |
iShares Expanded
Software ETF |
United States |
115,824 |
1.3 |
CleanSpark Inc |
United States |
104,773 |
1.2 |
Mirriad Advertising
plc |
United Kingdom |
101,754 |
1.2 |
Netflix Inc |
United States |
100,543 |
1.2 |
AcuityAds Holdings
Inc |
Canada |
92,029 |
1.1 |
Matterport Inc |
United States |
91,872 |
1.0 |
Isoray Inc |
United States |
61,455 |
0.7 |
Teradyne Inc |
United States |
59,794 |
0.7 |
S4 Capital Plc |
United Kingdom |
54,101 |
0.6 |
ASM International
NV |
Netherlands |
40,684 |
0.5 |
Telford Offshore
Holdings Ltd |
Cayman Islands |
- |
0.0 |
|
|
6,348,437 |
72.9 |
Debt
Securities |
|
|
|
Telford Offshore 12%
Perpetual |
Cayman Islands |
- |
0.0 |
Total
Investments |
|
6,348,437 |
72.9 |
|
|
|
|
Cash |
|
2,355,677 |
27.1 |
|
|
|
|
Total |
|
8,704,114 |
100.0 |
Interim Management Report
Performance
The year to 30th April 2022 was a
difficult one and the first six months of the current financial
year have not been any easier for the Trust, nor for investors in
general. The benchmark index, the Nasdaq Composite Index, fell 30%
in the first 10 months of 2022, its worst start to a year since
2008 and 4th worst since the index was created in 1971. Over the
same period the S&P 500 Index fell 19%, its worst start to a
year since the 2008 financial crisis and 9th worst performance
since the index was created in 1928. Blue Planet Investment Trust’s
net asset value fell 25.8% in the six months to 31 October 2022. Drilling down into our
performance, our investments produced a total return of -16.9%. The
balance was attributable to adverse FX movements and the expenses
of running the Trust.
The cause of these steep declines in asset prices has been
monetary tightening by central banks. Rampant inflation has forced
them to raise interest rates to a degree, and with a speed, that is
unprecedented. The reason this has been so damaging is because of
the inverse relationship that exists between the cost of capital
(essentially interest rates) and the value of assets. As the cost
of capital (interest rates) rises, the value of assets fall. As the
cost of capital (interest rates) falls, the value of assets
rises.
In March 2020, the US Federal
Reserve reduced the Fed Funds Rate to be in the range of 0.00% to
0.25% and held it there for two years. Over this period, the cost
of capital was essentially zero and the valuations of assets rose
sharply. Inflation then, quite predictably, took off and in
March 2022, the Fed began to hike
rates to quash it. By the 2nd of November
2022, the Fed Funds Rate had increased to be in the range of
3.75% and 4.00%, an incredible 16-fold increase in the cost of
capital in just over six months. Over the same period 2-year bond
yields rose from 0.15% to 4.5%. and 10-year money went from 0.5% to
4.00%. This unprecedented and reckless increase in the cost of
capital crushed asset prices and has led to mayhem in financial
markets. Property markets, which are much slower to react to
changes in the cost of capital, have yet to fully reflect the
impact of these events and are likely to be the next domino to
fall. During the “pandemic” the interest rate on two-year fixed
rate mortgages in the UK was about 1.5%. Now it is 5.5% to 6%. As
fixed rate mortgages fall due for refinancing the impact on the
property market is going to be significant.
Investors have suffered enormous losses because of these wild
swings in monetary policy. In fact, the largest in history.
According to Bank of America over $46
trillion has been wiped off the value of shares and bonds in
the last year alone. This has, quite understandably, severely
damaged investor confidence and it will take some time for it to be
rebuilt and for markets to recover fully.
The good news, to the extent that there is any, is that since
the half-year end, the outlook has improved. Inflation peaked in
June and has been falling steadily ever since. The bad news is that
the same officials are still in charge at the Fed and other central
banks. Instead of pausing or reducing interest rates in response to
this, they have continued to aggressively increase them, and they
are now far higher than is necessary to bring down inflation and
risk doing serious and unnecessary economic damage. Having created
the inflation in the first place by expanding the money supply at a
rate that was bound to be inflationary, they have now overdone the
tightening to an extent that is bound to cause a recession.
Nevertheless, a peak in central bank rates may now be in sight
and as inflation falls so too does the need for high interest rates
and eventually central banks will have to start reducing them. When
that happens, we are likely to see a more substantial and sustained
recovery in share and bond prices. In the meantime., we may have to
contend with a recession brought about by their overtightening. We
can only hope that it will be mild and short-lived.
In terms of our portfolio, our exposures have remained
relatively unchanged. We have continued to focus on the long-term
potential of our investments whilst managing down risk in the
portfolio, replacing higher risk investments with lower risk ones
as we navigate through these difficult times.
The United States continued to
be our largest country exposure at 88.9% of the portfolio with the
balance invested in Canada (4.9%),
Netherlands (3.7%) and the
United Kingdom (2.5%). Information
Technology remains our largest sector exposure at 57.6% of the
portfolio whilst Health Care is our second largest exposure at
23.1%. Communication Services represented 17.1% and Financials
2.3%. Breaking the sectors down into sub-sectors, Software (22.8%)
and Semiconductors (18.5%) are our two largest exposures. The
remaining industry exposures are Communications 9.8%, Life Sciences
Tools 8.6%, Health Care Technology 8.3%, Media 8.2%, Interactive
Media 7.2%, IT Services 5.3%, Pharmaceuticals 5.2%, Electronic
Equipment 2.8%, Consumer Finance 2.3% and Biotechnology 1.0%.
In terms of performance, our best month during the period was
July when our NAV rose 15.2%. This was preceded by our worst month
which was June (-17.6%). We experienced extraordinary levels of
volatility throughout the period as markets descended into chaos as
inflation skyrocketed and central banks became ever more reckless,
hiking the cost of borrowing well beyond what is necessary to
suppress it. Our best performing investments during the period were
Moovly Media (+124%), Revance Therapeutics (+48%), STAAR Surgical
(+34%), Keysight Technologies Inc (+26%), Netflix (+25%) and
Repligen (+21%). Conversely, the investments that lost most value
were Mirriad Advertising (-79%), Mogo (-56%), Digital Turbine
(-50%) and S4 Capital (-45%).
GICS Industry
Classification |
% of Portfolio |
Software |
22.8% |
Semiconductors |
18.5% |
Communications |
9.8% |
Life Sciences Tools |
8.6% |
Health Care Technology |
8.3% |
Media |
8.2% |
Interactive Media |
7.2% |
IT Services |
5.3% |
Pharmaceuticals |
5.2% |
Electronic Equipment |
2.8% |
Consumer Finance |
2.3% |
Biotechnology |
1.0% |
|
100.0 |
Proposal for the Winding-Up of the
Company
Recent falls in asset prices combined with inflation and
regulatory changes have pushed the Trust’s Ongoing Charges to over
9%. This has rendered it commercially uncompetitive and unable to
achieve its objectives. The Board, having considered various
options for the continuation of the Company, have concluded that it
would be in the best interests of Shareholders for the Trust to be
wound up. Consequently, they have resolved to recommend to
Shareholders that a members’ voluntary liquidation of the Company
be undertaken (“the Proposal”). If the Proposal becomes effective,
it will, subject to the terms and conditions set out in the
Circular, which is included with this report and available at:
www.blueplanet.eu, provide Shareholders with a full cash exit less
costs. The Board believes this is in the best interests of
shareholders and recommends that you vote in favour of it.
Full information is provided in the Circular, including the
Notice of General Meeting, to be held at Quakers Meeting House, 7
Victoria Terrace, Edinburgh, EH1
2JL on 21 February 2023.
Income and Dividends
In accordance with established policy no interim dividend has
been declared for the first half of the year.
Gearing and Capital Allocation
At the end of the six-month period to 31st
October 2022 the Trust had gearing,
net of cash, equal to 15.4% of NAV and its portfolio was allocated
as follows: 72.9% was invested in equities and 27.1% in cash.
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 and can be affected by any number of unforeseen external
events such as the global pandemic and the war in Ukraine. 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. All investments are
listed on recognised exchanges, traded in active markets and
readily realisable, with the exception of holdings in Telford
Offshore Holdings Ltd, which are unlisted. See note 5 for the
valuation basis of these 2 holdings.
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.
The Company has no cyber systems of its own; instead, it
outsources the provision of services to third party providers who
themselves, like any company, are exposed to cyber risk. This risk
is monitored by a regular review of service providers by the
Company Secretary who reports directly to the Board of
Directors.
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 9 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.
However, if the members vote in favour of the resolutions set out
in the Circular then the Company will be wound up and additional
costs will be incurred as set out in the Circular.
Related party transactions
There have been no changes to related party transactions which
were disclosed in the Directors Report on page 28 of the Annual
Report.
Borrowings, Gearing and Liquidity
The Fund ended the period with gearing net of cash of 15.4%. The
Company financed its gearing by means of credit facilities with
Interactive Brokers Incorporated.
Under the Company’s Articles of Association, the maximum gearing
the Company may deploy is 75% of NAV. The Company may borrow in
Sterling and other currencies.
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.
Russell Frith
Chairman
30th January 2023
Balance Sheet
|
At 31
October
2022
£
(unaudited) |
At 31
October
2021
£
(unaudited) |
At 30
April
2022
£
(audited) |
Fixed assets (note 5) |
|
|
|
Equity investments |
6,348,438 |
20,224,157 |
11,958,519 |
Non - equity investments |
- |
171,536 |
- |
|
6,348,438 |
20,395,693 |
11,958,519 |
Current assets |
|
|
|
Debtors |
341,776 |
30,898 |
338,316 |
Cash at bank and in
hand |
2,355,677 |
223,636 |
58,894 |
Creditors: amounts falling due within one year (note 6) |
(3,321,799) |
(4,724,596) |
(4,635,236) |
Net current liabilities |
(624,346) |
(4,470,062) |
(4,238,026) |
Net assets |
5,724,092 |
15,925,631 |
7,720,493 |
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 |
(17,160,136) |
(12,305,773) |
(14,459,593) |
Capital reserve – investment holding losses |
(5,104,716) |
(272,277) |
(6,052,615) |
Capital redemption reserve |
8,167,389 |
8,167,389 |
8,167,389 |
Revenue reserve |
897,329 |
1,412,066 |
1,141,086 |
Shareholders’ funds |
5,724,092 |
15,925,631 |
7,720,493 |
Net asset value per ordinary share (note 3) |
11.57p |
32.19p |
15.60p |
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
Russell Frith
Chairman
30th January 2023
Statement of Changes
in Equity
For the
six months ended 31 October 2022 (unaudited) |
|
|
Called-up Share capital
(£) |
Share premium
(£) |
Capital reserve-realised
(£) |
Capital reserve- investment holding losses
(£) |
Capital Redemption reserve
(£) |
Revenue reserve
(£) |
Shareholders’ funds
(£) |
|
Shareholders’ funds at
1 May 2022 |
497,820 |
18,426,406 |
(14,459,593) |
(6,052,615) |
8,167,389 |
1,141,086 |
7,720,493 |
|
Return on
ordinary activities after taxation |
- |
- |
(2,700,543) |
947,899 |
- |
(243,757) |
(1,996,401) |
|
Shareholders’ funds at
31 October 2021 |
497,820 |
18,426,406 |
(17,160,136) |
(5,104,716) |
8,167,389 |
897,329 |
5,724,092 |
|
|
|
|
|
|
|
|
|
|
For the
six months ended 31 October 2021 (unaudited) |
|
|
Called-up Share capital
(£) |
Share premium
(£) |
Capital reserve-realised
(£) |
Capital reserve- investment holding losses
(£) |
Capital Redemption reserve
(£) |
Revenue reserve
(£) |
Shareholders’ funds
(£) |
|
Shareholders’ funds at 1 May 2021 |
497,820 |
18,426,406 |
(11,655,673) |
634,057 |
8,167,389 |
1,914,863 |
17,984,862 |
|
Return on ordinary activities after taxation |
- |
- |
(650,100) |
(906,334) |
- |
(245,528) |
(1,801,962) |
|
Dividend paid during the period |
- |
- |
- |
- |
- |
(257,269) |
(257,269) |
|
Shareholders’ funds at 31 October 2021 |
497,820 |
18,426,406 |
(12,305,773) |
(272,277) |
8,167,389 |
1,412,066 |
15,925,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
year ended 30 April 2022 (audited) |
|
|
Called-up Share capital
(£) |
Share
premium
(£) |
Capital
reserve-realised
(£) |
Capital
reserve- investment holding losses
(£) |
Capital Redemption reserve
(£) |
Revenue
reserve
(£) |
Shareholders’ funds
(£) |
Shareholders’ funds at
1 May 2021 |
497,820 |
18,426,406 |
(11,655,673) |
634,057 |
8,167,389 |
1,914,863 |
17,984,862 |
Return on ordinary
activities after taxation |
- |
- |
(2,803,920) |
(6,686,672) |
- |
(516,508) |
(10,007,100) |
Dividend paid during the period |
- |
- |
- |
- |
- |
(257,269) |
(257,269) |
Shareholders’ funds at 30 April 2022 |
497,820 |
18,426,406 |
(14,459,593) |
(6,052,615) |
8,167,389 |
1,141,086 |
7,720,493 |
|
|
|
|
|
|
|
|
|
Income Statement
|
For the six months ended 31 October 2022
(unaudited) |
For the six months ended 31 October 2021
(unaudited) |
For the year ended 30 April 2022
(audited) |
|
Revenue
£ |
Capital
£ |
Total
£ |
Revenue
£ |
Capital
£ |
Total
£ |
Revenue
£ |
Capital
£ |
Total
£ |
Capital losses on
investment |
|
|
|
|
|
|
|
|
|
Net losses |
- |
(1,290,559) |
(1,290,559) |
- |
(1,374,481) |
(1,374,481) |
- |
(8,841,674) |
(8,841,674) |
Exchange losses |
- |
(386,896) |
(386,896) |
- |
(65,113) |
(65,113) |
- |
(431,586) |
(431,586) |
Net capital losses
on investment |
- |
(1,677,455) |
(1,677,455) |
- |
(1,439,594) |
(1,439,594) |
- |
(9,273,260) |
(9,273,260) |
Income from
investments |
24,338 |
- |
24,338 |
22,763 |
- |
22,763 |
45,596 |
- |
45,596 |
Bank interest
receivable |
31 |
- |
31 |
- |
- |
- |
- |
- |
- |
Gross revenue and
capital losses |
24,369 |
(1,677,455) |
(1,653,086) |
22,763 |
(1,439,594) |
(1,416,831) |
45,596 |
(9,273,260) |
(9,227,664) |
Administrative
expenses |
(252,125) |
(48,234) |
(300,359) |
(260,674) |
(106,065) |
(366,739) |
(530,760) |
(191,233) |
(721,993) |
Net return before interest payable and taxation |
(227,756) |
(1,725,689) |
(1,953,445) |
(237,911) |
(1,545,659) |
(1,783,570) |
(485,164) |
(9,464,493) |
(9,949,657) |
Interest payable |
(11,552) |
(26,955) |
(38,507) |
(4,618) |
(10,775) |
(15,393) |
(11,186) |
(26,099) |
(37,285) |
Return on ordinary activities before taxation |
(239,308) |
(1,752,644) |
(1,991,952) |
(242,529) |
(1,556,434) |
(1,798,963) |
(496,350) |
(9,490,592) |
(9,986,942) |
Taxation on ordinary
activities |
(4,449) |
- |
(4,449) |
(2,999) |
- |
(2,999) |
(20,158) |
- |
(20,158) |
Return on ordinary
activities after taxation and total comprehensive income |
(243,757) |
(1,752,644) |
(1,996,401) |
(245,528) |
(1,556,434) |
(1,801,962) |
(516,508) |
(9,490,592) |
(10,007,100) |
Return per ordinary
share (note 3) |
(0.49)p |
(3.54)p |
(4.04)p |
(0.49)p |
(3.15)p |
(3.64)p |
(1.05)p |
(19.18)p |
(20.23)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 2022 have been prepared on the basis of
the accounting policies set out in the Company’s Annual Report and
Accounts as at 30th April
2022 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, 70% of which, less the
appropriate tax relief, is charged to capital. Investment
Management and Administrators fees totalled £166,906 in the period
(Full year to 30 April 2022 -
£469,271)
3. The return per
ordinary share is based upon the following figures:
|
31
October 2022
(unaudited) |
31
October 2021
(unaudited) |
30 April
2022
(audited) |
Revenue return |
£(243,757) |
£(245,529) |
£(516,508) |
Capital
return |
£(1,752,644) |
£(1,556,434) |
£(9,490,592) |
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.
4. No interim
dividend is proposed.
5. The carrying
value of investments is equivalent to their fair value and all
investments are measured at fair value through profit or loss, are
quoted in active markets and classified as level one, with the
exception of Telford Offshore Holding Ltd Perpetual an unquoted
bond, and Telford Offshore Holdings Ltd ordinary shares, which
management have judged to be valued at nil.
6. The Company
has credit facilities with Interactive Brokers Incorporated. Loans
are secured against the investments held in custody accounts.
As at 31st October 2022 the
prevailing rate of interest on the facility with Interactive
Brokers Incorporated was 3.5%. At 31
October 2022, the amount outstanding with this facility was
£3,238,235 (31st October 2021 -
£4,635,069)
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
31st October 2022, 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 2023.
8. The figures and
financial information for the year ended 30th April 2022 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 Accounts have not been audited or reviewed by the Company’s
Auditors.
Alternative Performance Measures
Alternative performance measures are numerical measures of the
Company's current, historical or future performance, financial
position or cash flows, other than financial measures defined or
specified in the applicable financial framework. The Company’s
applicable financial framework includes FRS 102 and the AIC SORP.
The Directors assess the Company's performance against a range of
criteria which are viewed as particularly relevant for closed-end
investment companies.
Discount to Net Asset Value per
Ordinary Share
Discount to Net Asset Value per Ordinary Share is calculated as
the difference between net asset value per share and share price,
divided by net asset value per share.
|
|
31st October
2022 |
30th April
2022 |
NAV per ordinary share |
a |
11.57p |
15.60p |
Share price (BID) |
b |
9.00p |
14.00p |
Discount |
(a - b) / a |
22.2% |
10.3% |
Net gearing
Net gearing measures the total borrowings less cash and cash
equivalents divided by shareholders funds, expressed as a
percentage.
|
|
31st October
2022 |
30th April
2022 |
Borrowings (£’000) |
a |
3,238 |
4,520 |
Cash (£’000) |
b |
2,356 |
59 |
Shareholders’ funds (£’000) |
c |
5,724 |
7,720 |
Net gearing |
(a – b) / c |
15.4% |
57.8% |
Ongoing charges
The ongoing charges ratio has been prepared in accordance with
the AIC recommended methodology. Estimated annual administrative
expenses, less non-recurring expenses, is divided by average
shareholders’ funds during the year.
|
31st October
2022 |
30th April
2022 |
Estimated annual administrative
expenses (£’000) |
589 |
722 |
Less: non-recurring expenses
(£’000) |
(6) |
(9) |
Ongoing charges (£’000) |
583 |
713 |
Average net assets
(£’000) |
6,433 |
13,628 |
Ongoing charges ratio |
9.1% |
5.2% |