TIDMEAT
RNS Number : 1244I
European Assets Trust PLC
03 August 2023
Date: 3 August 2023
Contact: Sam Cosh (Lead Investment Manager) / Scott McEllen
(Investment Company Secretary)
Columbia Threadneedle Investment Business Limited
0131 573 8300
LEI: 213800N61H8P3Z4I8726
European Assets Trust PLC
Unaudited Statement of Results
for the half-year ended 30 June 2023
Highlights for the half-year ended 30 June 2023:
-- Net Asset Value total return of 5.2% in comparison to the benchmark return of 2.9%.
-- Share price total return of -0.3%.
-- An annual dividend of 5.80p per share for 2023 representing a
dividend yield of 6.5% based on the Company's closing share price
of 89.6p on 2 August 2023.
"It has been a better half for our portfolio with our total
return outperforming the benchmark in an environment that rewarded
stock picking. Some of our long-term themes such as health and
wellness, digitalisation and consumer brands reasserted themselves
following a tough last year.
While this is a good start, the Board recognises that we still
have much to do to make up the ground lost last year. Accordingly,
we are not complacent and are conscious that the macroeconomic and
volatile geopolitical environment provides a continuing challenge
for stock pickers. However, history shows that volatility can
provide opportunity."
Jack Perry CBE
Chairman
SUMMARY OF RESULTS
Half-year Half-year ended
ended 30 June 2022
30 June 2023
---------------------------------------- -------------- ----------------
Net Asset Value per share total return
(1) 5.2% -31.4%
Share price total return (1) -0.3% -31.8%
Benchmark(2) 2.9% -21.0%
---------------------------------------- -------------- ----------------
Distributions per ordinary share
Dividends per share - as at 30 June (3) 2.90p 4.40p
Dividends announced for the year 5.80p 8.80p
---------------------------------------- -------------- ----------------
(1) Total Return - the return to Shareholders calculated on a
per share basis adding dividends paid in the period to the increase
or decrease in the Share Price or Net Asset Value in the period.
The dividends are assumed to have been re-invested in the form of
shares or net assets, respectively, on the date on which the shares
were quoted ex-dividend.
(2) With effect from 1 June 2023 the benchmark changed from EMIX
Smaller European Companies (ex UK) Index (net) to MSCI Europe
excluding United Kingdom Small Mid Cap (Net Return) Index. For the
six-month period ended 30 June 2023 a time-apportioned composite of
both indices has therefore been calculated and disclosed.
(3) The first interim dividend of 1.45p per share was paid on 31
January 2023, the second interim dividend of 1.45p per share on 28
April 2023 and the third interim dividend of 1.45p per share on 31
July 2023. The fourth interim dividend of 1.45p per share is
payable to eligible Shareholders on 31 October 2023.
The Chairman, commenting on the results, said:
For the six-month period ended 30 June 2023, European Assets
Trust PLC ("the Company") recorded a Sterling Net Asset Value
("NAV") total return of 5.2%. This compares to the total return
from the Company's benchmark of 2.9% for the same period. With the
discount widening from 5.1% as at 31 December 2022 to 10.2% as at
30 June 2023, the Sterling share price total return for the period
was -0.3%. At the period end the NAV was 98.7p (31 December 2022:
96.5p) and the share price was 88.6p (31 December 2022: 91.6p).
It has been a better half for our portfolio with our NAV total
return outperforming the benchmark in an environment that rewarded
stock picking. Some of our long-term themes such as health and
wellness, digitalisation and consumer brands reasserted themselves
following a tough last year. Unfortunately, our share price failed
to keep pace with our NAV as our discount widened, a trend that has
been seen across most of the Investment Company sector.
The year started optimistically with better economic data
showing that Europe had navigated what was predicted to be a tough
winter well. This positive impetus was checked in March by the
failure of Silicon Valley Bank in the US and the collapse of Credit
Suisse in Europe. Whilst Europe's banking system was resilient
enough to avoid contagion, a tightening of credit conditions
exacerbated the delayed effect of higher rates with much of the
Eurozone suffering anaemic growth or indeed recession. The first
half of 2023 has therefore concluded on a more pessimistic
note.
Dividends
The 2023 dividend of 5.80p per share is payable in four equal
instalments of 1.45p. Three interim dividends have been paid on 31
January, 28 April and 31 July with a further instalment of 1.45p to
be paid on 31 October 2023.
As at 2 August 2023, the latest practicable date prior to
publication of this announcement, an annual dividend of 5.80p per
share represented a yield of 6.5% calculated with reference to the
Company's closing share price of 89.6p. The level of dividend paid
each year is determined in accordance with the Company's
distribution policy. The Company has stated that, barring
unforeseen circumstances, it will pay an annual dividend equivalent
to six per cent of its NAV at the end of the preceding year.
Directorate Changes
As part of the Board's succession plan, and as previously
announced, Julia Bond, the Company's Senior Independent Director,
will retire on 31 January 2024. Julia was appointed as a Director
of the Supervisory Board of the Company's Dutch predecessor,
European Assets Trust NV, in April 2014 and upon retirement will
have served nine years between both entities. On behalf of the
Board and Shareholders of the Company I thank Julia for her
diligence and wise counsel
throughout her period of appointment.
As a further part of this plan a search company has been
commissioned to find a new Director for the Board.
I was also appointed to the Supervisory Board of the Company's
predecessor in April 2014 and became its Chairman with effect from
April 2015. As previously announced, I will retire from the Board
at the conclusion of the Company's 2024 Annual General Meeting and
Stuart Paterson, who was appointed to the Board in July 2019 will
become Chairman.
Following my retirement and Stuart Paterson's assumption of the
Chairmanship, Kevin Troup will be appointed Chairman of the
Company's Audit and Risk Committee.
Outlook
After a disappointing 2022, the Company's recent performance in
a difficult market for European equities is pleasing. While this is
a good start, the Board recognises that we still have much to do to
make up the ground lost last year. Accordingly, we are not
complacent and are conscious that the macroeconomic and volatile
geopolitical environment provides a continuing challenge for stock
pickers. However, it is worth looking back to the Company's 2022
interim report where I noted that during times of economic
volatility it is sometimes easy to lose sight of the potential of
our focus markets. This was during the depths of negative sentiment
towards Europe last summer when inflation was rising rapidly, and
European industry was facing the prospects of gas shortages during
the winter. From these lows, Europe led the recovery of global
markets. While this recovery has petered out in recent months,
history shows that volatility can provide opportunity. We are
expecting some further difficult months for the European economy as
interest rates bite, but this is beginning to be discounted by the
markets. After all, valuations in the region are attractive,
especially for smaller companies. How central banks manage the
balance between curbing inflation and stifling economic activity
will largely dictate the outturn for the period. But it will
provide opportunities for the well managed businesses which we
believe our portfolio comprises, which in turn should lay the
foundation for a more sustained recovery.
Jack Perry CBE
Chairman
The Investment Manager, commenting on the results, said:
Market Backdrop
The year started strongly with a pickup in business surveys
leading to more optimistic assessments of the region's economic
outlook. While the ECB continued to raise interest rates, inflation
rates declined, and lower energy costs provided some relief to the
industrial sector and for the European economy as a whole.
Cyclically sensitive sectors performed strongly, with peaking
interest rate expectations providing a more supportive backdrop for
growth stocks. This optimism, however, faded as we transitioned
through the six-month period as higher interest rates started to
bite and economic indicators moved into contraction territory. Core
inflation also remains stubbornly high, prompting the ECB to
continue pushing rates higher, though any further economic weakness
must make more rate rises less palatable. Investors also had to
contend with the failure of Credit Suisse following the collapse of
Silicon Valley Bank in the US. Despite this, the European banking
system held up well through the period, but credit conditions have
since worsened. Nonetheless our index registered gains in both
local currencies and our reporting currency, though the strength of
Sterling softened some of this return.
Performance
It is pleasing to report a strong NAV performance ahead of the
index. Our consumer related stocks were strong contributors to this
performance. Cairn, the Irish housebuilder, led this
outperformance. While higher interest rates are not necessarily a
good backdrop for demand for housing, the unique dynamics of the
Irish market mean that Cairn's outlook is attractive. For historic
reasons, the supply of new homes has been sorely lacking, meaning
that there is a huge imbalance with demand continuing to be strong.
This means that the housing market is a key priority for the
government, who are generating a significant surplus, and who have
a fully funded 'housing for all' strategy in place. With the
largest landbank and order book in the market, and buoyant new
sales figures, Cairn are benefitting from this. Another strong
performer within the Irish market was Dalata, the Irish listed
hotel operator, which has also seen the benefit of a favourable
demand and supply balance, but also the recovery in tourism and
corporate travel. Thule, the Swedish producer of outdoor and
leisure equipment, continued its recovery from a very challenging
year in 2022, as signs emerged that retail inventories had reduced
enough to see consumer demand patterns return to normal.
Our semiconductor equipment companies, the Dutch listed ASM
International, and Belgian listed, BE Semiconductor Industries
("BESI"), had exceptional halves. Both companies are exposed to
secular growth within the industry as the ongoing miniaturisation
of semiconductors results in more demand for their equipment. The
industry as a whole is benefitting from the requirements of
governments to source more silicon chips locally. These shares
really took off though in May when the Nvidia results heralded the
first positive impact of Generative AI on demand in the sector.
Generative AI is the latest iteration of artificial intelligence in
which computer algorithms are used to generate outputs that
resemble human-created content. This requires significant computer
processing power and will drive greater demand for semiconductors.
Both ASM International and BESI should benefit from this demand,
though we are unlikely to see it in the order books before the year
end.
Our industrials also performed well. Of note was the recent
addition Engcon, the leading producer of tiltrotators that attach
to excavators. This Swedish listed business produced exceptional
first quarter results, despite uncertain activity in its end
markets. Wizz Air, the low-cost airline, also had a good first half
as it saw a significant increase in demand while fuel costs fell.
Kardex, the leading intralogistics solutions provider, fared well
following good results and provided confidence that automation and
re-shoring would drive growth. Many of these stocks suffered badly
in 2022 and our patience through that difficult patch has been
rewarded. Turning to more disappointing aspects of performance, our
worst contributor was one of our largest positions, Tecan, the
Swiss listed, medical technology business. While there was not any
stock specific news, there were a number of profit warnings within
the sector, and this appeared to weigh on the shares. One of these
warnings came from another of our healthcare holdings, Stratec,
which announced weaker profits reflecting an inability to pass on
extra manufacturing costs to its clients. This lack of cost control
and pricing power prompted us to sell the position. However, we
continue to back Tecan and would expect its results to remind
investors of the strong characteristics of the business and be
reflected in improved stock market performance.
Another poor performer was Karnov, the leading provider of legal
information in Scandinavia. While its operating results have been
reasonable, it has struggled for two reasons. Firstly, following
the acquisition of some large assets in Spain and France, it is
carrying significant balance sheet leverage. The cash flow
generation of the company is excellent, so we would expect the
leverage ratios to fall rapidly, and are therefore not unduly
concerned. The second reason for the weakness is the uncertainty
over the emergence of Generative AI on the business. We view this
threat as overstated, though we are cognisant that we are early in
establishing what Generative AI means for the industry.
Other poor performance came from Lectra, the French listed
manufacturing technology business, Nordic Semiconductor, the
leading Bluetooth chip provider, and Coor Service Management, the
Scandinavian facilities management company. All companies had poor
operating results, but we expect these to be temporary, so are
maintaining our holdings, and have been adding in some cases.
Portfolio Activity
Portfolio turnover is in line with long term averages. We sold
our holdings in Alten, the French R&D outsourcer, and
Sparebank, for valuation reasons, as well as Sligro, the Dutch food
services business, and Stratec, the medical technology company,
following a loss of conviction in their market positions.
Idea generation was productive, supported by our new colleagues
within Columbia Threadneedle Investments. We diversified our
relatively large semiconductor holdings by adding BESI, listed in
Belgium, and Technoprobe, listed in Italy, both equipment providers
to the industry, the former so far proving to be a well-timed
purchase. We also added Campari and Remy Cointreau within the
spirits sector, taking advantage of the shares falling in our
market cap range. We are taking our time to build our full position
in Remy as the shorter-term outlook is weaker, but Campari has
delivered well thus far. We have also added Carel, a market leading
producer of intelligent controls for heating, ventilation,
air-conditioning and refrigeration, which is set to benefit from
regulation driven investments to improve the environmental
credentials of buildings. Finally, we have started a position in
Swiss listed Surgical Science. It is the market leader in software
and systems used in medical training for minimally invasive surgery
and robotic surgery. Robotic surgery is growing quickly, yet the
penetration rate globally is small. Surgical Science enables this
growth through teaching surgeons to operate safely.
Outlook
The recent economic news is troubling with rising interest rates
finally starting to impact aggregate demand. The key from here is
whether central banks can achieve a relatively benign cooling of
activity or whether they will continue to tighten, potentially
curtailing activity too far pushing the economy into a deeper
recession. The market is now, however, starting to discount more of
the latter, taking their cue from the rapidly deteriorating
business surveys, and has therefore weakened recently. This has
left European equities and smaller companies, in particular,
looking good value. While a deteriorating economy certainly is not
good news, central banks now have the tools to respond to this, and
were they to pivot away from raising rates, the market would be
able to look favourably towards recovery. In that environment
smaller companies will thrive. In the meantime, we will look for
opportunities in stock selection to harness the recovery when it
comes.
Sam Cosh
Lead Investment Manager
Columbia Threadneedle Investment Business Limited
Forward -looking statements
This interim report may contain forward-looking statements with
respect to the financial condition, results of operations and
business of the Company. Such statements involve risk and
uncertainty because they relate to future events and circumstances
that could cause actual results to differ materially from those
expressed or implied by forward-looking statements. The
forward-looking statements are based on the Board's' current view
and on information known to them at the date of this report.
Nothing should be construed as a profit forecast.
Directors' Statement of Principal Risks and Uncertainties
Most of the Company's principal risks and uncertainties are
market related and no different from those of other investment
trusts investing in listed equities. They are described in more
detail under the heading "Principal Risks and Changes in the Year"
within the Strategic Report in the Company's Report and Accounts
for the year ended 31 December 2022.
The principal risks identified in the Report and Accounts for
the year ended 31 December 2022 were:
-- Poor absolute and/or relative performance;
-- Relevance/attractiveness of the investment strategy and policy;
-- Failure of the manager, execution risk arising from the
acquisition of BMO GAM EMEA or the loss of key investment
management staff;
-- Regulatory and compliance failure (including ESG reporting);
-- Service provider failure;
-- The sustainability of the Company's dividend policy; and
-- Geopolitical issues and their impact.
At present the global economy continues to suffer considerable
disruption due to inflationary pressures, the war in Ukraine and
the after-effects of the COVID-19 pandemic. The Directors continue
to review the key risk register for the Company which identifies
the risks that the Company is exposed to, the controls in place and
the actions being taken to mitigate them.
It is also noted that:
-- An analysis of the performance of the Company since 1 January
2023 is included within the Chairman's Statement and the Investment
Manager's Review above.
-- The Company has a EUR45 million multi-currency loan facility
with The Bank of Nova Scotia (London branch). As at 30 June 2023
EUR20.0 million was drawn down.
-- Note 4 below details the Board's consideration for the
continued applicability of the principle of Going Concern when
preparing this report.
On behalf of the Board
Jack Perry CBE
Chairman
2 August 2023
Directors' Statement of Responsibilities in Respect of the
Half-Yearly Financial Report
In accordance with Chapter 4 of the Disclosure and Transparency
Rules the Directors confirm, that to the best of their
knowledge:
-- the condensed set of financial statements has been prepared
in accordance with applicable UK-adopted International Accounting
Standards on a going concern basis, and gives a true and fair view
of the assets, liabilities, financial position and net return of
the Company;
-- the Chairman's Statement, Investment Manager's Review and the
Directors' Statement of Principal Risks and Uncertainties include a
fair review of the information required by the Disclosure Guidance
and Transparency Rule ('DTR') 4.2.7R, being an indication of
important events that have occurred during the first six months of
the financial year and their impact on the financial
statements;
-- the Directors' Statement of Principal Risks and Uncertainties
shown above is a fair review of the principal risks and
uncertainties for the remainder of the financial year; and
-- the half-yearly report includes a fair review of the
information required by DTR 4.2.8R, being related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the Company during the period,
and any changes in the related party transactions described in the
last Annual Report that could do so.
On behalf of the Board
Jack Perry CBE
Chairman
2 August 2023
Condensed Statement of Comprehensive Income
Half-year ended Half-year ended
30 June 2023 30 June 2022
(Unaudited) (Unaudited)
Revenue Capital Total Revenue Capital Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------------ --------- --------- --------- --------- ---------- ------------
Gains/(losses) on investments held at fair
value through profit or loss - 25,944 25,944 - (178,269) (178,269)
Foreign exchange gains/(losses) 1 300 301 (20) (365) (385)
Income 5,883 - 5,883 6,391 - 6,391
Management fees (285) (1,139) (1,424) (348) (1,391) (1,739)
Other expenses (465) (28) (493) (482) (14) (496)
--------------------------------------------- --------- --------- --------- --------- ---------- ------------
Profit / (loss) before finance costs and
taxation 5,134 25,077 30,211 5,541 (180,039) (174,498)
Finance costs (58) (230) (288) (24) (99) (123)
--------------------------------------------- --------- --------- --------- --------- ---------- ------------
Profit / (loss) before taxation 5,076 24,847 29,923 5,517 (180,138) (174,621)
Taxation (551) - (551) (684) - (684)
--------------------------------------------- --------- --------- --------- --------- ---------- ------------
Profit / (loss) for the period 4,525 24,847 29,372 4,833 (180,138) (175,305)
--------------------------------------------- --------- --------- --------- --------- ---------- ------------
Earnings per share - pence 1.26 6.90 8.16 1.34 (50.03) (48.69)
--------------------------------------------- --------- --------- --------- --------- ---------- ------------
The total column of this statement represents the Company's
Income Statement and Statement of Comprehensive Income, prepared in
accordance with UK-adopted International Accounting Standards. The
supplementary revenue and capital return columns are both prepared
under guidance published by the Association of Investment
Companies.
All revenue and capital items in the above statement derive from
continuing operations.
Condensed Statement of Changes in Equity
Cumulative Total
Share Distributable Capital Revenue Translation Shareholders'
Half-year ended 30 June 2023 Capital Reserve Reserve Reserve Reserve Funds
(Unaudited) GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------------------- --------- -------------- ---------- --------- ------------ --------------
Balance at 31 December 2022 37,506 296,945 8,671 - 4,505 347,627
Movements during the half-year ended
30 June 2023
Interim dividends distributed and
reinvested - (8,015) - (2,427) - (10,442)
Total comprehensive income - - 24,847 4,525 - 29,372
Cumulative translation adjustment - - - - (11,341) (11,341)
-------------------------------------- --------- -------------- ---------- --------- ------------ --------------
Balance at 30 June 2023 37,506 288,930 33,518 2,098 (6,836) 355,216
-------------------------------------- --------- -------------- ---------- --------- ------------ --------------
Half-year ended 30 June 2022
(Unaudited)
-------------------------------------- --------- -------------- ---------- --------- ------------ --------------
Balance at 31 December 2021 37,506 322,694 188,661 - (23,426) 525,435
Movements during the half-year ended
30 June 2022
Interim dividends distributed and
reinvested - (11,011) - (4,833) - (15,844)
Total comprehensive income - - (180,138) 4,833 - (175,305)
Cumulative translation adjustment - - - - 13,071 13,071
-------------------------------------- --------- -------------- ---------- --------- ------------ --------------
Balance at 30 June 2022 37,506 311,683 8,523 - (10,355) 347,357
-------------------------------------- --------- -------------- ---------- --------- ------------ --------------
Condensed Statement of Financial Position
30 June 2023 30 June 2022 31 December
2022
(Unaudited) (Unaudited) (Audited)
GBP'000s GBP'000s GBP'000s
------------------------------------ --------------- --------------- --------------
Non-current assets
Investments at fair value through
profit or loss 354,437 341,166 340,717
------------------------------------ --------------- --------------- --------------
Current assets
Other receivables 5,714 3,315 3,247
Derivative financial instruments 342 - -
held at fair value through profit
or loss
Cash and cash equivalents 12,097 20,731 13,317
------------------------------------ --------------- --------------- --------------
Total current assets 18,153 24,046 16,564
------------------------------------ --------------- --------------- --------------
Current liabilities
Other payables (211) (204) (782)
Derivative financial instruments - (434) -
held at fair value through profit
or loss
Bank Loan (17,163) (17,217) (8,872)
------------------------------------ --------------- --------------- --------------
Total current liabilities (17,374) (17,855) (9,654)
------------------------------------ --------------- --------------- --------------
Net current assets 779 6,191 6,910
------------------------------------
Net assets 355,216 347,357 347,627
------------------------------------ --------------- --------------- --------------
Capital and reserves
Share capital 37,506 37,506 37,506
Distributable reserve 288,930 311,683 296,945
Capital reserve 33,518 8,523 8,671
Revenue reserve 2,098 - -
Cumulative translation reserve (6,836) (10,355) 4,505
Total Shareholders' funds 355,216 347,357 347,627
------------------------------------ --------------- --------------- --------------
Net Asset Value per ordinary
share - pence 98.65 96.47 96.54
------------------------------------ --------------- --------------- --------------
Condensed Statement of Cash Flows
Half-year ended Half-year ended
30 June 2023 30 June 2022
(Unaudited) (Unaudited)
GBP'000s GBP'000s
----------------------------------------------- ---------------- ----------------
Cash flows from operating activities before
dividends and interest received and interest
paid (2,489) (2,167)
----------------------------------------------- ---------------- ----------------
Dividends received 5,309 5,276
Interest received 146 -
Interest paid (263) (126)
----------------------------------------------- ---------------- ----------------
Cash flows from operating activities 2,703 2,983
----------------------------------------------- ---------------- ----------------
Investing activities
Purchase of investments (63,040) (60,211)
Sale of investments 61,532 93,280
Derivative financial instruments purchased
for future settlement (342) 434
Other capital expenses (28) (14)
----------------------------------------------- ---------------- ----------------
Cash flows from investing activities (1,878) 33,489
----------------------------------------------- ---------------- ----------------
Cash flows before financing activities 825 36,472
----------------------------------------------- ---------------- ----------------
Financing activities
Equity dividends distributed (10,442) (15,844)
Drawdown of bank loan 8,879 -
Repayment of bank loan - (8,452)
----------------------------------------------- ---------------- ----------------
Cash flows from financing activities (1,563) (24,296)
----------------------------------------------- ---------------- ----------------
Net movement in cash and cash equivalents (738) 12,176
Cash and cash equivalents at the beginning
of the period 13,317 8,342
Effect of movement in foreign exchange 301 (385)
Translation adjustment (783) 598
----------------------------------------------- ---------------- ----------------
Cash and cash equivalents at the end of
the period 12,097 20,731
----------------------------------------------- ---------------- ----------------
Represented by:
----------------------------------------------- ---------------- ----------------
Cash at bank 6 19
Short term deposits 12,091 20,712
12,097 20,731
----------------------------------------------- ---------------- ----------------
Notes
1 Basis of preparation
These condensed financial statements, which are unaudited, have
been prepared on a going concern basis in accordance with the
Companies Act 2006, UK-adopted International Accounting Standards
and the Statement of Recommended Practice "Financial Statements of
Investment Trust Companies and Venture Capital Trusts" ("SORP")
issued by the AIC.
All of the Company's operations are of a continuing nature. The
functional currency of the Company is the euro and presentational
currency is the pound sterling as the Board believe this will
provide clarity of the Company's financial statements for its
Shareholders, the overwhelming majority of whom are located in the
United Kingdom.
All transactions during the period are translated on the date of
execution and the Statement of Financial Position as at the period
end date.
The accounting policies applied in the condensed set of
financial statements are set out in the Company's annual report for
the year ended 31 December 2022.
2 Earnings per share
Earnings per ordinary share attributable to Shareholders
reflects the overall performance of the Company in the period. Net
revenue recognised in the first six months is not necessarily
indicative of the total likely to be received in the full
accounting year.
Half-year Half-year ended
ended 30 June 2022
30 June 2023 GBP'000s
GBP'000s
---------------------------------- --------------- ------------------
Revenue return 4,525 4,833
Capital return 24,847 (180,138)
---------------------------------- --------------- ------------------
Total return 29,372 (175,305)
---------------------------------- --------------- ------------------
Number Number
Weighted average ordinary shares
in issue 360,069,279 360,069,279
Earnings per share - pence 8.16 (48.69)
---------------------------------- --------------- ------------------
3 Dividend
The fourth interim dividend of 1.45p per share in respect of the
year ending 31 December 2023 will be paid on 31 October 2023 to
eligible Shareholders on the register. The total cost of this
dividend based on 360,069,279 shares in issue is GBP5,221,000.
4 Going concern
In assessing the going concern basis of accounting the Directors
have had regard to the guidance issued by the Financial Reporting
Council. They have also considered the Company's objective, high
distribution policy, the current cash position of the Company, the
availability of the loan facility and compliance with its covenants
and the operational resilience of the Company and its service
providers.
At present the global economy continues to suffer disruption due
to inflationary pressures, the war in Ukraine and the after-effects
of the COVID-19 pandemic and the Directors have given careful
consideration to the consequences for this Company.
The Company has a number of banking covenants and at present the
Company's financial position does not suggest that any of these are
close to being breached. The primary risk is that there is a
further significant decrease in the Net Asset Value of the Company
in the short to medium term.
As at 1 August 2023, the latest practicable date before the
publication of this report, borrowings amounted to EUR20 million.
This is compared to a net asset value of EUR415.4 million. In
accordance with its investment policy the Company is invested
mainly in readily realisable listed securities. These can be
realised if necessary, to repay the loan facility and fund the cash
requirements for future dividend payments.
The Company operates within a robust regulatory environment. The
Company retains title to all assets held by the Custodian. Cash is
held with banks approved and regularly reviewed by the Manager and
the Board.
The Company's annual dividend, which is declared in sterling, is
determined by reference to the prior year-end Net Asset Value. The
Company manages any sterling/euro exchange rate exposure which may
arise from the declaration of a sterling denominated dividend by
entering into specific matched forward currency hedging contracts.
As at 30 June 2023 the Company had a Distributable Reserve of
GBP288.9 million.
Based on this information the Directors believe that the Company
has the ability to meet its financial obligations as they fall due
for a period of at least twelve months from the date of approval of
these financial statements. Accordingly, these financial statements
have been prepared on a going concern basis.
5 Results
The results for the half-year ended 30 June 2023 and 30 June
2022, which are unaudited, constitute non-statutory accounts within
the meaning of Section 434 of the Companies Act 2006. The latest
published accounts which have been delivered to the Registrar of
Companies are for the year ended 31 December 2022; the report of
the independent auditors thereon was unqualified and did not
contain a statement under Section 498 of the Companies Act 2006.
The condensed financial statements shown above for the year ended
31 December 2022 are an extract from those accounts.
6 Half-yearly report and accounts
The Company's report and accounts will be available shortly on
the internet at www.europeanassets.co.uk. Printed copies may be
obtained by writing to the Company Secretary at European Assets
Trust Plc, Cannon Place, 78 Cannon Street, London, EC4N 6AG.
By order of the Board
Columbia Threadneedle Investment Business Limited, Secretary
Cannon Place,
78 Cannon Street,
London EC4N 6AG
2 August 2023
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