TIDMGGOR
Gartmore Growth Opportunities plc
Report for the six months to 31 December 2009
(Full text)
Page 1:
Highlights
- Net Asset Value per Ordinary share increased 24.3% to 510.9p, versus the FTSE
SmallCap (excluding investment companies) Index up 23.1% over the period.
- Mid-Market Price per Ordinary share rose 27.3% to 483.25p.
- Management fees and finance costs allocated 25% to revenue and 75% to capital
effective from 1 July 2009.
- Portfolio well-placed to benefit from prospective increased market
recognition of the small-cap sector's potential.
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Page 2:
Chairman's Statement
for the six months to 31 December 2009
Following the very strong performance in the last financial year, performance
in the six months to 31 December 2009 held up well, with the NAV per Ordinary
share increasing by 24.3%, compared with 23.1% in our benchmark index.
During the period the share price reached new heights, increasing by 27.3%
overall: this is reflected by further narrowing of the discount, with the price
much closer to NAV than other smaller companies investment trusts throughout
the period.
There has also been a strong contribution to revenue from our dealing
subsidiary, Gartmore GO Dealing Limited, which added GBP972,000 to the
consolidated revenue for the six months.
The Board has announced that, with effect from 1 July 2009, the Company will
allocate 75% of its management fees and finance costs to capital, with 25% to
the revenue account. This is consistent with the majority of investment trusts
in our sector. It will not have any effect on the total return for
shareholders, but it will increase the revenue earnings per share and reduce
the capital return per share by the same amount. On current figures the revenue
return for the present year will be increased by approximately 3p per share.
The portfolio remains positioned in small and micro-cap stocks where the
Manager believes opportunities are the greatest.
All the shares submitted for redemption at both opportunities in the period
were matched with buyers. In January 2010, due to inopportune price movements
14,200 shares were not able to be matched and so were redeemed. None-the-less
we were encouraged that the number submitted was small.
We believe that despite strong stock market gains over the last six months many
of our investments have not yet received market recognition for their
potential. With uncertainty over the prospects for UK economic growth and the
outcome of the forthcoming general election we expect that the UK stock market
will make little headway overall. Consequently, we believe that investors will
increasingly look to small-cap stocks for returns. We are well placed to
benefit from increased interest in the small-cap sector and are confident that
our shareholders will continue to benefit from our Manager's active investment
style and strong stock picking skills.
David Peters
Chairman
24 February 2010
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Page 3:
Manager's Review
for the six months to 31 December 2009
Since the markets turned in March equities have performed well. UK small-caps
performed significantly better than the wider market up to October but then
fell back through rising risk aversion after poor UK GDP results disappointed
the market. Even so, the FTSE SmallCap (excluding investment companies) Index
finished 2009 up 52.7% from its level at the end of 2008 compared with an
increase of 25.0% for the FTSE All-Share Index. The Company's NAV per Ordinary
share increased 79.9% over that period.
Over the six months under review the Company's NAV rose by 24.3%, slightly
ahead of the 23.1% rise in the benchmark FTSE SmallCap (excluding investment
companies) Index.
The top contributor to performance in the six months was technology company
Morse. Its share price more than doubled early in the period following a
positive earnings update and confirmation that a preliminary approach to buy
the company at 25p per share had been made. The share price fell back a little
after takeover talks ended during August but then improved further, supported
by a reported return to operating profitability over the third quarter despite
lower revenues. Although the company expects the environment to remain
challenging in the near term, we still believe the business is attractive at
current prices. We expect that the cost-cutting measures that enabled Morse to
deliver this result leave the company well-positioned when trading conditions
improve.
Amongst other strong performers, a new holding in oil & gas producer Sterling
Energy performed very well. Sterling's competitor Gulf Keystone announced it
had made a significant oil discovery in a region of Iraq where Sterling also
has exploration assets. Sterling, which has interests in the Gulf of Mexico,
Africa and the Middle East, also proposed an equity placing in August, to
provide much needed capital, and signed an amended waiver with its bankers
giving it some space to dispose of assets and repay bank debt. Returns have
been good since we participated in this refinancing. Putting the business on a
more stable footing has allowed the market to concentrate on the potential of
the company's assets, which look attractive given the excellent drilling
results of peers in Kurdistan.
Our holding in AIM-listed Penna Consulting also made strong gains, reaching a
high in November after a broker upgrade and positive results. The price came
back subsequently, but at 31 December it was still up 43% from its 30 June
level.
Although it slipped after its peak in October, BATM Advanced Communications
also performed very well. During August the maker of routers and switches for
the internet reported good results for its first half, with record revenues and
a 34% increase in pre-tax profit. Later, in October, broadening analytical
coverage coupled with a solid trading update at the end of the month further
stimulated the share price.
Sometimes performance relative to the benchmark can come from stocks that are
not held, not just those that are. In this respect not holding UK Coal provided
a lift to relative returns over the period after very weak performance from its
shares, whereas not holding Trinity Mirror detracted after the newspaper
group's share price
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Page 4:
nearly tripled over the past six months. Improving conditions such as a slowing
in advertising revenue declines, a profitable first half, and broker upgrades
all contributed to its strength.
Amongst holdings that were less beneficial in the period, our large position in
set-top box maker Pace underperformed relative to the index. Although the share
price initially rose, albeit at a lower rate than the wider market, it fell
back from mid-September and finished the period just 5% up on its 30 June
level. We sold some of our holding around the time the price reached its peak
in September in order to crystallise some of the gains and reinvest in new
ideas.
Sportech, an overweight position, also detracted following heavy declines over
the period. In mid-November it issued a trading statement which further
disappointed the market, with online revenues failing to meet expectations. The
share price fell sharply as a result, but our investment case for Sportech
remains unchanged and we continued to add to our stake over the quarter.
We were active with the trading subsidiary in the period and participated in a
large number of secondary placings. This activity generated a profit of GBP
972,000 in the six months, which is available to be paid up as income to the
parent company and distributed to shareholders.
Prospects
Despite the injections of liquidity into the financial system over the last
year, there has been an ongoing lack of asset allocation to small-caps.
Small-caps were already undervalued coming into the credit crisis, and it is
the small-cap effect (the scale of change within a business, and the difference
between the public perception and business reality) which is the enduring
driver behind small-cap stock returns. In a broad, diverse, and neglected asset
class the scope to invest is constrained only by the investment team's energy
and access to capital. In this respect a number of factors are a source of
encouragement.
Firstly, we believe that the normalisation of risk appetites during 2009
remains in the early stages for smaller companies after a protracted period of
underperformance. Further, the pace of economic growth last year was driven (at
least initially), by inventory cycles. As the economy stabilises the pressure
on large businesses to manufacture earnings growth is likely to lead to an
uptick in corporate activity in 2010.
In addition, there was an apparent attitude in 2008 that all financials,
cyclicals and companies with debt were bad, while all exposure to public
expenditure was good and defensive. However, this completely reversed in 2009.
At present the market is still not showing great signs of differentiation and
discrimination, but that is a trend that will reassert itself, and when it does
it will be disproportionately beneficial for good and active stock selection
styles.
Gartmore Investment Limited
24 February 2010
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Page 5:
Financial Statistics
At 31 At 30 June Change
December
2009 2009 %
Shareholders' Funds:
Net Assets (GBP'000) 59,801 48,094 24.3
Net Asset Value per Ordinary share 510.90p 410.88p 24.3
Share Price:
Market Capitalisation (Ordinary 56,565 44,450 27.3
shares GBP'000)
Mid-Market Price 483.25p 379.75p 27.3
(Discount) (5%) (8%)
Benchmark Index:
FTSE SmallCap (excluding investment 2327.93 1891.40 23.1
companies) Index
Gearing (expressed as a percentage
of Net Assets):
Potential Gearing 10.2% 13.3%
Actual Gearing 7.4% 2.5%
Six months Six months
to to
31 December 31 December
2009 2008
Total Return per Ordinary Share:*
Revenue 10.66p (5.07)p
Capital 95.65p (63.02)p
Total Return per Ordinary share 106.31p (68.09)p
*Based on the weighted average of 11,705,040 (2008: 13,283,557) Ordinary shares
in issue during the period.
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Page 6:
Principal Investments
at 31 December 2009
Valuation Percentage
Company Sector Classification GBP'000 of Portfolio
BATM Advanced Technology Hardware & 2,750 4.4
Communications Equipment
Pace Technology Hardware & 2,546 4.1
Equipment
Penna Consulting Support Services 2,379 3.8
Juridica Investments Financial Services 1,218 1.9
Sterling Energy* Oil & Gas Producers 1,083 1.7
Innovation Group Software & Computer 918 1.5
Services
MBL Group* Media 917 1.5
MWB 9.75% 09/12 Corporate Bonds 865 1.4
Management Consulting Support Services 838 1.3
Group
Nestor Healthcare Healthcare Equipment 831 1.3
& Services
Top Ten Investments 14,345 22.9
Morse Software & Computer 818 1.3
Services
Lavendon Group Support Services 813 1.3
Carclo Chemicals 795 1.3
Assetco* Support Services 795 1.3
Dart Group* Industrial 782 1.3
Transportation
Daisy Group* Fixed Line 781 1.3
Telecommunications
Renovo Group Pharmaceuticals & 754 1.2
Biotech.
MDM Engineering Group1 Construction & 710 1.1
Materials
Powerflute Forestry & Paper 709 1.1
Allocate Software* Software & Computer 693 1.1
Services
Top Twenty Investments 21,995 35.2
Conygar Investment* Real Estate 680 1.1
Oakley Capital Investments Financial Services* 668 1.1
Hargreaves Services* Support Services 660 1.1
REA Holdings Food Producers 647 1.0
Iomart Group* Software & Computer 585 0.9
Services
BPC* Oil & Gas Producers 559 0.9
Costain Construction & 543 0.9
Materials
Begbies Traynor* Support Services 539 0.9
Renold Industrial 528 0.8
Engineering
Ora Capital Partners* Financial Services 526 0.8
Top Thirty Investments 27,930 44.7
The value of the portfolio of investments on which this table is based was
GBP62,512,000. The total number of investments at 31 December 2009 was 196.
* Alternative Investment Market
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Page 7:
Analysis of Net Assets and Shareholders' Funds
Valuation at Net Appreciation/ Valuation at
30 June 2009 Transactions (Depreciation) 31 December
2009
GBP'000 % GBP'000 GBP'000 GBP'000 %
Equities*
Oil & Gas 3,794 7.9 (1,313) 1,598 4,079 6.8
Basic Materials 3,291 6.8 436 946 4,673 7.8
Industrials 13,436 27.9 1,432 2,580 17,448 29.2
Consumer Goods 2,070 4.3 970 229 3,269 5.5
Healthcare 4,487 9.3 (1,629) 1,673 4,531 7.6
Consumer Services 3,399 7.1 963 448 4,810 8.0
Telecommunications 407 0.9 134 240 781 1.3
Utilities 455 0.9 - 71 526 0.9
Financials 3,949 8.2 3,825 827 8,601 14.4
Technology 11,286 23.5 (1,587) 3,054 12,753 21.3
------- ---- ------- ------- ------- ----
46,574 96.8 3,231 11,666 61,471 102.8
Convertibles/ 1,036 2.2 55 (50) 1,041 1.7
Corporate Bonds
------- ---- ------- ------- ------- ----
47,610 99.0 3,286 11,616 62,512 104.5
Current Assets 2,280 4.7 (107) - 2,173 3.7
including Cash
------- ---- ------- ------- ------- ----
Total Assets 49,890 103.7 3,179 11,616 64,685 108.2
Liabilities (1,796) (3.7) (3,152) 64 (4,884) (8.2)
------- ---- ------- ------- ------- ----
Net Assets 48,094 100.0 27 11,680 59,801 100.0
======= ==== ======= ======= ======= ====
Attributable to 48,094 100.0 (737)** 12,444*** 59,801 100.0
Ordinary
Shareholders
======= ==== ======= ======= ======= ====
* The valuation is based on bid prices and includes GBP28,847,000 (30 June 2009:
GBP20,009,000) in respect of investments quoted on the Alternative Investment
Market.
** Comprises dividends paid in the period.
*** Comprises the total return for the period.
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Page 8:
Group Income Statement (unaudited)
for the six months to 31 December 2009
Six months to 31 December 2009
Revenue Capital Total
Return Return Return
Note GBP'000 GBP'000 GBP'000
Income and Capital Profits
Dividends and other income 2 600 - 600
Gains on investments held 969 11,616 12,585
at fair value
------ ------ ------
Total Income 1,569 11,616 13,185
Expenses
Management fees 3 (57) (169) (226)
Other fees and expenses (253) (162) (415)
------ ------ ------
Expenses before Finance (310) (331) (641)
Costs and Taxation
------ ------ ------
Net Loss before Finance 1,259 11,285 12,544
Costs and Taxation
Finance Costs
Interest payable (8) (25) (33)
Movement in fair value of - (64) (64)
Loan Stock
------ ------ ------
Total Finance Costs (8) (89) (97)
------ ------ ------
Net Profit before Taxation 1,251 11,196 12,447
Taxation (3) - (3)
------ ------ ------
Net Profit after Taxation 1,248 11,196 12,444
====== ====== ======
Earnings per Ordinary Share 4 10.66p 95.65p 106.31p
====== ====== ======
The total column of this statement represents the Group's Statement of
Comprehensive Income, prepared in accordance with IFRS, as adopted by the
European Union.
The revenue return and capital return columns are supplementary disclosures
provided in accordance with guidance issued by The Association of Investment
Companies.
All items derive from continuing operations.
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Page 9:
Group Income Statement (unaudited)
for the six months to 31 December 2008
Six months to 31 December 2008
Revenue Capital Total
Return Return Return
Note GBP'000 GBP'000 GBP'000
Income and Capital Profits
Dividends and other income 2 918 28 946
Losses on investments held (1,251) (8,442) (9,693)
at fair value
------ ------ ------
Total Income (333) (8,414) (8,747)
Expenses
Management fees (108) - (108)
Other expenses (189) (116) (305)
------ ------ ------
Expenses before Finance (297) (116) (413)
Costs and Taxation
------ ------ ------
Net Loss before Finance (630) (8,530) (9,160)
Costs and Taxation
Finance Costs
Interest payable (42) - (42)
Movement in fair value of - 159 159
Loan Stock
------ ------ ------
Total Finance Costs (42) 159 117
------ ------ ------
Net Loss before Taxation (672) (8,371) (9,043)
Taxation (2) - (2)
------ ------ ------
Net Loss after Taxation (674) (8,371) (9,045)
====== ====== ======
Loss per Ordinary Share 4 (5.07)p (63.02)p (68.09)p
====== ====== ======
The total column of this statement represents the Group's Statement of
Comprehensive Income, prepared in accordance with IFRS, as adopted by the
European Union.
The revenue return and capital return columns are supplementary disclosures
provided in accordance with guidance issued by The Association of Investment
Companies.
All items derive from continuing operations.
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Page 10:
Group Statement of Changes in Equity (unaudited)
for the six months to 31 December 2009
Six months to 31 December 2009
Called-up Special Capital
share distributable redemption Retained
capital reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 June 2009 3 51,523 1 (3,433) 48,094
Total Comprehensive
Income:
Net lprofit for the - - - 12,444 12,444
period to 31
December 2009
Transactions with owners, recorded
directly to equity:
Equity dividends - - - (737) (737)
payable on Ordinary
shares
------ ------ ------ ------ ------
At 31 December 2009 3 51,523 1 8,274 59,801
====== ====== ====== ====== ======
Six months to 31 December 2008
Called-up Special Capital
share distributable redemption Retained
capital reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 June 2008 4 51,523 - (435) 51,092
Total Comprehensive
Income:
Net loss for the - - - (9,045) (9,045)
period to 31
December 2008
Transactions with owners, recorded
directly to equity:
Equity dividends - - - (469) (469)
payable on Ordinary
shares
Redemption of (1) - 1 (4,680) (4,680)
Ordinary shares
------ ------ ------ ------ ------
At 31 December 2008 3 51,523 1 (14,629) 36,898
====== ====== ====== ====== ======
Directors' Responsibility Statement
The Directors of the Company, who are listed on the inside front cover of this
Report, each confirm that to the best of their knowledge this condensed set of
financial statements has been prepared in accordance with IAS 34, as adopted by
the European Union, and that the Report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8.
The Company's principal risks and uncertainties continue to be as stated in the
Annual Report and Accounts for the year ended 30 June 2009.
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Page 11:
Group Balance Sheet (unaudited)
at 31 December 2009
At 31 December At 30 June
Notes 2009 2009
GBP'000 GBP'000
Non-Current Assets
Investments held at fair 5 62,512 47,610
value through profit or loss
------ ------
Current Assets
Investments held for trading 1,678 1,168
Balances due from brokers 5 680
Other receivables 61 216
Cash and cash equivalents 429 216
------ ------
2,173 2,280
------ ------
Total Assets 64,685 49,890
Current Liabilities
Equity-Linked Unsecured Loan - (299)
Stock 2004/09
Balances due to brokers (319) (435)
Bank Loan (4,400) (900)
Other Payables (152) (149)
------ ------
(4,871) (1,783)
------ ------
Total Assets, less Current 59,814 48,107
Liabilities
Non-Current Liabilities
Non-equity management shares (13) (13)
------ ------
Net Assets 59,801 48,094
====== ======
Equity Attributable to Equity
Shareholders
Called-up share capital 6 3 3
Special distributable reserve 51,523 51,523
Capital redemption reserve 1 1
Retained earnings: 7
Capital reserve 5,164 (6,032)
Revenue reserve 3,110 2,599
------ ------
Total Equity 59,801 48,094
====== ======
Net Asset Value per Ordinary 8 510.90p 410.88p
Share
====== ======
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Page 12:
Group Cash Flow Statement (unaudited)
to 31 December 2009
Six months to Six months to
31 December 31 December
2009 2008
GBP'000 GBP'000
Cash Flows from Operating
Activities
Net profit/(loss) before taxation 12,447 (9,043)
Adjustments for:
(Increase)/decrease in (15,412) 12,472
investments
Decrease in receivables 830 1,028
Decrease in payables (112) (5)
Finance costs 97 (117)
------ ------
Net Cash Flows from Operating (2,150) 4,335
Activities before taxation
------ ------
Taxation paid (3) (2)
------ ------
Net Cash Flows from Operating (2,153) 4,333
Activities
Cash Flows from Financing
Activities
Redemption of Ordinary shares - (4,680)
Redemption of Equity-linked loan (363) (7)
stock units
Bank loans drawn down 3,500 600
Equity dividends paid on Ordinary (737) (209)
shares
Loan interest paid (34) (42)
------ ------
Net Cash Flows used in Financing 2,366 (4,338)
Activities
------ ------
Net Increase/(Decrease) in Cash 213 (5)
and Cash Equivalents
Cash and Cash Equivalents at 30 216 307
June
------ ------
Cash and Cash Equivalents at 31 429 302
December
====== ======
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Page 13:
Notes to the Accounts
1. Accounting Policies
The consolidated accounts on pages 8 to 12 comprise the unaudited results of
the Company and its subsidiary, Gartmore GO Dealing Limited, for the six months
to 31 December 2009. These accounts do not constitute statutory accounts under
the Companies Act 2006. Nor do the comparative figures for the financial year
ended 30 June 2009 constitute the Company's statutory accounts for that
financial year. Those accounts have been reported on by the Company's auditors
and filed with the registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
The consolidated accounts have been prepared on a going concern basis, in
accordance with International Financial Reporting Standards (IFRS) set by the
International Accounting Standards Board and are presented in pounds sterling,
as this is the principal currency in which the Group's transactions are
undertaken.
The accounting policies remain the same as those disclosed in the accounts for
the year to 30 June 2009. However, as detailed in note 3, the allocation
between revenue and capital of management fees and finance costs changed with
effect from 1 July 2009.
IFRS8, `Operating Segments', came into affect on 1 January 2009 and has been
applied for the first time in this interim report. As a result of the new
standard, the directors consider there to be two distinct operating segments,
being the parent company and its subsidiary (See Note 10). Implementation of
other changes to accounting standards in the financial period, as outlined in
the 30 June 2009 accounts, had no significant affect on the accounting or
reporting of the Company.
2. Dividends and Other Income
Six months Six months
to to
31 December 31 December
2009 2008
GBP'000 GBP'000
Revenue:
Income from investments held at
fair value through profit or loss:
Franked dividends 429 497
Unfranked dividends 57 45
Interest on debt securities 55 55
Stock dividends 8 -
------ ------
549 597
Other income:
Interest on deposits - 31
VAT reclaim interest received - 290
Underwriting commission 51 -
------ ------
600 918
====== ======
Capital:
Special dividends allocated to - 28
capital
====== ======
3. Management Fees and Interest Payable
With effect from 1 July 2009 management fees and interest charged on borrowings
have been allocated 75% to capital and 25% to revenue. Tax relief in respect of
such allocations is credited to capital to the extent that such relief can be
utilised in reducing the Company's overall liability to taxation. Prior to 1
July 2009 all such costs were allocated to revenue.
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Page 14:
4. Earnings/(Loss) per Ordinary Share
Six months to Six months to
31 December 31 December
2009 2008
GBP'000 GBP'000
Revenue return 1,248 (674)
Capital return 11,196 (8,371)
Total return 12,444 (9,045)
Weighted average Ordinary shares in 11,705,040 13,283,557
issue
5. Investments Held at Fair Value Through Profit or Loss
Investments are either listed in Great Britain or traded on the Alternative
Investment Market in the UK and have been valued at bid prices.
6. Called-up Share Capital
The Directors approved redemptions as follows in connection with the two
quarterly redemption opportunities provided in the period:
15 July 2009 843,012 Ordinary shares
14 October 2009 2,428 Ordinary shares
The redemptions were fully matched with buyers and consequently there was no
change in the period to the number of Ordinary shares in issue of 11,705,040.
7. Retained Earnings
Capital Revenue Retained
reserve* reserve earnings
GBP'000 GBP'000 GBP'000
At 30 June 2009 (6,032) 2,599 (3,433)
Net profit for the six months 11,196 1,248 12,444
to 31 December 2009
Equity dividends payable on - (737) (737)
Ordinary shares
------ ------ ------
At 31 December 2009 5,164 3,110 8,274
====== ====== ======
At 30 June 2008 (2,494) 2,059 (435)
Net loss for the six months (8,371) (674) (9,045)
to 31 December 2008
Equity dividends payable on - (469) (469)
Ordinary shares
Redemption of Ordinary shares (4,680) - (4,680)
------ ------ ------
At 31 December 2008 (15,545) 916 (14,629)
====== ====== ======
*The capital reserve comprises both gains and losses on disposal of investments
and investment holding gains and losses. Only "realised" profits may be
distributed, which comprise net gains less losses on the realisation of
investments together with changes in the fair value of investments that are
considered to be readily convertible into cash without accepting adverse terms.
Accordingly, the split of reserves in order to determine distributable realised
profits is as follows:
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Page 15:
7. Retained Earnings (continued)
31 December 30 June
2009 2009
GBP'000 GBP'000
Capital reserve - distributable 7,318 1,126
Capital reserve - non-distributable (2,154) (7,158)
------ ------
5,164 (6,032)
8. Net Asset Value per Ordinary Share
The Net Asset Value per Ordinary share is calculated on Net Assets of
GBP59,801,000 (30 June 2009: GBP48,094,000) and 11,705,040 (30 June 2009:
11,705,040) Ordinary shares in issue at the period-end.
9. Related Party Transactions
Gartmore Investment Limited is the Manager and Company Secretary of the
Company. As such, it is regarded as a related party. During the period, total
management fees of GBP226,000 (six months to 31December 2008: GBP108,000) and
secretarial fees of GBP30,000 (six months to 31 December 2008: GBP30,000) were
payable to Gartmore Investment Limited for the provision of services to the
Company.
The Company has also financed and been financed by the trading activity of its
subsidiary, Gartmore GO Dealing Limited.
10. Operating Segments
The Directors consider that the Group has two operating segments, being the
parent Company, Gartmore Growth Opportunities plc, which invests in shares and
securities for capital appreciation in accordance with the Company's published
investment objective, and its wholly owned subsidiary, Gartmore GO Dealing
Limited, which trades in securities to enhance Group returns. Discrete
financial information for these sectors is reviewed regularly by the Manager
and the Board who allocate resources and assess performance.
Segment financial information:
Six months to Six months to
31 December 31 December
2009 2008
GBP'000 GBP'000
External Revenues:
Parent Company 12,213 (7,543)
Subsidiary 972 (1,204)
------ ------
Total Income 13,185 (8,747)
Net Profit / (Loss):
Parent Company 11,472 (7,841)
Subsidiary 972 (1,204)
------ ------
Total Comprehensive Income 12,444 (9,045)
As at As at
31 December 31 December
2009 2008
GBP'000 GBP'000
Total Assets:
Parent Company 62,676 46,422
Subsidiary 2,009 3,468
------ ------
Group Total Assets 64,685 49,890
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Inside Front Cover:
The Company
Investment Objective
The Company seeks capital appreciation from investment primarily in the shares
of quoted UK smaller companies.
Investment Policy
Asset Allocation:
The Company mainly invests in UK smaller companies, with a wide range of market
capitalisations, targeting sustained returns even in difficult markets. A
number of the UK smaller companies within the portfolio may therefore be
outside the universe of the benchmark index when it is believed this will
increase shareholder value. Whilst the majority of investments are equities,
other instruments such as warrants and convertible and non-convertible
securities (including preference shares and loan stocks) may be used. Cash and
derivative instruments (such as futures and options) may also be utilised for
efficient portfolio management and as part of investment strategy, not only as
a short-term measure. In addition, the Company's trading subsidiary targets
absolute returns in order to enhance shareholder returns under a broader range
of market conditions and to offer further downside protection to the portfolio
as a whole.
Risk Diversification:
Portfolio risk is mitigated by investing in a diversified spread of
investments. In compliance with section 842 Income and Corporation Taxes Act
1988 investments in any one company, other than holdings in another investment
company, shall not, on acquisition, exceed 15% of the portfolio value.
Gearing:
The Company will make use of borrowings when it is considered that gearing will
enhance total returns. The Company has bank borrowing facilities in place and
may also use derivative instruments to facilitate gearing. The Board currently
has a policy that gearing under these facilities shall not exceed 20% of the
value of Net Assets.
Benchmark
Performance is measured against the FTSE SmallCap (excluding investment
companies) Index. The Company sources index and price data from Thomson
Financial Datastream.
Structure
The Company is an investment trust whose share capital at the date of this
report comprises 11,690,840 Ordinary shares of 0.025p each. Ordinary
shareholders can request the redemption of their shares, subject to certain
limitations and the Directors exercising their discretion, at quarterly
intervals. There are also in issue 50,000 Management shares which have the
right to be repaid the amount paid up on such shares.
Directors
David Peters (Chairman of the Board)
David Cade (Chairman of the Audit Committee)
Peter Derby
Daniel Mace
Robert Ware
Gartmore Growth Opportunities plc
is a member of The Association of Investment Companies and is managed by
Gartmore Investment Limited.
Gartmore Investment Limited is regulated by the Financial Services Authority.
=--
The foregoing represents the full text of the Half-Year Report for the six
months to 31 December 2009, which will be posted to shareholders shortly. The
Report will also be available for download from
http://www.gartmoregrowthopps.co.uk and http://www.gartmore.com or on request
from the Company Secretary.
Gartmore Investment Limited
Corporate Company Secretary
24 February 2010
END
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