5 December 2023
LONDON STOCK EXCHANGE ANNOUNCEMENT
The
Lindsell Train Investment Trust plc (the
“Company”)
Unaudited
Half-Year Results for the six months ended
30 September 2023
This
Announcement is not the Company’s Half-year Report & Accounts.
It is an abridged version of the Company’s full Half-year Report
& Accounts for the six months ended 30
September 2023. The full Half-year Report & Accounts
together with a copy of this announcement, will shortly be
available on the Company’s website at
www.ltit.co.uk where up
to date information on the Company, including NAV, share prices and
monthly updates, can also be found.
The
Company's Half-year Report & Accounts for the six months ended
30 September 2023 has been submitted
to the UK Listing Authority, and will shortly be available for
inspection on the National Storage Mechanism (NSM) at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Financial
Highlights
|
Six
months to
|
Year
to
|
Performance
comparisons
|
30
September 2023
|
31 March
2023
|
Net asset
value total return per Ordinary Share*^
|
-3.6%
|
-0.4%
|
Share
price total return per Ordinary Share*^
|
-11.3%
|
-0.7%
|
Discount
of Share price to Net Asset Value
|
8.5%
|
0.4%
|
MSCI World
Index total return (Sterling)
|
+4.5%
|
-1.0%
|
UK RPI
Inflation (all items)
|
+3.1%
|
+13.5%
|
* The
net asset value and the share price at 30
September 2023 have been adjusted to include the ordinary
dividend of £51.50 per share paid on 12 September
2023, with the associated ex-dividend date of 10 August 2023.
^ Alternative
Performance Measure (“APM”). See Glossary of Terms and Alternative
Performance Measures.
Source:
Morningstar and Bloomberg.
Investment
Objective
The
objective of the Company is to maximise long-term total returns
with a minimum objective to maintain the real purchasing power of
Sterling capital.
Investment
Policy
The
Investment Policy of the Company is to invest:
(i) in
a wide range of financial assets including equities, unlisted
equities, bonds, funds, cash and other financial investments
globally with no limitations on the markets and sectors in which
investment may be made, although there is likely to be a bias
towards equities and Sterling assets, consistent with a
Sterling-dominated investment objective. The Directors expect that
the flexibility implicit in these powers will assist in the
achievement of the investment objective;
(ii) in
Lindsell Train managed fund products, subject to Board approval, up
to 25% of its gross assets; and
(iii) in
LTL and to retain a holding, currently 24.1%, in order to benefit
from the growth of the business of the Company’s
Manager.
The
Company does not envisage any changes to its objective, its
investment policy, or its management for the foreseeable future.
The current composition of the portfolio as at 30 September 2023, which may be changed at any
time (excluding investments in LTL and LTL managed funds) at the
discretion of the Investment Manager within the confines of the
policy stated above.
Diversification
The
Company expects to invest in a concentrated portfolio of securities
with the number of equity investments averaging fifteen companies.
The Company will not make investments for the purpose of exercising
control or management and will not invest in the securities of, or
lend to, any one company (or other members of its group) more than
15% by value of its gross assets at the time of
investment.
The
Company will not invest more than 15% of gross assets in other
closed-ended investment funds.
Gearing
The
Directors have discretion to permit borrowings up to 50% of the Net
Asset Value. However, the Directors have decided that it is in the
Company’s best interests not to use gearing. This is in part a
reflection of the increasing size and risk associated with the
Company’s unlisted investment in LTL, but also in response to the
additional administrative burden required to adhere to the full
scope regime of the AIFMD.
Dividends
The
Directors’ policy is to pay annual dividends consistent with
retaining the maximum permitted earnings in accordance with
investment trust regulations, thereby building revenue
reserves.
In a year
when this policy would imply a reduction in the ordinary dividend,
the Directors may choose to maintain the dividend by increasing the
percentage of revenue paid out or by drawing down on revenue
reserves. Revenue reserves on 31 March
2023 were twice the annual 2023 ordinary dividend paid on
12 September 2023.
All
dividends have been distributed from revenue or revenue
reserves.
Chairman’s
Statement
Over the
six months to 30 September 2023 the
Company’s net asset value per share (“NAV”) fell 8.3% (from
£1,056.95 to £968.75), with the NAV total return down 3.6%, once
the payment of the dividend of £51.50 is added back. The share
price total return fell more, by 11.3%, primarily on account of the
share price discount to NAV widening from 0.4% at
31 March
2023 to 8.5% at 30 September
2023. This should be seen in the context of sharply widening
discounts across the whole Investment Trust sector recently. These
returns compared with a positive MSCI World index total return
(Sterling) of 4.5% over the same six month period.
The
half-yearly results of the Company were impacted by two interlinked
causes. One was the performance of the Company’s 24.1% holding in
LTL, the Company’s Investment Manager, which accounted for 38.6% of
NAV on 30 September
2023. LTL’s valuation fell by 11.9% over the six months
reflecting the fall in its funds under management (“FUM”) from
£18.6bn to £16.4bn but the total return from the investment was
down less, 6.0%, thanks to the payment of a half-year dividend. The
fall in FUM extended a trend from early 2021, partly in reaction to
deteriorating relative performance from LTL’s fund range but
exacerbated by a gruelling environment for the fund management
industry. In 2022
UK investors redeemed £26bn from retail funds making it the worst
year on record for the industry and the only year that has recorded
an annual outflow, according to data from the Investment
Association. All of LTL’s strategies have underperformed over the
last three years, which was as much a consequence of its consistent
approach to investment as of any isolated investment misjudgments.
LTL portfolios exhibit a bias towards consumer franchises where
share prices have fallen or stagnated recently and all have a
limited number of investments in technology and no exposure to
energy and leveraged financials, which are the areas that have
driven the performance of LTL’s funds’ benchmarks in recent years.
Another cause of the Company’s underperformance has been the lack
of any investments in the seven large US companies
(Apple, Amazon, Alphabet, Tesla, Nvidia, Microsoft and Meta) that
have led the performance of the MSCI World
index this year and in the recent past to such an extent that they
now make up 17% of the index. Both causes are related, as LTL’s
funds also have minimal investments in these leading index
performers, which in turn has contributed to their
underperformance.
This
highlights a risk that I have been at pains to warn about in
previous statements. It is that our quoted investments are in
general a concentrated subset of LTL’s stock selections for other
LTL client portfolios. Thus the Company’s underperformance is both
reflected in its quoted investments and in the deteriorating
business results of LTL partly caused by its recent disappointing
investment returns across other strategies. The Board take on this
risk and the volatility associated with it in the belief that the
underlying companies owned, either by LTL on behalf of its clients
or as quoted investments by the Company, generate superior average
returns on capital at a level that should produce satisfactory
investment returns similar to the 12.9% per annum NAV per share
growth achieved since the Company’s inception. Unfortunately in the
short term there can be a disconnect between what companies deliver
as businesses and the return from share prices. In the last five
years the NAV per share total return has been 7.2% per annum and
over three years zero, as compared with LTL’s underlying businesses
which have continued to earn an average return on equity of more
than 20% per annum. As long as LTL’s equity selections maintain
these superior returns on capital, we would expect investment
returns to recover from the current depressed levels.
There is
no doubt that the rapid rise in interest rates to a level not seen
for 15 years is also providing stiff competition to equities in a
way that has been absent over the last unprecedented period. Less
than two years ago the Bank rate stood at 0.1% , rising 14 times
since then to its present level of 5.25%. At the same time
competition from passive funds and rising costs is an ongoing
challenge for the active fund management industry. Faced with these
headwinds it is perhaps not surprising that the Company is
undergoing a tough period. The Board is reassured that the
Manager’s investment in durable business franchises gives the
Company the best chance to weather any financial turbulence that
may occur. In addition the Company has its direct investment in
LTL, which is a business that has a number of positive attributes
including a highly differentiated investment approach that
generates repeatable and relatively high margin revenues and has
given rise to a strong balance sheet.
Whilst the
valuation of LTL has declined from a peak of £18,730.17 per share
on 30 June 2021 to £11,644.87 per
share at 30 September 2023, its net
profit margin has remained relatively stable averaging 56%. This is
partly a function of LTL’s salary and bonus cap that restricts
remuneration (LTL’s biggest expense) to c.26% of revenues. The cap,
together with LTL’s historic 80% dividend payout ratio, helps
ensure that the Company’s shareholders receive a tangible benefit
from the payment of dividends from its holding in LTL. Whilst no
change to these policies is anticipated, now that LTL’s profit
share scheme is also funded from revenues set aside for
remuneration, if FUM continues to fall it may be necessary to raise
the cap to help fund the scheme. The Board has agreed that 90% of
LTL shareholders would need to approve such a change if proposed –
a modification from a simple Board approval that was necessary
historically.
This is my
final report to you after eight years as your Chairman. This period
has, in many ways, been an extraordinary time for investors. From
March 2009 to December 2021 the Bank of England base rate never exceeded 0.75%, which
is an unprecedented aberration in the long-term series. The
extremely low rates were triggered 15 years ago by the 2008 banking
crisis and although they undoubtedly stabilised economies worldwide
they also created an asset bubble unparalleled in recent times.
This was exacerbated by the response of governments to the Covid
pandemic and the inflationary effects of Putin’s war on
Ukraine. Government fiscal
deficits rose dramatically from 2020 and after a period of sharply
rising money supply investors are now suffering the effects of an
equally dramatic contraction. Central bankers have rightly been
accused of doing too little too late. I fear this will prove to be
the case in both directions. In the short-term
the current policies have had a significant negative impact on
markets worldwide. It remains to be seen whether we have reached
equilibrium.
It has
been an honour to chair your Company and I have been privileged to
have the support of talented and knowledgeable colleagues,
including several now retired, through these momentous times. I
thank them all for their wise counsel. Most recently we have
welcomed David MacLellan as a
director. David took the chair of the Audit Committee at the time
of the Annual General Meeting, having been appointed after a formal
recruitment process. He succeeded Helena
Vinnicombe, who assumed the role on an interim basis
following Richard Hughes’ retirement, and who remains a valued
member of the Board. I will stand down from the Board at the end of
2023 leaving the Company in the good hands of Roger Lambert. I wish you well for the
future.
Julian Cazalet
Chairman
4 December 2023
Investment
Manager’s Report
There is
no consolation for shareholders when an investment strategy is
stuck in a long period of underperformance, with little sign of
respite. Disappointingly this is the case for all of LTL’s
investment strategies, including that of your Company.
If there
is a consolation for us as the Investment Managers, it is knowing
that we have not made material changes to any of our portfolios
through this period. There are three reasons why that is a
consolation to us.
First, it
suggests that, notwithstanding share price performance, we are
happy with the companies we are invested in. And this
is the case. When I review the portfolio of direct holdings, which
are all also held across other LTL accounts (except for
Laurent-Perrier), I recognise that it is not perfect and that some
of the companies are dealing with issues that have slowed their
long-term growth rates. But no portfolio is ever perfect, and every
company will face such issues at some stage in its history.
Nonetheless, the Company owns businesses that possess valuable
brands or market positions which we are sure will prosper in the
future and will be rewarded by higher share prices when they
do.
Second,
holding on to our positions at least means we have not committed
one of the cardinal errors of active investors. This is to sell
cheap and buy dear. It sounds so easy to avoid this error, because
who wants to sell at the bottom and buy at the top? But, as we are
sure some shareholders will recognise from their own investment
experience, the pressure to give up on an underperforming
investment is strong, as is the temptation to buy into what has
been working well after it has already gone up.
Third and
most important, while our portfolios are underperforming, they are
becoming better value. One day we hope our shareholders will be
rewarded by that value and shares will start going up again. All
the holdings in your portfolio have excellent prospects.
Investment
value can build through periods of underperformance in several
ways. Earnings can carry on rising, but for whatever reason the
shares go sideways or down and the shares suffer a derating,
temporarily you hope. In your portfolio London Stock Exchange Group
is an example. Or a company is making strategic changes that
improve the prospects for the business, even if those improved
prospects are not reflected in an improved share price until
actually delivered. That is so for Unilever, we believe. Or
companies take advantage of their underperforming shares to buy
them back for cancellation, which increases per share value for
shareholders who don’t sell. Nearly 90% by value of the direct
holdings in your portfolio have bought back shares in recent
years.
I propose
to write a few lines about each of the holdings in your portfolio,
because doing so allows me to highlight the latent value in each
and in the portfolio overall.
A.G.
Barr
The shares
now trade on 15 times prospective earnings. Revenues and forecast
earnings are at record highs, while the shares are barely half the
level they reached in 2019. With a cash-rich balance sheet A.G.
Barr has made a series of useful acquisitions that have pushed
recent sales growth up to 10% p.a. underlying. If that growth
continues the share price will follow.
Diageo
Since the
period end Diageo has unpleasantly surprised investors with a
profit-warning, caused by a sudden contraction in its Latin
American business (11% of group revenues). The result has been a
further fall in its share price, which is currently down nearly 25%
year-to-date. This seems excessive, given the company can
demonstrate that the other 89% of
its business is growing. We have added to the
holding since the warning, believing that buying into Diageo’s
current 3% prospective dividend yield is attractive. That dividend
yield is supported by the growing cash flows of the world’s biggest
alcoholic beverage company.
Heineken
Heineken
has bought back shares in 2023, as well as closing a material
acquisition in southern Africa –
both sensible actions. The shares trade 22% below their 2019 highs
leaving them valued at 15 times earnings. When input costs fall and
consumer confidence recovers that should look very good value. We
hope that will be the case in 2024, or sooner.
Laurent-Perrier
13 times
earnings seems a modest price to pay to access the earnings power
of Laurent-Perrier’s brands. Shares are down 12% in 2023, having
hit an all-time high in May. As with our other beverage
investments, they could be much more highly valued once consumers
feel wealthier.
London
Stock Exchange Group (“LSEG”)
This is
the biggest quoted holding not only in your portfolio but across
all LTL’s strategies and it is also one of our better recent
performers, with the shares up 16% over the first nine months of
2023. Nonetheless, they still sit 16% below their 2021 high.
Earnings are forecast to be c.£3.30 for 2023/4, double those of
2021/2 – showing the extent of the derating of the shares since
then. You have to pay 25 times to own them, but to us this looks
attractive relative to the growth LSEG is set to deliver from its
merger with Refinitiv and joint venture with Microsoft. LSEG has
bought back shares in 2023 as well.
Mondelez
Shares are
down 17% from their all-time highs, set in May 2023. Earnings and dividends have grown to
all-time highs this year too. On 20 times earnings the company
clearly regards its equity as undervalued, because it continues to
retire shares at a rate of 1-2%pa. Since 2009 and the Great
Financial Crisis, Mondelez’ shares have steadily climbed, from
c.$15 to $65, as the company has demonstrated its ability
to generate growing cash flows from its iconic global brands. Why
shouldn’t that continue?
Nintendo
Shares are
up 13% in 2023, but sit c.8% below the highs of 2021. Earnings are
forecast to be down this year, as the company invests for the
launch of its next gaming device. The previous console, Switch, has
been one of the most successful in the history of the video gaming
industry and since its introduction, in March 2017, Nintendo’s shares have nearly
trebled. On 17 times prospective earnings it appears to us
investors don’t believe the company can repeat that success. The
seven-fold gain (in Sterling) of Nintendo’s share price over the
last 30 years is reassuring for long-term investors, suggesting the
company’s proprietary devices and gaming franchises do indeed
create long-term value.
PayPal
On 10
times prospective earnings, PayPal’s shares are deeply out of
favour. Having met recently with the new CEO and considering the
size and value of its customer base, 428m active global accounts, and its
participation in the still growing trend toward online payments, we
remain holders of PayPal. The company has bought back nearly 4% of
its equity over the last year.
RELX
These
shares have done well in 2023, up 22% to end September and are now
on 25 times prospective earnings. This follows their near
quintupling over the last decade. As a result, RELX is currently
the largest holding in LTL’s UK strategy. It is the fourth biggest
direct holding in your portfolio, behind LSEG, Nintendo and Diageo.
RELX has consistently found new ways to make its proprietary data
more useful to its customers in the global scientific community,
the legal professions and insurance industry.
Advances
in technology, notably Artificial Intelligence, mean that RELX’s
data should become even more valuable to its clientele. At the same
time, RELX’s continued buyback of its own shares makes us believe
they still offer good long-term value.
Unilever
The shares
are down c.3% in 2023 to end September and this is disappointing
after several years of mediocre business and poor share price
performance. The shares stand 22% below their 2019 peak.
Objectively, considering Unilever’s household name brands and
advantaged position in the Emerging Markets, we’d have hoped for
better. And this disappointment seems to be shared by Unilever’s
board, because in short order there is to be a new Chair, CEO and
CFO. We expect them to be motivated to improve business performance
or risk the undoubted value of Unilever being realised by a
break-up. The company has continued to buy back its own shares,
which is rational, in our opinion, given the discount between the
value stock market investors currently place on the company and
that of its constituent parts. The shares trade on 17 times
earnings.
Reviewing
your portfolio of direct holdings in its entirety, we note it is
split almost exactly 50%/50%. The split is between, first, owners
of long-established and successful consumer brands, where there
seems reason to believe those brands will continue to be
successful; and, next, companies with Intellectual Property (data
or entertainment), with an opportunity to exploit technology change
to make their IP more valuable. To us this seems like an attractive
combination of predictability and steady growth potential. On a
weighted average basis the portfolio is valued on just under 20
times prospective earnings. That equates to an earnings yield of
c.5%, which is roughly where yields sit for long-dated, fixed
interest UK government
bonds. History suggests that owning sound common stocks beats fixed
interest over time and, given the calibre of the companies we have
invested in for you and their current valuations, we certainly hope
that will be the case for your portfolio.
Nick Train
Lindsell
Train Limited
Investment
Manager
4 December 2023
Portfolio
Holdings at 30 September
2023
(All
ordinary shares unless otherwise stated)
|
|
|
|
Look-
|
|
|
|
|
through
|
|
|
Fair
|
%
of
|
basis:
|
|
|
value
|
net
|
%
of total
|
Holding
|
Security
|
£’000
|
assets
|
assets†
|
6,421
|
Lindsell
Train Limited
|
74,772
|
38.6%
|
38.6%
|
235,000
|
London
Stock Exchange Group
|
19,345
|
10.0%
|
10.2%
|
12,500,000
|
WS
Lindsell Train North American Equity Fund*
|
17,296
|
8.9%
|
0.0%
|
410,000
|
Nintendo
|
14,022
|
7.2%
|
7.2%
|
420,500
|
Diageo
|
12,758
|
6.6%
|
6.8%
|
363,000
|
RELX
|
10,074
|
5.2%
|
5.4%
|
222,000
|
Unilever
|
9,017
|
4.7%
|
4.9%
|
149,980
|
Mondelez
International
|
8,527
|
4.4%
|
4.7%
|
1,263,393
|
A.G.
Barr
|
6,203
|
3.2%
|
3.2%
|
89,000
|
Heineken
|
5,508
|
2.9%
|
2.9%
|
97,400
|
PayPal
|
4,665
|
2.4%
|
2.9%
|
39,099
|
Laurent-Perrier
|
4,053
|
2.1%
|
2.1%
|
420,000
|
Finsbury
Growth & Income Trust*
|
3,574
|
1.8%
|
0.0%
|
|
Indirect
Holdings
|
–
|
–
|
8.9%
|
|
Total
Investments
|
189,814
|
98.0%
|
97.8%
|
|
Net
Current Assets
|
3,936
|
2.0%
|
2.2%
|
|
Net
Assets
|
193,750
|
100.0%
|
100.0%
|
† Look-through
basis: Percentages held in each security is adjusted upwards by the
amount of securities held by LTL managed funds.
A downward
adjustment is applied to the fund’s holdings to take into account
the underlying holdings of these funds. It provides shareholders
with a measure of stock specific risk by aggregating the direct
holdings of the Company with the indirect holdings held within LTL
funds.
* LTL
managed funds.
Leverage
We detail
below the equity exposure of the Funds managed by LTL as at
30 September 2023:
|
Net
equity
|
|
exposure
|
WS
Lindsell Train North American Equity Fund Acc
|
97.9%
|
Finsbury
Growth & Income Trust PLC
|
100.8%
|
Analysis
of Investment Portfolio at 30 September
2023
Breakdown
by Location of Listing
(look-through
basis)^
UK*
|
70%
|
USA
|
16%
|
Japan
|
7%
|
Europe
excluding UK
|
5%
|
Cash and
Equivalents
|
2%
|
|
100%
|
|
|
Breakdown
by Location of Underlying Company Revenues
|
|
(look-through
basis)^
|
|
USA^^
|
30%
|
Europe
excluding UK^^
|
27%
|
UK^^
|
26%
|
Rest of
the World^^
|
12%
|
Japan
|
3%
|
Cash and
Equivalents
|
2%
|
|
100%
|
|
|
Breakdown
by Sector
|
|
(look-through
basis)^
|
|
Financials*
|
55%
|
Consumer
Staples
|
26%
|
Communication
Services
|
9%
|
Industrials
|
6%
|
Cash and
Equivalents
|
2%
|
Information
Technology
|
2%
|
|
100%
|
^ Look-through
basis: this adjusts the percentages held in each asset class,
country or currency by the amount held by LTL managed funds.
It provides
Shareholders with a more accurate measure of country and currency
exposure by aggregating the direct holdings of the Company with the
indirect holdings held by the LTL funds.
* LTL
accounts for 38.6% and is not listed.
^^ LTL
accounts for 16 percentage points of the Europe figure, 17 percentage points of the UK
figure, 5 percentage points of the USA figures and 0 percentage
point of the RoW figure.
Income
Statement
|
|
Six
months ended
|
Six months
ended
|
|
|
30
September 2023
|
30
September 2022
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
Notes
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
Losses on
investments held at fair value through profit or loss
|
|
–
|
(13,047)
|
(13,047)
|
–
|
(13,047)
|
(13,047)
|
Exchange
losses on currency
|
|
–
|
(4)
|
(4)
|
–
|
(10)
|
(10)
|
Income
|
2
|
6,687
|
–
|
6,687
|
7,793
|
–
|
7,793
|
Investment
management fees
|
3
|
(530)
|
–
|
(530)
|
(586)
|
–
|
(586)
|
Other
expenses
|
4
|
(385)
|
–
|
(385)
|
(371)
|
–
|
(371)
|
Return/(loss)
before taxation
|
|
5,772
|
(13,051)
|
(7,279)
|
6,836
|
(13,057)
|
(6,221)
|
Taxation
|
5
|
(61)
|
–
|
(61)
|
(57)
|
–
|
(57)
|
Return/(loss)
after taxation for the financial period
|
|
5,711
|
(13,051)
|
(7,340)
|
6,779
|
(13,057)
|
(6,278)
|
Return/(loss)
per Ordinary Share
|
6
|
£28.56
|
£(65.26)
|
£(36.70)
|
£33.90
|
£(65.29)
|
£(31.39)
|
All
revenue and capital items in the above statement derive from
continuing operations.
The total
columns of this statement represent the profit and loss accounts of
the Company. The revenue and capital columns are supplementary to
this and are prepared under the guidance published by the
Association of Investment Companies.
The
Company does not have any other recognised gains or losses. The net
loss for the period disclosed above represents the Company’s total
comprehensive income.
No
operations were acquired or discontinued during the
period.
Statement
of Changes in Equity
|
Share
|
Special
|
Capital
|
Revenue
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
Total
|
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
For
the six months ended 30 September 2023
(unaudited)
|
|
|
|
|
|
At 31
March 2023
|
150
|
19,850
|
168,000
|
23,390
|
211,390
|
(Loss)/return
after tax for the financial period
|
–
|
–
|
(13,051)
|
5,711
|
(7,340)
|
Dividend
paid
|
–
|
–
|
–
|
(10,300)
|
(10,300)
|
At
30 September 2023
|
150
|
19,850
|
154,949
|
18,801
|
193,750
|
|
Share
|
Special
|
Capital
|
Revenue
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
Total
|
|
£’000
|
£’000
|
£’000
|
£’000
|
£’000
|
For
the six months ended 30 September 2022
(unaudited)
|
|
|
|
|
|
At 31
March 2022
|
150
|
19,850
|
180,982
|
21,779
|
222,761
|
(Loss)/return
after tax for the financial period
|
–
|
–
|
(13,057)
|
6,779
|
(6,278)
|
Dividends
paid
|
–
|
–
|
–
|
(10,600)
|
(10,600)
|
At
30 September 2022
|
150
|
19,850
|
167,925
|
17,958
|
205,883
|
Statement
of Financial Position
|
|
30
September
|
31
March
|
|
|
2023
|
2023
|
|
|
Unaudited
|
Audited
|
|
Note
|
£’000
|
£’000
|
Fixed
assets
|
|
|
|
Investments
held at fair value through profit or loss
|
|
189,814
|
203,128
|
Current
assets
|
|
|
|
Other
receivables
|
|
461
|
491
|
Cash at
bank
|
|
3,750
|
8,010
|
|
|
4,211
|
8,501
|
Creditors:
amounts falling due within one year
|
|
|
|
Other
payables
|
|
(275)
|
(239)
|
|
|
(275)
|
(239)
|
Net
current assets
|
|
3,936
|
8,262
|
Net
assets
|
|
193,750
|
211,390
|
Capital
and reserves
|
|
|
|
Called up
share capital
|
|
150
|
150
|
Special
reserve
|
|
19,850
|
19,850
|
|
|
20,000
|
20,000
|
Capital
reserve
|
|
154,949
|
168,000
|
Revenue
reserve
|
|
18,801
|
23,390
|
Equity
shareholders’ funds
|
|
193,750
|
211,390
|
Net
asset value per Ordinary Share
|
7
|
£968.75
|
£1,056.95
|
Cash
Flow Statement
|
Six
months ended
|
Six months
ended
|
|
30
September
|
30
September
|
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
|
£’000
|
£’000
|
Net loss
before finance costs and tax
|
(7,279)
|
(6,221)
|
Losses on
investments held at fair value
|
13,047
|
13,047
|
Losses on
exchange movements
|
4
|
10
|
Decrease
in other receivables
|
67
|
13
|
(Increase)/decrease
in accrued income
|
(25)
|
33
|
Increase/(decrease)
in other payables
|
36
|
(35)
|
Taxation
on investment income
|
(73)
|
(50)
|
Net
cash inflow from operating activities
|
5,777
|
6,797
|
Purchase
of investments held at fair value
|
(86)
|
(56)
|
Sale of
investments held at fair value
|
353
|
–
|
Net
cash inflow/(outflow) from investing activities
|
267
|
(56)
|
Equity
dividends paid
|
(10,300)
|
(10,600)
|
Net
cash outflow from financing activities
|
(10,300)
|
(10,600)
|
Decrease
in cash and cash equivalents
|
(4,256)
|
(3,859)
|
Cash and
cash equivalents at beginning of period
|
8,010
|
6,708
|
Losses on
exchange movements
|
(4)
|
(10)
|
Cash
and cash equivalents at end of period
|
3,750
|
2,839
|
Notes
to the Financial Statements
1
Accounting policies
The
financial statements of the Company have been prepared under the
historical cost convention modified to include the revaluation of
investments and in accordance with FRS 104 “Interim Financial
Reporting” and with the Statement of Recommended Practice (“SORP”)
“Financial Statements of Investment Trust Companies and Venture
Capital Trusts”, issued by the Association of Investment Companies
updated in July 2022 and the
Companies Act 2006.
The
accounting policies followed in this Half-year Report are
consistent with the policies adopted in the audited financial
statements for the year ended 31 March
2023.
2
Income
|
Six
months ended
|
Six months
ended
|
|
30
September
|
30
September
|
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
|
£’000
|
£’000
|
Income
from investments
|
|
|
Overseas
dividends
|
530
|
493
|
UK
dividends
|
|
|
– Lindsell
Train Limited
|
4,954
|
6,288
|
– Other UK
dividends
|
1,082
|
1,006
|
– Deposit
interest
|
121
|
6
|
|
6,687
|
7,793
|
3
Investment management fees
|
Six
months ended
|
Six months
ended
|
|
30
September
|
30
September
|
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
|
£’000
|
£’000
|
Investment
management fee
|
591
|
644
|
Rebate of
investment management fee
|
(61)
|
(58)
|
Net
management fees
|
530
|
586
|
4
Other
expenses
|
Six
months ended
|
Six months
ended
|
|
30
September
|
30
September
|
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
|
£’000
|
£’000
|
Directors’
emoluments
|
91
|
61
|
Company
Secretarial & Administration fee
|
96
|
99
|
Auditor’s
remuneration†*
|
24
|
30
|
Tax
compliance fee
|
3
|
2
|
Other**
|
171
|
179
|
|
385
|
371
|
† Remuneration
for the audit of the Financial Statements of the
Company.
* Excluding
VAT.
** Includes
registrar’s fees, printing fees, marketing fees, safe custody fees,
London Stock Exchange/FCA fees, Key Man and Directors’ and
Officers’ liability insurance, Employer’s National Insurance and
legal fees.
5
Effective rate of tax
The
effective rate of tax reported in the revenue column of the income
statement for the six months ended 30
September 2023 is 1.06% (six months ended 30 September 2022: 0.83%), based on revenue
profit before tax of £5,772,000 (six months
ended 30 September 2022: £6,836,000).
This differs from the standard rate of tax, 25% (six months ended
30 September
2022: 19%) as a result of revenue not taxable for
Corporation Tax purposes.
6
Total
loss per Ordinary Share
|
Six
months ended
|
Six months
ended
|
|
30
September
|
30
September
|
|
2023
|
2022
|
|
Unaudited
|
Unaudited
|
Total
loss
|
£(7,340,000)
|
£(6,278,000)
|
Weighted
average number of Ordinary Shares in issue during the
period
|
200,000
|
200,000
|
Total loss
per Ordinary Share
|
£(36.70)
|
£(31.39)
|
The total
loss per Ordinary Share detailed above can be further analysed
between revenue and capital, as below:
Revenue
return per Ordinary Share
|
|
|
Revenue
return
|
£5,711,000
|
£6,779,000
|
Weighted
average number of Ordinary Shares in issue during the
period
|
200,000
|
200,000
|
Revenue
return per Ordinary Share
|
£28.56
|
£33.90
|
Capital
loss per Ordinary Share
|
|
|
Capital
loss
|
£(13,051,000)
|
£(13,057,000)
|
Weighted
average number of Ordinary Shares in issue during the
period
|
200,000
|
200,000
|
Capital
loss per Ordinary Share
|
£(65.26)
|
£(65.29)
|
7
Net asset value per Ordinary Share
|
Six
months ended
|
Year
ended
|
|
30
September
|
31
March
|
|
2023
|
2023
|
|
Unaudited
|
Audited
|
Net assets
attributable
|
£193,750,000
|
£211,390,000
|
Ordinary
Shares in issue at the period/year end
|
200,000
|
200,000
|
Net asset
value per Ordinary Share
|
£968.75
|
£1,056.95
|
8
Valuation of financial instruments
The
Company’s investments and derivative financial instruments as
disclosed in the Statement of Financial Position are valued at fair
value.
FRS 102
requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used
in making the measurements. Categorisation within the hierarchy has
been determined on the basis of the lowest level input that is
significant to the fair value measurement of the relevant asset as
follows:
-
Level 1 –
The unadjusted quoted price in an active market for identical
assets or liabilities that the entity can access at the measurement
date.
-
Level 2 –
Inputs other than quoted prices included within Level 1 that are
observable (i.e. developed using market data) for the asset or
liability, either directly or indirectly.
-
Level 3 –
Inputs are unobservable (i.e. for which market data is unavailable)
for the asset or liability.
The tables
below set out fair value measurements of financial instruments as
at the year end by the level in the fair value hierarchy into which
the fair value measurement is categorised.
Financial
assets/liabilities at fair value through profit or
loss
|
Level
1
|
Level
2
|
Level
3
|
Total
|
At
30 September 2023
|
£’000
|
£’000
|
£’000
|
£’000
|
Investments
|
97,746
|
17,296
|
74,772
|
189,814
|
|
Level
1
|
Level
2
|
Level
3
|
Total
|
At 31 March
2023
|
£’000
|
£’000
|
£’000
|
£’000
|
Investments
|
100,547
|
17,361
|
85,220
|
203,128
|
Note:
Within the
above tables, level 1 comprises all the Company’s ordinary
investments, level 2 represents
the investment in WS Lindsell Train North American Equity Fund and
level 3 represents the investment in LTL.
During the
year ended 31 March 2022 the Board
appointed J.P. Morgan Cazenove Ltd to undertake an independent
review of the Company’s valuation methodology applied to its
unlisted investment in LTL. The methodology was adopted and applied
to monthly valuations from 31 March
2022 onwards.
This
methodology has a single component based on a percentage of LTL’s
funds under management (“FUM”), with the percentage applied being
reviewed monthly and adjusted to reflect the ongoing profitability
of LTL. At the end of each month the ratio of LTL’s notional
annualised net profits* to LTL’s FUM is calculated and, depending
on the result, the percentage of FUM is adjusted according to the
table shown in Appendix 2.
The
valuation methodology was formally reviewed previously in
March 2018 and March 2020.
The Board
reserves the right to vary its valuation methodology at its
discretion.
* LTL’s
notional net profits are calculated by applying a fee rate
(averaged over the last six months) to the most recent end-month
FUM to produce annualised fee revenues excluding performance fees.
Notional staff costs of 45% of revenues, annualised fixed costs and
tax are deducted from revenues to then produce notional annualised
net profits.
9
Sections 1158/1159 of the Corporation Tax Act
2010
It is the
intention of the Directors to conduct the affairs of the Company so
that the Company satisfies the conditions for approval as an
Investment Trust Company set out in Sections 1158/1159 of the
Corporation Tax Act 2010.
10
Going Concern
The
Directors believe, having considered the Company’s investment
objective, risk management policies, capital management policies
and procedures, and the nature of the portfolio and the expenditure
projections, that the Company has adequate resources, an
appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the
foreseeable future, and, more specifically, that there are no
material uncertainties relating to the Company that would prevent
its ability to continue in such operational existence for at least
twelve months from the date of the approval of this Half-year
Report. For these reasons, they consider there is reasonable
evidence to continue to adopt the going concern basis in preparing
the financial statements. In reviewing the position as at the date
of this Report, the Board has considered the guidance on this
matter issued by the Financial Reporting Council.
As part of
their assessment, the Directors have given careful consideration to
the consequences for the Company of continuing uncertainty in the
global economy. As previously reported, stress testing was also
carried out in April 2023 to
establish the impact of a significant and prolonged decline in the
Company’s performance and prospects. This included a range of
plausible downside scenarios such as reviewing the effects of
substantial falls in investment values and the impact of the
Company’s ongoing charges ratio.
11
2023 Accounts
The
figures and financial information for the year to 31 March 2023 are extracted from the latest
published accounts of the Company and do not constitute statutory
accounts for the year.
Those
accounts have been delivered to the Registrar of Companies and
included the Report of the Company’s auditor which was unqualified
and did not contain a reference to any matters to which the
Company’s auditor drew attention by way of emphasis without
qualifying the report, and did not contain a statement under
section 498 of the Companies Act 2006.
Interim
Management Report
The
Directors are required to provide an Interim Management Report in
accordance with the UK Listing Authority’s Disclosure and
Transparency Rules. They consider that the Chairman’s Statement and
the Investment Manager’s Report, the following statements and the
Directors’ Responsibility Statement below together constitute the
Interim Management Report for the Company for the six months ended
30 September 2023.
Principal
Risks and Uncertainties
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.
This is set against the backdrop of increased risk levels within
the global economy created by ongoing global supply chain
disruption, rising levels of inflation and interest rates, together
with the consequences of the wars in Ukraine and the Middle East and the subsequent
long-term
effects on economies and international relations. The Directors
have considered the impact of the continued uncertainty on the
Company’s financial position and, based on the information
available to them at the date of this Report, have concluded that
no adjustments are required to the accounts as at 30 September 2023.
A review
of the half-year and the outlook for the Company can be found in
the Chairman’s Statement and in the Investment Manager’s Review.
The principal risks and uncertainties faced by the Company include
the following:
-
The Board
may have to reduce the Company’s dividend.
-
The
Company’s share price total return may differ materially from the
NAV per share total return.
-
The
departure of a key individual at the Investment Manager may affect
the Company’s performance.
-
The
investment strategy adopted by the Investment Manager, including
the high degree of concentration of the investment portfolio, may
lead to an investment return that is materially lower than the
Company’s comparator benchmark index, and/or a possible failure to
achieve the Company’s investment objective.
-
The
adverse impact of climate change on the portfolio companies'
operational performance.
-
The
investment in LTL becomes an even greater proportion of the overall
value of the Company’s portfolio.
-
Adverse
reputational impact of one or more of the Company’s key service
providers which, by association, causes the Company reputational
damage.
-
Fraud
(including unauthorised payments and cyber-fraud) occurs leading to
a loss.
-
The
Company is exposed to credit risk.
-
The
Company is exposed to market price risk.
-
The
Company and/or the Directors fail(s) to comply with its legal
requirement with any applicable regulations.
-
The
regulatory environment in which the Company operates changes,
affecting the Company’s business model.
-
The
Company’s valuation of its investment in LTL is materially
misstated.
The Audit
Committee identified the following emerging risks to be included in
the risk register.
Geopolitical
conflicts and macroeconomic developments, whether they be
political, economic or military, introduce new risks and exacerbate
existing risks. These include:
-
Disruptions
to supply chains, operations and markets for investee companies
both as a direct result of conflict and as result of economic
sanctions;
-
Increased
inflation, leading policy makers to increase interest rates. This
in turn may dampen economic activity and raise
unemployment;
-
Increased
market volatility and reduced investor risk appetites;
and
-
Increased
threat of state sponsored cyberattacks.
While
presenting investment opportunities, the rapid development of new
technologies, such as artificial intelligence, may disrupt the
markets and operating models of the companies in which we invest,
damaging their potential investment returns.
Information
on principal risks is given in the Annual Report for the year ended
31 March 2023. Further information of
the emerging risks will be included in the Annual Report for the
year ended 31 March 2024.
In the
view of the Board, there have not been any material changes to the
fundamental nature of these risks and they are applicable to the
remainder of the financial year.
Related
Party Transactions
During the
first six months of the current financial year, no transactions
with related parties have taken place which have materially
affected the financial position or the performance of the
Company.
Directors’
Responsibilities
The Board
of Directors confirms that, to the best of its
knowledge:
(i) the
condensed set of financial statements contained within the
Half-year Report have been prepared in accordance with applicable
UK Accounting Standards; and
(ii) the
interim management report includes a true and fair review of the
information required by:
(a) DTR
4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year;
and
(b) DTR
4.2.8R of the Disclosure Guidance and Transparency Rules, 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 entity during
that period; and any changes in the related party transactions
described in the last Annual Report that could do so.
The
Half-year Report has not been audited by the Company’s
auditors.
This
Half-year Report contains certain forward-looking statements. These
statements are made by the Directors in good faith based on the
information available to them up to the date of this report and
such statements should be treated with caution due to the inherent
uncertainties, including both economic and business risk factors,
underlying any such forward-looking
information.
For and on
behalf of the Board
Julian Cazalet
Chairman
4 December 2023
Appendix
1
Half-year
review of Lindsell Train Limited (“LTL”) the Investment Manager of
The Lindsell Train Investment Trust plc (“LTIT”) as at 31 July 2023
Funds
under Management
|
Jul
2023
|
Jan
2023
|
Jul
2022
|
FUM
by Strategy
|
£m
|
£m
|
£m
|
UK
|
7,456
|
7,690
|
8,099
|
Global
|
9,798
|
10,352
|
10,810
|
Japan
|
216
|
554
|
624
|
North
America
|
35
|
30
|
29
|
Total
|
17,505
|
18,626
|
19,562
|
Largest
Client Accounts
|
Jul
2023
|
Jan
2023
|
Jul
2022
|
|
%
of FUM
|
% of
FUM
|
% of
FUM
|
Largest
Pooled Fund Asset
|
30%
|
30%
|
30%
|
Largest
Segregated Account
|
11%
|
10%
|
10%
|
Financials
|
Unaudited
|
|
|
|
Jul
2023
|
Jul
2022
|
%
|
Profit
& Loss
|
£’000
|
£’000
|
Change
|
Fee
Revenue
|
|
|
|
Investment
Management Fees
|
45,240
|
49,259
|
-8%
|
Performance
Fees
|
0
|
0
|
0%
|
Interest
|
433
|
38
|
|
|
45,673
|
49,297
|
|
Staff
Remuneration *
|
(13,542)
|
(15,101)
|
-10%
|
Fixed
Overheads
|
(2,352)
|
(2,228)
|
6%
|
Operating
Profit
|
29,779
|
31,968
|
-7%
|
FX
Currency Translation Gain/(loss)
|
(853)
|
3,005
|
|
Investment
Unrealised Gain/(loss)
|
217
|
(14)
|
|
Gilts/Bonds
Gain/(loss)
|
840
|
0
|
|
Profit
before taxation
|
29,983
|
34,959
|
|
Taxation
|
(6,857)
|
(6,202)
|
|
Net
Profit
|
23,126
|
28,757
|
-20%
|
Dividends
|
(20,465)
|
(25,879)
|
|
Retained
profit
|
2,661
|
2,878
|
|
Balance
Sheet
|
|
|
|
Fixed
Assets
|
75
|
133
|
|
Investments
|
62,113
|
6,900
|
|
Current
Assets (Inc cash at bank)
|
50,674
|
94,206
|
|
Liabilities
|
(12,311)
|
(7,267)
|
|
Net
Assets
|
100,551
|
93,972
|
|
Capital
& Reserves
|
|
|
|
Called up
Share Capital
|
266
|
266
|
|
Treasury
Shares
|
(437)
|
(1,794)
|
|
Profit
& Loss Account
|
100,722
|
95,500
|
|
Shareholders'
Funds
|
100,551
|
93,972
|
|
* Staff
costs include permanent staff remuneration, social security,
temporary apprentice levy, introduction fees and other staff
related costs. No more
than 25% of fees (other than LTIT) can be paid as permanent staff
remuneration.
Five
Year History
|
Unaudited
|
|
|
|
|
|
Jul
2023
|
Jul
2022
|
Jul
2021
|
Jul
2020
|
Jul
2019
|
Operating
Profit Margin
|
65%
|
65%
|
64%
|
66%
|
64%
|
Earnings
per share (£)
|
867
|
1,083
|
1,237
|
1,084
|
1,054
|
Dividends
per share (£)
|
768
|
975
|
1,004
|
949
|
776
|
Total
Staff Cost as % of Revenue
|
30%
|
31%
|
33%
|
29%
|
33%
|
Opening
FUM (£m)
|
19,562
|
24,298
|
21,151
|
22,563
|
15,304
|
Changes in
FUM (£m)
|
-2,057
|
-4,736
|
3,147
|
-1,412
|
7,259
|
–
of market movement
|
1,054
|
-1,271
|
3,041
|
-1,385
|
4,568
|
–
of net fund inflows/(outflows)
|
-3,111
|
-3,465
|
106
|
-27
|
2,691
|
Closing
FUM (£m)
|
17,505
|
19,562
|
24,298
|
21,151
|
22,563
|
LTL
Open-ended funds as % of total
|
64%
|
66%
|
73%
|
72%
|
75%
|
Client
Relationships
|
|
|
|
|
|
– Pooled
funds
|
5
|
5
|
5
|
5
|
4
|
–
Segregated accounts
|
15
|
18
|
17
|
17
|
17
|
|
|
|
|
|
|
Ownership
|
|
|
|
|
|
|
Jul
2023
|
Jan
2023
|
Jul
2022
|
Jan
2022
|
Jul
2021
|
Michael
Lindsell and spouse
|
9,630
|
9,650
|
9,650
|
9,650
|
9,650
|
Nick Train
and spouse
|
9,630
|
9,650
|
9,650
|
9,650
|
9,650
|
The
Lindsell Train Investment Trust plc*
|
6,421
|
6,450
|
6,450
|
6,450
|
6,450
|
Other
Directors/employees
|
979
|
893
|
805
|
778
|
899
|
|
26,660
|
26,643
|
26,555
|
26,528
|
26,649
|
Treasury
Shares
|
0
|
17
|
105
|
132
|
11
|
Total
Shares
|
26,660
|
26,660
|
26,660
|
26,660
|
26,660
|
Board
of Directors
Nick
Train
|
Chairman
and Portfolio Manager
|
Michael
Lindsell
|
Chief
Executive and Portfolio Manager
|
Michael
Lim
|
IT
Director and Secretarial
|
Keith
Wilson
|
Head of
Marketing & Client Services
|
Joss
Saunders
|
Chief
Operating Officer
|
Jane
Orr
|
Non-Executive
Director
|
Julian
Bartlett
|
Non-Executive
Director
|
Rory
Landman
|
Non-Executive
Director
|
Employees
|
Jul
2023
|
Jan
2023
|
Jul
2022
|
Jan
2022
|
Jul
2021
|
Investment
Team
(including
three Portfolio Managers)
|
7
|
7
|
7
|
7
|
6
|
Client
Servicing & Marketing
|
8
|
9
|
7
|
7
|
6
|
Operations
& Administration
|
12
|
12
|
12
|
11
|
8
|
Non-Executive
Directors
|
3
|
2
|
2
|
2
|
2
|
|
30
|
30
|
28
|
27
|
22
|
Appendix
2
LTIT
Director’s valuation of LTL (unaudited)
|
30
Sept 2023
|
30 Sept
2022
|
Notional
annualised net profits (A)* (£’000)
|
31,411
|
38,368
|
Funds
under Management less LTIT holdings (B) (£'000)
|
16,339,590
|
18,548,853
|
Normalised
notional net profits as % of FUM A/B = (C)
|
0.192%
|
0.207%
|
% of FUM
(D) (see table below to view % corresponding to C)
|
1.90%
|
1.95%
|
Valuation
(E) i.e. B x D (£’000)
|
310,452
|
361,703
|
Number of
shares in issue (F)†
|
26,660
|
26,555
|
Valuation
per share in LTL i.e. E / F
|
£11,645
|
£13,621
|
* Notional
annualised net profits are made up of:
– annualised
fee revenue, based on 6-mth average fee rate applied to most recent
month-end AUM
–
annualised
fee revenue excludes performance fees
– annualised
interest income, based on 3-mth average
–
notional
staff costs of 45% of annualised fee revenue
–
annualised
operating costs (excluding staff costs), based on 3-mth normalised
average
–
notional
tax at Sep ’23: 25%, Sep ’22: 19%
† The
increase in shares in issue is accounted for by net purchases of
Treasury Shares by LTL employees.
Notional
annualised net profits*/FUM (%)
|
Valuation
of LTL - Percentage of FUM
|
0.15 –
0.16
|
1.70%
|
0.16 –
0.17
|
1.75%
|
0.17 –
0.18
|
1.80%
|
0.18 –
0.19
|
1.85%
|
0.19
– 0.20
|
1.90%
|
0.20 –
0.21
|
1.95%
|
0.21 –
0.22
|
2.00%
|
0.22 –
0.23
|
2.05%
|
0.23 –
0.24
|
2.10%
|
0.24 –
0.25
|
2.15%
|
0.25 –
0.26
|
2.20%
|
0.26 –
0.27
|
2.25%
|
Glossary
of Terms and Alternative Performance Measures
Alternative
Investment Fund Managers Directive (“AIFMD”)
The
Alternative Investment Fund Managers Directive (the “Directive”) is
a European Union Directive that entered into force on 22 July 2013. The Directive regulates EU fund
managers that manage alternative investment funds (this includes
investment trusts).
Alternative
Performance Measure (“APM”)
An
alternative performance measure is a financial measure of
historical or future financial performance, financial position or
cash flow that is not prescribed by the relevant accounting
standards. The APMs are the discount and premium, dividend yield,
share price and NAV total returns and ongoing charges. The
Directors believe that these measures enhance the comparability of
information between reporting periods and aid investors in
understanding the Company’s performance.
Benchmark
With
effect from 1 April 2021 the
Company’s comparator benchmark is the MSCI World Index total return
in Sterling.
Discount
and premium (APM)
If the
share price of an investment trust is higher than the Net Asset
Value (NAV) per share, the shares are trading at a premium to NAV.
In this circumstance the price that an investor pays or receives
for a share would be more than the value attributable to it by
reference to the underlying assets. The premium is the difference
between the Share Price and the NAV, expressed as a percentage of
the NAV.
A discount
occurs when the share price is below the NAV. Investors would
therefore be paying less than the value attributable to the shares
by reference to the underlying assets.
A premium
or discount is generally the consequence of the balance of supply
and demand for the shares on the stock market.
The
discount or premium is calculated by dividing the difference
between the Share Price and the NAV by the NAV.
|
As
at
|
As
at
|
|
30
September
|
31
March
|
|
2023
|
2023
|
|
£
|
£
|
Share
Price
|
886.00
|
1,052.50
|
Net Asset
Value per Share
|
968.75
|
1,056.95
|
Discount
to Net Asset Value per Share
|
8.54%
|
0.42%
|
MSCI
World Index total return in Sterling (the Company’s comparator
Benchmark)
The
MSCI requires the Company to include the following statement in the
Half-year Report.
“The MSCI
information (relating to the Benchmark) may only be used for your
internal use, may not be reproduced or redisseminated in any form
and may not be used as a basis for or a component of any financial
instruments or products or indices. None of the MSCI information is
intended to constitute investment advice or a recommendation to
make (or refrain
from making) any kind of investment decision and may not be relied
on as such. Historical data and analysis should not be taken as an
indication or guarantee of any future performance analysis,
forecast or prediction. The MSCI information is provided on an “as
is” basis and the user of this information assumes the entire risk
of any use made of this information. MSCI, each of its affiliates
and each other person involved in or related to compiling,
computing or creating any MSCI information (collectively, the “MSCI
Parties”) expressly disclaims all warranties (including, without
limitation, any warranties of originality, accuracy, completeness,
timeliness, non-infringement, merchantability and fitness for a
particular purpose) with respect to this information. Without
limiting any of the foregoing, in no event shall any MSCI Party
have any liability for any direct, indirect, special, incidental,
punitive, consequential (including, without limitation lost
profits) or any other damages. (www.msci.com).”
Net
asset value (“NAV”) per Ordinary Share
The NAV is
shareholders’ funds expressed as an amount per individual share.
Equity shareholders’ funds are the total value of all the Company’s
assets, at current market value, having deducted all current and
long-term liabilities and any provision for liabilities and
charges.
The NAV of
the Company is published weekly and at each month end.
The
figures disclosed in the Statement of Financial Position have been
calculated as shown below:
|
Six
months
|
|
|
ended
|
Year
ended
|
|
30
September
|
31
March
|
|
2023
|
2023
|
Net Asset
Value (a)
|
£193,750,000
|
£211,390,000
|
Ordinary
Shares in issue (b)
|
200,000
|
200,000
|
Net asset
value per Ordinary Share (a) ÷ (b)
|
£968.75
|
£1,056.95
|
Revenue
return per share
The
revenue return per share is the revenue return profit for the
period divided by the weighted average number of ordinary shares in
issue during the period.
Share
price and NAV total return (APM)
This is
the return on the share price and NAV taking into account both the
rise and fall of share prices and valuations and the dividends paid
to shareholders.
Any
dividends received by a shareholder are assumed to have been
reinvested in either additional shares (for share price total
return) or the Company’s assets (for NAV total return).
The share
price and NAV total returns are calculated as the return to
shareholders after reinvesting the net dividend in additional
shares on the date that the share price goes
ex-dividend.
The
figures disclosed earlier in the announcement have been calculated
as shown below:
|
|
Six
months ended
30
September 2023
|
|
|
LTIT
NAV
|
LTIT
Share Price
|
NAV/Share
Price at 30 September 2023
|
a
|
£968.75
|
£886.0
|
Dividend
Adjustment Factor*
|
b
|
1.052
|
1.054
|
Adjusted
closing NAV/Share Price
|
c = a x
b
|
£1,018.90
|
£933.57
|
NAV/Share
Price 31 March 2023
|
d
|
£1,056.95
|
£1,052.50
|
Total
return
|
[(c/d)-1]
x 100
|
-3.6%
|
-11.3%
|
* The
dividend adjustment factor is calculated on the assumption that the
dividend of £51.50 paid by the Company during the year was
reinvested into shares or assets of the Company at the cum income
NAV per share/share price, as appropriate, at the ex-dividend
date.
LTL
total return performance
The total
return performance for LTL is calculated as the return after
receiving but not reinvesting dividends received over the
period.
|
|
Six
months ended
|
|
|
30
September 2023
|
|
|
LTL
valuation
|
Valuation
at 31 March 2023
|
a
|
£13,212
|
Valuation
at 30 September 2023
|
b
|
£11,645
|
Dividend
per share paid during the period
|
c
|
£768
|
Total
return
|
[(b-a)+c]/a
x 100
|
-6.0%
|
Treasury
Shares
Shares
previously issued by a company that have been bought back from
Shareholders to be held by the Company for potential sale or
cancellation at a later date. Such shares are not capable of being
voted and carry no rights to dividends.
-ENDS-
For
further information please contact
Victoria Hale
Company
Secretary
Frostrow
Capital LLP
020 3100
8732