Last checked at 
31 Mar 2023 07:00
abrdn Asia Focus plc
Legal Entity Identifier (LEI): 5493000FBZP1J92OQY70
ANNOUNCEMENT OF UNAUDITED HALF YEARLY RESULTS
for the six months ended 31 January 2023
The Board of abrdn Asia Focus plc, a £540m Company that holds a fundamental, high conviction portfolio of well-researched Asian small caps, today confirms its half yearly results for the six months ended 31 January 2023.
Financial highlights for the interim reporting period include:
• Share price (total return basis): +5.5%;
• Net Asset Value (total return): +3.0% slightly lower than the Company's benchmark return, the MSCI AC Asia ex-Japan Small Cap Index, of 3.8%;
• The Board remains confident in Asia and its dynamic smaller companies over the longer term: £1000 invested at inception in 1995 is now worth over £22,950 ,on a NAV basis with dividends reinvested, a return of over 2195%;
• The Board has set a target dividend of at least 6.4p per Ordinary Share for the financial year ending 31 July 2023. The Board plans to maintain the progressive dividend policy of the last 27 years to provide shareholders with a regular level of income, alongside capital growth prospects;
• AIC ISA millionaire: abrdn Asia Focus is one of the top 5 companies that would have made investors £1,000,000 if they had invested their full isa allowance from 1999 to 2023 (AIC release: ISA millionaires | The AIC);
• The information technology sector made the most positive contribution to performance.
· Investment managers continue to target high-quality companies which offer growth but are also profitable, have strong cash flows, robust balance sheets, and trade at reasonable valuations.
Performance Highlights
Net asset value total return (diluted)AB | Net Asset Value per share (diluted) | |||
Six months ended 31 January 2023 | As at 31 January 2023 | |||
+3.0% | 299.2p | |||
Year ended 31 July 2022 | -0.02 | As at 31 July 2022 | 295.3p | |
Share price total returnA | Share price | |||
Six months ended 31 January 2023 | As at 31 January 2023 | |||
+5.5% | 263.0p | |||
Year ended 31 July 2022 | -1.7% | As at 31 July 2022 | 254.0p | |
MSCI AC Asia ex Japan Small Cap Index total returnC | Total assets | |||
'Six months ended 31 January 2023 | As at 31 January 2023 | |||
+3.8% | £540.1m | |||
'Year ended 31 July 2022 | -5.1% | As at 31 July 2022 | £532.9m | |
Net asset value total return since inception (diluted)ABD | Discount to net asset valueAB | |||
To 31 January 2023 | As at 31 January 2023 | |||
+2195.7% | 12.1% | |||
To 31 July 2022 | +2115.6% | As at 31 July 2022 | 14.0% | |
A Considered to be an Alternative Performance Measure (see definition below). | ||||
'B Presented on a diluted basis as the Convertible Unsecured Loan Stock (CULS) is "in the money". | ||||
'C Currency adjusted, capital gains basis. | ||||
D Inception being 19 October 1995. | ||||
Financial Highlights
Capital values | 31 January 2023 | 31 July 2022 | % change |
Total assets less current liabilitiesA | £540,052,000 | £532,912,000 | +1.3 |
Net asset value per share (basic) | 300.00p | 295.88p | +1.4 |
Net asset value per share (diluted) | 299.15p | 295.25p | +1.3 |
Share price (mid market) | 263.00p | 254.00p | +3.5 |
Discount to net asset value (basic)B | 12.3% | 14.2% | |
Discount to net asset value (diluted)B | 12.1% | 14.0% | |
Net gearingB | 13.7% | 12.1% | |
Ongoing charges ratioB | 0.90% | 0.88% | |
A Total assets less current liabilities (excluding prior charges such as bank loans) as per the Statement of Financial Position. | |||
B Considered to be an Alternative Performance Measure (see definition below). | |||
Chairman's Statement
Background
Global markets remained volatile over the review period, with sentiment influenced by a sharp rise in interest rates from the US Federal Reserve (Fed) and fears that this could lead to a global recession. Towards the end of the period, China's decision to ease Covid-19 restrictions led to expectations that the country's re-opening would boost consumer demand and help export-oriented markets such as Taiwan and South Korea. Likewise, the diversification of supply chains has seen net benefits to Vietnam, India and Indonesia, amongst others in South East Asia.
Against this volatile market background, your Company's share price gained 5.5% on a total return basis with the discount to the net asset value("NAV") narrowing to 12.1%. The NAV total return was 3.0% although that came in slightly lower than the benchmark MSCI AC Asia Pacific ex-Japan Small Cap Index's 3.8% increase.
Despite continued short-term market volatility, the Board is as confident as ever in the potential for Asia and its smaller companies over the long-term. It is worth noting that £1,000 invested in your Company at inception is now worth over £22,950 on a NAV basis with dividends reinvested, a return of over 2195%. Indeed, according to a recent press release from the Association of Investment Companies (AIC) we are one of the top five companies that would have made investors £1,000,000 if they had invested their full isa allowance from 1999 to 2023.
This is the world's fastest-growing region, underpinned by powerful structural trends such as increasing affluence, rising urbanisation, and growing technology adoption. Exciting opportunities continue to abound in its small and mid-cap investment universe, where companies tend to be domestically oriented and low research coverage leaves considerable scope for active managers to take advantage of market mispricing.
Dividend The Board recognises the importance of your Company's dividend income for many shareholders. The Ordinary dividend has been maintained or raised every year since 1998, and your Board is firmly committed to the new enhanced and progressive dividend policy approved by shareholders in 2022.
Two interim dividends have been paid in the first six months of the year. The first interim dividend of 1.6p per Ordinary share was paid on 20 December 2022 to Ordinary shareholders on the register on 25 November 2022 and the second interim dividend was paid on 21 March 2023 to Ordinary shareholders on the register on 24 February 2023. The Board has set a target dividend of at least 6.4p per Ordinary Share for the financial year ending 31 July 2023. The Board plans to maintain the progressive policy of the last 27 years in order to provide shareholders with a regular level of income alongside capital growth prospects.
Share Capital Management and Gearing During the period the Ordinary shares have traded at an average discount of 11.9% and we did not buy back any Ordinary shares in the market. However, subsequent to the period 120,000 Ordinary shares have been acquired for treasury at a discount to the prevailing NAV per share. The Board will continue to consider the use of share buybacks to both reduce the volatility of any discount and to modestly enhance the NAV per share for shareholders.
The Company's net gearing at 31 January 2023 was 13.7% with the debt provided by the £30 million unsecured Loan Notes 2035 and the £36.6m Convertible Unsecured Loan Stock redeemable in 2025. As at 30 March 2023, the latest practicable date, the net gearing stood at 12.9%.
ESG
In my first report to Shareholders, I wanted to draw out the importance that your Board and Manager place upon Environmental, Social and Governance ("ESG") matters. While ESG concerns do not form a specific part of the Company's investment objective, and the investment process does not exclude exposure to certain industries, the Investment Manager has long believed that a holistic assessment of business risks and active engagement, with the goal of improving the performance of the Company's portfolio, is vital before, during and after an investment is made. That includes a detailed understanding of the environmental, social and governance risks and opportunities associated with each holding. It is, therefore, very much embedded in the Investment Manager's approach to managing the Company and we will provide more detail on these important matters in your Company's Annual Report.
Outlook
The purpose of the Company remains the same as ever, to give investors access to Asia's exciting growth prospects via a concentrated portfolio of high-quality smaller companies. Your Company continues to benefit from a highly experienced management team, with excellent on-the-ground access to companies, business leaders and policymakers. They continue to uncover under-researched quality companies in what is a large and varied universe of Asian small caps.
Considering the current fragile state of the global economy, our view is that Asia is in a better position than many Western economies. For the most part, government finances and corporate balance sheets in the region are in good health. The wider macroeconomic risks (whether inflation or geopolitics related) persist, but one of the benefits of this Trust's small-cap emphasis is that it allows for a portfolio that is more geared to Asia's domestic growth story - indeed, at the end of the reporting period, over 80% of the underlying revenues of the companies in the portfolio came from within Asia itself.
In this regard, the Board is pleased to note there are positive signs for structural growth right across the region. China's re-opening should lead to a recovery in both domestic consumption and industry production. In turn, this could be a spur for Asia-wide exports, services, trade, and tourism.
Valuations are attractive and your Manager has positioned the portfolio to weather near-term risks - the majority of the companies in the portfolio hold net cash on their balance sheet - while keeping in mind the long-term secular trends across Asia: rising local demand, a move to a lower-carbon future and the growth of Asia's technology and supply chains. Accordingly, your Company's core investment strategy remains judicious - quality companies at a reasonable price with strong balance sheets and demonstrating sustainable earnings, delivering outperformance over the long-term.
Krishna Shanmuganathan Chairman30 March 2023
Investment Manager's Review
Overview The six months to the end of January 2023 can be split into three distinct periods. The first, in August and September, was noteworthy for the level of concern among investors about the pace of interest rate increases in the US, reflected in a global sell-off across a number of markets. The strength of the US dollar also contributed to market volatility.
In October, the focus shifted to the Communist Party Congress in Beijing and President Xi Jinping's consolidation of power. After securing an unprecedented third term in office President Xi filled the country's leadership team with close allies. Investors reacted nervously and the markets in mainland China and Hong Kong were among the weakest during this month. The volatility spread to wider Asian markets, and, notably, to Asian smaller companies, which underperformed both the wider region and those in developed markets.
November and December, however, saw a marked change in sentiment. China announced a sharp U-turn in policy with the removal of Covid-19 restrictions, driving a strong rally across many Asian markets particularly those more closely linked to the mainland.
Portfolio Review
The information technology sector made the most positive contribution to performance where your Manager targets high-quality companies which offer growth but are also profitable, have strong cash flows, robust balance sheets, and trade at reasonable valuations.
Prominent among them was Korea's Park Systems which is an exciting prospect thanks to its innovative products and dominant position in atomic force microscopy - an emerging imaging field - which has a number of growing applications within advanced science and technology labs.
In the same sector, the portfolio saw good contributions from Leeno Industrial, Koh Young Technology and Taiwan's Andes Technology. However, not every holding in the sector made gains. Some in the technology supply chain, such as Nanofilm, were affected by concerns about a drop in demand for Apple products. AEM Holdings, which produces tests for semiconductors, was also weak due to fears of a cyclical downturn in the sector.
Our Indian holdings also boosted your Company's returns thanks to good stock selection. Aegis Logistics, which is primarily focused on operating port terminals, was a strong performer, as was Vijaya Diagnostic Centre, which owns a network of diagnostics clinics in Southern India. Elsewhere, positive contributions came from Indonesia and Thailand with Bank OCBC NISP benefiting from the broader economic recovery in Indonesia, clearly reflected in a 60% rise in the bank's net profits in the third quarter.
The Vietnamese government's attempt to address corruption and speculative activity in the property market impacted our holding in property developer Nam Long due to the resultant delays in land purchases and project launches. Your Manager however remains confident in the reputation of the company and believes it should benefit from the government's intervention over the long-term. Also in Vietnam, information technology group FPT Corp was another detractor from performance, but we were reassured to see it publish strong annual results with revenues and earnings both beating expectations.
Stock selection in China and Hong Kong was also a source of weakness. Among the main detractors were Joinn Laboratories, Sinoma Science & Technology and Pacific Basin Shipping. The last of these suffered from forecasts of lower global growth and a decline in freight rates, but your Manager continues to see value in the stock, given expectations of strong free cash flow generation and therefore healthy dividend payouts.
ChaCha Food, which was added to the portfolio during the period, was another detractor but your Manager saw the ongoing weakness in the Chinese equity market as an opportunity to add to the position. It is among China's leading nuts producers with well established brands, including the largest roasted seeds brand locally which generates healthy cash flow. It has high growth potential as the highly fragmented snacks industry presents a consolidation opportunity for a focused, vertically integrated company with strong brands. You can read more about your Manager's rationale behind holding this stock below.
Turning to portfolio activity, your Manager continued to maintain discipline in the portfolio's quality focus, especially given the challenging backdrop. Alongside the investment in ChaCha Food, a new position was also initiated in Kerry Logistics Network, one of the largest integrated logistics providers in Asia with a diversified customer base. Your Manager believes the company is well placed to benefit from supply-chain relocation, e-commerce growth and intra-regional trade in Asia. The position in Douzone Bizon was sold due to concerns over execution and an uncertain growth outlook. The holding in eCloudvalley was also divested, owing to poor disclosure and a slowdown in growth.
Gabriel Sacks, Flavia Chong,Xin Yao Ng & Hugh Young
abrdn Asia Limited30 March 2023
Ten Largest Investments
As at 31 January 2023
| Park Systems Corporation |
| Aegis Logistics | |||
The Korean company is the leading developer of atomic force microscopes, a nascent technology that could have broad industrial application in sectors such as chip-making and biotechnology. The company's financials are sound, despite significant upfront sales and distribution costs. | A strong and conservative player in India's gas and liquids logistics sector, with a first mover advantage in key ports and a fair amount of capacity expansion to come. The government's push for the adoption of cleaner energy is also boosting its liquefied natural gas business.
| |||||
| Sinoma Science & Technology - A |
| Bank OCBC NISP | |||
One of the largest wind turbine blade producers in China and the third largest battery separator maker, which is backed by strong R&D capability and support from its parent group We view the stock as a proxy for growth of wind energy. | An Indonesian listed banking and financial services company, which is a steady consistent performer backed by healthy asset quality. | |||||
| Mega Lifesciences (Foreign) |
| AKR Corporindo | |||
The Thai group produces, sells and distributes health supplements and pharmaceutical products, mostly in the under-penetrated but fast-growing frontier and emerging markets. | AKR is one of the main players in industrial fuel in Indonesia, which has a high entry barrier. Its key strength is its extensive infrastructure and logistic facilities throughout the country. | |||||
| FPT Corporation |
| Affle India | |||
FPT is a diversified technology group with a fast-growing software outsourcing business. It also owns a telecoms unit, an electronics retailing company, and has interests in other sectors, such as education. | A consumer technology business operating a data platform that helps direct digital advertising. It is dominant in India where digitalisation has reached an inflection point. | |||||
| AEM Holdings |
| MOMO.com | |||
A Singapore-based provider of advanced semiconductor chip testing services that has embedded itself in chipmaker Intel's global supply chain. | Momo, the largest online retailer in Taiwan, serves as a nice proxy for consumer growth in the country, as it is benefitting from the shift to online from both consumers and vendors. |
Investment Portfolio
As at 31 January 2023 | ||||
Total | ||||
Valuation | assets | |||
Company | Industry | Country | £'000 | % |
Park Systems Corporation | Electronic Equipment, Instruments & Components | South Korea | 21,972 | 4.1 |
Aegis Logistics | Oil, Gas & Consumable Fuels | India | 19,339 | 3.6 |
Sinoma Science & Technology - A | Chemicals | China | 16,510 | 3.1 |
Bank OCBC NISP | Banks | Indonesia | 15,943 | 2.9 |
Mega Lifesciences (Foreign) | Pharmaceuticals | Thailand | 15,901 | 2.9 |
AKR Corporindo | Oil, Gas & Consumable Fuels | Indonesia | 15,709 | 2.9 |
FPT Corporation | IT Services | Vietnam | 15,160 | 2.8 |
Affle India | Media | India | 14,654 | 2.7 |
AEM Holdings | Semiconductors & Semiconductor Equipment | Singapore | 14,641 | 2.7 |
MOMO.com | Internet & Direct Marketing Retail | Taiwan | 14,435 | 2.7 |
Top ten investments | 164,264 | 30.4 | ||
Cyient | Software | India | 14,347 | 2.7 |
Dah Sing Financial Holdings | Banks | Hong Kong | 13,709 | 2.5 |
M.P. Evans Group | Food Products | United Kingdom | 13,688 | 2.5 |
Oriental Holdings | Automobiles | Malaysia | 13,342 | 2.5 |
Hana Microelectronics (Foreign) | Electronic Equipment, Instruments & Components | Thailand | 12,751 | 2.4 |
Joinn Laboratories China | Life Sciences Tools & Services | China | 12,563 | 2.3 |
UIE | Food Products | Denmark | 11,342 | 2.1 |
Medikaloka Hermina | Health Care Providers & Services | Indonesia | 11,235 | 2.1 |
Cebu Holdings | Real Estate Management & Development | Philippines | 11,186 | 2.1 |
Nam Long Invest Corporation | Real Estate Management & Development | Vietnam | 11,026 | 2.0 |
Top twenty investments | 289,453 | 53.6 | ||
Pacific Basin Shipping | Marine | Hong Kong | 10,825 | 2.0 |
LEENO Industrial | Semiconductors & Semiconductor Equipment | South Korea | 10,544 | 1.9 |
John Keells Holdings | Industrial Conglomerates | Sri Lanka | 10,322 | 1.9 |
Precision Tsugami China Corporation | Machinery | China | 10,211 | 1.9 |
Asian Terminals | Transportation Infrastructure | Philippines | 10,181 | 1.9 |
Millennium & Copthorne Hotels New ZealandA | Hotels, Restaurants & Leisure | New Zealand | 9,992 | 1.9 |
Sunonwealth Electric Machinery Industry | Machinery | Taiwan | 9,913 | 1.8 |
Sporton International | Professional Services | Taiwan | 9,632 | 1.8 |
Ultrajaya Milk Industry & Trading | Food Products | Indonesia | 8,954 | 1.7 |
Bukit Sembawang Estates | Real Estate Management & Development | Singapore | 8,897 | 1.6 |
Top thirty investments | 388,924 | 72.0 | ||
AEON Credit Service (M) | Consumer Finance | Malaysia | 8,890 | 1.6 |
IPH | Professional Services | Australia | 7,741 | 1.4 |
Kerry Logistics | Air Freight & Logistics | Hong Kong | 7,492 | 1.4 |
Prestige Estates Projects | Real Estate Management & Development | India | 6,967 | 1.3 |
Koh Young Technology | Semiconductors & Semiconductor Equipment | South Korea | 6,902 | 1.3 |
Vijaya Diagnostic Centre | Health Care Providers & Services | India | 6,770 | 1.3 |
Taiwan Union | Electronic Equipment, Instruments & Components | Taiwan | 6,732 | 1.2 |
United Plantations | Food Products | Malaysia | 6,509 | 1.2 |
Syngene International | Life Sciences Tools & Services | India | 6,225 | 1.2 |
Tisco Financial Group (Foreign) | Banks | Thailand | 6,132 | 1.1 |
Top forty investments | 459,284 | 85.0 | ||
Shangri-La Hotels Malaysia | Hotels, Restaurants & Leisure | Malaysia | 5,924 | 1.1 |
Pentamaster International | Semiconductors & Semiconductor Equipment | Malaysia | 5,816 | 1.1 |
Yoma Strategic Holdings | Real Estate Management & Development | Myanmar | 5,674 | 1.1 |
Andes Technology | Semiconductors & Semiconductor Equipment | Taiwan | 5,642 | 1.1 |
Sanofi India | Pharmaceuticals | India | 5,622 | 1.0 |
Nanofilm Technologies International | Chemicals | Singapore | 5,096 | 1.0 |
KMC Kuei Meng International | Leisure Products | Taiwan | 4,999 | 0.9 |
ChaCha Food | Food Products | China | 4,988 | 0.9 |
NZX | Capital Markets | New Zealand | 4,477 | 0.8 |
Absolute Clean Energy (Foreign) | Independent Power and Renewable Electricity Producers | Thailand | 4,451 | 0.8 |
Top fifty investments | 511,973 | 94.8 | ||
Convenience Retail Asia | Food & Staples Retailing | Hong Kong | 4,125 | 0.8 |
Aspeed Technology | Semiconductors & Semiconductor Equipment | Taiwan | 3,937 | 0.7 |
CE Info Systems | Software | India | 3,789 | 0.7 |
Nazara Technologies | Entertainment | India | 3,660 | 0.7 |
Thai Stanley Electric (Foreign) | Auto Components | Thailand | 3,552 | 0.7 |
Credit Bureau Asia | Professional Services | Singapore | 3,203 | 0.6 |
Tatva Chintan Pharma | Chemicals | India | 3,013 | 0.6 |
Manulife Holdings | Insurance | Malaysia | 1,616 | 0.3 |
First Sponsor Group (Warrants 21/03/2029) | Real Estate Management & Development | Singapore | 235 | - |
AEON Stores Hong Kong | Multiline Retail | Hong Kong | 222 | - |
Top sixty investments | 539,325 | 99.9 | ||
First Sponsor Group (Warrants 30/05/2024) | Real Estate Management & Development | Singapore | 123 | - |
G3 Exploration | Oil, Gas & Consumable Fuels | China | - | - |
Total investments | 539,448 | 99.9 | ||
Net current assets | 604 | 0.1 | ||
Total assetsB | 540,052 | 100.0 | ||
A Holding includes investment in both common and preference lines. | ||||
B Total assets less current liabilities. | ||||
Investment Case Studies
Cha Cha Food
Seeds of growth: ChaCha is a dominant player in a niche category of the foods industry in China. The company's cash cow is its seeds segment, which accounts for the bulk of sales. Its sunflower seed products cover different price bands from the classic red-bag seeds to flavoured blue-bag seeds and on up to the high-end Kuizhen series. Growth will come from ChaCha's nuts business, where the company is expanding its product portfolio and driving greater penetration.
In which year did we first invest?
2022
Where is the head office?
Anhui, China
What does the company do?
ChaCha Food is among China's leading seeds and nuts producers with well established brands, including the largest roasted seeds brand domestically.
Why do we like the investment?
ChaCha has been a leading player in China's packaged roasted seeds and nuts market since it was first set up in 1996. We view the company as well established within a fast-changing snack market. Its superior product quality, strong branding and deep-rooted distribution channels have the makings of a long-term winner.
This also reflects its stringent quality control of its production line and supply chain. ChaCha has historically been a strong offline channel player with an established distribution network. Among the major domestic snack players, ChaCha is also one of the few which manufactures its products in-house rather than resorting to outsourcing, thereby gaining an edge in food quality. It has local production and processing farms that are close to raw material and distribution terminals, resulting in more efficient and less costly transport of its products. A well-established supply chain also adds to the strength: ChaCha sources 80% of raw materials for its daily nuts directly from the main production areas during harvest season, then ships back, processes and sells the products within the same quarter.
Another core strength has been a nimble organisational structure after several rounds of management and strategy reform since 2015 (with the latest in the second half of 2021 following the return of chairman Chen Xianbao). The company has been resilient in a tough operating environment amid the pandemic. We have seen it maintain decent growth over the short term, with a smooth price increase in its seeds segment and recovery in its monthly shipments, at a time when most food and beverage categories have been seeing softening demand.
For ChaCha, the seeds segment has been its cash cow, thanks to a dominant market share in China. Looking ahead, the nuts division is set to drive growth, supported by its larger total addressable market and positioning as daily consumption over leisure snacks. The company is following a "nuts plus" strategy to build up a diversified nut product portfolio, and it has started selling upgraded nut milk products online. ChaCha uses the online channel mainly as an extension of its offline distribution strength, as well as a platform for the company to engage with younger consumers and as part of the trial and testing of new products.
All this has increased our conviction in ChaCha's outlook. We see high-growth potential for ChaCha, as the highly fragmented industry presents a consolidation opportunity for a focused, vertically integrated player with strong brands.
On the ESG front, ChaCha has only a B rating from MSCI because its levels of disclosure are not high. We recently engaged with ChaCha to gain visibility on its risk-management policies in key ESG topics and to encourage the company to issue its first ESG report. We came away with a positive impression because ChaCha surprised us with its comprehensive and some best-in-class ESG practices in its daily operations, and its efforts to improve disclosure and business integration. The call enhanced our view on its ESG quality, and strengthened our confidence that ChaCha would be rated higher by MSCI after improving its disclosure. This would be a key area that we would look to work with ChaCha in future.
Prestige Estates
Expanding beyond the south: Having been a leading property developer in South India, Prestige Estates is looking to drive growth by diversifying from its base in Bangalore to other parts of India, such as Mumbai (with its Prestige Jardan Classic residential development pictured above) and New Delhi.
In which year did we first invest?
2019
Where is the head office?
Bangalore, Karnataka, India
What does the company do?
It is a leading South Indian developer with a good reputation for executing and completing projects, covering segments such as residential, commercial, retail, hospitality and property management.
Why do we like the investment?
We regard Prestige Estates as a quality developer with a strong track record of residential housing development and a growing investment property portfolio. Founded in 1986, the group has completed more than 270 projects through the years. It has continued to show decent growth in pre-sales, completions, launches and rental income. Having been a leading player in South India, Prestige is looking to drive growth by diversifying from its base in Bangalore to other parts of India, such as Mumbai and New Delhi. Its expansion strategy has been sensible, as it is opting to add new projects through tie-ups with developers in other regions, such as HDFC in affordable housing.
Prestige has more than 150 million sq ft of real estate space in its pipeline and around a quarter of this is in locations outside south India. Its most recent updates have highlighted a new asset creation cycle as the company is planning an aggressive scaling up across all its business segments over the next five years, including the rebuilding of its shopping mall pipeline. Capital discipline is key and we would monitor how the company executes on this, albeit operating cash flows have been strong and pre-sales momentum remains positive. There is also support from a substantial improvement in the company's liquidity position, following the conclusion of a spin-off of assets to Blackstone and a stake sale in one of its office blocks.
More broadly, the government's bold housing programme is taking shape with affordable homes being built across the country, while sector reform such as the Real Estate (Regulation and Development) Act (RERA) has triggered large-scale consolidation in the industry, with the strongest impact on the residential segment. We expect good quality developers with strong balance sheets and brands, such as Prestige Estates, likely to benefit the most. The consolidation theme is still happening with Prestige getting more deals from banks offloading their assets. We also see urbanisation and population growth, combined with increasing disposable income and the increase in nuclear families, as fuelling the overall demand for housing over the longer term.
With regard to the environment, social and governance (ESG) aspects, Prestige Estates has yet to have an MSCI ESG rating, but we are encouraged by the company's efforts towards a greener planet. The company is committed to designing and delivering assets with "green building" certification, while also incorporating water conservation and waste recycling. For instance, the company has installed rainwater harvesting mechanisms at all its project locations. Compared with conventional buildings, overall Prestige has conserved more than 30% of water in its portfolio of green buildings. Its freshwater consumption also fell by 19% in FY2022. The company also recycled 29% of its overall waste in FY2022. As for the social aspect, in terms of talent management, Prestige uses online learning resources to enhance the skills of its workforce, with a learning platform that has videos, articles, podcasts and TED Talks on various topics and interests. In addition, it has in place an employee well-being policy and Prevention of Sexual Harassment (POSH) policy that applies to all employees. We have also seen some progress in corporate governance. Independent representation on the board of directors is about 56%, while Prestige increased the number of female directors on the nine-member board to two in FY2020 from one previously.
Condensed Statement of Comprehensive Income (unaudited)
Six months ended | Six months ended | ||||||
31 January 2023 | 31 January 2022 | ||||||
Revenue | Capital | Total | Revenue | Capital | Total | ||
Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Gains on investments | - | 9,989 | 9,989 | - | 2,033 | 2,033 | |
Income | 2 | 8,162 | - | 8,162 | 6,023 | - | 6,023 |
Exchange losses | - | (181) | (181) | - | (60) | (60) | |
Investment management fees | (376) | (1,128) | (1,504) | (413) | (1,239) | (1,652) | |
Administrative expenses | (601) | (16) | (617) | (582) | (390) | (972) | |
Net return before finance costs and taxation | 7,185 | 8,664 | 15,849 | 5,028 | 344 | 5,372 | |
Finance costs | (252) | (755) | (1,007) | (252) | (755) | (1,007) | |
Net return before taxation | 6,933 | 7,909 | 14,842 | 4,776 | (411) | 4,365 | |
Taxation | 3 | (249) | (588) | (837) | (225) | (963) | (1,188) |
Net return after taxation | 6,684 | 7,321 | 14,005 | 4,551 | (1,374) | 3,177 | |
Return per share (pence)A | 4 | ||||||
Basic | 4.26 | 4.66 | 8.92 | 2.90 | (0.88) | 2.02 | |
Diluted | 3.99 | 4.44 | 8.43 | 2.71 | n/a | 1.98 | |
A Figures for 2022 have been restated to reflect the 5:1 sub-division as disclosed in note 8. | |||||||
The total column of this statement represents the profit and loss account of the Company. | |||||||
There is no other comprehensive income and therefore the net return after taxation is also the total comprehensive income for the period. | |||||||
All revenue and capital items in the above statement derive from continuing operations. | |||||||
The accompanying notes are an integral part of the condensed financial statements. | |||||||
Condensed Statement of Financial Position (unaudited)
As at | As at | ||
31 January 2023 | 31 July 2022 | ||
Notes | £'000 | £'000 | |
Fixed assets | |||
Investments at fair value through profit or loss | 539,448 | 524,841 | |
Current assets | |||
Debtors and prepayments | 1,842 | 1,464 | |
Cash and short-term deposits | 2,170 | 9,471 | |
4,012 | 10,935 | ||
Creditors: amounts falling due within one year | |||
Other creditors | (3,408) | (2,864) | |
Net current assets | 604 | 8,071 | |
Total assets less current liabilities | 540,052 | 532,912 | |
Non-current liabilities | |||
2.25% Convertible Unsecured Loan Stock 2025 | 7 | (36,059) | (35,940) |
3.05% Senior Unsecured Loan Note 2035 | 6 | (29,895) | (29,892) |
Deferred tax liability on Indian capital gains | (3,224) | (2,684) | |
(69,178) | (68,516) | ||
Net assets | 470,874 | 464,396 | |
Capital and reserves | |||
Called-up share capital | 8 | 10,435 | 10,435 |
Capital redemption reserve | 2,062 | 2,062 | |
Share premium account | 60,434 | 60,428 | |
Equity component of 2.25% Convertible Unsecured Loan Stock 2025 | 7 | 1,057 | 1,057 |
Capital reserve | 382,771 | 375,450 | |
Revenue reserve | 14,115 | 14,964 | |
Equity shareholders' funds | 470,874 | 464,396 | |
Net asset value per share (pence) | 9 | ||
Basic | 300.00 | 295.88 | |
Diluted | 299.15 | 295.25 | |
The accompanying notes are an integral part of the condensed financial statements. | |||
Condensed Statement of Changes in Equity (unaudited)
Six months ended 31 January 2023 | ||||||||
Capital | Share | Equity | ||||||
Share | redemption | premium | component | Capital | Revenue | |||
capital | reserve | account | CULS 2025 | reserve | reserve | Total | ||
Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 31 July 2022 | 10,435 | 2,062 | 60,428 | 1,057 | 375,450 | 14,964 | 464,396 | |
Conversion of 2.25% Convertible Unsecured Loan Stock 2025 | 8 | - | - | 6 | - | - | - | 6 |
Return after taxation | - | - | - | - | 7,321 | 6,684 | 14,005 | |
Dividends paid | 5 | - | - | - | - | - | (7,533) | (7,533) |
Balance at 31 January 2023 | 10,435 | 2,062 | 60,434 | 1,057 | 382,771 | 14,115 | 470,874 | |
Six months ended 31 January 2022 | ||||||||
Capital | Share | Equity | ||||||
Share | redemption | premium | component | Capital | Revenue | |||
capital | reserve | account | CULS 2025 | reserve | reserve | Total | ||
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
Balance at 31 July 2021 (*Restated) | 10,435 | 2,062 | 60,412 | 1,057 | 401,124 | 12,868 | 487,958 | |
Conversion of 2.25% Convertible Unsecured Loan Stock 2025 | 8 | - | - | 14 | - | - | - | 14 |
Return after taxation | - | - | - | - | (1,374) | 4,551 | 3,177 | |
Dividends paid | 5 | - | - | - | - | - | (5,022) | (5,022) |
Balance at 31 January 2022 | 10,435 | 2,062 | 60,426 | 1,057 | 399,750 | 12,397 | 486,127 | |
* The financial statements for the year ended 31 July 2021 were restated to reallocate costs of £250,0000 associated with the long term investment strategy review from revenue to capital. | ||||||||
The accompanying notes are an integral part of the condensed financial statements. | ||||||||
Condensed Statement of Cash Flows (unaudited)
Six months ended | Six months ended | |
31 January 2023 | 31 January 2022 | |
£'000 | £'000 | |
Cash flows from operating activities | ||
Return before finance costs and tax | 15,849 | 5,372 |
Adjustments for: | ||
Dividend income | (8,125) | (6,023) |
Interest income | (37) | - |
Dividends received | 8,260 | 6,599 |
Interest received | 37 | - |
Interest paid | (871) | (871) |
Gains on investments | (9,989) | (2,033) |
Foreign exchange movements | 181 | 60 |
Increase/(decrease) in prepayments | (8) | 11 |
Decrease in other debtors | 10 | 8 |
(Decrease)/increase in other creditors | (975) | 165 |
Stock dividends included in investment income | - | (157) |
Overseas withholding tax suffered | (297) | (355) |
Net cash inflow from operating activities | 4,035 | 2,776 |
Cash flows from investing activities | ||
Purchase of investments | (28,361) | (44,447) |
Sales of investments | 24,739 | 36,150 |
Net cash outflow from investing activities | (3,622) | (8,297) |
Cash flows from financing activities | ||
Equity dividends paid | (7,533) | (5,022) |
Net cash outflow from financing activities | (7,533) | (5,022) |
Decrease in cash and cash equivalents | (7,120) | (10,543) |
Analysis of changes in cash and short term deposits | ||
Opening balance | 9,471 | 14,577 |
Decrease in cash and short term deposits | (7,120) | (10,543) |
Foreign exchange movements | (181) | (60) |
Closing balance | 2,170 | 3,974 |
The accompanying notes are an integral part of the condensed financial statements. | ||
Notes to the Financial Statements
For the six months ended 31 January 2023
1. | Accounting policies |
Basis of accounting. The condensed financial statements have been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting) and with the Statement of Recommended Practice (SORP) for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts', issued in July 2022 (The AIC SORP). They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted. |
2. | Income | ||
Six months ended | Six months ended | ||
31 January 2023 | 31 January 2022 | ||
£'000 | £'000 | ||
Income from investments | |||
Overseas dividends | 7,914 | 5,697 | |
UK dividend income | 211 | 169 | |
Stock dividends | - | 157 | |
8,125 | 6,023 | ||
Other income | |||
Deposit interest | 37 | - | |
Total income | 8,162 | 6,023 |
3. | Taxation |
The taxation charge for the period allocated to revenue represents withholding tax suffered on overseas dividend income. The taxation charge for the period allocated to capital represents capital gains tax arising on the sale of Indian equity investments. |
4. | Return per share | ||
(*Restated) | |||
Six months ended | Six months ended | ||
31 January 2023 | 31 January 2022 | ||
p | p | ||
Basic | |||
Revenue return | 4.26 | 2.90 | |
Capital return | 4.66 | (0.88) | |
Total return | 8.92 | 2.02 | |
The figures above are based on the following: | |||
£'000 | £'000 | ||
Revenue return | 6,684 | 4,551 | |
Capital return | 7,321 | (1,374) | |
Total return | 14,005 | 3,177 | |
Weighted average number of shares in issueA | 156,954,206 | 156,949,665 | |
(*Restated) | |||
Six months ended | Six months ended | ||
31 January 2023 | 31 January 2022 | ||
DilutedB | p | p | |
Revenue return | 3.99 | 2.71 | |
Capital return | 4.44 | n/a | |
Total return | 8.43 | 1.98 | |
The figures above are based on the following: | |||
£'000 | £'000 | ||
Revenue return | 6,753 | 4,596 | |
Capital return | 7,529 | (1,237) | |
Total return | 14,282 | 3,359 | |
Number of dilutive shares | 12,505,379 | 12,509,930 | |
Diluted shares in issueAB | 169,459,585 | 169,459,595 | |
A Calculated excluding shares held in treasury. | |||
B The calculation of the diluted total, revenue and capital returns per Ordinary share is carried out in accordance with IAS 33, "Earnings per Share". For the purpose of calculating total, revenue and capital returns per Ordinary share, the number of Ordinary shares used is the weighted average number used in the basic calculation plus the number of Ordinary shares deemed to be issued for no consideration on exercise of all 2.25% Convertible Unsecured Loan Stock 2025 (CULS). The calculations indicate that the exercise of CULS would result in an increase in the weighted average number of Ordinary shares of 12,505,379 (31 January 2022 restated - 12,509,930) to 169,459,585 (31 January 2022 restated - 169,459,595) Ordinary shares. | |||
For the six months ended 31 January 2023 the assumed conversion for potential Ordinary shares was dilutive to the revenue return per Ordinary share (31 January 2022 - dilutive) and dilutive to the capital return per Ordinary share (31 January 2022 - non-dilutive). Where dilution occurs, the net returns are adjusted for interest charges and issue expenses relating to the CULS (31 January 2023 - £277,000; 31 January 2022 - £182,000). Total earnings for the period are tested for dilution. Once dilution has been determined individual revenue and capital earnings are adjusted. | |||
* The returns per share figures for January 2022 have been restated to reflect the 5:1 sub-division as disclosed in note 8. | |||
5. | Dividends | ||
Six months ended | Six months ended | ||
31 January 2023 | 31 January 2022 | ||
£'000 | £'000 | ||
Final dividend for 2021 - 3.0p | - | 4,708 | |
Special dividend for 2022 - 1.6p (2021 - 0.2p) | 2,511 | 314 | |
Interim dividend for 2022 - 1.6p | 2,511 | - | |
Interim dividend for 2023 - 1.6p | 2,511 | - | |
7,533 | 5,022 |
6. | Senior Unsecured Loan Note |
On 1 December 2020 the Company issued a £30,000,000 15 year Loan Note at a fixed rate of 3.05%. Interest is payable in half yearly instalments in June and December and the Loan Note is due to be redeemed at par on 1 December 2035. The issue costs of £118,000 will be amortised over the life of the loan note. The Company has complied with the Note Purchase Agreement that the ratio of total borrowings to adjusted net assets will not exceed 0.20 to 1.00, that the ratio of total borrowings to adjusted net liquid assets will not exceed 0.60 to 1.00, that net tangible assets will not be less than £225,000,000 and that the minimum number of listed assets will not be less than 40. | |
The fair value of the Senior Unsecured Loan Note as at 31 January 2023 was £27,353,000, the value being based on a comparable quoted debt security. |
7. | 2.25% Convertible Unsecured Loan Stock 2025 ("CULS") | |||
Liability | Equity | |||
Nominal | component | component | ||
£'000 | £'000 | £'000 | ||
Balance at beginning of period | 36,642 | 35,940 | 1,057 | |
Conversion of CULS into Ordinary shares | (6) | (6) | - | |
Notional interest on CULS | - | 77 | - | |
Amortisation of issue expenses | - | 48 | - | |
Balance at end of period | 36,636 | 36,059 | 1,057 | |
The 2.25% Convertible Unsecured Loan Stock 2025 ("CULS") can be converted at the election of holders into Ordinary shares during the months of May and November each year throughout its life until 31 May 2025 at a rate of 1 Ordinary share for every 293.0p nominal of CULS. Interest is paid on the CULS on 31 May and 30 November each year. | ||||
In the event of a winding-up of the Company the rights and claims of the Trustee and CULS holders would be subordinate to the claims of all creditors in respect of the Company's secured and unsecured borrowings, under the terms of the Trust Deed. | ||||
During the period ended 31 January 2023 the holders of £6,334 of 2.25% CULS 2025 exercised their right to convert their holdings into Ordinary shares. Following the receipt of the exercise instructions, the Company converted £6,334 (31 July 2022 - £15,343) nominal amount of CULS into 2,158 (31 July 2022 - 5,211) Ordinary shares. | ||||
As at 31 January 2023, there was £36,636,078 (31 July 2022 - £36,642,412) nominal amount of CULS in issue. | ||||
8. | Called-up share capital |
During the six months ended 31 January 2023 no Ordinary shares were bought back to be held in treasury at a total cost of £nil (31 January 2022 - nil). During the six months ended 31 January 2023 an additional 2,158 (31 July 2022 - 5,211) Ordinary shares were issued after 6,334 nominal amount of 2.25% Convertible Unsecured Loan Stock 2025 were converted at 293.0p each (31 July 2022 - £15,343). The total consideration received was £nil (31 July 2022 - £nil). At the end of the period there were 208,700,379 (31 July 2022 - 208,698,221) Ordinary shares in issue, of which 51,744,590 (31 July 2022 - 51,744,590) were held in treasury. | |
On 4 February 2022 there was a sub-division of each existing Ordinary 25p share into 5 Ordinary shares of 5p each. As a result the conversion price of the CULS decreased from 1,465p to 293p. | |
Subsequent to the period end, 120,000 Ordinary shares have been bought back to be held in treasury at a cost of £304,000. |
9. | Net asset value per share | ||
As at | As at | ||
31 January 2023 | 31 July 2022 | ||
Basic | |||
Net assets attributable | £470,874,000 | £464,396,000 | |
Number of shares in issueA | 156,955,789 | 156,953,631 | |
Net asset value per share | 300.00p | 295.88p | |
DilutedB | |||
Net assets attributable | £506,932,000 | £500,336,000 | |
Number of shares | 169,459,570 | 169,459,574 | |
Net asset value per share | 299.15p | 295.25p | |
A Excludes shares in issue held in treasury. | |||
B The diluted net asset value per Ordinary share has been calculated on the assumption that £36,636,078 (31 July 2022 - £36,642,412) 2.25% Convertible Unsecured Loan Stock 2025 ("CULS") are converted at 293.0p per share, giving a total of 169,459,570 (31 July 2022 - 169,459,574) Ordinary shares. Where dilution occurs, the net assets are adjusted for items relating to the CULS. | |||
Net asset value per share - debt converted. In accordance with the Company's understanding of the current methodology adopted by the AIC, convertible financial instruments are deemed to be 'in the money' if the cum income net asset value ("NAV") exceeds the conversion price of 293.0p per share. In such circumstances a net asset value is produced and disclosed assuming the convertible debt is fully converted. At 31 January 2023 the cum income NAV was 300.00p and thus the CULS were 'in the money' (31 July 2022 - same). | |||
10. | Transaction costs | ||
During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows: | |||
Six months ended | Six months ended | ||
31 January 2023 | 31 January 2022 | ||
£'000 | £'000 | ||
Purchases | 49 | 46 | |
Sales | 61 | 81 | |
110 | 127 | ||
11. | Analysis of changes in net debt | |||||
At | At | |||||
31 July | Currency | Cash | Non-cash | 31 January | ||
2022 | differences | flows | movements | 2023 | ||
£'000 | £'000 | £'000 | £'000 | £'000 | ||
Cash and short-term deposits | 9,471 | (181) | (7,120) | - | 2,170 | |
Debt due after more than one year | (68,516) | - | - | (662) | (69,178) | |
(59,045) | (181) | (7,120) | (662) | (67,008) | ||
At | At | |||||
31 July | Currency | Cash | Non-cash | 31 January | ||
2021 | differences | flows | movements | 2022 | ||
£'000 | £'000 | £'000 | £'000 | £'000 | ||
Cash and short-term deposits | 14,577 | (60) | (10,543) | - | 3,974 | |
Debt due within one year | (65,594) | - | - | (114) | (65,708) | |
(51,017) | (60) | (10,543) | (114) | (61,734) | ||
A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences from the above analysis. | ||||||
12. | Fair value hierarchy | ||||||
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. The fair value hierarchy has the following classifications: | |||||||
Level 1: unadjusted quoted prices 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 (ie developed using market data) for the asset or liability, either directly or indirectly. | |||||||
Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability. | |||||||
The financial assets measured at fair value in the Condensed Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows: | |||||||
Level 1 | Level 2 | Level 3 | Total | ||||
As at 31 January 2023 | £'000 | £'000 | £'000 | £'000 | |||
Financial assets at fair value through profit or loss | |||||||
Quoted equities | 524,641 | - | 11,186 | 535,827 | |||
Quoted preference shares | - | 3,263 | - | 3,263 | |||
Quoted warrants | - | 358 | - | 358 | |||
Net fair value | 524,641 | 3,621 | 11,186 | 539,448 | |||
Level 1 | Level 2 | Level 3 | Total | ||||
As at 31 July 2022 | £'000 | £'000 | £'000 | £'000 | |||
Financial assets at fair value through profit or loss | |||||||
Quoted equities | 511,540 | - | 9,664 | 521,204 | |||
Quoted preference shares | - | 3,203 | - | 3,203 | |||
Quoted warrants | - | 434 | - | 434 | |||
Net fair value | 511,540 | 3,637 | 9,664 | 524,841 | |||
Quoted equities. The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges. | |||||||
Quoted preference shares and quoted warrants. The fair value of the Company's investments in quoted preference shares and quoted warrants has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade as actively as Level 1 assets. | |||||||
Six months ended | Year ended | ||||||
31 January 2023 | 31 July 2022 | ||||||
Level 3 Financial assets at fair value through profit or loss | £'000 | £'000 | |||||
Opening fair value | 9,664 | - | |||||
Transfer from level 1 | - | 9,664 | |||||
Total gains or losses included in losses on investments in the Statement of Comprehensive Income: | |||||||
- assets held at the end of the year | 1,522 | - | |||||
Closing balance | 11,186 | 9,664 | |||||
13. | Related party disclosures |
Mr Young is a director of abrdn Asia Limited ("abrdn Asia"), which has been delegated, under an agreement with abrdn Fund Managers Limited ("aFML"), to provide management services to the Company. Mr Young is not a director of aFML. | |
Transactions with the Manager. The investment management fee is payable monthly in arrears based on the market capitalisation of the Company multiplied by the number of shares in issue (less those held in treasury) at the month end. With effect from 1 August 2021 the annual management fee has been charged at 0.85% for the first £250,000,000, 0.60% for the next £500,000,000 and 0.50% over £750,000,000 . During the period £1,504,000 (31 January 2022 - £1,652,000) of investment management fees were charged, with a balance of £990,000 (31 January 2022 - £586,000) being payable to aFML at the period end. Investment management fees are charged 25% to revenue and 75% to capital. | |
The Company also has a management agreement with aFML for the provision of both administration and promotional activities services. The administration fee is payable quarterly in advance and is adjusted annually to reflect the movement in the Retail Price Index. It is based on a current annual amount of £105,000 (31 January 2022 - £105,000). During the period £52,000 (31 January 2022 - £51,000) of fees were charged, with a balance of £52,000 (31 January 2022 - £26,000) payable to aFML at the period end. The promotional activities costs are based on a current annual amount of £219,000 (31 January 2022 - £219,000), payable quarterly in arrears. During the period £128,000 (31 January 2022 - £110,000) of fees were charged, with a balance of £128,000 (31 January 2022 - £73,000) being payable to aFML at the period end. |
14. | Segmental information |
The Company is engaged in a single segment of business, which is to invest in equity securities and debt instruments. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based on the Company as one segment. |
15. | Half-Yearly Report |
The financial information in this Report does not comprise statutory accounts within the meaning of Section 434 - 436 of the Companies Act 2006. The financial information for the year ended 31 July 2022 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified and contained no statement under Section 498 (2), (3) or (4) of the Companies Act 2006. The condensed interim financial statements have been prepared using the same accounting policies as the preceding annual financial statements. |
16. | This Half-Yearly Report was approved by the Board and authorised for issue on 30 March 2023. |
Alternative Performance Measures ("APMs")
Alternative Performance Measures ("APMs") are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies. | |||
Discount to net asset value per Ordinary share | |||
The difference between the share price and the net asset value per Ordinary share expressed as a percentage of the net asset value per Ordinary share. This has been presented on a diluted basis as the Convertible Unsecured Loan Stock ("CULS") is "in the money". | |||
31 January 2023 | 31 July 2022 | ||
NAV per Ordinary share (p) | a | 299.15 | 295.25 |
Share price (p) | b | 263.00 | 254.00 |
Discount | (a-b)/a | 12.1% | 14.0% |
Net gearing | |||
Net gearing measures the total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due from and to brokers at the period end as well as cash and short term deposits. | |||
31 January 2023 | 31 July 2022 | ||
Borrowings (£'000) | a | 65,954 | 65,832 |
Cash and short term deposits (£'000) | b | 2,170 | 9,471 |
Amounts due to brokers (£'000) | c | 1,511 | - |
Amounts due from brokers (£'000) | d | 797 | 280 |
Shareholders' funds (£'000) | e | 470,874 | 464,396 |
Net gearing | (a-b+c-d)/e | 13.7% | 12.1% |
Ongoing charges | |||
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average published daily net asset values with debt at fair value throughout the year. The ratio as at 31 January 2023 is based on forecast ongoing charges for the year ending 31 July 2023. | |||
31 January 2023 | 31 July 2022 | ||
Investment management fees (£'000) | 3,055 | 3,204 | |
Administrative expenses (£'000) | 1,192 | 1,561 | |
Less: non-recurring charges (£'000)A | (28) | (428) | |
Ongoing charges (£'000) | 4,219 | 4,337 | |
Average net assets (£'000) | 466,854 | 490,446 | |
Ongoing charges ratio | 0.90% | 0.88% | |
A Professional fees comprising corporate and legal fees incurred associated with proposals approved by shareholders on 27 January 2022. | |||
The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes finance costs and transaction charges. | |||
Total return | |||
NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. NAV and share price total returns are monitored against open-ended and closed-ended competitors, and the Reference Index, respectively. | |||
Share | |||
Six months ended 31 January 2023 | NAV | Price | |
Opening at 1 August 2022 | a | 295.25p | 254.00p |
Closing at 31 January 2023 | b | 299.15p | 263.00p |
Price movements | c=(b/a)-1 | 1.3% | 3.5% |
Dividend reinvestmentA | d | 1.7% | 2.0% |
Total return | c+d | +3.0% | +5.5% |
Share | |||
Year ended 31 July 2022 | NAV | Price | |
Opening at 1 August 2021 | a | 309.02p | 266.00p |
Closing at 31 July 2022 | b | 295.25p | 254.00p |
Price movements | c=(b/a)-1 | -4.5% | -4.5% |
Dividend reinvestmentA | d | 2.5% | 2.8% |
Total return | c+d | -2.0% | -1.7% |
NAV total return from inception (19 October 1995) to | 31 January 2023 | 31 July 2022 | |
Opening NAV | a | 20.00p | 20.00p |
Closing NAV | b | 299.15p | 295.25p |
Price movements | c=(b/a)-1 | 1395.8% | 1376.3% |
Dividend reinvestmentA | d | 799.9% | 739.3% |
Total return | c+d | +2195.7% | +2115.6% |
A NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend. | |||
Copies of the Company's Half Yearly Report for the six months ended 31 January 2023 will be posted to shareholders in April 2023 and will be available thereafter on the Company's website: asia-focus.co.uk *.
Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.
* Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.
abrdn Holdings Limited
Secretaries
30 March 2023