14 Sep 2023 07:00
abrdn Smaller Companies Income Trust plc
Half Yearly Financial Report for the six months to 30 June 2023
OBJECTIVE
The objective of the Company is to provide a high and growing dividend and capital growth from a portfolio invested principally in the ordinary shares of smaller UK companies and UK fixed income securities.
BENCHMARK
Numis Smaller Companies ex Investment Trusts Index - effective from 1 January 2020; FTSE Small Cap ex Investment Trusts Index (total return) - up to 31 December 2019
MANAGEMENT
The Company's alternative investment fund manager is abrdn Fund Managers Limited ("aFML" or "the Manager"), previously named Aberdeen Standard Fund Managers Limited, authorised and regulated by the Financial Conduct Authority. The Company's portfolio is managed on a day-to-day basis by abrdn Investments Limited, previously named Aberdeen Asset Managers Limited ("aIL" or "the Investment Manager") by way of a delegation agreement in place between aFML and aIL.
Performance Highlights
Performance Highlights
Net asset value total returnA | | Numis Smaller Companies ex Inv Trust Index |
Six months ended 30 June 2023 | | Six months ended 30 June 2023 |
-0.7% | | +1.4% |
Year ended 31 December 2022: -33.2% | | Year ended 31 December 2022: -17.9% |
| | |
Earnings per Ordinary share (revenue) | | Share price total returnA |
Six months ended 30 June 2023 | | Six months ended 30 June 2023 |
6.52p | | +8.1% |
Six months ended 30 June 2022: 6.10p | | Year ended 31 December 2022: -33.7% |
| | |
Discount to net asset valueA | | Net cash/(gearing)A |
As at 30 June 2023 | | As at 30 June 2023 |
9.3% | | 1.6% |
As at 31 December 2022: 16.3% | | As at 31 December 2022: -8.2% |
A Considered to be an Alternative Performance Measure. Further details can be found on pages 25 and 27 of the 2023 Interim Report. | ||
Performance (total return)
| Six months ended | 1 year ended | 3 years ended | 5 years ended |
| 30 June 2023 | 30 June 2023 | 30 June 2023 | 30 June 2023 |
Share priceA | +8.1% | +1.8% | +6.2% | +0.4% |
Net asset value per Ordinary shareA | -0.7% | -5.2% | -0.6% | -6.7% |
Composite benchmarkB | +1.4% | +4.4% | +29.5% | +4.2% |
A Considered to be an Alternative Performance Measure. Further details can be found on page 27 of the 2023 Interim Report. | ||||
B Comprises the Numis Smaller Companies (exc Inv Trusts) from 1 January 2020 and the FTSE SmallCap Index (exc Inv Trusts) up to 31 December 2019. | ||||
Source: aFML, Lipper & Morningstar. | ||||
Financial Calendar, Dividends and Highlights
Payment dates of quarterly dividends | January 2023April 2023July 2023October 2023 |
Financial year end | 31 December 2023 |
Extraordinary General Meetings | 20 November 2023 1 December 2023 |
Financial Highlights
| 30 June 2023 | 31 December 2022 | % change |
Shareholders' funds (£'000) | 61,397 | 63,520 | -3.3 |
Net asset value per Ordinary share (with debt at par value) | 277.69p | 287.29p | -3.3 |
Share price (mid-market) | 252.00p | 240.50p | +4.8 |
Discount to net asset value per Ordinary shareA | 9.3% | 16.3% | |
Net cash/(gearing)A | 1.6% | (8.2%) | |
Ongoing charges ratioA | 1.31% | 1.34% | |
A Considered to be an Alternative Performance Measure. Further details can be found on pages 25 and 26 of the 2023 Interim Report. | |||
Chair's Statement
Introduction
Since the year end, the Board has announced, on 13 February 2023, a review to consider the future of the Company (the "Strategic Review") and more recently, on 26 July 2023, the results of the Strategic Review: that the Board has agreed heads of terms with the board of Shires Income plc ("Shires") for a combination of the assets of the Company with the assets of Shires. If approved by the shareholders of each company, the combination of assets will be implemented by way of a scheme of reconstruction and members' voluntary winding up of the Company under section 110 of the Insolvency Act and the associated transfer of assets to Shires (the "Proposals").
The Board was very satisfied with the interest shown in the Strategic Review, with proposals received from more than a dozen candidates, and is now pleased to recommend the Proposals to shareholders of the Company.
We believe the Proposals will provide an attractive and potentially growing level of dividend and the potential for future capital growth, whilst also allowing you to retain some exposure to smaller companies overseen by the UK Equities team at abrdn. Shareholders can choose to rollover into Shires or receive cash for all or some of their shareholding, as calculated at the cut-off date, on materially improved terms to those which Shires proposed prior to the Strategic Review. The default option under the Scheme is for shareholders to receive new shares in Shires.
The Proposals will be subject to the approval of shareholders of the Company and Shires, as well as regulatory and tax approvals. Further details will be in the circular, which is expected to be published in the coming weeks.
The Board believes that the Proposals as a whole are in the best interests of the Company. In the event that the scheme of reconstruction does not go-ahead, then the Company will make an announcement to the London Stock Exchange and on the Company's website. We therefore encourage shareholders to check for such updates.
Performance
During what has been a very challenging economic environment for smaller companies, the Company's net asset value for the six month period to 30 June 2023 underperformed its benchmark, the Numis Smaller Companies ex Investment Companies Index, by 2.1%, returning -0.7% on a total return basis, versus a benchmark return of 1.4%.
Share price performance over the six month period was more positive, with a return of +8.1%.
Discount
The Company's discount to net asset value as at 30 June 2023 stood at 9.3%, compared with 16.3% at the end of December 2022. The narrowing of the discount reflects the positive market sentiment which followed the announcement of the Strategic Review. At the time of writing it is also encouraging to see that, following the announcement of the results of the Strategic Review, the Company's discount remains at these lower levels.
Company Gearing and Debt
In April 2023, the Company's £5 million fixed rate loan with the Royal Bank of Scotland International Limited, London Branch expired and, in light of the Strategic Review at that time, the Board decided not to renew it.
The Company's £5 million revolving credit facility remained in place and at 30 June 2023, £2 million was drawn down under this facility.
This resulted in a reduction in the Company's gearing level, which stood at 1.6% at the end of June 2023, compared with 8.2% at the end of December 2022.
After the period end, the Board took the decision to repay the Company's remaining facility in full and the facility was cancelled on 7 August 2023.
Dividend
As announced with the results of the Strategic Review, the Company expects to pay out the vast majority of its accumulated revenue reserves via a pre-liquidation dividend to all shareholders. More details will be announced separately to the London Stock Exchange via a regulatory news service announcement.
For the first and second quarters of 2023, the Board announced dividends of 2.60p each per Ordinary share (2022 - 2.40p each), an increase on last year's equivalent figures of 8.3%.
The Board has been pleased with the strength of the dividends generated from the Company's portfolio holdings, which reflects the quality focus of these companies. We have seen companies with robust business models, strong balance sheets and the ability to defend margins against a challenging market back drop. In recognition of this, the Board now declares a third interim dividend of 2.60p per share in respect of the year to 31 December 2023 payable on 27 October 2023 to shareholders on the register at close of business on 29 September 2023. The ex-dividend date is 28 September 2023.
More information on the Company's portfolio can be found in the Investment Manager's Review on pages 8 to 10 of the half yearly report for the period ended 30 June 2023 (the "2023 Interim Report").
General Meetings
The Board strongly encourages attendance at general meetings, where you are offered an opportunity to meet with the Board and representatives from the Manager face to face after the meeting.
Your Manager's presentation, which was delivered at the Annual General Meeting on 14 June 2023, is available to view on the Company's website, abrdnsmallercompaniesincome.co.uk.
The notice for the general meetings required to effect the Proposals will be circulated separately to all shareholders, together with the circular. As usual, shareholders are encouraged to lodge their proxy votes in advance of the meetings, irrespective of whether they are able to attend in person. You may also submit any questions in advance of the meetings by email to: smallercompaniesincome@abrdn.co.uk.
It is anticipated that the documentation in connection with the Proposals will be published during October, with a view to convening general meetings on 20 November 2023 and 1 December 2023 in order to complete the transaction before the end of the year.
Thus, if the necessary approvals are forthcoming, this will be my final statement as Chair of the Company. I would like to thank shareholders for their continuing support and all of the Company's service providers, including the Manager and the Investment Manager, particularly Abby Glennie and Amanda Yeaman, for all their hard work and stewardship of the Company's investments, through some very challenging times for the smaller companies sector. Whilst many of the challenges may remain, your Board believes that shareholders will continue to benefit from the Investment Manager's focus on high income and the potential upside presented under the merger Proposals.
Dagmar Kent KershawChair13 September 2023
Other Matters
Principal Risks and Uncertainties
There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has identified the principal risks and uncertainties facing the Company together with a description of the mitigating actions it has taken. These can be summarised under the following headings:
- Investment and Market
- Investment Portfolio Management
- Major Market Event, Climate Change or Geopolitical Development
- Income and Dividend
- Operational
- Gearing
Details of these risks are provided in detail on pages 23 to 25 of the Annual Report for the year ending 31 December 2022.
The Board monitors these principal risks closely and has a process to identify and assess emerging risks, such as climate change and geopolitical developments.
The Board is also aware of the elevated threat posed by climate change and continues to monitor, through the Investment Manager, the potential risk that the companies in the portfolio may fail to adapt to the requirements imposed by climate change.
In all other respects, the Company's principal risks have not changed materially since the year end, nor are they expected to change in the second half of the financial year ended 31 December 2023. Please note the material uncertainty with regard to the future of the Company outlined below.
Going Concern with Material Uncertainty
The Company's assets consist substantially of "Level One" securities in companies listed on recognised stock exchanges and in normal circumstances are realisable within a short timescale.
The Board has set gearing limits and regularly reviews actual exposures, cash flow projections and compliance with banking covenants. During the period and in light of the Strategic Review, the Board has fully repaid the £5 million variable rate loan facility using the proceeds of the sale of investments and has terminated the loan facility with effect from 7 August 2023. The £5 million fixed rate loan facility expired in April 2023 and was not renewed. Accordingly, the Company no longer has a credit facility in place.
In accordance with the Financial Reporting Council's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued in September 2014, taking account of the "Level One" assets (being realisable within a short timescale) and the fact that the Company no longer has any gearing, the Directors believe that adopting a going concern basis of accounting remains appropriate. The Company has adequate financial resources to continue in operational existence for the foreseeable future and at least twelve months from the date of approval of this Half Yearly Report.
Material Uncertainty The Board announced a Strategic Review on 13 February 2023, which concluded on 26 July 2023 with the announcement of the proposed combination of the assets of the Company with the assets of Shires Income plc ("Shires"), subject to shareholder approval, through a tax efficient scheme of reconstruction under section 110 of the Insolvency Act 1986 (the "Proposals"). More detail can be found in the Chair's Statement above and in the RNS announcement dated 26 July 2023.
The Board believes that the Proposals are in the best interests of shareholders as a whole and recommends that shareholders vote in favour of the resolutions required to effect the Proposals. This would result in the voluntary liquidation of the Company. Due to the requirement for the Proposals to receive approval from the shareholders of both the Company and Shires (including the approval of independent shareholders in the Company for a related party transaction) there remains material uncertainty as to the future of the Company.
However, should the Proposals not receive the necessary shareholder approvals, the Board believes that other attractive options remain viable for shareholders, which can be pursued. The Board also believes that the investment objective remains relevant and the Company remains in a position to generate attractive returns for all shareholders. Accordingly, the Board has prepared the financial statements in this Half Yearly Report on a going concern basis.
Directors' Responsibility Statement
The Directors are responsible for preparing the Half Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:
- the condensed set of Financial Statements has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting';
- the Interim Board Report includes a fair review of the information required by rule 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 financial year); and
- the Interim Board Report includes a fair review of the information required by 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could do so).
The Half Yearly Financial Report for the six months to 30 June 2023 comprises the Interim Board Report and a condensed set of financial statements.
For and on behalf of the BoardDagmar Kent Kershaw,Chair13 September 2023 Investment Manager's Review
Overview
UK equities made steady gains over the first six months of 2023 but underperformed major markets in Europe and North America. Persistently high inflation rates, further increases in interest rates and a gloomy economic outlook were detrimental to the UK market. Overall, the UK's small and medium sized companies underperformed their blue-chip counterparts over the period. While the FTSE 100 Index returned 3.1%, the domestically focused FTSE 250 Index and FTSE Small Cap Index both declined by 0.6%.
Global equity markets remained volatile throughout the period, with the collapse of US-based Silicon Valley Bank and a loss of confidence in Switzerland's Credit Suisse in March 2023, sparking fears about the resilience of the global financial system. The prospect of a US government debt default also impacted markets in May 2023 before Congress eventually approved an eleventh-hour increase of the debt ceiling. Lacklustre economic data from China in the second quarter of 2023 also led to a weakening of commodities prices, which weighed on the UK's large-cap energy and mining stocks.
In economic news, inflation in the UK remained stubbornly high over the period, with a surprise rise in February 2023 and gradual declines in the months that followed. The Bank of England ("BoE") increased the base rate in the first half of the year in its ongoing efforts to bring price rises under control. The 0.5% increase in interest rates surprised markets in June and raised fears that further rate rises could be implemented later in the year. Higher interest rates led to a surge in mortgage costs for homeowners and prompted a sharp decline in construction sector and housing market activity.
Performance
In the first six months of the year, UK markets have been volatile, macro-driven and have sold-off heavily. The dominating market narrative is one of out-of-control inflation in the UK that requires the BoE to increase interest rates. Against this backdrop our quality, growth and momentum process has been out of favour. A series of four above expectation inflation reports have made it clear to investors that UK inflation is differentiated from that of the Eurozone or the US; with a combination of labour market shortages and a lack of productivity growth conspiring to embed inflation in the UK economy more than overseas. This excessive pessimism about inflation and monetary policy in the UK has constrained UK equity markets and has been the driving narrative for the first half of the year.
Overall, with the exception of the month of March 2023, when the market moved towards quality names in the wake of the crisis in US regional banks and the demise of Credit Suisse, the economic environment has been challenging for the Company's portfolio. Accordingly, the Company has underperformed the Numis Smaller Companies (excluding Investment Trusts) Index (total return) benchmark by 2.1%.
Portfolio Activity
During the period, the Company initiated a position in Next Fifteen, the high matrix scoring technology and data driven growth consultancy firm, taking advantage of an attractive valuation entry point and consistent robust earnings delivery. While the uncertain macroeconomic backdrop does present risk, we believe the company has multiple growth levers and has left itself material room on margins compared to consensus expectations. The shares are trading on a 45% discount to its average valuation over the last ten years. Our view is that this economic risk is over-estimated by the market and the shares are undervalued.
The Company took a new position in the engineering consultant, Ricardo, after the strategy laid out by management several years ago has finally come to fruition. The company's new CEO has been key to driving this transformation and there is more for the company to do, particularly in terms of cross-selling, as well as organic growth or growth by acquisition. An increase in focus on environmental and energy consultancy is expected to help Ricardo approach its mid double-digit margin target over the next few years.
A new position in Alpha Group International ("Alpha") was initiated, after several years of strong execution, with the company having successfully addressed risks and processes in its foreign-exchange business and improved banking solutions operations. Alpha has a strong management team built around founder and CEO Morgan Tillbrook. We expect the company to deliver progress on earnings growth and margins in the second half of 2023, while continuing to reinvest in the business.
We sold the Company's position in Polar Capital, due to a decline in its matrix score. While we believe the business is well placed over the longer term, the industry backdrop is challenging and we haven't seen sufficient, sustained momentum returning in the short term.
We also sold out of Victrex in view of perceived risk to earnings, deteriorating end markets and lacklustre delivery. Moreover, we believe the special dividend paid by the company last year is unlikely to be repeated.
ESG Engagement
During the first half of the year, we met with management at Paragon Banking Group ("Paragon"), a business affected by environmental, social and governance ("ESG") matters on several levels. The most insightful part of the engagement was our discussion around sustainable finance and the company's capital allocation towards that area. This includes lending for rental properties with high energy-performance certificate ratings, finance for electric vehicles and development finance for energy efficient property developments. Paragon is in a powerful position to create change and also be involved in determining future regulation in the sector; however, we should not necessarily expect them to cut exposure to other areas.
From a social perspective, Paragon's professional landlord service and the wider influence it has in its buy-to-let business can help deliver a better outcome for tenants. The company's staff turnover levels are also attractive in comparison with its peers, and Paragon has made a very strong effort to support women in senior roles. Overall, we were pleased with the progress the business has already made and its general strategy. However, we would like to engage further on Paragon's exposure to the UN's Sustainable Development Goals through sustainable finance, as well as look in greater detail at its performance relative to its peers in new originations in lower-emission homes.
We engaged directly with Smart Metering Systems ("SMS") regarding its battery supply chain. We received clear evidence that SMS was taking its responsibilities around the sourcing and handling of batteries seriously, with regular independent audits of key suppliers. The company recognises the importance of lithium's role in enabling the transition to a low-carbon future and has clear policies to ensure suppliers' adherence to controls around the sourcing and management of the raw materials and related resources involved in battery production.
Fixed Income Portfolio
The first half of 2023 has been somewhat challenging for the UK bond market. Inflation continues to run significantly ahead of the BoE's 2% target and the Monetary Policy Committee has been forced to raise rates significantly more than the market expected at the start of the new year. Credit spreads were volatile in the first quarter on the back of the banking failures mentioned earlier in this report. However, they have been rallying back and the increase in government bond yields has more than offset the move.
The Company's holdings in the shorter end of the sterling market were impacted by the significant tightening of monetary policy. Five-year yields were about 50 basis points higher over the period leading to some losses from bond holdings. Bond issued by banks performed well relative to other areas of the market which contributed to the Company's performance. Thames Water's well documented financial and operational issues have no material impact on the holdings.
Outlook
The markets continue to be dominated by macro conditions, predominantly the pathway of inflation and interest rates, globally. The UK still stands out in terms of inflation, in that whilst many countries are battling with high inflation environments, the UK appears to be showing stickier inflation. Whilst energy prices have stepped back, we are seeing areas such as food inflation in the UK remain at high levels; and wage inflation as well as a strong labour market continue to support consumer spending. Without a recession, there remains the challenge of how inflation gets controlled; interest rates having already been increased significantly, but often taking some time to have an impact. China is the region where Covid-19 and the re-opening still remains uncertain, with other countries having returned to some 'normality'. The combination of these factors creates a very uncertain environment, which continues to drive market challenges.
We would also remind investors of the geographic exposures of the portfolio companies' revenues. At the time of writing, 51% of revenues are generated in the UK, with 49% overseas. This is similar to the exposure within the Company's benchmark. Many of the companies in the portfolio, as has been true through time and a result also of our investment process, have strong international growth exposure. Some are global leaders in what they do. One challenge in the upcoming period for overseas earners is the current strength of Sterling, which, if it continues, may cause some currency headwinds for these businesses.
In a recessionary environment, or continued low economic growth, we believe the market will move towards quality, resilience, reliability, visible revenue streams and strong balance sheets. We have seen these characteristics fundamentally demonstrated by the portfolio companies over this period, clear also through the dividend strength. In that economic situation, where growth becomes scarcer, the growth that remains tends to become more valuable.
In a recovery phase, small and mid-cap stocks tend to lead that market recovery, and the outlook for the asset class should be attractive. Small and mid-caps in the UK have still lagged large companies in the market moves since the start of 2022. In that environment, we believe the small-cap asset class can produce some attractive return potential, as markets recover and the disparity to large-cap narrows. Encouragingly, the Company outperformed in the sharp market recovery in Q4 2022, with quality growth companies performing well.
We continue to believe there are opportunities for quality growth businesses, which deliver well on earnings expectations, to outperform. The valuations currently being paid for growth companies in UK small mid-cap markets remain significantly below historic levels, whereas in other regions the market is now paying a ten-year median valuation for growth businesses again. As such, many quality UK growth companies currently trade on undemanding valuations.
Amanda Yeaman & Abby Glennieabrdn Investments Limited13 September 2023
Ten Largest Investments
As at 30 June 2023
Games Workshop | | 4imprint |
Global retailer of hobbyist products, selling through own retail stores, online, and through trade partners. Owner of the IP of Warhammer. | | Direct marketer of promotional products, with a focus on US. |
| | |
Bytes Technology | | Morgan Sindall |
UK based company that provides information technology (IT) software offerings and solutions, with a focus on cloud and security products. | | UK leading business in construction and regeneration work. |
| | |
Hollywood Bowl | | DiscoverIE |
Operator of bowling centres. | | International group of businesses that designs, manufactures and supplies highly differentiated components for electronic applications. |
| | |
Alpha Financial Markets Consulting | | Greggs |
Leading global consulting company to assist asset management, wealth management and insurance industries. | | UK based food to go retailer, specialising in fresh bakes, sandwiches, hot drinks and sweet treats. |
| | |
Telecom Plus | | Softcat |
Reseller of telecom and utilities service, under the Utility Warehouse brand. | | Value added technology reseller in UK. |
Portfolio - Equities
At 30 June 2023 | |||
| | Valuation | Total |
| | 2023 | portfolio |
Company | Sector Classification | £'000 | % |
Games Workshop | Leisure Goods | 2,263 | 3.7 |
4imprint | Media | 2,156 | 3.6 |
Bytes Technology | Software and Computer Services | 2,155 | 3.6 |
Morgan Sindall | Construction and Materials | 2,096 | 3.5 |
Hollywood Bowl | Travel & Leisure | 2,082 | 3.5 |
discoverIE | Technology Hardware & Equipment | 2,062 | 3.4 |
Alpha Financial Markets Consulting | Industrial Support Services | 1,888 | 3.1 |
Greggs | Personal Care, Drug and Grocery Stores | 1,724 | 2.9 |
Telecom Plus | Telecommunications Service Providers | 1,603 | 2.7 |
Softcat | Software & Computer Services | 1,579 | 2.6 |
Ten largest investments | | 19,608 | 32.6 |
AJ Bell | Investment Banking & Brokerage Services | 1,574 | 2.6 |
Tatton Asset Management | Investment Banking & Brokerage Services | 1,557 | 2.6 |
Sirius Real Estate | Real Estate Investment & Services | 1,466 | 2.4 |
Safestore | Real Estate Investment Trusts | 1,448 | 2.4 |
Intermediate Capital | Investment Banking & Brokerage Services | 1,405 | 2.3 |
Energean | Oil Gas & Coal | 1,398 | 2.3 |
Chesnara | Life Insurance | 1,379 | 2.3 |
Paragon Banking | Investment Banking & Brokerage Services | 1,351 | 2.3 |
Pets at Home | Retailers | 1,305 | 2.2 |
Assura | Real Estate Investment Trusts | 1,264 | 2.1 |
Twenty largest investments | | 33,755 | 56.1 |
Somero Enterprises | Industrial Engineering | 1,243 | 2.1 |
Smart Metering Systems | Industrial Support Services | 1,205 | 2.0 |
Midwich | Industrial Support Services | 1,126 | 1.9 |
Chemring | Aerospace & Defense | 1,054 | 1.8 |
Rathbone Brothers | Investment Banking & Brokerage Services | 1,044 | 1.7 |
Close Brothers | Banks | 1,042 | 1.7 |
Dunelm | Retailers | 1,026 | 1.7 |
Hilton Food | Food Producers | 1,026 | 1.7 |
Hill & Smith | Industrial Metals & Mining | 1,020 | 1.7 |
KeskoA | Personal Care, Drug & Grocery Stores | 985 | 1.6 |
Thirty largest investments | | 44,526 | 74.0 |
FDM | Industrial Support Services | 958 | 1.6 |
Severfield | Construction & Materials | 939 | 1.5 |
Robert Walters | Industrial Support Services | 919 | 1.5 |
Coats | General Industrials | 908 | 1.5 |
Serica Energy | Oil Gas & Coal | 899 | 1.5 |
Unite | Real Estate Investment Trusts | 886 | 1.5 |
Mortgage Advice Bureau | Finance & Credit Services | 885 | 1.5 |
Liontrust Asset Management | Investment Banking & Brokerage Services | 848 | 1.4 |
Forterra | Construction & Materials | 729 | 1.2 |
Gateley | Industrial Support Services | 693 | 1.2 |
Forty largest investments | | 53,190 | 88.4 |
XP Power | Electronic & Electrical Equipment | 654 | 1.1 |
MJ Gleeson | Household Goods & Home Construction | 643 | 1.1 |
Spirent Communications | Telecommunications Equipment | 606 | 1.0 |
FRP Advisory | Industrial Support Services | 598 | 1.0 |
Impax Asset Management | Investment Banking & Brokerage Services | 595 | 1.0 |
Next 15 Communications | Media | 592 | 1.0 |
Ricardo | Construction & Materials | 552 | 0.9 |
Marshalls | Construction & Materials | 517 | 0.8 |
Alpha Group | Industrial Support Services | 430 | 0.7 |
Total Equity Investments | | 58,377 | 97.0 |
A All investments are listed on the London Stock Exchange (sterling based), except where marked, which is listed on an overseas exchange (sterling based). | |||
Portfolio - Other Investments
At 30 June 2023 | ||
| Valuation | Total |
| 2023 | portfolio |
Company | £'000 | % |
Corporate BondsA | | |
NGG Finance 5.625% | 379 | 0.7 |
Barclays Bank 9% Perp | 311 | 0.5 |
HSBC Holdings 6.5% | 300 | 0.5 |
Northumbrian Water 1.625% | 256 | 0.4 |
Anglian Water Service Finance 4.5% | 191 | 0.3 |
Informa 3.125% | 180 | 0.3 |
NatWest Group 2.105% | 165 | 0.3 |
Total Corporate Bonds | 1,782 | 3.0 |
Total Investments | 60,159 | 100.0 |
A All investments are listed on the London Stock Exchange (Sterling based). | ||
Distribution of Assets and Liabilities
As at 30 June 2023 | |||||||
| Valuation at | | | | Valuation at | ||
| 31 December 2022 | Movement during the period | 30 June 2023 | ||||
| | | Purchases | Sales | Losses | | |
| £'000 | % | £'000 | £'000 | £'000 | £'000 | % |
Listed investments | | | | | | | |
Equity investments | 66,628 | 104.9 | 3,130 | (9,236) | (2,145) | 58,377 | 95.1 |
Corporate bonds | 2,104 | 3.3 | - | (300) | (22) | 1,782 | 2.9 |
| 68,732 | 108.2 | 3,130 | (9,536) | (2,167) | 60,159 | 98.0 |
Current assets | 2,127 | 3.3 | | | | 3,483 | 5.7 |
Other current liabilities | (340) | (0.5) | | | | (245) | (0.4) |
Loans | (6,999) | (11.0) | | | | (2,000) | (3.3) |
Net assets | 63,520 | 100.0 | | | | 61,397 | 100.0 |
Net asset value per Ordinary share | 287.29p | | | | | 277.69p | |
Condensed Statement of Comprehensive Income
| | Six months ended | Six months ended | Year ended | ||||||
| | 30 June 2023 | 30 June 2022 | 31 December 2022 | ||||||
| | (unaudited) | (unaudited) | (audited) | ||||||
| | Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total |
| Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
Losses on investments at fair value | | - | (2,167) | (2,167) | - | (30,167) | (30,167) | - | (34,164) | (34,164) |
| | | | | | | | | | |
Currency losses | | - | (3) | (3) | - | - | - | - | - | - |
Income | | | | | | | | | | |
Dividend income | 2 | 1,688 | - | 1,688 | 1,656 | - | 1,656 | 3,037 | - | 3,037 |
Interest income from investments | 2 | 41 | - | 41 | 46 | - | 46 | 90 | - | 90 |
Other income | 2 | 59 | - | 59 | 9 | - | 9 | 37 | - | 37 |
| | 1,788 | (2,170) | (382) | 1,711 | (30,167) | (28,456) | 3,164 | (34,164) | (31,000) |
| | | | | | | | | | |
Expenses | | | | | | | | | | |
Investment management fee | | (72) | (168) | (240) | (88) | (205) | (293) | (160) | (373) | (533) |
Other administrative expenses | | (226) | - | (226) | (226) | - | (226) | (435) | - | (435) |
Finance costs | | (33) | (77) | (110) | (33) | (77) | (110) | (62) | (145) | (207) |
Profit/(loss) before tax | | 1,457 | (2,415) | (958) | 1,364 | (30,449) | (29,085) | 2,507 | (34,682) | (32,175) |
| | | | | | | | | | |
Taxation | 3 | (15) | - | (15) | (15) | - | (15) | (21) | - | (21) |
Profit/(loss) attributable to equity holders | | 1,442 | (2,415) | (973) | 1,349 | (30,449) | (29,100) | 2,486 | (34,682) | (32,196) |
| | | | | | | | | | |
Return per Ordinary share (pence) | 5 | 6.52 | (10.92) | (4.40) | 6.10 | (137.72) | (131.62) | 11.24 | (156.86) | (145.62) |
| | | | | | | | | | |
The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations. | ||||||||||
The Company does not have any income or expense that is not included in profit for the period, and therefore the "Profit/(loss) attributable to equity holders" is also the "Total comprehensive income attributable to equity holders" as defined in IAS 1 (revised). | ||||||||||
The accompanying notes are an integral part of these condensed financial statements. | ||||||||||
Condensed Balance Sheet
| | As at | As at | As at |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | (unaudited) | (unaudited) | (audited) |
| Notes | £'000 | £'000 | £'000 |
Non-current assets | | | | |
Equities | | 58,377 | 68,363 | 66,628 |
Corporate Bonds | | 1,782 | 2,181 | 2,104 |
Securities at fair value | | 60,159 | 70,544 | 68,732 |
| | | | |
Current assets | | | | |
Cash and cash equivalents | | 2,945 | 3,741 | 1,786 |
Other receivables | | 538 | 651 | 341 |
| | 3,483 | 4,392 | 2,127 |
| | | | |
Current liabilities | | | | |
Bank loan | | (2,000) | (6,997) | (6,999) |
Trade and other payables | | (245) | (260) | (340) |
| | (2,245) | (7,257) | (7,339) |
Net current assets/(liabilities) | | 1,238 | (2,865) | (5,212) |
Total assets less current liabilities | | 61,397 | 67,679 | 63,520 |
| | | | |
Net assets | | 61,397 | 67,679 | 63,520 |
| | | | |
Share capital and reserves | | | | |
Called-up share capital | | 11,055 | 11,055 | 11,055 |
Share premium account | | 11,892 | 11,892 | 11,892 |
Capital redemption reserve | | 2,032 | 2,032 | 2,032 |
Capital reserve | | 32,564 | 39,212 | 34,979 |
Revenue reserve | | 3,854 | 3,488 | 3,562 |
Shareholders' funds | | 61,397 | 67,679 | 63,520 |
| | | | |
Net asset value per Ordinary share (pence) | 6 | 277.69 | 306.10 | 287.29 |
| | | | |
The accompanying notes are an integral part of these condensed financial statements. | ||||
Condensed Statement of Changes in Equity
Six months ended 30 June 2023 (unaudited) | ||||||
| | Share | Capital | | | |
| Share | premium | redemption | Capital | Revenue | |
| capital | account | reserve | reserve | reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
As at 31 December 2022 | 11,055 | 11,892 | 2,032 | 34,979 | 3,562 | 63,520 |
(Loss)/profit for the period | - | - | - | (2,415) | 1,442 | (973) |
Dividends paid in the period | - | - | - | - | (1,150) | (1,150) |
As at 30 June 2023 | 11,055 | 11,892 | 2,032 | 32,564 | 3,854 | 61,397 |
| | | | | | |
| | | | | | |
Six months ended 30 June 2022 (unaudited) | ||||||
| | Share | Capital | | | |
| Share | premium | redemption | Capital | Revenue | |
| capital | account | reserve | reserve | reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
As at 31 December 2021 | 11,055 | 11,892 | 2,032 | 69,661 | 3,200 | 97,840 |
(Loss)/profit for the period | - | - | - | (30,449) | 1,349 | (29,100) |
Dividends paid in the period | - | - | - | - | (1,061) | (1,061) |
As at 30 June 2022 | 11,055 | 11,892 | 2,032 | 39,212 | 3,488 | 67,679 |
| | | | | | |
| | | | | | |
Year ended 31 December 2022 (audited) | ||||||
| | Share | Capital | | | |
| Share | premium | redemption | Capital | Revenue | |
| capital | account | reserve | reserve | reserve | Total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
As at 31 December 2021 | 11,055 | 11,892 | 2,032 | 69,661 | 3,200 | 97,840 |
(Loss)/profit for the period | - | - | - | (34,682) | 2,486 | (32,196) |
Dividends paid in the year | - | - | - | - | (2,124) | (2,124) |
As at 31 December 2022 | 11,055 | 11,892 | 2,032 | 34,979 | 3,562 | 63,520 |
| | | | | | |
The accompanying notes are an integral part of these condensed financial statements. | ||||||
Condensed Statement of Cash Flows
| Six months ended | Six months ended | Year ended |
| 30 June 2023 | 30 June 2022 | 31 December 2022 |
| (unaudited) | (unaudited) | (audited) |
| £'000 | £'000 | £'000 |
Cash flows from operating activities | | | |
Dividend income from investments received | 1,511 | 1,369 | 3,071 |
Interest income from investments received | 64 | 57 | 102 |
Interest from AAA-rated money market funds received | 47 | 5 | 29 |
Bank interest received | 7 | 1 | 3 |
Investment management fee paid | (327) | (322) | (447) |
Other cash expenses | (217) | (252) | (476) |
Cash generated from operations | 1,085 | 858 | 2,282 |
| | | |
Interest paid | (134) | (122) | (213) |
Overseas taxation suffered | (6) | (9) | (33) |
Net cash inflows from operating activities | 945 | 727 | 2,036 |
| | | |
Cash flows from investing activities | | | |
Purchases of investments | (3,125) | (9,319) | (21,738) |
Sales of investments | 9,492 | 10,802 | 21,020 |
Net cash inflows/(outflows) from investing activities | 6,367 | 1,483 | (718) |
| | | |
Cash flows from financing activities | | | |
Loan repaid | (5,000) | - | - |
Equity dividends paid | (1,150) | (1,061) | (2,124) |
Net cash outflow from financing activities | (6,150) | (1,061) | (2,124) |
Net increase/(decrease) in cash and cash equivalents | 1,162 | 1,149 | (806) |
| | | |
Analysis of changes in cash and cash equivalents during the period | | | |
Opening balance | 1,786 | 2,592 | 2,592 |
Currency loss | (3) | - | - |
Increase/(decrease) in cash and cash equivalents as above | 1,162 | 1,149 | (806) |
Cash and cash equivalents at the end of the period | 2,945 | 3,741 | 1,786 |
| | | |
The accompanying notes are an integral part of these condensed financial statements. | |||
Notes to the Financial Statements
For the year ended 30 June 2023
1. | Accounting policies |
| Basis of preparation. The condensed financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') 34 - 'Interim Financial Reporting', as adopted by the International Accounting Standards Board ('IASB'), and interpretations issued by the International Financial Reporting Interpretations Committee ('IFRIC') of the IASB. They have been prepared using the same accounting policies applied for the year ended 31 December 2022 financial statements, which received an unqualified audit report. |
| Going concern with Material Uncertainty. In accordance with the Financial Reporting Council's guidance on 'Going Concern and Liquidity Risk' the Directors have undertaken a review of the Company's assets which principally consist of equity shares in companies listed on the London Stock Exchange and may be realised within a short timescale to meet outstanding liabilities. |
| The Board announced a Strategic Review on 13 February 2023, which concluded on 26 July 2023 with the announcement of the proposed combination of the assets of the Company with the assets of Shires Income plc ("Shires"), subject to shareholder approval, through a tax efficient scheme of reconstruction under section 110 of the Insolvency Act 1986 (the "Proposals"). More detail can be found in the Chair's Statement above and in the RNS announcement dated 26 July 2023. |
| The Board believes that the Proposals are in the best interests of shareholders as a whole and recommends that shareholders vote in favour of the resolutions required to effect the Proposals. This would result in the voluntary liquidation of the Company. Due to the requirement for the Proposals to receive approval from the shareholders of both the Company and Shires (including the approval of independent shareholders in the Company for a related party transaction) there remains material uncertainty as to the future of the Company. |
| However, should the Proposals not receive the necessary shareholder approvals, the Board believes that other attractive options remain viable for shareholders, which can be pursued. The Board also believes that the investment objective remains relevant and the Company remains in a position to generate attractive returns for all shareholders. Accordingly, the Board has prepared the financial statements in this Half Yearly Report on a going concern basis. |
2. | Income | | | |
| | Six months ended | Six months ended | Year ended |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | £'000 | £'000 | £'000 |
| Income from investments | | | |
| Dividend income from UK equity securities | 1,431 | 1,269 | 2,367 |
| Dividend income from overseas equity securities | 149 | 260 | 462 |
| Property income distributions | 108 | 127 | 208 |
| | 1,688 | 1,656 | 3,037 |
| Interest income from investments | 41 | 46 | 90 |
| | 1,729 | 1,702 | 3,127 |
| Other income | | | |
| Bank interest | 7 | 1 | 4 |
| Interest from AAA-rated money market funds | 52 | 8 | 33 |
| Total revenue income | 1,788 | 1,711 | 3,164 |
3. | Taxation |
| The tax expense reflected in the Condensed Statement of Comprehensive Income represents irrecoverable withholding tax suffered on overseas dividend income. |
4. | Dividends | | | |
| The following table shows the revenue for each period less the dividends declared in respect of the financial period to which they relate. | |||
| | | | |
| | Six months ended | Six months ended | Year ended |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | £'000 | £'000 | £'000 |
| Profit attributable | 1,442 | 1,349 | 2,486 |
| Dividends declared | (1,150)A | (1,061)B | (2,168)C |
| | 292 | 288 | 318 |
| A Dividends declared relate to the first two interim dividends (both 2.60p each) declared in respect of the financial year 2023. | |||
| B Dividends declared relate to the first two interim dividends (both 2.40p each) declared in respect of the financial year 2022. | |||
| C Dividends declared relate to the three interim dividends (2.40p each) and final interim dividend (2.60p) declared in respect of the financial year 2022 totalling 9.80p. | |||
5. | Return per Ordinary share | | | |
| | Six months ended | Six months ended | Year ended |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | p | p | p |
| Revenue return | 6.52 | 6.10 | 11.24 |
| Capital return | (10.92) | (137.72) | (156.86) |
| Net return | (4.40) | (131.62) | (145.62) |
| | | | |
| The returns per Ordinary share are based on the following figures: | |||
| | | | |
| | Six months ended | Six months ended | Year ended |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | £'000 | £'000 | £'000 |
| Revenue return | 1,442 | 1,349 | 2,486 |
| Capital return | (2,415) | (30,449) | (34,682) |
| Net return | (973) | (29,100) | (32,196) |
| | | | |
| Weighted average number of Ordinary shares in issue | 22,109,765 | 22,109,765 | 22,109,765 |
6. | Net asset value per Ordinary share | | | |
| The net asset value per Ordinary share and the net assets attributable to Ordinary shareholders at the period end calculated in accordance with the Articles of Association were as follows: | |||
| | | | |
| | As at | As at | As at |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | (unaudited) | (unaudited) | (audited) |
| Attributable net assets (£'000) | 61,397 | 67,679 | 63,520 |
| Number of Ordinary shares in issue | 22,109,765 | 22,109,765 | 22,109,765 |
| Net asset value per Ordinary share (p) | 277.69 | 306.10 | 287.29 |
7. | Transaction costs | | | |
| During the period expenses were incurred in acquiring or disposing of investments classified as fair value. These have been expensed through capital and are included within losses on investments at fair value in the Condensed Statement of Comprehensive Income. The total costs were as follows: | |||
| | | | |
| | Six months ended | Six months ended | Year ended |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | £'000 | £'000 | £'000 |
| Purchases | 6 | 32 | 81 |
| Sales | 5 | 9 | 18 |
| | 11 | 41 | 99 |
8. | Analysis of changes in financing liabilities during the period | |||
| The following table shows the movements during the period of financing liabilities in the Condensed Balance Sheet: | |||
| | | | |
| | Six months ended | Six months ended | Year ended |
| | 30 June 2023 | 30 June 2022 | 31 December 2022 |
| | £'000 | £'000 | £'000 |
| Opening balance | 6,999 | 6,995 | 6,995 |
| Amortisation of arrangement costs | 1 | 2 | 4 |
| Repayment of loan | (5,000) | - | - |
| Closing balance | 2,000 | 6,997 | 6,999 |
9. | Fair value hierarchy | |||||
| Under IFRS 13 'Fair Value Measurement' an entity is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making measurements. The fair value hierarchy has the following levels: | |||||
| Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; | |||||
| Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and | |||||
| Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). | |||||
| The financial assets measured at fair value in the Condensed Balance Sheet are grouped into the fair value hierarchy as follows: | |||||
| | | | | | |
| | | Level 1 | Level 2 | Level 3 | Total |
| At 30 June 2023 (unaudited) | Note | £'000 | £'000 | £'000 | £'000 |
| Financial assets at fair value through profit or loss | | | | | |
| Quoted equities | a) | 58,377 | - | - | 58,377 |
| Quoted bonds | b) | - | 1,782 | - | 1,782 |
| | | 58,377 | 1,782 | - | 60,159 |
| | | | | | |
| | | Level 1 | Level 2 | Level 3 | Total |
| At 30 June 2022 (unaudited) | Note | £'000 | £'000 | £'000 | £'000 |
| Financial assets at fair value through profit or loss | | | | | |
| Quoted equities | a) | 68,363 | - | - | 68,363 |
| Quoted bonds | b) | - | 2,181 | - | 2,181 |
| | | 68,363 | 2,181 | - | 70,544 |
| | | | | | |
| | | Level 1 | Level 2 | Level 3 | Total |
| At 31 December 2022 (audited) | Note | £'000 | £'000 | £'000 | £'000 |
| Financial assets at fair value through profit or loss | | | | | |
| Quoted equities | a) | 66,628 | - | - | 66,628 |
| Quoted bonds | b) | - | 2,104 | - | 2,104 |
| | | 66,628 | 2,104 | - | 68,732 |
| | | | | | |
| a) 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. | |||||
| b) Quoted bonds. The fair value of the Company's investments in quoted bonds has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade in active markets. | |||||
| There have been no transfers of assets between levels of the fair value hierarchy during any of the periods covered in this Report. | |||||
10. | Related party transactions |
| There were no related party transactions during the period. |
11. | Transactions with the Manager |
| The Company has agreements with abrdn Fund Managers Limited ("aFML" or "the Manager") for the provision of investment management, secretarial, accounting and administration and promotional activities. |
| The management fee is calculated at an annual rate of 0.75% of the net assets of the Company, calculated and paid monthly. During the period £240,000 (30 June 2022 - £293,000; 31 December 2022 - £533,000) of investment management fees were payable to the Manager, with a balance of £117,000 (30 June 2022 -£89,000; 31 December 2022 - £204,000) being payable to aFML at the period end. During the period and at the period end, the Company held £2,533,000 (30 June 2022 - £3,498,000; 31 December 2022 - £1,450,000) in Aberdeen Standard Liquidity Fund (Lux) - Sterling Fund which is managed by abrdn Investments Luxembourg S.A. The Company pays a management fee on the value of these holdings but no fee is chargeable at the underlying fund level. The management fee is chargeable 30% to revenue and 70% to capital. |
| During the period expenses of £28,000 (30 June 2022 - £28,000; 31 December 2022 - £56,000) were payable to the Manager in connection with the promotion of the Company. The balance outstanding at the period end was £14,000 (30 June 2022 - £14,000; 31 December 2022 - £14,000). |
12. | 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. |
13. | Publication of non-statutory accounts |
| The financial information contained in this Half Yearly Financial Report does not constitute statutory accounts as defined in Sections 434 - 436 of the Companies Act 2006. The financial information for the six months ended 30 June 2023 and 30 June 2022 has not been audited. |
| The information for the year ended 31 December 2022 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006. |
14. | This Half Yearly Financial Report was approved by the Board on 13 September 2023. |
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. Investors may not get back the amount they originally invested
For further information please contact:-
Holly Kidd
abrdn Holdings Limited
Company Secretary
Tel: 0131 372 2200
Alternative Performance Measures
Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes IFRS 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 amount by which the market price per Ordinary share is lower than the net asset value per Ordinary share, expressed as a percentage of the net asset value per Ordinary share. | |||
| | | |
| | 30 June 2023 | 31 December 2022 |
NAV per Ordinary share (p) | a | 277.69 | 287.29 |
Share price (p) | b | 252.00 | 240.50 |
Discount | (b-a)/a | 9.3% | 16.3% |
| | | |
Net cash/(gearing) | |||
Net cash/(gearing) measures 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 to and from brokers at the period end as well as cash. | |||
| | | |
| | 30 June 2023 | 31 December 2022 |
Borrowings (£'000) | a | 2,000 | 6,999 |
Cash (£'000) | b | 412 | 336 |
Investments in AAA-rated money market funds | c | 2,533 | 1,450 |
Amounts due to brokers (£'000) | d | 5 | - |
Amounts due from brokers (£'000) | e | 44 | - |
Shareholders' funds (£'000) | f | 61,397 | 63,520 |
Net cash/(gearing) | (a-b-c+d-e)/f | 1.6% | -8.2% |
| | | |
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 for 30 June 2023 is based on forecast ongoing charges for the year ending 31 December 2022. | |||
| | | |
| | 30 June 2023 | 31 December 2022 |
Investment management fees (£'000) | | 470 | 533 |
Administrative expenses (£'000) | | 429 | 435 |
Less: non-recurring chargesA (£'000) | | - | (30) |
Ongoing charges (£'000) | | 899 | 938 |
Average net assets (£'000) | | 62,551 | 71,863 |
Ongoing charges ratio (excluding look-through costs) | | 1.44% | 1.31% |
Look-through costsB | | 0.02% | 0.03% |
Ongoing charges ratio (including look-through costs) | | 1.46% | 1.34% |
A Professional services comprising new director recruitment costs and legal fees considered unlikely to recur. | |||
B Calculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis. | |||
The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes amongst other things, financing and transaction costs. | |||
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. Share price and NAV total returns are monitored against open-ended and closed-ended competitors, and the benchmark, respectively. | |||
| | | |
| | | Share |
Six months ended 30 June 2023 | | NAV | Price |
Opening at 1 January 2023 | a | 287.3p | 240.5p |
Closing at 30 June 2023 | b | 277.7p | 252.0p |
Price movements | c=(b/a)-1 | -3.3% | 4.8% |
Dividend reinvestmentA | d | 2.6% | 3.3% |
Total return | c+d | -0.7% | +8.1% |
| | | |
| | | Share |
Year ended 31 December 2022 | | NAV | Price |
Opening at 1 January 2022 | a | 442.6p | 375.0p |
Closing at 31 December 2022 | b | 287.3p | 240.5p |
Price movements | c=(b/a)-1 | -35.1% | -35.9% |
Dividend reinvestmentA | d | 1.9% | 2.2% |
Total return | c+d | -33.2% | -33.7% |
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 dividend in the share price of the Company on the date on which that dividend goes ex-dividend. | |||