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Schroder Asian Total Return is an Investment Trust

To provide a high rate of total return primarily through investment in equity and equity related securities in Asia Pacific Region (excluding Japan).

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Half-year Report

7 Sep 2018 07:00

RNS Number : 0385A
Schroder Asian Total Retn InvCo PLC
07 September 2018
 

Half Year Report

 

Schroder Asian Total Return Investment Company plc hereby submits its Half Year Report for the period ended 30 June 2018 as required by the UK Listing Authority's Disclosure Guidance and Transparency Rule 4.2.

 

The Half Year Report is also being published in hard copy format and an electronic copy of that document will shortly be available to download from the Company's webpage. Please click on the following link to view the document:

 

http://www.rns-pdf.londonstockexchange.com/rns/0385A_1-2018-9-6.pdf

 

The Company has submitted a pdf of the hard copy format of its Half Year Report to the National Storage Mechanism and it will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

 

Enquiries:

 

Benjamin Hanley

Schroder Investment Management Limited Tel: 020 7658 3847

 

7 September 2018

 

 

Half Year Report and Accounts for the six months ended 30 June 2018

 

Interim Management Report -

 

Chairman's Statement

 

Performance

 

During the six months to 30 June 2018 the Company consolidated the excellent returns of the prior year and produced a net asset value ("NAV") total return of +0.3%, outperforming the Reference Index which produced a total return of -1.8% and the peer group average NAV total return of -0.8%.

 

Further details on performance may be found in the Portfolio Managers' Review.

 

Promotion and share issuance

 

The Board remains focused on promotion of the Company's shares based on the distinctive characteristics of the Company's strategy and the differentiation of the opportunities offered by the Company from those offered by the peer group. Demand for the Company's shares from new and existing investors has continued, with the remainder of the shares held in treasury being issued in April 2018 and the issue of new shares in the Company under a block listing since that time. During the period, a total of 6,113,104 shares were issued at a premium to NAV.

 

In the six months to 30 June 2018, the share price premium to NAV increased from 2.0% at the beginning of the period to 2.3% at 30 June 2018. The average premium during the period was 2.7%, compared with an average discount of 7.3% for the peer group.

 

Gearing and the use of derivatives

 

The Board has agreed a disciplined framework for gearing, based on a number of valuation indicators, and it will not exceed 30% of NAV.

 

The portfolio managers continued to use gearing during the period and at 30 June 2018 it stood at 4.1%. The maximum gearing level during the period was 5.9%.

 

Board succession and refreshment

 

As discussed in my annual statement, the Board has continued its ongoing refreshment and following the appointment of Sarah MacAulay and the retirement of Christopher Keljik and Alexandra Mackesy, the Board will consider its succession planning and will look to appoint a further Director in the coming year.

 

Outlook

 

The outlook for the second half of the year is clouded. Clearly, US trade policy and a soaring dollar has soured sentiment towards emerging economies as a whole and Asia is not immune. Given the volatility of US decision making, it is unclear whether the trade war will end soon or be an ongoing backdrop for investors. This gives grounds for some short-term caution. However, valuations are now more attractive generally given the market weakness and our managers are finding opportunities to add selectively to holdings at attractive long-term valuations although continuing to hedge against further market weakness. It is one of the attractions of the Company's investment process that we are able to pursue such a strategy.

 

David Brief

Chairman

7 September 2018

 

Portfolio Managers' Review

 

Performance analysis

 

Asian equities started the year strongly but as worries over protectionism took centre stage investor sentiment soured and this led to a significant sell-off towards the end of the first half. The ongoing efforts of the Chinese government to reduce the amount of credit in the economy and rein in unregulated financing activities also fuelled concerns that growth momentum in China could decelerate. The Philippine and Indonesian currencies, equity and bond markets were notably weak, as their economies were perceived to be relatively more vulnerable to rising US interest rates due to their current account and government deficits.

 

Against this backdrop, the portfolio held up reasonably well and ended the first half of the year flat in sterling terms, compared to the reference index which was down by 1.8%. The biggest positive contributions came from healthcare holdings in China and Australia. In China, Wuxi Biologics, a leading drug research and development company, performed well on the back of strong sales growth and the improving policy environment for the Chinese healthcare sector. The company also has a strong order backlog to support its high profit growth in the medium term. Resmed and CSL in Australia also saw strong share price performance buoyed by robust sales and upbeat management guidance.

 

Financials and Real Estate are two other areas that added to performance. The top performing stock was mid-cap Aeon Thana Sinsap, provider of retail financial services in Thailand. Its stock surged following solid Q4 results driven by robust loan growth momentum. Indian private sector bank HDFC Bank also posted strong share price returns as it benefits from the long-term secular growth of the sector and continues to capture market share from public sector banks which remain shackled by legacy bad debts and poor systems and practices. In Hong Kong, commercial landlord Swire Properties rallied following the announcement of a potential disposal of two office towers at premium valuations. We remain structurally positive on this segment given continued recovery in retail sales and ongoing tight supply-demand conditions of commercial properties in Hong Kong.

 

Performance for technology stocks was mixed, with strong gains in Alibaba and Cognizant Technology, an Indian IT services provider, offsetting weakness in the hardware space including Hon Hai Precision Industries, Samsung Electronics and Venture amid weak market sentiment and profit-taking in the broader technology space. Rising trade tensions and in particular the escalation in rhetoric between US and China in recent months also weighed on performance of export-related names like Nexteer Automotive, Johnson Electric Holdings and Techtronic Industries.

 

The portfolio was slightly geared as at the end of June. The capital protection, through index put options and index futures, had a relatively disappointing performance, with losses in Taiwan as the market rose.

 

Outlook

 

Valuations in Asia, after looking a little frothy at the end of 2017, appear more reasonable after recent market falls, and are now back in line with the long-term average. The end of quantitative easing (by the US Federal Reserve at least) and a genuine effort in China to rein in unregulated financing activities look to have heralded a change in market sentiment in Asia. With rising US interest rates and the US dollar appreciating, we now have a markedly different investment environment compared to the last 18 months, putting us in a clearly different stage of the market cycle.

 

In the short-term there are risks due to slowing economic momentum and elevated measures of financial distress. Looking longer-term, many individual markets, with the exception of Taiwan, may offer opportunities as their valuations are below their historic averages. Given this, we have hedged market risks in Taiwan and continue to hold some index put option positions in the portfolio.

 

In terms of where we see the best value across the region in absolute terms and versus history, banks, technology, insurance and capital goods rank best, whereas consumer staples, healthcare and retail look very expensive, particularly considering some of the headwinds faced by consumer and retail names in Asia.

 

After a recent comprehensive company visit programme in Taiwan, we returned more cautious on both the outlook for the technology sector and more domestically-exposed companies. Many technology companies will likely struggle to meet the bullish expectations for earnings as global handset and auto shipments, already not showing much growth before the Trump trade rhetoric, continue to slow. In addition rising competition from the best Chinese technology and capital goods names is likely to mean revenues and margins for many Taiwanese companies come under pressure. This resulted in us trimming the portfolio's Taiwanese technology and industrial exposure, and rotating into some Chinese insurance and Hong Kong commercial property names. In addition, following the recent falls in markets, we are now looking again at opportunities in Indonesia and the Philippines where valuations are back at more reasonable levels.

 

In China, while we are likely to see more volatility as the government continues to tackle the excesses in the shadow banking system, we view this policy as good news long-term assuming the government can continue on the current path without creating mass panic and deposit flight. Near-term we see further pain to come and inevitably the economy will slow as credit creation slows. But given the closed capital account, the current account surplus, and the fact the government controls most of the major lenders and borrowers, we are optimistic the mess can be dealt with over time and, whilst painful for many, without a significant financial crisis.

 

Therefore, if the slowing economy and the inevitable jump in bad debts causes further sharp falls in Chinese stock markets, we would be looking at this as a trigger to add to our favoured stocks with strong exposure to structural trends in China. First among these is Chinese rebalancing - or the rise of the Chinese consumer. Finally, after 25 years of waiting, we are seeing Chinese consumer spending becoming the key driver of GDP growth. As the chart below shows, there is plenty of scope for this to rise, particularly when compared with the US consumer. With the investment and export sectors slowing we expect consumer spending as a percentage of GDP to rise quite quickly from here.

 

Overall, after recent falls, we feel Asian share prices are fairly valued and offer reasonable upside potential, assuming we avoid a full-blown trade war or emerging market debt crisis. However, in the very near-term financial risks are likely to remain elevated as US rates rise and Chinese liquidity tightening continues. We are now happy to cautiously add to a few favoured Hong Kong/China names, and to relook at companies in the Philippines and Indonesia where falls have been large, but we are not inclined to take off our puts or add aggressively unless we see further falls over the coming months. We believe the interim results season is likely to see more disappointments than positive surprises. If this leads to further falls, we may then look to more proactively raise the portfolio's market exposure.

 

Robin Parbrook, King Fuei Lee

7 September 2018

 

These stocks are for illustrative purposes only, and should not be taken as a recommendation to buy or sell.

 

Principal risks and uncertainties

 

The principal risks and uncertainties with the Company's business fall into the following categories: strategic risk; investment management risk; custody risk; financial and currency risk; gearing and leverage risk; accounting, legal and regulatory risk; and service provider risk. A detailed explanation of the risks and uncertainties in each of these categories can be found on pages 14 and 15 of the Company's published Annual Report and Accounts for the year ended 31 December 2017.

 

These risks and uncertainties have not materially changed during the six months ended 30 June 2018.

 

Going concern

 

Having assessed the principal risks and uncertainties, and the other matters discussed in connection with the viability statement as set out on page 16 of the published Annual Report and Accounts for the year ended 31 December 2017, the Directors consider it appropriate to adopt the going concern basis in preparing the accounts.

 

Related party transactions

 

There have been no transactions with related parties that have materially affected the financial position or the performance of the Company during the six months ended 30 June 2018.

 

Directors' responsibility statement

 

The Directors confirm that, to the best of their knowledge, this set of condensed financial statements has been prepared in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP") and with the Statement of Recommended Practice, "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued in November 2014 and that this Interim Management Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

 

Income Statement

 

 

(Unaudited)

For the six months

ended 30 June 2018

(Unaudited)

For the six months

ended 30 June 2017

(Audited)

For the year

ended 31 December 2017

Revenue

Capital

Total

Revenue

Capital

Total

Revenue

Capital

Total

 

Note

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Gains on investments held at fair value through profit or loss

 

-

682

 682

-

43,405

 43,405

-

78,351

 78,351

Net losses on derivative contracts

 

-

(2,242)

 (2,242)

-

(5,181)

 (5,181)

 -

(8,866)

 (8,866)

Net foreign currency (losses)/gains

 

 -

(371)

 (371)

 -

979

 979

 -

1,665

 1,665

Income from investments

 

 4,146

-

 4,146

 2,603

-

 2,603

 5,483

30

 5,513

Other interest receivable and similar income

 

10

-

 10

 6

-

 6

11

-

 11

Gross return/(loss)

 

4,156

(1,931)

2,225

2,609

39,203

41,812

 5,494

71,180

76,674

Investment management fee

 

 (250)

(748)

 (998)

 (193)

(579)

 (772)

 (428)

(1,283)

 (1,711)

Performance fee

 

 -

-

 -

 -

(2,677)

 (2,677)

 -

(4,177)

 (4,177)

Administrative expenses

 

(316)

-

 (316)

 (296)

-

 (296)

 (646)

 -

 (646)

Net return/(loss) before finance costs and taxation

 

 3,590

 (2,679)

 911

 2,120

 35,947

 38,067

 4,420

 65,720

 70,140

Finance costs

 

 (46)

 (138)

 (184)

(32)

 (96)

 (128)

 (78)

 (235)

 (313)

Net return/(loss) on ordinary activities before taxation

 

 3,544

 (2,817)

 727

 2,088

 35,851

 37,939

 4,342

 65,485

 69,827

Taxation on ordinary activities

3

 (209)

 -

 (209)

5

 -

 5

 (159)

 -

 (159)

Net return/(loss) on ordinary activities after taxation

 

 3,335

 (2,817)

 518

 2,093

 35,851

 37,944

 4,183

 65,485

 69,668

Return/(loss) per share - basic and diluted

4

3.82p

(3.23)p

0.59p

2.82p

48.34p

51.16p

5.48p

85.78p

91.26p

 

The "Total" column of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return on ordinary activities after taxation is also the total comprehensive income for the period.

 

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

 

Statement of Changes in Equity

 

For the six months ended 30 June 2018 (unaudited)

 

 

 

Called-up

 

Capital

 

 

 

 

 

 

share

Share

redemption

Special

Capital

Revenue

 

 

 

capital

premium

reserve

reserve

reserves

reserve

Total

 

Note

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 31 December 2017

 

4,260

 12,345

 11,646

 29,182

 223,942

 13,051

 294,426

Issue of shares

 

195

 13,701

-

-

-

-

13,896

Reissue of shares out of treasury

 

-

3,349

 -

 -

 4,498

 -

 7,847

Net (loss)/return on ordinary activities

 

-

 -

 -

 -

 (2,817)

 3,335

 518

Dividend paid in the period

5

 -

 -

 -

 -

 -

 (4,064)

 (4,064)

At 30 June 2018

 

 4,455

 29,395

 11,646

 29,182

 225,623

 12,322

 312,623

 

For the six months ended 30 June 2017 (unaudited)

 

 

 

Called-up

 

Capital

 

 

 

 

 

 

share

Share

redemption

Special

Capital

Revenue

 

 

 

capital

premium

reserve

reserve

reserves

reserve

Total

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 31 December 2016

 

4,260

 5

 11,646

 29,182

 137,783

 12,141

 195,017

Repurchase of the Company's own shares into treasury

 

-

 -

 -

 -

 (334)

 -

(334)

Reissue of shares out of treasury

 

-

 3,330

 -

 -

8,545

 -

11,875

Net return on ordinary activities

 

-

 -

 -

 -

 35,851

 2,093

37,944

Dividend paid in the period

5

 -

 -

 -

 -

-

(3,273)

 (3,273)

At 30 June 2017

 

 4,260

 3,335

 11,646

 29,182

 181,845

 10,961

 241,229

 

For the year ended 31 December 2017 (audited)

 

 

 

Called-up

 

Capital

 

 

 

 

 

 

share

Share

redemption

Special

Capital

Revenue

 

 

 

capital

premium

reserve

reserve

reserves

reserve

Total

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 31 December 2016

 

4,260

 5

 11,646

 29,182

 137,783

 12,141

 195,017

Repurchase of the Company's own shares into treasury

 

 -

 -

 -

 -

 (334)

 -

 (334)

Reissue of shares out of treasury

 

 -

 12,340

 -

 -

 21,008

 -

 33,348

Net return on ordinary activities

 

 -

 -

 -

 -

 65,485

 4,183

 69,668

Dividend paid in the year

5

 -

 -

 -

 -

 -

 (3,273)

 (3,273)

At 31 December 2017

 

4,260

 12,345

 11,646

 29,182

 223,942

13,051

 294,426

 

Statement of Financial Position

 

 

 

(Unaudited)

(Unaudited)

(Audited)

 

 

30 June

30 June

31 December

 

 

2018

2017

2017

 

Note

£'000

£'000

£'000

Fixed assets

 

 

 

 

Investments held at fair value through profit or loss

 

321,588

255,434

311,798

Current assets

 

 

 

 

Debtors

 

3,523

584

269

Cash at bank and in hand

 

6,244

911

2,315

Derivative financial instruments held at fair value through profit or loss

 

1,405

592

594

 

 

11,172

2,087

3,178

Current liabilities

 

 

 

 

Creditors: amounts falling due within one year

 

(20,136)

(16,029)

(20,330)

Derivative financial instruments held at fair value through profit or loss

 

(1)

(263)

(220)

 

 

(20,137)

(16,292)

(20,550)

Net current liabilities

 

(8,965)

(14,205)

(17,372)

Total assets less current liabilities

 

312,623

241,229

294,426

Net assets

 

312,623

241,229

294,426

Capital and reserves

 

 

 

 

Called-up share capital

6

 4,455

4,260

4,260

Share premium

 

29,395

3,335

12,345

Capital redemption reserve

 

11,646

11,646

11,646

Special reserve

 

29,182

29,182

29,182

Capital reserves

 

225,623

181,845

223,942

Revenue reserve

 

12,322

10,961

13,051

Total equity shareholders' funds

 

 312,623

241,229

294,426

Net asset value per share

7

 

 

 

Undiluted

 

350.87p

313.88p

354.79p

Diluted

 

350.87p

313.67p

354.79p

 

Registered in England and Wales

Company registration number: 02153093

 

Cash Flow Statement

 

 

 

(Unaudited)

(Unaudited)

 

 

 

For the

For the

(Audited)

 

 

six months

six months

For the

 

 

ended

ended

year ended

 

 

30 June

30 June

31 December

 

 

2018

2017

2017

 

Note

£'000

£'000

£'000

Net cash (outflow)/inflow from operating activities

8

(2,451)

(930)

572

Net cash outflow from servicing of finance

 

(169)

(130)

(310)

Net cash outflow from investment activities

 

(14,027)

(4,520)

(31,071)

Dividends paid

 

(4,064)

(3,273)

(3,273)

Net cash inflow from financing

 

24,705

730

29,109

Net cash inflow/(outflow) in the period

 

3,994

(8,123)

(4,973)

Reconciliation of net cash flow to movement in net debt

 

 

 

 

Net cash inflow/(outflow) in the period

 

3,994

(8,123)

(4,973)

Bank loan (drawn down)/repaid

 

(3,407)

10,812

3,905

Exchange movements

 

(371)

979

1,665

Changes in net debt arising from cash flows

 

216

3,668

597

Net debt at the beginning of the period

 

(13,135)

(13,732)

(13,732)

Net debt at the end of the period

 

(12,919)

(10,064)

(13,135)

Represented by:

 

 

 

 

Cash at bank and in hand

 

6,244

911

2,315

Bank overdrafts

 

-

(2,891)

-

Bank loans

 

(19,163)

(8,084)

(15,450)

Net debt

 

 (12,919)

(10,064)

(13,135)

 

1. Financial Statements

 

The information contained within the accounts in this Half Year report has not been audited or reviewed by the Company's auditors.

 

The figures and financial information for the year ended 31 December 2017 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

 

2. Accounting policies

 

Basis of accounting

 

The accounts have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice and with the Statement of Recommend Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued by The Association of Investment Companies in November 2014 and updated in February 2018.

 

All of the Company's operations are of a continuing nature.

 

The accounting policies applied to these accounts are consistent with those applied in the accounts for the year ended 31 December 2017.

 

3. Taxation on ordinary activities

 

The Company's effective corporation tax rate is nil, as deductible expenses exceed taxable income. The taxation charge comprises irrecoverable overseas withholding tax on dividends receivable, less certain amounts of Taiwanese withholding tax which have been recovered during the period.

 

4. Return per share

 

 

(Unaudited)

(Unaudited)

 

 

Six months

Six months

(Audited)

 

ended

ended

Year ended

 

30 June

30 June

31 December

 

2018

2017

2017

 

£'000

£'000

£'000

Revenue return

3,335

2,093

4,183

Capital (loss)/return

(2,817)

35,851

65,485

Total return

518

37,944

69,668

Weighted average number of shares in issue during the period, excluding shares held in treasury

87,277,252

74,167,594

76,336,740

Revenue return per share

3.82p

2.82p

5.48p

Capital (loss)/return per share

(3.23)p

48.34p

85.78p

Total return per share

0.59p

51.16p

91.26p

 

There is no dilution to the above returns per share when the diluted returns are calculated in accordance with the requirements of FRS 102.

 

5. Dividend paid

 

 

(Unaudited)

(Unaudited)

 

 

Six months

Six months

(Audited)

 

ended

ended

Year ended

 

30 June

30 June

31 December

 

2018

2017

2017

 

£'000

£'000

£'000

2017 dividend paid of 4.80p (2016: 4.50p)

4,064

3,273

3,273

 

No interim dividend has been declared in respect of the six months ended 30 June 2018 (2017: nil).

 

6. Called-up share capital

 

(Unaudited)

(Unaudited)

 

 

Six months

Six months

(Audited)

 

ended

ended

Year ended

 

30 June

30 June

31 December

 

2018

2017

2017

 

£'000

£'000

£'000

Changes in called-up share capital during the period were as follows:

 

 

 

Opening balance of ordinary shares of 5p each, excluding shares held in treasury

4,149

3,637

3,637

Issue of shares

195

-

-

Repurchase of shares into treasury

-

(6)

(6)

Reissue of shares out of treasury

111

212

518

Subtotal of ordinary shares of 5p each, excluding shares held in treasury

4,455

3,843

4,149

Shares held in treasury

-

417

111

Closing balance of ordinary shares of 5p each, including shares held in treasury

4,455

4,260

4,260

 

 

(Unaudited)

(Unaudited)

 

 

Six months

Six months

(Audited)

 

ended

ended

Year ended

 

30 June

30 June

31 December

 

2018

2017

2017

Changes in the number of shares in issue during the period were as follows:

 

 

 

 

 

 

 

Ordinary shares of 5p each, allotted, called-up and fully paid

 

 

 

Opening balance of shares in issue, excluding shares held in treasury

82,987,055

72,749,141

72,749,141

Issue of shares

3,895,347

-

-

Repurchase of shares into treasury

-

(120,000)

(120,000)

Reissue of shares out of treasury

2,217,757

4,225,000

10,357,914

Closing balance of shares in issue, excluding shares held in treasury

89,100,159

76,854,141

82,987,055

Closing balance of shares held in treasury

-

8,350,671

2,217,757

Closing balance of shares in issue, including shares held in treasury

89,100,159

85,204,812

85,204,812

 

7. Net asset value per share

 

 

(Unaudited)

(Unaudited)

 

 

Six months

Six months

(Audited)

 

ended

ended

Year ended

 

30 June

30 June

31 December

 

2018

2017

2017

Undiluted

 

 

 

Total equity shareholders' funds (£'000)

312,623

241,229

294,426

Shares in issue at the period end

89,100,159

76,854,141

82,987,055

Net asset value per share

350.87p

313.88p

354.79p

Diluted

 

 

 

Total equity shareholders' funds assuming reissue of any dilutive treasury shares (£'000)

312,623

260,308

294,426

Potential shares in issue at the period end

89,100,159

82,987,041

82,987,055

Net asset value per share

350.87p

313.67p

354.79p

 

At a General Meeting held on 23 January 2018, the Company was granted authority to reissue up to 2,489,600 shares out of treasury at a discount of no greater than 4% to NAV per share at the time of sale. At that date there were 2,217,757 shares held in treasury and these were all reissued in the period prior to the AGM held on 9 May 2018 at a premium to NAV. At the AGM, the Company did not seek to renew its authority to reissue treasury shares at a discount to NAV per share, although it was granted authority to reissue treasury shares at, or at a premium to, NAV, and to issue new shares. There were no treasury shares in issue at 30 June 2018.

 

8. Reconciliation of total return on ordinary activities before finance costs and taxation to net cash (outflow)/inflow from operating activities

 

 

(Unaudited)

(Unaudited)

 

 

Six months

Six months

(Audited)

 

ended

ended

Year ended

 

30 June

30 June

31 December

 

2018

2017

2017

 

£'000

£'000

£'000

Total return on ordinary activities before finance costs and taxation

911

38,067

70,140

Capital loss/(return) on ordinary activities before finance costs and taxation

2,679

(35,947)

(65,720)

(Increase)/decrease in prepayments and accrued income

(940)

(1)

65

Decrease/(increase) in other debtors

3

(350)

(10)

(Decrease)/increase in other creditors

(4,229)

520

1,746

Special dividend allocated to capital

-

-

30

Management fee allocated to capital

(748)

(579)

(1,283)

Performance fee allocated to capital

-

(2,677)

(4,177)

Taiwanese withholding tax recovered

-

184

183

Overseas withholding tax deducted at source

(127)

(147)

(402)

Net cash (outflow)/inflow from operating activities

(2,451)

(930)

572

 

9. Financial instruments measured at fair value

 

The Company's financial instruments that are held at fair value include its investment portfolio and derivative financial instruments.

 

FRS 102 requires that these financial instruments are categorised into a hierarchy consisting of the following three levels:

 

Level 1 - valued using unadjusted quoted prices in active markets for identical assets.

 

Level 2 - valued using observable inputs other than quoted prices included within Level 1.

 

Level 3 - valued using inputs that are unobservable.

 

The following table sets out the fair value measurements using the above hierarchy:

 

 

30 June 2018 (unaudited)

 

Level 1

Level 2

Level 3

Total

 

£'000

£'000

£'000

£'000

Financial instruments held at fair value through profit or loss

 

 

 

 

Equity investments and derivative financial instruments

302,689

-

-

302,689

Participatory notes1

-

20,303

-

20,303

Total

302,689

20,303

-

322,992

 

 

30 June 2017 (unaudited)

 

Level 1

Level 2

Level 3

Total

 

£'000

£'000

£'000

£'000

Financial instruments held at fair value through profit or loss

 

 

 

 

Equity investments and derivative financial instruments

248,450

-

-

248,450

Participatory notes1

-

7,313

-

7,313

Total

248,450

7,313

-

255,763

 

 

31 December 2017 (audited)

 

Level 1

Level 2

Level 3

Total

 

£'000

£'000

£'000

£'000

Financial instruments held at fair value through profit or loss

 

 

 

 

Equity investments and derivative financial instruments

286,995

-

-

286,995

Participatory notes1

-

25,177

-

25,177

Total

286,995

25,177

-

312,172

 

1 Participatory notes, which are valued using the quoted bid prices of the underlying securities, have been allocated to Level 2 as, strictly, these are not identical assets.

 

10. Events after the interim period that have not been reflected in the financial statements for the interim period

 

The Directors have evaluated the period since the interim date and have not noted any significant events which have not been reflected in the financial statements.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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