BMPI.L Regulatory News (BMPI)

To: RNS

Date: 28 January 2021

From: BMO Managed Portfolio Trust PLC

LEI: 213800ZA6TW45NM9YY31

Unaudited Interim Results

The Board of BMO Managed Portfolio Trust PLC announces the unaudited interim results of the Company for the six month period to 30 November 2020.

Income shares - financial highlights and performance summary for the six months

· Dividend yield(1) of 4.8% at 30 November 2020, compared to the yield on the FTSE All-Share Index of 3.7%. Dividends are paid quarterly. First two interim dividends were maintained at the same level as the prior year.

· Net asset value total return(1) per Income share of +13.0% for the six months, outperforming the FTSE All-Share Index total return of +6.9% by +6.1%.

Growth shares - financial highlights and performance summary for the six months

· Net asset value total return(1) per Growth share of +20.0% for the six months, outperforming the FTSE All-Share Index total return of +6.9% by +13.1%.

· NAV total return compound annual growth rate(1) of +10.0% over 10 years compared with a return of +5.9% from the FTSE All-Share Index.

Notes:

(1) Yield, total return and compound annual growth rate - See Alternative Performance Measures.

Chairman's Statement

Highlights

· Net asset value ("NAV") total return for the six months of +13.0% for the Income shares and +20.0% for the Growth shares, both classes outperforming the FTSE All-Share Index total return of +6.9%

· NAV total return compound annual growth rate over 10 years of +7.8% for the Income shares and +10.0% for the Growth shares compared with a return of +5.9% from the FTSE All-Share Index.

· Income share dividend yield of 4.8% at 30 November 2020

Investment performance

For the six months to 30 November 2020, the NAV total return was +13.0% for the Income shares and +20.0% for the Growth shares. The total return for the benchmark index for both share classes, the FTSE All-Share Index, was +6.9%. The long-term track record continues to show the NAV total return for both share classes outperforming the benchmark index over 3 years, 5 years and 10 years

to 30 November 2020, with the NAV total return over 10 years achieving a compound annual growth

rate of +7.8% for the Income shares and +10.0% for the Growth shares compared with a return of +5.9% from the benchmark index.

Given the level of market uncertainty the rate for the first two interim dividends has been maintained at that paid in the prior year and the yield on the Income shares of 4.8% remains higher than the yield of 3.7% on the FTSE All-Share Index as at 30 November 2020.

The period under review witnessed markets operating under the spectre of the COVID-19 pandemic. As a result of strict lockdowns, the European and US economies went into a sharp and deep recession during the second calendar quarter of 2020. Restrictions were gradually eased, only to be tightened again as a second wave of the pandemic became apparent. The UK equity market was particularly hard hit and for most of the period continued to move lower until the announcement of the first vaccine in early November. Equity markets globally rallied strongly, especially in Europe and the UK as investors looked ahead to an opening up of economies and a return to a degree of normality.

The Growth portfolio performed strongly over the period as a number of investment companies with

significant exposure to the wider technology sector performed well. This trend was led by Scottish Mortgage Investment Trust (the largest listed investment company) which rose over 50%. The trust benefitted from the extraordinary rise in the share price of its largest holding electric vehicle manufacturer Tesla. Its next biggest holding Amazon also performed well as demand for its online shopping was very strong. The next two best performers were UK equity trusts which had both experienced, for long periods, a difficult time in terms of performance. However, following the vaccine announcement in November they enjoyed substantial gains. Over the six months under review, Artemis Alpha Trust rose by 42% and Henderson Opportunities Trust appreciated by 41%; however, in both cases the majority of the share price rises happened following the vaccine announcement.

Due to the requirement for yield it is challenging for the Income portfolio to gain exposure to the secular growth opportunities offered by investment trusts in the technology sector where the underlying companies often pay no or very low dividends. It is nonetheless encouraging that the Income portfolio outperformed its benchmark. The leading contributor with a 41% gain was Princess Private Equity Holding which specialises in mid-sized private companies primarily in the US and Europe with a focus on software, education, and digital platforms in a variety of different sectors. Long-time holding JPMorgan Global Emerging Markets Income Trust was ahead by 29% in a better environment for companies in emerging markets and Law Debenture Corporation gained 27% as UK equities rallied strongly following the vaccine announcement.

The Trust's excellent performance was recognised when the Growth portfolio once again won the 2020 Investment Week Investment Trust of the Year Award for the Flexible Investment sector.

(All share prices are total return).

Revenue and dividends

The Company's net revenue for the six months was £1.67 million which is equivalent to 3.57p per Income share (compared to 3.40p per Income share for the corresponding period in 2019). Income shares are entitled to all the dividends paid by the Company. One benefit of the closed-end investment trust structure is the ability to utilise revenue reserves, built up in previous years, to sustain dividend payments during periods when there is a significant reduction in dividend income from underlying holdings. That was the case in the interim period to 30 November 2020 and enabled many of our holdings to sustain or, in some cases, grow their dividend payments.

While the net revenue per Income share has increased in the current period by approximately 5%, given the continuing level of market uncertainty, the Company maintained the dividend rate when it declared a first and second interim dividend in respect of the year to 31 May 2021, each of 1.4p per Income share (1.4p per Income share in the corresponding period in the year to 31 May 2020).

In the absence of unforeseen circumstances, the Board intends to pay three interim dividends, each of 1.4p per Income share, and aggregate dividends for the current financial year to 31 May 2021 will be at least 6.1p per Income share (2020: 6.1p per Income share). The amount of the fourth interim dividend will be determined when a clearer view of income for the year emerges. A minimum expected annual rate of 6.1p per Income share represents a yield on the Income share price at 30 November 2020 of 4.8%.

Borrowing

At 30 November 2020 the Income portfolio had total borrowings of £5 million (7.8% of gross assets), the investment of which helps to boost net income after allowing for the interest cost. The Growth

portfolio had no borrowings.

Discount to NAV and share buy-backs

In normal circumstances we aim to maintain our discount at not more than 5%, by buying back shares from time to time if necessary. In practice over the years the shares have generally traded close to NAV. During the six months to 30 November 2020 the average discount to NAV for the Income shares and for the Growth shares was 0.2% and 0.4% respectively. At 30 November 2020, the Income shares stood at a discount to NAV of 0.1% and the Growth shares at a premium of 0.4% to NAV.

Share conversion facility

Shareholders have the opportunity to convert their Income shares into Growth shares or their Growth shares into Income shares annually subject to minimum and maximum conversion thresholds which may be reduced or increased at the discretion of the Board. On 5 November 2020 the conversion proceeded, for those shareholders who had elected to do so. The net result of those conversions was a decrease of 115,747 Income shares and an increase of 58,343 Growth shares in issue. The ability to convert without incurring capital gains tax should be an attractive facility for shareholders and the next conversion date (subject to minimum and maximum thresholds) will be in October 2021. Details will be provided when the Company's annual report is published in late July 2021.

Outlook

After the experience of 2020 where the pandemic caused an unprecedented sharp and deep recession the news of a number of effective vaccines has brought the hope that by the second half of this calendar year economies will be moving towards normalisation. Financial markets are assuming this will be the case. In the meantime, massive monetary and fiscal stimulation from various governments and Central Banks is being undertaken to ensure recovery will be robust as the year unfolds. Valuations of many equity markets (particularly the US) are at high levels, however the expectation is that economic recovery will be accompanied by a rapid and substantial recovery in corporate earnings in 2021.

Since the Brexit referendum in 2016 UK equities have been a persistent underperformer relative to most other major equity markets. This has left the UK very attractively valued when compared to other global equity markets. Conclusion of the post-Brexit trade agreement and the removal of the accompanying prolonged uncertainty should help to clear the way for a revival in the relative performance of the UK equity market. Although current lockdowns may delay the recovery, there is confidence that widespread vaccination will eventually bring about a concerted move towards normality.

Colin S McGill

Chairman

27 January 2021

Unaudited Condensed Income Statement

Six months to 30 November 2020

The total column of this statement is the Profit and Loss Account of the Company.

The supplementary revenue and capital columns are prepared under guidance published by The Association of Investment Companies.

All revenue and capital items in the Income Statement derive from continuing operations.

Return attributable to shareholders represents the profit/(loss) for the period and also total comprehensive income.

Unaudited Condensed Income Statement

Six months to 30 November 2019

The total column of this statement is the Profit and Loss Account of the Company.

The supplementary revenue and capital columns are prepared under guidance published by The Association of Investment Companies.

All revenue and capital items in the Income Statement derive from continuing operations.

Return attributable to shareholders represents the profit/(loss) for the period and also total comprehensive income.

Condensed Income Statement (audited)

Year to 31 May 2020

The total column of this statement is the Profit and Loss Account of the Company.

The supplementary revenue and capital columns are prepared under guidance published by The Association of Investment Companies.

All revenue and capital items in the Income Statement derive from continuing activities.

Return attributable to shareholders represents the profit/(loss) for the year and also total comprehensive income.

Unaudited Condensed Balance Sheet

As at 30 November 2020

Unaudited Condensed Balance Sheet

As at 30 November 2019

Condensed Balance Sheet (audited)

As at 31 May 2020

Unaudited Condensed Statement of Cash Flows

Six months to 30 November 2020

Unaudited Condensed Statement of Cash Flows

Six months to 30 November 2019

Condensed Statement of Cash Flows (audited)

Year to 31 May 2020

Unaudited Condensed Statement of Changes in Equity

Six months to 30 November 2020

Unaudited Condensed Statement of Changes in Equity

Six months to 30 November 2019

Condensed Statement of Changes in Equity (audited)

Year to 31 May 2020

Notes

1. Accounting policies

These condensed financial statements have been prepared on a going concern basis in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, FRS 102, FRS 104 Interim Financial Reporting and the Statement of Recommended Practice ("SORP") "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued by The Association of Investment Companies ("AIC").

The accounting policies applied for the condensed financial statements are set out in the Company's annual report for the year ended 31 May 2020.

2. Income

3. Investment management and performance fees

During the period, the Company incurred investment management fees of £483,000 (30 November 2019: £447,000; 31 May 2020: £881,000) of which £250,000 was payable to BMO Investment Business Limited at the period end.

At 30 November 2020 the adjusted total return of the Income portfolio for the period since 31 May 2020 (being the date a performance fee was last accrued) exceeded that of the FTSE All-Share Index and a performance fee of £114,000 was accrued in the Income portfolio at 30 November 2020 (30 November 2019: £25,000; 31 May 2020: £206,000).

At 30 November 2020 the adjusted total return of the Growth portfolio since 31 May 2020 (being the date a performance fee was last payable) exceeded that of the FTSE All-Share Index and a performance fee of £160,000 was accrued in the Growth portfolio at 30 November 2020 (30 November 2019: £nil; 31 May 2020: £263,000).

As the NAV per Income share at 31 May 2020 was less than the Watermark NAV at 31 May 2019 (the date a performance fee was last payable in the Income portfolio) payment of the performance fee of £206,000 which was accrued in the Income portfolio at 31 May 2020 is deferred until the end of the next financial year when the NAV per share for the Income portfolio is in excess of the Watermark NAV. If the Watermark NAV is not reached by the end of the fourth financial year subsequently, it will no longer be payable.

4. Investments

* Fair value hierarchy

The Company's investments as disclosed in the balance sheet are valued at fair value. The fair value as at the reporting date has been estimated using the following fair value hierarchy:

· Level 1 - quoted prices (unadjusted) in active markets for identical assets;

· Level 2 - investments whose value is evidenced by comparison with other observable current market transactions in the same instrument or based on a valuation technique whose variables includes only data from observable markets; and

· Level 3 - investments whose value is not based on observable market data.

There were no investments held which are valued in accordance with Levels 2 or 3.

5. Return per share

The return per share for the six months to 30 November 2020 is as follows:

The return per share for the comparative six months to 30 November 2019 is as follows:

The return per share for the comparative year to 31 May 2020 is as follows: