Last checked at 3 Jun 2021 07:00
RNS Announcement
Edinburgh Worldwide Investment Trust plc
Legal Entity Identifier: 213800JUA8RKIDDLH380
Regulated Information Classification: Half Yearly Financial Report.
Results for the six months to 30 April 2021
Since 1 February 2014, the Company has been invested in a diversified portfolio of companies which individually offer significant long term growth potential and typically have a market capitalisation of less than US$5bn at the time of initial investment.
¾ Over the six month period, the Company's net asset value per share increased by 24.9% while the comparative index* increased by 30.3%. The share price rose by 24.5%.
¾ During the period, the Company issued 44,085,000 shares at a premium to its net asset value, raising net proceeds of £159,784,000. Since then a further 3,875,000 shares have been issued raising a further £12,515,000.
¾ The net revenue return per share was a negative 0.31p (six months to 30 April 2020: negative 0.18p). No interim dividend is being recommended.
¾ A number of the Company's holdings contributed to absolute performance, notably: Tesla (electric vehicles, autonomous driving and solar energy); QuantumScape (batteries for electric cars); Upwork, (online freelancing and recruitment services platform); and Appian (enterprise software developer).
¾ As at 30 April 2021 the Company's unlisted exposure was 7.9% of total assets, comprised of 11 unlisted investments: Akili Interactive Labs; Astranis Space Technologies; Epic Games; Graphcore; KSQ Therapeutics; Oxford Nanopore Technologies; PsiQuantum; Reaction Engines; Relativity Space; Space Exploration Technologies and Spire Global.
¾ Short term cycles of exaggerated investor behaviour tend to come and go, but company fundamentals prevail over the longer term. The long duration cycles of innovation and technological advancement to which the portfolio is aligned remain very robust and we remain hugely excited about how the portfolio will develop over the coming years and decades.
* S&P Global Small Cap Index total return (in sterling terms). See disclaimer at the end of this announcement.
For a definition of terms see Glossary of Terms and Alternative Performance Measures (see note 12).
Past performance is not a guide to future performance.
Edinburgh Worldwide aims to achieve long term capital growth by investing primarily in listed companies throughout the world. The Company has total assets of £1,439.1 million (before deduction of loans of £46.7 million) as at 30 April 2021.
Edinburgh Worldwide is managed by Baillie Gifford, the Edinburgh based fund management group with around £325 billion under management and advice as at 2 June 2021.
Edinburgh Worldwide Investment Trust plc is a listed UK company. The value of its shares and any income from them can fall as well as rise and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares. Investment in investment trusts should be regarded as medium to long-term. The Company's risk could be increased by its investment in unlisted investments. These assets may be more difficult to buy or sell, so changes in their prices may be greater. The Company is listed on the London Stock Exchange and is not authorised or regulated by the Financial Conduct Authority. You can find up to date performance information about Edinburgh Worldwide on the Edinburgh Worldwide page of the Managers' website at edinburghworldwide.co.uk‡
‡ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.
3 June 2021
For further information please contact:
Anzelm Cydzik, Baillie Gifford & Co
Tel 0131 275 2000
Mark Knight, Four Communications
Tel: 0203 697 4200 or 07803 758810
The following is the unaudited Interim Financial Report for the six months to 30 April 2021.
Responsibility statement
We confirm that to the best of our knowledge:
a) the condensed set of Financial Statements has been prepared in accordance with FRS 104 'Interim Financial Reporting';
b) the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months, their impact on the Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the year); and
c) the Interim Financial Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
On behalf of the Board
Henry CT Strutt
Chairman
2 June 2021
Interim management report
Performance
Over the six months to 30 April 2021, the Company's net asset value per share increased by 24.9%, which compares to a rise of 30.3% in the S&P Global Smaller Companies Index*, total return in sterling terms, over the same period. The share price over the six months rose by 24.5% to 358.0p representing a premium of 2.4% to the net asset value at 30 April 2021. This compares to a 2.7% premium at the beginning of the period.
The six months under discussion was preceded by an exceptionally strong year in which the Company's NAV rose by 57.8%, significantly ahead of the index's return of 0.4%. We say that not to try and justify a period where we 'underperformed' on a relative basis, more that we believe the context is useful in appreciating just how robust the Trust's returns have been in a period of extreme uncertainty and challenge created by the ongoing Covid-19 pandemic.
In the Company's 2020 Annual Report we explored the reasons for this robustness alongside postulating on the lasting impacts of the Covid-19 pandemic. While we think many such impacts will be of deep long-term significance, we also recognise that there is a more immediate transition that both society and commerce will need to navigate as much of the world emerges from its enforced hibernation. This will inevitably pose challenges across a range of business-related activities as supply and demand wrestle to form a new post-Covid equilibrium. Pockets of inflationary pressure are already evident in some dislocated supply chains and the significant monetary stimulus that was a necessity during the pandemic raises the prospect of broader inflationary forces being unleashed during a recovery.
Recently, such fears have appeared to spook global markets resulting in a pronounced equity market sell-off alongside a rise in volatility (as captured by the 14.7% fall in the Company's NAV from its recent peak in mid-February to the end of April). Our sense is that investors are second guessing how the various Central Banks might be forced to act through potentially raising interest rates from their exceptionally low levels. This would be of most relevance to companies with interest sensitivity in either their operational or financial characteristics, but it also has a broader impact on discount rates used to value future cashflows generated by businesses. We are not economics forecasters and feel we have little of merit to say on the dynamics that will shape this debate. That said, with US treasury yields at broadly similar levels to where they were prior to the pandemic, we wonder if anything especially fundamental has occurred. Also, were inflation to tick up, we question whether interest rates would be an effective control tool in such an atypical recovery scenario.
Aggressive swings in market sentiment like that which we have seen in recent months are part of the unpredictable fabric of modern equity investing. As long-term investors we are accustomed to navigating them and generally find them to be more of a source of opportunity than angst. Against this backdrop there have been two notable, yet somewhat distracting, themes in equity markets over the past year. First, a very active capital-raising environment typified by highly oversubscribed IPOs and Special Purpose Acquisition Companies (SPACs). Second, some well-documented examples of exaggerated retail investor involvement, most notably in heavily shorted stocks and cryptocurrencies. Hot IPOs and short-term speculative trading had become the core narrative of many and was perhaps indicative of some assets being ill-perceived as a one-way bet. A market shake-out that removes some of this froth and fear-of-missing-out behaviour from its edges is likely a good development, even if it can feel rather abrupt and indiscriminatory as it plays out.
Short term cycles of exaggerated investor behaviour tend to come and go, but company fundamentals prevail over the longer term. The long duration cycles of innovation and technological advancement to which the portfolio is aligned remain very robust and we remain hugely excited about how the portfolio will develop over the coming years and decades.
Portfolio update
We have been generally happy with how the holdings have performed operationally. We would highlight robust growth in MarketAxess where we increasingly sense that revenue growth is being driven by an expansion of the addressable market and not just market share gains. Likewise, Zillow where the core lead generating business has performed very well and where its attempts to rearchitect the housing transaction market are showing early promise. Several of our oncology-focused healthcare holdings also had encouraging developments in the period. Rubius Therapeutics produced encouraging clinical data that hints at the potential of its engineered red blood cell therapeutics at modulating the immune system in cancer patients. The independent advisory committee recommended that Novocure's Phase 3 trial, investigating its Optune product in lung cancer patients, be expediated with fewer patients based on an interim positive assessment of the data. We await the full data set with interest and are excited about how this could significantly expand the addressable market for Novocure's novel product beyond its existing applications in brain cancer.
We purchased eleven new holdings over the six months comprising eight listed and three private companies. They can be broadly captured using three themes: software-based tools that help companies scale in the digital age; the opening of space as an attractive commercial endeavour and products built on deep molecular and physics based insights with potential to transform their respective industries.
We have written before around how software, the cloud and use of data-led insights is helping companies tackle new opportunities with unprecedented scale. Companies that deploy code and maximise its potential throughout their business are increasingly the ones separating themselves from their competitors both regarding their own revenue growth potential and their own internal efficiency. This trend is only likely to accelerate as the backbone of businesses continues to digitise. The following purchases fit neatly within this theme:
JFrog is a US/Israeli company which sells software that helps developers manage their libraries of software code and automates the deployment of that code across different environments, on-premise and in the cloud. It makes it easier, faster and cheaper for developers to deliver higher quality, more secure software. It speeds up innovation and allows companies to update their software and release new features more frequently. With its roots in opensource, JFrog is well placed to capitalise on demand and mindshare with many developers. Early signs of commercial traction encouraged us to take a holding.
Freee provides accounting and HR software for Japanese small and medium-sized enterprises (SMEs). Freee's products stand out for their ease of use and scalability, features that are helping the company to rapidly gain traction in Japan. This technological edge and the aligned, founder-led management team should help Freee to take advantage of a large revenue opportunity in this market.
Sprout Social provides software that helps businesses manage their social media presence across a growing number of networks such as Facebook, Glassdoor, Twitter and others. We believe there is a large opportunity for the company to both increase the number of brands it serves and for the value it can generate for its customers by continuing to add more functionality to its platform. With strong partnerships with the social networks and a founder-led management team, we believe it has a strong chance of converting this opportunity.
Cardlytics is a provider of white labelled rewards programmes for many of the largest financial institutions in the US and the UK. With access to anonymised purchase data via its partnerships with banks and relationships with advertisers it offers personalised discounts to end consumers via a bank's digital channels. Having spent the best part of a decade building partnerships with banks such as Wells Fargo, Bank of America and others, we believe this founder-led management team are at the early stages of focusing on what could be a large opportunity to better monetise its relationship with advertisers.
BASE provides services to Japanese SMEs to help them when they wish to start selling products online. It gives the SMEs the complete infrastructure: from domain name, to website, to payment and shipment. We believe that the e-commerce penetration in Japan is at the cusp of acceleration and this presents an attractive opportunity for growth. With a differentiated business model that aligns itself with the SMEs, alongside a founder-led management team, we believe the company could become one of the key e-commerce platforms in Japan over the next decade.
Through our existing private investments in SpaceX and Spire we have witnessed first-hand how the economics of accessing space and the associated satellite and data opportunity are radically changing. The opportunity for new approaches and capabilities in such a dynamic area is very real. In addition to supporting SpaceX with further capital in a recent follow-on funding round, we acquired new positions in two additional private space-related companies:
Relativity Space is a company at the forefront of a shift towards software-defined manufacturing. The company is combining large-scale 3D printing, artificial intelligence and autonomous robotics into factories which can improve the performance and construction of the products they make. Relativity Space is developing this capability within the aerospace market first, 3D printing entire rockets from scratch to provide customers with a uniquely agile and affordable launch service. We believe Relativity Space has the makings of a genuinely differentiated business within this industry and a manufacturing platform which should have broad and growing applicability beyond it.
Astranis Space Technologies builds and operates next-generation, geostationary (GEO) communication satellites. Thanks to its novel design approach, these can be made for a fraction of the cost and time required for traditional GEO satellites. This manifests as a better, cheaper and more scalable connectivity for corporate customers - who are increasingly looking to make their own services available in hard to reach places while remaining competitive with rival offerings. We are encouraged by Astranis' disruptive potential in this large market.
Recent advances in molecular and atomic understanding underpin the futures of many of our healthcare and technology focused holdings in the portfolio. Companies that unlock insights around these principles are the ones best positioned to harness that knowledge and use it to scale commercially. Consistent with this theme we added to Codexis, Oxford Nanopore and semiconductor chip designer Graphcore when these companies recently raised additional funds to aid their growth. We also added the following science-driven companies to the portfolio:
Quanterix is a US-based company developing ultrasensitive protein detection instruments which unlock our ability to see and quantify proteins that are present in the blood at levels beyond the detection levels of traditional assays. Thus far, the technology has been primarily used in research applications across several therapeutic areas, notably neurology and increasingly in oncology. The real excitement with Quanterix however is the potential for the technology to go beyond research use cases into diagnostics and eventually population health. A number of recent developments - a partnership with Abbott in diagnostics as well as the initiation of health screening studies with large payers like UnitedHealth - give us greater confidence of the progress towards achieving that goal and encouraged us to take a holding in the company.
New Horizon Health is a Chinese cancer diagnostics company. Its main product of promise is a stool-based test for colon cancer, known as Colo Clear which has very recently been approved by the Chinese Health Authority (and which represents the first molecular cancer diagnostic ever approved in China). With a high 'at risk' population, low screening initiatives and poor uptake of colonoscopies we see significant potential for its test to become a successful primary screening diagnostic in a vast market. We invested via its IPO in Hong Kong.
We took a new holding in a French biotechnology company, Nanobiotix, as it raised additional capital through a listing in the US. We are intrigued by the company's novel cancer-treating nanoparticles given their potential to improve the efficacy and safety of conventional radiotherapy. When injected into a tumour, the product acts as a local amplifier of energy, meaning that a lower or less frequent dose can be used to achieve the same therapeutic effect. The simplicity of this process and its alignment with existing care and equipment should make it highly scalable. Furthermore, we think it likely that this treatment regime will synergise well with the numerous immune-oncology drugs that are increasingly being used in the cancer setting.
QuantumScape is a leader in the development of next generation, solid-state lithium-metal batteries. This technology has the potential to unlock significant improvements in the range, charging time, and safety of electric vehicles. Crucially though, QuantumScape's design is also suitable for traditional, mass-manufacturing processes. With significant support from Volkswagen and several other notable automotive partners, there is strong alignment for the adoption of this technology in the latter half of the decade. We participated in a private funding round for the company prior to its listing.
We exited the positions in Dexcom, Seagen (formerly Seattle Genetics), Faro, National Instruments and Digital Garage. We also further reduced the Tesla holding following share price strength.
The principal risks and uncertainties facing the Company are set out in note 11.
* See disclaimer at the end of this announcement.
Total return information sourced from Refinitiv/Baillie Gifford and relevant underlying index providers.
For a definition of terms see Glossary of Terms and Alternative Performance Measures (see note 12).
Past performance is not a guide to future performance.
Baillie Gifford Statement on Stewardship
Reclaiming Activism for Long-Term Investors
Baillie Gifford's over-arching ethos is that we are 'actual' investors. We have a responsibility to behave as supportive and constructively engaged long-term investors. We invest in companies at different stages in their evolution, across vastly different industries and geographies and we celebrate their uniqueness. Consequently, we are wary of prescriptive policies and rules, believing that these often run counter to thoughtful and beneficial corporate stewardship. Our approach favours a small number of simple principles which help shape our interactions with companies.
Our Stewardship Principles
Prioritisation of long-term value creation
We encourage company management and their boards to be ambitious and focus their investments on long-term value creation. We understand that it is easy for businesses to be influenced by short-sighted demands for profit maximisation but believe these often lead to sub-optimal long-term outcomes. We regard it as our responsibility to steer businesses away from destructive financial engineering towards activities that create genuine economic value over the long run. We are happy that our value will often be in supporting management when others do not.
A constructive and purposeful board
We believe that boards play a key role in supporting corporate success and representing the interests of minority shareholders. There is no fixed formula, but it is our expectation that boards have the resources, cognitive diversity and information they need to fulfil these responsibilities. We believe that a board works best when there is strong independent representation able to assist, advise and constructively test the thinking of management.
Long-term focused remuneration with stretching targets
We look for remuneration policies that are simple, transparent and reward superior strategic and operational endeavour. We believe incentive schemes can be important in driving behaviour, and we encourage policies which create alignment with genuine long-term shareholders. We are accepting of significant pay-outs to executives if these are commensurate with outstanding long-run value creation, but plans should not reward mediocre outcomes. We think that performance hurdles should be skewed towards long-term results and that remuneration plans should be subject to shareholder approval.
Fair treatment of stakeholders
We believe it is in the long-term interests of companies to maintain strong relationships with all stakeholders, treating employees, customers, suppliers, governments and regulators in a fair and transparent manner. We do not believe in one-size-fits-all governance and we recognise that different shareholder structures are appropriate for different businesses. However, regardless of structure, companies must always respect the rights of all equity owners.
Sustainable business practices
We look for companies to act as responsible corporate citizens, working within the spirit and not just the letter of the laws and regulations that govern them. We believe that corporate success will only be sustained if a business's long-run impact on society and the environment is taken into account. Management and boards should therefore understand and regularly review this aspect of their activities, disclosing such information publicly alongside plans for ongoing improvement.
Income statement (unaudited)
| For the six months ended 30 April 2021 | For the six months ended 30 April 2020 | For the year ended 31 October 2020 (audited) | ||||||
| Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 |
Gains on sales of investments | - | 42,775 | 42,775 | - | 14,802 | 14,802 | - | 33,373 | 33,373 |
Movements in investment holding gains | - | 204,206 | 204,206 | - | 76,035 | 76,035 | - | 295,863 | 295,863 |
Currency losses | - | (1,612) | (1,612) | - | (240) | (240) | - | (1,360) | (1,360) |
Income from investments and interest receivable | 386 | - | 386 | 495 | - | 495 | 773 | - | 773 |
Investment management fee (note 3) |
(999) | (2,996) | (3,995) | (462) | (1,387) | (1,849) | (1,145) | (3,434) | (4,579) |
Other administrative expenses | (435) | - | (435) | (364) | - | (364) | (715) | - | (715) |
Net return before finance costs and taxation | (1,048) |
242,373 |
241,325 | (331) | 89,210 | 88,879 | (1,087) | 324,442 | 323,355 |
Finance costs of borrowings | (109) | (327) | (436) | (193) | (578) | (771) | (331) | (991) | (1,322) |
Net return before taxation | (1,157) | 242,046 | 240,889 | (524) | 88,632 | 88,108 | (1,418) | 323,451 | 322,033 |
Tax | (24) | - | (24) | (29) | - | (29) | (61) | - | (61) |
Net return after taxation | (1,181) | 242,046 | 240,865 | (553) | 88,632 | 88,079 | (1,479) | 323,451 | 321,972 |
Net return per ordinary share (note 4) | (0.31p) | 63.87p | 63.56p | (0.18p) | 29.01p | 28.83p | (0.46p) | 100.89p | 100.43p |
The total column of this Statement represents 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 this Statement derive from continuing operations.
A Statement of Comprehensive Income is not required as the Company does not have any other comprehensive income and the net return after taxation is both the profit and comprehensive income for the period.
Balance sheet (unaudited)
| At 30 April 2021
£'000 | At 31 October 2020 (audited) £'000 |
Fixed assets |
|
|
Investments held at fair value through profit or loss (note 6) | 1,382,986 | 1,002,194 |
Current assets |
|
|
Debtors | 1,144 | 160 |
Cash and cash equivalents | 76,684 | 40,894 |
| 77,828 | 41,054 |
Creditors |
|
|
Amounts falling due within one year (note 7) | (68,431) | (51,514) |
Net current assets/(liabilities) | 9,397 | (10,460) |
Net assets | 1,392,383 | 991,734 |
Capital and reserves |
|
|
Share capital | 3,984 | 3,543 |
Share premium account | 475,624 | 316,281 |
Special reserve | 35,220 | 35,220 |
Capital reserve | 880,427 | 638,381 |
Revenue reserve | (2,872) | (1,691) |
Shareholders' funds | 1,392,383 | 991,734 |
Net asset value per ordinary share | 349.49p | 279.90p |
Ordinary shares in issue (note 8) | 398,403,695 | 354,318,695 |
Statement of changes in equity (unaudited)
For the six months ended 30 April 2021
| Sharecapital £'000 | Sharepremium account £'000 | Special reserve £'000 | Capital reserve* £'000 | Revenue reserve £'000 | Shareholders'funds £'000 |
Shareholders' funds at 1 November 2020 | 3,543 | 316,281 | 35,220 | 638,381 | (1,691) | 991,734 |
Ordinary shares issued (note 8) | 441 | 159,343 | - | - | - | 159,784 |
Net return after taxation | - | - | - | 242,046 | (1,181) | 240,865 |
Shareholders' funds at 30 April 2021 | 3,984 | 475,624 | 35,220 | 880,427 | (2,872) | 1,392,383 |
For the six months ended 30 April 2020
| Sharecapital £'000 | Sharepremium account £'000 | Special reserve £'000 | Capital reserve* £'000 | Revenue reserve £'000 | Shareholders'funds £'000 |
Shareholders' funds at 1 November 2019 | 3,026 | 183,754 | 35,220 | 314,930 | (212) | 536,718 |
Ordinary shares issued | 73 | 15,234 | - | - | - | 15,307 |
Net return after taxation | - | - | - | 88,632 | (553) | 88,079 |
Shareholders' funds at 30 April 2020 | 3,099 | 198,988 | 35,220 | 403,562 | (765) | 640,104 |
* The Capital reserve as at 30 April 2021 includes investment holding gains of £680,424,000 (30 April 2020 - gains of £256,389,000).
Condensed cash flow statement (unaudited)
|
Six months to 30 April 2021 £'000 |
Six months to 30 April 2020 £'000 |
Cash flows from operating activities |
|
|
Net return before taxation | 240,889 | 88,108 |
Net gains on investments | (246,981) | (90,837) |
Currency losses | 1,612 | 240 |
Finance costs of borrowings | 436 | 771 |
Overseas withholding tax incurred | (23) | (24) |
Changes in debtors and creditors | 574 | 77 |
Cash from operations* | (3,493) | (1,665) |
Interest paid | (507) | (789) |
Net cash outflow from operating activities | (4,000) | (2,454) |
Net cash outflow from investing activities | (115,462) | (189) |
Financing |
|
|
Ordinary shares issued | 158,850 | 14,117 |
Bank loans drawn down | 141,177 | 99,864 |
Bank loans repaid | (141,177) | (99,864) |
Net cash inflow from financing activities | 158,850 | 14,117 |
Increase in cash and cash equivalents | 39,388 | 11,474 |
Exchange movements | (3,598) | 519 |
Cash and cash equivalents at start of period | 40,894 | 13,342 |
Cash and cash equivalents at end of period† | 76,684 | 25,335 |
* Cash from operations includes dividends received in the period of £324,000 (30 April 2020 - £370,000) and deposit interest
received of nil (30 April 2020 - £60,000).
† Cash and cash equivalents represent cash at bank and short term money market deposits repayable on demand.
Performance of the Top 20 Holdings as at 30 April 2021 (unaudited)
Name | Business |
| Value £'000 | % of total assets* | Performance† | |
Country | Absolute % | Relative % | ||||
Tesla | Electric vehicles, autonomous driving and solar energy | USA | 68,165 | 4.7 | 71.1 | 31.3 |
Zillow# | US online real estate portal | USA | 54,292 | 3.8 | 37.5 | 5.5 |
Ocado | Online grocery retailer and technology provider | UK | 51,626 | 3.6 | (7.9) | (29.3) |
STAAR Surgical | Ophthalmic implants for vision correction | USA | 44,959 | 3.1 | 76.3 | 35.3 |
Novocure | Manufacturer of medical devices for cancer treatment | USA | 44,907 | 3.1 | 56.1 | 19.8 |
Alnylam Pharmaceuticals | Drug developer focused on harnessing gene silencing technology | USA | 40,760 | 2.8 | 7.0 | (17.9) |
MarketAxess | Electronic bond trading platform | USA | 39,463 | 2.7 | (15.2) | (34.9) |
Upwork | Online freelancing and recruitment services platform | USA | 38,615 | 2.7 | 133.5 | 79.2 |
Chegg | Online educational company | USA | 37,890 | 2.6 | 14.9 | (11.8) |
Space Exploration Technologies u # | Designs, manufactures and launches advanced rockets and spacecraft | USA | 31,364 | 2.2 | 43.1‡ | 9.8‡ |
Zai Lab ADR | Chinese bio-pharmaceutical development and distribution company | China | 30,561 | 2.1 | 89.2 | 45.2 |
Teladoc | Telemedicine services provider | USA | 26,692 | 1.9 | (18.0) | (37.1) |
Appian | Enterprise software developer | USA | 25,298 | 1.8 | 78.8 | 37.2 |
Ceres Power Holding | Developer of fuel cells | UK | 25,121 | 1.7 | 92.6 | 47.8 |
Exact Sciences | Non-invasive molecular tests for early cancer detection | USA | 24,500 | 1.7 | (0.7) | (23.8) |
Kingdee International Software | Enterprise management software provider | China | 24,384 | 1.7 | 18.0 | (9.4) |
QuantumScape | Solid-state batteries for electric vehicles | USA | 24,109 | 1.7 | 437.5‡ | 362.5‡ |
BlackLine | Enterprise financial software provider | USA | 23,444 | 1.6 | 11.1 | (14.8) |
Codexis | Industrial and pharmaceutical enzyme developer | USA | 20,885 | 1.5 | 62.1 | 24.4 |
Xero | Cloud based accounting software for small and medium-sized enterprises | New Zealand | 20,763 | 1.4 | 32.0 | 1.3 |
|
|
| 697,798 | 48.4 |
|
|
* Total assets before deduction of loans.
† Absolute and relative performance has been calculated on a total return basis over the period 1 November 2020 to 30 April
2021. Absolute performance is in sterling terms; relative performance is against S&P Global Small Cap Index (in sterling terms).
Source: Baillie Gifford/StatPro and relevant underlying index providers. See disclaimer at the end of this announcement.
u Denotes unlisted security.
# More than one line of stock held. Holding information represents the aggregate of all lines of stock.
‡ Figures relate to part period returns where the security has been purchased or added to during the period.
Past performance is not a guide to future performance
List of Investments as at 30 April 2021 (unaudited)
Name | Business |
| Value £'000 | % of total assets* |
Country | ||||
Tesla | Electric vehicles, autonomous driving and solar energy | USA | 68,165 | 4.7 |
Zillow Class C | US online real estate portal | USA | 45,572 | 3.2 |
Zillow Class A | US online real estate portal | USA | 8,720 | 0.6 |
|
|
| 54,292 | 3.8 |
Ocado | Online grocery retailer and technology provider | UK | 51,626 | 3.6 |
STAAR Surgical | Ophthalmic implants for vision correction | USA | 44,959 | 3.1 |
Novocure | Manufacturer of medical devices for cancer treatment | USA | 44,907 | 3.1 |
Alnylam Pharmaceuticals | Drug developer focused on harnessing gene silencing technology | USA | 40,760 | 2.8 |
MarketAxess | Electronic bond trading platform | USA | 39,463 | 2.7 |
Upwork | Online freelancing and recruitment services platform | USA | 38,615 | 2.7 |
Chegg | Online educational company | USA | 37,890 | 2.6 |
Space Exploration Technologies Series N Preferred u |
Designs, manufactures and launches advanced rockets and spacecraft | USA | 17,976 | 1.2 |
Space Exploration Technologies Series J Preferred u |
Designs, manufactures and launches advanced rockets and spacecraft | USA | 8,154 | 0.6 |
Space Exploration Technologies Series K Preferred u |
Designs, manufactures and launches advanced rockets and spacecraft | USA | 3,717 | 0.3 |
Space Exploration Technologies Corp Class A Common u |
Designs, manufactures and launches advanced rockets and spacecraft | USA | 1,159 | 0.1 |
Space Exploration Technologies Corp Class C Common u |
Designs, manufactures and launches advanced rockets and spacecraft | USA | 358 | |
|
|
| 31,364 | 2.2 |
Zai Lab ADR | Chinese bio-pharmaceutical development and distribution company | China | 30,561 | 2.1 |
Teladoc | Telemedicine services provider | USA | 26,692 | 1.9 |
Appian | Enterprise software developer | USA | 25,298 | 1.8 |
Ceres Power Holding | Developer of fuel cells | UK | 25,121 | 1.7 |
Exact Sciences | Non-invasive molecular tests for early cancer detection | USA | 24,500 | 1.7 |
Kingdee International Software | Enterprise management software provider | China | 24,384 | 1.7 |
QuantumScape | Solid-state batteries for electric vehicles | USA | 24,109 | 1.7 |
BlackLine | Enterprise financial software provider | USA | 23,444 | 1.6 |
List of Investments as at 30 April 2021 (unaudited) (Ctd)
Name | Business |
| Value £'000 | % of total assets* |
Country | ||||
Codexis | Industrial and pharmaceutical enzyme developer | USA | 20,885 | 1.5 |
Xero | Cloud based accounting software for small and medium-sized enterprises | New Zealand | 20,763 | 1.4 |
PureTech Health | IP commercialisation focused on healthcare | UK | 20,677 | 1.4 |
PsiQuantum Series C Preferred u | Developer of commercial quantum computing | USA | 18,672 | 1.3 |
Wayfair | Online furniture and homeware retailer | USA | 18,586 | 1.3 |
Cloudera | Enterprise data software provider | USA | 17,607 | 1.2 |
AeroVironment | Small unmanned aircraft and tactical missile systems | USA | 17,532 | 1.2 |
LendingTree | Online consumer finance marketplace | USA | 17,463 | 1.2 |
Oxford Nanopore Technologies u | Novel DNA sequencing technology | UK | 15,711 | 1.1 |
Avacta Group | Affinity based diagnostic reagents and therapeutics | UK | 15,001 | 1.0 |
Genmab | Antibody based drug development | Denmark | 14,655 | 1.0 |
Pacira BioSciences | Opioid free analgesics developer | USA | 14,636 | 1.0 |
Axon Enterprise | Law enforcement equipment and software provider | USA | 14,484 | 1.0 |
Everbridge | Critical event management software provider | USA | 14,189 | 1.0 |
IPG Photonics | High-power fibre lasers | USA | 14,166 | 1.0 |
M3 | Online medical database | Japan | 14,019 | 1.0 |
MonotaRO | Online business supplies | Japan | 12,831 | 0.9 |
Genus | Livestock breeding and technology services | UK | 11,797 | 0.8 |
CyberArk Software | Cyber security solutions provider | Israel | 11,682 | 0.8 |
JFrog | Software development tools and management | Israel | 11,204 | 0.8 |
Sutro Biopharma | Biotechnology company focused on next generation protein therapeutics | USA | 11,088 | 0.8 |
Trupanion | Pet health insurance provider | USA | 10,839 | 0.8 |
InfoMart | Online platform for restaurant supplies | Japan | 10,589 | 0.7 |
LiveRamp | Marketing technology company | USA | 10,436 | 0.7 |
Cardlytics | Digital advertising platform | USA | 10,135 | 0.7 |
ShockWave Medical | Medical devices manufacturer | USA | 10,109 | 0.7 |
iRobot | Consumer robotics and connected devices | USA | 10,082 | 0.7 |
Adaptimmune Therapeutics ADR | Cell therapies for cancer treatment | UK | 9,937 | 0.7 |
List of Investments as at 30 April 2021 (unaudited) (Ctd)
Name | Business |
Country | Value £'000 | % of total assets* |
Tandem Diabetes Care | Manufacturer of insulin pumps for diabetic patients |
USA |
9,849 |
0.7 |
LivePerson | Messaging tools for business and customer interactions |
USA |
9,781 |
0.7 |
Temenos Group | Banking software provider | Switzerland | 9,715 | 0.7 |
Ilika | Discovery and development of novel materials for mass market applications |
UK |
9,278 |
0.7 |
Quanterix | Ultra-sensitive protein analysers | USA | 9,232 | 0.6 |
Q2 Holdings | Cloud based virtual banking solutions provider | USA | 9,183 | 0.6 |
Zuora | Enterprise sales management software | USA | 9,132 | 0.6 |
Epic Games u | Video game platform and software developer | USA | 8,893 | 0.6 |
Renishaw | Measurement and calibration equipment | UK | 8,806 | 0.6 |
Yext | Digital knowledge manager | USA | 8,677 | 0.6 |
Astranis Space Technologies Series C Preferred u | Communication satellite manufacturing and operation |
USA |
8,667 |
0.6 |
Sprout Social | Cloud based software for social media management |
USA |
8,454 |
0.6 |
Tabula Rasa HealthCare | Cloud-based healthcare software developer | USA | 8,181 | 0.6 |
Freee K.K. | Cloud based accounting software for small and medium-sized enterprises |
Japan |
8,045 |
0.6 |
BASE | Commerce platform for small and medium sized enterprises | Japan | 7,999 | 0.6 |
Huya ADR | A live game streaming platform | China | 7,905 | 0.5 |
American Superconductor | Designs and manufactures power systems and superconducting wire |
USA |
7,722 |
0.5 |
Galapagos | Clinical stage biotechnology company focusing on autoimmune and fibrosis diseases | Belgium | 7,569 | 0.5 |
Baozun SPN ADR | Chinese e-commerce solution provider | China | 7,360 | 0.5 |
Agora ADR | Voice and video platform technology provider | China | 7,212 | 0.5 |
IP Group | Intellectual property commercialisation | UK | 7,017 | 0.5 |
Ambarella | Video compression and image processing semiconductors | USA | 6,861 | 0.5 |
Reaction Engines u | Advanced heat exchange company | UK | 6,811 | 0.5 |
Splunk | Data diagnostics | USA | 6,746 | 0.5 |
Graphcore Series D2 Preferred u | Specialised lending processor chips for machine learning applications | UK | 5,046 | 0.4 |
Graphcore Series E Preferred u | Specialised lending processor chips for machine learning applications | UK | 1,609 | 0.1 |
|
|
| 6,655 | 0.5 |
Dialog Semiconductor | Semiconductors for mobile devices | Germany | 6,070 | 0.4 |
List of Investments as at 30 April 2021 (unaudited) (Ctd)
Name | Business |
| Value £'000 | % of total assets* |
Country | ||||
Nanobiotix ADR | Nanomedicine company focused on cancer radiotherapy | France | 6,009 | 0.4 |
Peptidream | Peptide based drug discovery platform | Japan | 5,934 | 0.4 |
Relativity Space Series D Preferred u |
3D printing and aerospace launch company |
USA |
5,666 |
0.4 |
EverQuote | Online marketplace for buying insurance | USA | 5,656 | 0.4 |
SEEK | Online recruitment portal | Australia | 5,636 | 0.4 |
ASOS | Online fashion retailer | UK | 5,325 | 0.4 |
Morphosys | Antibody based drug discovery platform | Germany | 5,088 | 0.4 |
Oxford Instruments | Advanced instrumentation and equipment provider |
UK |
4,843 |
0.3 |
Berkeley Lights | Biotechnology tools focused on cell characterisation | USA | 4,597 | 0.3 |
Spire Global Series C Preferred u | Satellite powered data collection and analysis company |
USA |
3,255 |
0.2 |
Spire Global Sub. Convertible Promissory Note u | Satellite powered data collection and analysis company |
USA |
1,046 |
0.1 |
|
|
| 4,301 | 0.3 |
Rightmove | UK online property portal | UK | 4,237 | 0.3 |
New Horizon Health | Cancer screening company | China | 3,883 | 0.3 |
NuCana SPN ADR | Next generation chemotherapy developer | UK | 3,875 | 0.3 |
Digimarc | Digital watermarking technology provider | USA | 3,768 | 0.3 |
Akili Interactive Labs Series C Preferred u | Digital medicine company |
USA | 3,612 | 0.2 |
Cellectis | Genetic engineering for cell based therapies | France | 3,313 | 0.2 |
CEVA | Licenses IP to the semiconductor industry | USA | 3,303 | 0.2 |
C4X Discovery Holdings | Rational drug design and optimisation | UK | 3,134 | 0.2 |
Victrex | High-performance thermo-plastics | UK | 2,986 | 0.2 |
Rubius Therapeutics | Developer of novel therapies using engineered red blood cells |
USA |
2,780 |
0.2 |
Sensirion Holdings | Manufacturer of gas and flow sensors | Switzerland | 2,780 | 0.2 |
KSQ Therapeutics Series C Preferred u |
Biotechnology target identification company |
USA | 2,716 | 0.2 |
Stratasys | 3D printer manufacturer | USA | 2,340 | 0.2 |
Cosmo Pharmaceuticals | Therapies for gastrointestinal diseases | Italy | 2,326 | 0.2 |
AxoGen | Regenerative medicine and nerve repair company | USA | 2,289 | 0.2 |
Benefitfocus | Employee benefits software provider | USA | 2,207 | 0.2 |
List of Investments as at 30 April 2021 (unaudited) (Ctd)
Name | Business |
| Value £'000 | % of total assets* |
Country | ||||
4D Pharma | Microbiome biology therapeutics | UK | 2,013 | 0.1 |
4D Pharma Warrants | Microbiome biology therapeutics | UK | 42 | |
|
|
| 2,055 | 0.1 |
Catapult Group International | Analytics and data collection technology for sports teams and athletes |
Australia |
2,046 |
0.1 |
Kaleido Biosciences | Microbiome chemistry therapeutics | USA | 1,639 | 0.1 |
Chinook Therapeutics (formerly Aduro Biotechnology) |
Immunotherapy drug development |
USA |
1,518 |
0.1 |
Uxin ADR | Online Chinese used car marketplace | China | 1,223 | 0.1 |
Unity Biotechnology | Biotechnology company seeking to develop anti ageing therapies | USA | 1,222 | 0.1 |
Adicet Bio (formerly resTORbio) | Biotechnology company focused on age related disorders | USA | 1,009 | 0.1 |
Summit Therapeutics ADR | Developer of novel antibiotics | UK | 869 | 0.1 |
Ricardo | Engineering services provider | UK | 575 | |
VYNE Therapeutics (formerly Foamix Pharmaceuticals) | Biopharmaceutical company focused in the dermatology space |
USA |
178 |
|
Xeros Technology Group | Polymer technology company with laundry and textile applications |
UK |
171 |
|
Tissue Regenix | Regenerative medicine technology provider | UK | 106 | |
Velocys | Gas to liquid technology | UK | 26 | |
China Lumena New Materials | Mines, processes and manufactures natural thenardite products | China | 0 | 0.0 |
Ensogo | South East Asian e-commerce |
| 0 | 0.0 |
Total Investments | 1,382,986 | 96.1 | ||
Net Liquid Assets | 56,139 | 3.9 | ||
Total Assets | 1,439,125 | 100.0 | ||
* Total assets before deduction of loans.
u Denotes unlisted security.
| Listed equities % | Unlisted securities# % | Net liquid assets % | Total assets % |
30 April 2021 | 88.2 | 7.9 | 3.9 | 100.0 |
31 October 2020 | 90.5 | 5.8 | 3.7 | 100.0 |
Figures represent percentage of total assets.
# includes holdings in ordinary shares, preference shares and convertible promissory note.
Distribution of total assets* (unaudited)
Industry Analysis at 30 April 2021
|
% of total assets* |
|
Portfolio Weightings (relative to comparative index†) % |
Software | 17.1 |
| 12.2 |
Biotechnology | 14.0 |
| 10.0 |
Healthcare Equipment and Supplies | 8.8 |
| 6.1 |
Internet and Direct Marketing Retail | 5.5 |
| 4.5 |
Aerospace and Defence | 5.3 |
| 4.1 |
Interactive Media and Services | 4.9 |
| 4.4 |
Automobiles | 4.7 |
| 4.4 |
Healthcare Technology | 3.9 |
| 3.2 |
Life Sciences Tools and Services | 3.8 |
| 2.2 |
Electrical Equipment | 3.5 |
| 1.3 |
Capital Markets | 3.2 |
| 0.5 |
Professional Services | 2.7 |
| 1.7 |
Diversified Consumer Services | 2.6 |
| 1.8 |
Electronic Equipment, Instruments and Components | 2.2 |
| -0.4 |
IT Services | 2.0 |
| -0.1 |
Technology Hardware, Storage and Peripherals | 2.0 |
| 1.2 |
Auto Components | 1.7 |
| 0.2 |
Pharmaceuticals | 1.4 |
| -0.7 |
Consumer Finance | 1.2 |
| 0.4 |
Semiconductors and Semiconductor Equipment | 1.1 |
| -2.1 |
Trading Companies and Distributors | 0.9 |
| -0.6 |
Insurance | 0.8 |
| -1.9 |
Media | 0.7 |
| -0.8 |
Household Durables | 0.7 |
| -1.2 |
Entertainment | 0.5 |
| -0.2 |
Internet and Catalogue Retail | 0.4 |
| 0.4 |
Healthcare Providers and Services | 0.3 |
| -1.6 |
Chemicals | 0.2 |
| -2.9 |
Machinery |
| -4.4 | |
Energy Equipment and Services |
| -0.5 | |
Net Liquid Assets | 3.9 |
| 3.9 |
| 100.0 |
|
|
* Total assets before deduction of loans. |
|
|
|
† S&P Global Small Cap Index. Weightings exclude industries where the Company has no exposure. See disclaimer at the end of this announcement.
Distribution of total assets* (unaudited)
Geographical Analysis | 30 April 2021 % | 31 October 2020 % | ||
North America | 63.7 | 63.5 | ||
| USA | 63.7 | 63.5 | |
Europe |
| 20.6 | 20.7 | |
| United Kingdom | 15.0 | 15.5 | |
| Eurozone | 2.1 | 2.2 | |
| Developed Europe (non euro) | 3.5 | 3.0 | |
Asia |
| 9.9 | 10.1 | |
| Japan | 4.2 | 5.0 | |
| China | 5.7 | 5.1 | |
Australasia | 1.9 | 2.0 | ||
| Australia | 0.5 | 0.5 | |
| New Zealand | 1.4 | 1.5 | |
Net Liquid Assets | 3.9 | 3.7 | ||
Total Assets | 100.0 | 100.0 | ||
Sectoral Analysis | 30 April 2021 % |
| 31 October 2020 % | |
Communication Services | 6.1 |
| 5.6 | |
Consumer Discretionary | 15.6 |
| 16.5 | |
Financials | 5.2 |
| 8.3 | |
Healthcare | 32.2 |
| 32.5 | |
Industrials | 12.4 |
| 9.2 | |
Information Technology | 24.4 |
| 24.0 | |
Materials | 0.2 |
| 0.2 | |
Net Liquid Assets | 3.9 |
| 3.7 | |
Total Assets |
| 100.0 |
| 100.0 |
* Total assets before deduction of loans.
Notes to the condensed Financial Statements (unaudited)
1. | Basis of Accounting |
| The condensed Financial Statements for the six months to 30 April 2021 have been prepared in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended Practice issued in November 2014, updated in October 2019 and April 2021 with consequential amendments and have not been audited or reviewed by the Auditor pursuant to the Auditing Practices Board Guidance on 'Review of Interim Financial Information'. The Financial Statements for the six months to 30 April 2021 have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements at 31 October 2020. Going Concern The Directors have considered the nature of the Company's principal risks and uncertainties, as set out below, as well as the implications of the current Covid-19 pandemic. In addition, the Company's investment objective and policy, assets and liabilities, and projected income and expenditure, together with the dividend policy have been taken into consideration and it is the Directors' opinion that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. The Company has continued to comply with the investment trust status requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements and confirm that they are not aware of any material uncertainties which may affect the Company's ability to continue to do so over a period of at least twelve months from the date of approval of these Financial Statements. |
2. | Financial Information |
| The financial information contained within this Interim Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial information for the year ended 31 October 2020 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditor's Report on those accounts was not qualified, did not include a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying the report, and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006. |
3. | Investment Manager |
| Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed by the Company as its Alternative Investment Fund Manager and Company Secretary. The investment management function has been delegated to Baillie Gifford & Co. Dealing activity and transaction reporting have been further sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited. The management agreement is terminable on not less than three months' notice. The annual management fee is 0.75% on the first £50 million of net assets, 0.65% on the next £200 million of net assets and 0.55% on the remaining net assets. |
Notes to the condensed Financial Statements (unaudited) (ctd)
4. | Net return per ordinary share |
Six months to 30 April 2021 £'000 |
Six months to 30 April 2020 £'000 | Year to 31 October 2020 (audited) £'000 | |||||
| Revenue return after taxation | (1,181) | (553) | (1,479) | |||||
| Capital return after taxation | 242,046 | 88,632 | 323,451 | |||||
| Total net return | 240,865 | 88,079 | 321,972 | |||||
| Weighted average number of ordinary shares in issue | 378,943,832 | 305,469,025 | 320,606,304 | |||||
| Net return per ordinary share is based on the above totals of revenue and capital and the weighted average number of ordinary shares in issue during each period. There are no dilutive or potentially dilutive shares in issue | ||||||||
5. | Dividend | ||||||||
| No interim dividend has been declared. | ||||||||
6. | Fair Value Hierarchy | ||||||||
| The Company's investments are financial assets held at fair value through profit or loss. The fair value hierarchy used to analyse the basis on which the fair values of financial instruments held at fair value through the profit or loss account are measured is described below. Fair value measurements are categorised on the basis of the lowest (that is the least reliable or least independently observable) level input that is significant to the fair value measurement. Level 1 - using unadjusted quoted prices for identical instruments in an active market; Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and Level 3 - using inputs that are unobservable (for which market data is unavailable). An analysis of the Company's financial asset investments based on the fair value hierarchy described above is shown below. Investments held at fair value through profit or loss | ||||||||
| As at 30 April 2021 | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | ||||
| Listed equities | 1,269,918 | - | - | 1,269,918 | |||||
| Unlisted ordinary shares | - | - | 32,932 | 32,932 | ||||
| Unlisted preference shares* | - | - | 79,090 | 79,090 | ||||
| Unlisted convertible promissory note | - | - | 1,046 | 1,046 | ||||
| Total financial asset investments | 1,269,918 | - | 113,068 | 1,382,986 | ||||
Notes to the condensed Financial Statements (unaudited) (ctd)
6. | Fair Value Hierarchy (Ctd) | |||||
| As at 31 October 2020 (audited) | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | |
| Listed equities | 941,393 | - | - | 941,393 | ||
| Unlisted ordinary shares | - | - | 23,213 | 23,213 | |
| Unlisted preference shares* | - | - | 37,319 | 37,319 | |
| Unlisted convertible promissory note | - | - | 269 | 269 | |
| Total financial asset investments | 941,393 | - | 60,801 | 1,002,194 | |
| * The investments in preference shares are not classified as equity holdings as they include liquidation preference rights that determine the repayment (or multiple thereof) of the original investment in the event for a liquidation event such as a take-over. There have been no transfers between levels of the fair value hierarchy during the period other than QuantumScape which was purchased during the period in a private funding round prior to its listing before 30 April 2021. The fair value of listed investments is either bid price or, depending on the convention of the exchange on which the investment is listed, last traded price. Listed investments are categorised as Level 1 if they are valued using unadjusted quoted prices for identical instruments in an active market and as Level 2 if they do not meet all these criteria but are, nonetheless, valued using market data. Unlisted investments are valued at fair value by the Directors following a detailed review and appropriate challenge of the valuations proposed by the Managers. The Managers' unlisted investment policy applies methodologies consistent with the International Private Equity and Venture Capital Valuation guidelines ('IPEV'). The principal methodologies can be categorised as follows: (a) market approach (price of recent investment, multiples, industry valuation benchmarks and available market prices); (b) income approach (discounted cash flows); and (c) replacement cost approach (net assets). The Company's holdings in unlisted investments are categorised as Level 3 as unobservable data is a significant input to their fair value measurements. | |||||
7. | Bank Loans | |||||
| At 30 April 2021 creditors falling due within one year include borrowings of £46,742,000 (31 October 2020 - £48,728,000) drawn down under a five year £25 million revolving credit facility with National Australia Bank Limited which expires on 29 June 2023 and a five year £36 million revolving credit facility with National Australia Bank Limited which expires on 30 September 2024. At 30 April 2021 the drawings were €2,821,800, US$37,090,500 and £17,500,000 (31 October 2020 - €2,821,800, US$37,090,500 and £17,500,000) drawn under the two floating rate facilities. The fair value of the bank loans at 30 April 2021 was £46,742,000 (31 October 2020 - £48,728,000). | |||||
8. | Share Capital | |||||
| The Company has authority to allot shares under section 551 of the Companies Act 2006. The Board has authorised use of this authority to issue new shares at a premium to net asset value in order to enhance the net asset value per share for existing shareholders and improve the liquidity of the Company's shares. In the six months to 30 April 2021 the Company issued a total of 44,085,000 shares on a non pre-emptive basis (nominal value £441,000, representing 12.4% of the issued share capital at 31 October 2020) at a premium to net asset value (on the basis of debt valued at book value) raising net proceeds of £159,784,000. (In the year to 31 October 2020 - 51,720,000 shares with a nominal value of £517,000, representing 17.1% of the issued share capital at 31 October 2019 raising net proceeds of £133,044,000). Over the period from 30 April 2021 to 2 June 2021 the Company has issued a further 3,875,000 shares at a premium to net asset value, raising net proceeds of £12,515,000. The Company also has authority to buy back shares. In the six months to 30 April 2021 no ordinary shares were bought back therefore the Company's authority remains unchanged at 54,588,887 ordinary shares. | |||||
Notes to the condensed Financial Statements (unaudited) (ctd)
9. | Transaction Costs |
| During the period the Company incurred transaction costs on purchases of investments of £58,000 (30 April 2020 - £13,000; 31 October 2020 - £49,000) and transaction costs on sales of £20,000 (30 April 2020 - £15,000; 31 October 2020 - £21,000). |
10. | Related Party Transactions |
| There have been no transactions with related parties during the first six months of the current financial year that have materially affected the financial position or the performance of the Company during that period and there have been no changes in the related party transactions described in the last Annual Report and Financial Statements that could have had such an effect on the Company during that period. |
11. | Principal Risks and Uncertainties |
| The principal risks facing the Company are financial risk, investment strategy risk, discount risk, regulatory risk, custody and depositary risk, small company risk, unlisted investments, operational risk, leverage risk and political and associated economic risk. An explanation of these risks and how they are managed is set out on pages 8 to 10 of the Company's Annual Report and Financial Statements for the year to 31 October 2020 which is available on the Company's website: edinburghworldwide.co.uk. The principal risks and uncertainties have not changed since the date of the Annual Report. |
12. | Glossary of Terms and Alternative Performance Measures ('APM') |
| An alternative performance measure is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. |
| Total Assets Total value of all assets held less liabilities, other than liabilities in the form of borrowings. |
| Net Asset Value ('NAV') Also described as shareholders' funds, net asset value is the value of total assets less liabilities (including borrowings). Net asset value can be calculated on the basis of borrowings stated at book value and fair value. An explanation of each basis is provided below. The net asset value per share is calculated by dividing this amount by the number of ordinary shares in issue excluding any shares held in treasury. |
| Net Asset Value (Borrowings at Book Value) Borrowings are valued at nominal book value (book cost). |
| Net Asset Value (Borrowings at Fair Value) (APM) Borrowings are valued at an estimate of their market worth. |
|
|
Notes to the condensed Financial Statements (unaudited) (ctd)
12. | Glossary of Terms and Alternative Performance Measures ('APM') (Ctd) | |||
| Net Asset Value (Reconciliation of NAV at Book Value to NAV at Fair Value) | |||
|
| 30 April 2021
| 31 October 2020
|
|
| Net Asset Value per ordinary share (borrowings at book value) | 349.49p | 279.90p |
|
| Shareholders' funds (borrowings at book value) | £1,392,383,000 | £991,734,000 |
|
| Add: book value of borrowings | £46,742,000 | £48,728,000 |
|
| Less: fair value of borrowings | (£46,742,000) | (£48,728,000) |
|
| Shareholders' funds (borrowings at fair value) | £1,392,383,000 | £991,734,000 |
|
| Number of shares in issue | 398,403,695 | 354,318,695 |
|
| Net Asset Value per ordinary share (borrowings at fair value) | 349.49p | 279.90p |
|
| At 30 April 2021 and 31 October 2020 all borrowings are in the form of short term floating rate borrowings and their fair value is considered equal to their book value, hence there is no difference in the net asset value at book value and fair value. |
| ||
| Net Liquid Assets Net liquid assets comprise current assets less current liabilities, excluding borrowings. |
| ||
| Discount/Premium (APM) As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its net asset value. When the share price is lower than the net asset value per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the net asset value per share and is usually expressed as a percentage of the net asset value per share. If the share price is higher than the net asset value per share, this situation is called a premium. |
| ||
|
| 30 April 2021
| 31 October 2020
|
|
| Net Asset Value per share (a) | 349.49p | 279.90p |
|
| Share price (b) | 358.00p | 287.50p |
|
| Premium/(discount) ((b) - (a)) ÷ (a) | 2.4% | 2.7% |
|
| Total Return (APM) The total return is the return to shareholders after reinvesting the dividend on the date that the share price goes ex-dividend. |
| ||
| Ongoing Charges (APM) The total recurring expenses (excluding the Company's cost of dealing in investments and borrowing costs) incurred by the Company as a percentage of the average net asset value (with debt at fair value). The ongoing charges are calculated on the basis prescribed by the Association of Investment Companies. |
| ||
|
|
| ||
|
|
| ||
Notes to the condensed Financial Statements (unaudited) (ctd)
12. | Glossary of Terms and Alternative Performance Measures ('APM') (Ctd) |
| Gearing (APM) At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets. Potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds. Invested gearing is the Company's borrowings at book value less cash and cash equivalents (as adjusted for investment and share buy-back/issuance transactions awaiting settlement) expressed as a percentage of shareholders' funds. |
| Leverage (APM) For the purposes of the Alternative Investment Fund Managers Directive, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other. |
| Active Share (APM) Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index. |
| Unlisted Company An unlisted company means a company whose shares are not available to the general public for trading and not listed on a stock exchange. |
13. | The Interim Financial Report will be available at edinburghworldwide.co.uk‡ and will be posted to shareholders on or around 14 June 2021. |
‡ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement. |
None of the views expressed in this document should be construed as advice to buy or sell a particular investment. |
Third Party Data Provider Disclaimer No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data. No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom.
No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.
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S&P Index Data The S&P Global Small Cap Index ('Index') is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates ('SPDJI'). Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC, a division of S&P Global ('S&P'); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ('Dow Jones'). Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. |
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