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13 Dec 2021 12:21
MIGO Opportunities Trust Plc - Half-year ReportMIGO Opportunities Trust Plc - Half-year Report
PR Newswire
London, December 13
MIGO Opportunities Trust plc
(previously: Miton Global Opportunities plc)
Half-Yearly Report for the six months ended 31 October 2021
MIGO Opportunities Trust plc (the “Company”) has today released its Half-Yearly Report for the six months ended 31 October 2021.
The Half-Yearly Report and other information will be available via www.migoplc.co.uk
A copy of the half-yearly report will also be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Enquiries:
Premier Portfolio Managers Limited
Claire Long, Head of Investment Trusts
DDI: +44 (0) 1483 400463
Email: claire.long@premiermiton.com
Frostrow Capital LLP
Company Secretary
DDI: +44 (0)203 709 8732
Email: info@frostrow.com
Financial Highlights
| Six months ended | Year ended | ||
| 31 October 2021 | 30 April 2021 | % change | |
| Net asset value per share | 382.3p | 345.9p | 10.5% |
| Share price | 381.0p | 346.0p | 10.1% |
| (Discount)/premium to net asset value per share | (0.3%) | 0.0% | |
| Net asset value volatility* | 4.0% | 7.5% | |
| Gearing* | 0.0% | 2.1% | |
| Ongoing charges* | 1.3% | 1.3% |
* Alternative Performance Measure, see Glossary.
Source: Morningstar.
Total Return Performance to 31 October 2021
| 6 months | 1 year | 5 years | |
| % | % | % | |
| Net asset value | 10.5% | 49.0% | 68.7% |
| Share price | 10.1% | 54.3% | 82.3% |
| SONIA +2% | 1.0% | 2.1% | 12.4% |
Source: Morningstar
Investment Objective
The objective of MIGO Opportunities Trust plc (previously: Miton Global Opportunities plc) (the “Company”) is to outperform SONIA plus 2% (the “Benchmark”) over the longer term, principally through exploiting inefficiencies in the pricing of closed-end funds. This objective is intended to reflect the Company’s aim of providing a better return to shareholders over the longer term than they would get by placing money on deposit.
The Benchmark is a target only and should not be treated as a guarantee of the performance of the Company or its portfolio.
Investment Policy
The Company invests in closed-end investment funds traded on the London Stock Exchange’s main market, but has the flexibility to invest in investment funds listed or dealt on other recognised stock exchanges, in unlisted closed-end funds (including, but not limited to, funds traded on AIM) and in open-ended investment funds. The funds in which the Company invests may include all types of investment trusts, companies and funds established onshore or offshore. The Company has the flexibility to invest in any class of security issued by investment funds including, without limitation, equity, debt, warrants or other convertible securities. In addition, the Company may invest in other securities, such as non-investment fund debt, if deemed to be appropriate to produce the desired returns to shareholders.
The Company is unrestricted in the number of funds it holds.
The Company invests in listed closed-end investment funds that themselves have stated investment policies to invest no more than 15% of their gross assets in other listed closed-end investment funds. However, the Company may invest up to 10%, in aggregate, of the value of its gross assets at the time of acquisition in closed-end investment funds that do not have such a stated investment policy.
In addition, the Company will not invest more than 25%, in aggregate, of the value of its gross assets at the time of acquisition in open-ended funds.*
There are no prescriptive limits on allocation of assets in terms of asset class or geography.
There are no limits imposed on the size of hedging contracts, save that their aggregated value will not exceed 20% of the portfolio’s gross assets at the time they are entered into.
The Board permits borrowings of up to 20% of the Company’s net asset value (measured at the time new borrowings are incurred).
The Company’s investment objective may lead, on occasions, to a significant amount of cash or near cash being held.
(*the above text highlighted in Italics shows minor changes to the wording of the Investment Policy to make it easier to understand. Shareholders should note that there is no change to the way that investments are made on behalf of the Company.)
Chairman’s Statement
I am pleased to present this report on your Company’s activities during the six months to 31 October 2021 and on its financial position on that date.
Performance
Over the six months to 31 October 2021 the Company’s net asset value per share total return was 10.5% and the share price total return was 10.1%. These returns compare to the return from the Company’s Benchmark, sterling SONIA +2%, which delivered a total return of 1.0%.
The Board is especially pleased to note that the market capitalisation of MIGO has exceeded £100 million for the first time and stands at £101.1 million as at 10 December 2021. The Board view this as a significant milestone not only because of the positive returns generated for shareholders to get to this point, but also because the larger market capitalisation may open the Company to new investors and improve liquidity.
During the period under review, a continuation of recovering growth, accommodative monetary policy and a slow rotation to value all benefitted MIGO, although concerns about the prospect of rising inflation and increasing global supply chain disruption have now made themselves felt in the markets.
A comprehensive review of the factors affecting the Company’s performance during the period can be found in the Investment Managers’ Review.
Share Price, Share Issuances and Buybacks
The share price increased over the period from 346.0p to 381.0p and the shares traded at a very small discount to net asset value per share of -0.3% at the end of the period.
During the six months under review, the net asset value per share was modestly ahead of the share price for most of the time resulting in the shares trading at a discount to net asset value per share. In order to manage the share price discount, the Company undertook a buyback of 50,000 shares in July. A further buyback was undertaken at the end of September, of the shares that had been elected for realisation during the 2021 Realisation Opportunity, bringing the total number of shares bought back during the period to 199,729. As at 31 October 2021, the Company had 26,730,256 (30 April 2021: 26,929,985) shares in issue.
Since the period-end, the Company’s shares have been trading at a premium to their net asset value per share and the Company has been able to issue 75,000 shares, increasing the number of shares in issue to 26,805,256. We hope that this trend will continue and allow us to grow the Company further.
The Board’s policy is to be proactive in managing its share price premium or discount. Issuing new shares at a premium to net asset value per share creates value for existing shareholders and any share issuance also improves the liquidity of the Company’s shares, controls the premium to net asset value per share at which the shares trade and spreads the operating costs over a larger capital base, reducing the ongoing charges ratio. Share buybacks reduce the overhang of shares in the market and correct imbalances of supply and demand. The Board and the Investment Managers are in regular contact in order to be able to react swiftly to any disproportionate premiums or discounts the Company’s shares are trading at.
2021 Realisation Opportunity
Under its Articles of Association, the Company will offer shareholders a Realisation Opportunity every three years; the first such opportunity having been offered in 2018. During the period under review, the Board again gave Shareholders the right to realise all or part of their holdings of Ordinary Shares for cash, at a price per Ordinary Share representing a 2% discount to the net asset value per share as at the close of business on 22 September 2021. By the deadline on 23 September, elections had been received in respect of 149,729 ordinary shares or 0.55% of the Company’s issued share capital. These shares were subsequently bought back by the Company. The next Realisation Opportunity is expected to be offered to shareholders in 2024.
Company Name Change
As shareholders will have seen in our Stock Exchange announcements, the Board has decided to change the name of the Company from Miton Global Opportunities plc to MIGO Opportunities Trust plc. Over the years since its launch in 2004 the Company has increasingly become known as “MIGO” and the Board believes that the new name will be easier for potential investors to find and identify, thereby promoting the success of the Company in the interests of its shareholders. This name change has now become effective.
The trading symbol for the Company’s ordinary shares listed on the London Stock Exchange will remain unchanged as MIGO. No new share certificates will be issued in respect of existing shares held in certificated form, but after the change takes effect any new share certificates will be issued in the name of MIGO Opportunities Trust plc. Shareholders should retain their existing share certificates which will continue to be valid.
Outlook
With the Company trading at a premium again and issuing shares, the outlook is cautiously positive but focused more on alpha generation rather than the rising tide of markets. Whilst discounts across the sector remain tight when compared with long-term averages, there continue to be a wide range of interesting opportunities in the sector. Our Investment Managers are well positioned to take advantage of these opportunities as they arise, and to manage a well-diversified portfolio that offers attractive returns. Your Board continues to believe in the long-term proposition of the Company.
Richard Davidson
Chairman
13 December 2021
Investment Manager’s Report
for the six months ended 31 October 2021
Performance
During the six months to 31 October 2021, our net asset value rose from 345.89p to 382.34p. This represents a gain of 10.5% in capital terms. In comparison, the Numis All-Share Index* appreciated by 2.5% in capital terms. On the last day of our reporting period, our shares closed at 381p trading close to the NAV per share.
* Please see Glossary.
Markets generally continued their ascent driven by the vast quantities of monetary stimulus unleashed by the authorities to combat the debilitating effects of the global pandemic. Economies started to open up as Covid related restrictions started to ease.
Contributors
Given market conditions there were rather more contributors than detractors. These were drawn from a wide range of asset classes highlighting the diversification that MIGO brings to investors’ portfolios.
Dunedin Enterprise added the most to our attribution. This investment trust has been in orderly wind down for a number of years. Despite the reality that eventually all assets will be returned to shareholders at around net asset value, the shares have often traded at a significant discount. In recent months two disposals have been announced both triggering an exit well above carrying value. U-Pol is a producer of automotive refinishing products whilst GPS is involved in payment processing technology. Post the end of the reporting period, Dunedin undertook a tender issue buying in 27% of the outstanding shares in issue at a level comfortably in excess of the open market price.
A theme that has proved profitable was Uranium where we own both Geiger Counter and Yellowcake. The former owns a portfolio of mining shares whilst the latter simply owns the physical metal, the principal use of which is the generation of energy in nuclear power stations. The price of this metal has remained depressed since the accident at Fukushima in 2011 which triggered the decision by some nations to abandon nuclear power. Recently it has been accepted that sources of renewable power such as wind and solar are not constantly reliable. Nuclear has started to become more favoured acting as a baseload part of a portfolio of power sources given its carbon free characteristics. Countries such as France and the United States have decided to extend the lives of their reactors. The challenge will be to source sufficient Uranium. In recent years, more of the metal has been burnt than mined and this shortfall is becoming more pronounced. It has not been economic for a decade to develop new mines. Whist Uranium is not a rare mineral, bringing fresh capacity online can easily take seven years. In the meantime, it seems likely that the open market price will be squeezed steadily higher.
Some of our private equity trusts have been useful contributors. NB Private Equity and Oakley Capital both have mature portfolios ripe for monetisation at a time when the sector has vast quantities of cash waiting to be invested. Despite these trusts enjoying the sweet spot in their cycle, their shares trade at attractive discounts. This is likely to be the result of recent legislation that requires owners of investment trusts to disclose the underlying costs when they are held in client portfolios or fund of funds. The methodology throws up high levels of charges for many private equity trusts, especially at times when they have performed strongly given they receive a share of the profits. Many advisers do not have the opportunity to explain the nature of these charges to their clients and simply sell.
India was a buoyant market during the period. Government intervention in China has unnerved investors which led to reduced exposure and a greater allocation to India within defined emerging market mandates. A number of IPOs within the technology sector excited retail investors exacerbating the bull run. We top sliced our position in India Capital Growth in response.
Another position that benefited from the developing situation in China was Vietnam Opportunities Trust. Multinationals are seeking to diversify their manufacturing and supply lines away from China so that they do not have all their eggs in the Chinese basket. Vietnam is an obvious alternative. We think that looking forward there will be greater interest in the Ho Chi Minh stockmarket. Many trusts specialising in Vietnam trade on wide discounts despite the encouraging outlook. This is a legacy from the mid noughties when briefly the country was an extremely popular investment destination. Investment trusts launched during that period raised vast sums of capital. The two trusts we own are FTSE 250 constituents in their own right. This dwarfs demand for Vietnamese assets and the discounts reflect this. Both trusts recognise this situation and regularly buy back surplus shares. We are hopeful that increased demand combined with reduced supply will lead to a sharp narrowing of the discount
River & Mercantile Micro Cap was another trust that handed back cash to shareholders at around net asset value. In order to stay nimble in a market where liquidity is limited, this trust redeems shares once the value of the portfolio exceeds £100 million. Despite the portfolio being valued at slightly more than that figure, it has frequently been possible to acquire shares at a significant discount creating an anomaly that we have been happy to exploit.
Third Point is a trust which owns a stake in the eponymous Wall Street hedge fund managed by Dan Loeb. Management have turned affairs around after a difficult Covid crisis, but the trust has never succeeded in attracting a UK following and as a result has traded at times at a discount approaching 30%. This has narrowed of late as the situation has attracted activist investor AVI who are agitating for change. We have enjoyed a powerful combination of a rising net asset value and narrowing discount as a result.
EPE Special Opportunties remains extremely cheap on a sum of the parts basis. At current market prices, its stake in LED specialist Luceco alone is worth more than EPE’s entire market capitalisation. In addition to a significant amount of cash, it also holds stakes in Whittards of Chelsea, Pharmacy 2U and a housewares business with the rights to brand names such as Kilner jars. The appreciation in EPE’s shares was driven by the rally in Luceco’s price.
Detractors
Baker Steel Resources was the biggest detractor as the shares suffered from a bout of profit taking after an extremely strong run earlier in the calendar year. The pandemic has made it difficult to perform due diligence given the need for geologists to travel to remote locations when movements across borders has been severely restricted, therefore the trust has decided to list several of its projects instead of selling to a multinational. The first to IPO was Tungsten West which owns an open cast mine near Plymouth that will potentially be the largest Tungsten mine outside China. Baker Steel’s portfolio has a focus on metals and minerals that are required for the electrification of the global economy. Despite the decline in the share price the period under review has been one of progress at portfolio level.
Henderson Opportunities was another situation that has been on the receiving end of profit taking. The shares traded at a very narrow discount in April at which point we sharply reduced our holding. The discount has since widened to a more typical level.
Macau Property Opportunities was already impacted by China’s anti speculation measures which were designed to take the heat out of the market for high end properties. More recently, the mainland authorities have announced measures which will give them more control over the local casinos. Macau residential property now trades at an extremely large discount to the Hong Kong market. Given that the shares also trade at an extreme discount it is fair to say that there is already plenty of bad news reflected within the share price. It is encouraging to note that the managers have bought shares recently.
New Entry and Departures
We initiated a position in Biotech Growth. The biotechnology sector has fallen out of favour given fears that the Democrats will seek to initiate drug price reductions. It has also struggled as resources have been diverted to fight Covid-19 and away from other areas of treatment. We think that the Biden administration has other priorities and that market fears will prove to be overblown. Post Covid-19, areas of medicine that have suffered during the pandemic will naturally recover as backlogs are dealt with.
Two positions were exited: Tufton Oceanic and Polar Capital Financial. It is difficult to see how the boom conditions in Shipping can improve much further. Financials have recovered sharply and Polar Financials was exited around net asset value.
Outlook
Markets have been moving steadily higher for some time on a wave of stimulus. At some point the tide will move into reverse and asset values will cease to rise by default. Our portfolio of mispriced special situations has the scope to progress in such a market environment
The closed end sector has rapidly evolved into a home for alternative asset classes. There have recently been a wide range of mandates including accommodation for the homeless, digital infrastructure, hydrogen, forestry and space. The diverse range of trusts available means there will usually be a number of sectors coming into and out of favour. It is when we identify an out of favour asset class which then returns to popularity that we make the greatest returns. Looking forward there will be a greater number of opportunities than there has been in the past.
Nick GreenwoodCharlotte CuthbertsonPremier Fund Managers Limited13 December 2021
Average underlying (discount)/premium
| Top 12 stocks | Weight (%) | (Discount)/ Premium (%) |
| Dunedin Enterprise Investment Trust | 6.8 | (14.3) |
| Baker Steel Resources Trust | 6.2 | (14.0) |
| VinaCapital Vietnam Opportunity Fund | 6.0 | (17.6) |
| EPE Special Opportunities | 5.4 | (33.4) |
| Alpha Real Trust | 4.5 | (20.9) |
| Phoenix Spree Deutschland | 4.3 | (14.0) |
| NB Private Equity Partners | 3.8 | (23.0) |
| Geiger Counter | 3.8 | 21.4 |
| New Star Investment Trust | 3.6 | (27.0) |
| Atlantis Japan Growth Fund | 3.4 | (13.7) |
| India Capital Growth Fund | 3.2 | (10.9) |
| Georgia Capital | 3.1 | (58.7) |
| Average discount | (18.8)1 |
Source: Link Asset Services & Bloomberg, 31.10.2021.
1 Please note that the average discount figure only takes into account the top 12 holdings in the portfolio.
Portfolio Valuation
as at 31 October 2021
| Investment | Valuation | % of | ||
| Company | Sector | Region | £’000 | portfolio |
| Dunedin Enterprise Investment Trust Plc† | Private Equity | Global | 6,318 | 6.8 |
| Baker Steel Resources Trust | Mining | Global | 5,712 | 6.2 |
| VinaCapital Vietnam Opportunity Fund | Private Equity | Asia Pacific – Vietnam | 5,536 | 6.0 |
| EPE Special Opportunities* | Private Equity | UK | 4,963 | 5.4 |
| Alpha Real Trust | Real Estate | Global | 4,168 | 4.5 |
| Phoenix Spree Deutschland | Real Estate | Europe | 4,010 | 4.3 |
| NB Private Equity Partners | Private Equity | North America | 3,506 | 3.8 |
| Geiger Counter | Mining – Uranium | Global | 3,479 | 3.8 |
| New Star Investment Trust | Equity | Global | 3,326 | 3.6 |
| Atlantis Japan Growth Fund | Equity | Japan | 3,124 | 3.4 |
| Top ten investments | 44,142 | 47.8 | ||
| India Capital Growth Fund* | Equity | India | 2,940 | 3.2 |
| Georgia Capital | Equity | Europe | 2,869 | 3.1 |
| Oakley Capital Investments | Private Equity | Global | 2,792 | 3.0 |
| River and Mercantile UK Micro Cap Investment Company | Equity – Small Cap | UK | 2,760 | 3.0 |
| Third Point Investors | Equity | Global | 2,750 | 3.0 |
| Real Estate Investors* | Real Estate | UK | 2,535 | 2.7 |
| Strategic Equity Capital | Equity – Small Cap | UK | 2,482 | 2.7 |
| Duke Royalty* | Other – Alternative Lender | Global | 2,254 | 2.4 |
| Yellow Cake* | Mining – Uranium | Global | 2,109 | 2.3 |
| Industrials REIT | Real Estate | UK | 2,038 | 2.2 |
| Top twenty investments | 69,671 | 75.4 | ||
| CQS Natural Resources Growth and Income | Mining | Global | 2,010 | 2.2 |
| Downing Strategic Micro-Cap Invesment Trust | Equity – Small Cap | UK | 1,866 | 2.0 |
| Henderson Opportunities Trust | Equity | UK | 1,728 | 1.9 |
| Artemis Alpha Trust | Equity | UK | 1,636 | 1.8 |
| Chrysalis Investments | Private Equity | Europe | 1,594 | 1.7 |
| Marwyn Value Investors | Equity | UK | 1,536 | 1.7 |
| Ashoka India Equity Investment Trust | Equity | India | 1,452 | 1.6 |
| Vietnam Enterprise Investments | Equity | Asia Pacific – Vietnam | 1,443 | 1.6 |
| Hansa Investment | Equity | Global | 1,318 | 1.4 |
| Gresham House Strategic* | Equity – Small Cap | UK | 1,283 | 1.4 |
| Top thirty investments | 85,537 | 92.7 | ||
| Macau Property Opportunities Fund† | Real Estate | Asia Pacific – China | 1,194 | 1.3 |
| Schroder UK Public Private Trust | Private Equity | UK | 1,153 | 1.3 |
| Ground Rents Income Fund | Real Estate | UK | 1,147 | 1.3 |
| Biotech Growth Trust | Equity | UK | 1,050 | 1.1 |
| Life Settlement Assets | Other – Life Policies | North America | 1,047 | 1.1 |
| Chelverton Growth Trust | Equity | UK | 306 | 0.3 |
| Aseana Properties† | Real Estate | Asia Pacific | 277 | 0.3 |
| Cambium Global Timberland*† | Other – Forestry | Global | 197 | 0.2 |
| Better Capital PCC† | Private Equity | UK | 124 | 0.1 |
| Reconstruction Capital II*† | Equity | Europe | 82 | 0.1 |
| Origo Partners*†# | Private Equity | Emerging Markets | 74 | 0.1 |
| RENN Universal Growth Investment Trust†^ | Equity | North America | 49 | 0.1 |
| Global Resources Investment Trust | Mining | Global | 3 | 0.0 |
| Total investments in the portfolio | 92,241 | 100.0 | ||
| Other current assets (including net cash) | 9,958 | |||
| Net asset value | 102,199 |
* AIM/NEX Listed
† In liquidation, in a process of realisation or has a fixed life.
# Includes both Ordinary and Convertible Preference share holdings.
^ Unlisted or trading of shares currently suspended.
Capital Structure
As at the date of this report, the Company’s share capital comprises 26,805,256 Ordinary shares of 1p each with one vote per share. The Company’s Articles of Association contain provisions enabling shareholders to elect at three-year intervals for the realisation of all or part of their shareholding (the “Realisation Opportunity”). At the discretion of the Company, shareholders may request that all or part of the Ordinary shares they hold be placed, repurchased, or purchased out of the proceeds of an issue of new Ordinary shares, or purchased under a tender offer or by a market maker. If realisation elections cannot be satisfied in their entirety through the placing and/or repurchase mechanism, all remaining Elected shares shall be converted into Realisation shares.
Also in the event that the Company does not make available to members an opportunity to effect such a realisation at the appointed time, shareholders may serve a realisation election requesting that all or part of their Ordinary shares be converted into Realisation shares.
The portfolio would then be split into two separate and distinct pools pro rata as between the Continuing Ordinary shares (the “Continuation Pool”) and the Realisation shares (the “Realisation Pool”). The Continuation Pool would be managed in accordance with the Company’s investment objective and policy, while the assets comprising the Realisation Pool would be managed in accordance with an orderly realisation programme with the aim of making progressive returns of cash to holders of Realisation shares as soon as practicable. The precise mechanism for any return of cash to holders of Realisation shares would depend on the relevant factors prevailing at the time and would be at the discretion of the Board. If the net asset value of the Company’s Continuing Ordinary shares is more than £30 million, then the Company would continue in operation.
In September 2021, the Company offered a Realisation Opportunity, giving shareholders the option either to retain or to realise their investment in the Company. Realisation elections were received in respect of 0.55% of shares in issue at the time, and these shares were subsequently repurchased by the Company. There are currently no Realisation shares in issue. The next Realisation Opportunity will be offered to shareholders in 2024. The Board intends to put forward tailored proposals in relation to each Realisation Opportunity to ensure it can be delivered efficiently and in accordance with the best interests of the Company, at the relevant point in time.
Interim Management Report
Principal Risks and Uncertainties
A review of the half year and the outlook for the Company can be found in the Chairman’s Statement and in the Investment Manager’s Review. The principal risks and uncertainties facing the Company fall into the following broad categories: investment risks (including market and discount risk; liquidity, cash and foreign exchange risk; interest rate risk and macro risk), strategic risks (including shareholder relations and share price performance risk; key person risk and company duration risk) and operational risks (in particular service provider risk). These risks were explained in detail on pages 15 to 18 in the annual report for the year ended 30 April 2021. In addition, the Covid-19 pandemic and Brexit are recognised as principal risks and uncertainties with a possible impact on the investment performance of the Company as well as on the operations of the Company and its service providers.
Related Parties Transactions
During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.
Going Concern
The Directors believe, having considered the Company’s investment objective, risk management policies, capital management policies and procedures, the nature of the portfolio and expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future and, more specifically, that there are no material uncertainties pertaining to the Company that would prevent its ability to continue in such operational existence for at least twelve months from the date of the approval of this half year report. For these reasons, the Directors consider there is reasonable evidence to continue to adopt the going concern basis in preparing the Half-Yearly Report.
Directors Responsibility Statement
The Board of Directors confirms that, to the best of its knowledge:
the condensed set of financial statements contained within the Half-Yearly Report has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting); The Half-Yearly Report and condensed financial statements give a true and fair view of the assets, liabilities, financial position and return of the Company; and The Interim Management Report includes a fair review of the information required by: DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.The Half-Yearly Report has not been reviewed or audited by the Company’s auditor.
This Half-Yearly Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the date of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
For and on behalf of the Board
Richard DavidsonChairman13 December 2021
Condensed Income Statement
| Six months to 31 October 2021 (unaudited) | Six months to 31 October 2020 (unaudited) | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| Note | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Gains on investments | – | 9,698 | 9,698 | – | 9,050 | 9,050 | |
| Exchange losses on capital items | – | – | – | – | (1) | (1) | |
| Income | 4 | 943 | – | 943 | 672 | – | 672 |
| Portfolio management fee | (319) | – | (319) | (212) | – | (212) | |
| Other expenses | (493) | – | (493) | (254) | – | (254) | |
| Return before finance costs and taxation | 131 | 9,698 | 9,829 | 206 | 9,049 | 9,255 | |
| Finance costs | (37) | – | (37) | (33) | – | (33) | |
| Return before taxation | 94 | 9,698 | 9,792 | 173 | 9,049 | 9,222 | |
| Taxation | – | – | – | – | – | – | |
| Return after taxation | 94 | 9,698 | 9,792 | 173 | 9,049 | 9,222 | |
| Return per Ordinary share (pence) | 0.3 | 36.1 | 36.4 | 0.6 | 32.6 | 33.2 | |
The Total column of this statement is the Income Statement of the Company. The supplementary revenue and capital columns have been prepared in accordance with guidance issued by the AIC.
All revenue and capital items in the above statement derive from continuing operations. There are no recognised gains or losses other than those passing through the Income Statement and therefore no Statement of Total Comprehensive Income has been presented.
The notes form an integral part of these financial statements.
Condensed Statement of Changes in Equity
| Capital | Share | ||||||
| Share | redemption | premium | Special | Capital | Revenue | ||
| capital | reserve | account | reserve | reserve | reserve | Total | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Six months to 31 October 2021 (Unaudited) | |||||||
| Balance at 30 April 2021 | 269 | 74 | 25,105 | 6,406 | 61,303 | (12) | 93,145 |
| Buyback of shares for cancellation | (2) | 2 | – | (738) | – | – | (738) |
| Return for the period | – | – | – | – | 9,698 | 94 | 9,792 |
| Balance at 31 October 2021 | 267 | 76 | 25,105 | 5,668 | 71,001 | 82 | 102,199 |
| Six months to 31 October 2020 (Unaudited) | |||||||
| At 30 April 2020 | 281 | 62 | 25,105 | 9,356 | 28,158 | (370) | 62,592 |
| Buyback of shares for cancellation | (5) | 5 | – | (1,131) | – | – | (1,131) |
| Return for the period | – | – | – | – | 9,049 | 173 | 9,222 |
| Balance at 31 October 2020 | 276 | 67 | 25,105 | 8,225 | 37,207 | (197) | 70,683 |
The notes form an integral part of these financial statements.
Condensed Statement of Financial Position
| As at | As at | ||
| 31 October 2021 | 30 April 2021 | ||
| (unaudited) | (audited) | ||
| Note | £’000 | £’000 | |
| Non-current assets | |||
| Investments | 5 | 92,241 | 90,485 |
| Current assets | |||
| Debtors | 310 | 861 | |
| Cash | 9,964 | 4,035 | |
| 10,274 | 4,896 | ||
| Creditors: amounts falling due within one year | |||
| Bank borrowings | – | (2,000) | |
| Creditors | (316) | (236) | |
| (316) | (2,236) | ||
| Net current assets | 9,958 | 2,660 | |
| Net assets | 102,199 | 93,145 | |
| Share capital and reserves: | |||
| Share capital | 267 | 269 | |
| Capital redemption reserve | 76 | 74 | |
| Share premium account | 25,105 | 25,105 | |
| Special reserve | 5,668 | 6,406 | |
| Capital reserve | 71,001 | 61,303 | |
| Revenue reserve | 82 | (12) | |
| Total shareholders’ funds | 102,199 | 93,145 | |
| Net asset value per ordinary share (pence) | 382.3 | 345.9 |
The net asset value per ordinary share is based on 26,730,256 shares, being the shares in issue as at 31 October 2021 (30 April 2021: 26,929,985).
The notes form an integral part of these financial statements.
Condensed Cash Flow Statement
| Six months to | Six months to | |
| 31 October 2021 | 31 October 2020 | |
| (unaudited) | (unaudited) | |
| £’000 | £’000 | |
| Net cash inflow from operating activities | 91 | 336 |
| Investing activities | ||
| Purchases of investments | (6,517) | (6,675) |
| Sales of investments | 15,127 | 4,600 |
| Exchange loss on settlement | (2) | (2) |
| Net cash (outflow)/inflow from investing activities | 8,608 | (2,077) |
| Financing activities | ||
| Buyback of shares for cancellation | (738) | (1,131) |
| Revolving credit facility (repayment)/drawdown | (2,000) | 2,000 |
| Finance costs paid | (34) | (25) |
| Net cash (outflow)/inflow from financing activities | (2,772) | 844 |
| increase/(decrease) in cash | 5,927 | (897) |
| Reconciliation of net cash flow movement in funds: | ||
| Cash at beginning of period | 4,035 | 2,286 |
| Exchange rate movements | 2 | 2 |
| Increase(decrease) in cash | 5,927 | (897) |
| Increase/(decrease) in net cash | 5,929 | (895) |
| Cash at end of period | 9,964 | 1,391 |
The notes form an integral part of these financial statements.
Notes to the Condensed Interim Financial Statements
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 104 ‘Interim Financial Reporting’, the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ updated in February 2018 and using the same accounting policies as set out in the Company’s Annual Report for the year ended 30 April 2021.
2 Financial statements
The condensed financial statements contained in this interim financial report do not constitute statutory accounts as defined in s434 of the Companies Act 2006. The financial information for the six months to 31 October 2020 has not been audited or reviewed by the Company’s external auditors.
The information for the year ended 30 April 2021 has been extracted from the latest published audited financial statements. Those statutory financial statements have been filed with the Registrar of Companies and included the report of the auditors, which was unqualified and did not contain a statement under Sections 498(2) or (3) of the Companies Act 2006.
3 Going concern
After making enquiries, and having reviewed the investments, Statement of Financial Position and projected income and expenditure for the next 12 months, the Directors have a reasonable expectation that the Company has adequate resources to continue in operation for the foreseeable future. The Directors have therefore adopted the going concern basis in preparing these financial statements.
4 Income
| Six months to | Six months to | |
| 31 October 2021 | 31 October 2020 | |
| £’000 | £’000 | |
| Income from investments: | ||
| UK dividend income | 380 | 241 |
| Non UK dividend income | 415 | 299 |
| Property dividends income | 148 | 132 |
| Total income | 943 | 672 |
5 Fair value hierarchy
The methods of fair value measurement are classified into a hierarchy based on reliability of the information used to determine the valuation.
| Level 1 – | Quoted prices in an active market. |
| Level 2 – | Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data), either directly or indirectly. |
| Level 3 – | Inputs are unobservable (i.e. for which market data is unavailable). |
The table below sets out the Company’s fair value hierarchy investments.
| Level 1 | Level 2 | Level 3 | Total | |
| £’000 | £’000 | £’000 | £’000 | |
| As at 31 October 2021 | ||||
| Investment – Equities | 91,997 | – | 173 | 92,241 |
| Total | 91,997 | – | 173 | 92,241 |
| As at 30 April 2021 | ||||
| Investment – Equities | 90,242 | – | 173 | 90,485 |
| Total | 90,242 | – | 173 | 90,485 |
Glossary of Terms and Alternative Performance Measures (“APMs”)
Discount or Premium (APM)
A description of the difference between the share price and the net asset value per share. The size of the discount or premium 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, the result is a premium. If the share price is lower than the net asset value per share, the shares are trading at a discount.
| As at | As at | |
| 31 October 2021 | 30 April 2021 | |
| £’000 | £’000 | |
| Closing NAV per share (p) | 382.3 | 345.9 |
| Closing share price (p) | 381.0 | 346.0 |
| (Discount)/premium | (0.3%) | 0.0% |
Net Asset Value (“NAV”) Total Return (APM)
NAV total return is the closing NAV per share including any cumulative dividends paid as a percentage over the opening NAV.
NAV total return is an alternative way of measuring investment management performance of investment trusts which is not affected by moments in the share price.
| Six months to | One year to | Five years to | |
| 31 October 2021 | 31 October 2021 | 31 October 2021 | |
| £’000 | £’000 | £’000 | |
| Closing NAV per share (p) | 382.3 | 382.3 | 382.3 |
| Opening NAV per share (p) | 345.9 | 256.5 | 226.7 |
| NAV total return | 10.5% | 49.0% | 68.7% |
Ongoing Charges (APM)
Ongoing charges are calculated by taking the Company’s annualised revenue and capitalised expenses (excluding finance costs and certain non-recurring items) expressed as a percentage of the average monthly net assets of the Company during the year.
| Six months to | Year to | |
| 31 October 2021 | 30 April 2021 | |
| £’000 | £’000 | |
| Total expenses per Income Statement | 812 | 1,021 |
| Less non recurring expenses | (175) | – |
| Total expenses – annualised | 1,274 | 1,021 |
| Average net assets | 99,030 | 76,912 |
| Ongoing charges | 1.3% | 1.3% |
The ongoing charges percentage reflects the costs incurred directly by the Company which are associated with the management of a static investment portfolio. Consistent with AIC Guidance, the ongoing charges percentage excludes non-recurring items. In addition, the NAV performance also includes the costs incurred directly or indirectly in investments that are managed by external fund managers. Many of these managers net these costs off within their valuations, and therefore they form part of the Company’s investment return, and it is not practical to calculate an ongoing charges percentage from the information they provide.
Share Price Total Return (APM)
The combined effect of any dividends paid, together with the rise and fall in the share price or NAV. Total return statistics enable the investor to make performance comparisons between trusts with different dividend policies. Any dividends (after tax) received by a shareholder are assumed to have been reinvested in either additional shares of the trust at the time the shares go ex-dividend (the share price total return) or in the assets of the trust at its NAV per share (the NAV total return). As the Company does not currently pay dividends the NAV and share price total return are calculated by taking the increase in the NAV or share price during the relevant period and dividing by the opening NAV or share price.
| Six months to | One year to | Five years to | |
| 31 October 2021 | 31 October 2021 | 31 October 2021 | |
| £’000 | £’000 | £’000 | |
| Closing share price (p) | 381.0 | 381.0 | 381.0 |
| Opening share price (p) | 346.0 | 247.0 | 209.0 |
| Dividend reinvested (p) | – | – | – |
| Share price total return | 10.1% | 54.3% | 82.3% |
NAV Volatility (APM)
Volatility is related to the degree to which NAV or prices differ from their mean (the standard deviation). Volatility is calculated by taking the daily NAV or closing prices over the relevant year and calculating the standard deviation of those prices. The daily standard deviation is then multiplied by an annualisation factor being the square root of the number of the trading days in the year.
| Six months to | Year ended | |
| 31 October 2021 | 30 April 2021 | |
| Standard deviation of daily NAV (A) | 0.35% | 0.46% |
| Number of trading days | 132 | 265 |
| Square root of the number of trading days (B) | 11.5 | 16.3 |
| Annualised volatility (A*B) | 4.0% | 7.5% |
Numis All-Share Index
Previously, the Company has occasionally referenced the FTSE 100 and the FTSE All-Share Indices in its reporting. However, given the licensing terms available from London Stock Exchange Group (who own the FTSE Index data) and the fact that publication of the indices would require separate licences for the Company (notwithstanding that Premier Miton, as Investment Manager, already has such licences), the Company has decided that reference will only be made to the Numis All-Share Index going forward. This avoids the need for additional expense to the Company in obtaining separate FTSE licences, and the Board believes it provides a similar level of reporting on the return as in previous years.
Shareholder Information
Share dealing
Shares can be traded through a stockbroker or other authorised intermediary. The Company’s Ordinary shares are traded on the London Stock Exchange. The Company’s shares are fully qualifying investments for Individual Savings Accounts (“ISAs”).
Share register enquiries
The register for the Company’s ordinary shares is maintained by Computershare Investor Services PLC. If you would like to notify a change of name or address, please contact the registrar in writing to Computershare Investor Services PLC, the Pavilions, Bridgwater Road, Bristol BS99 6ZZ.
With queries in respect of your shareholdings, please contact Computershare on 0370 889 3231 (lines are open from 8.30 am to 5.30 pm, UK time, Monday to Friday). Alternatively, you can email WebCorres@computershare.co.uk or contact the Registrar via www.investorcentre.co.uk.
Share capital and net asset value information
SEDOL number 3436594
ISIN number GB0034365949
Bloomberg symbol MIGO
The Company releases its net asset value per Ordinary share to the London Stock Exchange on a daily basis.
Website: www.migoplc.co.uk
Annual and Half-Yearly Reports
Copies of the Annual and Half-Yearly Reports are available from the Company Secretary and on the Company’s website.
Investment Manager: Premier Fund Managers Limited
The Company’s Investment Manager is Premier Fund Managers Limited, a wholly owned subsidiary of Premier Miton Group plc, an asset management group managing £13.9 billion on behalf of clients (as at 30 September 2021). Product strengths include UK equities, US equities, European and Global equities and a wide range of multi-asset strategies.
Investor updates in the form of monthly factsheets are available from the Company’s website, www.migoplc.co.uk
Association of Investment Companies
The Company is a member of the Association of Investment Companies.
Directors and Advisers
Directors (all non-executive)Richard Davidson (Chairman)Michael Phillips (Senior Independent Director)Katya Thomson (Audit Committee Chairman)Hugh van Cutsem
Registered Office6th FloorPaternoster House65 St Paul’s ChurchyardLondon EC4M 8AB
Company Secretary, Marketing & AdministrationFrostrow Capital LLP25 Southampton BuildingsLondon WC2A 1AL
Website: www.frostrow.comEmail: info@frostrow.com
Alternative Investment Fund ManagerPremier Portfolio Managers LimitedEastgate CourtHigh StreetGuildfordSurrey GU1 3DE
Investment ManagerPremier Fund Managers LimitedEastgate CourtHigh StreetGuildfordSurrey GU1 3DE
Website: www.premiermiton.com
Independent AuditorPricewaterhouseCoopers LLP2 Glass WharfBristol BS2 0FR
RegistrarComputershare Investor Services PLCThe PavilionsBridgewater RoadBristol BS99 6ZZUnited Kingdom
Telephone: (0) 370 889 3231*Email: WebCorres@computershare.co.ukWebsite: www.investorcentre.co.uk
Please contact the Registrars if you have a query about a certificated holding in the Company’s shares.
* Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales.
Stockbroker and Financial AdviserNumis Securities LimitedThe London Stock Exchange Building10 Paternoster SquareLondon EC4M 7LT
Depositary and CustodianThe Bank of New YorkMellon (International) LimitedOne Canada SquareLondon E14 5AL
A member of the Association of Investment Companies
MIGO Opportunities Trust plc (previously: Miton Global Opportunities plc)An investment company as defined under Section 833 of the Companies Act 2006 Registered in England and Wales No. 5020752
END
Neither the contents of the Company’s website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.