Svm Uk Emerg Regulatory News (SVM)

SVM UK EMERGING FUND PLC (the "Fund") HALF YEARLY REPORT (FOR THE SIX MONTHS TO 30 SEPTEMBER 2013) A copy of the Half Yearly Report can be downloaded from the Manager's websiteat www.svmonline.co.uk and a copy has also been submitted to the NationalStorage Mechanism and will shortly be available for inspection atwww.hemscott.com/nsm.do HIGHLIGHTS Net asset value gained 18.4% compared to a 9.0% return in the FTSE AIM AllShare Index Share price rose by 28.5% Change in the benchmark for the Fund to the IMA UK All Companies Sector AverageIndex Interim Management Report CHAIRMAN'S STATEMENT Over the six months to 30 September 2013, your Fund's net asset value gained18.4% to 63.84p, compared to a rise of 9.0% in the benchmark, the FTSE AIM AllShare Index. The share price gained 28.5% to 55.25p. As a result, thediscount at which the shares stand to net asset value reduced to 13.5%.Further progress in the share price and net asset value have been achieved inOctober. Shareholders approved a change in the benchmark for the Fund, with effect from30 September 2013, to the IMA UK All Companies Sector Average Index, which theManagers believe will be a more challenging benchmark than AIM. This indexrepresents the performance of the average fund in the Investment ManagementAssociation's largest sector. It represents funds which invest at least 80% oftheir assets in UK equities and which have a primary objective of deliveringcapital growth. Equity markets were strong over the period, and the Fund was fully invested.The portfolio emphasis on consumer sectors, property and technology washelpful, as prospects improved for these sectors. The best performances duringthe six months came from the consumer sector; ASOS, ITV, Ted Baker, SuperGroupand Sports Direct. These gains were driven by good results; profitabilitypicking up as the UK economy recovered. Consumer pressures have eased, withgrowth in private sector pay, and a stabilisation of real take-home pay. Therecovery in the Pound since mid year has lowered some import costs and cutpetrol prices, and the UK economy continues to perform better than theEurozone. The main portfolio disappointments were in Manroy and Ophir Energy,which have both been sold. Portfolio investment in the UK consumer sector wasincreased during the period under review. The portfolio emphasises businesses with a specialisation or other competitiveadvantage which helps to produce growth along with stable and growing margins.With low financing costs, these businesses can pay down debt, restructure ormake acquisitions to enhance earnings. Investments with these characteristicsinclude Thomas Cook, ITV and Mitchells & Butlers. Additional investment has been made in two technology businesses; Iomart Groupwhich is a cloud hosting business, and in WANdisco which provides wide areanetworks. Both of these are growing, scalable businesses. Another technologyinvestment, Delcam, a CAD CAM software business, received a bid in November. The outlook for the UK consumer is improving, and many portfolio companies willalso be helped by continuing growth in the global economy. We expect morestimulus for the UK economy, particularly in housebuilding, encouraging growthin the regions. The Fund retains a focused portfolio of growth businesses,many of which are modestly valued in comparison to their larger equivalents.Its aim remains to deliver long term capital growth, with lower volatility.The Board and Managers believe the Fund is well placed to continue to deliveron this aim. Peter Dicks Chairman 22 November 2013 INVESTMENT OBJECTIVE The investment objective of the Fund is long term capital growth frominvestments in smaller and medium sized UK companies. Its aim is to outperformthe IMA UK All Companies Sector Average Index on a total return basis. The Fund aims to achieve its objective and to diversify risk by investing inshares and related instruments, controlled by a number of limits on exposures.Appropriate guidelines for the management of the investments, gearing andfinancial instruments have been established by the Board. Limits are expressedas percentages of shareholders' funds, measured at market value. This is an abridged version of the Fund's investment policy and objective. Thefull investment policy can be found on page 11 and 12 of the Annual Report &Accounts for the year ended 31 March 2013. Financial Statements Income Statement Six months to 30 Six months to 30 September 2013 September 2012 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Net gain/(loss) on investments atfair value through profit or loss - 590 590 - (1,403) (1,403) Income 52 - 52 15 - 15 Investment management fees - - - - - - Other expenses (36) (4) (40) (29) - (29) Return/(loss) before finance costsand taxation 16 586 602 (14) (1,403) (1,417) Finance costs (5) - (5) (2) - (2) Return/(loss) on ordinaryactivities before taxation 11 586 597 (16) (1,403) (1,419)Taxation - - - - Return/(loss) attributable toordinary shareholders 11 586 597 (16) (1,403) (1,419) Return/(loss) per Ordinary Share 0.18p 9.76p 9.94p (0.27p) (23.35p) (23.62p) Year ended 31 March 2013 (audited) Revenue Capital Total £'000 £'000 £'000 Net loss on investments at fairvalue through profit or loss - (991) (991) Income 50 - 50 Investment management fees - - - Other expenses (96) (12) (108) Loss before finance costs andtaxation (46) (1,003) (1,049) Finance costs (6) - (6) Loss on ordinary activitiesbefore taxation (52) (1,003) (1,055) Taxation - - - Loss attributable to ordinaryshareholders (52) (1,003) (1,055) Loss per Ordinary Share (0.86p) (16.71p) (17.57p) Total column of this statement is the profit and loss account of the Company.All revenue and capital items in this statement derive from continuing operations.A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. Balance Sheet As at As at As at 30 31 30 September March September 2013 2013 2012 (unaudited) (audited) (unaudited) £'000 £'000 £'000 Fixed Assets Investments at fair value through profit or 3,732 3,248 1,905loss Total Current Assets 355 200 1,734 Creditors: amounts falling due within one (253) (211) (766)year Net current assets 102 (11) 968 Total assets less current liabilities 3,834 3,237 2,873 Capital and Reserves 3,834 3,237 2,873 Equity shareholders' funds 3,834 3,237 2,873 Net asset value per Ordinary Share 63.84p 53.90p 47.85p Note These are not full statutory accounts in terms of Section 435 of the CompaniesAct 2006. Audited accounts for the year to 31 March 2013, which wereunqualified, have been lodged with the Registrar of Companies. Summarised Cash Flow Statement Six months Year to 31 Six months to 30 March to 31 March September 2013 2013 2013 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Net cash (out)/inflow from operating activities (53) (467) 373 Taxation 2 - (2) Capital expenditure and financial investment 137 (187) 395 Servicing of finance (5) (6) (2) Movement in cash in the period 81 (660) 764 Summarised Reconciliation of Movement in Shareholders' Funds For the period to 30 September 2013 Capital Share Share redemption Special Capital Revenue capital premium reserve reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 As at 1 April 300 314 5,144 27 (1,927) (621)2013 Return - - - - 586 11attributabletoshareholders As at 30 300 314 5,144 27 (1,341) (610)September 2013 For the yearto 31 March2013 Capital Share Share redemption Special Capital Revenue capital premium reserve reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 As at 1 April 300 314 5,144 27 (924) (569)2012 Loss - - - - (1,003) (52)attributabletoshareholders As at 30 300 314 5,144 27 (1,927) (621)September 2012 For the period to 30 September 2012 Capital Share Share redemption Special Capital Revenue capital premium reserve reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 As at 1 April 300 314 5,144 27 (924) (569)2012 Loss - - - - (1,403) (16)attributabletoshareholders As at 30 300 314 5,144 27 (2,327) (585)September 2012 Investment Portfolio % of Net Assets Sector analysis % as at 30 Ten largest Valuation September 2013 Valuation of Net Assets investments as at 30 £000 £000 September 2013 Sector Stock Hydrodec 8% 250 6.5 Basic Materials 0 0.0 CULS Ted Baker 191 5.0 Industrials 564 14.7 PLC ASOS PLC 154 4.0 Oil and Gas 316 8.2 Thomas Cook 146 3.8 Consumer Goods 370 9.6 Group PLC Tribal 132 3.4 Consumer 1,357 35.4 Group PLC Services Delcam PLC 132 3.4 Healthcare 0 0.0 WANdisco 125 3.3 Telecoms 33 0.9 PLC - CFD Unite Group 124 3.2 Technology 576 15.0 PLC Mitchells 122 3.2 Financials 516 13.5 and Butlers PLC - CFD Workspace 111 2.9 Utilities 0 0.0 Group PLC Ten largest 1,487 38.7 Total 3,732 97.3 investments Other 2,245 58.6 investments (inc CFD margin) Total 3,732 97.3 investments Net current 3,834 100.0 assets Risks And Uncertainties The principal risks facing the Fund relate to the investment in financialinstruments and include market, liquidity, credit and interest rate risk.Additional risks faced by the Fund are investment strategy, share pricediscount, accounting, legal and regulatory risk, operational, corporategovernance and shareholder relations risk, and financial risk. The Board seeksto mitigate and manage these risks through continuous review, policy settingand enforcement of contractual obligations. The Board receives both formal andinformal reports from the Managers and third party service providers addressingthese risks. An explanation of these risks and how they are mitigated isexplained in the 2013 Annual Report, which is available on the Manager'swebsite: www.svmonline.co.uk. These principal risks and uncertainties have notchanged from those disclosed in the 2013 Annual Report.Directors' Responsibility Statement The Directors are responsible for preparing the Half Yearly Report inaccordance with applicable law and regulations. The Directors confirm that to the best of their knowledge: (i) the condensed set of financial statements, which have been prepared in accordance with the Accounting Standards Board's statement 'Half Yearly Financial gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Fund; (ii) the Interim Management Report includes a fair review of the information required by the Disclosure and Transparency Rules DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and DTR 4.2.8R (disclosure of related party transactions and changes therein). (iii) No related party transactions have taken place during the first six months of the year that have materially affected the financial position of the Fund during the period and there have been no changes in the related party transactions described in the Annual Report & Accounts for the year end 31 March 2013 that could do so. The Half Yearly Financial Report has not been audited or reviewed by the Fund'sauditors. By Order of the Board Peter Dicks Chairman 22 November 2013 Notes 1. The results have been prepared in accordance with applicableaccounting standards and the 2009 Statement of Recommended Practice (SORP)issued by the Association of Investment Companies. These accounts have beenprepared in accordance with prior year accounting policies. 2. Returns per share Return per share is based on a weighted average of 6,005,000 (2012 - 6,005,000) ordinary shares in issue during the year. Total return per share is based on the total profit for the period of £597,000 (2012 - loss of £1,419,000). Capital return per share is based on net profit for the period of £ 586,000 (2012 - loss of £1,403,000). Revenue return per share is based on the revenue profit after taxation for the period of £11,000 (2012 loss of £16,000). The number of shares in issue at 30 September 2013 was 6,005,000 (2012 - 6,005,000). 3. Due to the size of the Fund, the Investment Managers have waived their fees for the periods to 30 September 2014 and 2013. 4. The above figures do not constitute full accounts in terms of Section 435 of the Companies Act 2006. The accounts for the year to 31 March 2013, on which the auditors issued an unqualified report under Section 495 of the Companies Act 2006, have been lodged with the Registrar of Companies and did not contain a statement required under Section 498 of the Companies Act 2006. The half yearly report will be available on the Managers' website: www.svmonline.co.uk. Copies are also available for inspection at 7 Castle Street, Edinburgh EH2 3AH, the registered office of the Fund. For further information, please contact: Colin McLean SVM Asset Management 0131 226 6699 Roland Cross Broadgate Mainland 020 7226 6111