Last checked at 24 Jun 2022 12:37
BlackRock Throgmorton Trust Plc - Portfolio UpdateBlackRock Throgmorton Trust Plc - Portfolio Update
PR Newswire
London, June 22
The information contained in this release was correct as at 31 May 2022. Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at:
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
All information is at 31 May2022 and unaudited.Performance at month end is calculated on a cum income basis
| One Month % | Three months % | One year % | Three years % | Five years % | |
| Net asset value | -4.1 | -12.7 | -22.9 | 22.2 | 39.3 |
| Share price | -2.9 | -16.6 | -27.8 | 24.5 | 57.8 |
| Benchmark* | -1.7 | -2.6 | -11.7 | 20.8 | 17.6 |
Sources: BlackRock and Datastream
*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. The performance of the indices have been blended to reflect this.
| At month end | |
| Net asset value capital only: | 666.45p |
| Net asset value incl. income: | 672.58p |
| Share price | 635.00p |
| Discount to cum income NAV | 5.6% |
| Net yield1: | 1.7% |
| Total Gross assets2: | £690.2m |
| Net market exposure as a % of net asset value3: | 101.5% |
| Ordinary shares in issue4: | 102,615,194 |
| 2021 ongoing charges (excluding performance fees)5,6: | 0.57% |
| 2021 ongoing charges ratio (including performance fees)5,6,7: | 1.38% |
1. Calculated using the 2021 interim dividend declared on 26 July 2021 and paid on 27 August 2021, together with the 2021 final dividend declared on 07 February 2022 and paid on 31 March 2022.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long exposure less short exposure as a percentage of net asset value.
4. Excluding 594,670 shares held in treasury.
5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2021.
6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.
7. Effective 1st December 2017 the annual performance fee is calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total management fees (comprising the base management fee of 0.35% and a potential performance fee of 0.90%) are therefore 1.25% of average month end gross assets on a two-year rolling basis (from 1.70% of average annual gross assets).
| Sector Weightings | % of Total Assets |
| Industrials | 28.0 |
| Consumer Discretionary | 22.8 |
| Financials | 18.8 |
| Technology | 7.1 |
| Health Care | 6.9 |
| Consumer Staples | 4.3 |
| Telecommunications | 3.4 |
| Basic Materials | 1.9 |
| Energy | 0.3 |
| Net Current Assets | 6.5 |
| ----- | |
| Total | 100.0 |
| ===== | |
| Country Weightings | % of Total Assets |
| United Kingdom | 93.3 |
| United States | 5.0 |
| France | 1.5 |
| Australia | 0.7 |
| Germany | -0.5 |
| ----- | |
| Total | 100.0 |
| ===== |
| Market Exposure (Quarterly) | ||||
| 31.08.21 % | 30.11.21 % | 28.02.22 % | 31.05.22 % | |
| Long | 119.4 | 121.3 | 121.8 | 104.8 |
| Short | 2.4 | 2.7 | 2.3 | 3.3 |
| Gross exposure | 121.8 | 123.9 | 124.1 | 108.1 |
| Net exposure | 117.0 | 118.6 | 119.5 | 101.5 |
| Ten Largest Investments | |
| Company | % of Total Gross Assets |
| Gamma Communications | 3.4 |
| Electrocomponents | 3.2 |
| CVS Group | 3.0 |
| Watches of Switzerland | 3.0 |
| Auction Technology Group | 2.8 |
| Oxford Instruments | 2.8 |
| YouGov | 2.7 |
| WH Smith | 2.5 |
| Dechra Pharmaceuticals | 2.3 |
| Impax Asset Management | 2.2 |
Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:
The Company returned -4.1%1 during May, underperforming its benchmark, the Numis Smaller Companies + AIM ex Investment Companies, which returned -1.7%1. Many of the strongest areas of the market were either in energy related sectors, or those deemed to be the most defensive as investors continued to grapple with the fear of an economic slowdown.
Similar to the trend that we have highlighted in recent monthly updates, UK small & mid-caps continued to be aggressively sold during May, we feel largely regardless of their end exposure as companies. The largest detractor was IntegraFin, a UK wealth management platform for advisers, which did disappoint the market over their guidance for costs. The major feature of this business should be high levels of recurring (and growing) revenues and this has indeed been true. However, the company has felt it necessary to take a step up in operating spend to deliver best in class service and so margins will need to fall back from the mid 40% range. This should not really change the fundamental long term investment case, but it is a disappointment given previous statements on cost control, and we have reduced the position. Shares in Treatt, the ingredients manufacturer, fell after reporting a fall in profits compared to the same period last year despite reporting positive sales growth. SigmaRoc, another UK mid cap industrial that has been sold off although profits continue to grow and therefore, we continue to hold the position.
The top contributor was Auction Technology Group – a company which had been a detractor in recent months but released a strong set of results and an outlook statement that was better than expected, with the company indicating double digit revenue growth to continue this year. The shares therefore rebounded and we think are excellent value. Another share that rebounded this month was Baltic Classified Group however, this company is yet to report its results and we shall have to wait another month to see how trading has fared. Nevertheless, with its strong market position and margins over 70% we believe it should fare well. YouGov also rebounded during May, despite the company not reporting any results, and therefore we think the share price moves reflect the high quality, more defensive nature of the business.
Overall, this has been a very ‘macro’ month and year to date. When looking at individual company results and looking at the state of profit and loss and balance sheets, we are often struck by just how much protection and upside there is, which is why we have retained our exposure and remain modestly net long. Acknowledging the heightened levels of uncertainty and recognising that strong numbers aren’t translating into instant share price recovery in this market back drop we reduced the gross exposure to c.115% and the net exposure to around 104%. We still believe many of our longs are already pricing in very bearish scenarios (indeed as some of our shorts have now been reduced) and we continue to believe in the ability of many of our long positions to grow double-digit over many years, names that our now trading on free cash flow yields of 4-5% and as such representing significant value for us. It would seem many of the Management teams agree judging by the size of share buyback programmes that have been commenced in recent weeks, and as we have articulated before, we own many companies where a sizeable percentage of market cap is in net cash. We understand that the year to date has been a painful period for our shareholders and we appreciate your ongoing support, and we can assure you that our confidence in the recovery in our long book is undiminished and we remain of the view there is significant upside to come in time.
1Source: BlackRock as at 31 May 2022
24 June 2022
ENDS
Latest information is available by typing www.blackrock.com/uk/thrg on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.