Last checked at 16 Mar 2018 13:37
BlackRock Throgmorton Trust Plc - Portfolio UpdateBlackRock Throgmorton Trust Plc - Portfolio Update
PR Newswire
London, March 15
BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
All information is at 28 February 2018 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 | -2.0 | 2.4 | 23.2 | 65.7 | 120.8 |
| Share price | 0.2 | 6.9 | 28.8 | 78.1 | 135.0 |
| Benchmark* | -3.2 | -2.9 | 8.7 | 29.4 | 62.9 |
Sources: BlackRock and Datastream
*With effect from 1 December 2013 the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies plus AIM (excluding Investment Companies) Index as the Company’s benchmark. The five year period indices have been blended to reflect this.
| At month end | |
| Net asset value capital only: | 547.65p |
| Net asset value incl. income: | 548.84p |
| Share price | 482.00p |
| Discount to cum income NAV | 12.2% |
| Net yield1: | 1.9% |
| Total Gross assets2: | £401.4m |
| Net market exposure as a % of net asset value3: | 111.2% |
| Ordinary shares in issue4: | 73,130,326 |
| 2017 ongoing charges* (excluding performance fees5,6: | 0.9% |
| 2017 ongoing charges* ratio (including performance fees)5,6,7: | 2.2% |
*Ongoing Charges: The recent management fee rate reductions, as detailed in the notes below, will impact management fees in 2017 and onwards. The impact of the new fee arrangements, assuming the same level of performance from the manager and assuming all other charges remain the same, would be to reduce the level of Ongoing Charges borne by the trust.1. Calculated using 2017 interim dividend declared on 24 July 2017 and 2017 final dividend declared on 12 February 2018.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long positions less short positions as a percentage of net asset value.
4. Excluding 7,400,000 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 2017.
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 arrangements for the Company have changed. The annual performance fee is now 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 fees (comprising the base management fee of 0.35% and a potential performance fee of 0.90%) will therefore fall to 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 | 35.0 |
| Financials | 19.1 |
| Consumer Services | 16.1 |
| Consumer Goods | 9.9 |
| Basic Materials | 6.2 |
| Health Care | 6.0 |
| Technology | 5.8 |
| Oil & Gas | 2.0 |
| Net current liabilities | -0.1 |
| ----- | |
| Total | 100.0 |
| ===== |
Market Exposure (Quarterly)
| 31.05.17 % | 31.08.17 % | 30.11.17 % | 28.02.18 % | |
| Long | 117.3 | 115.3 | 116.9 | 119.6 |
| Short | 6.1 | 5.8 | 6.3 | 8.4 |
| Gross exposure | 123.4 | 121.1 | 123.2 | 128.0 |
| Net exposure | 111.2 | 109.5 | 110.6 | 111.2 |
| Ten Largest Investments | |
| Company | % of Total Gross Assets |
| Melrose Industries | 3.1 |
| Dechra Pharmaceuticals | 2.8 |
| Ascential | 2.8 |
| 4imprint Group | 2.6 |
| Robert Walters | 2.4 |
| CVS Group | 2.3 |
| Ibstock | 2.1 |
| Bodycote | 2.0 |
| Johnson Service Group | 2.0 |
| SSP | 2.0 |
Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:
During February the Company’s NAV per share fell by 2.0% to 548.84p on a cum income basis whilst our benchmark (the Numis Smaller Companies excluding AIM (excluding Investment Companies Index) fell by 3.2%; the FTSE 100 Index fell 4.0% (all performance figures are with income reinvested and net of ongoing charges and any applicable performance fees).
Positive stock selection in both long and short positions drove outperformance over the benchmark during the month.
Ascential, a core holding, performed well after the company announced solid full year results where Earnings Per Share (EPS) beat expectations by 4% and a confident outlook: organic revenue and profit growth to accelerate. Integrafin, a fast growing UK financial services company, which we purchased at Initial Public Offering (IPO) during the month, and where we have strong conviction in the growth prospects for the company and potential for valuation uplift, made a positive start to its life as a listed company. Dechra Pharmaceuticals reported interim results for the six months to 31 December 2017, showing strong revenue growth in both Europe and North America while management stated that current trading remains in line with expectations.
Whilst short positions benefitted in general from a falling market, we had some strong wins with our shorts in a UK roadside assistance company and a UK bus and rail company. Both have high leverage and have seen profits falling. Given interest rate uncertainty, it does seem right now that the market is focusing more and more on balance sheets and cashflow, rather than just EPS and P/E (price to earnings) ratios, so this should bode well for many of our shorts.
Shares in Sophos fell after the company reported results reiterating full year guidance, but noted a slight reduction in its renewal rate. While the decline in the renewal rate was disappointing, Sophos remains an attractive investment given its market leading position in the fast growing cyber security space.
Activity during February included adding to SSP Group and Melrose Industries and purchasing a new holding in Integrafin as mentioned above. We continue to use market volatility to add to existing holdings where we feel the valuation does not reflect the true earnings potential of these companies.
16 March 2018
ENDS
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