Half-year Report
31/07/2024 13:00
BlackRock Energy and Resources Income Trust plc
LEI: 54930040ALEAVPMMDC31
Half Yearly Financial Report 31 May 2024
Performance record
As at As at
31 May 30 November
2024 2023
Net assets (£’000) 1 172,233 162,362
Net asset value per ordinary share (pence) 138.24 123.58
Ordinary share price (mid-market) (pence) 121.50 110.40
Discount to net asset value 2 12.1% 10.7%
========= =========
For the For the
six months year
ended ended
31 May 30 November
2024 2023
Performance (with dividends reinvested)
Net asset value per share 2 13.8% (11.8)%
Ordinary share price 2 12.3% (15.2)%
--------------- ---------------
Performance since inception (with dividends reinvested)
Net asset value per share 2 255.3% 212.2%
Ordinary share price 2 213.7% 179.4%
========= =========
For the For the Change
six months six months %
ended ended
31 May 31 May
2024 2023
Revenue
Net profit on ordinary activities after taxation (£’000) 2,334 3,209 -27.3
Revenue earnings per ordinary share (pence) 3 1.83 2.37 -22.7
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Interim dividends (pence)
1st interim 1.125 1.10 2.3
2nd interim 4 1.125 1.10 2.3
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Total dividends payable/paid 2.250 2.20 2.3
========= ========= =========
1 The change in net assets reflects portfolio movements, the buyback of
shares and dividends paid during the period.
2 Alternative Performance Measures, see Glossary within the Half Yearly
Financial Report.
3 Further details are given in the Glossary within the Half Yearly Financial
Report.
4 Paid on 15 July 2024.
Chairman’s Statement
Dear Shareholder
I am pleased to report that our portfolio has performed well during the six
months to 31 May 2024, delivering strong absolute NAV returns. My fellow Board
members and I believe that the Company remains well positioned to exercise
flexibility to take advantage of the energy transition to a lower carbon
global economy.
Market overview
At the start of the Company’s financial year on 1 December 2023 and through
into the first half of 2024, markets as a whole showed resilience driven
initially by signs of easing inflation and expectations of interest rate cuts
in the US and UK. Generally strong corporate earnings and labour markets, as
well as enthusiasm for AI, helped markets subsequently look through stubbornly
high core services inflation (and consequently higher for longer interest
rates) and political uncertainty, although some cracks are starting to show as
of the time or writing. Given the mix of opportunity and risks, the Board is
confident in your Company’s 3-pronged investment strategy (Mining,
Traditional Energy and Energy Transition), giving the portfolio managers the
flexibility to be able to manoeuvre the portfolio around volatile markets to
invest in stocks where they think the best investment opportunities can be
found. The portfolio managers decreased Traditional Energy exposure through
2023 and into 2024, to stand at 28.3% at the end of the period, and increased
the weighting in the Energy Transition sector to 26.3% at 31 May 2024.
Performance
During the six months ended 31 May 2024, the Company’s net asset value (NAV)
per share rose by 13.8% and its share price rose by 12.3% (both percentages in
Pound Sterling terms with dividends reinvested). Although the Company does not
have a formal benchmark, to set this in the context of the market backdrop,
the MSCI ACWI Metals and Mining Index rose by 10.6%, S&P Clean Energy Index
rose by 5.5% and the MSCI World Energy Index rose by 9.7% over the same period
(all percentages in Pound Sterling terms with dividends reinvested).
As noted above, the Board does not formally benchmark the Company’s
performance against Mining and Energy sector indices because meeting a
specific dividend target is not within the scope of these indices and also
because no index appropriately reflects the Company’s blended exposure to
the Energy (including the Energy Transition) and Mining sectors. For internal
monitoring purposes, however, the Board compares the performance of the
portfolio against a bespoke internal Mining and Energy composite index. The
neutral sector weightings of this bespoke index are 40% Mining, 30%
Traditional Energy and 30% Energy Transition.
Further information on investment performance is given in the Investment
Managers’ Report.
Revenue return and dividends
The Company’s revenue return per share for the six-month period was 1.83
pence per share, a decrease of 22.7% over the same period last year (the
revenue return for the six months to 31 May 2023 was 2.37 pence per share).
The Board’s current target is to declare quarterly dividends of at least
1.125 pence per share in the year to 30 November 2024, making a total of at
least 4.50 pence per share for the year as a whole. This target represents a
yield of 3.7% based on the share price of 121.50 pence per share as at 31 May
2024, and 3.8% based on the share price of 117.00 pence per share at the close
of business on 29 July 2024. When the Company’s net revenue is insufficient
to meet the dividend payments, the Board’s policy is to utilise the
considerable distributable reserves, including group revenue reserves of 3.46p
per share as at 31 May 2024 (after adjusting for the second interim dividend
for 2024) to meet any shortfall. This enables the portfolio managers to focus
on total return from their investment selections.
The first quarterly interim dividend of 1.125 pence per share was paid on 26
April 2024 and the second quarterly interim dividend of 1.125 pence per share
was paid on 15 July 2024 (four quarterly interim dividends each of 1.10 pence
per share were paid in the twelve months ended 30 November 2023).
The Company may write options to generate revenue return, although the
portfolio managers’ focus is on investing the portfolio to generate an
optimal level of total return without striving to meet an annual income target
from option writing. Consequently, they will only enter into option
transactions with the intention that the overall contribution is beneficial to
total return.
Gearing
The Company operates a flexible gearing policy which depends on prevailing
market conditions. It is not intended that gearing will exceed 20% of the
gross assets of the Company. The maximum gearing used during the period was
14.8%, and the level of gearing at 31 May 2024 was 9.6%. For calculations, see
the Glossary within the Half Yearly Financial Report
Management of share rating
The Directors recognise the importance to investors that the Company’s share
price should not trade at a significant premium or discount to NAV, and
therefore, in normal market conditions, may use the Company’s share buyback,
sale of shares from treasury and share issuance powers to ensure that the
share price is broadly in line with the underlying NAV. The Board seeks to
balance this aim, and to control discount volatility, against its desire to
avoid excessive buybacks which impact the size of the Company and hence the
liquidity of its shares and the Ongoing Charges Ratio.
During the period under review, the discounts on Investment Trusts in general
have remained at close to historically high levels- the average discount for
the Investment Trusts sector (ex 3i Group) has been 15.5% - and in this
context, your Company’s shares have been trading at a discount between 8.0%
and 14.1% over the period under review with an average discount of 11.2%. The
Company has therefore actively intervened to control the discount and has
bought back 6,800,000 shares for costs of £7,684,000, representing an average
discount of 12.6%. All shares were bought back at a discount to NAV,
delivering an uplift to the NAV per share of 0.5% for continuing shareholders
for the period under review. Since 31 May 2024 and as at 29 July 2024, the
Company has bought back 1,841.697 shares for costs of £1,527,000 and at an
average discount of 10.7%. As at 29 July 2024 the Company’s shares are
trading at a discount of 10.0%.
Market outlook & portfolio positioning
Despite the current political uncertainty, the ongoing drive by governments to
address climate change and decarbonise the energy supply chain remains an
important backdrop for the Company’s three pillars, of Traditional Energy,
Mining and Metals and Energy Transition. The Board considers that all three
sectors have an important role to play as the energy system transitions to a
lower carbon economy. Traditional energy is needed to support base load energy
to continue to power economies during the transition. The Metals and Mining
sector provides the material supply chain for low carbon technologies from
steel for wind turbines to lithium for electric cars. The path to a lower
carbon economy is also expected to disrupt many industries and business models
with scope for the Company to invest directly in opportunities in the Energy
Transition space. Against this backdrop, the flexibility of the Company’s
investment mandate with the ability to shift exposure between Traditional
Energy, Energy Transition and Mining sectors, means that it is uniquely
positioned to serve investors as these sectors evolve.
The Board is confident that the Company remains well-placed to benefit from
these key investment trends over the long term.
ADRIAN BROWN
Chairman
31 July 2024
Investment Managers’ Report
Market overview
The first six months of 2024 saw strong momentum in the broader equity markets
carry over from 2023. Whilst the Company’s net asset value per share (NAV)
saw a positive return, it again lagged the overall equity market as all three
sectors the Company invests in lagged broader markets, which were once again
driven in a narrow fashion by the spectacular performance of a small group of
technology and artificial intelligence (AI) related companies. See Figure 1
within the Half Yearly Financial Report.
Whilst the market excitement about AI has naturally focused on the relevant
technology companies and associated industrial companies that will benefit
from the step change in demand for cooling etc., there has been less attention
paid to the energy and materials side of the equation. Just like the energy
transition, the growth in AI is going to be materials and energy intensive as
well as compounding some of the bottlenecks faced by the energy transition. We
see some exciting opportunities associated with grid spending that is required
to cope with the electricity demand growth as well as the upgrades to the
grids. These investments are critical to cope with the rising complexity of
grid management resulting from the higher proportion of intermittent
generation from sources such as solar and wind.
Although the market has been pre-occupied with the timing and pace of interest
rate cuts in the major economies, we have not viewed delays in rate cut
expectations as a concern. The higher for longer scenario that now faces the
market is a result of stronger than expected economic data in the US, which we
view as positive for many of the companies held or potential investment
opportunities for the portfolio. The resurgent US manufacturing industry,
fuelled by the triple forces of reshoring driven geopolitics, the investments
funded by the Inflation Reduction Act of 2022 and the AI/datacentre boom, are
all energy and materials intensive forms of growth, that more than offset the
costs of higher interest rates for many of the companies in the portfolio.
Commodity 31 May 30 November % change H1 2024 on
2024 2023 H1 2023
Average Price %
Change 1
Base Metals (US$/tonne)
Aluminium 2,607 2,156 20.9 -2.3
Copper 9,913 8,388 18.2 2.4
Lead 2,216 2,092 5.9 -2.1
Nickel 19,456 16,438 18.4 -32.0
Tin 32,775 22,984 42.6 9.1
Zinc 2,915 2,467 18.2 -12.4
--------------- --------------- --------------- ---------------
Precious Metals (US$/ounce)
Gold 2,330.7 2,037.8 14.4 13.2
Silver 30.3 25.3 20.0 8.0
Platinum 1,048.0 937.0 11.8 -7.5
Palladium 949.0 1,025.0 -7.4 -36.8
--------------- --------------- --------------- ---------------
Energy
Oil (WTI) (US$/barrel) 78.0 75.6 3.1 3.2
Oil (Brent) (US$/barrel) 79.4 81.7 -2.8 2.8
Natural Gas (US$/Metric Million British Thermal Unit (mmbtu)) 1.8 2.8 -35.3 -27.5
--------------- --------------- --------------- ---------------
Bulk Commodities (US$/tonne)
Iron ore 117.0 132.5 -11.7 4.7
Coking coal 220.5 285.0 -22.6 -4.2
Thermal coal 142.4 129.0 10.4 -47.9
--------------- --------------- --------------- ---------------
Equity Indices
MSCI ACWI 2 Metals & Mining Index (US$) 643.7 578.7 11.2 1.4
MSCI ACWI Metals & Mining Index (£) 505.6 457.2 10.6 -1.7
MSCI 3 World Energy Index (US$) 507.6 459.9 10.4 8.5
MSCI World Energy Index (£) 398.7 363.3 9.7 1.8
S&P Clean Energy Index (US$) 1,279.0 1,205.7 6.1 -27.0
S&P Clean Energy Index (£) 822.3 779.7 5.5 -29.3
========= ========= ========= =========
Source: LSEG Datastream, June 2024.
1 Average of 1/12/2022-31/05/2023 to 1/12/2023-31/05/2024.
2 Morgan Stanley Capital International All Country Weighted Index.
3 Morgan Stanley Capital International.
Portfolio activity & investment performance
The Company’s portfolio delivered a total NAV return of 13.8% during the
period driven by positive performance within all three sectors of the Company.
The most notable top down change in the portfolio during the first half was to
add to our Energy Transition exposure (see Figure 2 within the Half Yearly
Financial Report) as the valuations continue to move lower compared to broader
equity markets, a trend we noted in the 2023 annual report too. This change
was still relatively modest in size as whilst valuations have become more
attractive, we do not think that broad based positive earnings momentum is
imminent, given that areas like electric vehicles are still seeing shorter
term sales estimates being revised downwards.
Within the three sectors we made some notable changes both to the
industry/sub-sector exposures and the stock specific exposures (see Figure 3
within the Half Yeary Financial Report). While we think that nuclear has a
strong role to play in the energy transition, we exited our only uranium
holding because both the spot price of uranium and the valuation of this
particular company had got well ahead of fundamentals.
On the Traditional Energy side we added several new positions across the
infrastructure, services and production segments. The infrastructure companies
we now own are focused on natural gas so should see good volume growth to
drive earnings and also benefit if there are unexpected reduction in rates.
These purchases were funded by exiting a refining company (Valero) and an
Exploration and Production (E&P) company (EOG Resources).
On the Energy Transition side we added a new holding in a US wind turbine
manufacturer that looks to be a beneficiary from the ongoing fiscal support
provided by the Inflation Reduction Act of 2022 and we initiated a position in
a leading cable manufacturer, Prysmian. It should see its order books well
supported by the array of investments needed in transmission and the grid.
Income
The Company paid a total of 2.250p in dividends for the first half of the
year, split between the two quarterly payments.
The underlying dividend trends in the portfolio over the first six months of
the year were a mixed picture. This is less as a result of companies deciding
to make reductions to their dividend payments but more as a function of the
changes we have made to the stock selection in the portfolio. The decisions to
reduce Vale, TotalEnergies and BHP had negative implications for the ongoing
income generation in the portfolio. However, we have conviction that the
investments made with the proceeds offer a more attractive total return
prospect to offset the income foregone.
We did make an investment in a new convertible bond issue that came with an
attractive coupon as well as an equity upside. This was in a leading lithium
producer where despite the near-term headwinds, the convertible bond offers a
better risk-adjusted return with the added benefit of enhancing the
portfolio’s income.
We also note that Pound Sterling has strengthened over 7% from its October
2023 lows against the US Dollar (as at 16 July 2024). If this trend continues
then it will be a headwind for the Company’s income in Pound Sterling as
most of the dividends in the underlying portfolio companies are paid in US
Dollars.
Traditional Energy
Oil prices remained relatively range-bound (see Figure 4 within the Half
Yearly Financial Report) in the period consistent with our view that Oil and
Petroleum Exporting Countries (OPEC) plus countries continue to act in a
disciplined fashion in balancing supply and demand. Our thesis remains
supported by oil futures firmly in backwardation despite market concerns of
oversupply following OPEC’s June announcement to gradually phase out cuts to
production.
Excluding COVID-19, US natural gas prices (Henry Hub, see Figure 5 within the
Half Yearly Financial Report) hit a 32-year low in February 2024 forcing gas
drillers to reduce production. Lower activity levels helped to rebalance
markets and prices have since recovered through June.
Although the Company’s Traditional Energy holdings contributed positively to
overall performance in the period, the underlying sub-sector performance was
more mixed. Underweight positions in Chevron and Total Energies drove an
overall negative contribution from Integrated Oil Companies (IOCs). Elsewhere,
the Biden Administration announced a moratorium on US Liquified Natural Gas
export licenses at the end of January which impacted shares in Cheniere
Energy. Subsequent to the period end, a federal district judge in Louisiana
ordered the Biden Administration to lift the suspension.
On a more positive note, we made several changes within our Traditional Energy
holdings during the period. We exited our position in EOG Resources to help
fund new holdings in Targa Resources, Permian Resources and Saipem. The first
two holdings reflect an overall positive view on the long-term growth outlook
for the world-class Permian Basin in West Texas. Targa Resources provides
compelling low-risk throughput growth in its midstream business with an
attractive yield whilst Permian Resources has continued to demonstrate
best-in-class execution with a highly motivated management team.
Our holding in Saipem reflects an overall pivot within the Traditional Energy
value-chain towards international oilfield services where we see a strong
pipeline of new projects and improving margins. This follows new holdings
initiated last year in TechnipFMC and Weatherford.
Energy Transition
Over the trailing 12-month period (see Figure 6 within the Half Yearly
Financial Report), Energy Transition-related stocks (S&P Clean Energy Index)
have generally struggled against the Mining and Traditional Energy sectors,
albeit with a strong step-up, particularly in the month of May (see Figure 7
within the Half Yearly Financial Report). This was partly driven by strong
performance from a handful of renewable development companies that were
subject to premium acquisitions including Encavis AG and Neoen SA. This
precipitated a broader re-rating of renewables-focused stocks in the period
which underpinned strong active return contributions from key holdings in
NextEra Energy and First Solar.
Elsewhere, manufacturing spend continued to broaden in the United States as a
follow through from subsidies encapsulated in the Inflation Reduction Act of
2022 and the CHIPS and Science Act of 2022. This benefited stocks such as
Trane Technologies and Ingersoll Rand with strong backlog expansion in CHVAC
(Cooling, Heating, Ventilation and Air Conditioning) and industrial equipment
demand, respectively.
Excitement around AI/datacentre build-outs in the United States led to a sharp
upwards revision in long-term electricity demand forecasts (see Figure 8
within the Half Yearly Financial Report) which for much of the last two
decades has been largely flat. Given the competing forces around rapid data
centre build-out and dramatic improvements in the energy efficiency of
leading-edge chips from the likes of Nvidia the range of growth estimates
remains necessarily wide at this stage. Nevertheless, the outlook for baseload
power demand growth in the region is likely to hit mid-single digits in the
coming years. This helped drive positive stock performance from the likes of
Schneider Electric. The Company also benefitted from a new position in GE
Vernova, a spin-off from General Electric which has a leading position in
electric power systems and gas turbine manufacturing. Building on the rising
electrification theme, we also initiated new positions in global cabling
systems supplier, Prsymian, and UK grid-operator, National Grid.
The Company’s investments in renewables-focused utility companies in Europe
were amongst the largest detractors for the period including German-utility
RWE AG and Portuguese-based EDP Renovaveis SA. Both companies faced earnings
headwinds from a combination of lower trading earnings for the former and
impairment charges for the latter.
Mining
The mining sector saw a fairly strong first half performance for both mining
companies and commodities. However there was significant dispersion in
performance which was more pronounced for commodities than related equities
explained further below.
The main differences came between steel related commodities (iron ore and
coking coal), which both saw heavy price falls in the six months, and base
metals (such a copper and aluminium) that posted strong double digit price
gains. The real estate sector in China remains under significant pressure and
this weighed heavily on the steel sentiment in China.
As shown in Figure 9 in the Half Yearly Financial Report, steel margins were
negative in China early in the period and, with demand subdued given the real
estate woes, steel producers held back on iron ore purchases causing the price
to fall back from $130/tonne to $100/tonne from the start of January to the
end of March (SGX Iron Ore 62%). As margins improved in the second quarter
steel production was able to pick up, with much of this destined for export
given the depressed local demand. The chart below shows how much steel exports
have picked up from China in 2024 (and 2023) – it is likely that this
can’t be sustained as trade barriers will be erected to protect steel
industries in other countries (see Figure 10 within the Half Yearly Financial
Report).
Despite the challenging iron ore market, the major producers of iron ore, such
as BHP and Rio Tinto, held up quite well (Rio Tinto total return 5.6%, BHP
0.0%; GBP). This performance relative to the underlying commodity implies a
noticeable increase in valuation multiple associated with the companies – in
many ways we think this is deserved given the greater resilience and
discipline of these businesses compared to previous cycles. However, despite
this re-rating, they did lag their peers that have a more diversified
commodity mix with another one of our portfolio companies, Teck Resources
delivering substantially better returns for the six month period.
A key thematic to surface in the period was a “buy or build” question in
the copper space. This is something that we have described in the past when
talking about the incentive price to bring new projects online being
substantially higher than current prices and that existing copper production
capacity used to trade at lower implied copper prices than that incentive
price. We saw significant corporate activity to emphasise this point with BHP
making several approaches to Anglo American to try to get a deal agreed. The
prize that BHP were seeking was clearly the South American copper portfolio of
Anglo, which has several long life and high quality assets. In the end, they
could not agree a deal due to the complexities of Anglo’s South African
assets but other copper orientated companies saw strong share price
appreciation as a result of the approach, with portfolio holdings such as
Ivanhoe Mines notable performers.
Whilst our enthusiasm for copper longer-term remains, it should be noted that
in the short-term there are some clouds on the horizon. Inventories, although
low in terms of numbers of days of use at around 7 weeks, have been rising
steadily during the first half of the year, as shown in Figure 11 within the
Half Yearly Financial Report. Investor sentiment towards copper though has
remained very positive, as shown by the long positions and overall net length
in copper futures in Figure 12 within the Half Yearly Financial Report. If
physical markets do not see near-term improvements, there is every chance the
“hot money” in futures will look to deploy elsewhere and cause a copper
price pullback. Given our longer-term structural positive view, it is likely
we would use such an opportunity to increase the portfolio’s exposure.
Market outlook and portfolio positioning
Looking back at the 2023 annual report we flagged “an abnormally high level
of uncertainty for the year ahead”. Part of this reflected a record spate of
elections in 2024 as well as persistent tensions between the United States and
China “where tariffs continue to be the tool of choice in tackling the
competitive threat of cheaper manufactured goods in the Energy Transition
value chain”. Since then, the European Union has announced tariffs against
Chinese Electric Vehicles. Against this backdrop, we believe there is likely
to be higher and stickier inflation than we have seen in the last two decades
and reinforces our view of a higher interest rate environment. Whilst risks
remain elevated, we believe the flexibility that the Company offers remains
key to achieving our twin objectives of growth and income as these
uncertainties drive persistent dispersion.
AI and datacentre demand will be additive to prior estimates of baseload power
demand which we see as supportive not just for renewables, but critically for
natural gas and nuclear. Further, as technology companies seek to drive rapid
build out of these energy intensive assets the demand for traditional
investments will drive further bottlenecks on the supply side.
As we look into the second half of the year we are also closely monitoring the
outcome of Federal-level elections and their potential impact on energy and
climate policy. The UK (22 May) and France (10 June) both announced snap
elections during the period. Subsequent to the period end, a Labour majority
has been confirmed in the UK that will likely see an acceleration of
decarbonisation efforts and should provide a positive tailwind for grid
expansion and permitting. Finally, as we head towards the November US
Presidential election it is not unreasonable to surmise that, under either a
Republican or Democratic victory, it will do little to derail the underlying
pace of capital investment into the Energy Transition space. The Inflation
Reduction Act of 2022, for instance, has been a very positive force in job
creation and capital formation in the United States - an outcome most
politicians will tend to favour.
TOM HOLL AND MARK HUME
BlackRock Investment Management (UK) Limited
31 July 2024
Distribution of investments as at 31 May 2024
Asset allocation – Geography
Global 52.2%
United States 20.6%
Canada 9.4%
Africa 2.7%
Germany 2.6%
United Kingdom 2.5%
Latin America 1 2.5%
Australia 2.3%
France 1.8%
Brazil 1.5%
Italy 1.3%
Ireland 0.6%
1 Latin America represents Argentina.
Source: BlackRock.
Asset allocation – Commodity/sub-sectors
Mining 45.4%
Traditional Energy 28.3%
Energy Transition 26.3%
Energy Transition (26.3%)
Energy Efficiency 9.4%
Electrification 7.1%
Renewables 5.5%
Transport 3.0%
Storage 1.3%
Traditional Energy (28.3%)
Exploration & Production 12.2%
Integrated 8.4%
Distribution 3.3%
Oil Services 2.2%
Oil, Gas & Consumable Fuels 1.4%
Refining & Marketing 0.8%
Mining (45.4%)
Diversified 23.4%
Copper 7.9%
Steel 3.7%
Industrial Minerals 2.9%
Gold 2.5%
Aluminium 1.8%
Metals & Mining 1.8%
Nickel 1.4%
Source: BlackRock.
Ten largest investments
Together, the ten largest investments represent 31.7% of the Company’s
portfolio as at 31 May 2024 (30 November 2023: 36.3%).
1 + Anglo American (2023: 65th)
Diversified mining group
Market value: £8,817,000
Share of investments: 4.7%1 (2023: 0.4%)
A global mining group. The group’s mining portfolio includes bulk
commodities including iron ore, manganese, metallurgical coal, base metals
including copper and nickel and precious metals and minerals including
platinum and diamonds. Anglo American has mining operations globally, with
significant assets in Africa and South America.
2 + Rio Tinto (2023: 4th)
Diversified mining group
Market value: £8,757,000
Share of investments: 4.6% (2023: 4.4%)
One of the world’s leading mining companies. The group’s primary product
is iron ore, but it also produces aluminium, copper, diamonds, gold,
industrial minerals and energy products.
3 + Teck Resources (2023: 14th)
Diversified mining group
Market value: £7,951,000
Share of investments: 4.2% (2023: 2.1%)
A diversified mining group headquartered in Canada. Teck Resources is engaged
in mining and mineral development with operations and projects in Canada, the
US, Chile and Peru. The group has exposure to copper, zinc, steelmaking coal
and energy.
4 - Glencore (2023: 1st)
Diversified mining group
Market value: £6,450,000
Share of investments: 3.4% (2023: 4.8%)
One of the world’s largest globally diversified natural resources groups.
The group’s operations include approximately 150 mining and metallurgical
sites and oil production assets. Glencore’s mined commodity exposure
includes copper, cobalt, nickel, zinc, lead, ferroalloys, aluminium, iron ore
gold and silver.
5 = Shell (2023: 5th)
Integrated oil group
Market value: £6,147,000
Share of investments: 3.3% (2023: 3.8%)
Shell is one of the largest integrated energy companies globally with five
main operating segments: Integrated Gas, Upstream, Marketing, Chemicals and
Products, and Renewables and Energy Solutions. The company has a high quality,
gas/liquified natural gas (LNG)-weighted portfolio.
6 + Filo Corp. (2023: 13th)
Copper mining group
Market value: £4,802,000
Share of investments: 2.5% (2023: 2.2%)
Filo Corp., part of the Lundin Group of companies, is a Canadian mineral
exploration company focused on exploring their copper-gold-silver deposit in
Filo del Sol near the borders of Argentina and Chile.
7 = NextEra Energy (2023: 7th)
Electrification
Market value: £4,610,000
Share of investments: 2.4% (2023: 2.7%)
NextEra Energy is America’s premier clean energy leader and the world’s
largest producer of wind and solar energy. The company has a dominant market
share in a structurally growing renewables market.
8 - BHP (2023: 2nd)
Diversified mining group
Market value: £4,291,000
Share of investments: 2.3% (2023: 4.7%)
The world’s largest diversified mining group by market capitalisation. The
group is an important global player in a number of commodities including iron
ore, copper, thermal and metallurgical coal, manganese, nickel, silver and
diamonds. BHP also has significant interests in oil, gas and liquefied natural
gas.
9 + Schneider Electric (2023: 21st)
Energy efficiency
Market value: £4,137,000
Share of investments: 2.2% (2023: 1.8%)
Schneider Electric is a French multinational company specialising in digital
automation and energy management and addresses homes, buildings, data centres,
infrastructure and industries, by combining energy technologies,real-time
automation, software and services
10 = Hess (2023: 10th)
Exploration & Production
Market value: £3,995,000
Share of investments: 2.1% (2023: 2.4%)
An American global independent energy company, involved in the exploration and
production of crude oil and natural gas.
All percentages reflect the value of the holding as a percentage of total
investments.
The symbols indicate the change in relative ranking of the position in the
portfolio compared to its ranking as at 30 November 2023.
Percentages in brackets represent the value of the holding as at 30 November
2023.
Investment
Main Market % of
geographic value investments
exposure £’000
Mining
Diversified
Anglo American Global 8,822 } 4.7
Anglo American Put Option 21/06/24 Global (5)
Rio Tinto Global 8,757 4.6
Teck Resources Global 7,951 4.2
Glencore Global 6,449 3.4
BHP Global 4,291 2.3
Abaxx Technologies Global 3,334 1.8
Vale Debentures* Brazil 2,162 } 1.5
Vale Brazil 750
Trident Global 1,629 0.9
--------------- ---------------
44,140 23.4
========= =========
Copper
Filo Corp. Latin America 4,802 2.5
First Quantum Minerals 6.875% 15/10/27 Global 1,616 }
First Quantum Minerals Global 1,200 1.6
Foran Mining Canada 2,018 1.1
Metals Acquisition Australia 1,981 1.0
Freeport-McMoRan United States 1,619 0.9
Ivanhoe Electric United States 1,219 0.6
Develop Global Australia 414 0.2
--------------- ---------------
14,869 7.9
========= =========
Steel
Steel Dynamics United States 2,424 1.3
ArcelorMittal Global 2,354 1.2
Stelco Canada 2,291 1.2
--------------- ---------------
7,069 3.7
========= =========
Industrial Minerals
Albemarle Global 2,431 1.3
Bunge Global 1,061 0.6
Nutrien United States 988 0.5
Lynas Corporation Australia 919 0.5
CF Industries United States 47 –
--------------- ---------------
5,446 2.9
========= =========
Gold
Allied Gold Corporation 8.75% 07/09/2028 Africa 1,728 0.9
Wheaton Precious Metals Global 1,603 0.8
Barrick Gold Global 1,419 0.8
--------------- ---------------
4,750 2.5
========= =========
Metals & Mining
Ivanhoe Mines Africa 3,441 1.8
--------------- ---------------
3,441 1.8
========= =========
Aluminium
Norsk Hydro Global 3,310 1.8
--------------- ---------------
3,310 1.8
========= =========
Nickel
Nickel Mines Australia 1,138 0.6
Lifezone Metals Global 1,590 0.8
--------------- ---------------
2,728 1.4
========= =========
Total Mining 85,753 45.4
========= =========
Traditional Energy
Exploration & Production
Hess Global 3,995 2.1
Canadian Natural Resources Canada 3,889 2.1
ConocoPhillips Global 3,540 1.9
Permian Resources United States 2,920 1.5
Tourmaline Oil Canada 2,417 1.3
Arc Resources Canada 2,284 1.2
Diamondback Energy United States 2,231 1.2
Kosmos Energy United States 1,688 0.9
--------------- ---------------
22,964 12.2
========= =========
Integrated
Shell Global 6,147 3.3
ExxonMobil Global 3,985 2.1
BP Global 3,564 1.9
Cenovus Energy Canada 2,188 1.1
Gazprom** Russian Federation – –
--------------- ---------------
15,884 8.4
========= =========
Distribution
Targa Resources United States 3,887 2.1
Cheniere Energy United States 2,334 1.2
--------------- ---------------
6,221 3.3
========= =========
Oil Services
TechnipFMC Global 2,072 1.1
Weatherford International Global 1,228 0.6
Saipem Global 898 0.5
--------------- ---------------
4,198 2.2
========= =========
Oil, Gas & Consumable Fuels
Pembina Pipeline Canada 2,703 1.4
--------------- ---------------
2,703 1.4
========= =========
Refining & Marketing
Marathon Petroleum Corporation United States 1,519 0.8
--------------- ---------------
1,519 0.8
========= =========
Total Traditional Energy 53,489 28.3
========= =========
Energy Transition
Energy Efficiency
Schneider Electric Global 4,137 2.2
Ingersoll-Rand United States 3,610 1.9
Analog Devices Global 3,422 1.8
Trane Technologies United States 2,964 1.6
Regal Rexnord United States 1,683 0.9
Kingspan Group Ireland 1,087 0.6
Nidec Corp Global 809 0.4
--------------- ---------------
17,712 9.4
========= =========
Electrification
NextEra Energy United States 4,610 2.4
RWE Germany 3,607 1.9
National Grid United Kingdom 2,916 } 1.7
National Grid Rights 11/06/2024 United Kingdom 161
Sempra Energy United States 1,975 1.1
EDP Renováveis Global 42 –
--------------- ---------------
13,311 7.1
========= =========
Renewables
First Solar Global 3,721 2.0
GE Vernova United States 3,106 1.6
Vestas Wind Global 1,852 1.0
SSE United Kingdom 1,660 0.9
--------------- ---------------
10,339 5.5
========= =========
Transport
STMicroelectronics France 3,365 1.8
Infineon Technologies Germany 1,333 0.7
Samsung SDI Global 967 0.5
--------------- ---------------
5,665 3.0
========= =========
Storage
Prysmian Spa Italy 2,420 1.3
--------------- ---------------
2,420 1.3
========= =========
Total Energy Transition 49,447 26.3
========= =========
Total Portfolio 188,689 100.0
========= =========
Comprising
Equity and debt investments 188,694 100.0
Derivative financial instruments – futures (5) –
--------------- ---------------
188,689 100.0
========= =========
* The investment in the Vale debentures is illiquid and has been valued using
secondary market pricing information provided by the Brazilian Financial and
Capital Markets Association (ANBIMA).
** The investment in Gazprom has been valued at a nominal value of RUB0.01 as
secondary listings of the depositary receipts on Russian companies have been
suspended from trading.
All investments are ordinary shares unless otherwise stated. The total number
of holdings (including options) at 31 May 2024 was 74 (30 November 2023: 78).
There was one open option as at 31 May 2024 (30 November 2023: one).
The equity and fixed income investment total of £188,694,000 (30 November
2023: £175,540,000) above before the deduction of the negative valuation of
commodity futures contracts of £5,000 (30 November 2023: negative option
valuation of £110,000 and negative futures contract valuation of £780,000)
represents the Group’s total investments held at fair value as reflected in
the Consolidated Statement of Financial Position. The table above excludes
cash and gearing; the level of the Group’s gearing may be determined with
reference to the bank overdraft of £15,213,000 (30 November 2023:
£17,862,000) and cash and cash equivalents of £73,000 (30 November 2023:
£5,276,000) that are also disclosed in the Consolidated Statement of
Financial Position. Details of the AIC methodology for calculating gearing are
given in the Glossary within the Half Yearly Financial Report.
As at 31 May 2024, the Company did not hold any equity interests comprising
more than 3% of any company’s share capital.
Interim Management Report and Responsibility Statement
The Chairman’s Statement and the Investment Managers’ Report above give
details of the important events which have occurred during the period and
their impact on the financial statements.
Principal risks and uncertainties
The principal risks faced by the Company can be divided into various areas as
follows:
· Investment performance;
· Income/dividend;
· Gearing;
· Legal and regulatory compliance;
· Operational;
· Market; and
· Financial.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 30
November 2023. A detailed explanation can be found in the Strategic Report on
pages 38 to 42 and in note 18 on pages 110 to 122 of the Annual Report and
Financial Statements which are available on the Company’s website at
www.blackrock.com/uk/beri.
The Board and the Investment Manager continue to monitor investment
performance in line with the Company’s investment objectives, and the
operations of the Company and the publication of net asset values are
continuing.
In the view of the Board, there have not been any changes to the fundamental
nature of the principal risks and uncertainties since the previous report and
these are equally applicable to the remaining six months of the financial year
as they were to the six months under review.
Going concern
The Board is mindful of the risk that unforeseen or unprecedented events
including (but not limited to) heightened geopolitical tensions such as the
wars in Ukraine and Middle East, their longer-term effects on the global
economy, high inflation and the current cost of living crisis could have a
significant impact on global markets. Notwithstanding this significant degree
of uncertainty, the Directors, having considered the nature and liquidity of
the portfolio, the Company’s investment objective, the Company’s projected
income and expenditure and the Company’s substantial distributable reserves,
are satisfied that the Company has adequate resources to continue in
operational existence for the foreseeable future and is financially sound.
The Company has a portfolio of investments which are considered to be readily
realisable and is able to meet all of its liabilities from its assets and
income generated from these assets. Borrowings under the overdraft facility
shall be lower of £40.0 million or 20% of the Company’s net assets
(calculated at the time of draw down) and this covenant was complied with
during the period. Ongoing charges (excluding finance costs, direct
transaction costs, custody transaction charges, VAT recovered, taxation, prior
year expenses written back and certain non recurring charges) have been capped
by the Manager at 1.25% of average daily net assets with effect from 17 March
2020 and were 1.20% of net assets for the year ended 30 November 2023.
Based on the above, the Board is satisfied that it is appropriate to continue
to adopt the going concern basis in preparing the financial statements.
Related party disclosure and transactions with the Investment Manager
BlackRock Fund Managers Limited (BFM) is the Company’s Alternative
Investment Fund Manager (AIFM) and has, with the Company’s consent,
delegated certain portfolio and risk management services, and other ancillary
services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Both BFM
and BIM (UK) are regarded as related parties under the Listing Rules. Details
of the management fee payable are set out in note 4 and note 14 below. The
related party transactions with the Directors are set out in note 13 below.
Directors’ responsibility statement
The Disclosure Guidance and Transparency Rules (DTR) of the UK Listing
Authority require the Directors to confirm their responsibilities in relation
to the preparation and publication of the Interim Management Report and
Financial Statements.
The Directors confirm to the best of their knowledge that:
· the condensed set of financial statements contained within the Half Yearly
Financial Report has been prepared in accordance with International Accounting
Standard 34 Interim Financial Reporting; and
· the Interim Management Report together with the Chairman’s Statement and
Investment Managers’ Report include a fair review of the information
required by 4.2.7R and 4.2.8R of the FCA’s Disclosure Guidance and
Transparency Rules.
This Half Yearly Financial Report has not been audited or reviewed by the
Company’s Auditor.
The Half Yearly Financial Report was approved by the Board on 31 July 2024 and
the above responsibility statement was signed on its behalf by the Chairman.
ADRIAN BROWN
For and on behalf of the Board
31 July 2024
Consolidated Statement of Comprehensive Income for the six months ended 31 May
2024
Six months ended Six months ended Year ended
31 May 2024 31 May 2023 30 November 2023
(unaudited) (unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Income from investments held at fair value through profit or loss 3 2,700 – 2,700 3,411 101 3,512 6,258 79 6,337
Other income 3 428 – 428 652 – 652 1,218 – 1,218
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total revenue 3,128 – 3,128 4,063 101 4,164 7,476 79 7,555
========= ========= ========= ========= ========= ========= ========= ========= =========
Net profit/(loss) on investments and derivatives held at fair value through profit or loss – 19,011 19,011 – (29,497) (29,497) -- (27,606) (27,606)
Net (loss)/profit on foreign exchange – (1) (1) – (35) (35) – 6 6
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 3,128 19,010 22,138 4,063 (29,431) (25,368) 7,476 (27,521) (20,045)
========= ========= ========= ========= ========= ========= ========= ========= =========
Expenses
Investment management fee 4 (181) (543) (724) (202) (606) (808) (387) (1,162) (1,549)
Other operating expenses 5 (240) (4) (244) (232) (13) (245) (535) (16) (551)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total operating expenses (421) (547) (968) (434) (619) (1,053) (922) (1,178) (2,100)
========= ========= ========= ========= ========= ========= ========= ========= =========
Net profit/(loss) on ordinary activities before finance costs and taxation 2,707 18,463 21,170 3,629 (30,050) (26,421) 6,554 (28,699) (22,145)
Finance costs 6 (128) (385) (513) (93) (279) (372) (196) (588) (784)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) on ordinary activities before taxation 2,579 18,078 20,657 3,536 (30,329) (26,793) 6,358 (29,287) (22,929)
Taxation (expense)/credit (245) 34 (211) (327) 54 (273) (584) 117 (467)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) on ordinary activities after taxation 8 2,334 18,112 20,446 3,209 (30,275) (27,066) 5,774 (29,170) (23,396)
========= ========= ========= ========= ========= ========= ========= ========= =========
Earnings/(loss) per ordinary share (pence) 8 1.83 14.17 16.00 2.37 (22.40) (20.03) 4.39 (22.17) (17.78)
========= ========= ========= ========= ========= ========= ========= ========= =========
The total columns of this statement represent the Group’s Statement of
Comprehensive Income, prepared in accordance with UK–adopted International
Accounting Standards (IAS). The supplementary revenue and capital accounts are
both prepared under guidance published by the Association of Investment
Companies (AIC). All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period. All
income is attributable to the equity holders of the Group.
The Group does not have any other comprehensive income/(loss) (31 May 2023:
£nil; 30 November 2023: £nil). The net profit/(loss) for the period
disclosed above represents the Group’s total comprehensive income/(loss).
Consolidated Statement of Changes in Equity for the six months ended 31 May
2024
Notes Called Share Special Capital Revenue Total
up share premium reserve reserves reserve £’000
capital account £’000 £’000 £’000
£’000 £’000
For the six months ended 31 May 2024 (unaudited)
At 30 November 2023 1,356 69,980 66,100 18,660 6,266 162,362
Total comprehensive income
Net profit for the period – – – 18,112 2,334 20,446
Transaction with owners, recorded directly to equity:
Ordinary shares bought back into treasury 9 – – (7,631) – – (7,631)
Share buyback costs – – (53) – – (53)
Dividends paid 1 7 – – – – (2,891) (2,891)
--------------- --------------- --------------- --------------- --------------- ---------------
At 31 May 2024 1,356 69,980 58,416 36,772 5,709 172,233
========= ========= ========= ========= ========= =========
For the six months ended 31 May 2023 (unaudited)
At 30 November 2022 1,344 68,203 70,937 47,803 6,421 194,708
Total comprehensive (loss)/income:
Net (loss)/profit for the period – – – (30,275) 3,209 (27,066)
Transactions with owners, recorded directly to equity:
Ordinary share issues 12 1,781 – – – 1,793
Share issue costs – (4) – – – (4)
Share reissue costs written back – – – 28 – 28
Dividends paid 2 7 – – – – (2,969) (2,969)
--------------- --------------- --------------- --------------- --------------- ---------------
At 31 May 2023 1,356 69,980 70,937 17,556 6,661 166,490
========= ========= ========= ========= ========= =========
For the year ended 30 November 2023 (audited)
At 30 November 2022 1,344 68,203 70,937 47,803 6,421 194,708
Total comprehensive (loss)/income:
Net (loss)/profit for the year – – – (29,170) 5,774 (23,396)
Transactions with owners, recorded directly to equity:
Ordinary share issues 12 1,781 – – – 1,793
Share issue costs – (4) – – – (4)
Ordinary shares bought back into treasury – – (4,802) – – (4,802)
Share buyback costs – – (35) – – (35)
Share reissue costs written back – – – 27 – 27
Dividends paid 3 7 – – – – (5,929) (5,929)
--------------- --------------- --------------- --------------- --------------- ---------------
At 30 November 2023 1,356 69,980 66,100 18,660 6,266 162,362
========= ========= ========= ========= ========= =========
1 4th interim dividend of 1.125p per share for the year ended 30 November
2023, declared on 7 December 2023 and paid on 12 January 2024 and 1st interim
dividend of 1.125p per share for the year ending 30 November 2024, declared on
15 March 2024 and paid on 26 April 2024.
2 4th interim dividend of 1.100p per share for the year ended 30 November
2022, declared on 7 December 2022 and paid on 13 January 2023 and 1st interim
dividend of 1.100p per share for the year ended 30 November 2023, declared on
13 March 2023 and paid on 19 April 2023.
3 4th interim dividend of 1.100p per share for the year ended 30 November
2022, declared on 7 December 2022 and paid on 13 January 2023; 1st interim
dividend of 1.100p per share for the year ended 30 November 2023, declared on
13 March 2023 and paid on 19 April 2023; 2nd interim dividend of 1.100p per
share for the year ended 30 November 2023, declared on 7 June 2023 and paid on
14 July 2023 and 3rd interim dividend of 1.100p per share for the year ended
30 November 2023, declared on 20 September 2023 and paid on 27 October 2023.
For information on the Company’s distributable reserves, please refer to
note 10 below
Consolidated Statements of Financial Position as at 31 May 2024
Notes 31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Non current assets
Investments held at fair value through profit or loss 12 188,694 175,627 175,540
--------------- --------------- ---------------
Current assets
Other receivables 484 835 618
Current tax asset 195 134 130
Cash collateral pledged with brokers 343 1,086 1,538
Cash and cash equivalents 73 194 5,276
--------------- --------------- ---------------
Total current assets 1,095 2,249 7,562
--------------- --------------- ---------------
Total assets 189,789 177,876 183,102
========= ========= =========
Current liabilities
Other payables (2,338) (1,463) (1,988)
Derivative financial liabilities held at fair value through profit or loss 12 (5) (559) (890)
Bank overdraft (15,213) (9,364) (17,862)
--------------- --------------- ---------------
Total current liabilities (17,556) (11,386) (20,740)
--------------- --------------- ---------------
Net assets 172,233 166,490 162,362
========= ========= =========
Equity attributable to equity holders
Called up share capital 10 1,356 1,356 1,356
Share premium account 69,980 69,980 69,980
Special reserve 58,416 70,937 66,100
Capital reserves 36,772 17,556 18,660
Revenue reserve 5,709 6,661 6,266
--------------- --------------- ---------------
Total shareholders’ funds 172,233 166,490 162,362
========= ========= =========
Net asset value per ordinary share (pence) 8 138.24 122.79 123.58
========= ========= =========
Consolidated Cash Flow Statement for the six months ended 31 May 2024
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Operating activities:
Net profit/(loss) on ordinary activities before taxation 20,657 (26,793) (22,929)
Add back finance costs 513 372 784
Net (profit)/loss on investments and derivatives held at fair value through profit or loss (including transaction costs) (19,011) 29,497 27,606
Net amount for capital special dividends received – (86) –
Net loss/(profit) on foreign exchange 1 35 (6)
Sales of investments held at fair value through profit or loss 61,484 53,133 97,330
Purchases of investments held at fair value through profit or loss (56,512) (51,272) (93,247)
Decrease/(increase) in other receivables 204 44 (134)
Increase in other payables 253 515 471
(Increase)/decrease in amounts due from brokers (70) 1,100 1,496
Increase/(decrease) in amounts due to brokers 23 (4,838) (4,269)
Net movement in cash collateral held with brokers 1,195 (801) (1,253)
--------------- --------------- ---------------
Net cash inflow from operating activities before taxation 8,737 906 5,849
Taxation on investment income included within gross income (276) (304) (494)
--------------- --------------- ---------------
Net cash inflow from operating activities 8,461 602 5,355
========= ========= =========
Financing activities
Interest paid (513) (372) (784)
Receipts from share issues – 1,793 1,793
Share issue costs paid – (58) (59)
Shares bought back into treasury (7,557) – (4,802)
Share buyback costs (53) – (35)
Dividends paid (2,891) (2,969) (5,929)
--------------- --------------- ---------------
Net cash outflow from financing activities (11,014) (1,606) (9,816)
========= ========= =========
Decrease in cash and cash equivalents (2,553) (1,004) (4,461)
Effect of foreign exchange rate changes (1) (35) 6
--------------- --------------- ---------------
Change in cash and cash equivalents (2,554) (1,039) (4,455)
========= ========= =========
Cash and cash equivalents at start of period/year (12,586) (8,131) (8,131)
--------------- --------------- ---------------
Cash and cash equivalents at end of period/year (15,140) (9,170) (12,586)
========= ========= =========
Comprised of:
Cash at bank 73 194 5,276
Bank overdraft (15,213) (9,364) (17,862)
--------------- --------------- ---------------
(15,140) (9,170) (12,586)
========= ========= =========
Notes to the financial statements for the six months ended 31 May 2024
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of Section 1158 of the Corporation Tax Act 2010.
The principal activity of the subsidiary, BlackRock Energy and Resources
Securities Income Company Limited, is investment dealing and options writing.
2. Basis of preparation
The half yearly financial statements for the period ended 31 May 2024 have
been prepared in accordance with the Disclosure Guidance and Transparency
Rules sourcebook of the Financial Conduct Authority and with the UK-adopted
International Accounting Standard 34 (IAS 34), Interim Financial Reporting.
The half yearly financial statements should be read in conjunction with the
Group’s Annual Report and Financial Statements for the year ended 30
November 2023, which have been prepared in accordance with UK-adopted
International Accounting Standards (IAS) in conformity with the requirements
of the Companies Act 2006.
Insofar as the Statement of Recommended Practice (SORP) for investment trust
companies and venture capital trusts, issued by the Association of Investment
Companies (AIC) in October 2019 and updated in July 2022, is compatible with
UK-adopted IAS, the financial statements have been prepared in accordance with
guidance set out in the SORP.
Adoption of new and amended International Accounting Standards and
interpretations:
IFRS 17 – Insurance contracts (effective 1 January 2023). This standard
replaced IFRS 4 and applies to all types of insurance contracts. IFRS 17
provides a consistent and comprehensive model for insurance contracts covering
all relevant accounting aspects.
This standard did not have any impact on the Company as it has no insurance
contracts.
IAS 12 - Deferred tax related to assets and liabilities arising from a single
transaction (effective 1 January 2023). The IASB has amended IAS 12 Income
Taxes to require companies to recognise deferred tax on particular
transactions that, on initial recognition, give rise to equal amounts of
taxable and deductible temporary differences. According to the amended
guidance, a temporary difference that arises on initial recognition of an
asset or liability is not subject to the initial recognition exemption if that
transaction gave rise to equal amounts of taxable and deductible temporary
differences. These amendments might have a significant impact on the
preparation of financial statements by companies that have substantial
balances of right-of-use assets, lease liabilities, decommissioning,
restoration and similar liabilities. The impact for those affected would be
the recognition of additional deferred tax assets and liabilities.
The amendment of this standard did not have any significant impact on the
Company.
IAS 8 – Definition of accounting estimates (effective 1 January 2023). The
IASB has amended IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors to help distinguish between accounting policies and accounting
estimates, replacing the definition of accounting estimates.
IAS 1 and IFRS Practice Statement 2 – Disclosure of accounting policies
(effective 1 January 2023). The IASB has amended IAS 1 Presentation of
Financial Statements to help preparers in deciding which accounting policies
to disclose in their financial statements by stating that an entity is now
required to disclose material accounting policies instead of significant
accounting policies.
IAS 12 – International Tax Reform Pillar Two Model Rules (effective 1
January 2023). The IASB has published amendments to IAS 12 Income Taxes to
respond to stakeholders’ concerns about the potential implications of the
imminent implementation of the OECD pillar two rules on the accounting for
income taxes. The amendment is an exception to the requirements in IAS 12 that
an entity does not recognise and does not disclose information about deferred
tax assets as liabilities related to the OECD pillar two income taxes and a
requirement that current tax expenses must be disclosed separately to pillar
two income taxes.
Relevant International Accounting Standards that have yet to be adopted:
IAS 1 – Classification of liabilities as current or non current (effective 1
January 2024). The IASB has amended IAS 1 Presentation of Financial Statements
to clarify its requirement for the presentation of liabilities depending on
the rights that exist at the end of the reporting period. The amendment
requires liabilities to be classified as non current if the entity has a
substantive right to defer settlement for at least 12 months at the end of the
reporting period. The amendment no longer refers to unconditional rights.
IAS 1 - Non current liabilities with covenants (effective 1 January 2024). The
IASB has amended IAS 1 Presentation of Financial Statements to introduce
additional disclosures for liabilities with covenants within 12 months of the
reporting period. The additional disclosures include the nature of covenants,
when the entity is required to comply with covenants, the carrying amount of
related liabilities and circumstances that may indicate that the entity will
have difficulty complying with the covenants.
None of the standards that have been issued but are not yet effective are
expected to have a material impact on the Group.
3. Income
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Investment income:
UK dividends 654 329 608
Fixed income 332 227 453
Overseas dividends 1,560 2,055 4,578
Overseas special dividends 154 800 619
--------------- --------------- ---------------
Total investment income 2,700 3,411 6,258
========= ========= =========
Other income:
Bank interest 2 – 2
Interest on collateral received 8 – 7
Option premium income 418 652 1,209
--------------- --------------- ---------------
428 652 1,218
========= ========= =========
Total income 3,128 4,063 7,476
========= ========= =========
During the period, the Group received option premium income in cash totalling
£418,000 (six months ended 31 May 2023: £652,000; year ended 30 November
2023: £1,209,000) for writing covered call and put options for the purposes
of revenue generation.
Option premium income is amortised evenly over the life of the option contract
and accordingly, during the period, option premiums of £418,000 (six months
ended 31 May 2023: £652,000; year ended 30 November 2023: £1,209,000) were
amortised to revenue.
At 31 May 2024, there was one open position (31 May 2023: nil; 30 November
2023: one) with an associated liability of £5,000 (31 May 2023: £nil; 30
November 2023: £110,000).
Dividends and interest received in cash during the period amounted to
£2,374,000 and £287,000 (six months ended 31 May 2023: £2,837,000 and
£178,000; year ended 30 November 2023: £5,107,000 and £482,000).
Special dividends of £nil have been recognised in capital during the period
(six months ended 31 May 2023: £101,000; year ended 30 November 2023:
£79,000).
4. Investment management fee
Six months ended Six months ended Year ended
31 May 2024 31 May 2023 30 November 2023
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 181 543 724 202 606 808 387 1,162 1,549
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 181 543 724 202 606 808 387 1,162 1,549
========= ========= ========= ========= ========= ========= ========= ========= =========
The investment management fee is levied at 0.80% of gross assets per annum.
Gross assets for the purposes of calculating the management fee equate to the
value of the portfolio’s gross assets held on the relevant date as valued on
the basis of applicable accounting policies, less the value of any investments
in in-house funds.
The fee is allocated 25% to the revenue account and 75% to the capital account
of the Consolidated Statement of Comprehensive Income. There is no additional
fee for company secretarial and administration services.
The Company is entitled to a rebate from the investment management fee charged
by the Manager in the event the Company’s ongoing charges exceed the cap of
1.25% per annum of average daily net assets. The amount of rebate accrued for
the six months ended 31 May 2024 amounted to £nil (six months ended 31 May
2023: £nil; year ended 30 November 2023: £nil). The rebate, if any, is
offset against management fees and is allocated between revenue and capital in
the ratio of total ongoing charges (as defined on page 142 of the Annual
Report and Financial Statements for the year ended 30 November 2023) allocated
between revenue and capital during the period.
5. Other operating expenses
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Allocated to revenue:
Custody fee 4 5 9
Auditor’s remuneration – audit services 1 28 24 48
Registrar’s fee 17 18 35
Directors’ emoluments 75 66 133
Broker fees 13 12 24
Depositary fees 8 9 17
Marketing fees 15 21 84
Printing and postage fees 21 19 39
Legal and professional fees 12 13 26
Directors’ search fees – 6 38
Bank charges 7 7 14
Stock exchange listings fees 5 9 14
Other administration costs 35 42 75
Write back of prior year expense accruals 2 – (19) (21)
--------------- --------------- ---------------
240 232 535
========= ========= =========
Allocated to capital:
Custody transaction costs 3 4 13 16
--------------- --------------- ---------------
244 245 551
========= ========= =========
1 No non-audit services were provided by the Company’s auditors in the six
months ended 31 May 2024 (six months ended 31 May 2023: none; year ended 30
November 2023: none).
2 No expenses were written back during the period (six months ended 31 May
2023: miscellaneous fees, external Director evaluation fees, legal and
professional fees; year ended 30 November 2023: miscellaneous fees, external
Director evaluation fees, legal and professional fees).
3 For the six months ended 31 May 2024, expenses of £4,000 (six months ended
31 May 2023: £13,000; year ended 30 November 2023: £16,000) were charged to
the capital account of the Statement of Comprehensive Income.
The transaction costs incurred on the acquisition of investments amounted to
£99,000 for the six months ended 31 May 2024 (six months ended 31 May 2023:
£32,000; year ended 30 November 2023: £89,000). Costs relating to the
disposal of investments amounted to £21,000 for the six months ended 31 May
2024 (six months ended 31 May 2023: £19,000; year ended 30 November 2023:
£23,000). All transaction costs have been included within the capital
reserves.
6. Finance costs
Six months ended Six months ended Year ended
31 May 2024 31 May 2023 30 November 2023
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Interest payable – bank overdraft 128 385 513 93 279 372 196 588 784
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 128 385 513 93 279 372 196 588 784
========= ========= ========= ========= ========= ========= ========= ========= =========
Finance costs for the Company are charged 25% to the revenue account and 75%
to the capital account of the Consolidated Statement of Comprehensive Income.
Subsidiary finance costs are charged 100% to the revenue account of the
Consolidated Statement of Comprehensive Income.
At 31 May 2024, the Group had an overdraft facility of the lower of £40
million (six months ended 31 May 2023: £40 million; year ended 30 November
2023: £40 million) or 20% of the Group’s net assets.
7. Dividends
The Board’s current dividend target is to declare quarterly dividends of
1.125 pence per share in the year to 30 November 2024, making a total of at
least 4.500 pence per share for the year as a whole.
A first interim dividend for the year ending 30 November 2024 of £1,423,000
(1.125 pence per share) was paid on 26 April 2024 to shareholders on the
register on 29 March 2024.
The Directors have declared a second interim dividend for the year ending 30
November 2024 of 1.125 pence per share. The total cost of the dividend was
£1,394,000 and was paid on 15 July 2024 to shareholders on the Company’s
register on 14 June 2024. This dividend has not been accrued in the financial
statements for the six months ended 31 May 2024, as under IAS, interim
dividends are not recognised until paid. Dividends are debited directly to
reserves.
The third and fourth interim dividends will be declared in September 2024 and
December 2024 respectively.
Dividends on equity shares paid during the period were:
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
2nd interim dividend of 1.100p per share for the year ended 30 November 2023 (2022: 1.100p) – – 1,478
3rd interim dividend of 1.100p per share for the year ended 30 November 2023 (2022: 1.100p) – – 1,491
4th interim dividend of 1.125p per share for the year ended 30 November 2023 (2022: 1.100p) 1,468 1,478 1,491
1st interim dividend of 1.125p per share for the year ending 30 November 2024 (2023: 1.100p) 1,423 1,491 1,469
--------------- --------------- ---------------
2,891 2,969 5,929
========= ========= =========
8. Consolidated earnings and net asset value per ordinary share
Revenue, capital earnings/(loss) and net asset value per ordinary share are
shown below and have been calculated using the following:
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
Net revenue profit attributable to ordinary shareholders (£’000) 2,334 3,209 5,774
Net capital profit/(loss) attributable to ordinary shareholders (£’000) 18,112 (30,275) (29,170)
--------------- --------------- ---------------
Total profit/(loss) attributable to ordinary shareholders (£’000) 20,446 (27,066) (23,396)
========= ========= =========
Equity shareholders’ funds (£'000) 172,233 166,490 162,362
The weighted average number of ordinary shares in issue during each period on which the earnings per ordinary share was calculated was: 127,790,523 135,151,964 131,610,148
The actual number of ordinary shares in issue at the period end on which the net asset value per ordinary share was calculated was: 124,586,194 135,586,194 131,386,194
--------------- --------------- ---------------
Earnings per share
Revenue earnings per share (pence) - basic and diluted 1.83 2.37 4.39
Capital earnings/(loss) per share (pence) – basic and diluted 14.17 (22.40) (22.17)
--------------- --------------- ---------------
Total earnings/(loss) per share (pence) – basic and diluted 16.00 (20.03) (17.78)
========= ========= =========
As at As at As at
31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
Net asset value per ordinary share (pence) 138.24 122.79 123.58
Ordinary share price (pence) 121.50 111.60 110.40
========= ========= =========
There were no dilutive securities at the period end (six months ended 31 May
2023: nil; year ended 30 November 2023: nil).
9. Reconciliation of liabilities arising from financing activities
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2024 2023 2023
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Bank overdraft at beginning of period/year 17,862 14,345 14,345
Cash flows:
Movement in overdraft (2,649) 4,981 3,517
--------------- --------------- ---------------
Bank overdraft at end of period/year 15,213 9,364 17,862
========= ========= =========
10. Called up share capital
(unaudited) Ordinary Treasury Total Nominal
shares shares shares value
number number number £’000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 1 pence each:
At 30 November 2023 131,386,194 4,200,000 135,586,194 1,356
Ordinary shares repurchased into treasury (6,800,000) 6,800,000 – –
--------------- --------------- --------------- ---------------
At 31 May 2024 124,586,194 11,000,000 135,586,194 1,356
========= ========= ========= =========
During the period ended 31 May 2024, 6,800,000 shares were bought back into
treasury (six months ended 31 May 2023: nil; year ended 30 November 2023:
4,200,000) for a net consideration after costs of £7,684,000 (six months
ended 31 May 2023: £nil; year ended 30 November 2023: £4,837,000).
During the period ended 31 May 2024, no shares were issued (six months ended
31 May 2023: 1,230,000; year ended 30 November 2023: 1,230,000) for a net
consideration after costs of £nil (six months ended 31 May 2023: £1,789,000;
year ended 30 November 2023: £1,789,000).
Since 31 May 2024, no shares have been issued.
Since 31 May 2024 and as at 29 July 2024, the Company has bought back
1,841,697 shares for costs of £2,172,000.
11. Reserves
The share premium account and capital redemption reserve are not distributable
reserves under the Companies Act 2006. In accordance with ICAEW Technical
Release 02/17BL on Guidance on Realised and Distributable Profits under the
Companies Act 2006, the special reserve and capital reserve of the Parent
Company may be used as distributable reserves for all purposes and, in
particular, the repurchase by the Parent Company of its ordinary shares and
for payments such as dividends. In accordance with the Company’s Articles of
Association, the special reserve, capital reserves and revenue reserve may be
distributed by way of dividend. The Parent Company’s gain on the capital
reserve arising on the revaluation of investments of £32,843,000 (31 May
2023: gain of £13,039,000; year ended 30 November 2023: gain of £15,447,000)
is subject to fair value movements and may not be readily realisable at short
notice, as such it may not be entirely distributable. The investments are
subject to financial risks, as such capital reserves (arising on investments
sold) and the revenue reserve may not be entirely distributable if a loss
occurred during the realisation of these investments. The reserves of the
subsidiary company are not distributable until distributed as a dividend to
the Parent Company.
12. Financial risks and valuation of financial instruments
The Company’s investment activities expose it to the various types of risk
which are associated with the financial instruments and markets in which it
invests. The risks are substantially consistent with those disclosed in the
previous annual financial statements with the exception of those outlined
below.
Market risk arising from price risk
Price risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices (other than
those arising from interest rate risk or currency risk) whether those changes
are caused by factors specific to the individual financial instrument or its
issuer, or factors affecting similar financial instruments traded in the
market. Local, regional or global events such as war, acts of terrorism, the
spread of infectious illness or other public health issues, recessions,
climate change or other events could have a significant impact on the Group
and the market price of its investments and could result in increased premiums
or discounts to the Company’s net asset value.
Valuation of financial instruments
Financial assets and financial liabilities are either carried in the
Consolidated Statement of Financial Position at their fair value (investments
and derivatives) or at an amount which is a reasonable approximation of fair
value (due from brokers, dividends and interest receivable, due to brokers,
accruals, cash at bank and bank overdrafts). IFRS 13 requires the Group to
classify fair value measurements using a fair value hierarchy that reflects
the significance of inputs used in making the measurements. The valuation
techniques used by the Group are explained in the accounting policies note
2(h) as set out on page 100 of the Group’s Annual Report and Financial
Statements for the year ended 30 November 2023.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset.
The fair value hierarchy has the following levels:
Level 1 – Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted
prices are readily available from an exchange, dealer, broker, industry group,
pricing service or regulatory agency and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. The Group
does not adjust the quoted price for these instruments.
Level 2 – Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for similar
instruments in markets that are considered less than active, or other
valuation techniques where all significant inputs are directly or indirectly
observable from market data.
Valuation techniques used for non-standardised financial instruments such as
options, currency swaps and other over-the-counter derivatives include the use
of comparable recent arm’s length transactions, reference to other
instruments that are substantially the same, discounted cash flow analysis,
option pricing models and other valuation techniques commonly used by market
participants making the maximum use of market inputs and relying as little as
possible on entity specific inputs.
Over-the-counter derivative option contracts have been classified as Level 2
investments as their valuation has been based on market observable inputs
represented by the underlying quoted securities to which these contracts
expose the Group.
Level 3 – Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes
inputs not based on market data and these inputs could have a significant
impact on the instrument’s valuation.
This category also includes instruments that are valued based on quoted prices
for similar instruments where significant entity determined adjustments or
assumptions are required to reflect differences between the instruments and
instruments for which there is no active market. The Investment Manager
considers observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary and
provided by independent sources that are actively involved in the relevant
market.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement. If a fair value
measurement uses observable inputs that require significant adjustment based
on unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability including an assessment of the relevant risks including but not
limited to credit risk, market risk, liquidity risk, business risk and
sustainability risk. The determination of what constitutes ‘observable’
inputs requires significant judgement by the Investment Manager and these
risks are adequately captured in the assumptions and inputs used in
measurement of Level 3 assets or liabilities.
Fair values of financial assets and financial liabilities
The table below sets out fair value measurements using the IFRS 13 fair value
hierarchy.
Financial assets/(liabilities) at fair value through profit or loss at 31 May 2024 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 186,532 – – 186,532
Fixed income investments – 2,162 – 2,162
--------------- --------------- --------------- ---------------
Liabilities:
Derivative financial instruments – written options (5) – – (5)
--------------- --------------- --------------- ---------------
186,527 2,162 – 188,689
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss at 31 May 2023 (unaudited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 170,896 – – 170,896
Fixed income investments 2,714 2,017 – 4,731
--------------- --------------- --------------- ---------------
Liabilities:
Derivative financial instruments – commodity futures (559) – – (559)
--------------- --------------- --------------- ---------------
173,051 2,017 – 175,068
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss at 30 November 2023 (audited) Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Assets:
Equity investments 169,171 – – 169,171
Fixed income investments 4,022 2,347 – 6,369
--------------- --------------- --------------- ---------------
Liabilities:
Derivative financial instruments – written options (110) – – (110)
Derivative financial instruments – commodity futures (780) – – (780)
--------------- --------------- --------------- ---------------
172,303 2,347 – 174,650
========= ========= ========= =========
The investment in Vale debentures has been classified as Level 2 in the tables
above for all periods as these are priced using secondary market pricing
information provided by the Brazilian Financial and Capital Markets
Association (ANBIMA).
As at 31 May 2024, the investment in Gazprom has been valued at a nominal
value of RUB0.01 (31 May 2023: RUB0.01; 30 November 2023: RUB0.01) due to lack
of access to the Moscow Stock Exchange as a result of sanctions against Russia
following the invasion of Ukraine. Following the suspension of the secondary
listings of depositary receipts of Russian companies, the investment in
Gazprom ADRs was transferred from Level 1 to Level 3. Towards the previous
year end, the ADRs in Gazprom were converted into equity shares of Gazprom. As
at the period-end, this investment is considered a Level 3 financial asset.
For exchange listed equity investments, the quoted price is the bid price.
Substantially, all investments are valued based on unadjusted quoted market
prices. Where such quoted prices are readily available in an active market,
such prices are not required to be assessed or adjusted for any business
risks, including climate change risk, in accordance with the fair value
related requirements of the Company’s financial reporting framework.
The Company may invest no more than 10% of its net asset value in investments
held through Stock Connect as set out on page 122 of the Group’s Annual
Report and Financial Statements for the year ended 30 November 2023.
13. Related party disclosure
Directors’ emoluments
The Board consists of four non-executive Directors, all of whom are considered
to be independent of the Manager by the Board. None of the Directors has a
service contract with the Company. The Chairman receives an annual fee of
£42,000, the Chairman of the Audit and Management Engagement Committee
receives an annual fee of £35,000, the Senior Independent Director receives
an annual fee of £31,000 and each of the other Directors receives an annual
fee of £30,000.
As at 31 May 2024, an amount of £11,000 (31 May 2023: £11,000; 30 November
2023: £11,000) was outstanding in respect of Directors’ fees.
At the period end, interests of the Directors in the ordinary shares of the
Company are as set out below:
31 May 31 May 30 November
2024 2023 2023
Mr Adrian Brown (Chairman) 35,000 35,000 35,000
Mr Andrew Robson 35,000 35,000 35,000
Mrs Anne Marie Cannon 1 15,000 n/a n/a
Mrs Carole Ferguson 14,505 10,000 14,505
Dr Carol Bell 2 n/a 44,000 50,800
========= ========= =========
1 Mrs Cannon joined the Board with effect from 16 January 2024 and held no
shares as at that date.
2 Dr Carol Bell retired from the Board with effect from 15 March 2024.
Since the period end and up to the date of this report there have been no
changes in Directors’ holdings.
Significant Holdings
The following investors are:
a. funds managed by the BlackRock Group or are affiliates of BlackRock, Inc.
(Related BlackRock Funds); or
b. investors (other than those listed in (a) above) who held more than 20% of
the voting shares in issue in the Company and are as a result, considered to
be related parties to the Company (Significant Investors).
Total % of shares Total % of shares Number of
held by Related held by Significant Investors Significant Investors
BlackRock Funds who are not affiliates of who are not affiliates of
BlackRock Group or BlackRock Group or
BlackRock, Inc. BlackRock, Inc.
As at 31 May 2024 0.75 n/a n/a
As at 30 November 2023 0.70 n/a n/a
As at 31 May 2023 0.95 n/a n/a
========= ========= =========
14. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Group under a contract which is terminable on six months’
notice. BFM has (with the Group’s consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock
Investment Management (UK) Limited (BIM (UK)). Further details of the
investment management contract are disclosed on page 53 of the Directors’
Report in the Company’s Annual Report and Financial Statements for the year
ended 30 November 2023.
The investment management fee due for the six months ended 31 May 2024
amounted to £724,000 (six months ended 31 May 2023: £808,000; year ended 30
November 2023: £1,549,000). At the period end £1,088,000 was outstanding in
respect of these fees (31 May 2023: £1,187,000; 30 November 2023: £742,000).
The Company is entitled to a rebate from the investment management fee charged
by the Manager in the event the Company’s ongoing charges exceed the cap of
1.25% per annum of average daily net assets. The amount of rebate accrued to
31 May 2024 amounted to £nil (six months ended 31 May 2023: £nil; year ended
30 November 2023: £nil). Any final rebate for the full year ending 30
November 2024 will not crystallise and fall due until the calculation date of
30 November 2024.
In addition to the above services, BIM (UK) has provided the Group with
marketing services. The total fees paid or payable for these services for the
period ended 31 May 2024 amounted to £15,000 excluding VAT (six months ended
31 May 2023: £21,000; year ended 30 November 2023: £84,000). Marketing fees
of £121,000 (31 May 2023: £43,000; 30 November 2023: £106,000) were
outstanding at 31 May 2024.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
15. Capital commitments and contingent liabilities
The Group had no capital commitments at 31 May 2024 (31 May 2023: one SPAC
PIPE commitment for investment in Lifezone Metals; year ended 30 November
2023: none). There were no contingent liabilities at 31 May 2024 (31 May 2023:
none; 30 November 2023: none).
16. Publication of non-statutory accounts
The financial information contained in this Half Yearly Financial Report does
not constitute statutory accounts as defined in Section 435 of the Companies
Act 2006. The financial information for the six months ended 31 May 2024 and
31 May 2023 has not been reviewed or audited by the auditor.
The information for the year ended 30 November 2023 has been extracted from
the latest published audited financial statements, which have been filed with
the Registrar of Companies unless otherwise stated. The report of the Auditors
on those accounts contained no qualification or statement under Sections
498(2) or 498(3) of the Companies Act 2006.
17. Annual results
The Board expects to announce the annual results for the year ending 30
November 2024 in January 2025.
Copies of the annual results announcement can be obtained from the Secretary
on 020 7743 3000 or at cosec@blackrock.com. The Annual Report and Financial
Statements should be available at the beginning of February 2025, with the
Annual General Meeting being held in March 2025.
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