REG-BlackRock Greater Europe Investment Trust Plc: Half-year Report
06/05/2025 17:30
BlackRock Greater Europe Investment Trust plc
LEI: 5493003R8FJ6I76ZUW55
Half Yearly Financial Report for the six months ended 28 February 2025
Performance record
As at As at
28 February 31 August
2025 2024
Net assets (£’000) 1 620,574 640,300
Net asset value per ordinary share (pence) 639.30 644.60
Ordinary share price (mid-market) (pence) 596.00 601.00
Discount to cum income net asset value 2 6.8% 6.8%
FTSE World Europe ex UK Index 2321.09 2219.24
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For the six For the six
months ended months ended
28 February 29 February
2025 2024
Performance (with dividends reinvested)
Net asset value per share 2 0.1% 18.6%
Ordinary share price 2 0.1% 20.5%
FTSE World Europe ex UK Index 4.6% 9.6%
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For the period For the period
since inception since inception
to 28 February to 29 February
2025 2024
Performance since inception (with dividends reinvested)
Net asset value per share 2 798.3% 814.2%
Ordinary share price 2 748.5% 784.3%
FTSE World Europe ex UK Index 486.9% 431.2%
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For the six For the six Change
months ended months ended %
28 February 29 February
2025 2024
Revenue
Net (loss)/profit on ordinary activities after taxation (£’000) (43) 63 -168.3
Revenue (loss)/earnings per ordinary share (pence) 3 (0.04) 0.06 -166.7
Dividends
Interim dividend (pence) 1.75 1.75 –
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1 The change in net assets reflects payments for shares repurchased into
treasury, portfolio movements and dividends paid.
2 Alternative Performance Measures, see Glossary contained within the Half
Yearly Financial Report.
3 Further details are given in the Glossary contained within the Half Yearly
Financial Report.
Chairman’s Statement
Overview
The Company’s Net Asset Value (NAV) underperformed the reference index (the
FTSE World Europe ex UK Index) over the six months under review, ending the
period only marginally higher by 0.1% compared to a 4.6% increase in the
reference index. Over the same period, the Company’s share price returned
0.1% (all percentages calculated in Sterling terms with dividends reinvested).
A potential ceasefire in Ukraine and increased fiscal spending to strengthen
European defence programmes, resulted in narrow market leadership driven by
only a few industries, particularly banks, defence companies and lower quality
cyclicals. More broadly, this environment favoured domestically exposed
businesses and value stocks which largely came at the expense of some of the
best-in-class global leaders we own in this Company. Our portfolio managers
provide a detailed description of the key contributors to and detractors from
performance during the period in their report which follows.
Since the period end to 2 May 2025, the Company’s NAV has decreased by 5.9%
compared with a rise in the FTSE World Europe ex UK Index of 1.1% over the
same period. Whilst acknowledging that this recent short-term performance has
been disappointing, your Board has a long-term investment approach based on
investing in companies characterised by exceptional quality and enduring
growth. Of late, we have witnessed extreme discounting of these companies,
with European Growth underperforming European Value by 31%1 since the peak,
larger than any historic drawdown in the last two decades. Your Board believes
that this represents a material market dislocation which has caused
shorter-term underperformance but can offer significant longer-term
opportunities for investors to access these unique assets at compelling
valuations. Over the 10 years ended 28 February 2025, the Company has
delivered shareholders exceptionally strong long-term performance. Your
Company has delivered a NAV total return of 191.6%, outperforming the
reference index by 56.4%. The Company’s performance compares favourably with
the AIC European peer group, with the NAV total return being first over the
ten years to 28 February 2025. Since the Company launched in September 2004,
the NAV total return has been 798.3%, 311.4% ahead of the reference index (an
annualised outperformance of 7.2%).
1Source: BlackRock. Data from Bloomberg, March 2025. MSCI Europe Growth Index
and MSCI Europe Value Index representing Growth and Value respectively.
Revenue earnings and dividends
The Company’s revenue return per share for the six-month period ended 28
February 2025 amounted to a loss of 0.04p compared with a profit of 0.06p for
the corresponding period in 2024. The majority of the Company’s income
typically is generated in the second half of the year when portfolio companies
announce and pay dividends. The Board has taken this into account in
considering the interim dividend payment level.
The Board has declared an interim dividend of 1.75p (2024: 1.75p) per share.
The dividend will be paid on 18 June 2025 to shareholders on the Company’s
register on 23 May 2025, the ex-dividend date being 22 May 2025.
The Company has consistently grown its regular dividends in all the 19
financial periods since its inception on 20 September 2004.
Management of share rating
The Board monitors the discount to NAV closely and receives regular updates
from the Manager and our corporate broker, Cavendish Securities. In the
Board’s opinion, it is important to consider the discount in the context of
wider market conditions, with investor sentiment and discounts being
influenced by various external factors, including the war in Ukraine, US
politics, US exceptionalism and trade war fears. Over the six-month period,
the Company’s shares traded at an average discount of 7.1% and, following
consultation with the Manager and Company’s broker, it was determined that
it was in shareholders’ interests to buy back shares with the objective of
ensuring that an excessive discount to NAV did not arise.
As part of this programme, the Company repurchased 2,261,528 shares
(representing 1.9% of the issued share capital) for a total consideration of
£13,209,000 over the six months under review. Since 28 February 2025 and up
to the latest practicable date of 2 May 2025 a further 825,222 shares have
been bought back for a total consideration of £4,635,000. As at this date,
the Company’s shares were trading at a discount of 5.5%.
All shares were bought back at a discount to the prevailing NAV and the buy
backs were therefore accretive to existing shareholders. All shares bought
back have been placed in treasury for future reissue.
There are several factors which influence the level of premium/discount at
which a Company’s shares trade in the market, many of which are outside of
the Board’s direct scope of control or influence, not least the pervasive
selling in the investment trust sector we have witnessed since early 2022
which has depressed share prices across the closed end funds sector. It is
important to view the Company’s share rating in the wider market context,
noting that the Investment Trust sector average discount at 28 April 2025 had
widened to 14.5% compared to 12.8% at the end of 2023 and 10.7% at the end of
2022, remaining correlated with gilt yields. Buy back activity has been
significantly elevated across the sector as a whole as boards grappled with
selling pressure. In total, the sector saw £7.5 billion of shares bought back
(nearly double the sum in 2023 which had previously represented a record
year).
Overall, the Board believes that the share buyback activity undertaken in the
period has been beneficial in reducing the volatility of our share rating and
maintaining the discount at the narrowest end of the peer group. Your Board
will continue to monitor the Company’s share rating and may deploy its
powers to support it by issuing or buying back the Company’s shares where it
believes that it is in shareholders’ long-term best interests to do so.
Tender offers
The Directors of the Company have the discretion to make semi-annual tender
offers at the prevailing NAV less 2%, for up to 20% of the issued share
capital in May and November of each year. The Board announced on 23 September
2024 that it had decided not to proceed with a tender offer in November 2024
and on 17 March 2025 that the tender offer in May 2025 would also not be
implemented.
Despite a challenging period for discounts, it is pleasing that the
Company’s share rating has been relatively stable versus the market and peer
group and the Board believes that the buyback activity undertaken has been
beneficial in reducing the volatility of the Company’s share rating and in
shareholders’ interests. As the Company’s discount was trading at 6.1% on
14 March 2025 and was trading at one of the narrowest discounts within its
peer group, the Board concluded that it was not in the interests of
shareholders as a whole to implement the May 2025 semi-annual tender offer.
The Board will continue to monitor the Company’s discount and may use the
Company’s share buyback powers to ensure that the share price does not go to
an excessive discount to the underlying NAV. The Board remains committed to
supporting the share price to a narrow discount or premium to its NAV.
Board composition
I am delighted to welcome Andrew Impey to the Board. As announced on 12 March
2025, Andrew was appointed as a non-executive Director of the Company with
effect from 28 April 2025. He brings a wealth of both fund management and
investment trust experience, having been a lead manager on a broad range of
funds including a sovereign wealth mandate, unit trusts and several investment
trusts. He is currently non-executive chair of the Pacific Assets Trust plc.
As previously advised in last year’s Annual Report, it is my intention to
step down from the Board in due course, subject to a suitable successor being
identified. As at 6 May 2025, the Board consisted of six independent
non-executive Directors. As part of its succession planning, the Board
regularly considers its composition to ensure that a suitable balance of
skills, knowledge and experience is achieved to enable the Board to discharge
its duties most effectively.
Outlook
For years, European equities have been overshadowed by the US, but the start
of 2025 saw a shift in this trend as European markets initially outperformed
the US. However, more recently, concerns over developments in US trade policy
have generated exceptional volatility, making it difficult to predict the
economic impact for Europe in the near to medium term. Notwithstanding these
headwinds, your Board believes that there is cause for optimism over the
longer term. In particular, post-election changes in Germany, with a new
government releasing fiscal constraints to stimulate the economy,
stabilisation measures in China and the potential for further interest rate
cuts by the European Central Bank, should provide a positive backdrop for
European equities over time.
Despite the challenges facing the region, our portfolio managers believe that
Europe offers some compelling valuation opportunities making it an appealing
proposition (more details are set out in the Investment Manager’s Report
below). Opportunities also remain in Europe’s highest quality, fastest
growing companies, irrespective of their size and geography, given these are
often global leading companies that are listed in Europe and dominating their
respective sectors. Against this backdrop, our portfolio managers remain
constructive on the outlook for European equities.
ERIC SANDERSON
6 May 2025
Investment Manager’s Report
Market review
The Company’s share price and underlying NAV were flat, with a 0.1% increase
for both over the last six months to 28 February 2025. By way of comparison,
the FTSE World Europe ex UK Index returned 4.6% during the same period (all
percentages in Sterling terms with dividends reinvested). Subsequent to the
period end, Europe ex UK markets experienced substantial declines, driven by
concerns around the US economy, particularly tariffs and federal spending
cuts, which created significant market volatility. Against this backdrop, and
from the period end up to 2 May 2025, the Company’s NAV fell by 5.9%,
underperforming the reference index which rose by 1.1%. Although this
short-term performance was disappointing, we note that current market
conditions do not favour our focus on investing in high quality companies with
enduring growth and we are confident that current valuations offer significant
longer-term opportunity for investors to access these quality assets at
historically attractive prices. Long-term performance remains strong; over the
10 years ended 28 February 2025 your Company has delivered a NAV total return
of 191.6%, outperforming the reference index by 56.4%.
Over the past six months, European equities have experienced a notable shift
in sentiment. Initially, investor views towards the asset class were largely
pessimistic, with many asset allocators turning to the US, especially post the
presidential election. However, the ongoing rate-cutting cycle in Europe
provided additional support for sentiment moving forward, whilst the interest
rate trajectory in the US remains more uncertain. Accordingly, this trend
reversed in the early months of 2025, with meaningful inflows into European
equities as confidence returned. In fact, European indices outperformed the
S&P500 Index by 6% (in US Dollar terms) since the election day and 9% from the
beginning of 2025 to the end of February.
Despite this notable outperformance, the asset class remains under-owned. At
the time of writing, for every US$100 of outflows from European equities since
the start of the Russia/Ukraine conflict in February 2022 (totalling US$255
billion of outflows from the asset class) there have been just US$4 of inflows
from the beginning of this year. The perception of Europe being structurally
disadvantaged has given way to a sense of urgency among European politicians,
prompting Germany and other European countries, along with the European Union,
to take dramatic action, including increased defence spending and plans for a
substantial infrastructure package in Germany.
This step change in sentiment was supported further by European earnings
surprising positively, which led to earnings revisions of European companies
being among the strongest globally. The latter development was also helped by
a large gap in market expectations. At the start of this year earnings for the
STOXX 600 were expected to grow 8% in 2025, while US earnings were seen to
increase 15% over the same period, the widest dispersion in 20 years.
In addition, the second half of the reporting period saw markets driven by a
mix of narratives which ranged from hopes of a ceasefire in Ukraine, to a
European domestic recovery and then to concerns about the impact of US tariffs
on global trade. In combination, those macro topics led to outperformance of
value stocks over growth stocks during the period, which was enhanced further
by an unwind of US equity market concentration and investors looking to
diversify into cheaper cyclical stocks in Europe. As a result, the financials
sector delivered the strongest returns, followed by other value sectors such
as telecoms. In contrast, health care, consumer staples and real estate fell
during the period.
Portfolio performance – contributors and detractors
The Company experienced negative contributions from Novo Nordisk, as well as a
number of technology stocks. Novo Nordisk was the largest detractor in the
portfolio over the period with its share price under significant pressure at
times. This was largely due to concerns around growth prospects of its highly
successful diabetes and obesity franchise. Investors focused in particular on
its weight-loss drug, Wegovy, as well as the follow-on compound, Cagrisema,
where important Phase III trial read outs impacted shares negatively towards
the end of 2024. While Cagrisema showed promising results, investors were
disappointed by the slower-than-anticipated progress and lack of a clear
market-leading advantage over existing treatment mechanisms. Although the
trial was successful, the 22.7% weight loss achieved was below the expected
25% end point. This outcome ultimately was driven by the trial’s flexible
design, allowing patients to adjust dosage titration during treatment. Despite
this, 40% of participants achieved 25% or higher weight loss, indicating good
efficacy as well as a strong safety profile. Ultimately, market participants
ended up disappointed with management’s communication and lack of
transparency around the trial design, creating unnecessary uncertainty around
real-world usage of high-dose, high-efficacy weight loss drugs. We have
slightly reduced our weight in the holding.
Within technology, our exposure to the European semiconductor industry
detracted from performance mainly due to ongoing weak trading in traditional
end markets. Continued weak demand in autos, industrials, smartphones and
personal computers weighed on growth prospects for semiconductor companies.
Additionally, investors showed concern around the sustainability of capital
expenditure on artificial intelligence (AI) related technologies, thereby
questioning the growth potential for semiconductor companies in the medium to
long term. A position in ASML dragged on relative returns as the company
significantly reduced its 2025 revenue guidance, driven by lower assumptions
for extreme ultraviolet (EUV) tool shipments and a significant reduction in
expected sales to China. Despite these challenges, we view the missing EUV
tools as delayed rather than cancelled. However, the increased uncertainty in
the near-term outlook has led to a decline in ASML shares, contributing to the
sector’s underperformance.
Within financials, banks delivered strong performance amid a shifting interest
rate environment, benefiting from earnings resilience, improving returns and a
measured rerating overcoming a volatile macro-economic backdrop. While we
recognise the positive cycle underway, we remain underweight given the
sector’s historical challenges in sustained value creation and
leverage-driven volatility. In economies where we see high-quality players
with greater return visibility and stronger fundamentals, we have selectively
added to our portfolio. Our positions in Allied Irish Banks and KBC Groep
positively contributed to performance over the last six months. However, the
overall underweight detracted from performance as we saw a sector rerating at
the beginning of the new year. While the banking sector may continue to
benefit from positive balance sheet trends and a steepening yield curve in the
near term, longer-term competitive dynamics for the industry remain uncertain.
Our investment philosophy stays focused on identifying businesses with
sustainable, high-return profiles that can drive long-term growth in capital
for our shareholders.
On the positive side, we have started to see evidence of a gradual recovery in
the luxury sector, albeit stock selection remains key with near-term
volatility likely to stay high. The structural appeal of the sector remains
unchanged, driven by growing consumer demand, especially in markets like Asia
and the US where the cohort of ultra-high-net-worth individuals keeps
expanding at pace. More generally, as economic conditions stabilise and
affluent consumers continue to spend on premium goods, winning luxury brands
tend to benefit from strong organic sales growth and improving margins. We
maintain weights in the best-in-class operators, including Hermès which has
been a strong performer for the Company.
Hermès has stood out, with its shares performing well due to its ability to
maintain exclusivity and high demand for its iconic products, such as handbags
and accessories. The brand’s focus on craftsmanship, limited product
availability and pricing power have allowed it to continue growing even during
challenging times. Additionally, Hermès has successfully navigated supply
chain challenges and expanded its presence in key markets, further boosting
investor confidence in the brand’s long-term appeal. While Chinese demand
declined last year, it is expected to improve and the high-end US consumer
market remains robust, with small improvements also across the rest of the
developed world. Hermès, with its strong pricing power and conservative
management, is well-positioned to continue to capitalise on these trends and
deliver profitable growth for years to come.
Elsewhere, Adyen has performed well over the last six months due to strong
growth in its payments processing business, driven by the increasing demand
for seamless, digital payment solutions worldwide. The company has benefited
from its ability to expand its customer base, particularly in the e-commerce
sector, as more businesses move towards online transactions. Adyen’s
platform, which offers a wide range of payment services with low fees and high
efficiency, has attracted major global brands, enhancing its market position.
Additionally, its ability to scale and integrate new technologies, such as AI
and machine learning for fraud prevention, has helped boost investor
confidence.
Outlook
We remain optimistic on European equities as we move forward. We see several
building blocks that could lay the foundation for the recently seen
outperformance of the asset class to extend. To start with China, at least
temporarily, should turn from a headwind into a tailwind for European
companies as the Chinese economy gradually stabilises, benefiting global
demand for European goods and services. In Northern Europe, construction
activity is picking up after three years of weak construction volumes and
activity finally reaching a trough. Increased spending on renovation projects
and the potential for lower interest rates should lend further support.
Additionally, we see the manufacturing sector beginning to bottom out, with
end markets showing signs of recovery, which should drive growth across key
industrial sectors. Stronger domestic earnings from European companies further
bolster this optimistic outlook, as many firms continue to report solid
results.
On the political front, the new US administration appears to have created a
greater sense of urgency among European policymakers, leading to an
understanding that now is the time to act to address some of Europe’s
structural issues. Germany’s plan for increased infrastructure spending and
the growing commitment from European countries to boost defence budgets
highlight a more proactive approach, which bodes well for long-term growth.
With the ongoing rate-cutting cycle providing additional support, these
factors collectively point to a more favourable environment for European
equities moving forward.
Finally, at the time of writing, uncertainty around the US tariffs remains
high and we are likely to see soft-data, such as US consumer sentiment,
continue to deteriorate while corporate reporting and outlook statements will
likely point to a wider range of possible outcomes. All of which brings
expectations for heightened volatility. However, given the Company’s focus
on pricing power and high margins, we would expect many of our companies to be
able to partially offset the effects of tariffs.
STEFAN GRIES AND ALEXANDRA DANGOOR
BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED
6 May 2025
Ten largest investments
Together, the Company’s ten largest investments represented 50.6% of the
Company’s portfolio as at 28 February 2025 (31 August 2024: 51.8%)
1 ▶ Novo Nordisk (2024: 1st)
Health Care company
Market value: £48,246,000
Share of investments: 7.1%
Novo Nordisk is a Danish multinational pharmaceutical company which is a
leader in diabetes care. We expect Novo Nordisk to continue to post strong
growth in earnings and cash flows driven by demand for Semaglutide/GLP-1 which
treats type 2 diabetes through Ozempic, as well as obesity through its weight
lowering drug Wegovy. We remain confident the company remains well positioned
to serve the increased demand for those classes of drugs and follow on
molecules for diabetes in weight loss; we observe rapidly growing patient
populations globally. Overall, Novo Nordisk offers attractive long-term growth
potential at high returns and sector leading cash flow conversion with any
excess in cash being returned to shareholders.
2 ▲ Safran (2024: 7th)
Industrials company
Market value: £40,917,000
Share of investments: 6.0%
Safran is a French multinational supplier of systems and equipment for
aerospace, defence and security. The industry has emerged from a heavy
investment period in new planes and engines and we see Safran as well placed
to benefit from continued strength in its best-in-class after-market business,
as well as strong execution in its LEAP engine program which should drive
growth for the next decade. Additionally, the company is well-positioned to
benefit from increasing defence budgets in Europe.
3 ▶ RELX (2024: 3rd)
Consumer Discretionary company
Market value: £40,073,000
Share of investments: 5.9%
RELX is a multinational information and analytics company which enjoys high
barriers to entry in most of its divisions, including scientific publishing.
The capital light business model allows for a high rate of cash flow
conversion, with repeatable revenues built on subscription-based models. The
company benefits from holding intellectual property and has made significant
steps in monetising AI, already generating revenue from their AI tools leaving
potential for further acceleration in growth in future years.
4 ▼ ASML (2024: 2nd)
Technology company
Market value: £35,398,000
Share of investments: 5.2%
ASML is a Dutch company which specialises in the supply of photolithography
systems for the semiconductor industry. The company is at the forefront of
technological change, investing in leading research and development to capture
the structural growth opportunity coming from the production of microchip
components. The company is run by an exceptional management team who aim to
create long-term value whilst returning excess cash to shareholders.
5 ▼ Hermès (2024: 6th)
Consumer Discretionary company
Market value: £33,821,000
Share of investments: 4.9%
Hermès is a French luxury design house established in 1837. It specialises in
leather goods, lifestyle accessories, home furnishings, perfumery, jewellery,
watches and ready-to-wear textiles. Due to deliberate brand management and
craftsmanship, this ultimate high-end brand remains supply constraint and
enjoys strong earnings visibility, as some of its most iconic products are
sold on allocation via waiting lists. Hermès is a largely family-owned
business and has been run in a conservative fashion for generations with any
strategic decisions taken with the longest of timeframes in mind. This
business tends to prove resilient, even during economic downturns, as
Hermès’ client base is typically less sensitive to weaker macro
environments.
6 ▲ Schneider Electric (2024: 8th)
Industrials company
Market value: £31,606,000
Share of investments: 4.6%
Schneider Electric is a French multinational company specialising in digital
automation and energy management across various industries globally. We see
Schneider Electric as a beneficiary of structural investment spend for energy
transition solutions. Demand for its products is driven by the three
megatrends of energy efficiency, automation and digitisation. Additionally, we
expect durable growth in Schneider Electric’s main end markets due to
governmental programs supporting green initiatives globally. Schneider
Electric is a well-managed company offering compounding growth at attractive
returns on capital.
7 ▲ Allied Irish Banks (2024: 11th)
Financials company
Market value: £29,655,000
Share of investments: 4.3%
Allied Irish Banks (AIB) is an Irish bank benefiting from positive trends
related to deposits and loan growth, as well as capital rich balance sheets.
Structural consolidation has led to a more concentrated Irish banking market,
with AIB holding above a 30% share of mortgages and close to 40% of deposits.
Additionally, AIB’s excess capital should allow for significant shareholder
distributions in future years.
8 ▼ Ferrari (2024: 5th)
Consumer Discretionary company
Market value: £29,408,000
Share of investments: 4.3%
Ferrari is an Italian luxury sports car manufacturer emphasising exclusivity,
performance and quality globally, with a strong focus on innovation and
delivering unique driving experiences to its clientele. Ferrari enjoys
excellent earnings visibility with an order book extending well into 2026.
Ferrari’s strategy of focusing on limited production volumes, selling just
14,000 cars each year, continues to create elevated levels of desirability, an
unparalleled degree of pricing power and has demonstrably enhanced its
earnings resilience over time.
9 ▲ Partners Group (2024: 14th)
Financials company
Market value: £29,251,000
Share of investments: 4.3%
Partners Group is a Swiss-based global private markets firm. The company
specialises in private equity, although also offers private debt, private real
estate and private infrastructure to clients. Their aim is to provide clients
with solutions, providing them with a diverse portfolio of alternatives which
suit their needs. With the funding environment easing, Partners Group is well
set up to continue raising assets in a structurally growing alternatives
segment. The business offers high and sector leading returns which should
compound for many years to come.
10 ▲ Adyen (2024: 18th)
Industrials company
Market value: £27,232,000
Share of investments: 4.0%
Ayden is a leading payment technology company offering a global platform for
businesses to accept and process multiple payment methods across online,
mobile and point-of-sale channels. We expect Adyen to keep generating highly
attractive organic growth rates, which should lead to operating leverage and
improving margins owing to Adyen’s best-in-class technology offering.
All percentages reflect the value of the holding as a percentage of total
investments.
Arrows indicate the change in relative ranking of the position in the
portfolio compared to its ranking as at 31 August 2024.
Percentages in brackets represent the value of the holding as at 31 August
2024.
Portfolio analysis as at 28 February 2025
% % % % % % % % % % % % % FTSE
France Switzerland Ireland Germany Sweden Netherlands Denmark Belgium Spain Italy Central Portfolio Portfolio World
Eastern 28.02.25 31.08.24 Europe
Europe ex UK
& Other 28.02.25
Basic Materials – – – – – 2.9 – – – – 3.8 6.7 6.9 4.0
Consumer Discretionary 9.6 4.0 – – – – – – – 4.3 5.9 23.8 23.0 11.9
Consumer Staples – – – – – – – – – – – – 0.9 6.7
Energy – – – – – – – – – – – – – 3.3
Financials – 4.3 4.3 – – – – 2.2 – – – 10.8 8.9 21.6
Health Care – 4.8 – – – – 9.5 – – – – 14.3 15.4 15.4
Industrials 10.6 4.1 1.6 1.9 3.7 4.0 – – – – 1.9 27.8 26.5 19.2
Real Estate – – – – 2.1 – – – – – – 2.1 – 1.0
Technology – – – 3.2 – 11.3 – – – – – 14.5 18.4 9.8
Telecommunications – – – – – – – – – – – – – 3.3
Utilities – – – – – – – – – – – – – 3.8
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
% Portfolio 28.02.25 20.2 17.2 5.9 5.1 5.8 18.2 9.5 2.2 – 4.3 9.7 100.0 – –
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
% Portfolio 31.08.24 20.8 17.9 5.9 2.1 5.3 20.5 10.5 1.9 – 4.4 10.7 – 100.0 –
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
FTSE World Europe ex UK 28.02.25 19.5 19.3 0.6 18.6 6.6 10.3 5.1 1.6 5.7 5.8 6.9 – – 100.0
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Percentages in the table above are a % of total investments.
Investments as at 28 February 2025
Country Market % of
of operation value investments
£’000
Industrials
Safran France 40,917 6.0
Schneider Electric France 31,606 4.6
Adyen Netherlands 27,232 4.0
Belimo Switzerland 21,009 3.1
Atlas Copco Sweden 16,032 2.3
Rational Germany 13,176 1.9
Kone Finland 12,899 1.9
Kingspan Ireland 10,730 1.6
Epiroc Sweden 9,889 1.4
VAT Group Switzerland 6,785 1.0
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190,275 27.8
========= =========
Consumer Discretionary
RELX United Kingdom 40,073 5.9
Hermès France 33,821 4.9
Ferrari Italy 29,408 4.3
Compagnie Financière Richemont Switzerland 27,218 4.0
LVMH France 22,448 3.3
L’Oréal France 9,890 1.4
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162,858 23.8
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Technology
ASML Netherlands 35,398 5.2
Nemetschek Germany 21,864 3.2
ASM International Netherlands 21,185 3.1
BE Semiconductor Netherlands 20,889 3.0
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99,336 14.5
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Health Care
Novo Nordisk Denmark 48,246 7.1
Lonza Group Switzerland 22,899 3.4
ChemoMetec Denmark 16,519 2.4
Straumann Switzerland 9,863 1.4
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97,527 14.3
========= =========
Financials
Allied Irish Banks Ireland 29,655 4.3
Partners Group Switzerland 29,251 4.3
KBC Groep Belgium 14,902 2.2
Sberbank* Russia 1 –
--------------- ---------------
73,809 10.8
========= =========
Basic Materials
Linde United States 26,014 3.8
IMCD Netherlands 19,702 2.9
--------------- ---------------
45,716 6.7
========= =========
Real Estate
Hemnet Group Sweden 14,016 2.1
--------------- ---------------
14,016 2.1
========= =========
Energy
Lukoil* Russia – –
--------------- ---------------
Total investments 683,537 100.0
========= =========
* The investments in Sberbank and Lukoil have been marked down to a nominal
value of £0.01 as the secondary listings of depositary receipts of Russian
companies have been suspended from trading.
All investments are in ordinary shares unless otherwise stated. The total
number of investments held at 28 February 2025 was 32 (31 August 2024: 34).
Industry classifications in the table above are based on the Industrial
Classification Benchmark standard for categorisation of companies by industry
and sector.
As at 28 February 2025, 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 Manager’s 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:
· Counterparty;
· Investment performance;
· Legal and regulatory compliance;
· Market;
· Operational;
· Financial; and
· Marketing.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 31
August 2024. A detailed explanation can be found in the Strategic Report on
pages 35 to 39 and in note 16 on pages 101 to 107 of the Annual Report and
Financial Statements which are available on the website maintained by
BlackRock at www.blackrock.com/uk/brge.
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 Directors, having considered the nature and liquidity of the portfolio,
the Company’s investment objective and the Company’s projected income and
expenditure, are satisfied that the Company has adequate resources to continue
in operational existence for the foreseeable future and is financially sound.
The Board is mindful of the continuing uncertainty surrounding the current
environment of heightened geopolitical risk given the war in Ukraine and
conflict in the Middle East. The Board believes that the Company and its key
third-party service providers have in place appropriate business continuity
plans and these services have continued to be supplied without interruption.
The Company has a portfolio of investments which are predominantly readily
realisable and is able to meet all of its liabilities from its assets and
income generated from these assets. Accounting revenue and expense forecasts
are maintained and reported to the Board regularly and it is expected that the
Company will be able to meet all its obligations. The Investment Manager
generally aims to be fully invested and it is anticipated that gearing will
not exceed 15% of net asset value at the time of drawdown of the relevant
borrowings. Borrowings under the overdraft facility shall at no time exceed
£75 million or 15% of the Company’s net asset value (whichever is lower)
and this covenant was complied with during the period. At 28 February 2025,
the Company had net gearing of 10.1% (29 February 2024: 7.4%; 31 August 2024:
8.0%). 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. Ongoing charges for the year ended 31 August 2024 were
approximately 0.95% of net assets.
Related party disclosure and transactions with the Manager
BlackRock Fund Managers Limited (BFM) was appointed as the Company’s
Alternative Investment Fund Manager (AIFM) with effect from 2 July 2014. BFM
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 fees payable are set
out in note 4 and note 13 below. The related party transactions with the
Directors are set out in note 12 below.
Directors’ responsibility statement
The Disclosure Guidance and Transparency Rules 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 applicable UK Accounting
Standards and the Accounting Standards Board’s Statement ‘Half Yearly
Financial Reports’; and
· the Interim Management Report, together with the Chairman’s Statement
and Investment Manager’s 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 auditors.
The Half Yearly Financial Report was approved by the Board on 6 May 2025 and
the above responsibility statement was signed on its behalf by the Chairman.
ERIC SANDERSON
FOR AND ON BEHALF OF THE BOARD
6 May 2025
Income Statement for the six months ended 28 February 2025
Six months ended Six months ended Year ended
28 February 2025 29 February 2024 31 August 2024
(unaudited) (unaudited) (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Gains on investments held at fair value through profit or loss – 654 654 – 106,000 106,000 – 88,991 88,991
Gains on foreign exchange – 865 865 – 423 423 – 1,075 1,075
Income from investments held at fair value through profit or loss 3 1,121 – 1,121 1,252 – 1,252 11,969 31 12,000
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total income 1,121 1,519 2,640 1,252 106,423 107,675 11,969 90,097 102,066
========= ========= ========= ========= ========= ========= ========= ========= =========
Expenses
Investment management fee 4 (483) (1,932) (2,415) (470) (1,879) (2,349) (994) (3,976) (4,970)
Other operating expenses 5 (391) (6) (397) (406) (8) (414) (2,420) (9) (2,429)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total operating expenses (874) (1,938) (2,812) (876) (1,887) (2,763) (3,414) (3,985) (7,399)
========= ========= ========= ========= ========= ========= ========= ========= =========
Net profit/(loss) on ordinary activities before finance costs and taxation 247 (419) (172) 376 104,536 104,912 8,555 86,112 94,667
Finance costs (225) (902) (1,127) (184) (736) (920) (467) (1,870) (2,337)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net profit/(loss) on ordinary activities before taxation 22 (1,321) (1,299) 192 103,800 103,992 8,088 84,242 92,330
Taxation charges (65) – (65) (129) – (129) (709) (11) (720)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net (loss)/profit on ordinary activities after taxation 7 (43) (1,321) (1,364) 63 103,800 103,863 7,379 84,231 91,610
========= ========= ========= ========= ========= ========= ========= ========= =========
(Loss)/earnings per ordinary share (pence) 7 (0.04) (1.35) (1.39) 0.06 102.96 103.02 7.35 83.88 91.23
========= ========= ========= ========= ========= ========= ========= ========= =========
The total columns of this statement represent the Company’s profit and loss
account. 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 Company.
The net profit on ordinary activities for the period disclosed above
represents the Company’s total comprehensive income.
Statement of Changes in Equity for the six months ended 28 February 2025
Note Called Share Capital Special Capital Revenue Total
up share premium redemption reserve reserves reserve £’000
capital account reserve £’000 £’000 £’000
£’000 £’000 £’000
For the six months ended 28 February 2025 (unaudited)
At 31 August 2024 117 85,325 130 58,331 484,862 11,535 640,300
Total comprehensive loss:
Net loss for the period – – – – (1,321) (43) (1,364)
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – – (13,133) – – (13,133)
Share repurchase costs – – – (76) – – (76)
Dividends paid 1 6 – – – – – (5,153) (5,153)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 28 February 2025 117 85,325 130 45,122 483,541 6,339 620,574
========= ========= ========= ========= ========= ========= =========
For the six months ended 29 February 2024 (unaudited)
At 31 August 2023 117 85,325 130 68,558 400,631 10,949 565,710
Total comprehensive income:
Net profit for the period – – – – 103,800 63 103,863
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – – (1,904) – – (1,904)
Share repurchase costs – – – (10) – – (10)
Dividends paid 2 6 – – – – – (5,040) (5,040)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 29 February 2024 117 85,325 130 66,644 504,431 5,972 662,619
========= ========= ========= ========= ========= ========= =========
For the year ended 31 August 2024 (audited)
At 31 August 2023 117 85,325 130 68,558 400,631 10,949 565,710
Total comprehensive income:
Net profit for the year – – – – 84,231 7,379 91,610
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – – (10,171) – – (10,171)
Share repurchase costs – – – (56) – – (56)
Dividends paid 3 6 – – – – – (6,793) (6,793)
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 August 2024 117 85,325 130 58,331 484,862 11,535 640,300
========= ========= ========= ========= ========= ========= =========
1 Final dividend paid in respect of the year ended 31 August 2024 of 5.25p
per share was declared on 5 November 2024 and paid on 20 December 2024.
2 Final dividend paid in respect of the year ended 31 August 2023 of 5.00p
per share was declared on 8 November 2023 and paid on 20 December 2023.
3 Interim dividend paid in respect of the year ended 31 August 2024 of 1.75p
per share was declared on 2 May 2024 and paid on 19 June 2024. Final dividend
paid in respect of the year ended 31 August 2023 of 5.00p per share was
declared on 8 November 2023 and paid on 20 December 2023.
For information on the Company’s distributable reserves, please refer to
note 10 below.
Balance Sheet as at 28 February 2025
Notes 28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Non current assets
Investments held at fair value through profit or loss 11 683,537 711,970 691,831
Current assets
Current tax asset 3,071 2,446 3,100
Debtors 66 7,017 748
Cash and cash equivalents – cash at bank – – 8
--------------- --------------- ---------------
Total current assets 3,137 9,463 3,856
========= ========= =========
Current liabilities
Cash and cash equivalents – bank overdraft (59,024) (55,509) (50,150)
Other creditors (7,076) (3,305) (5,237)
--------------- --------------- ---------------
Total current liabilities (66,100) (58,814) (55,387)
--------------- --------------- ---------------
Net current liabilities (62,963) (49,351) (51,531)
========= ========= =========
Net assets 620,574 662,619 640,300
========= ========= =========
Equity
Called up share capital 9 117 117 117
Share premium account 85,325 85,325 85,325
Capital redemption reserve 130 130 130
Special reserve 45,122 66,644 58,331
Capital reserves 483,541 504,431 484,862
Revenue reserve 6,339 5,972 11,535
--------------- --------------- ---------------
Total shareholders’ funds 620,574 662,619 640,300
========= ========= =========
Net asset value per ordinary share (pence) 7 639.30 658.25 644.60
========= ========= =========
Statement of Cash Flows for the six months ended 28 February 2025
Six months Six months Year
ended ended ended
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Operating activities
Net (loss)/profit on ordinary activities before taxation 1 (1,299) 103,992 92,330
Add back finance costs 1,127 920 2,337
Gains on investments held at fair value through profit or loss (654) (106,000) (88,991)
Gains on foreign exchange (865) (423) (1,075)
Sale of investments held at fair value through profit or loss 116,457 85,303 134,209
Purchase of investments held at fair value through profit or loss (107,358) (103,559) (142,473)
Net amount for capital special dividends received – – (20)
Decrease/(increase) in debtors 200 125 (21)
Increase/(decrease) in other creditors 2,170 (967) 630
Taxation on investment income (148) (608) (2,291)
Interest paid (1,127) (920) (2,337)
Refund of withholding tax reclaims 112 479 821
--------------- --------------- ---------------
Net cash generated from/(used in) operating activities 8,615 (21,658) (6,881)
========= ========= =========
Financing activities
Ordinary shares repurchased into treasury (13,209) (1,617) (9,926)
Dividends paid (5,153) (5,040) (6,793)
--------------- --------------- ---------------
Net cash used in financing activities (18,362) (6,657) (16,719)
========= ========= =========
Decrease in cash and cash equivalents (9,747) (28,315) (23,600)
Effect of foreign exchange rate changes 865 423 1,075
Cash and cash equivalents at the start of the period/year (50,142) (27,617) (27,617)
--------------- --------------- ---------------
Cash and cash equivalents at the end of the period/year (59,024) (55,509) (50,142)
========= ========= =========
Comprised of:
Cash at bank – – 8
Bank overdraft (59,024) (55,509) (50,150)
--------------- --------------- ---------------
(59,024) (55,509) (50,142)
========= ========= =========
1 Dividends and interest received in cash during the period amounted to
£1,173,000 and £1,000 (six months ended 29 February 2024: £758,000 and
£nil; year ended 31 August 2024: £8,119,000 and £nil).
Notes to the Financial Statements for the six months ended 28 February 2025
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.
2. Basis of preparation
The financial statements of the Company are prepared on a going concern basis
in accordance with Financial Reporting Standard 104 Interim Financial
Reporting (FRS 104) applicable in the United Kingdom and Republic of Ireland
and the revised Statement of Recommended Practice – ‘Financial Statements
of Investment Trust Companies and Venture Capital Trusts’ (SORP), issued by
the Association of Investment Companies (AIC) in October 2019 and updated in
July 2022, and the provisions of the Companies Act 2006.
The accounting policies and estimation techniques applied for the condensed
set of financial statements are as set out in the Company’s Annual Report
and Financial Statements for the year ended 31 August 2024.
3. Income
Six months Six months Year
ended ended ended
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Investment income:
UK dividends – – 807
Overseas dividends 1,120 1,252 10,687
Overseas special dividends – – 475
--------------- --------------- ---------------
Total investment income 1,120 1,252 11,969
========= ========= =========
Other income:
Interest received 1 – –
--------------- --------------- ---------------
Total other income 1 – –
========= ========= =========
Total 1,121 1,252 11,969
========= ========= =========
Dividends and interest received in cash during the period amounted to
£1,173,000 and £1,000 respectively (six months ended 29 February 2024:
£758,000 and £nil; year ended 31 August 2024: £8,119,000 and £nil).
No special dividends have been recognised in capital during the period (six
months ended 29 February 2024: £nil; year ended 31 August 2024: £31,000).
4. Investment management fee
Six months ended Six months ended Year ended
28 February 2025 29 February 2024 31 August 2024
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Investment management fee 483 1,932 2,415 470 1,879 2,349 994 3,976 4,970
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 483 1,932 2,415 470 1,879 2,349 994 3,976 4,970
========= ========= ========= ========= ========= ========= ========= ========= =========
The investment management fee is levied quarterly based on a tiered basis:
0.85% per annum of the month-end net asset value up to £350 million and 0.75%
per annum of the month-end net asset value above £350 million.
The investment management fee is allocated 20% to the revenue account and 80%
to the capital account of the Income Statement. There is no additional fee for
company secretarial and administration services.
5. Other operating expenses
Six months Six months Year
ended ended ended
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Allocated to revenue:
Broker fees 24 24 48
Custody fees 35 27 65
Depositary fees 34 32 70
Audit fees 1 31 26 64
Legal fees 13 13 26
Registrar’s fees 48 45 94
Directors’ emoluments 94 89 186
Marketing fees 50 77 157
Postage and printing fees 30 22 46
AIC fees 11 11 22
Professional fees 5 11 37
Stock exchange listing fees 17 12 30
Write back of prior year expense accruals 2 (39) (12) (12)
Other administration costs 38 29 30
Provision for doubtful debts 3 – – 1,557
--------------- --------------- ---------------
Total revenue expenses 391 406 2,420
========= ========= =========
Allocated to capital:
Custody transaction costs 4 6 8 9
--------------- --------------- ---------------
Total 397 414 2,429
========= ========= =========
1 No non-audit services are provided by the Company’s auditors (six months
ended 29 February 2024: none; year ended 31 August 2024: none).
2 Relates to legal fees, professional fees and other administration costs
written back in the period (six months ended 29 February 2024: postage and
printing fees and other administration costs; year ended 31 August 2024:
professional fees and postage and printing fees).
3 Provision for doubtful debts relate to dividend income from Sberbank which
has not been received due to measures imposed by the Russian authorities in
response to the sanctions that have been imposed on Russia as a result of the
invasion of Ukraine.
4 For the six month period ended 28 February 2025, expenses of £6,000 (six
months ended 29 February 2024: £8,000; year ended 31 August 2024: £9,000)
were charged to the capital account of the Income Statement. These relate to
transaction costs charged by the custodian on sale and purchase trades.
The direct transaction costs incurred on the acquisition of investments
amounted to £90,000 for the six months ended 28 February 2025 (six months
ended 29 February 2024: £191,000; year ended 31 August 2024: £211,000).
Costs relating to the disposal of investments amounted to £34,000 for the six
months ended 28 February 2025 (six months ended 29 February 2024: £52,000;
year ended 31 August 2024: £71,000). All transaction costs have been included
within the capital account.
6. Dividends
The Directors have declared an interim dividend of 1.75p per share for the
period ended 28 February 2025, payable on 18 June 2025 to shareholders on the
register on 23 May 2025. The total cost of the dividend based on 96,245,411
ordinary shares in issue at 2 May 2025 was £1,684,000 (six months ended 29
February 2024: £1,752,000).
In accordance with FRS 102, Section 32 Events After the End of the Reporting
Period, the interim dividend payable on the ordinary shares has not been
included as a liability in the financial statements, as interim dividends are
only recognised when they have been paid.
7. Earnings and net asset value per ordinary share
Revenue (loss)/earnings, capital (loss)/earnings 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
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
Net revenue (loss)/profit attributable to ordinary shareholders (£’000) (43) 63 7,379
Net capital (loss)/profit attributable to ordinary shareholders (£’000) (1,321) 103,800 84,231
--------------- --------------- ---------------
Total (loss)/profit attributable to ordinary shareholders (£’000) (1,364) 103,863 91,610
========= ========= =========
Total shareholders’ funds (£’000) 620,574 662,619 640,300
========= ========= =========
Earnings per share
The weighted average number of ordinary shares in issue during the period on which the earnings per ordinary share was calculated was: 98,146,439 100,816,318 100,411,682
The actual number of ordinary shares in issue at the end of the period on which the net asset value per ordinary share was calculated was: 97,070,633 100,663,851 99,332,161
Calculated on weighted average number of ordinary shares:
Revenue (loss)/earnings per share (pence) - basic and diluted (0.04) 0.06 7.35
Capital (loss)/earnings per share (pence) - basic and diluted (1.35) 102.96 83.88
--------------- --------------- ---------------
Total (loss)/earnings per share (pence) - basic and diluted (1.39) 103.02 91.23
========= ========= =========
As at As at As at
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
Net asset value per share (pence) 639.30 658.25 644.60
Ordinary share price (pence) 596.00 629.00 601.00
========= ========= =========
There were no dilutive securities at 28 February 2025 (29 February 2024: none;
31 August 2024: none).
8. Reconciliation of liabilities arising from financing activities
Six months Six months Year
ended ended ended
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Bank overdraft at beginning of the period/year 50,150 27,617 27,617
Cash flows:
Movement in overdraft 9,595 28,256 23,229
Non cash flows:
Effects of foreign exchange gain (721) (364) (696)
--------------- --------------- ---------------
Bank overdraft at end of the period/year 59,024 55,509 50,150
========= ========= =========
9. Called up share capital
Ordinary Treasury Total Nominal
shares shares shares value
number number number £’000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 0.1 pence each:
At 31 August 2023 (audited) 101,000,161 16,928,777 117,928,938 117
Ordinary shares repurchased into treasury (336,310) 336,310 – –
--------------- --------------- --------------- ---------------
At 29 February 2024 (unaudited) 100,663,851 17,265,087 117,928,938 117
Ordinary shares repurchased into treasury (1,331,690) 1,331,690 – –
--------------- --------------- --------------- ---------------
At 31 August 2024 (audited) 99,332,161 18,596,777 117,928,938 117
Ordinary shares repurchased into treasury (2,261,528) 2,261,528 – –
--------------- --------------- --------------- ---------------
At 28 February 2025 (unaudited) 97,070,633 20,858,305 117,928,938 117
========= ========= ========= =========
During the six months ended 28 February 2025, 2,261,528 ordinary shares were
repurchased and held in treasury (six months ended 29 February 2024: 336,310;
year ended 31 August 2024: 1,668,000) for a net consideration after expenses
of £13,209,000 (six months ended 29 February 2024: £1,914,000; year ended 31
August 2024: £10,227,000).
Since 28 February 2025 and up to the latest practicable date of 2 May 2025,
825,222 ordinary shares have been repurchased and placed in treasury for a
total consideration of £4,635,000.
10. Reserves
The share premium account and capital redemption reserve of £85,325,000 and
£130,000 (29 February 2024: £85,325,000 and £130,000; 31 August 2024:
£85,325,000 and £130,000) 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 reserves may be used as distributable reserves for all
purposes and, in particular, the repurchase by the 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 the revenue
reserve may be distributed by way of dividend. The gain on the capital reserve
arising on the revaluation of investments held of £210,107,000 (29 February
2024: £247,433,000; 31 August 2024: £229,515,000) 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.
11. 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 Company
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 Balance
Sheet at their fair value (investments) or at an amount which is a reasonable
approximation of fair value (due from brokers, dividends and interest
receivable, due to brokers, accruals, cash and cash equivalents and
overdrafts). Section 34 of FRS 102 requires the Company 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
Company are explained in the accounting policies note on page 91 of the Annual
Report and Financial Statements for the year ended 31 August 2024.
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
Company 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.
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 the
measurement of Level 3 assets or liabilities.
Fair values of financial assets and financial liabilities
The table below is the analysis of the Company’s financial instruments
measured at fair value at the balance sheet date.
Financial assets at fair value through profit or loss Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Equity investments at 28 February 2025 (unaudited) 683,536 – 1 683,537
Equity investments at 29 February 2024 (unaudited) 711,969 – 1 711,970
Equity investments at 31 August 2024 (audited) 691,830 – 1 691,831
========= ========= ========= =========
The Company held two Level 3 securities as at 28 February 2025 (29 February
2024: three; 31 August 2024: two).
A reconciliation of fair value measurement in Level 3 is set out below.
Level 3 financial assets at fair value through profit or loss
Six months Six months Year
ended ended ended
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
£’000 £’000 £’000
Opening fair value 1 942 942
Loss on investments included in the Income Statement – (939) (941)
--------------- --------------- ---------------
Closing balance 1 1 1
========= ========= =========
As at 28 February 2025, the investments in Sberbank and Lukoil have been
valued at a nominal value of £0.01 due to the closure of the Moscow Stock
Exchange to overseas investors and the secondary listings of depositary
receipts of Russian companies having been suspended from trading. At the time
of the invasion of Ukraine on 23 February 2022, the original book cost of
these holdings was £28.7m and its carrying value was £20.7m and these
amounts were fair valued to a nominal value of £0.01 on 3 March 2022.
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.
12. Related party disclosure
The Board now consists of six non-executive Directors, all of whom are
considered to be independent by the Board. None of the Directors has a service
contract with the Company. The Chairman receives an annual fee of £49,000,
the Chair of the Audit and Management Engagement Committee receives an annual
fee of £39,000 and each of the other Directors receives an annual fee of
£33,500. The Senior Independent Director receives an additional fee of
£1,000.
At the period end, the members of the Board held ordinary shares in the
Company as set out below:
28 February 29 February 31 August
2025 2024 2024
Eric Sanderson 4,000 4,000 4,000
Peter Baxter 11,000 11,000 11,000
Paola Subacchi 11,700 11,109 11,700
Ian Sayers 4,000 4,000 4,000
Sapna Shah 4,000 – –
========= ========= =========
Andrew Impey was appointed as a Director after the period end on 28 April 2025
and therefore has not been included in the table above.
Since the period end and up to the date of this report there have been no
changes in Directors’ holdings.
The transactions with the Investment Manager and AIFM are stated in note 13
below.
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 held by Number of Significant Investors
held by Related Significant Investors who are not who are not affiliates of
BlackRock Funds affiliates of BlackRock Group or BlackRock Group or
BlackRock, Inc. BlackRock, Inc.
As at 28 February 2025 1.2 n/a n/a
As at 31 August 2024 1.3 n/a n/a
As at 29 February 2024 1.3 n/a n/a
========= ========= =========
13. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months’
notice. BFM 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)). Further details of the
investment management contract are disclosed in the Directors’ Report on
pages 51 and 52 in the Annual Report and Financial Statements for the year
ended 31 August 2024.
The investment management fee is levied quarterly based on a tiered basis:
0.85% per annum of the month-end net asset value up to £350 million and 0.75%
per annum of the month-end net asset value above £350 million. The investment
management fee due for the six months ended 28 February 2025 amounted to
£2,415,000 (six months ended 29 February 2024: £2,349,000; year ended 31
August 2024: £4,970,000). At the period end, £6,287,000 was outstanding in
respect of the management fee (29 February 2024: £2,349,000; 31 August 2024:
£3,872,000).
In addition to the above services, BIM (UK) provided the Company with
marketing services. The total fees paid or payable for these services for the
six months ended 28 February 2025 amounted to £50,000 excluding VAT (six
months ended 29 February 2024: £77,000; year ended 31 August 2024:
£157,000). Marketing fees of £117,000 excluding VAT were outstanding at 28
February 2025 (29 February 2024: £117,000; 31 August 2024: £198,000).
During the year, the Manager pays the amounts due to the Directors. These fees
are then reimbursed by the Company for the amounts paid on its behalf. As at
28 February 2025, an amount of £109,000 was payable to the Manager in respect
of Directors’ fees (29 February 2024: £202,000; 31 August 2024: £205,000).
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
14. Contingent liabilities
There were no contingent liabilities at 28 February 2025 (29 February 2024:
none; 31 August 2024: none).
15. Publication of non statutory accounts
The financial information contained in this half yearly report does not
constitute statutory accounts as defined in Section 435 of the Companies Act
2006. The financial information for the six months ended 28 February 2025 and
29 February 2024 has not been audited.
The information for the year ended 31 August 2024 has been extracted from the
latest published audited financial statements, which have been filed with the
Registrar of Companies. The report of the auditors on those accounts contained
no qualification or statement under Sections 498 (2) or (3) of the Companies
Act 2006.
16. Annual results
The Board expects to announce the annual results for the year ending 31 August
2025 in early November 2025. Copies of the annual results announcement can be
obtained from the Secretary on 020 7743 3000 or cosec@blackrock.com. The
Annual Report should be available by November 2025 with the Annual General
Meeting being held in December 2025.
12 Throgmorton Avenue
London
EC2N 2DL
6 May 2025
For further information please contact:
Sarah Beynsberger, Director, Closed End Funds, BlackRock Investment Management
(UK) Limited
Tel: 020 7743 3000
Stefan Gries, Fund Manager, BlackRock Investment Management (UK) Limited
Tel: 020 7743 3000
Press enquires:
Ed Hooper, Lansons Communications
Tel: 020 7294 3620
E-mail: BlackRockInvestmentTrusts@lansons.com or EdH@lansons.com
END
The Half Yearly Financial Report will also be available on the BlackRock
website at www.blackrock.com/uk/brge. Neither the contents of the Manager’s
website nor the contents of any website accessible from hyperlinks on the
Manager’s website (or any other website) is incorporated into, or forms part
of, this announcement.
Release (https://mb.cision.com/Main/22396/4146245/3432059.pdf)
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