REG-BlackRock Greater Europe Investment Trust Plc: Portfolio Update

Blackrock Greater Europe Investment TrustAnnouncement

Today 12:45

The information contained in this release was correct as at 30 April 2025.
Information on the Company’s up to date net asset values can be found on the
London Stock Exchange website at:

 

https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. 

 

 

 

BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC (LEI - 5493003R8FJ6I76ZUW55)

All information is at 30 April 2025 and unaudited.

Performance at month end with net income reinvested
 

                              One Month  Three Months  One Year  Three Years  Launch (20 Sep 04)  
                                                                                                  
 Net asset value (undiluted)  1.3%       -9.4%         -7.2%     16.2%        719.2%              
 Share price                  2.6%       -8.2%         -8.8%     13.7%        685.9%              
 FTSE World Europe ex UK      1.5%       1.0%          7.2%      32.7%        480.3%              

Sources: BlackRock and Datastream
 

 

At month end

 Net asset value (capital only):      579.92p     
 Net asset value (including income):  583.00p     
 Share price:                         552.00p     
 Discount to NAV (including income):  5.3%        
 Net gearing:                         4.1%        
 Net yield 1 :                        1.3%        
 Total assets (including income):     £561.1m     
 Ordinary shares in issue 2 :         96,245,411  
 Ongoing charges 3 :                  0.95%       

 

1  Based on a final dividend of 5.25p per share for the year ended 31 August
2024 and an interim dividend of 1.75p per share for the year ending 31 August
2025.

2  Excluding 21,683,527 shares held in treasury.
3  The Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating expenses
excluding finance costs, direct transaction costs, custody transaction
charges, VAT recovered, taxation, write back of prior year expenses and
certain non-recurring items for the year ended 31 August 2024.

 

                          
 Sector Analysis          Total Assets (%)  
 Industrials              35.7              
 Consumer Discretionary   22.1              
 Technology               13.5              
 Health Care              10.7              
 Financials               10.0              
 Basic Materials          6.5               
 Real Estate              2.1               
 Net Current Liabilities  -0.6              
                          -----             
                          100.0             
                          =====             
                                              
 Country Analysis         Total Assets (%)  
 France                   18.5              
 Switzerland              15.0              
 Germany                  12.7              
 Netherlands              11.6              
 United Kingdom           7.2               
 Sweden                   6.1               
 Denmark                  5.9               
 Ireland                  5.2               
 Italy                    4.5               
 United States            4.0               
 Finland                  3.2               
 Belgium                  2.6               
 Norway                   2.5               
 Spain                    1.6               
 Net Current Liabilities  -0.6              
                          -----             
                          100.0             
                          =====             
                                            

 


 

 Top 10 holdings                  Country         Fund %  
 RELX                             United Kingdom  7.1     
 Safran                           France          6.0     
 Hermès                           France          5.1     
 SAP                              Germany         4.7     
 Ferrari                          Italy           4.5     
 Compagnie Financière Richemont   Switzerland     4.2     
 Schneider Electric               France          4.2     
 Lonza Group                      Switzerland     4.1     
 Linde                            United States   4.0     
 Adyen                            Netherlands     3.8     
                                                          

 

Commenting on the markets, Stefan Gries and Alexandra Dangoor, representing
the Investment Manager noted:

 

During the month, the Company’s NAV rose by 1.3% and the share price by
2.6%. For reference, the FTSE World Europe ex UK Index returned +1.5% during
the period.

 

Market volatility was particularly elevated this month and peaked in early
April as investors reacted to US President Donald Trump’s announcement of
sweeping tariffs on US imports and then a few days later announced a 90-day
pause for most countries except China. Despite modest headline numbers, these
events led to a bifurcation in underlying returns, with defensives generally
outperforming cyclicals and domestically focused companies outperforming
exporters.

 

Quarterly earnings reported in the month gave companies a chance to
communicate revised outlooks. Investors may be settled by many companies not
yet seeing any impacts to backlog orders, but as expected, forward looking
comments were generally more cautious in tone. A notable positive from the
earnings season is that guidance from hyperscalers included increased capex
spending, muting concerns that advancements made by DeepSeek would diminish
future AI investments.

 

At a sector level, traditionally defensive Real Estate and Utilities sectors
were outperformers, while Energy and Health Care were weakest, dragged down by
growing recession risk and lingering questions surrounding pharmaceutical
companies on the back of threats from Trump’s administration.

 

The Company outperformed the reference index on a share price basis over the
month, despite having lagged on a NAV basis. Stock selection effect was
additive: broadly, portfolio companies have been showing resilience in the
current volatile environment.

 

Belimo performed strongly in the month, reporting 22% organic revenue growth
in Q1'25, outperforming across all regions and accelerating further versus
last year. The company is continuing to see strength in data centres and is
particularly benefiting from the need for cooling systems for Nvidia's
Blackwell chips. Belimo showed confidence in their near-term outlook by
raising their full year sales and margin expectations given their good order
visibility.

 

A position in Lonza contributed positively over the month. The pharmaceutical
company is well positioned to mitigate the possible impacts of tariffs due to
their domestic US production capabilities. This has been further increased
recently due to their acquisition of the Vacaville site in California.

 

The Company's holding in Nemetschek contributed to active returns after
reporting solid Q1'25 results. The software company has been able to
consistently exceed earnings expectations since mid-2024 and this has
continued with a 2% beat in revenue. This was driven by the Subscriptions and
SaaS part of the business which is now close to 70% of group revenues and
continues to increase.

 

A weakening US dollar negatively impacted dollar earners over the month. This
was a driver of Linde’s weak share price, as well as pressures from weak gas
volumes. Negative news also came from Dow pausing a net-zero petrochemical
project. As part of the project, Linde is set to provide a blue hydrogen plant
that makes up $2bn of their $10bn backlog. As the project is only paused,
rather than cancelled, it remains part of their backlog, however this impacts
the annual project growth going forwards.

 

A number of the Company's holdings in European aerospace and defence companies
- MTU, Safran, Thales – were also impacted by the weakening US dollar, in
addition to some profit taking from the market leading to a decline. Shares
rebounded by the end of the month as companies started to release solid
earnings reports. For example, Safran’s earnings included 25% organic
revenue growth for the Spare Parts business, 10% ahead of consensus estimates.
It was also encouraging to hear management had not seen a change in airline
behaviour given the tariff uncertainty and conversations regarding exemptions
for aerospace companies had been heading in the right direction.

 

Partners Group provided negative attribution as the uncertain economic
environment continues to disadvantage the ability for private equity firms to
complete exits and crystalise performance fees.

 

Outlook

 

While near-term uncertainty has increased, we continue to see a resilient
bottom-up picture of both consumers and corporates. In our home market, Europe
is going through a renaissance moment, introducing potential for change with
lasting impact to corporate earnings. We are focused on analysing change as it
relates to positioning the portfolio for the duration earnings-streams we see
likely to be supported for years and decades to come. We believe with some of
the significant changes going on in the market – fiscal policy change,
potential for a Ukraine ceasefire and earnings cycles turning – that the
European equity rally can continue, although given the geopolitical backdrop
this is unlikely to be a straight path. We would expect the shape of market
drivers to change in time, with earnings becoming a larger determinant of
returns as the narrow areas that have been bid up run out of steam.

 

Historically, Europe has been home to many world-class franchises that earn
profits globally, including from the US and China. This remains true, but now
there is a stronger domestic earnings contribution driven by an improved
outlook for the continent. There is potential recovery within rate-sensitive
sectors such as construction, as Europe is currently in a rate-cutting cycle.
Economic strength in Europe has been evident in the periphery—Spain and
Italy, but now there is change in key countries like Germany with a new
government forming and releasing fiscal constraints to stimulate the economy.

 

While the geopolitical landscape is challenging to navigate, especially with
US policy keeping investors on their toes, focusing on changing earnings
streams can help deliver strong long-term outcomes for investors. Overall, we
retain our core exposure to companies with predictable business models, higher
than average returns on capital, strong cash flow conversions and
opportunities to reinvest that cash flow into future growth projects at high
incremental returns.

 

15 May 2025

 

ENDS

 

Latest information is available by typing www.blackrock.com/uk/brge on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3
(ICV terminal).  Neither the contents of the Manager’s website nor the
contents of any website accessible from hyperlinks on the Manager’s website
(or any other website) is incorporated into, or forms part of, this
announcement.

 Release (https://mb.cision.com/Main/22396/4151023/3451804.pdf)  



Copyright (c) 2025 PR Newswire Association,LLC. All Rights Reserved