REG-BlackRock Throg Tst: Portfolio Update <Origin Href="QuoteRef">THRG.L</Origin>

Blackrock Throgmorton TrustAnnouncement

18/11/2016 12:25

BLACKROCK THROGMORTON TRUST PLC All information is at 31 October 2016 and unaudited .                                  
                                                                                                                        
 Performance at month end is calculated on a cum income basis                                                           
                                                                                                                        
                                                        One             Three      One                  Three     Five  
                                                      Month            months     year                  years    years  
                                                           %                 %        %                      %        % 
 Net asset value (undiluted)#                           -2.6               5.3      5.4                   30.0    108.1 
 Net asset value (fully diluted)                        -2.6               5.3      5.4                   30.0    102.4 
 Share price                                            -4.9               1.9      1.3                   16.2    113.3 
 Benchmark*                                             -1.3               3.5      5.3                   18.5     76.0 
 Sources: BlackRock and Datastream  (#)Prior to dilution arising on conversion of subscription shares. *With effect from 1 December 2013 the Numis Smaller Companies excluding AIM (excluding investment companies) Index replaced the Numis Smaller Companies plus AIM (excluding investment companies) Index as the Company’s benchmark. The three and five year period indices have been blended to reflect this. 
 At month end                                                                                                           
 Net asset value capital only:                                                                                  393.79p 
 Net asset value incl. income:                                                                                  400.14p 
 Share price                                                                                                    318.00p 
 Discount to cum income NAV                                                                                       20.5% 
 Net yield (1)                                                                                                     2.2% 
 Total Gross assets (2)                                                                                         £292.6m 
 Net market exposure as a % of net asset value (5)                                                               108.4% 
 Ordinary shares in issue (3):                                                                               73,130,326 
 2015 ongoing charges (excluding performance fees) (4):                                                            1.1% 
 2015 ongoing charges ratio (including performance fees):                                                          2.3% 
 1. Calculated using current year interim dividend paid on 19 August 2016 and prior year final dividend. 2. Includes current year revenue and excludes the gross exposure through contracts for difference. 3. Excluding 7,400,000 shares held in treasury. 4. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2015. 5. Long positions less short positions as a percentage of net asset value. 
 Sector Weightings                                                                              % of Total Gross Assets 
                                                                                                                        
 Industrials                                                                                                       31.4 
 Consumer Services                                                                                                 21.6 
 Financials                                                                                                        14.1 
 Consumer Goods                                                                                                     9.3 
 Basic Materials                                                                                                    8.6 
 Health Care                                                                                                        6.5 
 Technology                                                                                                         5.9 
 Oil & Gas                                                                                                          2.2 
 Net current assets                                                                                                 0.4 
                                                                                                                  ----- 
 Total                                                                                                            100.0 
                                                                                                                  ===== 
 Market Exposure (Quarterly)                                                                                            
                                                                                                                        
                    30.11.15                                29.02.16                       31.05.16  %      31.08.16  % 
                            %                                       %                                                   
 Long                   115.2                                   118.2                            114.4            114.3 
 Short                    9.2                                    11.2                              8.3              8.3 
 Gross exposure         124.4                                   129.4                            122.7            122.6 
 Net exposure           106.0                                   107.0                            106.1            106.0 
                                                                                                                        
 Ten Largest Investments                                                                                                
                                                                                                                        
 Company                                                                                        % of Total Gross Assets 
                                                                                                                        
 4imprint Group                                                                                                     3.2 
 CVS Group                                                                                                          2.9 
 JD Sports                                                                                                          2.6 
 Dechra Pharmaceuticals                                                                                             2.5 
 Avon Rubber                                                                                                        2.0 
 Hill & Smith                                                                                                       1.7 
 Cineworld Group                                                                                                    1.7 
 Accesso Technology                                                                                                 1.6 
 Savills                                                                                                            1.6 
 Fevertree Drinks                                                                                                   1.6 
                                                                                                                        

Commenting on the markets, Mike Prentis and Dan Whitestone, representing the
Investment Manager noted:

During October the Company’s NAV per share fell by 2.6% on a cum income
basis whilst our benchmark (Numis Smaller Companies excluding AIM (excluding
investment companies) Index) fell by 1.3%; the FTSE 100 Index rose by 1.0%.

The long only portfolio fell in value by 2.3%, underperforming the benchmark
by 1.0%. The CFD portfolio lost 0.17% during the month. These portfolio
returns are before costs.

Underperformance in the long only portfolio was mainly driven by stock
selection. The largest detractor was our holding in GB Group, a company
focussed on identity verification and fraud prevention. GB Group announced a
trading update covering the six months to 30 September 2016 indicating organic
sales growth of 9% and operating profits up by 11%. Growth was lower than
expected and impacted by the slower than expected rollout of the GOV.UK Verify
program. GB Group shares have been strong performers over the last few years,
the shares had become highly rated, so any news which was clearly not good was
likely to be taken poorly. GB Group shares fell by 29% during the month.

Sector allocation within the long only portfolio was also negative. The
largest detractors were our underweight position in mining stocks and our
overweight position in aerospace & defence companies. Our underweight sector
position in IT hardware companies was positive.

Activity within the long only portfolio during the month was fairly modest.

Turning to the CFD portfolio, the Company lost 0.17%, where the gains in the
short book were insufficient to offset the losses in the long book. This was
rather a frustrating month, which was short on news flow but focused a lot on
sentiment and prospects for reflation. The consequence of this was that
despite our benchmark falling by 1.3%, sectors such as mining performed very
strongly whereas consumer services suffered from ongoing sterling weakness.
This negatively impacted the Company’s positioning on both sides of the book
and helps explain why most of the Company’s detractors were either long
positions in consumer services (that gave up some of their recent gains) or
short positions in industrials (which continue to re-rate) albeit the number
of industrials delivering profit warnings around the globe should not go
unnoticed! 

We have made little change to portfolio positioning and still see good money
making opportunities on the short side in the coming months. Meanwhile, the
shares in our long book continue to deliver.  New ideas are coming into the
Company on both sides of the book, and indeed, the biggest contributor to
October’s performance was Luceco, a recent IPO which we participated in. 
Luceco has a heritage in electrical products and owns some of the UK’s best
known commercial brands. They’ve established a low cost production advantage
with their own manufacturing facility in China. By concentrating on
innovation, and partnered with the newest and fastest growing distribution
channel, the “net price offer”, we think this distribution channel is
hugely disruptive to a mature industry. This is generating rapid market share
gains in its traditional business, whilst their recent move into LED lighting
can be sold through the same channel but is at the start of its industry
lifecycle. All this points to several years of very strong growth.  

18 November 2016

ENDS

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



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