REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

13/04/2018 15:30

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 March 2018 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       0.2      -1.6    19.3     67.0    116.0 
 Share price          -0.6       1.9    29.7     77.8    131.2 
 Benchmark*           -0.9      -7.0     5.0     29.9     60.3 

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index replaced the Numis Smaller Companies
excluding AIM (excluding Investment Companies) Index as the Company’s
benchmark. From 1 December 2013 to 21 March 2018, the Company’s benchmark
was the Numis Smaller Companies excluding AIM (excluding Investment Companies)
Index, which replaced the Numis Smaller Companies plus AIM (excluding
Investment Companies) Index as the Company’s benchmark. The above period
indices have been blended to reflect these changes.

 At month end                                                                   
 Net asset value capital only:                                          547.04p 
 Net asset value incl. income:                                          550.10p 
 Share price                                                            479.00p 
 Discount to cum income NAV                                               12.9% 
 Net yield (1):                                                            1.9% 
 Total Gross assets (2):                                                £402.3m 
 Net market exposure as a % of net asset value (3):                      104.5% 
 Ordinary shares in issue (4):                                       73,130,326 
 2017 ongoing charges* (excluding performance fees (5,6):                  0.9% 
 2017 ongoing charges* ratio (including performance fees) (5,6,7):         2.2% 

*Ongoing Charges: The management fee rate reductions, as detailed in the notes
below, will impact management fees in 2017 and onwards.   The impact of the
new fee arrangements, assuming the same level of performance from the manager
and assuming all other charges remain the same, would be to reduce the level
of Ongoing Charges borne by the Company.

1. Calculated using the 2017 interim dividend declared on 24 July 2017 and the
2017 final dividend declared on 12 February 2018 and paid on 29 March 2018.

2. Includes current year revenue and excludes gross exposure through contracts
for difference.

3. Long positions less short positions as a percentage of net asset value.

4. Excluding 7,400,000 shares held in treasury.

5. Calculated as a percentage of average net assets and using expenses,
excluding performance fees and interest costs for the year ended 30 November
2017.

6. With effect from 1 August 2017 the base management fee was reduced from
0.70% to 0.35% of gross assets per annum.

7. Effective 1st December 2017 the annual performance fee arrangements for the
Company have changed.  The annual performance fee is now calculated using
performance data on an annualised rolling two year basis (previously, one
year) and the maximum annual performance fee payable is effectively reduced to
0.90% of two year rolling average month end gross assets (from 1% of average
annual gross assets over one year). Additionally, the Company now accrues this
fee at a rate of 15% of outperformance (previously 10%). The maximum annual
total fees (comprising the base management fee of 0.35% and a potential 
performance fee of 0.90%) will therefore fall to 1.25% of average month end
gross assets on a two year rolling basis (from 1.70% of average annual gross
assets).
 

 Sector Weightings    % of Total Assets 
                                        
 Industrials                       35.0 
 Financials                        19.8 
 Consumer Services                 15.8 
 Consumer Goods                     7.9 
 Technology                         6.4 
 Health Care                        6.0 
 Basic Materials                    4.9 
 Oil & Gas                          1.9 
 Net current assets                 2.3 
                                  ----- 
 Total                            100.0 
                                  ===== 

Market Exposure (Quarterly)

                  31.05.17   31.08.17   30.11.17   28.02.18  
                          %          %          %          % 
 Long                 117.3      115.3      116.9      119.6 
 Short                  6.1        5.8        6.3        8.4 
 Gross exposure       123.4      121.1      123.2      128.0 
 Net exposure         111.2      109.5      110.6      111.2 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 Melrose Industries                           3.3 
 Ascential                                    3.1 
 Dechra Pharmaceuticals                       3.0 
 Robert Walters                               2.5 
 Ibstock                                      2.3 
 Restore                                      2.2 
 CVS Group                                    2.1 
 SSP                                          2.0 
 Fevertree Drinks                             2.0 
 Hill & Smith                                 2.0 

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

During March the Company’s NAV per share rose by 0.2% to 550.10p on a cum
income basis, whilst our benchmark index fell by 0.9%; the FTSE 100 Index fell
by 2.4% (all performance figures are with income reinvested and net of ongoing
charges and any applicable performance fees).

Positive stock selection in both long and short positions drove outperformance
over the benchmark during the month.

Against the backdrop of a falling market during the month, short positions in
aggregate contributed positively to performance, however the key contributors
were stock specific, with several idiosyncratic short positions delivering
meaningful performance contributions. The largest contributor was from a short
position in a UK wholesaler of alcoholic beverages, which in the space of a
couple of weeks issued negative profit revisions, announced an unexpected tax
bill to HMRC, an increase in its net debt position, a failed capital raise,
before finally filing notice on its intention to appoint administrators and
warning that “shareholders will receive little to no value”.

Long positions that contributed positively included Fenner, YouGov and Dechra
Pharmaceuticals. Shares in Fenner rallied after the company received an all in
cash bid at a circa 30% premium to the share price and YouGov’s interim
results showed continued strong organic growth and improving margins with
profits significantly ahead of consensus. Dechra Pharmaceuticals reported
interim results for the six months to 31 December 2017 showing strong revenue
growth in both Europe and North America; while management stated that current
trading remains in line with expectations.

The largest detractor was 4imprint which was weak over the month, in part
reflecting the company’s lowering of its gross margin guidance as they
invest more in above-the-line advertising to accelerate market share gains,
and also in response to a broker downgrading the shares to a Sell
recommendation later in the month. We had a positive meeting with management
and have maintained the position.

Activity during March included additions to Computacenter and Microgen and the
purchase of a new holding in Tatton Asset Management, which helps provide IFAs
(Independent Financial Advisers) with discretionary fund management services
and aims to bring its services to a much wider client base. The portfolio
continues to evolve post management change, where we have reduced exposure to
resources, and added to some of the Company’s core ideas including Melrose
Industries, Fever-Tree and Renishaw.

13 April 2018

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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