REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

20/07/2018 13:10

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 30 June 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       2.5      11.5    23.9     71.0    138.3 
 Share price           4.1      16.9    34.3     82.8    160.0 
 Benchmark*           -0.3       6.0     7.4     29.5     71.1 

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. The five year period indices have been blended to reflect this.

 At month end                                                                   
 Net asset value capital only:                                          605.43p 
 Net asset value incl. income:                                          613.29p 
 Share price                                                            560.00p 
 Discount to cum income NAV                                                8.7% 
 Net yield (1):                                                            1.6% 
 Total Gross assets (2):                                                £448.5m 
 Net market exposure as a % of net asset value (3):                      107.6% 
 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                       32.3 
 Financials                        22.4 
 Consumer Services                 15.1 
 Technology                         9.6 
 Consumer Goods                     7.8 
 Health Care                        6.6 
 Basic Materials                    3.4 
 Oil & Gas                          1.9 
 Net current assets                 0.9 
                                  ----- 
 Total                            100.0 
                                  ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  31.08.17   30.11.17   28.02.18   31.05.18  
                          %          %          %          % 
 Long                 115.3      116.9      119.6      115.9 
 Short                  5.8        6.3        8.4       10.0 
 Gross exposure       121.1      123.2      128.0      125.9 
 Net exposure         109.5      110.6      111.2      105.9 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 Ascential                                    2.9 
 Dechra Pharmaceuticals                       2.6 
 Workspace Group                              2.3 
 Fever-Tree Drinks                            2.3 
 CVS Group                                    2.2 
 Robert Walters                               2.2 
 Integrafin                                   2.2 
 YouGov                                       2.1 
 SSP                                          2.0 
 Restore                                      2.0 

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

June was another strong month for the Company, outperforming the benchmark by
+2.8%*, with both the longs (+2.4%*) and shorts (+0.2%*) delivering a positive
return against a market that was broadly flat (NAV performance figures are in
sterling terms with income reinvested and net of fees; the contribution from
long and short positions is stated gross of fees). The largest individual
contributors during the month came mainly from long positions, delivering good
updates and responding to positive newsflow.

Video game developer Sumo Group delivered good interim results, citing
continued strong demand for the group’s services and a positive outlook on
the opportunities in its fast growing global markets. Another notable
contributor was from our long-held position in UK veterinary practice
consolidator, CVS Group, which rallied as Mars, the US consumer goods company,
announced a series of acquisitions of veterinary practices across the UK and
Europe as they expand beyond the US.  We expect further consolidation in this
industry due to the fragmentation of the market and the buyers’ belief in
long term secular drivers. The portfolio also benefitted from our holdings
within financial services during the month, particularly asset managers Polar
Capital and Liontrust, which both delivered strong final results, with profits
in both companies doubling as a result of rising markets and strong fund
performance generating more in performance fees. Other notable contributors
included premium mixer supplier Fever-Tree, wine producer Chapel Down and
media business Ascential.

Detractors during the month were limited. The largest negative contributor
came from XLMedia, which fell in response to a trading update warning that
revenues and profits are expected to be lower as a result of regulatory
changes in the Australian market at the end of 2017, and ongoing uncertainty
in certain European markets. We had been reducing the position prior to the
profit warning, therefore the position only cost the portfolio 0.11% in
performance, and we have subsequently fully exited the position.

We remain confident in the Company’s overall positioning and the stock and
industry risks that we are currently taking. Trading activity during the month
has been limited, mainly centred around trimming some of our strongest
performers to manage position sizing, whilst continuing to build positions in
some of our new international holdings, such as Xero. The only notable
position exit was Melrose as it is now a FTSE 100 company.

*Source: BlackRock as at 30 June 2018

20 July 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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