REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

29/03/2019 14:50

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 28 February 2019 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       2.3       2.4    -2.7     50.9     59.8 
 Share price           1.5       8.8     3.7     66.2     69.5 
 Benchmark*            1.1       1.1    -5.3     24.8     20.3 

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. The performance of the indices have been blended to reflect this.

 At month end                                                                  
 Net asset value capital only:                                         522.33p 
 Net asset value incl. income:                                         524.14p 
 Share price                                                           490.00p 
 Discount to cum income NAV                                               6.5% 
 Net yield (1):                                                           2.0% 
 Total Gross assets (2):                                               £383.3m 
 Net market exposure as a % of net asset value (3):                      93.8% 
 Ordinary shares in issue (4):                                      73,130,326 
 2018 ongoing charges (excluding performance fees) (5,6):                 0.6% 
 2018 ongoing charges ratio (including performance fees) (5,6,7):         1.3% 

1. Calculated using the 2018 interim dividend declared on 26 July 2018 and
paid on 29 August 2018, together with the 2018 final dividend declared on 12
February 2019 and due to be paid on 29 March 2019.
2. Includes current year revenue and excludes gross exposure through contracts
for difference.
3. Long exposure less short exposure 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
2018.
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 is 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%) are therefore 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 
                                        
 Consumer Services                 28.2 
 Financials                        23.6 
 Industrials                       19.5 
 Technology                         9.7 
 Health Care                        8.5 
 Consumer Goods                     5.8 
 Basic Materials                    2.8 
 Telecommunications                 0.7 
 Net current assets                 1.2 
                                  ----- 
 Total                            100.0 
                                  ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  31.05.18   31.08.18   30.11.18   28.02.19  
                          %          %          %          % 
 Long                 115.9      119.4      103.7      108.7 
 Short                 10.0        9.6       10.5       14.9 
 Gross exposure       125.9      129.0      114.2      123.6 
 Net exposure         105.9      109.8       93.2       93.8 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 Aveva                                        3.2 
 Dechra Pharmaceuticals                       3.2 
 SSP                                          3.1 
 YouGov                                       3.0 
 Integrafin                                   2.7 
 4imprint Group                               2.6 
 Workspace Group                              2.6 
 Craneware                                    2.5 
 WH Smith                                     2.4 
 Beazley                                      2.2 

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

During February the Company’s NAV per share rose by 2.3%(1) to 522.33p on a
cum income basis, outperforming our benchmark index, the Numis Smaller
Companies plus AIM (excluding Investment Companies) Index, which rose by
1.1%(1); the large cap FTSE 100 Index rose by 2.3%(1) (all performance figures
are in sterling terms with income reinvested).

The UK market posted another month of gains during February, shrugging off the
ongoing geopolitical uncertainty, softening global economic data and largely
underwhelming corporate earnings newsflow. Against the backdrop of a rising
market, the Company outperformed its benchmark, with a positive contribution
from the long book, while the short book marginally detracted, a good result
considering the rally in a number of companies and industries that we find
unattractive.

The largest positive contributors to performance came from long positions in
Aveva, Next Fifteen Communications and Hiscox. Software engineering group
Aveva rallied in response to a positive trading update and outlook. The trends
seen in the first half of the year have continued, helped by strong sales
execution, while an improving revenue mix towards software sales has resulted
in margins improving. Shares in Hiscox, the specialist insurer, rose
throughout the month and received a further boost towards the end after they
delivered positive results. Digital marketing group, Next Fifteen, continued
to rise in response to a recent trading update confirming positive trends in
the business, whilst also commenting on a positive outlook.

Despite the rising market, the Company continued to generate alpha from stock
specific wins in the short book. In particular, we benefitted from our short
positions in a food delivery company and a branded restaurant, both of which
face a multitude of challenges in our opinion, ranging from increased supply,
rising cost pressures, increased financial leverage and changes in consumer
behaviour.

Given the rising market, a number of the largest detractors came from short
positions that rose along with the wider market despite no stock or industry
specific newsflow. We did however have a couple of stock specific setbacks;
one in a short position in a technology company that rallied after a capital
raise, and a long position in a video gaming company that fell after beating
profit expectations but slightly moderating their forward quarter’s
guidance.

We continue to believe that the portfolio is in good shape. February was a
busy month for company newsflow, and we saw good company updates and positive
outlooks for the year ahead from the majority of our investments. As mentioned
in recent reports, we had lowered both the gross and net exposure, recognising
the potential for increasing levels of market volatility in the current
environment. While these remain lower than normal levels, with an eye on macro
economic developments, we have been gradually increasing our exposures,
through both new positions and adding to existing holdings on both the long
and short side.

(1)Source: BlackRock as at 28 February 2019

29 March 2019

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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