REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

21/05/2019 16:30

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 30 April 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       5.7      10.8     1.0     57.4     82.4 
 Share price           7.5      12.7     5.1     77.0     96.6 
 Benchmark*            4.1       5.7    -5.0     23.1     32.9 

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:                                         563.77p 
 Net asset value incl. income:                                         567.76p 
 Share price                                                           544.00p 
 Discount to cum income NAV                                               4.2% 
 Net yield (1):                                                           1.8% 
 Total Gross assets (2):                                               £415.2m 
 Net market exposure as a % of net asset value (3):                      95.6% 
 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 paid on 28 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 management 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                 26.1 
 Financials                        23.6 
 Industrials                       20.7 
 Technology                         8.5 
 Health Care                        7.3 
 Consumer Goods                     6.7 
 Basic Materials                    2.4 
 Telecommunications                 1.3 
 Net current assets                 3.4 
                                  ----- 
 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 
                                                  
 JD Sports Fashion                            3.1 
 SSP                                          3.0 
 Aveva                                        3.0 
 4imprint Group                               3.0 
 Dechra Pharmaceuticals                       3.0 
 IntegraFin                                   2.9 
 YouGov                                       2.7 
 Bodycote                                     2.5 
 Workspace Group                              2.4 
 Craneware                                    2.3 

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

During April the Company’s NAV per share rose by 5.7% to 567.76p on a cum
income basis, outperforming our benchmark index, the Numis Smaller Companies
plus AIM (excluding Investment Companies) Index, which rose by 4.1%.

This was a strong month for the Company in both absolute and relative terms,
benefitting from stock specific alpha driven by positive updates from some of
our core holdings, and also from stock selection as we avoided some high
profile profit warnings from companies in our benchmark and in some cases
benefitted from being short in these companies.

The largest positive contributor to performance during the month came from our
long position in JD Sports, which rallied strongly in response to another
“beat and raise” from the company at their full year results. This
generated over 0.5% of positive performance. What this company has achieved in
sales and profit growth, not just over the last 12 months, but over the last 5
years, is truly impressive considering the pressures facing bricks and mortar
retailing and illustrates the differentiated proposition and multi-channel
approach to retailing that this management team have created. The second and
third largest contributors to performance were from companies in our benchmark
that fell heavily but which we did not own, namely Saga and Funding Circle.
Both of these companies reveal how the active decision not to own a position
in them can be as beneficial to performance as picking the winners like JD
Sports.

The three largest detractors to performance were from long positions in
YouGov, WH Smith and Dechra Pharmaceuticals. YouGov delivered another set of
robust results in the month but gave back a little of its recent gains. We had
a positive update with the company and it remains one of the larger positions
in the portfolio. Dechra and WH Smith are also two of the larger positions in
the Company, so fairly insignificant share price movements can weigh on
returns, with both of these investments costing the Company less than 0.2%
each. Decrha didn’t update the market so its small share price retreat
wasn’t news flow related and WH Smith delivered strong results in our
opinion, with further positive revisions to forecasts, however the shares gave
back a little over the month which we think reflects a brief period of
consolidation after a strong run in the shares.

The extension of the Brexit process might provide a temporary respite from the
endless media headlines and political machinations, so maybe a little more
attention can return to shares and fundamentals. We remain hopeful and
continue to highlight the importance of stock specifics in the current
environment and the greater dispersion in winners and losers that this market
regime and political backdrop can generate. Whether they are key contributors
or detractors, focusing on company and industry fundamentals will be the
driver of this Company’s returns. Thankfully during April we have been on
the right side of company updates in the vast majority of cases, and we could
point to many other examples of companies that have continued to deliver which
have helped drive April’s returns, e.g. RWS and IntegraFin. April also
benefited from some stock specific wins in the short book, notably in Support
Services and Technology. We therefore continue to feel comfortable with the
portfolio positioning. While the gross and net exposures remain lower than
normal levels, reflecting increased risks in the current environment, we
believe the portfolio can continue to generate alpha driven by stock and
industry specific outcomes, regardless of the wider macro environment. 

(1)Source: BlackRock as at 30 April 2019

21 May 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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