REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

16/07/2020 09:25

The information contained in this release was correct as at 30 June 2020. 
Information on the Company’s up to date net asset values can be found on the
London Stock Exchange Website at:

https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. 

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 30 June 2020 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       1.1      22.7    -2.3     16.5     60.8 
 Share price           1.1      21.2     0.4     39.0     89.2 
 Benchmark*            1.0      19.2   -10.7    -11.1      7.2 

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:                                         553.44p 
 Net asset value incl. income:                                         557.79p 
 Share price                                                           560.00p 
 Premium to cum income NAV                                                0.4% 
 Net yield (1):                                                           1.8% 
 Total Gross assets (2):                                               £466.6m 
 Net market exposure as a % of net asset value (3):                     117.7% 
 Ordinary shares in issue (4):                                      83,643,462 
 2019 ongoing charges (excluding performance fees) (5,6):                 0.6% 
 2019 ongoing charges ratio (including performance fees) (5,6,7):         1.8% 

1. Calculated using the 2019 interim dividend declared on 23 July 2019 and
paid on 28 August 2019, together with the 2019 final dividend declared on 06
February 2020 and paid on 27 March 2020.
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 0 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
2019.
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 
                                             
 Industrials                            31.5 
 Financials                             19.7 
 Consumer Services                      19.1 
 Consumer Goods                         11.2 
 Technology                              7.7 
 Health Care                             6.4 
 Telecommunications                      2.4 
 Basic Materials                         2.3 
                                             
 Net current liabilities                -0.3 
                                       ----- 
 Total                                 100.0 
                                       ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  31.08.19   30.11.19   29.02.20   31.05.20  
                          %          %          %          % 
 Long                 109.1      103.2      119.3      118.6 
 Short                 11.2        7.4        8.9        2.1 
 Gross exposure       120.3      110.6      128.2      120.7 
 Net exposure          97.9       95.8      110.4      116.6 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 Serco Group                                  3.1 
 YouGov                                       2.9 
 Dechra Pharmaceuticals                       2.6 
 Breedon                                      2.5 
 IntegraFin                                   2.5 
 Games Workshop                               2.5 
 Gamma Communications                         2.4 
 Watches of Switzerland                       2.2 
 Avon Rubber                                  2.2 
 Learning Technologies                        2.1 

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

During the month the Company returned +1.1%(1) (net of fees), while our
benchmark returned +1.0%(1). Outperformance during the month was generated by
the long book, while the short book was flat.

Equity markets remained volatile across June, characterised by style rotations
and rapidly shifting investor sentiment, and culminated with broader market
weakness towards month end. Much of the period could be characterised by a
rotation towards “value”, a headwind for performance considering our
strong growth philosophy. Given our focus on company and industry dynamics we
take it as a sign of strong underlying fundamentals that the portfolio
continued to outperform the market during the month.  Although June tends to
be a light month for company news, where it did occur, we were reassured by
impressive updates from some of our long positions emphasising again the
importance of stock and industry specific outcomes in times of uncertainty.

The largest contributor to performance was Serco, the provider of services to
governments around the world. In the month Serco announced trading profits
ahead of expectations, with positive developments in all the key areas we look
for: order book, revenue growth, margins, cashflow and debt. We have added to
our position here as our conviction in the investment case has strengthened.
Shares in Chegg, the online education platform, continued to rise after the
extremely impressive first quarter results reported in May. Discretionary fund
manager, Tatton Asset Management, was the third largest contributor to
performance. Despite the negative market return caused by the COVID-19
pandemic, Tatton reported strong full year results which showed continued
growth in assets under management, helped by positive inflows from its IFA
support business Paradigm.

Turning to detractors, we are pleased to say that most of the largest
detractors to performance were not related to company specific news flow, and
therefore we are relatively sanguine about recovering any short-term losses
here in shares such as IntegraFin and IWG. RWS Holdings fell after reporting a
decline in sales and profits in the first half of the year. The company did
however maintain its interim dividend and announced additional acquisitions
whilst management also gave a positive outlook for the second half of the
year.

In summary, June was another positive month for the portfolio, despite the
initial style rotation and febrile market environment. Once again this was a
month that contained some impressive updates from companies in which we have
strong conviction. It does seem to come as a surprise to many people when
differentiated companies with compelling product offerings, announce positive
updates and continue to trade well at times of financial market uncertainty.
But for us that is precisely the opportunity, and this is one of the key
reasons we have built our long book and our philosophy around these types of
companies, whilst avoiding or shorting companies that don’t exhibit these
attributes. We thank shareholders for their ongoing support.

(1)Source: BlackRock as at 30 June 2020

16 July 2020

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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