REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

20/10/2020 18:25

The information contained in this release was correct as at 30 September
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 September 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      -0.3       9.3     4.8     20.5     74.7 
 Share price          -5.3       5.1     4.4     40.1     96.4 
 Benchmark*           -1.1       7.7    -2.8     -8.6     19.4 

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:                                         603.03p 
 Net asset value incl. income:                                         607.11p 
 Share price                                                           586.00p 
 Discount to cum income NAV                                               3.5% 
 Net yield (1):                                                           1.7% 
 Total Gross assets (2):                                               £509.3m 
 Net market exposure as a % of net asset value (3):                     117.4% 
 Ordinary shares in issue (4):                                      83,883,462 
 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 2020 interim dividend declared on 23 July 2020 and
paid on 26 August 2020, 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                       30.5 
 Financials                        18.9 
 Consumer Services                 18.8 
 Technology                        10.9 
 Consumer Goods                     8.3 
 Health Care                        6.6 
 Telecommunications                 2.8 
 Basic Materials                    2.5 
 Oil & Gas                          0.2 
 Net current assets                 0.5 
                                  ----- 
 Total                            100.0 
                                  ===== 
                                        
 Country Weightings   % of Total Assets 
                                        
 United Kingdom                    86.1 
 United States                      8.0 
 France                             2.5 
 Australia                          1.0 
 Netherlands                        0.9 
 Switzerland                        0.7 
 Denmark                            0.5 
 Ireland                            0.3 
                                  ----- 
 Total                            100.0 
                                  ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  30.11.19   29.02.20   31.05.20   31.08.20  
                          %          %          %          % 
 Long                 103.2      119.3      118.6      121.0 
 Short                  7.4        8.9        2.1        2.4 
 Gross exposure       110.6      128.2      120.7      123.4 
 Net exposure          95.8      110.4      116.6      118.6 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 Gamma Communications                         2.8 
 YouGov                                       2.6 
 Games Workshop                               2.6 
 Avon Rubber                                  2.5 
 Watches of Switzerland                       2.5 
 Dechra Pharmaceuticals                       2.5 
 IntegraFin                                   2.5 
 Pets at Home                                 2.4 
 Breedon                                      2.4 
 Impax Asset Management                       2.1 

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

During the month the Company returned -0.3%(1) (net of fees), outperforming
our benchmark, the Numis Smaller Companies plus AIM (excluding Investment
Companies) Index, which fell -1.1%(1). Both the long and short book
contributed positively to outperformance during the month.

Global equity markets fell during September as signs of a second wave of
COVID-19 infections in several countries, most notably in Europe, once again
resulted in an increase in market volatility. As seen in many other countries,
tighter restrictions were once again imposed in the UK to curb the spread of
the virus including the ‘rule of six’ and fewer operating hours for the
already fragile hospitality sector. Brexit made headlines with the
Government’s controversial Internal Markets Bill which provoked an intense
row with the EU. As a result, concerns of a “no-deal Brexit” once again
came to the fore and this coupled with softer domestic data led to sterling
weakness.

The single biggest contributor to relative performance was Pets At Home, a
company with a leading position in the growth of the UK pet market, and a
company that has successfully adapted its business model by strengthening its
digital capabilities. This latter factor has been a major benefit during the
COVID-19 crisis and the company’s trading update revealed second quarter
like-for-like sales up double digit, well ahead of expectations, prompting
large increases to profit forecasts. Shares in video game developer, Sumo
Group, rallied after the company delivered positive interim results as well as
announcing the acquisition of Pipeworks, which gives Sumo a strategic foothold
in the US market. Games Workshop continued to rise after reporting strong
trading ahead of expectations, driven by online sales, whilst also confirming
the payment of its dividend.

The largest single detractor during the month was YouGov, which fell despite
no negative stock specific newsflow. The shares have performed extremely well
since their last trading update and we would simply attribute the weakness
during the month to some share price consolidation after a strong run. Breedon
was weak during the month along with many domestically focused industrial
businesses given the uncertainty in the UK outlook. We think the company has
unique assets and maintain the view they are well placed to benefit from
infrastructure stimulus when it arrives. Insurance business, Beazley, fell
sharply after reporting higher than expected losses due to COVID-19 related
insurance claims.

Overall, we think the positive return for the month is good in light of the
wider sell off in equity markets. Months like this are an important reminder
to us to demonstrate our long held belief that stock and industry specifics
triumph macro trends, and to showcase that there are large contributions from
companies that can buck the market trend and have delivered great financial
outcomes for shareholders through this period and over many years; Pets At
Home, Sumo Group and Games Workshop are just a few examples, but there are
many more of these advantaged companies we own that remain the spinal cord of
this Company and continue to be a significant driver of the Company’s
returns.

We remain very excited about the opportunities ahead. What is most striking
when looking at industrial trends is that the COVID-19 crisis seems mainly to
have accelerated existing patterns rather than changing them. And so we are
excited by the level of opportunity that this brings. We think that the
dispersion we have already seen is likely to be enduring because it is causing
actual changes at the industry level; changes in market share and changes to
profits and cashflows. We do not think this has just been about temporary
moves in share prices that will revert back to where they were pre-COVID-19.
As ever, there remains much uncertainty, but hopefully months like September
remind us that if we continue to prioritise our efforts on stock and industry
analysis and back the advantaged and the differentiated, these shares will
prevail. We thank shareholders for their ongoing support.

(1)Source: BlackRock as at 30 September 2020

20 October 2020

ENDS

Latest information is available by typing www.blackrock.com/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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