REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

24/11/2020 09:15

The information contained in this release was correct as at 31 October 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 31 October 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       1.8       8.0     5.7     17.6     74.3 
 Share price           6.5       9.5     8.1     42.8    114.0 
 Benchmark*            0.9       6.1    -2.6     -9.7     18.3 

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:                                         612.85p 
 Net asset value incl. income:                                         617.92p 
 Share price                                                           624.00p 
 Premium to cum income NAV                                                1.0% 
 Net yield (1):                                                           1.6% 
 Total Gross assets (2):                                               £519.8m 
 Net market exposure as a % of net asset value (3):                     120.2% 
 Ordinary shares in issue (4):                                      84,118,462 
 2019 ongoing charges (excluding performance fees) (5,6):                0.59% 
 2019 ongoing charges ratio (including performance fees) (5,6,7):        1.75% 

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                            31.1 
 Financials                             19.4 
 Consumer Services                      18.5 
 Technology                             10.7 
 Consumer Goods                          8.8 
 Health Care                             6.8 
 Telecommunications                      2.9 
 Basic Materials                         2.4 
 Oil & Gas                               0.2 
 Net current liabilities                -0.8 
                                       ----- 
 Total                                 100.0 
                                       ===== 
                                             
 Country Weightings        % of Total Assets 
                                             
 United Kingdom                         86.6 
 United States                           7.9 
 France                                  2.5 
 Australia                               0.9 
 Switzerland                             0.7 
 Netherlands                             0.6 
 Denmark                                 0.5 
 Ireland                                 0.2 
 Israel                                  0.1 
                                       ----- 
 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 
                                                  
 Games Workshop                               3.2 
 YouGov                                       3.1 
 Gamma Communications                         2.9 
 Watches of Switzerland                       2.8 
 Dechra Pharmaceuticals                       2.6 
 Breedon                                      2.3 
 IntegraFin                                   2.3 
 Impax Asset Management                       2.3 
 Avon Rubber                                  2.2 
 Pets at Home                                 2.2 

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

During the month the Company returned 1.8%(1) (net of fees), outperforming our
benchmark, the Numis Smaller Companies plus AIM (excluding Investment
Companies) Index, which returned 0.9%(1). Performance during the month was
driven by the long book, while the short book detracted modestly.

Renewed coronavirus concerns and uncertainty in the run up to the US
Presidential Election sent most equity markets lower during October. However,
UK small and mid-caps bucked the trend and finished the month in positive
territory, in part we think due to encouraging messaging around Brexit trade
negotiations, though only time will tell.

Stock specifics continued to drive performance during the month, with several
our holdings delivering strong results as we moved into reporting season,
enabling these specific investment cases to drive differentiated returns
against the wider market. The largest contributor was from Watches of
Switzerland, where demand for high end watches and jewellery has been far
stronger than expected and the relationship with Rolex has proved a point of
differentiation in securing access to watches where demand continues to exceed
supply. We increased the holding after the results. The second largest
contributor was from YouGov, another long-term holding which reported strong
results in the month and continues to deliver on its strategy to monetise its
online panel data across an increasing array of industries looking for data
insights – we expect demand for this type of service to endure and grow.
Elsewhere shares in Bodycote rose in line with many other industrials as part
of the rotation towards cyclicals during the month.

When looking through the list of detractors, there were some holdings which
have delivered strongly for the portfolio throughout the year, but which have
retraced some earlier gains alongside the many growth shares during October.
Shares in IMImobile for example, gave back some recent share price gains
despite continued strong underlying trading, and Citrix fell despite reporting
third quarter, earnings which beat expectations and raising guidance, driven
by strong growth in Citrix Workspace. In both cases we expect a recovery in
the share prices and have retained the positions. The largest single detractor
during the month came from one of our short positions in a UK retirement
housebuilder which received a bid from a US private equity firm.

Overall a strong month for the portfolio and another month where
outperformance of the benchmark highlights the ability for stock and industry
specifics to triumph over broader market forces and macro trends. Where some
share prices were weak during the month, we are reassured that much of this
will be only temporary because where our holdings have reported they have
generally shown very strong results and have raised guidance. This combination
of a fall in share price but an increase in profits should quickly underpin
valuations and therefore we do not believe there has been permanent loss of
value.

We remain very excited about the opportunities ahead. Although we are
disappointed to find more COVID-19 lockdowns occurring, in general we are not
materially exposed to the worst affected industries, and many of our holdings
in the long book will find their competitive advantages strengthened yet
again. As such 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. By focusing on stock and industry
analysis and backing the advantaged and the differentiated, we believe the
Company remains well set to capitalise on the opportunities ahead. We thank
shareholders for their ongoing support.

(1)Source: BlackRock as at 31 October 2020

24 November 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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