REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

27/04/2021 16:55

The information contained in this release was correct as at 31 March 2021. 
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 March 2021 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       4.0       6.7    76.1     50.4    125.0 
 Share price           4.6       5.6    75.6     75.4    177.0 
 Benchmark*            4.3       9.9    71.3     26.2     57.4 

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:                                         785.94p 
 Net asset value incl. income:                                         788.68p 
 Share price                                                           800.00p 
 Premium to cum income NAV                                                1.4% 
 Net yield (1):                                                           1.3% 
 Total Gross assets (2):                                               £722.7m 
 Net market exposure as a % of net asset value (3):                     123.2% 
 Ordinary shares in issue (4):                                      91,629,137 
 2020 ongoing charges (excluding performance fees) (5,6):                0.60% 
 2020 ongoing charges ratio (including performance fees) (5,6,7):        1.60% 

1. Calculated using the 2020 interim dividend declared on 23 July 2020 and
paid on 26 August 2020, together with the 2020 final dividend declared on 10
February 2021 and paid on 31 March 2021.

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
2020.

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                           31.2 
 Consumer Services                     21.4 
 Financials                            16.4 
 Consumer Goods                        11.5 
 Technology                             8.0 
 Health Care                            5.3 
 Telecommunications                     3.5 
 Basic Materials                        2.2 
 Consumer Discretionary                 0.2 
 Net current assets                     0.3 
                                      ----- 
 Total                                100.0 
                                      ===== 
                                            
 Country Weightings       % of Total Assets 
                                            
 United Kingdom                        89.6 
 United States                          7.2 
 France                                 1.3 
 Australia                              0.8 
 Denmark                                0.6 
 Netherlands                            0.4 
 Israel                                 0.1 
                                      ----- 
 Total                                100.0 
                                      ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  31.05.20   31.08.20   30.11.20   28.02.21  
                          %          %          %          % 
 Long                 118.6      121.0      120.4      126.8 
 Short                  2.1        2.4        1.9        1.5 
 Gross exposure       120.7      123.4      122.3      128.3 
 Net exposure         116.6      118.6      118.6      125.3 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 Electrocomponents                            3.1 
 Gamma Communications                         3.0 
 Games Workshop                               2.8 
 YouGov                                       2.7 
 Watches of Switzerland                       2.5 
 Moonpig Group                                2.4 
 Impax Asset Management                       2.3 
 Pets at Home                                 2.2 
 CVS Group                                    2.0 
 Dr Martens                                   2.0 

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

During March the Company returned 4.0%(1), marginally trailing its benchmark,
the Numis Smaller Companies plus AIM (excluding Investment Companies) Index,
which returned 4.3%(1). The long book rose during the month but lagged the
benchmark, while the short book modestly detracted which should be expected in
light of the strong market movements (both on a gross basis).

March saw an extension of the theme from February, with markets continuing to
rise and the shares in favour were generally those associated with
“re-opening” or other companies and industries that had endured a
difficult 2020. Conversely, “growth” shares tended to lag the market. This
is not to say that they fell - in fact some rose to new highs by the end of
March - but generally, they did lag behind re-opening shares. As with last
month, we have continued to see strong trading updates from our long holdings
and look forward to the first quarter reporting in April. Profits continue to
move forward, and we expect share prices will follow. We have also started to
see large equity raises from many re-opening companies, and we believe that
the extra shares in issue caps the upside and limits our appetite to chase
them.

Despite trailing the benchmark, the Company did not suffer any meaningful
disappointments at the stock level and underperformance was more a result of
broader market forces and of share price retrenchment, which we are convinced
will be temporary given the strong underlying trading that many of these
companies continue to report. Dr Martens gave back some share price gains
after a very strong IPO (Initial Public Offering) in January, and Chegg, one
of our US holdings which has traded exceptionally well over the past year,
fell during the month despite the attractive runway for growth in online
education that Chegg remains well set to monetise. XP Power also fell despite
no negative newsflow, and subsequently (during April), the group provided a
positive first quarter trading update which reaffirmed our confidence in the
long-term prospects for this business.

On the positive side, Gamma Communications, a long-term holding which we have
added to in recent months, reported results in March which were strong. Gamma
continues to be at the forefront of the structural change within cloud
communications-as-a-service in UK and is increasingly building its European
presence where cloud penetration rates are even lower. We also saw very strong
trading updates from Oxford Instruments and CVS Group which are all large
holdings in the portfolio, and we are confident in the growth outlook for
revenues and profits in both companies.

The discussion over interest rates and the recovery trade continued in March
from where it left off in February, and our outlook remains unchanged. As
mentioned last month, we continue to believe that higher interest rates
won’t be an enduring phenomenon as any rise in inflation will be tolerated
by central bankers, therefore we do not expect material rises in policy rates.
Our main takeaway from March is that the increased number of equity issues
among recovery names speaks to the fact that debts have substantially
increased over 2020. Since equity issuance is now being used to pay down this
debt it is best to avoid looking at the 2019 share price as a target because
there are likely to be many more shares in issue in 2021 than 2019. Meanwhile,
many cash generative and growing companies continue to trade well, often
beating and “raising their forecasts”, and in some cases shrinking their
share count. Most importantly, we have been impressed by the strength in
trading in many of our core holdings, as highlighted above.

We continue to believe the Company remains in great shape and we are very
positive on the prospects for our holdings in the long book. We remain
extremely positive on the opportunity set for the Company and this is
reflected in our net exposure which is now c.120%. We thank shareholders for
their support.

(1)Source: BlackRock as at 31 March 2021

27 April 2021

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.



Copyright (c) 2021 PR Newswire Association,LLC. All Rights Reserved