REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

20/05/2022 17:00

The information contained in this release was correct as at 30 April 2022. 
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 April2022 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      -6.4     -14.5   -18.8     28.8     51.0 
 Share price         -13.3     -20.8   -25.3     25.3     74.9 
 Benchmark*           -1.6      -5.8    -9.1     21.7     22.8 

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:                                          695.95p 
 Net asset value incl. income:                                          701.25p 
 Share price                                                            654.00p 
 Discount to cum income NAV                                                6.7% 
 Net yield (1):                                                            1.6% 
 Total Gross assets (2):                                                £723.7m 
 Net market exposure as a % of net asset value (3):                      117.1% 
 Ordinary shares in issue (4):                                      103,204,864 
 2021 ongoing charges (excluding performance fees) (5,6):                 0.57% 
 2021 ongoing charges ratio (including performance fees) (5,6,7):         1.38% 

1. Calculated using the 2021 interim dividend declared on 26 July 2021 and
paid on 27 August 2021, together with the 2021 final dividend declared on 07
February 2022 and paid on 31 March 2022.

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 5,000 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
2021.

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                           30.2 
 Consumer Discretionary                23.2 
 Financials                            17.2 
 Technology                             7.6 
 Health Care                            6.7 
 Consumer Staples                       5.7 
 Telecommunications                     3.3 
 Basic Materials                        3.0 
 Energy                                 0.1 
 Net Current Assets                     3.0 
                                      ----- 
 Total                                100.0 
                                      ===== 
                                            
 Country Weightings       % of Total Assets 
                                            
 United Kingdom                        92.4 
 United States                          5.3 
 France                                 1.2 
 Sweden                                 0.8 
 Australia                              0.6 
 Germany                               -0.3 
                                            
                                      ----- 
 Total                                100.0 
                                      ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  31.05.21   31.08.21   30.11.21   28.02.22  
                          %          %          %          % 
 Long                 121.3      119.4      121.3      121.8 
 Short                  1.5        2.4        2.7        2.3 
 Gross exposure       122.8      121.8      123.9      124.1 
 Net exposure         119.8      117.0      118.6      119.5 

   

 Ten Largest Investments                               
                                                       
 Company                       % of Total Gross Assets 
                                                       
 Electrocomponents                                 3.6 
 Gamma Communications                              3.3 
 Watches of Switzerland                            3.1 
 Oxford Instruments                                3.0 
 CVS Group                                         2.9 
 IntegraFin                                        2.8 
 Next Fifteen Communications                       2.6 
 YouGov                                            2.5 
 Impax Asset Management                            2.5 
 Auction Technology                                2.4 

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

The Company returned -6.4%(1) in April, underperforming the Numis Smaller
Companies +AIM (ex Investment Trusts) Index, benchmark which returned
-1.6%(1). This is particularly disappointing given the fact most of our
investments have continued to deliver very positive updates during the month,
but this was a challenging month with the same narrow market leadership
(resources) and bifurcation between growth and value that has characterised
the year. Notably, and as if often the case during periods of heightening
uncertainty and risk-off environments, small and mid-caps are being
disproportionately punished, despite positive trading updates. The current
dynamic reflects the high level of uncertainty caused by the interplay of
three factors:

(i)  war in Ukraine and its impact on energy and wider commodity prices;

(ii) ongoing supply disruptions; particularly the increased COVID-19 lockdowns
in China during April; and

(iii)      the ongoing debate about inflation, interest rate policy and
the growing risk of a recession.

Two of the largest detractors came from IntegraFin and Impax Asset Management,
which have seen mark to market downgrades on falling equity markets. We heard
from both companies during the month, and while assets under management have
fallen, it was encouraging to see that the businesses have continued to see
net inflows during the first quarter which we believe demonstrates the
strength of these two franchises and their ability to continue to take share
in their respective markets where he long term growth dynamics remains very
positive. Shares in Watches of Switzerland also fell in April which we would
attribute to ongoing concerns around the outlook for the consumer. Whilst the
outlook for the consumer has deteriorated, we do not see the “cost of
living” crisis a particularly acute problem for high end luxury watches
where demand continues to far exceed supply.

The two largest contributors during the month were Oxford Instruments and
Spectris, both industrial companies that have featured in recent updates
following the unsuccessful attempt by Spectris to acquire Oxford Instruments.
It was reassuring to have updates from both companies in the month,
highlighting the strength of recent trading activity in their respective end
markets and their confidence in the outlook. The third largest contributor to
performance was our holding in US listed pool and spa business, Leslie’s
Inc. The shares rose after the company delivered record second quarter sales
that were ahead of expectations with upgrades to full year guidance.

We are disappointed to have to report this performance in April, particularly
as we had hoped for a recovery after the lows of sentiment in mid-March. While
it is fair to say that there were some disappointments in the April reporting
this was certainly not universally true and many of our investment reports
very encouraging results (Oxford Instruments, GBG Group, Grafton, Leslie’s).
The broader macro-outlook has deteriorated in recent weeks, from Chinese
lock-downs to ongoing inflationary pressures exacerbated by Russia/Ukraine
conflict, with a Federal Reserve that has exhibited an aggressive stance to
curb inflation. The cost of debt is rising, a headwind we feel is yet to be
felt by many of our short positions and certainly not captured in today’s
valuations. As the world slows and uncertainty abounds, we can be sure of one
thing which that its impact will not be felt evenly, and it remains our view
that well-financed companies with strong and enduring growth prospects is a
good place to be, particularly post the large retracement in valuations we
have seen.  We are working hard to ensure we cut shares where the investment
case has changed but overall, we see plenty of rebound potential once the
current level of uncertainty/fear in markets abates and as companies can
continue to deliver profit growth. We thank shareholders for your ongoing
support during this challenging environment.

(1)Source: BlackRock as at 30 April 2022

20 May 2022

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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