REG-BlackRock Throgmorton Trust Plc: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

29/04/2024 17:00

The information contained in this release was correct as at 31 March 2024. 
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 2024 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  3.4       2.7        10.2     -12.6     32.1      
 Share price      1.7       -3.2       3.4      -22.5     26.2      
 Benchmark*       3.0       -0.8       3.0      -12.7     14.9      

  

Sources: BlackRock and Deutsche Numis

*With effect from 15 January 2024 the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index changed to the Deutsche Numis Smaller
Companies plus AIM (excluding Investment Companies).

 

 At month end                                                         
 Net asset value capital only:                            650.37p     
 Net asset value incl. income:                            653.68p     
 Share price                                              587.00p     
 Discount to cum income NAV                               10.2%       
 Net yield 1 :                                            2.5%        
 Total Gross assets 2 :                                   £609.7m     
 Net market exposure as a % of net asset value 3 :        118.4%      
 Ordinary shares in issue 4 :                             93,278,514  
 2023 ongoing charges (excluding performance fees) 5,6 :  0.54%       
 2023 ongoing charges ratio (including performance        0.87%       
  fees) 5,6,7 :                                                       

1. Calculated using the interim dividend declared on 07 July 2023 paid on 29
August 2023, together with the final dividend declared on 05 February 2024
paid on 28 March 2024

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 9,931,350 shares held in treasury.

5. The Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating
expenses, excluding performance fees, finance costs, direct transaction
charges, VAT recovered, taxation and certain other non-recurring items for the
year ended 30 November 2023.

6. With effect from 1 August 2017 the base management fee was reduced from
0.70% to 0.35% of gross assets per annum. The Company’s ongoing charges are
calculated as a percentage of average daily net assets and using the
management fee and all other operating expenses, including performance fees,
but excluding finance costs, direct transaction charges, VAT recovered,
taxation and certain other non-recurring items for the year ended 30 November
2023.

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             36.0               
 Consumer Discretionary  22.8               
 Financials              15.7               
 Basic Materials         6.8                
 Technology              6.5                
 Telecommunications      3.8                
 Health Care             2.2                
 Consumer Staples        1.9                
 Energy                  1.2                
 Communication Services  1.1                
 Real Estate             0.9                
 Other                   0.1                
 Net Current Assets      1.0                
                         -----              
 Total                   100.0              
                         =====              
                                            
 Country Weightings      % of Total Assets  
                                            
 United Kingdom          91.6               
 United States           4.8                
 Ireland                 1.4                
 Australia               0.8                
 France                  0.8                
 Switzerland             0.5                
 Canada                  0.4                
 Sweden                  -0.3               
                         -----              
 Total                   100.0              
                         =====              

 

 Market Exposure (Quarterly)                                 
                                                             
                 31.05.23   31.08.23   30.11.23   29.02.24   
                  %          %          %          %         
 Long            111.7      112.7      111.3      117.9      
 Short           3.6        4.5        3.8        3.2        
 Gross exposure  115.3      117.2      115.1      121.1      
 Net exposure    108.1      108.2      107.5      114.7      

 

 Ten Largest Investments                         
                                                 
 Company                % of Total Gross Assets  
                                                 
 FTSE 250 Index Future  3.6                      
 Breedon                3.2                      
 Gamma Communications   3.1                      
 4imprint Group         3.0                      
 Oxford Instruments     2.9                      
 WH Smith               2.9                      
 Grafton Group          2.9                      
 Rotork                 2.5                      
 Hill & Smith Holdings  2.5                      
 YouGov                 2.3                      
                                                 
                                                 

 

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

 

The Company returned 3.4% in March, outperforming its benchmark the Deutsche
Numis Smaller Companies plus AIM (excluding Investment Companies) Index which
returned 3.0%.

 

March was another strong month for risk assets broadly, with equity markets
globally delivering solid returns across the board on back of positive macro
data points and falling rates of inflation. Specifically, within the UK, CPI
data continued to come in below forecast and is heading towards the Bank of
England’s (BOE) target. Indeed, if we annualise the last seven months of UK
CPI then inflation is already below 2%. This leaves the path open for cuts to
UK rates before the Federal Reserve, something unthinkable in June last year.

 

The largest positive contributor to performance during March was UK wealth
manager Mattioli Woods, which received a cash bid from financial private
equity specialist Pollen Street Capital. The sale of Mattioli Woods marks
another name in a long (and growing) list of UK listed businesses, which have
been targeted by Private Equity firms or Corporates taking advantage of the
attractive valuations currently placed on the UK market, particularly when
compared to comparable companies in other listed markets. The second largest
contributor was Gamma Communications, the UK listed cloud communications
company, which delivered robust results with organic revenues growing around
9%. Additionally, the company initiated its first buyback, utilising some of
its £130m net cash pile while leaving enough capacity to continue to do bolt
on acquisitions. The shares have re-rated to a mid-teens PE (price to earning
ratio) this year, but this is still at a steep discount to other stable high
single digit organic growth companies. 4imprint also contributed positively
after reporting a 36% rise in pre-tax profit and a 16% increase in total
revenue, once again demonstrating their market leading position and ongoing
market share gains.

 

The largest detractor was veterinary services business, CVS Group. The shares
fell in response to an announcement from the CMA (Competition and Markets
Authority) that they would be progressing to a full Market Investigation into
the veterinary market in the UK. The CMA had announced an initial review in
September last year and we reduced the position to reflect uncertainty then.
Our work at the time indicated that the market was functioning reasonably well
for consumers and there was limited evidence of overcharging or
anticompetitive practices so we were surprised and disappointed by the CMA's
decision. Alas, this is now a cloud that will hang over the shares for 18
months so reflecting that prolonged uncertainty we have reduced the position
size further. YouGov was the second biggest detractor after a set of results
which, although in line with expectations, demonstrated a larger than
anticipated slowdown in the core Data Products business and a larger than
expected weighting to H2 to meet their FY guidance. We have moderated the
position but retain a holding as we still believe in the long term growth
potential for YouGov's proprietary data and sophisticated analytics platform.
Shares in IT reseller Computacenter fell in response to providing a cautious
outlook for 2024, despite delivering another year of record revenue and
profits.

 

March was a positive month, rounding out a positive first quarter in 2024. We
remain pleased with the breadth of returns in the portfolio, with positive
contributions across a broad range of holdings both in the month and
year-to-date. We are also reassured that the returns are primarily driven by
stock specifics rather than any one factor or macro bet. Though it remains a
source of frustration for us, the continued underperformance of UK small &
mid-caps remains the biggest opportunity for the strategy. There were some
tentative signs of increasing breadth within markets in March, but largely
within large caps, if this were to spread to small & mid-caps, it would
provide an even more positive environment for the strategy. The net of the
fund is around 113% while the gross is around 119%.

 

We thank shareholders for your ongoing support.

 

1Source: BlackRock as at 31 March 2024

 

29 April 2024

 

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.

 

 

 Release (https://mb.cision.com/Main/22398/3967916/2769052.pdf)  



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