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REG-Chelverton UK Dividend Trust plc Chelverton UK Dividend Trust plc: Half-Yearly Financial ReportFor the six months ended 31 October 2020

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Chelverton UK Dividend Trust plc (SDVP)
Chelverton UK Dividend Trust plc: Half-Yearly Financial ReportFor the six months ended 31 October 2020

30-Nov-2020 / 14:35 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

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CHEVERTON UK DIVIDEND TRUST PLC

 

Half-Yearly Financial Report

For the six months ended 31 October 2020

 

Investment Objective and Policy

The investment  objective of  Chelverton UK  Dividend Trust  PLC ('the  Company') is  to provide  Ordinary
shareholders with a  high income  and opportunity  for capital growth,  having provided  a capital  return
sufficient to repay the full  final capital entitlement of the  Zero Dividend Preference shares issued  by
the wholly owned subsidiary company, SDV 2025 ZDP PLC ('SDVP').

Chelverton UK Dividend  Trust PLC  ('the Company'), and  its subsidiary  SDV 2025 ZDP  PLC ('SDVP')  ('the
Subsidiary'), together form the Group ('the Group'). The Group's funds are invested principally in mid and
smaller capitalised  UK companies.  The portfolio  comprises companies  listed on  the Official  List  and
companies admitted to trading on AIM. The Group does not invest in other investment trusts or in  unquoted
companies. No investment  is made in  preference shares, loan  stock or notes,  convertible securities  or
fixed interest securities.

 

Financial Highlights

                                                                  31 October      30 April        %
Capital
                                                                        2020          2020   change
Total gross assets (£'000)                                            41,602        42,040   (1.04)
Total net assets (£'000)                                              25,205        26,034   (3.18)
Net asset value per Ordinary share                                   120.89p       124.86p   (3.18)
Mid-market price per Ordinary share                                  111.00p       127.50p  (12.94)
(Discount)/premium                                                   (8.18%)         2.11%         
Net asset value per Zero Dividend Preference share                   111.84p       109.67p     1.98
Mid-market price per Zero Dividend Preference share                  108.00p       102.00p     5.88
Discount                                                             (3.43%)       (6.99%)         
                                                                                                   
                                                                             Six months to
                                                    Six months to 31 October                      %
Revenue                                                                         31 October
                                                                        2020                 change
                                                                                      2019
Return per Ordinary share                                              2.80p         6.71p  (58.27)
Dividends declared per Ordinary share*                                 5.00p         4.80p     4.17
Special dividends declared per Ordinary share                              -         2.50p (100.00)
                                                                                                   
Total Return                                                                                       
Total return on Group net assets**                                     0.74%       (4.94%)         

 

* Dividend per Ordinary share includes the first interim  paid and second interim declared for the  period
to 31 October 2020 and 2019 and will differ from the amounts disclosed within the statement of changes  in
net equity, owing to the timings of payments.

** Adding back dividends distributed in the period.

 

Interim Management Report

Overview

Given the extraordinary events of the past few months the Board felt it appropriate to update shareholders
on the positioning of the Company with a more detailed view of the current state of the portfolio and  the
market.

In the period since the depths of the market collapse  in March, a time we have called "The Great  Panic",
matters have become progressively clearer as more is now known medically about the Covid-19 virus and over
this period  companies  have  developed processes  and  systems  to manage  their  businesses  within  the
constraints of keeping employees and customers safe and operating within Government regulations.

Initially, after the significant market  collapse of share prices in  the Small and Mid-Cap sector,  share
values "flatlined". Whilst the portfolio companies,  universally, started reporting that trading had  been
better than expected,  there was  no marked improvement  in their  share prices. Since  that period  share
prices have  in  general  modestly recovered,  although  the  sectors most  affected  by  Covid-19  driven
restrictions - travel and hospitality - have continued to be depressed.

However, after a little while  companies began to work  out new ways of  operating and were innovative  in
what they did and how they  did it. Whilst some of our  companies are dependent on people interacting  and
coming together, others have very definitely benefited from the restrictions of the lockdown.

Across the companies invested in  by the funds managed  by Chelverton Asset Management  it is fair to  say
that all of them felt they were in a better position after four to six months of lockdown than they had at
first anticipated in  March. Clearly  companies involved  in the  hospitality industry  have, through  the
recent tightening of regulations, gone backwards of late.

Another very clear feature that has become evident over  the past six months is that this period has  been
used by our companies to  adopt new business practices and  to drive through efficiency improvements  that
will make a difference now but particularly in the future as demand picks up. The furlough scheme, and the
subsequent gradual unwinding of the furlough scheme,  has highlighted the productivity, or indeed lack  of
productivity, of the marginal employee. It might well be that the spike in unemployment that we all expect
in the  next few  months could  be partially  from a  reduction in  demand but  also from  a reduction  in
workforces resulting in improvement in  their productivity. It looks like  the absolute level of  expected
unemployment might be  reduced by the  news that some  800,000 visitors from  the European Community  have
already returned to their home countries.

Hopefully, if and when, we  finally see a Free Trade  Agreement in the next few  weeks or months then  the
country and  the  companies  we  are invested  in  can  get  on  with managing  with  what  will  then  be
"known-knowns". The energy,  time and  resources spent on  the Brexit  process will be  applied much  more
productively. There is a feeling  that once the relationship with  the European Union is resolved,  either
with a Free Trade Agreement or  indeed No Agreement, then there will  be a release of pent-up demand  that
has been held up while waiting several years for this to be resolved.

The portfolio is invested in small listed and AIM-traded companies whose business is largely conducted  in
the UK and therefore  the strength and  growth of the  UK economy is  by far and  away the most  important
determinant of our underlying companies' success.

 

It is a well-documented fact that UK and overseas investors remain very underweight in UK equities, as  it
has been all too easy to sit on the side-lines waiting for a resolution of the Brexit Debate and then  the
Free Trade Agreement impasse. The trend we highlighted last year of the large differential in the relative
ratings between "Growth" companies and "Value" companies has continued to widen in the year. An example of
this is the extraordinary rise in  the past year in the value  of Apple, the American technology  company,
which on its own became worth more than the aggregate value of the components of FTSE 100. Those of us who
have been working in and observing markets for some time know that these extremes of valuation  difference
do not last forever.

As is often the case after  a market sell-off, the share prices  of smaller companies take much longer  to
recover as  compared  to  members of  the  FTSE100.  This period,  after  a  market collapse  and  then  a
stabilisation period, generally  throws up  a large  number of deeply  undervalued companies  and this  is
particularly true  as one  moves down  the market  capitalisation scale,  especially in  under  researched
smaller companies which is this fund's area of focus.

Results

This half-yearly report covers the six months to 31  October 2020. The net asset value per Ordinary  share
at 31 October 2020 was 120.89p, down from 124.86p at 30th April 2020, a decrease of 3.18% in the past  six
months compared to an increase of 2.03% in the MSCI Small Cap Index.

Since the beginning of the Company's financial year, the Ordinary share price has decreased from 127.5p to
111.0p at 31th October 2020, a decrease of 12.9%. Since  the period end the net asset value per share  has
increased to 156.34p, a percentage increase of 29.3% as at  26 November 2020 and the shares at a price  of
151.0p now trade on a discount of some 3.41%.

Dividend

In respect of the year ended 30 April 2021,  a first interim dividend of 2.50p (2019: 2.40p) per  Ordinary
share was paid on 1 October 2020. The Board  has declared a second interim dividend of 2.50p per  Ordinary
share (2019: 2.40p) payable on 4 January 2021 to shareholders on the register on 11 December 2020,  making
a total for the half year of  5.00p per Ordinary share (2019: 4.80p)  an increase of 4.2%. At present  the
Company intends to at  least maintain this level  of dividend for the  third and fourth interim  dividends
making a total core dividend of 10.00p for the year (2019: 9.6p) an increase of 4.2%.

The Board will review the dividend flow from the company's portfolio over the next six months and consider
the forecast dividend  flow for 2021/2022  before deciding on  the absolute amount  of the fourth  interim
dividend. A number  of the  Company's investee  companies initially adopted  a very  cautious approach  in
respect of the uncertainties that lay ahead and reduced or passed their dividends. Some of these companies
have restored their dividends  and others have  already indicated that they  will resume paying  dividends
next year.

 

Shareholders will also be aware that your Company has built up significant revenue reserves over the past
ten years and has one of the highest levels of reserves relative to its annual core dividend. It is
therefore in a strong position to continue increasing the dividend paid even in this period where others
are having to cut or maintain their dividend.

 

Portfolio

In the last six months we have increased  our investment in twenty-three of our existing holdings,  taking
advantage of  lower share  prices and  shares being  available, including  Amino Technologies,  Appreciate
Group, Belvoir Lettings, Bloomsbury Publishing, Brewin  Dolphin Holdings, Brown (N) Group, Close  Brothers
Group, Coral  Products, Elementis,  Marstons, MTI  Wireless Edge,  Orchard Funding  Group, Personal  Group
Holdings, Portmeirion Group, Premier Miton Group, Randall & Quilter, Regional REIT, Revolution Bars Group,
RPS Group, Saga, STV,  1 TheWorks.co.uk and Wilmington Group.

During the period we added four new names  to the portfolio; Contourglobal - a power generation  business,
Curtis Banks Group (a company that the fund has owned before) - an administrator of Self Invested  Pension
Schemes, Hargreaves Services - providing services to  industrial and property sectors and i-Energiser -  a
global supplier of Business Outsourcing Solutions.

Funds were raised from the  outright sale of six of  our holdings; Low and Bonar  and Moss Bros were  both
taken over in the period. Elementis  has received a very preliminary  takeover approach at this time.  The
following holdings  were  reduced as  they  grew  to become  larger  weightings on  lower  yields,  Jarvis
Securities, Strix Group and UP Global Sourcing Holdings.

Outlook

Despite the current extraordinary conditions we  expect that once we as  a nation have navigated the  next
six months, a period when the political situation in the USA will be clarified and, when the  arrangements
with the European Union have been resolved, life will return to a more stable and normal position once the
Covid-19 pandemic has been brought under control.

It is being consistently reported and routinely discussed  in the media that UK equities are cheaper  than
they have been for some 40 years. Once the matters referred to above are resolved then it is reasonable to
expect that the improved certainty  and clarity in the  UK will encourage investors  back to invest in  UK
companies. In time the Board believes this will lead to a significant increase in the net asset value  per
share.

We believe that the companies in the portfolio have shown great resilience over the past 12 months and  it
will be this strength that will enable them to  survive and prosper whilst some of their competitors  will
not last the course. We hope, and expect, that the investment and development that has taken place in  the
past few years will begin to bear fruit over the next period.

Chelverton Asset Management
30 November 2020

 

Responsibility Statement of the Directors in respect of the Half-Yearly Report

We confirm that to the best of our knowledge:

  • the condensed set of  financial statements has been  prepared in compliance with  the IAS 34  'Interim
    Financial Reporting' and gives a true and fair view of the assets, liabilities and financial  position
    of the Group; and
  • the interim  management  report and  notes  to the  Half-Yearly  Report include  a  fair view  of  the
    information required by:

 a.     DTR 4.2.7R of the Disclosure and Transparency  Rules, being an indication of the important  events
    that have occurred during the first six months of the financial year and their impact on the condensed
    set of  financial statements;  and a  description of  the principal  risks and  uncertainties for  the
    remaining six months of the year; and
 b.     DTR 4.2.8R of the  Disclosure and Transparency Rules, being  related party transactions that  have
    taken place in the first six  months of the current financial  year and that have materially  affected
    the financial position or performance of the Group during that period; and any changes in the  related
    party transactions described in the last annual report that could do so.

This Half-Yearly Report was approved by the Board of Directors on 30 November 2020 and the above
responsibility statement was signed on its behalf by Lord Lamont, Chairman.

 

Condensed Consolidated Statement of Comprehensive Income (unaudited)

for the six months ended 31 October 2020

                        Six months to                    Year to                      Six months to
 
                       31 October 2020                30 April 2020                  31 October 2019
                   Revenue   Capital  Total  Revenue    Capital          Total   Revenue   Capital   Total
                     £'000     £'000  £'000    £'000      £'000          £'000     £'000     £'000   £'000
                                                        (audited)                                         
Gains/(losses) on
investments at
fair value               -        84     84        -   (17,046)       (17,046)         -   (3,080) (3,080)
through profit or
loss
Investment income      790         -    790    2,414          -          2,414     1,604         -   1,604
Investment            (52)     (156)  (208)    (135)      (407)          (542)      (71)     (214)   (285)
management fee
Other expenses       (139)       (5)  (144)    (270)       (13)          (283)     (134)       (8)   (142)
Net
surplus/(deficit)
before finance         599      (77)    522    2,009   (17,466)       (15,457)     1,399   (3,302) (1,903)
costs and
taxation
Finance costs                                                                                             
Preference shares        -     (314)  (314)        -      (607)          (607)         -     (302)   (302)
Net
surplus/(deficit)      599     (391)    208    2,009   (18,073)       (16,064)     1,399   (3,604) (2,205)
before taxation
Taxation (see         (15)         -   (15)     (38)          -           (38)         -         -       -
note 2)
Total
comprehensive          584     (391)    193    1,971   (18,073)       (16,102)     1,399   (3,604) (2,205)
income/(expense)
for the period
                      Revenue   Capital   Total    Revenue Capital   Total  Revenue   Capital     Total  
                        pence  pence      pence      pence   pence   pence    pence     pence     pence  
Net return per:
                         2.80 (1.87)       0.93       9.45 (86.68) (77.23)     6.71   (17.29)   (10.58)  
Ordinary share (see
note 3)
Zero Dividend
Preference share 2025       -   2.17       2.17          -    4.19    4.19        -      2.08      2.08  
(see note 3)
                                                                                                         

The total column of this statement is the Statement of Comprehensive Income of the Group prepared in
accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union. All
revenue and capital items in the above statement derive from continuing operations. No operations were
acquired or discontinued during the period. All of the net return for the period and the total
comprehensive income for the period is attributed to the shareholders of the Group. The supplementary
revenue and capital return columns are presented for information purposes as recommended by the Statement
of Recommended Practice issued by the Association of Investment Companies ('AIC').

 

Condensed Consolidated Statement of Changes in Net Equity (unaudited)

for the six months ended 31 October 2020

                                          Share Share premium Capital Redemption Capital  Revenue    Total
                                        capital       account            reserve reserve  reserve
                                          £'000         £'000              £'000    £'000   £'000    £'000
Six months ended 31 October 2020                                                                   
30 April 2020                             5,213        17,517              5,004  (5,148)   3,448   26,034
Total comprehensive income/ (expense)         -             -                  -    (391)     584      193
for the period
Dividends paid (see note 4)                   -             -                  -        - (1,022)  (1,022)
31 October 2020                           5,213        17,517              5,004  (5,539)   3,010   25,205
Year ended 30 April 2020 (audited)                                                                 
30 April 2019                             5,213        17,517              5,004   12,925   4,000   44,659
Total comprehensive income/ (expense)         -             -                  - (18,073)   1,971 (16,102)
for the period
Dividends paid                                -             -                  -        - (2,523)  (2,523)
30 April 2020                             5,213        17,517              5,004  (5,148)   3,448   26,034
Six months ended 31 October 2019                                                                   
30 April 2019                             5,213        17,517              5,004   12,925   4,000   44,659
Total comprehensive income/ (expense)         -             -                  -  (3,604)   1,399  (2,205)
for the period
Dividends paid (see note 4)                   -             -                  -        - (1,522)  (1,522)
31 October 2019                           5,213        17,517              5,004    9,321   3,877   40,932

 

Condensed Consolidated Balance Sheet (unaudited)

as at 31 October 2020

 

                                                             30 April
                                                 31 October           31 October
                                                                 2020
Non-current assets                                     2020                 2019
                                                                £'000
                                                      £'000                £'000
                                                            (audited)
Investments at fair value through profit or loss     41,347    40,588     56,239
Current assets                                                         
Trade and other receivables                             123       186        259
Cash and cash equivalents                               132     1,266        236
                                                        255     1,452        495
Total assets                                         41,602    42,040     56,734
Current liabilities                                                    
Trade and other payables                              (181)     (104)      (205)
                                                      (181)     (104)      (205)
Total assets less current liabilities                41,421    41,936     56,529
Non-current liabilities                                                
Zero Dividend Preference shares 2025               (16,216)  (15,902)   (15,597)
Total liabilities                                  (16,397)  (16,006)   (15,802)
Net assets                                           25,205    26,034     40,932
Represented by:                                                        
Share capital                                         5,213     5,213      5,213
Share premium account                                17,517    17,517     17,517
Capital redemption reserve                            5,004     5,004      5,004
Capital reserve                                     (5,539)   (5,148)      9,321
Revenue reserve                                       3,010     3,448      3,877
Equity shareholders' funds                           25,205    26,034     40,932
Net asset value per: (see note 5)                     pence     pence      pence
Ordinary share                                       120.89    124.86     196.32
Zero Dividend Preference share 2025                  111.84    109.67     107.57

 

 

Condensed Consolidated Statement of Cash Flows (unaudited)

for the six months ended 31 October 2020

 

                                                    31 October 30 April 2020 31 October

Operating activities                                      2020         £'000       2019

                                                         £'000     (audited)      £'000
Investment income received                                 727         2,618      1,665
Investment management fee paid                           (161)         (605)      (324)
Administration and secretarial fees paid                  (27)          (64)       (32)
Other cash payments                                      (120)         (247)      (152)
Cash generated from operations (see note 7)                419         1,702      1,157
Purchases of investments                               (3,962)       (9,951)    (7,021)
Sales of investments                                     3,431        10,348      5,932
Net cash (outflow)/inflow from operating activities      (112)         2,099         68
Financing activities                                                          
Dividends paid                                         (1,022)       (2,523)    (1,522)
Net cash (outflow)/inflow from financing activities    (1,022)       (2,523)    (1,522)
Change in cash and cash equivalents for period         (1,134)         (424)    (1,454)
Cash and cash equivalents at start of period             1,266         1,690      1,690
Cash and cash equivalents at end of period                 132         1,266        236
Comprised of:                                                                 
Cash and cash equivalents                                  132         1,266        236

 

Notes to the Condensed Half-Yearly Report

for the six months ended 31 October 2020

1 General information

The financial information  contained in this  Half-Yearly Report does  not constitute statutory  financial
statements as defined in Section 434 of the Companies Act 2006. The statutory financial statements for the
year ended 30  April 2020,  which contained an  unqualified auditors'  report, have been  lodged with  the
Registrar of Companies  and did  not contain  a statement  required under  the Companies  Act 2006.  These
statutory financial statements were  prepared under International  Financial Reporting Standards  ('IFRS')
and in accordance with the Statement of Recommended Practice ('SORP'): Financial Statements of  Investment
Trust Companies and Venture Capital Trusts issued by the  AIC in October 2020, except to any extent  where
it conflicts with IFRS.

The Group has considerable financial resources and therefore the Directors believe that the Group is  well
placed to manage its  business risks and  also believe that  the Group will  have sufficient resources  to
continue in operational  existence for the  foreseeable future.  Accordingly, they continue  to adopt  the
going concern basis in preparing this report.

This report has not been reviewed by the Group's Auditors.

This report has been prepared  using accounting policies adopted in  the audited financial statements  for
the year ended  30 April  2020. This report  has also  been prepared in  compliance with  IAS 34  'Interim
Financial Reporting' as adopted by the European Union.

2 Taxation

The Company has an effective tax rate of 0% as investment gains are exempt from tax owing to the Company's
status as an Investment Trust and  there is expected to be an  excess of management expenses over  taxable
income and thus there is no charge for corporation tax.

Deferred tax assets in respect of unrelieved excess expenses are not recognised as it is unlikely that the
Group will generate sufficient taxable income in the future to utilise these expenses. Deferred tax is not
provided on  capital  gains and  losses  because the  Company  meets the  conditions  for approval  as  an
investment trust company.

3 Earnings per share

Ordinary shares

Revenue earnings per Ordinary share is based on revenue on ordinary activities after taxation of  £584,000
(30 April 2020: £1,971,000, 31 October 2019: £1,399,000) and on 20,850,000 (30 April 2020: 20,850,000,  31
October 2019: 20,850,000) Ordinary shares, being the  weighted average number of Ordinary shares in  issue
during the period.

Capital earnings per Ordinary share is based on the capital loss of £391,000 (30 April 2020:  £18,073,000,
31 October 2019: £3,604,000) and  on 20,850,000 (30 April 2020:  20,850,000, 31 October 2019:  20,850,000)
Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.

Zero Dividend Preference shares

Capital earnings per Zero Dividend Preference share 2025 is based on allocations from the Company of
£314,000 (30 April 2020: £607,000, 31 October 2019: £302,000) and on 14,500,000 (30 April 2020:
14,500,000, 31 October 2019: 14,500,000) Zero Dividend Preference shares 2025 being the weighted average
number of Zero Dividend Preference shares in issue during the period.

 

4 Dividends

In respect of the financial year ended 30 April 2020, during the period, a fourth interim dividend of

2.40p per Ordinary share has been paid to Shareholders.

In respect of the year ended 30 April 2021, a first interim dividend of 2.50p per ordinary share has  been
paid to the shareholders.

In addition, for the year ended 30 April 2021,  the Board has declared a second interim dividend of  2.50p
per Ordinary share payable 4 January 2021 to shareholders on the register at 11 December 2020 (ex-dividend
10 December 2020).

5 Net asset values

Ordinary shares

The net asset value per Ordinary share is based on assets attributable of £25,205,000 (30 April 2020:

£26,034,000, 31 October 2019: £40,932,000) and on 20,850,000 (30 April 2020: 20,850,000, 31 October

2019: 20,850,000) Ordinary shares being the number of shares in issue at the period end.

Zero Dividend Preference shares

The net asset value per Zero Dividend Preference shares is based on assets attributable of £16,216,000 (30
April 2020: £15,902,000, 31 October  2019: £15,597,000) and on 14,500,000  (30 April 2020: 14,500,000,  31
October 2019: 14,500,000)  Zero Dividend  Preference shares being  the number  of shares in  issue at  the
period end.

6 Fair value hierarchy

Financial assets  and financial  liabilities of  the Company  are carried  in the  condensed  Consolidated
Balance Sheet at their fair value. The  fair value is the amount at which  the asset could be sold or  the
liability transferred  in a  current  transaction between  market participants,  other  than a  forced  or
liquidation sale. For investments actively traded in organised financial markets, fair value is  generally
determined by reference to Stock Exchange quoted  market bid prices and Stock Exchange Electronic  Trading
Services ('SETS') at last trade price at the Balance Sheet date, without adjustment for transaction  costs
necessary to realise the asset.

The Company measures  fair values  using the  following hierarchy that  reflects the  significance of  the
inputs used in making  the measurements. Categorisation  within the hierarchy has  been determined on  the
basis of the lowest level input that is significant  to the fair value measurement of the relevant  assets
as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

An active market  is a  market in  which transactions for  the asset  or liability  occur with  sufficient
frequency and volume  on an  ongoing basis  such that quoted  prices reflect  prices at  which an  orderly
transaction would take place between market participants  at the measurement date. Quoted prices  provided
by external pricing services,  brokers and vendors  are included in  Level 1, if  they reflect actual  and
regularly occurring market transactions on an arm's length basis.

Level 2 - Inputs other  than quoted prices included  within Level 1 that are  observable for the asset  or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 2 inputs include the following:

 

  • quoted prices for similar (i.e. not identical) assets in active markets;
  • quoted prices  for  identical or  similar  assets  or liabilities  in  markets that  are  not  active.
    Characteristics of an inactive market include a significant decline in the volume and level of trading
    activity, the available prices vary significantly over time or among market participants or the prices
    are not current;
  • inputs other than quoted  prices that are observable  for the asset (for  example, interest rates  and
    yield curves observable at commonly quoted intervals); and
  • inputs that are derived principally from, or corroborated by, observable market data by correlation or
    other means (market-corroborated inputs).

Level 3 - Inputs for  the asset or liability  that are not based  on observable market data  (unobservable
inputs).

The level in  the fair  value hierarchy  within which the  fair value  measurement is  categorised in  its
entirety is determined  on the  basis of the  lowest level  input that is  significant to  the fair  value
measurement in its entirety. If a fair  value measurement uses observable inputs that require  significant
adjustment based  on  unobservable inputs,  that  measurement is  a  Level 3  measurement.  Assessing  the
significance of a  particular input  to the  fair value measurement  in its  entirety requires  judgement,
considering factors specific to the asset or liability.

As at 31 October 2020, 30 April 2020 and  31 October 2019 all of the Company's investments are  classified
as Level 1.

7 Reconciliation of net return before and after
taxation to cash generated from operations

                                                     31 October 30 April 31 October

                                                           2020     2020       2019

                                                          £'000    £'000      £'000
Net return before taxation                                  208 (16,064)    (2,205)
Taxation                                                   (15)     (38)          -
Net return after taxation                                   193 (16,102)    (2,205)
Net capital return                                          391   18,073      3,604
(Increase)/decrease in receivables                         (44)      225         45
Increase/(decrease) in payables                              40     (74)       (65)
Interest and expenses charged to the capital reserve      (161)    (420)      (222)
Net cash inflow from operating activities                   419    1,702      1,157

 

8 Related party transactions

The Group's investments  are managed by  Chelverton Asset Management  Limited, a company  in which Mr  van
Heesewijk, a  Director of  the Company  and the  subsidiary,  has an  interest. The  amounts paid  to  the
Investment Manager in the period to 31 October 2020 were £208,000 (year ended 30 April 2020: £542,000, six
months to 31 October 2019: £285,000).

At 31 October 2020 there were amounts outstanding to be paid to the Investment Manager of £105,000 (year
ended 30 April 2020: £58,000, six months to 31 October 2019: £83,000).

 

Portfolio Investments

as at 31 October 2020

                                                                                   Market       % of
                                                                                    value
Security                                       Sector                                £'000 portfolio
Diversified Gas & Oil                          Oil & Gas Producers                   2,012 4.9
Randall & Quilter                              Nonlife Insurance                     1,453 3.5
UP Global Sourcing Holdings                    Household Goods & Home Construction   1,406 3.4
Belvoir Lettings                               Real Estate Investment & Services     1,388 3.4
Jarvis Securities                              Financial Services                    1,064 2.6
Bloomsbury Publishing                          Media                                 1,048 2.5
Alumasc Group                                  Construction & Materials                950 2.3
DFS Furniture                                  General Retailers                       925 2.2
Polar Capital Holdings                         Financial Services                      919 2.2
STV                                            Media                                   910 2.2
Devro                                          Food Producers                          901 2.2
Marston's                                      Travel & Leisure                        844 2.0
Tyman                                          Construction & Materials                801 1.9
MTI Wireless Edge                              Electronic & Electrical Equipment       792 1.9
Chesnara                                       Life Insurance                          786 1.9
Castings                                       Industrial Engineering                  775 1.9
Flowtech Fluid Power                           Industrial Engineering                  770 1.9
Numis Corporation                              Financial Services                      742 1.8
Amino Technologies                             Technology Hardware & Equipment         735 1.8
Brewin Dolphin Holdings                        Financial Services                      729 1.8
Strix Group                                    Electronic & Electrical Equipment       673 1.6
Severfield                                     Industrial Engineering                  667 1.6
Clarke (T.)                                    Construction & Materials                664 1.6
Crest Nicholson                                Household Goods & Home Construction     659 1.6
Close Brothers Group                           Banks                                   646 1.6
Epwin Group                                    Construction & Materials                640 1.5
Essentra                                       Support Services                        616 1.5
Premier Miton Group                            Financial Services                      594 1.4
Ramsdens Holdings                              Financial Services                      590 1.4
Vertu Motors                                   General Retailers                       588 1.4
Finncap Group                                  Financial Services                      570 1.4
Brown (N) Group                                General Retailers                       564 1.4
Regional REIT                                  Real Estate Investment Trusts           561 1.4
DX Group                                       Industrial Transportation               555 1.3
Personal Group Holdings                        Nonlife Insurance                       540 1.3
Redde Northgate                                Support Services                        533 1.3
Headlam Group                                  Household Goods & Home Construction     530 1.3
Curtis Banks Group                             Financial Services                      500 1.2
Photo-me International                         Leisure Goods                           490 1.2
Contourglobal                                  Electricity                             484 1.2
Braemar Shipping Services                      Industrial Transportation               472 1.1
Vistry Group                                   Household Goods & Home Construction     469 1.1
Palace Capital                                 Real Estate Investment & Services       455 1.1
Wilmington Group                               Media                                   441 1.1
Appreciate Group                               Financial Services                      378 0.9
Kin & Carta                                    Support Services                        355 0.9
iEnergizer                                     Support Services                        351 0.8
Orchard Funding Group                          Financial Services                      346 0.8
Sabre Insurance          Nonlife Insurance                                         343 0.8        
Centaur Media            Media                                                     340 0.8        
Town Centre Securities   Real Estate Investment Trusts                             336 0.8        
RTC Group                Support Services                                          330 0.8        
Coral Products           General Industrials                                       329 0.8        
Babcock International    Support Services                                          326 0.8        
Portmeirion Group        Personal Care & Other Household Products                  312 0.8        
Hansard Global           Life Insurance                                            310 0.7        
Connect Group            Support Services                                          305 0.7        
Restaurant Group         Travel & Leisure                                          297 0.7        
Bakkavor                 Food Producers                                            292 0.7        
Go-Ahead Group           Travel & Leisure                                          292 0.7        
Saga                     General Retailers                                         276 0.7        
Shoe Zone                General Retailers                                         260 0.6        
RPS Group                Support Services                                          254 0.6        
 2 TheWorks.co.uk        General Retailers                                         248 0.6        
McColl's Retail Group    Food & Drug Retailers                                     240 0.6        
Foxtons Group            Real Estate Investment & Services                         238 0.6        
Hargreaves Services      Support Services                                          200 0.5        
Gattaca                  Support Services                                          176 0.4        
Revolution Bars Group    Travel & Leisure                                          157 0.4        
Elementis                Chemicals                                                 149 0.4        
Kier Group               Construction & Materials                                  112 0.3        
Galliford Try            Construction & Materials                                  107 0.3        
GLI Finance              Financial Services                                        105 0.3        
Titon Holdings           Construction & Materials                                   82 0.2        
Chamberlin               Industrial Engineering                                     50 0.1        
Total Portfolio                                                                 41,347 100.0      
                                                                                                  

 

Shareholder Information

 

Financial calendar

Group's year end 30 April

Quarterly dividends paid July, October, January and April

Annual results announced July

Annual General Meeting September

Group's half year 31 October

Half-Year results announced November

Share prices and performance information

The Company's Ordinary (SDV.L) and Zero Dividend Preference shares issued through SDVP (SDVP.L) are

listed on the London Stock Exchange Main Market.

The net asset values are announced daily to the London Stock Exchange and published monthly via the AIC.

Information about the Group can be obtained on the Chelverton website at  3 www.chelvertonam.com. Any
enquiries can also be e-mailed to  4 cam@chelvertonam.com.

 

Share register enquiries

The register for the Ordinary shares and Zero Dividend Preference shares are maintained by Share
Registrars Limited. In the event of queries regarding your holding, please contact the Registrar on 01252
821390. Changes of name and/or address must be notified in writing to the Registrar.

 

Capital Structure

 

Chelverton UK Dividend Trust PLC ('the Company')

Chelverton UK Dividend Trust PLC was registered on  3 September 2003 with number 0374956. The Company  has
in issue one class  of Ordinary share. In  addition, it has  a wholly owned subsidiary  SDV 2025 ZDP  PLC,
which was registered  on 25  October 2017  with number 11031268,  through which  Zero Dividend  Preference
shares have been issued.

Ordinary shares of 25p each (SDV.L) - 20,850,000 in issue as at 31 October 2020

The Company has only one class of share and this figure represents 100% of the Company's share capital

and voting rights.

Dividends

Holders of Ordinary shares are entitled to dividends.

Capital

On a winding-up  of the  Company, Ordinary  shareholders will be  entitled to  all surplus  assets of  the
Company available after payment of the Company's liabilities including the capital entitlement of the Zero
Dividend Preference shares.

Voting

Each holder, on a show of hands, will have one vote and on a poll will have one vote for each Ordinary

share held.

SDV 2025 ZDP PLC ('SDVP')

Ordinary shares of 100p each ( SDVP.L) - 50,000 in issue (partly paid up as to 25p each)

The ordinary shares are wholly owned by the Company. References to Ordinary shares within this Half-

Yearly Report are to the Ordinary shares of Chelverton UK Dividend Trust PLC.

Capital

Following payment of any liabilities and the capital entitlement to the Zero Dividend Preference

shareholders, ordinary shareholders are entitled to any surplus assets of SDVP.

Voting

Each holder, on a show of hands, will have one vote and on a poll will have one vote for each ordinary
share

held.

Zero Dividend Preference shares of 100p each - 14,500,000 in issue as at 31 October 2020

Dividends

Holders of Zero Dividend Preference shares are not entitled to dividends.

Capital

On a winding  up of SDVP,  after the  satisfaction of prior  ranking creditors and  subject to  sufficient
assets being available, Zero Dividend Preference shareholders are entitled to an amount equal to 100p  per
share increased daily from  8 January 2018  at such compound rate  as will give  an entitlement to  133.18
pence per share at 30 April 2025.

Voting

Each holder of Zero Dividend  Preference shares on a  show of hands will have  one vote at meetings  where
Zero Dividend Preference Shareholders are entitled to vote and on a poll will have one vote for each  Zero
Dividend Preference share held.

Holders of Zero Dividend Preference shares are not entitled to attend, speak or vote at General Meetings
unless the business of the meeting includes a resolution to vary, modify or abrogate the rights attached
to the Zero Dividend Preference shares.

 

Directors and Advisers

Directors Lord Lamont of Lerwick (Chairman)

William van Heesewijk

Howard Myles

Andrew Watkins

Investment Manager Chelverton Asset Management Limited

11 Laura Place

Bath BA2 4BL

Tel: 01225 483030

Secretary and Maitland Administration Services Limited

Registered Office Hamilton Centre

Rodney Way, Chelmsford

Essex CM1 3BY
Tel: 01245 398950

Registrar and Share Registrars Limited

Transfer Office The Courtyard

17 West Street

Farnham

Surrey GU9 7DR

Tel: 01252 821390

 5 www.shareregistrars.uk.com

Auditors Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham GL50 3AT

Brokers Shore Capital

Cassini House

57 St James's Street
London SW1A 1LD

Custodian Jarvis Investment Management Limited

78 Mount Ephraim

Tunbridge Wells

Kent TN4 8BS

══════════════════════════════════════════════════════════════════════════════════════════════════════════

   ISIN:           GB0006615826, GB00BZ7MQD81
   Category Code:  IR
   TIDM:           SDVP
   LEI Code:       213800DAF47EJ2HT4P78
   OAM Categories: 1.2. Half yearly financial reports and audit
                   reports/limited reviews
   Sequence No.:   88779
   EQS News ID:    1151602


    
   End of Announcement EQS News Service

   ══════════════════════════════════════════════════════════════════════════

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