Martin Currie GblPrt - Half-year Report
02/10/2024 09:46
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RNS Number : 6498G Martin Currie Global Portfolio Tst 02 October 2024
Martin Currie Global Portfolio Trust plc
Legal Entity Identifier: 549300RKB85NFVSTBM94
Half-yearly report - six months to 31 July 2024
A copy of the Half-yearly report for the six months to 31 July 2024 has been
submitted to the National Storage Mechanism and will shortly be available for
inspection.
A copy of the Half-yearly report can be downloaded at
www.martincurrieglobal.com (http://www.martincurrieglobal.com) .
FINANCIAL HIGHLIGHTS
Key data Six months ended Six months ended
31 July 2024 31 July 2023
Net asset value per share ('NAV') total return(1,2) 4.4% 8.9%
MSCI All Country World index (benchmark) total return(1) 11.5% 5.5%
Share price total return(1) 5.8% 10.5%
Ongoing charges (as a percentage of shareholders' funds)(4) 0.64% 0.63%
Revenue return per share(5) 1.52p 1.56p
Dividend per share 1.80p 1.80p
Past performance is not a guide to future returns. All returns are total
returns unless otherwise stated.
Source: Martin Currie Investment Management.
(1)Total return is the combined effect of the rise and fall in the share
price, net asset value or benchmark together with any dividend paid. See the
Half-yearly report for more details on Alternative Performance Measures.
(2)The net asset value per share total return is calculated using the cum
income net asset value with dividends reinvested on the ex-dividend date. This
is an Alternative Performance Measure, see the Half-yearly report for more
details.
(3)The benchmark with effect from 1 February 2020 is the MSCI All Country
World index. Prior to this, the benchmark was the FTSE World index to 31
January 2020. Prior to this, the benchmark was the FTSE All-Share to 31 May
2011.
(4)Ongoing charges (as a percentage of shareholders' funds) are calculated
using average net assets over the period. The ongoing charges figure has been
calculated in line with the Association of Investment Companies ('AIC')
recommended methodology. This is an Alternative Performance Measure, see the
Half-yearly report for more details.
(5)For details of calculation, refer to note 3.
INTERIM MANAGEMENT REPORT
CHAIR'S STATEMENT
Dear shareholder,
Investment Performance
The Company's net asset value total return for the six months under review was
+4.4%. This lagged the return of our benchmark index, which was +11.5%. Our
investment manager is of course focused on longer-term performance and
investment in companies with robust earnings and prospects of superior
long-term growth, by understanding fundamental changes and trends in economies
and businesses. The resulting portfolio is a focused list of companies and it
differs materially from the make up of the benchmark index. As set out in the
Manager's review, a small number of holdings in the portfolio were responsible
for the underperformance against the benchmark index and the majority of the
portfolio continues to perform well at the earnings level.
However, equity investments are best made for the long term. This year is the
25th anniversary of our Company in its present form. Over that period the
share price is up 6.6 times on a total return basis (as shown by the chart on
page 2 of the Half-yearly report), a compound return of 8.3 percent per annum.
Income and dividends
Net revenue earnings per share for the six months amounted to 1.52 pence per
share. As we have set out in recent reports to shareholders, capital growth is
the primary focus of the investment manager and the investment strategy is not
constrained by any income target but, recognising the importance of dividends
for many shareholders, the Board intends to maintain the recent level of
distributions when it is prudent to do so. Dividends have historically been
paid quarterly and in recent years the Company has paid three interim
dividends of 0.9 pence per share and a fourth interim dividend of 1.5 pence
per share for each financial year. The Company paid a first interim dividend
for the current financial year of 0.9 pence per share on 26 July 2024 and will
pay a second interim dividend of 0.9 pence per share on 25 October 2024,
maintaining the same level as the last financial year.
Gearing
The Company has an unsecured three-year £10 million sterling revolving loan
facility agreement with The Royal Bank of Scotland International Limited. The
Board recognises the potential for a modest level of gearing to enhance
investment returns over the long term and the full £10m available under the
facility is drawn down. Gearing was 4.0% as at 31 July which the Board
considers prudent in the current environment.
Promoting the Company
The Board and investment manager continue to believe that making investors
aware of the attractions of investing in the Company is an essential part of
our role and we will continue actively and energetically to market the Company
as part of our long-term strategy. Franklin Templeton is very active in
promoting the Company, including regular meetings with major shareholders, a
wide variety of online marketing designed to encourage investors to go to our
interesting and informative website, and regular press coverage of the
portfolio manager's distinctive investment style.
The Company is recognised as a long-term leader in ESG investing and continues
to maintain the highest possible 'Five Globes' from Morningstar. It is also
rated in the top 2% of over 8,000 funds in Morningstar's global large cap
category for ESG. The Board believes that the Company's distinctive approach
to investing is important in stimulating demand for shares in a crowded market
and against a background of continuing focus on the environment, and in
particular climate change, and on social and governance issues.
Demand for investment trusts in general remains lacklustre and we note that a
number of investment trusts have announced initiatives to increase their rates
of share buybacks in response to wide and persistent discounts. In contrast,
we have for some years operated our zero discount policy under which the
Company buys back and issues shares with the objective of providing
shareholders, in normal market conditions, with:
• assurance that the share price is aligned with the prevailing NAV per
share; and
• liquidity, so that investors can buy or sell as many shares as they wish
at a price which is not materially different from the NAV.
During the six months under review, the Company bought back 4,827,873 shares
which were placed in Treasury and no shares were issued. We continued to be
successful in achieving the aims of the zero discount policy, with the share
price generally remaining close to NAV. Shares which are bought back are held
in Treasury rather than cancelled as they can be reissued from Treasury at
lower cost than issuing new shares.
Annual General Meeting
Each resolution at this year's AGM was passed by a large majority and I would
like to thank shareholders for their continuing support.
Outlook
The economic outlook for the world remains difficult to predict. While the
effects of Covid-19 are gradually fading into history, conflicts in Ukraine
and Gaza along with geopolitical tensions elsewhere in the world continue to
be causes for concern. As described in more detail in the Manager's review,
central banks continue to tread a fine line in using interest rates to control
inflation while not stifling growth. The volatility in share prices for a few
days in August of this year clearly illustrated that markets can be highly
unpredictable and susceptible to large swings in prices.
Your Company invests in companies with resilient earnings growth, exposed to
long-term structural growth themes, that have pricing power and solid balance
sheets and which should be well placed to produce superior returns for
shareholders, looking through the noise of price swings in the short term. I
noted in the Annual Report that there will inevitably be challenges along the
way and that equity markets will always be prone to volatility in the face of
bad news. Our investment manager will continue to focus on a portfolio of high
quality, growing companies with the aim of producing long-term performance for
the Company's shareholders and we have every confidence that long-term returns
will be attractive.
Keep in touch
The Company's website at www.martincurrieglobal.com is a comprehensive source
of information and includes regular portfolio manager updates and outlook
videos, monthly performance factsheets and independent research reports. I
recommend that you subscribe for regular email updates that will keep you
abreast of the news on your Company. Please contact me if you have any
questions regarding your Company by email at: ftcosec@franklintempleton.com.
Christopher Metcalfe
Chair
2 October 2024
MANAGER'S REVIEW
The first six months of the financial year have been volatile as far as
markets are concerned and challenging for the performance of the Company.
The market was up +11.5% during the period, whilst the NAV of the Company was
up +4.5% on a total return basis. Whilst we realise that the weak short-term
relative performance will be disappointing to our shareholders, we remain
confident that the exposures that we have in the Company are enabling us to
harness attractive structural growth opportunities across themes that we
favour, as we detail further down in this report. Our long-term investment
approach permits us to look through the shorter-term market gyrations, and
focus our shareholders' capital on what we see as the most promising
opportunities within the quality growth segment of the market. We define this
as companies with the ability to generate high returns on invested capital,
that have solid balance sheets and an attractive growth profile looking into
the future.
During the six months to 31 July, the strong return of the market continued to
be dominated by the Artificial Intelligence ('AI') theme. However, performance
of various stocks within this theme has been more disparate than last year.
The 'Magnificent 7'(1) basket has not produced uniform returns; some stocks
continue to perform strongly during the period, with Nvidia (+89%) remaining
the standout stock, whilst Tesla (+23%), Alphabet (+22%), Meta (+21%), Apple
(+20%) and Amazon (+19%) have also been strong, but to a much lesser extent.
Microsoft was the laggard, being only up by +5% during the period (all data
total returns: see Glossary in the Half-yearly report).
Generally, the market has regarded Big Tech as being the winners of AI, in a
broad-brushed manner, which in our view is an overly simplistic conclusion to
make, given the different exposures, investment needs, and varying degrees of
growth prospects and return prospects that each of the businesses faces. This
explains why we have been focused on only two of the 'Magnificent 7' stocks,
Nvidia and Microsoft, given our focus on growth and returns assessments, and
our valuation discipline. We believe that Nvidia and Microsoft have an
attractive growth profile, and high and rising ROICs over our forecast period,
and valuations remain supportive for both stocks in our view. These two
companies are also best positioned to harness the AI opportunity, and the
structural growth that is likely to come from that seismic thematic shift. We
detailed the reasons for our preference in a report earlier this year,
entitled "The Formidable Two amongst the Magnificent Seven", which our
shareholders can access on the Company's website.
At the sectoral level, the strongest performing sectors during the period were
Technology, up by +17%, Utilities +14%, and Financials +13%, whilst the
weakest sectors were Consumer Staples, up only +4.3%, Materials +6.5% and Real
Estate +6.5%. Some of these sectors, such as Utilities and Financials in
general, remain unattractive to us, given their weak return profiles, low
growth potential, and often challenging business dynamics, both in terms of
competitive pressures, pricing pressures, and disruption risk.
The other focal point for the market during the period has been inflation,
and the implications for interest rates. On the inflation front, the picture
has remained mixed, with inflation showing an element of ongoing stickiness.
This has led the major central banks to delay their intended interest rate
cuts during the first half of the year, with the European Central Bank only
initiating its first cut in June, followed by one more in September, whilst in
the US the Federal Reserve only made its first move in September. The
delay in major central banks moving towards rate cuts is in line with what we
had predicted in our outlook for 2024. Now that major central banks have
shifted into monetary policy easing, the focus will be on the speed of further
rate cuts. The market is now looking for significant cuts in the second half
of this year, and over the next 12 months, which could in itself
create some short-term risks and increased volatility, depending on what the
central banks decide to do. We remain of the view that central banks will be
slower in cutting rates than is generally expected, as they understand only
too well both the imperative of tackling stubborn inflation properly, and
not letting the inflationary fire reignite, given that it is more difficult
to extinguish inflation than it is to reignite growth.
On the growth front, as we write, the market has gone through a fear of hard
landing, as some recent macroeconomic data points have come in weaker, notably
in China and in the US, the two largest economies globally. Consumer spending
has been generally weak across the US, Europe and China, weighing on sentiment
and on economic momentum generally, whilst Industrial Production has also been
generally soft. As we look forward, the leading indicators are pointing to
weak activity generally, both on the manufacturing and services sides, and
across most geographies. We see an ongoing risk of a slowdown in economic
growth over the next 12 months, and maintain our probability of recession at
c.35-40% - i.e. not our central scenario, but not a negligible risk. We note
that some brokers have been increasing their probability of recession in the
past months as well.
This weakening economic growth has been translating into mixed earnings
momentum since the start of the year. Whilst the earnings momentum improved in
the first 3-4 months, this was in large part driven by the technology and
communications sectors. With the most recent results season, earnings momentum
is turning more negative again, with many profit warnings and downgrades,
notably in the consumer sectors. Consensus estimates for overall earnings
growth for the year 2024 might prove to be too optimistic, sitting at c.+10%
at the Global level, +10% at the US level, and +6% in Europe.
Against this backdrop of ongoing sticky inflation, weaker economic momentum
and weakening corporate earnings, we continue to focus on finding companies
with resilient earnings, pricing power, solid balance sheets and exposure to
structural growth prospects.
The final angle to mention is the political and geopolitical uncertainty
across various geographies. The key event this year has been the surprise snap
election in France, which led to a hung parliament.
This brought particular volatility in European equities, notably in the French
market. The UK elections leading to a landslide win by the Labour Party was,
in comparison, a rather predictable outcome. Geopolitical tensions have been
rising, both in the Ukraine-Russia conflict, and in the Middle East. As we
head into the second half of the financial year, the key focus will be the US
elections, with a regain of momentum by the Democrats following the change of
candidate to Kamala Harris. The polls are still too narrow to take a strong
stance on who could emerge as the winning candidate at this stage. This event
could fuel some volatility in markets as we approach election day in November,
especially given that potential implications for economic growth and corporate
profits can be very different, depending on which candidate wins. We will
review this topic in a report later this year, which will be available on the
Company's website to our readers interested in reading more about this.
Below, we review portfolio transactions during the period, and the strongest
and weakest stock performers.
Stock Contributors
Nvidia - Nvidia continued its strong start to 2024, up +89% during the period,
with a series of snippets from the value chain confirming that the
semiconductor chain supporting GPU/AI(2) chips remained tight with demand
exceeding supply. Nvidia reported earnings in the period in which they beat
analysts' forecasts and raised future earnings projections. The annual Nvidia
GTC conference - an AI conference for developers - showcased Nvidia's new
product portfolio with the Grace-Blackwell Superchip which reinforced
investors' perception of its strong lead against competitors, with the gap
widening in our view.
Ferrari - In an otherwise challenging environment, Ferrari was up +17% and
continued to demonstrate real strength in order books and to see very strong
growth in average selling prices driven by model delivery mix. We believe that
this is a function of real pricing power and continued levels of unsatiated
demand. We also see continued acceleration in personalisation of products
driving better financial outcomes for the group, whilst driving increased
engagement with customers.
Mettler Toledo - Mettler delivered a solid performance in the period, up +30%,
as the company resolved the shipping disruptions which affected the results in
the fourth quarter of 2023. This led to returns exceeding the guidance issued
in the first quarter of 2024 and a slight upward revision to its full year
guidance. Despite maintaining a cautious stance regarding the demand
environment, particularly in China which remains a significant challenge, the
company's new product launches across the portfolio have been well-received.
As a result, there is cautious optimism despite the company not assuming any
improvement in the underlying market in the second half of the year.
Stock Detractors
Estée Lauder - We continued to see weak performance from Estée Lauder during
the period, down -24%, as excess inventory positions continue to reduce, but
at a slower pace than expected given the weaker end consumer demand in China
in particular. We are also seeing consumer weakness in other key markets
like the US, some of which is market channel related but also largely driven
by a weaker outlook due to interest rate increases and inflationary pressures.
We continue to believe that Estée Lauder is well positioned in luxury
personal care as penetration of key categories increases with access and
income growth.
Sartorius Stedim - Sartorius reported second quarter results in line with
market expectations, although the full year guidance was brought down by 4% on
sales, and 9% on earnings, which weighed on the share price near term, with
the stock down -27% during the period. Sartorius also held its Capital Markets
Day during the period, reiterating unchanged long-term expectations for
low-to-mid teens growth in sales, supported by improving trends in biotech
funding and clinical trials. The long-term outlook for the company remains
intact and the earnings guidance to 2028 was maintained, and our conviction in
the name remains strong.
Illumina - The focus in the period for Illumina was the disposal of Grail,
which occurred sooner than expected. This was taken by the market as a
positive step with Illumina's shares up by +36% since the board approval of
the spin-off of Grail on 3 June, although the stock was still down -15% over
the 6-month period we are reviewing. In addition, Illumina made a small
acquisition of Fluent Biosciences, a developer of emerging single-cell
technology that eliminates the need for complex instrumentation that would be
used in combination with sequencing. This is not material financially but is a
positive move strategically. The company also delivered a strong set of
results, beating consensus estimates on sales and EPS(3) and reiterating the
flat expectation for full year growth.
Portfolio activity
In the half year period, we initiated new positions in the listed private
equity group, Partners Group, the biopharma company Novo Nordisk, and the
semiconductor equipment company BE Semiconductors ('BESI'). On the other side
we sold out of Nike and Adobe.
We see favourable industry dynamics within private asset managers, with a
strong growth profile from increasing wealth and high barriers to entry.
Partners Group is a high-quality middle market private asset manager that is
well placed to benefit from the secular trend we foresee in the private equity
space, given the company's robust investment approach, consistent track record
and a hard-to-replicate product offering that appeals to both large
institutional investors and private wealth customers. Partners Group has been
growing its assets under management at 10-15% per year and has a ROIC(3) of
over 30%.
Novo Nordisk is a pure-play organic research & development biopharma
company focused on diabetes (Insulin & GLP-1s(3)), obesity (GLP-1s) and
'Bio-pharma' (mostly haemophilia). Diabetes is a structural growth category
which has a stable, low competition market structure in insulin (21% of sales)
& diabetes GLP-1's (53% of sales) because of three factors: (i)
Manufacturing scale, (ii) Net price discounts and (iii) intellectual property
protection (until 2031). Obesity (18% of sales) will, with high probability,
be the largest drug category of all time by 2030. It is expected to provide
substantial growth but the market structure will be less attractive due to
limited patent protection resulting in short product cycles, and threats from
new entrants. Novo Nordisk is expected to deliver sales growth ahead of the
peer group, with industry leading margins.
BESI, a leader in semiconductor packaging technology, is a beneficiary of
trends such as the ongoing need for miniaturisation despite the physical
challenges of doing so. Next generation semiconductor designs are gaining
traction with Intel, TSMC and Samsung, who are all investing materially more
into semiconductor packaging after decades of neglect. The apex of this
opportunity centres on die-to-wafer hybrid bonding - where we believe that
BESI has a multiyear head-start, and is ahead of competition. We expect hybrid
bonding to progress from 0% of sales to over 50% of the BESI business in the
long term. Key applications centre on computing, high bandwidth memory, and
smartphone applications. We also expect that the hybrid bonding business will
be significantly accretive to earnings. Following weak results in the second
quarter of 2024 due to shorter term macro issues, we believe the hybrid
bonding opportunity has become relatively de-risked for a range of
applications, and believe therefore it is the right time to enter a position
in the stock.
We exited our position in Adobe due to uncertainty over Adobe's long-term
competitive advantage due to the disruptive threat of generative AI. Adobe's
generative AI product (Firefly) deserves credit, however competitors are
developing advanced solutions that may encroach on Adobe's designer space
going forward. Overall, we believe that Adobe's AI product portfolio is
nascent and still some way away from meaningful monetisation.
Nike's poor recent results led to a significant downgrade of projections for
the 2025 financial year. Projections had already been lowered in the third
quarter of 2023, in large part due to internal issues in our view. The
downgrade is due to below par innovation and overextension of key franchises
(e.g. AF1, Dunks, Pegasus, AJ1, Air) which need revitalization. CEO Jon
Donohue's restructuring by divisions rather than sport categories has failed
and been reversed. The push into higher-margin areas has exposed Nike to new
competition in the wholesale channel and strained partnerships. Our previous
conviction in Nike shifting profitability higher while growing market share
has diminished and our updated target price had limited upside, leading to the
decision to sell the holding.
Thematic opportunities still abound within our three mega-trends
As we look into the remainder of 2024 and beyond, through our 5-10 years' time
horizon, we continue to see many attractive thematic opportunities for long
term investors to harness. We continue to focus on eight mid-term thematic
opportunities, which sit within our three mega-trends of (1) demographic
changes, (2) future of technology and (3) resource scarcity.
These eight mid-term themes are bundled into three broad areas: energy
transition, ageing population and artificial intelligence, where we see
seismic shifts, and a long and supportive investment cycle in each of them. We
have detailed our view on these three seismic thematic shifts in a report
earlier this year, also available on the Company's website. See the chart of
thematic opportunities in the Half-yearly report.
At the same time as focusing on the above thematic opportunities, we also
continue to favour companies with resilient earnings, pricing power, solid
balance sheets and exposure to structural growth opportunities, given the
challenging growth dynamics at the market level in general in our view.
I would like to finish by thanking all our shareholders for their continued
support and confidence, whilst we go through a period of volatility and
challenging short-term performance. I would like to also reiterate our
confidence in our ability to gain exposure to the most attractive quality
growth stocks globally, exposed to long-term structural thematic
opportunities, as a result of our in-depth fundamental research approach, and
structured investment process. As always, I am looking forward to the ongoing
interactions with our shareholders.
Zehrid Osmani
Lead Senior Portfolio Manager, Martin Currie Global Portfolio Trust plc
2 October 2024
(1)The so-called 'Magnificent 7' stocks which are believed to be key
beneficiaries of the growing adoption of AI are Apple, Microsoft, Alphabet,
Amazon, Nvidia, Meta and Tesla.
(2)GPU/AI's are specialised graphics processing units designed to handle the
intensive computation required for artificial intelligence and machine
learning tasks.
(3)See Glossary in Half-yearly report.
(4)GLP-1s are medications that help lower blood sugar levels and promote
weight loss.
PORTFOLIO SUMMARY
By sector
31 July 2024 31 January 2024 MSCI All Country World index %
31 July 2024 MSCI All Country World index % 31 January 2024
Company % Company %
Healthcare 29.2 11.1 22.8 11.4
Information Technology 28.3 24.9 30.8 23.5
Consumer Discretionary 9.9 10.3 12.0 10.8
Industrials 9.7 10.6 12.2 10.6
Financials 8.7 16.1 7.2 16.0
Materials 7.1 4.0 7.7 4.2
Consumer Staples 7.1 6.3 7.3 6.7
Communication Services - 7.6 - 7.5
Energy - 4.4 - 4.5
Utilities - 2.6 - 2.5
Real Estate 2.1 - 2.3
100.0 100.0 100.0 100.0
By asset class
31 July 2024 % 31 January 2024 %
Equities 103.2 103.1
Cash 0.8 0.8
Less borrowings (4.0) (3.9)
100.0 100.0
Portfolio distribution by region
31 July 2024 31 January 2024 MSCI All Country World index %
31 July 2024 MSCI All Country World index % 31 January 2024
Company % Company %
Developed Europe 50.4 14.8 44.4 15.6
North America 46.6 67.2 52.2 66.0
Developed Asia Pacific ex Japan 3.0 2.4 3.4 2.6
Global Emerging Markets - 10.1 - 10.0
Japan - 5.3 - 5.6
Middle East - 0.2 - 0.2
100.0 100.0 100.0 100.0
Largest 10 holdings
31 July 2024 31 July 2024 31 January 2024 31 January 2024
Market value % of total Market value % of total
£000 portfolio £000 portfolio
Nvidia 21,332 8.3 24,357 9.2
Microsoft 15,438 6.0 17,136 6.5
Linde 13,249 5.2 13,818 5.2
ASML Holding 12,853 5.0 14,074 5.3
Ferrari 11,877 4.6 11,792 4.5
Moncler 10,089 3.9 10,341 3.9
Atlas Copco 10,064 3.9 10,576 4.0
Mastercard 10,022 3.9 11,341 4.3
Novo Nordisk 9,545 3.7 - -
L'Oreal 9,493 3.7 10,212 3.9
GOVERNANCE
Risk and mitigation
The principal long-term risks facing the Company are unchanged since the date
of the Annual Report for the year to 31 January 2024, as set out on pages 32
and 33 of that report.
The Company's business model is longstanding and resilient to most of the
short-term operational uncertainties that it faces. The Board believes these
are effectively mitigated by the internal controls established by the Board
and by the AIFM(1) and their combined oversight of the investment manager.
The Company's principal risks and uncertainties are therefore largely
long-term and driven by the inherent uncertainties of investing in global
equity markets. The Board's process seeks to mitigate known risks and to
identify new risks as they emerge. The Board's planned mitigation measures
are described in the most recent Annual Report. However, it is recognised that
the
likelihood and timing of crystallisation of some risks cannot be predicted in
advance and the Board then relies on professional management, effective
systems and communication to mitigate these risks as and when they arise.
The Board identified the following principal risks to the Company in the
Annual Report:
• Sustained investment underperformance
• Material decline in market capitalisation of the
Company
• Loss of s1158-9 tax status
Following the ongoing assessment of the principal and emerging risks facing
the Company, and its current position, the Board is confident that the Company
will be able to continue in operation and meet its liabilities as they fall
due. The Board believes that the processes of internal control that the
Company has adopted and oversight by the AIFM continue to be effective.
Statement of Directors' responsibilities
In accordance with Chapter 4 of the Disclosure and Transparency Rules and to
the best of their knowledge, each director of the Company confirms that the
financial statements have been prepared in accordance with the United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards
and applicable law) and with the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies and Venture Capital Trusts' issued by
the AIC in July 2022.
The directors are satisfied that the financial statements give a true and fair
view of the assets, liabilities, financial position and profit of the Company.
Furthermore, each director certifies that the interim management report
includes an indication of important events that have occurred during the first
six months of the financial year and their impact on the financial statements
together with a description of the principal risks and uncertainties that the
Company faces. In addition, each director of the Company confirms that, with
the exception of management and secretarial fees, directors' fees and
directors' shareholdings, there have been no related party transactions during
the first six months of the financial year.
Going concern status
The Company's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the Chair's
statement and Manager's review.
The financial position of the Company as at 31 July 2024 is shown on the
unaudited condensed statement of financial position. The unaudited statement
of cash flow of the Company is set out below.
In accordance with the 2019 AIC Code of Corporate Governance and the 2018 UK
Corporate Governance Code, the directors have undertaken a rigorous review of
the Company's ability to continue as a going concern.
The Company's assets consist of a diverse portfolio of listed equity shares
which, in most circumstances, are realisable within a very short timescale.
The directors are mindful of the principal and emerging risks disclosed
above.
They have reviewed forecasts for the current and following financial year,
including liabilities arising from the loan facility, and believe that the
Company has adequate financial resources to continue its operational existence
for the foreseeable future and for at least one year from the date of signing
these financial statements. Accordingly, the directors continue to adopt the
going concern basis in preparing these financial statements.
Christopher Metcalfe
Chair
2 October 2024
(1)See Glossary in the Half-yearly report
FINANCIAL REVIEW
UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) Six months ended 31 July 2024 (Unaudited) Six months ended 31 July 2023
Revenue Capital Total Revenue Capital Total
Note £000 £000 £000 £000 £000 £000
Net gains on investments - 11,182 11,182 - 21,115 21,115
Net currency (losses)/gains - (17) (17) - 13 13
Revenue 1,731 - 1,731 1,772 - 1,772
Investment management fee (119) (474) (593) (117) (466) (583)
Other expenses (303) - (303) (237) - (237)
Net return on ordinary activities before finance costs and taxation
1,309 10,691 12,000 1,418 20,662 22,080
Finance costs (69) (274) (343) (35) (141) (176)
Net return on ordinary activities before taxation
1,240 10,417 11,657 1,383 20,521 21,904
Taxation on ordinary activities (196) - (196) (217) - (217)
Net return attributable to shareholders
1,044 10,417 11,461 1,166 20,521 21,687
Net return per Ordinary share 3 1.52p 15.17p 16.69p 1.56p 27.38p 28.94p
The total columns of this statement are the profit and loss accounts of the
Company.
The revenue and capital items are presented in accordance with the Association
of Investment companies ('AIC') Statement of Recommended Practice 2022.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the six months.
The notes below form part of these financial statements.
There is no other comprehensive income and therefore the return attributable
to shareholders is also the total comprehensive income for the period.
UNAUDITED CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) As at 31 July 2024 (Audited) As at 31 January 2024
Note £000 £000 £000 £000
Non-current assets
Investments at fair value through profit or loss
256,571 264,787
Current assets
Trade receivables 392 1,029
Cash and cash equivalents 2,106 1,922
2,498 2,951
Current liabilities
Trade payables (598) (961)
Bank loan (10,000) (10,000)
(10,598) (10,961)
Total net assets 248,471 256,777
Equity
Called up Ordinary share capital 4,934 4,934
Share premium account 11,823 11,823
Capital redemption reserve 11,083 11,083
Capital reserve, of which: 6 219,563 228,307
Realised capital reserve (distributable) 163,024 156,688
Unrealised gains on investments (undistributable) 56,539 71,619
Revenue reserve 1,068 630
Total shareholders' funds 248,471 256,777
Net asset value per Ordinary share 374.2p 360.5p
The notes below form part of these financial statements.
Martin Currie Global Portfolio Trust plc is registered in Scotland, company
number SC192761.
The financial statements were approved by the Board of directors on 2 October
2024 and signed on its behalf by
Christopher Metcalfe
Chair
2 October 2024
UNAUDITED STATEMENT OF CHANGES IN EQUITY
Called up Share Capital
Ordinary premium redemption Capital Revenue
(Unaudited) share capital account reserve reserve reserve Total
Six months ended 31 July 2024 £000 £000 £000 £000 £000 £000
As at 31 January 2024 4,934 11,823 11,083 228,307 630 256,777
Net return attributable to shareholders - - - 10,417 1,044 11,461
Ordinary shares bought back during the period - - - (18,120) - (18,120)
Dividends paid - - - (1,041) (606) (1,647)
As at 31 July 2024 4,934 11,823 11,083 219,563 1,068 248,471
Called up Share Capital
Ordinary premium redemption Capital Revenue
(Unaudited) share capital account reserve reserve reserve Total
Six months ended 31 July 2023 £000 £000 £000 £000 £000 £000
As at 31 January 2023 4,934 11,424 11,083 221,463 864 249,768
Net return attributable to shareholders - - - 20,521 1,166 21,687
Ordinary shares issued during the period - 399 - 1,940 - 2,339
Ordinary shares bought back during the period - - - (6,742) - (6,742)
Dividends paid - - - (1,118) (675) (1,793)
As at 31 July 2023 4,934 11,823 11,083 236,064 1,355 265,259
Called up Share Capital
Ordinary premium redemption Capital Revenue
(Audited) share capital account reserve reserve reserve Total
Year ended 31 January 2024 £000 £000 £000 £000 £000 £000
As at 31 January 2023 4,934 11,424 11,083 221,463 864 249,768
Net return attributable to shareholders - - - 24,327 1,750 26,077
Ordinary shares issued - 399 - 1,940 - 2,339
Ordinary shares bought back during the year - - - (18,305) - (18,305)
Dividends paid - - - (1,118) (1,984) (3,102)
As at 31 January 2024 4,934 11,823 11,083 228,307 630 256,777
The notes below form part of these financial statements.
UNAUDITED STATEMENT OF CASH FLOW
(Unaudited) (Unaudited)
Six months ended Six months ended
31 July 2024 31 July 2023
£000 £000 £000 £000
Cash flows from operating activities
Net return on ordinary activities before taxation 11,657 21,904
Adjustments for:
Gains on investments (11,182) (21,115)
Finance costs 343 176
Dividend income recognised (1,705) (1,757)
Interest income recognised (26) (15)
Decrease/(increase) in receivables 48 (15)
Increase/(decrease) in payables 29 (59)
Overseas withholding tax suffered (196) (217)
Net cash outflows from operations (1,032) (1,098)
Dividends received 1,602 1,694
Interest received 26 15
Overseas withholding tax recovered 37 12
Net cash flows from operating activities 633 623
Cash flows from investing activities
Purchases of investments (48,684) (49,045)
Sales of investments 68,737 56,033
Net cash flows from investing activities 20,053 6,988
Cash flows from financing activities
Repurchase of Ordinary share capital (18,515) (7,267)
Shares issued for cash - 2,339
Equity dividends paid (1,647) (1,793)
Interest and fees paid on bank loan (340) (176)
Net cash flows from financing activities (20,502) (6,897)
Net increase in cash and cash equivalents 184 714
Cash and cash equivalents at the start of the period 1,922 1,256
Cash and cash equivalents at the end of the period 2,306 1,970
The notes below form part of these financial statements.
Analysis of debt
(Audited) (Unaudited)
As at 31 January 2024 Cash flows As at 31 July 2024
£000 £000 £000
Cash at bank 1,922 184 2,106
Bank loan (10,000) - (10,000)
Net debt (8,078) 184 (7,894)
(Audited) (Unaudited)
As at 31 January 2023 Cash flows As at 31 July 2023
£000 £000 £000
Cash at bank 1,256 714 1,970
Bank loan (30,000) - (30,000)
Net debt (28,744) 714 (28,030)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Note 1: Financial statements
The financial information contained in this half-yearly report does not
constitute statutory accounts as defined in s434 (3) of the Companies Act
2006. The financial information for the six months ended 31 July 2023 has not
been audited or reviewed by the Company's independent auditors.
The information for the year ended 31 January 2024 has been extracted from the
latest published audited financial statements which have been filed with the
Registrar of Companies. The report of the auditors on those accounts contained
no qualification or statement under s498 (2), (3) or (4) of the Companies Act
2006.
Note 2: Accounting policies
For the period ended 31 July 2024 (and the year ended 31 January 2024), the
Company is applying the Financial Reporting Standard applicable in the UK and
Republic of Ireland ('FRS 102'), which forms part of the revised Generally
Accepted Accounting Practice ('UK GAAP') issued by the Financial Reporting
Council ('FRC').
These condensed financial statements have been prepared on a going concern
basis in accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority, FRS 102 issued by the FRC in September 2015, FRS
104 Interim Financial Reporting issued by the FRC in March 2015 and the
revised Statement of Recommended Practice "Financial Statements of Investment
Trust Companies and Venture Capital Trusts" ('SORP') issued by the AIC in July
2022.
The accounting policies applied for the condensed set of financial statements
are set out in the Company's Annual Report for the year ended 31 January 2024.
Note 3: Net returns per Ordinary share
(Unaudited) (Unaudited)
Six months ended 31 July 2024 Six months ended 31 July 2023
£000 £000
Revenue return 1,044 1,166
Capital return 10,417 20,521
Total return 11,461 21,687
Weighted average number of shares in issue during the period 68,678,926 74,938,623
Revenue return per share 1.52p 1.56p
Capital return per share 15.17p 27.38p
Total return per share 16.69p 28.94p
Note 4: Dividends
(Unaudited) (Unaudited)
Six months ended 31 July 2024 Six months ended 31 July 2023
£000 £000
Year ended 31 January 2023 - fourth interim dividend of 1.50p (2023: 1.50p) 1,041 1,118
Year ended 31 January 2025 - first interim dividend of 0.90p (2024: 0.90p) 606 675
1,647 1,793
The fourth interim dividend for the years ended 31 January 2024 and 31 January
2023 have been allocated to the realised capital reserve.
The first interim dividend for the years ended 31 January 2025 and 31 January
2024 have been allocated to the revenue reserve.
Note 5: Ordinary shares of 5p
(Unaudited) (Unaudited)
Six months to 31 July 2024 Six months to 31 July 2023
Number of shares £000 Number of shares £000
Ordinary shares of 5p
Ordinary shares in issue at the beginning of the period
71,228,807 3,560 76,105,554 3,804
Ordinary shares issued from Treasury during the period
- - 675,000 34
Ordinary shares bought back to Treasury during the period
(4,827,873) (241) (2,025,924) (101)
Ordinary shares in issue at end of the period 66,400,934 3,319 74,754,630 3,737
(Unaudited) (Unaudited)
Six months ended 31 July 2024 Six months ended 31 July 2023
Number of shares £000 Number of shares £000
Treasury shares (Ordinary shares of 5p)
Treasury shares in issue at the beginning of the period
27,447,100 1,374 22,570,353 1,130
Ordinary shares issued from Treasury during the period
- - (675,000) (34)
Ordinary shares bought back to Treasury during the period
4,827,873 241 2,025,924 101
Treasury shares in issue at end of the period 32,274,973 1,615 23,921,277 1,197
Total Ordinary shares in issue and in Treasury at the period end
98,675,907 4,934 98,675,907 4,934
Note 6: Capital reserve
Realised capital reserve Unrealised gains on investments Total capital reserve
£000 £000 £000
As at 31 January 2024 156,688 71,619 228,307
Net gains on realisation of investments at fair value 26,262 - 26,262
Movement in fair value of investments - (15,080) (15,080)
Realised currency losses during the period (17) - (17)
Cost of shares bought back into Treasury (18,120) - (18,120)
Capital expenses (748) - (748)
Dividends paid (1,041) - (1,041)
As at 31 July 2024 163,024 56,539 219,563
Realised capital reserve Unrealised gains on investments Total capital reserve
£000 £000 £000
As at 31 January 2023 154,191 67,292 221,463
Net gains on realisation of investments at fair value 21,284 - 21,284
Movement in fair value of investments - 4,347 4,347
Proceeds from the issue of shares from Treasury 1,940 - 1,940
Cost of shares bought back into Treasury (18,305) - (18,305)
Capital expenses (1,304) - (1,304)
Dividends paid (1,118) - (1,118)
As at 31 January 2024 156,688 71,619 228,307
Note 7: Fair value hierarchy
Under FRS 102, the Company is required to classify fair value measurements
using a fair value hierarchy that reflects the significance of the inputs used
in making the measurements. The fair value hierarchy has the following levels:
- Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities;
- Level 2: other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayments, credit risk, etc); and
- Level 3: significant unobservable input (including the Company's own
assumptions in determining the fair value of investments).
The financial assets measured at fair value through profit and loss are
grouped into the fair value hierarchy as follows:
(Unaudited) (Audited) (Unaudited)
Six months ended 31 July 2024 Year ended 31 January 2024 Six months ended 31 July 2023
£000 £000 £000
Level 1 256,571 264,787 293,171
Net fair value 256,571 264,787 293,171
Note 8: Post balance sheet events
Between 1 August and 27 September 2024, the Company bought back into Treasury
1,147,710 ordinary shares at an average price of 361.9p per share.
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