REG - Gabelli Merger Plus+ Gabelli Merger -GMPP - Half-year Report
28/03/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250328:nRSb5704Ca&default-theme=true
RNS Number : 5704C Gabelli Merger Plus+ Trust PLC 28 March 2025
Gabelli Merger Plus+ Trust Plc
Half-Yearly Financial Report for the six months ended 31 December 2024
"We invest like owners. We invest primarily in the equity securities of cash
generating, franchise companies, selling in the public market at a significant
discount to our appraisal of their Private Market Value. We define Private
Market Value (PMV) as the value an informed industrialist would pay to
purchase assets with similar characteristics in a privately negotiated
transaction. We measure PMV by scrutinizing on- and off-balance sheet assets
and liabilities and free cash flow. As a reference check, we examine
valuations and merger transactions in the public domain. Our investment
objective is to achieve a long-term annualised return in excess of inflation
for our clients."
Our Investment Approach
Continuing a Value Investing Legacy
● Our Firm's approach is founded on the principles of Graham
& Dodd
● Furthered academically by our founder Mario Gabelli
● Establish values to determine margin of safety
● Invest within circle of competence
● Invest like owners of businesses
● Intensive proprietary research culture
● Focused and rigorous independent fundamental analysis in
valuing the underlying business using publicly available information including
data from customers, competitors, products and new technologies
● Announcement of a merger with definitive terms starts the
process
● Merger investing benefits from the Gabelli core fundamental
approach by establishing real world value before initiating positions
Gabelli Merger Plus + Trust Plc's primary investment objective is to seek to
generate total return consisting of capital appreciation and current income
for the long term.
Overview
Portfolio summary
Largest Portfolio Security holdings (excluding cash and cash equivalents)
See Note 19 for a detailed breakdown of portfolio holdings
(Unaudited)
As at 31 December 2024
Security(1) Offsetting % of total Market Offsetting % of total
short position(2)
portfolio(6)
value(4)
market
portfolio(3)
(gross)
$000
value(5)
(net)
$000
U.S. Treasury Bill 18 Feb 2025 6.9 4,475 6.9
Hess Corp Chevron Corp 5.8 3,755 (4,194) (0.7)
Kellanova 4.9 3,194 4.9
Hashicorp Inc 4.7 3,034 4.7
U.S. Treasury Bill 6 Feb 2025 3.9 2,490 3.9
--------------- --------------- --------------- ---------------
Amedisys Inc 3.2 2,087 3.2
Frontier Communications Parent Inc 3.2 2,084 3.2
Smartsheet Inc 3.2 2,037 3.2
Juniper Networks Inc 3.1 2,030 3.1
U.S. Treasury Bill 27 Mar 2025 3.1 1,980 3.1
--------------- --------------- --------------- ---------------
Summit Materials Inc 2.6 1,650 2.6
Arcadium Lithium plc 2.4 1,526 2.4
U.S. Treasury Bill 20 Feb 2025 2.3 1,491 2.3
U.S. Treasury Bill 6 Mar 2025 2.3 1,489 2.3
United States Steel Corp 2.3 1,485 2.3
--------------- --------------- --------------- ---------------
Allete Inc 2.3 1,458 2.3
Endeavor Group Holdings 2.2 1,449 2.2
Barnes Group Inc 2.2 1,408 2.2
Infinera Corp Nokia Corp 2.1 1,328 (438) 1.4
Albertsons Cos Inc 1.7 1,130 1.7
--------------- --------------- --------------- ---------------
Subtotal Top 20 Holdings 64.4 41,580 (4,632) 57.2
Other holdings(7) 35.6 35,380 (7,738) 42.8
--------------- --------------- --------------- ---------------
Total holdings 100.0 76,960 (12,370) 100.0
========= ========= ========= =========
1 Long position.
2 Offsetting position taken, based on the acquirer of the security
when acquirer stock is being offered in whole, or in part, to finance the
transaction.
3 Represents the total position value (market value plus the
offsetting market value) as a percentage of the total portfolio value.
4 Market value of the long position.
5 Market value of the offsetting position.
6 Represents the market value as a percentage of the total portfolio
value.
7 Including derivatives.
Portfolio allocation %
Equities 79.6
Fixed income 19.5
Derivatives (contracts for difference) 0.9
---------------
Total 100.0
=========
Financial highlights
Performance
(Unaudited) (Unaudited) (Audited)
As at
As at
As at
31 December 2024
31 December 2023
30 June 2024
Net asset value (cum income)(1,2) $10.14 $10.43 $10.04
Net asset value per share (ex income)(3) $10.21 $10.76 $10.12
Dividends per share paid during the period(2,4) $0.16 $0.12 $0.48
Share price(5) $8.00 $8.50 $9.00
Discount to Net Asset Value(6,7) 21.09% 18.17% 10.36%
========= ========= =========
TOTAL RETURNS (Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 224
Net asset value per share(7,8) 2.65% 3.31% 3.14%
U.S. 3-month Treasury Bill Index 4.34% 5.35% 5.36%
Share price(7,9) (9.08)% (4.30)% 5.39%
========= ========= =========
Income
Per Share Returns (Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
Revenue return per share $0.01 ($0.05) $0.12
Capital return per share $0.24 $0.38 $0.17
Total return per share $0.25 $0.32 $0.29
========= ========= =========
Ongoing charges(7,10)
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
Annualised ongoing charges 2.09% 2.01% 2.01%
========= ========= =========
Source: Portfolio Manager (Gabelli Funds, LLC), verified by the Administrator
(State Street Bank and Trust Company).
1 Net Asset Value (NAV) includes balance sheet adjustments resulting
from the Company now being a close company. Such adjustments include deferred
tax assets as per Note 8.
2 Cum-income net asset value includes all income, less the value of
any dividends paid together with the value of any dividends which have been
declared and marked ex dividend but not yet paid. Where the cum-income NAV is
lower than the ex-income NAV, this reflects the revenue deficit.
3 Ex-Income NAV: Ex-income net asset value is the Cum-income NAV
excluding net income (net income being all income, less the value of any
dividends paid together with the value of any dividends which have been
declared and marked ex-dividend but not yet paid).
4 The dividend paid during the half year ended 31 December 2024 was
the dividend for the fiscal year ended 30 June 2024. The Board has continued
to review and assess the Company's distribution policy.
5 See Chairman's Statement for discussion regarding the Specialist
Fund Segment of the London Stock Exchange, on which the Company's Ordinary
Shares trade.
6 The amount by which the market price per share is lower than the
cum-income NAV per share, expressed as a percentage of the cum-income NAV per
share. Figures are inclusive of income and dividends paid, in line with the
Association of Investment Companies (the "AIC") guidance.
7 These key performance indicators are alternative performance
measures. Further information regarding the use of alternative performance
measures can be found on page 11 and 12 in the Annual Report and Financial
Statements as at 30 June 2024.
8 Net Asset Value per ordinary share, total return represents the
theoretical return on NAV per ordinary share, assuming that dividends paid to
shareholders were reinvested at the NAV per ordinary share at the close of
business on the day shares were quoted ex-dividend.
9 Share Price Total Return represents the theoretical return to a
shareholder, on a closing market price basis, assuming that all dividends
received were reinvested, without transaction costs, into the ordinary shares
of the Company at the close of business on the day the shares were quoted
ex-dividend.
10 Ongoing Charges are operating expenses incurred in the running of the
Company, whether charged to revenue or capital, but excluding financing costs.
These are expressed as a percentage of the average net asset value during the
period and this is calculated in accordance with guidance issued by the
Association of Investment Companies.
Chairman's Statement
Introduction
Gabelli Merger Plus+ Trust Plc (the "Company") was incorporated in England and
Wales on 28 April 2017. Its shares trade under the symbol "GMP" and have been
listed on the Specialist Fund Segment of the Main Market of the London Stock
Exchange and the Official List of the International Stock Exchange since 19
July 2017.
The Company's objective is to generate total returns, consisting of capital
appreciation and current income. The Company's secondary objective is the
protection of capital, uncorrelated to equity and fixed income markets. The
Company has broad and flexible investment authority and, accordingly, it may
at any time have investments in other related or unrelated areas.
The Company is a close company and no longer avails itself of investment trust
status, as per Section 1158 of the Corporation Tax Act 2010 ("S1158").
Furthermore, the Company is classified as an investment company and
accordingly is a member of the Association of Investment Companies ("AIC").
After consultation with minority shareholders, the Company determined that
continued adherence to the AIC's SORP is in the best interests of the
investment company despite no longer remaining S1158 eligible. The largest
shareholder, Associated Capital Group, Inc., is intent on continuing with the
listed vehicle and growing value in the markets in accordance with the
investment policy.
The Deferred Tax Asset ("DTA") increases the book value of the standard
portfolio NAV from $9.79 per share to $10.14 per share as of 31 December 2024.
The DTA is expected to preserve tax advantages into the medium term. The Board
believes there is currently no material NAV impact to the Company and its
shareholders from the loss of S1158 status.
The Company's Ordinary Shares trade on the Specialist Fund Segment of the
London Stock Exchange. Secondary liquidity for the Company's Ordinary Shares
is available via the trading system known as SETSqx, which is an auction based
trading process. It is quote based throughout the day, until the auctions at
U.K. times: 8am, 9am, 11am, 2pm and 4:35pm, when buyers and sellers can cross
orders with each other. As there is no market maker, absent a "match" in
prices, a trade would not occur. The closing market price is based on the last
actual trade on the day or from any previous trading session when the last
trade occurred. Thus there would have to be a match at the prescribed auction
times to "meet" on price and quantity for an execution to occur.
The 7½% discount management mentioned in the offering prospectus is not a
policy and the Board instead reviews overall conditions on a regular and
frequent basis.
The Board is always receptive to feedback and welcomes any questions and
comments from shareholders.
Performance
The Company's Net Asset Value ("NAV") at 31 December 2024 was $10.14 per
share, generating a total return of 2.65% for the six months ended 31 December
2024.
The Company has provided a total return of 39.51% since issuance. This
includes the costs of the issue resulting in a starting NAV of $9.92 per share
compared with the issue price of $10.00 per share, and initial closing market
price of $10.15 per share.
Expansion of Operating Investment Activities
On 29 October 2024 the Company acquired its affiliated UK investment manager,
Gabelli Securities International UK Limited ("GSIL UK"), a limited company
organised and existing under the laws of England and Wales. The transaction
was financed through the issuance of 96,493 ordinary shares at a $0.50 per
share premium to the Company's Net Asset Value. The Company's shareholders
benefit from the increase to the Company's cash and investments of
approximately $1 million as it absorbed GSIL UK's balance sheet in the
exchange. Accordingly, the Company's operating results for the period July 1,
2024 to December 31, 2024 include the results of GSIL UK from the date of
acquisition through the end of the period. The acquisition positions the
Company to increase sources of income, allowing for both self-management and
the broadening of services to affiliated and third parties. Further, Gabelli
Merger Plus(+) Trust Plc will be rebranded as Gabelli Merchant Partners Plc,
reflecting the Company's investment approach and strategic direction. The
customary filings for the name change were submitted in March 2025, with the
transition expected to be completed in due course.
Dividend
Through 31 December 2024 the Company paid dividends of $3.03 per Ordinary
Share, totaling $28.7 million:
Year Per share ($) Total ($ million)
2018 0.59 6.1 million
2019 0.48 5.0 million
2020 0.48 5.0 million
2021 0.48 4.9 million
2022 0.24 2.5 million
2023 0.24 1.6 million
2024 0.52 1.1 million
--------------- ---------------
Total 3.03 28.7 million
========= =========
Subsequently, in March 2025 the Company paid an interim dividend of $0.02 per
ordinary share with ex-date 6 March and payment date 21 March. This dividend
was the 24th dividend made since listing and demonstrates the Company's
ongoing commitment to distributing value to shareholders in the form of cash.
The Company will make dividend payments at the discretion of the Board,
dividend consideration includes revenue per share for the period of
calculation, prior to the impact of any non-cash deferred taxes.
Loyalty Programme
The Company has implemented a Loyalty Programme to incentivise long-term share
ownership. The Loyalty Programme is open to all shareholders who are entered
in the Loyalty Register, a separate register to allow a shareholder to
increase its voting power after holding shares for a continuous period of at
least five years. Each shareholder so registered will be entitled to subscribe
for one Special Voting Loyalty Share in respect of each Ordinary Share held.
These shares can also be used as a form of consideration when entering into
one or more agreements to acquire operating businesses in accordance with the
Investment Policy.
As of 31 December 2024, Associated Capital Group, Inc. is subscribed for
6,179,100 Special Voting Loyalty Shares, the maximum amount it was permitted
under the Loyalty Programme.
Outlook
We are enthusiastic for the year ahead.
It may be difficult to believe, but the world is now five years removed from
the start of the COVID-19 pandemic. Although still circulating, concerns about
the lethality of the virus have faded, along with the inflationary impact
triggered by its supply chain disruptions and the stimulative response of
governments around the world. At last reading, U.S. inflation was 2.75%, well
below the 2022/23 averages of 8.3%/4.1%, but lingering above the Federal
Reserve's comfort zone. The Fed Funds Rate's march from the zero-bound to a
high of 5.5% (now 4.25%-4.50%) has apparently done little to curtail GDP
growth (last 3.1%) or employment (unemployment rate of 4.2% vs 3.9% one year
ago). This stands in stark contrast to history, where nine of the last twelve
Fed tightening cycles resulted in recession. With data indicating a
potentially higher theoretical neutral, or R* rate (i.e. the interest rate
that neither contracts nor expands the economy), the Fed has pivoted to fewer
rate cuts in 2025.
Around the world, globalism is being replaced by nationalism, a preference for
capital and intellectual property is giving way to labor and hard assets, and
questions about the impact of climate and technological change abound.
Americans voted to disrupt entrenched patterns on November 5, and that they
may receive. For all the uncertainty about how the next president might
govern, Trump 1.0 presented a fairly detailed blueprint: ask for the world,
but ultimately compromise. That will have to be the case as Congress gets down
to the serious business of addressing our $2 trillion annual budget deficit
and $35 trillion national debt, while extending many of the tax cuts from the
Tax Cuts and Jobs Act of 2017. Will greed for power lead Republicans to
overstep in 2025, only to be turned about by a potentially reinvigorated
Democratic Party in 2026? Would the benefits to the economy be worth it?
Again, maybe. Observations suggest a slow, but not recessionary, U.S. economy,
and a tired but remarkably resilient consumer. In our view, the biggest risk
to the economy (outside of geopolitical shocks) is a resurgence of inflation.
On that front, we expect to witness a battle between the disinflationary
forces of deregulation and government cost efficiencies (think DOGE) and the
inflationary forces of tariffs, tax cuts, and deportation.
With President Trump once again taking up residency at 1600 Pennsylvania
Avenue, merger arbitrage investors have been able to breathe a sigh of relief.
The Biden administration's strict stance on antitrust enforcement has caused
headaches for investors but, with recent changes to the U.S. antitrust
watchdogs, we expect to see a resurgence of robust deal activity following
several months of pent-up demand. Key drivers of accelerating M&A activity
in the coming years include the need to compete on a global basis, acquire new
technologies and expand into emerging areas. We believe 2025 is setting up to
be a promising and exciting time to be investing in global mergers and
acquisitions, with strong tailwinds likely to propel new deal announcements in
the months ahead.
In the current environment, it is strategically advantageous to allocate a
portion of the Company's assets to U.S. Treasury bills due to the numerous
benefits they offer. Treasuries stand out for their ability to provide
competitive returns when compared to other fixed-income securities and given
their short-term nature allows for frequent reinvestment at prevailing
interest rates, potentially maximizing the overall yield of the portfolio over
time. Moreover, Treasuries are highly liquid and can be easily bought and sold
without significantly affecting their value. This liquidity not only enhances
the flexibility of the Company's investment strategy but also allows for swift
adjustments in response to changing market conditions.
We extend a welcome to all our shareholders for the next phase of exciting
growth.
John Birch Marc Gabelli
Co-Chairman Co-Chairman
28 March 2025
Interim Management Report and Responsibility Statement
We share this 1st Half Report to Shareholders, encompassing the period from
July 2024 through December 2024, and note certain developments post calendar
year end. This period included several important updates for the Gabelli
Merger Plus+ Trust Plc (the "Company") as included in the Chairman's
Statement, which include:
● On 29 October 2024 the Company acquired its affiliated UK
investment manager, GSIL UK, through the issuance of 96,493 new ordinary
shares at a $0.50 per share premium to the Company's Net Asset Value.
● On 22 November 2024 the Company paid the full-year dividend in
respect of the financial year ended 30 June 2024 of $0.16 per ordinary share.
● On 27 February 2025 the Board declared the first interim
dividend for the financial year ended 30 June 2025 of $0.02 per ordinary
share. The dividend was paid on 21 March 2025 to shareholders of record on 7
March 2025.
● The Company has elected continued adherence to the AIC's SORP.
Although no longer an investment trust, the Company has elected to continue to
prepare the financial statements on a basis compliant with the recommendations
of the SORP. The SORP is issued by the AIC and it sets out recommendations,
intended to represent current best practice, on the form and contents of the
financial statements of Investment Companies. Investment Companies include
investment trust companies that have been, currently are, or are directing its
affairs so as to enable it to obtain or retain approval under Section 1158.
Although the Company no longer meets the requirements of section 1158 to be an
investment trust, it continues to conduct its affairs as an investment
company.
Gabelli Merger Plus+ Trust Plc ("GMP") seeks to achieve long-term total return
from capital appreciation and income utilising the Gabelli Private Market
Value with a Catalyst(TM) methodology, primarily investing in the securities
of businesses undergoing some form of strategic change where there are
substantial disconnects between market price and business value, and, where
catalysts exist that may narrow these discounts for the benefit of
shareholders. GMP objectives, operating within this highly specialised value
based catalyst event driven merger arbitrage discipline, are to compound and
preserve shareholder wealth over time while remaining non-correlated to the
broad equity and fixed income markets.
The Investment Methodology provides additional details on our investment
process and how we find value in an effort to achieve, over the long term,
superior risk adjusted annual returns above inflation for shareholders.
On behalf of the Board of Directors, we thank investors for entrusting a
portion of their assets with the Gabelli Merger Plus+ Trust ("GMP"). We
appreciate your confidence in the Gabelli long-term oriented investment
method.
The Portfolio Manager's Review provides details of the important events that
have occurred during the period and their impact on the financial statements.
Company Considerations
Investors should note the difference between book and accounting value.
Deferred tax assets ("DTA") can be used to offset certain taxes as applicable
in the United Kingdom. And as such, based on a continuing level of activity
the DTA are expected to be utilised resulting in the company not paying UK tax
for this year. As a result of Associated Capital Group Inc's ownership of
92.7% of shares in issue, the Company is a consolidated subsidiary for
Associated Capital Group Inc.'s financial reporting purposes. As such,
activities of the Company and of Associated Capital Group Inc. could be deemed
related parties for purposes of this disclosure. Investors should note that as
a close company with Associated Capital Group Inc. controlling greater than
90% of shares Associated Capital Group Inc. may be able to ensure the approval
of certain shareholder resolutions.
The Company is committed to delivering its investment programme for the long
term and Directors, together with management are in the process of examining
alternatives to minimise taxes, costs and expenses for its Shareholders.
Principal Risks and Uncertainties
The principal risks and uncertainties faced by the Company fall into the
following broad categories: investment portfolio; global macro events;
operational; market and share price; financial; corporate governance and
regulatory compliance; taxation; emerging and geopolitical risks. The global
macro event category includes specific market and operational risks associated
with the geopolitical dynamics in the Ukraine and Middle East which continue
to cause uncertainty and disruption across global economies and markets.
Information on each of these identified risk areas, including mitigating
actions taken by the Company, was provided on pages 13 to 14 in the Strategic
Report in the Company's Annual Report and Accounts for the year ended 30 June
2024.
Related Party Disclosure and Transactions
During the first six months of the current financial year, other than fees
payable by the Company in the ordinary course of business, there have been no
material transactions with related parties which have materially affected the
financial position or the performance of the Company.
Going Concern
The Board have closely monitored the impact of the various risks and
uncertainties impacting the Company. Those impacts and related continuing
uncertainty have short-and potentially medium-term implications for the
Company's investment strategy. Additionally, the Board is monitoring the
period ahead on the basis of the Company no longer having investment trust
status and its implications on the Company's investment return profile over
the longer term. In context, the Board continuously monitors the Company's
investment portfolio, liquidity and gearing, along with levels of market
activity, to appropriately minimise and mitigate consequential risks to
capital and future income such as geopolitical risks, financial risks etc.
Taking these factors into account, the Directors confirm that they have a
reasonable expectation that the Company will continue to operate and meet its
expenses as they fall due. For these reasons, the Directors consider there is
reasonable evidence to continue to adopt the going concern basis in preparing
the accounts as at 31 December 2024.
Directors' Responsibility Statement
The Directors confirm to the best of their knowledge that:
● the condensed set of financial statements contained within the
half yearly financial report has been prepared in accordance with applicable
International Accounting Standard 34 - 'Interim Financial Reporting' (IFS) as
contained in UK-adopted international accounting standards; and
● the Interim Management Report, together with the Portfolio
Manager's Review, include a fair review of the information required by 4.2.7R
and 4.2.8R of the Disclosure Guidance and Transparency Rules.
This half yearly financial report has not been audited or reviewed by the
Company's auditors.
The half yearly financial report was approved by the Board on 28 March 2025
and the above responsibility statement was signed on its behalf by the
Co-Chairmen.
JOHN BIRCH MARC GABELLI
Co-Chairman Co-Chairman
FOR AND ON BEHALF OF THE BOARD
28 March 2025
The Search For Value - Gabelli Merger Plus+ Investment Methodology
The Gabelli Investment Process
Private Market Value with a Catalyst(TM)
Process in Action
Gabelli Funds approach the global marketplace in a similar fashion; we invest
like owners. Our clients own businesses through the fractional interest of a
share. We are not index benchmarked, and construct portfolios agnostic of
market capitalisation and index weightings. We seek long-term capital
appreciation for our clients relative to inflation over the long term,
regardless of market cycles. We have invested this way since 1977.
The Gabelli Merger Plus portfolio offers access to companies that have been
identified to have substantial disconnects between market price and our
estimate of the business value (PMV), and where catalyst events exist that may
narrow these discounts for the benefit of GMP shareholders. We thus establish
a "Margin of Safety" for our investors by identifying differences between our
estimate of PMV and the stock market price. The process seeks to identify
businesses undergoing some form of strategic change, typically with strong
organic cash flow characteristics, balance sheets reorganizational
opportunities, and strategic operational flexibility accelerated with the
prospect of management capital allocation actions.
Catalyst merger events can come in many forms including, but not limited to,
corporate restructurings (such as demergers and asset sales), operational
improvements, regulatory or managerial changes, special situations (such as
liquidations), and mergers and acquisitions. Corporate mergers provide
valuable insights into corporate capital allocation decisions and therefore
help in our assessment of long-term valuations. Our proprietary research data
bases track thousands of announced deals globally and utilises that compounded
knowledge in the continued refinement of Private Market Valuations. PMV's will
change over time, and while our analysis is long term, it is through this
consistent process of bottom up stock selection and the implementation of
disciplined portfolio construction that we expect to create value for our
shareholders annually.
In this process, we do sector-by-sector analysis, assessing the PMV of a
business, and identifying the catalyst in place to realise returns. A
company's PMV is not constant, and changes as a function of many variables.
Our analysis emphasizes balance sheets, cash flows, and the long-term
defendable position of a corporation. We achieve returns through investing in
businesses utilising our proprietary Private Market Value ("PMV") with a
Catalyst™ methodology. The PMV is the value that we believe an informed
buyer would be willing to pay to acquire an entire company in a private
transaction. Our team arrives at a PMV valuation by a rigorous assessment of
fundamentals from publicly available information. Further, PMV's are enhanced
through the analysis of announced corporate mergers and acquisition activity.
Mergers offer tangible insights into the long-term capital allocation
decisions of global corporations. We focus on the balance sheet, earnings,
free cash flow, and the management, the stewards of corporates assets, of
prospective companies. The judgement gained from our comprehensive,
accumulated knowledge across a variety of sectors is deployed for investors in
a portfolio. Our analysts typically forecast model company operations 5 years
into the future. Unlike Wall Street's earnings momentum players, we do not try
to forecast earnings with accounting precision and then trade stocks based on
quarterly expectations and realities. We simply try to position ourselves in
front of long-term earnings trends. Throughout our research process, the focus
is on free cash flow: earnings before interest, taxes, depreciation and
amortization ("EBITDA") minus the capital expenditures necessary to grow the
business. We believe free cash flow is the best barometer of a business'
value. Deteriorating or rising free cash flow often foreshadows net earnings
changes. We also look at earnings per share trends. In addition, we analyse on
and off balance sheet assets and liabilities such as property, plant and
equipment, inventories, receivables, and legal, environmental and health care
issues. We want to know everything and anything that will add to, or detract
from, our valuation models. This method of analysis involves looking at
businesses as a function of their assets and earnings power. We examine
businesses as if we were owners of those businesses, and we believe that we
can do that in a rational way by looking at industries on a global basis. Our
investment professionals visit with hundreds of companies each year. Our work
is proprietary, bottom up, and involves the full utilisation of public
resources.
Our analysts follow industries on a global basis, and narrow the universe of
potential investment candidates to a short list of the most attractive
companies. All publicly available company material is reviewed, including
annual and quarterly reports, 10-Ks, 10-Qs, and proxy statements.
Each analyst develops an operational understanding of their industry,
effectively becoming an expert in that industry. The analysts hone this
expertise by continually visiting companies and their senior managements, and
by talking to competitors, suppliers and customers. They also develop and
maintain government and trade sources to derive an overall understanding of
their industry. In addition, our firm hosts a number of industry seminars,
where the top executives of the leading firms share their insights with the
investment community.
The objective of this process is to identify companies that trade at
significant differences to their intrinsic or private market values.
We continually visit the management of hundreds of companies and integrate
their input with our knowledge base. Our goal is to understand management's
motivations and expectations. Given our approach, we want to know who our
partners are and if they are working to enhance shareholder value. This
process, coupled with our financial analysis, helps us select the most
attractive investment candidates for our portfolios.
We employ a three-dimensional approach to valuation:
● Earnings per share
● Free cash flow
● Private market value
The first step is to analyse the income statement and cash flow. Cash flow is
viewed as a barometer of financial health, and often foreshadows earnings
trends. We attempt to forecast the direction and growth rates of the earnings
and cash flow streams.
The second step is to examine the balance sheet. The corporate balance sheet
is recast, assessing real-world values of inventories, property, plant and
equipment and stated book value.
Manager History
The Gabelli organisation, of which Gabelli Funds, LLC is an affiliate, began
in the U.S. in 1976 as an institutional value investing research firm. Mario
Gabelli, the firm's founder, is credited by the academic community for
establishing the notion of Private Market Value ("PMV"), the value an informed
industrialist would pay for an entire business in a negotiated transaction.
This is a long-term oriented bottom- up investment process based on the
fundamental investment principles first articulated in 1934 by Graham and
Dodd, the founders of modern security analysis, and further augmented by Mario
Gabelli in 1977 with his introduction of the concepts of PMV into equity
analysis. Gabelli has added the element of a catalyst event to generate
long-term returns. The Gabelli method, PMV with a CatalystTM, is part of the
Value Investing Curriculum at many major business schools and is thus applied
in the analysis of public equity securities by Gabelli Funds for shareholders.
To these two analytical processes, dynamic forecasting and static asset and
liability valuation, we add our assessment of the PMV of the business. In
other words, what would this company be worth to an informed business person
attempting to create or purchase a business with similar characteristics?
Catalyst: Identification of a mispriced situation, however, does not
necessarily guarantee a rewarding investment. The next step is to determine
events in businesses undergoing some form of strategic change that will help
narrow the spread between a stock's public market price and our determination
of its PMV. We call these events catalysts. Catalysts include industry events
such as consolidation, changes in the regulatory or accounting environment,
new technologies, or be indigenous to the company itself such as financial
engineering, demergers, acquisitions or sales.
Results: After we have identified and selected stocks that qualify as
candidates based on these fundamental and conceptual considerations, our
objective is to structure a diversified portfolio. This has been a proven
long-term method for creating wealth, risk adjusted, in the stock market.
Portfolio Manager's review
Methodology and Market Opportunity
In this context, let us outline our investment methodology and the investment
environment through 31 December 2024.
Merger arbitrage is a highly specialized investment approach designed
principally to profit from corporate events, including the successful
completion of proposed mergers, acquisitions, takeovers, tender offers,
leveraged buyouts, restructurings, demergers, and other types of corporate
reorganizations and actions. As arbitrageurs, we seek to earn the
differential, or "spread," between the market price of our investments and the
value ultimately realized through deal consummation.
We are especially enthusiastic about the opportunities to grow client wealth
in the decades to come, and we highlight below several factors that should
help drive results. These include:
● Increased market volatility, which enhances our ability to
establish positions for the prospect of improved returns
● A robust market for corporate deal making as conditions
continue to provide an accommodative market for mergers and acquisitions
● A normalized interest rate environment, providing attractive
merger spread opportunities
● The Fund's experienced investment team, which pursues
opportunities globally through the disciplined application of Gabelli's
investment methodology
Global Deal Activity(1)
Global deal activity totaled $3.2 trillion during 2024, a year over year
increase of 10%. This increase was partially driven by the return of larger
sized deals. Deals greater than $5 billion totaled $1.1 trillion, an increase
of 17% compared to 2023. Deals valued at under $500 million, on the other
hand, accounted for $795 billion during the first half, down 4% year over
year.
The United States continued to be the most popular venue for transactions.
Deals involving United States- based targets increased 5% year over year and
accounted for 45% of global deal activity. European M&A tallied $700
billion of transactions over the same period, an increase of 22%. The Asia
Pacific region totaled $611 bn in M&A-a 1% increase year over year.
1 Thomson Reuters M&A Review - Full Year 2024
Cross border M&A activity totaled $1.1 trillion during the year, an
increase of 12% year over year. Private equity backed M&A was robust as
well. Such buyouts accounted for $706 billion, an increase of 24% year over
year. Private equity accounted for 22% of total deal activity.
The Technology sector was the biggest contributor to merger activity during
the year, totaling $500 billion, accounting for 16% of total announced deal
volume. The Energy & Power sector accounted for 15% of deal activity.
Portfolio in Review
Despite election uncertainty, risk assets in the US had another remarkable
year in 2024; bolstered by moderating inflation, interest rate cuts, and solid
economic growth. The S&P 500 returned 25%, led by big tech and other
stocks adjacent to the artificial intelligence thematic.
Our merger arbitrage portfolios earn returns from taking idiosyncratic deal
risk and not market risk. The return profile of the fund is a function of
investing in M&A transactions, earning a "spread" upon deal closure, and
reinvesting that capital into newly announced deals. M&A activity in 2024
totaled $3.2 trillion globally, up 10% year over year. Two of the major
impediments for deal activity in recent years have begun to abate and should
become tailwinds for M&A as we enter 2025: interest rates and antitrust
regulation. Beginning in September, the Federal Reserve embarked on a new
easing cycle, which led to 3 rate cuts totaling 100 basis points in 2024. The
lower cost of capital should promote more activity from strategic as well as
private equity buyers. Regarding antitrust regulation, a new administration
will take office in the US in January with an agenda starkly opposite to the
last. Pro-business policy will replace the previous administration's dogmatic
commitment to "hipster" antitrust enforcement. We anticipate that a return to
more traditional antitrust analysis and theories of harm will be supportive of
the return of large-scale M&A.
Merger arbitrage spreads continue to remain attractive. As the risk-free rate
is one of the components of a deal spread, short-term rates should drive
spread levels for transactions on the safer side of the risk spectrum. Even
with the recent easing by the Fed, we expect a more normalized interest rate
environment than we have seen over the past decade; thus creating a compelling
spread environment going forward. Spread levels for deals that skew on the
riskier side have naturally remained wider and will continue to be driven by
regulatory and other specific risks involved. While regulators have been more
aggressive in recent years in challenging transactions, we are optimistic that
the change in leadership will lead to a change in ideology regarding M&A
regulation.
We continue to find attractive investment opportunities in newly announced and
pipeline deals. We remain focused on investing in highly strategic,
well-financed deals with an added focus on near-term catalysts, and are upbeat
about our prospect to generate absolute returns.
Notable contributors to performance include:
Sports and Entertainment Content
Endeavor Group (EDR-NYSE), is a global sports and entertainment company that
owns and operates properties including UFC and WWE, publishes and distributes
sports and entertainment content and has a talent management business that
represents athletes and entertainers. Endeavor Group is being acquired by
Silver Lake Management for $27.50 cash per share or about $25 billion. Shares
have consistently traded above the deal price of $27.50 per share as investors
are poised for litigation, as the deal materially undervalues the company.
Silver Lake Management and Endeavor executives own more than 70% of Endeavor
equity and control the company through super-voting shares. Although a
shareholder vote is not a condition to the deal given Silver Lake's voting
control of the company, many shareholders are expected to file for appraisal
in Delaware Court and are purchasing shares above the deal price in
anticipation of a future windfall from the appraisal process. Endeavor owns
about 90 million shares of TKO Group (about 53% of shares outstanding) and
TKO's stock has increased in value by nearly 60% since the acquisition of
Endeavor Group was announced.
Containers and Packaging
DS Smith (SMDS LN-London) is a leading, global provider of sustainable
fiber-based packaging. DS Smith is being acquired by International Paper for
0.1285 shares of International Paper common stock per share of DS Smith, which
values DS Smith at about £8 billion. The spread on the transaction narrowed
in the second half of the year after Brazilian pulp producer Suzano dropped
its unsolicited bid to acquire International Paper, which had caused
uncertainty over IP's ability to complete the acquisition. Due to the amount
of stock to be issued by International Paper, the deal was subject to approval
by shareholders of IP, and the presence of a hostile bidder for IP created the
potential for IP shareholders to vote against the acquisition of DS Smith in
favour of selling the company to Suzano. The companies have since received
shareholder approval and are awaiting only regulatory clearance from the
European Commission. We expect the transaction will close in the first quarter
of 2025.
Biotech Pharma
Catalent (CERE-NASDQ), is a provider of manufacturing solutions for drugs,
biologics, cell and gene therapies, as well as other medical treatments. The
deal closed in December following an extended antitrust review. Under terms of
the agreement with Novo Holdings, Catalent shareholders received $63.50 cash
per share, which valued Catalent at $16 billion.
Cerevel Therapeutics Holdings (CERE-NASDQ) is a clinical-stage pharmaceutical
company focused on neurological disorders. Following an in-depth investigation
by the U.S. FTC, the transaction closed in August 2024. Under terms of the
agreement Cerevel shareholders received $45 cash per share, which valued the
company at $8.5 billion.
Application Software
Squarespace, Inc. (SQSP-NYSE) is a platform that allows users to create and
manage websites. Following investor pushback that the acquisition price
undervalued the company-evidenced by a low premium and strong performance of
peer companies since the announcement of the acquisition-Permira agreed to
increase the acquisition price to $46.50 cash per share and convert to a
tender offer. Squarespace previously agreed to be acquired by the same group
for $44.00 cash per share in May 2024. The transaction closed in October 2024.
Financial Statements
Statement of comprehensive income
(Unaudited) (Unaudited) (Audited)
Half year ended 31 December 2024
Half year ended 31 December 2023
Year ended 31 December 2024
Income Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
Investment income 5 764 - 764 966 - 966 2,374 - 2,374
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total investment income 764 - 764 966 - 966 2,374 - 2,374
========= ========= ========= ========= ========= ========= ========= ========= =========
Advisory and distribution
Investment advisory revenue 453 - 453 - - - - - -
Distribution revenue 163 - 163 - - - - - -
Other revenue from affiliate 45 - 45 - - - - - -
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total advisory and distribution 661 - 661 - - - - - -
========= ========= ========= ========= ========= ========= ========= ========= =========
Gains on investments
Net realised and unrealised gains on investments 3, 12 - 2,239 2,239 - 2,870 2,870 - 2,255 2,255
Net realised and unrealised currency gains on investments - 3 3 - 31 31 - 24 24
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net gains on investments - 2,288 2,288 - 2,901 2,901 - 2,279 2,279
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total income and gains on investments 764 2,288 3,052 966 2,901 3,867 2,374 2,279 4,653
========= ========= ========= ========= ========= ========= ========= ========= =========
Expenses
Portfolio management fee 6 (289) - (289) (287) - (287) (568) - (568)
Performance fee 6, 14 - - - - - - - - -
Other expenses 6 (973) (322) (1,295) (331) (320) (651) (647) (600) (1,247)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total expenses (1,262) (322) (1,584) (618) (320) (938) (1,215) (600) (1,815)
========= ========= ========= ========= ========= ========= ========= ========= =========
Net return on ordinary activities before finance costs and taxation 163 1,920 2,083 348 2,581 2,929 1,159 1,679 2,838
Interest expense and similar charges (1) - (1) (11) - (11) (20) - (20)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Profit before taxation 162 1,920 2,082 337 2,581 2,918 1,139 1,679 2,818
Taxation on ordinary activities 8 (101) (258) (359) (698) - (698) (316) (510) (826)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
(Loss)/profit for the period 61 1,662 1,723 (361) 2,581 2,220 823 1,169 1,992
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
(Loss)/earnings per share (basic and diluted) 9 $0.01 $0.24 $0.25 ($0.05) $0.38 $0.32 $0.12 $0.17 $0.29
========= ========= ========= ========= ========= ========= ========= ========= =========
The total column of this statement represents the Statement of Comprehensive
Income prepared in accordance with UK International Accounting Standards (UK
IAS). The supplementary revenue return and capital return columns are both
prepared under guidance issued by the Association of Investment Companies. All
items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the period ended 31
December 2024.
The Company does not have any income or expense that is not included in net
profit for the year. Accordingly, the net profit for the period is also the
total comprehensive income for the year, as defined in UK IAS.
The notes form part of these financial statements.
Statement of changes in equity for the period ended 31 December 2024
Half year ended 31 December 2024
(Unaudited)
Half year ended 31 December 2024
Note Called up Special Capital Revenue Total
Share Capital
Distributable
Reserve
Reserve(1)
$000
$000
Reserve(1)
$000
$000
$000
Balance as at 1 July 2024 103 42,593 26,454 (537) 68,613
Ordinary shares created 1 1,003 - - 1,004
Profit for the period after tax on ordinary activities - - 1,662 61 1,723
Dividends paid 7 - (1,109) - - (1,109)
--------------- --------------- --------------- --------------- ---------------
Balance as at 31 December 2024 104 42,487 28,116 (476) 70,231
========= ========= ========= ========= =========
Half year ended 31 December 2023
(Unaudited)
Half year ended 31 December 2023
Note Called up Special Capital Revenue Total
Share Capital
Distributable
Reserve
Reserve(1)
$000
$000
Reserve(1)
$000
$000
$000
Balance as at 1 July 2023 103 45,995 25,285 (1,360) 70,023
Profit/(loss) for the period after tax on ordinary activities - - 2,581 (361) 2,220
Dividends paid - (822) - - (822)
--------------- --------------- --------------- --------------- ---------------
Balance as at 31 December 2023 103 45,173 27,866 (1,721) 71,421
========= ========= ========= ========= =========
Year ended 30 June 2023
(Audited)
Year ended 30 June 2024
Note Called up Special Capital Revenue Total
Share Capital
Distributable
Reserve
Reserve(1)
$000
$000
Reserve(1)
$000
$000
$000
Balance as at 1 July 2023 103 45,995 25,285 (1,360) 70,023
Ordinary shares bought back into treasury - (175) - - (175)
Profit for the period after tax on ordinary activities - - 1,169 823 1,992
Dividends paid 7 - (3,227) - - (3,227)
--------------- --------------- --------------- --------------- ---------------
Balance as at 30 June 2024 103 42,593 26,454 (537) 68,613
========= ========= ========= ========= =========
1 The Revenue Reserve and Special Distributable Reserve are
distributable. The amount of the Revenue Reserve and Special Distributable
Reserve that is distributable is not necessarily the full amount of the
reserves as disclosed within these financial statements. As at 31 December
2024, the net amount of reserves that are distributable are $39,764,000 (31
December 2023: $43,452,000, 30 June 2024: $42,056,000).
The notes form part of these financial statements.
Statement of financial position
(Unaudited) (Unaudited) (Audited)
As at 31 December 2024
As at 31 December 2023
As at 30 June 2024
Note $000 $000 $000 $000 $000 $000
Non-current assets
Investments held at fair value through profit or loss 3 61,291 63,892 57,488
Current assets
Cash and cash equivalents 10 7,411 5,901 8,430
Receivable for investment sold 104 77 1,391
Other receivables 15 609 77 131
Deferred tax asset 8 2,415 2,870 2,774
--------------- --------------- ---------------
10,539 8,925 12,726
Current liabilities
Portfolio management fee payable (49) (49) (46)
Payable for investment purchased (205) (643) (661)
Other payables 15 (1,112) (338) (403)
Bank overdrafts (35) (36) (89)
--------------- --------------- --------------- --------------- --------------- ---------------
Net current assets 9,138 7,859 11,527
========= ========= =========
Non-current liabilities
Investments at fair value through profit or loss 3 (146) (278) (350)
Offering fees payable (52) (52) (52)
--------------- --------------- ---------------
Net assets 70,231 71,421 68,613
========= ========= =========
Share capital and reserves
Called-up share capital 11 104 103 103
Special distributable reserve(1) 42,487 45,173 42,593
Capital reserve 28,116 27,866 26,454
Revenue reserve(1) (476) (1,721) (537)
--------------- --------------- --------------- --------------- --------------- ---------------
Total shareholders' funds 70,231 71,421 68,613
========= ========= =========
Net asset value per ordinary share $10.14 $10.43 $10.04
========= ========= =========
1 The Revenue Reserve and Special Distributable Reserve are
distributable. The amount of the Revenue Reserve and Special Distributable
Reserve that is distributable is not necessarily the full amount of the
reserves as disclosed within these financial statements. As at 31 December
2024, the net amount of reserves that are distributable are $39,764,000 (31
December 2023: $43,452,000, 30 June 2024: $42,056,000).
Gabelli Merger Plus+ Trust Plc is registered in England and Wales under
Company number 10747219.
The notes form part of these financial statements.
Notes to the financial statements
1 Condensed financial statements
The half yearly report has not been audited by the Company's auditors.
2 Accounting policies
(a) Basis of preparation - The financial statements of Gabelli Merger Plus+
Trust Plc have been prepared in accordance with the UK adopted International
Financial Reporting Standards (IFRS). The financial statements have been
prepared under the historical cost convention, as modified by the revaluation
of financial assets and financial liabilities (including derivative financial
instruments) at fair value through profit or loss.
The principal accounting policies adopted by the Company are set out below.
Where presentational guidance set out in the Statement of Recommended Practice
('SORP') for investment trusts issued by the Association of Investment
Companies ('AIC') in October 2019 is consistent with the requirements of IFRS,
the Directors have sought to prepare the financial statements on a basis
compliant with the recommendations of the SORP.
For the accounting period ended 30 June 2022, the Company met the requirements
to be an investment trust under sections 1158 and 1159 of the Corporation Tax
Act of 2010. However, as a result of the Tranche One Tender Offer completed in
the third quarter of 2022, the Company subsequently became a close company due
to becoming controlled by a single participator, Associated Capital Group,
Inc.
Although no longer an Investment Trust, the Company has elected to continue to
prepare the financial statements on a basis compliant with the recommendations
of the SORP. The SORP is issued by the AIC and it sets out recommendations,
intended to represent current best practice, on the form and contents of the
financial statements of Investment Companies. Investment Companies include
investment trust companies that have been, currently are, or are directing its
affairs so as to enable it to obtain or retain approval under Section 1158 of
the Corporation Tax Act 2010. Although the Company no longer meets the
requirements of Section 1158 of the Corporation Tax Act 2010 to be an
investment trust, it continues to conduct its affairs as an investment
company. Further, management of the Company also believes that consistency in
presentation will be beneficial to investors reviewing the Company's financial
statements.
(b) Presentation of Statement of Comprehensive Income - To better reflect the
activities of an investment trust company and in accordance with guidance
issued by the AIC, supplementary information which analyses the Statement of
Comprehensive Income between items of a revenue and capital nature has been
presented alongside the Statement of Comprehensive Income.
(c) Going concern - The Directors, have taken account of the continuing market
regulatory changes affecting investee companies, investment valuations and
various geopolitical conflicts. Those impacts and related continuing
uncertainty have short- and potentially medium-term implications for the
Company's investment strategy. Additionally, the Board is monitoring the
period ahead on the basis of the Company no longer having investment trust
status and its implications on the Company's investment return profile over
the longer term. In context, the Board continuously monitors the Company's
investment portfolio, liquidity, and gearing, along with levels of market
activity, to appropriately minimise and mitigate consequential risks to
capital and future income such as geopolitical risks and financial risks.
Taking these factors into account, the Directors confirm that they have a
reasonable expectation that the Company will continue to operate and meet its
expenses as they fall due for a period no less than 12 months from the signing
of the balance sheet. For these reasons, the Directors consider there is
reasonable evidence to continue to adopt the going concern basis in preparing
the accounts as at 31 December 2024.
In forming this position, the Directors considered the Company's investment
objectives, risk management policies, capital management policies and
procedures, the nature of the portfolio and expenditure projections in detail.
(d) Statement of estimation uncertainty - In the application of the Company's
accounting policies, the Investment Manager is required to make judgements,
estimates, and assumptions about carrying values of assets and liabilities
that are not always readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may vary from these
estimates. There have been no significant judgements, estimates, or
assumptions for the period.
(e) Income recognition - Revenue from investments (other than special
dividends), including taxes deducted at source, is included in revenue by
reference to the date on which the investment is quoted ex-dividend, or where
no ex-dividend date is quoted, when the Company's right to receive payment is
established. Franked investment income is stated net of the relevant tax
credit. Other income includes any taxes deducted at source.
Special dividends are credited to capital or revenue, according to the
circumstances. Scrip dividends are treated as unfranked investment income; any
excess in value of the shares received over the amount of the cash dividend is
recognised as a capital item in the Statement of Comprehensive Income.
Interest income is accounted for on an accrual basis by reference to the
principal outstanding and at the effective interest rate applicable, which is
the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset's net carrying amount.
(f) Expenses - The management fees are allocated to revenue in the Statement
of Comprehensive Income. Interest receivable and payable and management
expenses are treated on an accruals basis. Other expenses are charged to
revenue except where they directly relate to the acquisition or disposal of an
investment, in which case, they are added to the cost of the investment or
deducted from the sale proceeds. Starting with the year ended 30 June 2023,
transaction and finance charges related to contracts for difference are
charged to capital.
The formation and initial expenses of the Company are allocated to capital.
(g) Investments - Investments have been designated upon initial recognition at
fair value through profit or loss. Investments are recognised and
de-recognised at trade date where a purchase or sale is under a contract whose
terms require delivery within the time frame established by the market
concerned, and are initially measured at fair value. Subsequent to initial
recognition, investments are valued at fair value. U.S. Treasuries held for
investment diversification purposes are not included as cash equivalents and
are valued at their amortised cost. Movements in the fair value of investments
and gains/losses on the sale of investments are taken to the Statement of
Comprehensive Income as capital items.
The Company's investments are classified as held at fair value through profit
or loss in accordance with applicable International Financial Standards.
Financial assets and financial liabilities are recognised in the Statement of
Financial Position when the Company becomes a party to the contractual
provisions of the instrument. The Company shall offset financial assets and
financial liabilities if it has a legally enforceable right to set off the
recognised amounts and interests and intends to settle on a net basis.
Financial assets and liabilities are derecognised when the Company settles its
obligations relating to the instrument.
Contracts for Difference (CFDs)
CFDs are recognised in the Statement of Financial Position at the accumulated
unrealised gain or loss as an asset or liability, respectively. This
represents the difference between the nominal book cost and market value of
each position held. Movements in the unrealised gains/losses are taken to the
Statement of Comprehensive Income as capital items.
(h) Cash and cash equivalents - The Company may invest part of its net assets
in cash and cash equivalents, money market instruments, bonds, commercial
papers or other debt obligations with banks or other counterparties, having at
least a single-A (or equivalent) credit rating from an internationally
recognised rating agency or government and other public securities, if the
Portfolio Manager believes that it would be in the best interests of the
Company and its shareholders. This may be the case, for example, where the
Portfolio Manager believes that adverse market conditions justify a temporary
defensive position.
Any cash or surplus assets may also be temporarily invested in such
instruments pending investment in accordance with the Company's investment
policy. Cash balances are marked to market based on the prevailing exchange
rate as of the valuation date. U.S. Treasuries are valued at their amortised
cost.
(i) Transaction costs - Transaction costs incurred on the purchase and
disposal of investments are recognised as a capital item in the Statement of
Comprehensive Income.
(j) Foreign currency - Foreign currencies are translated at the rates of
exchange ruling on the period end date. Revenue received/receivable and
expenses paid/payable in foreign currencies are translated at the rates of
exchange ruling at the transaction date.
(k) Fair value - All financial assets and liabilities are recognised in the
financial statements at fair value.
(l) Dividends payable - Interim and final dividends are recognised in the
period in which they are declared.
(m) Capital reserve - Capital distributions received, realised gains or losses
on investments that are readily convertible to cash, and capital expenses are
transferred to the capital reserve. Share buybacks are funded through the
capital reserve.
(n) Taxation - The tax effect of different items of income/gains and
expenditure/losses is allocated between revenue and capital on the same basis
as the particular item to which it relates, under the marginal method, using
the Company's effective rate of tax. Deferred taxation is recognised in
respect of all timing differences that have originated but not reversed at the
period end date where transactions of events that result in an obligation to
pay more or a right to pay less tax in future have occurred at the period end
date measured on an undiscounted basis and based on enacted tax rates. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the underlying timing differences can be deducted. Timing
differences are differences arising between the Company's taxable profits and
its results as stated in the accounts which are capable of reversal in one or
more subsequent periods.
GMP was historically authorized as an Investment Trust under Sections 1158 and
1159 Corporation Tax Act 2010 and the Investment Trust (Approved Company)
(Tax) Regulations 2011 (S.I.2011/2999).
Following a share buy-back offer from 19 August 2022 to 22 September 2022, GMP
became a close company due to becoming controlled by a single participator,
Associated Capital Group Inc. This constituted a "serious" breach of the
Investment Trust rules.
Accordingly, GMP notified HMRC of this development in December 2022 and
requested confirmation that GMP's authorization as an Investment Trust should
be withdrawn from the commencement of the accounting period starting 1 July
2022.
The primary benefit associated with the Investment Trust regime is that
capital gains realized by a qualifying Investment Trust company is exempt from
UK Corporation Tax. Therefore, loss of Investment Trust status for a UK
company can have potentially significant consequences for its tax profile
moving forwards, as it would be subject to tax on any capital gains realized
thereafter at the main rate of UK Corporation Tax.
At 31 December 2024, after offset against income taxable on receipt, there was
a deferred tax asset ("DTA") of $2.41 million (31 December 2023: $2.87
million, 30 June 2024: $2.77 million) in relation to surplus tax reliefs.
After the loss of its Investment Trust Status it is now possible for GMP to
utilise this DTA in order to shelter capital gains from UK Corporation Tax. In
order for the DTA to remain available, GMP must maintain its investment
business moving forward. GMP's activities are such that it will have an
investment business for UK tax purposes. In particular, the Investment Trust
rules require that "substantially all of the business of the Investment Trust
company consists of investing its funds in shares, land or other assets with
the aim of spreading investment risk and giving members of the company the
benefit of the results of the management of its funds". This may be considered
analogous to having an investment business.
Therefore, given (i) GMP previously received approval from HMRC that this
requirement was met, and (ii) the activity of the company is not intended to
change, GMP will continue having an investment business and will meet the
conditions to carry forward and use its excess management expenses in current
and future periods. As such GMP has included the DTA in the financial
statements.
(o) GSIL UK revenues and expenses - Effective from the date of acquisition on
29 October 2024, GSIL UK revenues and expenses are included in the Company's
Statement of Comprehensive Income. GSIL UK is contracted by Gabelli Funds, LLC
to provide certain investment advisory and distribution services to an
affiliated fund, accordingly Gabelli Funds pays GSIL 100% of such revenues
from the fund. Distribution expenses relate to marketing expenses incurred by
GSIL UK in performing these services. Further, GSIL UK has delegated the
investment advisory services to an affiliate of Associated Capital Group,
Inc., the cost of these services is reflected in Advisory revenue paid away to
affiliate.
(p) Functional and presentation currency - The functional and presentation
currency of the Company is the U.S. dollar.
3 Investments at fair value through profit or loss
The financial assets measured at fair value through profit or loss in the
financial statements are grouped into the fair value hierarchy as follows:
As at 31 December 2024 (Unaudited)
Level 1 Level 2 Level 3 Level 4
$000
$000
$000
$000
Financial assets at fair value through profit or loss
Quoted equities 48,542 - - 48,542
Contingent value rights 117 - - 117
Derivatives - 707 - 707
U.S. Treasuries 11,925 - - 11,925
--------------- --------------- --------------- ---------------
Gross fair value 61,291
Derivatives - (146) - (146)
--------------- --------------- --------------- ---------------
Net fair value 60,584 561 - 61,145
========= ========= ========= =========
There were no transfers between levels for the period ended 31 December 2024.
As at 31 December 2023 (Unaudited)
" Level 1 Level 2 Level 3 Total
$000
$000
$000
$000
Financial assets at fair value through profit or loss
Quoted equities 36,716 - 823 37,539
Contingent value rights - - 372 372
Derivatives - 115 - 115
U.S. Treasuries - 25,866 - 25,866
--------------- --------------- --------------- ---------------
Gross fair value 63,892
Derivatives - (278) - (278)
--------------- --------------- --------------- ---------------
Net fair value 36,716 25,703 1,195 63,614
========= ========= ========= =========
As at 30 June 2024 (Audited)
Level 1 Level 2 Level 3 Total
$000
$000
$000
$000
Financial assets at fair value through profit or loss
Quoted equities 47,822 - - 47,822
Contingent value rights 165 - - 165
Derivatives - 317 - 317
U.S. Treasuries - 9,184 - 9,184
--------------- --------------- --------------- ---------------
Gross fair value 57,488
Derivatives - (350) - (350)
--------------- --------------- --------------- ---------------
Net fair value 47,987 9,151 - 57,138
========= ========= ========= =========
Fair value hierarchy
IFRS 13 requires the Company to classify its financial instruments held at
fair value using a hierarchy that reflects the significance of the inputs used
in the valuation methodologies.
These are as follows:
● Level 1 - quoted prices in active markets for identical
investments;
● Level 2 - other significant observable inputs (including
quoted prices for similar investments, interest rates, prepayments, credit
risk, etc.); and
● Level 3 - significant unobservable inputs.
Analysis of changes in market value and book cost of portfolio investments in
period
(Unaudited) (Unaudited) (Audited)
As at
As at
As at
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Opening book cost 63,759 63,218 63,218
Opening investment holding losses (6,621) (7,029) (7,029)
--------------- --------------- ---------------
Opening market value 57,138 56,189 56,189
--------------- --------------- ---------------
Additions at cost 72,272 117,027 212,183
Disposals proceeds received (70,504) (112,472) (213,489)
Gains on investments 2,239 2,870 2,255
--------------- --------------- ---------------
Market value of investments 61,145 63,614 57,138
========= ========= =========
Closing book cost 65,928 69,493 63,759
Closing investment holding losses (4,783) (5,879) (6,621)
--------------- --------------- ---------------
Closing market value 61,145 63,614 57,138
========= ========= =========
The company received $70,504,000 (31 December 2023: $112,472,000, 30 June
2024: $213,489,000) from investments sold in the period. The book cost of
these investments when they were purchased was $70,103,000 (31 December 2023:
$110,752,000, 30 June 2024: $211,642,000).
Net realised and unrealised gains on investments
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Realised gains on investments 401 1,720 1,847
Movement in unrealised gains on investments 1,838 1,150 408
--------------- --------------- ---------------
Net realised and unrealised gains on investments 2,239 2,870 2,255
========= ========= =========
4 TRANSACTION COSTS
During the period commissions and other expenses were incurred in acquiring or
disposing of investments classified at fair value through profit or loss.
These have been charged through capital and are within gains/(losses) in the
Statement of Comprehensive Income. The total costs were as follows:
(Unaudited) Half (Unaudited) (Audited)
year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Purchases 38 27 56
Sales 4 15 23
--------------- --------------- ---------------
Total 42 42 79
========= ========= =========
5 INCOME
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Dividend income 273 280 499
Income on short-term investments(1) 386 597 1,337
Other income(2) 105 89 538
--------------- --------------- ---------------
Total income 764 966 2,374
========= ========= =========
1 Income on short-term investments represents the return on cash and
cash equivalents, primarily U.S. Treasury Bills.
2 Includes swap income of $65,000 for the half year ended 31 December
2024, $54,000 for the half year ended 31 December 2023 and $458,000 for the
full year ended 30 June 2024, respectively.
6 EXPENSES
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Revenue expenses
Advisory revenue paid away to affiliate(1) (431) - -
Portfolio Management Fee (289) (287) (568)
Distribution expense(1) (163) - -
Directors' Remuneration (79) (79) (157)
Other (69) (20) (54)
Audit Fees - PwC (50) (50) (100)
Company Secretary Fees (27) (50) (61)
Legal Fees (25) (25) (50)
AIFM Support Services (24) (24) (48)
Administration Fees - State Street (23) (23) (46)
Custodian/Depositary Fees - State Street (23) (23) (45)
General and administrative (21) - -
Printing (8) (8) (17)
Registrar - Computershare (7) (7) (13)
Regulatory Filing Fees - AIFMD (7) (7) (13)
LSE RNS fees (6) (6) (12)
Ongoing LSE and UKLA Fees (5) (5) (10)
Directors' Expenses (5) (4) (21)
--------------- --------------- ---------------
Total revenue expenses (1,262) (618) (1,215)
========= ========= =========
1 These are expenses of GSIL UK which has been consolidated into the
Company upon acquisition on 29 October 2024. GSIL UK has delegated investment
advisory services to an affiliate of Associated Capital Group, Inc., the cost
of these services rendered to an affiliated fund is reflected in Advisory
revenue paid away to affiliate. Distribution expenses relate to marketing
expenses paid to third parties incurred by GSIL UK for an affiliated fund.
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Capital expenses
Contracts for Difference (261) (261) (483)
Transaction costs on derivatives (34) (27) (63)
Transaction Charges - State Street (27) (32) (54)
--------------- --------------- ---------------
Total capital expenses (322) (320) (600)
========= ========= =========
Portfolio Management Fee
Under the terms of the Portfolio Management Agreement, the Portfolio Manager
will be entitled to a management fee ("Management Fee"), together with
reimbursement of reasonable expenses incurred by it in the performance of its
duties under the Portfolio Management Agreement, other than the salaries of
its employees and general overhead expenses attributable to the provision of
the services under the Portfolio Management Agreement. The Management Fee
shall be accrued daily and calculated on each Business Day at a rate
equivalent to 0.85% of NAV per annum.
AIFM Fees
The Company previously appointed Gabelli Funds, LLC to serve as Alternative
Investment Fund Manager pursuant to the AIFMD. Gabelli Funds, LLC does not
earn a fee for its role as AIFM; it earned $289,149 in portfolio management
fees during the period ended 31 December 2024 (31 December 2023: $287,299, 30
June 2024: $568,334). For the period ended 31 December 2024 Carne provided
certain support services to the AIFM such as due diligence and reporting for
which it earned fees of $24,198.
7 EQUITY DIVIDENDS
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Dividends paid 1,109 822 3,227
========= ========= =========
During the period ended 31 December 2024 dividends paid per share totaled
$0.16 (31 December 2023: $0.12, 30 June 2024: $0.48 per share).
8 TAXATION ON ORDINARY ACTIVITIES
Deferred Tax Assets
At 30 June 2024 total recognised deferred tax assets were $2.77 million.
During the period ended 31 December 2024 the Company incurred deferred tax
expense of $0.36 million reflecting partial utilisation of the deferred tax
asset, resulting in a deferred tax asset of $2.41 million or $0.35 per
Ordinary Share.
The deferred tax asset was comprised of $5,349,023 ($1,337,256 deferred tax
asset at 25% tax rate) related to unrealised losses on the value of the
investment portfolio and excess expenses of $4,311,608 ($1,077,902 deferred
tax asset at 25% tax rate) carried forward. This sum, which is net of the
amount set against current period taxable income, arose due to the cumulative
deductible expenses having exceeded taxable income over the life of the
Company. Now that the Company is no longer an investment trust for tax
purposes and is therefore subject to UK capital gains tax, the Company
believes it is more likely than not that it will have sufficient taxable
profits against which these expenses can be offset. Provided the Company
continues to maintain its current investment profile, it is likely that this
deferred tax asset will be utilised to offset future taxable income subject to
the normal corporate tax loss restriction rules for carried forward losses
which restrict their use for any particular period to £5 million plus 50% of
profits in excess of that initial £5 million.
(Unaudited)
Half year ended 31 December 2024
Analysis of the charge in the period Revenue Capital Total
$000
$000
$000
Deferred tax benefit (62) (258) (320)
Irrecoverable overseas tax (39) - (39)
--------------- --------------- ---------------
Total (101) (258) (359)
========= ========= =========
Deferred tax expense in the half year ended 31 December 2024 is due to the
partial utilization of the deferred tax.
(Unaudited)
Half year ended 31 December 2023
Analysis of the charge in the period Revenue Capital Total
$000
$000
$000
Deferred tax benefit (660) - (660)
Irrecoverable overseas tax (38) - (38)
--------------- --------------- ---------------
Total (698) - (698)
========= ========= =========
(Audited)
Year ended 30 June 2024
Analysis of the charge in the period Revenue Capital Total
$000
$000
$000
Deferred tax benefit (246) (510) (756)
Irrecoverable overseas tax (70) - (70)
--------------- --------------- ---------------
Total (316) (510) (826)
========= ========= =========
9 EARNINGS PER SHARE
Earnings per ordinary share is calculated with reference to the following
amounts:
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Revenue return
Revenue return attributable to ordinary shareholders ($000) 61 (361) 823
--------------- --------------- ---------------
Weighted average number of shares in issue during period 6,859,611 6,850,792 6,843,331
Total revenue return per ordinary share $0.01 ($0.05) $0.12
--------------- --------------- ---------------
Capital return
Capital return attributable to ordinary shareholders ($000) 1,662 2,581 1,169
--------------- --------------- ---------------
Weighted average number of shares in issue during period 6,859,611 6,850,792 6,843,331
Total capital return per ordinary share $0.24 $0.38 $0.17
========= ========= =========
Total return per ordinary share $0.25 $0.32 $0.29
========= ========= =========
Net asset value per share (Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Net assets attributable to shareholders ($000) 70,231 71,421 68,613
Number of shares in issue at period end 6,927,785 6,850,792 6,831,292
Net asset value per share $10.14 $10.43 $10.04
========= ========= =========
The Company continues to report according to SORP standards as provided by the
AIC. As such, the net asset value per share is provided in accordance with
IFRS standards inclusive of the Deferred Tax Asset of $0.35 per share, or
$2.41 million, as a result of the Company having Close status and no longer
availing itself of Section Investment Trust status under Section 1158 of the
Corporation Tax Act 2010.
10 CASH AND CASH EQUIVALENTS
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Cash 6,123 5,901 8,430
Cash of consolidated subsidiary 1,288 - -
--------------- --------------- ---------------
Total 7,411 5,901 8,430
========= ========= =========
The Board and Investment Manager oversee investments held in cash and cash
equivalents in accordance with the Investment Policy.
11 CALLED UP SHARE CAPITAL
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Allotted, called up and fully paid:
6,927,785 ordinary shares of $0.01 each - equity 69 68 68
Treasury shares: --------------- --------------- ---------------
3,502,874 ordinary shares of $0.01 each - equity 35 35 35
--------------- --------------- ---------------
Total shares 104 103 103
========= ========= =========
12 DERIVATIVES RISK
The Company's investment policy may involve the use of derivatives (including,
without limitation, forward foreign exchange contracts, equity contracts for
difference swap agreements ("CFDs"), securities sold short and/or structured
financial instruments). The Company may use both exchange-traded and
over-the-counter derivatives as part of its investment activity. The cost of
investing utilising derivatives may be higher than investing in securities
(whether directly or through nominees) as the Company will have to bear the
additional costs of purchasing and holding such derivatives, which could have
a material adverse effect on the Company's returns. The low initial margin
deposits normally required to establish a position in such instruments permit
a high degree of leverage. As a result, depending on the type of instrument, a
relatively small movement in the price of a contract may result in a profit or
a loss which is high in proportion to the amount of funds actually placed as
initial margin and may result in unquantifiable further losses exceeding any
margin deposited. In addition, daily limits on price fluctuations and
speculative position limits on exchanges may prevent prompt liquidation of
positions resulting in potentially greater losses.
The use of derivatives may expose the Company to a higher degree of risk.
These risks may include credit risk with regard to counterparties with whom
the Company trades, the risk of settlement default, lack of liquidity of the
derivative, imperfect tracking between the change in value of the derivative
and the change in value of the underlying asset that the Company is seeking to
track and greater transaction costs than investing in the underlying assets
directly. Additional risks associated with investing in derivatives may
include a counterparty breaching its obligations to provide collateral, or,
due to operational issues (such as time gaps between the calculation of risk
exposure to a counterparty's provision of additional collateral or
substitutions of collateral or the sale of collateral in the event of a
default by a counterparty), there may be instances where credit exposure to
its counterparty under a derivative contract is not fully collateralised. The
use of derivatives may also expose the Company to legal risk, which is the
risk of loss due to the unexpected application of a law or regulation, or
because a court declares a contract not legally enforceable.
The use of CFDs is a highly specialised activity that involves investment
techniques and risks different from those associated with ordinary portfolio
security transactions. In a CFD, a set of future cash flows is exchanged
between two counterparties. One of these cash flow streams will typically be
based on a reference interest rate combined with the performance of a notional
value of shares of a stock. The other will be based on the performance of the
shares of a stock. Depending on the general state of short-term interest rates
and the returns on the Company's portfolio securities at the time a CFD
transaction reaches its scheduled termination date, there is a risk that the
Company will not be able to obtain a replacement transaction or that terms of
the replacement will not be as favourable as on the expiring transaction. At
31 December 2024 the Company held CFDs, as shown in the following table.
Security names Trade Shares (Unaudited)
currency
(000)
As at
31 December 2024
Unrealised
gain/(loss)
$000
Aluflexpack AG CHF 7 3
Amcor plc USD 52 25
Aviva plc GBP 23 (2)
Banco Bilbao Vizcaya Argentaria EUR 20 4
Banco de Sabadell SA EUR 78 (2)
Britvic plc GBP 141 33
Capital One Financial Corp USD 4 26
Charter Communications Inc USD 2 74
Chevron Corp USD 29 262
CompuGroup Medical SE EUR 8 1
Covestro AG EUR 55 2
De Gryt Mining Ltd AUD 127 (12)
Direct Line Insurance Group GBP 82 1
Ds Smith plc GBP 489 (23)
Eckoh plc GBP 353 **
Egetis Therapeutics AB SEK 132 5
Equals Group plc GBP 79 **
Esker SA EUR 1 **
ESR Group LTD HKD 52 **
Genkyotex SA EUR 6 **
Global Interconnection Corp GBP 17 (46)
Grifols SA EUR 7 4
Hargreaves Lansdown plc GBP 62 2
Heartland Financials USA Inc USD 10 (39)
HKBN Ltd HKD 64 (2)
International Paper Co USD 63 103
John Bean Technologies Corp USD * (6)
Multichoice Group Ltd ZAR 33 **
Neoen SA EUR 13 4
Nokia Corp USD 99 5
Northern Star Resources Ltd AUD 15 10
OCI NV EUR 24 (6)
Pinewood Technologies GBP 57 10
Renasant Corp USD 1 1
Schlumberger Ltd USD 22 42
Seven & I Holdings Co Ltd JPY 3 2
SG Fleet Group Ltd AUD 64 **
Shinko Electric Industries JPY 16 20
Softwareone Holding AG CHF 2 **
Spear Investment Group EUR 39 **
Spirent Communications plc GBP 302 (8)
Synopsys Inc USD 1 20
IT Fluid Systems plc GBP 366 1
Ubisoft Entertainment EUR 9 6
UMB Financial Corp USD 6 41
--------------- ---------------
Total unrealised gain on derivatives 561
=========
* Fewer than 500 shares.
** Less than $500.
13 LEVERAGE
Leverage is the ratio between a fund's Total Exposure and its Net Asset Value,
expressed as a percentage. For the purposes of the AIFM Directive, leverage
can be calculated using two methods: (i) the gross method; and (ii) the
commitment method. Under the gross method, Total Exposure is the algebraic sum
of all investment positions (long and short), excluding cash and cash
equivalents and converting derivative instruments into the equivalent position
in the underlying asset. Under the commitment method, Total Exposure is the
algebraic sum of all investment positions (long and short), plus cash and cash
equivalents, minus hedging arrangements and offsetting instruments between
eligible assets.
The Company's leverage levels at 31 December 2024 are shown below:
Leverage Exposure Gross Commitment
Method
Method
Maximum Permitted Limit 500% 250%
Actual 133% 141%
========= =========
The leverage limits are set by the AIFM and approved by the Board and are in
line with the maximum leverage levels permitted in the Company's Articles of
Association. The AIFM is also required to comply with the gearing parameters
set by the Board in relation to borrowings.
14 PERFORMANCE FEE
Subject to the satisfaction of the Performance Conditions, the Portfolio
Manager shall be entitled under the Portfolio Management Agreement, in respect
of each Performance Period, to receive 20% of the Total Return relating to
such Performance Period provided that such amount shall not exceed 3% of the
Average NAV.
Performance Conditions
The Portfolio Manager's entitlement to a Performance fee in respect of any
Performance Period shall be conditional on the Closing NAV per Share in
respect of the Performance Period (adjusted for any changes to the NAV per
Share through dividend payments, Share repurchases (howsoever effected) and
Share issuances since Admission) being in excess of the Performance Hurdle and
High Water Mark. The Performance Hurdle is equal to the Starting NAV per Share
increased by two times the rate of return on 13 week Treasury Bills published
by the US Department of the Treasury over the Performance Period, less the
Starting NAV per Share; multiplied by the weighted average of the number of
Shares in issue (excluding any Shares held in treasury) at the end of each day
during the Performance Period. For the period ended 31 December 2024, no
Performance fee was paid. As at 31 December 2024, no amount was outstanding to
the Portfolio Manager in respect of the performance fee, reflecting the
performance period matching the Company's financial year (31 December 2023:
$nil, 30 June 2024: $nil).
15 OTHER ASSETS AND LIABILITIES
The categories of other receivables and other payables include:
(Unaudited) (Unaudited) (Audited)
Half year ended
Half year ended
Year ended
31 December 2024
31 December 2023
30 June 2024
$000
$000
$000
Other receivables
Receivables from affiliates 390 - -
All other receivables(1) 219 77 131
--------------- --------------- ---------------
Total other receivables 609 77 131
========= ========= =========
Other payables
FX currency sold - - 1
Custodian fees 28 19 22
Accounting fees 37 34 33
Audit fees 74 75 94
Payable to affiliates 310 75 94
Commissions payable 321 75 94
All other payables 342 210 253
--------------- --------------- ---------------
Total other payables 1,112 338 403
========= ========= =========
1 At 31 December 2024, all other receivables included prepaid expenses
and dividend and swap income.
16 RELATED PARTY DISCLOSURE: DIRECTORS
Each of the Directors is entitled to receive a fee from the Company at such
rate as may be determined in accordance with the Articles of Incorporation.
The Directors' remuneration is $30,000 per annum for each Director, other
than:
- the Co-Chairmen, who will receive an additional $1,000 per
annum(1);
- the Chairman of the Audit & Risk Committee, who will receive
an additional $5,000 per annum; and
- the Members of the Audit & Risk Committee, who will receive
an additional $1,000 per annum.
Each of the Directors is also entitled to be paid all reasonable expenses
properly incurred by them in connection with the performance of their duties.
These expenses will include those associated with attending general meetings,
Board or committee meetings and legal fees. The Board may determine that
additional remuneration may be paid, from time to time, to any one or more
Directors in the event such Director or Directors are requested by the Board
to perform extra or special services on behalf of the Company.
1 Mr Gabelli has waived his fees since appointment as Chairman and in
his current role as Co-Chairman.
Related parties disclosure: other
The Portfolio management fee for the period ended 31 December 2024 paid by the
Company to the Portfolio Manager is presented in the Statement of
Comprehensive Income. Details of the Portfolio Management fee paid during the
period is disclosed in Note 6. Details of Performance fee paid during the year
are disclosed in Note 14.
As at 31 December 2024, Associated Capital Group Inc., an affiliate of the
AIFM and Portfolio Manager, held 6,421,249 Ordinary Shares in the Company.
Associated Capital Group Inc. also subscribed for 6,179,100 Special Voting
Loyalty Shares, as defined in the glossary on page 72 in the Annual Report and
Financial Statements as at 30 June 2024, which increased its voting interest.
For the half year periods ended 31 December 2024 and 2023, the Company paid
dividends of $1.0 million and $0.7 million, respectively, to Associated
Capital Group, Inc. commensurate with its ownership interest.
GSIL UK advisory and distribution revenues are earned from a fund affiliated
with Gabelli Funds, LLC and Associated Capital Group, Inc. Further, GSIL UK
delegates certain investment advisory services to an affiliate of Associated
Capital Group, Inc. as disclosed in Note 6.
Investors should note that as a close company with Associated Capital Group
Inc. controlling greater than 90% of shares, Associated Capital Group Inc. may
be able to ensure the approval of shareholder resolutions.
Further details of related parties and transactions, including with the
Company's AIFM Gabelli Funds, LLC, are disclosed in the Directors' Report in
the Annual Report and Financial Statements as at 30 June 2024.
Connected party transactions
All connected party transactions are carried out at arm's length. There were
no such transactions during the period ended 31 December 2024.
17 CONTINGENT LIABILITIES AND COMMITMENTS
As at 31 December 2024, the Company had no contingent liabilities or
commitments (31 December 2023: nil).
18 POST BALANCE SHEET EVENTS
On 27 February 2025 the Company declared an interim dividend for the fiscal
year ended 30 June 2025 of $0.02 per ordinary share, payable on 21 March 2025
to holders of ordinary shares on the register at the close of business on 7
March 2025.
19 PORTFOLIO/SCHEDULE OF INVESTMENTS
A statement of changes in the composition of the Portfolio during the
financial period is available to shareholders free of charge from the
Administrator on request.
Quantity Security Name Cost Market % Total
Value
Investments
COMMON STOCKS
Communication Services
Media & Entertainment
38,605 Aimia Inc 144,787 70,864 0.1
14,705 Atlanta Braves Holdings Inc 451,654 562,613 0.9
46,300 Endeavor Group Holding 1,219,635 1,448,727 2.3
27,003 GCI Liberty Inc - - -
206,823 IMAX China Holding Inc 209,780 196,228 0.3
141,850 Innovid Corp 430,353 438,317 0.7
8,256 Liberty Broadband 673,612 617,219 1.0
2,391 Liberty Media Corp 79,631 162,731 0.3
329,631 NII Holdings Inc 626,707 115,371 0.2
1,700 SiriusXM Holdings Inc 56,737 38,760 0.1
69,350 Viacom Inc 779,791 768,617 1.2
13,800 Wideopenwest Inc 65,632 68,448 0.1
--------------- --------------- ---------------
4,738,319 4,487,895 7.0
========= ========= =========
Telecommunication Services
60,050 Frontier Communications Parent Inc 2,101,317 2,083,735 3.3
11,800 Telephone and Data Systems 275,160 402,498 0.6
13,747 Telesat Corp 393,390 226,001 0.4
5,550 US Cellular Corp 291,317 348,096 0.5
--------------- --------------- ---------------
3,061,184 3,060,330 4.8
========= ========= =========
Total Communication Services 7,799,503 7,548,225 11.8
========= ========= =========
Consumer Discretionary
Consumer Durables & Apparel
1,237 CH Auto Inc 5,047 2,226 0.0
--------------- --------------- ---------------
5,047 2,226 0.0
========= ========= =========
Consumer Services
28,950 Bally's Corporation 495,714 517,915 0.8
54,064 Everi Holdings Inc 697,003 730,404 1.1
12,934 International Game Technology 248,732 228,414 0.4
49,550 Playags Inc 567,085 571,311 0.9
--------------- --------------- ---------------
2,008,534 2,048,044 3.2
========= ========= =========
Retailing
23,100 Garrett Motion Inc 181,474 208,593 0.3
9,400 Nordstrom Inc 227,179 227,010 0.4
17,203 Sportsman's Warehouse Holdings 172,705 45,932 0.1
--------------- --------------- ---------------
581,358 481,535 0.8
========= ========= =========
Total Consumer Discretionary 2,594,939 2,531,805 4.0
========= ========= =========
Consumer Staples
Food & Staples Retailing
57,530 Albertsons Cos Inc 1,171,629 1,129,889 1.8
39,450 Kellanova 3,167,353 3,194,266 5.0
850 Lifeway Foods Inc 19,526 21,080 0.0
--------------- --------------- ---------------
4,358,508 4,345,235 6.8
========= ========= =========
Total Consumer Goods 4,358,508 4,345,235 6.8
========= ========= =========
Energy
Energy
6,710 Battalion Oil Corp 40,358 11,541 0.0
30,412 Championx Corp 1,062,563 826,902 1.3
28,230 Hess Corp 4,059,472 3,754,872 5.9
40,900 Profire Energy Inc 102,708 103,886 0.2
--------------- --------------- ---------------
5,265,101 4,697,201 7.3
========= ========= =========
Total Energy 5,265,101 4,697,201 7.3
========= ========= =========
Financials
Asset Management
51,800 Canaccord Genuity Group Inc 324,712 364,134 0.6
--------------- --------------- ---------------
324,712 364,134 0.6
========= ========= =========
Banks
796 First Bancshares Inc 26,700 27,860 0.0
350 Village Bank and Trust Financial Corp 26,391 27,317 0.0
--------------- --------------- ---------------
53,091 55,177 0.1
========= ========= =========
Diversified Financial Services
27,866 Bm Technologies Inc 132,793 136,265 0.2
18,250 CI Financial Corp 405,799 392,612 0.6
4,078 Discover Financial Services 591,334 706,432 1.1
750 Moneylion Inc 64,676 64,507 0.1
13,450 Payfare Inc 35,755 35,912 0.1
--------------- --------------- ---------------
1,230,357 1,335,728 2.1
========= ========= =========
Insurance
1,283 Enstar Group Ltd 413,444 413,190 0.6
4,550 Icc Holdings Inc 100,602 105,833 0.2
--------------- --------------- ---------------
514,046 519,023 0.8
========= ========= =========
Total Financials 2,122,206 2,274,062 3.6
========= ========= =========
Health Care
Health Care Equipment & Supplies
22,988 Amedisys Inc 2,128,202 2,087,080 3.3
34,550 Cross Country Healthcare Inc 623,455 627,428 1.0
7,000 Patterson Cos Inc 216,130 216,020 0.3
14,500 Surmodics Inc 594,071 574,200 0.9
--------------- --------------- ---------------
3,561,858 3,504,728 5.5%
========= ========= =========
Pharmaceuticals, Biotechnology & Life Sciences
25,850 Avid Bioservices Inc 317,098 319,248 0.5
16,275 Clementia Pharmaceuticals Inc 420,388 0 -
7,650 Contra Abiomed Inc 7,803 13,387 0.0
132,674 Contra Adamas Pharmaceuticals 0 1,658 0.0
90,210 Contra Akouos Inc 0 45,105 0.1
100,314 Contra Flexion Therapeutics 0 10,031 0.0
5,300 Contra Opiant Pharmaceuticals 3,445 2,650 0.0
155,990 Cyteir Therapeutics 0 0 -
8,716 Grifols S.A. 99,734 64,847 0.1
127,000 Revance Therapeutics Inc 713,616 386,080 0.6
--------------- --------------- ---------------
1,562,084 843,006 1.3
========= ========= =========
Total Health Care 5,123,942 4,347,734 6.8
========= ========= =========
Industrials
Capital Goods
29,800 Barnes Group Inc 1,383,935 1,408,348 2.2
45,684 Desktop Metal Inc 200,649 106,900 0.2
6,100 Heroux Devtek Inc 138,807 134,792 0.2
32,350 Manitex International Inc 181,815 187,630 0.3
36,893 Markforged Holding Corp 170,183 115,844 0.2
2,466 Mcgrath Rentcorp 288,266 275,748 0.4
14,450 Spirit AeroSystems Holdings Inc 494,076 492,456 0.8
23,350 Ttec Holdings Inc 130,920 116,516 0.2
--------------- --------------- ---------------
2,988,651 2,838,234 4.4
========= ========= =========
Total Industrials 2,988,651 2,838,234 4.4
========= ========= =========
Information Technology
Software & Services
306,233 Altaba Inc 3,755,803 436,382 0.7%
3,100 Altair Engineering Inc 322,380 338,241 0.5%
2,723 Ansys Inc 910,575 918,550 1.4%
600 Aspen Technology Inc 145,005 149,778 0.2%
88,700 Hashicorp Inc 2,951,304 3,034,427 4.7%
74,450 Matterport Inc 327,825 352,893 0.6%
3,850 Silicon Motion Technology 239,581 208,092 0.3%
36,350 Smartsheet Inc 2,023,581 2,036,691 3.2%
91,750 Zuora Inc 912,503 910,160 1.4%
--------------- --------------- ---------------
11,588,557 8,385,214 13.1%
========= ========= =========
Technology Hardware & Equipment
194,960 Infinera Corp 1,217,133 1,327,855 2.1%
54,200 Juniper Networks Inc 2,016,985 2,029,790 3.2%
--------------- --------------- ---------------
3,234,118 3,357,645 5.3%
========= ========= =========
Total Information Technology 14,822,675 11,742,859 18.4%
========= ========= =========
Materials
Containers & Packaging
22,531 Contra Resolute Forest 31,994 45,062 0.1%
--------------- --------------- ---------------
31,994 45,062 0.1%
========= ========= =========
Materials
297,583 Arcadium Lithium Plc 1,671,494 1,526,601 2.4%
8,027 Berry Global Group Inc 568,735 519,106 0.8%
--------------- --------------- ---------------
2,240,229 2,045,707 3.2%
========= ========= =========
Metals & Mining
3,500 Artemis Gold Inc. 149,617 33,462 0.1%
64,300 O3 Mining Inc 74,796 73,769 0.1%
20,150 Pactiv Evergreen Inc 349,074 352,020 0.6%
32,600 Summit Materials Inc 1,649,664 1,649,560 2.6%
43,685 United States Steel Corp 1,846,517 1,484,853 2.3%
2,700 Universal Stainless + Alloy 118,163 118,881 0.2%
--------------- --------------- ---------------
4,187,831 3,712,545 5.8%
========= ========= =========
Total Materials 6,460,054 5,803,314 9.1%
========= ========= =========
Utilities
Utilities
22,500 Allete Inc 1,414,837 1,458,000 2.3%
2,670 PNM Resources Inc 129,163 131,284 0.2%
--------------- --------------- ---------------
1,544,000 1,589,284 2.5%
========= ========= =========
Total Utilities 1,544,000 1,589,284 2.5%
========= ========= =========
RIGHTS
Financials
Asset Management
22,199 Breeze Holdings Acquisition Corp 5,527 1,443 0.0%
7,441 Clover Leaf Capital Corp 2,945 18 0.0%
13,400 Equity Commonwealth 10,419 23,718 0.0%
15,950 Northview Acquisition Corp 3,942 878 0.0%
20,450 Retail Opportunity Investment 354,789 355,012 0.6%
12,711 Viveon Health Acquisition Corp 2,312 766 0.0%
--------------- --------------- ---------------
379,934 381,835 0.6%
========= ========= =========
Total Financials 379,934 381,835 0.6%
========= ========= =========
Materials
Materials
190,215 Pan American Silver Corp CVR 28,643 70,379 0.1%
--------------- --------------- ---------------
28,643 70,379 0.1%
========= ========= =========
Total Materials 28,643 70,379 0.1%
========= ========= =========
WARRANTS
Financials
Asset Management
566 Blueriver Acquisition Corp 25 3 0.0%
4,394 Kalera PLC 1,984 0 0.0%
7,975 Northview Acquisition Corp 2,362 319 0.0%
3,186 OCA Acquisition Corp 108 10 0.0%
9,230 Viveon Health Acquisition Corp 2,933 46 0.0%
--------------- --------------- ---------------
7,412 378 0.0%
========= ========= =========
Total Financials 7,412 378 0.0%
========= ========= =========
Information Technology
Software & Services
2,139 Banzai International Inc 150 25 0.0%
16,200 Bm Technologies Inc 7,533 9,436 0.0%
34,900 Churchill Capital Corp IX 350,047 361,215 0.6%
13,933 CXApp Inc 8,968 2,647 0.0%
25,000 Klotho Neurosciences Inc 775 1,155 0.0%
48,961 Presto Automation Inc 23,304 98 0.0%
284 Prospector Leddartech 1 28 0.0%
1,429 Spectral AI Inc 50 1,086 0.0%
--------------- --------------- ---------------
390,828 375,690 0.6%
========= ========= =========
Total Information Technology 390,828 375,690 0.6%
========= ========= =========
FIXED INCOME
U.S. Government Obligations
U.S. Treasury Bills
4,500,000 U.S. Treasury Bill, 02/18/2025 4,473,891 4,475,432 7.0%
1,500,000 U.S. Treasury Bill, 02/20/2025 1,490,808 1,494,496 2.3%
2,000,000 U.S. Treasury Bill, 03/27/2025 1,980,072 1,980,470 3.1%
2,500,000 U.S. Treasury Bill, 06/02/2025 2,488,950 2,489,763 3.9%
1,500,000 U.S. Treasury Bill, 06/03/2025 1,488,408 1,489,028 2.3%
--------------- --------------- ---------------
11,922,129 11,929,189 18.7%
========= ========= =========
Total U.S. Government Obligations 11,922,129 11,929,189 18.7%
========= ========= =========
Notional Security Name Unrealized Market % Total
Amount
App/(Dep)
Value
Investments
Equity Contract for Difference Swap Agreements
Long Positions
6,700 Aluflexpack Ag New 3,327 115,332
77,613 Banco De Sabadell S.A (2,250) 150,851
140,639 Britvic Plc 33,466 2,305,624
8,272 Compugroup Medical Se & Co 1,363 186,389
55,158 Covestro Ag 2,114 3,312,734
126,692 De Grey Mining Ltd (12,023) 138,449
81,841 Direct Line Insurance Group 1,383 261,574
17,378 Disruptive Cap Swap (45,705) 43,528
489,290 Ds Smith Plc (22,906) 3,321,304
352,698 Eckoh Plc 0 235,878
131,910 Egetis Therapeutics AB 4,895 83,568
78,500 Equals Group Plc 0 132,231
642 Esker Sa 266 173,378
52,102 Esr Group Ltd (89) 80,085
6,738 Genkyotex Genkyotex 0 0
61,534 Hargreaves Lansdown Plc 1,541 846,175
10,254 Heartland Financial USA Inc (38,855) 628,621
63,800 Hkbn Ltd (1,807) 41,805
165 John Bean Technologies Corp (6,421) 20,971
32,748 Multichoice Group Ltd (23) 187,429
13,405 Neoen S.A. 3,609 551,348
24,045 Oci Nv (5,851) 269,278
56,757 Pinewood Technologies 9,951 255,186
3,404 Seven & I Holdings Co Ltd 2,082 53,867
63,850 Sg Fleet Group Ltd 0 134,807
16,298 Shinko Electric Industries 20,015 591,627
1,764 Softwareone Holding AG (19) 11,873
38,582 Spear Invst Wt Swap 0 8,789
301,590 Spirent Communications Plc (8,529) 668,549
366,304 Ti Fluid Systems Plc 831 886,322
8,691 Ubisoft Entertainment 5,979 118,344
--------------- ---------------
(53,656) 15,815,916
========= =========
Equity Contract for Difference Swap Agreements
Short Positions
(51,697) Amcor Plc 25,332 (486,469)
(23,464) Aviva Plc (1,545) (137,763)
(19,815) Banco Bilbao Vizcaya Argentaria 4,391 (193,940)
(4,161) Capital One Financial Corp 25,840 (741,989)
(1,995) Charter Communications 73,835 (683,826)
(28,961) Chevron Corp 261,518 (4,194,711)
(6,562) Grifols S.A. 3,683 (62,160)
(62,733) International Paper Co 103,484 (3,376,290)
(98,898) Nokia Corp 4,945 (438,118)
(15,077) Northern Star 10,221 (144,131)
(796) Renasant Corp 581 (28,457)
(22,360) Schlumberger Ltd 42,037 (857,282)
(802) Synopsys Inc 19,907 (389,259)
(5,629) Umb Financial Corp 40,864 (635,289)
--------------- ---------------
615,093 (12,369,684)
========= ========= =========
Total Equity Contract for Difference Swap Agreements 561,437 3,446,232 5.4%
========= ========= =========
Total Investments Including U.S. Treasuries $66,369,962 63,921,656 100.0%
========= ========= =========
20 APPROVAL OF FINANCIAL STATEMENTS
The Directors approved the financial statements on 28 March 2025.
COMPANY INFORMATION
REGISTERED NAME
Gabelli Merger Plus+ Trust Plc
REGISTERED OFFICE
3 St. James's Place,
London SW1A 1NP
BOARD OF DIRECTORS
Marc Gabelli
Marco Bianconi
John Birch
John Newlands
Yuji Sugimoto
James Wedderburn
PORTFOLIO MANAGER AND ALTERNATIVE INVESTMENT FUND MANAGER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580 USA
COMPANY SECRETARY
Bridgehouse Company Secretaries Limited
Suite 2:06,
Bridge House,
181 Queen Victoria Street,
London EC4V 4EG
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
ADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company
20 Churchill Place
Canary Wharf
London E14 5HJ
DEPOSITARY
State Street Trustees Ltd
20 Churchill Place
Canary Wharf
London E14 5HJ
REGISTRAR AND RECEIVING AGENT
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
LEGAL & FINANCIAL ADVISERS
Dickson Minto W.S.
16 Charlotte Square
Edinburgh
EH2 4DF
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London
EC2N 4BQ
CONTACT INFORMATION AND WEBSITE
Please visit us on the Internet. Our homepage at www.gabelli.co.uk includes
useful information about the Company, such as daily prices, factsheets,
announcements, and current and historic half year and annual reports.
We welcome your comments and questions at +44 (0) 20 3206 2100 or via e-mail
at info@gabelli.co.uk.
GENERAL INFORMATION
SEDOL/ISIN: BD8P074/GB00BD8P0741
London Stock Exchange (TIDM) Code: GMP
Legal Entity Identifier (LEI): 5493006X09N8HK0V1U37
The Company's registrar is Computershare Investor Services PLC.
Computershare's website address is investorcentre.co.uk and certain details
relating to your holding can be checked through this website. Alternatively,
Computershare can be contacted on 0370 707 1390.
Change of name or address must be notified through the website or sent to The
Pavilions, Bridgwater Road, Bristol BS99 6ZZ.
The Company is a member of The Association of Investment Companies ("AIC"),
which publishes a number of useful fact sheets and email updates for investors
interested in investment companies www.theaic.co.uk.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BLGDXISDDGURRecent news on Gabelli Merchant Partners
See all newsREG - Gabelli Merchant. Gabelli Merch - GMPP - Net Asset Value(s)
AnnouncementREG - Gabelli Merchant. Gabelli Merch - GMPP - Net Asset Value(s)
AnnouncementREG - Gabelli Merchant. Gabelli Merch - GMPP - Net Asset Value(s)
AnnouncementREG - Gabelli Merchant. Gabelli Merch - GMPP - Net Asset Value(s)
AnnouncementREG - Gabelli Merchant. Gabelli Merch - GMPP - Net Asset Value(s)
Announcement