REG - Investment Co PLC - Half-year Report
17/02/2025 07:00
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RNS Number : 2604X Investment Company PLC 17 February 2025
The Investment Company plc
Half Year Report for the six months ended 31 December 2024
LEI: 2138004PBWN5WM2XST62
The Investment Company plc (the "Company") is pleased to announce its
unaudited results for the six months ended 31 December 2024.
Summary of Results
At 31 December 2024 At 30 June
(unaudited) 2024
(audited) Change %
Equity Shareholders' funds (£) 7,356,860 7,376,741 (0.27)
Number of ordinary shares in issue * 1,837,205 1,837,205 -
Net asset value ("NAV") per ordinary share 400.44p 401.52p (0.27)
Ordinary share price (mid) 369.00p 353.00p 4.53
Discount to NAV 7.85% 12.08% 4.23
6 months to 6 months to
31 December 2024 31 December
(unaudited) 2023
(unaudited)
Total return per ordinary share ** (1.21p) 11.09p
Dividends paid per ordinary share nil nil
* Excluding 3,747,673 shares held in Treasury.
** The total return per ordinary share is based on total income after taxation
as detailed in the Condensed consolidated income statement and in note 4.
Introduction
At a General Meeting held on 26 June 2023, the members voted to amend the
investment objective. On 26 July 2023, the Company adopted the new investment
objective and policy following the completion of a tender offer and fund
raising. Alongside the change of investment objective and policy, Chelverton
Asset Management Limited were appointed as the Company's Investment Manager.
Investment Objective
The Company's investment objective is to maximise capital growth for
Shareholders over the long-term by investing in high-quality, quoted, UK small
and midcap companies.
Investment Policy
The Company intends to fulfil its investment objective through investing in
cash-generative quoted UK small and mid-cap companies that are expected to
grow faster than the UK stock market as a whole over the long term and which
can finance their own organic growth. The Company will primarily invest in
equity securities of companies with shares admitted to listing on the Main
Market, the AQSE or to trading on AIM with a market capitalisation of less
than £250 million at the time of investment. The Company may also invest in
companies with shares admitted to listing on the Main Market, the AQSE or to
trading on AIM with a market capitalisation of £250 million or more at the
time of investment for liquidity purposes. The Company will identify
prospective companies through a formal quantitative and qualitative screening
process which focuses on criteria such as the ability to convert a high
proportion of profit into cash, sustainable margins, limited working capital
intensity and a strong management team. Companies that successfully pass the
screening process will form part of the Company's 'investable universe' of
prospective companies.
The Company has not set any limits on sector weightings within the portfolio
but its exposures to sectors and stocks will be reported to, and monitored by,
the Board in order to ensure that adequate diversification is achieved. The
Company will maintain a diversified portfolio of a minimum of 60 holdings in
UK small and mid-cap companies.
The Company may also invest in cash, cash equivalents, near cash instruments
and money market instruments.
The Company will apply the following restrictions on its investments:
· not more than 10% of the Company's Gross Assets at the time of
investment will be invested in the securities of a single issuer;
· no investment will be made in companies that are not listed or
traded on the Main Market, the AQSE or AIM at the time of investment, nor in
any companies which have not applied for their shares to be admitted to
listing or trading on these markets;
· no investment will be made in other listed or unlisted
closed-ended investment funds or in any open-ended investment funds; and
· the Company will not invest directly in FTSE 100 companies
(preference shares, loan stocks or notes, convertible securities or fixed
interest securities or any similar securities convertible into shares), nor
will it invest in the securities of other investment trusts or in unquoted
companies. The Company may, on some occasions, hold such investments as a
result of corporate actions by investee companies. If the Company holds shares
in a company which enters the FTSE 100, it may not immediately divest of those
shares but will do so when it considers appropriate, subject to market
conditions.
The Company may hold assets acquired by the Company prior to the adoption of
its investment policy for which there is no market and whose value the Company
has written down to zero. The Company shall dispose of such assets as soon as
is reasonably practicable.
No material change will be made to the investment policy without the approval
of Shareholders by ordinary resolution.
Investment Managers Report
2024 was very much a year of two halves, with optimism and gains in the first
half reined back by the downbeat tone of the new Government in the second
half. The prospect of a majority Labour government that promoted fiscal
prudence and a pro-business stance, meant investors were looking forward to
political stability in the second half as the economy continued to improve.
The reality unfortunately proved very different. The new government almost
immediately started talking down the economy, undermining both business and
consumer confidence, continually referencing the existence of a £22 billion
black hole in public finances, which would need to be repaired by tax
increases. With increases in VAT, Income Tax and individual National Insurance
ruled out in the election campaign, the burden fell on business and savers.
The scale of the tax rises on business still surprised the market, with
companies curtailing new investment and hiring plans, and either looking to
pass on additional costs with inflationary price rises, where they can, or
cutting back on staff to reduce costs in labour intensive operations where
pricing power isn't a feature, curtailing the prospect of private sector
growth. At the same time, the Chancellor announced an increase in unfunded
public sector spending, undermining any confidence in the new government's
fiscal propriety and putting upward pressure on bond yields, undermining the
prospect of near-term rate cuts.
One issue that was particularly challenging for investors in UK smaller
companies was speculation surrounding the possible removal of business relief
from Inheritance Tax (IHT) on AIM shares. With the new government committing
to retaining tax relief for EIS and AIM VCT investing, the lack of mention of
AIM IHT relief caused a severe underperformance in AIM shares, where the
Company is circa 55% weighted (to get exposure to growth sectors like
Technology, Media and Healthcare). This underperformance was driven by
investors' concerns that relatively illiquid AIM IHT portfolios would need to
be unwound into an unreceptive market. As it was, AIM IHT relief was partially
withdrawn, moving AIM shares down the list of tax planning priorities but not
causing a wholesale sell-off, with AIM stocks enjoying a brief relief rally on
the budget, but only partially recovering the damage already done. With the
tax incentive substantially reduced, an increasing number of AIM-listed
holdings have either completed or proposed a move from AIM to the Main Market
(Alpha Group, Gamma Communications, Brooks Macdonald and Global Data). We
expect this trend to continue, particularly for larger AIM listed companies
that could benefit from Index inclusion when moving to a full listing.
As a consequence of the factors above, the Company endured an underwhelming
second half of 2024, with NAV performance of -0.3%, after returning 11.5% in
the first half of 2024. Whilst the UK market remains unloved by domestic
investors with all eyes on US Tech giants, the low valuations of its
constituents trade on have caught the eye of Private Equity and overseas trade
buyers with a high level of agreed takeovers, with 5 agreed offers for
holdings of the Company in the period.
The Company's highest contribution in the period came from online travel
operator On The Beach, which resolved a long-standing dispute with Ryanair
alongside reporting strong customer bookings growth, whilst the bid activity
referred to above drove contribution from Windward, Aquis Exchange and Eckoh.
Detractors included Oxford Metrics, which experienced customer order delays
within its motion-capture camera business, and several holdings that provide
discretionary B2B services (Ebiquity, Next 15 Group and Pulsar).
At a sectoral level, Technology remained the largest exposure within the
Company at 23.1%, perhaps unsurprisingly given the sector is home to many high
margin, high revenue visibility businesses with above average growth
prospects. As mentioned in the previous report, the largest divergence in
sector weightings in the period has been the increase in the Industrials
weighting (12.5%). Whilst less exposed to the domestic economy, we have more
recently built up the portfolio's Industrials exposure as overstocking caused
by earlier post pandemic supply chain disruption, which has impacted
industrial companies recent trading, starts to normalise. Outside of these
sectors, we have added a holding in Ashtead Technology, the subsea equipment
rental provider, and built up our positions in Brooks Macdonald and Luceco on
share price weakness.
Looking forward, as managers we feel that most of the bad news from the Budget
is now priced into the market. Inflation remains relatively subdued and real
interest rates remain high, with the prospect of further cuts, especially if
the economy continues to slow. President Trump's election has brought with it
significant uncertainty around tariffs, with some proposals implemented then
postponed whilst others, such as those focused on China, have gone ahead.
Meanwhile, the UK and EU await any potential tariff news and thus what
possible mitigating actions or concessions may be required. The Company's
investment process of identifying sustainably high margin, asset light
businesses means that most of the companies in the portfolio have pricing
power, with limited exposure to labour intensive businesses with poor pricing
power. Most of the Company's holdings have also advised that profits for 2024
will be at least in line with expectations in their year-end trading updates,
the exceptions being discretionary B2B services groups, which are suffering
from reduced discretionary spend by customers given the subdued economic
conditions. UK cyclical building materials stocks, whilst not seeing a
downturn, have not yet seen the rebound they had hoped for given the fewer
rate cuts than anticipated at the start of 2024.
In 2025, the Labour party's 'Growth Agenda' will be under close scrutiny and
we await with further clarification of capital projects and pro-growth
de-regulation. A manifesto commitment to increase UK pension fund allocation
to domestic investments would be a welcome change from the steady
disinvestment we've seen for many years, providing a real liquidity boost for
the Company's small and mid-cap end of the market. We continue to see the
portfolio as attractively valued and believe this is borne out by the
unprecedented level of takeover activity across the investment universe, as
well as the extent of share buy-backs as managers of the portfolio companies
see greater value using spare cash to buy their own shares back rather than
making acquisitions.
Chelverton Asset Management
14 February 2025
Enquiries
The Investment Company plc +44 (0) 20 3934 6630
Ian Dighé, Chairman info@theinvestmentcompanyplc.co.uk (mailto:info@theinvestmentcompanyplc.co.uk)
Chelverton Asset Management Limited
Investment Manager
David Horner +44(0)1225 483030
dah@chelvertonam.com (mailto:dah@chelvertonam.com)
Shore Capital Stockbrokers Limited
Gillian Martin/Daphne Zhang +44 (0) 20 7601 6128
(Corporate Advisory)
Henry Willcocks/Fiona Conroy
(Corporate Broking)
ISCA Administration Services Limited +44 (0) 1392 487056
Company Secretary
Portfolio and Assets
At 31 December 2024
Fair Value % of total net assets
Security Holding £
Alpha Group International 6,950 161,937 2.2
On the Beach Group 60,000 152,099 2.1
Learning Technologies Group 150,000 146,851 2.0
JTC 15,000 146,849 2.0
Global Data 72.500 136,663 1.8
Hostelworld 100,000 133,000 1.8
Restore 55,000 132,000 1.8
dotdigital 150,321 130,479 1.8
Eurocell 75,000 128,250 1.7
Bodycote 20,000 126,400 1.7
Brooks Macdonald 7,500 125,626 1.7
Auction Technology 22,500 123,750 1.7
Trufin 150,000 123,000 1.7
Ashtead Technology 22,056 122,853 1.7
Gamma Communications 8,000 122,400 1.7
Big Technologies 87,500 120,314 1.6
Celebrus Technologies 45,000 119,250 1.6
Sigmaroc 161,301 116,137 1.6
Warpaint London 22,381 115,038 1.6
Man Group 52,500 112,560 1.5
Clarkson 2,786 109,907 1.5
Inchcape 12,500 96,189 1.3
Vesuvius 22,500 95,063 1.3
Epwin Group 100,000 95,000 1.3
Duke Capital Limited 315,990 94,797 1.3
Coats Group 100,000 94,300 1.3
Spectris 3,750 93,975 1.3
Luceco 72,500 92,945 1.3
Advanced Medical Solutions Group 45,000 88,920 1.2
1Spatial 125,000 86,250 1.2
LBG Media 66,000 85,800 1.2
Spectra Systems 36,250 83,375 1.1
Windward 40,000 82,800 1.1
Zotefoams 25,000 78,750 1.1
Personal Group 42,500 78,200 1.1
Gooch and Housego 15,000 77,700 1.1
Alfa Financial Software Holdings 36,000 77,220 1.0
Diaceutics 62,500 76,875 1.0
System1 Group 12,500 76,250 1.0
Ebiquity 400,000 76,000 1.0
Premier Foods 40,000 75,040 1.0
EnSilica 175,000 73,500 1.0
The Pebble Group 162,500 73,125 1.0
Wickes 47,500 71,820 1.0
SDI Group 125,000 71,250 1.0
FDM Group (Holdings) 22,500 70,875 1.0
Microlise Group 75,000 69,750 0.9
Concurrent Technologies 50,000 68,500 0.9
Severfield 132,750 68,233 0.9
RWS Holdings 37,500 67,800 0.9
Aptitude Software Group 20,000 67,000 0.9
Accesso Technology Group 12,500 66,750 0.9
Adriatic Metals 35,000 66,640 0.9
DFS Furniture 45,495 63,693 0.9
YouGov 15,000 62,250 0.8
Tracsis 12,500 61,250 0.8
XP Power Limited 4,694 60,553 0.8
Pulsar 111,378 60,144 0.8
Kooth 32,500 57,850 0.8
Zoo Digital 150,000 57,000 0.8
Volution Group 10,000 56,000 0.8
Oxford Metrics 100,000 55,400 0.8
Somero Enterprise Inc. 17,500 55,125 0.7
Team17 25,000 55,000 0.7
Macfarlane Group 50,000 53,500 0.7
DP Poland 500,000 52,500 0.7
TT Electronics 50,000 52,000 0.7
Brave Bison 2,500,000 50,000 0.7
Next 15 Group 12,500 49,125 0.7
AJ Bell 10,750 48,643 0.7
Windar Photonics 78,000 46,800 0.6
PCI-PAL 75,893 46,295 0.6
Alliance Pharma 100,000 44,940 0.6
Eagle Eye Solutions 7,500 35,400 0.5
Seeing Machines 760,000 34,200 0.5
Water Intelligence 8,233 33,755 0.5
Nexteq 50,596 31,874 0.4
Dianomi 75,000 29,250 0.4
Getbusy 50,000 28,000 0.4
Inspired 65,000 26,650 0.4
Smarttech247 Group 250,000 26,250 0.4
Victorian Plumbing 25,000 23,200 0.3
Acuity RM 1,142,857 21,714 0.3
Arecor Therapeutics 30,000 21,600 0.3
Merit Group 70,000 21,000 0.3
Future 1,925 17,826 0.2
Quanex Building Supplies 750 14,511 0.2
Narf Industries 2,500,000 12,500 0.2
Invinity Energy Systems 71,739 11,120 0.1
PJSC Lukoil ADR (Rep 1 Ord RUB0.025) 9,500 - 0.0
Total equity investments 6,722,973 91.4
Cash 425,303 5.8
Other assets net of other liabilities 208,584 2.8
Total cash and other net current assets 633,887 8.6
Total net assets 7,356,860 100.0
Interim management report and Directors' responsibility statement
Interim management report
The important events that have occurred during the period under review and
their impact on the financial statements are set out in the Investment
Manager's Report above.
In the view of the Board, the principal risks facing the Group are
substantially unchanged since the date of the Report and Accounts for the year
ended 30 June 2024 and continue to be as set out in that report. Risks faced
by the Group include, but are not limited to, market risk (which comprises
market price risk, interest rate risk and liquidity risk). Details of the
Group's management of these risks and exposure to them is set out in the
Group's Report and Accounts for the year ended 30 June 2024.
Other than as disclosed in note 9, there have been no significant changes in
the related party disclosures set out in the Annual Report.
The Board has undertaken a review of the Company's subsidiaries and has
concluded that it is in the best interests of the Group to commence the
wind-up of New Centurion Trust Limited which became a subsidiary of the
Company in 2005. It is a dormant company whose only asset is the preference
shares in the Company which are eliminated on consolidation. Therefore, the
wind up will have no impact on the Group's financial statements.
Directors' responsibility statement
The Directors confirm that to the best of their knowledge:
· the condensed set of financial statements has been prepared in
accordance with International Accounting Standard 34, Interim Financial
Reporting, and gives a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group; and
· this Half-Yearly Financial Report includes a fair review of the
information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being
an indication of important events that have occurred during the first six
months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the Group during that period; and any changes in
the related party transactions that could do so.
This Half-Yearly Financial Report was approved by the Board of Directors on 14
February 2025 and the above responsibility statement was signed on its behalf
by I. R. Dighé, Chairman.
Condensed consolidated income statement
For the six months ended 31 December 2024 (unaudited)
6 months to 31 December 2024 6 months to 31 December 2023 Year ended 30 June 2024
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£ £ £ £ £ £ £ £ £
(Losses)/gains on investments at fair value through profit or loss - (11,153) (11,153) - 258,021 258,021 - 886,415 886,415
Exchange loss on capital items - (1) (1) - (10,475) (10,475) - (10,484) (10,484)
Investment income 2 59,187 3,750 62,937 84,002 - 84,002 210,040 118,536 328,576
Investment Management fee 3 - - - - - - - - -
Expenses (74,834) - (74,834) (80,660) - (80,660) (188,232) - (188,232)
(Loss)/return before taxation (15,647) (7,404) (23,051) 3,342 247,546 250,888 21,808 994,467 1,016,275
Taxation 801 - 801 (1,123) - (1,123) (3,629) - (3,629)
Total (loss)/return (14,846) (7,404) (22,250) 2,219 247,546 249,765 18,179 994,467 1,012,646
after taxation
Revenue Capital Total Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence pence pence pence
Return on total income after taxation per 50p ordinary share - basic & 4 (0.81) (0.40) (1.21) 0.10 10.99 11.09 0..89 48.61 49.50
diluted
The total column of this statement is the Income Statement of the Group
prepared in accordance with International Accounting Standards in conformity
with the Companies Act 2006. The supplementary revenue and capital columns are
prepared in accordance with the Statement of Recommended Practice ("AIC SORP")
issued in July 2022 by the Association of Investment Companies.
The Group did not have any income or expense that was not included in total
income for the period. Accordingly, total income is also total comprehensive
income for the period, as defined by IAS 1 (revised) and no separate Statement
of Comprehensive Income has been presented.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
The notes form part of these condensed financial statements.
Condensed consolidated statement of changes in equity
For the six months ended 31 December 2024 (unaudited)
Ordinary Share Capital redemption reserve Capital Revenue Total
share premium £ Special reserve reserve £
capital £ Reserve £ £
£ £
Balance at 1 July 2024 2,792,439 2,425,325 - - 3,662,726 (1,503,749) 7,376,741
Total comprehensive income
Net loss for the period - - - - (7,404) (14,846) (22,250)
Transactions with Shareholders recorded directly to equity
Ordinary dividends (note 5) - - - - - 2,369 2,369
Balance at 31 December 2024 2,792,439 2,425,325 - - 3,655,322 (1,516,226) 7,356,860
Balance at 1 July 2023 2,386,025 4,453,903 2,408,820 - 8,545,911 (1,523,855) 16,270,804
Total comprehensive income
Net return for the period - - - - 247,546 2,219 249,765
Transactions with Shareholders recorded directly to equity
Cancellation of share premium account and capital redemption reserve - (4,453,903) (2,408,820) - - -
6,862,723
Share issue 406,414 2,425,325 - - - - 2,831,739
Costs of shares purchased under Tender Offer and held in Treasury - - - (12,658,140) - (12,658,140)
-
Tender offer and share issue costs - - - - (82,235) - (82,235)
Ordinary dividends (note 5) - - - - - 1,927 1,927
Balance at 31 December 2023 2,792,439 2,425,325 - 6,862,723 (3,946,918) (1,519,709) 6,613,860
Balance at 1 July 2023 2,386,025 4,453,903 2,408,820 - 8,545,911 (1,523,855) 16,270,804
Total comprehensive income
Net return for the year - - - - 994,467 18,179 1,012,646
Transactions with Shareholders recorded directly to equity
Cancellation of share - (4,453,903) (2,408,820) 6,862,723 - - -
premium account and
capital redemption
reserve
Share issue 406,414 2,425,325 - - - - 2,831,739
Cost of shares purchased under Tender Offer and held in Treasury - - - (6,862,723) (5,795,417) - (12,658,140)
Tender offer and share issue costs - - - - (82,235) - (82,235)
Ordinary dividends (note 5) - - - - - 1,927 1,927
Balance at 30 June 2024 2,792,439 2,425,325 - - 3,662,726 (1,503,749) 7,376,741
The notes form part of these condensed financial statements.
Condensed consolidated balance sheet
At 31 December 2024 (unaudited)
31 December 2024 31 December 2023 30 June
£ £ 2024
Notes £
Non-current assets
Investments held at fair value through profit or loss 8 6,722,973 6,209,733 7,069,820
Current assets
Trade and other receivables 332,043 140,531 264,926
Cash and cash equivalents 425,303 368,049 252,293
757,346 508,580 517,219
Current liabilities
Trade and other payables (123,459) (104,453) (210,298)
(123,459) (104,453) (210,298)
Net current assets 633,887 404,127 306,921
Net assets 7,356,860 6,613,860 7,376,741
Capital and reserves
Ordinary share capital 6 2,792,439 2,792,439 2,792,439
Share premium 2,425,325 2,425,325 2,425,325
Special reserve - 6,862,723 -
Capital reserve 3,655,322 (3,946,918) 3,662,726
Revenue reserve (1,516,226) (1,519,709) (1,503,749)
Shareholders' funds 7,356,860 6,613,860 7,376,741
NAV per ordinary share of 50p 7 400.44p 360.00p 401.52p
The notes form part of these condensed financial statements.
Condensed consolidated cash flow statement
For the six months ended 31 December 2024 (unaudited)
31 December 2024 31 December 2023 30 June
£ £ 2024
£
Cash flows used in operating activities
Income received from investments 68,758 14,451 269,318
Interest received 2,738 48,236 50,708
Overseas taxation received (paid) 808 (2,609) (4,475)
Investment management fees paid - - -
Other cash payments (233,486) (211,259) (352,286)
Net cash used in operating activities (161,182) (151,181) (36,735)
Cash flows generated from/(used in) financing activities
Proceeds from Share Issue - 3,618,690 3,618,690
Funding of Tender Offer - (13,445,091) (13,445,091)
Share Issue and Tender Offer expenses paid - (539,075) (539,075)
Net cash used in financing activities - (10,365,476) (10,365,476)
Cash flows generated from investing activities
Purchase of investments (1,769,680) (5,956,391) (9,459,505)
Sale of investments 2,103,873 8,558,662 11,831,583
Net cash generated from investing activities 334,193 2,602,271 2,372,078
Net increase/(decrease) in cash and cash equivalents 173,011 (7,914,386) (8,030,133)
Reconciliation of net cash flow to movement in net cash
Increase/(decrease) in cash 173,011 (7,914,386) (8,030,133)
Exchange rate movements (1) 9 -
Increase/(decrease) in net cash 173,010 (7,914,377) (8,030,133)
Net cash at start of period 252,293 8,282,426 8,282,426
Net cash at end of period 425,303 368,049 252,293
Analysis of net cash
Cash and cash equivalents 425,303 368,049 252,293
425,303 368,049 252,293
The notes form part of these condensed financial statements.
Condensed notes to the consolidated financial statements
For the six months ended 31 December 2024 (unaudited)
1. Significant accounting policies
Basis of Preparation
The condensed consolidated financial statements, which comprise the unaudited
results of the Company and its wholly owned subsidiaries, Abport Limited and
New Centurion Trust Limited, (until the date of liquidation) together referred
to as the "Group", have been prepared in accordance with United Kingdom
adopted International Accounting Standards and in accordance with the
requirements of the Companies Act 2006. The financial statements have been
prepared in accordance with the AIC SORP, except to any extent where it is not
consistent with the requirements of International Accounting Standards. The
accounting policies are as set out in the Report and Accounts for the year
ended 30 June 2024.
The half-year financial statements have been prepared in accordance with IAS
34 "Interim Financial Reporting".
The financial information contained in this half year financial report does
not constitute statutory accounts as defined by the Companies Act 2006. The
financial information for the periods ended 31 December 2024 and 31 December
2023 have not been audited or reviewed by the Company's Auditor. The figures
and financial information for the year ended 30 June 2024 are an extract from
the latest published audited statements, and do not constitute the statutory
accounts for that year. Those accounts have been delivered to the Registrar of
Companies and include a report of the Auditor, which was unqualified and did
not contain a statement under either Section 498(2) or 498(3) of the Companies
Act 2006.
Going Concern
The Directors have made an assessment of the Group's ability to continue as a
going concern. This has included consideration of portfolio liquidity, the
Group's financial position in respect of its cash flows and investment
commitments (of which there are none of significance), the working
arrangements of the key service providers, the continued eligibility to be
approved as an investment trust company, the impact of the conflicts in
Ukraine and the Middle East, and the current economic environment. In
addition, the Directors are not aware of any material uncertainties that may
cast significant doubt upon the Group's ability to continue as a going
concern.
The Directors are satisfied that the Group has the resources to continue in
business for the foreseeable future being a period of at least 12 months from
the date that these financial statements were approved. Therefore, the
financial statements have been prepared on the going concern basis.
Segmental Reporting
The Directors are of the opinion that the Group is engaged in a single segment
of business, being investment business.
2. Income
6 months to 6 months to Year ended
31 December 2024 31 December 2023 30 June
£ £ 2024
£
Income from investments:
UK dividends 58,998 22,061 241,132
Unfranked dividend income (including scrip dividends) 1,201 5,115 13,548
UK fixed interest - 7,723 23,188
60,199 34,899 277,868
Other income
Bank deposit and other interest 2,738 49,103 50,708
Total income 62,937 84,002 328,576
3. Investment Management Fee
6 months to 6 months to Year ended
31 December 2024 31 December 2023 30 June
£ £ 2024
£
Investment management fee - - -
The Company was self-managed until 26 July 2023 when Chelverton Asset
Management were appointed as Investment Manager.
The Investment Manager is entitled to an annual fee of 0.75% of the Net Asset
Value. To the extent that the ongoing charges ratio exceeds 2% of Net Asset
Value, the Investment Manager has waived the management fee and shall instead
make a contribution to the Company to ensure that the ongoing charges ratio
does not exceed 2% of Net Asset Value. An amount of £118,352 has become
available to offset against future investment management fees during the
period.
At 31 December 2024, there was an amount of £307,828 due to the Group as a
contribution towards the running costs of the Group.
4. Return per Ordinary Share
Returns per share are based on the weighted average number of shares in issue
during the period. Normal and diluted returns per share are the same as there
are no dilutive elements on share capital.
6 months to 6 months to Year ended
31 December 2024 31 December 2023 30 June 2024
Net return Pence per share Net return Pence per share Net return Pence per share
£ £ £
Return after taxation attributable to ordinary Shareholders
Revenue (14,846) (0.81) 2,219 0.10 18,179 0.89
Capital (7,404) (0.40) 247,546 10.99 994,467 48.61
Total comprehensive income (22,250) (1.21) 249,765 11.09 1,012,646 49.50
Weighted average number of ordinary shares 1,837,205 2,251,911 2,045,691
5. Dividends per Ordinary Share
Amounts recognised as distributions to equity holders in the period.
6 months to 31 December 2024 6 months to 31 December 2023 Year ended
£ £ 30 June
2024
£
Ordinary shares
Unclaimed dividends in respect of prior periods clawed back after 12 years (2,369) (1,927) (1,927)
Total (2,369) (1,927) (1,927)
6. Ordinary Share Capital
31 December 2024 31 December 2023 30 June 2024
Number £ Number £ Number £
Ordinary shares of 50p each 5,584,878 2,792,439 5,584,878 2,792,439 5,584,878 2,792,439
As announced on 18 July 2023, 3,980,664 ordinary shares were validly tendered
pursuant to the Tender Offer, constituting 83.4% of the existing issued share
capital of the Company at that date. All validly tendered ordinary shares were
accepted in full, with 3,747,673 ordinary shares repurchased by the Company
and 232,991 ordinary shares sold to Incoming Shareholders pursuant to the
Matched Bargain Facility.
In addition, on 26 July 2023 the Company issued 812,829 new ordinary shares in
connection with the Offer for Subscription and Intermediaries Offer.
Following Admission, and completion of the Tender Offer, the Company's total
issued share capital comprises of 5,584,878 ordinary shares. Of the shares in
issue, 3,747,673 ordinary shares are held in Treasury. Therefore, the total
number of shares with voting rights in the Company is 1,837,205.
The above figure of 1,837,205 may be used by Shareholders as the denominator
for the calculations by which they will determine if they are required to
notify their interest, or a change to their interest in, the Company under the
FCA's Disclosure Guidance and Transparency Rules.
The ordinary shares entitle the holders to receive all ordinary dividends and
all remaining assets on a winding up, after the fixed rate preference shares
have been satisfied in full.
At 31 December 2024, the Company holds 3,747,673 ordinary shares in Treasury
(31 December 2023: 3,747,673, 30 June 2024: 3,747,673).
7. Net Asset Value per Ordinary Share
The NAV per ordinary share is calculated as follows:
31 December 2024 31 December 2023 30 June 2024
£ £ £
Net assets 7,356,860 6,613,860 7,376,741
Ordinary shares in issue (excluding shares held in Treasury) 1,837,205 1,837,205 1,837,205
NAV per ordinary share 400.44p 360.00p 401.52p
8. Fair Value Hierarchy
The fair value is the amount at which an asset could be sold in an ordinary
transaction between market participants at the measurement date, other than a
forced or liquidation sale. The Group measures fair values using the following
hierarchy that reflects the significance of the inputs used in making the
measurements.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant asset as follows:
Level 1 - valued using quoted prices, unadjusted in active markets for
identical assets and liabilities.
Level 2 - valued by reference to valuation techniques using observable inputs
for the asset or liability other than quoted prices included in Level 1.
Level 3 - valued by reference to valuation techniques using inputs that are
not based on observable market data for the asset or liability.
The table below sets out fair value measurement of financial instruments as at
31 December 2024, by the level in the fair value hierarchy into which the fair
value measurement is categorised.
Level 1 Level 2 Level 3 Total
£ £ £ £
At 31 December 2024
Investments held at fair value through profit or loss 6,722,973 - - 6,722,973
At 31 December 2023
Investments held at fair value through profit or loss 6,209,733 - - 6,209,733
At 30 June 2024
Investments held at fair value through profit or loss 7,069,820 - - 7,069,820
9. Related party transactions
Fiske plc, a company in which Mr Perrin is a non-executive director, is the
Company's custodian. An amount of £3,535 (2023: £3,088) was paid to Fiske
plc pursuant to the custody agreement and, as at the period end, £1,755
(2023: £1,553) was payable to Fiske plc.
David Horner was appointed as a non-executive Director on 26 July 2023. Mr
Horner is the Investment Trust Director of the Investment Manager. The
transactions with the Investment Manager are described in note 3. At 31
December 2024, there was an amount of £307,828 due to the Group as a
contribution towards the running costs of the Group.
During the first six months of the financial year, no other transactions with
related parties have taken place which have materially affected the financial
position or performance of the Group.
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of this announcement.
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