Annual Financial Report
20/12/2022 07:00
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RNS Number : 2371K Majedie Investments PLC 20 December 2022
MAJEDIE INVESTMENTS PLC
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2022
The Directors of Majedie Investments PLC are pleased to announce the Annual
Report and Accounts ("Annual Report") for the year ended 30 September 2022.
The Annual Report can be obtained from the Company's website at
www.majedieinvestments.com (http://www.majedieinvestments.com) or by
contacting the Company Secretary on telephone number 07936 332 503.
INVESTMENT OBJECTIVE
The Company's investment objective is to maximise total shareholder return
whilst increasing dividends by more than the rate of inflation over the long
term.
Highlights 2022 2021
Total shareholder return (including dividends): -24.9% 37.1%
Net asset value total return (debt at fair value including dividends): -18.2% 22.5%
Net asset value total return (debt at par including dividends): -19.8% 20.6%
Total dividends (per share): 10.4p 11.4p
Directors' valuation of investment in Majedie Asset Management Limited: £25.2m
Sold
YEAR'S SUMMARY
Capital Structure Note 2021 %
(see below) 2022
As at 30 September
Total assets 1 £137.6m £173.0m -20.4
Which are attributable to:
Financial liabilities (debt at par value) 2 £20.8m £20.8m -23.1
Equity Shareholders Funds £116.9m £152.2m
Gearing 3 12.6% 12.3%
Potential Gearing 3 17.8% 13.7%
Total returns (capital growth plus dividends) 4
Net asset value per share (debt at par value) 5 -19.8% +20.6%
Net asset value per share (debt at fair value) 5 -18.2% +22.5%
Share price -24.9% +37.1%
Capital returns
Net asset value per share (debt at par value) 5 220.6p 287.1p -23.1
Net asset value per share (debt at fair value) 220.5p 281.4p -21.7
Share price 163.5p 230.0p -30.4
Discount of share price to net asset value per share
Debt at par value 27.5% 19.9%
Debt at fair value 27.4% 18.3%
Revenue and dividends
Net revenue available to Equity Shareholders £2.8m £5.0m
Net revenue return per share 5.2p 9.4p -44.7
Total dividends per share 10.4p 11.4p -8.7
Total administrative expenses and management fees £1.6m £1.6m
Ongoing Charges Ratio 6 1.3% 1.2%
Notes:
Alternative Performance Measures (APM) definitions used in the Annual Report
are as follows:
1. Total Assets: Total assets are defined as total assets less
current liabilities.
2. Debt at par or fair value: Par value is the carrying value
of the debenture which will equate to the nominal value at maturity. Fair
value is the estimated market value the Company would pay (on the relevant
reporting date), as a willing buyer, to a debenture holder, as a willing
seller, in an arms-length transaction.
3. Gearing and Potential Gearing: Gearing represents the
amount of borrowing that a company has and is calculated using the Association
of Investment Companies (AIC) guidance. It is usually expressed as a
percentage of equity shareholders' funds and a positive percentage or ratio
above one shows the extent of the level of borrowings. Gearing is calculated
as borrowings less net current assets to arrive at a net borrowings figure.
Potential Gearing excludes cash from the calculation. Details of the
calculation for the Company are in note 22.
4. Total Return: Total returns include any dividends paid as
well as capital returns as a result of an increase or decrease in a company's
share price or NAV.
5. Net Asset Value: The Net Asset Value (NAV) is the value of
all of the Company's assets less all liabilities. The NAV is usually expressed
as an amount per share.
6. Ongoing Charges Ratio (OCR): Ongoing charges are a measure
of the regular ongoing administration costs of running a company, as
calculated in accordance with AIC guidance. Further information is shown in
the Business Review section of the Strategic Report contained within the full
Annual Report.
Year's high/low 2022 2021
Share price high 243.0p 252.5p
low 160.0p 176.0p
Net asset value - debt at par high 297.1p 304.2p
low 220.7p 245.0p
Discount - debt at par high 28.7% 30.0%
low 14.9% 13.3%
Discount - debt at fair value high 28.5% 27.9%
low 13.4% 11.2%
Ten Year Record
to 30 September 2022
Year End Total Equity share-holders' Funds NAV Per Share (Debt at par value) Share Discount Earnings Pence Total Dividend** Pence Gearing† Potential Gearing† Ongoing Charges Ratio(#)
Price
Assets ++ £000 Pence
Pence % % % %
£000
2013 159,013 125,166 240.5 160.0 33.47 6.80 10.50 21.47 27.04 1.73
2014 167,934 134,061 256.7 229.0 10.79 9.36 7.50 23.39 25.27 1.66
2015 183,708 149,807 281.9 257.3 8.74 9.42 8.00 21.25 22.63 1.88
2016 203,917 169,986 318.1 257.1 19.18 9.25 8.75 18.46 19.96 1.58
2017 216,507 182,544 341.6 281.5 17.59 11.14 9.75 17.09 18.61 1.54
2018 199,151 178,626 334.3 277.5 16.99 12.47 11.00 10.01 11.49 1.33
2019 175,621 155,074 292.3 256.0 12.42 12.92 11.40 11.50 13.25 1.34
2020 152,153 131,333 247.7 176.5 28.74 9.11 11.40 10.97 15.85 1.34
2021 172,951 152,153 287.1 230.0 19.89 9.41 11.40 12.26 13.67 1.25
2022 137,647 116,887 220.6 163.5 27.50 5.20 10.40 12.65 17.80 1.34
Notes:
** Dividends disclosed represent dividends that relate to the Company's
financial year. Under UK adopted International Accounting Standards dividends
are not accrued until paid or approved. Total dividends include special
dividends paid, if any.
† Calculated in accordance with AIC guidance.
# As of May 2012, under AIC guidance, Ongoing Charges Ratio replaced previous
cost ratios.
++ Total Assets are defined as total assets less current liabilities.
STRATEGIC REPORT
CHAIRMAN'S STATEMENT
The year ended 30 September 2022 was very disappointing for shareholders as
the NAV at par and fair value (net asset value with debt at par and fair
value) fell by 19.8% and 18.2% respectively on a total return basis. The share
price fell by 24.9% also on a total return basis. By way of comparison, the
FTSE All-Share Index fell by 4.0% and the MSCI All Country Index fell by 4.2%
in sterling terms and in both cases, on a total return basis.
The sale of Majedie Asset Management Limited (MAM) to Liontrust Asset
Management PLC (Liontrust) announced in December 2021 was completed on 1 April
2022. In May 2022 Majedie Investments PLC (the Company) announced that the
Board was considering the Company's investment objective together with the
range of assets that should be considered for inclusion in the Company's
portfolio, as well as its own responsibilities for portfolio allocation.
On 10 November 2022 the Company announced that, following an extensive review
of the Company's investment management arrangements, it had entered into a
conditional agreement to appoint Marylebone Partners LLP (Marylebone) as the
Company's investment manager. Following its recent approval by the FCA, a
Shareholder Resolution to implement the new investment policy will be voted on
by shareholders at the General Meeting on 25 January 2023.
The Board believes the change in investment manager and the adoption of the
new investment policy will provide the following benefits to shareholders:
· Potential for differentiated and repeatable investment
performance, enabled by a transition to a liquid endowment model. The model is
a long-term strategy that focusses on fundamental investments and incorporates
multi-asset return sources that are realisable within a 2-3 year time horizon.
It will not feature private equity, venture capital, infrastructure or
property. Over the three years to 30 September 2022, Marylebone representative
track record has delivered net annualised performance in GBP of +8.4%, some 4%
ahead of the U.K. Consumer Price Index.
· A differentiated return profile, complementing shareholders'
other investments. Given the opportunity across its three core activities,
Marylebone believes it should be possible to deliver capital appreciation,
whilst funding a dividend out of a combination of underlying income and
capital growth.
· Alignment of interests and participation in the future growth of
Marylebone. The Company will receive, for no consideration, an interest in
Marylebone entitling it to 7.5% of residual profits and capital.
· The Board is aware of investors (including parties connected to
Marylebone) who have expressed an interest in becoming shareholders. The Board
and Marylebone believe this may help narrow the discount to Net Asset Value at
which the Company's shares trade currently, whilst potentially improving
liquidity and paving the way for future growth.
· Cost mitigation. Marylebone will reduce the management fee
payable by Majedie by 50% for a period of twelve months and make a significant
ongoing contribution to the cost of marketing the Company.
Results and Dividends
In the twelve months to 30 September 2022 the Company had a capital loss of
£31.9m which includes
£12.0m resulting from the decline in value of the Liontrust shares received
as part of the MAM transaction.
Total income received from investments was £3.9m compared to £6.1m in the
twelve months to 30 September 2021. The dividend received from MAM was £1.2m,
compared to £4.0m the previous year and the income from MAM Funds was £2.7m
compared to £2.1m in 2021. Total administration costs and management fees and
finance costs were £1.7m and £1.5m respectively.
The net revenue return after tax decreased from £5.0m in the year to 30
September 2021 to £2.8m in the year to 30 September 2022. The interim
dividend was maintained at 4.4p and the Board is recommending a final dividend
of 4.2p and a special dividend of 1.8p. The reduction in the final dividend
reflects the reduction in net revenue and the special dividend reflects the
new dividend policy of paying circa 0.75% of NAV quarterly.
The final dividend will be payable on 27 January 2023 to shareholders on the
register at 13 January 2023 and the Company's shares go ex-dividend on 12
January 2023.
Investment Performance
The investment performance of the funds in which the Company is invested was
disappointing both on an absolute and relative basis with the notable
exception of the Tortoise Fund which increased by 8.6%. The CEO's report which
follows gives further detail on the reasons behind this.
As a result of the sale of MAM the Company received a combination of shares in
Liontrust and cash which was valued at £22.4m on 7 December 2021, the date
the transaction with Liontrust was announced, compared with the valuation of
the Company's holding in MAM at 30 September 2021 of £25.2m. Subsequent to
the announcement the share price of Liontrust declined and at 30 September
2022 the transaction value had reduced by a further £9.2m to £13.2m
including dividends received from Liontrust, a loss for the year of £12.0m.
The Company was able to negotiate the removal of the lock up on selling
Liontrust shares in July 2022. Subsequently, it has sold 108,000 Liontrust
shares for an average price of 908p per share. At 30 September 2022 the
Company had a holding of 539,207 shares in Liontrust.
Notwithstanding the writedowns in the stake in MAM in recent years the Company
has benefitted from providing seed capital to MAM in 2002 both in terms of
capital growth and receipt of dividends. The Board would like to thank the
team for their hard work and dedication in growing the business and wishes
them well in their new role as the Global Fundamental Team at Liontrust.
Investment Management Arrangements
As described earlier the Company has announced it has entered into a
conditional agreement to appoint Marylebone as its investment manager. Founded
in 2013 Marylebone is an independent firm, currently managing US $400m for
professional and institutional clients which includes charities, foundations,
family offices and high net worth individuals.
With equities at its heart, Marylebone's long-term fundamental approach is
aligned with Majedie's ethos. Their proposition met the Board's criteria for
an investment manager who could deliver differentiated investment outcomes and
bring a new and relevant proposition to the investment trust sector, whilst
developing the Company's culture and history.
The Board selected Marylebone for its ability to identify differentiated
investment opportunities and reputation for protecting and growing the wealth
of its clients. Marylebone's investment approach includes three core
strategies, comprising special investments, allocations to specialist funds
managed by third parties and a focused portfolio of listed equities.
Marylebone sources investments through a global network, which its principals
have built over nearly three decades at industry leading firms. The Board
believes it will be increasingly important to identify differentiated sources
of performance from the large and growing set of less researched opportunities
that are available within this wider investment mandate, in addition to those
in other major asset classes.
In order to proceed with the appointment of Marylebone, the Company intends to
amend its investment policy at a General Meeting. This will enable Majedie to
pursue a high-conviction, long-term approach that is unconstrained by
geographic limitations or any formal benchmark. Following adoption of the new
investment strategy, the Company will target annualised total returns (net of
fees and expenses, in GBP) of at least 4% above the UK Consumer Price Index,
measured over rolling five-year periods. The target total return will include
an annual dividend, paid quarterly.
Each quarterly dividend payment is initially expected to comprise 0.75% of the
relevant quarter-end Net Asset Value, leading to an annual dividend of
approximately 3% of Net Asset Value. Further details are included in an
accompanying circular for General Meeting.
Marketing
The Company normally conducts marketing through face-to-face meetings together
with research from Kepler to targeted wealth managers. The review of the
Company's investment management arrangements has curtailed such meetings, but
following the announcement a number of such meetings have taken place both
virtually and in person. It is intended that this will continue once the new
managers are in place. The Company also uses doceo, a web portal that provides
financial information and video presentations to retail investors on
Investment Companies. There is currently a video presentation by William
Barlow on the appointment of Marylebone and an overview from Dan Higgins, CIO
of Marylebone on doceo via the link
https://doceo.tv/funds/majedie-investments/.
Outlook
The previous twelve months have been painful for investors, as all asset
classes with the exception of
commodities have fallen. The realisation that inflation was not transitory and
that authorities were behind the curve caused Central Banks, led by the US, to
raise interest rates aggressively. This was exacerbated by the Ukraine
conflict which put significant pressure on commodity prices. After a decade of
ultra-loose monetary policy following the financial crisis and COVID, the
change in policy was a shock for investors. Bond rates rose significantly and
equity markets sold off and there was significant rotation away from growth
stocks.
The Board will retain the Company's exposure to markets until the shareholders
have approved the proposed changes to the Company's investment management
arrangements because the equity valuations had approached attractive levels at
the year end. There is evidence that inflation is peaking as the supply side
shocks from COVID are easing and commodity prices have appeared to have
peaked.
Turbulence in markets has greatly expanded the opportunity set available to
Marylebone to pursue a
liquid endowment strategy, in particular in equities and credit. Illiquid
strategies that were favoured by low interest rates no longer offer an
attractive risk reward for investors. The multi asset approach that will be
pursued uses the Investment Company structure to add value and provide
differentiated returns over the long term. The Board has consistently stated
that it wishes to grow the Company for the benefit of all shareholders and has
already seen significant investment from new investors since the announcement
in November. Over time with good investment performance the Board is confident
that the discount will narrow and new shares will be issued.
Arrangements for the AGM
The AGM will be held at the City of London Club, 19 Old Broad Street, London
EC2N 1DS at 12.00pm on Wednesday 25 January 2023. Dan Higgins, CIO of
Marylebone, will present the new investment strategy. I very much look forward
to welcoming shareholders in person after the last two years meetings have
been restricted.
Christopher Getley
Chairman
19 December 2022
CHIEF EXECUTIVE'S REPORT
During the year under review the Company's assets were allocated at the
discretion of the Board between four investment strategies managed by
Liontrust. The Company has no overall benchmark; rather each fund has its own
benchmark. The monthly factsheets of the relevant Liontrust funds are
available on the Company's website, as are the monthly factsheets of the
Company which show the allocation between the funds and the top thirty
holdings on a look through basis. The Company's total assets at 30 September
2022 were £137.6m.
The Company's 17.6% stake in MAM was realised in April 2022, as part of the
purchase of MAM by Liontrust for a mixture of cash and shares in Liontrust,
the removal of a lock up clause on the Liontrust shares was successfully
negotiated in July and the Company has since sold 108,000 Liontrust shares.
The proceeds have been invested in the Liontrust Global Fund and Liontrust
International Fund.
Asset Allocation at 30 September 2022 Value % of Total Assets
£000
UK Equity Segregated Portfolio 55,862 40.5
Global Equity Fund 39,610 28.8
International Equity Fund 11,081 8.0
Tortoise Fund 23,668 17.2
Liontrust 3,936 2.9
Net cash/realisation fund* 3,490 2.6
Total Assets 137,647 100.0
*Net cash and realisation fund does not include cash held in the UK Equity
Segregated Portfolio or any Liontrust funds.
MAM/Liontrust
Following the sale of MAM to Liontrust the Company received shares in
Liontrust and cash. At 30 September having sold 108,000 shares in Liontrust
for £1.0m, the remaining shares were valued at £3.9m. The Company also
received a dividend from MAM of £1.2m, a special dividend from MAM of £6.5m,
a final cash distribution of £0.4m and a dividend from Liontrust of £0.3m.
The valuation of the consideration that was received from the transaction in
cash and shares at 30 September 2022 was £13.2m (inclusive of the Liontrust
dividend) compared to the valuation of MAM at 30 September 2021 of £25.2m.
The Company places no value on the potential deferred payment that is
dependent on the Liontrust Global Fundamental team's performance and their AUM
growth which are not expected to be met.
Liontrust/MAM Performance
It is disappointing that the funds underperformed their respective benchmarks
in the twelve months to 30 September 2022 with the exception of the Tortoise
Fund. This fund has been a cornerstone of the Company's allocation to provide
protection in turbulent markets and a provider of differentiated returns. In
such a volatile year the fund has been a shining light. The Global and
International Funds, whilst having a difficult year, have provided strong
relative and absolute returns since the Company invested in them.
12 months to 30 September 2022 Since MI invested
% Fund return % Benchmark % Relative % Fund return % Benchmark % Relative performance
performance
return return
UK Equity Segregated (14.7) (4.0) (10.7) 20.0 41.3 (21.3)
Global Equity Fund (10.0) (4.2) (5.8) 138.2 130.1 8.1
International Equity Fund (17.4) (9.4) (8.0) 16.0 5.1 10.9
Tortoise Fund 8.6 26.0
MAM/Liontrust (47.3)
Development of Net Asset Value
The chart below outlines the change in the Company's NAV (debt at par) over
the year to 30 September 2022. In aggregate the NAV has decreased by £35.3m,
comprised of net investment losses at the Liontrust/MAM Funds of £14.1m, a
loss on the investment in MAM/Liontrust of £12.0m (after dividends received
from MAM), expenses and finance costs of £3.2m and dividends paid to
shareholders of £6.0m.
NAV 30.09.21 £152.2m
UK Equity Segregated Portfolio (£9.2m)
Tortoise Fund £1.8m
Global Equity Fund (£4.4m)
International Equity Fund (£2.3m)
MAM/Liontrust (£12.0m)
Admin Costs & Other (£1.6m)
Finance Costs (£1.6m)
Share Buybacks Nil
Dividend Paid (£6.0m)
NAV 30.09.22 £116.9m
* MAM Funds comprise the UK Income Fund, Global Equity Fund, International
Equity Fund, US Equity Fund and Tortoise Fund.
UK Equity Segregated Portfolio
The UK Equity Fund launched in March 2003. Its objective is to produce a total
return in excess of the FTSE All-Share Index after costs, over any five year
period, through a diversified portfolio of predominantly UK Equities with the
flexibility to invest up to 20% in shares listed outside the UK. The fund
incorporates a dedicated investment in smaller companies. The Company's assets
are invested in a segregated portfolio that is managed pari passu to the UK
Equity Fund and since the Company invested in the portfolio to 30 September
2022 the portfolio has returned 20.0% net of fees compared to the benchmark
return of 41.3%. In the year to 30 September 2022, the UK Equity Segregated
Portfolio returned -14.7% net of fees which is an underperformance of 10.7%
against its benchmark.
The most significant positive and negative sector contributors to the relative
performance of the UK Equity Segregated Portfolio for the twelve months to 30
September 2022, in %
Real Estate 0.73 Underweight
Financials 0.32 Underweight
Telecommunications 0.06 Underweight
Utilities 0
Industrials -0.43 Overweight
Health Care -0.72 Underweight
Energy -0.90 Underweight
Basic Materials -1.07 Underweight
Technology -1.14 Overweight
Consumer Discretionary -2.47 Overweight
Consumer Staples -2.71 Underweight
The table below shows most significant positive and negative stock
contributors to the relative performance of the UK Equity Segregated Portfolio
for the year to 30 September 2022, in %
Prudential 0.55 Underweight
Serco 0.39 Overweight
Scottish Mortgage Investment Trust 0.34 Underweight
Flutter Entertainment 0.28 Underweight
Compass 0.28 Overweight
Glencore -0.90 Underweight
BP -0.95 Underweight
Fevertree Drinks -1.23 Overweight
Ascential -1.29 Overweight
UK Smaller Companies -2.17 Overweight
The principal overweight and underweight sector positions of the UK Equity
Segregated Portfolio at 30 September 2022 relative to the FTSE All-Share
Index, in %
Industrials 15.1 Overweight
Consumer Discretionary 6.6 Overweight
Technology 5.2 Overweight
Healthcare -1.0 Underweight
Telecommunications -1.1 Underweight
Utilities -1.8 Underweight
Real Estate -2.7 Underweight
Energy -3.4 Underweight
Basic Materials -5.0 Underweight
Consumer Staples -7.0 Underweight
Financials -7.3 Underweight
The table below shows the principal overweight and underweight positions of
the UK Equity Segregated Portfolio at 30 September 2022 relative to the FTSE
All-Share Index, in %
RSGroup 2.7 Overweight
NatWest 2.7 Overweight
AVEVA 2.7 Overweight
3i 2.1 Overweight
Serco 1.8 Overweight
HSBC -2.6 Underweight
Glencore -2.9 Underweight
British American Tobacco -3.4 Underweight
BP -3.8 Underweight
Diageo -4.0 Underweight
The Global Equity Fund
The Global Equity Fund was launched in June 2014 and its objective is to
produce a total return in excess of the MSCI All Country World Index after
costs over any five year period through investment in a diversified portfolio
of global equities. Since inception to 30 September 2022 the Global Equity
Fund has returned 138.2% net of fees for the sterling share class, which
represents an outperformance of 7.9% against its benchmark. In the year to 30
September 2022 the Global Equity Fund returned -10.0% net of fees which
represents an underperformance of 5.8%.
The most significant positive and negative sector contributors were to the
relative performance of the Global Equity Fund for twelve months to 30
September 2022, in %
Materials 1.13 Overweight
Real Estate 0.04 Underweight
Financials 0.03 Underweight
Industrials -0.09 Overweight
Information Technology -0.12 Underweight
Utilities -0.40 Underweight
Consumer Discretionary -0.57 Overweight
Consumer Staples -1.01 Underweight
Energy -1.08 Underweight
Health Care -1.26 Overweight
Communication Services -1.51 Overweight
The table below shows most significant positive and negative stock
contributors to the relative performance of the Global Equity Fund for the
year to 30 September 2022, in %
Sociedad Quimica y Minera de Chile 0.99 Overweight
Will Scot Mobile Mini 0.56 Overweight
Elevance Health 0.53 Overweight
Ionis Pharmaceuticals 0.43 Overweight
Centene 0.32 Overweight
M3 -0.55 Overweight
Frontdoor -0.55 Overweight
Sea -0.58 Overweight
Apple -0.66 Underweight
Vertiv -0.75 Overweight
The principal overweight and underweight sector positions of the Global Equity
Fund at 30 September 2022 relative to the MSCI All Country Index, in %
Consumer Discretionary 6.0 Overweight
Health Care 5.5 Overweight
Communication Services 5.3 Overweight
Industrials 2.1 Overweight
Materials 1.6 Overweight
Real Estate -2.7 Underweight
Utilities -3.1 Underweight
Consumer Staples -3.9 Underweight
Information Technology -4.0 Underweight
Energy -4.3 Underweight
Financials -5.9 Underweight
The table below shows the principal overweight and underweight positions of
the Global Equity Fund at 30 September 2022 relative to the MSCI All Country
Index, in %
Electronic Arts 2.8 Overweight
Fiserv 2.6 Overweight
Royal KPN 2.0 Overweight
L3 Harris Technologies 2.0 Overweight
Will Scot Mobile Mini 1.8 Overweight
Exon Mobil Corporation -0.7 Underweight
Johnson & Johnson -0.8 Underweight
United Health -0.9 Underweight
Tesla -1.4 Underweight
Apple -4.3 Underweight
The International Equity Fund
The International Equity Fund was launched in December 2019 and its objective
is to produce a total return in excess of the MSCI All Country World Index ex
US after costs over any period of five years. It is a high conviction
portfolio which captures developed and emerging market opportunities and can
invest up to a maximum of 10% in US equities. Since inception the
International Equity Fund has returned 16.0% net of fees for the sterling
share class, which represents an outperformance of 10.9% against it benchmark.
In the year to 30 September 2022 the International Equity Fund returned -17.4%
net of fees which represents an underperformance of 8.0%.
The most significant positive and negative sector contributors to relative
performance of the International Equity Fund for the twelve months to 30
September 2022, in %
Materials 3.23 Overweight
Industrials 0.67 Underweight
Consumer Discretionary 0.21 Overweight
Real Estate 0.11 Underweight
Utilities -0.26 Underweight
Information Technology -0.50 Overweight
Energy -0.95 Underweight
Financials -1.53 Underweight
Consumer Staples -1.67 Underweight
Communication Services -2.44 Overweight
Health Care -3.10 Overweight
The table below shows most significant positive and negative stock
contributors to the relative performance of the International Equity Fund for
the year to 30 September 2022, in %
Sociedad Quimica y Minera de Chile 2.58 Overweight
Novo Nordisk 0.97 Overweight
Ionis Pharmaceuticals 0.91 Overweight
Credicorp 0.79 Overweight
Anglo American 0.75 Overweight
Fevertree Drinks -0.96 Overweight
Ambu -1.09 Overweight
NAVER -1.14 Overweight
M3 -1.31 Overweight
Sea -1.72 Overweight
The principal overweight and underweight sector positions of the International
Equity Fund at 30 September 2022 relative to the MSCI All Country Index ex US,
in %
Health Care 13.1 Overweight
Information Technology 6.4 Overweight
Consumer Services 5.9 Overweight
Communication Discretionary 5.0 Overweight
Materials 4.0 Overweight
Real Estate -2.4 Underweight
Utilities -3.4 Underweight
Industrials -3.6 Underweight
Energy -6.2 Underweight
Consumer Staples -8.3 Underweight
Financials -13.1 Underweight
The table below shows the principal overweight and underweight positions of
the International Equity Fund at 30 September 2022 relative to the MSCI All
Country Index ex US, in %
Prosus 4.3 Overweight
Novo Nordisk 4.2 Overweight
MercadoLibre 4.2 Overweight
Sociedad Quimica y Minera de Chile 4.1 Overweight
Samsung SDI 4.0 Overweight
ASML -0.9 Underweight
Shell -1.0 Underweight
Tencent -1.1 Underweight
Roche -1.2 Underweight
Nestle -1.6 Underweight
The Tortoise Fund
The Tortoise Fund is a global absolute return fund which was launched in
August 2007. Its objective is to achieve positive absolute returns in all
market conditions, through investment primarily in long and synthetic short
positions in equities over rolling three-year periods, with less volatility
than a conventional long only equity fund. Since inception the Tortoise Fund
has returned 26% net of fees. In the year to 30 September 2022 the Tortoise
Fund returned 8.6% net of fees.
The table below shows most significant positive and negative stock
contributors to the relative performance of the Tortoise Fund for the year to
30 September 2022, in %
Futures 3.53 Short
Health Care 2.41 Long
Energy 1.83 Long
Financials 1.25 Long
Materials 1.04 Long
Real Estate 0.50 Long
Utilities 0.10 Long
Communication Services 0.03 Long
Information Technology -0.04 Long
Consumer Staples -0.13 Long
Industrials -0.73 Long
Consumer Discretionary -2.28 Long
The table below shows most significant positive and negative stock
contributors to the relative performance of the Tortoise Fund for the year to
30 September 2022, in %
Cardinal Health 0.90 Long
Shell 0.85 Long
Coinbase Global 0.85 Short
BAE Systems 0.68 Long
Gold Fields Limited 0.67 Long
Compagnie de Saint-Gobain -0.64 Long
easyJet -0.74 Long
Rolls-Royce -0.82 Long
Intel -0.89 Long
THG -0.96 Long
The principal long and short sector positions of the Tortoise Fund at 30
September 2022, in %
Industrials 16.7 Long
Financials 11.0 Long
Consumer Staples 9.6 Long
Health Care 8.5 Long
Materials 7.7 Long
Information Technology 6.9 Long
Communication Services 6.5 Long
Consumer Discretionary 6.3 Long
Energy 5.5 Long
Utilities 2.2 Long
Real Esate 1.0 Long
Futures -39.2 Short
The table below shows the principal long and short stock positions of the
Tortoise Fund at 30 September 2022, in %
Shell 2.3 Long
Haleon 2.2 Long
TotalEnergies 2.2 Long
Publicis Groupe 2.1 Long
Compagnie de Saint-Gobain 2.1 Long
Union Pacific -1.0 Short
Geographic and Sector Exposure
Europe ex UK UK Asia Pacific North America Cash Total
Emerging Markets
Basic Materials 1.4 1.3 2.2 4.9
Consumer Goods 0.2 4.6 0.1 0.3 1.6 6.8
Consumer Services 1.6 7.0 2.1 0.6 5.5 16.8
Financials 1.2 7.0 0.7 0.5 2.2 11.6
Real Estate 0.2 0.2
Health Care 4.1 4.5 0.5 0.7 4.9 14.7
Industrials 3.3 10.2 0.1 0.7 4.3 18.6
Oil & Gas 0.8 3.9 0.2 4.9
Technology 0.4 3.1 4.1 0.2 4.8 12.6
Telecommunications 1.5 0.6 0.8 2.9
Utilities 0.3 0.8 1.1
Cash 4.9 4.9
Total 13.4 43.1 8.9 3.8 25.9 4.9 100.0
Futures* (7.1)
* The Tortoise Fund has short futures positions on the S&P 500 and NASDAQ
100 indices.
The assets analysed above are the net exposure of the UK Equity Segregated
Portfolio, Global Equity Fund, International Equity Fund and the Tortoise
Fund. The Tortoise Fund, an absolute return fund invests through equities,
CFDs for short positions and futures. The net exposure is shown in the table.
The aggregate of the funds represents 94.7% of the Company's total assets.
Exposures are classified by the stock exchange on which the underlying equity
is listed and by the relevant FTSE sector classification.
The Liontrust funds have all performed strongly since the year end, both in
absolute and relative terms. The Tortoise Fund, in particular, has risen by
9.7%. The Board intends to retain the current exposure until the General
Meeting on 25 January 2023. If shareholders approve the appointment of
Marylebone it is anticipated that the capital will be deployed relatively
quickly into the new investment strategy, although the Special Investments
part of the portfolio, will take longer to be fully invested.
Thirty Largest Holdings at 30 September 2022
Value % of Total Assets
£000
Shell Plc 5,102 3.7
Liontrust Asset Management Limited 3,936 2.9
AstraZeneca PLC 2,565 1.9
NatWest Group PLC 2,247 1.6
Unilever PLC 2,004 1.5
Anglo American PLC 1,711 1.2
RS Group plc 1,616 1.2
Microsoft Corporation 1,539 1.1
AVEVA Group plc 1,512 1.1
Royal KPN NV 1,509 1.1
Thales SA 1,493 1.1
3i Group plc 1,470 1.1
Tesco PLC 1,443 1.0
Barrick Gold Corporation 1,379 1.0
Compass Group PLC 1,320 1.0
Ashtead Group plc 1,313 1.0
Novo Nordisk A/S 1,303 0.9
RELX PLC 1,256 0.9
Standard Chartered PLC 1,252 0.9
Amazon.com, Inc. 1,245 0.9
BAE Systems PLC 1,199 0.9
Novartis AG 1,176 0.9
Sociedad Quimica y Minera de Chile S.A. 1,138 0.8
MercadoLibre, Inc. 1,133 0.8
L3 Harris Technologies, Inc. 1,129 0.8
Electronic Arts Inc. 1,129 0.8
Samsung SDI Co., Ltd 1,093 0.8
Fiserv, Inc. 1,081 0.8
Taiwan Semiconductor Manufacturing Co., Ltd. 1,077 0.8
Weir Group PLC 1,075 0.8
48,345 35.2
Outlook
Markets have bounced from the lows in September as investors' expectations,
particularly in the bond market, are beginning to discount the peak of
inflation. Central Banks have raised interest rates aggressively and the
distortions of the pandemic are easing, particularly in the global supply
chain. For equities, earnings expectations have yet to catch up with slowing
economic growth forecasts into 2023, but looking into the next five years, the
economic background will be different from that which prevailed in the last
decade of quantitative easing, low inflation and stagnant nominal GDP Growth.
Interest rates will be higher offering an alternative to equities for
investors and long duration growth stocks will be less attractive. Careful
stock selection based on good fundamental analysis of equities and credit
opportunities should offer shareholders good returns and the Board believes
that Marylebone is well placed to deliver from this outlook.
J William Barlow
CEO
19 December 2022
Final Dividend and Special Dividend
Subject to shareholder approval at the AGM on 25 January 2023, a final
dividend of 4.2p per share and a special dividend of 1.8p per share will be
paid on 27 January 2023 to shareholders on the register at 13 January 2023.
The ex-dividend date will be 12 January 2023.
Annual General Meeting
The Company's Annual General Meeting will be held on Wednesday 25 January 2023
at City of London Club, 19 Old Broad Street, London EC2N 1DS.
Further Information
The Annual Report and Accounts for the year ended 30 September 2022 can be
obtained from the Company's website at www.majedieinvestments.com
(http://www.majedieinvestments.com) .
A copy of the Annual Report and Accounts will be submitted shortly to the
National Storage Mechanism ("NSM") and will be available for inspection at the
NSM, which is situated at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) , in accordance with
DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
ENQUIRIES
If you have any enquiries regarding this announcement, please contact Mr
William Barlow on 020 7382 8185.
END
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.
LEI: 2138007QEY9DYONC2723
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