REG - Monks Inv.Trust - Monks Investment Trust PLC Half-year Results
04/12/2024 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:20241204:nRSD6767Oa&default-theme=true
RNS Number : 6767O Monks Investment Trust PLC 04 December 2024
RNS Announcement
The Monks Investment Trust PLC (MNKS)
Legal Entity Identifier: 213800MRI1JTUKG5AF64
Results for the six months to 31 October 2024
The following is the unaudited Interim Financial Report for the six months to
31 October 2024 which was approved by the Board on 3 December 2024.
Chairman's statement
Performance
During the first half of the financial year, the Company produced a net asset
value (NAV(*)) total return of +6.3% compared to +8.1% for the comparative
index (FTSE World in sterling). The share price total return was +3.1%.
Commentary on performance and portfolio positioning is contained in the
Managers' Report.
Capital allocation
The Board has continued to be active in buying back shares at a discount to
NAV. The Company bought back approximately 15 million of its own shares over
the six months to 31 October 2024, at a cost of £176 million and an average
discount of 9.1%. Since the Company commenced its buyback programme in January
2022 it has bought back 54 million shares at a total cost of £582 million and
an average discount of 8.6%. This represents 22.9% of the share capital
outstanding at the end of December 2021.
Gearing
An advantage of the investment trust structure is that the Company can deploy
borrowing to enhance returns in the long term. The Company has a mixture of
long term, structural debt and shorter term, more flexible debt. The Company's
revolving credit facility of £150 million with National Australia Bank
Limited expired at the end of November 2024 and has been replaced by a £100
million revolving credit facility with The Royal Bank of Scotland
International. £50 million is drawn under this facility. At the period end,
net gearing was 7.3% and the weighted average interest rate across all
borrowings was 3.6%.
The Board
Jeremy Tigue retired from the Board at the AGM in September 2024, and Claire
Boyle has succeeded him as Audit Committee Chair. As I announced at the AGM,
it is my intention to step down at or before the Company's 2025 AGM. The Board
has recruited three new Directors over the four years since I became its
Chairman and the Board's succession plan will be announced in due course.
Outlook
Monks has a well-diversified portfolio of growth stocks. The Board believes
that the Company's diversified approach offers investors exposure to a wide
range of growth opportunities that are likely to drive returns in the years
ahead.
Karl Sternberg
Chairman
3 December 2024
(*) NAV with debt at fair value. For a definition of terms used see
Glossary of terms and Alternative Performance Measures towards the end of this
announcement.
Total return information is sourced from Baillie Gifford/LSEG and relevant
underlying index providers. See disclaimer towards the end of this
announcement.
Interim management report
Global equity markets have continued to make progress in the six months to the
end of October, delivering +8.1% in sterling terms. There has been no shortage
of news for investors to digest. The US Federal Reserve began to cut interest
rates amidst optimism that the United States would pull off a "soft landing"
by both tempering inflation and maintaining economic growth. China announced a
significant package of stimulus measures designed to boost its economy in
September. And of course, the prospect of a new US president, coupled with
what feels like rising geopolitical barriers, gathered substantial attention
through the period.
The implications of these moves will be felt over our investment time horizon
of five years and beyond but they are far from the only things that matter:
Massive infrastructure spending catch-up is being deployed in some of the
largest economies in the world; a billion more people have joined the global
online population since 2020; and a new era of space transport was ushered in
when Space X's super heavy booster rocket landed safely back at its launch
site in October.
As always, we remain focused on making the best long-term choices for the
Company. So far this year, that has meant pursuing the areas outlined in our
annual Research Agenda, engaging with current holdings, and 'kicking the
tyres' (literally, in some cases) of new investment ideas. In the past six
months, we have visited the US, Brazil, and China (more on this later),
seeking to broaden the base for growth within the Monks portfolio.
Performance
In the first half of the financial year the Company produced a net asset value
(NAV) total return of +6.3% compared to +8.1% for the comparative index (FTSE
World in sterling). The share price total return was +3.1%. This represents
continued progress in the recovery of the portfolio's NAV which has increased
by +29.2% in the twelve months to 31 October 2024, modestly ahead of the
benchmark index's return of +26.1% over the same period.
The portfolio's NAV performance lagged the stock market in the past six months
for two key reasons. First, some very large businesses have found strong
favour in markets based on their scale and technology advantages in an
emerging era of artificial intelligence. We share that excitement. The Company
is invested in the likes of Microsoft, NVIDIA, Meta and Amazon. But we do not
hold all the biggest businesses in this space, and in some cases hold them in
smaller sizes than the index, and this has detracted from our relative
returns. Those deliberate choices reflect the return opportunities we see
elsewhere in the portfolio.
The second reason has been the poor share price performance of a subset of our
healthcare holdings. Elevance Health and Novo Nordisk have both suffered share
price falls on disappointing news. Elevance is the second largest US health
insurer after United Health, which we also own within the portfolio. We
believe a growing need for health insurance coverage (as the population ages
and treatment becomes more expensive) provides a structural tailwind for
growth in the years ahead. The recent weakness in Elevance's shares is a
result of its government-supported Medicaid customers falling as eligibility
criteria are tightened post-pandemic. This has increased the company's medical
loss ratio and weighed on margins, but we believe this is a temporary
phenomenon. Elevance's pricing power should allow it to grow its margins again
and deliver sustainable double-digit earnings growth over the long term.
Novo Nordisk could become one of the scale providers of weight loss drugs to a
vast and structurally undersupplied market. Its current drug (Wegovy) is
driving strong growth for the business, whilst there has been exciting
potential shown in late-stage trials of a more efficacious iteration called
CagriSema (which has the potential of up to 25% weight loss). Recently, its
shares fell following disappointing results from a small trial of weight loss
pills (existing products are taken by injection). This looks overdone to us in
the context of the overall opportunity. We believe that Novo's significant
investment in capacity and its scalable manufacturing process leave it
positioned to grow materially from here.
Finally, Moderna's revenues continue to fall from Covid vaccine highs. We have
been disappointed by the company's respiratory syncytial virus vaccine which
took too long to reach the market. While the platform potential of its mRNA
technology remains exciting, and progress in personalised cancer vaccines is
encouraging, we want to see improved commercial execution from the business as
it seeks to become a multi-drug company.
We have seen stronger results from other healthcare holdings in the portfolio.
Alnylam Pharmaceuticals' pioneering drugs restrict the production of specific
genes that can cause disease. It reached a significant milestone after
positive results from its late-stage trial to treat a rare heart condition.
This could multiply its addressable patient population tenfold. We took some
profits on shareholders' behalf after the share price rose by 80% but remain
excited by the company's potential to address even larger patient populations.
Other notable contributors include The Trade Desk (TTD) and CBRE. The Trade
Desk's programmatic ad-buying platform is market-leading and allows
advertisers to place targeted adverts online. It is the largest and
fastest-growing platform (revenues at +27% year-on-year) but remains in the
early stages of its growth. It is expanding strategic partnerships with major
platforms like Disney and Netflix which suggests that they recognise its
importance. The connected TV market (adverts being sold on streaming
platforms) is forecast to double to $13.5bn over the next 5 years and we
believe that TTD is strongly positioned to take an outsized share of these
revenues. We have reflected our enthusiasm by adding to the position. CBRE is
a diversified real estate business and plays an important 'stalwart' role
within the portfolio. Whilst property transactions are down against a backdrop
of higher interest rates, CBRE's recurring revenue services have performed
strongly. These results are a testament to management's efforts to make CBRE a
more robust business by widening the scope of property management services it
provides. We are encouraged by the progress of each of these companies and by
the breadth of growth they represent.
Boldly seeking diversification
Our approach deliberately seeks different sources of growth. These are
reflected in our growth profiles as set out on the following pages, into which
we categorise all our holdings. We invest in some of the largest and
fastest-growing companies in the world, but we value the latitude to seek a
broader base for growth. Market forecasts suggest that the outlook for
earnings growth is changing. Whilst the large technology companies look set to
remain important contributors, they will not retain a monopoly on earnings
growth.
Broadening outlook
(% contribution of S&P 500 earnings growth year-over-year(*))
http://www.rns-pdf.londonstockexchange.com/rns/6767O_1-2024-12-3.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6767O_1-2024-12-3.pdf) -
Market Concentration Graph
Source: BoFA Global Research, Factset.
(*) 3Q25E, as of 16 May 2024.
We believe the stage is set for returns from a more diversified group of
companies. Our task, therefore, is to ensure that we identify where the
rewards for growth are most seriously underappreciated. Our Research Agenda
helps ensure that we remain return-seeking in our outlook and focus our
research productively.
01. Generative AI - the next frontier - We are witnessing the dawn of
a major technological revolution. Like previous revolutions, it will
precipitate profound social and economic changes. Unlike previous revolutions,
the pace of diffusion will surely be rapid.
Over the past two years, we have been building the
portfolio's exposure to the drivers and beneficiaries of AI. This has seen the
proportion of the portfolio invested in semiconductors rise from 2% to 11%
today, and underpinned investments in second and third-order beneficiaries
like Comfort Systems, which provides data centres with essential cooling and
ventilation equipment. In recent months we have added to both Microsoft
(enterprise software and cloud) and NVIDIA (semiconductors) where we believe
AI is widening their competitive moat and serving to elongate their runway for
growth. In contrast, we have reduced our position in Alphabet where we believe
the emergence of AI search platforms may threaten Alphabet's core search
advertising business.
Elsewhere, we have sold our position in Adobe (creative
software). The mass adoption of generative AI tools is likely to disrupt
Adobe's creative platform, materially lowering barriers to entry. Whilst Tesla
is embracing AI too, having built its own supercomputer for AI machine
learning, we have sold the portfolio's position because the valuation looked
stretched relative to its growth prospects. Electric vehicle competition is
intensifying, and we have reservations about the management team's ability to
deliver sufficient growth from its self-driving software.
02. Infrastructure upgrade and the resurgence of the domestic champion
- We believe there are businesses positioned to benefit from the repair and
enhancement of physical infrastructure. Developed nations have underinvested
for decades. Resilience and longer-term economic growth have suffered. Roads
need repaired; bridges rebuilt; power grids upgraded; advanced manufacturing
installed. Our conviction that we are witnessing the early stages of an
industrial super-cycle across the western world has deepened further.
Our exposure to domestic US infrastructure-related
opportunities continues to grow. Over the past year, we have added a handful
of new positions to the portfolio, including Advanced Drainage Systems (storm
drains) and Stella Jones (utility poles). A core attraction of these
businesses is that they either have a first-mover advantage or are the largest
player which underpins their ability to grow through pricing power. The former
is the case for Advanced Drainage Systems, which has a dominant position in
plastic storm drains that are replacing crumbling concrete equivalents. The
latter is true of Stella Jones, which owns around 70% of the market's supply
of lumber for utility poles, an essential component of the energy grid
upgrade. Our most recent purchase is Builders FirstSource. It is establishing
a first-mover advantage and changing the way that building products and
prefabricated components are supplied to professional builders in the US. We
think that it will continue to take market share as its prefabricated products
are market-leading, allowing for greater efficiencies and lower construction
costs. Growth is underpinned by a structural shortage of housing and sensible
consolidation through M&A should support growth further.
03. Capital cycles and emerging scarcity - The impact of higher rates
in some ways was immediate and obvious: Long-duration assets such as
high-growth equities became less valuable. We have certainly felt that.
However, in other ways, the impact has been slower to materialise. Changes to
the supply side take time but in the long run the impact of capital scarcity
on spending, and therefore competition, should be far more impactful than
merely a higher discount rate today.
As several of our technology companies have focused on
operational execution and profitable growth, we have added where our
conviction has been growing. For example, we have increased our positions in
DoorDash (food delivery) and Adyen (digital payments). DoorDash, now a top 10
holding within the fund, has grown its US market share from 18% in 2018 to 70%
today. We believe that its focus on operational execution and customer
experience has been the driver of this success. Revenues are growing at over
+20%, whilst its nascent grocery delivery offering is growing both the
frequency and average order value of customers. Adyen provides an end-to-end
digital payment solution for global companies in search of a simple solution
for the complexities of global trade. Its solution takes care of a range of
services from risk management and payment processing to dealing with issuing
banks. The company's premium pricing strategy, justified by the value-added
services it offers, appears to be gaining traction and revenues are growing at
more than +20%, per annum.
Elsewhere, we took a new position in Norwegian Cruise Line
Holdings, one of three big players - alongside Carnival and Royal Caribbean -
that control 85% of the cruise shipping market. We believe that the current
valuation (13x forward price-to-earnings) underappreciates the improving
outlook for the business. Norwegian is set to address a supply bottleneck by
bringing thirteen new ships to market through 2036. Allied with falling debt
levels and margin expansion we are excited by the potential return dynamic of
the shares.
China
For us, getting out on the road helps to deepen our understanding of
industries and companies, no more so than in China. Deputy Manager, Helen
Xiong, spent a month there earlier this year assessing, among other things,
the competitive landscape in the electric vehicle (EV) market. Her work
underpinned our decision to add to our holding in Li Auto, the electric
vehicle manufacturer. The EV market is fiercely competitive (there are more
than 100 EV manufacturers in China). However, we view Li Auto as one of a
small list of potential winners (alongside the likes of NIO and Xpeng which
have strong capabilities too). Li's 'extended range' offering (an internal
combustion system charges a battery pack and extends the vehicle's range) has
been a success (its latest results show it is growing unit sales at +45%
year-on-year) and has solved 'range anxiety' among early adopters. It has
established a strong brand known for quality and innovation. We are confident
that it is well-placed to continue its progress towards a fully electric car
business (its first model was released this year) and has a strong chance of
emerging as one of the leading brands in Chinese EVs.
More broadly, we have been tilting the portfolio's Chinese exposure toward the
domestic consumer in recent years. At around 4% of the portfolio, our Chinese
holdings tend to be 'local-for-local' (i.e. Chinese companies growing into
domestic consumption). We added one new position in the period in Kweichow
Moutai, China's leading producer of premium baiju (spirit drink). Its
centuries-old production techniques, limited supply, and loyal customer base
mean Moutai commands exceptional pricing power. Indeed, 24 bottles of Kweichow
Moutai sold for $1.4m at Sotheby's in 2021! We took a position at a valuation
considerably below its long-term average and believe it will be a resilient
compounder for the portfolio. We recognise that there are risks associated
with investing in China but believe that there remains significant opportunity
too. You can read and hear more from Helen on the Chinese opportunity for
global investors by clicking on 'Why growth investors can't ignore China
(https://www.bailliegifford.com/en/uk/individual-investors/insights/ic-article/2024-q3-why-growth-investors-can-t-ignore-china-10050738/)
' on bailliegifford.com.
We sold positions in Alibaba and Sands China. Having played a transformative
role in transitioning China from traditional retail to ecommerce, we believe
Alibaba is likely to be outcompeted by other players in its different markets
(e.g. Pinduoduo in ecommerce, which we now hold in Monks). Sands China is a
casino and hotel operator based in Macau. Having endured a very difficult
spell through the pandemic, we had hoped that customers would return in
numbers, but this has been slower than we had anticipated. We also have
reservations about the extent of its alignment with the priorities of the
Chinese state and 'common prosperity'.
Outlook
What excites us most is our ability to capture growth in all its forms.
Artificial intelligence (AI) represents a paradigm shift in computing power
and a transformational growth opportunity. We invest in the protagonists
(NVIDIA, Microsoft, Amazon and Meta) in addition to a range of other
beneficiaries. We have sown the seeds of future returns by investing in a
range of overlooked growth companies in areas like cruise shipping, building
materials, and auto parts.
The resulting portfolio is in good shape. Over the next three years, market
consensus forecasts suggest that the portfolio will grow its sales twice as
fast as the market average and earnings +50% faster. We recognise that share
price performance in recent years has been disappointing. However, amid
continued signs of progress from our portfolio holdings, we are increasingly
confident in the portfolio's ability to deliver attractive returns for
shareholders in the years ahead.
Baillie Gifford & Co
Managers
3 December 2024
For a definition of terms used see Glossary of terms and Alternative
Performance Measures towards the end of this announcement.
Total return information is sourced from Baillie Gifford/LSEG and relevant
underlying index providers. See disclaimer towards the end of this
announcement.
Past performance is not a guide to future performance.
The Managers' core investment beliefs
We believe the following features of Monks provide a sustainable basis for
adding value for shareholders.
Active management
• We invest in attractive companies using a 'bottom-up'
investment process. Macroeconomic forecasts are of relatively little interest
to us.
• High active share(*) provides the potential for adding
value.
• We ignore the structure of the index - for example the
location of a company's HQ and therefore its domicile are less relevant to us
than where it generates sales and profits.
• Large swathes of the market are unattractive and of no
interest to us.
• As index agnostic global investors we can go anywhere and
only invest in the best ideas.
• As the portfolio is very different from the index, we
expect portfolio returns to vary - sometimes substantially and often for
prolonged periods.
Committed growth investors
• In the long run, share prices follow fundamentals; growth
drives returns.
• We aim to produce a portfolio of stocks with above average
growth, this in turn underpins the ability of Monks to add value.
• We have a differentiated approach to growth, focusing on
the type of growth that we expect a company to deliver. All holdings fall into
one of three growth categories - as set out on the following pages.
• The use of these three growth categories ensures a
diversity of growth drivers within a disciplined framework.
Long-term perspective
• Long-term holdings mean that company fundamentals are
given time to drive returns.
• We prefer companies that are managed with a long-term
mindset, rather than those that prioritise the management of market
expectations.
• We believe our approach helps us focus on what is
important during the inevitable periods of underperformance.
• Short-term portfolio results are random.
• As longer-term shareholders we are able to have greater
influence on environmental, social and governance matters.
Dedicated team with clear decision‑making process
• Senior and experienced team drawing on the full resources
of Baillie Gifford.
• Alignment of interests - the investment team responsible
for Monks all own shares in the Company.
Portfolio construction
• Investments are held in three broad holding sizes, as set
out on the following pages.
• This allows us to back our judgement in those stocks for
which we have greater conviction, and to embrace the asymmetry of returns
through 'incubator' positions in higher risk/return stocks.
• 'Asymmetry of returns' - some of our smaller positions
will struggle and their share prices will fall; those that are successful may
rise many fold. The latter should outweigh the former.
Low cost
• Investors should not be penalised by high management fees.
• Low turnover and trading costs benefit shareholders.
(*) For a definition of terms used see Glossary of terms and Alternative
Performance Measures towards the end of this announcement.
Responsibility statement
We confirm that to the best of our knowledge:
a. the condensed set of Financial Statements has been prepared in
accordance with FRS 104 'Interim Financial Reporting';
b. the Interim Management Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule 4.2.7R
(indication of important events during the first six months, and their impact
on the Financial Statements, and a description of principal risks and
uncertainties for the remaining six months of the year); and
c. the Interim Financial Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule 4.2.8R
(disclosure of related party transactions and changes therein).
On behalf of the Board
KS Sternberg
Chairman
3 December 2024
List of investments
as at 31 October 2024
Name Business Value % of total
£'000 assets (*)
Microsoft Software and cloud computing 115,126 4.0
Meta Platforms Social networking website 111,304 3.9
NVIDIA Graphics processing, gaming, AI technology 102,626 3.6
Amazon.com Online retailer and cloud computing platform 101,974 3.6
Prosus Media and ecommerce 88,366 3.1
Martin Marietta Materials Cement and aggregates manufacturer 85,494 3.0
TSMC Semiconductor manufacturer 85,141 3.0
Elevance Health Healthcare insurer 72,592 2.5
Ryanair Low cost European airline 67,764 2.4
DoorDash Online commerce platform 65,144 2.3
Service Corporation International Funeral and crematoria services 63,020 2.2
The Schiehallion Fund Global unlisted growth equity investment company 61,606 2.2
The Trade Desk Advertising technology 58,399 2.0
Mastercard Electronic payments network and related services 52,883 1.9
Novo Nordisk Diabetes and weight loss treatment 51,789 1.8
CRH Diversified building materials 50,172 1.8
Shopify Online commerce platform 47,080 1.6
Alphabet Online search engine 39,497 1.4
Analog Devices Integrated circuits 39,445 1.4
MercadoLibre Latin American ecommerce platform 37,888 1.3
Arthur J. Gallagher Insurance broker 36,718 1.3
Reliance Industries Indian energy conglomerate 34,229 1.2
Netflix Subscription service for TV shows and movies 33,176 1.2
CBRE Group Commercial real estate 32,332 1.1
Olympus Optoelectronic products 30,654 1.1
Texas Instruments Semiconductors 30,198 1.1
Cloudflare Cloud based IT services 29,179 1.0
Royalty Pharma Biopharmaceutical royalties portfolio 28,967 1.0
AIA Asian life insurer 28,904 1.0
S&P Global Credit rating agency 28,769 1.0
UnitedHealth Healthcare insurer 28,689 1.0
AeroVironment Reconnaissance and defence drones 28,460 1.0
Coupang South Korean ecommerce 28,086 1.0
Block Financial technology 28,063 1.0
Richemont Luxury goods 27,240 1.0
BHP Group Mineral exploration and production 27,019 0.9
CATL Battery manufacturer 26,848 0.9
Atlas Copco Industrial equipment 26,660 0.9
Eaton Industrial engineering products 25,744 0.9
Advanced Drainage Systems Manufacturer of pipes and drainage systems 25,291 0.9
Alnylam Pharmaceuticals RNA interference based biotechnology 25,225 0.9
Markel Markets and underwrites speciality insurance products 24,699 0.9
PDD Holdings Chinese real estate development 24,367 0.9
ByteDance(§) Online content platform including TikTok 23,532 0.8
Comfort Systems USA HVAC systems and solutions 23,098 0.8
Adyen Digital payments 22,528 0.8
Moody's Credit rating agency 21,743 0.8
Li Auto Chinese EV manufacturer 21,611 0.8
Thermo Fisher Scientific Scientific instruments, consumables and chemicals 21,297 0.7
Sea Limited Online and digital gaming 20,691 0.7
Chewy Online pet supplies retailer 20,499 0.7
Autozone(†) Automotive replacement parts and accessories 20,348 0.7
Stella-Jones Industrial pressure treated wood products manufacturer 20,215 0.7
Schibsted Media and classified advertising platforms 19,969 0.7
Builders FirstSource(†) Building products for professional homebuilders 19,722 0.7
Samsung Electronics Multinational technology 18,664 0.7
Kweichow Moutai(†) Spirits manufacturer 18,270 0.6
CoStar Commercial property portal 18,080 0.6
Entegris Supplier of materials to high-tech industries 18,027 0.6
SiteOne Landscape Supply US distributor of landscaping supplies 17,640 0.6
Petroleo Brasileiro(†) Oil exploration and production 17,377 0.6
Epiroc Construction and mining machinery 17,352 0.6
Walt Disney Media and theme parks 17,052 0.6
ASM International Vapour deposition technology for semiconductors 16,937 0.6
Spotify Online music streaming service 16,829 0.6
Norwegian Cruise Line Holdings(†) Global cruise company 16,616 0.6
Nippon Paint Japanese paint manufacturer 16,603 0.6
SMC Factory automation equipment 16,091 0.6
ICICI Prudential Life Insurance Life insurance services 15,310 0.5
B3 Group Brazilian stock exchange operator 15,270 0.5
Rakuten Online retail and financial services 14,550 0.5
Bellway Home construction 13,946 0.5
Dutch Bros(†) Coffee and drinks retailer 13,922 0.5
Nexans Manufacturer of cables and electrical parts 13,880 0.5
Topicus.com Vertical market software and solutions 13,698 0.5
Stripe(§) Payments platform 13,456 0.5
Floor & Décor Holdings Floor and furnishing retailer 13,273 0.5
Epic Games(§) Gaming software developer 13,264 0.5
YETI Holdings Outdoor lifestyle products 12,132 0.4
Datadog Cloud based IT system monitoring application 11,886 0.4
Brunswick Corp Recreational boats, marine engines, marine parts and accessories 11,649 0.4
Albemarle Lithium miner 11,044 0.4
Shiseido Japanese cosmetics manufacturer 10,550 0.4
LVMH Luxury goods 10,518 0.4
Neogen Corp Food and animal safety products and services 10,444 0.4
Sartorius Stedim Biotech Biotechnology, specialised equipment for research 9,904 0.3
Moderna Drug discovery using mRNA technology 8,940 0.3
Genmab Biotechnology 8,745 0.3
Space Exploration Technologies(§) Space rockets and satellites 8,711 0.3
Soitec(†) Manufactures substrates for semiconductor wafers 7,984 0.3
CyberAgent Japanese internet advertising and content 7,643 0.3
Mobileye Advanced driver assistance systems (ADAS) and autonomous driving technologies 6,206 0.2
Ant International(§) Chinese online payments and financial services business 6,147 0.2
Silk Invest Africa Food Fund(§) Africa focused private equity fund 2,232 0.1
Illumina CVR(§) Gene sequencing business 323 <0.1
Abiomed CVR Medical implant manufacturer - -
Sberbank of Russia^ Russian commercial bank - -
Total investments 2,823,245 99.1
Net liquid assets(*) 27,186 0.9
Total assets(*) 2,850,431 100.0
Borrowings (222,586) (7.8)
Shareholders' funds 2,627,845 92.2
Listed Schiehallion Unlisted Net liquid Total
equities Fund securities (#) assets (*) assets (*)
% % % % %
31 October 2024 94.5 2.2 2.4 0.9 100.0
30 April 2024 94.1 2.6 2.0 1.3 100.0
(*) For a definition of terms used see Glossary of terms and Alternative
Performance Measures towards the end of this announcement.
(§) Denotes unlisted/private company holding.
^ Denotes suspended investment.
(†) New purchase during the period.
(#) Includes holdings in preference shares, ordinary shares and
contingent value rights (CVR).
Investment portfolio by growth category
as at 31 October 2024(*)
Holding size Growth Stalwarts 31.1% Rapid Growth 38.8% Cyclical Growth 30.1% Holding
Highest conviction holdings Microsoft 4.1 NVIDIA 3.6 Martin Marietta Materials 3.0 Total in this
holding size
c.2.0% each
45.3%
Meta Platforms 3.9 Amazon.com 3.6 TSMC 3.0
Elevance Health 2.6 Prosus 3.1 Ryanair 2.4
Service Corporation International 2.2 DoorDash 2.3 CRH 1.8
Mastercard 1.9 The Schiehallion Fund 2.2
The Trade Desk 2.1
Novo Nordisk 1.8
Shopify 1.7
Average sized holdings Alphabet 1.4 MercadoLibre 1.3 CBRE Group 1.1 Total in this
c.1.0% each
holding size
37.9%
Analog Devices 1.4 Reliance Industries 1.2 Royalty Pharma 1.0
Arthur J. Gallagher 1.3 Netflix 1.2 Richemont 1.0
Olympus 1.1 Cloudflare 1.0 BHP Group 1.0
Texas Instruments 1.1 AeroVironment 1.0 CATL 1.0
AIA 1.0 Coupang 1.0 Atlas Copco 0.9
S&P Global 1.0 Block 1.0 Eaton 0.9
UnitedHealth 1.0 Alnylam Pharmaceuticals 0.9 Advanced Drainage Systems 0.9
Moody's 0.8 PDD Holdings 0.9 Markel 0.9
Thermo Fisher Scientific 0.8 ByteDance 0.8 Comfort Systems USA 0.8
Chewy 0.7 Adyen 0.8 Builders FirstSource 0.7
Autozone 0.7 Li Auto 0.8 Samsung Electronics 0.7
Stella-Jones 0.7 Sea Limited 0.7
Kweichow Moutai 0.7 Schibsted 0.7
Incubator holdings c.0.5% each Walt Disney 0.6 Spotify 0.6 CoStar 0.6 Total in this
holding size
16.8%
Topicus.com 0.5 ICICI Prudential Life Insurance 0.5 Entegris 0.6
Shiseido 0.4 B3 Group 0.5 SiteOne Landscape Supply 0.6
LVMH 0.4 Dutch Bros 0.5 Petroleo Brasileiro 0.6
Neogen Corp 0.4 Stripe 0.5 Epiroc 0.6
Sartorius Stedim Biotech 0.4 Epic Games 0.5 ASM International 0.6
Datadog 0.4 Norwegian Cruise Line Holdings 0.6
Moderna 0.3 Nippon Paint 0.6
Genmab 0.3 SMC 0.6
Space Exploration Technologies 0.3 Rakuten 0.5
CyberAgent 0.3 Bellway 0.5
Mobileye 0.2 Nexans 0.5
Ant International 0.2 Floor & Décor Holdings 0.5
Illumina CVR <0.1 YETI Holdings 0.4
Abiomed CVR - Brunswick Corp 0.4
Albemarle 0.4
Soitec 0.3
Silk Invest Africa Food Fund 0.1
Sberbank of Russia -
(*) Excludes net liquid assets.
Portfolio positioning
as at 31 October 2024(*†)
Although the Managers' approach to stock picking is resolutely 'bottom-up' in
nature and pays no attention to the structure of the index, it is essential to
understand the risks of each investment and, in turn, where there may be
concentrations of exposures. The charts below outline some key exposures of
the portfolio.
Geographical
Geographical region % at % at
31 October
30 April
2024
2024
1 North America 60.9 57.4
2 Continental Europe 16.3 17.7
3 Emerging Markets 13.1 12.6
4 Japan 3.5 4.2
5 United Kingdom 2.7 3.6
6 Developed Asia 2.6 3.2
7 Net liquid assets 0.9 1.3
Sectoral
Sector % at % at
31 October
2024 30 April
2024
1 Technology 33.4 28.5
2 Consumer discretionary 22.0 20.3
3 Industrials 18.1 18.2
4 Healthcare 10.3 11.8
5 Financials 8.5 11.7
6 Basic materials 2.0 1.9
7 Energy 1.8 2.6
8 Real estate 1.7 1.6
9 Telecommunications 0.7 0.9
10 Consumer staples 0.6 1.2
11 Net liquid assets 0.9 1.3
(*) Expressed as a percentage of total assets.
(†) For a definition of terms used see Glossary of Terms and
Alternative Performance Measures towards the end of this announcement.
Past performance is not a guide to future performance.
Income statement (unaudited)
For the six months ended For the six months ended For the year ended
31 October 2024
31 October 2023
30 April 2024 (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments - 145,724 145,724 - (96,176) (96,176) - 389,428 389,428
Currency gains/(losses) - 132 132 - (50) (50) - 1,419 1,419
Income from investments and interest receivable 13,688 - 13,688 16,092 - 16,092 29,888 - 29,888
Investment management fee 3 (4,913) - (4,913) (4,592) - (4,592) (9,431) - (9,431)
Other administrative expenses (938) - (938) (830) - (830) (1,850) - (1,850)
Net return before finance costs and taxation 7,837 145,856 153,693 10,670 (96,226) (85,556) 18,607 390,847 409,454
Finance cost of borrowings (4,297) - (4,297) (3,892) - (3,892) (8,264) - (8,264)
Net return on ordinary activities before taxation 3,540 145,856 149,396 6,778 (96,226) (89,448) 10,343 390,847 401,190
Tax on ordinary activities 4 (1,142) (957) (2,099) (1,219) (559) (1,778) (2,102) (736) (2,838)
Net return on ordinary activities after taxation 2,398 144,899 147,297 5,559 (96,785) (91,226) 8,241 390,111 398,352
Net return per ordinary share 5 1.15p 69.66p 70.81p 2.44p (42.41p) (39.97p) 3.68p 174.07p 177.75p
The total column of this statement represents the profit and loss account of
the Company. The supplementary revenue and capital columns are prepared under
guidance issued by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing
operations.
A Statement of Comprehensive Income is not required as the Company does not
have any other comprehensive income and the net return on ordinary activities
after taxation is both the profit and total comprehensive income for the
period.
Balance sheet (unaudited)
Notes At 31 October At 30 April
2024 2024
£'000 (audited)
£'000
Fixed assets
Investments held at fair value through profit or loss 7 2,823,245 2,847,068
Current assets
Debtors 1,705 12,506
Cash and cash equivalents 41,753 38,622
43,458 51,128
Creditors
Amounts falling due within one year:
National Australia Bank Limited Loan 8 (50,000) (50,000)
Other creditors (15,124) (11,957)
(65,124) (61,987)
Net current liabilities (21,666) (10,859)
Total assets less current liabilities 2,801,579 2,836,209
Creditors
Amounts falling due after more than one year:
Loan notes 8 (172,586) (173,176)
Provision for tax liability 9 (1,148) (1,896)
(173,734) (175,072)
Net assets 2,627,845 2,661,137
Capital and reserves
Share capital 12,659 12,659
Share premium account 433,714 433,714
Capital redemption reserve 8,700 8,700
Capital reserve 2,101,291 2,132,609
Revenue reserve 71,481 73,455
Shareholders' funds 10 2,627,845 2,661,137
Shareholders' funds per ordinary share (borrowings at book value) 10 1,319.8p 1,242.8p
Net asset value per ordinary share(*) (borrowings at par value) 1.319.7p 1,242.7p
Net asset value per ordinary share(*) (borrowings at fair value) 1,344.1p 1,266.1p
Ordinary shares in issue 10 199,115,666 214,130,666
(*) For a definition of terms used see Glossary of terms and Alternative
Performance Measures towards the end of this announcement.
Statement of changes in equity (unaudited)
For the six months ended 31 October 2024
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve (*) reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 May 2024 12,659 433,714 8,700 2,132,609 73,455 2,661,137
Net return on ordinary activities after taxation - - - 144,899 2,398 147,297
Ordinary shares bought back 11 - - - (176,217) - (176,217)
Dividends paid during the period 6 - - - - (4,372) (4,372)
Shareholders' funds at 31 October 2024 12,659 433,714 8,700 2,101,291 71,481 2,627,845
For the six months ended 31 October 2023
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve (*) reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 May 2023 12,659 433,714 8,700 1,915,385 72,422 2,442,880
Net return on ordinary activities after taxation - - - (96,785) 5,559 (91,226)
Ordinary shares issued/bought back 11 - - - (62,938) - (62,938)
Dividends paid during the period 6 - - - - (7,208) (7,208)
Shareholders' funds at 31 October 2023 12,659 433,714 8,700 1,755,662 70,773 2,281,508
(*) The Capital Reserve balance at 31 October 2024 includes holding
gains on investments of £1,008,555 (31 October 2023 - gains of
£520,850,000).
Condensed cash flow statement (unaudited)
Notes Six months to Six months to
31 October 2024 31 October 2023
£'000 £'000
Cash flows from operating activities
Net return on ordinary activities before taxation 149,396 (89,448)
Net (gains)/losses on investments (145,724) 96,176
Currency (gains)/losses (132) 50
Finance costs of borrowings 4,297 3,892
Overseas tax incurred (2,869) (1,244)
Changes in debtors and creditors 1,172 1,302
Cash from operations(*) 6,140 10,728
Interest paid (4,325) (3,427)
Net cash inflow from operating activities 1,815 7,301
Net cash inflow from investing activities 176,598 39,429
Cash flows from financing activities
Equity dividends paid 6 (4,372) (7,208)
Ordinary shares bought back (170,449) (67,591)
Borrowings drawn down - 15,000
Net cash outflow from financing activities (174,821) (59,799)
Increase/(decrease) in cash and cash equivalents 3,592 (13,069)
Exchange movements (461) (50)
Cash and cash equivalents at start of period 38,622 42,191
Cash and cash equivalents at end of period 41,753 29,072
(*) Cash from operations includes dividends received of £13,123,000 (31
October 2023 - £16,998,000) and deposit interest received of £940,000 (31
October 2023 - £727,000).
Notes to the condensed financial statements (unaudited)
01 Basis of accounting
The condensed Financial Statements for the six months to 31 October 2024
comprise the statements set out on the previous pages together with the
related notes below. They have been prepared in accordance with FRS 104
'Interim Financial Reporting' and the AIC's Statement of Recommended Practice
issued in November 2014 and updated in July 2022 with consequential
amendments. They have not been audited or reviewed by the Auditor pursuant to
the Auditing Practices Board Guidance on 'Review of Interim Financial
Information'. The Financial Statements for the six months to 31 October 2024
have been prepared on the basis of the same accounting policies as set out in
the Company's Annual Report and Financial Statements at 30 April 2024.
Going concern
The Directors have considered the Company's principal risks and uncertainties,
as set out on the inside front cover, together with the Company's current
position, investment objective and policy, the level of demand for the
Company's shares, the nature of its assets, its liabilities and projected
income and expenditure. The Board has, in particular, considered the impact of
macroeconomic and geopolitical concerns, including hostilities in Ukraine and
Gaza, and US-China and China-Taiwan tensions. It is the Directors' opinion
that the Company has adequate resources to continue in operational existence
for the foreseeable future. The vast majority of the Company's investments are
readily realisable and can be sold to meet its liabilities as they fall due.
All borrowings require the prior approval of the Board. Gearing levels and
compliance with covenants are reviewed by the Board on a regular basis. The
Company has continued to comply with the investment trust status requirements
of section 1158 of the Corporation Tax Act 2010 and the Investment Trust
(Approved Company) Regulations 2011. Accordingly, the Directors consider it
appropriate to adopt the going concern basis of accounting in preparing these
Financial Statements and confirm that they are not aware of any material
uncertainties which may affect the Company's ability to continue to do so over
a period of at least twelve months from the date of approval of these
Financial Statements.
02 Financial information
The financial information contained within this Interim Financial Report does
not constitute statutory accounts as defined in sections 434 to 436 of the
Companies Act 2006. The financial information for the year ended 30 April 2024
has been extracted from the statutory accounts which have been filed with the
Registrar of Companies. The Auditor's Report on those accounts was not
qualified, did not include a reference to any matters to which the Auditor
drew attention by way of emphasis without qualifying its report, and did not
contain statements under sections 498(2) or (3) of the Companies Act 2006.
03 Investment managers
Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford
& Co, has been appointed by the Company as its Alternative Investment Fund
Managers (AIFM) and Company Secretary. The investment management function has
been delegated to Baillie Gifford & Co. The management agreement can be
terminated on six months' notice. The annual management fee is 0.45% on the
first £750 million of total assets, 0.33% on the next £1 billion of total
assets and 0.30% on the remaining total assets. For fee purposes, total assets
is defined as the total value of all assets held less all liabilities (other
than any liability in the form of debt intended for investment purposes) and
excludes the value of the Company's holding in The Schiehallion Fund a
closed-ended investment company managed by Baillie Gifford & Co. The
Company does not currently hold any other collective investment vehicles
managed by Baillie Gifford & Co. Where the Company holds investments in
open-ended collective investment vehicles managed by Baillie Gifford, such as
OEICs, Monks' share of any fees charged within that vehicle will be rebated to
the Company. All debt drawn down during the periods under review is intended
for investment purposes.
04 Tax on ordinary activities
The revenue tax charge arises from withholding tax suffered on overseas
dividends. The capital tax charge results from the Provision for Tax Liability
in respect of Indian capital gains tax as detailed in note 9.
05 Net return per ordinary share
Six months to Six months to Year to
31 October 2024 31 October 2023 30 April 2024
£'000 £'000 (audited)
£'000
Revenue return on ordinary activities after taxation 2,398 5,559 8,241
Capital return on ordinary activities after taxation 144,899 (96,785) 390,111
Total net return 147,297 (91,226) 398,352
Net return per ordinary share is based on the above totals of revenue and
capital and on 208,004,715 (31 October 2023 - 228,211,498; 30 April 2024
-224,114,021) ordinary shares, being the weighted average number of ordinary
shares in issue during the period.
There are no dilutive or potentially dilutive shares in issue.
06 Dividends
Six months to Six months to Year to
31 October 2024 31 October 2023 30 April 2024
£'000 £'000 (audited)
£'000
Amounts recognised as distributions in the period: 4,372 7,208 7,208
Previous year's final dividend of 2.10p (2023 - 3.15p),
paid 17 September 2024
Amounts paid and payable in respect of the period: - - 4,372
Final dividend (2024 - 2.10p)
07 Fair value hierarchy
The Company's investments are financial assets held at fair value through
profit or loss. The fair value hierarchy used to analyse the basis on which
the fair values of such financial instruments are measured is described below.
Fair value measurements are categorised on the basis of the lowest level input
that is significant to the fair value measurement.
Level 1 - using unadjusted quoted prices for identical instruments in an
active market;
Level 2 - using inputs, other than quoted prices included within Level 1,
that are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is
unavailable).
An analysis of the Company's financial asset investments based on the fair
value hierarchy described above is shown below.
As at 31 October 2024 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities 2,693,974 61,606 - 2,755,580
Unlisted securities - - 67,665 67,665
Total financial asset investments 2,693,974 61,606 67,665 2,823,245
As at 30 April 2024 (audited) Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities 2,714,161 73,796 - 2,787,957
Unlisted securities - - 59,111 59,111
Total financial asset investments 2,714,161 73,796 59,111 2,847,068
The fair value of listed investments is either bid price or last traded price
depending on the convention of the exchange on which the investment is listed.
Listed Investments are categorised as Level 1 if they are valued using
unadjusted quoted prices for identical instruments in an active market and as
Level 2 if they do not meet all these criteria but are, nonetheless, valued
using market data. Unlisted investments are valued at fair value by the
Directors following a detailed review and appropriate challenge of the
valuations proposed by the Managers. The Managers' unlisted investment policy
applies methodologies consistent with the International Private Equity and
Venture Capital Valuation Guidelines ('IPEV'). These methodologies can be
categorised as follows: (a) market approach (multiples, industry valuation
benchmarks and available market prices); (b) income approach (discounted cash
flows); and (c) replacement cost approach (net assets). The Company's holdings
in unlisted investments are categorised as Level 3 as unobservable data is a
significant input to their fair value measurements.
08 Financial liabilities
31 October 2024 30 April
£'000 2024
£'000
Due within one year:
National Australia Bank Limited revolving credit facility 50,000 50,000
Due after more than one year:
£60 million 1.86% notes 2054 59,908 59,907
£40 million 1.77% notes 2045 39,957 39,956
¥2,500 million 2.17% notes 2037 12,766 12,687
€18 million 4.55% notes 2035 15,200 15,370
€35 million 4.29% notes 2033 29,555 29,886
€18 million 4.30% notes 2030 15,200 15,370
222,586 223,176
The fair value of borrowings at 31 October 2024 was £174,188,000 (30 April
2024 - £173,210,000).
09 Provision for tax liability
The tax liability provision at 31 October 2024 of £1,148,000 (30 April 2024 -
£1,896,000) relates to a potential liability for Indian capital gains tax
that may arise on the Company's Indian investments should they be sold in the
future, based on the net unrealised taxable capital gain at the period end and
on enacted Indian tax rates. The amount of any future tax amounts payable may
differ from this provision, depending on the value and timing of any future
sales of such investments and future Indian tax rates.
10 Shareholders' funds
31 October 30 April
2024 2024
Shareholders' funds £2,627,845,000 £2,661,137,000
Number of ordinary shares in issue excluding treasury shares 199,115,666 214,130,666
Shareholders' funds per ordinary share 1,319.8p 1,242.8p
The shareholders' funds figures above have been calculated after deducting
borrowings at book value, in accordance with the provisions of FRS 104.
Reconciliations between shareholders' funds and net asset values, calculated
after deducting borrowings at par value and fair value, are shown towards the
end of this announcement.
11 Share capital
In the six months to 31 October 2024 the Company bought back 15,015,000
ordinary shares into treasury (31 October 2023 - 6,521,000 shares bought
back). No shares were issued during the period and 54,055,794 shares were held
in treasury at 31 October 2024 (31 October 2023 - 28,895,794, 30 April 2024 -
39,040,794). At 31 October 2024, the Company had authority to buy back
24,364,293 shares and to allot, or sell from treasury, 21,061,566 shares.
12 Related party transactions
There have been no transactions with related parties during the first six
months of the current financial year that have materially affected the
financial position or the performance of the Company during that period and
there have been no changes in the related party transactions described in the
last Annual Report and Financial Statements that could have had such an effect
on the Company during that period.
Baillie Gifford - valuing private companies
We aim to hold our private company investments at 'fair value' i.e., the price
that would be paid in an open-market transaction. Valuations are adjusted both
during regular valuation cycles and on an ad hoc basis in response to 'trigger
events'. Our valuation process ensures that private companies are valued in
both a fair and timely manner.
The valuation process is overseen by a valuations group at Baillie Gifford
which takes advice from an independent third party (S&P Global). The
valuations group is independent from the investment team, with all voting
members being from different operational areas of the firm, and the portfolio
managers only receive final valuation notifications once they have been
applied.
We revalue the private holdings on a three-month rolling cycle, with one-third
of the holdings reassessed each month. During stable market conditions, and
assuming all else is equal, each investment would be valued four times in a
twelve month period. For investment trusts, the prices are also reviewed twice
per year by the respective investment trust boards and are subject to the
scrutiny of external auditors in the annual audit process.
Beyond the regular cycle, the valuations team also monitors the portfolio for
certain 'trigger events'. These may include: changes in fundamentals; a
takeover approach; an intention to carry out an Initial Public Offering (IPO);
company news which is identified by the valuation team or by the portfolio
managers or significant changes to the valuation of comparable public
companies. Any ad hoc change to the fair valuation of any holding is
implemented swiftly and reflected in the next published NAV. There is no
delay.
The valuations team also monitors relevant market indices on a weekly basis
and updates valuations in a manner consistent with our external valuer's
(S&P Global) most recent valuation report where appropriate. When market
volatility is particularly pronounced the team undertakes these checks daily.
In addition to the 2.4% of the portfolio holdings in direct private company
investments, 2.2% of the portfolio is in The Schiehallion Fund, a closed ended
investment company investing predominantly in private companies, which Monks
values by reference to its market price.
Glossary of terms and Alternative Performance Measures ('APM')
An Alternative Performance Measure is a financial measure of historical or
future financial performance, financial position, or cash flows, other than a
financial measure defined or specified in the applicable financial reporting
framework.
Total assets
This is the Company's definition of adjusted total assets, being the total
value of all assets held less all liabilities (other than liabilities in the
form of borrowings).
Shareholders' funds
Shareholders' funds is the value of all assets held less all liabilities, with
borrowings deducted at book cost.
Net Asset Value (APM)
Net Asset Value (NAV) is the value of all assets held less all liabilities,
with borrowings deducted at either par value or fair value as described below.
Per share amounts are calculated by dividing the relevant figure by the number
of ordinary shares in issue.
Net Asset Value (borrowings at par value) (APM)
Borrowings are valued at nominal par value. A reconciliation from
shareholders' funds (borrowings at book value) to net asset value after
deducting borrowings at par value is provided below.
31 October 31 October 30 April 30 April
2024 2024 2024 2024
£'000 per share £'000 per share
Shareholders' funds (borrowings at book value) 2,627,845 1,319.8p 2,661,137 1,242.8p
Add: book value of borrowings 222,586 111.8p 223,176 104.2p
Less: par value of borrowings (222,721) (111.9p) (223,313) (104.3p)
Net asset value (borrowings at par value) 2,627,710 1,319.7p 2,661,000 1,242.7p
The per share figures above are based on 199,115,666 (30 April 2024 -
214,130,666) ordinary shares of 5p, being the number of ordinary shares in
issue at the period end excluding treasury shares.
Net Asset Value (borrowings at fair value) (APM)
Borrowings are valued at an estimate of market worth. The fair values of the
loan notes are calculated using a comparable debt approach, by reference to a
basket of corporate debt. The fair value of the Company's short term bank
borrowings is equivalent to its book value.
A reconciliation from shareholders' funds (borrowings at book value) to net
asset value after deducting borrowings at fair value is provided below.
31 October 31 October 30 April 30 April
2024 2024 2024 2024
£'000 per share £'000 per share
Shareholders' funds (borrowings at book value) 2,627,845 1,319.8 2,661,137 1,242.8p
Add: book value of borrowings 222,586 111.8p 223,176 104.2p
Less: fair value of borrowings (174,188) (87.5p) (173,210) (80.9p)
Net asset value (borrowings at fair value) 2,676,243 1,344.1p 2,711,103 1,266.1p
The per share figures above are based on 199,115,666 (30 April 2024 -
214,130,666) ordinary shares of 5p, being the number of ordinary shares in
issue at the period end excluding treasury shares.
Net liquid assets
Net liquid assets comprise current assets less current liabilities (excluding
borrowings) and provisions for deferred liabilities.
Discount/premium (APM)
As stock markets and share prices vary, an investment trust's share price is
rarely the same as its NAV. When the share price is lower than the NAV per
share it is said to be trading at a discount. The size of the discount is
calculated by subtracting the NAV per share from the share price and is
usually expressed as a percentage of the NAV per share. If the share price is
higher than the NAV per share, this situation is called a premium.
31 October 2024 30 April
2024
Closing NAV per share (borrowings at par) (a) 1,319.7p 1,242.7p
Closing NAV per share (borrowings at fair value) (b) 1,344.1p 1,266.1p
Closing share price (c) 1,192.0p 1,158.0p
Discount to NAV with borrowings at par (c - a) ÷ a (9.7%) (6.8%)
Discount to NAV with borrowings at fair value (c - b) ÷ b (11.3%) (8.5%)
Active share (APM)
Active share, a measure of how actively a portfolio is managed, is the
percentage of the listed equity portfolio that differs from its comparative
index. It is calculated by deducting from 100 the percentage of the portfolio
that overlaps with the comparative index. An active share of 100 indicates no
overlap with the index and an active share of zero indicates a portfolio that
tracks the index.
Total return (APM)
The total return is the return to shareholders after reinvesting the net
dividend on the date that the share price goes ex-dividend, as detailed below.
Net Asset Value total return
31 October 2024 31 October 2024
NAV (par) NAV (fair)
Closing NAV per share (a) 1,319.7p 1,344.1p
Dividend adjustment factor(*) (b) 1.0017 1.0017
Adjusted closing NAV per share (c = a x b) 1,321.9p 1,346.4p
Opening NAV per share (d) 1,242.7p 1,266.1p
Total return (c ÷ d) -1 6.4% 6.3%
(*) The dividend adjustment factor is calculated on the assumption that
the dividend of 2.10p paid by the Company during the period was reinvested
into shares of the Company at the cum income NAV at the ex-dividend date.
Share price total return
31 October 2024
share price
Closing share price (a) 1,192.0p
Dividend adjustment factor(*) (b) 1.0019
Adjusted closing share price (c = a x b) 1,194.3p
Opening share price (d) 1,158.0p
Total return (c ÷ d) -1 3.1%
(*) The dividend adjustment factor is calculated on the assumption that
the dividend of 2.10p paid by the Company during the period was reinvested
into shares of the Company at the share price at the ex-dividend date.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an
investment trust can borrow money to invest in additional investments for its
portfolio. The effect of the borrowing on the shareholders' assets is called
'gearing'. If the Company's assets grow, the shareholders' assets grow
proportionately more because the debt remains the same. But if the value of
the Company's assets falls, the situation is reversed. Gearing can therefore
enhance performance in rising markets but can adversely impact performance in
falling markets. The level of gearing can be adjusted through the use of
derivatives which affect the sensitivity of the value of the portfolio to
changes in the level of markets.
Gross gearing, also referred to as potential gearing is the Company's
borrowings expressed as a percentage of shareholders' funds (a ÷ c in the
table below).
Net gearing, also referred to as invested or equity gearing is borrowings at
book value less cash and cash equivalents (any certificates of deposit are not
deducted) and brokers' balances expressed as a percentage of shareholders'
funds (b ÷ c in the table below)(*).
Effective gearing, as defined by the Board and Managers of Monks, is the
Company's borrowings at par less cash, brokers' balances and investment grade
bonds maturing within one year, expressed as a percentage of shareholders'
funds(*).
(*) As adjusted to take into account the gearing impact of any
derivative holdings.
31 October 2024 30 April 2024
Borrowings (at book cost) (a) £222,586,000 £223,176,000
Less: cash and cash equivalents (£41,753,000) (£38,622,000)
Less: sales for subsequent settlement - (£9,749,000)
Add: purchases for subsequent settlement £10,111,000 £7,086,000
Adjusted borrowings (b) £190,944,000 £181,891,000
Shareholders' funds (c) £2,627,845,000 £2,661,137,000
Gross (potential) gearing (a ÷ c) 8.5% 8.4%
Net (invested) gearing (b ÷ c) 7.3% 6.8%
Unlisted, unquoted and private company investments
'Unlisted', 'unquoted' and 'private company' investments are investments in
securities not traded on a recognised exchange.
Treasury shares
The Company has the authority to make market purchases of its ordinary shares
for retention as treasury shares for future reissue, resale, transfer, or for
cancellation. Treasury shares do not receive distributions and the Company is
not entitled to exercise the voting rights attaching to them.
Turnover (APM)
Turnover is a measure of portfolio change or trading activity. Monthly
turnover is calculated as the minimum of purchases and sales in a month,
divided by the average market value of the fund. Monthly numbers are added
together to get the rolling 12 month turnover data.
Contingent value rights
'CVR' after an instrument name indicates a security, usually arising from a
corporate action such as a takeover or merger, which represents a right to
receive potential future value, should the continuing company achieve certain
milestones. The Illumina CVR was received on Illumina's takeover of the
Company's private company investment in GRAIL and the Abiomed CVR arose on
Johnson & Johnson's takeover of Abiomed. In both cases the milestones
relate to the performance of the technologies acquired through those
takeovers. Any values attributed to these holdings reflect both the amount of
the future value potentially receivable and the probability of the milestones
being met within the time frames in the CVR agreement.
Automatic exchange of information
In order to fulfil its obligations under UK tax legislation relating to the
automatic exchange of information, the Company is required to collect and
report certain information about certain shareholders.
The legislation requires investment trust companies to provide personal
information to HMRC on certain investors who purchase shares in investment
trusts. Accordingly, the Company will have to provide information annually to
the local tax authority on the tax residencies of a number of non-UK based
certificated shareholders and corporate entities.
Shareholders, excluding those whose shares are held in CREST, who come on to
the share register will be sent a certification form for the purposes of
collecting this information.
For further information, please see HMRC's Quick Guide: Automatic Exchange of
Information - information for account holders
gov.uk/government/publications/exchange-of-information-account-holders.
Third party data provider disclaimer
No third party data provider ('Provider') makes any warranty, express or
implied, as to the accuracy, completeness or timeliness of the data contained
herewith nor as to the results to be obtained by recipients of the data.
No Provider shall in any way be liable to any recipient of the data for any
inaccuracies, errors or omissions in the index data included in this document,
regardless of cause, or for any damages (whether direct or indirect) resulting
therefrom.
No Provider has any obligation to update, modify or amend the data or to
otherwise notify a recipient thereof in the event that any matter stated
herein changes or subsequently becomes inaccurate. Without limiting the
foregoing, no Provider shall have any liability whatsoever to you, whether in
contract (including under an indemnity), in tort (including negligence), under
a warranty, under statute or otherwise, in respect of any loss or damage
suffered by you as a result of or in connection with any opinions,
recommendations, forecasts, judgements, or any other conclusions, or any
course of action determined, by you or any third party, whether or not based
on the content, information or materials contained herein.
FTSE Index Data
London Stock Exchange Group plc and its group undertakings (collectively, the
'LSE Group'). © LSE Group 2024. FTSE Russell is a trading name of certain of
the LSE Group companies. 'FTSE®' 'Russell®', FTSE Russell®, is/are a trade
mark(s) of the relevant LSE Group companies and is/are used by any other LSE
Group company under license. All rights in the FTSE Russell indexes or data
vest in the relevant LSE Group company which owns the index or the data.
Neither LSE Group nor its licensors accept any liability for any errors or
omissions in the indexes or data and no party may rely on any indexes or data
contained in this communication.
No further distribution of data from the LSE Group is permitted without the
relevant LSE Group company's express written consent. The LSE Group does not
promote, sponsor or endorse the content of this communication.
None of the views expressed in this document should be construed as advice to
buy or sell a particular investment.
The printed version of the Interim Financial Report will be sent to
shareholders and will be available on the Monks' page of the Managers' website
monksinvestmenttrust.co.uk ‡ on or around 18 December 2024.
(‡) Neither the contents of the Managers' website nor the contents of
any website accessible from hyperlinks on the Managers' website (or any other
website) is incorporated into, or forms part of, this announcement.
Monks is managed by Baillie Gifford & Co, the Edinburgh based fund
management group with around £224 billion under management and advice in
active equity and bond portfolios for clients in the UK and throughout the
world (as at 2 December 2024).
Investment Trusts are UK public limited companies and are not authorised or
regulated by the Financial Conduct Authority.
Past performance is not a guide to future performance. The value of an
investment and any income from it is not guaranteed and may go down as well as
up and investors may not get back the amount invested. This is because the
share price is determined by the changing conditions in the relevant stock
markets in which the Company invests and by the supply and demand for the
Company's shares.
3 December 2024
For further information please contact:
Client Relations, Baillie Gifford & Co - Tel: 0131 275 2000
Jonathan Atkins, Four Communications - Tel: 0203 920 0555 or 07872 495396
-ends-
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 EAXADESFLFFARecent news on Monks Investment Trust
See all newsREG - Monks Inv.Trust - Transaction in Own Shares
AnnouncementREG - Monks Inv.Trust - Net Asset Value(s)
AnnouncementREG - Monks Inv.Trust - Transaction in Own Shares
AnnouncementREG - Monks Inv.Trust - Net Asset Value(s)
AnnouncementREG - Monks Inv.Trust - Transaction in Own Shares
Announcement