REG-New Star Investment Trust PLC New Star Investment Trust PLC: Final Results
31/10/2024 13:15
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New Star Investment Trust PLC (NSI)
New Star Investment Trust PLC: Final Results
31-Oct-2024 / 13:06 GMT/BST
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NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS
FOR THE YEAR ENDED 30TH JUNE 2024
New Star Investment Trust plc (the ‘Company’), whose current objective is
to achieve long-term capital growth, announces its results for the year
ended 30th June 2024.
FINANCIAL HIGHLIGHTS
30th June 30th June %
2024 2023 Change
PERFORMANCE
Net assets (£ ‘000) 137,861 125,592 9.77
Net asset value per Ordinary share 194.11p 176.83p 9.77
Mid-market price per Ordinary share 131.50p 120.00p 9.58
Discount of price to net asset value 32.3% 32.1% n/a
Total Return* 11.69% 2.62% n/a
IA Mixed Investment 40% - 85% Shares (total 11.80% 3.37% n/a
return)
MSCI AC World Index (total return, sterling 20.61% 11.89% n/a
adjusted)
MSCI UK Index (total return) 13.16% 6.78% n/a
1st July 2023 to 1st July 2022 to
30th June 2024 30th June 2023
Revenue return per Ordinary share 4.05p 2.99p
Capital return per Ordinary share 16.62p 1.58p
Return per Ordinary share 20.67p 4.57p
TOTAL RETURN* 11.69% 2.62%
DIVIDEND PER ORDINARY SHARE
Interim paid April 2024 1.70p 0.90p
Proposed final dividend 1.70p 1.70p
3.40p 2.60p
* The total return figure for the Company represents the revenue and
capital return shown in the Statement of Comprehensive Income divided by
the net asset value at the beginning of the period. The total return
performance basis is the industry standard and is considered a more
appropriate measure than just the revenue returns. This is an alternative
performance measure.
CHAIRMAN’S STATEMENT
PERFORMANCE
Your Company’s generated a total return of 11.69% over the year to 30th
June 2024, leaving the net asset value (NAV) per ordinary share at
194.11p. By comparison, the Investment Association’s Mixed Investment
40-85% Shares Index gained 11.80%. The MSCI AC World Total Return Index
gained 20.61% in sterling while the MSCI UK All Cap Total Return Index
rose 13.16%. Over the year, UK government bonds returned 4.50%. Further
information is provided in the investment manager’s report.
Your Company made a revenue profit for the year of £2.88 million (2023:
£2.12 million).
RETURN OF CAPITAL
On 21st June 2024, the board announced plans to return £17 million to
shareholders by way of a B share scheme. On 24th July 2024, shareholders
voted in favour of the scheme at an extraordinary general meeting. New B
Shares were issued and then redeemed immediately at a price of 24p per B
share. Following the scheme, your Company’s total issued share capital and
voting rights were unchanged. Your Company financed the repayment by
selling a proportion of its holdings across the board with a view broadly
to maintaining in percentage terms the asset allocation, including the
allocation to cash. As a result, the risk profile of the portfolio was
broadly unchanged.
CHANGE OF INVESTMENT OBJECTIVE
Your Board is proposing to widen the investment objective towards total
return rather than simply capital growth. This revised objective will be
put to shareholders at the forthcoming annual meeting.
GEARINGS AND DIVIDEND
Your Company has no borrowings. It ended the year under review with cash
and bank deposits representing 11.61% of its NAV and is likely to maintain
a significant cash and bank deposit position. In respect of the financial
year to 30th June 2024, your Directors recommend the payment of a final
dividend of 1.7p per share, making a total for the year of 3.4p (2023:
2.6p).
DISCOUNT
During the year under review, your Company’s shares continued to trade at
a significant discount to their NAV. The Board keeps this issue under
review.
OUTLOOK
Inflation in the US, the UK and eurozone is likely to fall further towards
the leading central banks’ 2% targets over the remainder of 2024. Amid
this backdrop and at a time of weakening monetary trends within the Group
of Seven major industrial nations and the seven largest emerging markets,
there are likely to be further reductions in policy interest rates. Lower
interest rates should be supportive for equities and bonds. There may,
however, be increased volatility ahead of November’s US presidential
election, especially given the conflicts in Ukraine and the Middle-East
and as investors attempt to discern the potential for profit from advances
in artificial intelligence.
NET ASSET VALUE
After the return of capital, your Company’s unaudited NAV at 30 September
2024 was 169.07p.
INVESTMENT MANAGER’S REPORT
MARKET REVIEW
Equities, as measured by the MSCI AC World Total Return Index, and bonds,
as measured by the Bloomberg Barclays Global Aggregate Bond Total Return
Index, rose 20.61% and 1.50% respectively in sterling over the year to 30
June 2024 as inflation fell towards the major central banks’ 2% targets.
In response, the European Central Bank (ECB) eased its monetary policy for
the first time in the current interest rate cycle, reducing its main
policy rate by a quarter percentage point to 4.25%. Shortly after the year
end, the Bank of England cut Bank Rate by a quarter point to 5% and in
September the Federal Reserve reduced its policy rate by a half point to
4.75-5.0%.
The US core personal consumption expenditures price index, the Fed’s
preferred inflation measure, fell from 4.3% in June 2023 to 2.6% in July
2024. UK headline inflation fell from 7.9% in June 2023 to 2.0% in May and
June 2024 before increasing to 2.2% in July. The ECB’s preferred eurozone
inflation measure fell from 5.5% in June 2023 to lows of 2.4% in November
2023 and April 2024 before increasing to 2.6% in July.
Emerging from two quarters of mild recession, the UK recorded
stronger-than-expected economic growth of 0.7% in the first quarter of
2024 followed by 0.6% in the second quarter. After Labour’s general
election victory in July, tax increases are expected in October’s budget.
Clarity on fiscal policy may, however, encourage businesses and households
to commit to longer-term spending, enhancing economic activity.
By contrast, the Bank of Japan (the BoJ) began to reverse its
accommodative monetary policy, which had been intended to achieve
sustained 2% inflation through negative interest rates after decades of
deflation. The BoJ raised its key short-term interest rate in March 2024
from -0.1% to a 0-0.1% range in the first rise since 2007 and raised the
rate a second time in July, taking it to 0.25%. Japanese stocks rose
25.59% in yen terms as currency-weakness improved Japan’s export
competitiveness but the yen’s decline against the pound reduced the gain
to 13.49% in sterling terms.
Among developing economies, China eased monetary policy by cutting its key
reserve requirement ratio from 7.6% to 7.4% in September 2023 and to 7% in
February 2024. Despite this, Chinese stocks fell 0.87% in sterling over
the year as a result of slowing economic growth, property-sector
over-indebtedness and bipartisan US support for trade restrictions.
China’s “common prosperity” measures collided with shareholder interests
to justify a higher risk premium and lower valuations for Chinese stocks.
By contrast, Indian equities rose 35.67% in sterling, benefitting from
strong economic growth, business-friendly policies and protections for
shareholder rights under the rule of law. In India’s general election,
Narendra Modi, the Prime Minister, secured a third term in office, albeit
propped by coalition partners.
PORTFOLIO REVIEW
Your Company’s total return over the year under review was 11.69%. By
comparison, the Investment Association (IA) Mixed Investment 40-85% Shares
sector, a peer group of multi-asset funds with allocations to equities in
the 40-85% range, rose 11.80%. The MSCI AC World Total Return and MSCI UK
All Cap Total Return Indices rose 20.61% and 13.16% respectively while
global bonds rose 1.50% in sterling and UK government bonds rose 4.50%.
Your Company is invested across asset classes to increase diversification
and reduce longer-term risks. In consequence, performance did not keep
pace with a strongly rising equity market as sterling and dollar cash and
low-risk multi-asset investments lagged the gains for equities. Within the
equity allocation, a relatively high emerging markets weighting at the
expense of the technology-heavy US market compared to the IA 40-85% Shares
sector hurt performance. The focus on higher-yielding markets and
investments managed in accordance with an income mandate will facilitate
the payment of dividends by your Company.
US technology stocks rose 45.14% in sterling as investors embraced the
commercial potential of artificial intelligence (AI), fueling the 25.27%
gain in US stocks overall. Within the portfolio, Polar Capital Global
Technology, the largest holding at the year end, and the iShares S&P 500
exchange-traded fund (ETF) gained 41.70% and 26.94% respectively. Polar
Capital Global Technology has focused on beneficiaries of the demand for
artificial intelligence, with Nvidia, the leading designer of AI
semiconductors, the largest holding. This focus on AI may lead to greater
volatility of returns because of the difficulties inherent in forecasting
the commercial development of an emerging technology.
Nvidia outsources production to Taiwan Semiconductor Manufacturing Company
(TSMC), the world’s leading foundry, and TSMC is another large Polar
Capital holding because hardware suppliers should benefit from commercial
applications for AI. TSMC is also a large holding in the portfolio’s
emerging markets holdings including Polen Capital Asia Income, Schroder
Asian Income Maximiser, the Schroder Oriental Income investment trust and
JP Morgan’s two Emerging Markets Income funds, one of which is an
investment trust. Nvidia and TSMC gained 193.81% and 65.03% in sterling
respectively over the year. Your Company will benefit in the longer term
from AI advances because of its significant allocation to technology
stocks. Investments outside US technology may, however, provide some
protection and diversification if and when technology stocks fall short of
investors’ expectations.
By contrast, your Company’s relatively high weightings in developing
markets hurt performance as equities in Asia excluding Japan and emerging
markets lagged, rising 13.92% and 13.62% respectively in sterling.
Valuations ended the year relatively low, however, and likely US interest
rate cuts may lead to dollar weakness, which typically increases demand
for developing economy assets. Within the emerging markets allocation,
Stewart Investors Indian Subcontinent did best, rising 24.40%, while
Vietnam Enterprise Investments was weakest, up 1.55%.
The UK stock market also lagged, rising 13.29%, but smaller stocks did
slightly better, rising 14.49%. UK companies ended the year relatively
lowly valued and may prove defensive should equities fall overall. Within
the portfolio’s UK equity allocation, Aberforth Split Level Income did
best, rising 31.60% over the year. The majority of your Company’s holding
in this investment trust was rolled over in June 2024 into Aberforth
Geared Value & Income, which has a similar mandate, investing in smaller
value stocks. Man GLG UK Income, which invests across the market cap
spectrum in value stocks, also outperformed rising 20.62%, while
Chelverton UK Equity Income, a small cap specialist, gained 13.80%.
Over the course of the year, various long-standing investments were sold
including Fundsmith as well as Crux European Special Situations and
BlackRock Continental Income, two disposals that reduced your Company’s
allocation to equities in Europe excluding the UK.
Investment in higher-yielding equity investments facilitates the payment
of dividends by your Company. Higher-yielding equities may also deliver
attractive total returns because an above-average yield may indicate an
undervalued investment opportunity capable of delivering capital returns
alongside a healthy dividend. The allocation to equity income holdings
increased during the year through purchases of Baillie Gifford Global
Income Growth and Redwheel Global Equity Income. A new investment was also
made in Clearbridge Global Infrastructure Income. Infrastructure stocks
typically benefit from falling interest rates because many have bond-like
characteristics as a result of the high visibility of future cash flows.
Spending on environmentally friendly electricity generation and
distribution to meet governments’ clean energy targets is a major
opportunity for some companies in the Clearbridge portfolio. Investment in
higher-yielding UK equities was also increased through an addition to Man
GLG UK Income.
Your Company’s holdings in developing economies increased through
purchases of Schroder Asian Income Maximiser, Prusik Asian Equity Income
and Schroder Oriental Income. Matthews Asia ex-Japan was sold, however,
following a change of manager and investment mandate from income to total
return as was Baillie Gifford Pacific.
In Japan, Lindsell Train Japanese Equity, a growth-oriented holding, was
sold following poor performance while the JP Morgan Japan Small Cap Growth
& Income, an investment trust, was added.
Trojan, a low-risk multi-asset investment, and BlackRock Gold & General,
which invests in mining companies, were sold. These investments provided
diversification during the recent rate-tightening cycle in which your
Company had a low allocation to bonds, which typically fall as interest
rates rise. A sterling-hedged iShares Treasury Bond 7-10 Years ETF holding
and Schroder Strategic Credit were purchased, however, because interest
rates appeared to reach a cyclical peak and these holdings may provide
attractive income as well as capital gains as interest rates fall.
OUTLOOK
Following your Company’s year-end, £17 million was returned to
shareholders via a B share issue and redemption. The asset allocation was
kept broadly unchanged.
Over the coming months, inflation is likely to fall further towards
central bank targets, leading to monetary easing across the major western
economies. Easier monetary policy should support equities and bonds while
your Company’s cash and longer term deposits provide income and some
diversification in the event that markets fall.
Your Company has benefited from the strong performance from US technology
stocks but changes over the year have resulted in a higher allocation to
more lowly-valued countries and sectors, which may prove defensive if
investors become disenchanted with the scale or pace of the
commercialisation of AI advances. With the outcome far from clear, there
may be increased volatility ahead of November’s US presidential election.
Since your Company’s year-end, conflict in the Middle East has intensified
although the impact on global markets, particularly oil prices, remains
muted for now because of US energy self-sufficiency. A focus on equity
income investments may provide some defensiveness in times of heightened
volatility and facilitate the payment of dividends by your Company.
SCHEDULE OF LARGEST HOLDINGS AT 30TH JUNE 2024
Market Purchases/ Market Market
value 30 (Sales) movement value 30
June 2023 June 2024 % of
net
assets
£’000 £’000
£’000 £’000
Polar Capital Global 8,615 - 3,628 12,243 8.88
Technology
Baillie Gifford Global 4,252 2,500 574 7,326 5.31
Income Growth
TM Redwheel Global Equity 2,132 4,700 389 7,221 5.24
Income Fund
Man GLG UK Income Fund 2,597 3,900 683 7,180 5.21
iShares Core S&P 500 UCITS 5,327 - 1,316 6,643 4.82
ETF
First State Indian 4,578 - 1,120 5,698 4.12
Subcontinent Fund
Aquilus Inflection Fund 4,544 - 522 5,066 3.68
EF Brompton Global 4,439 - 318 4,757 3.45
Conservative Fund
MI Chelverton UK Equity 4,300 - 309 4,609 3.34
Income Fund
EF Brompton Global Equity 3,615 - 652 4,267 3.10
Fund
MI Polen Capital Asia 3,782 - 365 4,147 3.01
Income Fund
Aberforth Split Level 3,526 - 539 4,065 2.95
Income Trust
Schroder Asian Income - 3,900 165 4,065 2.95
Maximiser L Income
FTF Clearbridge Global - 3,900 7 3,907 2.83
Infrastructure Income
EF Brompton Global 3,332 - 442 3,774 2.74
Opportunities Fund
EF Brompton Global Growth 3,159 - 404 3,563 2.59
Fund
Vietnam Enterprise 3,473 - 24 3,497 2.54
Investments
MI Brompton UK Recovery 2,933 - 357 3,290 2.38
Unit Trust
Schroder Strategic Credit - 3,000 50 3,050 2.21
Fund L Income
Prusik Asian Equity Income - 3,000 (27) 2,973 2.16
Fund
iShares $ Treasury Bond - 3,056 (111) 2,945 2.14
7-10yr UCITS ETF
EF Brompton Global Balanced 2,503 - 242 2,745 1.99
Fund
EF Brompton Global Income 2,120 - 116 2,236 1.62
Fund
Schroder Oriental Income 1,627 153 1,780 1.29
Fund
Fundsmith Equity Fund 9,745 (10,188) 443 - -
BlackRock Continental 4,355 (4,723) 368 - -
European Income Fund
Blackrock Gold and 3,832 (3,806) (26) - -
General
Matthews Asia Ex Japan (3,889) _(377) _____- _____-
4,266
91,425 6,977 12,645 111,047 80.55
Balance not held in 16,876 (6,137) __(70) _10,669 _7.74
investments above
Total investments
(excluding cash and bank
deposits) 108,301 840 12,575 121,716 88.29
The investment portfolio, excluding cash and bank deposits, can be
further analysed as follows:
£ ‘000
Investment funds 97,469
Investment companies and exchange traded funds 20,735
Unquoted investments, including loans of £0.4m 2,753
Other quoted investments ___759
121,716
STRATEGIC REVIEW
The Strategic Review is designed to provide information primarily about
the Company’s business and results for the year ended 30th June 2024. The
Strategic Review should be read in conjunction with the Chairman’s
Statement and the Investment Manager’s Report above, which provide a
review of the year’s investment activities of the Company and the outlook
for the future.
STATUS
The Company is an investment company under section 833 of the Companies
Act 2006. It is an Approved Company under the Investment Trust (Approved
Company) (Tax) Regulations 2011 (the ‘Regulations’) and conducts its
affairs in accordance with those Regulations so as to retain its status as
an investment trust and maintain exemption from liability to United
Kingdom capital gains tax.
The Company is a small registered Alternative Investment Fund Manager.
PURPOSE CULTURE AND VALUES
The Directors acknowledge the expectation under the UK Code on Corporate
Governance issued by the Financial Reporting Council in July 2018 (the
‘Code’) that they formally define a purpose for the Company. The
Directors have reviewed this requirement and consider that the Company’s
purpose is to deliver the Company’s stated investment objective to achieve
long-term capital growth for the benefit of its investors.
Similarly, the Directors have also considered the Company’s culture and
values in line with the Code requirements. The Board has formed the view
that as the Company has no direct employees, and with operational
management outsourced to the Investment Manager, the Administrator and the
Company Secretary, the Company’s culture and values have to be those of
the Board. Having a stable composition and established working practices,
the Board is defined by experienced membership, trust and robust
investment challenge. These are therefore the key characteristics of the
Company’s culture and values.
STAKEHOLDER RESPONSIBILITIES (S.172 STATEMENT UNDER COMPANIES ACT 2006)
The Directors are aware of their responsibilities to stakeholders under
both the Code and legislation through regular governance updates from the
Company Secretary. As a UK listed investment trust, the Directors
outsource operational management of the Company, including day-to-day
management of the investment portfolio, to third parties. As a
consequence, the Directors consider their key stakeholder groups to be
limited to the Company’s shareholders, its third-party advisers and
service providers, and individual Board members.
The Company’s Articles of Association, the Board’s commitment to follow
the principles of the Code and the involvement of the independent Company
Secretary in Board matters enable the Directors to meet their
responsibilities towards individual shareholder groups and Board members.
Governance procedures are in place which allow both investors and
Directors to ask questions or raise concerns appropriately. The Board is
satisfied that those governance procedures mean the Company can act fairly
between individual shareholders and takes account of Mr Duffield’s
significant shareholding. In considering the payment of the minimum
dividend required to maintain investment trust tax status, the
recommendations to vote in favour of the resolutions at the AGM and the
asset allocation within the investment portfolio, the Board assessed the
potential benefits to shareholders.
The Board also regularly considers the performance of its independent
third-party service providers. Those third-party service providers in turn
have regular opportunities to report on matters meriting the attention of
the Board, including in relation to their own performance. The Board is
therefore confident that its responsibilities to each of its key
stakeholder groups are being discharged effectively.
As the Company does not have any employees, the Board does not consider it
necessary to establish means for employee engagement with the Board as
required by the latest version of the Code.
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
The Company’s investment objective has been to achieve long-term capital
growth.
It is proposed that the investment objective is widened towards total
return rather than simply capital growth. This revised objective will be
put to shareholders at the forthcoming annual general meeting.
Investment Policy
The Company’s investment policy is to allocate assets to global investment
opportunities through investment in equity, bond, commodity, real estate,
currency and other markets. The Company’s assets may have significant
weightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded
funds, futures, options, limited partnerships and direct investments in
relevant markets. The Company may invest up to 15% of its net assets in
direct investments in relevant markets.
The Company will not follow any index with reference to asset classes,
countries, sectors or stocks. Aggregate asset class exposure to any one of
the United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan
or Emerging Markets and to any individual industry sector will be limited
to 50% of the Company’s net assets, such values being assessed at the time
of investment and for funds by reference to their published investment
policy or, where appropriate, the underlying investment exposure.
The Company may invest up to 20% of its net assets in unlisted securities
(excluding unquoted pooled investment vehicles), such values being
assessed at the time of investment.
The Company will not invest more than 15% of its net assets in any single
investment, such values being assessed at the time of investment.
Derivative instruments and forward foreign exchange contracts may be used
for the purposes of efficient portfolio management and currency hedging.
Derivatives may also be used outside of efficient portfolio management to
meet the Company’s investment objective. The Company may take outright
short positions in relation to up to 30% of its net assets, with a limit
on short sales of individual stocks of up to 5% of its net assets, such
values being assessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or
long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company’s total assets
may be invested in other closed-ended investment funds except where such
funds have themselves published investment policies to invest no more than
15% of their total assets in other listed closed-ended investment funds.
Information on the Company’s portfolio of assets with a view to spreading
investment risk in accordance with its investment policy is set out above.
FINANCIAL REVIEW
For the year-ended 30 June 2023, the Company changed its management fee
allocation policy. Previously the management fee was charged to income.
As the Company invests on a fund of funds basis, for much of the
investment portfolio this results in two investment management fees being
charged to income. For 2023 and subsequent periods, the management fee
charged directly by Brompton is being allocated to the capital account.
Net assets at 30th June 2024 amounted to £137,861,000 compared with
£125,592,000 at 30th June 2023. In the year under review, the NAV per
Ordinary share increased by 9.77% from 176.83p to 194.11p, after paying a
final dividend of 1.40p per share in respect of 2023 and an interim
dividend for 2024 of 1.70p per share.
The Company’s gross revenue rose to £3,256,000 (2023: £2,454,000). After
deducting expenses and taxation, the revenue profit for the year was
£2,881,000 (2023: £2,122,000).
Total expenses, including the management fee charged to capital, for the
year increased slightly to £1,186,000 (2023: £1,107,000). In the year
under review the investment management fee increased to £811,000 (2023:
£775,000), reflecting the Company’s higher average NAV over the period.
Further details on the Company’s expenses may be found in notes 3 and 4
below.
Historically, dividends have not formed a central part of the Company’s
investment objective. The increased investment in income focused funds
over the last few years and charging management fees to capital has
enabled the Directors to declare an increased dividend more recently. At
the half year the Company paid a dividend of 1.70p per share. The
Directors propose a final dividend of 1.70p per Ordinary share in respect
of the year ended 30th June 2024 (2023: 1.70p). If approved at the Annual
General Meeting, the dividend will be paid on 13th December 2024 to
shareholders on the register at the close of business on 15th November
2024 (ex-dividend 14th November 2024).
The primary source of the Company’s funding is shareholder funds.
While the future performance of the Company is dependent, to a large
degree, on the performance of international financial markets, which in
turn are subject to many external factors, the Board’s intention is that
the Company will continue to pursue its stated investment objective in
accordance with the strategy outlined above. Further comments on the
short-term outlook for the Company are set out in the Chairman’s Statement
and the Investment Manager’s report.
PERFORMANCE MEASUREMENT AND KEY PERFORMANCE INDICATORS
Throughout the year the Company’s investments included seven funds managed
by the Investment Manager (2023: seven). No investment management fees
were payable directly by the Company in respect of these investments.
In order to measure the success of the Company in meeting its objectives,
and to evaluate the performance of the Investment Manager, the Directors
review at each meeting: net asset value, income and expenditure, asset
allocation and attribution, the share price of the Company and the
discount. The Directors consider a number of different indicators as the
Company does not have a formal benchmark and performance against these is
shown in the Financial Highlights.
Performance is discussed in the Chairman’s Statement and Investment
Manager’s Report.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks identified by the Board, and the steps the Board takes
to mitigate them, are discussed below. The Audit and Risk Committee
reviews existing and emerging risks on a six-monthly basis. The Board has
closely monitored the societal, economic and market focused implications
of recent events.
Investment strategy
Inappropriate long-term strategy, asset allocation and fund selection
could lead to underperformance. The Board discusses investment
performance at each of its meetings and the Directors receive reports
detailing asset allocation, investment selection and performance.
Business conditions and general economy
The Company’s future performance is heavily dependent on the performance
of different equity and currency markets. The Board cannot mitigate the
risks arising from adverse market movements. However, diversification
within the portfolio will reduce the impact. Further information is given
in portfolio risks below.
Macro-economic event risk
The scale and potential adverse impact of a macro-economic event, such as
a pandemic and the outbreak of localised wars has highlighted the
possibility of a number of identified risks such as market risk, currency
risk, investment liquidity risk and operational risk having an adverse
impact at the same time. The risk may impact on the value of the
Company’s investment portfolio, its liquidity, meaning investments cannot
be realised quickly, or the Company’s ability to operate if the Company’s
suppliers face financial or operational difficulties. The Directors
closely monitor these areas and currently maintain a significant cash
balance.
Portfolio risks - market price, foreign currency and interest rate risks
The largest investments are listed above. Investment returns will be
influenced by interest rates, inflation, investor sentiment,
availability/cost of credit and general economic and market conditions in
the UK and globally. A significant proportion of the portfolio is in
investments denominated in foreign currencies and movements in exchange
rates could significantly affect their sterling value. The Investment
Manager takes all these factors into account when making investment
decisions, but the Company does not normally hedge against foreign
currency movements. The Board’s policy is to hold a spread of investments
to reduce the impact of the risks arising from the above factors,
investing in a spread of asset classes and geographic regions.
Net asset value discount
The discount in the price at which the Company’s shares trade to net asset
value means that shareholders cannot realise the real underlying value of
their investment. Over the last few years, the Company’s share price has
been at a significant discount to the Company’s net asset value. The
Directors regularly review the level of discount, however given the
investor base of the Company, the Board is very restricted in its ability
to influence the discount to net asset value.
Investment Manager
The quality of the team employed by the Investment Manager is an important
factor in delivering good performance and the loss of key staff could
adversely affect returns. A representative of the Investment Manager
attends each Board meeting, and the Board is informed if any major changes
to the investment team employed by the Investment Manager are proposed.
The Investment Manager regularly informs the Board of developments and any
key implications for either the investment strategy or the investment
portfolio. Also see note 18.
Tax and regulatory risks
A breach of The Investment Trust (Approved Company) (Tax) Regulations 2011
(the ‘Regulations’) could lead to capital gains realised within the
portfolio becoming subject to UK capital gains tax. A breach of the FCA
Listing Rules could result in suspension of the Company’s shares, while a
breach of company law could lead to criminal proceedings, financial and/or
reputational damage. The Board employs Brompton Asset Management Limited
as Investment Manager, and Apex Fund Administration Services (UK) Ltd as
Secretary and Administrator, to help manage the Company’s legal and
regulatory obligations.
Operational
Disruption to, or failure of, the Investment Manager’s or Administrator’s
accounting, dealing or payment systems, or the Custodian’s records, could
prevent the accurate reporting and monitoring of the Company’s financial
position. The Company is also exposed to the operational risk that one or
more of its suppliers may not provide the required level of service.
The Directors confirm that they have carried out a robust assessment of
the risks and emerging risks facing the Company, including those that
would threaten its business model, future performance, solvency and
liquidity.
VIABILITY STATEMENT
The assets of the Company consist mainly of securities that are readily
realisable, or cash and bank deposits and it has no significant
liabilities and financial commitments. Investment income has exceeded
annual expenditure and current liquid net assets cover current annual
expenses for many years. Accordingly, the Company is of the opinion that
it has adequate financial resources to continue in operational existence
for the long term which is considered to be in excess of five years. Five
years is considered a reasonable period for investors when making their
investment decisions. In reaching this view, the Directors reviewed the
anticipated level of annual expenditure against the cash, bank deposits
and liquid assets within the portfolio. The Directors have also
considered the risks the Company faces in making this viability statement.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES
The Company has no employees, with day-to-day operational and
administration of the Company being delegated by the Board to the
Independent Investment Manager and the Administrator. The Company’s
portfolio is managed in accordance with the investment objective and
policy approved by shareholders. The Company is primarily invested in
investment funds and exchange traded funds, where it has no direct
dialogue with the underlying investments. Environmental, social and
governance considerations of underlying investee companies are not a key
driver when evaluating existing and potential investments.
GREENHOUSE GAS EMISSIONS
As the Company has no premises, properties or equipment of its own, the
Directors deem the Company to be exempt from making any disclosures under
the Companies Act 2006 (Strategic Reports and Directors’ Reports)
Regulations 2013.
STREAMLINED ENERGY AND CARBON REPORTING
The Company is categorised as a lower energy user under the HMRC
Environmental Reporting Guidelines March 2019 and is therefore not
required to make the detailed disclosures of energy and carbon information
set out within the guidelines. The Company’s energy and carbon
information is not therefore disclosed in this report.
MODERN SLAVERY ACT
The Directors rely on undertakings given by its independent third-party
advisers that those companies continue to have no instances of modern
slavery either within their businesses or supply chains. Given the
financial services focus and geographical location of all third-party
suppliers to the Company, the Directors perceive the risks of a
contravention of the legislation to be very low.
DIVERSITY
The Board of Directors comprises four male directors, and currently no
female board members and no minority ethnic members. Mr McQuaker joined
the Board in 2023, as he was someone who would add significantly to the
debate over the Company’s investment positioning, the key determinant of
the Company’s performance.
The Board does not have a formal diversity policy, and no targets have
been established. The Board is committed to the benefits of diversity,
including gender, ethnicity and background when considering new
appointments to the Board, whilst always seeking to base any decision on
merit, measured by knowledge, experience and ability to make a positive
contribution to the Board’s decision making.
The Company has not met the diversity and minority ethnic targets set by
the FCA.
CLIMATE RELATED REPORTING
As a closed-end investment fund, the Company is exempt from any climate
related reporting. The Company mainly invests in funds. Those funds are
responsible for determining the impact of climate change when making their
investment decisions. The Company does not influence the investment
decisions of the funds it invests in.
LISTING RULE 9.8.4
Listing rule 9.8.4 requires the Company to include certain information in
a single identifiable section of the Annual Report or a cross-reference
table indicating where the information is set out. The Directors confirm
that there were no disclosures to be made in this regard.
STATEMENT OF COMPREHENSIVE INCOME AT 30TH JUNE 2024
Year ended Year ended
30th June 2024 30th June 2023
Revenue Revenue
Return Capital Return Capital
Return Total Return Total
£ ‘000 £ ‘000 £ ‘000 £ ‘000 £ ‘000 £ ‘000
Notes
INVESTMENT INCOME 2 2,373 - 2,373 1,997 - 1,997
Other operating 2 883 - 883 457 - 457
income
3,256 - 3,256 2,454 - 2,454
GAINS AND LOSSES ON
INVESTMENTS
Gains on investments
at fair value
through profit or 8 - 12,575 12,575 - 2,279 2,279
loss
Legal and - - - - - -
professional costs
Other exchange - 35 35 - (381) (381)
Gains/(losses)
Trail rebates - 4 4 - 2 2
3,256 12,614 15,870 2,454 1,900 4,354
EXPENSES
Management fees 3 (811) (811) - (775) (775)
Other expenses 4 (375) - (375) (332) - (332)
(375) (811) (1,186) (332) (775) (1,107)
PROFIT BEFORE TAX 2,881 11,803 14,684 2,122 1,125 3,247
Tax 5 - - - - - -
PROFIT FOR THE YEAR 2,881 11,803 14,684 2,122 1,125 3,247
EARNINGS PER SHARE
Ordinary shares 6 4.05p 16.62p 20.67p 2.99p 1.58p 4.57p
(pence)
The total column of this statement represents the Company’s profit and
loss account, prepared in accordance with UK adopted international
accounting standards. The supplementary Revenue Return and Capital Return
columns are both prepared under guidance published by the Association of
Investment Companies. All revenue and capital items in the above statement
derive from continuing operations.
The Company did not have any income or expense that was not included in
‘Profit/(Loss) for the year’. Accordingly, the ‘Profit/(Loss) for the
year’ is also the ‘Total comprehensive income for the year’, as defined in
IAS 1 and no separate Statement of Comprehensive Income has been
presented.
No operations were acquired or discontinued during the year.
All income is attributable to the equity holders of the company. There are
no minority interests.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2024
Share Share Special Retained
premium reserve earnings
Note capital Total
£ ‘000 £ ‘000 £ ‘000
£ ‘000 £ ‘000
AT 30th JUNE 2023 710 21,573 56,908 46,401 125,592
Total comprehensive income - - - 14,684 14,684
for the year
Dividends paid 7 - - - (2,415) (2,415)
AT 30th JUNE 2024 710 21,573 56,908 58,670 137,861
Included within Retained earnings were £2,621,000 of Company revenue
reserves available for distribution.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30TH JUNE 2023
Share Share Special Retained
premium reserve earnings
Note capital Total
£ ‘000 £ ‘000 £ ‘000
£ ‘000 £ ‘000
AT 30th JUNE 2022 710 21,573 56,908 44,787 123,978
Total comprehensive income - - - 3,247 3,247
for the year
Dividends paid 7 - - - (1,633) (1,633)
AT 30th JUNE 2023 710 21,573 56,908 46,401 125,592
Included within Retained earnings were £2,155,000 of Company revenue
reserves available for distribution.
BALANCE SHEET AT 30TH JUNE 2024
30th June 30th June
Notes 2024 2023
£ ‘000 £ ‘000
NON-CURRENT ASSETS
Investment at fair value through profit or loss 8 121,716 108,301
CURRENT ASSETS
Other receivables 10 479 345
Cash and cash equivalents 11 10,236 17,244
Other financial assets (longer-term deposits) 12 5,773 -
16,488 17,589
TOTAL ASSETS 138,204 125,890
CURRENT LIABILITIES
Other payables 13 (343) (298)
TOTAL ASSETS LESS CURRENT LIABILITIES 137,861 125,592
NET ASSETS 137,861 125,592
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Called-up share capital 14 710 710
Share premium 15 21,573 21,573
Special reserve 15 56,908 56,908
Retained earnings 15 58,670 46,401
TOTAL EQUITY 137,861 125,592
CASH FLOW STATEMENTS AT 30TH JUNE 2024
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Notes
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,985 1,300
INVESTING ACTIVITIES
Purchase of investments 8 (32,535) (9,812)
Sale of investments 8 31,695 3,240
(840) (6,572)
Longer term deposits 12 (5,773) -
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (6,613) (6,572)
FINANCING ACTIVITIES
Equity dividends paid 7 (2,415) (1,633)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (2,415) (1,633)
DECREASE IN CASH (7,043) (6,905)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN
CASH & CASH EQUIVALENTS
Decrease in cash resulting from cash flows (7,043) (6,905)
Exchange movements 35 (381)
Movement in net funds (7,008) (7,286)
Net funds at start of the year 17,244 24,530
CASH & CASH EQUIVALENTS AT END OF YEAR 10,236 17,244
RECONCILIATION OF PROFIT BEFORE
FINANCE COSTS AND TAXATION TO NET
CASH FLOW FROM OPERATING
ACTIVITIES
Profit before finance costs and taxation* 14,684 3,247
Gains on investments (12,575) (2,279)
Exchange differences (35) 381
Capital trail rebates (4) (2)
Net revenue gains before taxation 2,070 1,347
Increase in debtors (134) (87)
Increase in creditors 45 38
Taxation - -
Capital trail rebates 4 2
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,985 1,300
*Includes dividends received in cash of £2,132,000 (2023: £1,607,000),
accumulation income of £253,000 (2023: £218,000) and interest received of
£726,000 (2023: £586,000).
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 30TH JUNE 2024
1. ACCOUNTING POLICIES
The financial statements have been prepared in accordance with UK adopted
international accounting standards.
These financial statements are presented in pounds sterling, the Company’s
functional currency, being the currency of the primary economic
environment in which the Company operates, rounded to the nearest
thousand.
(a) Basis of preparation: The financial statements have been prepared on a
going concern basis (see 1(o)). The principal accounting policies adopted
are set out below.
Where presentational guidance set out in the Statement of Recommended
Practice ‘Financial Statements of Investment Trust Companies and Venture
Capital Trusts’ ('SORP') issued by the Association of Investment Companies
('AIC') in November 2014 and updated in February 2018 and October 2019
with consequential amendments is consistent with the requirements of UK
adopted International Accounting Standards, the Directors have sought to
prepare the financial statements on a basis compliant with the
recommendations of the SORP.
The Company is an investment entity and has one subsidiary which is
dormant. Accordingly, the Company is not required to prepare consolidated
financial statements.
The Company is an investment entity as defined by UK adopted International
Accounting Standards and assets are held at their fair value reflecting
the impact, if any, of climate change (see 1(f)).
Consolidated accounts have not been prepared as the subsidiary is
immaterial in the context of these financial statements. The net asset
value of the investment in JIT Securities Limited has been included in the
investments in the Company’s balance sheet. JIT Securities Limited has
not traded throughout the year and the preceding year and, as a dormant
company, has exemption under 480(1) of the Companies Act 2006 from
appointing auditors or obtaining an audit.
(b) Presentation of Statement of Comprehensive Income: In order to better
reflect the activities of an investment trust company and in accordance
with guidance issued by the AIC, supplementary information which analyses
the statement of comprehensive income between items of a revenue and
capital nature has been presented alongside the statement of comprehensive
income.
In accordance with the Company's Articles of Association, net capital
returns may not be distributed by way of a dividend. Additionally, the net
revenue profit is the measure the Directors believe is appropriate in
assessing the Company’s compliance with certain requirements set out in
the Investment Trust (Approved Company) (Tax) Regulations 2011.
(c) Use of estimates: The preparation of financial statements requires the
Company to make estimates and assumptions that affect items reported in
the company balance sheet and statement of comprehensive income and the
disclosure of contingent assets and liabilities at the date of the
financial statements. Although these estimates are based on the
Directors’ best knowledge of current facts, circumstances and, to some
extent, future events and actions, the Company’s actual results may
ultimately differ from those estimates, possibly significantly. The most
significant estimate relates to the valuation of unquoted investments.
(d) Revenue: Dividends and other such revenue distributions from
investments are credited to the revenue column of the statement of
comprehensive income on the day in which they are quoted ex-dividend.
Where the Company has elected to receive its dividends in the form of
additional shares rather than in cash and the amount of the cash dividend
is recognised as income, any excess in the value of the shares received
over the amount recognised is credited to the capital reserve. Deemed
revenue from offshore funds is credited to the revenue account. Interest
on fixed interest securities and deposits is accounted for on an accrual’s
basis.
(e) Expenses: Expenses are accounted for on an accruals basis.
(1) Administration and other expenses, except for transaction charges, are
charged to the revenue column of the statement of comprehensive income.
(2) Direct management fees are recognised as a capital item in the
statement of comprehensive income.
(f) Investments held at fair value: Purchases and sales of investments are
recognised and derecognised on the trade date where a purchase or sale is
under a contract whose terms require delivery within the timeframe
established by the market concerned and are initially measured at fair
value.
All investments are classified as held at fair value through profit or
loss on initial recognition and are measured at subsequent reporting dates
at fair value, which is either the quoted bid price or the last traded
price, depending on the convention of the exchange on which the investment
is quoted. Investments in units of unit trusts or shares in OEICs are
valued at the bid price for dual priced funds, or single price for
non-dual priced funds, released by the relevant investment manager.
Unquoted investments are valued by the Directors at the balance sheet date
based on recognised valuation methodologies, in accordance with
International Private Equity and Venture Capital ('IPEVC') Valuation
Guidelines such as dealing prices or third-party valuations where
available, net asset values and other information as appropriate.
As the quoted investments hold listed companies, the fair value prices
should reflect the impact, if any, of climate change.
(g) Taxation: The charge for taxation is based on taxable income for the
year. Withholding tax deducted from income received is treated as part of
the taxation charge against income. Taxation deferred or accelerated can
arise due to temporary differences between the treatment of certain items
for accounting and taxation purposes. Full provision is made for deferred
taxation under the liability method on all temporary differences not
reversed by the Balance Sheet date. No deferred tax provision is made
against deemed reporting offshore funds. Deferred tax assets are only
recognised when there is more likelihood than not that there will be
suitable profits against which they can be applied.
(h) Foreign currency: Assets and liabilities denominated in foreign
currencies are translated at the rates of exchange ruling at the balance
sheet date. Foreign currency transactions are translated at the rates of
exchange applicable at the transaction date. Exchange gains and losses
are taken to the revenue or capital column of the statement of
comprehensive income depending on the nature of the underlying item.
(i) Capital reserve: The following are accounted for in the capital
reserve:
- gains and losses on the realisation of investments together with the
related taxation effect;
- foreign exchange gains and losses on capital transactions, including
those on settlement, together with the related taxation effect;
- revaluation gains and losses on investments;
- direct management fees;
- legal expenses in assessing potential investments or incurred in
disposing of investments; and
- trail rebates received from the investment managers of the Company’s
investments.
The capital reserve is not available for the payment of dividends.
(j) Revenue reserve: The revenue reserve includes net revenue recognised
in the revenue column of the Statement of Comprehensive Income.
(k) Special reserve: The special reserve can be used to finance the
redemption and/or purchase of shares in issue.
(l) Cash and cash equivalents: Cash and cash equivalents comprise deposits
with an original maturity of less than 3 months and balances with banks.
Cash and cash equivalents may be held for the purpose of either asset
allocation or managing liquidity.
(m)Longer term deposits: Longer term bank deposits with an original
maturity of over 3 months are shown as other financial assets.
(n)Dividends payable: Dividends are recognised from the date on which they
are irrevocably committed to payment.
(o) Segmental Reporting: The Directors consider that the Company is
engaged in a single segment of business with the primary objective of
investing in securities to generate long term capital growth for its
shareholders. Consequently, no business segmental analysis is provided.
(p) Going concern basis of preparation: The financial statements are
prepared on a going concern basis and on the assumption that approval as
an investment trust under section 1158 of the Corporation Tax Act 2010 and
the Investment Trust (Approved Company) (Tax) Regulations 2011 will be
retained.
(q) New standards, interpretations and amendments effective for the
periods beginning on or after 1st July 2023: There are no new standards,
amendments to standards and interpretations that have impacted the Company
and should be disclosed.
(r) New standards, interpretations and amendments issued which are not yet
effective and applicable for the periods beginning on or after 1st July
2024: There are no new standards, amendments to standards and
interpretations that will impact the Company and should be disclosed.
2. INVESTMENT INCOME
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
INCOME FROM INVESTMENTS
UK net dividend income 2,102 1,707
Unfranked investment income 91 175
UK fixed interest 180 115
2,373 1,997
OTHER OPERATING INCOME
Bank interest 883 457
883 457
TOTAL INCOME COMPRISES
Dividends 2,193 1,882
Interest income 1,063 572
3,256 2,454
The above dividend and interest income has been included in the profit
before finance costs and taxation included in the cash flow statements.
3. MANAGEMENT FEES
Year ended Year ended
30th June 2024 30th June 2023
Revenue Capital Total Revenue Capital Total
£ ‘000 £ ‘000
£ ‘000 £ ‘000 £ ‘000 £ ‘000
Investment management fee - 811 811 - 775 775
- 811 811 - 775 775
At 30th June 2024 there were amounts accrued of £212,000 (2023: £194,000)
for investment management fees.
4. OTHER EXPENSES
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Directors’ remuneration 104 66
Administrative and secretarial fee 95 95
Auditors’ remuneration*
- Audit 56 70
Other expenses 120 101
375 332
Allocated to:
- Revenue 375 332
- Capital - -
375 332
* inclusive of VAT
5. TAXATION
a. Analysis of tax charge for the year:
Year ended Year ended
30th June 2024 30th June 2023
Revenue
Return Capital Revenue Capital
Return Return Return
£ ‘000 £ ‘000 Total £ ‘000 Total
£ ‘000 £ ‘000 £ ‘000
Overseas tax 7 - 7 9 - 9
Recoverable income tax (7) - (7) (9) - (9)
Total current tax for the - - - - - -
year
Deferred tax - - - - - -
Total tax for the year - - - - - -
(note 5b)
(b) Factors affecting tax charge for the year:
The charge for the year of £nil (2023: £nil) can be reconciled to the
profit per the statement of comprehensive income as follows:
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Total profit before tax 14,684 3,247
Theoretical tax at the UK corporation tax rate of 3,671 666
25% (2023: 20.50%)
Effects of:
Non-taxable UK dividend income (526) (350)
Gains and losses on investments that are not taxable (3,154) (389)
Excess expenses not utilised 23 99
Overseas dividends which are not taxable (14) (26)
Overseas tax 7 9
Recoverable income tax (7) (9)
Total tax for the year - -
Due to the Company’s tax status as an investment trust and the intention
to continue meeting the conditions required to maintain approval of such
status in the foreseeable future, the Company has not provided tax on any
capital gains arising on the revaluation or disposal of investments.
There is no deferred tax (2023: £nil) in the capital account of the
Company. There is no deferred tax charge in the revenue account (2023:
£nil).
At the year-end there is an unrecognised deferred tax asset of £1,156,000
(2023: £1,207,000) based on the enacted tax rates of 25% for financial
years beginning 1st April 2023, as a result of excess expenses.
6. RETURN PER ORDINARY SHARE
Total return per Ordinary share is based on the total profit on ordinary
activities after taxation of £14,684,000 (2023: £3,247,000) and on
71,023,695 (2023: 71,023,695) Ordinary shares, being the weighted average
number of Ordinary shares in issue during the year.
Revenue return per Ordinary share is based on the revenue profit on
ordinary activities after taxation of £2,881,000 (2023: £2,122,000) and on
71,023,695 (2023: 71,023,695) Ordinary shares, being the weighted average
number of Ordinary shares in issue during the year.
Capital return per Ordinary share is based on net capital profit for the
year of £11,803,000 (2023: £1,125,000) and on 71,023,695 (2023:
71,023,695) Ordinary shares, being the weighted average number of Ordinary
shares in issue during the year.
7. DIVIDENDS ON EQUITY SHARES
Amounts recognised as distributions in the year:
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Dividends paid during the year
2023 Final 1,207 994
2024 Interim 1,208 639
2,415 1,633
Dividends payable in respect of the year ended
30th June 2024: 3.4p (2023: 2.6p) per share 2,415 1,846
A final dividend of 1.7p per share is proposed.
8. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
121,716 108,301
ANALYSIS OF INVESTMENT
PORTFOLIO
Quoted* Unquoted Total
£ ‘000 £ ‘000 £ ‘000
Opening book cost 78,281 10,729 89,010
Opening investment holding gains/(losses) 27,530 (8,239) 19,291
Opening valuation 105,811 2,490 108,301
Movement in period
Purchases at cost 31,873 662 32,535
Sales
- Proceeds (31,276) (419) (31,695)
- Realised gains on sales 10,249 - 10,249
Movement in investment holding gains for the 2,306 20 2,326
year
Closing valuation 118,963 2,753 121,716
Closing book cost 89,127 10,972 100,099
Closing investment holding gains/(losses) 29,836 (8,219) 21,617
Closing valuation 118,963 2,753 121,716
* Quoted investments include unit trust and OEIC funds and one monthly
priced fund.
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
ANALYSIS OF CAPITAL GAINS AND LOSSES
Realised gains on sales of investments 10,249 1,443
Investment holding gains/(losses) 2,326 836
Net gains/(losses) on investments attributable to 12,575 2,279
ordinary shareholders
Transaction costs
The purchase and sale proceeds above include transaction costs on
purchases of £8,818 (2023: £786) and on sales of £nil (2023: £nil).
9. INVESTMENT IN SUBSIDIARY UNDERTAKING
The Company owns the whole of the issued share capital (£1) of JIT
Securities Limited, a company registered in England and Wales.
The financial position of the subsidiary is summarised as follows:
Year ended Year ended
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Net assets brought forward - -
Dividend paid to parent - -
Net assets carried forward - -
10. OTHER RECEIVABLES
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Prepayments and accrued income 479 345
Taxation - -
479 345
11. CASH AND CASH EQUIVALENTS
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Cash at bank and on short term deposit 10,236 17,244
12. OTHER FINANCIAL ASSETS (LONGER TERM DEPOSITS)
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Longer term deposits 5,773 -
The Longer term deposits matured in July 2024.
13. OTHER PAYABLES
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Accruals 343 298
14. CALLED UP SHARE CAPITAL
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Authorised
305,000,000 (2023: 305,000,000) Ordinary shares of 3,050 3,050
£0.01 each
Issued and fully paid
71,023,695 (2023: 71,023,695) Ordinary shares of £0.01 710 710
each
15. RESERVES
Share Special Retained
Premium Reserve earnings
account
£ ‘000 £ ‘000 £ ‘000
At 30th June 2023 21,573 56,908 46,401
Increase in investment holding gains - - 2,326
Net gains on realisation of investments - - 10,249
Losses on foreign currency - - 35
Trail rebates - - 4
Management fees allocated to capital - - (811)
Retained revenue profit for year - - 2,881
Dividends paid - - (2,415)
At 30th June 2024 21,573 56,908 58,670
The components of retained earnings are set out below:
30th June 30th June
2024 2023
£ ‘000 £ ‘000
Capital reserve - realised 34,432 24,955
Capital reserve - revaluation 21,617 19,291
Revenue reserve 2,621 2,155
58,670 46,401
16. NET ASSET VALUE PER ORDINARY SHARE
The net asset value per Ordinary share is 194.11 (2023: 176.83).
The net asset value per Ordinary share is calculated on net assets of
£137,861,000 (2023: £125,592,000) and 71,023,695 (2023: 71,023,695)
Ordinary shares in issue at the year end.
17. ANALYSIS OF CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
Exchange At 30th June
At 1st July At 1st July movement 2024
2023 2023
£’000 £ ‘000
Cash at bank and on short 17,244 (7,043) 35 10,236
term deposit
18. RELATED PARTIES
Since 1st January 2010, Brompton or its predecessor Brompton Asset
Management LLP has acted as Investment Manager to the Company. This
relationship is governed by an agreement dated 17th May 2018.
Mr Duffield is the senior partner of Brompton Asset Management Group LLP,
the ultimate parent of Brompton. Mr Duffield owns the majority (59.14%)
of the shares in the Company.
Mr Gamble has an immaterial holding in Brompton Asset Management Group
Limited.
The total investment management fee payable to Brompton for the year ended
30th June 2024 was £811,000 (2023: £775,000) and at the year-end £212,000
(2023: £194,000) was accrued.
The Company’s investments include seven funds managed by Brompton or its
associates totaling £24,631,000 (2023: £22,100,000). No investment
management fees were payable directly by the Company in respect of these
investments.
The Company has an equity investment of £100,000 (2023: £100,000) in an
investment management company in which a related party of Mr Duffield
holds a minority stake. The loan of £400,000 outstanding at 30th June 2023
was repaid during the year.
19. COMMITMENTS AND CONTINGENCIES
The Company has made commitments to invest a further £1.2 million (2023:
£0.6 million) which remains undrawn at the year-end. There are no other
commitments or contingencies at the reporting date (2023: £nil).
20. SUBSEQUENT EVENTS
On 8 August 2024 the company returned £17,046,000 to its shareholders by
way of a B share scheme. A bonus issue of one new B share was made for
each Ordinary Share which was then redeemed for cash. The net assets of
the company were reduced by £17 million.
In addition to the B share issue, the Shareholders approved a resolution
to enable distributions to be paid out of capital profits.
21. FINANCIAL INFORMATION
2024 Financial information
The figures and financial information for 2024 are unaudited and do not
constitute the statutory accounts for the year.
2023 Financial information
The figures and financial information for 2023 are extracted from the
published Annual Report and Accounts for the year ended 30th June 2023 and
do not constitute the statutory accounts for the year. The Annual Report
and Accounts for the year-end 30th June 2023 (available on the Company’s
website 1 www.nsitplc.com) has been delivered to the registrar of
Companies and includes the Independent Auditors report which was
unqualified and did not contain a statement under either section 498 (2)
or section 498 (3) of the Companies Act 2006.
Annual Report and Accounts
The accounts for the year ended 30th June 2024 will be sent to
shareholders in November 2024 and will be available on the Company’s
website or in hard copy format at the Company’s registered office, 1
Knightsbridge Green, London SW1X 7QA and will be available for
inspection. A copy will also be submitted to the FCA's National Storage
Mechanism.
The Annual General Meeting of the Company will be held on Thursday 5th
December 2024 at 11.00am at 1 Knightsbridge Green, London SW1X 7QA.
31st October 2024
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Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ISIN: GB0002631041
Category Code: FR
TIDM: NSI
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 356426
EQS News ID: 2020279
End of Announcement EQS News Service
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