REG-New Star Investment Trust PLC New Star Investment Trust PLC: Interim ANNOUNCEMENT for the Six Months to 31 12 2021
18/03/2022 09:45
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New Star Investment Trust PLC (NSI)
New Star Investment Trust PLC: Interim ANNOUNCEMENT for the Six Months to
31 12 2021
18-March-2022 / 09:40 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31st DECEMBER 2021
INVESTMENT OBJECTIVE
The Company's objective is to achieve long-term capital growth.
FINANCIAL HIGHLIGHTS
31st December 30th June %
2021
2021 Change
PERFORMANCE
Net assets (£ '000) 140,722 138,132 1.88
Net asset value per Ordinary 198.13p 194.49p 1.88
share
Mid-market price per Ordinary 143.00p 134.00p 6.72
share
Discount of price to net asset 27.8% 31.1% n/a
value
Six months ended Six months ended
31st December 2021 31st December
2020
Total Return* 2.59% 8.71% n/a
IA Mixed Investment 40-85% 4.18% 10.00% n/a
Shares (total return)
MSCI AC World Index (total 7.86% 12.32% n/a
return, sterling adjusted)
MSCI UK Index (total return) 7.42% 5.48% n/a
Six months ended 31st Six months ended
December
31st December
2021
2020
REVENUE
Return (£'000) 405 279
Return per Ordinary share 0.57p 0.39p
Proposed dividend per Ordinary - -
share
Dividend paid per Ordinary share 1.40p 1.40p
TOTAL RETURN
Return (£'000) 3,584 9,922
Net assets (dividend added back) 2.59% 8.7%
Net assets 1.88% 7.8%
* The total return figure for the Group represents the revenue and capital
return shown in the consolidated statement of comprehensive income plus
dividends paid.
INTERIM REPORT
CHAIRMAN'S STATEMENT
PERFORMANCE
Your Company generated a positive total return of 2.59% over the six
months to 31st December 2021, taking the net asset value (NAV) per
ordinary share to 198.13p. By comparison, the Investment Association's
Mixed Investment 40-85% Shares Index rose 4.18%. The MSCI AC World Total
Return Index rose 7.86% in sterling over the period, the MSCI UK Total
Return Index rose 7.42% while UK government bonds returned 0.54%. Further
information is provided in the investment manager's report.
Your Company made a revenue profit for the six months of £405,000 (2020:
£279,000).
GEARING AND DIVIDENDS
Your Company has no borrowings. It ended the period under review with cash
representing 3.65% of its NAV (14.20% inclusive of outstanding sale
proceeds) and is likely to maintain a significant cash position. Cash
stood at 21.05% at 28th February 2022 following the receipt of proceeds
from the sale of Embark Group, previously your Company's largest private
equity investment, to Lloyds Banking, and profit taking from various
equity holdings. Your Company has small retained revenue reserves and your
Directors do not intend to pay an interim dividend (2020: nil). Your
Company paid a dividend of 1.4p per share (2020: 1.4p) in November 2021 in
respect of the previous financial year.
DISCOUNT
Your Company's shares continued to trade at a significant discount to
their NAV during the period under review. The Board keeps this issue under
review.
OUTLOOK
Your Company's holdings in cash, gold and multi-asset investments left it
defensively positioned ahead of Russia's Ukraine invasion and the
subsequent equity market falls and price rises for industrial and
agricultural commodities. The weakness in equities resulting from the war
in Ukraine may, however, provide attractive buying opportunities for
longer-term investors. Value stocks outperformed growth stocks in late
2021 and the first two months of 2022 yet a balance between value and
growth appears appropriate because growth companies with strong market
positions may be better able to pass on cost increases to consumers than
cyclical companies with little pricing power.
NET ASSET VALUE
Your Company's unaudited NAV at 28th February 2022 was 183.79p.
Geoffrey Howard-Spink
Chairman
17th March 2022
INVESTMENT MANAGER'S REPORT
MARKET REVIEW
Global equities rose 7.86% in sterling over the six months to 31 December
2021 as a synchronised global economic recovery, fuelled by accommodative
monetary policy and fiscal easing, spurred demand for risky assets.
Investor sentiment improved as it became apparent the Covid-19 Omicron
variant's infectiousness was not matched by its severity. Global bonds
fell 1.55% in local currencies because of rising inflation and interest
rate expectations but gained 0.41% in sterling.
Shortly after the period end, equities fell sharply because of fears of
monetary tightening in response to rising inflation and Russia's invasion
of Ukraine. In December, the Federal Reserve accelerated its run-down of
asset purchases and pencilled in three interest rate increases for 2022
and a median interest rate expectation of 0.9% by December. The Bank of
England ceased asset purchases in December and raised Bank rate in
December and February 2022, taking it to 0.5%. The European Central Bank
also slowed the pace of asset purchases and eurozone interest rates may
increase in 2022.
Prices are higher because of "cost-push", not "demand-led", inflation. In
January 2022, US, UK and eurozone inflation figures were above central
bank targets at 7.5%, 5.5% and 5.1% respectively but supply chain
bottlenecks are reducing and materials shortages may ease as economic
growth slows. Savings amassed by people during Covid-19 lockdowns may have
been largely spent and this, coupled with cost-of-living increases such as
higher energy bills, may dampen consumer confidence. The Ukraine war may
exacerbate inflationary pressures from higher energy prices. As a result
of decisions taken over decades to close coal, nuclear and gas-fired power
plants, some countries depend on Russian gas. Following the invasion,
Germany's chancellor, Olaf Scholz, suspended plans to open the Nord Stream
2 gas pipeline from Russia. The West's initial rounds of sanctions did not
extend to a ban on Russian energy imports but the US and UK announced bans
on Russian oil after 13 days of conflict.
PORTFOLIO REVIEW
Your Company's total return over the period under review was 2.59%. By
comparison, the Investment Association Mixed Investment 40-85% Shares
sector, a peer group of funds with a multi-asset approach to investing and
a typical investment in global equities in the 40-85% range, rose 4.18%.
The MSCI AC World Total Return Index rose 7.86% in sterling while the MSCI
UK Total Return Index rose 7.42%. Your Company benefited from its
allocation to equity investments and underweight holdings in bonds. The
6.18% allocation to cash at the start of the period reflected your
manager's confidence in the longer-term prospects for equities.
Performance was, however, hurt by the relatively-low allocation to US
equities, which gained 13.90% in sterling.
Growth companies outperformed value stocks over the period although market
leadership changed in December as central banks turned more hawkish.
Higher interest rates may affect growth company valuations as future cash
flows are discounted more aggressively. Fundsmith Equity and Polar Capital
Technology, your Company's two largest collective investments, hold growth
companies and rose 8.04% and 5.55% respectively. Both held US technology
stocks, which gained 18.79% in sterling as Omicron led to further
lockdowns and investors bought lockdown beneficiaries. The Polar Capital
holding lagged US equities because of its bias towards mid- and small-cap
technology stocks, which underperformed larger peers.
Equities in Asia excluding Japan and emerging markets fell 8.52% and 7.30%
respectively in sterling, with rising inflation and interest rate
expectations leading investors to expect a rise in the dollar and capital
outflows. As a result, your Company's relatively high allocation in these
areas hurt performance. Chinese equities were conspicuously weak, falling
21.56% in sterling on signs that growth may slow and fears regarding
China's over-indebted property sector and political intervention in quoted
companies. Beijing's "zero-Covid" policy, which involves full local
lockdowns in response to infections, may damage growth. Your Company has
no direct investments in China and both its Asia ex-Japan equity holdings,
Matthews Asia ex Japan Dividend and Liontrust Asia Income, outperformed
but still fell 2.28% and 5.34% respectively.
Your Company owns JP Morgan Emerging Markets Income and the JP Morgan
Global Emerging Markets Income investment trust. These differ in structure
but share the same investment strategy. Over the period, both
outperformed, with the former rising 2.85% and the latter falling 1.09%.
This was because they were underweight Chinese equities and owned no
shares in Alibaba and Tencent, which fell 61.24% and 20.53% respectively.
Within your Company's allocation to country-specific emerging market
holdings, Stewart Investors Indian Subcontinent Sustainability and Vietnam
Enterprise Investment gained 17.62% and 6.89% respectively. Indian
equities rose 14.78% in sterling as investors warmed to the moves by the
prime minister, Narendra Modi, to make India more business friendly.
Vietnamese equities benefited from off-shoring from China and increased
public spending. At the period end, approximately 1.36% of your Company's
portfolio was invested in Russian equities via the HSBC MSCI Russia Capped
exchange-traded fund.
UK equities rose 7.42% although smaller companies lagged, up only 3.83%.
Within the portfolio, Trojan Income did best, rising 9.23%, but Man GLG
Income and Brompton UK Recovery gained only 4.85% and 5.38% respectively
because of their small-cap bias. The two small company specialists,
Chelverton UK Equity Income and Aberforth UK Split Level Income, gained
4.16% and fell 5.27% respectively.
Equities in Europe excluding the UK lagged, rising 5.92% in sterling.
Within the portfolio, BlackRock Continental European Income and Standard
Life European Equity Income outperformed, rising 6.85% and 6.69%
respectively, but Crux European Special Situations gained only 4.27%.
Gold and gold equities rose 4.94% and fell 1.04% respectively in sterling
as safe-haven assets remained out of favour. BlackRock Gold & General rose
1.64%. Your Company benefited from the diversification provided by
alternative and low-risk multi-asset investments in preference to bonds as
Chelsea Managed Monthly Income, Aquilus Inflection and Trojan gained
6.11%, 5.81% and 5.74% respectively.
Within the private equity portfolio, the sale of Embark Group, your
Company's largest investment, to Lloyds Banking was completed after the
period end and the proceeds were held in cash.
Investment income increased over the period, with corporate dividends
restored as the global economy emerged from Covid-19 lockdowns.
OUTLOOK
Following the Embark sale and profit-taking from a number of equity
holdings, cash held in sterling and dollars rose to 21.21% of your
Company's portfolio at 28 February. The allocation to bonds was low,
however, because bonds will weaken in an environment of rising inflation
and interest rates.
The high allocation to cash and the holdings in gold and gold equities and
low-risk multi-asset investments resulted in your Company being
defensively positioned ahead of Russia's invasion of Ukraine. Following
the invasion, market volatility increased to reflect uncertainty regarding
the outcome of the war and its impact on the global economy and financial
market prospects. The prices of oil, gas and commodities such as wheat
rose to a degree that will hurt consumers and slow growth. Your Company's
holdings in sterling and dollar cash, physical gold, gold equities and
low-risk multi-asset investments provide diversification and some
protection to capital in falling equity markets because these investments
are typically sought by investors as safe-havens in times of market
stress. Gold may also perform well at times such as the present when
inflation is higher than interest rates.
Your manager is positive on longer-term equity market prospects and there
were no disposals of equity investments in the immediate aftermath of the
Russian invasion. Inflation will be affected by rising commodity prices
but may not remain at elevated levels for many more months, with supply
chain bottlenecks expected to reduce and materials shortages ease as
growth slows. The rotation towards value stocks extended after New Year
but your Company continues to invest in growth- and value-oriented
investments because growth companies with high barriers to entry may be
more able to pass on cost increases through higher prices than value
companies. The equity market falls since the period end may offer
attractive buying opportunities for longer-term investors such as your
Company.
Brompton Asset Management Limited
17th March 2022
DIRECTORS' REPORT
PERFORMANCE
In the six months to 31st December 2021 the total return per Ordinary
share was 2.59% (2020: 7.84%) and the NAV per ordinary share increased to
198.13p, whilst the share price increased by 6.72% to 143.00p. This
compares to an increase of 4.18% in the IA Mixed Investment 40-85% Shares
Index.
INVESTMENT OBJECTIVE
The Company's investment objective is to achieve long-term capital growth.
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, their underlying investment exposure.
The Company may invest up to 20% of its net asset value 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.
SHARE CAPITAL
The Company's share capital comprises 305,000,000 Ordinary shares of 1p
each, of which 71,023,695 (2020: 71,023,695) have been issued and fully
paid. No Ordinary shares are held in treasury, and none were bought back
or issued during the six months ending 31st December 2021.
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 committee reviews
existing and emerging risks on a six monthly basis. The Board has closely
monitored the geopolitical, societal, economic and market focused
implications of the events in 2020 and 2021.
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 should reduce the
impact. Further information is given in portfolio risks below.
Macro-economic event risk: The Covid-19 pandemic was felt globally in 2020
and 2021 although economies and markets have recovered. The scale and
potential adverse impact of a macro-economic event, such as the Covid-19
pandemic, 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 below. 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 in order
to reduce the impact of the risks arising from the above factors by
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 review regularly 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.
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 Maitland
Administration Services Limited 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 Board monitors its service providers, with
an emphasis on their business interruption procedures.
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.
INVESTMENT MANAGEMENT ARRANGEMENTS AND RELATED PARTY TRANSACTIONS
In common with most investment trusts the Company does not have any
executive directors or employees. The day-to-day management and
administration of the Company, including investment management, accounting
and company secretarial matters, and custodian arrangements are delegated
to specialist third party service providers.
Details of related party transactions are contained in the Annual Report.
There have been no unusual material transactions with related parties
during the period which have had a significant impact on the performance
of the Company.
GOING CONCERN AND VIABILITY
The Directors believe that it is appropriate to continue to adopt the
going concern basis in preparing the interim report as the assets of the
Company consist mainly of securities that are readily realisable or cash
and it has no significant liabilities and no financial commitments.
Investment income exceeds 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 foreseeable future 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 and liquid assets within the portfolio. The Directors have also
considered the risks the Company faces.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
As disclosed in note 1, the annual consolidated financial statements of
the Group are prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union. The
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International
Accounting Standard 34, "Interim Financial Reporting".
The Chairman's statement and the Investment Manager's report include a
fair review of important events that have occurred during the first six
months of the financial year and their impact on the financial statements;
The Chairman's statement, the Investment Manager's report and the
Directors' report include a fair review of the potential risks and
uncertainties for the remaining six months of the year;
The Director's report and note 8 to the interim financial report include a
fair review of the information concerning transactions with the investment
manager and changes since the last annual report.
By order of the Board
Maitland Administration Services Limited
17th March 2022
SCHEDULE OF TOP TWENTY INVESTMENTS at 31st December 2021
30th June Purchases/
2021 Market 31st Dec % of Net
(Sales) Movement 2021 £'000 Assets
£'000
Embark Group 14,842 - - 14,842 10.55
Fundsmith Equity Fund 10,653 - 856 11,509 8.18
Polar Capital Global 9,299 - 517 9,816 6.98
Technology
TM Crux European Special 5,903 - 252 6,155 4.37
Situations Fund
Matthews Asia Ex Japan 5,839 - (193) 5,646 4.01
Fund
MI Chelverton UK Equity 5,387 - 82 5,469 3.89
Income Fund
EF Brompton Global 4,766 - 99 4,865 3.46
Conservative Fund
BlackRock Continental
European Income Fund
4,431 - 277 4,708 3.34
Aquilus Inflection Fund 4,378 - 254 4,632 3.29
Baillie Gifford Global 4,075 - 317 4,392 3.12
Income Growth
BlackRock Gold & General 4,195 - 69 4,264 3.03
First State Indian 3,608 - 636 4,244 3.02
Subcontinent Fund
EF Brompton Global 3,726 - 202 3,928 2.79
Equity Fund
Aberforth Split Level 4,212 - (284) 3,928 2.79
Income Trust
EF Brompton Global 3,545 - 125 3,670 2.61
Opportunities Fund
EF Brompton Global 3,309 - 115 3,424 2.43
Growth Fund
MI Brompton UK Recovery 3,020 - 162 3,182 2.26
Unit Trust
Liontrust Asia Income 3,233 - (213) 3,020 2.15
Fund
Lindsell Train Japanese 3,199 - (377) 2,822 2.00
Equity Fund
EF Brompton Global 2,669 - 63 2,732 1.94
Balanced Fund
104,289 - 2,959 107,248 76.21
Balance held in 24 25,438 2,885 155 28,478 20.24
investments
Total investments
(excluding cash) 129,727 2, 885 3,114 135,726 96.45
All of the above investments are investment funds with the exception of
Embark Group which is an unquoted investment and Aberforth Split Level
Income Trust which is an investment company.
The investment portfolio, excluding cash, can be further analysed
as follows:
£'000
Investment funds 104,381
Unquoted investments 16,779
Investment companies and exchange traded funds 12,325
Other quoted investments 2,241
135,726
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2021 (unaudited)
Six months ended
31st December 2021
(unaudited)
Total
Revenue Return Capital Return
£ '000 Return
£ '000 £ '000
Notes
INCOME
Investment income 1,001 - 1,001
Other operating income - - -
Total income 2 1,001 - 1,001
GAINS AND LOSSES ON INVESTMENTS
Gains on investments at fair 5 - 3,114 3,114
value through profit or loss
Legal and professional costs - (60) (60)
Other exchange gains - 121 121
Trail rebates - 4 4
1,001 3,179 4,180
EXPENSES
Management fees 3 (437) - (437)
Other expenses (158) - (158)
(595) - (595)
PROFIT BEFORE FINANCE COSTS AND 406 3,179 3,585
TAX
Finance costs (1) - (1)
PROFIT BEFORE TAX 405 3,179 3,584
Tax - - -
PROFIT FOR THE PERIOD 405 3,179 3,584
EARNINGS PER SHARE
Ordinary shares (pence) 4 0.57p 4.48p 5.05p
The total return column of this statement represents the Group's profit
and loss account, prepared in accordance with IFRS. The supplementary
Revenue Return and Capital Return columns are both prepared under guidance
published by the Association of Investment Companies. All items in the
above statement derive from continuing operations. No operations were
acquired or discontinued during the period.
All income is attributable to the equity holders of the parent company.
There are no minority interests.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2020 and the year ended 30th June
2021
Six months ended Year ended
31st December 2020 30th June 2021
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
Notes Return Return Return Return Return Return
£'000 £'000 £'000 £'000 £'000 £'000
INCOME
Investment income 795 - 795 1,519 - 1,519
Other operating 3 - 3 3 - 3
income
Total income 2 798 - 798 1,522 - 1,522
GAINS AND LOSSES ON
INVESTMENTS
Gains on investments
at fair value
through profit or 5 - 10,677 10,677 - 25,927 25,927
loss
Other exchange - (1,035) (1,035) - (1,119) (1,119)
losses
Trail rebates - 1 1 - 4 4
798 9,643 10,441 1,522 24,812 26,334
EXPENSES
Management fees 3 (370) - (370) (774) - (774)
Other expenses (149) - (149) (319) - (319)
(519) - (519) (1,093) - (1,093)
PROFIT/(LOSS) BEFORE 279 9,643 9,922 429 24,812 25,241
TAX
Tax - - - - - -
PROFIT FOR THE 279 9,643 9,922 429 24,812 25,241
PERIOD
EARNINGS PER SHARE
Ordinary shares 4 0.39p 13.58p 13.97p 0.61p 34.93p 35.54p
(pence)
The total return column of this statement represents the Group's profit
and loss account, prepared in accordance with IFRS. The supplementary
Revenue Return and Capital Return columns are both prepared under guidance
published by the Association of Investment Companies. All items in the
above statement derive from continuing operations. No operations were
acquired or discontinued during the periods.
All income is attributable to the equity holders of the parent company.
There are no minority interests.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2021 (unaudited)
Share Share Special Retained
premium reserve earnings
capital Total
£ '000 £ '000 £ '000
£ '000 £ '000
At 30th JUNE 2021 710 21,573 56,908 58,941 138,132
Total comprehensive income for - - - 3,584 3,584
the period
Dividend paid - - - (994) (994)
At 31st DECEMBER 2021 710 21,573 56,908 61,531 140,722
Included within retained earnings were £1,429,000 of Company reserves
available for distribution.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2020 (unaudited)
Share Share Special Retained
premium reserve earnings
capital Total
£ '000 £ '000 £ '000
£ '000 £ '000
At 30th JUNE 2020 710 21,573 56,908 34,694 113,885
Total comprehensive income for - - - 9,922 9,922
the period
Dividend paid - - - (994) (994)
At 31st DECEMBER 2020 710 21,573 56,908 43,622 122,813
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th June 2021 (audited)
Share Share Special Retained
premium reserve earnings
capital Total
£ '000 £ '000 £ '000
£ '000 £ '000
At 30th JUNE 2020 710 21,573 56,908 34,694 113,885
Total comprehensive income for - - - 25,241 25,241
the year
Dividend paid - - - (994) (994)
At 30th JUNE 2021 710 21,573 56,908 58,941 138,132
CONSOLIDATED BALANCE SHEET
at 31st December 2021
31st December 31st December 30th June
2021 2020 2021
Notes
(unaudited) (unaudited) (audited)
£ '000 £ '000 £ '000
NON-CURRENT ASSETS
Investments at fair value
through profit or loss
5 135,726 111,261 129,727
CURRENT ASSETS
Other receivables 126 101 235
Cash and cash equivalents 5,139 11,682 8,440
5,265 11,783 8,675
TOTAL ASSETS 140,991 123,044 138,402
CURRENT LIABILITIES
Other payables (269) (231) (270)
TOTAL ASSETS LESS CURRENT
LIABILITIES
140,722 122,813 138,132
NET ASSETS 140,722 122,813 138,132
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS
Called-up share capital 710 710 710
Share premium 21,573 21,573 21,573
Special reserve 56,908 56,908 56,908
Retained earnings 6 61,531 43,622 58,941
TOTAL EQUITY 140,722 122,813 138,132
NET ASSET VALUE PER ORDINARY 7 198.13p 172.92p 194.49p
SHARE (PENCE)
The interim report was approved and authorised for issue by the Board on
17th March 2022.
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2021
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2021 2020 2021
(unaudited) (unaudited) (audited)
£ '000 £ '000 £ '000
NET CASH INFLOW FROM OPERATING 517 318 376
ACTIVITIES
INVESTING ACTIVITIES
Purchase of investments (2,885) (6,500) (9,717)
Sale of investments - 8,931 8,932
Legal and professional costs (60) - -
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES
FINANCING (2,945) 2,431 (785)
Equity dividend paid (994) (994) (994)
NET CASH (OUTFLOW)/INFLOW AFTER
FINANCING (3,422) 1,755 (1,403)
(DECREASE)/INCREASE IN CASH (3,422) 1,755 (1,403)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(Decrease)/Increase in cash (3,422) 1,755 (1,403)
resulting from cash flows
Exchange movements 121 (1,035) (1,119)
Movement in net funds (3,301) 720 (2,522)
Net funds at start of period/year 8,440 10,962 10,962
NET FUNDS AT END OF PERIOD/YEAR 5,139 11,682 8,440
RECONCILIATION OF PROFIT BEFORE FINANCE COSTS AND TAXATION TO NET CASH
FLOW FROM OPERATING ACTIVITIES
Profit before finance costs and 3,585 9,922 25,241
taxation *
Gains on investments (3,114) (10,677) (25,927)
Exchange differences (121) 1,035 1,119
Legal and professional costs 60 - -
Capital trail rebates (4) (1) (4)
Revenue profit before finance 406 279 429
costs and taxation
Decrease/(Increase) in debtors 109 36 (90)
(Decrease)/Increase in creditors (1) 2 41
Finance costs (1) - -
Taxation - - (8)
Capital trail rebates 4 1 4
NET CASH INFLOW FROM OPERATING 517 318 376
ACTIVITIES
* Includes dividends received in cash of £963,000 (30th June 2021:
£1,273,000) (2020: £718,000), accumulation income of £140,000 (30th June
2021: £187,000) (2020: £173,000) and interest income of less than £1,000
(30th June 2021: £3,000) (2020: £3,000).
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 31st December 2021
1. ACCOUNTING POLICIES
The condensed consolidated interim financial statements comprise the
unaudited results of the Company and its subsidiary, JIT Securities
Limited (together "the Group"), for the six months ended 31st December
2021. The comparative information for the six months ended 31st December
2020 and the year ended 30th June 2021 are a condensed set of accounts and
do not constitute statutory accounts under the Companies Act 2006. Full
statutory accounts for the year ended 30th June 2021 included an
unqualified audit report, did not contain any statements under section 498
of the Companies Act 2006, and have been filed with the Registrar of
Companies.
The half year financial statements have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting', and
are presented in pounds sterling, as this is the Group's functional
currency.
The same accounting policies have been followed in the interim financial
statements as applied to the accounts for the year ended 30th June 2021,
which were prepared in accordance with IFRSs.
No segmental reporting is provided as the Group is engaged in a single
segment.
2. TOTAL INCOME
Year ended
Six months ended 31st 30th June
December 2021 Six months ended
31st December 2020 2021
£'000
£'000
£'000
Income from
Investments
UK net dividend 900 677 1,278
income
Unfranked investment 85 118 238
income
UK fixed interest 16 - 3
1,001 795 1,519
Other Income
Bank interest - 3 3
receivable
- 3 3
Year ended
Six months ended 31st December 30th June
2021 Six months ended
31st December 2020 2021
£'000
£'000
£'000
Total income
comprises
Dividends 985 795 1,516
Other income 16 3 6
1,001 798 1,522
3. MANAGEMENT FEES
Year ended
Six months ended 31st 30th June
December 2021 Six months ended
31st December 2020 2021
£'000
£'000
£'000
Investment 437 370 774
management fee
437 370 774
The Investment Manager receives a management fee, payable quarterly in
arrears, equivalent to an annual 0.75 per cent of total assets after the
deduction of the value of any investments managed by the Investment
Manager or its associates (as defined in the investment management
agreement).
4. RETURN PER ORDINARY SHARE
Year ended 30th
Six months ended June
31st December 2021 Six months ended
31st December 2020 2021
£'000
£'000
£'000
Revenue return 405 279 429
Capital return 3,179 9,643 24,812
Total return 3,584 9,922 25,241
Weighted average
number of Ordinary 71,023,695 71,023,695 71,023,695
shares
Revenue return per 0.57p 0.39p 0.61p
Ordinary share
Capital return per 4.48p 13.58p 34.93p
Ordinary share
Total return per 5.05p 13.97p 35.54p
Ordinary share
5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
At At At
31st December 31st December 30th June
2021 2020
2021
£'000 £'000
£'000
GROUP AND COMPANY 135,726 111,261 129,727
ANALYSIS OF INVESTMENT
PORTFOLIO
Six months ended 31st December
2021
Total
Quoted* Unquoted**
(level 1 and (level 3)
2)
£'000 £'000
£'000
Opening book cost 68,281 9,428 77,709
Opening investment holding 44,200 7,818 52,018
gains/(losses)
Opening valuation 112,481 17,246 129,727
Movement in period:
Purchases at cost 2,849 36 2,885
Sales
- Proceeds - - -
- Realised gains on sales - - -
Movement in investment holding 3,617 (503) 3,114
gains/(losses)
Closing valuation at 31 December 118,947 16,779 135,726
2021
Closing book cost 71,130 9,464 80,594
Closing investment holding gains 47,817 7,315 55,132
Closing valuation 118,947 16,779 135,726
* Quoted investments include unit trust and OEIC funds which are valued at
quoted prices. Included within Quoted Investments is one monthly valued
investment fund of £4,632,000 (30th June 2021: £4,378,000) (2020:
£4,103,000).
** The Unquoted investments, representing just under 12% of the Company's
NAV, have been valued in accordance with IPEVC valuation guidelines. The
largest unquoted investment amounting to £14,842,000 (30th June 2021:
£14,842,000) (2020: £6,990,000) was valued at the latest transaction
price. The second and third largest investments have been valued based on
recent transaction price. A 10% increase or decrease in the earnings of
the two largest investments would not have a material impact on the
valuation of those investments.
There were no reclassifications for assets between Level 1, 2 and 3.
5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS continued
Year
Six months ended Six months ended
ended
31st December 31st December
2021 2020 30th June
£'000 £'000 2021
£'000
ANALYSIS OF CAPITAL GAINS
Realised gains on sales of - 745 745
investments
Increase in investment holding 3,114 9,932 25,182
gains
3,114 10,677 25,927
6. RETAINED EARNINGS
At At
At
31st December 2021 30th June
31st December 2020
£'000 2021
£'000
£'000
Capital reserve - realised 5,381 5,395 5,316
Capital reserve - 55,132 36,770 52,018
revaluation
Revenue reserve 1,018 1,457 1,607
61,531 43,622 58,941
7. NET ASSET VALUE PER ORDINARY SHARE
31st December 30th June
2021 31st December
2020 2021
£'000
£'000 £'000
Net assets attributable to Ordinary
shareholders 140,722 122,813 138,132
Ordinary shares in issue at end of
period 71,023,695 71,023,695 71,023,695
Net asset value per Ordinary share 198.13p 172.92p 194.49p
8. TRANSACTIONS WITH THE INVESTMENT MANAGER
During the period there have been no new related party transactions that
have affected the financial position or performance of the Group.
Since 1st January 2010 Brompton has acted as Investment Manager to the
Company. This relationship is governed by an agreement dated 17 May 2018.
Mr Duffield is the senior partner of Brompton Asset Management Group LLP
the ultimate parent of Brompton. Mr Duffield owns a majority (59.14%) of
the shares in the Company.
Mr Gamble has an immaterial holding in Brompton Asset Management Group
Limited LLP.
The total investment management fee payable to Brompton for the half year
ended 31st December 2021 was £437,000 (30th June 2021: £774,000) (2020:
£370,000) and at the half year £219,000 (30th June 2021: £214,000) (2020:
£190,000) was accrued.
The Group's investments include seven funds managed by Brompton or its
associates valued at £24,194,000 (30th June 2021: £23,389,000) (2020:
£21,998,000). No investment management fees were payable directly by the
Company in respect of these investments.
══════════════════════════════════════════════════════════════════════════
ISIN: GB0002631041
Category Code: IR
TIDM: NSI
Sequence No.: 150130
EQS News ID: 1306499
End of Announcement EQS News Service
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