Pacific Horizon - Baillie Gifford Pacific Horizon Annual Results
17/09/2024 07:00
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RNS Number : 4169E Pacific Horizon Investment Tst PLC 17 September 2024
RNS Announcement
Pacific Horizon Investment Trust PLC
Legal Entity Identifier: VLGEI9B8R0REWKB0LN95
Results for the year to 31 July 2024
Regulated Information Classification: Additional regulated information
required to be disclosed under the applicable laws and regulations.
The following is the results announcement for the year to 31 July 2024 which
was approved by the Board on 16 September 2024.
Over the year the Company's net asset value total return* was 4.8% and the
share price total return was 5.1% compared with a total return of 6.8% for the
MSCI All Country Asia ex Japan Index (in sterling terms)†.
Chairman's statement
Board Composition
Having been appointed to the Board on 13 March 2024 as Chairman, I would like
to take this opportunity to thank, on behalf of the Company and its Directors,
my predecessor, Angus Macpherson, for guiding the Company during a period of
geopolitical uncertainty and market volatility. Subject to shareholders
confirming my appointment, I look forward to working with the current Board
and portfolio managers for the benefit of shareholders.
Performance
In the year to 31 July 2024, the Company's net asset value ('NAV') per share
total return was 4.8 per cent., compared to a 6.8 per cent. increase in the
total return of the MSCI All Country Asia ex Japan Index in sterling terms.
The share price rose by 4.4 per cent. and the discount ended the period at 7.8
per cent.. The Company's annual ongoing charge was 0.74 per cent. compared to
0.72 per cent. for the year to 31 July 2023, due largely as a consequence of
increased expenses. The reporting period was marked by volatility, with
negative returns in the first six months followed by a period of positive
portfolio and index returns.
The notable positive contributors to the portfolio's relative performance over
the year were the holdings in Indian property developers Prestige Estates
Project, Equinox India Development and Phoenix Mills. The notable detractors
to relative performance were the holdings in Li-Ning, a Chinese sportswear and
sporting equipment company, and Ping An Insurance, a Chinese financial
services company. Having an underweight position in TSMC, a Taiwanese
semiconductor company, was also a notable detractor. The Managers' Review,
below, provides fuller comment on the drivers to returns, as well as thoughts
on the investee companies and their prospects.
Over the five years to 31 July 2024, the Company's NAV and share price total
return were 96.1 per cent. and 93.6 per cent. respectively, whereas the
Company's comparative index returned 17.0 per cent. in sterling terms during
the same period.
Gearing
The deployment of gearing was considered regularly, and continues to be so.
The Company was ungeared throughout the course of the last financial year. The
Board sets the gearing parameters within which the portfolio managers are
permitted to operate. At present, the agreed range of equity gearing is minus
15 per cent. (holding net cash) to plus 15 per cent..
The Company has a multi-currency revolving credit facility with the Royal Bank
of Scotland International Limited for up to £100 million. This facility
expires in March 2025 and provides for potential gearing of 16.6 per cent. at
present.
Earnings and Dividend
As highlighted in the reports of my predecessors, it remains the case that
investors should not invest in this Company if they require steady or growing
income from their investment as the Company invests in growth stocks that will
typically have little or no yield.
Earnings per share this year were 3.82p, a decrease from the 4.56p per share
reported last year. The Board is recommending that a final dividend of 2.65p
per share be paid (3.25p per share paid in 2023), subject to shareholder
approval at the Annual General Meeting ('AGM').
Issuance, Share Buybacks and Treasury
At the Company's AGM in November, the Board will be seeking to renew the
existing 10 per cent. non-pre-emptive issuance authority. The authority will
also permit the re-issue of any shares held in treasury, of which there are
currently 1,418,210. Any issuance, be it of new shares or from treasury, will
only be undertaken at a premium to the NAV per share, so avoiding dilution for
existing investors. Issuance at a premium enhances NAV per share, improves
liquidity in the Company's shares and spreads the operating expenses of the
Company across a broader base.
The Board is also asking shareholders to renew the annual authority to
repurchase up to 14.99 per cent. of the Company's outstanding shares on an ad
hoc basis, either for cancellation or to be held in treasury. Over the course
of the Company's financial year, 425,198 shares, 0.5 per cent. of the starting
issued share capital, were bought back into treasury at a cost of £2.3
million. The buybacks were undertaken at a weighted average discount of 11.2
per cent..
The Board intends to use the authority opportunistically, considering not only
the level of the discount relative to peers and in absolute terms, but also
the underlying liquidity and trading volumes in the Company's shares. This
approach to buybacks seeks to support liquidity whilst addressing, in part,
any imbalance between the supply and demand for the Company's shares that
results in a large discount to NAV.
Sustainable Disclosure Requirements ('SDR')
SDR is a package of measures that the Financial Conduct Authority ('FCA')
finalised in November 2023. These measures include rules imposing conditions
on the use of sustainability-related terms and labels in literature produced
by FCA regulated entities, such as our Managers, Baillie Gifford & Co
Limited, on behalf of 'products', such as investment trusts. SDR also
establishes anti-greenwashing rules.
The Managers' view is that a precondition of a long term investment is that
businesses in which they invest must be sustainable, although Pacific Horizon
itself does not have an explicit sustainability objective. Therefore, under
SDR the Company will not be taking a label. The Board agrees with the
Managers' approach of engaging and working with companies towards achieving
improved practices and outcomes while being cognisant of the risks of imposing
developed market standards on emerging market companies indiscriminately.
Annual General Meeting
I look forward to meeting shareholders at this year's AGM. This will take
place on Thursday 21 November 2024 at the offices of Baillie Gifford &
Co, in Edinburgh, at 11.30am. If attending, please endeavour to arrive by
11.20am to allow time to register. There will be a presentation from the
portfolio managers who, along with the Directors, will answer questions from
shareholders.
Outlook
The past year saw weakness in the Chinese economy, the recent unwinding of the
Yen carry trade (borrowing Yen at a low rate of interest to invest in
higher-yielding assets) and regional tensions on Taiwan. Notwithstanding these
challenges, there remain a wealth of opportunities for the patient investor.
These are based on both superior long-term economic growth rates and the range
of attractive companies in the region. Valuations are at multi-year lows
relative to developed markets. The very diversity of opportunities should
encourage investors, as demonstrated in the range of Asian/Indian market
returns in the past year - from 30 per cent. plus in Taiwan and India to
negative 12 per cent. in China. Within the markets, our portfolio managers
continue to find companies with strong prospects trading at reasonable
valuations. The Managers' report below provides examples.
Based on the encouraging macroeconomic trends and stock specific
opportunities, there is every reason to be optimistic about the long‑term
prospects for the portfolio. As always, it remains important that our
portfolio managers (and shareholders) can see through the occasional and
perhaps inevitable bouts of volatility in returns. Assuming that is the case
then the outlook for the portfolio and the Company is a positive one.
Roger Yates
Chairman
16 September 2024
*For a definition of terms see Glossary of terms and Alternative Performance
Measures at the end of this announcement.
† The MSCI All Country Asia ex Japan Index (in sterling terms) is the
principal index against which performance is measured.
Past performance is not a guide to future performance.
Managers' Review
Overview
In the year to 31 July 2024, the Company's net asset value ('NAV') per share
total return and the share price total return were 4.8% and 5.1% respectively.
This compares to a 6.8% increase in the total return of the MSCI All Country
Asia ex Japan Index in sterling terms.
Geographic returns across the region showed significant disparity. India and
Taiwan were top performers, with gains of 36.4% and 34.6% respectively. In
contrast, Hong Kong and China experienced declines of 19.8% and 12.0%.
Portfolio performance was primarily driven by substantial exposure to India,
particularly in the real estate sector. Investments in Vietnam and limited
exposure to Hong Kong also contributed to positive relative performance.
However, stock selection in China and an underweight position in Taiwan's TSMC
were the notable detractors.
Despite regional challenges, such as a strong US dollar, ongoing weakness in
the Chinese economy, and the reversal of the Yen carry trade, most Asian
economies demonstrated resilience. Our holdings generally performed well
operationally, and an increasing number of new investment opportunities led to
higher portfolio turnover.
The most notable changes involved increasing our holdings in 'rapid growth'
companies, particularly within the technology sector. We significantly raised
our exposure to online consumer businesses, including Kaspi.kz, a fintech and
ecommerce super app from Kazakhstan; Pinduoduo Inc, a Chinese ecommerce
platform; and Tencent Holdings, known for gaming and social media in China.
Additionally, we increased our investments in the semiconductor industry,
adding to memory chip makers SK hynix and Samsung Electronics, semiconductor
equipment manufacturers including ASMPT, and the foundry sector, where we made
substantial additions to TSMC.
Funding predominantly came from a reduction in cyclical investments, including
materials, shipbuilders and engineering businesses. By country, we continued
to reduce our exposure to India and increased our positioning in Taiwan.
Despite global headwinds, we maintain a positive long-term outlook for the
Asia ex Japan region. Most Asian economies boast favourable macroeconomic
conditions and structurally faster growth rates compared to developed markets,
yet their valuations are at multi-year lows on a relative basis. A potential
catalyst for the region is the rate cutting cycle in most developed markets,
which may lead to a weakening US dollar. This would serve as a significant
tailwind for Asia and emerging markets more broadly. Perhaps most
encouragingly, we are discovering an increasing number of investment-worthy
companies, particularly ones with substantial growth opportunities.
Philosophy
We are growth investors endeavouring to invest in the top twenty percent of
the fastest-growing companies in Asia. Across the region we have found the
most persistent source of outperformance to be those companies which can grow
their profits faster than the market, in hard currency terms, over the long
term. This trend persists irrespective of starting valuations. Our research is
singularly focused on finding those companies whose share prices can at least
double, in sterling terms, on a five-year view and we expect most of this
doubling to come from earnings growth.
We are particularly interested in three specific and persistent
inefficiencies:
1) Underappreciated growth duration
We believe one of the greatest investment inefficiencies is in companies with
excellent long-term earnings growth where profits are volatile from one
quarter to the next. The market typically shows an aversion to such companies,
preferring the predictability of smooth profit generation even if the
long-term growth rate turns out to be a fraction of that achieved by firms
more willing to reinvest in their business and with greater ambition. This
presents exciting investment opportunities, but it requires an approach that
allows near-term volatility to be ignored.
2) Underappreciated growth pace
The market consistently underestimates the likelihood of rapid growth. The
evidence shows that most investors cluster around a narrow range of earnings
growth predictions, which can in turn lead to significant mispricing of
companies with the potential to grow very rapidly. Our process is focused on
finding those companies. By looking further out and searching for low
probability but high impact growth opportunities, we endeavour to outperform
the broader market.
3) Underappreciated growth surprise
The final significant inefficiency lies in the interaction between top-down
and bottom-up investing. As investors in Asia, ex Japan, and the Indian
Sub-continent, we do not have the luxury of ignoring macroeconomics. Purely
bottom-up investment is a path to ruin in a universe where industrial and
economic cycles can dominate investment returns over multi-year periods. The
long-term earnings of many companies - notably in the financial, materials and
industrial sectors - are determined by exogenous macro factors beyond their
control. This also provides opportunities.
Our analysis shows that while it may pay to invest in companies that display
consistently high levels of profitability, the strongest returns are to be
found in those companies that transition from poor levels of profitability to
high ones - a 'growth surprise'.
This may seem obvious - rising levels of profitability are normally
accompanied by a re-rating, thereby providing a two-fold kicker to share price
performance. But identifying the drivers behind this change is the key and has
been a significant source of outperformance for Pacific Horizon. We accept
that timing these inflection points perfectly is impossible, but when you have
an investment horizon measured over many years, anticipating the future
direction of travel is possible.
We are agnostic as to the type of growth inefficiency we are exploiting and
will invest wherever we are finding the best opportunities. At times this will
lead to a concentration in particular sectors or countries, and at others to a
much broader, flatter portfolio, but growth will always be the common theme.
Pacific MSCI AC
Horizon Asia
ex Japan
Index
Historical earnings growth (5 years trailing compound annual growth to 5.5% 5.6%
31 July 2024)
One year forecast earnings growth to 31 July 2025 38.5% 16.0%
Estimated p/e ratio for the year to 31 July 2025 13.1x 12.6x
Active share 75% n/a
Portfolio turnover 30.8% n/a
Data as at 31 July 2024, source: Baillie Gifford, UBS PAS, APT, MSCI (see
disclaimer at the end of this announcement).
Review
Asian markets demonstrated resilience in the face of significant challenges
over the past few years. Despite headwinds including the strongest US dollar
in decades, rising geopolitical tensions, armed conflicts in Europe and the
Middle East, and most recently the dramatic unwinding of the Yen carry trade,
Asian economies not only avoided crisis, but most prospered, outpacing growth
in many Western nations.
This resilience marks a significant shift from historical patterns, where such
external pressures would likely have triggered economic turmoil in the region.
Improved stability underscores the enhanced macroeconomic position of Asia
today, particularly compared to many Western economies. Combining this
favourable macroeconomic condition with Asia's structurally faster growth
rates, and valuations at multi-year lows relative to developed markets, Asia
ex Japan appears to be in a sweet spot.
Despite this, however, Asian markets have yet to fully reflect the advantages
in market performance. Several external headwinds persist, most notably the
strength of Western currencies, particularly the US dollar. However, the
economic landscape appears to be shifting. With inflation peaking in Western
economies, developed markets should be on the cusp of a rate cutting cycle.
The European Central Bank and the Bank of England already initiated rate cuts,
and the US Federal Reserve seems poised to follow suit. Coupled with rising
government spending and mounting debt in the US and Europe, Asian economies
are likely to become increasingly appealing to investors.
Within Asia, China remains a concern, with the MSCI China index still below
half its early 2021 peak. As discussed in previous reports, many economic
challenges persist. Of particular concern is the real estate sector, which
accounts for roughly 30% of the economy and continues to struggle. Its ongoing
weakness has further depressed consumer confidence, which combined with
continued geopolitical pressures, created a challenging environment for
investors.
Despite these issues, we believe there are compelling investment opportunities
in China. Firstly, valuations have reached extreme levels with many world
class companies trading at low single digit multiples and others even below
the cash on their balance sheets.
Secondly, the macro situation is not as dire as valuations suggests. China
remains a US$17 trillion economy growing at 5%, with considerable fiscal,
monetary and policy room to support further growth. Throughout the year, the
government shifted towards a more supportive approach, implementing interest
rate cuts, fiscal stimulus and various measures to shore up the property
market, including the easing of home purchase restrictions and the lowering of
mortgage rates and down payment ratios.
Thirdly, many companies continue to perform strongly operationally. In the
internet sector, despite the negative headlines, companies are generating
record revenues and profits. Large-cap firms like Tencent Holdings and
Pinduoduo Inc reported impressive earnings growth of 79% and 350%
year-over-year, respectively. These businesses are highly cash-generative and
committed to significant shareholder returns through buybacks and/or
dividends, potentially establishing a floor for their low valuations.
We have been adding to the sector with new purchases of Tencent Holdings (3.8%
holding at the end of the period), Pinduoduo Inc (2.6%) and Lufax Holdings
(0.8%). We also increased our existing holdings in Baidu Inc and unlisted
ByteDance, owner of Douyin and TikTok, the world's most popular short form
video apps.
These purchases were mostly funded by sales of other Chinese companies,
including slower growing, non-technology businesses Geely Automobile
(automotive manufacturer), China Oilfield Services Ltd (oil services), and
Ningbo Peacebird Fashion (fashion retailer). A smaller portion of sales
involved internet companies with deteriorating competitive positions, such as
Alibaba Group.
Despite the sales and purchases roughly matching, market movements in China
took the portfolio's absolute China exposure down from 33.7% to 25.9% over the
period.
At the other end of the performance spectrum is India, where the index gained
36.4% over the year. The country continues to thrive under the
business-friendly reforms of the Modi government, resulting in robust economic
growth (GDP growth exceeding 8%) and a surge in foreign investment. Notably,
in June 2024, Modi and his BJP party faced a setback in national elections.
Despite securing a third term, the BJP lost its overall majority in
parliament's lower house (Lok Sabha) and will rely on coalition partners to
govern.
While the new political landscape may pose challenges for future reforms, we
believe it doesn't fundamentally alter India's growth trajectory. In fact, it
may prove beneficial by tempering some of the BJP's more socially divisive
policies.
We remain optimistic about India's long-term outlook and continue to see
attractive investment opportunities. Our largest exposure is in Indian real
estate, comprising 10.0% of our total assets. This sector benefits from the
most affordable house prices in decades, coupled with significant industry
consolidation over the past ten years.
Our other Indian holdings focus on new technology, either directly through
investments in companies like Dailyhunt, one of the country's leading social
media platforms, and PolicyBazaar, India's leading price comparison site, or
indirectly through companies such as Delhivery, a dominant player in
e-commerce logistics.
We have, however, found valuations increasingly difficult to justify in a
number of other sectors in India, particularly consumer and industrial
companies, and in many small and mid-cap businesses. Consequently, we made
significant reductions to several of our holdings, including large reductions
to India industrials, where we sold Skipper (power transmissions) and Tata
Motors (automotive), both of which had appreciated over five-fold since our
initial purchases. We also greatly reduced our holding in Ramkrishna Forgings
(auto parts manufacturer).
Following their strong performance, we trimmed several Indian property
holdings as well. These sales in India totalled roughly 15% of the portfolio.
However, due to the robust performance of our remaining Indian holdings, the
portfolio's overall position in India only decreased from 23.9% to 23.0% over
the year.
By sector, our most significant additions to the portfolio were in high
growth, technology companies, primarily in two areas.
Firstly, we increased our exposure to internet platforms. We already discussed
the significant purchases of internet names in China, including Pinduoduo Inc
and Tencent Holdings. Elsewhere, we initiated a new holding in Kaspi.kz,
Kazakhstan's leading super app. Kaspi.kz is used by nearly the entire adult
population of Kazakhstan and has a dominant market share of 70% or more in
ecommerce, payments and fintech. The company became one of our top ten
holdings, representing 2.8% of total assets. As a result of these changes, our
exposure to information technology and communication services increased from
30.6% to 45.7% over the year.
The second main area of focus was semiconductor companies. We made significant
additions to TSMC, the Taiwanese foundry, increasing our holding from 1.1% to
8.8% over the course of the year. TSMC has become an effective monopoly in
advanced chip manufacturing, with increasing pricing power, and is central to
many major technology advancements from AI to quantum computing. We also
substantially increased our positions in Korean computer memory makers Samsung
Electronics and SK hynix. We also purchased SG Micro, a leading Chinese
analogue semiconductor company, and ASMPT, which provides semiconductor
manufacturing solutions. Throughout the year, our exposure to companies with
significant revenues from semiconductors rose from approximately 15% to 27%.
Overall, the number of names in the portfolio reduced to 59 from 72 in the
year to 31 July 2024. Private companies, of which there were 5 in the
portfolio as of 31 July 2024, accounted 7.1% of the portfolio, and gearing
was nil.
Performance
India emerged as the portfolio's standout market, accounting for all eight of
our top-performing companies. The Indian real estate sector was the primary
driver of returns, contributing approximately 600 basis points. This was led
by Prestige Estates Projects, Equinox India Developments (formerly IndiaBulls
Real Estate), and Phoenix Mills, which ranked as our top three performing
companies.
Performance was strong across the sector as the property cycle finally gained
momentum after more than a decade of stagnation, with volumes and prices
accelerating. The fundamentals look robust, characterised by good
affordability, long-term structural demand, and a consolidated market that has
translated into strong operational performance at the developers. Prestige
Estates exemplified this trend, with annual sales bookings up over 60% and a
record-breaking launch of 40 million square feet in new projects,
representing a 52% year-over-year increase.
Equinox India Developments unfolded as a more intricate case, involving the
Embassy Group's (an Indian developer base in Bengaluru) efforts to acquire
control, enhance corporate governance and consolidate its assets within the
company. This complex process, which we've consistently backed, saw the
completion of a significant deal whereby the company secured new capital,
Embassy contributed a substantial portion of its assets and Blackstone emerged
as a major shareholder (we also participated in the capital raise). As a
result, the shares underwent a notable re-rating.
Our Indian industrial holdings delivered strong performances as the country's
investment cycle continued to accelerate. Ramkrishna Forgings increased by 52%
and Skipper rose by 59%. Meanwhile, automotive company Tata Motors gained over
50%, buoyed by robust domestic sales of its cars and trucks. In the technology
sector, PolicyBazaar emerged as our standout holding, climbing 94%. The
company continues to capture market share in insurance product sales,
benefiting from increased online searches which drove rapid sales growth of
60% year-over-year.
Hong Kong and Vietnam emerged as significant relative contributors. Hong Kong
was the weakest market, falling 19.8%, and we benefitted from our significant
underweight position in the country. In contrast, Vietnam is our second
largest active country position in the portfolio (+7.8%) which, despite some
political turbulence, performed well. Performance was led by HDBank, which
continued to generate returns on equity in the mid-twenties and maintained
good asset quality as concerns over various property exposures proved
unfounded.
China emerged as the worst performing country, detracting 300bp from
performance. The most significant detractors were our holdings in Li-Ning,
Ping An Insurance and Dada Nexus. Li-Ning's share price fell nearly 70%
following the company's announcement of inventory management issues. However,
after consulting with the company and numerous distributors, we believe this
setback is temporary and expect growth to resume within the next 12 months.
Ping An Insurance faced concerns over tightening financial regulations and its
exposure to the property market. In response, we reduced our position in the
company over the year.
Dada Nexus was negatively impacted by two factors: the sluggish performance of
JD.com, for which it provides logistics services, and revelations of
accounting irregularities. Consequently, we decided to divest our position
entirely.
Taiwan detracted 280bp from performance, primarily due to our underweight
position in TSMC whose share price rose nearly 60%. The company experienced
robust growth as the semiconductor cycle rebounded. With its monopolistic
position in leading-edge semiconductor manufacturing, TSMC emerged as the
major beneficiary of demand driven by artificial intelligence, notably as the
sole supplier for NVIDIA's leading AI chips.
By sector, our underweight exposure to TSMC led to information technology
being our worst-performing sector, followed by financials. In contrast, real
estate and materials were the top contributors to performance.
We remain excited by the prospects for companies across the region and the
breadth and depth of investment opportunities in growth businesses that will
reward long-term patient investors.
Baillie Gifford & Co
16 September 2024
Valuing private companies
We aim to hold our private company investments at 'fair value', i.e. the price
that would be paid in an open-market transaction. Valuations are adjusted both
during regular valuation cycles and on an ad hoc basis in response to 'trigger
events'. Our valuation process ensures that private companies are valued in
both a fair and timely manner.
The valuation process is overseen by a valuations group at Baillie Gifford,
which takes advice from an independent third party (S&P Global). The
valuations group is independent from the investment team with all voting
members being from different operational areas of the firm, and the investment
managers only receive final valuation notifications once they have been
applied.
We revalue the private holdings on a three‑month rolling cycle, with
one-third of the holdings reassessed each month. During stable market
conditions, and assuming all else is equal, each investment would be valued
four times in a twelve‑month period. For investment trusts, the prices are
also reviewed twice per year by the respective boards.
Beyond the regular cycle, the valuations group also monitors the portfolio for
certain 'trigger events'. These may include changes in fundamentals, a
takeover approach, an intention to carry out an Initial Public Offering
('IPO'), company news which is identified by the valuation team or by the
portfolio managers, or meaningful changes to the valuation of comparable
public companies. Any ad hoc change to the fair valuation of any holding is
implemented swiftly and reflected in the next published net asset value
('NAV'). There is no delay.
The valuations group also monitors relevant market benchmarks on a weekly
basis and updates valuations in a manner consistent with our external valuer's
(S&P Global) most recent valuation report where appropriate.
Generally speaking, public markets have continued to be less volatile in the
12 months to 31 July 2024, and overall, an improvement in market conditions
has led to an increase in private market deal activity. The data below
quantifies the revaluations carried out during the 12 months to 31 July 2024,
however doesn't reflect the ongoing monitoring of the private investment
portfolio which hasn't resulted in a change in valuation.
Pacific Horizon Investment Trust
Instruments (lines of stock reviewed) 7
Revaluations performed 37
Percentage of portfolio revalued up to 4 times 29%
Percentage of portfolio revalued 5+ times 71%
List of investments
as at 31 July 2024
Name Geography Business 2024 2024 2023
Value % of total Value
£'000 assets * £'000
Samsung Electronics South Korea Memory, phones and electronic components manufacturer 57,877 9.6 36,937
TSMC Taiwan Semiconductor manufacturer 52,860 8.8 6,458
Equinox India Developments India Real estate 23,158 3.8 11,988
Tencent Holdings China Internet services 22,940 3.8 -
Dailyhunt (VerSe Innovation) Series I Preferred+ India News aggregator application 15,417 2.6 13,428
Dailyhunt (VerSe Innovation) Series Equity+ India News aggregator application 3,078 0.5 2,462
Dailyhunt (VerSe Innovation) Series J Preferred+ India News aggregator application 2,198 0.4 2,031
20,693 3.5 17,921
Delhivery§ India Logistics and courier services provider 18,175 3.0 18,399
Zijin Mining Group China Gold and copper miner 18,142 3.0 16,602
Kaspi.kz Khazakstan Banking, ecommerce and payments platform 17,034 2.8 -
EO Technics South Korea Manufacturer and distributor of semiconductor laser markers 15,692 2.6 15,526
Pinduoduo Inc China Ecommerce platform 15,469 2.6 -
ByteDance Series E-1 Preferred+ China Social media 15,232 2.5 11,413
Reliance Industries India Petrochemical company 14,290 2.4 12,397
SK hynix South Korea Semiconductor manufacturer 14,266 2.4 4,565
Prestige Estate Projects India Owner and operator of residential real estate properties 13,985 2.3 7,611
MMG China Copper miner 12,885 2.1 14,237
Phoenix Mills India Commercial property manager 12,263 2.0 9,448
Lemon Tree Hotels India Owner and operator of a chain of Indian hotels and resorts 11,583 1.9 9,559
SEA ADR Singapore Internet gaming and ecommerce 11,197 1.9 11,414
Mobile World Investment Corporation Vietnam Electronic and grocery retailer 11,052 1.8 3,400
Jio Financial Services India Financial service business 10,724 1.8 1,273
Accton Technology Corporation Taiwan Server network equipment manufacturer 10,717 1.8 8,531
Bank Rakyat Indonesia Consumer bank 10,444 1.7 13,684
MediaTek Taiwan Electronic component manufacturer 10,216 1.7 6,100
HDBank Vietnam Consumer bank 9,751 1.6 9,521
PolicyBazaar India Online financial services platform 9,637 1.6 3,725
Baidu Inc China Internet provider 8,752 1.5 9,272
Luckin Coffee Inc ADR China Coffeehouse chain 8,456 1.4 -
Silergy Taiwan Semiconductor manufacturer 8,428 1.4 4,979
Midea Group A shares China A Household appliance manufacturer 8,386 1.4 7,941
FPT Corporation Vietnam IT service provider 8,272 1.4 944
JD.com China Online mobile commerce 8,027 1.3 14,910
Ping An Insurance China Life insurance provider 7,345 1.2 21,418
MicroConnect+ Hong Kong SME financing exchange 6,782 1.1 -
Military Commercial Joint Vietnam Retail and corporate bank 6,578 1.1 5,448
Stock Bank
KE Holdings China Real estate platform 5,722 1.0 7,303
KE Holdings ADR China Real estate platform 517 <0.1 655
6,239 1.0 7,958
Coupang South Korea Ecommerce business 6,239 1.0 5,490
Zhejiang Supor Co A Shares China A Manufacturer of cookware and home appliance products 6,161 1.0 6,243
SK Square South Korea Asset manager, investing in semiconductors and information and communciations 5,835 1.0 -
technologies
Hoa Phat Group Vietnam Steel and related products manufacturer 5,767 1.0 8,150
Jadestone Energy Singapore Oil and gas explorer and producer 5,616 1.0 5,932
PT AKR Corporindo Tbk Indonesia Logistics and supply chain 5,211 0.9 -
ASMPT Hong Kong Semiconductor manufacturer 5,147 0.9 -
SG Micro A Shares China A Semiconductor manufacturer 4,871 0.8 -
PropertyGuru Singapore Real estate platform 4,850 0.8 3,148
Lufax Holding China Online financial services platform 4,615 0.8 -
Binh Minh Plastics Joint Stock Company Vietnam Plastic piping manufacturer 4,555 0.8 1,235
Ramkrishna Forgings India Auto parts manufacturer 4,361 0.7 19,091
Chroma ATE Taiwan Manufacturer of electronic measuring instruments 4,285 0.7 -
Li-Ning China Sportswear apparel supplier 3,548 0.6 11,503
Precision Tsugami China Industrial machinery manufacturer 3,170 0.5 2,877
Vietnam Enterprise Investments Limited Vietnam Investment fund 3,090 0.5 8,232
Vinh Hoan Corporation Vietnam Food producer 3,062 0.5 2,907
Techtronic Industries Hong Kong Power tool manufacturer 2,354 0.4 2,088
Koh Young Technology South Korea 3D inspection machine manufacturer 2,328 0.4 5,169
AirTAC International Group Taiwan Pneumatic components manufacturer 1,909 0.3 2,243
Brilliance China Automotive China Minibus and automotive components manufacturer 980 0.2 1,076
Chalice China Miner 616 0.1 3,311
Chime Biologics+ China Biopharmaceutical company 46 <0.1 76
Eden Biologics+ Taiwan Biopharmaceutical company 10 <0.1 17
Total investments 606,173 100.7
Net liquid assets* (4,203) (0.7)
Total assets 601,970 100.0
Listed Private company Net liquid Total
equities investments † assets * assets *
% % % %
31 July 2024 93.6 7.1 (0.7) 100.0
31 July 2023 93.6 5.1 1.3 100.0
Figures represent percentage of total assets.
* For a definition of terms see Glossary of terms and
Alternative Performance Measures at the end of this announcement.
† Includes holdings in ordinary shares and preference shares.
§ Denotes listed investment previously held in the portfolio as
an unlisted (private company) investment.
+ Denotes unlisted (private company) investment.
Distribution of total assets* and size splits
Geographical 2024
Geographical 2024 2023
% %
1 India 23.0 23.9
2 China 22.6 28.5
3 South Korea 17.0 18.3
4 Taiwan 14.7 5.7
5 Vietnam 8.7 6.7
6 Singapore 3.7 3.5
9 China 'A' shares 3.2 5.2
7 Kazakhstan 2.8 -
8 Indonesia 2.6 5.7
10 Hong Kong 2.4 0.3
11 Thailand - 0.9
12 Net liquid assets (0.7) 1.3
Sectoral 2024
Sectoral 2024 2023
% %
1 Information Technology 32.5 22.0
2 Financials 14.2 12.9
3 Communication Services 13.2 8.6
4 Consumer Discretionary 13.2 20.3
5 Real Estate 10.0 6.9
6 Materials 6.9 12.5
7 Industrials 6.0 10.6
8 Energy 4.2 4.3
9 Consumer Staples 0.5 0.5
10 Healthcare - 0.1
11 Net liquid assets (0.7) 1.3
* For a definition of terms see Glossary of terms and
Alternative Performance Measures at the end of this announcement.
Income statement
For the year ended 31 July
Notes 2024 2024 2024 2023 2023 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments 9 - 33,438 33,438 - (25,404) (25,404)
Currency losses 14 - (113) (113) - (791) (791)
Income 2 8,987 - 8,987 9,580 - 9,580
Investment management fee 3 (3,458) - (3,458) (3,419) - (3,419)
Other administrative expenses 4 (830) - (830) (762) - (762)
Net return before finance costs and taxation 4,699 33,325 38,024 5,399 (26,195) (20,796)
Finance costs of borrowings 5 (401) - (401) (403) - (403)
Net return before taxation 4,298 33,325 37,623 4,996 (26,195) (21,199)
Tax 6 (834) (9,875) (10,709) (830) (1,256) (2,086)
Net return after taxation 3,464 23,450 26,914 4,166 (27,451) (23,285)
Net return per ordinary share 7 3.82p 25.82p 29.64p 4.56p (30.05p) (25.49p)
The total column of this Statement represents the profit and loss account of
the Company. The supplementary revenue and capital columns are prepared under
guidance published by the Association of Investment Companies.
All revenue and capital items in this Statement derive from continuing
operations.
A Statement of Comprehensive Income is not required as the Company does not
have any other comprehensive income and the net return after taxation is both
the profit and comprehensive income for the year.
Balance sheet
As at 31 July
Notes 2024 2024 2023 2023
£'000 £'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss 9 606,173 572,748
Current assets
Debtors 10 790 420
Cash and cash equivalents 18 4,205 12,442
4,995 12,862
Creditors
Amounts falling due within one year:
Other creditors and accruals 11 (1,507) (1,163)
Net current assets 3,488 11,699
Total assets less current liabilities 609,661 584,447
Creditors
Amounts falling due after more than one year:
Provision for tax liability 12 (7,691) (4,092)
Net assets 601,970 580,355
Capital and reserves
Share capital 13 9,208 9,208
Share premium account 14 254,120 254,120
Capital redemption reserve 14 20,367 20,367
Capital reserve 14 308,888 287,783
Revenue reserve 14 9,387 8,877
Total shareholders' funds 601,970 580,355
Net asset value per ordinary share 15 664.01p 637.18p
Statement of changes in equity
For the year ended 31 July 2024
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 August 2023 9,208 254,120 20,367 287,783 8,877 580,355
Net return after taxation - - - 23,450 3,464 26,914
Ordinary shares bought back into treasury 13 - - - (2,345) - (2,345)
Ordinary shares sold from treasury 13 - - - - - -
Dividends paid during the year 8 - - - - (2,954) (2,954)
Shareholders' funds at 31 July 2024 9,208 254,120 20,367 308,888 9,387 601,970
For the year ended 31 July 2023
Notes Share Share Capital Capital Revenue Shareholders'
capital premium redemption reserve reserve funds
£'000 account reserve £'000 £'000 £'000
£'000 £'000
Shareholders' funds at 1 August 2022 9,208 253,946 20,367 319,573 7,456 610,550
Net return after taxation - - - (27,451) 4,166 (23,285)
Ordinary shares bought back into treasury 13 - - - (5,541) - (5,541)
Ordinary shares sold from treasury 13 - 174 - 1,202 - 1,376
Dividends paid during the year 8 - - - - (2,745) (2,745)
Shareholders' funds at 31 July 2023 9,208 254,120 20,367 287,783 8,877 580,355
Cash flow statement
For the year ended 31 July
Notes 2024 2024 2023 2023
£'000 £'000 £'000 £'000
Cash flows from operating activities
Net return before taxation 37,623 (21,199)
Adjustments to reconcile company profit before tax to net cash flow from
operating activities
Net (gains)/losses on investments (33,438) 25,404
Currency losses 113 791
Finance costs of borrowings 5 401 403
Other capital movements
Overseas withholding tax incurred (785) (881)
Indian tax paid on transactions (6,276) (180)
Changes in debtors (465) 523
Change in creditors 71 (11)
Cash from operations* (2,756) 4,850
Non-utilisation fee paid (401) (403)
Net cash (outflow)/inflow from operating activities (3,157) 4,447
Cash flows from investing activities
Acquisitions of investments (206,776) (89,277)
Disposals of investments 207,108 99,574
Net cash inflow from investing activities 332 10,297
Cash flows from financing activities
Ordinary shares bought back into treasury 13 (2,345) (5,541)
Ordinary shares sold from treasury 13 - 1,376
Equity dividends paid 8 (2,954) (2,745)
Net cash outflow from financing activities (5,299) (6,910)
(Decrease)/increase in cash and cash equivalents (8,124) 7,834
Exchange movements (113) (791)
Cash and cash equivalents at 1 August 12,442 5,399
Cash and cash equivalents at 31 July 4,205 12,442
* Cash from operations includes dividends received of £8,362,000
(2023 - £9,925,000 ) and interest received of £160,000 (2023 - £163,000).
Notes to the Financial Statements
1. Principal accounting policies
The Financial Statements for the year to 31 July 2024 have been prepared in
accordance with FRS 102 'The Financial Reporting Standard applicable in the UK
and Republic of Ireland' on the basis of the accounting policies set out below
which are unchanged from the prior year and have been applied consistently.
2. Income
2024 2023
£'000 £'000
Income from investments
Overseas dividends 8,827 9,417
Other income
Deposit interest 160 163
Total income 8,987 9,580
Total income comprises:
Dividends from financial assets designated at fair value through profit or 8,827 9,417
loss
Interest from financial assets not at fair value through profit or loss 160 163
8,987 9,580
3. Investment management fee
2024 2023
£'000 £'000
Investment management fee 3,458 3,419
The Company has appointed Baillie Gifford & Co Limited, a wholly owned
subsidiary of Baillie Gifford & Co, as its Alternative Investment Fund
Managers ('AIFM') and Company Secretaries. Baillie Gifford & Co Limited
has delegated portfolio management services to Baillie Gifford & Co.
Dealing activity and transaction reporting have been further sub-delegated to
Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited.
The Managers may terminate the Management Agreement on six months' notice and
the Company may terminate on three months' notice.
The annual management fee is 0.75% on the first £50 million of net assets,
0.65% on the next £200 million of net assets and 0.55% on the remaining net
assets. Management fees are calculated and payable on a quarterly basis.
4. Net return per ordinary share
2024 2024 2024 2023 2023 2023
Revenue Capital Total Revenue Capital Total
Net return after taxation 3.82p 25.82p 29.64p 4.56p (30.05p) (25.49p)
Revenue return per ordinary share is based on the net revenue profit after
taxation of £3,464,000 (2023 - net revenue profit of £4,166,000) and on
90,804,045 (2023 - 91,364,427) ordinary shares, being the weighted average
number of ordinary shares in issue (excluding treasury shares) during the
year.
Capital return per ordinary share is based on the net capital gain for the
financial year of £23,450,000 (2023 - net capital loss of £27,451,000) and
on 90,804,045 (2023 - 91,364,427) ordinary shares, being the weighted average
number of ordinary shares in issue (excluding treasury shares) during the
year.
Total return per ordinary share is based on the total gain for the financial
year of £26,914,000 (2023 - total loss of £23,285,000) and on 90,804,045
(2023 - 91,364,427) ordinary shares, being the weighted average number of
ordinary shares in issue (excluding treasury shares) during the year.
There are no dilutive or potentially dilutive shares in issue.
5. Ordinary dividends
2024 2023 2024 2023
£'000 £'000
Amounts recognised as distributions in the year:
Previous year's final dividend (paid 30 November 2023) 3.25p 3.00p 2,954 2,745
We set out below the total dividends proposed in respect of the financial
year, which is the basis on which the requirements of section 1158 of the
Corporation Tax Act 2010 are considered. There is a revenue surplus for the
year to 31 July 2024 of £3,464,000 which is available for distribution by
way of a dividend payment (2023 - a revenue surplus of £4,166,000).
2024 2023 2024 2023
£'000 £'000
Amounts paid and payable in respect of the financial year:
Proposed final dividend per ordinary share (payable 28 November 2024) 2.65p 3.25p 2,401 2,954
If approved, the final dividend of 2.65p will be paid on 28 November 2024 to all shareholders on the register at the close of business on 25 October 2024. The ex-dividend date is 24 October 2024.
6. Fair Value Hierarchy
As at 31 July 2024 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities 563,410 - - 563,410
Unlisted company equities - - 9,036 9,036
Unlisted company preference shares# - - 33,727 33,727
Total financial asset investments 563,410 - 42,763 606,173
As at 31 July 2023 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities* 542,048 1,273 - 543,321
Unlisted company equities - - 2,555 2,555
Unlisted company preference shares# - - 26,872 26,872
Total financial asset investments 542,048 1,273 29,427 572,748
* During the period, Brilliance China listed on the Hong
Kong stock exchange having de-listed on 31 March 2021 and there was a
demerger with Reliance Industries, where shares of Jio Financial Services were
acquired but the company did not list until 21 August 2023.
# The investments in preference shares include liquidation
preference rights that determine the repayment (or multiple thereof) of the
original investment in the event of a liquidation event such as a take-over.
During the year to 31 July 2024 no investments (31 July 2023 - nil) were
transferred from Level 3 to Level 1 on becoming listed.
Investments in securities are financial assets held at fair value through
profit or loss. In accordance with Financial Reporting Standard 102, the
tables above provide an analysis of these investments based on the fair value
hierarchy described below,
which reflects the reliability and significance of the information used to
measure their fair value.
The fair value hierarchy used to analyse the fair values of financial assets
is described below. The levels are determined by the lowest (that is the least
reliable or least independently observable) level of input that is significant
to the fair value measurement for the individual investment in its entirety as
follows:
Level 1 - using unadjusted quoted prices for identical instruments in an
active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that
are directly or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is
unavailable).
The Company's unlisted ordinary share investments at 31 July 2023 were valued
using a variety of techniques. These include using comparable company
performance, comparable scenario analysis, and assessment of milestone
achievement at investee companies. The determinations of fair value included
assumptions that the comparable companies and scenarios chosen for the
performance assessment provide a reasonable basis for the determination of
fair value. In some cases the latest dealing price is considered to be the
most appropriate valuation basis, but only following assessment using the
techniques described above.
7. Creditors - amounts falling due within one year
2024 2023
£'000 £'000
Royal Bank of Scotland International Limited multi-currency revolving credit 52 52
facility non-utilisation fee
Investment purchases awaiting settlement 273 -
Investment management fee 903 873
Other creditors and accruals 279 238
1,507 1,163
The Company has a multi-currency revolving credit facility with the Royal Bank
of Scotland International Limited for up to £100 million, with a
non-utilisation rate of 0.4%. This facility expires in March 2025. At 31 July
2024 there were no outstanding drawings (31 July 2023 - nil). The main
covenants relating to the loan are that borrowings should not exceed 30% of
the Company's adjusted net asset value and the Company's net asset value
should be at least £300 million.
There were no breaches in the loan covenants during the year.
None of the above creditors at 31 July 2024 or 31 July 2023 are financial
liabilities designated at fair value through profit or loss.
8. Provision for tax liability
The tax liability provision at 31 July 2024 of £7,691,000 (31 July 2023 -
£4,092,000) relates to a potential liability for Indian capital gains tax
that may arise on the Company's Indian investments should they be sold in the
future, based on the net unrealised taxable capital gain at the period end and
on enacted Indian tax rates (long-term capital gains are taxed at 12.5% (2023
- 10%) and short term capital gains are taxed at 20% (2023 - 15%)). The amount
of any future tax amounts payable may differ from this provision, depending on
the value and timing of any future sales of such investments and future Indian
tax rates.
9. Share capital
2024 2024 2023 2023
Number £'000 Number £'000
Allotted, called up and fully paid ordinary shares of 10p each 90,656,751 9,066 91,081,949 9,108
Treasury shares of 10p each 1,418,210 142 993,012 100
92,074,961 9,208 92,074,961 9,208
In the year to 31 July 2024, the Company issued no ordinary shares from
treasury (2023 - 200,000 ordinary shares with a nominal value of £20,000,
representing 0.2% of the issued share capital, raising net proceeds of
£1,376,000).
In the year to 31 July 2024, 425,198 ordinary shares, representing 0.5% of
the issued share capital at 31 July 2023, were bought back at a total cost of
£2,345,000 and are held in treasury (2023 - 979,012 shares, representing 1.1%
of the issued share capital at 31 July 2022, were bought back during the year
at a total cost of £5,541,000 and subsequently reissued from treasury). At
31 July 2024 the Company had authority to allot or sell from treasury
9,104,690 ordinary shares without application of pre-emption rights and to buy
back 13,440,596 ordinary shares on an ad hoc basis. Under the provisions of
the Company's Articles of Association share buy-backs are funded from the
capital reserve.
Between 1 August 2024 and 12 September 2024, no further shares were issued
and 39,875 shares were bought back.
10. Transactions with related parties and the Managers and Secretaries
The Directors' fees for the year are detailed in the Directors' remuneration
report on page 75. No Director has a contract of service with the Company.
During the year no Director was interested in any contract or other matter
requiring disclosure under section 412 of the Companies Act 2006.
Details of the management contract are set out in the Directors' report on
page 58 of the Annual Report and Financial Statements. The management fee
payable to the Manager by the Company for the year was £3,458,000 (2023 -
£3,419,000) of which £903,000 (2023 - £873,000) was outstanding at the year
end, as disclosed in note 7.
The Company is part of a marketing programme which includes all the investment
trusts managed by the Manager. The Company's marketing contribution, recharged
by the Manager, was £90,000 (2023 - £71,000).
11. The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 July 2024 or 2023 but is
derived from those accounts. Statutory accounts for 2023 have been delivered
to the Registrar of Companies, and those for 2024 will be delivered in due
course. The auditor has reported on these accounts; the reports were
unqualified, did not include a reference to any matters to which the auditors
drew attention by way of emphasis without qualifying the report and did not
contain a statement under sections 498 (2) or 498(3) of the Companies Act
2006.
The Annual Report and Financial Statements will be available on the Company's
page on the Managers' website pacifichorizon.co.uk† on or around 25
September 2024.
Glossary of terms and Alternative Performance Measures ('APM')
Total assets
This is the Company's definition of adjusted total assets, being the total
value of all assets held less all liabilities (other than liabilities in the
form of borrowings).
Shareholders' funds and net asset value
Also described as shareholders' funds, net asset value ('NAV') is the value of
all assets held less all liabilities (including borrowings). The NAV per share
is calculated by dividing this amount by the number of ordinary shares
(excluding treasury shares) in issue.
Net liquid assets
Net liquid assets comprise current assets less current liabilities (excluding
borrowings) and provisions for deferred liabilities.
Discount/premium (APM)
As stock markets and share prices vary, an investment trust's share price is
rarely the same as its NAV. When the share price is lower than the NAV per
share it is said to be trading at a discount. The size of the discount is
calculated by subtracting the share price from the NAV per share and is
usually expressed as a percentage of the NAV per share. If the share price is
higher than the NAV per share, this situation is called a premium.
2024 2023
Net asset value per ordinary share (a) 664.01p 637.18p
Share price (b) 612.00p 586.00p
(Discount)/premium ((b) - (a)) ÷ (a) (7.8%) (8.0%)
Turnover
Turnover is calculated as the minimum of purchases and sales in a month,
divided by the average market value of the portfolio, summed to get rolling 12
month turnover data.
Compound annual return (APM)
The compound annual return converts the return over a period of longer than
one year to a constant annual rate of return applied to the compound value at
the start of each year.
Ongoing charges (APM)
The total recurring expenses (excluding the Company's cost of dealing in
investments and borrowing costs) incurred by the Company as a percentage of
the daily average net asset value, as detailed below:
2024 2023
£'000 £'000
Investment management fee 3,458 3,419
Other administrative expenses 830 762
Total expenses (a) 4,288 4,181
Average net asset value (b) 580,820 578,071
Ongoing charges ((a) ÷ (b) expressed as a percentage) 0.74% 0.72%
China 'A' shares
'A' Shares are shares of mainland China-based companies that trade on the
Shanghai Stock Exchange and the Shenzhen Stock Exchange. Since 2003, select
foreign institutions have been able to purchase them through the Qualified
Foreign Institutional Investor system.
Treasury shares
The Company has the authority to make market purchases of its ordinary shares
for retention as Treasury Shares for future reissue, resale, transfer, or for
cancellation. Treasury Shares do not receive distributions and the Company is
not entitled to exercise the voting rights attaching to them.
Unlisted (private) company
An unlisted or private company means a company whose shares are not available
to the general public for trading and are not listed on a stock exchange.
Active share (APM)
Active share, a measure of how actively a portfolio is managed, is the
percentage of the portfolio that differs from its comparative index. It is
calculated by deducting from 100 the percentage of the portfolio that overlaps
with the comparative index. An active share of 100 indicates no overlap with
the index and an active share of zero indicates a portfolio that tracks the
index.
Total return (APM)
The total return is the return to shareholders after reinvesting the net
dividend on the date that the share price goes ex-dividend. In periods where
no dividend is paid, the total return equates to the capital return.
2024 2024 2023 2023
NAV Share price NAV Share price
Closing NAV per share/share price (a) 664.01p 612.00p 637.18p 586.00p
Dividend adjustment factor* (b) 1.0060 1.0060 1.0056 1.0057
Adjusted closing NAV per share/share price (c) = (a) x (b) 667.99p 615.67p 640.75p 589.34p
Opening NAV per share/share price (d) 637.18p 586.00p 664.65p 647.00p
Total return (c) ÷ (d) - 1 4.8% 5.1% (3.6%) (8.9%)
* The dividend adjustment factor is calculated on the
assumption that the final dividend of 3.25p (31 July 2023 - 3.00p) paid by
the Company during the period was reinvested into shares of the Company at the
cum income NAV per share/share price, as appropriate, at the ex-dividend date.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an
investment trust can borrow money to invest in additional investments for its
portfolio. The effect of the borrowing on the shareholders' assets is called
'gearing'. If the Company's assets grow, the shareholders' assets grow
proportionately more because the debt remains the same. But if the value of
the Company's assets falls, the situation is reversed. Gearing can therefore
enhance performance in rising markets but can adversely impact performance in
falling markets.
Gearing is borrowings at book less cash and brokers' balances expressed as a
percentage of shareholders' funds.
2024 2023
£'000 £'000
Borrowings (at book cost) (a) - -
Less: cash and cash equivalents (4,205) (12,442)
Less: sales for subsequent settlement - -
Add: purchases for subsequent settlement 273 -
Adjusted borrowings (b) (3,932) (12,442)
Shareholders' funds (c) 601,970 580,355
Gearing: (b) as a percentage of (c) (1%) (2%)
Gross gearing is the Company's borrowings expressed as a percentage of
shareholders' funds.
2024 2023
£'000 £'000
Borrowings (at book value) (a) - -
Shareholders' funds (b) 601,970 580,355
Gross gearing: (a) as a percentage of (b) - -
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers Regulations
leverage is any method which increases the Company's exposure, including the
borrowing of cash and the use of derivatives. It is expressed as a ratio
between the Company's exposure and its net asset value and can be calculated
on a gross and a commitment method. Under the gross method, exposure
represents the sum of the Company's positions after the deduction of sterling
cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of sterling cash balances and after certain hedging and netting
positions are offset against each other.
Pacific Horizon Investment Trust PLC (Pacific Horizon) aims to achieve capital
growth through investment in the Asia-Pacific region (excluding Japan) and in
the Indian subcontinent. The Company has total assets of £602 million (before
deduction of loans of nil) at 31 July 2024.
Pacific Horizon is managed by Baillie Gifford & Co Limited, the Edinburgh
based fund management group.
Past performance is not a guide to future performance. Pacific Horizon is a
public listed company and is not authorised or regulated by the Financial
Conduct Authority. The value of its shares and any income from those shares
can fall as well as rise and you may not get back the amount invested. Pacific
Horizon invests in overseas securities, changes in the rates of exchange may
also cause the value of your investment (and any income it may pay) to go down
or up. Pacific Horizon invests in emerging markets where difficulties in
dealing, settlement and custody could arise, resulting in a negative impact on
the value of your investment. Shareholders in Pacific Horizon have the right
to vote every five years, on whether to continue Pacific Horizon, or wind it
up. If the shareholders decide to wind the Company up, the assets will be sold
and you will receive a cash sum in relation to your shareholding. The next
vote will be held at the Annual General Meeting in 2026. You can find up to
date performance information about Pacific Horizon on the Pacific Horizon page
of the Managers' website at pacifichorizon.co.uk
(http://www.pacifichorizon.co.uk) .†
† Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers' website
(or any other website) is incorporated into, or forms part of, this
announcement.
16 September 2024
For further information please contact:
Anzelm Cydzik, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Four Communications
Tel: 0203 920 0555 or 07872 495396
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