REG - Pacific Horizon - Pacific Horizon Investment Trust Half Year Results
12/03/2025 07:00
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RNS Number : 2592A Pacific Horizon Investment Tst PLC 12 March 2025
RNS Announcement
Pacific Horizon Investment Trust PLC ('PHI')
Legal Entity Identifier: VLGEI9B8R0REWKB0LN95
Regulated Information Classification: Half Yearly Financial Report
Results for the six months to 31 January 2025
The following is the unaudited Interim Financial Report for the six months to
31 January 2025 which was approved by the Board on 11 March 2025.
Responsibility statement
We confirm that to the best of our knowledge:
a. the condensed set of Financial Statements has been prepared in
accordance with FRS 104 'Interim Financial Reporting';
b. the Interim Management Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule 4.2.7R
(being an indication of important events that have occurred during the first
six months of the financial year, their impact on the Financial Statements and
a description of the principal risks and uncertainties for the remaining six
months of the financial year); and
c. the Interim Financial Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule 4.2.8R
(disclosure of related party transactions and changes therein).
On behalf of the Board
Roger Yates
Chairman
11 March 2025
Summary of unaudited results
31 January 2025 31 July 2024 % change
(audited)
Shareholders' funds(*) £613.7m £602.0m
Gearing(†) 1.9% (1%)
Net asset value per ordinary share(*) 681.44p 664.01p 2.6
Share price 585.00p 612.00p (4.4)
MSCI All Country Asia ex Japan Index (in sterling terms)(#) 5.8
Discount(†‡) (14.2%) (7.8%)
Active share(†) 73% 75%
Six months to Six months to
31 January 2025 31 January 2024
Revenue earnings per ordinary share 0.52p 0.59p
Six months to Year to
31 January 2025 31 July 2024
Total return(†)
Net asset value per ordinary share(‡) 3.0% 4.8%
Share price(‡) (4.0%) 5.1%
MSCI All Country Asia ex Japan Index (in sterling terms)(#) 6.7% 6.8%
Six months to 31 January 2025 Year to 31 July 2024
Period's high and low High Low High Low
Net asset value per ordinary share(*) 705.93p 619.53p 712.09p 579.28p
Share price 617.00p 556.00p 657.00p 512.00p
Discount (†‡) (8.7%) (15.9%) (5.0%) (14.5%)
(*) For a definition of terms see Glossary of terms and Alternative
Performance Measures at the end of this announcement.
(†) Alternative Performance Measure - 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.
(‡) Key Performance Indicator.
Source: Baillie Gifford/LSEG and relevant underlying index providers. See
disclaimer at the end of this announcement.
Past performance is not a guide to future performance.
Chairman's statement
Performance
During the first half of the financial year, the Company produced a net asset
value ('NAV') total return of 3.0% compared to 6.7% for the comparative
index*. Commentary on performance and portfolio positioning is contained in
the Managers' Report.
The share price total return over the period was negative 4.0%, as the
discount widened from 7.8% to 14.2%.
Share Buybacks
In response to the discount widening, the Company increased its share
buybacks. Over the six months to 31 January 2025 the Company bought back
590,771 of its own shares at a total cost of approximately £3.5 million and
an average discount of approximately 13%. In the corresponding period to 31
January 2024, the Company bought back 335,775 shares at a cost of
approximately £1.8 million and at an average discount of 11%.
Thus far the increased buybacks had only a limited impact on the discount to
NAV of the share price and the Board will consider what actions might be taken
to reduce the discount further.
Gearing
The Company has a £100 million multi-currency revolving credit facility with
the Royal Bank of Scotland International Limited. This facility expires in
March 2025 and is being replaced with a £60 million facility with the same
lender. At the period end, gearing was 1.9%.
Outlook
As referred to above, investment performance relative to the comparative index
was disappointing over the half year. The numbers over one and three years are
also below benchmark. Nevertheless, over the longer term 5 and 10 year
periods the performance numbers remain very strong.
As a Board we encourage our managers to take a long term perspective both in
individual stock selection and in country allocation and this has served
shareholders well over those longer periods.
The Board and managers are very positive about macro economic conditions in
the region and about the growth companies located there. Accordingly, we
remain optimistic about the returns which will accrue to shareholders in the
medium to long term.
Roger Yates
Chairman
11 March 2025
(*) The MSCI All Country Asia ex Japan Index (in sterling terms) is the
principal index against which performance is measured.
Managers' review
Overview
Over the six-month reporting period, the Company's net asset value ('NAV') per
share total return and the share price total return were positive 3.0% and
negative 4.0% respectively. This compares to a total return of positive 6.7%
of the MSCI All Country Asia ex Japan Index in sterling terms.
Geographic returns across the region exhibited significant divergence. Most
notably, after a significant period of weakness, China rebounded strongly,
rising 20.6%, as the government moved to support the economy. Elsewhere,
Taiwan continued to perform strongly, rising 16.1%, primarily driven by its
semiconductor sector, which experienced strong demand from global investments
in artificial intelligence ('AI').
Conversely, South Korea was the worst performing market, falling 15.7%,
largely driven by weakness in its technology sector, particularly Samsung
Electronics. India, which was one of the best performing Asian markets over
the past couple of years, experienced a significant correction, down 8.0%,
after valuations became extended and a significant number of company results
disappointed market expectations.
Despite having significantly reduced our Indian exposure over the past 18
months, and re‑invested much of it into China, our performance disappointed.
China was the main detractor, where the Company was hurt by not owning some of
the top performing technology companies, including Xiaomi, Meituan and
Alibaba. Stock selection in Korea was detrimental, with our large holding in
Samsung Electronics being the single largest negative contributor as the
company fell behind in high bandwidth memory required in hyperscale
datacentres, an issue we believe to be temporary.
Taiwan was our largest positive contributor led by our semiconductor related
holdings. This was followed by Singapore, where our significant holding in SEA
generated substantial returns as the company's operational performance
significantly improved and the share price rose more than 90%. Vietnam, our
largest country overweight position (+10.3%), continued to contribute
positively.
Some modest changes were made to the portfolio, including continued
significant additions to TSMC in Taiwan, increasing our positions in China, in
particular internet companies including Pinduoduo and Tencent, and additions
to Vietnam. Funding came from a variety of sources, including continued
reductions in India. In the six months to 31 January 2025, we increased the
gearing of the Company from 0% to 1.9% and bought back 590,771 shares,
representing 0.7% of the issued share capital as at 31 July 2024.
Review
Many of the headwinds which hampered Asia for the past several years persist,
including the strongest US dollar in decades and geopolitical tensions. Yet
Asian economies have not only avoided crisis in this challenging environment,
but many have prospered, outpacing growth in many Western nations. This
success underscores the much-improved macroeconomic position of Asia today,
particularly compared to Western economies.
Combining Asia's favourable macroeconomic position with its structurally
faster growth rates and valuations at multi-year lows relative to developed
markets, Asia ex Japan appears to be in a sweet spot. Nevertheless,
performance thus far failed to fully reflect this positive position.
Two major catalysts could change this. Firstly, a weakening US Dollar would be
a substantial tailwind. While predicting short-term currency movements is
difficult, longer-term structural factors may put significant downward
pressure on the Dollar, including record high valuations, potential US
interest rate cuts, continued fiscal expansion, mounting debt, and the drive
to re-industrialise the country.
Secondly, an improvement in sentiment for China could be transformative. The
country remains a key concern among investors, with the MSCI China Index still
more than 40% below its early 2021 peak. While challenges persist, especially
in the real estate sector, China appears to have hit an important inflection
point in September. The government moved decisively to support the economy,
with stimulus plans that are significantly more meaningful than anything seen
since the Covid-19 pandemic, including explicit support for the property and
equity markets. Notably, these plans have been personally overseen and
approved by President Xi Jinping.
Support for China's private sector has continued to strengthen in 2025, with
Premier Xi personally endorsing its importance at a public meeting with major
technology companies in February. This shift in policy contributed to the
strong performance of MSCI China over the past six months.
The potential for further market gains is significant, given the low
valuations of many high-quality Chinese companies and the substantial
household savings accumulated over recent years (more than $10tr since the
Covid-19 pandemic).
Operationally many Chinese companies continue to perform well, especially in
the internet sector. Tencent Holdings and Pinduoduo Inc. have grown earnings
an impressive 40% (to c. $30bn) and 100% (to c.$17bn) year-over-year,
respectively, based on our expected full year earnings for 2024. These
businesses are highly cash-generative and committed to significant shareholder
returns through buybacks and/or dividends.
We continued to make modest additions to China, adding to the technology
platforms Tencent and Pinduoduo, the fintech firm Lufax, and to the Chinese
semiconductor company SG Micro. After the reporting period, we also took new
holdings in Haidilao, a leading Chinese restaurant chain and Goneo, a leading
manufacturer of electric hardware and sockets. These purchases were funded by
the use of gearing, and the sale of Baidu (after the reporting period) due to
concerns about the lack of growth in the core search business and increasing
competition from newer forms of search.
Meanwhile, India, which had been one of the best performing markets over the
past few years, experienced a correction. While the macro-outlook for the
country remains good, valuations had become overextended. This led us to
reduce our exposure to the country over the past year (a year ago India was
34% of the portfolio and 13% overweight the comparative index, today it is
18.9% and -2.4% underweight). With many companies trading at decade high
valuation multiples, and more than half of the companies we monitor missing
earnings estimates in their recently quarterly results, there was a sharp
correction in the market, especially in the mid and small cap sectors.
We continued to trim our exposure in India. We significantly reduced our
holding in Jio Financials, Reliance's fintech business, as we reassessed the
company's growth potential. We also trimmed our large position in Equinox (a
developer) and sold our remaining small holding in Tata Motors.
In our assessment, Vietnam remains the best structural growth story in Asia,
driven by its successful export manufacturing base. The country faced
challenges over the past few years due to a corruption clampdown and issues in
the property sector. However, with the appointment of Tô Lâm as the General
Secretary (effectively the head of the government), Vietnam is likely entering
a period of greater political stability, and we are hopeful of a more
business‑friendly environment.
Geopolitics remains the most significant short-term risk, with Vietnam having
a substantial $100bn trade deficit with the US, and the country will need to
manage relations carefully over the coming year.
We made small additions to our holdings in Military Bank (financial) and
Mobile World (retailer), and initiated a new holding in Khang Dien Housing,
one of the country's leading property developers. These purchases increased
Vietnam to a 10.4% absolute position and made it our largest country
overweight.
Taiwan's technology industry continued to be the major beneficiary of global
investment into artificial intelligence. We added to our holding in TSMC, the
world's leading semiconductor manufacturer, which ended the period as our
largest holding at 10.8%.
Performance
Underperformance during the period was primarily driven by stock selection in
China and South Korea, detracting 200 basis points (bp) and 180bp
respectively.
Despite China's strong performance in the comparative index (+20.6%), it was
our main detractor despite significant additions over the past year. Our
challenges were concentrated in two sectors.
In financials, our longstanding underweight position in Chinese banks, due to
concerns over margin pressures, regulatory issues, and state control, cost us
over 100bp. While this strategy has been correct long-term, Chinese financials
rose nearly 30% in this period as the government bolstered the economy and the
property sector.
In Information Technology, despite our overweight position, the sector
detracted more than 100bp. We missed out on Xiaomi's 135% rise, driven by
strong results and market excitement relating to its AI capabilities, while
our main holdings, Silergy and SG Micro, faced weak semiconductor demand.
In South Korea, Samsung Electronics (5.6% of our portfolio) was the largest
detractor (-200bp), falling 38% due to setbacks in high bandwidth memory for
AI applications. Despite this, Samsung remains the global leader in memory
chips, has new semiconductor management, and aims to launch next-generation
high bandwidth memory this year. Trading below book value, we see it as an
attractive long-term investment.
Kazakhstan's Kaspi, our large holding in the country's leading super app,
detracted 80bp following a short seller report questioning its Russian links.
We view these concerns as unfounded, given Kaspi's domestic focus (99.7% of
gross marketing value is from Kazakh residents). The company continues to
perform strongly, with expected revenue and earnings growth of 70% and 25%
respectively.
Taiwan emerged as the Trust's best-performing market, contributing 120bp to
performance, driven by strong demand for AI infrastructure. Accton, a
manufacturer of data centre switches, was our top Taiwanese company, rising
56% on accelerated demand from its key customer, Amazon. Semiconductor-related
businesses MediaTek (semiconductor designer) and Chroma (testing equipment)
also delivered robust performances.
Singapore followed closely, with SEA, ASEAN's leading e-commerce and gaming
company, rising 96% and adding 120bp to performance. The company reached a
crucial milestone as its ecommerce business turned profitable in both ASEAN
and Brazil, the latter surpassing our expectations. SEA's gaming division saw
its flagship title, Free Fire, become the year's most downloaded game
globally, while its fintech arm experienced rapid growth, with loan customers
expanding 60% year-on-year.
Vietnam showed solid performance, led by Binh Minh Plastics, the country's
largest pipes manufacturer, and FPT, Vietnam's premier IT company, which
recently unveiled plans for AI factory development and a strategic partnership
with NVIDIA.
Notably, several Chinese companies ranked among our top 5 positive
contributors, including privately-held ByteDance (owner of Douyin and TikTok),
which continued to see revenue growth of approximately 40% year‑on-year,
and Luckin Coffee, China's largest coffee chain.
Outlook
We maintain our positive outlook for the region, supported by strong growth,
record low valuations compared to developed markets, and China moving to
support its economy and the private sector.
Baillie Gifford & Co
11 March 2025
Baillie Gifford - valuing private companies
We aim to hold our private company investments at 'fair value', i.e. the
price that would be paid in an open-market transaction. Valuations are
adjusted both during regular valuation cycles and on an ad hoc basis in
response to 'trigger events'. Our valuation process ensures that private
companies are valued in both a fair and timely manner.
The valuation process is overseen by a valuations group at Baillie Gifford,
which takes advice from an independent third party (S&P Global).
The valuations group is independent from the investment team, with all voting
members being from different operational areas of the firm, and the 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. Regarding the Trust's private portfolio, the prices are
also reviewed twice per year by the respective investment trust 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. 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.
In the period we have seen an improvement in investor sentiment in certain
geographies, coupled with the continued dominant performance at the private
portfolio company level, all reflected in the valuation movements. That being
said, market conditions remain challenging for some private investments in the
portfolio tempering valuation increases seen below.
Pacific Horizon Investment Trust PLC(*)
Average movement per instrument 1.8%
Average movement at private company level 7.3%
(*) Data reflecting period 1 August 2024 to 31 January 2025 to align
with the Company's reporting period end.
List of investments
as at 31 January 2025 (unaudited)
Name Geography Business Value % of total
£'000 assets (*)
TSMC Taiwan Semiconductor manufacturer 68,212 10.8
Samsung Electronics South Korea Memory, phones and electronic components manufacturer 35,447 5.6
Tencent Holdings China Internet services 30,686 4.9
SEA ADR Singapore Internet gaming and ecommerce 21,504 3.4
Equinox India Developments India Real estate 21,129 3.4
Dailyhunt (VerSe Innovation) Series I Preferred (U) India News aggregator application 15,343 2.4
Dailyhunt (VerSe Innovation) Series Equity (U) India News aggregator application 3,064 0.5
Dailyhunt (VerSe Innovation) Series J Preferred (U) India News aggregator application 2,193 0.4
20,600 3.3
ByteDance Series E-1 China Social media 19,574 3.1
Preferred (U)
Zijin Mining Group China Gold and copper miner 17,262 2.7
Accton Technology Corporation Taiwan Server network equipment manufacturer 16,789 2.7
Pinduoduo Inc China Ecommerce platform 15,449 2.5
Delhivery (P) India Logistics and courier services provider 14,432 2.3
SK hynix South Korea Semiconductor manufacturer 14,304 2.3
MMG China Copper miner 14,013 2.2
Kaspi.kz Kazakhstan Banking, ecommerce and payments platform 12,887 2.0
MediaTek Taiwan Electronic component manufacturer 12,789 2.0
JD.com China Online mobile commerce 12,551 2.0
EO Technics South Korea Manufacturer and distributor of semiconductor laser markers 12,545 2.0
Reliance Industries India Petrochemical company 12,000 1.9
Luckin Coffee Inc ADR China Coffeehouse chain 11,755 1.9
PolicyBazaar India Online financial services platform 11,445 1.8
Phoenix Mills India Commercial property manager 11,186 1.8
Mobile World Investment Corporation Vietnam Electronic and grocery retailer 10,833 1.7
HDBank Vietnam Consumer bank 10,507 1.7
Lemon Tree Hotels India Owner and operator of a chain of Indian hotels and resorts 10,470 1.7
Prestige Estate Projects India Owner and operator of residential real estate properties 10,462 1.7
FPT Corporation Vietnam IT service provider 10,268 1.6
Midea Group A shares China 'A' shares Household appliance manufacturer 9,993 1.6
Bank Rakyat Indonesia Consumer bank 9,734 1.6
Ping An Insurance China Life insurance provider 9,707 1.5
Baidu Inc China Internet provider 9,086 1.5
Military Commercial Joint Stock Bank Vietnam Retail and corporate bank 8,925 1.4
SG Micro A Shares China 'A' shares Semiconductor manufacturer 8,335 1.3
KE Holdings China Real estate platform 7,368 1.2
KE Holdings ADR China Real estate platform 673 0.1
8,041 1.3
Silergy Taiwan Semiconductor manufacturer 7,693 1.2
Coupang South Korea Ecommerce business 7,308 1.2
Zhejiang Supor Co A Shares China 'A' shares Manufacturer of cookware and home appliance products 6,701 1.1
Khan Dien House Trading and Investment Joint Stock Company Vietnam Real estate 6,530 1.1
SK Square South Korea Asset manager, investing in semiconductors and information and communciations 6,254 1.0
technologies
MicroConnect (U) Hong Kong SME financing exchange 6,231 1.0
Binh Minh Plastics Joint Stock Vietnam Plastic piping manufacturer 6,209 1.0
Company
Fabrinet Thailand Manufacturer of optical and 6,039 1.0
electro-mechanical services
Hoa Phat Group Vietnam Steel and related products manufacturer 5,869 0.9
Chroma ATE Taiwan Manufacturer of electronic measuring instruments 5,601 0.9
Lufax Holding China Online financial services platform 4,666 0.7
ASMPT Hong Kong Semiconductor manufacturer 4,653 0.7
Jadestone Energy Singapore Oil and gas explorer and producer 4,620 0.7
Precision Tsugami China Industrial machinery manufacturer 4,064 0.7
Li-Ning China Sportswear apparel supplier 4,025 0.6
Ramkrishna Forgings India Auto parts manufacturer 3,982 0.6
PT AKR Corporindo Tbk Indonesia Logistics and supply chain 3,914 0.6
Vietnam Enterprise Investments Limited Vietnam Investment fund 3,280 0.5
Vinh Hoan Corporation Vietnam Food producer 3,053 0.5
Techtronic Industries Hong Kong Power tool manufacturer 2,547 0.4
AirTAC International Group Taiwan Pneumatic components manufacturer 2,061 0.3
Jio Financial Services India Financial service business 1,929 0.3
Brilliance China Automotive China Minibus and automotive components manufacturer 1,002 0.2
Hyundai Motor India India Automotive manufacturer 807 0.1
Chalice China Miner 606 0.1
Chime Biologics (U) China Biopharmaceutical company 46 <0.1
Eden Biologics (U) Taiwan Biopharmaceutical company 10 <0.1
Total investments 632,620 100.6
Net liquid assets(*) (3,551) (0.6)
Total assets(*) 629,069 100.0
Listed Private company Net liquid Total
Equities investments (†) assets (*) assets (*)
% % % %
31 January 2025 93.2 7.4 (0.6) 100.0
31 July 2024 93.6 7.1 (0.7) 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.
U Denotes private company investment.
(P) Denotes listed security previously held in the portfolio as a
private company investment.
Distribution of total assets(*) (unaudited)
Geographical analysis at 31 January 2025
Geographical % at % at
31 January 31 July
2025 2024
1 China 25.9 22.6
2 India 18.9 23.0
3 Taiwan 17.9 14.7
4 South Korea 12.1 17.0
5 Vietnam 10.4 8.7
6 Singapore 4.1 3.7
7 China 'A' shares 4.0 3.2
8 Indonesia 2.2 2.6
9 Hong Kong 2.1 2.4
10 Kazakhstan 2.0 2.8
11 Thailand 1.0 -
12 Net liquid assets (0.6) (0.7)
Sectoral analysis at 31 January 2025
Sectoral % at % at
31 January 31 July
2025 2024
1 Information Technology 32.1 32.5
2 Communication Services 16.2 13.2
3 Consumer Discretionary 14.6 13.2
4 Financials 12.5 14.2
5 Real Estate 9.3 10.0
6 Materials 6.5 6.9
7 Industrials 5.7 6.0
8 Energy 3.2 4.2
9 Consumer Staples 0.5 0.5
10 Healthcare <0.1 <0.1
11 Net liquid assets (0.6) (0.7)
(*) For a definition of terms see Glossary of terms and Alternative
Performance Measures at the end of this announcement.
Income statement (unaudited)
For the six months ended 31 January 2025 For the six months ended 31 January 2024 For the year ended 31 July 2024 (audited)
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments - 16,087 16,087 - (22,963) (22,963) - 33,438 33,438
Currency gains/(losses) - 179 179 - (145) (145) - (113) (113)
Income 3,626 - 3,626 3,067 - 3,067 8,987 - 8,987
Investment management fee 3 (1,831) - (1,831) (1,628) - (1,628) (3,458) - (3,458)
Other administrative expenses (406) - (406) (368) - (368) (830) - (830)
Net return before finance costs and taxation 1,389 16,266 17,655 1,071 (23,108) (22,037) 4,699 33,325 38,024
Finance costs of borrowings (482) - (482) (202) - (202) (401) - (401)
Net return before taxation 907 16,266 17,173 869 (23,108) (22,239) 4,298 33,325 37,623
Tax 4 (440) 894 454 (328) (5,424) (5,752) (834) (9,875) (10,709)
Net return after taxation 467 17,160 17,627 541 (28,532) (27,991) 3,464 23,450 26,914
Net return per ordinary share 5 0.52p 18.97p 19.49p 0.59p (31.38p) (30.79p) 3.82p 25.82p 29.64p
The total column of this statement represents the profit and loss account of
the Company. The supplementary revenue and capital columns are prepared under
guidance issued by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing
operations.
A Statement of Comprehensive Income is not required as the Company does not
have any other comprehensive income and the net return after taxation is both
the profit and total comprehensive income for the period.
Balance sheet (unaudited)
Notes At 31 January At 31 July
2025 2024
£'000 (audited)
£'000
Fixed assets
Investments held at fair value through profit or loss 7 632,620 606,173
Current assets
Debtors 842 790
Cash and cash equivalents 3,759 4,205
4,601 4,995
Creditors
Amounts falling due within one year:
Bank loans (15,325) -
Other creditors and accruals (1,553) (1,507)
Net current assets (12,277) 3,488
Total assets less current liabilities 620,343 609,661
Creditors
Amounts falling due after more than one year:
Provision for tax liability 9 (6,599) (7,691)
Net assets 613,744 601,970
Capital and reserves
Share capital 10 9,208 9,208
Share premium account 254,120 254,120
Capital redemption reserve 20,367 20,367
Capital reserve 322,593 308,888
Revenue reserve 7,456 9,387
Total shareholders' funds 613,744 601,970
Net asset value per ordinary share 681.44p 664.01p
Ordinary shares in issue 10 90,065,980 90,656,751
Statement of changes in equity (unaudited)
For the six months ended 31 January 2025
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 2024 9,208 254,120 20,367 308,888 9,387 601,970
Net return after taxation - - - 17,160 467 17,627
Ordinary shares bought back into treasury 10 - - - (3,455) - (3,455)
Dividends paid during the period 6 - - - - (2,398) (2,398)
Shareholders' funds at 31 January 2025 9,208 254,120 20,367 322,593 7,456 613,744
For the six months ended 31 January 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 - - - (28,532) 541 (27,991)
Ordinary shares bought back into treasury 10 - - - (1,820) - (1,820)
Dividends paid during the period 6 - - - - (2,954) (2,954)
Shareholders' funds at 31 January 2024 9,208 254,120 20,367 257,431 6,464 547,590
(*) The capital reserve balance at 31 January 2025 includes investment
holding gains of £112,017,000 (31 January 2024 - gains of £85,384,000).
Cash flow statement (unaudited)
Six months to Six months to
31 January 2025 31 January 2024
£'000 £'000
Cash flows from operating activities
Net return before taxation 17,173 (22,239)
Adjustments to reconcile company profit before tax to net cash flow from
operating activities
Net (gains)/losses on investments (16,087) 22,963
Currency (gains)/losses (179) 145
Finance costs of borrowings 482 202
Other capital movements
Changes in debtors 138 (395)
Changes in creditors (24) (121)
Taxation
Overseas withholding tax incurred (428) (259)
Indian tax paid on transactions (198) (644)
Cash from operations(*) 877 (348)
Interest paid (421) (201)
Net cash inflow/(outflow) from operating activities 456 (549)
Cash flows from investing activities
Acquisitions of investments (28,850) (52,638)
Disposals of investments 18,297 49,305
Net cash outflow from investing activities (10,553) (3,333)
Cash flows from financing activities
Ordinary shares bought back into treasury (3,455) (1,745)
Borrowings drawn down 15,325 -
Equity dividends paid (2,398) (2,954)
Net cash inflow/(outflow) from financing activities 9,472 (4,699)
Decrease in cash and cash equivalents (625) (8,581)
Exchange movements 179 (145)
Cash and cash equivalents at start of period 4,205 12,442
Cash and cash equivalents at end of period 3,759 3,716
(*) Cash from operations includes dividends received of £3,743,000 (31
January 2024 - £2,601,000) and interest received of £56,000 (31 January
2024 - £91,000).
Notes to the condensed Financial Statements (unaudited)
1 Basis of accounting
The condensed Financial Statements for the six months to 31 January 2025
comprise the statements set out above together with the related notes below.
They have been prepared in accordance with FRS 104 'Interim Financial
Reporting' and the AIC's Statement of Recommended Practice issued in November
2014 and updated in October 2019, April 2021 and July 2022 with consequential
amendments. They have not been audited or reviewed by the auditor pursuant to
the Auditing Practices Board Guidance on 'Review of Interim Financial
Information'. The Financial Statements for the six months to 31 January 2025
have been prepared on the basis of the same accounting policies as set out in
the Company's Annual Report and Financial Statements at 31 July 2024.
Going concern
The Directors have considered the Company's principal risks and uncertainties,
as set out on the inside cover of this report, together with the Company's
current position, investment objective and policy, the level of demand for
the Company's shares, the nature of its assets, its liabilities and projected
income and expenditure. The Board has, in particular, considered the impact
of heightened market volatility due to macroeconomic and geopolitical
concerns, but it does not believe the Company's going concern is affected. It
is the Directors' opinion that the Company has adequate resources to continue
in operational existence for the foreseeable future. The Company's assets, the
majority of which are investments in quoted securities which are readily
realisable, exceed its liabilities significantly. All borrowings require the
prior approval of the Board. The Board approves borrowing and gearing limits
and reviews regularly the amounts of any borrowing and the level of gearing as
well as compliance with borrowing covenants. The Company has continued to
comply with the investment trust status requirements of section 1158 of the
Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax)
Regulations 2011. In accordance with the Company's Articles of Association,
shareholders have the right to vote on the continuation of the Company every
five years, the next vote being in 2026. Accordingly, the Directors consider
it appropriate to adopt the going concern basis of accounting in preparing
these Financial Statements and confirm that they are not aware of any material
uncertainties which may affect the Company's ability to continue to do so over
a period of at least twelve months from the date of approval of these
Financial Statements.
2 Financial information
The financial information contained within this Interim Financial Report does
not constitute statutory accounts as defined in sections 434 to 436 of the
Companies Act 2006. The financial information for the year ended 31 July 2024
has been extracted from the statutory accounts which have been filed with the
Registrar of Companies. The auditor's report on those accounts was not
qualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying its report, and did not
contain statements under sections 498(2) or (3) of the Companies Act 2006.
3 Investment manager
Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie
Gifford & Co, has been appointed by the Company as its Alternative
Investment Fund Managers 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 Tax
The revenue tax charge includes the overseas withholding tax suffered in the
period. The capital tax charge results from the provision for tax liability in
respect of Indian capital gains tax as detailed in note 9.
5 Net return
Six months to Six months to Year to
31 January 2025 31 January 2024 31 July
£'000 £'000 2024 (audited)
£'000
Revenue return after taxation 467 541 3,464
Capital return after taxation 17,160 (28,532) 23,450
Total net return 17,627 (27,991) 26,914
Net return per ordinary share
Revenue return after taxation 0.52p 0.59p 3.82p
Capital return after taxation 18.97p (31.38p) 25.82p
Total net return per ordinary share 19.49p (30.79p) 29.64p
Weighted average number of ordinary shares in issue 90,437,115 90,921,470 90,804,045
The net return per ordinary share figures are based on the above totals of
revenue and capital and the weighted average number of ordinary shares in
issue (excluding treasury shares) during each period.
There are no dilutive or potentially dilutive shares in issue.
6 Dividends
Six months to Six months to Year to
31 January 2025 31 January 2024 31 July
£'000 £'000 2024 (audited)
£'000
Amounts recognised as distributions in the period: 2,398 2,954 2,954
Previous year's final dividend of 2.65p
(31 July 2023 - 3.25p), paid 28 November 2024
Amounts paid and payable in respect of the period: - - 2,398
Final dividend (31 July 2024 - 2.65p)
No interim dividend has been declared in respect of the current period.
7 Fixed assets - investments
The Company's investments in securities are financial assets held at fair
value through profit or loss. 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).
An analysis of the Company's financial asset investments based on the fair
value hierarchy described above is shown below.
Investments held at fair value through profit or loss
As at 31 January 2025 Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities 586,159 - - 586,159
Unlisted equities - - 9,351 9,351
Unlisted preference shares(†) - - 37,110 37,110
Total financial asset investments 586,159 - 46,461 632,620
As at 31 July 2024 (audited) Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed equities 563,410 - - 563,410
Unlisted equities - - 9,036 9,036
Unlisted preference shares(†) - - 33,727 33,727
Total financial asset investments 563,410 - 42,763 606,173
(†) 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.
The fair value of listed security investments is bid price or, in the case of
FTSE 100 constituents and holdings on certain recognised overseas exchanges,
last traded price. The fair value of suspended investments is the last traded
price, adjusted for the estimated impact on the business of the suspension.
Unlisted investments are valued at fair value by the Directors following
a detailed review and appropriate challenge of the valuations proposed by the
Managers. The Managers' unlisted investment policy applies methodologies
consistent with the International Private Equity and Venture Capital Valuation
guidelines ('IPEV'). These methodologies can be categorised as follows: (a)
market approach (multiples, industry valuation benchmarks and available market
prices); (b) income approach (discounted cash flows); and (c) replacement cost
approach (net assets). The valuation process recognises also, as stated in the
IPEV Guidelines, that the price of a recent investment may be an appropriate
starting point for estimating fair value, however it should be evaluated using
the techniques described above.
8 Financial liabilities
The Company has a £100 million multi-currency revolving 3 year credit
facility with The Royal Bank of Scotland International Limited, which expires
on 14 March 2025. At 31 January 2025, creditors falling due within one year
include £15,325,000 draw down (31 July 2024 - no outstanding drawings).
9 Provision for tax liability
The tax liability provision at 31 January 2025 of £6,599,000 (31 July 2024 -
£7,691,000) 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 10% and
short term capital gains are taxed at 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.
10 Share capital
As at 31 January 2025 As at 31 July 2024 (audited)
Number £'000 Number £'000
Allotted, called up and fully paid ordinary shares of 10p each in issue 90,065,980 9,007 90,656,751 9,066
Treasury shares of 10p each 2,008,981 201 1,418,210 142
92,074,961 9,208 92,074,961 9,208
The Company has authority to allot shares under section 551 of the Companies
Act 2006. In accordance with authorities granted at the last Annual General
Meeting in November 2024, buy-backs will only be made at a discount to net
asset value and the Board has authorised use of the issuance authorities to
issue new shares or sell shares from treasury at a premium to net asset value
in order to enhance the net asset value per share for existing shareholders
and improve the liquidity of the Company's shares. In the six months to 31
January 2025, the Company issued no ordinary shares (year to 31 July 2024 - no
ordinary shares from treasury). At 31 January 2025 the Company had authority
to allot or sell from treasury 9,061,688 ordinary shares without application
of pre-emption rights.
In the six months to 31 January 2025, 590,771 shares, representing 0.7% of the
issued share capital as at 31 July 2024, were bought back at a total cost of
£3,455,000 and held in treasury (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 held in treasury). As at 31
January 2025, the Company had authority remaining to buy back 13,244,058
ordinary shares on an ad hoc basis.
Over the period from 31 January 2024 to 11 March 2025 the Company has issued
no further shares from treasury and 188,000 shares were bought back.
11 Transaction costs on purchases
During the period, transaction costs on purchases amounted to £21,000 (31
January 2024 - £36,000; 31 July 2024 - £206,000) and transaction costs on
sales amounted to £30,000 (31 January 2024 - £92,000; 31 July 2024 -
£399,999).
12 Related party transactions
There have been no transactions with related parties during the first six
months of the current financial year that have materially affected the
financial position or the performance of the Company during that period and
there have been no changes in the related party transactions described in the
last Annual Report and Financial Statements that could have had such an effect
on the Company during that period.
13 Principal risks and uncertainties
The principal risks facing the Company are financial risk, investment strategy
risk, political and associated economic risk, discount risk, regulatory risk,
custody and depositary risk, operational risk, leverage risk, climate and
governance risk, cyber security risk and emerging risks. An explanation of
these risks and how they are managed is set out on pages 42 to 45 of the
Company's Annual Report and Financial Statements for the year to 31 July 2024
which is available on the Company's website: pacifichorizon.co.uk
(http://www.pacifichorizon.co.uk/) (‡).
The principal risks and uncertainties have not changed since the date of that
report.
None of the views expressed in this document should be construed as advice to
buy or sell a particular investment. The printed version of the Interim
Financial Report will be sent to shareholders and will be available on the
Company's page on the Managers' website pacifichorizon.co.uk
(http://www.pacifichorizon.co.uk/) (‡) on or around 19 March 2025.
(‡) 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.
Third party data provider disclaimer
No third party data provider ('Provider') makes any warranty, express or
implied, as to the accuracy, completeness or timeliness of the data contained
herewith nor as to the results to be obtained by recipients of the data. No
Provider shall in any way be liable to any recipient of the data for any
inaccuracies, errors or omissions in the index data included in this document,
regardless of cause, or for any damages (whether direct or indirect) resulting
therefrom.
No Provider has any obligation to update, modify or amend the data or to
otherwise notify a recipient thereof in the event that any matter stated
herein changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have any liability
whatsoever to you, whether in contract (including under an indemnity), in tort
(including negligence), under a warranty, under statute or otherwise, in
respect of any loss or damage suffered by you as a result of or in connection
with any opinions, recommendations, forecasts, judgements, or any other
conclusions, or any course of action determined, by you or any third party,
whether or not based on the content, information or materials contained
herein.
MSCI Index data
Source: MSCI. The MSCI information may only be used for your internal use, may
not be reproduced or redisseminated in any form and may not be used as a basis
for or a component of any financial instruments or products or indices. None
of the MSCI information is intended to constitute investment advice or a
recommendation to make (or refrain from making) any kind of investment
decision and may not be relied on as such. Historical data and analysis should
not be taken as an indication or guarantee of any future performance analysis,
forecast or prediction. The MSCI information is provided on an 'as is' basis
and the user of this information assumes the entire risk of any use made of
this information. MSCI, each of its affiliates and each other person involved
in or related to compiling, computing or creating any MSCI information
(collectively, the 'MSCI Parties') expressly disclaims all warranties
(including, without limitation, any warranties of originality, accuracy,
completeness, timeliness, non-infringement, merchantability and fitness for a
particular purpose) with respect to this information. Without limiting any of
the foregoing, in no event shall any MSCI Party have any liability for any
direct, indirect, special, incidental, punitive, consequential (including,
without limitation, lost profits) or any other damages. (msci.com
(https://bailliegifford.sharepoint.com/sites/ITInvestmentTrustAdminTeam/Shared%20Documents/Pacific%20Horizon%20Investment%20Trust/Accounts%20Files/Accounts%20File%20Interim%202025/2.%20Proofs/proofed/3622%20Pacific%20Horizon%20IR%20RNS%20Announcement.doc)
).
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
in issue (excluding shares held in treasury).
Net liquid assets
Net liquid assets comprise current assets less current liabilities (excluding
borrowings) and provisions for deferred liabilities.
Discount/premium (APM)
As stockmarkets 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.
As at As at
31 January 31 July 2024
2025 (audited)
£'000 £'000
Net asset value per ordinary share (a) 681.44p 664.01p
Share price (b) 585.00p 612.00p
Discount ((b) - (a)) ÷ (a) (14.2%) (7.8%)
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.
As at As at As at As at
31 January 31 January 31 July 31 July
2025 2025 2024 2024
NAV Share price NAV Share price
Closing NAV per share/share price (a) 681.44p 585.00p 664.01p 612.00p
Dividend adjustment factor(*) (b) 1.0040 1.0040 1.0060 1.0060
Adjusted closing NAV per share/share price (c) = (a) x (b) 684.17p 587.34p 667.99p 615.67p
Opening NAV per share/share price (d) 664.01p 612.00p 637.18p 586.00p
Total return (c) ÷ (d) -1 3.0% (4.0%) 4.8% 5.1%
(*) The dividend adjustment factor is calculated on the assumption that
the final dividend of 2.65p (31 July 2023 - 3.25p) 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.
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.
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.
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.
As at As at
31 January 31 July 2024
2025 (audited)
£'000 £'000
Borrowings (at book value) 15,325 -
Less: cash and cash equivalents (3,759) (4,205)
Less: sales for subsequent settlement (202) -
Add: purchases for subsequent settlement 282 273
Adjusted borrowings (a) 11,646 (3,932)
Shareholders' funds (b) 613,744 601,970
Gearing: (a) as a percentage of (b) 1.9% (1%)
Gross gearing is the Company's borrowings expressed as a percentage of
shareholders' funds.
As at As at
31 January 31 July 2024
2025 (audited)
£'000 £'000
Borrowings (at book value) (a) 15,325 -
Shareholders' funds (b) 613,744 580,355
Gross gearing: (a) as a percentage of (b) 2.5% -
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.
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.
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.
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.
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 Sub-continent. At 31 January 2025 the Company had total assets of
£613.7 million (before deduction of loans of nil).
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 listed UK 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 (including
Chinese 'A' shares) 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.
12 March 2025
For further information please contact:
Anzelm Cydzik, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Director, Four Communications
Tel: 0203 920 0555 or 07872 495396
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