REG - Polar Cap Glb Health PCGH ZDP PLC - Half-year Report
16/05/2024 07:00
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RNS Number : 6159O Polar Capital Global Health Tst PLC 16 May 2024
POLAR CAPITAL GLOBAL HEALTHCARE TRUST PLC
(the "Company")
Unaudited Results Announcement for the Six Months to 31 March 2024
LEI: 549300YV7J2TWLE7PV84 16 May 2024
FINANCIAL HIGHLIGHTS
Performance For the six months to For the year to
31 March 2024 30 September 2023
Net asset value per Ordinary share (total return) (note 1)* 16.55% 4.21%
Benchmark index 9.56% 1.19%
MSCI ACWI/Healthcare Index (total return in sterling with dividends
reinvested)
Since restructuring on 20 June 2017
Net asset value per Ordinary share (total return) since restructuring (note 95.30% 67.56%
2)*
Benchmark index total return since restructuring 81.88% 66.01%
Expenses (note 3)*
Ongoing charge 0.88% 0.87%
Ongoing charges including performance fee 1.05% 0.87%
Financials (Unaudited) (Audited)
As at As at
31 March 2024 30 September 2023 Change
Total net assets (Group and Company) £487,286,000 £419,182,000 16.2%
Net asset value per Ordinary share 401.82p 345.66p 16.2%
Net asset value per ZDP share 122.20p 120.41p 1.5%
Price per Ordinary share 375.00p 319.00p 17.6%
Discount per Ordinary share 6.7% 7.7%
Price per ZDP share 120.00p 116.00p 3.4%
Net gearing 8.42% 9.37%
Ordinary shares in issue (excluding those held in treasury) 121,270,000 121,270,000 -
Ordinary shares held in treasury 2,879,256 2,879,256 -
ZDP shares in issue 32,128,437 32,128,437 -
Dividends paid and declared in the period: Pay Date Amount per Ordinary share Record Date Ex-Dividend Declared
Date date
The Company has paid the following dividend relating to the financial year 29 February 2024 1.20p 2 February 2024 1 February 2024
ended 30 September 2023:
13 December 2023
Dividends for the current financial year ending 30 September 2024, if
declared, will be paid in August 2024 and February 2025.
All data sourced from Polar Capital LLP/HSBC.
Note 1 NAV total return is calculated as the change in NAV from the start of the
period, assuming that dividends paid to shareholders are reinvested on the
payment date in ordinary shares at their net asset
value.
Note 2 The Company's portfolio was restructured on 20 June 2017. The total return NAV
performance since restructuring is calculated by reinvesting the dividends in
the assets of the Group and Company from the relevant payment
date.
Note 3 Ongoing charges represent the total expenses of the Company, excluding finance
costs, transaction costs, tax and non-recurring expenses expressed as a
percentage of the average daily net asset value, in accordance with AIC
guidance issued in July 2022. Where a performance fee is paid or is payable, a
second ongoing charge is provided, calculated on the same basis as the above
but incorporating the amount of performance fee due or paid. The ongoing
charges figure as at 31 March 2024 is for the six month period from 30
September 2023 and is annualised (excluding the performance fee) for
comparison with the full year's calculation as at 30 September 2023.
*See Alternative Performance Measures below.
For further information please contact: Tracey Lago FCG Tel: 020 7227 2700
Company Secretary
Polar Capital Global Healthcare Trust Plc
INTERIM MANAGEMENT REPORT
CHAIR'S STATEMENT
On behalf of the Board, I am pleased to provide to you the Company's Half Year
Report for the six-months to 31 March 2024.
PERFORMANCE AND OUTLOOK
I am very pleased to be reporting strong performance during the six months to
31 March 2024. The Company's NAV returned 16.6%, outperforming its healthcare
benchmark (MSCI ACWI/Healthcare Index) by 7.0%. This strong result, against a
challenging market backdrop and geopolitical outlook, was driven by strong
stock selection across the entire market capitalisation spectrum, positive
stock selection across most geographies and a combination of good subsector
positioning and subsector stock selection. The discount also narrowed, ending
the period under review at 6.7%, from 7.7% as at 30 September 2023.
The Board remains optimistic about the outlook of the healthcare sector
particularly as the Manager's key investment themes, specifically utilisation,
continue to gather momentum with strong performance seen in subsectors such as
healthcare facilities, equipment and supplies. Together with the Manager's
views on the near-term opportunities provided by innovation, emerging markets
and increased utilisation of Artificial Intelligence, we believe that the
sector remains very well placed to deliver attractive returns and growth
opportunities for our shareholders in the coming months and years ahead.
Further details are provided in the Investment Manager's report below.
THE BOARD
There have been no changes to the membership of the Board in the six months to
31 March 2024. The Directors' biographical details are available on the
Company's website and are provided in the Annual Report.
SUBSIDIARY UNDERTAKING
As noted in the Company's Annual Report and Accounts for the year ended 30
September 2023, the Company is parent to a wholly owned subsidiary, PCGH ZDP
Plc, which was created as part of the Company's restructure in 2017 for the
purpose of providing a loan to the parent in the form of structural gearing.
The subsidiary has a fixed life whereby the loan will be repaid and the ZDP
shares will be redeemed in June 2024 at which time the entity will be
liquidated. The Company remains in a strong position to repay the outstanding
loan amount to ZDP Shareholders on the scheduled repayment date in June 2024
and has no current intention of refinancing the loan.
Further information on the redemption timeline and process will be
communicated to shareholders in due course.
PRINCIPAL RISKS AND UNCERTAINTIES
A detailed explanation of the Company's principal risks and uncertainties, and
how they are managed through mitigation and controls, can be found on pages 36
to 38 of the Annual Report for the year ended 30 September 2023. The principal
risks and uncertainties are categorised into four main areas: Portfolio
Management, Operational Risk, Regulatory Risk and Economic/Market Risk. The
Directors consider that, overall, the principal risks and uncertainties faced
by the Company for the remaining six months of the financial year have not
changed from those outlined within the Annual Report.
Further detail on the Company's performance and portfolio can be found in the
Investment Manager's Report.
GOING CONCERN
As detailed in the notes to the financial statements, the Board continually
monitors the financial position of the Group and Company and has undertaken an
assessment in determining the appropriateness of preparing the Financial
Statements on a going concern basis. Having carried out this assessment, the
Directors are satisfied that it is appropriate to continue to adopt the going
concern basis in preparing the financial results of the Group and Company. In
reaching this conclusion, the Board also considered the Company's performance
and its assessment of any material uncertainties and events that might cast
significant doubt upon the Group and Company's ability to continue as a going
concern.
RELATED PARTY TRANSACTIONS
In accordance with DTR 4.2.8R, there have been no new related party
transactions during the six-month period to 31 March 2024. There have been no
changes in any related party transaction described in the last Annual Report
that could have a material effect on the financial position or performance of
the Group or Company in the first six months of the current financial year or
to the date of this report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors of Polar Capital Global Healthcare Trust plc confirm to the best
of their knowledge that:
· The condensed set of financial statements has been prepared in
accordance with UK-adopted International Accounting Standard 34 and gives a
true and fair view of the assets, liabilities, financial position and profit
or loss of the Company as at 31 March 2024; and
· The Interim Management Report includes a fair review of the
information required by the Disclosure Guidance and Transparency Rules 4.2.7R
and 4.2.8R.
The half year financial report for the six-month period to 31 March 2024 has
not been audited or reviewed by the Auditors. The half year financial report
was approved by the Board on 15 May 2024.
On behalf of the Board
Lisa Arnold
Chair
INVESTMENT MANAGER'S REVIEW
Executive summary
Over the six-month period to the end of March 2024, the Company continued to
perform well with the Company's NAV materially outperforming its benchmark,
returning 16.6% versus 9.6% for the benchmark (MSCI ACWI/Healthcare Index
(total return in sterling with dividends reinvested), both figures in sterling
terms, driven by strong stock selection across the entire market
capitalisation range.
A strong start to the financial year, both in absolute and relative terms,
global equity markets really sparked into life in late 2023, driven by a raft
of positive news regarding the US economy. After a period of very strong
economic growth, the pace started to slow which eased fears of upward
inflationary pressures and the need to tighten financial conditions. With
regards to the healthcare sector, the mega-capitalisation (>$100bn) and
large-capitalisation ($10bn-$100bn) stocks were the best performers while
small-capitalisation (<$5bn) stocks continued to struggle. Encouragingly,
one of the key themes that was a focus in last year's half-yearly report,
namely increased levels of utilisation, became very apparent as evidenced by
the strong performances of the healthcare facilities, healthcare equipment and
healthcare supplies subsectors. In keeping with that theme, healthcare
insurance companies struggled with rising medical costs due to increased
procedure volumes putting pressure on near-term margins and earnings.
Reflecting on the period under review, as well as strong stock selection
across the entire market-capitalisation range, there were positive
contributions across the majority of geographies with the exception of Japan.
With regards to subsectors, both allocation and stock selection were positive,
with biotechnology the standout contributor driven entirely by strong stock
selection.
With conviction in the industry's key growth drivers increasing, especially
with regards to innovation and demand, we remain optimistic that the
healthcare sector will deliver attractive revenue and earnings growth and
generate outperformance in the coming months and years.
Performance - 30 September 2023 to 31 March 2024
The performance over the period was strong but the sector was volatile,
particularly towards the smaller end of the market capitalisation spectrum.
October 2023 witnessed the end of a very difficult period for markets and
particularly for small/mid-capitalisation healthcare stocks that suffered as
financial conditions started to tighten in July 2023. After a period of
economic growth surprising to the upside in the US, leading economic
indicators started to point towards slowing growth and the potential for
interest rate cuts. That backdrop sparked a reversal in markets, with a
significant rally in equities including healthcare, and an especially robust
response from small/mid-capitalisation stocks - a rally that continued through
to the end of March 2024. Despite the move higher, small and
mid-capitalisation stocks underperformed their larger counterparts, causing
the allocation effect in regard to performance attribution to be negative.
However, strong stock-picking, particularly in the small and
mid-capitalisation stocks, more than offset this weak allocation effect to
generate outperformance over the period.
Market capitalisation at 31 March 2024 30 September 2023
Mega Cap (>US$100bn) 37.3% 34.5%
Large (US$10bn - US$100bn) 40.6% 46.0%
Medium(US$5bn- US$10bn) 23.8% 14.5%
Small (US$100bn) 37.3% 34.5%
Large Cap (US$10bn -US$100bn) 40.6% 46.0%
Medium Cap (US$5bn - US$10bn) 23.8% 14.5%
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