REG - Polar Cap Glb Health PCGH ZDP PLC - Half-year Report
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RNS Number : 6789J Polar Capital Global Health Tst PLC 22 May 2025
POLAR CAPITAL GLOBAL HEALTHCARE TRUST PLC
(the "Company")
Unaudited Results Announcement for the Six Months to 31 March 2025
LEI: 549300YV7J2TWLE7PV84 22 May 2025
FINANCIAL HIGHLIGHTS
Performance For the six For the year to
months to 30 September 2024
31 March 2025
Net asset value per Ordinary share (total return) (note 1)* -10.27% 14.95%
Share price total return* -11.69% 18.65%
Benchmark index -3.29% 9.88%
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 72.84% 92.62%
2)*
Benchmark index total return since restructuring 76.41% 82.42%
Expenses (note 3)*
Ongoing charge 0.87% 0.88%
Financials (Unaudited)
As at (Audited)
31 March 2025 As at Change
30 September 2024
Total net assets £428,548,000 £479,073,000 -10.55%
Net asset value per Ordinary share * 353.38p 395.05p -10.55%
Price per Ordinary share 331.00p 376.00p -11.97%
Discount per Ordinary share* 6.33% 4.82%
Net cash* -1.64% -0.91%
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 -
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 28 February 2025 1.20p 7 February 2025 6 February 2025
ended 30 September 2024:
12 December 2024
Dividends for the current financial year ending 30 September 2025, if
declared, will be paid in August 2025 and February 2026.
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 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. The ongoing charges figure as at 31 March 2025
is for the six month period from 30 September 2024 and is annualised
(excluding the performance fee) for comparison with the full year's
calculation as at 30 September 2024.
*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 2025.
PERFORMANCE AND OUTLOOK
Following a period of cumulative outperformance since the Company's
restructuring in 2017, the Company's NAV underperformed its benchmark,
declining -10.3%~ versus -3.3% for the benchmark (MSCI ACWI Healthcare Index,
on a total return basis with dividends reinvested), both figures in sterling
terms. It has been a particularly challenging time for the healthcare sector,
as well as general financial markets, as a result of the major uncertainty and
volatility generated by the Trump Administration.
The announcement of the intention to nominate Robert F Kennedy Junior (RFK) as
Secretary for the Department of Health and Human Services was a shock for the
sector given RFK's publicly stated views on topics such as vaccines and
anti-obesity drugs. Whilst there was some recovery in the latter part of the
period under review, the introduction of US Tariffs and other macro-economic
factors caused even more uncertainty and volatility to financial markets, as
investors raised cash or looked for alternative assets to act as a
'safe-haven'.
While we await the longer-term impact of Trump's administration, the Board
remains optimistic about the outlook for the healthcare sector. It is a
diverse sector, spread across broad geographies with strong demand-led
characteristics. Companies continue to invest and innovate, which will
hopefully generate sustainable, long-term growth. The Managers are well placed
to identify those companies with strong fundamentals which we believe should
deliver attractive returns for our shareholders.
Further details are provided in the Investment Manager's report below.
DISCOUNT
Discounts~ for Investment Companies tended to be under pressure towards the
latter part of the period under review due to the wider market turmoil. The
Company's discount widened, ending the period at 6.3%, from 4.8% as at 30
September 2024.
~see APM below.
THE BOARD
Full biographical details of all Directors are available on the Company's
website and are provided in the Annual Report. As previously reported, Andrew
Fleming stepped down from the Board on 21 October 2024. There were no other
changes to the membership of the Board in the six months ended 31 March 2025.
RECRUITMENT
During the period under review, the Board considered its succession plans
ahead of the recommended 9-year tenure period for each Director. The first of
the current Board to reach this tenure period will be Neal Ransome, Chair of
the Audit Committee. In order to effect an orderly handover process, in
particular of the financial statements, the Board opted to appoint a new
non-executive Director (NED) as Audit Chair Elect. The Company engaged Odgers
Bernstein to assist with the recruitment search and identify suitably
qualified external candidates. Following this process, and consideration of
some excellent candidates, the Board announced on 6 May 2025 the appointment
of Caroline Gulliver as NED and Audit Chair Elect with effect from 15 May
2025.
Further to this appointment, the Board is considering the appointment of an
additional NED which will increase the size of the Board to five members
temporarily ahead of Neal's retirement.
More information will be provided in the Company's Annual Report and Financial
Statements following the conclusion of the recruitment process.
LIFE OF THE COMPANY
As noted in the Company's Annual Report and Financial Statements for the year
ended 30 September 2024, the Board has started considering the future of the
Company in light of its fixed-life and has commenced work with its advisors to
potentially bring forward proposals for a corporate reorganisation in the
second half of 2025. This would be ahead of the requirement to propose
liquidation at the first AGM to be held after 1 March 2025 which would
ordinarily take place in early 2026.
The Board will consider all options and following the conclusion of this
review, and should feedback indicate positive appetite and support for the
continuance of the Company, alternative resolutions may be put to shareholders
ahead of the 2026 AGM, removing the requirement to put forward a liquidation
resolution. Further details on any alternative proposals will be communicated
to shareholders once available. In the absence of any alternative resolution
being put to shareholders in advance of the 2026 AGM, then a resolution will
be put to shareholders at the AGM to liquidate the Company.
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 35
to 37 of the Annual Report for the year ended 30 September 2024. 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. However, as noted above,
the board is conscious that there is currently enhanced economic and market
volatility caused, in part, by some of the actions of the Trump
administration, in particular the changes to the tariff regime.
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 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 have not identified conditions or events that call into question the
Company's ability to continue to be a going concern other than the liquidation
vote.
As mentioned above, in the absence of any prior alternative proposals, the
Articles of Association of the Company require the Directors to put forward at
the first Annual General Meeting to be held after 1 March 2025 a resolution to
place the Company into members' voluntary liquidation. Therefore, it is
relevant to consider this as part of the going concern assessment. Should a
liquidation resolution be proposed to the AGM and a single vote be cast in
favour, the resolution will pass, and the Company would be placed into
liquidation. Therefore, it has been concluded that a material uncertainty
exists in relation to going concern surrounding the liquidation vote which may
cast significant doubt about the Company's ability to continue as a going
concern. However, subject to consultation with shareholders and advisors, the
Directors intend to review alternative reconstruction proposals during the
course of 2025. On the assumption that these deliberations result in
alternative resolutions being put to and approved by shareholders, a
liquidation resolution would not be required.
As such, the Directors are satisfied that it is appropriate to continue to
adopt the going concern basis.
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 2025. 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 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 2025; 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 2025 has
not been audited or reviewed by the Auditors. The half year financial report
was approved by the Board on 21 May 2025.
On behalf of the Board
Lisa Arnold
Chair
INVESTMENT MANAGER'S REVIEW
Executive summary
Over the six-month period to the end of March 2025, the Company's net asset
value (NAV) underperformed its benchmark, returning -10.3% compared to -3.3%
for its benchmark, the MSCI All Country World Daily Net Total Return Health
Care Index (both figures in sterling terms). Key drivers of the
under-performance were too much capital allocated to small and
mid-capitalisation stocks coupled with sub-par stock selection in
biotechnology, healthcare facilities and pharmaceuticals.
It was a challenging start to the financial year, in absolute and relative
terms, with global equity markets appearing to reflect the view that the
global economy is showing signs of weakness against a backdrop of slower
growth and lingering inflation. With regards the healthcare sector, the
mega-capitalisation (mega-cap; >$100bn) and large-cap ($10-100bn) stocks
experienced modest declines, while mid-cap stocks ($5-10bn) and small-cap
(<$5bn) stocks struggled. In terms of subsectors, healthcare
distributors, services and equipment fared reasonably well as they are seen as
somewhat sheltered from macro challenges such as tariffs, potential disruption
driven by the Trump administration to the healthcare ecosystem, and China. By
contrast, life sciences tools and services, facilities and managed care
lagged.
The near-term uncertainty and volatility being generated by the Trump
administration is unsettling for investors, with fears rising of a repeat of
the 2022 backdrop of a stagflationary macroeconomic environment. If this does
occur, it would be supportive for defensive sectors with high gross and
operating margins, such as large-cap healthcare companies. Looking further
out, the industry will continue to invest in research and development
(R&D), to hopefully generate sustainable, long-term growth, growth that
appears to be underappreciated at current, depressed valuations.
Performance: 30 September 2024 to 31 March 2025
Trading conditions were difficult in the first half of the financial year, not
only for the healthcare sector, but for the broader equity markets which
experienced negative returns. The weakness was particularly acute towards the
smaller end of the market-cap spectrum, as evidenced by the Russell 2000 Index
underperforming the S&P 500 Index by over 7%. After a relatively muted
performance in October, equities staged a narrow rally from November to
December 2024 spurred by Donald Trump securing a second mandate as president
of the US: Trump's agenda was viewed as pro-growth thanks to his commitment to
cut taxes, reduce deficit spending, roll out extensive deregulation measures
and impose tariffs on imports to support US businesses. Though healthcare was
not seen as a key topic for the Republicans during this election campaign
cycle, the sector came under pressure in the last two months of the calendar
year after Trump nominated Robert F Kennedy Jr (RFK) as Secretary of the
Department of Health and Human Services (HHS). This nomination introduced a
greater level of uncertainty for healthcare investors given some of RFK's
public views on issues such as vaccines and anti-obesity drugs. However,
healthcare recovered some of its underperformance when the general market
rally came to a halt early in the new year.
The mood of investors subsequently soured after the new US administration
announced its intention to impose broad-based tariffs on most of its trading
partners, a move which many expect could lead to prices rising for consumers.
This announcement came as GDP (Gross Domestic Product) growth looked to be
decelerating, and consumer sentiment and actual spending weakening. It is not
surprising that investors turned defensive, preferring safe havens or less
economically exposed areas of the equity market. This rotation away from
riskier assets benefitted healthcare, which performed better than the broader
market in January to March 2025.
Market capitalisation at 31 March 2025 30 September 2024
Mega cap (>US$100bn) 38.6% 37.5%
Large cap (US$10bn-US$100bn) 35.8% 38.7%
Medium cap (US$5bn-US$10bn) 12.2% 15.3%
Small cap (US$100bn) 38.6% 37.5%
Large Cap (US$10bn -US$100bn) 35.8% 38.7%
Medium Cap (US$5bn - US$10bn) 12.2% 15.3%
Small Cap (Recent news on Polar Capital Global Healthcare Trust
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AnnouncementREG - Polar Cap Glb Health PCGH ZDP PLC - Half-year Report
AnnouncementREG - Polar Cap Glb Health PCGH ZDP PLC - Net Asset Value(s)
AnnouncementREG - Polar Cap Glb Health PCGH ZDP PLC - Net Asset Value(s)
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