REG - Tufton Assets Ltd. Tufton Assets - SHPP - Interim Results for period ended 31 December 2024
18/03/2025 07:00
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RNS Number : 9972A Tufton Assets Limited 18 March 2025
Tufton Assets Limited
("Tufton Assets" or the "Company")
Interim Results for the six month period ended 31 December 2024
Tufton Assets announces its interim results for the six month period ended 31
December 2024. A copy of the Interim Report and Unaudited Financial Statements
will shortly be available on the Company's website in the Investor Relations
section at www.tuftonassets.com.
For further information, please contact:
Tufton Investment Management Limited +44 (0) 20 7518 6700
("Investment Manager" or "Tufton")
Andrew Hampson
Nicolas Tirogalas
Singer Capital Markets +44 (0) 20 7496 3000
James Maxwell, Alex Bond, Jalini Kalaravy (Corporate Finance)
Alan Geeves, James Waterlow, Sam Greatrex (Sales)
Hudnall Capital LLP +44 (0) 20 7520 9085
Andrew Cade
Highlights
For the six months period ended 31 December 2024:
· NAV was US$428.9m or US$1.593 per share, a 9.7% increase year on year (31
Dec 2023: US$427.1m or US$1.452 per share).
· NAV Total Return Per Share 6% (2H23: 9.6%).
· Dividends paid during the period of US$14.0m (2H23: US$12.6m)
· Average Charter Length of 1.4 years (31 Dec 2023: 1.7 years).
· The Company returned US$31.5m to shareholders in August via a Compulsory
Capital Redemption
· The Company bought back 1,500,000 shares at an average price of US$1.20
per share.
Portfolio by vessel type % NAV (number of vessels)
Chairman's Statement
Introduction
On behalf of The Board of Directors (the "Board"), I am pleased to present the
Company's Financial Report and Financial Statements for the six month
financial period ended 31 December 2024.
The Company's name was changed to Tufton Assets Limited on 1 November 2024.
At the end of the financial period the Company's portfolio consisted of 20
vessels (31 December 2023: 22 vessels), details of which are set out in the
Investment Manager's Report. The two divestments completed during 2024 were
completed at a premium to their most recent individually reported NAVs.
Strong Performance
At 31 December 2024, the Company's NAV was US$428.9m, being US$1.593 per share
(2023: US$427.1m being US$1.452 per share). The Company declared a profit of
US$25.2m, with the US$ NAV Total Return Per Share over the financial period
being 6% (2H23: 9.6%).
The NAV total return over the financial period was primarily driven by
operating performance. The unwind of portfolio negative charter value during
the period outweighed the fall in charter-free value.
The Company has raised its annual divided five times since inception to
US$0.10 per share and is forecast to have Dividend Cover of 1.4x over the next
18 months (through the end of 2Q26). At 31 December 2024, the Average Charter
Length was 1.4 years.
Share Price and Discount Management
During the financial period, the Company's share price has marginally declined
from US$1.21 per share as at the close of business 30 June 2024 to US$1.20 per
share as at the close of business 31 December 2024.
Although the Share price has remained largely flat over the financial period
we did see it appreciate ahead of the payment of the compulsory capital return
before returning to its prior levels at the end of the period. On average, the
Company's shares traded at a 19% discount to NAV over the FY.
During the period, the Company (in accordance with the authority granted to it
by shareholders) repurchased 1,500,000 (FY 2024: 11,386,000) shares at a cost
of US$1,803,606 (FY 2024: US$11,573,679). Refer to Note 5 for more details. At
the end of the period, there were 19,046,000 (FY 2024: 17,546,000) shares held
in treasury.
Compulsory Capital Redemption
The Company returned US$31.5m to investors in August 2024 through compulsory
redemption of 20,326,211 ordinary shares at a price of US$1.550 per Share
(being the prevailing NAV at 30 June 2024).
Continuation Vote
The Annual General Meeting ("AGM") of the Company was held on 24 October 2024.
Shareholders approved the continuation of the Company with 190,871,147 votes
(96.5% of shares voted) in favour and 6,892,691 votes against. The Directors
will propose a similar resolution to Shareholders at the 2027 AGM.
The favourable vote from Shareholders provides a clear direction of travel for
the Company under the guidelines of the mid-term strategy review.
Sanctions
The Company and its vessels were compliant with all international sanctions
imposed by the US, UK, EU and UN. The Company had no issues to date with any
vessels being blocked or otherwise affected by sanctions. The Investment
Manager monitors compliance through regular inspection of vessel logs,
satellite data and direct communication with the vessels. The Board and
Investment Manager are monitoring for new sanctions being put in place. Where
existing guidelines are unclear, procedures ensure that the Investment Manager
seeks legal advice.
Corporate Governance
The Company is a member of the Association of Investment Companies ("AIC") and
has therefore elected to comply with the provisions of the current AIC Code of
Corporate Governance which sets out a framework of best practice in respect of
governance of investment companies ("AIC Code"). The AIC Code has been
endorsed by the Financial Reporting Council and the Guernsey Financial
Services Commission (the "GFSC") as an alternative means for AIC members to
meet their obligations.
Where the Company's stakeholders, including shareholders and their appointed
agents, have matters they wish to raise with the Board in respect to the
Company, I would encourage them to contact us at SHIP@tuftonassets.com
(mailto:SHIP@tuftonassets.com) .
Environmental, Social, Governance ("ESG")
Our Investment Manager continues to integrate ESG factors into its investment
recommendations and asset ownership practices. The Board has reviewed and
approved the Investment Manager's 2023 Sustainability Report for the Company
which can be viewed on the Company's website (www.tuftonassets.com). The
Investment Manager will publish the Company's 2024 Sustainability report later
this year.
Outlook
Shipping is a global industry strongly influenced by geopolitics which has
come into focus recently. In January, the US government increased the scope of
sanctions to include 180+ tankers and associated commercial entities primarily
aiming to reduce Russian energy revenues. Separately, the US also blacklisted
prominent Chinese companies including China Cosco Shipping for suspected
military links. The Investment Manager notes that sanctions typically remove
capacity from legitimate commercial service - thereby tightening shipping
markets.
The introduction of higher bilateral trade tariffs represents another
wildcard. Within January, there have been several changes in proposed US
tariff schemes which have also prompted retaliatory measures. It remains
unclear whether these tariffs are being used as temporary negotiation tools or
will they remain in place representing longer-term hurdles to free trade.
Similarly, there is little clarity on the early proposal of increased US port
charges for Chinese-built vessels which is scheduled to be debated later in
March. Port charges are generally the Charterer's responsibility, and this is
likely to be the case for any increases. Further, only 4 of the Company's 20
vessels are Chinese-built.
In January, Houthi rebels signaled an intention to cease attacks on vessels
although there remains considerable uncertainty over how quickly this may
happen and normalise transit through the Suez Canal. The Houthi announcement
appears to be linked to the Gaza ceasefire deal which is itself conditional
and thereby uncertain.
Finally, prospects have been raised for peace between Ukraine and Russia
brokered by the current US administration. While such a possibility would be
widely welcomed, the Investment Manager believes the subsequent normalisation
of traditional trade routes and patterns between Europe and Russia likely
happens slowly.
2025 looks set to have several geopolitical avenues for disruptive change.
Disruption of traditional trade patterns often plays out to the benefit of
shipping in terms of effect on tonne-mile trade demand growth. Nevertheless,
the industry (like most others) also remains dependent on global GDP and trade
growth. The Board and Investment Manager continue to monitor geopolitical
developments.
The Board would like to thank investors for their support in the Continuation
Vote which is interpreted as a show of confidence in the Company and the
principles of the mid-term strategy review and capital allocation policy which
we will continue to prioritise.
………………………
Rob King
Non-executive Chairman
Board Members
The Company's Board of Directors comprises five independent non-executive
Directors. The Board's role is to manage and monitor the Company in accordance
with its objectives. The Board monitors the Company's adherence to its
investment policy, its operational and financial performance and its
underlying assets, as well as the performance of the Investment Manager and
other service providers. In addition, the Board has overall responsibility for
the review and approval of the Company's NAV calculations and financial
statements. It also maintains the Company's risk register, which it monitors
and updates on a regular basis.
The Directors of the Company who served during the period are:
Robert King
Christine Rødsæther
Paul Barnes
Stephen Le Page
Katriona Le Noury ("Trina")
All Directors also served during the year ended 30 June 2024, and their brief
biographies are available in the Annual Report as at that date.
Investment Manager's Report
Highlights of the Financial Period
During the six months ending 31 December 2024, the NAV Total Return Per Share
was 6.0% (2H23: 9.6%), meaning the NAV Total Return since inception to the end
of the financial period was 145.1%. Alternative Performance Measures ("APM"s),
applied on a consolidated basis, are utilised in this section to analyse
performance. Please see the APM definitions on pages 43-45.
The main drivers for the strong return over the period were:
· Portfolio Operating Profit was US$23.6m: Portfolio Operating Profit was
lower YoY mainly as some of our Medium Range ("MR") product tankers commenced
scheduled lower rate periods within their existing fixed-rate charters from
the beginning of 2024.
· Charter-free value of product tanker and bulkers fell by US$42.2m. Please
see Shipping Market Review section for discussion.
· Negative charter value unwound by US$43.8m due to the passage of time and
the fall in product tanker benchmark time charter rates as that market
softened.
· Return of Capital: c.10.5% of the 2Q24 NAV (US$47.3m) was returned during
the financial period including capital redemption, share buybacks and
quarterly dividends.
A total of US$47.3m was returned to shareholders during the financial period
in the form of dividends, capital redemption and share buybacks.
· The Company paid dividends of US$14.0m (US$12.6m in 2H23).
· The Company returned US$33.3m in the form of capital redemption and share
buybacks.
o The Company returned US$31.5m to shareholders in August via a
Compulsory Capital Redemption.
As per the Company's share price discount management policy described in the
IPO Prospectus and the authority given at the AGM in October 2024, the Company
repurchased 1,500,000 shares during the financial period. The Company has
purchased a total of 19,046,000 of its own shares from 4Q22 until the end of
the financial period.
Since inception, US$192.3m has been returned to Shareholders inclusive of the
4Q24 dividend paid and shares bought back shortly after the end of the
financial period compared to total equity capital of US$316.5m (gross) raised
Portfolio Operating Profit was lower than the comparative financial period
because:
· Gross Operating Profit, an indicator of the underlying profit from
operating activity, was lower YoY as Marvelous, Courteous and Mindful
commenced scheduled lower rate periods within their existing fixed-rate
charters from the beginning of 2024. Operating profit contribution from the
two chemical tankers was also slightly lower, outweighing higher operating
profits from bulkers which benefited from the Investment Manager's strategy of
increasing bulker market spot exposure. Please see next page for details.
· The number of Ship-Days was lower than 2H23 mainly due to the divestment
of Pollock and Dachshund.
· Loan interest and fees were slightly lower than the comparative financial
period primarily due to a lower capital balance after scheduled repayments.
The Consolidated Gearing Ratio at 31 December 2024 was 12.8% (31 December
2023: 12.7%).
· Portfolio capital value increased by $1.6m as the benefit from the unwind
of negative charter value (US$43.8m) outweighed the fall in charter-free value
(US$42.2m). Negative charter value unwound due to the fall in product tanker
benchmark time charter rates and the passage of time. The total negative
charter value was US$6.7m at 31 December 2024 (31 December 2023: US$42.0m).
Performance summary
Figures below are in US$m unless otherwise stated From 1 Jul 2024 to 31 Dec 2024 From 1 Jul 2023 to 31 Dec 2023
Ship-Days 3.681 4,048
Revenue 54.5 60.8
Operating Expense (26.1) (27.4)
Gross Operating Profit 28.4 33.4
Gross Operating profit / Time-weighted Capital Employed 12.9% 14.3%
Loan interest and fees (3.1) (3.6)
Gain / (loss) in capital values 1.6 7.5
Portfolio profit / (loss) 26.9 37.3
Interest income 0.7 0.2
Fund Level Fees and Expenses (2.4) (2.3)
Performance fee accrual - -
Profit / (Loss) for the period 25.2 35.2
Portfolio Operating Profit 23.6 27.7
Product tankers: The market weakened during 2H24 with spot market rates and
time charter rates falling in 3Q24 while values remained resilient. Rates
continued to weaken in 4Q24 due to the combined effects of OPEC production
cuts and lower refinery runs. Weaker crude tanker demand resulted in more
swing tonnage switching from crude to products service. In 4Q24, product
tanker charter-free values also fell. During 2H24, the benefit from the unwind
of negative charter value (US$42m) because of falling benchmark time charter
rates and the passage of time, outweighed the negative impact of falling
charter-free values (US$29m). Towards the end of the financial period and in
early 2025, product tanker time charter rates stabilised as several
geopolitical wild cards emerged including an increase in scope of US
sanctions. Please see the Shipping Market Review section for details. Though
our product tankers are on fixed-rate charters, operating profit during 2H24
was lower YoY as three vessels switched to scheduled lower rate periods within
their fixed rate charters.
Segment performance summary
Segment Performance During the Financial Period (unaudited) Product Chemical Gas Bulkers Total
Tankers
Tankers
Tanker
US$m unless otherwise stated
Gross Operating Profit 11.6 4.8 2.2 9.6 28.2
Loan interest & fees (3.1) - - - (3.1)
Gain / (loss) in charter-free values (29.0) - (0.3) (12.9) (42.2)
Gain / (loss) in charter values 42.0 1.3 - 0.5 43.8
Portfolio profit / (loss) 21.5 6.1 1.9 (2.8) 26.9
* The Company divested its last containership in 1Q23. Containership closing
adjustments of $0.2m added to Total Gross Operating Profit
Chemical tankers: The market weakened with demand growth during 2H24. The
Investment Manager reduced portfolio spot exposure by switching the Company's
chemical tankers to fixed-rate charters which commenced from November 2024.
Golding and Orson commenced up to two-plus-one year time charters to a leading
operator of chemical tankers securing a minimum of c.US$25m of EBITDA for the
Company. The time charters will have a fixed rate for two years yielding c.20%
return and a floor/ceiling rate structure for the third year.
Bulkers: Spot rates remained strong in 3Q24. Our bulkers benefited from spot
market exposure with operating profit rising to US$9.6m (US$7.0m in 2H23). The
market weakened in 4Q24 with normalisation of transit through the Panama Canal
and slowing imports into Europe and Asia. Iron ore trade between Brazil and
China weakened significantly towards the end of the year. We expect some part
of the slowdown is seasonal - ahead of Chinese New Year in January but
near-term concerns remain for bulker demand growth especially due to its
strong correlation with Chinese demand growth. Bulker charter-free value fell
by US$12.9m. The increase in charter value was only US$0.5m as bulker time
charters tend to be of shorter tenor (Average Charter Length of 0.38 years).
The Investment Manager remains relatively optimistic on the bulker market and
expects improvement in rates and values from 2Q25. Please see the Shipping
Market Review section for more market-related comments.
Segment exposure and forecast net yields
Segment Exposure and Forecast Yields* (unaudited) Product Chemical Gas Bulkers
Tankers
Tankers
Tanker
% of NAV 39.8% 9.4% 5.4% 36.6%
Forecast Net Yields* 9.2% 19.3% 17.8% 9.1%
* Based on the market values at 31 December 2024
At the end of the financial period, the Company's diversified portfolio had
high cash flow visibility from long-term charters on product tankers (39.8% of
NAV). The Company's two chemical tankers, which represent 9.4% of NAV are also
on fixed-rate charters with high yields over the firm 2-year period. The
option structure in the third year mitigates employment risk and provides high
visibility on potential cashflow in that year. At the end of the financial
period, the Forecast Net Yield of the fleet was 10.5%. As of 31 December 2024,
the Company's vessels had an average age of 12.5 years and were chartered to
eleven different counterparties.
Review of performance since inception
Since inception, the Company has delivered on its original investment
objectives including:
· Diversified portfolio into product and chemical tankers, bulkers and a
gas tanker.
· Provided investors a strong and growing dividend. Annual dividend
increased by c.21% from US$0.070 per share to US$0.085 per share through the
end of 2023. This was further increased by 17.6% to US$0.10 per share starting
1Q24.
· Net Company IRR is 14.2% , ahead of its 12% IRR target published in its
prospectus documents.
· Acquired 39 vessels with low leverage and divested 19 vessels at c.6%
above NAV in aggregate. Aggregate realised net IRR on all divestments is
c.24%.
Tufton Investment Management Holding Limited Group ("Tufton Group")
Stakeholders held ~4.6% of the issued share capital in the Company as at 31
December 2024.
The Assets
The Company's portfolio as at 31 December 2024:
SPV(+) Vessel Type and Year of Build Acquisition Date Expected end of charter period**
Anvil Handysize bulker built 2013 September 2021 April 2025
Auspicious Handysize bulker built 2015 February 2022 November 2025
Awesome Handysize bulker built 2015 January 2022 September 2025
Charming Handysize bulker built 2015 June 2022 August 2025
Cocoa Handysize product tanker October 2020 January 2026
built 2008
Courteous MR product tanker built 2016 December 2022 December 2026
Daffodil Handysize product tanker October 2020 March 2026
built 2008
Exceptional MR product tanker built 2015 April 2022 August 2025
Golding 25,600 DWT stainless steel chemical tanker built 2008 April 2021 November 2026
Idaho Ultramax bulker built 2011 July 2021 November 2025
Laurel Handysize bulker built 2011 July 2021 March 2025
Marvelous MR product tanker built 2014 July 2022 November 2025
Masterful Handysize bulker built 2015 April 2022 July 2025
Mayflower Handysize bulker built 2011 June 2021 March 2025
Mindful MR product tanker built 2016 December 2022 December 2026
Neon Mid-sized LPG carrier built 2009 July 2018 August 2025
Octane MR product tanker built 2010 December 2018 September 2025
Orson 20,000 DWT stainless steel chemical tanker built 2007 July 2021 November 2026
Rocky IV Handysize bulker built 2013 September 2021 June 2025
Sierra MR product tanker built 2010 December 2018 October 2025
Notes:
+ SPV that owns the vessel.
** Based on our assessment of the prevailing market conditions at 31 December
2023.
The market for second-hand ships is liquid with >US$40 billion worth of
annual transactions over the last three years. The charter-free and associated
charter values of the Company's standard vessels are calculated using the
online valuation platform provided by VesselsValue which utilises transaction
data as well as other market data to estimate charter-free values. The
Company's NAV is, in effect, proven by recent market transactions. Pollock and
Dachshund were divested at a 3.1% premium to the two vessels' most recent
holding NAV. Divestments to date have been in aggregate c.6% above NAV. The
Company aims to invest in fuel-efficient vessels. Marvelous, Mindful,
Courteous, Exceptional, Awesome, Auspicious, Masterful and Charming are in the
top quartile of fuel efficiency in their market segments.
As at 31 December 2024, the Company owned eleven tankers as follows:
SPV Type Employment Comments
Octane and Sierra MR Product tankers Time chartered ("TC") to an investment grade oil major -
Cocoa, Daffodil Handysize product tankers (Cocoa & Daffodil), MR product tankers TC to a major commodity trading and logistics company Marvelous, Mindful and Courteous have fixed-rate charters expected to end
later this year followed by optional periods (Charterer's options) at higher
Marvelous, Mindful and Courteous rates.
Exceptional TC to a leading tanker shipping company Exceptional has a fixed-rate charter expected to end later in 2025 followed by
an optional year (Charterer's option) at higher rate.
MR Product tanker
Orson and Golding TC to a leading chemical tanker operator The vessels commenced up to three-year time charters securing a minimum of
c.US$25m of EBITDA for the Company. The time charters will have a fixed rate
Chemical Tankers for two years yielding c.20% return and a floor/ceiling rate structure for the
third year.
Neon Operates on a bareboat charter under which the Company provides only the
vessel to the charterer, who is responsible for crewing, maintaining,
Gas Tanker insuring, and operating it.
As at 31 December 2024, the Average Charter Length of the tankers was 1.51
years.
As at 31 December 2024, the Company owned nine bulkers, as follows:
Bulkers Type Employment Comments
Anvil and Laurel Handysize Bulkers TC to an operator of bulkers After the end of its fixed-rate TC to a leading merchant and processor of
agricultural goods in October 2024, Laurel commenced a fixed-rate charter to
an operator of bulkers for 5-7 months at a slightly lower rate than
previously.
Auspicious, Mayflower and Idho Handysize Bulkers, TC to a leading owner and operator of bulkers After the end of its index-linked charter in July 2024, Auspicious commenced a
fixed-rate charter for 5-7 months to the same leading owner and operator of
Ultramax Bulker (Idaho) bulkers as previously, after the end of which, the vessel commenced an
index-linked charter to another leading owner and operator of bulkers for 9-11
months from December 2024. Mayflower's charter was extended by 5-7 months from
October 2024 at a slightly lower rate than previously. After the end of its
fixed-rate charter in December 2024, Idaho commenced an index-linked charter
for 3 months, to the same leading owner and operator of bulkers, which then
switches to a fixed rate for 7-9 months at a slightly lower rate than
previously.
Awesome, Charming and Masterful Handysize Bulkers TC to a leading merchant and processor of agricultural goods After the end of its fixed-rate charter in October 2024, Masterful's charter
was extended on an index-linked basis for 7-9 months whilst Awesome's
index-linked charter was extended by 9-12 months from September 2024 at a
slightly higher rate than previously.
Rocky IV Handysize Bulker TC to an owner and operator of bulkers After the end of its fixed-rate charter in November 2024, Rocky IV commenced
an index-linked charter for 5-7 months.
At 31 December 2024, the Average Charter Length on the Company's bulkers was
0.38 years. The Company's fleet, across all segments, had high technical
availability.
The Shipping Market
The Company aims to provide investors with an attractive level of regular and
growing income and capital returns through investing in second-hand commercial
sea-going vessels, with the portfolio diversified across the main segments of
shipping. The ClarkSea Index, a broad vessel earnings indicator from Clarksons
Research, ended 2024 at c.US$22,000/day, c.22% lower than at the end of June
2024.
The combination of limited shipyard capacity and tightening environmental
specifications continue to boost newbuild prices, supporting high second-hand
vessels. However, the rise in newbuild prices slowed over 2H24 compared to
1H24. The Clarksons Research Newbuilding ("NB") Price Index rose 1% during the
financial period compared to 5% in 1H24 and has risen c.51% since the end of
2020. Shipyard capacity is ~30% lower compared to 2011 but is now slowly
expanding (mainly in China). Slot availability remains limited in the medium
term. Shipyard orderbook forward cover (i.e. the number of years required to
deliver the orderbook at the output level of the last 12 months) was 3.71
years at the end of 2024 (End of 2023: 3.76 years). Global seaborne trade is
expected to grow by 2% in 2025, a deceleration after very strong (c.6%) growth
in 2024 driven partly by re-routing of cargoes after disruption of transit
through the Panama and Suez Canals.
Vessel transit through the Panama Canal was disrupted from late October 2023
until 4Q24. On the other hand, transit through the Suez Canal remained
significantly below long-term normal trend. Transit through the Suez Canal was
disrupted from late November 2023 as Houthi rebel attacks on vessels in the
Red Sea escalated. Disruption of canal transit causes re-routing of cargo via
alternate routes which typically take much longer and adds to shipping demand.
The normalisation of vessel transit through the Panama Canal during the
financial period was an incremental negative for shipping demand especially in
the bulker and gas shipping segments.
This section utilises data from Clarksons Research and the Tufton Real-Time
Activity Capture System ("TRACS") which analyses satellite data to track the
international shipping fleet by the major segments. TRACS uses the draught of
each vessel as a proxy for its utilisation and thereby enables us to have a
close to real-time measure of shipping demand. Other research data used in
this section is from Clarksons Research, unless specified otherwise.
Geopolitics has always had a strong influence on shipping markets, and we
expect this to be especially the case in 2025. In January, the US government
increased the scope of sanctions to include 180+ tankers and associated
commercial entities primarily aiming to reduce Russian energy revenues.
Separately, the US also blacklisted prominent Chinese companies including
China Cosco Shipping for suspected military links. The sanctions announced
will have the effect of reducing available tanker capacity which is
illustrated by a recent episode. In September 2019, the US sanctioned a tanker
subsidiary of China Cosco Shipping which controls c.3% of the global tanker
fleet. In the following three months, average tanker earnings rose >200%.
The sanctions were subsequently removed in 2020, but the episode illustrates
the potential market impact of sanctions. Lloyd's List estimated that even
after the latest increase in the scope, only c.35% of the fleet trading
Russian, Iranian and Venezuelan oil are now sanctioned by the US, UK or EU.
In the same vein, the introduction of higher bilateral trade tariffs
represents a wildcard. While tariffs add to trade costs and may impact trade
volumes (tonnes) negatively, they often incentivise cargo rerouting and
substitution trade flows which add to tonne-mile demand growth thereby
mitigating the negative effect on shipping demand. In the case of tankers,
increasing US oil and gas production could add to export volumes (tonnes) as
well as tonne-mile demand as a large proportion of exports typically end up on
long-haul trades. In January, Houthi rebels signalled an intention to cease
attacks on non-Israeli flagged vessels although there remains considerable
uncertainty over how quickly this may happen and normalise transit through the
Suez Canal. Normalisation of Suez Canal transit is expected to have a negative
impact on containership demand and to a lesser extent on product tanker
demand. The Houthi announcement is linked to the ceasefire in Gaza which
itself remains uncertain. Finally, though prospects have been raised for peace
between Ukraine and Russia brokered by the current US administration, we
expect the normalisation of traditional trade routes and patterns between
Europe and Russia is likely to take much longer.
Tankers
The product tanker market weakened during 2H24 due a combination of factors.
Voluntary OPEC production cuts decreased crude tanker demand and incentivised
swing capacity to switch from carrying crude cargoes to products, increasing
available capacity. This trend was especially apparent around the extension of
the OPEC cuts in September. Further, disappointing end market oil demand
resulted in lower refinery runs which weighed on product tanker demand.
The strong fundamentals in the product tanker segment have attracted capital
to new build investments. The product tanker orderbook rose to c.22% of fleet
at the end of the 2024. The increase in product tanker new build orders since
2022 is expected to result in higher fleet growth which will weigh on the
market in 2025/6. Much of the new orders are concentrated in the larger Long
Range ("LR") segment. The orderbook for MR tankers was c.15% of the fleet at
the end of 2024. Despite the higher expected fleet growth, we expect the
market will be supported at higher levels compared to the decade before 2020
because of the fleet age profile.
c.17% of the global product tanker fleet and c.13.5% of the global MR product
tanker fleet is >20 years old. The current MR orderbook of c.15% of fleet
(delivering over the next ~4 years) will therefore only be sufficient to
replace older peers that will be recycled after their useful life of ~25
years. Sanctions and geopolitical developments described earlier represent
potential for the upcycle to be prolonged.
The chemical tanker market also benefits from good supply-side fundamentals
with an orderbook c.15% of fleet compared to c.19% of the fleet >20 years
old. 25-30% of MR product tankers can engage in the chemicals/vegetable oil
trade. The weakness in the product tanker market during 2H24 incentivised some
swing tonnage to move to trading chemical resulting in some rate volatility.
To insulate the portfolio and also manage the spot market exposure, the
Company switched both chemical tankers in the portfolio from employment in a
pool (offering spot market exposure) to time charters with a fixed rate for
two years (yielding c. 20% return) and a floor/ceiling structure for the third
year. The charters are with a leading operator of chemical cankers and
commenced in November 2024 securing a minimum of c.US$25m of EBITDA for SHIP.
Bulkers
The bulker market weakened in 2H24 due to a combination of normalising transit
through the Panama Canal and slowing demand growth including from Chinese iron
ore imports.
The bulker orderbook rose from the very low level of c.8% of fleet in June
2023 to c.10.5% of fleet at the end of 2024 with deliveries stretching out to
2029. Despite the increase in the orderbook, the supply side for bulkers and
small bulkers (10k-69.9k dwt) in particular looks supportive with c.23% of the
total bulker fleet and c.27% of the small bulker fleet >15 years old
compared to the orderbook of c.10.5% of fleet. While the pace of fleet growth
in bulkers is likely to be manageable, variations in Chinese demand (an
important part of the bulker market) may continue to cause some volatility. 1y
time charter rates for benchmark Handysize bulkers fell to US$12,000/day at
the end of 4Q24. The Investment Manager believes the bulker market has
significant improvement potential after the seasonal slowdown around Chinese
New Year and has employed most of the bulkers in the portfolio on index-linked
charters.
The Company divested all its containerships by early 2023. After temporary
weakness during 2023, containership rates and values rose in 2024 after
disruption of transit via the Suez Canal forced vessels to re-route around the
Cape of Good Hope. The current strong market may weaken if the proposed
ceasefire by Houthi rebel has credence.
During 2H24, Clarksons NB Price Index rose 1%. Newbuilding prices have risen
c.51% since the end of 2020 but remain c.35% below their previous peak in
mid-2008 on an inflation adjusted basis. The increase in NB prices is a result
of the combination of tightening environmental regulations and limited
shipyard capacity. Towards the end of 2024, global shipyard capacity started
increasing from recent lows but remains c.30% below the 2011 peak. The
increase in global shipyard capacity is largely due to incremental expansion
in leading Chinese yards. Despite this, shipyard orderbook forward cover
remained 3.71 years which limits the pace of deliveries and therefore fleet
growth.
The Investment Manager expects higher fleet growth across the major segments
of shipping due to the increase in new build orders over the last few years.
However, the new build deliveries over the next few years are expected to only
replace the ageing global fleet in many segments. The average age of the
global fleet (>2000 GT) rose to ~17.5 years at the end of 2024 compared to
the average 25 year working life in most segments. The Investment Manager
therefore expects that the industry will offer higher yields and asset values
in coming years compared to the decade before 2020.
Shipping also benefits from ongoing supply side adjustment due to
environmental regulations from the IMO to measure and improve vessel carbon
emission intensity. The new regulations disadvantage older vessels and
incentivise lower operating speeds which results in reduced shipping capacity,
aiding the supply-side adjustment. With an average age of 12.5 years, the
Company's relatively fuel-efficient vessels should benefit
Environmental, Social and Governance Report
The Investment Manager, Tufton, emphasises the principles of Responsible
Investment in the management of the Company's assets through awareness and
integration of ESG factors into the investment process in the belief that
these factors have a positive impact on long-term financial performance.
Tufton recognises that their first duty is to act in the best financial
interests of the Company's Shareholders and to generate attractive financial
returns against acceptable levels of risk, in accordance with the objectives
of the Company. Tufton has been a signatory of the United Nations Principles
of Responsible Investment ("UN PRI") since December 2018 and have a
Responsible Investment policy statement which is available on Tufton's website
(https://www.tufton.com/responsible-investing) . In the 2024 UN PRI signatory
assessment, Tufton achieved scores higher than their peer group in all three
assessment categories. Please see the 2024 UN PRI scoring methodology
(https://www.unpri.org/reporting-assessment-methodology) for details.
The Company's Board does not have a separate ESG committee but collectively
reviews progress against the policy statement as part of the Company's annual
Sustainability Report which is also publicly available on the Company's
website. The Company's 2024 Sustainability Report will be published later this
year.
ESG highlights of the financial period include:
· The Company's operating emissions intensity, as measured by the Energy
Efficiency Operating Index ("EEOI"), improved by c.9% during 2024 primarily
because of capital in portfolio composition but also from improved vessel
utilisation and ESD retrofits.
· Tufton aims to minimise coal carriage on the Company's vessels. In June
2023, Tufton committed to limiting revenues from transportation of thermal
coal to 5% of the Company's total consolidated revenues. No thermal coal was
carried on the Company's vessels during the financial period. Revenue from
carriage of thermal coal corresponded to c.1% of 2024 consolidated revenues.
Principal Risks and Uncertainties
The Directors have reconsidered the principal risks and uncertainties
effecting the Company. The Directors consider that the principal risks and
uncertainties have not significantly changed since the publication of the
Annual Report for the year ended 30 June 2024. The risks and associated risk
management processes, including financial risks, can be found in the Annual
Report for the financial year ending 30 June 2024 at The Directors have
reconsidered the principal risks and uncertainties effecting the Company. The
Directors consider that the principal risks and uncertainties have not
significantly changed since the publication of the Annual Report for the year
ended 30 June 2024. The risks and associated risk management processes,
including financial risks, can be found in the Annual Report for the financial
year ending 30 June 2024 at http://www.tuftonassets.com/financial-statements/
(http://www.tuftonassets.com/financial-statements/) .
The risks referred to and which could have a material impact on the Company's
performance for the remainder of the current financial year relate to:
· Regulatory and legislative compliance
· Service quality of the Investment Manager and other Service Providers
· Shipping and financial markets
· Liquidity
· Damage to the Company's assets
· Cost overruns
· Commercial risks around charter payments
· Safety, health and environment
· Geopolitics
Interim Report of the Directors
The Directors present their Interim Report and the Condensed Interim Financial
Statements of the Company for the six-month period ended 31 December 2024.
The Company was registered in Guernsey on 6 February 2017 and is a registered
closed-ended investment scheme under the POI Law. The Company's Shares were
listed on the Specialist Funds Segment of the Main Market of the London Stock
Exchange on 20 December 2017 under the ticker SHIP. Post the compulsory
redemption on 14 August 2024, the Company's Shares are now listed under ticker
SHPP.
Investment Objective
The Company's investment objective is to provide investors with an attractive
level of regular and growing income and capital returns through investing in
second-hand commercial sea-going vessels. The Board monitors the Investment
Manager's activities through strategy meetings and discussions as appropriate.
The Company has established a wholly owned subsidiary that acts as a Guernsey
holding company for all its investments, LS Assets Limited ("LSA"), which is
governed by the same Directors as the Company.
On 17 January 2024 the Company announced the results of a strategy review
carried out by the Board in conjunction with the Investment Manager. This
review did not result in any change to the above Objective or Policy, but did
clarify the basis on which capital allocation decisions would be made through
to the end of the decade.
All vessels acquired, vessel-related contracts and costs will be held by SPVs
domiciled in the Isle of Man or other jurisdictions considered appropriate by
the Company's advisers. The Company conducts its business such that it
qualifies as an investment entity under IFRS 10: Consolidated Financial
Statements and as a result applies the investment entity exemption to
consolidation. The Company therefore reports its financial results on a
non-consolidated basis.
Subject to the solvency requirements of the Companies Law, the Company intends
to pay dividends on a quarterly basis. The Directors expect the dividend to
grow, in absolute terms, modestly over the long term. The Company raised its
annual dividend to US$0.10 per share starting 1Q24 (previously US$0.085 per
share).
The Company aims to achieve an IRR of 12% or above (net of expenses and fees)
on the Issue Price over the long term. The Company's profit for the period was
US$25.2m, or US$0.0916 per share.
Results and dividends
The Company's performance during the period is discussed in the Chairman's
Statement on pages 3 - 5. The results for the period are set out in the
Condensed Statement of Comprehensive Income on page 26.
Related Parties
Details of related party transactions that have taken place during the period
and of any material changes are set out in Note 13 of the Condensed Interim
Financial Statements.
Directors
The Directors of the Company who served during the period and to date are set
out on page 6.
Directors' interests
The Directors held the following interests in the share capital of the Company
either directly or beneficially:
31 December 2024 30 June 2024
Shares Shares
R King 65,000 60,000
S Le Page 46,504 41,268
P Barnes 18,651 5,000
C Rødsæther 37,906 30,000
T Le Noury 10,000 5,000
Effective 1 January 2025, T Le Noury was appointed as the chair of the audit
committee.
The annual Directors fees agreed are as disclosed below:
Payable from Payable from
1 January to 1 January to
31 December 2025 31 December 2024
£ £
R King 47,000 45,000
S Le Page 40,500 42,000
P Barnes 42,000 40,000
C Rødsæther 40,000 38,500
T Le Noury 44,500 38,500
The Directors fees for the first six months of the accounting periods are as
disclosed below:
Payable from Paid from Paid from
1 January 2025 1 July 2024 1 July 2023
to 30 June 2025 to 31 December 2024 to 30 June 2024
Director £ £ £
R King 23,500 22,500 43,500
S Le Page 20,250 21,250 40,500
P Barnes 21,000 20,000 37,750
C Rødsæther 20,250 19,250 37,000
T Le Noury 22,250 19,250 25,135
Other interests
Tufton Group related stakeholders including current & former shareholders,
employees, and non-executive directors directly or beneficially held ~4.6% of
the issued share capital as at 31 December 2024 (30 June 2024: ~4.9%). Refer
to Note 13 for details on ordinary shares held and Note 5 for rights and
obligations of the Company's shares.
Share buybacks and discount management
Subject to working capital requirements, and at the absolute discretion of the
Board, excess cash may be used to repurchase shares. The Directors may
implement share buybacks at any time before the 90-day guideline set out in
the Prospectus where they feel it is in the best interest of the Company and
all shareholders. The Board will consider repurchasing the Company's ordinary
shares in the market if they believe it to be in shareholders' interests as a
whole and as a means of correcting any imbalance between supply of and demand
for the shares.
The Company purchased 1,500,000 of its own Shares at an average price of
US$1.20 per Share during the current period. Refer to Note 5 for more details.
There were 19,046,000 Shares held in Treasury and 269,256,330 Shares
outstanding as at the end of the financial period. The Company bought back a
further 1,850,000 ordinary shares, between the end of the financial period and
31 January 2025, at an average price of US$1.175. The purchased shares will be
held in Treasury. The Company had 267,406,330 Shares outstanding as at the
date of approval of these accounts.
Change of Articles and Compulsory Redemption
A resolution was passed by the Company's shareholders at its Extraordinary
General Meeting on 11 June 2024 to enable compulsory Redemptions of the
Company's ordinary shares. On 14 August 2024 the Company compulsorily redeemed
and cancelled 20,326,211 shares at a price of US$1.550 per share, returning
US$31.5m to shareholders, paid on 28 August 2024.
The Directors shall have the right to allot and issue shares to grant rights
to subscribe for or to convert any security into shares and to make offers or
agreements to allot and issue equity securities (as defined in Article 5.1(a)
of the Articles) for cash and/or to sell Ordinary Shares held by the Company
as treasury shares as per the pre-emption rights contained in Article 5.2 of
the Articles.
Going concern
In assessing the going concern basis of accounting the Directors have,
together with discussions and analysis provided by the Investment Manager, had
regard to the guidance issued by the Financial Reporting Council. They have
considered the possible impact of recent market volatility and geopolitical
events on the current and future operations of the Company and its
investments. Cash reserves are held at the LSA and SPV levels and rolled up to
the Company as required to enable expenses to be settled as they fall due.
Shareholders approved the continuation of the Company at the 2024 AGM held on
24 October 2024.
The Directors are satisfied that, at the time of approving the Interim Report
and the Condensed Interim Financial Statements, no other material
uncertainties exist that may cast significant doubt concerning the Company's
ability to continue for the foreseeable future concluding that the Company has
adequate resources to continue in operational existence for at least twelve
months from the date of approval of the Interim Report and the Condensed
Interim Financial Statements.
For these reasons, the Directors continue to adopt the going concern basis in
preparing the Interim Report and the Condensed Interim Financial Statements.
Further Details of Continuation Vote
As outlined in the Prospectus dated 25 September 2018, the Directors presented
an ordinary resolution for the Company to continue its operations (the
"Continuation Resolution") at the 2024 AGM held on 24 October 2024.
Shareholders approved the continuation of the Company with 190,871,147 votes
in favour and 6,892,691 votes against. The Directors will propose a similar
resolution to Shareholders at the 2027 AGM and every three years thereafter.
Responsibility Statement
For the period from 1 July 2024 to 31 December 2024
The Directors are responsible for preparing the Interim Report and Condensed
Interim Financial Statements, which have not been audited or reviewed by an
independent auditor, and confirm that to the best of their knowledge:
· the Condensed Interim Financial Statements have been prepared in
accordance with International Accounting Standard (IAS) 34, Interim Financial
Reporting;
· the Interim Report includes a fair review of the information required by:
· DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the Condensed Interim Financial Statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
· DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
Approved by the Board of Directors on 17 March 2025 and signed on behalf of
the Board by:
…………………………
…………………………
Rob
King Trina
Le Noury
Non-executive
Chairman Non-executive
Director
Condensed Statement of Comprehensive Income
For the 6-month period ended 31 December 2024
Notes 31 December 2024 31 December 2023
US$ US$
Income (Unaudited) (Unaudited)
Net changes in fair value of financial assets at fair value through profit or 4 27,462,178 37,390,692
loss
Foreign exchange gain - 7,142
Total net income / (loss) 27,462,178 37,397,834
Expenditure
Administration fees (84,899) (84,097)
Audit fees (99,619) (109,041)
Corporate Broker fees (75,000) (75,000)
Depositary fees (27,749) (26,245)
Directors' fees 15 (132,087) (102,476)
Directors' expenses (8,452) (8,079)
Foreign exchange loss (6,217) -
Insurance fee (18,138) (15,463)
Investment management fee 11 (1,766,844) (1,707,055)
Legal fees (8,105) -
Professional fees (97,212) (57,214)
Sundry expenses (27,057) (48,069)
Total (expenses) / credit (2,351,379) (2,232,739)
Operating profit / (loss) 25,110,799 35,165,095
Finance income 124,184 2,208
Profit / (loss) and comprehensive income for the period 25,234,983 35,167,303
IFRS Earnings per ordinary share (cents) 6 9.16 11.90
There were no potentially dilutive instruments in issue at 31 December 2024 or
31 December 2023.
All activities are derived from continuing operations.
There is no other comprehensive income or expense apart from those disclosed
above and consequently a Statement of Other Comprehensive Income has not been
prepared. The accompanying notes are an integral part of these condensed
interim financial statements.
Condensed Statement of Financial Position
At 31 December 2024
Notes 31 December 2024 30 June
US$ 2024
US$
Non-current assets (Unaudited) (Audited)
Financial assets designated at fair value 4 439,113,021 444,977,383
through profit or loss
Total non-current assets 439,113,021 444,977,383
Current assets
Trade and other receivables 22,252 7,229,829
Cash and cash equivalents 158,513 56,007
Total current assets 180,765 7,285,836
Total assets 439,293,786 452,263,219
Current liabilities
Trade and other payables 10,412,048 1,207,547
Total current liabilities 10,412,048 1,207,547
Net assets 428,881,738 451,055,672
Equity
Ordinary share capital 5 258,277.878 291,640,823
Retained reserves 5 170,603,860 159,414,849
Total equity attributable to ordinary shareholders 428,881,738 451,055,672
Net assets per ordinary share (cents) 8 159.28 154.96
The accompanying notes are an integral part of these condensed interim
financial statements.
The financial statements were approved and authorised for issue by the Board
of Directors on
17 March 2025 and signed on its behalf by:
_______________________________
_____________________________
Rob
King Trina
Le Noury
Non-executive Chairman
Non-executive Director
Condensed Statement of Changes in Equity
For the 6-month period ended 31 December 2024
Notes Ordinary share capital US$ Retained earnings Total
US$ US$
For the six months ended
31 December 2024 (Unaudited)
291,640,823 159,414,849 451,055,672
Shareholders' equity at 1 July 2024
Profit and comprehensive income for the period - 25,234,983 25,234,983
Share buybacks 5 (1,803,606) - (1,803,606)
Compulsory redemption 5 (31,559,339) - (31,559,339)
Dividends paid 7 - (14,045,972) (14,045,972)
Shareholders' equity at 31 December 2024 258,277,878 170,603,860 428,881,738
Notes Ordinary share capital US$ Retained earnings Total
US$ US$
For the six months ended
31 December 2023 (Unaudited)
303,326,231 109,446,862 412,773,093
Shareholders' equity at 1 July 2023
Profit and comprehensive income for the period - 35,167,303 35,167,303
Share buybacks (8,315,170) - (8,315,170)
Dividends paid 7 - (12,560,730) (12,560,730)
Shareholders' equity at 31 December 2023 295,011,061 132,053,435 427,064,496
The accompanying notes are an integral part of these condensed interim
financial statements.
Condensed Statement of Cash Flows
For the 6-month period ended 31 December 2024
Notes 31 December 2024 31 December 2023
US$ US$
(Unaudited) (Unaudited)
Cash flows from operating activities
Total comprehensive income for the period 25,234,983 35,167,303
Adjustments for:
Changes in fair value on investments held at fair value through profit or loss 4 (27,462,178) (37,390,692)
Foreign exchange loss / (gain) 6,217 (7,142)
Operating cash flows before movements (2,220,978) (2,230,531)
Return of investment capital 4 33,326,540 9,217,844
Movement in trade and other receivables 7,207,577 7,859,683
Movement in trade and other payables 9,204,501 5,996,815
Net cash generated from operating activities 47,517,640 20,843,811
Cash flows from financing activities
Net amount paid for compulsory redemption 5 (31,559,339) -
Amounts paid for share buybacks 5 (1,803,606) (8,315,170)
Dividends paid 7 (14,045,972) (12,560,730)
Net cash utilised in financing activities (47,408,917) (20,875,900)
Net movement in cash and cash equivalents during the period 108,723 (32,089)
Cash and cash equivalents at the beginning of the period 56,007 47,731
Foreign exchange (loss) / gain (6,217) 7,142
Cash and cash equivalents at the end of the period 158,513 22,784
The accompanying notes are an integral part of these condensed interim
financial statements.
Notes to the Condensed Interim Financial Statements
For the 6-month period ended 31 December 2024
1. General information
The Company was incorporated with limited liability in Guernsey under the
Companies (Guernsey) Law, 2008, as amended, on 6 February 2017 with registered
number 63061, and is regulated by the GFSC as a registered closed-ended
investment company. The registered office and principal place of business of
the Company is 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL.
The Company's investment objective is to provide investors with an attractive
level of regular and growing income and capital returns through investing in
second-hand commercial sea-going vessels. The Company had 291,082,541 ordinary
shares in issue on 1 July 2024, all of which were listed on the Specialist
Funds Segment of the Main Market of the London Stock Exchange.
During the current period, the Company compulsorily redeemed 20,326,211 shares
at a price of US$1.550 per share. The Company also bought back 1,500,000
ordinary shares at a weighted average price of US$1.20 for a consideration of
US$1,803,606. Further details are noted in Note 5.
The total number of Company's shares in issue, excluding Treasury Shares, was
269,256,330 at the end of the financial period (FY 2024: 291,082,541).
2. Significant accounting policies
(a) Basis of preparation
The Condensed Interim Financial Statements have been prepared on a going
concern basis in accordance with IAS 34 Interim Financial Reporting, and
applicable Guernsey law. These Condensed Interim Financial Statements do not
comprise statutory Financial Statements within the meaning of the Companies
(Guernsey) Law, 2008, and should be read in conjunction with the Financial
Statements of the Company as of and for the year ended 30 June 2024, which
were prepared in accordance with International Financial Reporting Standards.
The statutory Financial Statements for the year ended 30 June 2024 were
approved by the Board of Directors on 25 September 2024. The opinion of the
auditors on those Financial Statements was not qualified. The accounting
policies adopted in these Condensed Interim Financial Statements are
consistent with those of the previous financial year and the corresponding
interim reporting period can be found in the Annual Report for the financial
year ending 30 June 2024, http://www.tuftonassets.com/financial-statements/,
except for the adoption of new and amended standards as set out below.
Compliance with IFRS Accounting Standards
The financial statements have been prepared on a going concern basis in
accordance with IFRS accounting standards as issued by the International
Accounting Standards Board ("IASB") and International Financial Reporting
Interpretations Committee ("IFRIC"), Listing rules and applicable Guernsey
law.
Historical cost convention
The financial statements have been prepared on a historical cost basis
modified by the revaluation of investments at fair value through profit or
loss. The principal accounting policies adopted, and which have been
consistently applied (unless otherwise indicated), are set out below.
Basis of non-consolidation
The Directors consider that the Company meets the investment entity criteria
set out in IFRS 10: Consolidated Financial Statements. As a result, the
Company applies the mandatory exemption applicable to investment entities from
producing consolidated financial statements and instead fair values its
investments in its subsidiaries in accordance with IFRS 13: Fair Value
measurement.
The criteria which define an investment entity are as follows:
· an entity that obtains funds from one or more investors for the purpose
of providing those investors with investment services; and
· an entity that commits to its investors that its business purpose is to
invest funds solely for returns from capital appreciation, investment income
or both (including having an exit strategy for investments); and
· an entity that measures and evaluates the performance of substantially
all of its investments on a fair value basis.
The Directors consider that the Company's objective of pooling investors'
funds for the purpose of generating an income stream and capital appreciation
is consistent with the definition of an investment entity, as is the reporting
of the Company's net asset value on a fair value basis.
(b) New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2024 reporting periods and have not been early adopted by the Company. These
standards, amendments or interpretations are not expected to have a material
impact on the Company in the current or future reporting periods and on
foreseeable future transactions.
(c) Standards, amendments and interpretations effective during the year
There are no standards, amendments to standards or interpretations that are
effective for annual periods beginning on 1 July 2024 that have a material
effect on the financial statements of the Company.
3. Critical accounting judgements and estimates
The preparation of financial statements requires management to make estimates
and judgements that affect the amounts reported for assets and liabilities as
at the Statement of Financial Position date and the amounts reported for
revenue and expenses during the period. The nature of the estimation means
that actual outcomes could differ from those estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the year in which the
estimates are revised and in any future years affected.
The significant judgements, estimates and assumptions which have the greatest
effect on the recognition and measurement of assets, liabilities, income and
expenses are the same as those that applied to the Annual Report and Financial
Statements for the year ended 30 June 2024.
Critical judgements in applying the Company's accounting policies - IFRS 10:
Consolidated Financial Statements
The audit committee considered the application of IFRS 10, and whether the
Company meets the definition of an investment entity.
The Company owns the investment portfolio through its investment in LSA. The
investment by LSA comprises the NAVs of the SPVs. The Company holds 100%
voting shares in LSA and has all the characteristics of an investment company.
Cash reserves are held at the LSA and SPV levels and paid up to the Company as
required to enable expenses to be settled as they fall due.
In the judgement of the Directors, the Company meets the investment criteria
set out in IFRS 10 and they therefore consider the Company to be an investment
entity in accordance with IFRS 10. As a result, as required by IFRS 10, the
Company is not consolidating its subsidiary but is instead measuring it at
fair value in accordance with IFRS 13 - Fair value measurements.
The criteria which define an investment entity are disclosed in Note 2(a).
Critical accounting estimates
The following are the key assumptions and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next Financial Year.
The principal critical accounting estimate in the Company's financial
statements is the value of its investment in LSA, which is in turn dependent
on the values of LSA's investments in the SPVs. Principal critical accounting
estimates in determining the values of the SPVs comprise the fair values of
their vessels, in turn comprised of the charter-free and attached charter
values, both of which are critical accounting estimates.
The unobservable inputs which significantly impact the fair value of the
vessels have been determined to be the charter-free valuation and market
charter rates for standard vessels (used to calculate charter values) and the
discount rate applied for specialised vessels.
The process of calculation of the charter-free and charter values of the
vessels is described in Note 2(j), Significant Accounting Policies, of the
statutory Financial Statements.
At 31 December 2024 the charter-free valuations of two vessels (30 June 2024:
two vessels) were provided through independent broker valuations rather than
VesselsValue. These broker valuations are themselves estimates derived from
the specialist knowledge of the broker, their proprietary data that considers
vessel specifications and applicable market information.
Further to the information mentioned in Note 2(j) of the statutory Financial
Statements there are specific capital adjustments considered as part of the
valuation process for standard vessels, mainly the adjustments for Ballast
Water Treatment Systems ("BWTSs") and scrubbers installed. BWTSs installed by
the Company's SPVs were considered to be an enhancement to the charter-free
value.
BWTS were initially recognised at cost and straight-line depreciated from the
commissioning date to 8 September 2024, being the date by which the IMO
mandated all vessels should have installed BWTS. Scrubbers are considered an
enhancement to the charter-free value using an estimated valuation from a
shipbroker, and straight-line depreciated over 5 years.
At 31 December 2024, one vessel was treated as a specialist vessel (30 June
2024: one vessel). The specialist vessel was valued on a DCF basis by the
Investment Manager using vessel specific information including the appropriate
discount rate, which is reviewed on a regular basis to ensure it remains
relevant to the project and market risk parameters, however the discount rate
remains a material driver to the valuation.
There were no other material areas of estimation for the Company.
4. Financial assets designated at fair value through profit or loss
(Investment)
30 June
31 December 2024 2024
US$ US$
LSA (Unaudited) (Audited)
Brought forward cost of investment 280,963,309 292,529,864
Total investment disposed of in the period / year (33,326,540) (11,566,555)
Carried forward cost of investment 247,636,769 280,963,309
Brought forward unrealised gains on fair value 164,014,074 113,458,851
Movement in unrealised gains / (loses) on fair value 27,462,178 50,555,223
Carried forward unrealised gains on fair value 191,476,252 164,014,074
Total investment at fair value 439,113,021 444,977,383
The Company owns the investment portfolio through its investment in LSA, which
comprises the NAV of the SPVs and residual assets and liabilities in LSA. The
NAVs consist of the fair value of vessel assets and the SPVs' residual net
assets and liabilities. The whole investment portfolio is designated by the
Board as a Level 3 item on the fair value hierarchy because of the lack of
observable market information in determining the fair value.
As a result, all the information above relates to the Company's Level 3 assets
only, with respect to the requirements set out in IFRS 7. The investment held
at fair value is recorded under Non-Current Assets in the Statement of
Financial Position as there is no current intention to dispose of its
investment in LSA.
The changes in the financial assets measured at fair value through profit or
loss for which the Company has used Level 3 inputs to determine fair value,
after considering dividends declared (see Note 7) are as detailed above.
The SPVs and holding companies Handy Holdco Limited and Product Holdco Limited
(which are also SPVs) are incorporated in the Isle of Man. The subsidiary
company LS Assets Limited is incorporated in Guernsey. The country of
incorporation is also their principal place of business.
Breakdown of Fair Value:
Name 31 December 2024 30 June Direct or indirect holding Principal activity Ownership at 31 December Ownership at 30 June
US$
2024
US$ 2024 2024
LS Assets Limited - - Direct Holding company 100% 100%
Anvil Limited 17,171,730 17,502,570 Indirect SPV 100% 100%
Auspicious Limited 20,146,215 20,505,411 Indirect SPV 100% 100%
Awesome Limited 19,479,803 20,060,142 Indirect SPV 100% 100%
Candy Limited(5) - - Indirect SPV 100% 100%
Charming Limited 19,899,736 20,221,500 Indirect SPV 100% 100%
Citra Limited(5) - - Indirect SPV 100% 100%
Cocoa Limited(4) - - Indirect SPV 100% 100%
Courteous Limited(4) - - Indirect SPV 100% 100%
Dachshund(1,2) Limited - - Indirect SPV 100% 100%
Daffodil Limited(4) - - Indirect SPV 100% 100%
Exceptional Limited(4) - - Indirect SPV 100% 100%
Golding Limited 22,862,273 19,055,526 Indirect SPV 100% 100%
Handy HoldCo Limited 16,745,397 36,973,101 Indirect SPV (Holding Company) 100% 100%
Idaho Limited 19,525,650 20,235,105 Indirect SPV 100% 100%
Laurel Limited 14,691,519 14,803,667 Indirect SPV 100% 100%
Lavender Limited(5) - - Indirect SPV 100% 100%
Marvelous Limited(4) - - Indirect SPV 100% 100%
Masterful Limited 19,479,661 19,630,327 Indirect SPV 100% 100%
Mayflower Limited 15,065,613 15,101,491 Indirect SPV 100% 100%
Mindful Limited(4) - - Indirect SPV 100% -
Neon Limited 26,272,805 24,405,007 Indirect SPV 100% 100%
Octane Limited 25,939,011 22,977,354 Indirect SPV 100% 100%
Orson Limited 17,929,810 15,603,911 Indirect SPV 100% 100%
Parrot Limited(5) - 29,502 Indirect SPV 100% 100%
Patience Limited(5) - 617,575 Indirect SPV 100% 100%
Pollock Limited(1,2) - - Indirect SPV 100% 100%
Product HoldCo Limited 72,419,323 56,855,114 Indirect SPV (Holding Company) 100% -
Riposte Limited(5) - 1,127,015 Indirect SPV 100% 100%
Rocky IV Limited 17,160,281 17,392,312 Indirect SPV 100% 100%
Sierra Limited 26,459,656 23,195,939 Indirect SPV 100% 100%
Vicuna Limited(5) - - Indirect SPV - 100%
Impressive Limited - - Indirect SPV 100% -
Cash and cash equivalents(3) 23,565,214 30,136,235
Residual net assets(3) 44,299,324 48,548,579
Total investment at fair value* 439,113,021 444,977,383
(*) Vessels are valued at fair value in each of the SPVs shown in the table
above and combined with the residual net liabilities of each SPV to determine
the fair value of the total investment attributable to LSA.
(1) Vessel sold.
(2) These SPVs report zero fair value in the table above because they are
owned by the intermediate holding company Handy Holdco Limited and are
included in Handy Holdco Limited's fair value.
(3) The cash and residual net liabilities are held in LSA.
(4) These SPVs report zero fair value in the table above because they are
owned by the intermediate holding company Product Holdco Limited and are
included in Product Holdco Limited's fair value.
(5) Company has been dissolved.
The movement in the fair value of the investment is recorded in the Condensed
Statement of Comprehensive Income.
5. Ordinary share Capital
Share capital
Share issuance Number of shares Gross amount (US$) Issue costs (US$) Share capital (US$)
As at 30 June 2024 291,082,541 297,761,725 (6,120,902) 291,640,823
Compulsory redemption (20,326,211) (31,505,627) (53,712) (31,559,339)
Share buybacks (1,500,000) (1,803,606) - (1,803,606)
Total in issue at 269,256,330 264,452,492 (6,174,614) 258,277,878
31 December 2024
The ordinary shares issued are of no par value and are authorised, issued and
fully paid. Ordinary shares carry the right to receive all income of the
Company attributable to ordinary shares, and to participate in any
distribution or other return of capital attributable to ordinary shares.
Ordinary shareholders have the right to receive notice of and attend any
general meetings of the Company and to vote at such meeting with one vote for
each ordinary share held.
The rights conferred upon the holders of the shares are not varied by the
creation or issue of further shares or classes of shares or by the purchase or
redemption by the Company of its own shares, or the holding of such shares in
treasury.
At the end of the period, there were 19,046,000 shares (30 June 2024:
17,546,000 shares) held in treasury. These treasury shares may be subsequently
cancelled or sold for cash.
No shares will be sold from treasury at a price less than the NAV per share at
the time of the sale unless they are first offered pro rata to existing
shareholders.
6. Earnings / (Loss) per share
31 December 2024 31 December 2023
US$ US$
(Unaudited) (Unaudited)
Total comprehensive income for the period 25,234,983 35,167,303
Weighted average number of ordinary shares 275,640,458 295,485,726
Earnings per ordinary share (cents) 9.16 11.90
Diluted Earnings per ordinary share (cents) 9.16 11.90
There were no potentially dilutive instruments in issue at 31 December 2024 or
31 December 2023.
7. Dividends
The company paid the following dividends during the period:
Quarter end Dividend per share Ex div date Net Dividend paid Record date Paid date
Dividends declared for the period ended 31 December 2024:
30 June US$0.025 25 July US$7,277,064 26 July 9 August 2024
2024 2024 2024
30 September 2024 US$0.025 26 October 2024 US$6,768,908 27 October 2024 05 November 2024
Dividends declared for the period ended 31 December 2023:
30 June US$0.02125 27 July US$6,296,601 28 July 11 August 2023
2023
2023
2023
30 September 2023 US$0.02125 26 October 2023 US$6,264,129 27 October 2023 10 November 2023
In addition, the company declared the following dividend in relation to the
profit for the period ended 31 December 2024:
Quarter end Dividend per share Ex div date Net Dividend paid Record date Paid date
31 December US$0.025 30 January US$6,731,408 31 January 14 February 2025
2024 2025 2025
Under the Companies (Guernsey) Law, 2008, the Company can distribute dividends
from capital and revenue reserves, subject to a prescribed net asset and
solvency test.
The net asset and solvency test considers whether a company is able to pay its
debts when they fall due, and whether the value of a company's assets is
greater than its liabilities. The Board confirms that the Company passed the
net asset and solvency test for each dividend paid.
8. Net assets per ordinary share
31 December 2024 30 June 2024
US$ US$
(Unaudited) (Audited)
Shareholders' equity 428,881,738 451,055,672
Number of ordinary shares 269,256,330 291,082,541
Net assets per ordinary share (cents) 159.28 154.96
9. Financial risk management
The Company's activities expose it to a variety of financial risks; market
risk (including price risk, currency risk and interest rate risk), credit risk
and liquidity risk.
The Condensed Interim Financial Statements do not include all financial risk
management information and disclosures required in the Annual Financial
Statements; they should be read in conjunction with the Company's Audited
Financial Statements as at 30 June 2024.
There have been no significant changes in the management of risk or in any
risk management policies since the last Statement of Financial Position date.
10. Financial assets and liabilities not measured at fair value
Cash and cash equivalents and trade and other receivables are liquid assets
whose carrying value represents fair value. The fair value of other current
assets and liabilities would not be significantly different from the values
presented at amortised cost.
11. Investment Management fee
The Investment Manager is entitled to receive an annual fee, calculated on a
sliding scale, as follows:
(a) 0.85% per annum of the quarter end Adjusted Net Asset Value up to US$250
million;
(b) 0.75% per annum of the quarter end Adjusted Net Asset Value in excess of
US$250 million but not exceeding US$500 million; and
(c) 0.65% per annum of the quarter end Adjusted Net Asset Value in excess of
US$500 million.
For the period ended 31 December 2024 the Company incurred US$1,766,844 (2023:
US$1,707,055) in management fees of which US$875,282 (2023: US$872,098) was
outstanding at 31 December 2024.
12. Performance fee
Whilst the total return performance of the Company remains above the hurdle
rate, the calculation methodology does not currently allow for any accrual to
be made. The Investment Manager and Board are reviewing this situation.
13. Related parties
The Investment Manager, Tufton Investment Management Limited, is a related
party due to having common key management personnel with the SPVs of the
Company. All management fee transactions with the Investment Manager are
disclosed in Note 11.
Tufton ODF Partners LP is a related party due to being the beneficiary of any
performance fee paid by the Company. All performance fee transactions are
disclosed in Note 12.
Transactions with LSA and subsidiary SPVs are not disclosed. There are no
commercial transactions between the Company and LSA other than the business of
investment into LSA, the transactions of which are shown in the main financial
statements.
The Directors of the Company and their shareholdings are stated in the Interim
Report of the Directors on page 23.
Other interest
Tufton Group related stakeholders including current and former
shareholders, employees, and non-executive directors directly or beneficially
held ~4.6% of the issued share capital as at 31 December 2024 (30 June 2024:
~4.9%).
14. Controlling party
In the opinion of the Directors, on the basis of shareholdings advised to
them, the Company has no immediate or ultimate controlling party.
15. Directors' fees
The remuneration of the Directors was US$132,087 (2023: US$102,476) for the
period which consisted solely of short-term employment benefits (refer to the
Interim Report of the Directors on page 23). At 31 December 2024, Directors'
fees of US$nil (2023: US$nil) were outstanding.
The Directors fees for the first six months of the accounting periods are as
disclosed below:
31 December 31 December
2024 2023
Director £ £
R King 22,500 21,000
S Le Page 21,250 19,250
P Barnes 20,000 17,750
C Rødsaether 19,250 17,750
T Le Noury 19,250 5,885*
(*)T Le Noury - appointed 1 November 2023
16. Events after the reporting period
On 21 January 2025, the Company declared a dividend of US$0.025 per ordinary
share for the quarter ending 31 December 2024. The dividend was paid on 14
February 2025 to holders of ordinary shares recorded on the register as at
close of business on 31 January 2025 with an ex-dividend date of 30 January
2025.
From 1 January 2025 to date the Company has purchased 1,850,000 ordinary
shares at a price of US$1.175 per share.
There has not been any other matter or circumstance occurring subsequent to
the end of the financial period that has significantly affected, or may
significantly affect, the operations of the Company or the state of affairs of
the Company in the current or future financial years.
Alternative Performance Measures ("APMs")
This Interim Report and Condensed Interim Financial Statements contain APMs,
which are financial measures not defined in IFRS Accounting Standards. These
include certain financial and operational highlights and key financials. The
definition of each of these APMs is shown below.
The Company assesses its performance using a variety of measures that are not
specifically defined under IFRS Accounting Standards and are therefore termed
APMs. The APMs that the Company uses may not be directly comparable with those
used by other companies. These APMs are used to present a clearer picture of
how the Company has performed and are all financial measures of historical
performance. The APMs are prepared on a consolidated basis.
Alternative Performance Measure Definition / Method of calculation Reason for use
Aggregate Realised Net IRR Realised IRR based on aggregated equity cash flows across all divested vessels Measures the net realised IRR on all vessel divestments
calculated at SPV level, net of fees
Average Charter Length Total forecast EBITDA from fixed-rate charters in place, divided by the To provide information about the extent to which the future revenue of the
annualised EBITDA of those charters SPVs is contractually fixed
CAGR Compound Annual Growth Rate. A business and investing specific term for the To provide a measure of annual compound growth rate over time
geometric progression ratio that provides a constant rate of return over the
time period
Company IRR The IRR of the Company calculated using all gross capital raises, dividends Measures the IRR achieved by the Company
and buyback and current Company NAV
Consolidated Gearing Ratio Loans to charter-free value on a consolidated basis To provide an indication of leverage, which is not reported in the financial
statements which are not prepared on a consolidated basis
Depreciated Replacement Cost Estimating the cost to replace the asset, considering any changes in the cost To provide a methodical basis for estimating the residual value of an asset at
of materials and labour since the asset was initially purchased or the end of a planned investment period
constructed, and subtracting the depreciation that has occurred since that
time
Dividend Cover Portfolio Operating Profit less debt amortisation, divided by dividends for To provide information about the extent to which past dividends are covered by
the period earnings
EBITDA Earnings before interest, taxes, depreciation and amortisation To provide a measure of profitability from operating activity, independent of
financing strategy
Forecast Net Yield Forecast EBITDA over the current charters minus any capex accruals for the To provide information about profitability from future operating activity
vessels in the portfolio divided by the time-weighted vessel values over the relative to current vessel values
same period
Gain / (loss) in Capital Values Fair value gains and losses (being the change in charter-free value + change Fair value of the Company's underlying investments is a key component of the
in charter value) from marking assets to market in accordance with the Company's overall investment performance
valuation policy of the Company
Gross Operating Profit Operating profit before gain / (loss) in capital values, loan interest, fees, To provide an indication of the underlying profit from operating activity,
and all other Company level expenses which is not reported in the financial statements, before interest, fees and
Company level expenses
IRR Internal Rate of Return. The internal rate of return is the interest rate at A widely used APM which allows the shareholders to compare the performance of
which the net present value of all the cash flows from a project or investment different funds
equal zero, and is a common performance indicator used in investment funds
NAV Total Return Per Share or NAV Total Return The change in NAV per share plus dividends per share paid by the Company A measure showing how the NAV per share has performed over a period of time,
during the period, divided by the initial NAV per share at inception taking into account both capital return and dividends paid to Shareholders
Portfolio Operating Profit Gross Operating Profit and interest income less loan interest and fees, To provide an indication of the underlying net profit from operating activity,
Company Level Fees and Expenses which is not reported in the financial statements
Portfolio Price / Depreciated Replacement Cost ("P/DRC") Price divided by the Depreciated Replacement Cost. Price may refer to a The Investment Manager's preferred valuation metric for investment analysis.
transaction (investment or divestment) value or fair value at a certain date P/DRC tends to revert to 100% in the long-term
Revenue Charter income, net of broker commissions and charter related costs, earned by To provide an indication of the underlying income from operating activity
SPVs which is not reported in the financial statements
Ship-Days The sum of the number of days each vessel was owned by the Company over the To provide information about the vessel operating activity measured in days
financial period
Time-Weighted Capital Employed Time-weighted capital invested in vessels A metric used to compare Gross Operating Profit across different periods
Total Return Per Share The Net Asset Value per ordinary share on any Calculation Day adjusted to: A measure showing how the investment in the Company's shares has performed
over a period of time, taking into account both capital return and dividends
(i) include the gross amount of any dividends and/or distributions paid to an paid to Shareholders
ordinary share since Admission;
(ii) not take account of any accrual made in respect of the performance fee
itself for that Calculation Period;
(iii) not take account of any accrual made in respect of any prevailing
Historic Performance Fee Amount (as adjusted pursuant to the operation of this
paragraph below);
(iv) not take account of any increase in Net Asset Value per share
attributable to the issue of ordinary shares at a premium to Net Asset Value
per share or any buyback of any ordinary shares at a discount to Net Asset
Value per ordinary share during such Calculation Period;
(v) not take account of any increase in Net Asset Value per share attributable
to any consolidation or sub-division of ordinary shares;
(vi) take into account any other reconstruction, amalgamation or adjustment
relating to the share capital of the Company (or any share, stock or security
derived therefrom or convertible there into); and
(vii) take into account the prevailing Net Asset Value of any C Shares in
issue
Corporate Information
Directors
Robert King, Chairman
Stephen Le Page
Paul Barnes
Christine Rødsæther
Trina Le Noury
Registered office
1 Royal Plaza
Royal Avenue
St Peter Port
GY1 2HL
Guernsey
Investment Manager and AIFM
Tufton Investment Management Limited ("Tufton IML")
70 Pall Mall
1(st) Floor London
SW1Y 5ES
Asset Manager
Tufton Management Limited
3(rd) Floor, St George's Court
Upper Church Street
Douglas
Isle of Man IM1 1EE
Secretary and Administrator
Apex Fund & Corporate Services (Guernsey) Limited
1 Royal Plaza
Royal Avenue
St Peter Port
GY1 2HL
Guernsey
Brokers
Hudnall Capital LLP
Adam House
7-10 Adam Street
London
WC2N 6AA
Singer Capital Markets
1 Bartholomew Lane
London
EC2N 2AX
Depositary
Apex Depositary (UK) Limited
Bastion House
140 London Wall
London
EC2Y 5DN
Guernsey Legal Advisers
Carey Olsen (Guernsey) LLP
PO Box 98, Carey House
Les Banques
St Peter Port
Guernsey
GY1 4BZ
UK Legal Advisers
Gowling WLG (UK) LLP
4 More London Riverside
London
SE1 2AU
Registrar
Computershare Investor Services (Guernsey) Limited
1(st) Floor, Tudor House
Le Bordage
St Peter Port
Guernsey
GY1 1DB
Receiving Agent
Computershare Investor Services PLC
The Pavillions
Bridgewater Road
Bristol
BS99 6AH
Independent Auditor to the Company
PricewaterhouseCoopers CI LLP
Royal Bank Place
1 Glategny Esplanade
St Peter Port
Guernsey
GY1 4ND
Principal Bankers
Barclays Bank Plc
Guernsey International Banking
PO Box 41
St Peter Port
Guernsey
GY1 3BE
Definitions
The following definitions apply throughout this document unless the context
requires otherwise:
Adjusted Net Asset Value The Net Asset Value less uninvested monies (cash and cash value equivalents)
held by the Company from time to time excluding monies arising on or from the
realisation of or a distribution from an investment
Administrator Apex Fund and Corporate Services (Guernsey) Limited)
AIC the Association of Investment Companies
AIFM Directive or AIFMD the EU Directive on Alternative Investment Fund Managers (No. 2011/61/EU)
AIF an Alternative Investment Fund
AIFM an Alternative Investment Fund Manager
AIFM Rules the AIFM Directive and all applicable rules and regulations implementing the
AIFM Directive in the UK
Articles of Incorporation or Articles the articles of incorporation of the Company, as amended from time-to-time
Asset Manager Tufton Management Limited
Auditor PricewaterhouseCoopers CI LLP
Board the Directors from time to time
Brokers Hudnall Capital LLP and Singer Capital Markets
BWTS Ballast Water Treatment System
Calculation Day The last business day of each Calculation Period
Calculation Period (a) the period starting on Admission and ending on the earlier of (i) 30 June
2024; (ii) the commencement of the winding up of the Company; and (iii) the
termination of the Manager's appointment; and
(b) if the previous Calculation Year ended on 30 June of the previous Year,
each successive period starting on 1 July and ending on the earlier of (i) 30
June three years later; (ii) the commencement of the winding up of the
Company; and (iii) the termination of the Manager's appointment.
Calculation Year 1 July to 30 June
Companies Law the Companies (Guernsey) Law, 2008 as amended
Company or Fund Tufton Assets Limited (Guernsey registered number 63061) which, when the
context so permits, shall include any intermediate holding company of the
Company and the SPVs.
Company Level Fees and Expenses the investment management fee and other professional fees and expenses at
company level
Depreciated Replacement Cost or DRC The Investment Manager's preferred valuation metric. DRC for a secondhand
vessel is the current cost of replacing the vessel with an equivalent
newbuild, depreciated to the same age
Directors or Board the Board of Directors of the Company or the Directors from time to time
Disclosure Guidance and Transparency Rules or DTRs the Disclosure Guidance and Transparency Rules made by the Financial Conduct
Authority under Section 73A of FSMA.
Discount Control Policy The policy described in the Discount Control section of the Company's
Prospectus.
Environmental, Social, and Corporate Governance (ESG) an evaluation of the Company's collective conscientiousness for social,
environmental and governance factors.
FCA the UK Financial Conduct Authority
Financial Reporting Council or FRC the UK Financial Reporting Council
FSMA the Financial Services and Markets Act 2000 and any statutory modification or
re-enactment thereof for the time being in force.
GFSC or Commission the Guernsey Financial Services Commission
High Watermark Per Share the higher of: (i) US$1.00 increased by the Hurdle; and (ii) if a Performance
Fee has previously been paid, the Total Return Per Share on the Calculation
Day for the last Calculation Period (if any) by reference to which a
Performance Fee was paid.
High Performance Fee Amount in respect of any Calculation Period, an amount equal to the Performance Fee
Pay-Out Amount for the previous Calculation Period where a Performance Fee was
payable
Historic Performance Fee Amount in respect of any Calculation Period, an amount equal to be Performance Fee
Pay-Out Amount for the previous Calculation Period where a performance fee was
payable.
IASB International Accounting Standards Board
IFRIC International Financial Reporting Interpretations Committee
IFRS International Financial Reporting Standards
IMO International Maritime Organisation
Investment Manager Tufton Investment Management Limited
IPO Initial Public Offering
Issue Price An issue price refers to the initial cost of a security when it first becomes
available for purchase by the public
Listing Rules the listing rules made by the UKLA pursuant to Part VI of FSMA
London Stock Exchange or LSE London Stock Exchange plc
LS Assets Limited or LSA the Guernsey holding company owning the SPVs through which the Company invests
into vessels.
LSE Admission Standards the rules issued by the London Stock Exchange in relation to the admission to
trading of, and continuing requirements for, securities admitted to the SFS.
Main Market the main market for listed securities operated by the London Stock Exchange.
Market Abuse Regulation or MAR Regulation (EU) No 596/2014 of the European Parliament and of the Council of
16 April 2014 on market abuse.
Memorandum the memorandum of association of the Company.
Net Asset Value or NAV the value, as at any date, of the assets of the Company after deduction of all
liabilities of the Company and in relation to a class of shares in the
Company, the value, as at any date of the assets attributable to that class of
shares after the deduction of all liabilities attributable to that class of
shares determined in accordance with the accounting policies adopted by the
Company from time-to-time.
Performance Fee Amount 20 per cent. of the excess in Total Return Per Share and the High Watermark
Per Share multiplied by the time weighted average number of shares in issue
during the Calculation Period
Performance Fee Pay-Out Amount in respect of the relevant Calculation Period, an amount equal to "A", where:
A = (0.5 x B) + C;
B = the Performance Fee Amount; and
C = an amount equal to the High Performance Fee Amount
POI Law the Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended
Portfolio the Company's portfolio of investments from time to time
Paris Agreement a legally binding international treaty on climate
change
Prospectus the Placing and Offer for Subscription document for the Company dated 8th
December 2017.
Redemption the capital return via a compulsory redemption of ordinary shares at a
pre-determined price
Register the register of members of the Company.
Relevant Number of Shares for any Calculation Period the time weighted average number of ordinary shares
in issue during such Calculation Period.
Responsible Investment A strategy and practice to incorporate environmental, social and governance
(ESG) factors in investment decisions and active ownership.
SFS or Specialist Funds Segment the Specialist Funds Segment of the Main Market (previously known as the
Specialist Fund Market or SFM).
Segment classifications of vessels within the shipping industry including, inter alia,
Tankers, General Cargo, Containerships and Bulkers.
SOFR Secured Overnight Financing Rate.
SPV or Special Purpose Vehicle corporate entities, formed and wholly owned (directly or indirectly) by the
Company, specifically to hold one or more vessels, and including (where the
context permits) any intermediate holding company of the Company.
£ or Sterling the lawful currency of the United Kingdom.
Tufton the Investment Manager.
Tufton Group Tufton Investment Management Holding Ltd and its subsidiaries.
UK Corporate Governance Code the UK Corporate Governance Code as published by the Financial Reporting
Council from time-to-time.
UK Listing Authority the FCA acting in its capacity as the competent authority for the purposes of
Part VI of FSMA.
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland.
VesselsValue VesselsValue Limited, a third party provider of vessel valuations to the
Company and Investment Manager.
WACC the weighted average cost of capital.
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