REG - Worsley Investors Ld - Half-year Report
14/12/2023 07:15
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RNS Number : 7126W Worsley Investors Limited 14 December 2023
14 December 2023
Worsley Investors Limited
(the "Company")
Half Year Report for the six months ended 30 September 2023
The Company is pleased to announce the release its half year report and
unaudited consolidated financial statements for the six months ended 30
September 2023 (the "Half Year Report"). A copy of the Half Year Report will
be posted to shareholders and will be available to view on the Company's
website shortly at: www.worsleyinvestors.com (http://www.worsleyinvestors.com)
For further information, please contact:
Worsley Associates LLP (Investment Advisor)
Blake Nixon
Tel: +44 (0) 203 873 2288
Shore Capital (Financial Adviser and Broker)
Robert Finlay / Anita Ghanekar / Rose Ramsden
Tel: +44 (0) 20 74080 4090
Sanne Fund Services (Guernsey) Limited (Administrator and Secretary)
Chris Bougourd / Matt Falla
Tel: +44 (0) 1481 737600
LEI: 213800AF85VEZMDMF931
Performance Summary
30 September 2023 31 March 2023 % change
Net Asset Value ("NAV") per share 42.59p 43.92p -3.03%
Share price(1) 27.40p 28.00p -2.14%
Share price discount to NAV 35.33% 36.25%
Six month period Six month period
ended ended
30 September 2023
30 September 2022
Earnings per share(2) -1.03p -0.62p
Total return Six month period ended Six month period ended
30 September 2022
30 September 2023
NAV Total Return(3) -3.03% 0.83%
Share price Total Return(4)
- Worsley Investors Limited -2.14% -16.25%
- FTSE All Share Index 1.42% -8.31%
- FTSE Real Estate Investment Trust Index -5.28% -33.24%
Worsley Associates LLP ('Worsley Associates') was appointed on 31 May 2019 as
Investment Advisor (the "Investment Advisor") to Worsley Investors Limited
(the "Company"). At an EGM held on 28 June 2019, an ordinary resolution was
passed to adopt new Investment Objective and Policy. The Company's Investment
Objective and Policy are set out below.
Past performance is not a guide to future performance.
( )
(1) Mid-market share price (source: Shore Capital and Corporate Limited).
(2) Earnings per share based on the net loss for the period of £0.393 million
(30 September 2022: net profit for the period of £0.209 million) and the
weighted average number of Ordinary Shares in issue during the period of
33,740,929 (30 September 2022: 33,740,929).
(3) On a pro forma basis, which includes adjustments as necessary to take
account of the effect of capital alterations during the period. NAV Total
Return is a measure showing how the NAV per share has performed over a period
of time, taking into account both capital returns and any dividends paid to
shareholders.
(4) A measure showing how the share price
(https://www.theaic.co.uk/aic/glossary/S?item=1057) has performed over a
period of time, taking into account both capital returns and any dividends
paid to shareholders.
Source: Worsley Associates LLP and Shore Capital and Corporate Limited.
Chairman's Statement
The Half Year to 30 September 2023 was in some ways rather dull. The Company over the six months generated a negative NAV net return of 3.03%, which was broadly in the range between the wider market in UK smaller companies as represented by the FTSE Small Capitalisation Index which had a total return of 1.68% and the real estate sector which continued to struggle under rising interest rates. The FTSE Real Estate Investment Trust Index, as proxy for the latter, generated a negative return of 5.28%. Within our overall figure, the return on the capital invested in our equity portfolio was negative 3.8% and the other major component was our Curno cinema which generated a positive cashflow of €529,870 before expenses but was marked down by €300,000 or 3.9% in local currency by the independent property valuer. Associated property management and structural expenses together with an adverse foreign exchange movement over the six months gave a net positive result in pounds sterling of 0.7% for Curno. Corporate expenses were equivalent to 1.4% of opening Net Assets.
Against this backdrop, our share price also drifted sideways with the period
end discount narrowing very marginally to 35.33% from 36.35% in March.
The Investment Advisor, Worsley Associates LLP, summarises the market
background and outlook together with the developments in respect of our
principal investments succinctly in its report and there is little that I can
usefully add here.
The salient details of the Curno lease are amongst the information set out in
the Investment Advisor's Report. It appears that there have been few (if any)
transactions in Italian cinemas in recent quarters partly, no doubt, due to
the scarcity of finance and partly due to the operational time lags throughout
the cinema industry as it recovers from the Covid pandemic shutdowns. At least
in that latter regard the availability of interesting new film releases has
continued post the period end with the effect that attendance volumes are now
only very slightly below those immediately prior to Covid-19. Given the lack
of observable and comparable transactional evidence, the valuer has increased
the capitalisation rate applied to the rental stream to 13.46% which means
that the index-linked passing rental yield is now 14.29% p.a. on a good
quality tenant covenant with 9.5 years to run to the tenant break option and
16.5 years of full term unexpired. At these levels, the prospective returns
compare very favourably with expectations of long-term equity market averages
even if they are somewhat below the historical outcomes achieved by the
Worsley strategy over such time periods.
I am also pleased to note the continuing improvements to operational and
financial performance at our largest equity investment, Smiths News plc,
although the market recognition of that occurred after our reporting period
ended on 30 September and indeed (and frustratingly) its shares underperformed
during the half year.
We are at a juncture where, absent unforeseen extraneous events, it would
appear that we are very close to the peak of this interest rate cycle and in
some sectors such as the UK residential mortgage market, the cost of
medium-term funding is already beginning to fall. When rates are rising and
markets have not formed a consensus on where they will peak, it is difficult
for the equity market as a whole to make significant sustained progress and,
depending upon the moving balance between optimism and pessimism, prices can
be volatile and subject to downward moves affecting the share prices even of
well-performing companies. In the short term, the capacity for negative
surprises remains but it does seem that the consensus is building that the
peak is not far off both in level and timing and although market indices could
still be described as range-bound, they would appear to be levelling off, a
necessary precursor to a broader advance in valuations. That said, Worsley
Investments runs a concentrated portfolio of investments each of which has the
capacity either of its own volition or with encouragement to generate
significant shareholder value in absolute terms. One of the effects of such
concentration is that depending on the timing of events in relation to such
investees and conversely those in relation to the principal constituents of
such indices, performance can diverge from wider market moves from reporting
period to reporting period even when investees' underlying commercial
performance is significantly better than market averages. A prime example of
this is the post period end re-rating of Smiths News plc's share price.
Once again and on behalf of the Board, I would like to thank our Investment
Advisor, Worsley Associates LLP, for the continued steady progress they have
made in developing our portfolio and to thank you, our shareholders, for your
ongoing support.
William Scott
Chairman
13 December 2023
Investment Advisor's Report
Investment Advisor
The Investment Advisor, Worsley Associates LLP, is regulated by the FCA and is
authorised to provide investment management and advisory services.
In the period under review, the equities portfolio remained close to fully
invested, and the Investment Advisor has concentrated on its further
development and oversight of the management of the Curno cinema, investor
interest in which has been adversely affected by European lenders being more
cautious in their approach to lending decisions and substantially higher
borrowing costs.
Curno Cinema Complex
The Group's Italian multiplex cinema complex, located in Curno, on the
outskirts of Bergamo, is let in its entirety to UCI Italia S.p.A. ("UCI").
The cinema lease documentation remains as amended in June 2020.
The key rental terms of the lease, which has a final termination date of 31
December 2042, are:
Base Rent
1 January 2023 to 31 December 2023 - €1,057,094 per annum.
Base rental is indexed annually to 100% of the Italian ISTAT Consumer Index on
an upwards-only basis. In the ten months to 31 October the index has increased
0.8%.
Variable Rent
Incremental rent is payable at the rate of €1.50 per ticket sold above a
minimum threshold of 350,000 tickets per year up to 450,000 tickets per year,
rising in 50,000 ticket stages above this level up to €2.50 per extra
ticket.
Tenant Guarantee
The lease benefits from a rental guarantee of an initial €13 million,
reducing over 15 years to €4.5 million, given by a U.K. domiciled
intermediate holding company for the UCI group's European operations, United
Cinemas International Acquisitions Limited, which has latest published
shareholders' funds of £291.2 million.
Tenant break option
UCI has the right to terminate the lease on 30 June 2035.
Trading
The cinema was open throughout the half.
On the back of a film slate which including a slew of 'blockbuster' movies,
and, in particular, the Barbenheimer phenomenon, Curno ticket sales in the
half were 75% up on those for 2022 period, and are continuing their
improvement towards pre COVID-19 levels.
In October, immediately after the period end, there was somewhat of a gap in
openings, but since the beginning of November, with the release of the Italian
smash hit, C' E' Ancora Domani (There's Still Tomorrow), Italian cinema ticket
sales have been extremely strong, reaching some 92% of November 2019 levels.
The Curno cinema has continued to benefit from substantial increases in total
revenue per customer.
Rentals remained current throughout the period.
Valuation
As at 30 September 2023, the Group's independent asset valuer, Knight Frank
LLP, fair valued the Curno cinema at €7.4 million (31 March 2023: €7.7
million), and this figure has been adopted in these Financial Statements.
Since the June 2020 lease amendment, the Board's expectation has been that the
valuation of the Curno cinema would increase once the enhanced rental began to
be generated by the property from 1 March 2021 onwards. The current rental is
some 27% higher than the pre amendment level.
In response to higher European interest rates, the valuer during half chose to
increase the yield at which it capitalised the rental stream from 12.97% to
13.46%, which has had the effect of reducing the valuation by some 3.9%. This
particularly cautious approach reflects the European Central Bank having
continued to increase interest rates in efforts to curb inflation levels and
consequent expectations of further outward pressure on yields.
Given the increasingly strong Italian box office takings seen since the
beginning of April, conditions are now much more conducive to a return of
investor appetite once European banks revert to more normal levels of property
lending. The Group will retain the Curno cinema until a disposal can be
effected at a price which the board believes properly reflects its medium term
prospects.
Investment Strategy
The Investment Advisor's strategy allies the taking of holdings in British
quoted securities priced at a deep discount to their intrinsic value, as
determined by a comprehensive and robust research process. Most of these
companies will have smaller to mid-sized equity market capitalisations, which
will in general not exceed £600 million. It is intended to secure influential
positions in such British quoted securities, with the employment of activism
as necessary to drive highly favourable outcomes.
Since the publication of the Annual Report in early July, the U.K. stock
market, as measured by the FTSE All-Share Index, has been range bound between
the 3930 and 4200 levels. US monetary policy developments have become the
largest influence on the British market, eclipsing prospects for the U.K.
economy, with the conflict in Gaza also an important factor.
The US Federal Reserve at its June monetary meeting had surprised investors
with a suggestion that two further rises could be in the pipeline over the
rest of the year, triggering an abrupt 3% drop in the London stock market.
However, mid-July first the U.K. Producer Price Index ('PPI') came in well
down and then the US CPI and PPI were both well below expectations, and the
market retraced most of its fall.
The release of better than expected U.K. June CPI figures then saw the British
market steam ahead, hitting a period high at the end of July. As it had
foreshadowed in June, the US Fed at its July meeting duly raised its Federal
Funds rate to 5.25% - 5.50%, the highest level for 22 years.
August began with equity markets worldwide in retreat as Fitch downgraded the
US's issuer default rating from AAA to AA+. Strong U.K. second quarter GDP
figures, robust wage growth and sticky core CPI all signalled further
increases in U.K. base rates, and, exacerbated by rising US and Chinese bond
yields, sentiment weakened with the result that the London market hit a low on
the 21st, at which point US 10-year Treasury bond yields were at their highest
since 2007.
Over the following month, however, U.K. equities tested their high for the
period on generally positive U.K. economic news, the announcement of
substantial economic stimulation in China, a view emanating out of the US
Jackson Hole economic symposium that the US Fed would pause interest rates,
and slower inflation in the US and U.K..
From that point something of a slide ensued, on fears that there would be one
more US Fed rate rise and that rates would remain higher for longer, the
financial distress of the Chinese property giant, Evergrande, and higher bond
yields. However, early in October a modest recovery commenced on stronger US
economic data, good August U.K. GDP figures and as the US Fed commented that
higher bond yields might aid the fight against inflation, tempered somewhat by
concerns about the conflict in Gaza.
By mid-October, tensions in Gaza had gained the ascendency, exacerbated by
some hawkish signals from the US Fed and bond yields rising further. The last
of these then fed into concerns regarding the stretched level of US technology
stock valuations, with the result that British market closed on the 27 October
at its low point since our March year end and the lowest level for almost a
year.
Since then, the overall direction of the U.K stock market has been gradually
upward. This was initially on expectations, subsequently proven correct, that
the US Fed and Band of England would hold interest rates at their respective
meetings on 2 and 3 November. Despite further hawkish warnings from the US Fed
that markets should not assume rates had peaked, much lower October inflation
figures in the US and the U.K. saw bond yields fall and the British market
advance, the All-Share Index reaching 4088 on the 17th. In subsequent weeks,
the market has drifted, reflecting uncertain prospects for the U.K. economy
and mixed Chinese economic data.
The outlook for interest rates in the U.K. and US has improved since the
Annual Report, with a peak level for both of around 5.5% now foreseen, a
reduction in expectations of circa 25 bps since June.
In the Company's target universe of British smaller companies, the total
return over the six months to 30 September was 1.68%. Share prices in this
section of the market, after a sharper fall in the last week of September and
most of October than the overall market, have recovered more strongly, ending
up approximately 0.6% over the last two and a half months.
The Company's portfolio has remained quite fully invested during the half.
This includes a previously undisclosed holding, now representing some 2.3% of
the Group's Net Assets, in LMS Capital plc ('LMS'). LMS is an English
investment company whose shares are listed on the London Stock Exchange's Main
Market. It has a market capitalisation of £19.4 million and as at 30
September its net cash balance was £16.0 million. At that same date LMS owned
an historic portfolio of very predominantly US and U.K. unlisted investments,
valued by its directors at £16.65 million, net of related liabilities. In the
past two years, LMS has pursued a new investment strategy, under which it has
made one material investment, an unquoted Romanian oil and gas production
business, valued by directors at £10.1 million. The shares at 24p sell at a
very substantial discount to their stated NAV/share as at 30 September of some
52p.
The largest portfolio position remains our shareholding of in excess of 4% in
Smiths News plc, England's major distributor of newspapers and magazines. In
early November, Smiths News published its 2023 preliminary results, which were
particularly strong, with increased revenue and operating profit, albeit
boosted by the 'Royal Succession' and the 2022 World Cup. Significant
inflationary pressures were substantially mitigated by the ongoing cost
reduction programme. Average net debt for 2023 was £25m, down from £50m in
2022. The shares, after early strength, were flat in the first three months of
our reporting period, but for most of the second quarter underperformed,
ending the period down almost 13%. Post period end the shares have recovered
well, being up circa 24% from their recent low.
The holding in Amedeo Air Four Plus Limited ('AA4') is largely unchanged. The
AA4 group's income stream is underpinned by its lease of six A380 and two
B777-300ER aircraft to the airline, Emirates. Post the end of the half, AA4,
in an update to the market, noted that Emirates continued to extol the virtues
of the A380 and had recently purchased two out of service A380s for $35m each.
Notwithstanding that, subsequent to going ex the most recent quarterly
dividend the shares have weakened significantly, and at current levels not
only do not reflect the recent uplift in residual values of A380s but also the
considerable equity value inherent in the group's four A350-900 aircraft
leased to Thai Airways.
The Northamber plc shareholding was increased further in the half year, after
the shares had weakened on the company posting an increased loss for its 2023
half year, and that in Shepherd Neame Limited was also topped up. During the
half, we also added to another three holdings and two new positions were
initiated. Preliminary (less than 2% of Net Assets) holdings are held in 9
other companies.
Following a strong recovery since 30 September, the Company's portfolio as at
30 November 2023 had a total cost of £5.30 million, a combined market value
of £8.27 million, and comprised 17 stocks. The surplus on the portfolio was a
little over 56% of cost, and the annualised return on capital invested since
the new strategy was adopted remains very acceptable, at a little under 27%.
Results for the six months period
Cash revenue from Curno for the period to 30 September 2023 was €529,900
(£458,000) (30 September 2022: €474,900 (£405,000)). The increase
reflected the inflationary rental adjustment, from 1 January 2023, which
applied throughout the current half.
Property expenses, mainly local Curno property taxes, of some €113,000
(£98,000) ((30 September 2022: €86,000 (£73,000)), were incurred. The
increase in the current half was almost entirely owing to anomalous expenses
of circa €35,000 in respect of disputed assessments for Italian registration
tax, since resolved in our favour.
General and administrative expenses of £282,000 (30 September 2022:
£260,000) were above the 2022 run rate, but only slightly above expectations.
Administration expenses were flat period on period, but Group general expenses
were somewhat higher, and included circa €9,000 (£8,000) in unbudgeted
interest and penalties on the disputed Italian registration tax. In addition,
registry costs continued to be elevated. As foreshadowed in the 2023 Annual
Report, increased Net Assets led to an increase in AUM-based fees compared to
the corresponding half in 2022.
Transaction charges incurred on equity acquisitions were £2,000 (30 September
2022: £4,000), reflecting lower activity than the more usual level in the
corresponding half last year.
We continue to believe that the Group's ongoing operating costs for the full
year will be somewhat higher than the 2023 level, principally the consequence
of higher AUM-based costs. Prior to the ultimate sale of Curno there remains
little scope for significant reduction in the overall cost base.
The equities portfolio recorded a small upturn in the first quarter before
suffering a significant reduction in the second (since fully recovered),
resulting for the half as a whole in a £430,000 net investment mark-to-market
reduction (30 September 2022: £446,000 reduction). Investment income for the
half, entirely dividends, was £229,000 and net investment gains realised
added £13,000. In consequence, the total return on capital invested in the
portfolio over the half came out at minus 3.8%.
Taxation is payable on an ongoing basis on Italian income and in Luxembourg.
For the half, an Italian operating tax charge of circa £50,000 (30 September
2022: £36,000) was incurred. In addition, irrecoverable VAT in Luxembourg of
some £3,000 was paid. Following a review by the Company's auditor,
elimination of deferred taxation, previously posted in respect of lease
incentive balance, resulted in a tax credit of £75,000.
In the remainder of the year, the increased Curno rental will be offset by a
return to a more normal tax rate at our Italian subsidiary, Multiplex, and the
incurrence of higher AUM-based fees, with the expectation remaining that
operating cash flow (that is prior to allowance for equity income and net
purchases) will be modestly positive.
Financial Position
Net Assets at 30 September 2023 were £14.369 million, which compares with the
£14.819 million contained in the 31 March 2023 Annual Report. The decrease
arose from the loss in the half of £348,000, of which £260,000 (€300,000)
related to the reduction in the Euro valuation of the Curno property, further
exacerbated by a £102,000 decrease in the pounds sterling fair value of
Euro-denominated assets, principally the property.
The Group's liquidity reduced slightly in the period, reflecting net portfolio
purchases of £328,000, with £400,000 in cash held at 30 September 2023 and
no debt. However, given the ample secondary liquidity of the equity portfolio
and positive ongoing cash flows, the Group's financial position continues to
be strong.
In due course, the sale of the Curno cinema will provide considerable
additional resources for equity investment.
Euro
As at 31 September 2023, some 45% of Total Assets were denominated in Euros,
of which the Curno property was circa 44% of Total Assets, similar to the 44%
as at 31 March 2023. The pound sterling Euro cross rate moved some 1.5% during
the period from 1.137 as at 31 March 2023 to 1.154 as at 30 September 2023.
This cross rate will remain a potentially significant influence on the level
of Group Net Assets until Curno's disposal.
Outlook
After the first two months of 2023 had been buoyant, U.K. stock market prices,
whilst variable, as a result of a strong dichotomy between investor hopes for
lowered interest rates and central banks' determination to drive inflation
down to target levels, now stand at just above their opening level.
This is in line with the view expressed in the Annual Report that economic
uncertainty appeared set to continue for at least the remainder of 2023.
Given the inherent delays in the impact of tighter U.K. monetary policy, and
in particular higher borrowing costs, the prospects for U.K. company earnings
in the first half of 2024 remain subdued.
It is pleasing to note that 2023's much more normal slate of movie releases,
including most recently new Italian titles, has continued to drive greatly
improved Italian cinema attendances.
Even so, there remains a dearth of Italian medium term debt finance available,
undermining investor demand, the consequence being that retention of our Curno
cinema is the most likely scenario in the immediate future. While that is not
our preferred course, the multiplex will remain the source of substantial,
inflation protected, cash flow for the Group.
We have previously stressed that the Worsley investment strategy is relatively
insensitive to the near term economic outlook, being focussed on the medium
term prospects of individual companies.
The interim profit figures for British companies released in the period came
in broadly in line with previously diminished expectations. Against that, once
again a multitude of stocks with capitalisations below £150 million have seen
their prices drop abruptly.
In the preponderance of instances these falls are the consequence of a
substantial worsening in the outlook for the relevant sector, natural
resources being a familiar example. Nevertheless, a proportion of the prices
of well-founded companies also tend to fall prey to such sentiments and,
inevitably, some come to be gravely mispriced and as such prospective
investees.
The Worsley equity portfolio is well established and, in spite of a somewhat
gloomy prognosis for the U.K. economy, the Company remains well placed to
continue to deliver respectable returns.
Worsley Associates LLP
12 December 2023
Interim Management Report
A description of the important events which have occurred during the first six
months of the financial year and their impact on the performance of the
Company as shown in the Financial Statements is given in the Chairman's
Statement, the Investment Advisor's Report and the Notes to the Financial
Statements and are incorporated here by reference.
Statement of principal risks and uncertainties
The Board is responsible for the Company's system of internal controls and for
reviewing its effectiveness. The Board, through its Risk Committee, has
carried out a robust assessment of the principal risks and uncertainties
facing the Company, using a comprehensive risk matrix as the basis for
analysing the Company's system of internal controls while monitoring the
investment limits and restrictions set out in the Company's investment
objective and policy.
The principal risks assessed by the Board relating to the Company were
disclosed in the Annual Financial Report for the year ended 31 March 2023. The
principal risks disclosed include investment risk, operational risk,
accounting, legal and regulatory risk, financial risks and foreign exchange
risk. A detailed explanation of these can be found in the Annual Financial
Report. The Board and Investment Advisor do not consider these risks to have
materially changed during the six months ended 30 September 2023 and they are
not expected to change in the remainder of the financial year.
Going concern
The Directors, at the time of approving the Financial Statements, have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the next 12 months. The lease income generates
enough cash flows to pay on-going expenses. The Directors have considered the
cash position and performance of the current capital invested of the Group and
concluded that it is appropriate to adopt the going concern basis in the
preparation of these Financial Statements.
Going concern is assessed over the period until 12 months from the approval of
these Consolidated Financial Statements. Owing to the fact that the Group
currently has no borrowing, has a significant cash holding and that the
Company's equity investments predominantly comprise readily realisable
securities, the Board considers there to be no material uncertainty.
Interim Report is Unaudited
This Interim Report has not been audited, nor reviewed by auditors pursuant to
the Auditing Practices Board guidance on Review of Interim Financial
Information.
Responsibility Statement
We confirm to the best of our knowledge that:
· the Condensed Unaudited Interim Financial Statements have been
prepared in accordance with International Accounting Standard 34 'Interim
Financial Reporting'; as required by Disclosure Guidance & Transparency
Rule ("DTR") 4.2.4R of the UK's Financial Conduct Agency ("FCA"); and
· the Interim Management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events which have occurred during the first six months
of the financial year and their impact on the condensed set of Financial
Statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions which have taken place in the first six months of the current
financial year and which 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 which could do so.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website, and for
the preparation and dissemination of financial statements. Legislation in
Guernsey governing the preparation and dissemination of financial statement
may differ from legislation in other jurisdictions.
On behalf of the Board
W. Scott
Chairman
13 December 2023
Condensed Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2023
For the six month period to For the six month period to
30 September 2023 30 September 2022
(Unaudited) (Unaudited)
Notes £000s £000s
Gross property income 3 & 6 394 380
Property operating expenses 3 & 6 (98) (73)
Net property income 296 307
Net loss on investments at fair value through profit or loss 7 (188) (75)
Unrealised valuation loss on investment property (260) (170)
Lease incentive movement 3 64 25
General and administrative expenses 4 (282) (260)
Operating loss (370) (173)
Loss before tax (370) (173)
Income tax expense (53) (36)
Tax credit 75 -
Loss for the period (348) (209)
Other comprehensive income
Foreign exchange translation (loss)/gain (102) 320
Total items which are or may be reclassified to profit or loss (450) 111
Total comprehensive (loss)/profit for the period (450) 111
Basic and diluted loss per ordinary share (pence) 5 (1.03) (0.62)
Condensed Unaudited Consolidated Statement of Changes in Equity
For the six months ended 30 September 2023
Revenue reserve Distributable reserve Total equity
Foreign currency reserve
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
£000s £000s £000s £000s
Balance at 1 April 2023 (44,446) 47,263 12,002 14,819
Loss for the period (348) - - (348)
Other comprehensive loss - - (102) (102)
Balance at 30 September 2023 (44,794) 47,263 11,900 14,369
For the six months ended 30 September 2022
Revenue reserve Distributable reserve Total equity
Foreign currency reserve
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
£000s £000s £000s £000s
Balance at 1 April 2022 (45,477) 47,263 11,680 13,466
Loss for the period (209) - - (209)
Other comprehensive income - - 320 320
Balance at 30 September 2022 (45,686) 47,263 12,000 13,577
Condensed Unaudited Consolidated Statement of Financial Position
As at 30 September 2023
30 September 2023 31 March 2023
(Unaudited) (Audited)
Notes £000s £000s
Non-current assets
Investment property 6 5,750 6,033
Lease incentive 6 663 737
Total non-current assets 6,413 6,770
Current assets
Cash and cash equivalents 400 541
Investments held at fair value through profit or loss 7 7,750 7,839
Trade and other receivables 8 31 54
Tax receivable 23 29
Total current assets 8,204 8,463
Total assets 14,617 15,233
Non-current liabilities
Deferred tax payable - 75
Total non-current liabilities - 75
Current liabilities
Trade and other payables 9 153 178
Tax payable 95 161
Total current liabilities 248 339
Total liabilities 248 414
Total net assets 14,369 14,819
Equity
Revenue reserve (44,794) (44,446)
Distributable reserve 47,263 47,263
Foreign currency reserve 11,900 12,002
Total equity 14,369 14,819
Number of ordinary shares 33,740,929 33,740,929
Net asset value per ordinary share (pence) 11 42.59 43.92
The Financial Statements were approved by the Board of Directors and
authorised for issue on 13 December 2023. They were signed on its behalf by:
W.
Scott
Chairman
Condensed Unaudited Consolidated Statement of Cash Flows
For the sixth months ended 30 September 2023
For the six month period to For the six month period to
30 September 2023 30 September 2022
(Unaudited) (Unaudited)
Notes £000s £000s
Operating activities
Loss before tax (370) (173)
Adjustments for:
Net loss on investments held at fair value through profit or loss 7 188 75
Investment income 229 203
Unrealised valuation loss on investment property 196 170
Decrease/(increase) in trade and other receivables 97 (32)
Decrease in trade and other payables (25) (42)
Purchase of investments held at fair value through profit or loss 7 (352) (533)
Sale of investments held at fair value through profit or loss 7 24 412
Net cash from operations (13) 80
Tax paid (125) (27)
Net cash (outflow)/inflow from operating activities (138) 53
Effects of exchange rate fluctuations (3) 47
(Decrease)/increase in cash and cash equivalents (141) 100
Cash and cash equivalents at start of the period 541 576
Cash and cash equivalents at the period end 400 676
1. Operations
Worsley Investors Limited (the "Company") is a limited liability, closed-ended
investment company incorporated in Guernsey. The Company historically invested
in commercial property in Europe which was held through subsidiaries. The
Company's current investment objective is to provide Shareholders with an
attractive level of absolute long-term return, principally through the capital
appreciation and exit of undervalued securities. The existing real estate
asset of the Company will be realised in an orderly manner, that is with a
view to optimising the disposal value of such asset.
The Condensed Unaudited Consolidated Financial Statements (the "Financial
Statements") of the Company for the period ended 30 September 2023 comprise
the Financial Statements of the Company and its Subsidiaries (together
referred to as the "Group").
Worsley Associates LLP was appointed on 31 May 2019 as Investment Advisor to
the Company.
2. Significant accounting policies
Basis of preparation
These Financial Statements have been prepared in accordance with International
Accounting Standard ("IAS") 34 'Interim Financial Reporting' as required by
DTR 4.2.4R, the Listing Rules of the London Stock Exchange and applicable
legal and regulatory requirements. They do not include all the information and
disclosures required in Annual Financial Statements and should be read in
conjunction with the Company's last Annual Report and Audited Consolidated
Financial Statements for the year ended 31 March 2023.
The same accounting policies and methods of computation are followed in the
Interim Financial Report as compared with the most recent Annual Financial
Statements for the year ended 31 March 2023.
Going concern
The Directors, at the time of approving the Financial Statements, have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the next 12 months.
The Group maintains a significant cash balance and an extensive portfolio of
securities, and the property lease generates sufficient cash flows to pay
on-going expenses and other obligations. The Directors have considered the
cash position and performance of the current capital invested by the Group,
the potential impact on markets and supply chains of geo-political risks such
as the crisis in Ukraine and continuing macro-economic factors and inflation
and concluded that it is appropriate to adopt the going concern basis in the
preparation of these Financial Statements.
Going concern is assessed over a minimum period of 12 months from the approval
of these Financial Statements. The Board consider there to be no material
uncertainty owing to the fact that the Group currently has no borrowing,
retains a significant cash balance and that the Company's equity investments
comprise predominantly readily realisable securities.
3. Gross property income
Gross property income for the period ended 30 September 2023 amounted to
£0.394 million (30 September 2022: £0.380 million). The Group leases out its
investment property under an operating lease which is structured in accordance
with local practices in Italy. The Group's lease agreement in place as at 30
September 2023 was unchanged from that disclosed in the Company's Audited
Annual Financial Statements for the year ended 31 March 2023.
Property income
30 September 2023 30 September 2022
£000s £000s
(Unaudited) (Unaudited)
Property income received (net of lease incentives) 458 405
Straight-lining of lease incentives (64) (25)
Property income 394 380
Expense from services to tenants, other property operating and administrative
expenses
30 September 2023 30 September 2022
£000s £000s
(Unaudited) (Unaudited)
Property expenses arising from investment property which generates income 98 73
Total property operating expenses 98 73
There were no property expenses arising from investment property which did not
generate income.
4. General and administrative expenses
30 September 2023 30 September 2022
£000s £000s
(Unaudited) (Unaudited)
Administration fees 54 54
General expenses 48 37
Audit fees 27 25
Legal and professional fees 10 9
Directors' fees (note 13) 25 23
Insurance costs 13 14
Corporate broker fees 12 13
Investment Advisor fees (note 13) 93 85
Total 282 260
5. Basic and diluted earnings per ordinary share (pence)
The basic and diluted earnings per share for the Group is based on the net
loss for the period of £0.393 million (30 September 2022: net loss of £0.209
million) and the weighted average number of Ordinary Shares in issue during
the period of 33,740,929 (30 September 2022: 33,740,929). There are no
instruments in issue which could potentially dilute earnings or loss per
Ordinary Share.
6. Investment property
6 months ended Year ended
30 September 2023 31 March 2023
(Unaudited) (Audited)
£000s £000s
6,770 7,328
Valuation of investment property before lease incentive adjustment
at beginning of period/year
Fair value adjustment (260) (862)
Foreign exchange translation (97) 304
Independent external valuation 6,413 6,770
Adjusted for: Lease incentive* (663) (737)
Fair value of investment property at the end of the period/year 5,750 6,033
Valuation of investment property before lease incentive adjustment
at beginning of period/year
6,770
7,328
Fair value adjustment
(260)
(862)
Foreign exchange translation
(97)
304
Independent external valuation
6,413
6,770
Adjusted for: Lease incentive*
(663)
(737)
Fair value of investment property at the end of the period/year
5,750
6,033
* The Lease incentive is separately classified as a non-current asset within
the Consolidated Statement of Financial Position and to avoid double counting
is hence deducted from the independent property valuation to arrive at fair
value for accounting purposes.
The property is carried at fair value. The lease incentive granted to the
tenant is amortised over the term of the lease. In accordance with IFRS, the
external independent valuation is reduced by the carrying amount of the lease
incentive as at the valuation date.
Quarterly valuations are carried out at 31 March, 30 June, 30 September and 31
December by Knight Frank LLP, external independent valuers. The valuation of
the investment property is recorded in Euros and converted into Pounds
Sterling at the end of each reporting period. The rates used were as follows:
30 September 2023 31 March 2023
(Unaudited) (Audited)
Euro / GBP 1.1538 1.1374
The resultant fair value of investment property is analysed below by valuation
method, according to the levels of the fair value hierarchy. The different
levels have been defined as follows:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included within Level 1 which are
observable for asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices);
Level 3: inputs for the asset or liability which are not based on observable
market data (unobservable inputs).
The investment property (Curno) is classified as Level 3.
The significant assumptions made relating to its independent valuation are set
out below:
Significant assumptions 30 September 2023 31 March 2023
(Unaudited) (Audited)
Gross estimated rental value per square metre p.a. €114.00 €114.00
Equivalent yield 13.46% 12.97%
The external valuer has carried out its valuation using the comparative and
investment methods. The external valuer has made the assessment on the basis
of a collation and analysis of appropriate comparable investment and rental
transactions. The market analysis has been undertaken using market knowledge,
enquiries of other agents, searches of property databases, as appropriate and
any information provided to them. The external valuer has adhered to the RICS
Valuation - Professional Standards.
An increase/decrease in ERV (Estimated Rental Value) will increase/decrease
valuations, while an increase/decrease to yield decreases/increases
valuations. The information below sets out the sensitivity of the independent
property valuation to changes in Fair Value.
If market rental increases by 10% then property value increases by 1.88%,
being €139,120 (31 March 2023: 1.85%, being €142,817).
If market rental decreases by 10% then property value decreases by 1.88% being
€139,120 (31 March 2023: 1.85%, being €142,817).
If yield increases by 1% then property value decreases by 5.74%, being
€424,760 (31 March 2023: 5.91%, being €456,044).
If yield decreases by 1% then property value increases by 6.66%, being
€492,840 (31 March 2023: 6.89%, being €532,021).
Property assets are inherently difficult to value owing to the individual
nature of each property. As a result, valuations are subject to uncertainty.
There is no assurance that estimates resulting from the valuation process will
reflect the actual sales price even where a sale occurs shortly after the
valuation date. Rental income and the market value for properties are
generally affected by overall conditions in the local economy, such as growth
in Gross Domestic Product ("GDP"), employment trends, inflation and changes in
interest rates. Changes in GDP may also impact employment levels, which in
turn may impact the demand for premises. Furthermore, movements in interest
rates may affect the cost of financing for real estate companies.
Both rental income and property values may be affected by other factors
specific to the real estate market, such as competition from other property
owners, the perceptions of prospective tenants of the attractiveness,
convenience and safety of properties, the inability to collect rents because
of the bankruptcy or the insolvency of tenants, the periodic need to renovate,
repair and release space and the costs thereof, the costs of maintenance and
insurance, and increased operating costs. The Investment Advisor addresses
market risk through a selective investment process, credit evaluations of
tenants, ongoing monitoring of tenants and through effective management of the
property.
7. Investments at fair value through profit or loss ("FVTPL")
6 months ended Year ended
30 September 2023 31 March 2023
£000s £000s
(Unaudited) (Audited)
Opening book cost 4,908 3,983
Total unrealised gains at beginning of period 2,931 1,990
Fair value of investments at FVTPL at beginning of period 7,839 5,973
Purchases 352 1,223
Sales (24) (563)
Realised gains 13 264
Unrealised (losses)/gains (430) 942
Total investments at FVTPL 7,750 7,839
Closing book cost 5,249 4,908
Total unrealised gains at end of period 2,501 2,931
Total investments at FVTPL 7,750 7,839
30 September 2023 30 September 2022
£000s £000s
(Unaudited) (Unaudited)
Realised gains 13 168
Unrealised losses (430) (446)
Total losses on investments at FVTPL (417) (278)
Investment income 229 203
Total losses on financial assets at FVTPL (188) (75)
The fair value of investments at FVTPL are analysed below by valuation method,
according to the levels of the fair value hierarchy. The different levels have
been defined as follows:
Level 1: quoted (unadjusted) prices in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included within Level 1 which are
observable for asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices);
Level 3: inputs for the asset or liability which are not based on observable
market data (unobservable inputs).
The following table analyses within the fair value hierarchy the Company's
financial assets at fair value through profit or loss:
30 September 2023 Level 1 Level 2 Level 3 Total
£000s £000s £000s £000s
Fair value through profit or loss
- Investments 5,244 2,506 - 7,750
As at 30 September 2023, within the Company's financial assets classified as
Level 2, securities totalling £1,424,323 are traded on the London Stock
Exchange or AIM, with securities of £1,081,500 being traded on the Aquis
Exchange. The Level 2 securities are valued at the traded price as at the
period end and no adjustment has been deemed necessary to these prices.
However, although these are traded, they are not regularly traded in
significant volumes and hence have been classified as level 2.
31 March 2023 Level 1 Level 2 Level 3 Total
£000s £000s £000s £000s
Fair value through profit or loss
- Investments 5,847 1,992 - 7,839
As at 31 March 2023, within the Company's financial assets classified as Level
2, securities totalling £1,162,559 were traded on the London Stock Exchange
or AIM Market and securities of £829,100 were traded on the Aquis Exchange.
The Level 2 securities were valued at the traded price as at the year end and
no adjustment were deemed necessary to these prices. However, although these
were traded, they were not regularly traded in significant volumes and hence
were classified as level 2.
The valuation and classification of the investments are reviewed on a regular
basis. The Board determines whether or not transfers have occurred between
levels in the hierarchy by re-assessing categorisation (based on the lowest
level input which is significant to the fair value measurement as a whole) at
the end of each reporting period.
8. Trade and other receivables
30 September 2023 31 March 2023
£000s £000s
(Unaudited) (Audited)
Prepayments 31 54
Total 31 54
The carrying values of trade and other receivables are considered to be
approximately equal to their fair value.
9. Trade and other payables
30 September 2023 31 March 2023
£000s £000s
(Unaudited) (Audited)
Investment Advisor's fee (note 13) 16 15
Administration fees 38 18
Audit fee 24 42
Directors' fees payable (note 13) - 2
Other 75 101
Total 153 178
Trade and other payables are non-interest bearing and are normally settled on
30-day terms. The carrying values of trade and other payables are considered
to be approximately equal to their fair value.
10. Share capital
6 months ended Year ended
30 September 2023 31 March 2023
Number of shares Number of shares
(Unaudited) (Audited)
Shares of no par value issued and fully paid
Balance at the start of the period/year 33,740,929 33,740,929
Balance at the end of the period/year 33,740,929 33,740,929
6 months ended Year ended
30 September 2023 31 March 2023
£000s £000s
(Unaudited) (Audited)
Balance at the start of the period/year 14,819 13,466
(Loss)/profit for the period/year and other comprehensive (loss)/ income (450) 1,353
Balance at the end of the period/year 14,369 14,819
No shares were issued by the Company during the period (31 March 2023: none).
11. Net asset value per ordinary share
The Net Asset Value per Ordinary Share at 30 September 2023 is based on the
net assets attributable to the ordinary shareholders of £14.369 million (31
March 2023: £14.819 million) and on 33,740,929 (31 March 2023: 33,740,929)
ordinary shares in issue at the Consolidated Statement of Financial Position
date.
12. Financial risk management
The Company's financial risk management objectives and policies are consistent
with those disclosed in the Company's Audited Annual Financial Statements for
the year ended 31 March 2023.
13. Related party transactions
The Directors are responsible for the determination of the Company's
investment objective and policy and have overall responsibility for the
Group's activities including the review of investment activity and
performance.
Mr Nixon, a Director of the Company, is also Founding Partner and a Designated
Member of Worsley Associates LLP ("Worsley"). The total charge to the
Consolidated Income Statement during the period in respect of Investment
Advisor fees to Worsley was £92,722 (30 September 2022: £85,450) of which
£15,657 (31 March 2023: £15,277) remained payable at the period end.
Upon appointment of Worsley as Investment Advisor (31 May 2019), Mr Nixon
waived his future Director's fee for so long as he is a member of the
Investment Advisor.
The Directors who served on the Board during the period, together with their
beneficial interests at 30 September 2023 and at 31 March 2023, were as
follows:
30 September 2023 31 March 2023
Ordinary shares % of shareholdings Ordinary shares % of shareholdings
Blake Nixon 10,083,126 29.88% 10,083,126 29.88%
William Scott 718,811 2.13% 678,811 2.01%
Robert Burke - - - -
The aggregate remuneration and benefits in kind of the Directors and directors
of its subsidiaries in respect of the Company's period ended 30 September 2023
amounted to £24,690 (30 September 2022: £22,975) in respect of the Group of
which £17,500 (30 September 2022: £17,500) was in respect of the Company. No
mounts were payable at the period end (31 March 2023: £1,912).
All the above transactions were undertaken at arm's length.
14. Capital commitments and contingent liability
As at 30 September 2023 the Company has no capital commitments (31 March 2023:
no commitments).
15. Segmental analysis
As at 30 September 2023, the Group has two segments (31 March 2023: two).
The following summary describes the operations in each of the Group's
reportable segments for the current period:
Property Group Management of the Group's property asset.
Parent Company Parent Company, which holds listed equity investments
Information regarding the results of each reportable segment is shown below.
Performance is measured based on segment profit/(loss) for the period, as
included in the internal management reports that are reviewed by the Board,
which is the Chief Operating Decision Maker ("CODM"). Segment profit is used
to measure performance as management believes that such information is the
most relevant in evaluating the results of certain segments relative to other
entities that operate within these industries.
The accounting policies of the reportable segments are the same as the Group's
accounting policies.
(a) Group's reportable segments
Continuing Operations
30 September 2023 Property Group Parent Company Total
£000 £000 £000
External revenue
Gross property income 394 - 394
Property operating expenses (98) - (98)
Net loss on investments at fair value through profit or loss - (188) (188)
Unrealised valuation loss on investment property (260) - (260)
Lease incentive movement 64 - 64
Total segment revenue 100 (188) (88)
Expenses
General and administrative expenses (72) (210) (282)
Total operating expenses (72) (210) (282)
Profit/(loss) before tax 28 (398) (370)
Income tax charge (53) - (53)
Tax credit 75 - 75
Profit/(loss) after tax 50 (398) (348)
Profit/(loss) for the period 50 (398) (348)
Total assets 6,525 8,092 14,617
Total liabilities 153 95 248
Continuing Operations
30 September 2022 Property Group Parent Company Total
£000 £000 £000
External revenue
Gross property income 380 - 380
Property operating expenses (73) - (73)
Net loss on investments at fair value through profit or loss - (75) (75)
Unrealised valuation loss on investment property (170) - (170)
Lease incentive movement 25 - 25
Total segment revenue 162 (75) 87
Expenses
General and administrative expenses (63) (197) (260)
Total operating expenses (63) (197) (260)
Profit/(loss) before tax 99 (272) (173)
Income tax charge (36) - (36)
Profit/(loss) after tax 63 (272) (209)
Profit/(loss) for the period 63 (272) (209)
Total assets 7,789 6,216 14,005
Total liabilities 269 159 428
(b) Geographical information
The Company is domiciled in Guernsey. The Group has subsidiaries incorporated
in Europe.
The Group's revenue from external customers from continuing operations and
information about its segment non-current assets by geographical location (of
the country of incorporation of the entity earning revenue or holding the
asset) are detailed below:
Revenue from External Customers Non-Current Assets
For the six months ended 30 September 2023
30 September 2023
£000 £000
Europe 394 6,413
394 6,413
Revenue from External Customers Non-Current Assets
For the six months ended 31 March 2023
30 September 2022
£000 £000
Europe 380 6,770
380 6,770
16. Net asset value reconciliation
The following is a reconciliation of the net asset value per share
attributable to ordinary shareholders as presented in these Financial
Statements to the net asset value per share reported to the London Stock
Exchange:
NAV per Ordinary Share
30 September 2023 (pence)
Net Asset Value reported to London Stock Exchange (unaudited) 42.37
Increase in current assets 0.22
Net Assets Attributable to Shareholders per Financial Statements (unaudited) 42.59
17. Subsequent events
There were no post period end events which require disclosure in these
Financial Statements.
Portfolio statement (unaudited)
as at 30 September 2023
Currency Fair value £'000 % of Group Net Assets
Property
UCI Curno EUR 6,413 44.63%
Less: lease incentive EUR (663) (4.61%)
Total 5,750 40.02%
Securities
Smiths News Plc GBP 4,299 29.92%
Northamber Plc GBP 667 4.64%
Amedeo Air Four Plus Limited GBP 637 4.43%
Shepherd Neame Limited GBP 580 4.04%
Daniel Thwaites PLC GBP 502 3.49%
J. Smart & Co (Contractors) PLC GBP 256 1.78%
LMS Capital plc GBP 151 1.05%
7,092 49.35%
Total disclosed securities
Other securities (none greater than 2% of Net Assets) GBP 658 4.58%
Total securities 7,750 53.93%
Total investments 13,500 93.95%
Investment Policy
Investment Objective and Policy Change
Investment Objective
The Company's investment objective is to provide shareholders with an
attractive level of absolute long-term return, principally through the capital
appreciation and exit of undervalued securities. The existing real estate
asset of the Company will be realised in an orderly manner, that is with a
view to optimising the disposal value of such asset.
Investment Policy
The Company aims to meet its objectives through investment primarily, although
not exclusively, in a diversified portfolio of securities and related
instruments of companies listed or admitted to trading on a stock market in
the British Isles (defined as (i) the United Kingdom of Great Britain and
Northern Ireland; (ii) the Republic of Ireland; (iii) the Bailiwicks of
Guernsey and Jersey; and (iv) the Isle of Man). The majority of such companies
will also be domiciled in the British Isles. Most of these companies will have
smaller to mid-sized equity market capitalisations (the definition of which
may vary from market to market, but will in general not exceed £600 million).
It is intended to secure influential positions in such British quoted
securities with the deployment of activism as required to achieve the desired
results.
The Company, Property Trust Luxembourg 2 SARL and Multiplex 1 SRL ("the
Group") may make investments in listed and unlisted equity and equity-related
securities such as convertible bonds, options and warrants. The Group may also
use derivatives, which may be exchange traded or over-the-counter.
The Group may also invest in cash or other instruments including but not
limited to: short, medium or long term bank deposits in Pound sterling and
other currencies, certificates of deposit and the full range of money market
instruments; fixed and floating rate debt securities issued by any corporate
entity, national government, government agency, central bank, supranational
entity or mutual society; futures and forward contracts in relation to any
other security or instrument in which the Group may invest; put and call
options (however, the Group will not write uncovered call options); covered
short sales of securities and other contracts which have the effect of giving
the Group exposure to a covered short position in a security; and securities
on a when-issued basis or a forward commitment basis.
The Group pursues a policy of diversifying its risk. Save for the Curno Asset
until such time as it is realised, the Group intends to adhere to the
following investment restrictions:
· not more than 30 per cent. of the Gross Asset Value at the time
of investment will be invested in the securities of a single issuer (such
restriction does not, however, apply to investment of cash held for working
capital purposes and pending investment or distribution in near cash
equivalent instruments including securities issued or guaranteed by a
government, government agency or instrumentality of any EU or OECD Member
State or by any supranational authority of which one or more EU or OECD Member
States are members);
· the value of the four largest investments at the time of
investment will not constitute more than 75 per cent of Gross Asset Value;
· the value of the Group's exposure to securities not listed or
admitted to trading on any stock market will not exceed in aggregate 35 per
cent. of the Net Asset Value;
· the Group may make further direct investments in real estate but
only to the extent such investments will preserve and/or enhance the disposal
value of its existing real estate asset. Such investments are not expected to
be material in relation to the portfolio as a whole but in any event will be
less than 25 per cent. of the Gross Asset Value at the time of investment.
This shall not preclude Property Trust Luxembourg 2 SARL and Multiplex 1 SRL
(the "Subsidiaries") from making such investments for operational purposes;
· the Company will not invest directly in physical commodities, but
this shall not preclude its Subsidiaries from making such investments for
operational purposes;
· investment in the securities, units and/or interests of other
collective investment vehicles will be permitted up to 40 per cent. of the
Gross Asset Value, including collective investment schemes managed or advised
by the Investment Advisor or any company within the Group; and
· the Company must not invest more than 10 per cent. of its Gross
Asset Value in other listed investment companies or listed investment trusts,
save where such investment companies or investment trusts have stated
investment policies to invest no more than 15 per cent. of their gross assets
in other listed investment companies or listed investment trusts.
The percentage limits above apply to an investment at the time it is made.
Where, owing to appreciation or depreciation, changes in exchange rates or by
reason of the receipt of rights, bonuses, benefits in the nature of capital or
by reason of any other action affecting every holder of that investment, any
limit is breached by more than 10 per cent., the Investment Advisor will,
unless otherwise directed by the Board, ensure that corrective action is taken
as soon as practicable.
Borrowing and Leverage
The Group may engage in borrowing (including stock borrowing), use of
financial derivative instruments or other forms of leverage provided that the
aggregate principal amount of all borrowings shall at no point exceed 50 per
cent. of Net Asset Value. Where the Group borrows, it may, in order to secure
such borrowing, provide collateral or security over its assets, or pledge or
charge such assets.
Corporate Information
Directors (All non-executive) Registered Office
W. Scott (Chairman) 1 Royal Plaza
R. H. Burke
Royal Avenue
B. A. Nixon
St Peter Port
Guernsey, GY1 2HL
Investment Advisor Administrator and Secretary
Worsley Associates LLP Sanne Fund Services (Guernsey) Limited
First Floor 1 Royal Plaza
Barry House Royal Avenue
20 - 22 Worple Road St Peter Port
Wimbledon, SW19 4DH Guernsey, GY1 2HL
United Kingdom
Financial Adviser Corporate Broker
Shore Capital and Corporate Limited Shore Capital Stockbrokers Limited
Cassini House Cassini House
57 St James's Street
57 St James's Street
London, SW1A 1LD
London SW1A 1LD
United Kingdom
United Kingdom
Independent Auditor Registrar
BDO Limited Computershare Investor Services (Guernsey) Limited
Place du Pré 1(st) Floor
Rue du Pré Tudor House
St Peter Port Le Bordage
Guernsey, GY1 3LL St Peter Port
Guernsey, GY1 1DB
Registration Number
43007
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