Half-yearly Report
16 July 2008
THE THROGMORTON TRUST PLC
Half yearly announcement of results in respect of the six months
ended 31 May 2008
- Continued outperformance against FTSE Small Cap (ex IC) Index
- Net Asset value per ordinary share of 169.23 pence (adjusted for fair value
of debt)
- Interim dividend of 0.55 pence per share (2007: 0.5 pence)
31 May 30 November Change
2008 2007 %
Net asset value
Net asset value per ordinary share 175.14p 194.57p (10.0)
Net asset value adjusted for fair value
of debt 169.23p 186.85p (9.4)
Total expense ratio (1) 0.93% 1.09% (14.7)
Capital (2)
Total assets less current liabilities £272.6m £304.7m (10.5)
Equity shareholders' funds £240.4m £272.5m (11.8)
Share price
Ordinary shares 144.00p 152.00p (5.3)
Comparative indices
FTSE Small Cap (ex Inv Cos) 2,745.0 3,132.3 (12.4)
FTSE All-Share 3,082.3 3,280.9 (6.1)
6 months to 6 months to
31 May 2008 31 May 2007
Revenue return per share 1.07p 0.51p 109.8
Dividends: interim 0.55p 0.50p 10.0
(1) The total expense ratio is a measure of the total expenses incurred by the
Company, including those charged to capital, expressed as a percentage of the
average shareholders' funds over the year. The ratio as at 31 May 2008 is an
annualised ratio based on forecast expenses for the year to 30 November 2008.
(2) After repurchase of 2,806,404 ordinary shares in the period (year to 30
November 2007: 23,522,593 ordinary shares).
For further information please contact:
Jonathan Ruck Keene, Managing Director
Investment Companies - 020 7743 2178
Mike Prentis, Fund Manager - 020 7743 2312
Emma Phillips, Media & Communications - 020 7743 2922
BlackRock Investment Management (UK) Limited
Or
William Clutterbuck
The Maitland Consultancy - 020 7379 5151
The Chairman, Richard Bernays, comments:
Performance
In the period under review UK equity markets, in common with many other
markets across the world, suffered from volatility and have been very weak
recently as a result of the subprime crisis and inflationary fears. Against
this background, the Company's net asset value ("NAV") fell by 9.4% and the
share price fell by 5.3% compared with a fall of 12.4% in the FTSE Small Cap
(ex Investment Companies) Index.
Revenue return and dividends
Revenue return in the period amounted to 1.07 pence per share and the Board is
pleased to declare an interim dividend of 0.55 pence per share (2007: 0.5
pence per share) payable on 12 September 2008 to shareholders on the register
on 8 August 2008. This represents an increase of 10% over the previous interim
dividend.
Change in Investment Manager, modified investment policy and discount
management
I wrote to shareholders on 6 June to report on the proposed change in
investment manager, modification of the investment policy and the introduction
of the discount control mechanisms. I am pleased to report that BlackRock
Investment Management (UK) Limited was appointed as Investment Manager and
Company Secretary on 1 July 2008. BlackRock has an excellent performance
record in the smaller companies sector and a strong commitment to the
investment trust sector. The Company's portfolio will be jointly managed by
Mike Prentis, manager of BlackRock Smaller Companies Trust plc, and Richard
Plackett, manager of BlackRock UK Emerging Companies Hedge Fund and head of
BlackRock's UK small/mid cap team. The Board recognises and appreciates the
management provided to the Company by AXA Framlington over many years. AXA
Framlington submitted a strong proposal in support of their continued
management and a restructuring of the Company; however, the Board has chosen
to adopt a differentiated and innovative approach to the Company's future.
A circular convening a general meeting of the Company and seeking the
necessary shareholder approvals to implement the proposals will be sent to
shareholders in the near future. In summary the proposals provide for the
following:
- Adoption of a modified and innovative Investment Policy to allow the Company
to have up to 30% of its net assets invested in a portfolio of contracts for
difference ("CFD") to provide both long and short exposure to UK small and mid
cap equities;
- An initial Tender Offer for up to 40% of the Company's issued share capital
on a tender pool basis with a 2% exit charge; and
- Ongoing discount control involving regular tender offers and share buybacks.
BlackRock will contribute to the costs of the proposals by way of a management
fee waiver.
Until the new investment approach has been approved by shareholders BlackRock
will be managing the Company as a smaller companies long only fund.
Performance will now be measured against a new benchmark of the Hoare Govett
Smaller Companies plus AIM (ex Investment Companies).
Investment Manager
You will note that there are two investment managers' reports, one from AXA
who managed the portfolio throughout the period under review and one from
BlackRock who took over as Manager on 1 July 2008 which comments on the market
outlook.
Prospects
The immediate outlook for the UK economy provides little obvious encouragement
for the traditional equity investor. However, within this environment we
anticipate opportunities for our incoming fund managers. First there will
continue to be attractive smaller companies which should provide positive
returns over the long term. In addition, the CFD portfolio (which will take
both long and short positions), once constituted, should be in a strong
position to exploit such capricious market conditions.
Interim Management Report and Responsibility Statement
The Chairman's statement above and the Investment Managers' Reports following
give details of important events which have occurred during the period and
their impact on the financial statements.
Principal risks and uncertainties
The principal risks faced by the Company can be divided into various areas as
follows:
- Performance;
- Income/dividend;
- Regulatory;
- Operational; and
- Financial.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Accounts for the year ended 30 November 2007.
A detailed explanation can be found on page 17 of the Annual Report and
Accounts which is available on the website maintained by the Investment
Manager, BlackRock Investment Management (UK) Limited, at
www.blackrock.co.uk/its.
In the view of the Board, there have not been any changes to the fundamental
nature of these risks since the previous report and these principal risks and
uncertainties are equally applicable to the remaining six months of the
financial year as they were to the six months under review. Following the
proposed change in the Company's investment policy the Company will utilise
contracts for difference or comparable equity derivatives as part of its
investment policy. These instruments can be highly volatile and expose
investors to a high risk of loss. Further details of the risk factors
associated with the use of such derivatives will be set out in the circular
which is expected to be sent to shareholders at the beginning of August 2008.
Related party transactions
AXA Framlington Investment Management Limited ("AXA") acted as Investment
Manager and Company Secretary until 30 June 2008. Details of AXA's services
and fee arrangements are provided in the Annual Report on page 18. Under a
termination agreement entered into on 30 June 2008 AXA will continue to
receive a fee under the previous fee arrangements until 6 November 2008
notwithstanding that AXA no longer acts as Investment Manager and Company
Secretary.
BlackRock Investment Management (UK) Limited ("BlackRock") was appointed as
Investment Manager and Company Secretary on 1 July 2008. The terms of the
investment management agreement with BlackRock provide for a basic management
fee, payable quarterly in arrears, of 0.7% per annum on the gross asset value
of the Company's long-only portfolio plus the gross value of the underlying
equities, long and short, to which the Company is exposed through derivatives
including contracts for difference. In addition, BlackRock is entitled to a
performance fee of 12.5% of any net asset value (total return) outperformance
against the Hoare Govett Small Companies plus AIM (ex Investment Companies)
Index. The performance fee is subject to a high watermark such that, if in a
performance period the Company underperforms the Index, where the Company
outperforms the Index in a future performance period a performance fee is only
payable on the net asset value return that represents the net outperformance.
In addition, the performance fee in any performance period will be capped at
4.99% of the average value of the Company's assets, calculated in the same way
as for the basic management fee, during the performance period. Any
performance fee that would otherwise exceed 4.99% of such amount will be
carried forward and payable in future periods to the extent that it does not
result in a performance fee payment exceeding 4.99% of the relevant assets in
any performance period. The agreement is terminable after an initial period of
18 months on 6 months' notice.
BlackRock has agreed to meet the costs of terminating the existing management
agreement with AXA, by way of a management fee waiver.
Directors' responsibility statement
The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority
require the Directors to confirm their responsibilities in relation to the
preparation and publication of the Interim Management Report and Financial
Statements.
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within the half yearly
financial report has been prepared in accordance with the Accounting Standards
Board's Statement `Half Yearly Financial Reports; and
- the Interim Management Report together with the Chairman's Statement and
Investment Managers' Reports, include a fair review of the information required
by 4.2.7R and 4.2.8R of the FSA's Disclosure and Transparency Rules.
The half yearly financial report has not been audited or reviewed by the
Company's Auditors.
The half yearly financial report was approved by the Board on 16 July 2008 and
the above Responsibility Statement was signed on its behalf by the Chairman.
Commenting upon performance for the Company, Chris St John of AXA Framlington
Investment Management UK Limited, notes:
Performance review
Over the six month period to 31 May 2008 the Company returned -9.4% (adjusted
for fair value of debt) outperforming the benchmark index which returned
-12.4%. Although the Company's equity investments returned 3.0% in excess of
the benchmark return, the return in absolute terms was disappointing.
The six month period to 31 May 2008 witnessed significant declines in UK
equity markets as economic sentiment deteriorated, caused principally by
collapsing confidence in a number of financial markets.
Over the past year, it has become apparent that the cost and availability of
credit has changed materially following several years of cheap, plentiful
debt, fuelled by complex securitisation and derivative instruments. A
reduction in the availability and a rise in the cost of debt has led not only
to the expectation of a deterioration in the macroeconomic background, but to
a significant increase in risk aversion.
Throughout the period, the UK small cap market remained volatile, illiquid and
not necessarily driven by fundamental newsflow. On average, companies with
pricing power, strong balance sheets and exposure to international markets
reported better news to the stock market than those with a UK domestic focus.
However, this was not necessarily reflected in the share prices of individual
small cap stocks, which have seen a wholesale de-rating. The technically
driven stock market of the past 12 months has led to significant opportunity
and for this reason we are optimistic for returns from smaller companies over
the longer term.
The Throgmorton Trust PLC FTSE Small Cap (ex Inv Cos)
Index
Portfolio
Sector Investments % Sector Index %
Oil & Gas 6.0 Oil & Gas 2.2
Basic Materials 13.0 Basic Materials 4.5
Industrials 26.5 Industrials 28.9
Consumer Goods 5.1 Consumer Goods 5.2
Health Care 9.5 Health Care 8.5
Consumer Services 6.1 Consumer Services 15.7
Telecommunications 0.7 Telecommunications 2.3
Financials 16.2 Financials 21.2
Technology 16.9 Technology 11.5
----- -----
Total 100.0 Total 100.0
----- -----
Source: AXA Framlington
There were no fundamental changes to the portfolio over the reporting period.
The Company remains focused on high margin, appropriately financed growth
stocks with exposure to international markets and underweight UK domestic,
consumer facing stocks, an area which showed further fundamental deterioration
over the period.
This strategic positioning benefited the Company, with most of the relative
outperformance coming from positive sector contribution. In particular, the
overweight position in Oil and Gas Producers and Industrial Metals and the
underweight position in Real Estate and Retailers contributed to
outperformance. The overweight position in Industrial Transportation detracted
from performance.
In particular, individual stock prices were both volatile and unpredictable
over the period. Stock selection detracted very slightly from performance
relative to the benchmark.
Positive contributions came from the following:
Cambrian Mining, the diversified mining group, returned to the stock market
following suspension and rallied strongly as a result of significant rises in
the coal price and a commitment from management to realise value in the
company's asset base.
SDL, in translation software and services, and Aveva, a 3D design company,
both of whom are exposed to international growing markets, reported strong
trading and a robust market background.
Fenner, a manufacturer and developer of belting (in particular to the coal
industry) and seals (in particular to the Oil and Gas Industry), reported
strong results and set out demand driven capital expenditure expansion plants.
Albidon, a mineral exploration and mining group, and International Ferro
Metals, a chromite smelting and mining group, both reported a combination of
positive trading and benefited from strong commodity prices.
Endace, in network monitoring, and Domino Printing, both reported strong
results and were rewarded for doing so.
Companies that reported disappointing newsflow or results were punished
severely by the stock market.
Poor liquidity in smaller companies has tended to exacerbate any share price
falls and has restricted the ability to consistently exit shareholdings at
satisfactory prices. We continue to work with the liquidity offered by the
market and to sell/buy holdings based on fundamental assessment of the
risk/rewards offered.
The Company continued to benefit from corporate activity over the period.
Gyrus, Broker Network, Inspicio, Titan Europe, Premier Research Group and
Civica were taken over or received formal bid approaches. We continue to
believe that corporate activity will be an accelerating feature at the small
end of the market where valuations have become very compelling.
The Company has continued to focus on companies with a market capitalisation
of circa £500 million and below and retains its robust structure of sector and
market capitalisation balance along with a diverse number of holdings.
Commenting upon the outlook for the Company, Mike Prentis and Richard Plackett
of BlackRock Investment Management (UK) Limited, the Investment Manager, note:
We are nervous about the prospects for both the UK and US economies in the
short term. The subprime crisis is impairing the ability and willingness of
the banks to lend. UK consumers are spending less and retailers, leisure
companies and housebuilders are feeling the impact most acutely. Share prices
of these companies have already fallen sharply in anticipation of the bad
news, but operational gearing, and in some cases also financial gearing, for
these companies is high; a relatively modest fall in sales can lead to a large
fall in earnings. We think earnings expectations are still too high, and
cannot see why these stocks will outperform in the near term.
Spending by UK corporates is also likely to come under pressure. Staffing
companies look vulnerable, as do some information technology software and
services companies, especially those selling into weak sectors such as
investment banking.
Some companies exposed to UK Government expenditure could face cutbacks.
Government debt is high and stamp duty and certain other tax receipts could
fall short of expectations. We expect the Government to delay or cancel
non-essential, non-contractual spending where it can. We still feel those
companies with long term contractual revenues should fare reasonably well.
UK exporters look more interesting; with sterling weak, many can expect to
benefit from currency upgrades. Some also have material revenues from emerging
markets, where growth looks set to remain fairly strong, and from sectors with
good fundamentals at present such as oil & gas and mining.
The aerospace sector has proved relatively defensive so far this year,
although the risks have been increasing of late as the higher oil price
threatens the viability of many civil airlines, and a new US President could
look to reduce military spending.
Resources prices remain very high. We generally favour stocks that are in
production and with good production growth forecasts.
Pessimism is pervasive at present, and markets have already fallen a long way.
Whilst we still expect a large number of profit warnings from more cyclical
companies, the smaller companies universe is large and we are now able to find
a number of high quality growth companies which we consider to be undervalued.
We also expect continuing volatility, and that this will provide us with good
opportunities for the proposed CFD portfolio both short and long.
INCOME STATEMENT
Six Months to 31 May 2008 Six Months to 31 May 2007 Year to 30 November 2007
(unaudited) (unaudited) (audited)
____________________________ _________________________ _________________________
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Realised gains on
investments - 3,594 3,594 - 30,148 30,148 - 39,989 39,989
Unrealised (losses)/gains
on investments - (28,930) (28,930) - 33,284 33,284 - (47,525) (47,525)
Income 3 2,461 - 2,461 2,803 - 2,803 6,196 - 6,196
Investment management fees 4 (202) (714) (916) (782) (782) (1,564) (1,422) (1,422) (2,844)
Other administrative
expenses (257) - (257) (228) - (228) (429) - (429)
----- -------- -------- ----- ------ ------- ------- ------- -------
Net return/(loss) before
finance costs and taxation 2,002 (26,050) (24,048) 1,793 62,650 64,443 4,345 (8,958) (4,613)
Finance costs 5 (513) (1,429) (1,942) (989) (953) (1,942) (1,983) (1,905) (3,888)
----- -------- -------- ----- ------ ------- ------- ------- -------
Return/(loss) on ordinary
activities before taxation 1,489 (27,479) (25,990) 804 61,697 62,501 2,362 (10,863) (8,501)
Tax on ordinary activities (1) - (1) - - - (14) - (14)
----- -------- -------- ----- ------ ------- ------- ------- -------
Return/(loss) on ordinary
activities after taxation
attributable to equity
shareholders 1,488 (27,479) (25,991) 804 61,697 62,501 2,348 (10,863) (8,515)
----- -------- -------- ----- ------ ------- ------- ------- -------
Return/(loss) per ordinary
share:
Basic 8 1.07p (19.85p) (18.78p) 0.51p 39.15p 39.66p 1.54p (7.14p) (5.60p)
----- -------- -------- ----- ------ ------- ------- ------- -------
All revenue and capital items in the above statement derive from continuing
operations.
The total column of this statement represents the Income Statement of the
Company. The revenue and capital return columns are supplementary to this and
are prepared under guidance published by the Association of Investment
Companies.
A statement of total recognised gains and losses is not required as all the
gains and losses of the Company have been recognised in the above statement.
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Ordinary Share Capital Capital Capital
share premium redemption reserve- reserve- Revenue
capital account reserve unrealised realised reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 November 2006 (audited) 8,179 35,272 7,011 61,393 208,415 5,942 326,212
Dividends paid during the year re 2006 - - - - - (2,367) (2,367)
Return attributable to shareholders in 2007 - - - (47,525) 36,662 2,348 (8,515)
Shares repurchased (1,176) - 1,176 - (42,085) - (42,085)
Dividends paid during the year re 2007 - - - - - (731) (731)
------ ------- ------ ------- ------- ------ -------
Balance at 30 November 2007 (audited) 7,003 35,272 8,187 13,868 202,992 5,192 272,514
Dividends paid during the year re 2007 - - - - - (2,367) (2,367)
Return attributable to shareholders in 2008 - - - (28,930) 1,451 1,488 (25,991)
Shares repurchased (140) - 140 - (3,771) - (3,771)
------ ------- ------ ------- ------- ------ ------- -
Balance as at 31 May 2008 (unaudited) 6,863 35,272 8,327 (15,062) 200,672 4,313 240,385
------ ------- ------ ------- ------- ------ ------- -
BALANCE SHEET
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Fixed asset investments held at fair value through profit
and loss
Portfolio investments 246,940 368,636 297,438
Subsidiary undertakings 2,061 1,969 2,008
------- ------- -------
249,001 370,605 299,446
------- ------- -------
Current assets
Debtors 2,382 865 1,051
Cash at bank 24,077 31,702 11,304
------- ------- -------
26,459 32,567 12,355
------- ------- -------
Creditors - amounts falling due within one year
Creditors (2,906) (4,545) (7,118)
------- ------- -------
Total assets less current liabilities 272,554 398,627 304,683
------- ------- -------
Creditors - amounts falling due after one year
Debenture stock (17,169) (17,169) (17,169)
Loan from group company (15,000) (15,000) (15,000)
------- ------- -------
(32,169) (32,169) (32,169)
------- ------- -------
240,385 366,458 272,514
======= ======= =======
Capital and reserves
Ordinary share capital 6,863 7,635 7,003
Share premium account 35,272 35,272 35,272
Other reserves 193,937 319,172 225,047
Revenue reserves 4,313 4,379 5,192
------- ------- -------
Total equity shareholders' funds 240,385 366,458 272,514
======= ======= =======
Net asset value per ordinary share 175.14p 240.00p 194.57p
======= ======= =======
Net asset value adjusted for `Fair Value' of debt 169.23p 233.54p 186.85p
======= ======= =======
CASH FLOW STATEMENT
Six months
Six months ended ended Year ended
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net cash inflow from operating activities 2,175 1,984 4,330
------ ------ -------
Servicing of finance
Interest paid (476) (990) (1,905)
------ ------ -------
Capital expenditure and financial investment
Net sales of investments 19,616 42,562 45,268
Capital management fee (609) (752) (1,511)
Interest charged to capital (1,429) (953) (1,905)
Net payments (to)/from subsidiaries (2) 33 (10)
------ ------ -------
Net cash inflow from investment activities 17,576 40,890 41,842
------ ------ -------
Dividends paid (2,367) (2,367) (3,098)
------ ------ -------
Net cash inflow before financing 16,908 39,517 41,169
------ ------ -------
Financing
Repurchase of ordinary shares (4,135) (19,755) (41,805)
------ ------ -------
Net cash outflow from financing (4,135) (19,755) (41,805)
------ ------ -------
Increase/(decrease) in cash 12,773 19,762 (636)
====== ====== =======
Notes to the financial statements
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of section 842 of the Income and Corporation Taxes Act
1988.
2. Basis of preparation
The half yearly financial statements have been prepared on the basis of the
accounting policies set out in the Company's financial statements as at 30
November 2007. Under FRS26 "Financial Instruments - Measurements" the Company
has designated its assets and liabilities as being measured as "fair value
through profit and loss". The fair value of fixed asset investments is deemed
to be bid market value at the close of business on the balance sheet date.
Group accounts have not been prepared as, in the opinion of the Directors, the
inclusion of the subsidiary undertakings, taken together, is not material for
the purpose of giving a true and fair view.
3. Income
Six months to Six months to Year to
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Investment income:
UK dividends 2,040 2,044 4,817
Dividends from subsidiary undertakings - 150 150
Unfranked investment income 39 82 114
----- ----- -----
2,079 2,276 5,081
----- ----- -----
Other income:
Deposit interest 326 510 1,088
Sundry income 56 17 27
----- ----- -----
Total income 2,461 2,803 6,196
----- ----- -----
4. Investment management fees Six months to Six months to Year to
31 May 2008 31 May 2007 30 November 2007
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Revenue:
Investment management fees 256 666 1,252
VAT (54) 116 170
--- ----- -----
202 782 1,422
--- ----- -----
Capital:
Investment management fees 768 666 1,252
VAT (54) 116 170
--- ----- -----
714 782 1,422
--- ----- -----
Total 916 1,564 2,844
--- ----- -----
The Board has decided that with effect from 1 December 2007, 75% of investment
management fees will be allocated to the capital account and 25% to the
revenue account. This change is based on the Board's estimated long term split
of returns in the form of capital growth and income respectively. For the
period under review AXA was paid a quarterly fee at a rate of 0.19375% on the
Company's gross assets up to £250 million and 0.125% on the gross assets above
£250 million.
5. Finance costs
The Board has decided that with effect from 1 December 2007, 75% of finance
charges will be allocated to the capital account and 25% to the revenue
account. This change is based on the Board's estimated long term split of
returns in the form of capital growth and income respectively.
6. Dividend
The Board has declared an interim dividend of 0.55 pence per share (2007: 0.5
pence) payable on 12 September 2008 to shareholders on the register at close
of business on 8 August 2008.
7. Contingent assets
In 2004 the Association of Investment Companies (the "AIC"), together with
JPMorgan Fleming Claverhouse Investment Trust plc, launched a case against HM
Revenue & Customs ("HMRC") to challenge whether Value Added Tax ("VAT") should
be charged on management services provided to investment trust companies. On
28 June 2007, the European Court of Justice delivered its judgement on the
case which was favourable to the AIC. It is expected that in due course AXA
will be able to reclaim from HMRC the VAT charged to the Company in respect of
management services and paid to HMRC. The VAT so recovered by AXA would then
be repaid to the Company. The Company understands that AXA has submitted
protective claims to HMRC in respect of the relevant periods for VAT accounted
for by AXA on management services provided by it to the Company. It seems
likely that some benefit will be realised in due course. The Board is
monitoring the situation closely and is in discussion with AXA as to the
determination of the amounts that will be receivable by the Company. However,
until the final determination and the discussions with AXA have been
concluded, it is not practicable to quantify the total amount of any VAT that
may be recoverable.
8. Net asset value and return per ordinary share
Six months
Six months ended ended Year ended
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
Net revenue return attributable to ordinary shareholders
(£'000) 1,488 804 2,348
Net capital gains attributable to ordinary shareholders (£'000) (27,479) 61,697 (10,863)
------- ------- -------
Net total return (£'000) (25,991) 62,501 (8,515)
------- ------- -------
Equity shareholders' funds (£'000) 240,385 366,458 272,514
------- ------- -------
The weighted average number of ordinary shares in issue during
the period, on which the return per ordinary share was
calculated, was: 138,443,057 157,593,341 152,150,218
The actual number of ordinary shares in issue at the end of
each period, on which the net asset value was calculated, was: 137,251,872 152,690,869 140,058,276
------- ------- -------
Net asset value per share 175.14p 240.00p 194.57p
------- ------- -------
Return per share
Calculated on weighted average shares:
- Revenue return 1.07p 0.51p 1.54p
- Capital return (19.85p) 39.15p (7.14p)
(18.78p) 39.66p (5.60p)
Calculated on actual number of shares:
- Revenue return 1.08p 0.53p 1.68p
- Capital return (20.02p) 40.41p (7.76p)
======= ======= =======
(18.94p) 40.94p (6.08p)
======= ======= =======
9. Ordinary share capital
Number of Ordinary Nominal value
shares in issue £'000
At 30 November 2007 140,058,276 7,003
Shares repurchased by the Company (2,806,404) (140)
----------- -----
At 31 May 2008 137,251,872 6,863
----------- -----
In the period under review 2,806,404 ordinary shares were repurchased for
cancellation for a total consideration of £3,771,000.
10. Publication of non statutory accounts
The financial information contained in this half yearly financial report does
not constitute statutory accounts as defined in section 435 of the Companies
Act 2006. The financial information for the six months ended 31 May 2008 and
31 May 2007 has not been audited. The information for the year ended 30
November 2007 has been extracted from the latest published audited financial
statements, which have been filed with the Registrar of Companies. The report
of the Auditors on those accounts contained no qualification or statement
under sections 498(2) or (3) of the Companies Act 2006.
11. Annual results
The Board expects to announce the annual results for the year ended 30
November 2008, as prepared under IFRS in mid January 2009. Copies of the
preliminary announcement can be obtained from the Secretary on 020 7743 3000.
The annual report should be available at the beginning of February 2009, with
the Annual General Meeting being held in March 2009.
12. Copies of the half yearly financial report will be posted to shareholders
by 31 July 2008. Copies will also be available to the public from the
Company's registered office at 33 King William Street, London EC4R 9AS, and on
BlackRock Investment Management's website at www.blackrock.co.uk/its.
16 July 2008
33 King William Street
London EC4R 9AS
Top twenty holdings
Market Portfolio
value investments
Company Holding £'000 %
1 UMECO 1,713,636 9,682 3.92
2 Fenner 3,273,200 8,347 3.38
3 SDL 2,595,000 8,278 3.35
4 Aveva Group 543,700 8,096 3.28
5 Headlam Group 1,750,000 6,829 2.77
6 Accsys Technologies 2,750,000 5,839 2.36
7 Rensburg Sheppards 1,020,790 5,788 2.34
8 Endace 1,226,500 5,765 2.33
9 Aero Inventory 975,000 5,353 2.17
10 Domino Printing Sciences 1,545,000 5,183 2.10
11 Interserve 1,000,000 4,772 1.93
12 Axis-Shield 1,485,000 4,678 1.89
13 Rathbone Brothers 450,000 4,433 1.80
14 Albidon 1,967,000 4,229 1.71
15 Vectura Group 7,700,010 4,120 1.67
16 Paragon Group of Companies 4,000,000 3,820 1.55
17 Charles Taylor Consulting 1,403,513 3,740 1.52
18 Faroe Petroleum 2,000,000 3,635 1.47
19 CLS Holdings 1,050,000 3,588 1.45
20 International Ferro Metals 2,450,000 3,577 1.45
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Total 109,752 44.44
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