Half-yearly Report

The Throgmorton Trust PLC Half yearly Financial Report for period ending 31 May 2013 Performance Record Financial Highlights As at As at 31 May 30 November Attributable to ordinary 2013 2012 Change shareholders (unaudited) (audited) % Assets Net assets (Â£'000) 210,298 174,067 +20.8 Net asset value per share 287.57p 238.02p +20.8 - with income reinvested +22.0 Ordinary share price (mid-market) 243.50p 193.25p +26.0 - with income reinvested +27.5 Benchmark index* 9,201.73 7,922.56 +16.1 For For the the six six months months ended ended 31 31 May May 2013 2012 Change (unaudited) (unaudited) % Revenue Net revenue return after taxation (Â£'000) 1,493 1,089 +37.1 Revenue return per ordinary share 2.04p 1.49p +36.9 Dividend per ordinary share Interim 0.75p 0.62p +21.0 *Hoare Govett Smaller Companies plus AIM (excluding investment companies) Index to 9 April 2012 and Numis Smaller Companies plus AIM (excluding Investment Companies) Index from 10 April 2012. Chairman's Statement Performance I am pleased to report that for the six months ended 31 May 2013, the Company's net asset value ("NAV") total return per share was 22.0% and the share price total return was 27.5%. By comparison, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index returned 16.1% (all percentages with income reinvested). The Company's outperformance against the benchmark was achieved through a combination of stock and sector allocation in both the long only and the CFD portfolio. Further details on investment performance are given in the Investment Manager's Report. Since the end of May the Company's NAV has increased by 3.0% and the share price has increased by 3.6% (all percentages with income reinvested). Equity markets began the period under review tentatively as fears resurfaced over the impending US 'fiscal cliff'. Concerns also centred around the extent to which the rebound in markets had been fuelled by the actions of policy makers in Europe, the US, Japan and China and how markets would react if such support was withdrawn. As these fears dissipated, markets responded positively. Encouragingly, this positive sentiment continued despite potentially destabilising events in Cyprus and Italy and slightly mixed economic data from the US and China. In the UK, the consumer environment has begun to show early signs of recovery, and this has been reflected in improved sentiment towards UK domestic stocks. Small and midcap stocks continued to perform well with the FTSE 250 Index gaining 21.0% compared to a rise of 14.3% in the FTSE 100 Index. This encouraging absolute and relative performance illustrates the growing appetite for smaller companies. By contrast, AIM was disappointing with the FTSE AIM All-Share Index rising by only 5.7% (all percentages with income reinvested). Revenue earnings and dividends The consolidated revenue return per share for the period amounted to 2.04 pence compared with 1.49 pence for the corresponding period in the previous year, an increase of 36.9% which is largely attributable to the receipt of a number of special dividends. The Board is pleased to declare an interim dividend of 0.75 pence per share (2012: 0.62 pence per share) payable on 23 August 2013 to shareholders on the register on 2 August 2013 (ex-dividend date is 31 July 2013). Subsidiary companies T.T. Finance PLC and The Third Throgmorton Trust Limited, the Company's subsidiaries have not traded for some considerable time and are in the process of being wound up. Alternative Investment Fund Managers' Directive The Alternative Investment Fund Managers' Directive ("the Directive") is a European directive which seeks to reduce potential systemic risk by regulating alternative investment fund managers ("AIFMs"). AIFMs are responsible for investment products that fall within the category of Alternative Investment Funds ("AIFs") and investment companies are included in this. The Directive was implemented on 22 July 2013 although it has been confirmed that the Financial Conduct Authority ("FCA") will permit a transitional period of one year within which UK AIFMs must seek authorisation. The Board is currently taking independent advice on the consequences for the Company and has decided in principle that BlackRock will be appointed as its AIFM in advance of the end of the transitional period on 22 July 2014. Prospects We remain optimistic about the prospects for UK small and midcap companies. The fundamentals continue to look supportive and the macroeconomic background appears to be improving. The recent increased appetite for the sector is certainly encouraging and they have historically performed well as UK economic growth accelerates. We are mindful, however, that a gradual return to more normal levels of interest rates is unlikely to be accomplished without significant market volatility, and this process - and how it is communicated to markets - will need to be skilfully handled by the world's central bankers. The CFD portfolio with its ability to take both long and short positions has the potential to take advantage of such volatility as it arises. However, any rise in interest rates will signal an improving global economic outlook and we believe that the portfolio is well positioned to benefit from this environment. Our Investment Manager continues to focus on high quality companies which possess strong balance sheets and resilient earnings. We also believe that there is scope for the portfolio to benefit from an expected pick-up in corporate mergers and acquisitions activity. Crispin Latymer Chairman 23 July 2013 Interim Management Report and Responsibility Statement The Chairman's Statement and the Investment Manager's Report give details of the 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; - Market; - Financial; and - Third party service providers. The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 30 November 2012. A detailed explanation can be found in the Directors' Report on pages 14 and 15 and in note 18 on pages 47 to 52 of the Annual Report and Financial Statements which are available on the website maintained by the Investment Manager, BlackRock Investment Management (UK) Limited, at www.blackrock.co.uk/thrg. 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. Going Concern The Directors are satisfied that the Company has adequate resources to continue in operational existence for the forseeable future and is financially sound. The Company has a portfolio of investments which are considered to be readily realisable and is able to meet all of its liabilities from its assets and the income generated from these assets. Related party disclosure and transactions with the Investment Manager The Investment Manager is regarded as a related party under the Listing Rules and details of the management fees payable are set out in note 4 and note 9. The related party transactions with the Directors are set out in note 10. 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 International Accounting Standard 34 'Interim Financial Reporting'; and - the Interim Management Report, together with the Chairman's Statement and Investment Manager's Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules. The half yearly financial report was approved by the Board on 23 July 2013 and the above responsibility statement was signed on its behalf by the Chairman. Crispin Latymer For and on behalf of the Board 23 July 2013 Investment Manager's Report Market review and investment performance Stockmarkets have been firm during the six month period and our net asset value ("NAV") has grown steadily. Markets have benefited from co-ordinated and determined efforts by Western governments to drive down interest rates, improving private sector growth in the USA, and signs in Asia and Europe that economic growth may be stabilising. Over the six months the Company's NAV per share increased by 22.0% to 287.57p; compared to the Company's benchmark which rose by 16.1%. The FTSE 100 Index increased by 14.3% (all percentages with income reinvested). The long only portfolio stock selection was positive and net gains of Â£5.1 million were achieved in the CFD portfolio; significant gains on the long CFDs substantially exceeded losses on the short CFDs. Sector allocation in the long only portfolio was slightly positive. Looking at stock selection, the most significant positive contributors to relative performance were our holdings in Blinkx, Ashtead Group, Xaar and Polar Capital. Good contributions also came from core holdings ITE Group, Howden Joinery Group, Senior and Workspace Group. All of these holdings, except Polar Capital, are held in the CFD portfolio as well as the long only portfolio. Blinkx, the leading supplier of internet video search capability and content, announced full year results with revenue up by 73% and earnings up by 94%, both well ahead of expectations. Ashtead's shares have performed well on the back of strong trading in the US where Ashtead provides exposure to recovery in the housing market; its quarterly profits were up by 173% on the comparable quarter in the prior year. Xaar announced 2012 earnings per share up by 88% on the back of strong sales of its Platform 3 printheads for use in printing on ceramics. Xaar shares, which increased by 145% over the six month period, continued to benefit from a subsequent strong trading update made in April 2013. Polar Capital announced assets under management had grown strongly. On the negative side the largest detractor from relative performance was our holding in AZ Electronic Materials. AZ Electronic Materials announced that it had a weaker start to the year and expected this to continue into the second quarter; earnings were downgraded. This is not inconsistent with many industrial companies which had a tough start to 2013. We still regard AZ Electronic Materials as a well run world leading supplier of specialty chemicals. The company's shares have already begun to recover. In terms of sector allocation the portfolio benefited from the overweight positions in housebuilders and food and drug retailers, where we hold Booker Group, and our underweight positions in oil & gas and mining shares. These gains were partially offset by our underweight position in travel & leisure companies which performed well. Activity We continued to reduce the number of holdings in the long only portfolio. This recognises that the bottom end of the market in terms of market capitalisation remains challenged, especially many AIM listed smaller companies. We participated in a number of IPOs and placings, in particular Countrywide, Tyman and Thomas Cook Group. Countrywide is the UK's largest residential property services group with activities which include estate agency (brands include Hamptons), lettings and surveying. We see Government schemes such as Help to Buy supporting the housing market and helping to increase activity, all of which should be good for Countrywide. Tyman manufactures door fittings and is benefiting from a pick up in new housebuilding activity in the US. Tyman has recently announced the purchase of Truth from Melrose, and with this, its sales will be 60% US based, mainly to the new housebuilding market. Thomas Cook Group is the well known travel operator. During May it announced a placing and rights issue to strengthen its balance sheet. Following an update with management we bought a small position in the placing. Portfolio positioning We have maintained exposure to high quality, well managed and well financed companies. We are most overweight electronics companies, which are typically fast growing, internationally exposed businesses with significant levels of intellectual property, such as Xaar and Oxford Instruments. We are also overweight housebuilders which, like estate agents, are likely to continue to do well, given UK Government measures to stimulate the market. We are most underweight, and indeed short in the CFD portfolio, support services companies, oil & gas producers, and travel & leisure companies. We are wary of outsourcing companies, especially those exposed to government spending where pressure to reduce costs is intense, construction companies exposed to the very weak UK construction market, retailers with mature offerings and large leasehold estates, and engineering and electronics companies with relatively limited intellectual property and modest gross margins. Outlook The macroeconomic position looks to be improving gradually. Growth in the US is being led by the private sector, and the housing market in particular has been looking much stronger since mid-2012. In China we believe that GDP growth will almost certainly continue at levels well ahead of major developed nations. It seems, however, that the new leadership in China is prepared to accept lower growth in the short term. In Europe political uncertainties remain but there are signs that most economies are stabilising. The UK economy looks to be gradually strengthening and consumer confidence rebuilding. In the past UK small and midcap companies have tended to do well going into periods of growth. We believe companies we own are well placed to make the most of slowly improving economic conditions. They are run by dynamic management teams, able to make the most of opportunities ahead, and many have good exposure to the faster growing parts of the world. We expect reasonable earnings growth from our holdings, and this should continue to feed through into share prices and dividends. Mike Prentis and Richard Plackett BlackRock Investment Management (UK) Limited 23 July 2013 Twenty Largest Investments as at 31 May 2013 Market value % of Company Â£'000 net portfolio Business activity Senior Ordinary 5,649 3.2 Manufacture and supply of shares components for the aerospace and automotive sector Long CFD 1,558 position Bellway Ordinary 5,418 3.0 Housebuilding shares Long CFD 1,277 position Howden Joinery Ordinary 4,834 2.8 Design and manufacture of Group shares kitchens sold to local builders Long CFD 1,479 position Victrex Ordinary 4,630 2.6 Manufacture and supply of shares PEEK thermoplastic products Long CFD 1,337 position ITE Group Ordinary 4,482 2.6 Organisation of trade shares exhibitions in Russia and other former Soviet Union countries Long CFD 1,468 position Oxford Ordinary 4,453 2.6 Design and manufacture of Instruments shares tools and systems to analyse and manipulate matter at the Long CFD 1,434 atomic level position Booker Group Ordinary 4,113 2.5 Wholesale of grocery shares products Long CFD 1,462 position Workspace Ordinary 4,583 2.4 Supply of flexible workspace Group shares to businesses in London Long CFD 805 position Restaurant Ordinary 3,792 2.4 Operation of branded Group shares restaurants Long CFD 1,555 position Dunelm Group Ordinary 3,897 2.1 Supply of home furnishings shares Long CFD 897 position Ashtead Group Ordinary 3,631 2.0 Hire of plant, predominantly shares in the US Long CFD 984 position Blinkx* Ordinary 3,917 2.0 Supply of video technology shares and an online catalogue to enable video clips to be Long CFD 666 viewed position Aveva Group Ordinary 2,935 2.0 Development and marketing of shares engineering computer software Long CFD 1,618 position Xaar Ordinary 2,951 2.0 Design and manufacture of shares industrial printheads used in inkjet printers Long CFD 1,473 position Rathbone Ordinary 2,524 1.6 Private client fund Brothers shares management Long CFD 1,160 position Abcam* Ordinary 2,072 1.4 Production and distribution shares of research grade antibodies and associated products Long CFD 1,129 position Bovis Homes Ordinary 1,587 1.4 Housebuilding shares Long CFD 1,503 position Keller Group Ordinary 2,442 1.4 Provision of ground shares engineering services globally Long CFD 628 position Headlam Group Ordinary 3,065 1.4 Distribution of carpets and shares other floor coverings Consort Ordinary 2,977 1.3 Manufacture of drug delivery Medical shares devices ====== ==== 20 Largest Investments 96,385 42.7 ====== ==== In addition, the Company had long only equity investments in 144 companies and 77 long and short CFD positions at 31 May 2013. The long CFD positions in the table above state the market value of the securities underlying the long CFD positions, as at 31 May 2013. *Traded on the Alternative Investment Market ("AIM") of the London Stock Exchange. Net portfolio is calculated as long CFD portfolio less short CFD portfolio plus long only equity portfolio. All investments are in equity shares unless otherwise stated. Disclosure of the Company's smaller holdings would not add materially to shareholders' understanding of the Company's portfolio structure and priority investment themes, hence only the twenty largest investments are disclosed. Distribution of Investments as at 31 May 2013 % of long % of long % of short % of gross Sector only portfolio CFD portfolio CFD portfolio portfolio Aerospace & Defence 3.6 0.7 -0.2 4.1 Beverages 0.3 - - 0.3 Chemicals 4.5 0.6 -0.3 4.8 Construction & Materials 2.8 0.3 -0.7 2.4 Electronic & Electrical 6.7 1.9 -0.9 7.7 Equipment Financial Services 8.4 0.5 - 8.9 Fixed Line 1.7 - -0.3 1.4 Telecommunications Food & Drug Retailers 1.8 0.6 -0.5 1.9 Food Producers 1.1 - -0.3 0.8 General Retailers 5.8 0.8 -1.1 5.5 Health Care Service & 1.8 - -0.2 1.6 Equipment Household Goods & Home 5.2 1.2 - 6.4 Construction Industrial Engineering - 0.8 -0.7 0.1 Industrial Metals & 0.5 - - 0.5 Mining Industrial Transportation 2.1 - -0.3 1.8 Leisure Goods 0.6 - - 0.6 Media 5.5 0.9 - 6.4 Mining 2.9 0.1 - 3.0 Oil & Gas Producers 4.0 0.1 -0.1 4.0 Personal Goods 1.4 - -0.4 1.0 Pharmaceuticals & 4.2 0.5 -0.2 4.5 Biotechnology Real Estate Investment & 4.5 0.4 - 4.9 Services Real Estate Investment 2.8 0.8 - 3.6 Trusts Software & Computer 6.9 1.3 -0.1 8.1 Services Support Services 9.1 1.4 -2.3 8.2 Technology & Hardware 1.3 0.3 -0.3 1.3 Equipment Travel & Leisure 5.5 0.9 -0.5 5.9 Other 0.3 - - 0.3 ---- ---- ---- ----- Total investments 95.3 14.1 -9.4 100.0 ---- ---- ---- ----- Analysis of the portfolio as at 31 May 2013 Gross Basis (1) % FTSE 250 58.0 FTSE AIM 19.4 FTSE Small Cap 17.6 FTSE Fledgling 0.7 Other 4.3 Net Basis (2) % FTSE 250 54.8 FTSE AIM 22.8 FTSE Small Cap 16.7 FTSE Fledgling 0.9 Other 4.8 Source: BlackRock. 1. Long and short CFD positions in aggregate plus long only equity portfolio. 2. Long CFD portfolio less short CFD portfolio plus long only equity portfolio. Market capitalisation as at 31 May 2013 Â£0 to Â£100m Â£100m to Â£400m Â£400m to Â£1bn Â£1bn+ Short positions % of net -0.1% -1.6% -4.2% -3.5% portfolio Long positions % of net 7.7% 29.2% 37.4% 35.1% portfolio Source: BlackRock. Position size as at 31 May 2013 Â£0 to Â£1m Â£1m to Â£2m Â£2m+ Short positions % of net -9.0% -0.4% - portfolio Long positions % of net 19.4% 34.1% 55.9% portfolio Source: BlackRock. Consolidated Statement of Comprehensive Income for the six months ended 31 May 2013 Revenue Â£'000 Capital Â£'000 Total Â£'000 Six months Six months Year Six months Six months Year Six months Six months Year ended ended ended ended ended ended ended ended ended 31.05.13 31.05.12 30.11.12 31.05.13 31.05.12 30.11.12 31.05.13 31.05.12 30.11.12 Notes (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) Gains on investments held at fair value through profit or loss - - - 34,679 9,692 26,521 34,679 9,692 26,521 Net (loss)/ profit on contracts for difference (112) (43) (52) 5,171 892 1,870 5,059 849 1,818 Income from investments held at fair value through profit or loss 3 2,001 1,559 3,382 - - - 2,001 1,559 3,382 Other income 3 3 3 9 - - - 3 3 9 ----- ----- ----- ------ ----- ------ ------ ------ ------ Total revenue 1,892 1,519 3,339 39,850 10,584 28,391 41,742 12,103 31,730 ----- ----- ----- ------ ----- ------ ------ ------ ------ Investment management and performance fees 4 (215) (183) (369) (3,137) (1,542) (2,368) (3,352) (1,725) (2,737) Other operating expenses 5 (181) (247) (404) - - - (181) (247) (404) ----- ----- ----- ------ ----- ------ ------ ------ ------ Total operating expenses (396) (430) (773) (3,137) (1,542) (2,368) (3,533) (1,972) (3,141) ----- ----- ----- ------ ----- ------ ------ ------ ------ Net profit before finance costs and taxation 1,496 1,089 2,566 36,713 9,042 26,023 38,209 10,131 28,589 Finance costs - - (2) - - - - - (2) ----- ----- ----- ------ ----- ------ ------ ------ ------ Profit on ordinary activities before taxation 1,496 1,089 2,564 36,713 9,042 26,023 38,209 10,131 28,587 Taxation on ordinary activities (3) - - - - - (3) - - ----- ----- ----- ------ ----- ------ ------ ------ ------ Net profit on ordinary activities after taxation 7 1,493 1,089 2,564 36,713 9,042 26,023 38,206 10,131 28,587 ===== ===== ===== ====== ===== ====== ====== ====== ====== Earnings per ordinary share - basic and diluted 7 2.04p 1.49p 3.51p 50.20p 12.36p 35.58p 52.24p 13.85p 39.09p ===== ===== ===== ====== ===== ====== ====== ====== ====== The total column of this statement represents the Consolidated Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period. All income is attributable to the equity holders of The Throgmorton Trust PLC. There are no minority interests. The net profit of the Company for the period was Â£38,206,000 (six months ended 31 May 2012: Â£10,131,000; year ended 30 November 2012: Â£28,587,000). The Group had no recognised gains or losses other than those disclosed in the Consolidated Statement of Comprehensive Income. The net profit for the periods disclosed above represents the Group's Total Comprehensive Income. Details of dividends paid and payable at the balance sheet date are given in note 6. Consolidated Statement of Changes in Equity for the six months ended 31 May 2013 Called up Share Capital share premium Special redemption Capital Revenue capital account reserve reserve reserves reserve Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 For the six months ended 31 May 2013 (unaudited) At 30 November 2012 4,026 21,049 35,272 11,905 95,378 6,437 174,067 Total Comprehensive Income: Net profit for the period - - - - 36,713 1,493 38,206 Transactions with owners, recorded directly to equity: Dividends paid* - - - - - (1,975) (1,975) ----- ------ ------ ------ ------- ----- ------- At 31 May 2013 4,026 21,049 35,272 11,905 132,091 5,955 210,298 ----- ------ ------ ------ ------- ----- ------- For the six months ended 31 May 2012 (unaudited) At 30 November 2011 4,026 21,049 35,272 11,905 69,339 6,183 147,774 Total Comprehensive Income: Net profit for the period - - - - 9,042 1,089 10,131 Transactions with owners, recorded directly to equity: Refund of unclaimed dividends - - - - - 8 8 Dividends paid** - - - - - (1,865) (1,865) ----- ------ ------ ------ ------- ----- ------- At 31 May 2012 4,026 21,049 35,272 11,905 78,381 5,415 156,048 ----- ------ ------ ------ ------- ----- ------- For the year ended 30 November 2012 (audited) At 30 November 2011 4,026 21,049 35,272 11,905 69,339 6,183 147,774 Total Comprehensive Income: Net profit for the year - - - - 26,023 2,564 28,587 Transactions with owners, recorded directly to equity: Write back of share issue costs - - - - 6 - 6 Write back of subscription share issue costs - - - - 10 - 10 Refund of unclaimed dividends - - - - - 8 8 Dividends paid and declared*** - - - - - (2,318) (2,318) ----- ------ ------ ------ ------- ----- ------- At 30 November 2012 4,026 21,049 35,272 11,905 95,378 6,437 174,067 ----- ------ ------ ------ ------- ----- ------- *Final dividend of 2.70p per share for the year ended 30 November 2012, declared on 8 February 2013 and paid on 4 April 2013. **Final dividend of 2.55p per share for the year ended 30 November 2011, declared on 13 February 2012 and paid on 5 April 2012. ***Final dividend of 2.55p per share for the year ended 30 November 2011, declared on 13 February 2012 and paid on 5 April 2012 and interim dividend of 0.62p per share for the year ended 30 November 2012, declared on 13 July 2012 and paid on 24 August 2012. Consolidated Statement of Financial Position as at 31 May 2013 31 31 30 May May November 2013 2012 2012 Â£'000 Â£'000 Â£'000 Notes (unaudited) (unaudited) (audited) Non current assets Investments held at fair value through profit or loss 214,859 158,036 173,933 ------- ------- ------- Current assets Other receivables 866 800 590 Amounts due in respect of contracts for difference 1,261 77 377 Cash held on margin deposit with brokers - 3,489 - Cash 330 1,906 2,012 ------- ------- ------- 2,457 6,272 2,979 ------- ------- ------- Total assets 217,316 164,308 176,912 Current liabilities Other payables (5,732) (5,752) (2,543) Collateral received in respect of contracts for difference (1,286) (2,439) (302) Amounts due in respect of contracts for difference - (69) - ------- ------- ------- (7,018) (8,260) (2,845) ------- ------- ------- Net assets 210,298 156,048 174,067 ======= ======= ======= Equity attributable to equity holders Called up share capital 8 4,026 4,026 4,026 Share premium account 21,049 21,049 21,049 Special reserve 35,272 35,272 35,272 Capital redemption reserve 11,905 11,905 11,905 Capital reserves 132,091 78,381 95,378 Revenue reserve 5,955 5,415 6,437 ------- ------- ------- Total equity shareholders' funds 7 210,298 156,048 174,067 ======= ======= ======= Net asset value per ordinary share - basic and diluted 7 287.57p 213.38p 238.02p ======= ======= ======= Consolidated Cash Flow Statement for the six months ended 31 May 2013 Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 Â£'000 Â£'000 Â£'000 (unaudited) (unaudited) (audited) Net cash (outflow)/inflow from operating activities (692) 792 (1) ----- ----- ----- Financing activities Refund of unclaimed dividends - 8 8 Dividends paid (1,975) (1,865) (2,318) ----- ----- ----- Net cash outflow from financing (1,975) (1,857) (2,310) ----- ----- ----- Decrease in cash and cash equivalents (2,667) (1,065) (2,311) Effect of foreign exchange rate changes 1 - - ----- ----- ----- Change in cash and cash equivalents (2,666) (1,065) (2,311) Cash and cash equivalents at the start of period 1,710 4,021 4,021 ----- ----- ----- (Debt)/cash and cash equivalents at the end of the period (956) 2,956 1,710 ===== ===== ===== Comprised of: Cash held on margin deposit with brokers - 3,489 - Cash 330 1,906 2,012 Collateral received in respect of contracts for difference (1,286) (2,439) (302) ----- ----- ----- Total (956) 2,956 1,710 ===== ===== ===== Reconciliation of Net Income before Finance Costs and Taxation to Net Cash Flow from Operating Activities Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 Â£'000 Â£'000 Â£'000 (unaudited) (unaudited) (audited) Operating activities Net profit before taxation 38,209 10,131 28,587 Add back interest paid 134 149 299 Gains on investments and contracts for difference held at fair value through profit or loss including transaction costs (39,983) (10,758) (28,690) Net movement on foreign exchange (1) - - Sales of investments held at fair value through profit or loss 55,170 33,251 84,256 Purchases of investments held at fair value through profit or loss (61,421) (36,153) (86,224) Net realised gains on contracts for difference 4,426 1,875 2,607 (Increase)/decrease in other receivables (305) (243) 12 Decrease/(increase) in amounts due from brokers 23 (320) (361) Increase in amounts due to brokers 393 1,160 37 Increase/(decrease) in other payables 2,790 1,849 (212) ----- ----- ------ Net cash (outflow)/inflow from operating activities before interest and taxation (565) 941 311 ----- ----- ------ Interest paid (134) (149) (299) Taxation recovered on overseas income 7 - (13) ----- ----- ------ Net cash (outflow)/inflow from operating activities (692) 792 (1) ===== ===== ====== Notes to the Financial Statements for the six months ended 31 May 2013 1. Principal activity The principal activity of the Company is that of an investment trust company within the meaning of sub-sections 1158-1165 of the Corporation Tax Act 2010. The Company's two subsidiaries, The Third Throgmorton Trust Limited and T.T. Finance PLC have not traded for some considerable time and are in the process of being wound up. 2. Basis of preparation The half yearly financial report has been prepared using the same accounting policies set out in the Company's annual report and financial statements for the year ended 30 November 2012 (which were prepared in accordance with IFRS as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006), and in accordance with International Accounting Standard 34. These comprise standards and interpretations of the International Accounting Standards and Standard Interpretations Committee as approved by the International Accounting Standards Committee that remains in effect, to the extent that IFRS have been adopted by the European Union. Insofar as the Statement of Recommended Practice ("SORP") for investment trust companies and venture capital trusts issued by the Association of Investment Companies ("AIC"), revised in January 2009 is compatible with IFRS, the financial statements have been prepared in accordance with the guidance set out in the SORP. The functional currency of the Group is UK pounds sterling as this is the currency of the primary economic environment in which the Group operates. Accordingly, the financial statements are presented in UK pounds sterling. 3. Income Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Investment income: UK listed dividends 1,813 1,468 3,208 Overseas listed dividends 188 91 174 ----- ----- ----- 2,001 1,559 3,382 ----- ----- ----- Other income: Deposit interest 3 3 9 ----- ----- ----- 3 3 9 ----- ----- ----- Total 2,004 1,562 3,391 ===== ===== ===== 4. Investment management and performance fees Six months ended Six months ended Year ended 31 May 2013 31 May 2012 30 November 2012 (unaudited) (unaudited) (audited) Revenue Capital Total Revenue Capital Total Revenue Capital Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Investment management fee 215 645 860 183 549 732 369 1,107 1,476 Performance fee - 2,492 2,492 - 993 993 - 1,261 1,261 --- ----- ----- --- ----- ----- --- ----- ----- Total 215 3,137 3,352 183 1,542 1,725 369 2,368 2,737 === ===== ===== === ===== ===== === ===== ===== 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 to derivatives through the CFD portfolio. In addition, BlackRock is entitled to a performance fee of 12.5% of any net asset value (total return) outperformance against the Numis Smaller Companies plus AIM (excluding Investment Companies) Index (the "Benchmark index"). The performance fee is subject to a high watermark and is capped at 3.5% of performance fee market value. A sliding scale cap applies in performance periods during which the NAV decreases (but still outperforms the benchmark). Any excess performance fee over the capped amount for the performance period shall neither be paid nor carried forward. Full details of the Company's investment management agreement with BlackRock are given on page 16 of the Company's annual report for the year ended 30 November 2012. The investment management fee is allocated 75% to the capital column and 25% to the revenue column of the Consolidated Statement of Comprehensive Income in line with the Board's expected long term split of returns, in the form of capital gains and income respectively, from the investment portfolio. A performance fee of Â£2,492,000 was accrued for the six months ended 31 May 2013 (six months ended 31 May 2012: Â£993,000; year ended 30 November 2012: Â£1,261,000). The performance fees have been wholly allocated to the capital column of the Consolidated Statement of Comprehensive Income, as performance has been predominantly generated through the capital returns of the investment portfolio. 5. Other operating expenses Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Auditors' remuneration - audit services 14 14 28 - other audit services* 5 5 5 Registrar's fee 12 19 32 Directors' remuneration 63 54 110 Other administration costs 87 155 229 --- --- --- 181 247 404 === === === *Other audit services relate to the review of the half yearly financial report. 6. Dividend The Board has declared an interim dividend of 0.75p per share (2012: 0.62p) payable on 23 August 2013 to shareholders on the register at the close of business on 2 August 2013. 7. Consolidated earnings and net asset value per ordinary share Revenue and capital earnings per share are shown below and have been calculated using the following: Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 (unaudited) (unaudited) (audited) Net revenue profit attributable to ordinary shareholders (Â£'000) 1,493 1,089 2,564 Net capital profit attributable to ordinary shareholders (Â£'000) 36,713 9,042 26,023 ------- ------- ------- Total earnings attributable to ordinary shareholders (Â£'000) 38,206 10,131 28,587 ======= ======= ======= Total equity shareholders' funds (Â£'000) 210,298 156,048 174,067 ------- ------- ------- Ordinary shares The weighted average number of ordinary shares in issue during the period on which the undiluted earnings per ordinary share was calculated was: 73,130,326 73,130,326 73,130,326 ---------- ---------- ---------- The actual number of ordinary shares in issue at the end of each period on which the diluted net asset value was calculated was*: 73,130,326 73,130,326 73,130,326 ---------- ---------- ---------- Undiluted Revenue earnings per share 2.04p 1.49p 3.51p Capital earnings per share 50.20p 12.36p 35.58p ------- ------- ------- Total earnings per share 52.24p 13.85p 39.09p ------- ------- ------- Net asset value per share 287.57p 213.38p 238.02p ======= ======= ======= Ordinary share price 243.50p 174.25p 193.25p ======= ======= ======= *The Company does not have any dilutive securities. 8. Called up share capital Ordinary shares in Treasury Total Nominal issue shares shares value number number number Â£'000 Allotted, called up and fully paid share capital comprised: Ordinary shares of 5p each ---------- --------- ---------- ----- At 1 December 2012 73,130,326 7,400,000 80,530,326 4,026 ---------- --------- ---------- ----- At 31 May 2013 73,130,326 7,400,000 80,530,326 4,026 ========== ========= ========== ===== There was no change in the share capital during the period. 9. Transaction with the Investment Manager BlackRock Investment Management (UK) Limited ("BlackRock") provides management and administration services to the Company under a contract which is terminable on six months' notice. Details of the fees receivable by BlackRock in relation to these services are set out in note 4. Six Six months months Year ended ended ended 31 31 30 May May November 2013 2012 2012 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 Investment Management fees payable 860 1,044 746 Performance fees accrued (1) 3,753 2,821 1,261 ----- ----- ----- 4,613 3,865 2,007 ----- ----- ----- (1) Includes performance fee for the year ended 30 November 2012 of Â£1,261,000 and performance fee for the six months ended 31 May 2012 of Â£2,492,000. The final performance fee for the full year to 30 November 2013 will not crystallise and fall due until the calculation date of 30 November 2013. 10. Related party disclosure The Board consists of five non-executive Directors, all of whom are considered to be independent. None of the Directors has a service contract with the Company. The Chairman receives an annual fee of Â£34,000, the Chairman of the Audit Committee receives an annual fee of Â£25,000 and each of the other Directors receives an annual fee of Â£22,000. At 31 May 2013, the period end, all five members of the Board held shares in the Company as set out below: Ordinary Ordinary shares shares 31 23 May July 2013 2013 Simon Beart 36,883* 37,000â€¡ Crispin Latymer 29,589 29,652 Jean Matterson 12,000 12,000 Eric Stobart 18,617** 18,828â€¡â€¡ Harry Westropp 24,000 24,000 * Including 10,451 shares held by Mrs Beart. ** Including 10,670 shares held by Mrs Stobart. â€¡Including 6,230 shares held by Mrs Beart. â€¡â€¡Including 6,441 shares held by Mrs Stobart. 11. Contingent liabilities There were no contingent liabilities at 31 May 2013, 31 May 2012 or 30 November 2012. 12. 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 2013 and 31 May 2012 has not been audited. The information for the year ended 30 November 2012 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the auditor on those financial statements contained no qualification or statement under sections 498(2) or (3) of the Companies Act 2006. 13. Annual results The Board expects to announce the annual results for the year ending 30 November 2013, as prepared under IFRS, in February 2014. Copies of the results announcement will be available from the Secretary on 020 7743 3000. The annual report should be available by the beginning of February 2014, with the Annual General Meeting being held in March 2014. Independent Review Report to The Throgmorton Trust PLC Introduction We have been engaged by the Company to review the condensed set of financial statements in the half yearly financial report for the six months ended 31 May 2013 which comprises the Consolidated Statement of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Statements of Financial Position, Consolidated Cash Flow Statements, Reconciliation of Net Income before Taxation to Net Cash Flow from Operating Activities, and the related notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The half yearly financial report is the responsibility of, and has been approved by the Directors. The Directors are responsible for preparing the half yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half yearly financial report based on our review. Scope of review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half yearly financial report for the six months ended 31 May 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. Ernst & Young LLP London 23 July 2013 For further information, please contact: Jonathan Ruck Keene, Managing Director, Investment Companies, BlackRock Investment Management (UK) Limited Tel: 020 7743 2178 Mike Prentis, Fund Manager, BlackRock Investment Management (UK) Limited Tel: 020 7743 2312 Emma Phillips, Media & Communication, BlackRock Investment Management (UK) Limited Tel: 020 7743 2922 23 July 2013 12 Throgmorton Avenue London EC2N 2DL END The Half Yearly Financial Report will also be available on the BlackRock Investment Management website at http://www.blackrock.co.uk/individual/literature/ interim-report/the-throgmorton-trust-plc-interim-report.pdf. Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement.

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