Portfolio Update

BLACKROCK THROGMORTON TRUST PLC All information is at31 October 2016 and unaudited.
Performance at month end is calculated on a cum income basis
			One Month		Three months		One year	Three years			Five years
Net asset value (undiluted)#			-2.6		5.3		5.4	30.0			108.1
Net asset value (fully diluted)			-2.6		5.3		5.4	30.0			102.4
Share price			-4.9		1.9		1.3	16.2			113.3
Benchmark*			-1.3		3.5		5.3	18.5			76.0
Sources: BlackRock and Datastream #Prior to dilution arising on conversion of subscription shares. *With effect from 1 December 2013 the Numis Smaller Companies excluding AIM (excluding investment companies) Index replaced the Numis Smaller Companies plus AIM (excluding investment companies) Index as the Company’s benchmark. The three and five year period indices have been blended to reflect this.
At month end
Net asset value capital only:									393.79p
Net asset value incl. income:									400.14p
Share price									318.00p
Discount to cum income NAV									20.5%
Net yield1									2.2%
Total Gross assets2									£292.6m
Net market exposure as a % of net asset value5									108.4%
Ordinary shares in issue3:									73,130,326
2015 ongoing charges (excluding performance fees)4:									1.1%
2015 ongoing charges ratio (including performance fees):									2.3%
1. Calculated using current year interim dividend paid on 19 August 2016 and prior year final dividend. 2. Includes current year revenue and excludes the gross exposure through contracts for difference. 3. Excluding 7,400,000 shares held in treasury. 4. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2015. 5. Long positions less short positions as a percentage of net asset value.
Sector Weightings				% of Total Gross Assets
Industrials				31.4
Consumer Services				21.6
Financials				14.1
Consumer Goods				9.3
Basic Materials				8.6
Health Care				6.5
Technology				5.9
Oil & Gas				2.2
Net current assets				0.4
				-----
Total				100.0
				=====
Market Exposure (Quarterly)
	30.11.15	29.02.16				31.05.16 %				31.08.16 %
Long	115.2	118.2				114.4				114.3
Short	9.2	11.2				8.3				8.3
Gross exposure	124.4	129.4				122.7				122.6
Net exposure	106.0	107.0				106.1				106.0
Ten Largest Investments
Company				% of Total Gross Assets
4imprint Group				3.2
CVS Group				2.9
JD Sports				2.6
Dechra Pharmaceuticals				2.5
Avon Rubber				2.0
Hill & Smith				1.7
Cineworld Group				1.7
Accesso Technology				1.6
Savills				1.6
Fevertree Drinks				1.6

Commenting on the markets, Mike Prentis and Dan Whitestone, representing the Investment Manager noted:

During October the Company’s NAV per share fell by 2.6% on a cum income basis whilst our benchmark (Numis Smaller Companies excluding AIM (excluding investment companies) Index) fell by 1.3%; the FTSE 100 Index rose by 1.0%.

The long only portfolio fell in value by 2.3%, underperforming the benchmark by 1.0%. The CFD portfolio lost 0.17% during the month. These portfolio returns are before costs.

Underperformance in the long only portfolio was mainly driven by stock selection. The largest detractor was our holding in GB Group, a company focussed on identity verification and fraud prevention. GB Group announced a trading update covering the six months to 30 September 2016 indicating organic sales growth of 9% and operating profits up by 11%. Growth was lower than expected and impacted by the slower than expected rollout of the GOV.UK Verify program. GB Group shares have been strong performers over the last few years, the shares had become highly rated, so any news which was clearly not good was likely to be taken poorly. GB Group shares fell by 29% during the month.

Sector allocation within the long only portfolio was also negative. The largest detractors were our underweight position in mining stocks and our overweight position in aerospace & defence companies. Our underweight sector position in IT hardware companies was positive.

Activity within the long only portfolio during the month was fairly modest.

Turning to the CFD portfolio, the Company lost 0.17%, where the gains in the short book were insufficient to offset the losses in the long book. This was rather a frustrating month, which was short on news flow but focused a lot on sentiment and prospects for reflation. The consequence of this was that despite our benchmark falling by 1.3%, sectors such as mining performed very strongly whereas consumer services suffered from ongoing sterling weakness. This negatively impacted the Company’s positioning on both sides of the book and helps explain why most of the Company’s detractors were either long positions in consumer services (that gave up some of their recent gains) or short positions in industrials (which continue to re-rate) albeit the number of industrials delivering profit warnings around the globe should not go unnoticed! 

We have made little change to portfolio positioning and still see good money making opportunities on the short side in the coming months. Meanwhile, the shares in our long book continue to deliver.  New ideas are coming into the Company on both sides of the book, and indeed, the biggest contributor to October’s performance was Luceco, a recent IPO which we participated in.  Luceco has a heritage in electrical products and owns some of the UK’s best known commercial brands. They’ve established a low cost production advantage with their own manufacturing facility in China. By concentrating on innovation, and partnered with the newest and fastest growing distribution channel, the “net price offer”, we think this distribution channel is hugely disruptive to a mature industry. This is generating rapid market share gains in its traditional business, whilst their recent move into LED lighting can be sold through the same channel but is at the start of its industry lifecycle. All this points to several years of very strong growth.  

18 November 2016

ENDS

Latest information is available by typing www.blackrock.co.uk/thrg on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  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.