Portfolio Update

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 January 2018 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	0.2	2.7	31.0	76.8	137.7
Share price	2.3	5.9	38.6	82.9	149.6
Benchmark*	-3.1	-1.3	15.1	41.7	75.0

Sources: BlackRock and Datastream

*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 five year period indices have been blended to reflect this.

At month end
Net asset value capital only:	558.15p
Net asset value incl. income:	567.43p
Share price	488.00p
Discount to cum income NAV	14.0%
Net yield1:	1.7%
Total Gross assets2:	£415.0m
Net market exposure as a % of net asset value3:	111.2%
Ordinary shares in issue4:	73,130,326
2016 ongoing charges* (excluding performance fees5,6:	1.1%
2016 ongoing charges* ratio (including performance fees)5,6,7:	1.3%

*Ongoing Charges: The recently announced management fee rate reductions, as detailed in the notes below, will impact management fees in 2017 and onwards.   As a result, the 2016 Ongoing Charge figures above should not be used as a guide to future costs.  The impact of the new fee arrangements, assuming the same level of performance from the manager and assuming all other charges remain the same, would be to reduce the level of Ongoing Charges borne by the trust.

1. Calculated using 2017 interim dividend declared on 24 July 2017 and 2016 final dividend declared on 6 February 2017.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long positions less short positions as a percentage of net asset value.
4. Excluding 7,400,000 shares held in treasury.
5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2016.
6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.
7. Effective 1st December 2017 the annual performance fee arrangements for the Company have changed.  The annual performance fee is now calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total fees (comprising the base management fee of 0.35% and a potential  performance fee of 0.90%) will therefore fall to 1.25% of average month end gross assets on a two year rolling basis (from 1.70% of average annual gross assets).

Sector Weightings	% of Total Assets
Industrials	34.1
Financials	19.9
Consumer Services	14.2
Consumer Goods	9.6
Basic Materials	7.0
Health Care	5.8
Technology	5.8
Oil & Gas	2.3
Net current assets	1.3
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Total	100.0
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Market Exposure (Quarterly)

	28.02.17	31.05.17	31.08.17	30.11.17
Long	121.4	117.3	115.3	116.9
Short	6.7	6.1	5.8	6.3
Gross exposure	128.1	123.4	121.1	123.2
Net exposure	114.7	111.2	109.5	110.6

Ten Largest Investments
Company	% of Total Gross Assets
Dechra Pharmaceuticals	3.1
4imprint Group	2.8
CVS Group	2.7
Melrose Industries	2.2
Ibstock	2.2
Robert Walters	2.2
Big Yellow	2.1
Bodycote	2.1
Johnson Service Group	1.9
Ascential	1.9

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

During January the Company’s NAV per share rose by 0.2% to 567.43p on a cum income basis whilst our benchmark (the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index) fell by 3.1%; the FTSE 100 Index fell by 2.0%(all performance figures are with income reinvested and net of ongoing charges and any applicable performance fees).

Stock selection in both long and short positions drove outperformance during the month.

Dechra Pharmaceuticals was the largest positive contributor during the month following a positive trading update, reporting revenues ahead of consensus, benefiting from strong performance in North America. The company also announced the Euro 340m acquisition of a Dutch based veterinary pharmaceuticals company focused on generic products. Shares in veterinary practitioner CVS Group rallied after the company reported better than expected like for like sales growth in H1. The result was particularly welcome as CVS had been a large detractor in the fourth quarter of 2017 following a trading update flagging slower and more volatile sales growth. These results provided us with confirmation that our investment thesis remains on track and we were right to add to the shares on weakness last year. On the short side we benefitted from our short in a UK roadside assistance company where shares fell during the month on growing fears about its balance sheet.

The largest stock specific detractor came from a short position in an online electrical retailer which bounced after reporting an in-line trading update, although the house broker reduced their future year profit forecasts significantly. Our long positions in Restore and Hill & Smith underperformed despite no stock specific newsflow.

Activity during January included adding to RWS and Liontrust Asset Management and purchasing a new holding in Computacenter. We continue to use market volatility to add to existing holdings where we feel the valuation does not reflect the true earnings potential of these companies.

14 February 2018

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.