Portfolio Update

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 28 February 2019 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	2.3	2.4	-2.7	50.9	59.8
Share price	1.5	8.8	3.7	66.2	69.5
Benchmark*	1.1	1.1	-5.3	24.8	20.3

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. The performance of the indices have been blended to reflect this.

At month end
Net asset value capital only:	522.33p
Net asset value incl. income:	524.14p
Share price	490.00p
Discount to cum income NAV	6.5%
Net yield1:	2.0%
Total Gross assets2:	£383.3m
Net market exposure as a % of net asset value3:	93.8%
Ordinary shares in issue4:	73,130,326
2018 ongoing charges (excluding performance fees)5,6:	0.6%
2018 ongoing charges ratio (including performance fees)5,6,7:	1.3%

1. Calculated using the 2018 interim dividend declared on 26 July 2018 and paid on 29 August 2018, together with the 2018 final dividend declared on 12 February 2019 and due to be paid on 29 March 2019.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long exposure less short exposure 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 2018.
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 is 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%) are therefore 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
Consumer Services	28.2
Financials	23.6
Industrials	19.5
Technology	9.7
Health Care	8.5
Consumer Goods	5.8
Basic Materials	2.8
Telecommunications	0.7
Net current assets	1.2
	-----
Total	100.0
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Market Exposure (Quarterly)
	31.05.18	31.08.18	30.11.18	28.02.19
Long	115.9	119.4	103.7	108.7
Short	10.0	9.6	10.5	14.9
Gross exposure	125.9	129.0	114.2	123.6
Net exposure	105.9	109.8	93.2	93.8

Ten Largest Investments
Company	% of Total Gross Assets
Aveva	3.2
Dechra Pharmaceuticals	3.2
SSP	3.1
YouGov	3.0
Integrafin	2.7
4imprint Group	2.6
Workspace Group	2.6
Craneware	2.5
WH Smith	2.4
Beazley	2.2

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

During February the Company’s NAV per share rose by 2.3%¹ to 522.33p on a cum income basis, outperforming our benchmark index, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index, which rose by 1.1%¹; the large cap FTSE 100 Index rose by 2.3%¹ (all performance figures are in sterling terms with income reinvested).

The UK market posted another month of gains during February, shrugging off the ongoing geopolitical uncertainty, softening global economic data and largely underwhelming corporate earnings newsflow. Against the backdrop of a rising market, the Company outperformed its benchmark, with a positive contribution from the long book, while the short book marginally detracted, a good result considering the rally in a number of companies and industries that we find unattractive.

The largest positive contributors to performance came from long positions in Aveva, Next Fifteen Communications and Hiscox. Software engineering group Aveva rallied in response to a positive trading update and outlook. The trends seen in the first half of the year have continued, helped by strong sales execution, while an improving revenue mix towards software sales has resulted in margins improving. Shares in Hiscox, the specialist insurer, rose throughout the month and received a further boost towards the end after they delivered positive results. Digital marketing group, Next Fifteen, continued to rise in response to a recent trading update confirming positive trends in the business, whilst also commenting on a positive outlook.

Despite the rising market, the Company continued to generate alpha from stock specific wins in the short book. In particular, we benefitted from our short positions in a food delivery company and a branded restaurant, both of which face a multitude of challenges in our opinion, ranging from increased supply, rising cost pressures, increased financial leverage and changes in consumer behaviour.

Given the rising market, a number of the largest detractors came from short positions that rose along with the wider market despite no stock or industry specific newsflow. We did however have a couple of stock specific setbacks; one in a short position in a technology company that rallied after a capital raise, and a long position in a video gaming company that fell after beating profit expectations but slightly moderating their forward quarter’s guidance.

We continue to believe that the portfolio is in good shape. February was a busy month for company newsflow, and we saw good company updates and positive outlooks for the year ahead from the majority of our investments. As mentioned in recent reports, we had lowered both the gross and net exposure, recognising the potential for increasing levels of market volatility in the current environment. While these remain lower than normal levels, with an eye on macro economic developments, we have been gradually increasing our exposures, through both new positions and adding to existing holdings on both the long and short side.

¹Source: BlackRock as at 28 February 2019

29 March 2019

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.