Portfolio Update

The information contained in this release was correct as at 31 July 2020.  Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at:

https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. 

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 July 2020 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	3.0	11.1	-1.8	15.9	60.4
Share price	2.2	8.8	3.4	37.6	90.3
Benchmark*	2.3	7.8	-8.7	-11.6	8.1

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:	568.83p
Net asset value incl. income:	571.94p
Share price	570.00p
Premium to cum income NAV	0.3%
Net yield1:	1.8%
Total Gross assets2:	£478.4m
Net market exposure as a % of net asset value3:	117.1%
Ordinary shares in issue4:	83,643,462
2019 ongoing charges (excluding performance fees)5,6:	0.6%
2019 ongoing charges ratio (including performance fees)5,6,7:	1.8%

1. Calculated using the 2020 interim dividend declared on 23 July 2020 and due to pay on 28 August 2020, together with the 2019 final dividend declared on 06 February 2020 and paid on 27 March 2020.

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. Excludes any shares held in treasury (at 31 July 2020 the Company did not hold any shares in treasury).

5. Calculated as a percentage of average net assets and using expenses, excluding performance fees, finance costs,  direct transaction costs, custody transaction charges, and taxation) for the year ended 30 November 2019.

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
Industrials	30.2
Financials	20.1
Consumer Services	19.7
Consumer Goods	9.4
Technology	8.7
Health Care	5.6
Telecommunications	2.9
Basic Materials	2.2
Oil & Gas	0.4
Net current assets	0.8
	-----
Total	100.0
	=====
Country Weightings	% of Total Assets
United Kingdom	87.9
United States	7.2
France	1.5
Australia	1.0
Netherlands	0.9
Switzerland	0.4
Ireland	0.3
Net current assets	0.8
	-----
Total	100.0
	=====

Market Exposure (Quarterly)
	31.08.19 %	30.11.19 %	29.02.20 %	31.05.20 %
Long	109.1	103.2	119.3	118.6
Short	11.2	7.4	8.9	2.1
Gross exposure	120.3	110.6	128.2	120.7
Net exposure	97.9	95.8	110.4	116.6

Ten Largest Investments
Company	% of Total Gross Assets
Serco Group	3.2
Gamma Communications	2.9
YouGov	2.9
IntegraFin	2.8
Breedon	2.4
Dechra Pharmaceuticals	2.3
Games Workshop	2.3
Avon Rubber	2.3
Chegg	2.3
Learning Technologies	2.2

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

During the month the Company’s NAV per share returned +3.0%¹ (net of fees), outperforming our benchmark which returned +2.3%¹. It should be noted that both the long and short book generated a positive return, contributing to the outperformance versus the benchmark.

Market conditions remained febrile in July as investors swung between hopes of a recovery from COVID-19 and fears of a second wave. There have been many attempts to call the top for growth and the bottom for value, but these calls have generally been incorrect as we believe they often fail to appreciate the profound structural changes affecting the outlooks for cashflows on a medium-term basis. As reporting season for Q2 began we have been reassured by the strong results from many the growth companies that we hold in the Company. In many cases growth actually accelerated in the second quarter on market share gains and the wider benefit of changing business and consumer spending habits.

The largest contributor was Gamma Communications, which delivered upgrades to consensus forecasts for 2021 on high demand for its products including new contract wins and low cancellation rates. The unified communications-as-a-service (UCAAS) market is an industry that we have long liked for its secular growth prospects, but COVID-19 is undoubtedly accelerating the structural shift to the cloud within corporate telecommunications. Similarly, Computacenter, the second biggest contributor, has seen demand for its products and services increase from the transition to “working-from home”, as well as the ongoing structural growth of “digital transformation” an area which corporates continue to prioritise spend. Other companies reporting strong results contributing to the month’s performance include Pets at Home, which has seen strong growth in online orders and IntegraFin, which continues to generate strong net inflows and take market share.

Turning to detractors, three of the top five were companies we didn’t own that rose during the month. The largest detractor was Bodycote, which fell amidst wider weakness in Industrials, but did deliver interim results that were modestly ahead of expectations, highlighting a robust margin and cash performance despite weaker volumes. Whilst many of Bodycote’s end markets remain challenged in the near term, we think Bodycote is an advantaged company and is well placed to benefit as and when end global demand recovers, whilst the restructuring being undertaken now should point to higher margins on recovered volumes in the future. Shares in IWG were also weak during the month, and while this was not related to any stock specific newsflow, our thinking over IWG’s end market has evolved and we have taken the decision to exit the position.

Standing back from July’s performance, what has been remarkable about this crisis is the level of dispersion of financial performance that it has created across industries and companies. There is evidence of accelerating rates of growth and decline in several specific industries as well as within specific companies. Understandably the outlook remains uncertain, but that is an opportunity rather than a problem for the Company. There remain sizeable opportunities for companies that can differentiate themselves, while the pressure on balance sheets and cashflows for struggling companies is intensifying. The gross exposure is currently c.119% while the net is around 115%, which reflects the reduced number of short positions which the Company currently holds. Overall, we remain positive on the opportunity set that this crisis has generated, and the ability of the Company to capitalise on these opportunities. We thank shareholders for your ongoing support.

¹Source: BlackRock as at 31 July 2020

19 August 2020

ENDS

Latest information is available by typing www.blackrock.com/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.