Portfolio Update

The information contained in this release was correct as at 31 March 2022.  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 31March 2022 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	-2.7	-21.0	-3.8	45.5	72.7
Share price	-0.9	-21.9	-4.6	55.4	117.0
Benchmark*	0.6	-10.4	-2.1	28.8	29.7

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:	745.85p
Net asset value incl. income:	749.49p
Share price	754.00p
Premium to cum income NAV	0.6%
Net yield1:	1.4%
Total Gross assets2:	£773.5m
Net market exposure as a % of net asset value3:	117.3%
Ordinary shares in issue4:	103,209,864
2021 ongoing charges (excluding performance fees)5,6:	0.57%
2021 ongoing charges ratio (including performance fees)5,6,7:	1.38%

1. Calculated using the 2021 interim dividend declared on 26 July 2021 and paid on 27 August 2021, together with the 2021 final dividend declared on 07 February 2022 and paid on 31 March 2022.

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 0 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 2021.

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 management 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	29.9
Consumer Discretionary	22.7
Financials	18.6
Technology	7.8
Health Care	7.2
Consumer Staples	6.2
Telecommunications	3.3
Basic Materials	3.0
Net Current Assets	1.3
	-----
Total	100.0
	=====
Country Weightings	% of Total Assets
United Kingdom	91.8
United States	5.8
France	1.2
Sweden	0.9
Australia	0.6
Germany	-0.3
	-----
Total	100.0
	=====

Market Exposure (Quarterly)
	31.05.21 %	31.08.21 %	30.11.21 %	28.02.22 %
Long	121.3	119.4	121.3	121.8
Short	1.5	2.4	2.7	2.3
Gross exposure	122.8	121.8	123.9	124.1
Net exposure	119.8	117.0	118.6	119.5

Ten Largest Investments
Company	% of Total Gross Assets
Electrocomponents	3.7
Gamma Communications	3.3
Watches of Switzerland	3.2
IntegraFin	2.9
YouGov	2.6
CVS Group	2.6
Impax Asset Management	2.6
Auction Technology	2.5
Oxford Instruments	2.5
Dechra Pharmaceuticals	2.4

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

The Company returned -2.7%¹ in March, underperforming its benchmark, the Numis Smaller Companies +AIM (ex Investment Trusts) Index, which returned 0.6%¹. The long book detracted during the month while the short book was flat.

Financial market conditions remained highly volatile in March. There were significant falls in equity markets early in the month on fears that the conflict in Ukraine would widen combined with fears of recession caused by sharply rising commodity prices. Stock markets then recovered from mid-March despite the continued conflict, perhaps simply reflecting the extremes of (low) valuations that had been reached as well as a sense that the conflict appears now to be geographically limited in scope.

The UK reporting season has generally been solid, and so in our view the share price dynamics remain about fear of potential future problems rather than a reaction to actual deterioration in cashflows. We are always working to identify problems, but in general we continue to believe that supply constraints and commodity inflation are mitigable and demand / ordering patterns remain robust as evidenced in recent reporting, and as such we believe that further proof points of corporate profit progression through the year will reassure investors and lead to strong reversion of share prices. Whilst concerns are heightened over a potential weakening demand outlook, it is important to reinforce that for our investments: 1) companies we own aren’t seeing this yet (in fact often the contrary); 2) we believe demand for their products services is structural/defensive (and so will fare far better than our short positions); and 3) the weak share prices in consumer related names have moved quickly to price in quite in bearish scenarios in our view.

The top detractor in the month was Oxford Instruments, although this is not quite what it initially seems as this simply reflects the price falling back from its bid premium at the end of last month after Spectris decided it was unable to progress with its offer. We do not see this as reflecting the ongoing investment case and retain the holding. Shares in S4 Capital fell sharply after they revealed a further delay in reporting their financial results as their auditor was unable to complete their work in time. This is clearly an unwelcome development, and we are unable to speculate as the range of outcomes is wide, but we have reduced the holding significantly on this development. Ongoing concerns around the cost of living crisis in the UK and falling consumer confidence added pressure to many sectors exposed to discretionary consumer spending, such as retailers and this saw our holding in WH Smith fall despite no sign of a deterioration in trading.

The top contributor was Electrocomponents which had another positive update driving upgrades to analyst forecasts, with strong revenue and profit growth. Shares in pharmaceutical services specialist Ergomed rose after the company reported earnings ahead of expectations, benefiting from its global expansion into a number of countries in Europe and Japan. Ingredients manufacturer Treatt rallied during March having been impacted by the sell-off in UK small and mid-cap growth shares earlier in the year.

The investment environment remains challenging, and we are acutely aware of the job that lies ahead to get back this year track given the headwinds faced at the beginning of the year.  A clear area of work for us is to identify companies that will be caught out by changes in demand patterns or cost dynamics, and we have discussed in previous updates some of the retail and consumer shorts that we have introduced, and additional names have been added in March. However, on balance it is worth saying that we do remain positive that most companies, and certainly those in the long book, are in good shape with robust fundamentals and will be able to raise prices and can continue to grow profits this year and in the years to come. Therefore, we remain positive on the corporate profit outlook, and now more than ever on the potential for share prices given low starting valuations. Although we have added to a few holdings where we think there is a good price opportunity, we have not materially changed the overall fund this month, and so we retain a net of c.118% which is above normal levels but is indicative of the current opportunities that we are finding in our universe. We thank shareholders for your ongoing support during this challenging environment.

¹Source: BlackRock as at 31 March 2022

25 April 2022

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.