Portfolio Update

The information contained in this release was correct as at 31 October 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 31 October2022 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	4.1	-12.5	-39.7	-0.2	11.1
Share price	8.2	-12.8	-41.8	-1.5	30.2
Benchmark*	2.1	-9.5	-24.9	4.9	-2.7

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:	558.59p
Net asset value incl. income:	568.10p
Share price	554.00p
Discount to cum income NAV	2.5%
Net yield1:	1.9%
Total Gross assets2:	£574.7m
Net market exposure as a % of net asset value3:	102.5%
Ordinary shares in issue4:	101,158,864
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 2022 interim dividend declared on 20 July 2022 and paid on 26 August 2022, 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 2,051,000 shares held in treasury.

5. The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, excluding performance fees, finance costs, direct transaction charges, VAT recovered, taxation and certain other non-recurring items 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. The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, including performance fees, but excluding finance costs, direct transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 30 November 2021.

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	32.4
Consumer Discretionary	21.6
Financials	13.2
Technology	6.4
Health Care	6.0
Consumer Staples	3.9
Telecommunications	3.1
Energy	2.1
Basic Materials	0.6
Communication Services	0.3
Information Technology	0.1
Net Current Assets	10.3
	-----
Total	100.0
	=====
Country Weightings	% of Total Assets
United Kingdom	92.3
United States	4.5
France	2.1
Australia	0.7
Netherlands	0.5
Germany	-0.1
	-----
Total	100.0
	=====

Market Exposure (Quarterly)
	30.11.21 %	28.02.22 %	31.05.22 %	31.08.22 %
Long	121.3	121.8	104.8	102.0
Short	2.7	2.3	3.3	4.1
Gross exposure	123.9	124.1	108.1	106.1
Net exposure	118.6	119.5	101.5	97.9

Ten Largest Investments
Company	% of Total Gross Assets
CVS Group	3.5
RS Group	3.4
Watches of Switzerland	3.3
Gamma Communications	3.1
Oxford Instruments	3.0
Ergomed	2.9
4imprint Group	2.9
Diploma	2.6
Auction Technology Group	2.6
YouGov	2.4

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

The Company returned 4.1% during October, outperforming the Numis Smaller Companies + AIM (excluding Investment Trusts) benchmark rose 2.1%.¹ Outperformance during the month was driven by the long book while the short book was flat.

Financial markets have remained volatile, heavily influenced by any new statistics on inflation and/or commentary from monetary authorities. The UK saw its own political drama with the replacement of both the Prime Minister and the Chancellor after the mini budget debacle of late September. UK gilt yields have subsequently eased, and Sterling has strengthened reflecting hopes for more political and economic stability.

As with many recent monthly updates reflecting the volatility in markets, the largest contributors and detractors often flip around each month. This is worth noting simply to illustrate the flip-flop nature of sentiment and there is not always any company specific news to drive these moves. The largest contributor was Watches of Switzerland which did not have news itself but there has been some industry data and trading updates from luxury peers that suggests luxury products continue to trade well. The second largest contributor was the holding in SigmaRoc whose shares bounced strongly after recent weakness and a solid update. The third largest contributor was the holding in sustainable focused fund manager, Impax Asset Management, which reported another quarter of positive net inflows despite the challenging macro backdrop.

Shares in Computacenter fell in response to a trading update which flagged a continuation of the challenges noted earlier in the year, notably the unwinding of the COVID impact, supply chain issues and cost inflation. The company flagged that it intends to invest heavily for future growth, which will hold back short-term profitability. Despite reporting encouraging half-year results, shares in Bytes Technology slumped during the month as weaker trading from other industry heavyweights, notably in the US, outweighed the otherwise positive momentum in the business. The third largest detractor was US listed supplier of swimming pool maintenance products, Leslie’s which fell despite no negative stock specific newsflow.

Overall, the most important data presently for all market participants remains the inflation data, and notably core inflation in the US which has heavily influenced global monetary policies and created very large moves in exchange rates and therefore earnings for many global companies. It is hard for us to give an accurate prediction of this one statistic, but it does seem that any “good” i.e. lower statistic here has the potential to create an easing in rate rises and an improvement in sentiment. Some of the largest contributors to headline CPI (Consumer Price Index) (energy and food) should now be showing much lower year-on-year increases and might even turn negative year-on-year as we move into the first quarter of 2023. The largest contributor to core CPI is housing costs and the forward looking data we can access for rental asking prices (Zillow index) suggest that the rate of increase here rolled over 3-6 months ago and so should start showing up in official current paid prices in the next few months. Anecdotally we also observe many consumer facing companies are currently cutting prices to stimulate sales, not least to clear excess inventory, so this suggests a lower level of price pressure on consumer goods as well as the potential for restocking in the coming months. We are therefore hopeful that inflation conditions can ease in the coming months. Nevertheless, and as discussed in previous updates we have lowered the Company’s gross and net exposure to reflect the high levels of uncertainty. The gross of the portfolio is therefore around 105% and the net is around 102%, and we remain net long to reflect the potential that we think is inherent in many holdings given much lower valuations but, we believe, secular growth prospects. We thank shareholders for their ongoing support.

¹Source: BlackRock as at 31 October 2022

22 November 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.