Portfolio Update

The information contained in this release was correct as at 30 November 2023.  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 30 November 2023 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	6.4	-1.2	-2.3	-7.7	25.3
Share price	11.3	3.6	-0.8	-11.1	37.3
Benchmark*	5.9	-3.1	-6.0	-3.4	8.3

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:	586.91p
Net asset value incl. income:	600.72p
Share price	579.00p
Discount to cum income NAV	3.6%
Net yield1:	2.0%
Total Gross assets2:	£575.9m
Net market exposure as a % of net asset value3:	107.5%
Ordinary shares in issue4:	95,872,161
2022 ongoing charges (excluding performance fees)5,6:	0.54%
2022 ongoing charges ratio (including performance fees)5,6,7:	0.54%

1. Calculated using the 2022 final dividend declared on 10 February 2023 and paid on 31 March 2023, together with the Interim Dividend declared on 07 July 2023 paid on 29 August 2023.

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 7,337,703 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 2022.

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 2022.

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	31.6
Consumer Discretionary	23.4
Financials	14.7
Technology	8.3
Basic Materials	5.8
Consumer Staples	3.1
Telecommunications	3.0
Communication Services	2.4
Health Care	2.1
Energy	1.3
Real Estate	1.0
Net Current Assets	3.3
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Total	100.0
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Country Weightings	% of Total Assets
United Kingdom	94.6
United States	3.5
France	0.9
Australia	0.8
Ireland	0.6
Sweden	-0.4
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Total	100.0
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Market Exposure (Quarterly)
	28.02.23 %	31.05.23 %	31.08.23 %	30.11.23 %
Long	110.3	111.7	112.7	111.3
Short	2.3	3.6	4.5	3.8
Gross exposure	112.6	115.3	117.2	115.1
Net exposure	108.0	108.1	108.2	107.5

Ten Largest Investments
Company	% of Total Gross Assets
Breedon	3.3
Gamma Communications	3.0
Oxford Instruments	2.8
Grafton Group	2.8
YouGov	2.7
4imprint Group	2.7
Rotork	2.5
WH Smith	2.5
Computacenter	2.4
CVS Group	2.4

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

The Company returned 6.4% in November, outperforming the Company’s benchmark, the Numis Smaller Companies + AIM (excluding Investment Companies) Index, which returned 5.9%.

November proved a strong market for global equity indices. Continued falls in inflation, combined with further normalisation in the jobs market, has resulted in a rapid and stark change in narrative from higher for longer to peak rates and imminent central bank pivot. This has manifested itself in a sharp fall in the US 10-year, and a broad rally for equities. Whilst this has worked for us in this most recent period, it does continue a trend of heightened volatility within markets as only a few weeks ago it seemed that a hard recession was inevitable and now the debate is how many interest rate cuts are priced into 2024! Against this backdrop, the long book drove performance whilst the short book detracted.

The largest contributor during the month was Watches of Switzerland. The shares have been very much front and centre over the last year over concerns around deteriorating demand and more recently, Rolex’s acquisition of Bucherer. However, these fears appeared to abate after the company reported a robust first half and reiterated its long-term growth plans to more than double sales and profits by 2028, which provided confidence in the long-term partnership with Rolex. YouGov continued to rise in November, having reported in-line results in October without the profit warning which the market had been expecting, and reiterating full year guidance. While the short book in aggregate detracted, very much driven by beta (a rising tide lifting all boats), the third largest positive contributor from performance came from a short position in a risk and compliance software business which issued a profit warning, reporting a loss in the first half of 2023 and increase in working capital outflows, cash exceptional charges and net debt.

The biggest detractor was 4imprint, which despite confirming another upgrade to FY23 (albeit a modest one compared to the usual double-digit upgrades) the shares fell on commentary that the company had noticed more volatility in order patterns in recent weeks. We’ve owned 4imprint for over 10 years as a team and we believe the market share opportunity remains very compelling. Shares in Qinetiq fell in response to interim results which showed profits in-line with expectations, however, the company reported a slowdown in its recently acquired US business. The third biggest detractor was from our long position in Indivior, which fell despite increasing its full year guidance on the back of strong sales for its key drug Sublocade (monthly injectable to treat opioid addiction).

November brings another financial year for the Company to a close. Whilst always disappointing to report an absolute loss for the period, the Company was able to outperform the benchmark by +3.7% (net of fees), generating alpha from both the long and short book, which reflects continued delivery from our portfolio holdings in aggregate. The second consecutive year of falls for our benchmark reflects the extreme negative sentiment towards UK small and medium sized companies that has resulted in a prolonged period of outflows. We think our current positioning remains balanced but constructive and despite the macro driven volatility, stock specifics are playing an increasingly important role as a driver of returns which should favour our Investment team and the Company. Despite a rally in November, mid-cap stocks remain anchored around 12-year low valuations, despite generally robust earnings and strong balance sheets and indeed exciting long-term growth prospects. The net of the portfolio is around 106% and the gross is around 114%.

We thank shareholders for your ongoing support and look forward to updating you all in the New Year.

1Source: BlackRock as at 30 November 2023

21 December 2023

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.

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