Half-yearly Report
For immediate release
10 May 2013
To: City Editors
Finsbury Growth & Income Trust PLC
Announces Half Year Results for the six months to 31 March 2013
Company Summary
Key Statistics
As at As at % Change
31 March 30
2013 September
2012
Share price 464.0p 376.0p +23.4
Net asset value per share 459.6p 370.7p +24.0
(including income)
Net asset value per share 456.2p 365.1p +25.0
(excluding income)~
Premium of share price to net 1.7% 3.0%
asset value per share (excluding
income)
Gearing* 4.6% 5.1%
Shareholders' funds £349.2m £254.2m +37.4
Market capitalisation £352.6m £257.8m +36.8
Number of shares in issue 75,986,219 68,568,381 +10.8
Six One year
months to to
31 March 30
2013 September
2012
Share price (total return)# +25.1% +23.6%
Net asset value per share (total +26.7% +21.1%
return)#
FTSE All-Share Index (total +14.5% +17.3%
return) (Company benchmark)#â€
Dividends per share Year ending Year
30 ended
September 30
2013 September
2012
First interim dividend 4.8p 4.6p
Second interim dividend Yet to be 5.2p
declared
# Source - Morningstar
* See glossary
~ Excluding accumulated income as at period end/year end
†Source - FTSE International Limited ("FTSE") © FTSE 2012*
This Announcement is not the Company's Half Year Report & Accounts. It is an
abridged version of the Company's full Half Year Report & Accounts for the six
months ended 31 March 2013. The full Half Year Report & Accounts will be sent
to shareholders on 17 May 2013. The full Half Year Report & Accounts, together
with a copy of this announcement, will also be available on the Company's
website: www.finsburygt.com
The Company's Half Year Report & Accounts for the six months ended 31 March
2013 has been submitted to the UK Listing Authority, and will shortly be
available for inspection on the National Storage Mechanism (NSM):
www.hemscott.com/nsm.do
For further information please contact: Mark Pope, Frostrow Capital LLP 020
3008 4913
Chairman's Statement
"..I am pleased to report that the Company's net asset value per share total
return of 26.7% and the share price total return of 25.1% have again both
substantially outperformed the Company's benchmark.."
Performance
Markets continued their strong performance over the six month period to 31
March 2013 and I am pleased to report that the Company's net asset value per
share and share price have again both substantially outperformed the Company's
benchmark, the FTSE All-Share Index (all measured over the period on a total
return basis) as shown below:
• Growth in net asset value per share 26.7%
• Increase in share price 25.1%
• Increase in FTSE All-Share Index 14.5%
The principal contributors to the Company's net asset value performance were
the three largest holdings, namely Heineken, Unilever and Diageo. Further
information on the Company's portfolio can be found in our Investment Manager's
Review.
During the period, the Company's shares have consistently traded close to its
net asset value, beginning the period at a 3.0% premium to the Company's
ex-income net asset value per share and ending on a 1.7% premium. At the time
of writing the premium stands at 0.1%.
Share Capital
As I reported at the year-end, due to continued strong demand for your
Company's shares, we took the following actions:
a General Meeting was held in December 2012 to renew shareholder authority to
issue further share equal to 10% of the Company's then issued share capital on
a non-pre-emptive basis;
that authority was renewed again at the Company's Annual General Meeting held
in January 2013;
a new block listing authority was obtained from the UK Listing Authority to
enable shares to be issued as cost effectively as possible; and
a Prospectus was also published in order that the Company can continue to issue
shares in accordance with the Prospectus Directive.
During the six months under review, and to the date of this report, a total of
9,282,838 new shares have been issued raising £38.6 million of new funds for
the Company.
The Directors believe that the issuance of those new shares has yielded the
following principal benefits:
Maintenance of the Company's ability to issue shares tactically, so as to
manage better the premium to net asset value per share at which the shares
trade;
Enhancement of the net asset value per share of existing shares through new
share issuance at a premium to the cum income net asset value per share;
Increase in the size of the Company, thereby spreading operating costs over a
larger capital base with a consequent reduction in the level of the Company's
ongoing charges; and
Improvement of liquidity in the market for the Company's shares.
Chairman's Statement
Continued
Return and Dividend
The Income Statement for the period shows the following returns per share (with
the comparable figures for the same period last year shown in brackets):
• revenue return 3.6p (3.0p)
• capital return 91.3p
(38.9p)
• total return 94.9p
(41.9p)
The Board has declared a first interim dividend of 4.8p per share, compared to
last year's first interim dividend of 4.6p per share, an increase of 4.3%. The
dividend was paid on 2 May 2013 to shareholders who were on the register on 5
April 2013. The associated ex dividend date was 3 April 2013.
Outlook
While overall performance has been strong, the UK market continues to be prone
to volatility. The FTSE 100 index of leading shares hit a five-year high in
February, but fell sharply on doubts that the US might not continue with its
programme of monetary easing during 2013; a subsequent recovery was then cut
short by the result of the Italian election, only for confidence to be regained
at the month-end. Meanwhile, the UK market coped with the downgrade by Moody's
of the UK's AAA rating, although this did have a negative impact on sterling
which fell to its lowest level against the US dollar for over two years.
Against this turbulent background, your Board continues to believe that our
Investment Manager's strategy of investing for the long term in high quality
companies will continue to deliver superior investment returns to shareholders.
Anthony Townsend
Chairman
10 May 2013
Investment Manager's Review
"..our approach is based on the conviction that long term investment in high
quality companies is a winning strategy."
The half year provided more benign and helpful conditions for your Company. It
is fair to say that although we were optimistic for the portfolio at the start
of the year - and remain so today - the best word to summarise our reaction to
recent returns is "flabbergasted" - so very marked has been the outperformance.
I use this report to examine how the performance came about and, more
important, whether it can continue.
As a generalisation we claim that the Company's portfolio comprises "quality"
companies. Of course this is a subjective term; nonetheless, identifying
"quality" is the first and most important filter in our research effort. It is
a defensible proposition, then, that the reason for our strong recent
performance is because "quality" companies have done well. Certainly the big
winners for the strategy over the period are fine businesses - Heineken,
Unilever, Diageo, Daily Mail and Schroders - all long established and high
profit margin companies.
We imagine shareholders must be asking themselves the same questions we ask
ourselves - when will this period of strong absolute and relative performance
by "quality" companies come to an end and, not necessarily the same, are they
now overvalued?
Our answers are as follows, though they are necessarily statements of opinion,
rather than certain, verifiable fact. First, we imagine that what will bring an
end to our outperformance will be a shift in other investors' appetite to lower
quality companies than we choose to invest in. These lower quality companies
could be "cyclical" or, perhaps, "speculative" (another mining boom? a
biotechnology boom?). During such episodes, as we experienced in 2007 (mining)
or 1999/2000 (technology), even the highest quality companies can go through
extended periods of dull or poor returns. There will certainly be another, of
whatever stripe, and the Company's portfolio will certainly perform less well
through its duration.
But what it is important for us to convey to shareholders is that even if we
were smart or lucky enough to recognise a change in the investment weather,
which meant lower quality companies were likely to outperform for a period - we
would not act on that recognition. This is because our approach is based on the
conviction that long term investment in high quality companies is a winning
strategy. And for that strategy to work one has to stick to it. So let me here
assert that we have no intention today to alter the shape of the portfolio; we
are not about to sell any or any part of any existing holding and that, at
today's prices, we have no actionable new ideas - although when we receive
additional cash flow into the portfolio we are enthusiastic about adding to
many current holdings. (And, to be clear, there are several candidate "quality"
companies not yet in the portfolio that we would invest in, given an attractive
entry point.)
As to when "quality" companies become overvalued, we say that when or if price
to earnings ratios ("P/Es") of over 30x are accorded there is a risk that even
the most exceptional companies may have become strategically overvalued. Now, a
P/E of 30x equates to an earnings yield of c3% and it is, surprisingly, still
possible to regard this level as "fair" - after all, a 3% inflation-protected
running yield delivered by a great company looks like a bargain compared to
government bond and cash yields today. But we acknowledge that at 30x any
margin of investment safety, even for a business as durable as, say, Unilever,
becomes too low.
However, your portfolio stocks are far from being valued at 30x or more
earnings, even after their recent good returns. So, while it is quite
conceivable that some of the positions may "have a rest" for a quarter or two,
we dismiss the proposition that, for example, Diageo, on a P/E of 19x is
dangerously overvalued.
Investment Manager's Review
Continued
Indeed we have found that there are always members of a portfolio "resting" at
any given point of time and, pertinently, Pearson has been a dull share now for
some quarters. We happily add to Pearson as its price drifts (on a lowly 13x
earnings, by the way, not 30x), because it offers pure access to what we still
regard as the most important thematic opportunity in the whole portfolio -
namely companies with a credible strategy to grow and improve profitability by
exploiting developments in digital technology. This remains the big bull market
idea of the next decade, in our opinion and Pearson and Daily Mail, Euromoney,
Fidessa, Reed and Sage are probable participants.
Nick Train
Director
Lindsell Train Limited
Investment Manager
10 May 2013
Portfolio
as at 31 March 2013
Investment Sector Fair % of
Value Investments
£'000
Diageo Beverages 36,549 10.0
Unilever Food Producers 35,273 9.7
Heineken Holdings (A Beverages 31,402 8.6
Shares)*
Pearson Media 24,003 6.6
A.G. Barr Beverages 23,657 6.5
Schroders Financial Services 18,773 5.1
Fidessa Software & Computer 17,097 4.7
Services
Daily Mail & General Media 17,059 4.7
Trust (A Shares)
Reed Elsevier Media 16,871 4.6
London Stock Exchange Financial Services 16,358 4.5
Top 10 investments 237,042 65.0
Rathbone Brothers Financial Services 15,045 4.1
Sage Group Software & Computer 14,715 4.0
Services
Hargreaves Landsdown Financial Services 14,230 3.9
Greene King Travel & Leisure 12,088 3.3
Burberry Group Personal Goods 9,349 2.6
Euromoney Institutional Media 8,915 2.4
Investor
Marston's Travel & Leisure 8,817 2.4
Thomson Reuters~ Media 8,638 2.4
Mondelez^ Food Producers 8,098 2.2
Dr. Pepper Snapple^ Beverages 7,445 2.0
Top 20 investments 344,382 94.3
Young & Co's Brewery Travel & Leisure 5,710 1.6
(non-voting)
Fuller Smith & Turner Travel & Leisure 5,632 1.5
Kraft Foods^ Food Producers 4,883 1.4
The Lindsell Train Financial Services 2,950 0.8
Investment Trust
Celtic Travel & Leisure 1,108 0.3
Frostrow Capital LLP+ Financial Services 470 0.1
Celtic 6% (cum Travel & Leisure 62 -
preference)**
Total investments 365,197 100.0
All of the above investments are equities listed in the UK, unless otherwise
stated.
* Listed in the Netherlands
^ Listed in the United States
~ Listed in Canada
** Non-equity - Preference Shares
+ Unquoted partnership interest
Comparison of Sector Weightings with the
FTSE All-Share Index
as at 31 March 2013
Sector Finsbury FTSE Finsbury
Growth All-Share Growth
& Income Index & Income
% % (under)/
overweight
%
Oil & Gas - 15.3 (15.3)
Basic Materials - 8.8 (8.8)
Industrials - 9.6 (9.6)
Consumer Goods 42.9 14.5 28.4
Health Care - 7.2 (7.2)
Consumer Services 29.8 9.9 19.9
Telecommunications - 6.2 (6.2)
Utilities - 3.8 (3.8)
Financials 18.6 23.1 (4.5)
Technology 8.7 1.6 7.1
Total 100.0 100.0 -
Income Statement
For the six months ended 31 March 2013
(Unaudited) (Unaudited) (Audited)
Six months ended 31 Six months ended 31 Year ended 30 September
March 2013 March 2012 2012
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on - 66,685 66,685 - 23,708 23,708 - 37,685 37,685
investments held
at fair value
through profit or
loss
Exchange - (15) (15) - (30) (30) - (39) (39)
differences
Income (note 2) 3,311 - 3,311 2,390 - 2,390 8,083 - 8,083
Investment (323) (656) (979) (220) (448) (668) (479) (974) (1,453)
management and
management fees
(note 3)
Other expenses (261) - (261) (256) (5) (261) (543) (5) (548)
Return on ordinary 2,727 66,014 68,741 1,914 23,225 25,139 7,061 36,667 43,728
activities before
finance charges
and taxation
Finance charges (57) (116) (173) (63) (128) (191) (131) (267) (398)
Return on ordinary 2,670 65,898 68,568 1,851 23,097 24,948 6,930 36,400 43,330
activities before
taxation
Taxation on (60) - (60) (50) - (50) (138) - (138)
ordinary
activities
Return on ordinary 2,610 65,898 68,508 1,801 23,097 24,898 6,792 36,400 43,192
activities after
taxation
Return per share 3.6p 91.3p 94.9p 3.0p 38.9p 41.9p 10.8p 58.0p 68.8p
(note 4)
The "Total" column of this statement represents the Income Statement of the
Company. The "Revenue" and "Capital" columns are supplementary to this and are
prepared under guidance published by the Association of Investment Companies
(AIC).
All items in the above statement derive from continuing operations. The Company
had no recognised gains or losses other than those declared in the Income
Statement.
Reconciliation of Movements in Shareholders' Funds
(Unaudited) Share Share Capital Special Capital Revenue Total
Six months ended capital premium redemption reserve reserve reserve £'000
31 March 2013 £'000 account reserve £'000 £'000 £'000
£'000 £'000
At 30 September 17,142 86,458 3,453 12,424 128,685 6,047 254,209
2012
Net return from - - - - 65,898 2,610 68,508
ordinary
activities
Second interim - - - - - (3,579) (3,579)
dividend (5.2p per
share) for the
year ended
30 September 2012
Issue of shares 1,854 28,367 - - - - 30,221
Cost of share - (114) - - - - (114)
issuance
At 31 March 2013 18,996 114,711 3,453 12,424 194,583 5,078 349,245
(Unaudited)
Six months ended
31 March 2012
At 30 September 14,309 50,253 3,453 12,424 92,285 4,894 177,618
2011
Net return from - - - - 23,097 1,801 24,898
ordinary
activities
Second interim - - - - - (2,740) (2,740)
dividend (4.8p per
share) for the
year ended
30 September 2011
Issue of shares 1,445 18,127 - - - - 19,572
Cost of share - (116) - - - - (116)
issuance
At 31 March 2012 15,754 68,264 3,453 12,424 115,382 3,955 219,232
(Audited)
Year ended 30
September 2012
At 30 September 14,309 50,253 3,453 12,424 92,285 4,894 177,618
2011
Net return from - - - - 36,400 6,792 43,192
ordinary
activities
Second interim - - - - - (2,740) (2,740)
dividend (4.8p per
share) for the
year ended
30 September 2011
First interim - - - - - (2,899) (2,899)
dividend (4.6p per
share) for the
year ended 30
September 2012
Issue of shares 2,833 36,321 - - - - 39,154
Cost of share - (116) - - - - (116)
issuance
Year ended 30 17,142 86,458 3,453 12,424 128,685 6,047 254,209
September 2012
Balance Sheet
as at 31 March 2013
(Unaudited) (Unaudited) (Audited)
31 March 31 March 30
2013 2012 September
£'000 £'000 2012
£'000
Fixed assets
Investments designated at fair 365,197 231,900 266,915
value through profit or loss
Current assets
Debtors 2,211 655 2,343
Cash at bank 1,264 925 2,224
3,475 1,580 4,567
Current liabilities
Creditors (2,227) (198) (2,023)
Bank loan (17,200) (14,050) (15,250)
(19,427) (14,248) (17,273)
Net current liabilities (15,952) (12,668) (12,706)
Total net assets 349,245 219,232 254,209
Capital and reserves
Share capital 18,996 15,754 17,142
Share premium account 114,711 68,264 86,458
Capital redemption reserve 3,453 3,453 3,453
Special reserve 12,424 12,424 12,424
Capital reserve 194,583 115,382 128,685
Revenue reserve 5,078 3,955 6,047
Equity shareholders' funds 349,245 219,232 254,209
Net asset value per share 459.6p 347.9p 370.7p
(note 5)
Cash Flow Statement
for the six months ended 31 March 2013
(Unaudited) (Unaudited) (Audited)
31 March 31 March 30
2013 2012 September
£'000 £'000 2012
£'000
Net cash inflow from operating 1,953 1,915 5,956
activities (note 7)
Net cash outflow from (180) (190) (310)
servicing of finance
Financial investment
Purchase of investments (31,420) (21,455) (42,666)
Sale of investments - 1,003 2,865
Net cash outflow from (31,420) (20,452) (39,801)
financial investment
Equity dividends paid (3,579) (2,740) (5,639)
Net cash outflow before (33,226) (21,467) (39,794)
financing
Financing
Cost of share issuance (114) (116) (116)
Drawdown of loan 1,950 500 1,700
Shares issued 30,445 19,572 38,007
Net cash inflow from financing 32,281 19,956 39,591
Decrease in cash (945) (1,511) (203)
Reconciliation of net cash
flow to movement in net debt
Decrease in cash resulting (945) (1,511) (203)
from cashflows
Increase in debt (1,950) (500) (1,700)
Exchange movements (15) (30) (39)
Movement in net debt (2,910) (2,041) (1,942)
Net debt at start of period/ (13,026) (11,084) (11,084)
year
Net debt at end of period/year (15,936) (13,125) (13,026)
Notes to the Accounts
1. Basis of preparation
The condensed financial statements have been prepared under the historical cost
convention, except for the measurement at fair value of investments, and in
accordance with UK Generally Accepted Accounting Practice (GAAP) and the
Statement of Recommended Practice (SORP) for `Financial Statements of
Investment Trust Companies and Venture Capital Trusts' issued by the
Association of Investment Companies dated January 2009.
The same accounting policies used for the year ended 30 September 2012 have
been applied.
2. Income
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 March 31 March 30
2013 2012 September
£'000 £'000 2012
£'000
Income from investments
Franked investment income
- dividends 2,911 2,085 6,901
Unfranked investment income
- limited liability - - 149
partnership profit-share
- overseas dividends 400 305 1,033
Total income 3,311 2,390 8,083
3. Investment management and management fees
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 March 31 March 30
2013 2012 September
£'000 £'000 2012
£'000
Investment management fee 670 448 978
Management fee 258 184 396
VAT on management fees 51 36 79
Total fees 979 668 1,453
4. Return per share
The total return per share is based on the total return attributable to equity
shareholders of £68,508,000 (six months ended 31 March 2012: return of £
24,898,000; year ended 30 September 2012: return of £43,192,000) and on
72,182,311 shares (six months ended 31 March 2012: 59,455,798; year ended
30 September 2012: 62,788,996), being the weighted average number of shares in
issue.
The revenue return per share is calculated by dividing the net revenue return
of £2,610,000 (six months ended 31 March 2012: return of £1,801,000; year ended
30 September 2012: return of £6,792,000) by the weighted average number of
shares in issue as above.
The capital return per share is calculated by dividing the net capital return
attributable to shareholders of £65,898,000, (six months ended 31 March 2012:
return of £23,097,000; year ended 30 September 2012: return of £36,400,000) by
the weighted average number of shares in issue as above.
5. Net asset value per share
The net asset value per share is based on net assets attributable to shares of
£349,245,000 (31 March 2012: £219,232,000 and 30 September 2012: £254,209,000)
and on 75,986,219 shares in issue (31 March 2012: 63,017,163 and 30 September
2012: 68,568,381).
Notes to the Accounts
Continued
6. Transaction costs
Purchase transaction costs for the six months ended 31 March 2013 were £184,000
(six months ended 31 March 2012: £84,000; year ended 30 September 2012: £
211,000).
Sales transaction costs for the six months ended 31 March 2013 were £nil (six
months ended 31 March 2012: £nil; year ended 30 September 2012: £nil).
7. Reconciliation of net total return before finance costs and taxation to net
cash inflow from operating activities
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 March 31 March 30
2013 2012 September
£'000 £'000 2012
£'000
Total return before finance 68,741 25,139 43,728
charges and taxation
Less capital return before (66,014) (23,225) (36,667)
finance charges and taxation
Net revenue before finance 2,727 1,914 7,061
costs and taxation
Decrease/(increase) in accrued (108) 39 (30)
income and prepayments
Decrease/(increase) in debtors - 451 -
Increase/(decrease) in 34 14 63
creditors
Taxation - irrecoverable (44) (50) (159)
overseas tax paid
Investment management and (656) (448) (974)
management fees charged to
capital
Other expenses charged to - (5) (5)
capital
Net cash inflow from operating 1,953 1,915 5,956
activities
8. 2012 accounts
The figures and financial information for the year to 30 September 2012 are
extracted from the latest published accounts of the Company and do not
constitute statutory accounts for the year.
Those accounts have been delivered to the Registrar of Companies and included
the Report of the Auditors which was unqualified and did not contain a
reference to any matters to which the auditors drew attention by way of
emphasis without qualifying the report, and did not contain a statement under
section 498 of the Companies Act 2006.
Interim Management Report
Principal Risks and Uncertainties
A review of the half year, including reference to the risks and uncertainties
that existed during the period, and the outlook for the Company can be found in
the Chairman's Statement beginning on page 3 and in the Investment Manager's
Review. The principal risks faced by the Company fall into the following broad
categories: market price risk; interest rate risk; portfolio performance;
operational and regulatory risk; credit risk; liquidity risk; investment
management key person risk; availability of bank finance; inability to maintain
a progressive dividend policy. Information on each of these areas, with the
exception of the availability of bank finance and the Board's ability to
maintain a progressive dividend policy, is given in the Business Review within
the Annual Report and Accounts for the year ended 30 September 2012. The risk
associated with the availability of bank finance is that the provider or any
other lender may no longer be prepared to lend to the Company. Copies of the
monthly loan covenant compliance certificates, provided for the lender, are
circulated to the Board and both the Board and the Investment Manager are kept
fully informed of any likelihood of the withdrawal of the loan facility so that
repayment can be effected in an orderly fashion if necessary. With regard to
the Company's dividend policy, the Board regularly reviews the Company's
portfolio and also income forecasts prepared by the Manager; regular reports on
the Company's income position are also made by the Company's Investment Manager
at each Board meeting. The Company also maintains a distributable revenue
reserve which can be used to help make up any shortfall in income received by
the Company.
In the view of the Board these principal risks and uncertainties are applicable
to the remaining six months of the financial year as they were to the six
months under review.
Related Party Transactions
During the first six months of the current financial year, no transactions with
related parties have taken place which have materially affected the financial
position or the performance of the Company.
Going Concern
The Directors, having made relevant enquiries, are satisfied that it is
appropriate to prepare financial statements on the going concern basis as the
net assets of the Company consist of liquid securities, all of which, with the
exception of the partnership interest in Frostrow Capital LLP, are traded on
recognised stock exchanges.
Directors' Responsibilities
The Board of Directors confirms that, to the best of its knowledge:
(i) the condensed set of financial statements contained within the Half Year
Report has been prepared in accordance with applicable accounting standards;
and
(ii) the interim management report includes a true and fair review of the
information required by 4.2.7R and 4.2.8R of the UK Listing Authority and
Transparency Rules.
The Half Year Report has not been reviewed or audited by the Company's
auditors.
The Half Year Report was approved by the Board on 10 May 2013 and the above
responsibility statement was signed on its behalf by:
Anthony Townsend
Chairman
Glossary of Terms
Discount or Premium
A description of the difference between the share price and the net asset value
per share. The size of the discount or premium is calculated by subtracting the
share price from the net asset value per share and is usually expressed as a
percentage (%) of the net asset value per share. If the share price is higher
than the net asset value per share the result is a premium. If the share price
is lower than the net asset value per share, the shares are trading at a
discount.
FTSE Disclaimer
"FTSE©" is a trade mark of the London Stock Exchange Group companies and is
used by FTSE International Limited under licence. All rights in the FTSE
indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor
its licensors accept any liability for any errors or omissions in the FTSE
indices and/or FTSE ratings or underlying data. No further distributions of
FTSE Data is permitted without FTSE's express written consent.
Gearing
The term used to describe the process of borrowing money for investment
purposes. The expectation is that the returns on the investments purchased will
exceed the finance costs associated with those borrowings.
There are several methods of calculating gearing and the following has been
selected:
Total assets, less current liabilities (before deducting any prior charges)
minus cash/cash equivalents divided by Shareholders' funds, expressed as a
percentage.
Net Asset Value (NAV)
The value of the Company's assets, principally investments made in other
companies and cash being held, minus any liabilities. The NAV is also described
as `shareholders' funds' per share. The NAV is often expressed in pence per
share after being divided by the number of shares which have been issued. The
NAV per share is unlikely to be the same as the share price which is the price
at which the Company's shares can be bought or sold by an investor. The share
price is determined by the relationship between the demand and supply of the
shares.
Net Asset Value Total Return
The theoretical total return on an investment over a specified period assuming
dividends paid to shareholders were reinvested at net asset value per share at
the time the shares were quoted ex-dividend. This is a way of measuring
investment management performance of investment trusts which is not affected by
movements in discounts or premiums.
Ongoing Charges
Ongoing charges are calculated by taking the Company's annualised expenses,
excluding performance fees and exceptional items, and dividing by the average
net asset value of the Company over the year.
The publishing of ongoing charges information rather than a total expense ratio
(TER) is advocated by the Association of Investment Companies who believe that
using a single methodology to calculate ongoing charges will help reduce
inconsistencies and allow investors and advisers to compare investment
companies more easily with open-ended funds.
Share Price Total Return
The change in capital value of a company's shares over a given period, plus
dividends received, expressed as a percentage of the opening value.
Glossary of Terms
Continued
Treasury Shares
Shares previously issued by a company that have been bought back from
shareholders to be held by the company for potential sale or cancellation at a
later date. Such shares are not capable of being voted and carry no rights to
dividends.
For and on behalf of
Frostrow Capital LLP, Secretary
10 May 2013
- ENDS -
The following are attached:
* Chairman's Statement
* Investment Manager's Review
* Income Statement
* Reconciliation of Movements in Shareholders' Funds
* Balance Sheet
* Cash Flow Statement
* Notes to the Interim Accounts
For further information please contact:
Alastair Smith/Mark Pope, Frostrow Capital LLP 020 3008 4911/4913
Jo Stonier, Quill Communications 020 7758 2236
Nick Train, Lindsell Train Limited 020 7227 8200
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