Half Yearly Results

RNS Number : 3867X

Aberdeen New Dawn Invest Trust PLC

19 December 2019

 

ABERDEEN NEW DAWN INVESTMENT TRUST PLC

HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 OCTOBER 2019

Legal Entity Identifier:  5493002K00AHWEME3J36

INVESTMENT OBJECTIVE

To provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.

BENCHMARK

MSCI All Countries Asia Pacific ex Japan Index (Sterling adjusted)

FINANCIAL HIGHLIGHTS

	31 October 2019	30 April 2019	% change
Total assets including current year incomeA	£344,576,000	£347,660,000	-0.9
Total equity shareholders' funds	£311,250,000	£314,411,000	-1.0
Share price (mid-market)B	246.0p	250.0p	-1.6
Net asset value per share (including current year income)B	279.9p	281.1p	-0.4
Net asset value per share (excluding current year income)BC	276.6p	277.8p	-0.4
Discount to net asset value (including current year income)BC	12.1%	11.1%
Discount to net asset value (excluding current year income)BC	11.1%	10.0%
MSCI AC Asia Pacific ex Japan Index (currency adjusted)B	754.9	772.7	-2.3
Net gearingC	9.3%	9.3%
Interim dividend per shareD	1.0p	1.0p	-
Ongoing charges ratioC	1.11%	1.13%
A           Total assets which includes current year income, less current liabilities, before deducting any prior charges.
B           Percentage change figures are on a capital return basis.
C           Considered to be an Alternative Performance Measure.
D           Interim dividend relating to the first six months of the financial year.

PERFORMANCE (TOTAL RETURN)

	Six months ended	Year ended
	31 October 2019	30 April 2019
Share priceA	-0.3%	+8.0%
Net asset valueA	+0.7%	+4.9%
MSCI AC Asia Pacific ex Japan Index (currency adjusted)	-0.2%	+3.0%
A  Considered to be an Alternative Performance Measure. Further details can be found on pages 17 and 18.

For further information, please contact:

Scott Anderson

Aberdeen Standard Investments              0131 222 1863

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.

INTERIM BOARD REPORT - CHAIRMAN'S STATEMENT

Results and Dividend

In my first report to Shareholders, I am pleased to record that, in what was a tough market environment, the Company's Net Asset Value ("NAV") delivered a resilient performance outperforming the benchmark over the six months to 31 October 2019. The NAV total return for the period was 0.7%, which compared favourably with the 0.2% decline in the MSCI AC Asia Pacific ex Japan Index. The share price total return for the period was -0.3%, resulting in a slight widening of the discount to NAV to 12.1% versus 11.1% on 30 April 2019.  Sterling weakness for most of the period, largely due to continued Brexit-related uncertainty, was beneficial to the total returns of the Company and the benchmark. 

The Board declares an unchanged interim dividend for the year of 1.0p per Ordinary share, which will be paid on 31 January 2020 to shareholders on the register on 3 January 2020 (the relevant ex-dividend date being 2 January 2020). Shareholders should be aware that, as in previous years, the level of future dividends will depend on the income from the portfolio.

Overview

The six month period was challenging for Asian stockmarkets as investors experienced mounting concerns over the macroeconomic outlook and political uncertainty. The US-China trade dispute was crucial in shaping sentiment. The optimism that fueled gains earlier in 2019 subsided after talks stalled and new tariffs were announced. For now, negotiations have resumed. Other emergent geopolitical issues, including the Japan-Korea dispute, the unrest in Hong Kong and events in the Middle East also unsettled markets.

Continued monetary easing from central banks in Europe and the US helped stocks avert deeper losses as weak exports and lower factory output compounded worries about slowing global economic growth. In addition, most major Asian central banks cut interest rates. At the same time, several governments turned to stimulus tools, such as tax cuts and extra spending, to offset the downturn. The tailwinds of benign inflation and relatively low debt levels should ensure that policymakers have room to support growth while maintaining fiscal prudence. China, for example, opted for targeted measures to spur demand in key consumer segments instead of the debt-financed investment of the past.

Against such a backdrop, the Board was encouraged by the contribution made by some of the holdings in the portfolio. Positive returns from the Company's holdings in China and India underscored the value of a quality-focused approach. In China, trade and growth concerns impacted the performance of some companies in the portfolio, but the holding in the Aberdeen Standard SICAV - China A Share Equity Fund proved helpful. This fund comprises market leaders in segments such as travel, food and beverage and healthcare, with their businesses linked mainly to domestic demand. These companies were largely insulated from the worst of the trade dispute, with earnings still growing at a decent rate.

It was a similar story in India, where the position in the Aberdeen Standard SICAV - Indian Equity Fund  also had a positive impact. It outperformed the domestic benchmark, which was volatile due to persistent financial-sector worries and a poorly-received post-election Budget. The quality of the India Equity Fund's underlying financial holdings merits mentioning. They remained resilient even as fears of a cash crisis within the country's sprawling "shadow banking" sector dampened most other financial shares. Despite the present challenges, the re-election of Prime Minister Narendra Modi was seen as a positive over the long-term as it should ensure that structural reforms and growth-friendly policies continue. In addition, a much-welcomed corporate tax cut could be a near-term fillip for business sentiment and the economy.

Also making notable contributions to performance were the Company's holdings in the technology sector which rebounded after a period of underperformance. Better than expected smartphone sales and hopes for a recovery in memory-chip prices sparked a rally in the sector, which also benefited from the expectation of faster adoption of 5G wireless technologies. These factors, coupled with more upbeat forecasts, lifted the share prices of Taiwan Semiconductor Manufacturing Company ("TSMC") and Samsung Electronics. These are among the stalwarts of the portfolio and attest to your Manager's strategy of investing in long-term quality companies. Your Manager believes that prospects for TSMC and Samsung continue to look promising, with both poised to benefit from an industry-wide shift towards more complex chips. Additionally, their technological leadership and investments in innovation set them apart from most of their rivals. Towards the end of the period, events in Hong Kong attracted increasing attention as large-scale street protests turned violent. The prolonged unrest hurt important pillars of the economy, including tourism, retail and property. Within the Company's portfolio, Jardine Strategic Holdings and Swire Properties were among the major laggards. Other Hong Kong holdings, however, were less affected as these companies generate their revenues from elsewhere, particularly China. A case in point is Budweiser Brewing Company, the sole addition to the portfolio during the period. Although listed in Hong Kong, the bulk of its profits are derived from China and South Korea, where it holds market-leading positions. The strength of its beer brands, along with consumers' growing preference for premium products, should be beneficial for future margin expansion and earnings growth.

The Company's overall exposure to Hong Kong has fallen, reflecting your Manager's preference for more attractive options in the mainland. To that end, your Manager exited Hang Lung Properties during the period in view of its more muted outlook and reduced the position in Jardine Strategic due to challenges at several of its regional units. Positions in lenders, HSBC and Standard Chartered, were also scaled back.

Gearing

At the end of the period, the Company's borrowing facilities comprised a fixed rate loan of £20 million which matures in December 2023 (with an interest rate of 2.626%), and a £15 million multi-currency revolving loan facility which matures in December 2021. During the period, the Company also had a £5 million fixed rate loan which matured, and was repaid, in October 2019. Total borrowing facilities have therefore reduced to £35 million compared to £40 million at the start of the period.

An aggregate Sterling equivalent of £33.3 million was drawn down at the period end and gearing (net of cash) was 9.3% as at 31 October 2019, unchanged from the start of the period.

Share Buy Backs

In common with other investment trusts, the Company has bought back shares with the aim of providing a degree of liquidity to the market at times when the discount to the NAV has widened in normal market conditions. It is the view of the Board that this policy is in the interests of all Shareholders. The Board closely monitors the discount and we review the operation of the share buy back policy at each Board meeting as well as considering other options for managing the discount.

During the period, the Company bought back 630,000 shares, representing 0.6% of the issued share capital.

These shares were bought back and held in treasury. The Company's stated policy on treasury shares is that these can only be re-issued to the market at a premium to the NAV per share at that time.

The Board is hopeful that the sustained performance of the Company will, in time, be reflected in a narrowing of the discount.

Board Composition

As previously announced, David Shearer retired as Chairman and a Director at the Annual General Meeting on 4 September and I succeeded him as Chairman. On behalf of the Board I would like to thank David for his services to the Company since he joined the Board in 2007 and as Chairman since 2012.

During the period, the Board was pleased to announce the appointment from 1 October 2019 of Stephen Souchon as an independent non-executive Director of the Company. Stephen is a Chartered Accountant and currently a non-executive director and Chair of the Audit Committee of SMBC Nikko Capital Markets Limited. He had an executive career at Morgan Stanley until 2015 where he was latterly Head of the EMEA Corporate Financial Control Group. He was a non-executive director and Chair of the Audit Committee of Morgan Stanley's Swiss Bank during which time he oversaw the development of the Swiss wealth management business within Asia. He was also the Audit Committee Chair of Morgan Stanley's Spanish wealth management subsidiary and its Russian bank and broker dealer.

As previously announced, John Lorimer has indicated that he intends to step down from the Board on conclusion of the Annual General Meeting in 2020 by which time he will have been a Director of the Company for 10 years including 8 years as Chairman of the Audit and Risk and Management Engagement Committees.

Electronic Communications for Registered Shareholders

The Board is proposing to move to more electronic based forms of communication with its registered shareholders. Increased use of electronic communications should be a more cost effective, as well as faster and more environmentally friendly way of providing information to shareholders. In addition, we hope that, over time, it might also increase engagement with shareholders who own their shares via platforms.  Registered shareholders will therefore find enclosed with this Half Yearly Report a letter containing our electronic communications proposals. Registered shareholders who wish to continue to receive hard copies of documents and communications by post need to opt-in and send back their replies in accordance with the instructions set out in the letter.

Shareholders who hold their shares through the Aberdeen Standard Investments Children's Plan, Investment Trust Share Plan or ISA ("Planholders") will continue to receive all documentation by post in hard copy for the time being. The Plan Manager is currently assessing how to adopt more electronically-based communications within these savings plans, Planholders will be contacted directly with more detail in due course.

Outlook

Uncertainty will remain the watchword in the coming months. Markets appear to have already priced in an interim US-China trade deal, which means that any delays could trigger a painful reversal. It also seems clear that the strategic rivalry between the world's two largest economies will continue to play out, with unknown consequences for trade, investment, supply chains and the application of technology. This is likely to influence the growth trajectory of economies across Asia and dictate the quality of corporate earnings.

Despite these risks, there are reasons for cautious optimism. Asian governments and central banks are united with regards to expansionary policies, while ongoing reforms and political stability should sustain consumer and business confidence. In addition, the robust macro fundamentals of most Asian economies, coupled with largely orthodox fiscal and monetary policies, should allow authorities to make more adjustments if needed.

Meanwhile, amid all the disquiet about a slowing global economy, it is worth remembering that Asia remains the world's most dynamic region. The structural trends that will underpin its growth are intact. These include advances in technology that are disrupting traditional approaches, as well as growing demand for broader, and more customised products and services from wealthier populations. Your Manager's stringent, bottom-up investment approach should ensure that the portfolio comprises holdings in companies with the ability to access these opportunities, even when market conditions are difficult. The Board remains confident that this approach will ensure that the portfolio has the requisite quality to deliver sustainable returns for the Company over the long term.

Donald Workman

Chairman

18 December 2019

INTERIM BOARD REPORT - OTHER MATTERS

Directors' Responsibility Statement

The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with applicable laws and regulations. The Directors confirm that to the best of their knowledge:

-      the condensed set of financial statements within the Half-Yearly Financial Report has been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting';

-      the Interim Board Report (constituting the Interim Management Report) includes a fair review of the information required by rule 4.2.7R of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period, and any changes in the related party transactions described in the last Annual Report that could do so).

Principal Risks and Uncertainties

The Board regularly reviews the principal risks and uncertainties faced by the Company together with the mitigating actions it has established to manage the risks. These are set out within the Strategic Report contained within the Annual Report for the year ended 30 April 2019 and comprise the following risk headings:

-      Investment strategy and objectives

-      Investment management

-      Income/dividends

-      Financial

-      Gearing

-      Regulatory

-      Operational

The Board has reviewed and considered the potential impact of the current geopolitical environment including Brexit and trade tensions. Apart from this, the Company's principal risks and uncertainties have not changed materially since the date of the Annual Report and are not expected to change materially for the remaining six months of the Company's financial year.

Going Concern

The Company's assets consist substantially of equity shares in companies listed on recognised stock exchanges and in most circumstances are realisable within a short timescale. The Board has set limits for borrowing and regularly reviews cash flow projections and compliance with banking covenants. The Directors believe that, after making enquiries, the Company has adequate resources to continue in operational existence for the foreseeable future and has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of this Report. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

On behalf of the Board

Donald Workman

Chairman

18 December 2019

INVESTMENT PORTFOLIO
As at 31 October 2019
		Valuation	Total assets
Company	Country	£'000	%
Aberdeen Standard SICAV - Indian Equity FundA	India	42,299	12.3
Aberdeen Standard SICAV - China A Share Equity FundA	China	23,767	6.9
Samsung Electronics Pref	South Korea	20,730	6.0
Tencent Holdings	China	20,256	5.9
Taiwan Semiconductor Manufacturing Company	Taiwan	19,663	5.7
Ping An Insurance H Shares	China	11,470	3.3
AIA Group	Hong Kong	11,050	3.2
Bank Central Asia	Indonesia	10,293	3.0
Ayala Land	Philippines	10,111	2.9
Jardine Strategic Holdings	Hong Kong	9,391	2.7
Top ten investments		179,030	51.9
CSL	Australia	8,886	2.6
Oversea - Chinese Banking Corporation	Singapore	8,463	2.5
China Resources Land	China	7,509	2.2
Aberdeen New India Investment TrustAB	India	6,361	1.8
BHP GroupB	Australia	6,340	1.8
Hong Kong Exchanges & Clearing	Hong Kong	5,830	1.7
Siam Cement (Foreign)	Thailand	5,221	1.5
City Developments	Singapore	5,103	1.5
DBS Group Holdings	Singapore	5,012	1.5
Wuxi Biologics (Cayman)	China	4,738	1.4
Top twenty investments		242,493	70.4
Swire Properties	Hong Kong	4,610	1.3
Astra International	Indonesia	4,264	1.2
Keppel Corporation	Singapore	4,222	1.2
LG Chem	South Korea	4,187	1.2
Cochlear	Australia	4,015	1.2
John Keells Holdings	Sri Lanka	3,929	1.1
M.P. Evans GroupB	United Kingdom	3,870	1.1
Sunny Optical Technology	China	3,682	1.1
Vietnam Dairy Products	Vietnam	3,518	1.0
Budweiser Brewing	Hong Kong	3,483	1.0
Top thirty investments		282,273	81.8
Singapore Telecommunication	Singapore	3,414	1.0
Rio TintoB	Australia	3,406	1.0
Autohome ADR	China	3,393	1.0
Huazhu Group ADR	China	3,387	1.0
Kerry Logistics Network	Hong Kong	3,316	1.0
Anhui Conch Cement H Shares	China	3,290	1.0
ASM Pacific Technology	Hong Kong	3,272	0.9
Venture Corp	Singapore	3,139	0.9
Taiwan Mobile	Taiwan	3,071	0.9
China Mobile	China	3,045	0.9
Top forty investments		315,006	91.4
United Overseas Bank	Singapore	2,870	0.8
Standard CharteredB	United Kingdom	2,828	0.8
Yum China Holdings	China	2,777	0.8
Mobile World	Vietnam	2,767	0.8
Aberdeen Standard Asia FocusAB	Other Asia	2,534	0.7
Unilever Indonesia	Indonesia	2,335	0.7
Bangkok Dusit Medical Services (Foreign)	Thailand	1,906	0.6
HSBC Holdings	Hong Kong	1,665	0.5
Raffles Medical	Singapore	1,660	0.5
Woodside Petroleum	Australia	1,375	0.4
Top fifty investments		337,723	98.0
Yoma Strategic Holdings	Myanmar	1,091	0.3
DFCC Bank	Sri Lanka	755	0.2
Swire Pacific B Shares	Hong Kong	636	0.2
Amorepacific Corporation Pref	South Korea	233	0.1
Total investments		340,438	98.8
Net current assetsC		4,138	1.2
Total assetsD		344,576	100.0
A         Holding also managed by the Standard Life Aberdeen Group but not subject to double charging of management fees.
B          London Stock Exchange listing.
C         Excluding short-term bank loans of £13,381,000.
D         Total assets which includes current year income, less current liabilities, before deducting any prior charges.
Note: Unless otherwise stated, foreign stock is held and all investments are equity holdings.

INDEPENDENT REVIEW REPORT TO ABERDEEN NEW DAWN INVESTMENT TRUST PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 31 October 2019 which comprises a Condensed Statement of Comprehensive Income, Condensed Statement of Financial Position, Condensed Statement of Changes in Equity, Condensed Statement of Cash Flows and the related notes 1 to 14. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with United Kingdom Generally Accepted Accounting Practice. The condensed set of financial statements included in this Half Yearly Financial Report has been prepared in accordance with the Financial Reporting Standard ("FRS")104 'Interim Financial Reporting'.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Yearly Financial Report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland)  'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half Yearly Financial Report for the six months ended 31 October 2019 is not prepared, in all material respects, in accordance with FRS 104 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

Edinburgh

18 December 2019

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
		Six months ended			Six months ended
		31 October 2019			31 October 2018
		Revenue	Capital	Total	Revenue		Capital	Total
	Notes	£'000	£'000	£'000	£'000		£'000	£'000
Losses on investments		-	(792)	(792)	-		(36,727)	(36,727)
Income	2	5,050	-	5,050	4,664		-	4,664
Management fee		(466)	(466)	(932)	(454)		(454)	(908)
Administrative expenses		(434)	-	(434)	(432)		-	(432)
Exchange losses	6	-	(54)	(54)	-		(1,659)	(1,659)
		_______	_______	_______	_______		_______	_______
Net return before finance costs and taxation		4,150	(1,312)	2,838	3,778		(38,840)	(35,062)
Finance costs		(246)	(246)	(492)	(201)		(201)	(402)
		_______	_______	_______	_______		_______	_______
Return before taxation		3,904	(1,558)	2,346	3,577		(39,041)	(35,464)
Taxation	3	(247)	-	(247)	(260)		-	(260)
		_______	_______	_______	_______		_______	_______
Return after taxation		3,657	(1,558)	2,099	3,317		(39,041)	(35,724)
		_______	_______	_______	_______		_______	_______
Return per Ordinary share (pence)	5	3.28	(1.40)	1.88	2.92		(34.39)	(31.47)
		_______	_______	_______	_______		_______	_______
The total column of the Condensed Statement of Comprehensive Income represents the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these condensed set of interim financial statements.

	CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
			As at	As at
			31 October 2019	30 April 2019
		Notes	£'000	£'000
Fixed assets
Investments at fair value through profit or loss		9	340,438	343,419
			__________	__________
Current assets
Debtors			566	926
Cash at bank and in hand			4,990	3,853
			__________	__________
			5,556	4,779
			__________	__________
Creditors: amounts falling due within one year
Loans			(13,381)	(13,311)
Other creditors			(1,418)	(538)
			__________	__________
			(14,799)	(13,849)
			__________	__________
Net current liabilities			(9,243)	(9,070)
			__________	__________
Total assets less current liabilities			331,195	334,349
Non-current creditors
Loans			(19,945)	(19,938)
			__________	__________
Net assets			311,250	314,411
			__________	__________
Share capital and reserves
Called-up share capital			6,011	6,011
Share premium account			17,955	17,955
Capital redemption reserve			10,543	10,543
Capital reserve		6	263,666	266,798
Revenue reserve			13,075	13,104
			__________	__________
Equity shareholders' funds			311,250	314,411
			__________	__________
Net asset value per Ordinary share (pence)		7	279.87	281.12

The accompanying notes are an integral part of these condensed set of interim financial statements.

CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Six months ended 31 October 2019
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2019		6,011	17,955	10,543	266,798	13,104	314,411
Buy back of Ordinary shares for treasury		-	-	-	(1,574)	-	(1,574)
Return after taxation		-	-	-	(1,558)	3,657	2,099
Dividend paid	4	-	-	-	-	(3,686)	(3,686)
		______	______	_______	______	______	_______
Balance at 31 October 2019		6,011	17,955	10,543	263,666	13,075	311,250
		______	______	_______	______	______	_______
Six months ended 31 October 2018
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2018		6,152	17,955	10,402	264,189	13,118	311,816
Buy back of Ordinary shares for treasury		-	-	-	(4,109)	-	(4,109)
Return after taxation		-	-	-	(39,041)	3,317	(35,724)
Dividend paid	4	-	-	-	-	(3,741)	(3,741)
		______	______	_______	______	______	_______
Balance at 31 October 2018		6,152	17,955	10,402	221,039	12,694	268,242
		______	______	_______	______	______	_______

The accompanying notes are an integral part of these condensed set of interim financial statements. ​​​​​​​

CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
		Six months ended	Six months ended
		31 October 2019	31 October 2018
	Notes	£'000	£'000
Operating activities
Net return before finance costs and taxation		2,838	(35,062)
Adjustment for:
Losses on investments		792	36,727
Currency losses		54	1,659
Dividend income		(5,041)	(4,661)
Dividend income received		5,515	5,467
Interest income		(9)	(3)
Interest income received		8	3
(Increase)/decrease in other debtors		(1)	8
Increase in creditors		13	167
Stock dividends included in investment income		(483)	(286)
Overseas withholding tax		(340)	(335)
		__________	__________
Net cash flow from operating activities		3,346	3,684
Investing activities
Purchases of investments		(18,728)	(32,564)
Sales of investments		22,190	31,911
		__________	__________
Net cash from investing activities		3,462	(653)
Financing activities
Interest paid		(490)	(402)
Equity dividends paid	4	(3,686)	(3,741)
Buyback of Ordinary shares for treasury		(1,512)	(4,134)
Loan drawdown		-	3,500
		__________	__________
Net cash used in financing activities		(5,688)	(4,777)
		__________	__________
Increase/(decrease) in cash		1,120	(1,746)
		__________	__________
Analysis of changes in cash during the period
Opening balances		3,853	4,507
Effect of exchange rate fluctuations on cash held		17	(39)
Increase/(decrease) in cash as above		1,120	(1,746)
		__________	__________
Closing balances		4,990	2,722
		__________	__________

The accompanying notes are an integral part of these condensed set of interim financial statements. ​​​

 

NOTES TO THE FINANCIALSTATEMENTS

For the period ended 31 October 2019

1.	Accounting policies
	Basis of accounting
	The condensed financial statements have been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting' and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
	The interim financial statements have been prepared using the same accounting policies as the preceding annual financial statements.

		Six months ended	Six months ended
		31 October 2019	31 October 2018
2.	Income	£'000	£'000
	Income from investments
	UK dividend income	589	646
	Overseas dividends	3,969	3,729
	Stock dividends	483	286
		__________	__________
		5,041	4,661
		__________	__________
	Other income
	Deposit interest	9	3
		__________	__________
	Total income	5,050	4,664
		__________	__________

3.	Taxation
	The taxation charge for the period represents withholding tax suffered on overseas dividend income (31 October 2018 - same).

4.	Dividends
	Ordinary dividends on equity shares deducted from reserves are analysed below:
		Six months ended	Six months ended
		31 October 2019	31 October 2018
		£'000	£'000
	2019 final dividend - 3.30p (2018 - 3.30p)	3,686	3,741
		__________	__________
	An interim dividend of 1.00p (31 October 2018 - 1.00p) per share will be paid on 31 January 2020 to shareholders on the register on 3 January 2020. The ex-dividend date will be 2 January 2020.

		Six months ended	Six months ended
		31 October 2019	31 October 2018
5.	Return per Ordinary share	p	p
	Revenue return	3.28	2.92
	Capital return	(1.40)	(34.39)
		__________	__________
	Total return	1.88	(31.47)
		__________	__________
	The figures above are based on the following attributable returns:
		£'000	£'000
	Revenue return	3,657	3,317
	Capital return	(1,558)	(39,041)
		__________	__________
	Total return	2,099	(35,724)
		__________	__________
	Weighted average number of Ordinary shares in issue	111,625,750	113,518,761
		__________	__________

6.	Capital reserve
	The capital reserve reflected in the Condensed Statement of Financial Position at 31 October 2019 includes gains of £141,748,000 (30 April 2019 - gains of £149,600,000) which relate to the revaluation of investments held at the reporting date.
	During the period the Company had exchange losses of £54,000 (2018 - losses of £1,659,000), of which £70,000 (2018 - losses of £1,719,000) were attributable to foreign exchange movements on bank loan drawdowns.

		As at	As at
7.	Net asset value per share	31 October 2019	30 April 2019
	Net assets per Condensed Statement of Financial Position (£'000)	311,250	314,411
	Number of Ordinary shares in issueA	111,211,348	111,841,348
	Net asset value per Ordinary share (p)	279.87	281.12
	A Excluding shares held in treasury.

8.	Transaction costs
	During the six months ended 31 October 2019 expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within losses on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows:
		Six months ended	Six months ended
		31 October 2019	31 October 2018
		£'000	£'000
	Purchases	38	70
	Sales	30	39
		__________	__________
		68	109
		__________	__________

9.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following classifications:
	Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	The financial assets and liabilities measured at fair value in the Condensed Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:
		Level 1	Level 2	Level 3	Total
	As at 31 October 2019	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	274,372	-	-	274,372
	Collective investment schemes	-	66,066	-	66,066
		__________	__________	__________	__________
	Net fair value	274,372	66,066	-	340,438
		Level 1	Level 2	Level 3	Total
	As at 30 April 2019	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities	280,340	-	-	280,340
	Collective investment schemes	-	63,079	-	63,079
	Net fair value	280,340	63,079	-	343,419
	Quoted equities
	The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	Collective investment schemes
	The fair value of the Company's investments in collective investment schemes has been determined by reference to their quoted net asset values at the reporting date and hence are categorised in Fair Value Level 2.

10.	Called-up share capital
	During the six months ended 31 October 2019 the Company purchased 630,000 (31 October 2018 - 1,800,000) Ordinary shares for treasury at a cost of £1,574,000 (31 October 2018 - £4,109,000).
	Between the period 1 November 2019 and the date of approval of this Report, the Company bought back for treasury a further 235,000 Ordinary shares at a cost of £584,000.

11.	Related party transactions and transactions with the Manager
	Mr Young is also a director of the Company's Investment Manager, Aberdeen Standard Investments (Asia) Limited, which is a wholly-owned subsidiary of Standard Life Aberdeen plc. Management, promotional activities and secretarial and administration services are provided to the Company by Aberdeen Standard Fund Managers Limited.
	The management fee is payable monthly in arrears based on an annual amount of 0.85% of the net asset value of the Company valued monthly, with the following provisions for commonly managed funds:
	-       the Company's investments in Aberdeen Standard SICAV - Indian Equity Fund, Aberdeen Standard Asia Focus Investment Trust PLC and Aberdeen New India Investment Trust PLC are excluded from the calculation of the investment management fee.  The Company's investment in Aberdeen Standard SICAV - China A Share Equity Fund is held in a share class not subject to management charges at a fund level and the Manager is therefore entitled to a fee on the value of the Company's investment. The total value of such commonly managed funds at the period end was £74,961,000 (31 October 2018 - £56,416,000).
	-       the Company receives a rebate from the Manager for the amount of fees in excess of 0.85%, of net assets charged by the Manager for any applicable commonly managed fund.
	During the period £932,000 (31 October 2018 - £908,000) of management fees were payable, with a balance of £305,000 (31 October 2018 - £291,000) being due to ASFML at the period end. Management fees are charged 50% to revenue and 50% to capital.
	The promotional activities fee is based on a current annual amount of £140,000 (31 October 2018 - £158,000), payable quarterly in arrears. During the period £70,000 (31 October 2018 - £79,000) of fees were payable, with a balance of £47,000 (31 October 2018 - £53,000) being due to ASFML at the period end.

12.	Segmental information
	The Company is engaged in a single segment of business, which is to invest in equity securities. Accordingly, all significant operating decisions are based on the Company as one segment.

13.	The financial information contained in this Half-Yearly Report does not constitute statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the six months ended 31 October 2019 and 31 October 2018 has not been audited by the Company's external auditor.
	The financial information for the year ended 30 April 2019 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the Independent Auditor on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006.

14.	This Half-Yearly Financial Report was approved by the Board on 18 December 2019.

ALTERNATIVE PERFORMANCE MEASURES

Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP.
Total return is considered to be an alternative performance measure. NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.
The tables below provide information relating to the NAVs and share prices of the Company on the dividend reinvestment dates during the six months ended 31 October 2019 and 31 October 2018.
	Dividend			Share
31 October 2019	rate		NAV	price
30 April 2019	N/A		281.12p	250.00p
15 August 2019	3.30p		277.07p	241.00p
31 October 2019	N/A		279.87p	246.00p
			__________	__________
Total return			-0.7%	-0.3%
			__________	__________
	Dividend			Share
31 October 2018	rate		NAV	price
30 April 2018	N/A		272.41p	236.00p
16 August 2018	3.30p		262.91p	227.00p
31 October 2018	N/A		238.09p	204.00p
			__________	__________
Total return			-12.6%	-13.6%
			__________	__________
Discount to net asset value
The amount by which the market price per Ordinary share of 246.00p (30 April 2019 - 250.00p) is lower than the net asset value per Ordinary share (including income 279.87p (30 April 2019 - 281.12p); excluding income 276.58p (30 April 2019 - 277.79p)), expressed as a percentage of the adjusted net asset value per Ordinary share.
Net asset value per Ordinary share (ex income)
The Company also uses net asset value (ex income) per share as an alternative performance measure. This is calculated as follows:
		31 October 2019		30 April 2019
Net assets attributable (£'000)		311,250		314,411
Less: Revenue for the year (£'000)		(3,657)		(4,850)
Add: Dividends paid during the year (£'000)		-		1,123
		__________		__________
Net assets (ex income) (£'000)		307,593		310,684
		__________		__________
Number of Ordinary shares in issue		111,211,348		111,841,348
		__________		__________
NAV (ex income) per Ordinary share		276.58p		277.79p
		__________		__________
Net gearing
Net gearing measures the total borrowings of £33,326,000 (30 April 2019 - £33,249,000) less cash and cash equivalents of £4,228,000 (30 April 2019 - £3,944,000) divided by shareholders' funds of £311,250,000 (30 April 2019 - £314,411,000), expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due to brokers £762,000 (30 April 2019 - due from brokers of £91,000) at the period end as well as cash at bank and in hand of £4,990,000 (30 April 2019 - £3,853,000).
Ongoing charges
Ongoing charges is considered to be an alternative performance measure. The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average net asset values throughout the year. The ratio for 31 October 2019 is based on forecast ongoing charges for the year ending 30 April 2020.
		31 October 2019		30 April 2019
Investment management fees (£'000)		1,843		1,803
Administrative expenses (£'000)		808		839
Less: non-recurring charges (£'000)		(52)		(89)
		__________		__________
Ongoing charges (£'000)		2,599		2,553
		__________		__________
Average net assets (£'000)		312,808		294,966
		__________		__________
Ongoing charges ratio (excluding look-through costs)		0.83%		0.87%
Look-through costsA		0.28%		0.26%
		__________		__________
Ongoing charges ratio (including look-through costs)		1.11%		1.13%
		__________		__________
A              Costs associated with holdings in collective investment schemes as defined by the Committee of European Securities Regulators' guidelines on the methodology for the calculation of the ongoing charges figure, issued on 1 July 2010.
During both years net asset values with debt at fair value equated to net asset value with debt at amortised cost due to the short-term nature of the bank loans.
The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations.

The Half-yearly Report and Accounts will be posted to shareholders. Copies may be obtained during normal business hours from the Secretary, Aberdeen Asset Management PLC, 1 George Street, Edinburgh EH2 2LL or from the Company's website, www.newdawn-trust.co.uk*.

By order of the Board

Aberdeen Asset Management PLC

Company Secretary

18 December 2019

* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

 

END

 

 

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