Half-year Report

RNS Number : 7910A

Edinburgh Worldwide Inv Trust PLC

10 June 2016

 

RNS Announcement

Edinburgh Worldwide Investment Trust plc

Results for the six months to 30 April 2016

Since 1 February 2014, the Company has been invested in a diversified portfolio of companies which individually offer significant long term growth potential and typically have a market capitalisation of less than US$5bn at the time of initial investment.

¾ Over the six month period the Company's net asset value per share† increased by 0.9% while the comparative index* increased by 5.6%. The share price rose by 1.2%.

¾ Revenue losses per share were 0.35p (six months to 30 April 2015: losses of 0.31p) and no interim dividend is being recommended.

¾ Several of the Company's larger holdings, such as MarketAxess and Tesla, were positive contributors. Detractors to performance included several healthcare focussed holdings such as Alnylam Pharmaceuticals and Dexcom.

¾ At present the Company holds three unlisted equity investments, Souq Group, Oxford Nanopore Technologies and Skyscanner, accounting for 2.43% of total assets.

¾ Although the near term direction of markets is influenced by both macro and geopolitical concerns, the Managers have long believed that the success, or failure, of smaller companies is most heavily influenced by their own actions.

†  Cum income with debt at fair value.

* S&P Global Small Cap Index (in sterling terms). 

Past performance is not a guide to future performance.

Edinburgh Worldwide aims to achieve long term capital growth by investing primarily in listed companies throughout the world. The Company has total assets of £261.9 million (before deduction of loans of £32.3 million) as at 30 April 2016.

Edinburgh Worldwide is managed by Baillie Gifford, the Edinburgh based fund management group with over £120 billion under management and advice as at 9 June 2016.

The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares. Investment in investment trusts should be regarded as medium to long-term. The Company's risk could be increased by its investment in unlisted investments. These assets may be more difficult to buy or sell, so changes in their prices may be greater. Edinburgh Worldwide Investment Trust plc is a listed UK company. The Company is listed on the London Stock Exchange and is not authorised or regulated by the Financial Conduct Authority. You can find up to date performance information about Edinburgh Worldwide on the Edinburgh Worldwide page of the Managers' website at http://www.edinburghworldwide.co.uk‡

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

10 June 2016

For further information please contact:

Anzelm Cydzik, Baillie Gifford & Co:  Tel [phone]

Roland Cross, Director, Four Broadgate:  Tel [phone]

The following is the unaudited Interim Financial Report for the six months to 30 April 2016.

Responsibility statement

We confirm that to the best of our knowledge:

a)   the condensed set of Financial Statements has been prepared in accordance with FRS 104 'Interim Financial Reporting';

b)   the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (indication of important events during the first six months, their impact on the Financial Statements and a description of principal risks and uncertainties for the remaining six months of the year); and

c)   the Interim Financial Report includes a fair review of the information required by Disclosure and Transparency Rules 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

David HL Reid

Chairman

9 June 2016

 

Interim management report

Performance

Over the six months from 31 October 2015 to 30 April 2016, the Trust's net asset value per share increased by 0.9%, which compares to a rise of 5.6% in the S&P Global Smaller Companies Index over the same period. The share price over the six months rose by 1.2% to 443.13p representing a discount of 5.1% to the net asset value at 30 April 2016. This is slightly narrower than the discount of 5.3% at the beginning of the period.

The six month period to end of April 2016 captured a number of elements that negatively impacted on the performance of the Trust. Most notably, there was a pronounced spike in share price volatility and an increase in investor risk aversion in the first few weeks of the calendar year. As we have seen before, such periods can create short term headwinds for the Trust as younger less mature businesses, to which the portfolio is skewed, tend to suffer disproportionately; this trend was most noticeable in the de-rating of several of the Trust's US biotechnology and healthcare holdings. Pin-pointing the root cause of market angst is difficult but our sense is that stock markets are grappling with the broad outlook for global growth in an environment where central bank stimulus is being removed and the Chinese economy appears to be slowing. Whilst markets have recovered off their February lows, we would characterise the near term investment environment as one where both macro and geopolitical concerns are likely to be a key determinant of broad stock market direction and volatility. While smaller, less mature businesses to which the Trust is exposed are not operationally immune from the broader economic environment, we have long believed that their success (or failure) is most heavily influenced by their own actions; while stock markets fret, the most dynamic management teams continue with building an interesting and viable business.

Portfolio Update

Whilst the performance of the Trust lagged behind the comparative index over the 6 months to April we have been broadly happy with the operational performance of the vast majority of the holdings. Notably, the top ten largest positive stock contributors to performance over the 6 months delivered an average sterling share price return of over 50%. This is indicative of the potential to identify attractive stock specific opportunities despite a market backdrop that has been challenging for younger, less developed businesses.

Positive contributions were made from several of the Trust's larger positions. MarketAxess, an electronic bond trading platform, continued to take an increasing amount of share in the trading of US investment grade bonds and we are encouraged that the business is beginning to broaden its platform into other illiquid asset classes such as high yield, municipal bonds and emerging market debt. We sense that the network effects are really starting to build to the advantage of MarketAxess and we are intrigued by the possibility that an efficient bond trading platform might provide a mechanism to increase overall bond volumes in the secondary market; a development which could significantly increase the addressable opportunity for MarketAxess. Tesla unveiled its Model 3 electric vehicle to the world and has already taken approaching 400,000 pre-orders. With a base price expected to be around $35,000, the Model 3 is Tesla's opening shot in the electrification of mass market vehicles. The aura that Tesla has created with its premium, technology-laden Model S and X cars clearly resonates with a broad audience and the strength of the pre-orders effectively destroys the negative argument that consumers are not accepting of fully electric vehicles. The investment case with Tesla is morphing from one based on pioneering a disruptive product to one where scalability, manufacturing excellence and the company's vertically integrated approach will be key determinants of future success; the challenge is evolving but we feel the competitive differentiation is becoming much clearer and more durable.

Detractors to performance included several of our healthcare focused holdings, such as the gene-silencing company Alnylam Pharmaceuticals and real-time blood glucose monitoring company Dexcom. In both cases we think the share price falls were unjustified given the significant progress the companies have made and the large audience of potential beneficiaries they are looking to address. The holding in LinkedIn impacted negatively on performance after the company reduced its profit guidance for 2016. The core recruiting business within LinkedIn continues to perform well but our hopes that the platform could evolve to support more targeted advertising have yet to be demonstrated.

We acquired a number of new holdings in the period including an additional unlisted investment in the travel comparison and booking website Skyscanner, taking our current number of unlisted investments to three. Skyscanner's business model is based on direct, bespoke links to airlines and hotels, which allows it to offer both its users and suppliers a cost effective, efficient way to make and receive travel bookings. With much of the power and profitability in online travel having migrated to online agents and their associated networks, we believe that Skyscanner's proposition has appeal to the airline and hotel owners. The characteristics of efficient digital distribution, as seen in Skyscanner, have parallels in another of the Trust's new holding LendingTree, a company that is emerging as an important facilitator for US consumers to access financial products. The core product is mortgages but it is making very strong progress in broadening the offering to personal loans, credit cards, auto finance and student loans. As lenders increasingly recognise the commoditised nature of their product and accept that their consumers will likely find them through digital channels, we think the role played by an aggregator, such as LendingTree, is of increasing importance to both lenders and borrowers. As the business scales and builds on its emerging competitive strengths we see significant potential for an improvement on its mid-teens margin structure. The Trust also took a new holding in Pacira Pharmceutical, a US biotechnology company that has developed a proprietary drug delivery technology that enables slow controlled release, potentially extending the drug's active life from just a few hours to several days or weeks. Initial applications of the technology have been directed to reformulating existing surgical anaesthetics which have limitations owing to their short duration of action. Early data appears to be encouraging and indicates that Pacira's technology allows significant improvements in pain relief and, importantly, much lower reliance on it when used post-operatively (potentially enabling some surgical procedures to shift to the out-patient setting). We see significant potential for the current near-term anaesthesia opportunities to expand and believe longer term opportunities exist in reformulating additional drug compounds.

The relatively small holdings in Medgenics, MakeMyTrip, Noah Holdings and BitAuto were sold in the period.

The principal risks and uncertainties facing the Company are set out in note 10.

Past performance is not a guide to future performance.

 

Income statement (unaudited)

	For the six months ended 30 April 2016			For the six months ended 30 April 2015			For the year ended 31 October 2015 (audited)
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains on sales of investments	-	5,282	5,282	-	2,637	2,637	-	8,319	8,319
Movements in investment holding gains and (losses)	-	(814)	(814)	-	29,211	29,211	-	14,926	14,926
Currency (losses)/gains	-	(1,108)	(1,108)	-	466	466	-	479	479
Income from investments and interest receivable	418	-	418	445	-	445	1,106	-	1,106
Investment management fee (note 3)	(202)	(605)	(807)	(205)	(614)	(819)	(415)	(1,245)	(1,660)
Other administrative expenses	(244)	-	(244)	(259)	-	(259)	(498)	-	(498)
Net return before finance costs and taxation	(28)	2,755	2,727	(19)	31,700	31,681	193	22,479	22,672
Finance costs of borrowings	(114)	(341)	(455)	(110)	(330)	(440)	(220)	(660)	(880)
Net return on ordinary activities before taxation	(142)	2,414	2,272	(129)	31,370	31,241	(27)	21,819	21,792
Tax on ordinary activities	(28)	-	(28)	(24)	-	(24)	(63)	-	(63)
Net return on ordinary activities after taxation	(170)	2,414	2,244	(153)	31,370	31,217	(90)	21,819	21,729
Net return per ordinary share (note 4)	(0.35p)	4.93p	4.58p	(0.31p)	64.01p	63.70p	(0.18p)	44.52p	44.34p
Dividends paid and proposed per ordinary share (note 5)	-			-			-

The total column of this statement is the profit and loss account of the Company.

All revenue and capital items in this statement derive from continuing operations.

 

Balance sheet (unaudited)

	At 30 April 2016 £'000	At 31 October 2015 (audited) £'000
Fixed assets
Investments held at fair value through profit or loss (note 6)	251,719	250,178
Current assets
Debtors	160	5,801
Cash and short term deposits	10,733	2,734
	10,893	8,535
Creditors
Amounts falling due within one year	(687)	(558)
Net current assets	10,206	7,977
Total assets less current liabilities	261,925	258,155
Creditors
Amounts falling due after more than one year (note 7)	(32,325)	(30,799)
Net assets	229,600	227,356
Capital and reserves
Called up share capital	2,450	2,450
Share premium	82,180	82,180
Special reserve	35,220	35,220
Capital reserve	109,039	106,625
Revenue reserve	711	881
Shareholders' funds	229,600	227,356
Net asset value per ordinary share (after deducting borrowings at fair value) (note 7)	466.74p	462.74p
Net asset value per ordinary share (after deducting borrowings at par)	468.53p	463.95p
Ordinary shares in issue (note 8)	49,004,319	49,004,319

 

Statement of changes in equity (unaudited)

For the six months ended 30 April 2016

	Called up share capital £'000	Share premium £'000	Special reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 November 2015	2,450	82,180	35,220	106,625	881	227,356
Net return on ordinary activities after taxation	-	-	-	2,414	(170)	2,244
Dividends paid during the period (note 5)	-	-	-	-	-	-
Shareholders' funds at 30 April 2016	2,450	82,180	35,220	109,039	711	229,600

For the six months ended 30 April 2015

	Called up share capital £'000	Share premium £'000	Special reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 November 2014	2,450	82,180	35,220	84,806	1,706	206,362
Net return on ordinary activities after taxation	-	-	-	31,370	(153)	31,217
Dividends paid during the period (note 5)	-	-	-	-	(735)	(735)
Shareholders' funds at 30 April 2015	2,450	82,180	35,220	116,176	818	236,844

*    The Capital reserve as at 30 April 2016 includes investment holding gains of £18,120,000 (30 April 2015 - gains of £33,219,000).

 

Condensed cash flow statement (unaudited)

	Six months to 30 April 2016 £'000	Six months to  30 April 2015 £'000
Cash flows from operating activities
Net return on ordinary activities before taxation	2,272	31,241
Net gains on investments	(4,468)	(31,848)
Currency losses/(gains)	1,108	(466)
Finance costs of borrowings	455	440
Overseas withholding tax	(24)	(20)
Changes in debtors and creditors	(76)	26
Cash from operations	(733)	(627)
Interest paid	(454)	(441)
Net cash outflow from operating activities	(1,187)	(1,068)
Net cash inflow/(outflow) from investing activities	9,186	(533)
Equity dividends paid (note 5)	-	(735)
Increase/(decrease) in cash and cash equivalents	7,999	(2,336)
Cash and cash equivalents at start of the period	2,734	10,595
Cash and cash equivalents at end of period*	10,733	8,259

* Cash and cash equivalents represent cash at bank and short term money market deposits repayable on demand.

 

Portfolio and equity performance at 30 April 2016 (unaudited)

Name	Business	Value £'000	% of total assets	Performance†
				Absolute %	Relative %
MarketAxess	Electronic bond trading platform	13,839	5.3	28.2	20.3
4D Pharma	Bacteria derived novel therapeutics	9,668	3.7	17.0	9.8
Alnylam Pharmaceuticals	Therapeutic gene silencing	8,451	3.2	(17.7)	(22.8)
IP Group	Intellectual property commercialisation	8,427	3.2	(27.7)	(32.2)
Tesla Motors	Electric cars	7,377	2.8	22.7	15.1
Stamps.com	Website for postage services	6,031	2.3	14.8	7.7
IPG Photonics	High-power fibre lasers	5,781	2.2	10.6	3.8
Ocado	Online food retailer	5,306	2.0	(21.5)	(26.4)
TripAdvisor	Online travel review platform	4,872	1.9	(18.7)	(23.7)
EPAM Systems	Outsourced software and services	4,714	1.8	(0.6)	(6.8)
MonotaRO	Online business supplies	4,581	1.8	27.6	19.7
Financial Engines	Investment advisory firm	4,178	1.6	6.0	(0.6)
Next	Provides online property information	3,960	1.5	65.3	55.1
Cosmo Pharmaceuticals	Therapies for gastrointestinal diseases	3,765	1.4	13.1	6.1
Genmab	Therapeutic antibody company	3,640	1.4	58.1	48.3
SEEK	Online recruitment portal	3,407	1.3	45.8	36.8
Genus	Animal breeding services	3,305	1.3	4.6	(1.9)
Xeros Technology Group	Commercial laundry manufacturer	3,267	1.3	(20.6)	(25.5)
M3	Online medical database	3,265	1.2	52.2	42.8
Temenos	Banking software	3,238	1.2	16.6	9.4
Dexcom	Real time blood glucose monitoring	3,205	1.2	(18.5)	(23.6)
Novadaq Technologies	Medical systems for intra-surgical imaging	3,113	1.2	(9.5)	(15.1)
iRobot	Domestic and military robots	3,079	1.2	31.3	23.2
Oxford Nanopore   Technologies#	Novel DNA sequencing technology	3,000	1.1	0.0	(6.2)
Zillow Class C	US online real estate portal	2,981	1.1	(8.5)	(14.1)
Start Today	Internet fashion retailer	2,943	1.1	36.1	27.7
Wayfair	Online furniture and homeware retailer	2,846	1.1	(5.4)	(11.2)
Cellectis	Biotech focused on genetic engineering	2,826	1.1	10.1	3.3
Xaar	Ink jet printing technology	2,783	1.1	(5.1)	(11.0)
Splunk	Data diagnostics	2,749	1.1	(2.4)	(8.5)
Seattle Genetics	Antibody conjugates based biotechnology	2,748	1.1	(9.8)	(15.4)
Aeorvironment	Small unmanned aircraft systems	2,696	1.0	32.2	24.0
Renishaw	Measurement and calibration equipment	2,667	1.0	1.0	(5.2)
Rightmove	UK online property portal	2,661	1.0	0.5	(5.7)
Xing	Professional networking	2,601	1.0	0.8	(5.4)
Dialog Semiconductor	Analogue chips for mobile phones	2,540	1.0	(1.4)	(7.5)
Digital Garage	Internet business incubator	2,515	1.0	37.2	28.7
Linkedin	Professional networking site	2,504	1.0	(45.2)	(48.5)
ASOS	Online fashion retailer	2,445	0.9	10.5	3.7
Galapagos	Clinical stage biotechnology company	2,396	0.9	(1.4)	(7.5)
Imagination Technologies	Graphics semiconductor designer	2,356	0.9	(29.7)	(34.0)
Peptidream	Drug discovery platform	2,353	0.9	165.0	148.7
Name	Business	Value £'000	% of total assets	Performance†
				Absolute %	Relative %
Wirecard	Internet payment and processing services	2,328	0.9	(12.2)	(17.6)
LendingTree	Online loan marketplace	2,262	0.9	59.9*	44.0*
Morphosys	Therapeutic antibodies	2,190	0.8	(15.1)	(20.4)
AAC Technologies	Miniature acoustic components	2,168	0.8	15.1	8.0
Puretech Health	IP commercialisation focused on health care	2,140	0.8	(15.9)	(21.1)
National Instruments Corp	Instrumentation equipment used in research   and testing	2,059	0.8	(3.5)	(9.4)
Basware	Software solutions for financial transactions	2,034	0.8	11.7	4.8
Skyscanner#	Flight metasearch platform	2,000	0.8	0.0*	(2.5)*
GrubHub	Online and mobile platform for restaurant pick-    up and delivery orders	1,968	0.8	17.6	10.4
SDL	Language translation services	1,957	0.7	4.5	(2.0)
Exa	Simulation software and services	1,941	0.7	43.2	34.3
Teradyne	Semiconductor testing equipment   manufacturer	1,935	0.7	2.7	(3.7)
Stratasys	3D printer manufacturer	1,914	0.7	1.2	(5.1)
On Deck Capital	Provider of capital finance to businesses	1,912	0.7	24.9*	18.6*
Abcam	Scientific reagent supplier	1,887	0.7	(0.3)	(6.5)
Tissue Regenix	Regenerative medical devices	1,869	0.7	11.3	4.4
Yoox Net-A-Porter	Online luxury fashion retailer	1,862	0.7	(9.4)	(15.0)
Horizon Discovery	Customised cell lines to aid drug discovery	1,853	0.7	41.8	33.0
Pacira Pharmaceutical	Development, commercialisation and   manufacturing of proprietary pharmaceutical   products	1,847	0.7	(12.5)*	(11.1)*
Xero	Cloud-based accounting software	1,844	0.7	11.7	4.8
Avacta Group	Analytical reagents and instrumentation	1,811	0.7	(16.4)	(21.5)
Victrex	High-performance thermo-plastics	1,780	0.7	(22.5)	(27.3)
Ellie Mae	Provides technology solutions to automate   mortgage origination process	1,712	0.7	(5.1)*	(8.9)*
Kingdee International  Software	Enterprise management software	1,693	0.6	(17.0)	(22.1)
Infomart Corp	Internet platform for restaurant supplies	1,688	0.6	2.7	(3.6)
Barco	Designs and develops visualisation solutions	1,593	0.6	11.6	4.7
Zillow Class A	US online real estate portal	1,550	0.6	(14.4)	(19.7)
Faro Technologies	Designs and develops measurement devices	1,543	0.6	(9.5)	(15.1)
hVIVO (formerly Retroscreen   Virology)	Outsourced pre-clinical analytical services	1,507	0.6	(23.7)	(28.4)
Oxford Instruments	Produces advanced instrumentation   equipment	1,457	0.6	27.1	19.2
Suss Microtec	Fabrication and inspection equipment	1,443	0.6	47.0	37.9
Power Integrations	Analogue integrated circuits	1,379	0.5	1.0	(5.3)
Souq Group#	Middle East e-commerce website	1,365	0.5	5.4	(1.1)
Nanocarrier	Drug delivery technology	1,273	0.5	84.5	73.1
Digimarc	Digital watermarking technology	1,251	0.5	40.3	31.6

 

Name	Business	Value £'000	% of total assets	Performance†
				Absolute %	Relative %
China Financial Services	Small and medium-sized enterprises lending in   China	1,198	0.5	32.1	24.0
Aduro Biotechnology	Immunotherapy services provider	1,147	0.4	(43.7)*	(47.9)*
Ricardo	Automotive engineer	1,113	0.4	(9.7)	(15.3)
Illika	Discovery and development of materials for   mass market applications	1,109	0.4	(5.2)	(11.0)
Nanoco	Quantum dot manufacturer	1,102	0.4	(19.2)	(24.2)
Foundation Medicine	Develops cancer diagnostic technology	1,089	0.4	(25.0)	(29.6)
Zumtobel	Commercial lighting	928	0.4	(40.0)	(43.7)
Thin Film Electronics	Develops printed, rewritable memory media	834	0.3	16.9	9.7
Ceres Power Holding	Developer of fuel cells	821	0.3	(1.6)	(7.6)
Bioamber	Bioengineering company	802	0.3	(40.0)	(43.7)
Evola Holdings	Yeast-based industrial biotechnology	795	0.3	(40.5)	(44.1)
Oisix	Organic food website	774	0.3	1.2	(5.1)
Acacia Research	Patent licenser	730	0.3	(22.5)	(27.3)
Sarine Technologies	Systems for diamond grading and cutting	719	0.3	17.4	10.1
Codexis	Manufacturer of custom industrial enzymes	640	0.2	2.3	(4.0)
C4X Discovery Holdings	Rational drug design and optimisation	598	0.2	33.8	25.5
Senomyx	Developer of additives to amplify certain   flavours in foods	577	0.2	(47.8)	(51.0)
Applied Graphene Materials	Manufactures graphene nanoplatelets	540	0.2	(19.6)	(24.6)
Summit Therapeutics	Drug discovery and development	512	0.2	(2.7)	(8.7)
Fusionex	Software for data analytics	508	0.2	(54.8)	(57.6)
Foamix Pharmaceuticals	Drug reformulation technology	479	0.2	(6.7)	(12.5)
Ensogo	South East Asian e-commerce	402	0.2	(11.4)	(16.9)
Velocys	Gas to liquid technology	142	0.1	(46.2)	(49.5)
Intelligent Energy Holding	Developer of modular fuel cells	55	0.0	(90.3)	(90.9)
GI Dynamics	Develops and markets medical devices	11	0.0	(38.2)	(42.0)
China Lumena New Materials	Mines, processes and manufactures natural   thenardite products	0	0.0	(100.0)	(100.0)
Total equities		251,719	96.1
Net liquid assets		10,206	3.9
Total assets at fair value (before deduction of loans)		261,925	100.0

†      Absolute and relative performance has been calculated on a total return basis over the period 1 November 2015 to 30 April 2016. Absolute performance is in sterling terms; relative performance is against S&P Global Small Cap Index (in sterling terms).

*      Figures relate to part-period returns where the equity has been purchased during the period.

#      Denotes unlisted equity.

Source: Baillie Gifford, StatPro.

Past performance is not a guide to future performance.

 

Distribution of total assets (unaudited)

Industry Analysis at 30 April 2016	% of total assets*		Portfolio Weightings (relative to comparative index†) at 30 April 2016 %
Biotechnology	13.9		11.5
Internet and Catalogue Retail	9.0		8.4
Internet Software and Services	8.4		6.7
Software	7.2		4.5
Electronic Equipment, Instruments and Components	6.6		3.8
Pharmaceuticals	6.0		4.3
Diversified Financial Services	6.0		4.8
Capital Markets	4.8		2.1
Semiconductors and Semiconductor Equipment	4.1		2.3
IT Services	3.7		1.1
Health Care Equipment and Supplies	3.1		0.8
Life Sciences Tools and Services	2.9		2.1
Automobiles	2.8		2.7
Professional Services	2.4		1.3
Technology Hardware, Storage and Peripherals	2.1		1.6
Chemicals	1.9		(1.3)
Trading Companies and Distributors	1.8		0.4
Machinery	1.6		(2.4)
Media	1.5		(1.1)
Health Care Technology	1.4		1.1
Household Durables	1.2		(0.5)
Aerospace and Defence	1.0		(0.2)
Thrifts and Mortgage Finance	0.9		0.2
Electrical Equipment	0.7		(0.3)
Speciality Retail	0.5		(2.0)
Consumer Finance	0.5		(0.1)
Energy Equipment and Services	0.1		(1.1)
Net Liquid Assets	3.9		3.9
Total Assets	100.0
* Total assets before deduction of loans.

† S&P Global Small Cap Index. Weightings exclude industries where the Company has no exposure.

 

Distribution of total assets* (unaudited)

Geographical Analysis		30 April 2016 %		31 October 2015 %
North America		41.8		39.3
	USA	41.8	39.3
Europe		40.5	43.3
	United Kingdom	26.9	29.2
	Eurozone	10.2	10.4
	Developed Europe (non euro)	3.4	3.7
Africa and Middle East Asia	U.A.E.	0.5 0.5 11.1	0.5 0.5 12.0
	Japan	8.9	8.3
	China	1.1	2.3
	Hong Kong	0.8	0.9
	India	-	0.3
	Singapore	0.3	0.2
Australasia		2.2		1.8
	Australia	1.5	1.2
	New Zealand	0.7	0.6
Net Liquid Assets		3.9		3.1
Total Assets		100.0		100.0

Sectoral Analysis		30 April 2016 %		31 October 2015 %
	Consumer Discretionary	15.0		14.8
	Energy	0.1		0.1
	Financials	12.2		11.2
	Health Care	27.3		27.0
	Industrials	7.5		7.9
	Information Technology	32.1		33.2
	Materials	1.9		2.7
	Net Liquid Assets	3.9		3.1
Total Assets		100.0		100.0

* Total assets before deduction of loans.

Notes to the condensed Financial Statements (unaudited)

1.	The condensed Financial Statements for the six months to 30 April 2016 have been prepared in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended Practice issued in November 2014 and have not been audited or reviewed by the Auditor pursuant to the Auditing Practices Board Guidance on 'Review of Interim Financial Information'. The Company has adopted FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and has early adopted the amendments to Section 34 of FRS 102 regarding fair value hierarchy disclosures for its financial year ending 31 October 2016. The application of the new reporting standards and the AIC's Statement of Recommended Practice has had no impact on the Company's Income Statement, Balance Sheet or Statement of Changes in Equity (previously called the Reconciliation of Movements in Shareholders' Funds) for periods previously reported. The Condensed Cash Flow Statement has been restated to reflect presentational changes required and does not include any other material changes. The Financial Statements for the six months to 30 April 2016 have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements at 31 October 2015. Going Concern Having considered the nature of the Company's assets, its liabilities, projected income and expenditure together with the Company's investment objective and policy, dividend policy and principal risks and uncertainties, as set out on the inside front cover, it is the Directors' opinion that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements and confirm that they are not aware of any material uncertainties which may affect its ability to continue to do so.
2.	The financial information contained within this Interim Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial information for the year ended 31 October 2015 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditor's Report on those accounts was not qualified and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.
3.	Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed by the Company as its Alternative Investment Fund Manager and Company Secretary. The investment management function has been delegated to Baillie Gifford & Co. The management agreement is terminable on not less than three months' notice. The annual management fee is 0.95% on the first £50m of net assets and 0.65% on the remaining net assets, calculated and payable quarterly.
4.	Net return per ordinary share	Six months to 30 April 2016 £'000	Six months to 30 April 2015 £'000	Year to 31 October 2015 (audited) £'000
	Revenue return on ordinary activities after taxation	(170)	(153)	(90)
	Capital return on ordinary activities after taxation	2,414	31,370	21,819
	Total return	2,244	31,217	21,729
	Net return per ordinary share is based on the above totals of revenue and capital and on 49,004,319 ordinary shares, being the number of ordinary shares in issue during each period. There are no dilutive or potentially dilutive shares in issue.

 

Notes to the condensed Financial Statements (unaudited) (ctd)

5.	Dividends			Six months to 30 April 2016 £'000		Six months to 30 April 2015 £'000		Year to 31 October 2015 (audited) £'000
	Amounts recognised as distributions in the period:
	Previous year's final dividend of Nil (2014 - 1.50p)			Nil		735		735
				Nil		735		735
	Paid and proposed in respect of the financial period:			Nil		Nil		Nil
	No interim dividend has been declared.
6.	Fair Value Hierarchy The fair value hierarchy used to analyse the basis on which the fair values of financial instruments held at fair value through the profit or loss account are measured is described below. Fair value measurements are categorised on the basis of the lowest level input that is significant to the fair value measurement. Level 1 - using unadjusted quoted prices for identical instruments in an active market; Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on                market data); and Level 3 - using inputs that are unobservable (for which market data is unavailable). An analysis of the Company's financial asset investments based on the fair value hierarchy described above is shown below. Investments held at fair value through profit or loss
		As at 30 April 2016	Level 1 £'000		Level 2 £'000		Level 3 £'000		Total £'000
		Listed equities	245,354		-		-		245,354
		Unlisted equities	-		-		6,365		6,365
		Total financial asset investments	245,354		-		6,365		251,719
		As at 31 October 2015	Level 1 £'000		Level 2 £'000		Level 3 £'000		Total £'000
		Listed equities	245,883		-		-		245,883
		Unlisted equities	-		-		4,295		4,295
		Total financial asset investments	245,883		-		4,295		250,178
	There have been no transfers between levels of the fair value hierarchy during the period. The fair value of listed investments is bid price or, in the case of FTSE 100 constituents or holdings on certain recognised overseas exchanges, last traded price. They are categorised as Level 1 if they trade in an active market and Level 2 if they are traded on a market which is not considered to be active. The fair value of unlisted investments is determined using valuation techniques, determined by the Directors, based upon observable and/or non-observable data such as latest dealing prices, stockbroker valuations, net asset values and other information, as appropriate. The Company's holdings in unlisted investments are categorised as Level 3 as the valuation techniques applied include the use of non-observable data.

Notes to the condensed Financial Statements (unaudited) (ctd)

7.	At 30 April 2016 creditors falling due after more than one year comprise borrowings of £32,325,000 (31 October 2015 - £30,799,000) drawn down under a five year fixed rate facility with National Australia Bank Limited which expires on 30 September 2019. The loans drawn down consisted €9.4m, US$25.6m and £7.5m at 30 April 2016 and 31 October 2015. The fair value of the bank loans at 30 April 2016 was £33,202,000 (31 October 2015 - £31,394,000).
8.	The Company has authority to buy back its ordinary shares. In the six months to 30 April 2016 no ordinary shares were bought back therefore the Company's authority remains unchanged at 7,345,747 ordinary shares.
9. 10.	During the period the Company incurred transaction costs on purchases of investments of £4,000 (30 April 2015 - £18,000; 31 October 2015 - £29,000) and transaction costs on sales of £7,000 (30 April 2015 - £11,000; 31 October 2015 - £22,000). Principal Risks and Uncertainties The principal risks facing the Company are financial risk, regulatory risk, custody and depositary risk, small company risk, operational risk, discount/premium volatility and leverage risk. An explanation of these risks and how they are managed is set out on pages 7 and 8 of the Company's Annual Report and Financial Statements for the year to 31 October 2015 which is available on the Company's website: www.edinburghworldwide.co.uk. The principal risks and uncertainties have not changed since the date of that report.
‡ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.
None of the views expressed in this document should be construed as advice to buy or sell a particular investment.
- Ends -

 

END

 

 

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