Interim Management Statement

RNS Number : 8277M

European Assets Trust NV

12 May 2015

 



European Assets Trust NV

Interim Management Statement

For the three month period from 31 December 2014 to 31 March 2015

Investment Objective

The investment objective of the Company is to achieve growth of capital through investment in quoted small and medium-sized companies in Europe, excluding the United Kingdom.

A high distribution policy has been adopted and dividends have been paid mainly out of other reserves.

Total return#	Three month period ended 31 March 2015		Year ended 31 December 2014
	Euro	Sterling	Euro	Sterling
Net asset value per share	22.1%	13.9%	15.3%	7.7%
Market price per share	22.5%	14.3%	16.6%	8.8%
Euromoney European Smaller Companies (ex UK) Index	19.4%	11.3%	5.2%	-1.9%

Dividends

The Board has announced dividends of Euro 0.7581 per share for the year to 31 December 2015 payable in three instalments in January, May and August.  The January dividend was paid on 30 January 2015 and amounted to Euro 0.2527 per share (£0.1933 per share in Sterling terms).  The May dividend has been announced at a rate of Euro 0.2527 per share and will be paid on 29 May 2015.

Capital return	As at  31 Mar  2015 Euro	As at 31 Dec 2014 Euro	As at  31 Mar  2015 Sterling	As at 31 Dec 2014 Sterling
Net assets (shareholders' funds)	€368.8m	€273.1m	£266.8m	£212.0m
Net asset value per share - treasury*	€15.14	€12.63	1,095.3p	980.5p
Market price per share	€15.29†	€12.72†	1,106.0p	987.0p
Euromoney European Smaller Companies (ex UK) Index	545.03	457.55	394.30	355.08
Premium to treasury net asset value			1.0%	0.7%
Gearing (0% = nil geared position)‡			3%	6%

Sources: F&C Investment Business Limited, Datastream.

* - In accordance with the AIC calculation method where shares are held in treasury; subject to the Company's  resale policy, including limiting dilution to 0.5 per cent of net asset value per annum.

† - London Stock Exchange prices converted into Euros at relevant exchange rate.

‡ - Gearing: The gearing ratio is total assets (less cash and cash equivalents) divided by shareholders' funds expressed as a percentage.

# - Total return means capital performance with dividends reinvested.

Review of the period to 31 March 2015

This was another strong quarter for European Assets Trust with our NAV rising +13.9% in Sterling terms against our benchmark which rose +11.3%. The Euro return was somewhat higher at +22.1% as Sterling returns were dampened by a weakening Euro. This reflected both the start of the ECB's programme of quantitative easing and the fact that Europe is later in its economic cycle and therefore also its monetary cycle than the UK.

The strong performance reflected the increasing momentum in the modest recovery in the Eurozone as lower oil prices, a weakening Euro, and improving confidence, all led to some positive economic surprises, which contrast with the rest of the world's data, particularly the US and China. This has proven to be a boost to smaller companies in Europe, which have a strong domestic and cyclical bias. This has also attracted capital to the region as investors switch to European equities and is reflected in the strong issuance your company has achieved this year (see below for details).

Nonetheless the strength of the market has surprised us. While in aggregate, European valuations do not look expensive, and certainly relative to other asset classes, they look attractive, we need profit levels to improve from here to see further market progress. Leading indicators suggest that this could happen, but we will continue to invest your capital conservatively and trust that this will deliver strong results over the long term for our shareholders.

Over the three months ended 31 March 2015 the Company issued 2,735,000 Ordinary Shares from treasury for a total consideration of £28.3 million representing 12.7% of the Ordinary Shares in issue at the beginning of the period.  During the period the Company also issued 7,679 Ordinary Shares from treasury via scrip dividend.

Top Ten Holdings

Company	Country	31 Mar 2015 percentage of net assets
Azimut	Italy	3.7
Glanbia	Ireland	3.7
Grafton	Ireland	3.3
Leonteq	Switzerland	3.3
CTT Correios de Portugal	Portugal	3.3
Forbo	Switzerland	3.2
ASM International	Netherlands	3.1
Ringkjoebing Landobank	Denmark	3.0
Irish Continental	Ireland	3.0
Plastic Omnium	France	2.9
Total		32.5

Geographical Analysis

Country	31 Mar 2015 percentage of net assets		31 Dec 2014 percentage of net assets
Ireland	19.9		21.3
Germany	19.3		19.6
Italy	12.7		10.4
Switzerland	11.4		10.3
Spain	9.3		9.4
Denmark	7.3		8.0
Norway	6.2		6.6
Sweden	4.5		4.4
Portugal	3.3		3.1
Netherlands	3.1		7.6
France	2.9		3.1
Finland	2.9		2.8
Net current liabilities (includes borrowings)	(2.8)		(6.6)
Total	100.0		100.0

Daily and Key Information

Since 1 April 2015 the Company has issued a further 577,057 Ordinary Shares from treasury for a total consideration of £6.6 million.  In addition, following the FCA approval of a blocklisting application for 2,491,234 Ordinary Shares on 2 April 2015 a further 470,000 Ordinary Shares have been issued from this facility since 14 April 2015.   On 7 May 2015 the Company announced that in order to allow the regular and ongoing issuance of shares the Board is considering making available up to 9 million new ordinary shares from July 2015.  It is anticipated that a further announcement on this matter will be made shortly. 

In addition, an Extraordinary General Meeting of the Company will be held on 1 July 2015 to approve an amendment to the Articles of Association to increase the authorised share capital of the Company from 30 million to 50 million shares.  A circular will be posted to shareholders on or around 15 May 2015.

The Boards are not aware of any other significant events or transactions which have occurred since 31 March 2015 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.europeanassets.eu, or at www.fandc.com.

For further information please contact:

Sam Cosh (Fund Manager)

Tel: [phone]

Scott McEllen (Company Secretary)

Tel: [phone]

Wilbert van Twuijver (representing the Management Board Director)

Tel [phone]

 

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