Interim Management Statement

RNS Number : 4363N

European Assets Trust NV

26 October 2016

 

European Assets Trust NV

Interim Management Statement

For the three month period from 1 July 2016 to 30 September 2016

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 current year net profits and other reserves.

Total return#	Three month period ended 30 September 2016		Nine month period ended 30 September 2016
	Euro	Sterling	Euro	Sterling
Net asset value per share	6.0%	10.4%	-9.7%	6.0%
Market price per share	7.9%	12.4%	-14.8%	0.2%
Euromoney European Smaller Companies (ex UK) Index	8.8%	13.3%	1.7%	19.5%

Dividends

The Boards have announced and paid dividends totalling EUR 0.912 (net) per share for the year to 31 December 2016 payable in three instalments in January, May and August.

Capital return	As at  30 Sep  2016 Euro	As at 30 June 2016 Euro	As at  30 Sep  2016 Sterling	As at 30 June 2016 Sterling
Net assets (shareholders' funds)	€424.7m	€411.0m	£367.4m	£341.5m
Net asset value per share	€12.80	€12.39	1,107.1p	1,029.4p
Market price per share			1,052.0p	961.0p
Euromoney European Smaller Companies (ex UK) Index	551.64	508.02	477.22	422.19
(Discount)/premium to net asset value			(5.0)%	(6.6)%
Gearing (100% = nil geared position)‡			98%	96%

Sources: F&C Investment Business Limited, Datastream.

‡ - 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 30 September 2016

The predicted shock waves from the UK's vote to leave the European Union have so far failed to materialise as European markets recovered from their post 'Brexit' lows, helped by encouraging economic data through the region. While our portfolio delivered a good absolute return, it was disappointing to give back some further relative performance following a difficult first half of the year. Indeed this continues to be a very challenging period for the portfolio. We are however pleased that our shareholders are still seeing a positive total return this year, though in truth, we have the depreciation of Sterling to thank for most of that.

The European economy continues to recover and equity markets continue to rise but the pace of profit growth is disappointing and valuation levels do not look obviously attractive to us. This is complicated further by the dispersion in the market which has driven quality assets to unprecedented relative highs, driven in a large part by Central Bank policies. This means that we have to look harder for companies that satisfy our criteria of quality businesses, run by proven managers at attractive prices. Our process however is delivering in this regard and we are confident that the changes to the portfolio this year will lead to better returns for our shareholders.

Over the three month period ended 30 September 2016 the Company issued 12,184 Ordinary Shares via scrip dividend. Of its current blocklisting facility as at 30 September 2016 3.3 million remain available for issuance.

Top Ten Holdings

Company	Country	30 September 2016 percentage of net assets
Gerresheimer	Germany	4.6
Forbo	Switzerland	4.4
Cerved Information Solutions	Italy	4.1
Amer Sports	Finland	4.0
Interpump	Italy	3.5
Glanbia	Ireland	3.5
CTS Eventim	Germany	3.4
Origin Enterprises	Ireland	3.4
IMCD	Netherlands	3.2
Irish Continental	Ireland	3.1
Total		37.2

Geographical Analysis

Country	30 Sep 2016 percentage of net assets		30 June 2016 percentage of net assets
Germany	20.4		19.9
Ireland	15.9		16.2
Italy	14.0		13.6
Switzerland	7.1		5.3
Norway	6.9		5.9
Spain	6.4		6.6
Netherlands	6.0		5.8
Sweden	5.9		5.3
Denmark	4.6		6.5
Finland	4.0		4.0
Portugal	2.9		3.5
France	2.4		2.4
Net assets/(current liabilities includes borrowings)	3.5		5.0
Total	100.0		100.0

Daily and Key Information

In coming months the Boards and their advisors will closely monitor financial and regulatory developments in both the United Kingdom and the Netherlands arising from the decision of the United Kingdom to leave the European Union. 

The Boards are not aware of any significant events or transactions which have occurred since 30 September 2016 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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