Half-year Report

RNS Number : 9491L
Law Debenture Corp PLC
25 July 2017
 

The Law Debenture Corporation p.l.c. and its subsidiaries

HALF YEARLY REPORT FOR THE SIX MONTHS TO 30 JUNE 2017 (unaudited)

 

 

The directors recommend an interim dividend of 5.5p on the ordinary shares for the six months to 30 June 2017. The report including the unaudited results for the period was as follows:

 

 

Group summary

 

From its origins in 1889, Law Debenture has diversified to become a group with a unique range of activities in the financial and professional services sectors.  The group divides into two distinct areas of business.

 

Investment trust

We are a global investment trust, listed on the London Stock Exchange.

 

Our portfolio of investments is managed by Henderson Global Investors Limited and the fund manager is James Henderson under a contract terminable by either side on six months' notice.

 

Our objective is to achieve long term capital growth in real terms and steadily increasing income.  The aim is to achieve a higher rate of total return than the FTSE Actuaries All-Share Index through investing in a portfolio diversified both geographically and by industry.

 

 

Independent professional services

 

We have decided to rename our businesses, better to reflect the nature of the services that we provide. We are a leading provider of independent professional services. Our activities are corporate trusts, pension trusts, corporate services (including agent for service of process), whistle blowing services and governance services. We have offices in London, Sunderland, Dublin, New York, Delaware, Hong Kong, the Channel Islands and the Cayman Islands.

 

Companies, agencies, organisations and individuals throughout the world rely upon Law Debenture to carry out its duties with the independence and professionalism upon which its reputation is built.

 

Registered office

Fifth Floor

100 Wood Street

London EC2V 7EX

 

Telephone: 020 7606 5451

Facsimile:   020 7606 0643

(Registered in England No 30397)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance to 30 June 2017

 


6 months

     1 year

     5 years

  10 years


%

%

%

  %






Share price total return 1

    10.2

21.3

78.0

  126.6

NAV total return 1

9.3

25.9

82.1

129.0

FTSE All-Share Index total return

5.5

       18.1

       65.2

68.5

 

1 Calculated in accordance with AIC methodology based on NAV at fair value

 




30 June

2017




%

Ongoing charges1



0.43

Gearing1



6

 

  

 

 Ongoing charges are based on the costs of the investment trust and include the Henderson management fee

 of 0.30% of NAV for the investment trust. There is no performance element related to the fee.

 

1 Source: AIC

 

Financial summary 


30 June

2017

30 June

2016

31 December

2016


pence

pence

pence

 

Net revenue return per share:

- Investment trust

8.11

7.05

10.88

- Independent professional services

3.26

3.44

7.68

- Group charges

-

-

 (2.60)

Group net revenue return per share

11.37

10.49

15.96

Capital return per share

39.49

13.30

89.30

Dividends per share

5.50

5.20

           16.70

Share price

572.00

486.50

530.00

NAV per share 1

641.10

519.18

598.48


%

%

%

(Discount)

(10.8)

(6.3)

(11.4)

 

1 Calculated in accordance with AIC methodology based on NAV including fair value of IPS businesses and long term borrowings

 

NAV per share


30 June

2017

30 June

2016

31 December

2016


pence

pence

pence

NAV per share per financial statements

599.96

485.56

560.73

Fair value adjustment for IPS

65.99

56.48

62.37

Debt fair value adjustment

     (24.85)

        (22.86)

(24.62)

NAV per share as disclosed with debt at fair value

641.10

519.18

598.48

 

 

 

 

 

 

 

Fair valuation of the independent professional services businesses

 

The fair valuation of the independent professional services businesses (IPS) is based upon the historic earnings before interest, taxation, depreciation and amortisation (EBITDA), an appropriate multiple and the surplus net assets of the business at their underlying fair value. The multiple applied in valuing the IPS is from comparable companies sourced from market data, with appropriate adjustments to reflect the difference between the comparable companies and the IPS in respect of growth, margin, size and liquidity.

 

Fair valuation of the IPS

 


30 June

2017

30 June

2016

31 December

2016


£000

£000

£000

EBITDA at a multiple of 8.3

(30 June 2016: 7.9; 31 December 2016: 8.1)

82,004

73,865

80,028

Surplus net assets

16,730

15,823

9,908


98,734

89,688

89,936

 

An increase or decrease of 1 in the multiple would give rise to a £9.9 million change in the fair valuation of the IPS. The adjustment to NAV to reflect the IPS fair value is an increase of 65.99p per share (30 June 2016: 56.48p; 31 December 2016: 62.37p).

 

Half yearly management report

 

Performance

 

Our Net Asset Value total return for the six months to 30 June 2017 was 9.3%, compared to a total return of 5.5% for the FTSE Actuaries All-Share Index. Net revenue per share was 11.37p, 8.4% higher than the corresponding period last year (2016: 10.49p).

 

Dividend

 

The board has declared an interim dividend of 5.5p (2016: 5.2p). The dividend will be paid on 8 September 2017 to holders on the record date of 11 August 2017. The current expectation of the directors is that the final dividend will be at least maintained.

 

Investment trust

 

The NAV rose 9.3% (with debt at fair value) while the FTSE All-Share Index rose 5.5%.The underlying equity portfolio rose 8.5%. The global economy continued to grow and outside the UK inflation remained muted. This is a benign background for equity investment and is one of the factors behind the continued satisfactory performance of global markets. For UK investors, it was a more testing period, with renewed political uncertainty adding to the continuing murmur of concerns over Brexit and the currency devaluation last year adding inflationary pressure. That said, company results in aggregate came through marginally better than expected.

 

In absolute terms the holding in Rolls Royce added the most value during the period as its share price began to reflect the long term strengths of the company. The holdings in Watkin Jones (which builds student accommodation) and International Consolidated Airlines (which includes British Airways) were the next largest contributors. The biggest absolute detractor was Royal Dutch Shell as a result of the fall in the oil price. lnterserve and IP Group were also among the largest detractors. In both cases we have maintained the holdings as we believe they should recover in time.

 

During the period, Henderson Global Investors Limited, which continues to be our fund manager, formally became part of the Janus Henderson Group.

  

Outlook

 

Global equity markets have been moving upwards since the spring of 2009, but the global bull run will not continue indefinitely. In the UK, there are signs of a slowdown. Valuations are at the higher end of their long term range so equity investors need to be increasingly careful in stock selection. The companies held in the portfolio in aggregate are generating cash, which is leading to increased dividend payments. With interest rates continuing at historically low levels, and in the absence of alternatives, the income (and income growth) available from equities continues for the time being to make them look a relatively attractive asset class.

 

Independent professional services

 

As indicated in the 2016 annual report, we have implemented a strategy within each business line that is focused on organic growth. As part of this strategy we have decided to rename the independent fiduciary services business to Independent Professional Services, or IPS.

 

Law Debenture's IPS businesses will consistently highlight the unique strengths of our independent service offering, namely the quality of our:

 

• service;

• people;

• reputation; and

• clients.

 

The focus on growth will require some time and investment. The 2017 full year results are anticipated to be broadly in line with recent years. However the future growth agenda is already firmly in place and the early indicators are positive.

Revenue, net of cost of sales, which represents legal costs recharged to clients, decreased by 1.8% over the corresponding period last year. Administration costs decreased by 3.6%. Profit before tax increased by 4.7%. Performance in the first half was reasonable across all IPS businesses and we expect this to continue in the second half of the year. The tax charge has increased as a result of changes made by HMRC regarding tax relief of interest, which was highlighted in the 2016 Annual Report.

 

 

Group income statement

for the six months ended 30 June (unaudited)


 

30 June 2017

 

30 June 2016








 Revenue

       £000

Capital

£000

 Total

  £000

 Revenue

£000

 Capital     

£000

 Total

     £000

UK dividends

10,135

-

10,135

9,316

-

9,316

UK special  dividends

743

-

743

888

-

888

Overseas dividends                                                                 

2,537

-

2,537

1,755

-

1,755

Overseas special dividends

50

-

50

114

-

114


13,465

-

13,465

12,073

-

12,073

Interest income

47

-

47

110

-

110

Independent professional services fees

 

14,669

 

-

 

14,669

 

14,166

 

-

 

14,166

Other income

220

-

220

194

-

194

 

Total income

28,401

 

-

28,401

26,543

 

-

26,543








Net gain on investments held

at fair value through profit or loss

-

46,828

46,828

-

15,803

15,803








Gross income and capital gains

 28,401

46,828

75,229

 26,543

15,803

42,346








Cost of sales

(1,838)

-

(1,838)

(1,085)

-

(1,085)








Administrative expenses

(10,287)

   (178)

(10,465)

(10,278)

   (107)

(10,385)








Operating profit

16,276

46,650

62,926

15,180

15,696

30,876








Finance costs














Interest payable

 (2,322)

-

(2,322)

 (2,690)

-

(2,690)








Profit before taxation

13,954

46,650

60,604

12,490

15,696

28,186








 

Taxation

     (521)

-

   (521)

     (106)

-

   (106)















Profit for  period

  13,433

46,650

60,083

  12,384

15,696

28,080








Return per ordinary share (pence)

  11.37

 39.49

  50.86

  10.49

 13.30

  23.79








Diluted return per ordinary

share (pence)

  11.37

 39.49

  50.86

  10.49

 13.30

  23.79

 

Statement of comprehensive income

for the six months ended 30 June (unaudited)

 


30 June 2017

30 June 2016


Revenue

£000

Capital

£000

Total

£000

Revenue

£000

Capital

£000

Total

£000








 

 

Profit for the period

 

 

  13,433

 

 

46,650

 

 

60,083

  12,384

 

15,696

 

       28,080








Foreign exchange on translation of  foreign operations

-

(119)

(119)

-

735

735

Other comprehensive income for the period

-

(119)

(119)

-

735

735

Total comprehensive income for the period

    13,433

46,531

59,964

  12,384

16,431

28,815

 

 

Group statement of financial position

 


30 June 2017

(unaudited)

    £000

30 June 2016

(unaudited)

  £000

31 December 2016

(audited)

£000





Assets




Non current assets




Goodwill

1,941

2,350

1,968

Property, plant and equipment

136

204

161

Other intangible assets

145

6

70

Investments held at fair value through profit or loss

735,791

629,225

696,080

Deferred tax assets

1,076

703

1,312

Total non current assets

739,089

632,488

699,591

Current assets




Trade and other receivables

6,910

5,863

6,680

Other accrued income and prepaid expenses

6,068

5,056

4,603

Derivative financial instruments

1,017

-

-

Cash and cash equivalents

94,462

68,239

94,804

Total current assets

108,457

79,158

106,087

Total assets

847,546

711,646

805,678

Liabilities




Current liabilities




Trade and other payables

11,534

11,960

13,346

Corporation tax payable

23

189

-

Other taxation including social security

597

665

444

Deferred income

3,871

4,202

3,826

Derivative financial instruments

-

1,731

2,029

Total current liabilities

16,025

18,747

19,645

Non current liabilities and deferred income




Long term borrowings

114,046

114,002

114,024

Retirement benefit obligations

1,863

972

2,300

Deferred income

4,199

4,747

4,318

Provision for onerous contracts

2,551

-

3,106

Total non current liabilities

122,659

119,721

123,748

Total net assets

708,862

573,178

662,285

Equity




Called up share capital

5,918

5,916

5,917

Share premium

8,753

8,667

8,722

Own shares

(1,034)

(1,467)

(1,197)

Capital redemption

8

8

8

Translation reserve

2,037

1,644

2,156

Capital reserves

655,727

519,345

609,077

Retained earnings

37,453

39,065

37,602

Total equity 

708,862

573,178

662,285

 

    

Group statement of cash flows

 






30 June

2017 (unaudited)

30 June

2016 (unaudited)

      31 December

2016

(audited)

£000

£000

£000

Operating activities




Operating profit before interest payable and taxation

62,926

30,876

129,796

(Gains) on investments

(46,650)

(15,696)

(105,428)

Foreign exchange  (gains)

(11)

(102)

(68)

Depreciation of property, plant and equipment

49

58

112

Amortisation of intangible assets

21

10

20

Provision for impairment of goodwill

-

-

418

(Increase)/decrease in receivables

(1,695)

1,042

678

(Decrease)/increase in payables

(1,659)

(644)

1,763

Transfer from capital reserves

(40)

(46)

(157)

Pension contributions in excess of cost

(437)

(428)

(1,300)

Cash generated from operating activities

12,504

15,070

25,834





Operating cash flow

12,242

14,768

25,274





Investing activities




Acquisition of property, plant and equipment

(27)

(48)

(53)

Expenditure on intangible assets

(96)

-

(75)

Purchase of investments

(38,385)

(51,132)

(91,494)

Sale of investments

45,442

59,127

122,248

Cash flow from investing activities

6,934

7,947

        30,626





Financing activities




Derivative financial instrument

(1,148)

-

(4,775)

Interest paid

(2,888)

(2,690)

(5,542)

Dividends paid

(13,582)

(12,983)

(19,122)

Proceeds of increase in share capital

32

-

  56

Purchase of own shares

163

26

296

Net cash flow from financing activities

(17,423)

(15,647)

(29,087)





Net increase in cash and cash equivalents

1,753

7,068

26,813





Cash and cash equivalents at beginning of period

94,804

60,301

60,301

Foreign exchange (losses)/gains on cash and cash equivalents

(2,095)

870

7,690

Cash and cash equivalents at  end of period

94,462

68,239

94,804





Cash and cash equivalents comprise








Cash and cash equivalents 

94,462

68,239

94,804









 

 

 

 

 

 

Group statement of changes in equity

 











Share capital

Share premium

     Own
shares

Capital redemption

Translation reserve

Capital reserves

Retained earnings

Total

£000

£000

£000

£000

    £000

£000

£000

£000










Equity at 1 January 2017

5,917

8,722

 

 

(1,197)

 

 

8

 

       2,156

 

 

609,077

 

 

37,602

 

 

662,285

Profit

-

-

-

-

         -

46,650

13,433

60,083

Foreign exchange

-

-

 

-

 

-

        (119)

 

-

 

-

 

(119)

Total comprehensive income for the period

           -

 

                -

 

         

 

 -

 

              

 

  -

 

    

    

 (119)

 

 

 

46,650

 

 

 

13,433

 

 

 

 59,964

Issue of shares

1

31

  -

-

       -

-

-

32

Movement in own shares

-

-

 

163

 

-

 

       -

 

-

 

-

 

163

Dividend relating to 2016

-

-

 

-

 

-

    

   -

 

-

(13,582)

(13,582)

Total equity at 30 June 2017

5,918

8,753

(1,034)

8

  2,037

655,727

37,453

708,862



















 

 

 

Group segmental analysis

 

 


Investment trust

Independent professional services

 

Group charges

                    

                     Total


30 June 2017

30 June 2016

31 Dec 2016

30 June 2017

30 June 2016

31 Dec 2016

30 June 2017

30 June 2016

31 Dec 2016

30 June

2017

30 June 2016

31 Dec

2016

     

       £000

£000

£000

£000

£000

       £000

£000

£000

       £000

£000

£000

£000

Revenue

 













Income

13,465

12,073

20,477

14,669

14,166

30,735

-

-

-

28,134

26,239

51,212














Other income

63

53

74

157

141

151

-

-

-

220

194

225

Cost of sales

-

-

-

(1,838)

(1,085)

(3,565)

-

-

-

(1,838)

(1,085)

(3,565)

Administration costs

 (1,661)

  (1,327)

 (2,739)

 

(8,626)

 

(8,951)

 

(17,573)

 

-

 

-

 

(464)

 

(10,287)

 

(10,278)

 

(20,776)

 

Provision for onerous contracts

 

-

 

-

 

-

 

-

 

-

 

-

 

 

-

 

 

-

 

(3,031)

 

-

 

-

 

(3,031)


11,867

10,799

17,812

4,362

4,271

9,748

-

-

(3,495)

16,229

15,070

24,065

Interest (net)

(2,280)

(2,479)

(4,964)

5

(101)

(275)

-

-

-

(2,275)

(2,580)

(5,239)

Return, including profit on ordinary activities before taxation

9,587

8,320

12,848

 

 

 

4,367

 

 

 

4,170

 

 

 

9,473

 

 

 

-

 

 

 

-

 

 

 

(3,495)

 

 

 

13,954

 

 

 

12,490

 

 

 

18,826

Taxation

-

-

-

 

(521)

 

(106)

 

(405)

 

-

 

-

 

422

 

(521)

 

(106)

 

17

Return, including profit attributable to shareholders

 

9,587

 

8,320

 

12,848

 

3,846

 

4,064

 

9,068

 

-

 

-

 

(3,073)

 

13,433

 

12,384

 

18,843

 

Revenue return per ordinary share (pence)

 

 

8.11

 

 

7.05

 

 

10.88

 

 

3.26

 

 

3.44

 

 

7.68

 

 

-

 

 

-

 

 

(2.60)

 

 

11.37

 

 

10.49

 

 

15.96

Assets

784,123

653,711

743,248

 

 

 

63,070

 

 

 

57,935

 

 

 

62,052

 

 

 

353

 

 

 

-

 

 

 

378

 

 

 

847,546

 

 

 

711,646

 

 

 

805,678

Liabilities

(96,025)

(103,546)

(97,230)

(40,108)

(34,922)

(43,057)

(2,551)

-

(3,106)

(138,684)

(138,468)

(143,393)

Total net assets

688,098

550,165

646,018

22,962

23,013

18,995

(2,198)

-

(2,728)

708,862

573,178

662,285














 

The capital element of the income statement is wholly attributable to the investment trust.

 

 

 

 

 

Analysis of the investment portfolio

By geographical location














Valuation

31 December 2016

£000

 

 

Purchases

£000

      

Costs of acquisition

£000

 

Sales proceeds

£000

 

  Appreciation

/(depreciation)

£000

Valuation 30 June 2017

£000

 

 

 

%

















United Kingdom

 

492,710

 24,371

 (81)

(20,037)

31,115

528,078

 71.8

North America

 

84,975

 2,247

 (3) 

(15,564)

4,464

 76,119

 10.3

Europe

 

55,244

10,943

(15)

(9,841)

6,268

 62,599

 8.5

Japan

 

14,366

 -  

 -  

-

(1,041)

 13,325

 1.8

Other Pacific

35,140

 -

-

 -

 5,427

40,567

 5.5

 

Other

 

13,645

 

 824

 

 (1)

 

 -  

 

635

 

 15,103

 

 2.1


 

696,080

 

38,385

 

 (100)

 

(45,442)

 

 46,868

 

735,791

 

100.0

 

 

By sector (excluding cash)




                  As at

              30 June

                   2017

As at

31 December

2016


%

%

Oil & gas

 8.3

9.7

Basic materials

 6.4

6.7

Industrials

 30.0

29.5

Consumer goods

 6.9

7.7

Health care

 8.4

8.3

Consumer services

 7.9

7.5

Telecommunications

 0.7

0.7

Utilities

 1.6

1.8

Financials

 27.5

25.4

Technology

 2.3

2.7





100.0

100.0

 

 

Investment portfolio valuation

as at 30 June 2017






UK unless otherwise stated.



Holdings in italics were acquired since 31 December 2016





 £'000

 %

Oil & gas



Oil & gas producers



Royal Dutch Shell

 22,688

 3.08

BP

 14,170

 1.93

Indus Gas

 6,349

 0.86

Total (Fra)

 2,060

 0.28

Premier Oil

 612

 0.08

Providence Resources

 524

 0.07


 

 


46,403

  6.30




Oil equipment & services



Cape

 4,675

 0.64

Gibson Energy (Can)

 4,603

 0.63

Schlumberger (USA)

 4,055

 0.55

National Oilwell Varco (USA)

 1,268

 0.17

Now (USA)

 154

 0.02

Gibson Energy (Can)




  14,755

 2.01




Basic materials



Chemicals



Croda

 6,563

 0.90

Elementis

 6,228

 0.85

Velocys

 3,879

 0.53

Carclo

 2,200

 0.30

Linde (Ger)

 1,460

 0.20





  20,330

 2.78




Forestry & paper



Mondi

  8,052

1.09





  8,052

  1.09




Mining



Rio Tinto

 12,158

 1.65

BHP Billiton

 6,465

 0.88





  18,623

  2.53




Industrials



Construction & materials



Marshalls

 10,050

 1.37

Ibstock

 5,640

 0.77

Accsys Technologies

 5,549

 0.75

Balfour Beatty

 5,445

 0.74





  26,684

 3.63

 

 



Aerospace & defence



Rolls Royce

 16,929

 2.30

Senior

 13,473

 1.83

BAE Systems

 11,403

 1.55

Embraer (Bra)

 4,817

 0.65

Meggitt

 4,769

 0.66

Lockheed Martin (USA)

 4,274

 0.58





  55,665

 7.57




General industrials



Smith(DS)

10,478

 1.42





10,478

 1.42




Electronic & electrical equipment


Spectris

 11,354

 1.54

Morgan Advanced Materials

 8,496

 1.15

Applied Materials (USA)

 6,359

 0.86

TT Electronics

 2,802

 0.38

XP Power

 2,305

 0.31

Legrand (Fra)

 1,928

 0.26

Philips Electronics (Net)

 1,534

 0.21

Philips Lighting (Net)

 1,388

 0.19





  36,166

 4.90




Industrial engineering



Hill & Smith

 10,833

 1.47

Cummins (USA)

 7,493

 1.02

Caterpillar (USA)

 7,445

 1.01

Deere (USA)

 5,618

 0.77

IMI

 5,224

 0.71

Ceres Power

 3,686

 0.50

Weir Group

 3,462

 0.47

Renold

 3,213

 0.44

Severfield

 642

 0.09





47,616

6.48







Industrial transportation



Eddie Stobart Logistics

 4,710

 0.64

AP Moller-Maersk (Den)

 1,703

 0.23

Wincanton

 1,183

 0.16





  7,596

  1.03




Support services



Johnson Service

 12,039

 1.64

Interserve

 6,144

 0.84

Carillion

 5,315

 0.72

Babcock

 4,366

 0.59

Deutsche Post (Ger)

 3,519

 0.48

SGS (Swi)

 2,331

 0.32

Sodexo (Fra)

 1,765

 0.25

Augean

 626

 0.09





  36,105  

  4.93




Consumer goods



Automobiles & parts



GKN

 14,739

 2.00

Toyota Motor (Jap)

 6,535

 0.89

General Motors (USA)

 6,050

 0.82





  27,324

3.71




Beverages



Pernod-Ricard (Fra)

 1,932

 0.26





 1,932

 0.26




Food producers



Unilever

 3,116

 0.42

Nestlé (Swi)

 2,957

 0.40





  6,073

  0.82




Household goods & home construction


Watkin Jones

 8,613

 1.17

L'Oreal (Fra)

 1,792

 0.24





  10,405

  1.41




Tobacco



Imperial Brands

  5,173

0.70





 5,173

  0.70







Health care



Health care equipment & services


Becton Dickinson (USA)

 9,011

 1.22

Smith & Nephew

 6,227

 0.85

Fresenius (Ger)

 5,822

 0.80

Spire Healthcare

 5,661

 0.77

Fresenius Medical Care (Ger)

 2,891

 0.39





29,612

  4.03










Pharmaceuticals & biotechnology


GlaxoSmithKline

 12,259

 1.67

AstraZeneca

 5,135

 0.70

Pfizer (USA)

 3,879

 0.53

Johnson & Johnson (USA)

 3,564

 0.49

Novartis (Swi)

 3,047

 0.41

Roche (Swi)

 2,260

 0.31

Novo-Nordisk (Den)

 1,811

 0.25





  31,955

  4.36




Consumer services



General retailers



Dunelm

 3,910

 0.53

Inditex (Spa)

 1,724

 0.23

Findel

 1,099

 0.15

Topps Tiles

 619

 0.08





7,352

  0.99




Media



Relx

 12,450

 1.69

Sky

 5,467

 0.74

Pearson

 3,630

 0.49

Daily Mail & General Trust

 3,435

 0.47

Publicis Groupe (Fra)

 1,557

 0.21





  26,539

  3.60




Travel & leisure



International Consolidated Airlines

 9,295

 1.26

Carnival

 5,080

 0.69

Irish Continental (Ire)

 4,302

 0.58

Fastjet

 3,395

 0.46

Marstons

 2,656

 0.36





  24,728

  3.35




Telecommunications



Mobile telecommunications



Inmarsat

 2,789

 0.38

Vodafone

 2,177

 0.30





 4,966

 0.68




Utilities



Electricity



SSE

  4,359

0.59





4,359

0.59




Gas, water & multiutilities



National Grid

 5,321

 0.72

Severn Trent

 2,181

 0.30





7,502

  1.02




Financials



Banks



HSBC

 18,765

 2.55

Standard Chartered

 10,770

 1.46

Barclays

 4,054

 0.55

ING Group (Net)

 1,867

 0.25

UBS (Swi)

 1,410

 0.19

Societe Generale (Fra)

 1,350

 0.18





  38,216

  5.18

 

 

Nonlife insurance



Hiscox

 11,913

 1.62

RSA Insurance

 9,233

 1.25





  21,146

2.87




Life insurance/assurance



Prudential

 12,922

 1.76

Aviva

 4,129

 0.56

Chesnara

 4,008

 0.55

Standard Life

 2,992

 0.41

Allianz (Ger)

 1,399

 0.19

Permanent TSB (Ire)

 10

 -  





  25,460

3.47




Real estate investments & services


St Modwen Properties

  6,628

  0.90





6,628

  0.90




Real estate investment trusts



Land Securities

 3,763

 0.51

Mucklow (A&J) Group

 3,750

 0.51

Pacific Industrial & Logistics

 2,217

 0.30





  9,730

1.32




Financial services



IP Group

 7,967

 1.08

Provident Financial

 6,691

 0.91

Oxford Sciences Innovation (unlisted)

 3,597

 0.49

International Personal Finance

 2,864

 0.39

Amundi (Fra)

 2,183

 0.30

Deutsche Börse (Ger)

 2,127

 0.29





  25,429

3.46




Equity investment instruments


Baillie Gifford Pacific

 17,825

 2.42

Stewart Investors Asia Pacific

 15,184

 2.06

Templeton Emerging Markets Investment Trust

 10,286

 1.40

Herald Investment Trust

 8,458

 1.15

Scottish Oriental Smaller Company Trust

 7,558

 1.03

Schroder Japan Growth Fund (Jap)

 6,790

 0.92

Syncona

 4,916

 0.67

Foresight Solar

 3,368

 0.46

Better Capital (2012)

 1,350

 0.18





  75,735

10.29

Technology



Software & computer services


Microsoft (USA)

 9,020

 1.23

SAP (Ger)

 2,292

 0.31

Amadeus IT (Spa)

 2,135

 0.29





13,447

  1.83

Technology hardware & equipment


Apple (USA)

  3,326

0.45





3,326

  0.45

 

Principal risks and uncertainties

 

The principal risks of the Corporation relate to the investment activities and include market price risk, foreign currency risk, liquidity risk, interest rate risk and credit risk. These are explained in the notes to the annual accounts for the year ended 31 December 2016. In the view of the board these risks are as applicable to the remaining six months of the financial year as they were to the period under review.

 

The principal risks of the independent professional services business arise during the course of defaults, potential defaults and restructurings where we have been appointed to provide services. To mitigate these risks we work closely with our legal advisers and, where appropriate, financial advisers, both in the set up phase to ensure that we have as many protections as practicable, and at all other stages whether or not there is a danger of default.

 

Related party transactions

 

There have been no related party transactions during the period which have materially affected the financial position or performance of the group. During the period transactions between the Corporation and its subsidiaries have been eliminated on consolidation. Details of related party transactions are given in the notes to the annual accounts.

 

 

Directors' responsibility statement

 

We confirm that to the best of our knowledge:

 

·     the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and gives a true and fair view of the assets, liabilities, financial position and profit of the group as required by DTR 4.2.4R;

 

·     the half yearly report includes a fair review of the information required by:

 

(a)        DTR 4.2.7R of the Disclosure 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 year; and

 

(b)        DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period.

 

On behalf of the board

 

Christopher Smith

25 July 2017  

 

 

 

 

 

 

Basis of preparation

 

The results for the period have been prepared in accordance with International Financial Reporting Standards (IAS 34 - Interim financial reporting). 

 

The financial resources available are expected to meet the needs of the group for the

foreseeable future. The financial statements have therefore been prepared on a going concern basis.

 

There have been no changes to the group's accounting policies during the period.

 

 

Notes

 

1.   The financial information presented herein does not amount to full statutory accounts within the meaning of Section 435 of the Companies Act 2006 and has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The annual report and financial statements for 2016 have been filed with the Registrar of Companies. The  independent  auditors'  report on the  annual  report and  financial  statements  for 2016 was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

2.   The calculations of NAV and earnings per share are based on:

           

NAV: shares at end of the period 118,152,259 (30 June 2016: 118,043,941; 31 December 2016: 118,111,845). Income: average shares during the period 118,134,437 (30 June 2016: 118,041,246; 31 December 2016: 118,063,495).

 

3.   Listed investments are all traded on active markets and as defined by IFRS 7 are level 1 financial instruments. As such they are valued at unadjusted quoted bid prices. Unlisted investments are Level 3 financial instruments. They are valued by the directors using unobservable inputs including underlying net assets of the instruments.

    

    

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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