Half-year Report

RNS Number : 0923R

Mid Wynd Intnl Inv Trust PLC

04 March 2021

 

Mid Wynd International Investment Trust PLC (the 'Company')

LEI: 549300D32517C2M3A561

Half-Yearly Financial Report (unaudited) for the six months ended 31 December 2020

This announcement contains regulated information

Financial Highlights

Total Returns	Six months ended 31 December 2020	Six months ended 31 December 2019	Year ended 30 June 2020
Net asset value per share †	14.6%	5.8%	12.2%
Share price †	17.6%	6.7%	9.1%
MSCI All Country Index (GBP)	12.1%	4.6%	5.2%
Revenue and dividends
Revenue earnings per share	3.10p	3.49p	7.38p
Dividends per share*	3.10p	3.00p	6.12p
Ongoing charges †	0.7%	0.7%	0.7%
Capital	As at 31 December 2020	As at 31 December 2019	As at 30 June 2020
Net asset value per share	698.66p	581.10p	612.61p
Share price	716.00p	602.00p	612.00p
Net cash/(gearing) †	1.0%	(0.2)%	1.7%
Premium/(discount) †	2.4%	3.5%	0.0%

Source: Artemis/Datastream.

† Alternative Performance Measure

*The interim dividend for the six months to 31 December 2020 will be paid on 31 March 2021 to shareholders on the register at the close of business on 12 March 2021.

Total returns to 31 December 2020	3 years	5 years	Since 1 May 2014**	10 years
Net asset value per share †	51.3%	119.6%	176.1%	211.0%
Share price †	51.1%	122.3%	186.3%	208.8%
MSCI All Country Index (GBP)	31.9%	92.2%	119.5%	174.4%

Source: Artemis/Datastream/Morningstar.

**The date when Artemis was appointed as Investment Manager.

† Alternative Performance Measure

 

Chairman's statement 

Board composition

I am delighted to write to you for the first time as Chairman of our Company. I would like to thank Malcolm Scott for his long and successful term on the Board both as Chairman and as a Director. I will have more to say on Malcolm's considerable contribution to the success of the Company in our Annual Financial Report and at our Annual General Meeting this November.

Performance

For the six months ended 31 December 2020 the Company's share price rose 17.6%, on a total return basis with dividends assumed to be re-invested. This compares to a total return from the MSCI All Country World Index (GBP) of 12.1%.

The Company's net asset value per share rose 14.6% on a total return basis. Since Artemis' appointment, as investment manager on 1 May 2014, the net asset value per share has increased by 176.1%, on a total return basis, against the benchmark's increase of 119.5%.

As at 31 December 2020 the shares stood at a 2.4% premium to net asset value.

Further details of the performance of the Company during the period are included in the Investment Manager's review.

Earnings and Dividend

The net return for the six months to 31 December 2020 was a gain of 88.24 pence per share, comprising a revenue gain of 3.10 pence per share and a capital gain of 85.14 pence per share. The Board is proposing an interim dividend of 3.10 pence per share which will be paid on 31 March 2021 to those shareholders on the register at the close of business on 12 March 2021. This represents an increase of 3.3% on last year's interim dividend of 3.00 pence. It continues to be the aim of the Board to grow the dividend but this will not be done at the expense of capital or if market conditions dictate otherwise.

Share capital

Demand for the Company's shares has continued to be strong, following the publication of our Prospectus in June 2020, and they have traded at an average premium to net asset value of 2.4% over the period.

The Company's policy, within normal market conditions, is to issue and re-purchase shares where necessary to maintain the share price within a 2% band relative to the net asset value.

The Board is pleased to report that for the period from 1 July 2020 to 31 December 2020, 6,076,000 new ordinary shares have been issued in the market, raising gross proceeds of £40.5 million. This represents an increase of 12.0% of the share capital at the start of the period. Following the period end, a further 1,475,000 new ordinary shares have been issued as at 1 March 2021, raising gross proceeds of £10.8 million.

Borrowings

As at 31 December 2020 the Company had drawn funds of EUR3.75 million and US$4.5 million; equating to £6.6 million.

Whilst the Company was in a net cash position at the period end, the borrowing in place added flexibility to the investment management.

Following consideration, on 19 February 2021 the Company agreed a new three year US$60 million multi-currency facility with The Bank of Nova Scotia, London Branch, an increase from the prior US$30 million reflecting the growth of the Company over the last three years and the desire to continue with the same level of flexibility to take advantage of attractive markets. The Company pays a commitment fee while these funds are undrawn and interest is only triggered when the funds are drawn down for investment.

Outlook

In over thirty years as a professional investor I have never witnessed the extreme changes in the prices of financial securities that now seem an everyday occurrence. These are not just extreme price movements associated with the uncertain outlook for corporate profits and equity valuations. They are also extreme price movements often associated with an uncertain outlook for the social and political stability in many of the countries in which our Company invests. The battle for investment survival today encompasses many challenges that are new to the current generation of investors. Of course our Company traces its roots back to a textile mill established in Dundee in 1797, so it has weathered many greater storms and ultimately prospered. That Mid Wynd continued to prosper in 2020 is due to the ability of our Managers, some extreme policy responses to the crisis by the global authorities but also to the ability of the best corporate management to adjust to the challenges they face. That investee company management can respond so flexibly to the scale of challenges associated with COVID-19 is a key reason why equities have produced such positive real returns to long-term investors. Thankfully, the Managers of Mid Wynd have proved capable of aligning your financial interests with the corporate management that can best adapt to change. The constant search for the businesses and management that can so adapt continues to be the key pursuit of our Managers. Not paying too much for these important attributes is also a key consideration.

The most likely outcome from the current crisis is a significant change in how society demands the financial sector serves its needs. This will include, but is not limited to, greater focus on environmental, social and governance issues that all stewards of capital will be increasingly attentive to going forward. Your Board and Managers are not just navigating your capital through a business cycle but through a very major structural change. Such major structural changes are not something new even if investors have to deal with them only very infrequently. The most pressing economic need that the financial system is likely to be conscripted to solve is the current excessively high level of debt-to-GDP across the developed world and also in China. Historically the preferred policy response to such indebtedness, particularly in the age of democracy, is to generate much higher levels of inflation. We should thus expect higher levels of inflation than seen over the past few decades though the path to such inflation may not be straight.

A key strength of equity investment is that there is such a wide range of listed companies for our Managers to select from. There are companies that have some of the solutions to many of the challenges that the world now faces. There is every prospect that our Managers will be able to find corporate management able to respond to these major challenges and protect and grow the purchasing power of your capital. Mid Wynd is committed to investing globally and this also creates the opportunity for our Managers to seek out investments in countries where the challenges in investing are less extreme. We thus face the great challenges of this new era with this dual flexibility that is inherent in the Company's global equity mandate. Recognising the importance of this flexibility in these changing times, I have recently increased my own holdings of the Company's shares. Astute selection of global equities still represents one of the best hopes for savers to see the growth in the purchasing power of their savings over the long-term.

Contact us

Shareholders can keep up to date with developments between formal reports by visiting midwynd.com where you will find information on the Company and a factsheet which is updated monthly, along with quarterly briefings and Manager presentations. In addition, the Board is always keen to hear from shareholders.

Should you wish to, you can e-mail me at [e-mail].

Russell Napier

Chairman

3 March 2021

 

 

Investment Manager's review

Performance

The Company's net asset value rose by 14.6% over the period. That compares with the index's return of 12.1% in sterling, continuing your Company's healthy returns for investors.

Although we have outperformed our comparator index, which is of course pleasing, this outperformance would have been greater had we held Tesla and more Apple shares in line with the index. The very large weightings of a small number of US technology companies in the index is the consequence of that type of stock seeing strong trading through the pandemic. As economies re-open, a broader range of businesses should attract investors' attention.

Indeed, our other underperforming holdings, such as Fresenius (kidney dialysis), have been left behind as investors look for more economically sensitive stocks whose 2021 will be significantly better than their 2020. Our style of investing - selecting high quality companies in less cyclical areas - can struggle to keep up with markets which rise on cyclical factors.

Five largest stock contributors

Company	Theme	Contribution (%)
Taiwan Semiconductor	Automation	0.9
Freeport McMoRan	High quality assets	0.8
Trane	Low carbon world	0.6
Charles Schwab	Fintech	0.6
Samsung Electronics	Automation	0.6

 

Five largest stock detractors

Company	Theme	Contribution (%)
Barrick Resources	High quality assets	(0.3)
Vodafone	Screen time	(0.3)
Reckitt Benckiser	Emerging market consumer	(0.2)
Sanofi	Healthcare costs	(0.2)
Roche Holding	Healthcare costs	(0.2)

 

Our investment process

 

Our aim is to identify areas of commercial growth around the world and invest in companies that trade on attractive valuations and give your Company exposure to this growth. We select high quality companies, with proven profitability and high levels of cash generation, preferring businesses with strong balance sheets and those that have established strong barriers to entry. The economic performance of such companies sometimes lag equity markets when they recover, but they can reduce capital risk well when economic conditions become more testing. Over time, we have found this investment approach gives a solid framework to deliver consistent returns to investors.

Review

Global equity markets rose strongly in the second half of 2020. Positive clinical trials from a number of COVID-19 vaccines suggested that economies might start to return to something like normal over the summer. The victory of President Biden over Donald Trump was well received by markets, as was the Brexit deal, or at least the removed threat of a no-deal Brexit. Compared with the troubles of 2020, 2021 looks to be a year of recovery, economic stimulus and business closer to 'normal'.

 

Current investment themes

Automation (17% of investments) - Over the last six months, orders for automation equipment have risen sharply, especially from China and Asia as economies prepare for a recovery in demand this year. Applications for automation continue to broaden by industry (the use of autonomously driven mining equipment being an interesting example). Companies also wish to broaden their supply chains, often opening plant in Asia outside China and designing plant to use more automation and often fewer workers.

Our semiconductor investments had a particularly strong period. That's because it became clear that only Taiwan Semiconductor, Nvidia and Samsung can produce the fastest modern chips which are essential for the next generation of smartphones and applications which process very large amounts of data.

Online services (18% of investments) - This theme continued to perform well, but we have taken some profits as valuations in some investments seem full. There is some concern that the very large stimulus packages announced in the US and Europe could lead to higher inflation and interest rates and that this might impact valuations in a group whose larger cashflows lie some years ahead.

Although there is scant evidence of inflation, we have run sensitivity analyses on our major holdings to assess this risk. We have found some stocks which are fully valued, but few whose valuations are greatly at risk - as long as the revenue growth comes through as expected. So we have concentrated on the smaller technology companies which should have more years of growth ahead of them.

We became concerned that Alibaba had mishandled their relations with the Chinese government following the cancellation of the listing of their affiliate company Art Financial, and have sold our holding.

Scientific equipment (8% of investments) - Many of our investments in this area are seeing exceptional trading from mass testing for coronavirus. These tests may well slow over the next year, but increased breadth and frequency of medical testing seems a core part of future policies on public health.

Emerging market consumer (11% of investments) - As the vaccine is rolled out and social restrictions are loosened, we expect consumption to revive - indeed, Asian consumers are already active. We have increased our holdings in this area by investing in Richemont, the owner of the Cartier brand.

Low carbon world (15% of investments) - This theme performed well, benefitting from 'green' initiatives which form the focus of both the European and US stimulus spending plans. There are signs that many new players are bidding for participation in wind farm contracts, potentially reducing available returns, so we are keeping an eye on valuations. Our investments in air-conditioning companies have performed well as improved energy efficiency and office health rules should drive future growth for this industry.

High quality assets (14% of investments) - The stimulus plans announced for this year focus on infrastructure and renewable energy. Both suggest higher demand for industrial minerals, especially copper. Our main investment in copper mining, Freeport McMoRan, performed very well over the six months. It seems odd that some sustainable investment funds would not invest in such a stock (due to environmental issues) when their product is an essential ingredient of a more environmentally sustainable future. Our approach, we hope, is sustainable, but also pragmatic.

 

Screen time (6% of investments) - A quiet period for this theme with Samsung the outstanding performer as prospects for semiconductor and smartphone sales improve .

Healthcare costs (5% of investments) - Another quiet period for our healthcare investments which now comprise a much smaller part of the portfolio. Although some Democrat politicians are a threat to the profitability of such stocks, the administration coming in seems most concerned to support existing Obamacare legislation and not inclined to change it. Also, the year coming should see increased healthcare activity as elective surgery resumes (with a backlog) and longer term public health policies will call for greater overall hospital capacity.

Thematic attribution

Theme	Contribution (%)
Automation	4.2
Online services	3.1
Low carbon world	3.0
Scientific equipment	1.6
Emerging market consumption	1.2
Screen time	0.9
High quality assets	0.7
Fintech	0.6
Healthcare costs	(0.7)

 

Regional attribution

Region	Contribution (%)
North America	7.8
Emerging	2.3
UK	(0.4)
Europe	1.2
Japan	3.5
Developed Asia	0.2

 

Outlook

The outlook for 2021 seems very good: economies recovering as vaccines are rolled out, social restrictions being lifted. It is hard to see 2021 being as difficult a year for business as 2020. Furthermore, many consumers have been forced to save, though others face unemployment as furlough schemes end. The huge stimulus packages announced in the US and Europe should encourage job creation, and hopefully the service sector in particular will enjoy a recovery through the summer.

The end of the Brexit negotiations removes the risk of a 'no-deal' on trade in hard goods. There will doubtless be further disputes over the next year, especially in the terms of trade on services. More importantly, a Biden White House should be less unpredictable than the Trump White House and that should suit business and investors. We expect a moderate approach, though with higher taxes and tougher regulation of business. We do not expect any softening of the trade issues with China.

While the scale of the stimulus packages for the current year is dramatic, the economic effect may be less dramatic. Infrastructure projects no longer require massive workforces, so the impact on employment could be modest. Also, replacing one form of electricity production with another benefits the environment, but has no obvious effect on economic productivity - unlike building a road or a railway. The bond market is wary of the risk of rising inflation and this concern will doubtless continue through the year. Inflationary risks seem higher in the US than in Europe and even Chinese inflation currently remains subdued.

Our selected investments coped very well with the unexpected events of last year, saying much for their quality and resilience. Our investment approach favours companies which are little affected by the economic cycle and which have strong balance sheets. Such companies could be left behind by an equity market led by vigorous recovery. However, the companies we have selected will benefit from better economic conditions and sustain good growth beyond the recovery period. Valuations again seem well supported by underlying cashflows.

No doubt the year will have further unexpected and perhaps unpredictable issues, but having navigated the events of last year, we believe we have selected investments which can handle most challenges.

Simon Edelsten, Alex Illingworth &

Rosanna Burcheri

Fund Managers

3 March 2021

Statement of Principal Risks and Uncertainties

Pursuant to DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, the principal risks faced by the Company include strategic, market, borrowing, regulatory, reliance on third party service providers and key personnel.

The pandemic risk and its effect on third party service providers, are included in the June 2020 Annual Financial Report, and continue to be closely monitored by the Investment Manager and the Board.

T hese risks, which have not materially changed since the Annual Financial Report for the year ended 30 June 2020, and the way in which they are managed, are described in more detail in the Annual Financial Report which is available at midwynd.com.

 

 

Responsibility statement of the Directors in respect of the Half-Yearly Financial Report

The Directors confirm that to the best of their knowledge, in respect of the Half-Yearly Financial Report for the six months ended 31 December 2020:

• the condensed set of financial statements has been prepared in accordance with Financial Reporting Standard ('FRS') 104: 'Interim Financial Reporting';

• having considered the expected cash flows and operational costs of the Company for the 18 months from the period end, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the going concern basis of accounting continues to be used in the preparation of the Half-Yearly Financial Report;

• the Half-Yearly Financial Report includes a fair review of the information required by:

(a)  DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the 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 Guidance 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, and any changes in the related party transactions described in the last Annual Financial Report that could do so.

The Half-Yearly Financial Report for the six months ended 31 December 2020 was approved by the Board and the above responsibility statement has been signed on its behalf by:

Russell Napier

Chairman

3 March 2021

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Condensed statement of comprehensive income

	For the six months ended			For the six months ended			For the year ended
	31 December 2020			31 December 2019			30 June 2020
	(unaudited)			(unaudited)			(audited)
	Revenue	Capital	Total	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000		£'000	£'000	£'000
Gains on investments	-	45,683	45,683	-	12,440	12,440		-	27,784	27,784
Currency gains/(losses)	-	358	358	-	(19)	(19)		-	(87)	(87)
Income	2,275	-	2,275	2,072	-	2,072		4,599	-	4,599
Investment management fee	(220)	(660)	(880)	(158)	(473)	(631)		(327)	(980)	(1,307)
Other expenses	(163)	(47)	(210)	(177)	(31)	(208)		(433)	(34)	(467)
Net return before finance costs and taxation	1,892	45,334	47,226	1,737	11,917	13,654		3,839	26,683	30,522
Finance costs of borrowings	(19)	(59)	(78)	(23)	(69)	(92)		(51)	(153)	(204)
Net return on ordinary activities before taxation	1,873	45,275	47,148	1,714	11,848	13,562		3,788	26,530	30,318
Taxation on ordinary activities	(225)	-	(225)	(221)	-	(221)		(458)	-	(458)
Net return on ordinary activities after taxation	1,648	45,275	46,923	1,493	11,848	13,341		3,330	26,530	29,860
Net return per share	3.10p	85.14p	88.24p	3.49p	27.64p	31.13p		7.38p	58.78p	66.16p

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. No operations were acquired or discontinued during the period.

The net return for the period disclosed above represents the Company's total comprehensive income.

Condensed statement of financial position

	As at 31 December 2020 (unaudited) £'000	As at 31 December 2019 (unaudited) £'000	As at 30 June 2020 (audited) £'000
Non current assets
Investments held at fair value through profit or loss	390,282	263,465	300,457
Current assets
Debtors	1,506	1,388	3,683
Cash and cash equivalents	10,473	5,720	14,716
	11,979	7,108	18,399
Creditors
Amounts falling due within one year	(8,493)	(8,255)	(10,813)
Net current assets/(liabilities)	3,486	(1,147)	7,586
Total net assets	393,768	262,318	308,043
Capital and reserves
Called up share capital	2,819	2,258	2,515
Capital redemption reserve	16	16	16
Share premium	165,604	95,095	125,454
Capital reserve	221,492	161,535	176,217
Revenue reserve	3,837	3,414	3,841
Shareholders' funds	393,768	262,318	308,043
Net asset value per ordinary share	698.66p	581.10p	612.61p

Condensed statement of changes in equity

	For the six months ended 31 December 2020 (unaudited)
	Share capital £'000	Capital redemption reserve £'000	Share premium £'000	Capital reserve1,2 £'000	Revenue reserve2 £'000	Shareholders' funds £'000
Shareholders' funds at 1 July 2020	2,515	16	125,454	176,217	3,841	308,043
Net return on ordinary activities after taxation	-	-	-	45,275	1,648	46,923
Issue of new shares (net of cost)	304	-	40,150	-	-	40,454
Dividend paid	-	-	-	-	(1,652)	(1,652)
Shareholders' funds at 31 December 2020	2,819	16	165,604	221,492	3,837	393,768
	For the six months ended 31 December 2019 (unaudited)
	Share capital £'000	Capital redemption reserve £'000	Share premium £'000	Capital reserve1,2 £'000	Revenue reserve2 £'000	Shareholders' funds £'000
Shareholders' funds at 1 July 2019	2,044	16	70,782	149,687	3,555	226,084
Net return on ordinary activities after taxation	-	-	-	11,848	1,493	13,341
Issue of new shares (net of costs)	214	-	24,313	-	-	24,527
Dividend paid	-	-	-	-	(1,634)	(1,634)
Shareholders' funds at 31 December 2019	2,258	16	95,095	161,535	3,414	262,318

	For the year ended 30 June 2020 (audited)
	Share capital £'000	Capital redemption reserve £'000	Share premium £'000	Capital reserve1,2 £'000	Revenue reserve2 £'000	Shareholders' funds £'000
Shareholders' funds at 1 July 2019	2,044	16	70,782	149,687	3,555	226,084
Net return on ordinary activities after taxation	-	-	-	26,530	3,330	29,860
Issue of new shares (net of costs)	471	-	54,619	-	-	55,090
Sale of shares from treasury	-	-	53	450	-	503
Repurchase of ordinary shares into treasury	-	-	-	(450)	-	(450)
Dividends paid	-	-	-	-	(3,044)	(3,044)
Shareholders' funds at 30 June 2020	2,515	16	125,454	176,217	3,841	308,043

¹   Capital reserve as at 31 December 2020 includes unrealised gains of £71,698,000 (31 December 2019: £34,094,000; 30 June 2020: £50,659,000).

²   The Company may pay dividends from both capital and revenue reserves.

 

Condensed statement of cash flows

	For the six months ended 31 December 2020 (unaudited) £'000	For the six months ended 31 December 2019 (unaudited) £'000	For the year ended 30 June 2020 (audited) £'000
Cash generated in operations	894	903	2,160
Interest received	5	70	96
Interest paid	(78)	(92)	(204)
Net cash generated from operating activities	821	881	2,052
Cash flow from investing activities
Purchase of investments	(247,818)	(144,871)	(399,065)
Sale of investments	206,394	120,330	350,140
Realised currency (losses)/gains	(2)	(294)	240
Net cash used in investing activities	(41,426)	(24,835)	(48,685)
Cash flow from financing activities
Issue of new shares, net of costs	40,406	24,229	54,779
Sale of shares from treasury	-	-	503
Repurchase of shares into treasury	-	-	(450)
Net (repayment)/drawdown of credit facility	(2,292)	1,550	4,056
Dividends paid	(1,652)	(1,634)	(3,044)
Net cash generated from financing activities	36,462	24,145	55,844
Net (decrease)/increase in cash and cash equivalents	(4,143)	191	9,211
Cash and cash equivalents at start of the period	14,716	5,529	5,529
(Decrease)/increase in cash in the period	(4,143)	191	9,211
Unrealised currency losses on cash and cash equivalents	(100)	-	(24)
Cash and cash equivalents at end of the period	10,473	5,720	14,716

 

Notes to the Half-Yearly Financial Report

1  Accounting policies

The financial statements have been prepared in accordance with the Company's accounting policies as set out in the Annual Financial Report for the year ended 30 June 2020 and are presented in accordance with the Companies Act 2006 (the 'Act'), FRS 104 and the requirements of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('SORP') issued by the Association of Investment Companies (the 'AIC') in October 2019.

The financial information contained within this Half-Yearly Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Act. The financial information for the year ended 30 June 2020 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 statements under sections 498(2) or (3) of the Act.

The unaudited condensed financial statements for the six months ended 31 December 2020 have been prepared on a going concern basis.

 

2  Return per share

Return per share has been calculated based on the weighted average number of ordinary shares in issue for the six months ended 31 December 2020 being 53,175,261 (31 December 2019: 42,864,378; 30 June 2020: 45,134,883).

3  Dividend

An interim dividend for the six months ended 31 December 2020 of 3.10 pence per ordinary share (31 December 2019: 3.00 pence) has been declared. This dividend will be paid on 31 March 2021 to those shareholders on the register at close of business on 12 March 2021.

4  Borrowing facilities

Over the six month period, the Company utilised its facility with Scotiabank (Ireland) Designated Activity Company for a US$30 million multi-currency revolving credit facility, of which US$4.5 million (£3.3 million) was drawn down at 31 December 2020 (31 December 2019: US$5.0 million (£3.8 million); 30 June 2020: US$6.0 million (£4.9 million)) and €3.8 million (£3.4 million) was drawn down at 31  December 2020 (31 December 2019: €3.0 million (£2.5 million); 30 June 2020: €5.0 million (£4.5 million)). These amounts are recognised in amounts falling due within one year in the condensed statement of financial position.

Following the period end on 19 February 2021, the Company entered into a new three year agreement with The Bank of Nova Scotia, London Branch for a US$60 million multi-currency revolving credit facility.

During the period to 31 December 2020, the Company paid interest separately on each currency drawn down. Interest was charged on each currency at variable rates equivalent to 1.05% over the relevant currency LIBOR i.e. Sterling, US dollar and Japanese yen, and the Euro interbank offered rate (EURIBOR) is used for Euro borrowings. The US$ interest rate applied as at 31 December 2020 was 1.2636% (31 December 2019: 2.951%; 30 June 2020: 1.4846%). The € interest rate applied as at 31 December 2020 was 1.05% (31 December 2019: 1.05%; 30 June 2020: 1.05%).

 

5  Fair value hierarchy

All investments are designated at fair value through profit or loss on initial recognition in accordance with FRS 102. The following table provides an analysis of these investments based on the fair value hierarchy as described below which reflects the reliability and significance of the information used to measure their fair value.

The disclosure is split into the following categories:

Level 1 - Investments with unadjusted quoted prices in an active market;

Level 2 - Investments whose fair value is based on inputs other than quoted prices that are either directly or indirectly observable; 

Level 3 - Investments whose fair value is based on inputs that are unobservable (i.e. for which market data is unavailable).

	31 December 2020 £'000 (unaudited)	31 December 2019 £'000 (unaudited)	30 June 2020 £'000 (audited)
Level 1	390,282	263,465	300,457
Total value of investments	390,282	263,465	300,457

 

6  Share capital

As at 31 December 2020 there were 56,360,114 ordinary shares in issue (31 December 2019: 45,141,416; 30 June 2020: 50,284,114).

In the six months ended 31 December 2020, 6,076,000 ordinary shares were allotted with total net proceeds of £40,525,000 (six months ended 31 December 2019: 4,270,000 ordinary shares were allotted with total net proceeds of £24,561,000; year ended 30 June 2020: ordinary shares of 9,412,698 were allotted with total net proceeds of £55,187,000 and 97,302 shares were bought back at a total cost of £450,000 into treasury and 97,302 shares were sold from treasury for proceeds of £503,000).

There are no ordinary shares held in treasury as at 31 December 2020.

Following the period end as at 1 March 2021, a further 1,475,000 ordinary shares have been issued with total net proceeds of £10.8 million.

 

7  Related party transactions

The Directors are considered to be related parties. No Director has an interest in any transactions which are, or were, unusual in their nature or significant to the nature of the Company.

The Directors receive fees for their services. During the six months to 31 December 2020, £79,000 was paid to Directors (31 December 2019: £56,000; year to 30 June 2020: £120,000) of which £12,000 was outstanding at the period end (31 December 2019: £nil; 30 June 2020: £5,000).

8  Transactions with the Investment Manager

The investment management fee payable to Artemis Fund Managers Limited for the six months ended 31 December 2020 was £880,000 (31 December 2019: £631,000; year to 30 June 2020: £1,307,000) of which £468,000 was outstanding at the period end (31 December 2019: £321,000; 2020: £360,000).

9.   Availability of Half-Yearly Financial Report

Copies of the Half-Yearly Financial Report for the six months ended 31 December 2020 will be sent to shareholders shortly and will also be available on request from the registered office at 6^th Floor, Exchange Plaza, 50 Lothian Road, Edinburgh, EH3 9BY as well as on the Company's website midwynd.com.

A copy of the Half-Yearly Financial Report will also be submitted to the FCA's National Storage Mechanism and will soon be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

For further information, please contact:

Artemis Fund Managers Limited

Company Secretary

Telephone number: 0131 225 7300

4 March 2021

 

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