Annual Financial Report
The Monks Investment Trust PLC
Legal Entity Identifier: 213800MRI1JTUKG5AF64
Annual Financial Report
This is the Annual Financial Report of The Monks Investment Trust PLC as required to be published under DTR 4 of the UKLA Listing Rules.
The financial information set out in this Annual Financial Report does not constitute the Company's statutory accounts for the years ended 30 April 2016 or 30 April 2017 but is derived from those accounts. The Company's Auditors have reported on the Annual Report and Financial Statements for 2016 and 2017; their reports were unqualified, did not draw attention to any matters by way of emphasis, and did not contain statements under 498(2) or 498(3) of the Companies Act 2006. Statutory accounts for the year ended 30 April 2016 have been filed with the Registrar of Companies and the statutory accounts for the year ended 30 April 2017 will be delivered to the Registrar in due course.
The Annual Report and Financial Statements for the year ended 30 April 2017, including the Notice of Annual General Meeting, has been submitted electronically to the National Storage Mechanism and will shortly be available for inspection http://www.morningstar.co.uk/uk/NSM and is also available on the Monks page of the Baillie Gifford website at: www.monksinvestmenttrust.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.
Baillie Gifford & Co Limited
Company Secretaries
4 July 2017
Chairman's Statement
Monks has had an excellent year, as you will see from this report. The weakness in Sterling contributed to the result, but the key to it was the performance of our new portfolio which was established two years ago. Our managers have commented on this as follows:
'Our approach is to focus on a range of the world's best businesses and to hold them for several years, often through political and economic cycles and uncertainties. The long-term revenue and profit growth potential of our investments dominates our analysis, as opposed to guesswork surrounding variations in global GDP, interest rates or politics. Indeed, one of the strengths which defines successful businesses is their ability to adapt and evolve in the face of changing external circumstances, with the best managers also having the ambition and vision to exploit new opportunities as and when they appear. Such companies should over time contribute greatly to social and economic development; they are the wealth creators and we as their shareholders can profit from their efforts. The bulk of our investments produced revenue and profit growth in line or ahead of our expectations during the reporting period.'
We are encouraged by the results that the implementation of the new approach has produced so far, but we note the caveat in the Managers' Report below that performance should be judged over a period of at least five years.
Performance
In the year to 30 April 2017, the total return for the FTSE World Index was 31.0% while the Company's net asset value total return (NAV), with borrowings at fair value, was 40.0%. The share price total return was greater at 53.9% because of the narrowing of the discount. The Company's one year net asset value performance ranked it third out of 23 AIC Global sector peer trusts.
Earnings and Dividend
Earnings per share increased from 2.31p to 2.36p. The Board is recommending that a single final dividend of 1.25p should be paid for the year, compared to a total of 1.5p last year. This is the minimum required to maintain the Company's investment trust status, reflecting our priority which is capital growth. No interim dividend was paid during the year.
Borrowings and Gearing
As advocates of the potential for strong real returns from equities over the long term, our managers will typically maintain a geared position. At present, we have agreed with them a gearing range of 5% net cash to plus 10% invested in equities. As at the financial year end, Monks equity gearing was 6.2%, which was unchanged over the year.
In addition to the £40m debenture that expires in 2023, the Company has a multi-currency revolving credit facility with National Australia Bank, of which US$87m is drawn at present.
Discount
The discount has narrowed substantially over the last two years. When the current team was appointed in March 2015 the discount (when calculated with borrowings at fair value) was 14.3%; by end April 2016 it had narrowed to 9.5% and as at the end of April 2017 it had moved to 0.6%. Since the year end the Company has occasionally traded at a small premium. If a clear premium to NAV emerges, we may issue shares to satisfy the demand from the market.
Management Fee
We have agreed a new tiered management fee with effect from 1 May 2017. The annual management fee payable to Baillie Gifford & Co Limited is now 0.45% on the first £750m of total assets and 0.33% on the remaining total assets, where total assets is defined as the total value of all assets held less all liabilities (other than any liability in the form of borrowings intended for investment purposes). Previously the fee payable was a flat 0.45% on total assets less current liabilities. Applying the new arrangement to the financial year to 30 April 2017, it is estimated that the ongoing charge would have been reduced by approximately £508,000. The new fee arrangement was instigated by our managers and ensures that shareholders benefit from economies of scale. The ongoing charge for the Company's last financial year was 0.59%.
The Board
During the financial year under review, we welcomed Belinda Richards and Professor Sir Nigel Shadbolt to the Board. Belinda Richards is a former senior partner at Deloitte LLP with a thirty year career specialising in business operations and strategy development with a particular focus on the Financial Services and Consumer Products sectors. Professor Sir Nigel Shadbolt is Principal of Jesus College, Oxford, Professorial Research Fellow in the Department of Computer Science, University of Oxford and a visiting Professor of Artificial Intelligence at the University of Southampton. He specialises in open data and artificial intelligence.
As a consequence of the increase in the number of Directors and with a view to giving flexibility for the future, we are seeking shareholder authority at the Annual General Meeting to increase the Company's aggregate Directors' fees limit from £200,000 to £300,000 per annum. This aggregate level was last increased in 2003 and the Board has no intention of increasing the Directors' fees this year.
Outlook
Despite the present political uncertainties, the global economy is enjoying its most rapid expansion for many years. US consumer confidence is high, and the European economy is now recovering strongly. As long-term investors in growth, our portfolio managers see many bright spots about which to be optimistic, based on their analysis of the companies in our portfolio.
Annual General Meeting
I hope shareholders will come to the Annual General Meeting, which will be held on Wednesday 2 August 2017 at 11.00am at the Institute of Directors. The managers will give a short presentation and there will be an opportunity to ask questions and to meet them and the Directors informally.
James Ferguson
Chairman
27 June 2017
Past performance is not a guide to future performance. See disclaimer at end of this document.
The Managers' Core Investment Beliefs
We believe the following features of Monks provide a sustainable basis for adding value for shareholders.
Active Management
¾ We invest in attractive companies using a 'bottom-up' investment process. Macroeconomic forecasts are of relatively little interest to us.
¾ High active share* provides the potential for adding value.
¾ We ignore the structure of the index - for example the location of a company's HQ and therefore its domicile are less relevant to us than where it generates sales and profits.
¾ Large swathes of the market are unattractive and of no interest to us.
¾ As index agnostic global investors we can go anywhere and only invest in the best ideas.
¾ As the portfolio is very different from the index, we expect portfolio returns to diverge - sometimes substantially and often for prolonged periods.
Committed Growth Investors
¾ In the long run, share prices follow fundamentals; growth drives returns.
¾ We aim to produce a portfolio of stocks with above average growth - this in turn underpins the ability of Monks to add value.
¾ We have a differentiated approach to growth, focusing on the type of growth that we expect a company to deliver. All equity holdings fall into one of four growth categories - as described in the equity portfolio by growth category table below.
¾ The use of these four growth categories ensures a diversity of growth drivers within a disciplined framework.
Long-Term Perspective
¾ Long-term holdings mean that company fundamentals are given time to drive returns.
¾ We prefer companies that are managed with a long-term mindset, rather than those that prioritise the management of market expectations.
¾ We believe our approach helps us focus on what is important during the inevitable periods of underperformance.
¾ Short-term portfolio results are random.
¾ As longer-term shareholders we are able to have greater influence on environmental, social and governance matters.
Dedicated Team with Clear Decision-making Process
¾ Senior and experienced team drawing on the full resources of Baillie Gifford.
¾ Alignment of interests - the investment team responsible for Monks all own shares in the Company.
Portfolio Construction
¾ Equities are held in three broad holding sizes - as described in the equity portfolio by holding size table below.
¾ This allows us to back our judgement in those stocks for which we have greater conviction, and to embrace the asymmetry of returns through 'incubator' positions in higher risk/return stocks.
¾ 'Asymmetry of returns': some of our smaller positions will struggle and their share prices will fall; those that are successful may rise many fold. The latter should outweigh the former.
Low Cost
¾ Investors should not be penalised by high management fees.
¾ Low turnover and trading costs benefit shareholders.
* Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.
Managers' Report
Background
Markets were strong in the year to end April 2017, with returns to Sterling investors flattered by the pronounced weakness in the pound which followed the UK's decision to leave the European Union. Global headlines throughout the period were dominated by political uncertainties and predictions of economic gloom, yet the reality was that few of these fears were realised and companies across the world were, in general, able to produce good revenue and profit growth against a background of stable low inflation and continuing low interest rates. There was limited divergence of performance between the major markets or between sectors; it was a year when stock selection dominated.
Performance
During the year to 30 April 2017 the Company's net asset value (NAV), with borrowings at fair value, returned 40.0%, significantly ahead of the FTSE World Index at 31.0%. While this is a more than satisfactory outcome, we believe that performance should only be judged over longer time periods of five years or more, so it is still early days for the new management team. Over the two years since the change in approach the NAV return has been 39.4% compared to the benchmark at 31.6%.
Remarkably 29 of our holdings appreciated by more than 50% in Sterling during the year and 7 by more than 100%. These big winners come disproportionately from two of our favourite growth areas: Platform businesses and Technology companies, notably those involved in semi-conductors. Among the Platforms we saw big contributions from long-term holdings including Amazon which is now our largest holding, MercadoLibre and Alibaba (respectively the leading Brazilian and Chinese ecommerce platforms), Naspers, a South African based internet investor, and MarketAxess which is an electronic bond trading platform. The diverse nationality of these companies demonstrates that geography was not a big influence but rather similarities in business model and scale alongside secular changes in behaviour enabled by the internet and the development of mobile services were the key success factors. It is interesting to note that despite very strong share price appreciation we made no sales of any of these holdings but rather added to Alibaba and Naspers during the year as we continue to believe such companies are capable of substantial further growth.
Broader technological progress is also driving demand for advanced electronics and in particular for the semi-conductors which enable everything from our mobile phones to industrial automation, medical diagnostics and treatments and electric (and eventually autonomous) vehicles. The semi-conductor industry has historically proven highly cyclical and unpredictable but it remains our contention that significant consolidation across several strands of the industry will result in more dominant leaders and more rational behaviour, particularly as it relates to new capacity and pricing. Combined with a rapid uptick in demand based on this wide range of new applications, this should produce significant future profits and a more positive assessment of the companies involved. The strong share price performance of holdings such as Nvidia, Teradyne, Samsung Electronics and Veeco, each of which more than doubled in the year, along with Rohm and TSMC suggests that this process has begun, though as with the Platform winners, we believe there is considerably more to go for.
We also saw strong relative share price performance across a broad spread of holdings including financials such as Sberbank, First Republic and HDFC (respectively Russian, American and Indian banks); industrials such as Renishaw, Atlas Copco, CRH and Lincoln Electric; and consumer companies including Royal Caribbean Cruises. The only notable negative contributors to performance, both of which remain in the portfolio, were Myriad Genetics (medical diagnostics) and Novo Nordisk, the world leader in diabetes treatment. Both fell victim to pricing pressures as regulators and competitors combined to try to get US healthcare costs under control but we believe each has technical leadership which should enable a better long-term outcome.
Performance was also helped by gearing, with borrowed funds invested in the equity markets contributing approximately 1.7% to returns for the year. We put the equity gearing in place in two stages following market weakness in late 2015 and early 2016. We have been waiting patiently for an opportunity to take the level of borrowings to what we consider the long-term norm of 10% of shareholders' funds. The market's strength has dissuaded us from taking out further borrowings for the time being but we remain alert to opportunities and we have scope within our existing bank arrangements to move quickly should the chance arise.
In addition to the strong performance of the underlying portfolio and the positive impact of gearing, shareholders also benefited during the year from a narrowing of the discount from 9.5% to 0.6% (calculated with borrowings at fair value). This boosted the share price total return to a gain of 53.9%. The reduction in the discount was the result of our efforts to generate more buyers of Monks' shares in the market while reducing the level of selling by existing shareholders. The approach we have taken is to explain clearly and consistently our investment approach to both existing and potential shareholders, focusing on those we consider to be the natural long-term holders, namely private individuals, those advised by intermediaries such as wealth managers and smaller charities and foundations. The main factor tying these groups together is their willingness to take a very long-term view of their investments, without the inclination for expensive and uncertain short-term portfolio trading.
We are encouraged by progress so far but recognise that if we are to prevent the discount from widening out again, we shall have to continue to demonstrate ongoing potential for strong performance. We are pleased that this is the second successive year where the Company has not needed to buy back shares and, in contrast, we are now approaching the position where we might potentially issue new shares at a premium to NAV in order to satisfy demand from buyers. Now that we have agreed a new lower tiered fee scale with the Board, any growth in assets will result in lower costs for all shareholders.
Portfolio changes
|
New Purchases |
Complete Sales |
|
Abiomed |
Aggreko |
|
AP Moller-Maersk |
American Express |
|
China Biologic Products |
Banco Popular Español |
|
Ctrip.com International |
Coca Cola HBC |
|
GRAIL |
Dolby Laboratories |
|
HTC |
eBay |
|
Infineon Technologies |
Ferrari |
|
Interactive Brokers Group |
Jardine Matheson |
|
Jardine Strategic Holdings |
Monsanto |
|
Kansai Paint |
Nanoco |
|
LendingTree |
Praxair |
|
Line |
Qualcomm |
|
PageGroup |
Shimano |
|
Resmed |
SK Hynix |
|
SiteOne Landscape Supply |
SoftBank |
|
Trupanion |
Stratasys |
|
Verisk Analytics |
THK |
|
|
Victrex |
|
|
Volvo |
|
|
Wolseley |
Portfolio turnover was lower than in recent years at 13.8%, suggesting an average holding period of over seven years, in line with our long-term perspective. The table above shows the new purchases and complete sales. We sold a number of successful investments where valuations now largely discount future prospects, including Shimano, Ferrari, Wolseley and Dolby and in a similar vein we also reduced Markel, First Republic, Ryanair and CRH. The balance of disposals were of companies which have failed to develop as we had previously hoped, many of which had entered the portfolio as smaller 'incubator' positions, reflecting the wide range of possible outcomes and uncertainties. It is our practice not to dwell on such unknowns as risk taking is at the heart of our investment approach and failures are inevitable; the key is to include as many successes as possible.
Several of the new purchases were of 'Rapid' growth stocks, including a number of relatively immature but high potential companies which address large markets with innovative solutions. Examples include Abiomed (heart pumps), LendingTree (consumer finance portal), China Biologics (plasma products) and GRAIL (cancer diagnosis). GRAIL is a start up company, working on the development of blood tests for the early detection of cancer. It is currently not listed on the stockmarket but has a pedigree list of backers including Illumina, Google and a number of leading pharmaceutical companies. One of the advantages of investment trusts relative to open-ended vehicles is this ability to invest in unquoted companies. We will continue to look out for further unique and high potential opportunities not otherwise accessible through public markets, however, we do not expect to hold more than a handful of such companies. Other new purchases represented more established growth businesses such as Resmed, Verisk, Infineon and Ctrip. Lastly, we acquired initial incubator sized holdings in two out of favour 'Latent' growth stocks HTC and AP Moller-Maersk. In each case we are hoping for much improved future prospects, especially as capacity is now growing more slowly than demand while self help and restructuring offer benefits on top. Both are strongly financed and would look significantly undervalued should our positive case come through.
Outlook for the Portfolio
Following the significant rise in the Monks share price over the last twelve months we must prepare ourselves for the likelihood of lower returns in the future. But importantly, we still believe portfolio returns should be positive, based on continued profit growth from a range of strong and adaptable businesses with superior prospects. We are less confident that aggregate stockmarket indices will make continued progress given the number of large companies and industries which look to us to be ripe for disruption and long-term decline. Our job is to ensure that the portfolio has sufficient exposure to the winners and the foresight to avoid too many of the losers.
Politics across the developed world does seem to be becoming less predictable, in part because of competition from fast developing economies and in part because of the impact of new technologies on societies. While aggregate market valuations appear high and perhaps fail to reflect some of the external risks, we believe that the portfolio carries significantly lower redundancy risk and well above average growth potential, thereby justifying premium valuations. Half of the portfolio is, in any case, not dependant on general economic development but rather on secular drivers. Such companies, and we have already referred to several of them in discussion of performance and transactions, should succeed or fail on their own efforts and we describe these as 'economically agnostic' (see the Thematic Risk Categories table below). In many cases we believe that the winner in a particular industry will take the vast majority of the rewards, so that as a dominant leader such as Amazon, Alibaba, Samsung or Facebook emerges, so the risks from competitors reduce, higher valuations can be justified and holdings can be allowed to rise in size. While the growth rates of such companies will eventually slow, margins and cashflows should improve and returns to shareholders remain healthy.
The other half of the portfolio is more economically sensitive and reflects three broad themes: continued confidence in American growth; a revival in Emerging Markets; and cautious optimism that we are past the worst in Japan and Europe. While the progress of the Trump administration's reforms are uncertain, we believe the direction of tax and industrial policy is broadly positive and should support the economy, with incentives to increase investment and research particularly important for the longer term. A number of Emerging Markets are benefiting from a cyclical recovery after a difficult few years, supported by competitive currencies and praiseworthy efforts to improve governance and reduce corruption; in several such countries politics is actually becoming a cause for optimism. The portfolio's exposure to Europe and Japan is currently modest but the passage of time and increased pressure for change and reform suggests growing scope for positive news.
Overall we are seeing more opportunities for profitable investment all over the world and we look forward with confidence. We believe we are closely aligned with the interests of investors looking for a low cost, actively managed global trust which they can buy easily in the market and then hold for the very long term.
Charles Plowden
Spencer Adair
Malcolm MacColl
Baillie Gifford & Co
27 June 2017
Past performance is not a guide to future performance. See disclaimer at end of this document.
|
Equity Portfolio by Growth Category as at 30 April 2017 |
|
Holding Size |
Growth Stalwarts |
% |
Rapid Growth |
% |
Cyclical Growth |
% |
Latent Growth |
% |
|
|
(c.10% p.a. earnings growth)
|
|
(c.15% to 25% p.a. earnings growth) |
|
(c.10% to 15% p.a. earnings growth through a cycle)
|
|
(earnings growth to accelerate over time)
|
|
|
|
Company Characteristics ¾ Durable franchise ¾ Deliver robust profitability in most macroeconomic environments ¾ Competitive advantage includes dominant local scale, customer loyalty and strong brands
|
|
Company Characteristics ¾ Early stage businesses with vast growth opportunity ¾ Innovators attacking existing profit pools or creating new markets |
|
Company Characteristics ¾ Subject to macroeconomic and capital cycles with significant structural growth prospects ¾ Strong management teams highly skilled at capital allocation |
|
Company Characteristics ¾ Company specific catalyst will drive above average earnings in future ¾ Unspectacular recent operational performance and therefore out of favour |
|
|
Highest conviction holdings c.2.0% each
Total: 36.5% |
Prudential |
3.4 |
Amazon.com |
3.8 |
Royal Caribbean Cruises |
3.2 |
Samsung Electronics |
1.8 |
|
SAP |
2.1 |
Naspers |
3.1 |
TSMC |
2.1 |
MS&AD Insurance |
1.7 |
|
|
Anthem |
2.0 |
Alphabet |
2.5 |
CRH |
2.0 |
|
|
|
|
Moody's |
1.7 |
AIA |
2.0 |
TD Ameritrade |
1.6 |
|
|
|
|
|
|
Alibaba |
1.9 |
CarMax |
1.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sized holdings c.1.0% each
Total: 42.1% |
Visa Schindler MasterCard Verisk Analytics Novo Nordisk Waters Resmed Colgate-Palmolive |
1.3 1.2 1.2 0.9 0.9 0.8 0.8 0.7 |
MercadoLibre Ryanair Seattle Genetics iRobot Ctrip.com International ICICI Bank Nvidia Baidu MarketAxess Tesla HDFC Yandex GrubHub LendingTree |
1.5 1.5 1.4 1.2 1.1 1.1 1.0 1.0 0.9 0.9 0.9 0.9 0.9 0.7 0.7
|
Martin Marietta Materials Teradyne Richemont Markel Atlas Copco EOG Resources Leucadia National First Republic Bank Hays Lincoln Electric Svenska Handelsbanken Wabtec CH Robinson Worldwide SMC Jardine Strategic Holdings
|
1.3 1.2 1.1 1.1 1.0 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.7 0.7 0.7
|
Bank of Ireland Apache Sberbank of Russia Veeco Instruments Fairfax Financial Carlsberg |
0.9 0.9 0.8 0.7 0.7 0.7 |
|
Incubator Holdings c.0.5% each
Total: 21.4% |
Bureau Veritas Olympus Kansai Paint Stericycle Dia
|
0.6 0.6 0.5 0.5 0.4 |
Renishaw Cyberagent Schibsted Infineon Technologies BM&F Bovespa M3 Financial Engines Zillow Trupanion Qiagen Abiomed GRAIL TripAdvisor IP Group China Biologic Products Myriad Genetics Japan Exchange Interactive Brokers Group Line Intuitive Surgical Alnylam Pharmaceuticals |
0.6 0.6 0.6 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
0.4 0.4 0.4 0.3 |
Deutsche Boerse Brambles Rolls Royce Ritchie Bros Auctioneers PageGroup Kirby Sands China DistributionNOW SiteOne Landscape Supply Ferro Alloy Resources |
0.6 0.6 0.6 0.5 0.5 0.5 0.4 0.4
0.3 0.1
|
Howard Hughes Toyota Tsusho Tsingtao Brewery Rohm Autohome HTC Silk Invest Africa Food Fund OC Oerlikon AP Moller-Maersk Fiat Chrysler Autos MTN Doric Nimrod Air One Juridica Investments |
0.6 0.6 0.6 0.5 0.5 0.4
0.4 0.4 0.4 0.4 0.2 0.1 - |
|
|
Total |
19.6% |
Total |
38.2% |
Total |
28.9% |
Total |
13.3% |
|
Portfolio Positioning as at 30 April 2017 |
Thematic Risk Categories
|
Category |
At 30 April 2017 % |
|
|
Economically Agnostic |
47.6 |
|
|
|
Internet Winners |
19.1 |
|
|
Innovation |
18.9 |
|
|
Consumer Stalwarts |
8.5 |
|
|
Idiosyncratic |
1.1 |
|
US Re-emergence |
22.9 |
|
|
|
Industrial |
5.9 |
|
|
Consumer |
5.8 |
|
|
Normalisation |
4.3 |
|
|
Capital Cycle |
3.6 |
|
|
Government Budgets |
2.0 |
|
|
Energy |
1.3 |
|
Continued progress of Asia/Latin America |
16.1 |
|
|
|
Consumer Catch-up |
12.8 |
|
|
Energy |
1.7 |
|
|
Industrial |
1.5 |
|
|
Capital Cycle |
0.1 |
|
European and Japanese Healing |
11.5 |
|
|
|
Consumer |
3.7 |
|
|
Industrial |
2.7 |
|
|
Abenomics |
2.7 |
|
|
Normalisation |
2.3 |
|
|
Capital Cycle |
0.1 |
|
Bonds and Net Liquid Assets |
1.3 |
|
|
|
Net Liquid Assets |
0.9 |
|
|
Bonds |
0.4 |
|
Other Equities |
0.6 |
|
|
Total Assets |
100.0 |
|
Geographical Analysis
|
|
At 30 April 2017 % |
At 30 April 2016 % |
|
North America |
47.1 |
46.1 |
|
Continental Europe |
16.4 |
17.7 |
|
Emerging Markets |
18.9 |
14.2 |
|
United Kingdom |
6.3 |
8.3 |
|
Japan |
6.3 |
8.3 |
|
Developed Asia |
3.7 |
3.2 |
|
Bonds |
0.4 |
0.6 |
|
Net Liquid Assets |
0.9 |
1.6 |
|
Total Assets |
100.0 |
100.0 |
Sectoral Analysis
|
|
|
At 30 April 2017 % |
At 30 April 2016 % |
|
Equities: |
Oil and Gas |
2.2 |
2.7 |
|
|
Basic Materials |
0.6 |
1.2 |
|
|
Industrials |
17.3 |
18.9 |
|
|
Consumer Goods |
8.0 |
7.8 |
|
|
Health Care |
8.9 |
7.0 |
|
|
Consumer Services |
21.1 |
18.8 |
|
|
Financials |
25.5 |
26.8 |
|
|
Technology |
14.9 |
13.3 |
|
|
Telecommunications |
0.2 |
1.3 |
|
|
98.7 |
97.8 |
|
|
Bonds |
0.4 |
0.6 |
|
|
Net Liquid Assets |
0.9 |
1.6 |
|
|
Total Assets |
100.0 |
100.0 |
|
|
List of Investments |
At 30 April 2017
|
Name |
Business |
Growth category |
Fair value £'000 |
% of total assets |
Cumulative % of total assets |
|
|
Amazon.com |
Online retailer |
Rapid |
56,326 |
3.7 |
|
|
|
Prudential |
International financial services |
Stalwart |
50,355 |
3.3 |
|
|
|
Royal Caribbean Cruises |
Cruise line operator |
Cyclical |
48,657 |
3.2 |
|
|
|
Naspers |
Media and e-commerce |
Rapid |
47,399 |
3.1 |
|
|
|
Alphabet |
Online search and platform provider |
Rapid |
37,578 |
2.5 |
|
|
|
SAP |
Enterprise software |
Stalwart |
32,272 |
2.1 |
|
|
|
TSMC |
Semiconductor manufacturer |
Cyclical |
31,555 |
2.1 |
|
|
|
AIA |
Asian insurance provider |
Rapid |
30,660 |
2.0 |
|
|
|
Anthem |
Healthcare insurer |
Stalwart |
30,548 |
2.0 |
|
|
|
CRH |
Diversified building materials |
Cyclical |
30,110 |
2.0 |
26.0 |
|
|
Alibaba |
Online and mobile commerce |
Rapid |
28,245 |
1.9 |
|
|
|
Samsung Electronics |
Consumer and industrial electronic equipment |
Latent |
26,560 |
1.7 |
|
|
|
Moody's |
Credit rating agency |
Stalwart |
25,318 |
1.7 |
|
|
|
MS&AD Insurance |
Non-life insurer |
Latent |
24,923 |
1.6 |
|
|
|
TD Ameritrade |
Online brokerage |
Cyclical |
23,623 |
1.6 |
|
|
|
CarMax |
Used car retailer |
Cyclical |
23,478 |
1.5 |
|
|
|
MercadoLibre |
Latin American e-commerce platform |
Rapid |
22,735 |
1.5 |
|
|
|
Ryanair |
Low cost airline |
Rapid |
22,090 |
1.5 |
|
|
|
|
Social media platform |
Rapid |
21,240 |
1.4 |
|
|
|
Martin Marietta Materials |
Cement and aggregates producer |
Cyclical |
20,221 |
1.3 |
41.7 |
|
|
Visa |
Global electronic payments network |
Stalwart |
18,938 |
1.2 |
|
|
|
Schindler |
Elevator and escalator manufacturer |
Stalwart |
18,504 |
1.2 |
|
|
|
MasterCard |
Global electronic payments network |
Stalwart |
17,855 |
1.2 |
|
|
|
Seattle Genetics |
Biotechnology treatments for cancer |
Rapid |
17,513 |
1.1 |
|
|
|
Teradyne |
Semiconductor testing equipment manufacturer |
Cyclical |
17,398 |
1.1 |
|
|
|
Richemont |
Luxury goods designer and manufacturer |
Cyclical |
17,283 |
1.1 |
|
|
|
Markel |
Speciality insurance |
Cyclical |
17,150 |
1.1 |
|
|
|
iRobot |
Domestic robots |
Rapid |
16,857 |
1.1 |
|
|
|
Ctrip.com International |
Chinese online travel agency |
Rapid |
15,987 |
1.0 |
|
|
|
ICICI Bank |
Banking and financial services |
Rapid |
15,724 |
1.0 |
52.8 |
|
|
Nvidia |
Interactive 3D graphics provider |
Rapid |
15,338 |
1.0 |
|
|
|
Atlas Copco |
Industrial compressors and mining equipment producer |
Cyclical |
15,178 |
1.0 |
|
|
|
EOG Resources |
Oil and gas explorer and producer |
Cyclical |
14,195 |
0.9 |
|
|
|
Baidu |
Chinese internet search engine |
Rapid |
13,859 |
0.9 |
|
|
|
Leucadia National |
Diversified holding and investment company |
Cyclical |
13,658 |
0.9 |
|
|
|
Bank of Ireland |
Retail and commercial bank |
Latent |
13,587 |
0.9 |
|
|
|
First Republic Bank |
Private banking and wealth management |
Cyclical |
13,554 |
0.9 |
|
|
|
MarketAxess |
Electronic bond trading platform |
Rapid |
13,524 |
0.9 |
|
|
|
Apache |
Oil exploration and production |
Latent |
13,415 |
0.9 |
|
|
|
Hays |
Recruitment and human resources |
Cyclical |
13,302 |
0.9 |
62.0 |
|
|
Verisk Analytics |
Data analytics provider |
Stalwart |
13,268 |
0.9 |
|
|
|
Tesla |
Electric vehicle and solution provider |
Rapid |
13,193 |
0.9 |
|
|
|
Lincoln Electric |
Welding equipment manufacturer |
Cyclical |
13,133 |
0.9 |
|
|
|
HDFC |
Indian mortgage provider |
Rapid |
13,062 |
0.9 |
|
|
|
Novo Nordisk |
Pharmaceutical company |
Stalwart |
12,978 |
0.9 |
|
|
|
Yandex |
Internet search and online services |
Rapid |
12,954 |
0.9 |
|
|
|
Sberbank of Russia |
Banking and financial services |
Latent |
12,531 |
0.8 |
|
|
|
Waters |
Liquid chromatography products and services |
Stalwart |
12,507 |
0.8 |
|
|
|
Resmed |
Develops and manufactures medical equipment |
Stalwart |
12,431 |
0.8 |
|
|
|
Svenska Handelsbanken |
Retail bank |
Cyclical |
12,090 |
0.8 |
70.6 |
|
|
Wabtec |
Technology products and services provider for the rail industry |
Cyclical |
11,540 |
0.8 |
|
|
|
Veeco Instruments |
Semiconductor equipment company |
Latent |
11,291 |
0.7 |
|
|
|
CH Robinson Worldwide |
Third party delivery and logistics business |
Cyclical |
10,661 |
0.7 |
|
|
|
Fairfax Financial |
Financial services holding company |
Latent |
10,636 |
0.7 |
|
|
|
Colgate-Palmolive |
Consumer goods |
Stalwart |
10,533 |
0.7 |
|
|
|
SMC |
Factory automation equipment producer |
Cyclical |
10,361 |
0.7 |
|
|
|
Carlsberg |
Brewer |
Latent |
10,254 |
0.7 |
|
|
|
Jardine Strategic Holdings |
Trading company |
Cyclical |
9,948 |
0.7 |
|
|
|
GrubHub |
Online takeaway ordering service |
Rapid |
9,920 |
0.6 |
|
|
|
LendingTree |
Online loan marketplace |
Rapid |
9,802 |
0.6 |
77.5 |
|
|
Bureau Veritas |
Consulting and testing services company |
Stalwart |
9,412 |
0.6 |
|
|
|
Renishaw |
Measurement and calibration equipment manufacturer |
Rapid |
9,410 |
0.6 |
|
|
|
Howard Hughes |
Real estate developer |
Latent |
9,380 |
0.6 |
|
|
|
Cyberagent |
Internet advertising and content |
Rapid |
8,920 |
0.6 |
|
|
|
Toyota Tsusho |
Trading company |
Latent |
8,891 |
0.6 |
|
|
|
Schibsted |
Online media and classifieds |
Rapid |
8,861 |
0.6 |
|
|
|
Deutsche Boerse |
Stock exchange operator |
Cyclical |
8,832 |
0.6 |
|
|
|
Olympus |
Optics manufacturer |
Stalwart |
8,674 |
0.6 |
|
|
|
Brambles |
Pallet pool operator |
Cyclical |
8,524 |
0.6 |
|
|
|
Tsingtao Brewery |
Brewer |
Latent |
8,324 |
0.5 |
83.4 |
|
|
Rolls Royce |
Power systems manufacturer |
Cyclical |
8,273 |
0.5 |
|
|
|
Infineon Technologies |
German semiconductor manufacturer |
Rapid |
8,020 |
0.5 |
|
|
|
BM&F Bovespa |
Stock exchange operator |
Rapid |
7,846 |
0.5 |
|
|
|
Ritchie Bros Auctioneers |
Industrial equipment auctioneer |
Cyclical |
7,724 |
0.5 |
|
|
|
Rohm |
Semiconductor manufacturer |
Latent |
7,705 |
0.5 |
|
|
|
Kansai Paint |
Paint manufacturer |
Stalwart |
7,494 |
0.5 |
|
|
|
PageGroup |
Recruitment consultancy |
Cyclical |
7,314 |
0.5 |
|
|
|
Autohome |
Online auto research platform |
Latent |
7,306 |
0.5 |
|
|
|
M3 |
Online medical database |
Rapid |
7,147 |
0.5 |
|
|
|
Stericycle |
Medical waste management services |
Stalwart |
7,122 |
0.5 |
88.4 |
|
|
Kirby |
Marine shipping company |
Cyclical |
7,027 |
0.5 |
|
|
|
Financial Engines |
Investment advisory firm |
Rapid |
6,791 |
0.4 |
|
|
|
Zillow |
US online real estate services |
Rapid |
6,748 |
0.4 |
|
|
|
Trupanion |
Pet health insurance provider |
Rapid |
6,747 |
0.4 |
|
|
|
HTC |
Mobile handset and visual hardware producer |
Latent |
6,677 |
0.4 |
|
|
|
Qiagen |
Biotechnology equipment |
Rapid |
6,528 |
0.4 |
|
|
|
Sands China |
Casino operator |
Cyclical |
6,374 |
0.4 |
|
|
|
Abiomed |
Manufacturer of medical implant devices |
Rapid |
6,218 |
0.4 |
|
|
|
Dia |
Discount food retailer |
Stalwart |
6,205 |
0.4 |
|
|
|
GRAIL* |
Liquid biopsy cancer testing |
Rapid |
6,184 |
0.4 |
92.5 |
|
|
TripAdvisor |
Online travel review platform |
Rapid |
6,173 |
0.4 |
|
|
|
IP Group |
Intellectual property commercialisation |
Rapid |
6,076 |
0.4 |
|
|
|
Silk Invest Africa Food Fund* |
Africa-focused private equity fund |
Latent |
6,060 |
0.4 |
|
|
|
OC Oerlikon |
Industrial equipment manufacturer |
Latent |
6,035 |
0.4 |
|
|
|
AP Moller-Maersk |
Transport and logistics company |
Latent |
6,026 |
0.4 |
|
|
|
China Biologic Products |
Biopharmaceuticals |
Rapid |
5,995 |
0.4 |
|
|
|
Myriad Genetics |
Genetic testing |
Rapid |
5,718 |
0.4 |
|
|
|
Fiat Chrysler Autos |
Vehicle manufacturer |
Latent |
5,660 |
0.4 |
|
|
|
Japan Exchange |
Stock exchange operator |
Rapid |
5,594 |
0.4 |
|
|
|
Interactive Brokers Group |
Online equity trading platform |
Rapid |
5,593 |
0.4 |
96.5 |
|
|
Line |
Online social media platform |
Rapid |
5,545 |
0.4 |
|
|
|
DistributionNOW |
Oilfield drilling equipment distributor |
Cyclical |
5,503 |
0.4 |
|
|
|
Intuitive Surgical |
Surgical robots |
Rapid |
5,492 |
0.4 |
|
|
|
SiteOne Landscape Supply |
Landscaping supplies distributor |
Cyclical |
4,819 |
0.3 |
|
|
|
Alnylam Pharmaceuticals |
Biotechnology |
Rapid |
4,073 |
0.3 |
|
|
|
MTN |
South African wireless telecom company |
Latent |
3,167 |
0.2 |
|
|
|
Ferro Alloy Resources* |
Vanadium mining |
Cyclical |
1,390 |
0.1 |
|
|
|
Doric Nimrod Air One |
Aircraft leasing |
Latent |
1,242 |
0.1 |
|
|
|
Juridica Investments |
Litigation financing |
Latent |
248 |
- |
|
|
|
Total Equity Investments |
|
|
1,500,892 |
98.7 |
98.7 |
|
|
|
|
|
|
|
|
|
|
Bonds |
|
|
|
|
|
|
|
Credit Suisse 0% Swap Rate Linked Note 2017* |
UK swap rate linked note |
|
6,185 |
0.4 |
|
|
|
Total Bonds |
|
|
6,185 |
0.4 |
|
|
|
Total Investments |
|
|
1,507,077 |
99.1 |
99.1 |
|
|
Net Liquid Assets |
|
|
14,053 |
0.9 |
|
|
|
Total Assets at Fair Value |
|
|
1,521,130 |
100.0 |
100.0 |
|
* Denotes an unlisted security
Key Performance Indicators
The key performance indicators (KPIs) used to measure the progress and performance of the Company over time are established industry measures and are as follows:
- the movement in net asset value per ordinary share on a total return basis;
- the movement in the share price on a total return basis;
- the discount; and
- ongoing charges.
An explanation of these measures can be found the Glossary of Terms on page 56 of the Annual Report and Financial Statements. The one, five and ten year records of the KPIs are shown on pages 12 to 14 of the Annual Report and Financial Statements.
In addition to the above, the Board also has regard to the total return of the Company's principal comparative index (FTSE World Index in sterling terms) and considers the performance of comparable companies.
Future developments of the company
The outlook for the Company is dependent to a significant degree on economic events and the financial markets. Further comments on the outlook for the Company and its investment portfolio are set out in the Chairman's Statement and the Managers' Report above.
Market Purchases of Own Shares
At the last Annual General Meeting the Company was granted authority to purchase up to 32,073,182 ordinary shares (equivalent to approximately 14.99% of its issued share capital), such authority to expire at the Annual General Meeting in respect of the year ending 30 April 2017. No shares were bought back during the year under review and no shares are held in treasury. The principal reason for share buy-backs is to enhance net asset value per share for continuing shareholders by purchasing shares at a discount to the prevailing net asset value.
The Company may hold bought-back shares 'in treasury' and then:
(i) sell such shares (or any of them) for cash (or its equivalent under the Treasury Shares Regulations); or
(ii) cancel the shares (or any of them).
Shares will only be sold from treasury at a premium to net asset value.
Related Party Transactions
The Directors' fees for the year are detailed in the Directors' Remuneration Report on page 27 of the Annual Report and Financial Statements. No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006.
Management fee arrangements
Details of the Investment Management Agreement are set out on page 19 of the Annual Report and Financial Statements. The annual management fee during the period under review was 0.45% of the total assets less current liabilities. With effect from 1 May 2017 the annual management fee is 0.45% on the first £750 million of total assets and 0.33% on the remaining total assets, where total assets is defined as the total value of all assets held less all liabilities (other than any liability in the form of borrowings intended for investment purposes). The management fee is levied on all assets, including any holdings in collective investment schemes (OEICs) managed by Baillie Gifford & Co; however, the class of shares in any such OEICs held by the Company does not attract a management fee. There were no such holdings during the year.
|
|
2017 £'000 |
|
2016 £'000 |
|
|
|
|
|
|
Investment management fee |
6,011 |
|
4,617 |
Principal Risks
As explained on pages 23 and 24 of the Annual Report and Financial Statements there is an ongoing process for identifying, evaluating and managing the risks faced by the Company. The Directors have carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. A description of these risks and how they are being managed or mitigated is set out below:
Financial Risk - the Company's assets consist mainly of listed securities and its principal financial risks are therefore market related and include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. An explanation of those risks and how they are managed is contained in the Financial Instruments section below. To mitigate this risk, the composition and diversification of the portfolio by geography, industry, growth category, holding size and thematic risk category are considered at each Board meeting along with sales and purchases of investments. Individual investments are discussed with the Managers together with their general views on the various investment markets and sectors. A strategy meeting is held annually.
Investment Strategy Risk - pursuing an investment strategy to fulfil the Company's objective which the market perceives to be unattractive or inappropriate, or the ineffective implementation of an attractive or appropriate strategy, may lead to reduced returns for shareholders and, as a result, a decreased demand for the Company's shares. This may lead to the Company's shares trading at a widening discount to their Net Asset Value. To mitigate this risk, the Board regularly reviews and monitors: the Company's objective and investment policy and strategy; the investment portfolio and its performance; the level of discount/premium to Net Asset Value at which the shares trade; and movements in the share register.
Regulatory Risk - failure to comply with applicable legal and regulatory requirements such as the tax rules for investment trust companies, the UKLA Listing rules and the Companies Act could lead to the Company being subject to tax on capital gains, suspension of the Company's Stock Exchange listing, financial penalties or a qualified audit report. To mitigate this risk, Baillie Gifford's Business Risk, Internal Audit and Compliance Departments provide regular reports to the Audit Committee on Baillie Gifford's monitoring programmes. Major regulatory change could impose disproportionate compliance burdens on the Company. In such circumstances representation is made to ensure that the special circumstances of investment trusts are recognised. Shareholder documents and announcements, including the Company's published Interim and Annual Report and Financial Statements, are subject to stringent review processes and procedures are in place to ensure adherence to the Transparency Directive and the Market Abuse Directive with reference to inside information.
Custody and Depositary Risk - safe custody of the Company's assets may be compromised through control failures by the Depositary, including cyber hacking. To mitigate this risk, the Board receives six monthly reports from the Depositary confirming safe custody of the Company's assets held by the Custodian. Cash and portfolio holdings are independently reconciled to the Custodian's records by the Managers. The Custodian's audited internal controls reports are reviewed by Baillie Gifford's Internal Audit Department and a summary of the key points is reported to the Audit Committee and any concerns investigated. In addition, the existence of assets is subject to annual external audit.
Operational Risk - failure of Baillie Gifford's systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets. To mitigate this risk, Baillie Gifford has a comprehensive business continuity plan which facilitates continued operation of the business in the event of a service disruption or major disaster. The Board reviews Baillie Gifford's Report on Internal Controls and the reports by other third party providers are reviewed by Baillie Gifford on behalf of the Board.
Discount Risk - the discount at which the Company's shares trade relative to its Net Asset Value can change. The risk of a widening discount is that it may undermine investor confidence in the Company. To manage this risk, the Board monitors the level of discount at which the shares trade and the Company has authority to buy back its existing shares when deemed by the Board to be in the best interests of the Company and its shareholders.
Political Risk - political change in areas in which the Company invests or may invest may increasingly have practical consequences for the Company. To mitigate this risk, developments are closely monitored and considered by the Board.
Leverage Risk - the Company may borrow money for investment purposes. If the investments fall in value, any borrowings will magnify the extent of this loss. If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings. The Company can also make use of derivative contracts. To mitigate this risk all borrowings require the prior approval of the Board and leverage levels are discussed by the Board and Managers at every meeting. The majority of the Company's investments are in quoted securities that are readily realisable. Further information on leverage can be found below and on page 56 of the Annual Report and Financial Statements.
The Company's maximum and actual leverage levels, in accordance with the Alternative Investment Fund Managers Directive, at 30 April 2017 are shown below:
|
|
|
|
Gross method |
Commitment method |
|
Maximum limit |
|
|
2.5:1 |
2.0:1 |
|
Actual |
|
|
1.1:1 |
1.1:1 |
Viability Statement
Having regard to provision C.2.2 of the UK Corporate Governance Code, published by the Financial Reporting Council in September 2014, the Directors have assessed the prospects of the Company over a three year period. The Directors believe this period to be appropriate as, in the absence of any adverse change to the regulatory environment and the favourable tax treatment afforded to UK investment trusts, it is a period over which they do not expect there to be any significant change to the current principal risks and to the adequacy of the mitigating controls in place. The Directors do not envisage any change in strategy or objectives or any events that would prevent the Company from continuing to operate over that period.
In making this assessment the Directors have taken into account the Company's current position and have conducted a robust assessment of the Company's principal risks and uncertainties (as detailed below), in particular the impact of market risk where a significant fall in global equity markets would adversely impact the value of the investment portfolio. The Directors have also considered the Company's investment objective and policy, the level of demand for the Company's shares, the nature of its assets, its liabilities and projected income and expenditure. The vast majority of the Company's investments are readily realisable and can be sold to meet its liabilities as they fall due, the main liabilities currently being the debenture stock repayable in 2023 and short-term bank borrowings. In addition, substantially all of the essential services required by the Company are outsourced to third party service providers; this allows key service providers to be replaced at relatively short notice where necessary.
Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over at least the next three years.
Going Concern
Having assessed the principal risks and other matters set out in the Viability Statement above, 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 effect the Company's ability to continue to do so over a period of at least twelve months from the date of approval of these Financial Statements.
Financial Instruments
As an investment trust, the Company invests in equities and makes other investments so as to secure its investment objective of capital growth. The Company borrows money when the Board and Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. In pursuing its investment objective, the Company is exposed to a variety of risks that cause short term variation in the Company's net assets and could result in either a reduction in the Company's net assets or a reduction in the profits available for dividend.
These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Company's exposures to these risks but does so in order to reduce the likelihood of a permanent reduction in the Company's net assets rather than to minimise the short term volatility.
The risk management policies and procedures outlined in this note have not changed substantially from the previous accounting period.
Market Risk
The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - currency risk, interest rate risk and other price risk. The Board reviews and agrees policies for managing these risks and the Company's Investment Manager both assesses the exposure to market risk when making individual investment decisions and monitors the overall level of market risk across the investment portfolio on an ongoing basis.
Details of the Company's investment portfolio are shown in note 9 of the Annual Report and Financial Statements.
Currency Risk
Certain of the Company's assets, liabilities and income are denominated in currencies other than sterling (the Company's functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling value of those items.
The Investment Manager monitors the Company's exposure to foreign currencies and reports to the Board on a regular basis. The Investment Manager assesses the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed. However, the currency in which a company's share price is quoted is not necessarily the one in which it earns its profits.
The movement in exchange rates on overseas earnings may have a more significant impact upon a company's valuation than a simple translation of the currency in which the share price of the company is quoted.
Foreign currency borrowings and forward currency contracts are used periodically to limit the Company's exposure to anticipated future changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. Where appropriate, they are used also to achieve the portfolio characteristics that assist the Company in meeting its investment objectives.
Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability is quoted, is shown below.
|
At 30 April 2017 |
Investments £'000 |
Cash and cash equivalents £'000 |
Loans and debentures £'000 |
Other debtors and creditors* £'000 |
Net exposure £'000 |
|
US dollar |
843,453 |
11,271 |
(67,246) |
259 |
787,737 |
|
Japanese yen |
95,254 |
- |
- |
686 |
95,940 |
|
Euro |
112,138 |
- |
- |
491 |
112,629 |
|
Other overseas currencies |
323,717 |
1,790 |
- |
(1,228) |
324,279 |
|
Total exposure to currency risk |
1,374,562 |
13,061 |
(67,246) |
208 |
1,320,585 |
|
Sterling |
132,515 |
2,147 |
(39,810) |
(1,363) |
93,489 |
|
|
1,507,077 |
15,208 |
(107,056) |
(1,155) |
1,414,074 |
* Includes non-monetary assets of £16,000.
|
At 30 April 2016 |
Investments £'000 |
Cash and cash equivalents £'000 |
Loans and debentures £'000 |
Other debtors and creditors* £'000 |
Net exposure £'000 |
|
US dollar |
564,646 |
13,774 |
(46,078) |
384 |
532,726 |
|
Japanese yen |
90,510 |
- |
- |
598 |
91,108 |
|
Euro |
84,587 |
36 |
- |
914 |
85,537 |
|
Other overseas currencies |
212,007 |
- |
- |
133 |
212,140 |
|
Total exposure to currency risk |
951,750 |
13,810 |
(46,078) |
2,029 |
921,511 |
|
Sterling |
127,684 |
2,120 |
(39,777) |
(589) |
89,438 |
|
|
1,079,434 |
15,930 |
(85,855) |
1,440 |
1,010,949 |
* Includes non-monetary assets of £16,000.
Currency Risk Sensitivity
At 30 April 2017, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite effect on the Financial Statement amounts. The analysis is performed on the same basis for 2016.
|
|
2017 £'000 |
|
2016 £'000 |
|
US dollar |
39,387 |
|
26,636 |
|
Japanese yen |
4,797 |
|
4,555 |
|
Euro |
5,631 |
|
4,277 |
|
Other overseas currencies |
16,214 |
|
10,607 |
|
|
66,029 |
|
46,075 |
Interest Rate Risk
Interest rate movements may affect directly:
¾ the fair value of the investments in fixed interest rate securities;
¾ the level of income receivable on cash deposits;
¾ the fair value of derivative instruments linked to interest rates;
¾ the fair value of the Company's fixed-rate borrowings; and
¾ the interest payable on any variable rate borrowings which the Company may take out.
Interest rate movements may also impact upon the market value of the Company's investments other than its fixed income securities. The effect of interest rate movements upon the earnings of a company may have a significant impact upon the valuation of that company's equity. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions and when entering borrowing agreements. The Board reviews on a regular basis the amount of investments in cash and fixed income securities and the income receivable on cash deposits, floating rate notes and other similar investments. The Company finances part of its activities through borrowings at approved levels. The amount of such borrowings and the approved levels are monitored and reviewed regularly by the Board.
Movements in interest rates, to the extent that they affect the fair value of the Company's fixed rate borrowings, may also affect the amount by which the Company's share price is at a discount or a premium to the net asset value (assuming that the Company's share price is unaffected by movements in interest rates).
The interest rate risk profile of the Company's financial assets and liabilities at 30 April is shown below.
Financial Assets
|
|
2017 |
2016 |
||||
|
|
Fair value £'000 |
Weighted average interest rate |
Weighted average period until maturity |
Fair value £'000 |
Weighted average interest rate |
Weighted average period until maturity |
|
Fixed rate: |
|
|
|
|
|
|
|
UK swap rate linked note* |
6,185 |
7.2% |
5 months |
5,933 |
7.2% |
17 months |
|
Floating rate: |
|
|
|
|
|
|
|
UK swap rate linked note* |
- |
n/a |
5 months |
- |
n/a |
17 months |
|
Fixed interest collective investment schemes: |
|
|
|
|
|
|
|
US dollar denominated funds |
- |
- |
- |
1,299 |
- |
3 months |
* This instrument comprises a zero coupon note issued by Credit Suisse and an option on sterling interest rate swaps. The zero coupon element has a redemption value of £6.25m (fair value - £6,185,000) and the redemption value of the interest rate swap element (fair value - £nil) is based on a formula linked to thirty year sterling interest swap rates with higher amounts payable as rates rise. Prior to redemption, the value of the interest rate swap element will vary depending on several factors such as the level of swap rates and the implied volatility of interest rate swap options.
Financial Liabilities
The interest rate risk profile of the Company's bank loans and debentures (at amortised cost) and the maturity profile of the undiscounted future cash flows in respect of the Company's contractual financial liabilities at 30 April are shown below.
Interest Rate Risk Profile
|
|
2017 £'000 |
2016 £'000 |
|
Floating rate - US dollar |
67,246 |
46,078 |
|
Fixed rate - sterling |
39,810 |
39,777 |
|
|
107,056 |
85,855 |
Maturity Profile
|
|
2017 Within 1 year £'000 |
2017 Between 1 And 5 years £'000 |
2017 More than 5 years £'000 |
2016 Within 1 Year £'000 |
2016 Between 1 And 5 years £'000 |
2016 More than 5 years £'000 |
|
Repayment of loans and debentures |
67,246 |
- |
40,000 |
46,078 |
- |
40,000 |
|
Interest on loans and debentures |
2,955 |
10,200 |
3,825 |
2,764 |
10,200 |
6,375 |
|
|
70,201 |
10,200 |
43,825 |
48,842 |
10,200 |
46,375 |
Interest Rate Risk Sensitivity
An increase of 100 basis points in bond/swap yields as at 30 April 2017 would have increased total net assets and total return on ordinary activities by £45,000 (2016 - £3,861,000) and would have increased the net asset value per share (with borrowings at fair value) by 1.1p (2016 - 3.0p). A decrease of 100 basis points would have increased total net assets and total return on ordinary activities by £90,000 (2016 - increased by £174,000) and would have decreased net asset value per share (with borrowings at fair value) by 1.1p (2016 - 1.1p).
Other Price Risk
Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Company's net assets. The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment positioning to ensure consistency with the Company's objective and investment policy.
Other Price Risk Sensitivity
A full list of the Company's investments is shown above. In addition, various analyses of the portfolio by growth category, thematic risk category, geography and broad industrial or commercial sector are contained in the Strategic Report of the Annual Report and Financial Statements. There were no derivative financial instruments open during the year other than the interest rate swap element of the Credit Suisse Note, as described above. 105.2% of the Company's net assets are invested in quoted equities (2016 - 105.3%). A 5% increase in quoted equity valuations at 30 April 2017 would have increased total assets and total return on ordinary activities by £74,363,000 (2016 - £53,227,000). A decrease of 5% would have had an equal but opposite effect.
Liquidity Risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not significant as the majority of the Company's assets are investments in quoted securities that are readily realisable. The Board also sets parameters for the degree to which the Company's net assets are invested in quoted equities. The Company has the power to take out borrowings, which give it access to additional funding when required. The Company's current borrowing facilities are detailed in notes 11 and 12 of the Annual Report and Financial Statements and the maturity profile of its borrowings is set out above.
Borrowings falling due within one year:
|
|
2017 £'000 |
2016 £'000 |
|
National Australia Bank Limited loan |
67,246 |
46,078 |
Borrowing facilities
At 30 April 2017 the Company had a 5 year £100 million floating rate loan facility with National Australia Bank Limited, which expires on 30 November 2020.
At 30 April 2017 drawings were as follows:
¾ National Australia Bank Limited: US$87 million at an interest rate of 2.35622% (2016 - US$67.5 million at an interest rate of 1.8351%)
The main covenants relating to the above loans are that total borrowings shall not exceed 30% of the Company's adjusted net asset value and the Company's minimum adjusted net asset value shall be £450 million.
There were no breaches of loan covenants during the year.
Borrowings falling due after more than one year:
|
|
Repayment date |
Nominal rate |
Effective rate |
2017 £'000 |
2016 £'000 |
|
£40 million 6 3/8% debenture stock 2023 |
1/9/2023 |
6.375% |
6.5% |
39,810 |
39,777 |
Debenture Stock
The debenture stock is stated at amortised cost (see note 1(f) on page 38 of the Annual Report and Financial Statements); the cumulative effect is to decrease the carrying amount of borrowings by £190,000 (2016 - £223,000). The debenture stock is secured by a floating charge over the assets of the Company. Under the terms of the Debenture Agreement, total borrowings should not exceed net assets and the Company cannot undertake share buy-backs if this would result in total borrowings exceeding 66.67%.
Credit Risk
This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. This risk is managed as follows:
¾ where the Investment Manager makes an investment in a bond or other security with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question;
¾ the Depositary is liable for the loss of financial instruments held in custody. The Depositary will ensure that any delegate segregates the assets of the Company. The Depositary has delegated the custody function to Bank of New York Mellon SA/NV London Branch. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed. The Investment Managers monitor the Company's risk by reviewing the custodian's internal control reports and reporting their findings to the Board;
¾ investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Manager. Transactions are ordinarily done on a delivery versus payment basis whereby the Company's custodian bank ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities away from the Company is completed;
¾ the creditworthiness of the counterparty to transactions involving derivatives, structured notes and other arrangements, wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest, are subject to rigorous assessment by the Investment Manager; and
¾ cash is only held at banks that have been identified by the Managers as reputable and of high credit quality.
Credit Risk Exposure
The amount that best represents the Company's maximum exposure to direct credit risk at 30 April was:
|
|
2017 £'000 |
2016 £'000 |
|
Fixed interest investments |
6,185 |
7,232 |
|
Cash and cash equivalents |
15,208 |
15,930 |
|
Debtors and prepayments* |
7,816 |
3,330 |
|
|
29,209 |
26,492 |
* Includes non-monetary assets of £16,000 (2016 - £16,000).
None of the Company's financial assets are past due or impaired.
Fair value of financial assets and financial liabilities
The Directors are of the opinion that there is no difference between the amounts at which the financial assets and liabilities of the Company are carried in the Balance Sheet and their fair values, with the exception of fixed rate borrowings. The fair values of the Company's borrowings are shown below. The fair value of the 6 3/8% debenture stock 2023 is based on the closing market offer price on the London Stock Exchange.
|
|
2017 |
2016 |
||||
|
|
Nominal value £'000 |
Book value £'000 |
Fair value £'000 |
Nominal value £'000 |
Book value £'000 |
Fair value £'000 |
|
Bank loans due within one year |
67,246 |
67,246 |
67,246 |
46,078 |
46,078 |
46,078 |
|
6 3/8% debenture stock 2023* |
40,000 |
39,810 |
48,600 |
40,000 |
39,777 |
44,800 |
|
|
107,246 |
107,056 |
115,846 |
86,078 |
85,855 |
90,878 |
* Financial liabilities stated in the Balance Sheet at amortised cost (book value).
Capital Management
The capital of the Company is its share capital and reserves as set out in note 14 of the Annual Report and Financial Statements together with its borrowings (see above). The objective of the Company is to invest globally to achieve capital growth, which takes priority over income and dividends. The Company's investment policy is set out on page 15 of the Annual Report and Financial Statements. In pursuit of the Company's objective, the Board has a responsibility for ensuring the Company's ability to continue as a going concern and details of the related risks and how they are managed are set out on pages 15, 16, 23 and 24 of the Annual Report and Financial Statements.
The Company has the ability to issue and buy back its shares (see page 20 of the Annual Report and Financial Statements) and any changes to the share capital during the year are set out in note 13 of the Annual Report and Financial Statements. The Company does not have any externally imposed capital requirements other than the covenants on its loans and debentures which are detailed above.
Investments in securities are financial assets held at fair value through profit or loss. In accordance with Financial Reporting Standard 102, the tables below provide an analysis of these investments based on the fair value hierarchy described below, which reflects the reliability and significance of the information used to measure their fair value.
Investments
|
As at 30 April 2017 |
Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
|
Listed equities |
1,487,258 |
- |
- |
1,487,258 |
|
Unlisted equities |
- |
- |
13,634 |
13,634 |
|
Unlisted debt securities |
- |
- |
6,185 |
6,185 |
|
Total financial asset investments |
1,487,258 |
- |
19,819 |
1,507,077 |
|
As at 30 April 2016 |
Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
|
Listed equities |
1,064,545 |
- |
- |
1,064,545 |
|
Unlisted equities |
- |
- |
7,657 |
7,657 |
|
Unlisted debt securities |
- |
- |
7,232 |
7,232 |
|
Total financial asset investments |
1,064,545 |
- |
14,889 |
1,079,434 |
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 and 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).
The valuation techniques used by the Company are explained in the accounting policies on page 38 of the Annual Report and Financial Statements.
Statement of Directors' Responsibilities in Respect of the Annual Report and Financial Statements
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have prepared the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law). Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the Financial Statements, the Directors are required to:
¾ select suitable accounting policies and then apply them consistently;
¾ state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the Financial Statements;
¾ make judgements and accounting estimates that are reasonable and prudent; and
¾ prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements and the Directors' Remuneration Report comply with the Companies Act 2006.
The Directors are also responsible both for safeguarding the assets of the Company and for the maintenance and integrity of the Company's website, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities (in the case of the safeguarding of assets) and also for the preservation of the website integrity.
Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
The Directors consider that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed within the Directors and Management section of the Annual Report and Financial Statements, confirm that, to the best of their knowledge:
¾ the Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and
¾ the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
On behalf of the Board
JGD Ferguson
Chairman
27 June 2017
Income statement
|
|
For the year ended 30 April 2017 |
For the year ended 30 April 2016 |
||||
|
|
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
Gains/(losses) on investments |
- |
403,486 |
403,486 |
- |
(10,799) |
(10,799) |
|
Currency (losses)/gains |
- |
(3,264) |
(3,264) |
- |
1,655 |
1,655 |
|
Income |
17,593 |
- |
17,593 |
15,149 |
- |
15,149 |
|
Investment management fee |
(6,011) |
- |
(6,011) |
(4,617) |
- |
(4,617) |
|
Other administrative expenses |
(1,261) |
- |
(1,261) |
(1,150) |
- |
(1,150) |
|
Net return before finance costs and taxation |
10,321 |
400,222 |
410,543 |
9,382 |
(9,144) |
238 |
|
Finance costs of borrowings |
(3,910) |
- |
(3,910) |
(3,291) |
- |
(3,291) |
|
Net return on ordinary activities before taxation |
6,411 |
400,222 |
406,633 |
6,091 |
(9,144) |
(3,053) |
|
Tax on ordinary activities |
(1,368) |
- |
(1,368) |
(1,137) |
- |
(1,137) |
|
Net return on ordinary activities after taxation |
5,043 |
400,222 |
405,265 |
4,954 |
(9,144) |
(4,190) |
|
Net return per ordinary share (note 2) |
2.36p |
187.05p |
189.41p |
2.31p |
(4.27p) |
(1.96p) |
|
Note: Dividends per share paid and payable in respect of the year (note 3) |
1.25p |
|
|
1.50p |
|
|
The total column of this statement represents the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in this statement derive from continuing operations.
A Statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement.
|
Balance sheet |
|
|
At 30 April 2017 £'000 |
At 30 April 2016 £'000 |
|
Fixed assets |
|
|
|
Investments held at fair value through profit or loss |
1,507,077 |
1,079,434 |
|
Current assets |
|
|
|
Debtors |
7,816 |
3,330 |
|
Cash and cash equivalents |
15,208 |
15,930 |
|
|
23,024 |
19,260 |
|
Creditors |
|
|
|
Amounts falling due within one year (note 4) |
(76,217) |
(47,968) |
|
Net current liabilities |
(53,193) |
(28,708) |
|
Total assets less current liabilities |
1,453,884 |
1,050,726 |
|
Creditors |
|
|
|
Amounts falling due after more than one year (note 4) |
(39,810) |
(39,777) |
|
Net assets |
1,414,074 |
1,010,949 |
|
Capital and reserves |
|
|
|
Called up share capital |
10,698 |
10,698 |
|
Share premium account |
11,100 |
11,100 |
|
Capital redemption reserve |
8,700 |
8,700 |
|
Capital reserve |
1,335,036 |
934,814 |
|
Revenue reserve |
48,540 |
45,637 |
|
Shareholders' funds |
1,414,074 |
1,010,949 |
|
Net asset value per ordinary share (after deducting borrowings at fair value) |
656.8p |
470.1p |
|
Net asset value per ordinary share (after deducting borrowings at par) |
660.8p |
472.4p |
|
Ordinary shares in issue (note 5) |
213,963,859 |
213,963,859 |
|
Statement of changes in equity |
For the year ended 30 April 2017
|
|
Called up share £'000 |
Share premium account £'000 |
Capital redemption reserve £'000 |
Capital reserve £'000 |
Revenue reserve £'000 |
Shareholders' £'000 |
|
Shareholders' funds at 1 May 2016 |
10,698 |
11,100 |
8,700 |
934,814 |
45,637 |
1,010,949 |
|
Net return on ordinary activities after taxation |
- |
- |
- |
400,222 |
5,043 |
405,265 |
|
Dividends paid during the year (note 3) |
- |
- |
- |
- |
(2,140) |
(2,140) |
|
Shareholders' funds at 30 April 2017 |
10,698 |
11,100 |
8,700 |
1,335,036 |
48,540 |
1,414,074 |
For the year ended 30 April 2016
|
|
Called up share £'000 |
Share premium account £'000 |
Capital redemption reserve £'000 |
Capital reserve £'000 |
Revenue reserve £'000 |
Shareholders' £'000 |
|
Shareholders' funds at 1 May 2015 |
10,698 |
11,100 |
8,700 |
943,958 |
49,135 |
1,023,591 |
|
Net return on ordinary activities after taxation |
- |
- |
- |
(9,144) |
4,954 |
(4,190) |
|
Dividends paid during the year |
- |
- |
- |
- |
(8,452) |
(8,452) |
|
Shareholders' funds at 30 April 2016 |
10,698 |
11,100 |
8,700 |
934,814 |
45,637 |
1,010,949 |
|
Cash flow statement |
|
|
Year ended 30 April 2017 |
Year ended 30 April 2016 |
||
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Cash flows from operating activities |
|
|
|
|
|
Net return on ordinary activities before taxation |
|
406,633 |
|
(3,053) |
|
Net (gains)/losses on investments |
|
(403,486) |
|
10,799 |
|
Currency losses/(gains) |
|
3,264 |
|
(1,655) |
|
Amortisation of fixed income book cost |
|
(409) |
|
(353) |
|
Finance costs of borrowings |
|
3,910 |
|
3,291 |
|
Overseas tax incurred |
|
(1,348) |
|
(1,125) |
|
Changes in debtors and creditors |
|
627 |
|
(1,257) |
|
Cash from operations |
|
9,191 |
|
6,647 |
|
Interest paid |
|
(3,858) |
|
(3,214) |
|
Net cash inflow from operating activities |
|
5,333 |
|
3,433 |
|
Cash flows from investing activities |
|
|
|
|
|
Acquisitions of investments |
(183,649) |
|
(209,105) |
|
|
Disposals of investments |
161,830 |
|
215,791 |
|
|
Net cash (outflow)/inflow from investing activities |
|
(21,819) |
|
6,686 |
|
Cash flows from financing activities |
|
|
|
|
|
Equity dividends paid |
(2,140) |
|
(8,452) |
|
|
Shares purchased for cancellation |
- |
|
(2) |
|
|
Borrowings drawn down/(repaid) |
15,608 |
|
(39,536) |
|
|
Net cash inflow/(outflow) from financing activities |
|
13,468 |
|
(47,990) |
|
Decrease in cash and cash equivalents |
|
(3,018) |
|
(37,871) |
|
Exchange movements |
|
2,296 |
|
2,986 |
|
Cash and cash equivalents at 1 May |
|
15,930 |
|
50,815 |
|
Cash and cash equivalents at 30 April |
|
15,208 |
|
15,930 |
|
Notes to the financial statements |
|
1. |
The Financial Statements for the year to 30 April 2017 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. The accounting policies adopted, which are set out on pages 38 and 39 of the Annual Report and Financial Statements, are consistent with those of the previous financial year. The Company has early adopted the amendments to section 34 of FRS 102 regarding fair value hierarchy disclosures. |
|||||||
|
|
|
|
|
|
||||
|
2. |
Net Return per Ordinary Share |
2017 |
|
2016 |
||||
|
Revenue return |
2.36p |
|
2.31p |
|||||
|
Capital return |
187.05p |
|
(4.27p) |
|||||
|
Total return |
189.41p |
|
(1.96p) |
|||||
|
Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £5,043,000 (2016 - £4,954,000) and on 213,963,859 (2016 - 213,963,859) ordinary shares of 5p, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on the net capital gain for the financial year of £400,222,000 (2016 - loss of £9,144,000) and on 213,963,859 (2016 - 213,963,859) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no dilutive or potentially dilutive shares in issue. |
||||||||
|
3. |
Ordinary Dividends
|
2017 |
2016 |
2017 £'000 |
2016 £'000 |
|||
|
Amounts recognised as distributions in the year: |
|
|
|
|
||||
|
Previous year's final (paid 5 August 2016) |
1.00p |
3.45p |
2,140 |
7,382 |
||||
|
Interim |
- |
0.50p |
- |
1,070 |
||||
|
|
1.00p |
3.95p |
2,140 |
8,452 |
||||
|
|
We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £5,043,000 (2016 - £4,954,000).
|
|||||||
|
|
Ordinary Dividends
|
2017 |
2016 |
2017 £'000 |
2016 £'000 |
|||
|
Amounts paid and payable in respect of the financial year: |
|
|
|
|
||||
|
Interim |
- |
0.50p |
- |
1,070 |
||||
|
Proposed final (payable 4 August 2017) |
1.25p |
1.00p |
2,675 |
2,140 |
||||
|
|
1.25p |
1.50p |
2,675 |
3,210 |
||||
|
|
If approved, the recommended final dividend on ordinary shares will be paid on 4 August 2017 to shareholders on the register at the close of business on 7 July 2017. The ex-dividend date is 6 July 2017. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 14 July 2017. |
|||||||
|
4. |
At 30 April 2017 the book value of the Company's borrowings amounted to £107m (2016 - £86m), comprising a £40m 6 3/8% debenture stock repayable in 2023 (2016 - £40m) and a short-term bank loan of US$87m (2015 - ¥67.5bn). The fair value of borrowings at 30 April 2017 was £116m (2016 - £91m). |
|||||||
|
5. |
At 30 April 2017 the Company had authority to buy back 32,073,182 ordinary shares, being 14.99% of the shares in issue at the year end, and to allot 21,396,385 ordinary shares without application of pre-emption rights, being 10% of the shares in issue at the year end. No shares were bought back or allotted during the year. Under the provisions of the Company's Articles of Association share buy-backs are funded from the capital reserve. |
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6. |
None of the views expressed in this document should be construed as advice to buy or sell a particular investment. |
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‡ 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.
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