Half-year Report

RNS Number : 5042Z

Oryx International Growth Fund Ld

15 December 2017

 

15 December 2017

FOR IMMEDIATE RELEASE

RELEASED BY BNP PARIBAS SECURITIES SERVICES S.C.A., GUERNSEY BRANCH

HALF-YEARLY RESULTS ANNOUNCEMENT

THE BOARD OF DIRECTORS OF Oryx International Growth Fund Limited ANNOUNCE UNAUDITED CONDENSED HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

A copy of the Company's Unaudited Condensed Half Yearly Financial Report will be available via the following link:

www.oryxinternationalgrowthfund.co.uk

HALF-YEARLY BOARD REPORT

FINANCIAL HIGHLIGHTS, PERFORMANCE SUMMARY AND DIVIDEND HISTORY

Financial highlights

Share buybacks

In the six month period ended 30 September 2017, Oryx International Growth Fund Limited (the "Company") carried out 2 share buybacks, resulting in a total reduction of 444,000 shares for a cost of £2,782,500. These shares were subsequently cancelled.

(£ in millions, except per share data and the number of Ordinary Shares in issue)	At 30 September 2017	At 31 March 2017
Number of Ordinary Shares in issue	14,415,125	14,859,125
Market capitalisation1
- Ordinary Shares	100.55	95.1
Net Asset Value ("NAV") attributable to shareholders
- Ordinary Shares	123.59	119.23
Investments	120.52	110.54
Cash and cash equivalents	3.37	8.95
NAV per share attributable to shareholders
- Ordinary Shares	8.57	8.02
Share Price	6.98	6.40
Discount to NAV (based on published NAV)	(20.10)%	(21.86)%
Earnings per share	0.49	1.10

Dividend history

No Ordinary Share dividend was declared during the period. 

¹ - Source: Bloomberg

 

CHAIRMAN'S STATEMENT

It is again my pleasure to report a good set of results for the six months ended 30 September 2017. The net asset value per share increased by 6.9% which compares favourably with the rise in appropriate indices. These results consolidate a period of strong growth over the last five years where the Company's NAV has increased by 120%.

As has been stated on many occasions in the past, the success of this Company is derived from investing in situations where the Manager, Harwood Capital, led by Christopher Mills, is able to influence the maximisation of value in our holdings. This long term approach has been very successful and has given shareholders very strong returns over the last five years. Harwood Capital continue to look for new investments at attractive prices but this process can be time consuming and, in a rising market, frustrating. As is reported below, there are grounds for optimism in the medium term as investments continue to mature with good prices being achieved on exit and new opportunities identified.

We continue to buy back shares and during the period, the Company purchased for cancellation 444,000 shares at an average discount of 18%. This policy continues to benefit shareholders.

In accordance with our long established policy, the directors are not recommending a dividend.

Nigel Cayzer

Chairman

15 December 2017

executive sUMMARY

This Executive Summary is designed to provide information about the Company's business and results for the six month period ended 30 September 2017. It should be read in conjunction with the Chairman's Statement and the Investment Manager's Report which gives a detailed review of investment activities for the period and an outlook for the future. 

Corporate summary

The Company is a Guernsey Authorised Closed-Ended Collective Investment Scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended, and the Authorised Closed Ended Investment Scheme Rules 2008 issued by the Guernsey Financial Services Commission. It was incorporated and registered with limited liability in Guernsey on 2 December 1994, with registration number 28917. The Company has a premium listing on the Main Market of the London Stock Exchange.

 

The Company's share capital is denominated in Sterling and each Ordinary Share carries equal voting rights.

The Investment Manager and Investment Adviser during the period was Harwood Capital LLP (the "Investment Manager" and the "Investment Adviser") a United Kingdom limited liability partnership incorporated under the Limited Partnerships Act 2000 (partnership number OC304213) and regulated by the Financial Conduct Authority.

Harwood Capital LLP was authorised by the Financial Conduct Authority ("FCA"), on 27 October 2014, as a Small Authorised UK Alternative Investment Fund Manager ('AIFM') under the Alternative Investment Fund Managers Directive (the 'AIFMD') and the Company has been included in Harwood Capital LLP's Schedule of Alternative Investment Funds ('AIFs').  As a Small Authorised UK AIFM, Harwood Capital LLP is not subject to the full scope of the Directive but must report to the FCA annually on the Company and the other AIFs that it manages.

Significant events

In the six month period ended 30 September 2017, the Company carried out 2 share buybacks, resulting in a total reduction of 444,000 shares for a cost of £2,782,500. These shares were subsequently cancelled. Please refer to note 10 for more detail.

Company investment objective and policy

The investment objective of the Company is to seek to generate consistently high absolute returns whilst maintaining a low level of risk for shareholders.

The Company principally invests in small and mid-size quoted and unquoted companies in the United Kingdom and the United States. The Investment Manager targets companies that have fundamentally strong business models, but where there may be specific factors which are constraining the maximisation or realisation of shareholder value, which may be realised through the pursuit of an activist shareholder agenda by the Investment Manager. Dividend income is a secondary consideration when making investment decisions.

 

Director interests

The Board comprises seven non-executive Directors, five of whom are independent: Nigel Cayzer (Chairman), Walid Chatila, Rupert Evans, John Grace and John Radziwill. Christopher Mills is an employee of the Investment Manager and Sidney Cabessa is a Director of Harwood Capital Management Limited and are therefore not regarded as independent.  Information on each director is presented below.

Walid Chatila, Rupert Evans and John Radziwill are members of the Audit Committee and Nomination Committee. Nigel Cayzer, Sidney Cabessa, and John Grace are also members of the Nomination Committee.

Christopher Mills is a Partner and Chief Executive Officer of the Investment Manager and Investment Adviser.  Harwood Capital LLP is entitled to fees as detailed in notes 4 and 5. Rupert Evans is a consultant to the law firm Mourant Ozannes, the legal adviser to the Company.

No fees were paid or are payable to Harwood Capital Management Limited where Sidney Cabessa is a director. (30 September 2016: Nil)

Information on the Directors' remuneration is detailed in note 8. Other than fees payable in the ordinary course of business, there have been no material transactions with these related parties.

The Company has not set any requirements or guidelines for Directors to own shares in the Company. As at the date of approval of the Half-Yearly Financial Report, Directors and their connected persons held the following number of Ordinary Shares in the Company:

Director	Directors' holdings in the Company's Ordinary Shares
Christopher Mills	328,716
John Grace 1	130,000 346,607

¹ John Grace holds a beneficial interest of 130,000 Ordinary Shares.  Mr Grace is also a member of a class of beneficiaries which holds an interest in 346,607 Ordinary Shares.

Principal risks and uncertainties

When considering the total return of the Company, the Board takes account of the risk which has been taken in order to achieve that return. The Board looks at the following risk factors as listed below:

·     Investment activity and performance

·     Level of discount or premium

·     Market price risk

Information on these risks and how they are managed is given in the Annual Report and Financial Statements for the year ended 31 March 2017. In the view of the Board, these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were in the six months under review.

Going concern

Under the UK Corporate Governance Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern from the date of approval of the condensed financial statements.

The Directors have considered the Company's investment objective and risk management policy, its assets and the expected income and return from its investments. The Directors are of the opinion that the Company is able to meet its liabilities and ongoing expenses as they fall due and they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, these financial statements have been prepared on a going concern basis and the Directors believe it is appropriate to continue to adopt this basis for a period of at least 12 months from the date of approval of these financial statements.

The special resolution outlined in Article 51 of the Articles of Incorporation was not passed at the AGM on 31 August 2017. Hence, the Company will continue its operations until the 2019 AGM when the special resolution outlined in Article 51 will be proposed to the shareholders again.

Events after the reporting date

The Directors are not aware of any developments that might have a significant effect on the operations of the Company in subsequent financial periods not already disclosed in this report or the attached condensed financial statements.

Future strategy

The Board continues to believe that the investment strategy and policy adopted by the Company is appropriate for and is capable of meeting the Company's investment objective.

The overall strategy remains unchanged and it is the Board's assessment that the Investment Manager resources are appropriate to properly manage the Company's portfolio in the current and anticipated investment environment.

Please refer to the Investment Manager's report for detail regarding performance to date of the investment portfolio and the main trends and factors likely to affect those investments.

BOARD MEMBERS

Directors

All Directors are non-executive.

Nigel Cayzer (Chairman)

British

Nigel Cayzer is Chairman of Aberdeen Asian Smaller Companies Investment Trust PLC. He is also a director of a number of private companies. He has been Chairman or a director of a number of Investment Companies and was Chairman of Maggie's, a leading cancer charity, from 2005 until 2014.

Sidney Cabessa

French

Sidney Cabessa is also a director of Club-Sagem and Mercator/Nature et découvertes.  He was Chairman of CIC Finance, an Investment Fund and a subsidiary of French banking group, CIC - Credit Mutuel and was previously a Director of other investment companies.

Walid Chatila

Canadian

Walid Chatila has more than 11 years of international audit and special assignment experience in the Middle East and North America. He is a Certified Public Accountant (Texas 1984) and a Certified Professional Accountant (Ontario 1991). From 1994 to 2006, he was the Finance Director of Emirates Holdings in Abu Dhabi, United Arab Emirates, and between 2006 and 2011, he assumed the role of General Manager of Al Nowais Investment LLC. He is currently advisor to the Chairman of Arab Development Establishment in Abu Dhabi.

Rupert Evans

British

Rupert Evans is a Guernsey Advocate and was a partner in the firm of Ozannes between 1982 and 2003, since then he has been a consultant to Ozannes (now Mourant Ozannes). He is a non-executive director of a number of other investment companies some of which are quoted on recognised stock exchanges. He is a Guernsey resident.

Christopher Mills

British

Christopher Mills is a Partner and the Chief Executive Officer of Harwood Capital LLP.  He is also Chief Investment Officer of North Atlantic Smaller Companies Investment Trust plc ("NASCIT"). NASCIT is the winner of numerous Micropal and S&P Investment Trust awards.  In addition, he is a non-executive director of numerous UK companies which are either currently, or have in the past five years been, publicly quoted.

John Radziwill

British

John Radziwill is currently a director of INTL FC Stone, Goldcrown Group Limited, Fourth Street Capital Ltd, Fifth Street Capital Ltd and Vendor Safe Technologies LLC. In the past ten years, he also served as a director of Acquisitor Plc and Acquisitor Holdings (Bermuda) Ltd, Air Express International Corp., Radix Ventures Inc, Baltimore Capital Plc, Lionheart Group Inc, USA Micro Cap Value Co Ltd and Radix Organisation Inc. Mr Radziwill is a member of the Bar of England and Wales.

John Grace

New Zealander

John Grace is actively involved in the management of several global businesses including asset management, financial services, and real estate. He is a Director and Founder of Sterling Grace International Ltd. Sterling Grace and its affiliates manage investments for high net-worth investors, institutions and investment partnerships. The company is active in global money management, financial services, private equity and real estate investments. He is also Chairman of Trustees Executors Holdings Ltd, owner of the premier and oldest New Zealand trust company established in 1882. It is the market leader in the corporate trust business. Its clients include government divisions, corporations and banks. The company is active in wholesale financial services including trust accounting, securities custody and mutual fund registry. It is also actively engaged in the personal trust business. Mr Grace graduated from Georgetown University. Mr Grace has served as a director of numerous public companies and charities. He currently supports genetic research and education initiatives in science at the university of Lausanne, EPFL École polytechnique fédérale de Lausanne and CERN, the European Organization for Nuclear Research.

INVESTMENT MANAGER'S REPORT

During the six month period under review, the net asset value per share rose by 6.9% which compares favourably with the rise in appropriate indices.

Quoted equities:

The major success for the period was a 100% rise in the value of Quantum Pharma following a takeover bid.  Other stocks that performed well include EKF Diagnostics Holdings Plc (+10%), Minds Plus Machines Group (+20%), Bioquell Plc (+50%), Anpario Plc (+30%) and Ten Entertainment Group which is up 13% since the IPO in early April.

The successes were offset by weakness in our two wealth management stocks, Harwood Wealth Management Group Plc and Frenkel Topping Group Plc which fell by around 15%. Lakehouse Plc also fell by over 25% due to its modest exposure to the Grenfell Towers disaster, although the share price has recovered in October.  Augean Plc also fell by over 50% following an HMRC notice that it has underpaid landfill tax. The company intends to vigorously defend its position so we are optimistic that there could be a substantial recovery from the current price.

Unquoted equities:

No new investments were made during the period. Unfortunately, it was necessary to write down Sherwood Holdings Limited due to poor trading. This was partly offset by an increase in the valuation of Jaguar Holdings Limited as a result of significant new contract wins.

Outlook:

We continue to believe that equities are fairly valued and there is significant market risk where companies report disappointing results.

MIFID II will, in our opinion, further reduce market liquidity and therefore lead to increased volatility.  The short term impact of this on the portfolio might be unfavourable although, in the long term, we believe it will create significant opportunities given our different investment strategy.

Finally, we continue to expect further corporate activity over the next twelve months which should help build the net asset value over the medium term.

Harwood Capital LLP

15 December 2017

LARGEST EQUITY HOLDINGS

As at 30 September 2017

M J Gleeson Plc

Gleeson is a market leader in building affordable homes in the North of England. The company continues to perform well relative to market expectations. Recent results confirmed a significantly higher than expected dividend which should support further growth in the share price over the medium term.

Quantum Pharma Plc

The company is being taken over by Clinigen Group plc with the proceeds expected prior to the end of the calendar year.

EKF Diagnostics Holdings Plc

The company is a leading supplier of point of care product for the hemoglobin and diabetes markets. Recent results have been very strong. The company has no net debt with cash balances rising strongly as the company completes its capital expenditure programme.

Sportech Plc

The company provides services to the gaming industry. Following the sale of its UK business, the company is significantly reducing its cost base which should result in a significant improvement in profitability over the next twelve months. 

The company also has very substantial cash balances which are expected to be returned to shareholders in the near future.

Satellite Solutions Worldwide Group Ltd

The company provides fast broadband services for people living in remote locations. The company is a market leader with excellent prospects due to strong organic growth and add-on acquisitions.

Minds Plus Machines Group

The company is a worldwide company selling domain names including .London and .VIP.  In particular .VIP has been very popular in China. The company has substantial net cash balances and is now profitable.

TEN Entertainment Group Plc

The company is the second largest indoor bowling business. The stock has performed well since the IPO and the recent trading statement shows that good progress is being made in the current year.

Goals Soccer Centres Plc

The company is the leading five-a-side soccer business in the UK. The company is in the midst of a major turnaround following years of under investment in the sites. A recent joint venture with City Football in the USA could materially improve profitability over the long term. 

Frenkel Topping Group Plc

The company is a market leader in providing financial advisory services to people who have suffered catastrophic injuries. In addition, the company has a fund management business that is growing rapidly. The company has substantial net cash with profits also growing rapidly.

Lakehouse Plc

The company provides compliance services mainly for the public sector. The share price was adversely impacted by the Grenfell Tower disaster but has recently won substantial new contracts. A non-core division was sold in early October which has significantly reduced group debt. The outlook for 2018 is encouraging.

DIRECTORS' STATEMENT OF RESPONSIBILITIES

The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with applicable Guernsey law and regulations.

The Directors confirm to the best of their knowledge that:

·     the unaudited condensed half-yearly financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting" and give a true and fair view of the assets, liabilities, financial position and profit of the Company as at 30 September 2017, as required by the UK Listing Authority Disclosure Guidance and Transparency Rule 4.2.4R;

·     the combination of the Chairman's Statement, the Investment Manager's Report, the Executive Summary and the notes to the unaudited condensed half-yearly financial statements include a fair view of the information required by:

1.   Rule 4.2.7R of the Disclosure Guidance and Transparency Rules of the UK's Listing Authority ("DTR"), being an indication of important events that have occurred during the six months ended 30 September 2017 and their impact on the condensed financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

2.   DTR 4.2.8R, being related party transactions that have taken place during the six months ended 30 September 2017 and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

Walid Chatila                                                                          Rupert Evans 

Director                                                                                    Director

15 December 2017                                                                    15 December 2017

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2017

 

		Six months ended 30 September 2017	Six months ended  30 September 2016
		(Unaudited)	(Unaudited)
	Notes	£	£
Income
Investment income	3	359,792	287,988
Realised gain on financial assets designated at fair value through profit or loss	9	7,166,200	5,823,562
Unrealised gain on financial assets designated at fair value through profit or loss		686,561	6,726,551
(Loss) / gain on foreign currency translation		(1,431)	1,738
Total income		8,211,122	12,839,839
Expenses
Investment manager and investment advisory fees	4	648,035	519,367
Transaction costs		75,972	47,850
Directors' fees and expenses	8	107,224	83,956
Audit fees		27,853	26,594
Administration fees	7	62,425	43,268
Legal and professional fees		69,907	38,653
Registrar and transfer agent fees		9,281	17,829
Custodian fees	6	15,836	13,577
Insurance fees		2,564	2,550
Regulatory fees		8,755	8,640
Printing fees		14,304	8,832
Other expenses		15,620	17,165
Total expenses		1,057,776	828,281
Profit before taxation		7,153,346	12,011,558
Withholding tax on dividends		(11,585)	(2,600)
Profit after taxation and total comprehensive income		7,141,761	12,008,958
Basic and diluted earnings per Ordinary Share	12	0.49	0.79

The Company has no items of other comprehensive income, and therefore the profit for the period is also the total comprehensive income.

All items in the above statement are derived from continuing operations. No operations were acquired or discontinued during the period.

The accompanying notes form an integral part of these financial statements.

 

CONDENSED STATEMENT OF FINANCIAL POSITION

As at 30 September 2017

			30 September 2017	31 March 2017
		Notes	(Unaudited)	(Audited)
			£	£
Non-current assets
Listed investments designated at fair value through profit or loss (Cost - £91,837,445 ( 31 March 2017 - £81,538,669))		9	116,576,177	102,297,113
Unlisted investments designated at fair value through profit or loss (Cost - £4,169,118 (31 March 2017 - £5,183,538))		9	3,939,675	8,247,821
			120,515,852	110,544,934
Current assets
Cash and cash equivalents			3,366,819	8,949,022
Amounts due from brokers			25,797	332,705
Dividends and interest receivable			41,756	182,025
Other receivables			6,982	3,212
Total current assets			3,441,354	9,466,964
Total assets			123,957,206	120,011,898
Current liabilities
Other payables and accrued expenses			330,896	340,665
Amounts due to brokers			40,707	250,000
Amounts due for share buybacks			-	194,891
Total current liabilities			371,603	785,556
Net assets			123,585,603	119,226,342
Shareholders' equity
Share capital		10	49,900,846	50,122,846
Capital redemption reserve			1,246,500	1,246,500
Other reserves			72,438,257	67,856,996
Total shareholders' equity			123,585,603	119,226,342
Net Asset Value per Ordinary Share - basic and diluted		11,13	£8.57	£8.02

The condensed financial statements were approved by the Board of Directors on 15 December 2017 and are signed on its behalf by:

Walid Chatila                                                                   Rupert Evans

Director                                                                         Director

 

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the six months ended 30 September 2017 (Unaudited)

		Share Capital	Capital redemption reserve	Other reserves	Total
	Note	£	£	£	£
Balance at 1 April 2017		50,122,846	1,246,500	67,856,996	119,226,342
Total comprehensive income for the period		-	-	7,141,761	7,141,761
Transactions with owners, recorded directly to equity
- Cancellation of shares	10	(222,000)	-	(2,560,500)	(2,782,500)
Balance at 30 September 2017		49,900,846	1,246,500	72,438,257	123,585,603

For the six months ended 30 September 2016 (Unaudited)

		Share Capital	Capital redemption reserve	Other reserves	Total
		£	£	£	£
Balance at 1 April 2016		50,289,346	1,246,500	53,181,631	104,717,477
Total comprehensive income for the period		-	-	12,008,958	12,008,958
Transactions with owners, recorded directly to equity
- Cancellation of shares		(69,000)	-	(744,750)	(813,750)
Balance at 30 September 2016		50,220,346	1,246,500	64,445,839	115,912,685

CONDENSED STATEMENT OF CASH FLOWS

For the six months ended 30 September 2017

		Six months ended 30 September 2017	Six months ended 30 September 2016
		£	£
	Note	(Unaudited)	(Unaudited)
Cash outflow from operating activities
Profit after taxation and total comprehensive income for the period		7,141,761	12,008,958
Adjustments to reconcile profit after tax to net cash flows:
-     Realised gain on financial assets designated at fair value through profit or loss	9	(7,166,200)	(5,823,562)
-     Unrealised gain on financial assets designated at fair value through profit or loss		(686,561)	(6,726,551)
-     Net loss / (gain) on foreign currency translation		1,431	(1,738)
Purchase of financial assets designated at fair value through profit or loss		(23,609,924)	(27,358,570)
Proceeds from sale of financial assets designated at fair value through profit or loss		21,491,768	23,148,197
Changes in working capital
Decrease in other receivables		136,499	81,008
Decrease in amounts due from brokers		306,908	158,381
Decrease in other payables and accrued expenses		(9,769)	(19,220)
Decrease in amounts due to brokers		(209,293)	(354,959)
Net cash outflow from operating activities		(2,603,380)	(4,888,056)
Cash outflow from financing activities
Cancellation of shares		(2,977,391)	(813,750)
Net cash outflow from financing activities		(2,977,391)	(813,750)
Net decrease in cash and cash equivalents in the period		(5,580,771)	(5,701,806)
Cash and cash equivalents at the beginning of the period		8,949,022	19,514,960
Effect of exchange rate fluctuations on cash and cash equivalents		(1,432)	1,738
Cash and cash equivalents at the end of period		3,366,819	13,814,892

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1.   General information

The Company was registered in Guernsey on 2 December 1994 and commenced activities on 3 March 1995. The Company was listed on the London Stock Exchange on 3 March 1995.

The Company is a Guernsey Authorised Closed-Ended Investment Scheme and is subject to the Authorised Closed-Ended Investment Scheme Rules 2008.

The investment activities of the Company are managed by the Investment Manager and the administration of the Company is delegated to BNP Paribas Securities Services S.C.A., Guernsey Branch (the "Administrator").

Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

2.   Accounting policies

The Annual Report and Financial Statements is prepared in accordance with the Disclosure Guidance and Transparency Rules of the FCA and with International Financial Reporting Standards as adopted by the European Union ("IFRS") which comprise standards and interpretations approved by the International Accounting Standards Board (IASB), and interpretations issued by the International Accounting Standards and Standing Interpretations Committee as approved by the International Accounting Standards Committee which remain in effect. The Half-Yearly Financial Report has been prepared in accordance with International Accounting Standards (IAS) 34 - "Interim Financial Reporting". They have also been prepared using the same accounting policies applied for the year ended 31 March 2017 Annual Report and Financial Statements.

The Half-Yearly Financial Report has been prepared under a going concern basis. After analysing the following, the Directors believe that it is appropriate to adopt the going concern basis in preparing these financial statements:

·     Working capital - As at 30 September 2017, there was a working capital surplus of £3,069,751. The Directors noted that as at 30 September 2017 (i) the net investment income for the period from 1 April 2017 to 30 September 2017 was £7,141,761 and (ii) the Company had no borrowings, as such it has sufficient capital in hand to cover all expenses (which mainly consist of Investment Manager's fees, Directors' fees, Administration fees and Legal and Professional fees) and to meet all of its obligations as they fall due.

·     Closed-ended Company --- The Company has been authorised by the Guernsey Financial Services Commission as an Authorised Closed-ended Collective Investment Scheme, as such there cannot be any shareholder redemptions, and therefore no cash flows out of the Company in this respect.

·     Investments - The Company has a tradable portfolio, as 97% of the investments are listed and can therefore be readily sold for cash.

The special resolution outlined in Article 51 of the Articles of Incorporation was not passed at the AGM on 31 August 2017.  Hence, the Company will continue its operations until the 2019 AGM when the special resolution outlined in Article 51 will be proposed to the shareholders again.

There have been no changes in accounting policies during the period. The accounting policies in respect of financial instruments are set out below at 2.3 due to the significance of financial instruments to the Company.

2.1 Use of judgements and estimates

In preparing these half-yearly financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgements made by management in applying the Company accounting policies and the key sources of estimation uncertainty were the same as those applied to for the year ended 31 March 2017 Annual Report and Financial Statements.

2.2 Segment reporting

The Directors view the operations of the Company as one operating segment, being the investment business. All significant operating decisions are based upon analysis of the Company's investments as one segment. The financial results from this segment are equivalent to the financial results of the Company as a whole, which are evaluated regularly by the chief operating decision-maker (the Board with insight from the Investment Manager).

2.3 Financial instruments

Financial Assets  

Classification

All investments of the Company are designated as financial assets at fair value through profit or loss. The investments are purchased mainly for their capital growth and the portfolio is managed, and performance evaluated, on a fair value basis in accordance with the Company's documented investment strategy, therefore the Directors consider that this is the most appropriate classification.

Initial recognition

Financial assets are measured initially at fair value being the transaction price. Subsequent to initial recognition on trade date, all assets classified as fair value through profit or loss are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income. Transaction costs are separately disclosed in the Statement of Comprehensive Income.

Fair value measurement principles

Listed investments have been valued at the bid market price ruling at the reporting date. In the absence of the bid market price, the closing price has been taken, or, in either case, if the market is closed on the financial reporting date, the bid market or closing price on the preceding business day.

Fair value of unlisted investments is derived in accordance with the International Private Equity and Venture Capital (IPEV) valuation guidelines. Their valuation includes all factors that market participants would consider in setting a price. The primary valuation techniques employed to value the unlisted investments are earnings multiples, recent investments and the net asset basis. Cost is considered appropriate for early stage investments.  The relevance of this methodology can be eroded over time and in these cases the carrying values will be adjusted to reflect fair value. 

For certain of the Company's financial instruments, including cash and cash equivalents, dividends and interest receivable and amounts due from brokers, the carrying amounts approximate fair value due to their immediate or short-term maturity.

De-recognition

De-recognition of financial assets occurs when the rights to receive cash flows from financial instruments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred.

Financial liabilities

Amounts due to brokers represent payables for investments that have been contracted for but not yet settled or delivered at the year end. Financial liabilities include other payables and accrued expenses, amounts due to brokers and amounts due on redemption of Ordinary Shares which are held at amortised cost using the effective interest rate method.

Financial liabilities are recognised initially at fair value, net of transaction costs incurred and are subsequently carried at amortised cost using the effective interest rate method. Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires.

3.   Investment income

	Six months ended 30 September 2017 (Unaudited)	Six months ended 30 September 2016 (Unaudited)
	£	£
Dividends	359,792	287,988
Total investment income	359,792	287,988

4.   Investment manager and investment advisory fees

Harwood Capital LLP, the Investment Manager and Investment Adviser, is entitled to an annual fee of 1.25% on the first £15 million of the Net Asset Value of the Company, and 1% of any excess, payable monthly in arrears. The agreement can be terminated giving 12 months' notice or immediately should the Investment Manager be placed into receivership or liquidation.  The Investment Manager is entitled to all the fees accrued and due up to the date of such termination but is not entitled to compensation in respect of any termination. Investment Manager and Investment Adviser fees payable as at 30 September 2017: £216,684 (31 March 2017: £199,181).

5.   Supplementary management fee

The Investment Manager agreed to waive its right to exercise management options to subscribe for Ordinary Shares in exchange for a discretionary bonus ("supplementary management fee").

As at approval of these condensed financial statements, no recommendation was made in respect of the 2017 supplementary management fee. The supplementary management fee is paid annually in arrears.

6.   Custodian fees

BNP Paribas Securities Services S.C.A., Guernsey Branch was appointed as custodian on 1 April 2007 and is entitled to an annual safekeeping fee based upon the value of investments held plus transactions fees, subject to a minimum of £4,000 per annum. Custodian fee payable as at 30 September 2017: £2,571 (31 March 2017: £2,373). This amount is included in other payables and accrued expenses.

7.   Administration fees

The Administrator was appointed on 1 April 2007 and is entitled to an annual fee at a rate of 0.125% on the first £20 million, 0.10% on the next £20 million and 0.075% of any excess of the Total Assets, subject to a minimum of £50,000 per annum. Administration fee payable as at 30 September 2017: £18,212 (31 March 2017: £16,540). This amount is included in other payables and accrued expenses.

8.   Directors' fees, expenses and interests

With the exception of the Chairman and Audit Committee Chairman, who are entitled to a fee of £27,500 and £25,000 per annum respectively, each Director is entitled to £20,000 per annum from the Company. In addition, all Directors are entitled to reimbursement of travel, hotel and other expenses incurred by them in course of their duties relating to the Company.

The Company has no employees other than the Directors. Directors' fees payable as at 30 September 2017 were £38,438 (31 March 2017: £37,708). This amount is included in other payables and accrued expenses.

As at the date of approval of these condensed financial statements, Christopher Mills and John Grace held Ordinary Shares in the Company. Please refer to section entitled Director interests for further details. No other Director holds shares in the Company.

No pension contributions were payable in respect of any of the Directors (31 March 2017: £nil).

9.   Financial assets designated at fair value through profit or loss

	30 September 2017	31 March 2017
	£	£
Cost at beginning of period / year	86,722,207	70,324,593
Additions	23,609,924	58,253,478
Disposals	(21,491,768)	(50,871,330)
Net realised gains on investments	7,166,200	9,015,466
Cost at end of period / year	96,006,563	86,722,207
Net unrealised gain on investments	24,509,289	23,822,727
Fair value at end of the period / year	120,515,852	110,544,934

Representing:

	30 September 2017	31 March 2017
	£	£
Listed equities	116,576,177	102,297,113
Unlisted equities	3,939,675	8,247,821
	120,515,852	110,544,934

Investments are predominantly comprised of equity and equity-related investments in small and mid-sized quoted and unquoted companies in the United Kingdom and United States.

Fair value hierarchy

Fair value measurement should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions, IFRS 13 - "Fair Value measurement" (IFRS 13), establishes a fair value hierarchy that gives the highest priority to unadjusted quoted prices in active markets (Level 1) and lowest priority to unobservable inputs (Level 3).  The three levels of the value hierarchy are as follows. 

Level 1: Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2: Inputs reflect quoted prices of similar assets and liabilities in active markets and quoted prices of identical assets and liabilities in markets that are considered to be inactive, as well as inputs other than quoted prices within level 1 that are observable for the asset or liability either directly or indirectly; and

Level 3: Inputs that are unobservable for the asset or liability and reflect the Investment Manager's own assumptions in accordance with the accounting policies disclosed within Note 2 to the financial statements.

30 September 2017	Level 1	Level 2	Level 3	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£	£	£	£
Financial assets at fair value
through profit or loss
Listed securities	116,576,177	-	-	116,576,177
Unlisted securities	-	-	3,939,675	3,939,675
	116,576,177	-	3,939,675	120,515,852

31 March 2017	Level 1	Level 2	Level 3	Total
	(Audited)	(Audited)	(Audited)	(Audited)
	£	£	£	£
Financial assets at fair value
through profit or loss
Listed securities	102,297,113	-	-	102,297,113
Unlisted securities	-	4,533,223	3,714,598	8,247,821
	102,297,113	4,533,223	3,714,598	110,544,934

The following table summarises the changes in fair value of the Company's Level 3 investments.

	30 September 2017	31 March 2017
	(Unaudited)	(Audited)
	£	£
Opening balance	3,714,598	5,066,275
Net realised losses on investments	(146,262)	(1,798,896)
Unrealised (losses) / gains on investments	(608,167)	843,354
Purchase of investments	886,506	-
Sale of investments	-	(1,631,997)
Transfers from level 1 into level 3	93,000	3,602,575
Transfers from level 3 into level 2	-	(2,366,713)
Closing balance	3,939,675	3,714,598
Change in unrealised losses on investments included in Condensed Statement of Comprehensive Income for Level 3 investments held	608,167	206,215

During the period ended 30 September 2017, there was one transfer from level 1 to level 3 resulting from an investee company's listing being suspended. There was one transfer from level 2 to level 1 resulting from one investee company being listed. (31 March 2017: There were three transfers from level 1 to level 3 and one transfer from level 3 to level 2). 

Transfers between levels are determined based on changes to the significant inputs used in the fair value estimation. The directors have selected an accounting policy to apply transfers between levels in the fair value hierarchy at the beginning of the relevant reporting period.

Quantitative information of significant unobservable inputs - Level 3

There were no significant unobservable inputs used at 30 September 2017 and 31 March 2017 in measuring financial instruments categorised as Level 3 in the fair value hierarchy. The financial instruments categorised as Level 3 have either a fair value that either approximates a recent transaction price or is cash held in escrow pending the outcome of certain post sale conditions (i.e. warranties).

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy - Level 3

No sensitivity analyses have been presented for the period ended 30 September 2017 and the year ended 31 March 2017 given, as mentioned above, there were no significant unobservable inputs used at 30 September 2017 or 31 March 2017.

Please refer to note 2.3 for valuation methodology of financial assets designated at fair value through profit or loss.

10. Share Capital

Authorised share capital

			Number of Shares	£
Authorised:
Ordinary shares of 50 pence each			90,000,000	45,000,000

Ordinary Shares Issued - 1 April 2017 to 30 September 2017 

Ordinary Shares of 50 pence each		Number of Shares	Share capital £
At 1 April 2017		14,859,125	50,122,846
Cancellation of shares		(444,000)	(222,000)
At 30 September 2017		14,415,125	49,900,846

Ordinary Shares Issued - 1 April 2016 to 31 March 2017

Ordinary Shares of 50 pence each		Number of Shares	Share capital £
At 1 April 2016		15,192,125	50,289,346
Cancellation of shares		(333,000)	(166,500)
At 31 March 2017		14,859,125	50,122,846

Rights attributable to Ordinary Shares

In a winding-up, the holders of Ordinary Shares are entitled to the repayment of the nominal amount paid up on their shares. In addition, they have the right to receive surplus assets available for distribution. The shares confer the right to dividends, and at general meetings, on a poll, confer the right to one vote in respect of each Ordinary Share held.

Share buybacks

In accordance with section 315 of The Companies (Guernsey) Law 2008, (as amended) (the "Law"), the Company has been granted authority to make one or more market acquisitions (as defined in section 316 of the Law, of Ordinary Shares of 50 pence each in the capital of the Company ("Ordinary Shares") on such terms and in such manner as the Directors of the Company may from time to time determine, provided that:

a) the maximum aggregate number of Ordinary Shares authorised to be acquired does not exceed 10% of the issued Ordinary Share capital of the Company on the date the shareholders' resolution is passed;

b) the minimum price (exclusive of expenses) payable by the Company for each Ordinary Share is 50 pence and the maximum price payable by the Company for each Ordinary Share is an amount equal to 105% of the average of the middle market quotations for an Ordinary Share as derived from The London Stock Exchange Daily Official List for the five business days immediately preceding the day on which that Ordinary Share is purchased and that stipulated by Article 5(1) of the Buy-back and Stabilisation Regulation being the higher of the price of the last independent trade and the highest current independent bid available in the market;

c) subject to paragraph (d), this authority shall expire (unless previously renewed or revoked) at the earlier of the conclusion of the next annual general meeting of the Company or on the date which is 18 months from the date of the previous shareholders' resolution;

d) notwithstanding paragraph (c), the Company may make a contract to purchase Ordinary Shares under the authority from the shareholders' before its expiry which will or may be executed wholly or partly after the expiry of the authority and may make a purchase of Ordinary Shares in pursuance of any such contract after such expiry; and

e) the price payable for any Ordinary Shares so purchased may be paid by the Company to the fullest extent permitted by the Companies Law.

A renewal of the authority to make purchases of the Company's own Ordinary Shares will be sought from existing shareholders at each annual general meeting of the Company.

Between 1 April 2017 and 30 September 2017, the Company carried out two share buybacks, resulting in a total reduction of 444,000 shares for a cost of £2,782,500. These shares were subsequently cancelled.

Between 1 April 2016 and 31 March 2017, the Company carried out six share buybacks, resulting in a total reduction of 1,179,486 shares for a cost of £6,161,989. These shares were subsequently cancelled.

11. Reconciliation of the net asset value to published net asset value

	30 September 2017		31 March 2017
	£	£ per share	£	£ per share
Published net asset value	125,854,893	8.73	121,667,553	8.19
Revaluation of investments at bid price	(2,269,290)	(0.16)	(2,441,211)	(0.17)
Net asset value attributable to shareholders	123,585,603	8.57	119,226,342	8.02

12. Basic and diluted earnings per Ordinary Share

				Six months ended 30 September 2017 (Unaudited)	Six months ended 30 September 2016  (Unaudited)
				£	£
Total comprehensive income for the period				7,141,761	12,008,958
Weighted average number of shares during the period				14,433,180	15,116,835
Basic and diluted earnings per share				0.49	0.79

13. Net Asset Value per Ordinary Share

				30 September 2017 (Unaudited)	31 March 2017 (Audited)
				£	£
Net asset value				123,585,603	119,226,342
Number of shares at period/year end				14,415,125	14,859,125
Net asset value per share				8.57	8.02

14. Related Parties

All transactions with related parties are carried out at arm's length and the prices reflect the prevailing fair market value of the assets on the date of the transaction.

The Investment Adviser is considered to be a related party. The fees paid are included in the Condensed Statement of Comprehensive Income and further detailed in notes 4 and 5.

The Directors are also considered to be related parties and their fees are disclosed in the Statement of Comprehensive Income. At 30 September 2017, £43,479 (31 March 2017: £37,708) included in other payables and accrued expenses was payable to the Directors.

Christopher Mills is a Director and shareholder of Oryx International Growth Fund Limited. He is also a Partner and the Chief Executive of Harwood Capital LLP, the Company's Investment Manager and Investment Adviser and Chief Investment Officer of North Atlantic Smaller Companies Investment Trust plc "NASCIT", which is a substantial shareholder of Oryx.

Rupert Evans is a consultant to the law firm Mourant Ozannes, the legal adviser to the Company. The Company neither paid fees to Mourant Ozannes during the period, nor had any dues outstanding at the Condensed Statement of Financial Position date (31 March 2017: £nil).

As at 30 September 2017, the Company held 2,500,000 shares in Harwood Wealth Management Group valued at £3,250,000. The Company considers Harwood Wealth Management Group a related party as Mr Christopher Mills, a non-executive director of Harwood Wealth Management Group, is also a member of key management personnel of the Company.

Sidney Cabessa is a Director of Harwood Capital Management Limited, the parent company of Harwood Capital LLP. No fees were paid or are payable to Harwood Capital Management Limited.

Christopher Mills and John Grace hold Ordinary Shares in the Company. Refer to Directors' Interests above for further details

14. Subsequent events

Management has evaluated subsequent events for the Company through 15 December 2017, the date the condensed financial statements were available to be issued, and had concluded there are not any material events that require disclosure or adjustment of the condensed financial statements.

COMPANY INFORMATION

Registered Office

BNP Paribas House, St Julian's Avenue, St Peter Port, Guernsey, GY1 1WA

Investment Manager and Investment Adviser

Harwood Capital LLP

6 Stratton Street, Mayfair, London, W1J 8LD

Custodian

BNP Paribas Securities Services S.C.A., Guernsey Branch

P.O. Box 482, BNP Paribas House, St Julian's Avenue,

St Peter Port, Guernsey, Channel Islands, GY1 1WA

Secretary and Administrator

BNP Paribas Securities Services S.C.A., Guernsey Branch

P.O. Box 482, BNP Paribas House, St Julian's Avenue,

St Peter Port, Guernsey, Channel Islands, GY1 1WA

Registrars

Capita Registrars (Guernsey) Limited

PO Box 627, St Sampson, Guernsey, GY1 4PP

Stockbroker

Winterflood Securities Limited

The Atrium Building, Cannon Bridge House

25 Dowgate Hill, London, EC4R 2GA

Independent Auditors

KPMG Channel Islands Limited
Glategny Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 1WR

Legal Advisors

To the Company as to Guernsey law:
Mourant Ozannes
1, Le Marchant Street, St Peter Port,
Guernsey, Channel Islands, GY1 4HP
To the Company as to English law:
Bircham Dyson Bell
50 Broadway
London, SW1H 0BL

Website

www.oryxinternationalgrowthfund.co.uk

Enquiries:

Sarah Hendry

BNP Paribas Securities Services SCA, Guernsey Branch

Tel: [phone]

A copy of the Company's Half Yearly Financial Report will be available shortly from the Company Secretary, BNP Paribas Securities Services S.C.A., Guernsey Branch at BNP Paribas House, St Julian's Avenue, St Peter Port, Guernsey, GY1 1WA, or on the Company's website  (www.oryxinternationalgrowthfund.co.uk).

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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