Half-year Report

RNS Number : 5970R

Oryx International Growth Fund Ld

13 December 2016

 

13 December 2016

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 2016

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 period from 1 April 2016 to 30 September 2016, Oryx International Growth Fund Limited (the "Company") carried out three share buybacks, resulting in a total reduction of 138,000 shares for a cost of £813,750. These shares were subsequently cancelled.

Number of Ordinary Shares in issue as at 30 September 2016:

            15,054,125 Ordinary Shares       

Market capitalisation as at 30 September 2016:

            Ordinary Share class: £101,991,697

Performance summary

	As at 30 September 2016	As at 31 March 2016
Net asset value per Ordinary Share	£7.6997	£6.8929
Ordinary share price (last market)1	£6.7750	£6.1250
Discount to net asset value ("NAV")2	(12.01)%	(11.14)%
Discount to net asset value (based on published NAV)2	(13.35)%	(12.55)%

 

Dividend history

No Ordinary Share dividend was declared during the period. 

Please refer to note 18 for further information subsequent to the reporting period.

¹ - Source: Bloomberg

² - Please refer to note 14 for reconciliation of the net asset value to published NAV.

 

CHAIRMAN'S STATEMENT

I am pleased to report another good set of results for the six months ended 30 September 2016. The net asset value rose by 10.7%, beating the FTSE Small Cap Index by over 4.5% which means that the rise in the NAV over the last five years now equals 114% as against 77% for the index.

There have been some significant disposals during the period which means the cash balances remain strong. The challenge for Christopher Mills and his team at Harwood is to identify new opportunities that can be purchased at sensible valuations where active management will yield a good return over a reasonable period. This has been the challenge since the Company's inception in 1995, but the board remains confident that the proven skill of the management will continue to realise value in the existing holdings and identify new opportunities as they arise.

The Company continues to buy back shares when it is considered to be in the interests of all shareholders and 138,000 shares were acquired during the six month period

In accordance with our policy, the directors are not recommending a dividend for the period under review.

Nigel Cayzer

Chairman

12 December 2016

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 2016. 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") (formerly North Atlantic Value LLP) 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 is also registered as a Small Authorised Alternative Investment Fund Manager ('AIFM') with the Company included on its schedule of Alternative Investment Funds ('AIFs')

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 eight non-executive Directors, six of whom are independent: Nigel Cayzer (Chairman), Jamie Brooke, 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.

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

Christopher Mills is a Partner and Chief Executive Officer of Harwood Capital LLP, 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.

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 Ordinary Shares
Christopher Mills	328,716
John Radziwill1	419,000
John Grace2	130,000 346,607

¹ John Radziwill is a Director of a fund, held by his family trust, that holds 419,000 Ordinary Shares and which is managed by an independent fund manager.

² 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

·     Accounting, legal and regulatory

·     Operational

Information on these risks and how they are managed is given in the Annual Report and Financial Statements for the year ended 31 March 2016. 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.

After reviewing the Company's budget and cash flow forecast for the next twelve months, the Directors are satisfied that, at the time of approving these financial statements, no material uncertainties exist that may cast significant doubt concerning the Company's ability to continue for the foreseeable future. The Directors therefore believe that it is appropriate to adopt the going concern basis in preparing these condensed financial statements.

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

All Directors are non-executive.

Directors

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.

Jamie Brooke

British

Jamie Brooke is a fund manager at Henderson Global Investors. He has spent over 20 years investing in smaller companies, listed and private, at all stages of development. He trained as an ACA with Deloitte.

Sidney Cabessa

French

Sidney Cabessa is also a director of Club-Sagem and Mercator/Nature et découvertes.  Mr Cabessa 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 the General Manager 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 International Assets Holding Corp, 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. Mr Grace 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

It is pleasing to note that during the six month period the net asset value rose by 10.7% as compared with a rise in the FTSE Small Cap Index of 6.1%.

Quoted Portfolio

The net asset value of the Company was assisted by the takeover of some of the major holdings in the Company and in particular Source Bioscience and Journey Group.  Cyprotex also performed strongly and since the end of the period has also had a takeover approach.

Minds & Machines and EKF have seen their share prices rise by 35% and 30% respectively.  Minds & Machines operations have gone from strength to strength and a large Chinese investment company has taken a strategic stake in the business.  EKF benefitted from a profit upgrade and the weakness of Sterling relative to the Dollar and Euro.

Assetco share price rose 19% due to good recent trading and the substantial claim against third parties.

 
Goals Soccer was however disappointing, although a new management team and a refinancing gives grounds for optimism over the medium term.

Unquoted Portfolio

The Company took a small holding which is the management buyout of Source Bioscience.  Indoor Bowls performed well but this was offset by the need to write down Team Rock following disappointing results.

Outlook

Identifying stocks trading at a discount to market value has become increasingly more challenging with ever decreasing market liquidity. Despite the worries of BREXIT placed on the UK market by British and EU governing bodies, we have seen the FTSE rally and hitting its highest level since 2015.

Notwithstanding this, there are several catalysts in place in the quoted portfolio which should support further improvement in the net asset value of the company over the balance of the fiscal year.

Harwood Capital LLP

12 December 2016

LARGEST EQUITY HOLDINGS

as at 30 September 2016

Gleeson (M.J.) Group Plc

Cost £4,067,733 (2,000,000 shares)
Market value £11,850,000 representing 10.07% of Published Net Asset Value
 

The company operates two divisions, Gleeson Homes and Gleeson Strategic Land. Gleeson Homes has shown a strong increase in revenue from the previous year driven by good demand for affordable housing among the group's core Northern customer base. Strategic Land continues to enjoy continuing success in securing residential planning permission as well as progressing the sale of several of its Southern UK sites. This twin track strategy continues to build momentum delivering increased profits, cash and margins.

OMG Plc

Cost £2,601,090 (18,000,000 shares)

Market value £8,325,000 representing 7.07% of Published Net Asset Value
 

The Group operates as a diversified technology service business with two core divisions, Vicon and Yotta with a strong international presence. Vicon operates as a technology service business providing image capture products and services for the film industry, life sciences and engineering industry. Yotta provides software systems for local authorities to help improve the management and make informed decisions on infrastructure assets, it is increasingly becoming the key growth component of the business, as it looks to expand its software business into new geographies in Holland and Australia. The loss making OMG Life has now been terminated and shut down.

The company has significant dollar revenue and profits which should lead to earnings upgrades over the course of the coming year.

Journey Group Plc

Cost £6,590,325 (3,277,575 shares)
Market value £7,784,241 representing 6.61% of Published Net Asset Value

The company is a specialist air support business providing in-flight products, catering and cabin management services to the airline industry. The group's operations are organised into two divisions, Watermark products and Air Fayre (USA). Watermark Products supplies in-flight products primarily to the international airline industry on a global basis. The Air Fayre brand provides in- flight catering to the international and domestic airline industry in the United States through its patent protected supply chain.

Air Faye has benefitted from the start of a five-year contract with FedEx out of Memphis launched towards the end of last year. Air Fayre has proven that its model is successful and can be replicated out of California, focusing their efforts on larger domestic markets.

The Independent Directors of Journey Group plc have recently reached an agreement with Jaguar Holdings Limited over the sale of Journey Group for the entire issue at a 30% premium to the undisturbed price.

Minds + Machines Group

Cost £4,155,734 (52,175,000 shares)

Market value £6,521,875 representing 5.54% of Net Asset Value

Mind + Machines targets top level domain names and operates as a sales and marking led business. The portfolio is focused around geography names (London, Miami, Boston), Consumer interests (Wedding, Cooking, Fashion), professional occupations (Law, Doctor of Dental Surgery), Lifestyle (Yoga, Fit, Surf), generic names (VIP and Work) and also outdoor activities (Garden and Fishing).

The Group have been through a transitional period, restructuring into a pure play registry with a new management team. The company recently announced a private subscription of circa 42.5m ordinary shares to reflect the companies increased presence in China, which should help develop key relationships and identify new commercial opportunities.

EKF Diagnostics Holdings Plc

Cost £5,501,020 (40,000,000 shares)

Market value £5,850,000 representing 4.97% of Published Net Asset Value

EKF Diagnostics is a global integrated market leader in the medical diagnostics business, offering the largest range of haemoglobin and haematocrit analysers. Essentially it focuses on manufacturing diagnostics for the Point of Care market demonstrating a way to make blood and anaemia screening more accessible and more affordable, I hereby giving specialists and physicians a choice of various products between measurement speed and price options. The business also has a central laboratory products where its liquid reagents can be used widely in analysers found in hospital laboratories globally.

The company has been through a restructuring period after completing a strategic review. The benefits of this are starting to pull through with the business reporting positive numbers after a period of reducing the cost base, through redundancies and closing several manufacturing facilities. Sales from key market demographics have steadily increased and the business looks on track to continue to grow organically, through new product licensees and entry to new markets.

Goals Soccer Centres Plc

Cost £6,069,864 (5,000,000 shares)
Market value £5,225,000 representing 4.44% of Published Net Asset Value

Goals is the leading operator of a 5-a-side soccer centres across the United Kingdom, operating 46 centres across the UK. It currently has good growth prospects. It also has one 5-a-side centre in Los Angeles, United States, and is in the process of opening a second site in Pomona.

The Group has completed a strategic business review and announced a placing on June 3^rd with 16.75m shares placed at 100p. This has enabled the business to deleverage the balance sheet and to refocus organic growth rejuvenating the core estates which were starting to look run down across the UK. The strategic review outlined four priorities which should be an improvement in the underlying performance.

Hayward Tyler Group Plc

Cost £4,492,574 (6,000,000 shares)
Market value £5,160,000 representing 4.38% of Published Net Asset Value

Hayward Tyler is a world leader in boiler circulation pumps and is engaged in the manufacturing, design, engineer and service of fluid filled electric motors and pumps for the energy sector. The company has a market leading reputation and is recently an established player in the Original Equipment and the aftermarket segments. The group made its first acquisition purchasing the trade assets of Peter Brotherhood which manufacturers steam turbines and gas compressors, it will look to establish synergies and explore cross selling opportunities with the Hayward Tyler.

The company has undertaken a major refurbishment of its UK factory headquarters based in Luton, establishing a leading Centre of Excellence for specialist manufacturing, which has now been completed on time. This will reduce working capital and production costs, whilst increasing the capacity of the facility and the future capability to be able to compete for substantial nuclear contracts. The group have established new strategic partnerships with FMC technologies and Ebara Corporation and will look to continue trading relationships with customers across the globe.

AssetCo Plc

Cost £2,600,000 (1,050,000 shares)
Market value £4,042,500 representing 3.43% of Published Net Asset Value

AssetCo is a Fire and Rescue business, operating in Abu Dhabi.  Recently trading has been good and the company has significant cash balances, and no debt.  In addition, it has a substantial claim amounting to £38m plus interest against third parties which it is actively pursuing for previous negligence, which is ongoing.

Cyprotex Plc

Cost £1,246,187 (2,500,000 shares)
Market value 3,587,500 representing 3.05% of Published Net Asset Value

Cyprotex specialises in ADME-Toxicity in vitro testing for pharmaceutical research. ADME describes the disposition of a pharmaceutical compound within an organism which influences the drug levels and drug exposure to the tissues, and helps influence the performance of the compound drug. Cyprotex serves the pharmaceutical and Biotech markets in cosmetics, personal care and the chemical industry. The company has developed several unique technologies with the aim to continually develop and improve approaches to precisely predict human clinical outcomes following increased exposures to a chemical or drug using vitro (laboratory experiments) combined with a silcio approach (computer modelling) to extract all the necessary data needed to complete the findings.

The Board of Cyprotex have recently announced a deal to be acquired by Evotec which is at a significant premium to the final purchase price.

Redcentric

Cost £3,000,000 (2,000,000 shares)
Market value £3,557,500 representing 3.02% of Published Net Asset Value

The company is a mid-market network-based managed service business delivering ICT solutions and services to meet its customer and client needs. The group benefits from an established reputation as an end to end managed service provider delivering innovative technology to improve business productivity and efficiency.

Since the end of the period the company has announced that its balance sheet has been misstated resulting in a significant fall in the share price.

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 interim financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting" and give a true and fair view on the state of the affairs of the Company as at 30 September 2016, as required by the UK Listing Authority Disclosure 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 interim financial statements include a fair view of the information required by:

1.   DTR 4.2.7R of the Disclosure and Transparency Rules of the UK's Financial Conduct Authority, being an indication of important events that have occurred during the six months ended 30 September 2016 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 of the Disclosure and Transparency Rules of the UK's Financial Conduct Authority, being related party transactions that have taken place during the six months ended 30 September 2016 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

12 December 2016                                                                    12 December 2016

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2016

 

		Six months ended 30 September 2016	Six months ended  30 September 2015
		(Unaudited)	(Unaudited)
	Notes	£	£
Income
Investment income	3	287,988	548,155
Realised gain on financial assets designated at fair value through profit or loss	9	5,823,562	12,910,118
Unrealised gain on financial assets designated at fair value through profit or loss	9	6,726,551	590,123
Gain/(loss) on foreign currency translation		1,738	(64,265)
Total income		12,839,839	13,984,131
Expenses
Investment manager and investment advisory fees	4	519,367	522,257
Transaction costs		47,850	124,552
Directors' fees and expenses	8	83,956	98,860
Audit fees		26,594	21,274
Administration fees	7	43,268	44,956
Legal and professional fees		38,653	67,282
Registrar and transfer agent fees		17,829	10,876
Custodian fees	6	13,577	12,570
Insurance fees		2,550	2,705
Regulatory fees		8,640	3,445
Printing fees		8,832	12,495
Other expenses		17,165	13,783
Total expenses		828,281	935,055
Profit before taxation		12,011,558	13,049,076
Withholding tax on dividends		(2,600)	(74,700)
Profit after taxation and total comprehensive income		12,008,958	12,974,376
Basic and diluted earnings per Ordinary Share	15	0.7944	0.8097

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 2016

			30 September 2016	31 March 2016
		Notes	(Unaudited)	(Audited)
			£	£
Non-current assets
Financial assets designated at fair value through profit or loss		9	102,425,342	85,664,856
Current assets
Cash and cash equivalents			13,814,892	19,514,960
Amounts due from brokers			220,858	379,239
Other receivables		10	19,388	100,396
Total current assets			14,055,138	19,994,595
Total assets			116,480,480	105,659,451
Current liabilities
Other payables and accrued expenses			301,513	320,733
Amounts due to brokers			266,284	621,241
Total current liabilities			567,797	941,974
Net assets			115,912,685	104,717,477
Capital and reserves
Called up share capital		12	50,220,346	50,289,346
Capital redemption reserve			1,246,500	1,246,500
Other reserves			64,445,839	53,181,631
Total shareholders' equity			115,912,685	104,717,477

The condensed financial statements were approved by the Board of Directors on 12 December 2016 and are signed on its behalf by:

Walid Chatila                                                                   Rupert Evans

Director                                                                           Director

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

 

 

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY

For the six months ended 30 September 2016 (Unaudited)

		Share Capital	Capital redemption reserve	Other reserves	Total
	Note	£	£	£	£
Opening equity shareholder's funds 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	12	(69,000)	-	(744,750)	(813,750)
Closing equity shareholders' funds at 30 September 2016		50,220,346	1,246,500	64,445,839	115,912,685

For the six months ended 30 September 2015 (Unaudited)

		Share Capital	Capital redemption reserve	Other reserves	Total
	Note	£	£	£	£
Opening equity shareholder's funds at 1 April 2015		50,879,089	1,246,500	40,939,428	93,065,017
Total comprehensive income for the period		-	-	12,974,376	12,947,376
Transactions with owners, recorded directly to equity
- Cancellation of shares		(589,743)	-	(5,572,246)	(6,161,989)
Closing equity shareholders' funds at 30 September 2015		50,289,346	1,246,500	48,341,558	99,877,404

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

 

 

CONDENSED STATEMENT OF CASH FLOWS

For the six months ended 30 September 2016

		Six months ended 30 September 2016	Six months ended 30 September 2015
		£	£
	Notes	(Unaudited)	(Unaudited)
Cash inflow from operating activities
Profit after taxation and total comprehensive income for the period		12,008,958	12,974,376
Adjustments to reconcile profit after tax to net cash flows:
-     Realised gain on financial assets designated at fair value through profit or loss		(5,823,562)	(12,910,118)
-     Unrealised gain on financial assets designated at fair value through profit or loss		(6,726,551)	(590,123)
-     Net (gain)/loss on foreign currency translation		(1,738)	64,265
Purchase of financial assets designated at fair value through profit or loss		(27,358,570)	(22,809,149)
Proceeds from sale of financial assets designated at fair value through profit or loss		23,148,197	41,904,688
Changes in working capital
Decrease in other receivables		81,008	10,279
Decrease in amounts due from brokers		158,381	-
Increase in manager's fees payable		109,233	92,146
Decrease in other payables and accrued expenses		(128,453)	(11,644)
Decrease in amounts due to brokers		(354,957)	(180,322)
Net cash (outflow)/inflow from operating activities		(4,888,054)	18,544,398
Cash outflow from financing activities
Cancellation of shares		(813,750)	(6,161,989)
Net cash outflow from financing activities		(813,750)	(6,161,989)
Net (decrease)/increase in cash and cash equivalents in the period		(5,701,804)	12,382,409
Cash and cash equivalents at the beginning of the period		19,514,960	992,864
Effect of exchange rate fluctuations on cash and cash equivalents		1,736	(64,265)
Cash and cash equivalents at the end of period		13,814,892	13,311,008

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

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 and Transparency Rules of the FCA and with International Financial Reporting Standards (IFRS) as adopted by the European Union 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 (IASC) 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 2016 Annual Report and Financial Statements, which was prepared in accordance with IFRS.

The Half Yearly Financial Report has been prepared under a going concern basis. After reviewing the Company's budget and cash flow forecast for the next financial period, the Directors are satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements.

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 interim 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 2016 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

a)   Classification

The Company classifies its investments as financial assets designated at fair value through profit or loss. These are financial instruments held for investment purposes. Financial assets also include cash and cash equivalents, amounts due from brokers, dividends and interest receivable and other receivables which are measured at amortised cost using the effective interest rate method.

Financial assets designated at fair value through profit or loss at inception

Financial assets designated at fair value through profit or loss at inception are financial instruments that are not classified as held for trading but are managed, and their performance is evaluated on a fair value basis in accordance with the Company's documented investment strategy.

The Company's policy requires the Investment Manager and the Board of Directors to evaluate the information about these financial assets on a fair value basis together with other related financial information.

b)   Recognition, measurement and derecognition

Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investment. Financial assets designated at fair value through profit or loss are measured initially at fair value. Transaction costs are expensed as incurred and movements in fair value are recorded in the Condensed Statement of Comprehensive Income. Subsequent to initial recognition, all financial assets designated at fair value through profit or loss are measured at fair value.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

c)   Fair value estimation and valuation process

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As at 30 September, the Company held principally equity and equity-related investments in small and mid-sized quoted and unquoted companies in the United Kingdom and United States.

Listed investments have been valued at the bid market price ruling at the statement of financial position 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.

The 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 transactions 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. 

The Directors are in ongoing communications with the Investment Manager and hold meetings on a timely basis to discuss performance of the investment portfolio and the valuation methodology and in addition review monthly investment performance reports.

The estimated fair values may differ from the values that would have been realised had a ready market existed and the difference could be material.

The fair value of investments is reassessed on an ongoing basis by the Board.

Financial liabilities

d)   Classification

Amounts due to brokers represent payables for investments that have been contracted for but not yet settled or delivered on 30 September 2016. Financial liabilities include other payables and accrued expenses which are held at amortised cost using the effective interest rate method.

e)   Recognition, measurement and derecognition

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 2016 (Unaudited)	Six months ended 30 September 2015 (Unaudited)
	£	£
Dividends	287,988	545,555
Other income	-	2,600
Total investment income	287,988	548,155

4.   Investment manager and investment advisory fee

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 2016: £202,867 (31 March 2016: £93,634).

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 2016 supplementary management fee.

On 3 December 2015, a payment of £200,000 was recommended by the Chairman in respect of the 2015 supplementary management fee. This was approved by the Board of Directors and paid during December 2015. 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 2016: £5,237 (31 March 2016: £24,042).

7.   Administration fees

BNP Paribas Securities Services S.C.A., Guernsey Branch was appointed as secretary and administrator 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 2016: £16,780 (31 March 2016: £92,939).

8.   Directors' fees, expenses and interests

With the exception of the Chairman, who is entitled to a fee of £25,000 per annum, each Director is entitled to £18,000 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 2016 were £33,560 (31 March 2016: £37,750).

As at the date of approval of these condensed financial statements, Christopher Mills, John Radziwill and John Grace held Ordinary Shares in the Company. No other Director holds shares in the Company.

No pension contributions were payable in respect of any of the Directors (31 March 2016: £nil).

 

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

		30 September 2016	31 March 2016
		(Unaudited)	(Audited)
			£
Financial assets designated at fair value through profit or loss		102,425,342	85,664,856

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

IFRS 13 'Fair Value Measurement' requires an analysis of investments valued at fair value based on the reliability and significance of information used to measure their fair value.

The Company categorises its financial assets according to the following fair value hierarchy detailed in IFRS 13, that reflects the significance of the inputs used in determining their fair values;

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable variable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

	Level 1	Level 2	Level 3	30 September 2016 Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£	£	£	£
Financial assets
Financial assets designated at fair value through profit and loss	96,664,632	-	5,760,710	102,425,342

	Level 1	Level 2	Level 3	31 March 2016 Total
	(Audited)	(Audited)	(Audited)	(Audited)
	£	£	£	£
Financial assets
Financial assets designated at fair value through profit and loss	80,598,581	-	5,066,275	85,664,856

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the reporting period.

	Level 1 (Unaudited)	Level 2 (Unaudited)	Level 3 (Unaudited)	30 September 2016 Total (Unaudited)
	£	£	£	£
Opening valuation	80,598,581	-	5,066,275	85,664,856
Movements in the period:
Purchases during the year	27,358,570	-	-	27,358,570
Sales - proceeds during the year	(23,750,858)	-	602,661	(23,148,197)
Realised gain on financial assets designated at fair value through profit or loss	5,419,582	-	403,980	5,823,562
Unrealised gain on financial assets designated at fair value through profit or loss	7,038,718	-	(312,167)	6,726,551
Transfers into/(out of) level 3	39	-	(39)	-
Closing valuation	96,664,632	-	5,760,710	102,425,342
Total change in unrealised gains on financial assets for the period ended 30 September 2016	7,038,718	-	(312,165)	6,726,551

During the period ended 30 September 2016, there was one transfer from level 3 to level 1.

	Level 1 (Audited)	Level 2 (Audited)	Level 3 (Audited)	31 March 2016 Total (Audited)
	£	£	£	£
Opening valuation	83,348,998	-	9,068,055	92,417,053
Movements in the year:		-
Purchases during the year	43,109,865	-	250,000	43,359,865
Sales - proceeds during the year	(60,777,109)	-	(8,459,488)	(69,236,597)
Realised gain on financial assets designated at fair value through profit or loss	11,169,182	-	8,455,850	19,625,032
Unrealised gain on financial assets designated at fair value through profit or loss	6,114,397	-	(6,614,894)	(500,497)
Transfers into/(out of) level 3	(2,366,752)	-	2,366,752	-
Closing valuation	80,598,581	-	5,066,275	85,664,856
Total change in unrealised gains on financial assets for the year ended 31 March 2016	6,114,397	-	(6,614,894)	(500,497)

During the year ended 31 March 2016, there were two transfers from level 1 to level 3; one resulting from a de-listing and the other from acquisition by a non-listed entity.

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

The table below sets out information about significant unobservable inputs used at 30 September 2016 in measuring financial instruments categorised as Level 3 in fair value hierarchy.

Valuation Method	Fair Value at 30 September 2016 (Unaudited) £	Unobservable inputs	Factor	Sensitivity to changes in significant unobservable inputs
Comparative Company Multiples	1,008,819	Earnings multiple	4.1x	The estimated fair value would increase if: - the Earnings multiple was increased

The table below sets out information about significant unobservable inputs used at 31 March 2016 in measuring financial instruments categorised as Level 3 in fair value hierarchy.

Valuation Method	Fair Value at 31 March 2016 (Audited) £	Unobservable inputs	Factor	Sensitivity to changes in significant unobservable inputs
Comparative Company Multiples	598,566	Earnings multiple	4.0x	The estimated fair value would increase if: - the Earnings multiple was increased

The rest of the investments classified as level 3 have not been included in the above analysis as they 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).

Although the Company believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. For fair value measurements in Level 3, changing one or more of the assumptions used to reasonably possible alternative assumptions would have the following effects on the net assets attributable to the shareholders.

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

As at 30 September 2016 (Unaudited)

Valuation Method	Input	Sensitivity used	£
Comparative Company Multiples	Multiple	+/-10% (4.5/3.7)	307,586/(307,586)

As at 31 March 2016 (Audited)

Valuation Method	Input	Sensitivity used	£
Comparative Company Multiples	Multiple	+/-10% (4.4/3.6)	258,580/(258,580)

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

10. Other receivables

			30 September 2016	31 March 2016
			(Unaudited)	(Audited)
			£	£
Dividend receivable			9,067	90,000
Prepayments			10,321	10,396
Total other receivables			19,388	100,396

11. Contingent liabilities and commitments

As at 30 September 2016, the Company had no contingent liabilities or commitments (31 March 2016: nil).

12. Share Capital

Authorised share capital

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

Ordinary Shares Issued - 1 April 2016 to 30 September 2016 

Ordinary Shares of 50p each		Number of Shares	Share Capital £
At 1 April 2016		15,192,125	50,289,346
Cancellation of shares		(138,000)	(69,000)
At 30 September 2016		15,054,125	50,220,346

Ordinary Shares Issued - 1 April 2015 to 31 March 2016

Ordinary Shares of 50p each		Number of Shares	Share Capital £
At 1 April 2015		16,371,611	50,879,089
Cancellation of shares		(1,179,486)	(589,743)
At 31 March 2016		15,192,125	50,289,346

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 2016 and 30 September 2016, the Company carried out three share buybacks, resulting in a total reduction of 138,000 shares for a cost of £813,750. These shares were subsequently cancelled.

Between 1 April 2015 and 31 March 2016, the Company carried out 6 share buybacks, resulting in a total reduction of 1,179,486 shares for a cost of £6,161,989. These shares were subsequently cancelled.

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

	30 September 2016 (Unaudited)		31 March 2016 (Audited)
Ordinary Shares	NAV £	NAV per share £	NAV £	NAV per share £
Published net asset value	117,705,824	7.8200	106,402,946	7.0000
Unrealised loss on revaluation of investments at bid / mid price1	(1,793,139)	(0.1200)	(1,685,469)	(0.1100)
Net Asset Value attributable to Shareholders	115,912,685	7.7000	104,717,477	6.8900

¹ In accordance with IFRSs, as adopted by the European Union, the Company's long investments have been valued at bid price in the condensed financial statements.  However, in accordance with the Company's principal documents the Net Asset Value reported each month reflects the investments being valued at the closing, last or mid-market (as the Directors in all circumstances consider appropriate) price as notified to the Company on the valuation day by a member of the stock exchange concerned.  Certain investments remain at fair value as determined in good faith by the Directors.

14. Basic and diluted earnings per Ordinary Share

					Six months ended 30 September 2016 (Unaudited)	Six months ended 30 September 2015  (Unaudited)
					£	£
Total comprehensive income for the period					12,008,958	12,974,376
Weighted average number of shares during the period					15,116,835	16,023,698
Basic and diluted earnings per share					0.7944	0.8097

15. Net Asset Value per Ordinary Share

					30 September 2016 (Unaudited)	31 March 2016 (Audited)
					£	£
Net asset value					115,912,685	104,717,477
Number of shares at period/year end					15,054,125	15,192,125
Net asset value per share					7.6997	6.8929

16. 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 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 2016, £33,560 (31 March 2016: £37,750) included in other accruals and payables 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 Statement of Financial Position date (2015: £nil).

As at 30 September 2016, the Company held 2,350,000 shares in Harwood Wealth Management Group valued at £2,867,000. 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.

17. Subsequent events

Management has evaluated subsequent events for the Company through 12 December 2016, the date the financial statements were available to be issued, and had concluded there are not any material events that require disclosure or adjustment of the 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

 

 

IR BUBDDSUBBGLD