Half-year Report

RNS Number : 7339W

Oryx International Growth Fund Ld

13 December 2019

 

13 December 2019

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 2019

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

PERFORMANCE SUMMARY AND DIVIDEND HISTORY

Performance Summary

	At 30 September 2019	At 31 March 2019
(£ in millions, except per share data and the number of Ordinary Shares in issue)
Number of Ordinary Shares in issue	14,192,125	14,192,125
Net Asset Value ("NAV") attributable to shareholders
- Ordinary Shares	145.31	133.33
Investments	143.44	125.65
Cash and cash equivalents	2.12	7.93
NAV per share attributable to shareholders
- Ordinary Shares	10.24	9.39
Share Price	7.53	7.68
Discount to NAV	(26.46)%	(18.21)%
Earnings per share1	0.84	0.57

Dividend history

No Ordinary Share dividend was declared during the period. 

¹ - The earnings per share of £0.84 relates to the six month period from 1 April 2019 to 30 September 2019 whereas the earnings per share of £0.57 relates to the financial year from 1 April 2018 to 31 March 2019.

CHAIRMAN'S STATEMENT

I am pleased to report another excellent set of results for the period ended 30 September 2019. The Net Asset Value per share rose by 9% during the period. During the same period, the relevant smaller companies' index reported a decline of approximately 7%.

The continued strong performance of Oryx International Growth Fund Limited (the "Company") is a reflection of the skills of Christopher Mills and the team at Harwood to invest in companies where they see opportunities for value creation through active management and, when appropriate, realisation of capital gains.

On 1 October 2019, we appointed Harwood Capital (Gibraltar) Limited as the Company's new Alternative Investment Fund Manager and Adviser with immediate effect as noted below under the events after the reporting period. 

In line with the Company's stated policy, no dividend will be paid.

Nigel Cayzer

Chairman

12 December 2019

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 2019. It should be read in conjunction with the Chairman's Statement and the Investment Adviser'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 six month period ended 30 September 2019 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.

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, the parent company of Harwood Capital LLP 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 3 and 4. 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 of which Sidney Cabessa is a Director.

Information on the Directors' remuneration is detailed in note 7. 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	350,000
John Grace 1	130,000 346,607

¹ John Grace holds a beneficial interest of 130,000 Ordinary Shares and 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 Directors have carried out a robust assessment of the principal risks facing the Company including those which would threaten its business model, future performance, solvency or liquidity. 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 2019. In the view of the Board, these principal risks and uncertainties were applicable to the six months under review and are not expected to change for the remaining six months of the financial year.

Events after the reporting date

On the 1 October 2019, the Alternative Investment Fund Management Agreement, dated 22 July 2014, was restated and amended.  The Alternative Investment Fund Management Restated and Amended Agreement (the "Restated Agreement"), dated 1 October 2019, appointed Harwood Capital Management (Gibraltar) Limited as the Company investment manager and adviser, replacing Harwood Capital LLP with effect from 1 October 2019. Under the Restated Agreement, no changes were made to the management fee and supplementary management fee as detailed in notes 3 and 4 respectively.

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 this Half-Yearly Financial Report.

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 condensed 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 condensed financial statements.

The special resolution outlined in Article 51 of the Articles of Incorporation was not passed at the AGM on 28 August 2019. Hence, the Company will continue its operations until the 2020 AGM when the special resolution outlined in Article 51 will be proposed to the shareholders again, where the Board will recommend that shareholders vote against this resolution. Although the outcome of such a vote remains uncertain, having assessed the principal risks to the business and investment model, the Directors' current view is that the shareholders will vote against the resolution.

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's and Investment Adviser's resources are appropriate to properly manage the Company's portfolio in the current and anticipated investment environment.

Refer to the Investment Adviser'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. He has previously been Senior Adviser with Rothschild and co (2012 to 2018); and is now Senior Adviser at Essling Capital. He is also a director of Harwood Capital Management Limited.

Walid Chatila

Canadian

Walid Chatila is a retired Certified Public Accountant (Texas 1984) and a Certified Professional Accountant (Ontario 1991). His career includes international audit and special assignment experience mostly in financial services in the Middle East and North America from 1983 to 1993. A resident of Abu Dhabi, United Arab Emirates, since 1993, he was the Finance Director of Emirates Holdings from 1994 to 2006, and between 2006 and 2011, he assumed the role of General Manager of Al Nowais Investment LLC. He was also the General Manager of Arab Development Establishment until June 2017.

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 Netsurion Ltd. 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. He graduated from Georgetown University. He 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 ADVISER'S REPORT

The Company had another successful period of performance, despite a challenging period. The NAV per share rose by 9% which compares favourably with a decline of approximately 7% of the appropriate indices during the six-month period under review.

Quoted equities:

The rise in NAV was positively impacted by a strong performance from top ten holdings Ergomed plc and Renalytix AI plc, which have gained 77% and 76% respectively in the six months through September. A significant investment in Stobart Group plc was initiated and has seen positive momentum in recent trading. The Southend Airport asset offers exciting potential for future upside in the business.

The principal disappointment in the interim was Hargreaves Services plc, which declined 21% through September. Despite a challenging year, we remain confident that management can fulfil its strategic objectives to release capital, manage risk and improve margins. Goals Soccer Centres plc also had to be written off following the discovery of fraud.

Unquoted equities:

The relatively small unquoted portfolio, amounting to 5.7% of assets, fell modestly as it was necessary to write down Jaguar Holdings Limited following the loss of the American Airlines contract. Antler Holdco Limited was, however, written up following very strong results.

Outlook:

We continue to invest in our existing holdings, as strong management teams have proven their capabilities in navigating the uncertain socio-economic environment. Markets have been stagnant as liquidity remains limited. Brexit negotiations with Europe have advanced which should bring clarity to the market, thus allowing share prices and volumes to improve.

We have benefited from three takeovers in recent months and there are several catalysts in the portfolio that we expect to contribute to underlying growth in the NAV of the Company in the current financial year.

Harwood Capital LLP

12 December 2019

TEN LARGEST HOLDINGS

As at 30 September 2019

EKF Diagnostics Holdings plc

EKF Diagnostics is a global integrated market leader in the medical diagnostics business, offering a large range of haemoglobin and haematocrit analysers. The company focuses on diagnostics for the Point of Care market, demonstrating a way to make blood and anaemia screening more accessible and affordable. The business also has a clinical laboratory division where its liquid reagents can be used widely in analysers found in hospital laboratories.

Management has provided positive outlook statements as strong margin performance has driven cash generation. The company is expected to declare a maiden dividend of 1p, equating to a yield in excess of 3%. Following the great success of the Renalytix AI plc spin out and IPO, EKF Diagnostics has signed a Preferred Provider Agreement with Mt Sinai, giving it early access to new commercial opportunities.

Ergomed plc

Ergomed provides specialised services to the pharmaceutical industry, which include clinical development and trial management for drug development companies. The company undertakes all facets of clinical trial management from Phase I to Phase IV on behalf of their clients. The group has continued to cut costs while continuing its path to leadership positions in the attractive PrimeVigilance and orphan drug development markets and has a strong order book underpinning future growth.

Ergomed has re-focused its business strategy and appointed new directors to the board that add significant expertise to the company's healthcare advisor committee. The company has received a strong order intake over the period, including a late-stage clinical trial win with a European specialty biotech business. The share price has appreciated significantly this year, but still remains at a discounted valuation to its various peers, suggesting further upside is available.

Augean plc

Augean is the market leader specialising in hazardous waste management practices, and provides waste management solutions across the United Kingdom. The group is strategically positioned to provide compliance and commercial solutions operated through five business units: Energy & Construction, Radioactive Waste Services, Industry and Infrastructure, Augean Integrated Services and Augean North Sea Services.

The group is currently engaged in a legal process with HMRC over supposed un-paid landfill tax assessments, the group believes that taxes have been collected and paid correctly and is challenging the HMRC's position. Cost savings in the business have climbed to £6 million per annum, and market drivers have remained strong in key segments. The company's net cash position has continued to strengthen, climbing to £23 million from £15 million since the beginning of the year.

MJ Gleeson plc

Gleeson operates two divisions, Gleeson Homes and Gleeson Strategic Land. Gleeson Homes continues to show a strong increase in revenues from the previous years. This has been driven by relentless demand for affordable housing among the group's core northern customer base. Gleeson 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, with a strong future pipeline. The decision has been made to retain the business within the group.

This twin track strategy continues to build momentum delivering increased revenues, profits, cash and margins as management puts in place the infrastructure to deliver its 2,000 homes a year target by 2022.

Bigblu Broadband plc

Bigblu Broadband, formerly "Satellite Solutions Worldwide", operates as a leading global telecommunication offering very fast broadband to rural communities, which traditional broadband providers cannot deliver. The company has established a strong position as an alternative and rural broadband provider across multiple geographies using satellite, fixed wireless and 4G/5G technologies. Organic growth is expected to accelerate, while increased scale and further integration of previous acquisitions should lead to improved margins and cash

generation. A recent partnership with Eutelsat will boost subscriber growth as the company expands its sales network.

During the interim period, the company accelerated organic growth and improved operating cash flow to £2.6 million from zero previously. Margins continue to improve amid operational gearing and streamlining of customer service costs. We expect satellite connectivity in Europe and Australia to continue to drive the business forward.

Renalytix AI plc

Renalytix AI plc was spun out of EKF Diagnostics Holdings plc in 2018. The company manufactures artificial intelligence-enabled diagnostics for kidney disease, serving patients on a global scale. The company recently announced the completion of a joint venture with AKESOgen, an industry leading commercial laboratory facility and provider of clinical trial precision medicine services. The partnership will allow RenalytixAI to immediately scale operations to support additional partnerships without incurring additional fixed overhead. The business has a strong management team and is supported by the Icahn School of Medicine at Mt Sinai.

The share price has performed well as strong markers for future take-up and broad payer acceptance have been achieved. The preliminary determination by CMS for national US Medicare pricing of the KidneyIntelX at $950 (vs $750 est) was extremely positive news and provides additional upside to the business.

Redcentric plc

The company is a leading UK IT managed services business that provides IT and cloud services to meet its customer and client's 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.

Redcentric is implementing a strategic review by cutting the cost base, consolidating property and systems from its legacy businesses throughout a challenging business environment. The operating model has been transformed to migrate more customers to the cloud. The company has delivered strong free cash flow and has demonstrated balance sheet improvement with net debt reduction. Cost savings have been ahead of expectations and a refreshed sales team continues to deliver on revenue targets.

Hargreaves Services plc

Hargreaves Services aims to deliver returns in three key asset classes; Energy, infrastructure and the property sector. The business has evolved from a traditional model of industrial services and logistics to incorporate renewable energy, civil engineering, land restoration and remediation. The company has developed a pipeline of opportunities with a land bank of 18,000 acres of land across the UK, which will have a mixed-use purpose of residential, commercial property and industrial use.

The group has faced challenging conditions but good strategic progress has been made towards a recovery in profitability. There is an increasing contribution from Hargreaves Land and German Associate HRMS as well as ongoing progress in Industrial Services. The company has announced its intention to introduce a dividend of 20p per share (equivalent of an 8% yield) funded by HMRS profits as the Carbon Pulverisation Plant comes on stream.

NAHL Group plc

NAHL Group consists of a group of businesses providing products and services to consumers in the UK legal services market. The company is mid-way through a strategic transition as regulatory changes lowered demand for the previous business model. NAHL is building a new brand of technology enabled law firm that focuses on customer experience and high-volume processing of claims through to final settlement through joint ventures with law firms and has recently launched its own wholly owned law firm.

The company has shown that its strategic transformation in the personal injury market from a marketing business to a full legal services provider is yielding positive results. The critical care division continues to grow on an organic basis and underpins the strong performance of the overall business.

Stobart Group plc

Stobart Group is a leading UK infrastructure and support service company that operates in aviation, energy and rail and civil engineering markets.  It is the operator of London Southend Airport and Stobart Air provides passenger flights under license from Aer Lingus and FlyBe. The Energy division supplies biomass plants in the UK with waste wood and other waste fuels while the rail division targets infrastructure companies such as National Rail. The company has a 12.5% interest in Eddie Stobart Logistics (ESL LN) which has been subject to takeover speculation from third parties.

STATEMENT OF DIRECTORS' 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 condensed financial statements contained within the Half-Yearly Financial Report have been prepared in accordance with IAS 34 "Interim Financial Reporting" and provides a fair, balanced and understandable view of the affairs of the Company as at 30 September 2019, as required by the Financial Conduct Authority ("FCA") through the Disclosure Guidance and Transparency Rule ("DTR") 4.2.4R; and

·     the Chairman's Statement, the Investment Adviser's Report, the Executive Summary and the notes to the condensed financial statements include a fair view of the information required by:

1.   DTR 4.2.7R, being an indication of important events that have occurred during the six months ended 30 September 2019 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 2019 and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions from the annual report that could have a material impact on the financial position or financial performance of the Company in the first six months of the current financial year.

By order of the Board

Walid Chatila                                                                          Rupert Evans 

Director                                                                                    Director

12 December 2019                                                                    12 December 2019

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 September 2019

 

		Six months ended 30 September 2019	Six months ended  30 September 2018
		(Unaudited)	(Unaudited)
	Notes	£	£
Income
Dividends		955,376	407,402
Net realised (losses)/gains on investments		(616,682)	549,812
Unrealised gains on revaluation of investments		12,721,697	7,119,604
Net losses on foreign currency translation		(22)	(5,219)
Total income		13,060,369	8,071,599
Expenses
Investment manager and adviser's fees	3	748,732	701,118
Transaction costs		26,340	39,480
Directors' fees and expenses	7	79,003	94,634
Audit fees		28,468	25,069
Administration fees	6	62,212	58,653
Legal and professional fees		32,553	34,564
Registrar and transfer agent fees		10,248	11,925
Custodian fees	5	16,612	15,781
Insurance fees		2,819	2,564
Regulatory fees		7,709	2,374
Printing fees		27,055	15,174
Interest and similar expense		-	74
Other expenses		28,185	9,191
Total expenses		1,069,936	1,010,601
Total profit for the period before taxation		11,990,433	7,060,998
Withholding tax on dividends		(10,737)	(11,379)
Profit and total comprehensive income for the period		11,979,696	7,049,619
Earnings per Ordinary Share - basic and diluted	11	0.84	0.50

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 condensed financial statements.     

 

CONDENSED STATEMENT OF FINANCIAL POSITION

as at 30 September 2019

			30 September 2019	31 March 2019
		Notes	(Unaudited)	(Audited)
			£	£
Non-current assets
Listed investments at fair value through profit or loss (Cost - £104,842,138 (31 March 2019 - £99,771,365))		8	134,144,627	116,042,185
Unlisted investments at fair value through profit or loss (Cost - £12,405,701 (31 March 2019 - £12,405,701))		8	9,293,013	9,602,986
			143,437,640	125,645,171
Current assets
Cash and cash equivalents			2,117,474	7,934,548
Dividends and interest receivable			255,370	210,500
Other receivables and prepayments			100,071	16,633
Total current assets			2,472,915	8,161,681
Total assets			145,910,555	133,806,852
Current liabilities
Other payables and accrued expenses			376,430	370,787
Amounts due to brokers			228,531	110,167
Total current liabilities			604,961	480,954
Net assets			145,305,594	133,325,898
Shareholders' equity
Share capital		9	49,789,346	49,789,346
Capital redemption reserve			1,246,500	1,246,500
Other reserves			94,269,748	82,290,052
Total shareholders' equity			145,305,594	133,325,898
Net Asset Value per Ordinary Share - basic and diluted		10,12	£10.24	£9.39

The condensed financial statements were approved by the Board of Directors on 12 December 2019 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 2019 (Unaudited)

		Share Capital	Capital redemption reserve	Other reserves	Total
		£	£	£	£
Balance at 1 April 2019		49,789,346	1,246,500	82,290,052	133,325,898
Total comprehensive income for the period		-	-	11,979,696	11,979,696
Balance at 30 September 2019		49,789,346	1,246,500	94,269,748	145,305,594

for the six months ended 30 September 2018 (Unaudited)

		Share Capital	Capital redemption reserve	Other reserves	Total
		£	£	£	£
Balance at 1 April 2018		49,789,346	1,246,500	74,205,667	125,241,513
Total comprehensive income for the period		-	-	7,049,619	7,049,619
Balance at 30 September 2018		49,789,346	1,246,500	81,255,286	132,291,132

 

CONDENSED STATEMENT OF CASH FLOWS

for the six months ended 30 September 2019

		Six months ended 30 September 2019	Six months ended 30 September 2018
		£	£
		(Unaudited)	(Unaudited)
Cash flow from operating activities
Profit for the period		11,979,696	7,049,619
Net realised losses/(gains) on investments		616,682	(549,812)
Unrealised gains on revaluation of investments		(12,721,697)	(7,119,604)
Net losses on foreign currency translation		22	5,219
(Increase)/decrease in dividends and interest receivable		(44,870)	112,640
Increase in other receivables and prepayments		(83,438)	(2,164)
Decrease in amounts due from brokers		-	(124,063)
Increase/(decrease) other payables and accrued expenses		5,643	(21,363)
Increase/(decrease) in amounts due to brokers		118,364	(651,783)
Purchase of investments		(13,188,427)	(20,006,990)
Sale of investments		7,500,973	8,046,860
Net cash outflow from operating activities		(5,817,052)	(13,261,441)
Net decrease in cash and cash equivalents in the period		(5,817,052)	(13,261,441)
Cash and cash equivalents at the beginning of the period		7,934,548	18,736,273
Effect of exchange rate fluctuations on cash and cash equivalents		(22)	(5,219)
Cash and cash equivalents at the end of period		2,117,474	5,469,613

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 (the "Annual Report") are prepared in accordance with  International Financial Reporting Standards ("IFRS") as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board, and 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". The accounting policies adopted are consistent with those of the previous financial year and corresponding interim period, except for the adoption of new and amended standards as set out below.

The Company applies for the first time IFRS 16 - Leases which became effective on 1 January 2019. As the Company does not participate in leasing arrangements as at 30 September 2019, the application of IFRS 16 - Leases does not have an impact on the Company's condensed financial statements.

Several other amendments and interpretations apply for the first time in 2019, but these do not have an impact on the condensed financial statements.

2.1 Going Concern

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 2019, there was a working capital surplus of £1,867,954. The Directors noted that as at 30 September 2019 (i) the profit and total comprehensive income for the period from 1 April 2019 to 30 September 2019 was £11,979,696 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 and investment advisory fees, directors' fees and expenses, 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 94% 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 28 August 2019. Hence, the Company will continue its operations until the 2020 AGM when the special resolution outlined in Article 51 will be proposed to the shareholders again, where the Board will recommend that shareholders vote against this resolution. Although the outcome of such a vote remains uncertain, having assessed the principal risks to the business and investment model, the Directors' current view is that the shareholders will vote against the resolution.

2.2 Use of judgements and estimates

In preparing these condensed 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's accounting policies and the key sources of estimation uncertainty were the same as those applied to the Annual Report and Financial Statements for the year ended 31 March 2019.

2.3 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).

2.4 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 profit or loss in the Statement of Comprehensive Income. Transaction costs are separately disclosed in profit or loss 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 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 and amounts due to brokers 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 manager and adviser's fees

In line with the Alternative Investment Fund Management Agreement, dated 22 July 2014, 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 2019: £250,539 (31 March 2019: £226,351).

Refer to note 14 for detail of the restatement and amendment of the Alternative Investment Fund Management Agreement with effect from 1 October 2019.

4.   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 2019 supplementary management fee. The supplementary management fee is paid annually in arrears.

Refer to note 14 for detail of the restatement and amendment of the Alternative Investment Fund Management Agreement with effect from 1 October 2019.

5.   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 2019: £8,818 (31 March 2019: £4,774). This amount is included in other payables and accrued expenses.

6.   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 2019: £21,463 (31 March 2019: £18,617). This amount is included in other payables and accrued expenses.

7.   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 2019 were £38,972 (31 March 2019: £38,125). 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. No other Director holds shares in the Company.

No pension contributions were payable in respect of any of the Directors (31 March 2019: £nil).

8.   Investments at fair value through profit or loss

	30 September 2019	31 March 2019
	(Unaudited)	(Audited)
	£	£
Cost at beginning of period/year	112,177,066	94,414,272
Additions	13,188,427	38,400,059
Disposals	(7,500,973)	(27,549,515)
Net realised (losses)/gains on investments	(616,682)	6,912,250
Cost at end of period/year	117,247,838	112,177,066
Net unrealised gains on investments	26,189,802	13,468,105
Fair value at end of the period/year	143,437,640	125,645,171

Representing:

	30 September 2019	31 March 2019
	(Unaudited)	(Audited)
	£	£
Listed equities	134,144,627	116,042,185
Unlisted equities	9,293,013	9,602,986
	143,437,640	125,645,171

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, 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 2019	Level 1	Level 2	Level 3	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£	£	£	£
Financial assets at fair value
through profit or loss
Listed securities	126,037,127	8,107,500	-	134,144,627
Unlisted securities	-	-	9,293,013	9,293,013
	126,037,127	8,107,500	9,293,013	143,437,640

31 March 2019	Level 1	Level 2	Level 3	Total
	(Audited)	(Audited)	(Audited)	(Audited)
	£	£	£	£
Financial Assets at fair value
through profit or loss
Listed securities	107,412,185	8,630,000	-	116,042,185
Unlisted securities	-	-	9,602,986	9,602,986
	107,412,185	8,630,000	9,602,986	125,645,171

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

	30 September 2019	31 March 2019
	(Unaudited)	(Audited)
	£	£
Opening balance	9,602,986	5,048,764
Net realised losses on investments	-	(228,908)
Unrealised losses on investments	(309,973)	(23,021)
Purchase of investments	-	1,294,600
Transfers from level 1 into level 3	-	3,511,551
Closing balance	9,293,013	9,602,986
Change in unrealised losses on investments included in Condensed Statement of Comprehensive Income for Level 3 investments held	(309,973)	(23,021)

During the period ended 30 September 2019, there were no transfers between the three levels of the fair value hierarchy (31 March 2019: One transfer from level 1 to level 3 resulting from the investee company's listing being suspended). 

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 2019 and 31 March 2019 in measuring financial instruments categorised as Level 3 in the fair value hierarchy.

Valuation Method	Fair Value at 30 September 2019  (£)	Unobservable inputs	Factor	Sensitivity to changes in significant unobservable inputs
Comparable Company Multiples	1,360,046	Earnings (EBITDA) multiple	16x	The estimated fair value would increase if: - the Earnings (EBITDA) multiple was increased
Comparable Company Multiples	2,701,334	Earnings (EBITDA) multiple	8.5x	The estimated fair value would increase if: - the Earnings (EBITDA) multiple was increased

Valuation Method	Fair Value at 31 March 2019 (£)	Unobservable inputs	Factor	Sensitivity to changes in significant unobservable inputs
Comparable Company Multiples	1,332,459	Earnings (EBITDA) multiple	15.1x	The estimated fair value would increase if: - the Earnings (EBITDA) multiple was increased
Comparable Company Multiples	3,499,800	Earnings (EBITDA) multiple	7.5x	The estimated fair value would increase if: - the Earnings (EBITDA) multiple was increased

The remaining 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

As at 30 September 2019

Valuation Method	Input	Sensitivity used	£
Comparable Company Multiples	Earnings (EBITDA) multiple	+/-10% (17.6/14.4)	155,725/(176,488)
Comparable Company Multiples	Earnings (EBITDA) multiple	+/-10% (9.5/7.7)	279,563/(279,563)

As at 31 March 2019

Valuation Method	Input	Sensitivity used	£
Comparable Company Multiples	Earnings (EBITDA) multiple	+/-10% (16.1/15.1)	117,758/(98,384)
Comparable Company Multiples	Earnings (EBITDA) multiple	+/-10% (8.3/6.8)	387,267/(387,267)

A sensitivity of 10% has been considered appropriate given the earnings (EBITDA) multiple for comparable company multiples lies within this range.

Please refer to note 2.4 for valuation methodology of financial assets at fair value through profit or loss.

9.   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 2019 to 30 September 2019 

Ordinary Shares of 50 pence each		Number of Shares	Share capital £
At 1 April 2019		14,192,125	49,789,346
At 30 September 2019		14,192,125	49,789,346

Ordinary Shares Issued - 1 April 2018 to 31 March 2019

Ordinary Shares of 50 pence each		Number of Shares	Share capital £
At 1 April 2018		14,192,125	49,789,346
At 31 March 2019		14,192,125	49,789,346

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 2019 to 30 September 2019 and 1 April 2018 to 30 September 2018, the Company did not carry out any share buybacks.

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

	30 September 2019		31 March 2019
	£	£ per share	£	£ per share
Published net asset value	146,898,469	10.35	135,880,966	9.57
Adjustment due to revaluation of investments at bid price	(1,592,875)	(0.11)	(2,546,871)	(0.18)
Adjustment - accrued expenses	-	-	(8,197)	(0.00)
Net asset value attributable to shareholders	145,305,594	10.24	133,325,898	9.39

11. Basic and diluted earnings per Ordinary Share

				Six months ended 30 September 2019 (Unaudited)	Six months ended 30 September 2018  (Unaudited)
				£	£
Total comprehensive income for the period				11,979,696	7,049,619
Weighted average number of shares during the period				14,192,125	14,192,125
Basic and diluted earnings per share				0.84	0.50

12. Net Asset Value per Ordinary Share

				30 September 2019 (Unaudited)	31 March 2019 (Audited)
				£	£
Net asset value				145,305,594	133,325,898
Number of shares at period/year end				14,192,125	14,192,125
Net asset value per share				10.24	9.39

13. 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 Manager and Investment Adviser are considered to be a related party. The fees paid are included in the Condensed Statement of Comprehensive Income and further detailed in notes 3 and 4.

The Directors are also considered to be related parties and their fees are disclosed in the Condensed Statement of Comprehensive Income. At 30 September 2019, £38,972 (31 March 2019: £38,125) 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 the Company.

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 2019: £nil).

As at 30 September 2019, the Company held 2,500,000 (31 March 2019: 2,500,000) shares in Harwood Wealth Management Group valued at £3,125,000 (31 March 2019: £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.

14. Subsequent events

On 1 October 2019, the Alternative Investment Fund Management Agreement, dated 22 July 2014, was restated and amended.  The Alternative Investment Fund Management Restated and Amended Agreement (the "Restated Agreement"), dated 1 October 2019, appointed Harwood Capital Management (Gibraltar) Limited as the Company Investment Manager and Adviser, replacing Harwood Capital LLP with effect from 1 October 2019. Under the Restated Agreement, no changes were made to the management fee and supplementary management fee as detailed in notes 3 and 4 respectively.

COMPANY INFORMATION

Registered Office

BNP Paribas House,

St Julian's Avenue,

St Peter Port, Guernsey, GY1 1WA

Investment Manager and Investment Adviser

(Resigned 1 October 2019)

Harwood Capital LLP

6 Stratton Street, Mayfair, London, W1J 8LD

Investment Manager and Investment Adviser

(Effective 1 October 2019)

Harwood Capital Management (Gibraltar) Limited

Suite 827 Europort, Europort Road, Gibraltar

Custodian

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

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

BNP Paribas House, St Julian's Avenue,

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

Registrars

Link Market Services (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 Advisers

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:

Jasper Cross

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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