Half Year Results

RNS Number : 1841E

Polar Capital Technology Trust PLC

16 December 2009

 



16 December 2009

POLAR CAPITAL TECHNOLOGY TRUST PLC (the "Company")

Unaudited Half Year Results for the Six Months ended 31 October 2009

Key Points

• Net assets rose 13.6% over the six month period ended 31 October 2009 compared to a rise in the Dow Jones World Technology Index in sterling terms of 11.5% 

• Relative valuations look well supported by a combination of sector earnings and M&A activity

• New technology cycle unfolding, driven by a move toward "cloud computing" and a renewed focus by corporates on IT cost efficiencies and productivity

• Our appointed Fund Manager won the techMARK 'Technology Fund Manager of the Year' Award for 2009

• The outlook for the technology sector looks favourable in 2010 with an increasing divergence of fortunes between legacy and next generation companies.

FINANCIAL HIGHLIGHTS
	(Unaudited)	(Audited)	Movement
	Half year ended	Year ended	%
	31 October 2009	30 April 2009
Net assets per ordinary share	246.21p	216.75p	13.6%
Price per ordinary share	216.00p	183.00p	18.0%
Total net assets	£311,450,000	£274,179,000	13.6%
Shares in issue	126,497,914	126,497,914	-
Benchmark Index Dow Jones World Technology   (total return sterling adjusted)			11.5%

For further information please contact:
Ben Rogoff	Ed Gascoigne-Pees / Georgina Turner
Polar Capital Technology Trust PLC	Financial Dynamics
Tel: [phone]	Tel: [phone]

Interim Management Report 

The half year to 31 October 2009 witnessed a sharp recovery in investor sentiment and a rebound in asset prices. The first stage of the rally in March and April was recognition that the action of central banks and governments to underwrite the financial system was likely to prove successful.  This action largely eliminated systemic risk and paved the way for phase two of the reflation process with liquidity moving into riskier assets. It has been the further rerating of risk assets that has largely driven equity returns during our half year, the FTSE World Index rising 14% in Sterling terms. The underlying equity performance was significantly better than headline returns with most major markets (excluding Japan) rising more than 20% over the half year. Unfortunately the weakness of the US Dollar, which fell more than 11% against the Pound, considerably reduced returns on a Sterling basis. 

Two additional positive impulses have ameliorated the impact of the downturn. The decision by China, India and other emerging nations to boost domestic investment and consumption has been critical. Developed economies are likely to contract by 3.4% in 2009 before rebounding just 1.3% in 2010. In contrast, developing economies are set to grow 1.7% in 2009 before significantly accelerating next year. With China set to grow in excess of 9% this year, the current downturn will be the first during the post-war period where the US consumer has not dragged the world out of recession. Furthermore, the persistence of the managed exchange rate / reserve accumulation system employed by Asian central banks has helped finance much of the necessary transfer of private debt to the public sector in the developed world. The other significant positive has been the unprecedented degree of corporate cost cutting, particularly in the US. Faced with the possibility of systemic collapse, management teams responded by slashing overheads, capital spending and employment well beyond historic averages. This has resulted in net margins in the US bottoming at 6% this cycle, nearly 200 basis points above average margin lows experienced during previous recessions post 1974. 

Technology stocks modestly trailed the broader market, the Dow Jones World Technology Index rising 11.5% in Sterling terms. Our own net asset value per share rose by 13.6% over the half year.

While the sector underperformed at the headline level, this largely reflected the poor relative performance of US equities in Sterling terms. This is apparent when one considers sector returns at the geographic level where technology stocks outperformed in most major markets, although they trailed in Asia. This positive underlying performance was driven initially by the sector's lack of participation during the last cycle and its superior balance sheet and earnings profile. Having demonstrated textbook leadership by not making fresh lows in March unlike most markets, the sector continued to attract generalist investors. While the sector's relative performance appears to have plateaued recently, the performance of next generation stocks such as Apple, Google and Amazon has continued to outpace the broader market. 

While we acknowledge that much of the revaluation of risk assets is behind us, we remain relatively sanguine about the prospects for further gains in equities over the coming second half of the year. As a result of the considerable slack that exists today, the deflationary impact of globalisation and the low probability of another commodity bubble so soon after the last, we believe inflation is likely to remain a non issue in 2010. This should result in little change to the stance taken by central banks and should be conducive to the performance of longer duration assets. As such we do not anticipate significant change to record low interest rates over the coming half year as inflationary risks are overwhelmed  by those associated with a 'double-dip' and / or deflation. The persistence of extremely low interest rates should continue to force cash out of risk free assets particularly once negligible nominal returns become even less palatable as headline inflation reappears. In addition we expect M&A to help underpin equity values, reflecting record corporate liquidity, balance sheet strength and low returns to cash balances. Lastly, we are intrigued by the muted expectations for growth in 2010 given that recoveries post deep recessions have usually mirrored the declines that preceded them. While a 'V-shape' recovery is not part of our base case, most investors appear to have dismissed it as a realistic outcome next year. 

Clearly there are a number of risks to our sanguine market view that have risen commensurate with the rebound in equity markets. These include the near term potential for profit taking given the extent of the rally.  Longer term, we are mindful of the plethora of structural imbalances that remain unresolved and the need for multi year balance sheet repair. Other risks that could affect our thesis include sovereign debt default, premature interest rate hikes, disorderly Dollar decline and a so called 'double-dip' should the recovery falter.  Political risk remains the most significant exogenous factor to consider, particularly relating to Iran. 

Turning to technology, we expect that the sector will continue to hold its own over the coming half year. While IT budgets are likely to remain restrained during early 2010, we are hopeful that the current divergence between capital spending and corporate cashflows will close as the recovery continues. Inventories remain extremely tight - reflecting the damage done to the corporate psyche during the credit crisis - which should result in favourable cyclical tailwinds as the pace of destocking slows and is likely to be ultimately followed by modest restocking. With recent US Dollar weakness likely to result in a tailwind for much of 2010 we would expect sector earnings growth to exceed that of the broader market. Furthermore, we anticipate the recent pick up in sector M&A to continue to support valuations now that a new cycle appears to have commenced. This combination may lead to a further re-rating of our sector, which currently trades at a 20% premium on a forward PE, placing it below its long term average. Furthermore, this premium is largely eliminated on a cash-adjusted basis due to the sector's vastly superior balance sheet position.

While the downturn has been a particularly challenging one, it has driven corporates to have a renewed focus on productivity which has ushered in the new technology cycle, which we have long awaited. The combination of sharply lower hardware prices and dramatic data growth has resulted in an IT sprawl that has left the industry with little choice but to radically rethink how computing should be delivered in the 21st Century. With budgets pressured, IT buyers are becoming more receptive to disruptive technologies that in aggregate forms the basis of a new cycle.  Therefore we believe that the combination of these drivers - dubbed by some as 'cloud computing' - is better understood as the first phase of a longer term move towards 'utility computing' or the delivery of IT as a variable, rather than fixed, cost. Looking into 2010, there are a number of additional possible growth drivers, including the potential for a PC upgrade cycle driven by a new Microsoft operating system ('Windows 7'), domestic consumption in emerging markets, data traffic growth and environmental technologies such as LED lighting. 

With a new cycle unfolding we are continuing the process of increasing our exposure to next generation companies. This may not be obvious given that our large cap weighting remains largely unchanged since the end of the last fiscal year. Our portfolio includes a number of significant holdings in well positioned large cap companies unencumbered by legacy exposure. We have also considerably reduced exposure to peripheral areas within technology, such as alternative energy, as our conviction level in our core thesis has increased. This has resulted in increased exposure to the software, components and internet subsectors at the expense of computing, life sciences and solar. 

With the developed world's economic growth likely to remain restrained for a considerable period, we expect that productivity gains will remain a critical corporate goal which should provide a very supportive environment for the sector. We would expect the fortunes of last and next generation companies to increasingly bifurcate, reflecting the disruptive impact of a new technology cycle. 

Ben Rogoff

15 December 2009

Risks and uncertainties

The Directors consider that the principal risks and uncertainties faced by the group for the remaining six months of the financial year, which could have a material impact on performance, are consistent with those outlined in the annual report for the year ended 30 April 2009.  

These principal risks can be summarised as market volatility, stock pricing and liquidity risk, currency and interest rates risk, counterparty risk, differing economic cycles between different markets and risk inherent in technology, such as obsolescence and consumer acceptance of changes.

The investment manager's report comments on the outlook for market related risks, including the increased volatility in share prices and the economic cycles.

The Company has a risk management framework that is a structured process for identifying, assessing and managing the risks associated with the Company's business. The investment portfolio is diversified by geographies which mitigates risk but is focused on the technology sector and has a high proportion of investment listed on US markets or exposed to the US Dollar. 

Responsibility Statement 

The Directors of Polar Capital Technology Trust plc, which are listed in the Shareholder Information Section, confirm to the best of their knowledge:

• The condensed set of financial statements have been prepared in accordance with IAS34 as adopted by the European Union and give a true and fair view of the, financial position of the Company and the Group as at 31 October 2009 and the results for the six months ended 31 October 2009 as required by the Disclosure and Transparency Rules 4.2.4R;  

• The Interim Management Report (constituting the investment manager's report) includes a fair review of the information required by the Disclosure and Transparency Rules 4.2.7R. 

The half year financial report has not been audited or reviewed by the Auditors. 

The half year financial report was approved by the Board on 15 December 2009 and the responsibility statement was signed on its behalf by Richard Wakeling, Chairman of the Board.

Related Party Transactions

In accordance with DTR 4.2.8R there have been no new related party transactions during the six months to 31 October 2009 and therefore nothing to report on any material effect by such transactions on the financial position or performance of the Company during that period. There have been no changes in any related party transaction described in the last annual report that could have a material effect on the financial position or performance of the Company in the first six months of the current financial year

Consolidated Income Statement for the half year ended 31 October 2009
	(Unaudited)			(Unaudited)			(Audited)
	Half year ended			Half year ended			Year ended
	31 October 2009			31 October 2008			30 April 2009
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	return	return	return	return
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Investment income	1,495	-	1,495	1,707	-	1,707	3,180	-	3,180
Other operating income	10	-	10	295	-	295	540	-	540
Gains/ (losses) on investments held at fair value	-	38,827	38,827	-	(57,770)	(57,770)	-	(16,737)	(16,737)
Other losses	-	(800)	(800)	-	(407)	(407)	-	(992)	(992)
Total income	1,505	38,027	39,532	2,002	(58,177)	(56,175)	3,720	(17,729)	(14,009)
Expenses
Investment management fee	(1,551)	-	(1,551)	(1,604)	-	(1,604)	(2,904)	-	(2,904)
VAT recovery	-	-	-	-	-	-	1,107	-	1,107
Net Management fee expenses	(1,551)	-	(1,551)	(1,604)	-	(1,604)	(1,797)	-	(1,797)
Other administrative expenses	(261)	-	(261)	(298)	-	(298)	(436)	-	(436)
Total expenses	(1,812)	-	(1,812)	(1,902)	-	(1,902)	(2,233)	-	(2,233)
Profit/(loss) before finance costs and tax	(307)	38,027	37,720	100	(58,177)	(58,077)	1,487	(17,729)	(16,242)
Finance costs	(259)	-	(259)	(305)	-	(305)	(657)	-	(657)
Profit /(loss) before tax	(566)	38,027	37,461	(205)	(58,177)	(58,382)	812	(17,729)	(16,917)
Tax	(190)	-	(190)	(218)	-	(218)	(246)	(122)	(368)
Net profit/(loss) for the period	(756)	38,027	37,271	(423)	(58,177)	(58,600)	566	(17,851)	(17,285)
Earnings per ordinary share (pence)	(0.60p)	30.06p	29.46p	(0.32p)	(44.02p)	(43.34p)	0.44p	(13.72p)	(13.28p)
The total columns of this statement represent the Group's Income Statement, prepared in accordance with IFRS as adopted by the European Union. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
All items in the above statement derive from continuing operations.
All income is attributable to the equity holders of Polar Capital Technology Trust Plc. There are no minority interests.

Consolidated and Company Balance Sheets at 31 October 2009
	(Unaudited)		(Unaudited)		(Audited)
	Half year ended  31 October 2009		Half year ended  31 October 2008		Year Ended  30 April 2009
	Group	Company	Group	Company	Group	Company
	£'000	£'000	£'000	£'000	£'000	£'000
Non current assets
Investments held at fair value	299,031	301,198	237,526	239,61	267,845	270,006
Current assets
Other receivables	1,638	5,023	2,424	5,775	7,150	10,531
Cash and cash equivalents	44,250	38,698	27,077	23,591	33,729	28,187
	45,888	43,721	31,501	29,366	40,879	38,718
Total assets	344,919	344,919	269,027	269,027	308,724	308,724
Current liabilities
Other payables	(6,594)	(6,594)	(4,917)	(4,917)	(7,039)	(7,039)
Total assets less current liabilities	338,325	338,325	264,110	264,110	301,685	301,685
Non current liabilities
Bank loans	(26,875)	(26,875)	(25,235)	(25,235)	(27,506)	(27,506)
Net assets	311,450	311,450	238,875	238,875	274,179	274,179
Equity attributable to equity shareholders
Ordinary share capital	31,624	31,624	32,683	32,683	31,624	31,624
Capital redemption reserve	12,588	12,588	11,529	11,529	12,588	12,588
Share premium	117,902	117,902	117,902	117,902	117,902	117,902
Warrant exercise reserve	7,536	7,536	7,536	7,536	7,536	7,536
Capital Reserves	202,400	202,400	130,058	132,192	164,373	166,534
Revenue Reserve	(60,600)	(60,600)	(60,833)	(62,967)	(59,844)	(62,005)
Total equity	311,450	311,450	238,875	238,875	274,179	274,179
Net asset value per ordinary share	246.21p	246.21p	182.72p	182.72p	216.75p	216.75p

Consolidated and Company Cash Flow Statements  for the half year ended 31 October 2009
	(Unaudited)		(Unaudited)		(Audited)
	Half year ended 31 October 2009		Half year ended 31 October 2008		Year ended 30 April 2009
	Group	Company	Group	Company	Group	Company
	£'000	£'000	£'000	£'000	£'000	£'000
Cash flows from operating activities
Profit /(loss) before finance cost and tax	37,720	37,720	(58,077)	(58,077)	(16,242)	(16,242)
Adjustments for non cash items:
Foreign exchange losses	800	800	407	407	992	992
Adjusted profit/(loss)before finance costs and tax	38,520	38,520	(57,670)	(57,670)	(15,250)	(15,250)
Adjustments for:
(Increase)/decrease in investments	(31,186)	(31,192)	48,043	47,942	17,724	17,597
Decrease in receivables	5,592	5,588	9,603	9,563	4,999	4,929
Decrease in payables	(444)	(444)	(6,828)	(6,828)	(4,727)	(4,727)
	(26,038)	(26,048)	50,818	50,677	17,996	17,799
Net cash from operating activities before tax	12,482	12,472	(6,852)	(6,993)	2,746	2,549
Overseas tax deduced at source	(270)	(270)	(312)	(312)	(584)	(584)
Net cash from operating activities	12,212	12,202	(7,164)	(7,305)	2,162	1,965
Cash flows from financing activities
Cost of shares repurchased	-	-	(2,950)	(2,950)	(8,961)	(8,961)
Loans matured	-	-	(5,271)	(5,271)	(5,271)	(5,271)
Finance costs	(260)	(260)	(276)	(276)	(625)	(625)
Net cash from financing activities	(260)	(260)	(8,497)	(8,497)	(14,857)	(14,857)
Net increase/(decrease) in cash and cash equivalents	11,952	11,942	(15,661)	(15,802)	(12,695)	(12,892)
Cash and cash equivalents at the beginning of the period	33,729	28,187	38,843	33,498	38,843	33,498
Effect of foreign exchange rate changes	(1,431)	(1,431)	5,895	5,895	7,581	7,581
Cash and cash equivalents at the end of the period	44,250	38,698	29,077	23,591	33,729	28,187

Consolidated Statement of Changes in Equity for the half year ended 31 October 2009 (Unaudited)
	Ordinary share capital	Capital redemption reserve	Share premium	Warrant exercise reserve	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Group
Total equity at 30 April 2009	31,624	12,588	117,902	7,536	164,373	(59,844)	274,179
Profit/(loss) for the period	-	-	-	-	38,027	(756)	37,271
Total equity at 31 October 2009	31,624	12,588	117,902	7,536	202,400	(60,600)	311,450
Company
Total equity at 30 April 2009	31,624	12,588	117,902	7,536	166,534	(62,005)	274,179
Profit/(loss) for the period	-	-	-	-	38,033	(762)	37,271
Total equity at 31 October 2009	31,624	12,588	117,902	7,536	204,567	(62,767)	311,450
Consolidated Statements of Changes in Equity for the half year ended 31 October 2008 (Unaudited)
	Ordinary share capital	Capital redemption reserve	Share premium	Warrant exercise reserve	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Group
Total equity at 30 April 2008	33,127	11,085	117,902	7,536	191,185	(60,410)	300,425
Loss for the period	-	-	-	-	(58,177)	(423)	(58,600)
Shares bought back for cancellation	(445)	445	-	-	(2,950)	-	(2,950)
Total equity at 31 October 2008	32,682	11,530	117,902	7,536	130,058	(60,833)	238,875
Company
Total equity at 30 April 2008	33,127	11,085	117,902	7,536	193,219	(62,444)	300,425
Loss for the period	-	-	-	-	(58,077)	(523)	(58,600)
Shares bought back for cancellation	(445)	445	-	-	(2,950)	-	(2,950)
Total equity at 31 October 2008	32,682	11,530	117,902	7,536	132,192	(62,967)	238,875

Consolidated Statements of Changes in Equity for the year ended 30 April  2009 (Audited)
	Ordinary share capital	Capital redemption reserve	Share premium	Warrant exercise reserve	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Group
Total equity at 30 April 2008	33,127	11,085	117,902	7,536	191,185	(60,410)	300,425
Loss/(profit) for the year	-	-	-	-	(17,851)	566	(17,285)
Shares bought back for cancellation	(1,503)	1,503	-	-	(8,961)	-	(8,961)
Total equity at 30 April 2009	31,624	12,588	117,902	7,536	164,373	(59,844)	274,179
Company
Total equity at 30 April 2008	33,127	11,085	117,902	7,536	193,219	(62,444)	300,425
Loss/(profit) for the year	-	-	-	-	(17,724)	439	(17,285)
Shares bought back for cancellation	(1,503)	1,503	-	-	(8,961)	-	(8,961)
Total equity at 30 April 2009	31,624	12,588	117,902	7,536	166,534	(62,005)	274,179

NOTES TO THE ACCOUNTS 

For the six month period ended 31 October 2009 

• General Information 

The consolidated accounts comprise the unaudited results for Polar Capital Technology Trust Plc and its subsidiary PCT Finance Limited for the six months to 31 October 2009. 

The unaudited accounts to 31 October 2009 have been prepared using the accounting policies used in the Group's annual accounts to 30 April 2009. These accounting policies are based on International Financial Reporting Standards ("IFRS") which comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") and by the International Accounting Standards Committee ("IASC") as adopted by the European Union.

The financial information in this half year report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the six months ended 31 October 2009 and 31 October 2008 have not been audited.  The figures and financial information for the year ended 30 April 2009 are an extract from the latest published accounts and do not constitute statutory accounts for that year.  Full statutory accounts for the year ended 30 April 2008, prepared under IFRS, including the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or 237(3) of the Companies Act 1985, have been delivered to the Registrar of Companies.

The financial statements are presented in GBP and all values are rounded to the nearest thousand pounds (£'000) except where otherwise stated.

2. Earnings per ordinary share
	(Unaudited)	(Unaudited)	(Audited)
	For the half year ended	For the half year ended	For the year ended
	31 October 2009	31 October 2008	30 April 2009
Net Profit / (loss) for the period	£'000	£'000	£'000
Revenue	(756)	(423)	566
Capital	38,027	(58,177)	(17,851)
Total	37,271	(58,600)	(17,285)
Weighted average number of shares	126,497,914	132,155,309	130,094,815
Revenue	(0.60p)	(0.32p)	0.44p
Capital	30.06p	(44.02p)	(13.72p)
Total	29.46p	(44.34p)	(13.28p)
3. Net asset value per ordinary share
	(Unaudited)	(Unaudited)	(Audited)
	For the half year ended	For the half year ended	For the year ended
	31 October 2009	31 October 2008	30 April 2009
	£'000	£'000	£'000
Net asset value	311,450	238,875	274,179
Number of ordinary shares in issue	126,497,914	130,730,914	126,497,914
Net asset value per ordinary share	246.21p	182.72p	216.75p

4. Share capital

During the period, the Company made no market purchases of its own ordinary shares for cancellation.

5. Dividend

In accordance with stated policy, no interim dividend has been declared for the period (31 October 2008 and 30 April 2009 - nil).    

Portfolio Analysis - Classification of Investments at 31 October 2009
				Total	Total
	North			31 October	30 April
	America	Europe	Asia	2009	2009
	%	%	%	%	%
Computing	23.2	-	3.1	26.3	28.2
Components	9.2	2.3	8.0	19.5	18.5
Software	19.4	1.7	1.5	22.6	20.5
Services	0.9	0.9	2.5	4.3	3.1
Communications	8.4	2.4	1.0	11.8	13.4
Life Sciences	1.2	0.3	-	1.5	2.1
Consumer, Media & Internet	6.6	-	2.1	8.7	7.6
Other Technology	-	0.8	0.2	1.0	4.0
Unquoted Investments	-	0.3	-	0.3	0.3
Total Investments	68.9	8.7	18.4	96.0	97.7
Other net assets (excluding loans)	2.5	2.4	7.7	12.6	12.3
Loans	-	-	(8.6)	(8.6)	(10.0)
GRAND TOTAL (net assets of £311,450,000)	71.4	11.1	17.5	100.0	-
At 30 April 2009 (net assets of £274,179,000)	74.0	11.5	14.5	-	100.0

INDEX CHANGES over the half year ended 31 October 2009
(Total return)	Local  Currency	Sterling  Adjusted
	%	%
Benchmark:
Dow Jones World Technology	24.1	11.5
Technology Indices:
NYSE Arca Technology 100	16.3	4.5
FTSE Techmark 100	-	20.4
Tecdax	23.4	23.5
Tokyo SE Electronics	13.8	11.2
MSCI AC Asia Pacific ex Japan Information Technology	36.5	22.7
Market Indices:
FTSE World	-	14.0
S&P 500 Composite	20.0	7.9
FTSE All-Share	-	21.2
FTSE World Europe (ex UK)	-	20.8
Tokyo SE (Topix)	7.5	5.0
FTSE World Pacific Basin (ex Japan)	-	26.3
EXCHANGE RATES	31 October 2009	30 April 2009
US$ to £	1.6484	1.4818
Japanese Yen to £	149.21	145.79
Euro to £	1.1172	1.1182

Portfolio Analysis:  Fund Distribution by Market Capitalisation as at 31 October 2009
Market Capitalisation	% of invested assets
< $2bn	22.0
$2bn-$10bn	15.2
> $10bn	62.8

		Portfolio Analysis: Equity Investments over 0.75% and details of investments over 1%  of net assets at 31 October 2009
		North America
	Value of holding					% of net assets
	31 October		30 April			31 October	30 April
	2009		2009			2009	2009
	£'000		£'000			%	%
	18,297		14,397	Apple		5.9	5.2
				Apple is a leading supplier of personal computers and digital media products that feature the company's proprietary OS X operating system. The company has become somewhat synonymous with the explosion in digital media as evidenced by market share gains in its core business and the spectacular success of its iPod and iTunes offerings. Its most recent product introduction - the iPhone - has already begun to redefine the smart phone category and today represents the company's most important growth driver.
	16,214		12,356	Google		5.2	4.5
				Google is the dominant provider of Internet search and online advertising, provider of web applications and tools, as well as a developer of software and mobile applications. The company operates a leading index of web sites and media content and offers an auction based advertising platform. By helping content owners to efficiently find customers online, Google remains a critical element in the growth of Internet advertising and e-commerce.
	14,816		11,113	Microsoft		4.8	4.0
				Microsoft is the largest software company in the world. Founded in 1975, the company has built a dominant franchise in desktop software through its ubiquitous Windows operating system and Office productivity software. In addition the company has expanded into other markets such as games consoles, server and storage software and the Internet via its MSN offering.
	11,898		11,713	Cisco		3.8	4.3
				Cisco Systems is a pre eminent provider of Internet protocol (IP)-based equipment that is used to carry data, voice and video traffic. In addition to its core router and switch offerings, the company also produces IP telephony products, set-top boxes and videoconferencing systems. The company is thus well positioned to benefit from the continued growth of both wireline and wireless broadband traffic.
	9,479		8,108	Hewlett Packard		3.0	3.0
				One of the world's largest providers of IT solutions, HP has used cash flows generated by its print supplies business to acquire companies such as Compaq and EDS. This has resulted in one of the most comprehensive portfolios of hardware, software and services.
	9,330		6,096	IBM		3.0	2.2
				International Business Machines (IBM) is one of the world's leading providers of enterprise solutions, offering a broad portfolio of hardware, IT services and software solutions. While the company's revenue growth rate has moderated over recent years, it has been able to deliver fairly consistent earnings per share growth as a result of acquisitions, cost-saving initiatives and share repurchases.
	9,028		8,821	Intel		2.9	3.2
				Intel is the world's largest supplier of semiconductor chips. The company designs and manufacturers microprocessors, boards and semiconductor components that are used in computers, servers, and networking and communication products. As the world's largest supplier of microprocessors, Intel enjoys a worldwide market share of more than 75%. New products include Atom (for netbooks), ultra-low voltage CPUs for thin notebooks and the new Xeon 5500, a server chip optimized for virtualised environments.
	8,929		10,378	Qualcomm		2.9	3.8
				Qualcomm is the world leader in wireless code division multiple access (CDMA) technologies for mobile communications. The company has more than 3,000 patents for CDMA and licenses its IP to the world's leading handset and infrastructure providers. The company also sells chipsets via its QCT division. Recent settlements with Broadcom (2009) and Nokia (2008) resulted in the removal of Qualcomm's legal overhang.
	6,340		8,169	Oracle		2.0	3.0
				Oracle is the leading vendor of relational database management systems (RDBMS) and is the world's second largest software company. With more than $20bn in annual revenues, Oracle's offerings span database systems, middleware and broad range of applications such as ERP, CRM and SCM. The company also intends to enter the enterprise hardware and storage markets following its surprise bid for Sun Microsystems.
	4,912		5,918	Texas Instruments		1.6	2.2
				An early pioneer in the field of semiconductors, TI is today a leading provider of both digital signal processors and analogue / mixed signal chips. The company has adopted a 'fab-light' manufacturing model which allows it to better manage utilisation rates during downturns allowing it to continue to generate strong free cash flows. The company has divested some non-core assets over recent years, returning the proceeds in the form of stock repurchases.
	4,052		3,414	F5 Networks		1.3	1.2
				F5 Networks is a leading provider of application delivery networking products that manage, control and optimize Internet traffic within a network. These products are used for network load balancing, file virtualisation, and WAN optimization all of which improve the reliability and user experience of applications being run remotely. The company's recent acquisition of Acopia expanded its addressable market into storage virtualisation.
	3,937		3,456	Salesforce.com		1.3	1.3
				Founded in 1999 and based in San Francisco, salesforce.com is the leading provider of hosted, outsourced customer relationship management (CRM) software. The company delivers its software via a web browser on a subscription basis and is widely considered a pioneer of the software-as-a-service (SAAS) alternative to the perpetual licence model adhered to by most software vendors. Its 'AppExchange' and 'Force.com' platforms have expanded the company's addressable market well beyond just CRM.
	3,560		4,700	Research In Motion		1.1	1.7
				Research In Motion is a leading designer, manufacturer and marketer of wireless solutions for the mobile communications market. Its popular line of 'BlackBerry' handsets handle voice, email and text message communications, as well as Internet access. In addition to dominating the enterprise market, the company is currently benefiting from the strong growth of smart phones in the consumer segment, driven by social networking, and aided by shifting carrier subsidies.
	3,130		-	Lam Research		1.0	-
				Lam Research is a leading maker of semiconductor process equipment. The company enjoys strong market position in both 'etch' and 'wet clean' and should be a beneficiary of increased foundry and memory customer spending due to its disproportionate share at both TSMC and Samsung.
	2,996		2,960	EMC		1.0	1.1
				EMC is a leading provider of enterprise storage systems that allows its customers to store, manage and retrieve massive amounts of information. In addition to its position in storage area networks (SANs), EMC also offers network-attached file servers and a wide array of software designed to manage, protect and share data. The company is the majority owner of VMware (a leading virtualisation software supplier) and enjoys a close relationship with Dell which resells its systems.
	2,761		2,202	Cognizant	IT services	0.9	0.8
	2,642		-	Check Point Software Technologies	Software	0.9	-
	2,523		-	Veeco Instruments	Semiconductor capital equipment	0.8	-
	2,499		-	Riverbed Technology	Communications equipment	0.8	-
	2,481		2,314	Network Appliance	Storage hardware	0.8	0.8
	139,824			Total investments over 0.75%		45.0
	74,910			Other investments		23.9
	214,734			Total North American investments		68.9
	Europe
	Value of holding					% of net assets
	31 October		30 April			31 October	30 April
	2009		2009			2009	2009
	£'000s		£'000s			%	%
	2,749		3,115	SAP	Software	0.9	1.1
	2,726		2,831	Ericsson	Telecom equipment	0.9	1.0
	2,561		2,142	ASML Holdings	Semiconductor capital equipment	0.8	0.8
	2,472		6,204	Nokia	Telecom equipment	0.8	2.1
	10,508			Total investments over 0.75%		3.4
	16,434			Other investments		5.3
	26,942			Total European investments		8.7
	Asia
	Value of holding					% of net assets
	31 October		30 April			31 October	30 April
	2009		2009			2009	2009
	£'000s		£'000s			%	%
	7,791		7,834	Samsung Electronics		2.5	2.8
				Samsung manufactures a very wide array of products ranging from components to finished products for both consumer electronics and industrial end markets. The company is particularly renowned for its high global market share in the fields of memory semiconductors, LCD displays, and mobile handsets.
	5,796		3,238	Canon		1.9	1.2
				Canon is one of the world's largest companies in the field of imaging and optical technology, manufacturing a wide range of products for both consumer and professional use. Examples include printers, copiers, cameras, semiconductor manufacturing equipment, and medical equipment.
	3,850		-	Mediatek		1.2	-
				Mediatek is Taiwan's leading fabless integrated circuit design house and increasingly one of the largest in the world. The company's original product speciality was centred on the optical storage chipset market, but has evolved in more recent years around mobile handsets. In particular, the company's low cost chip and reference designs for phones have captured a large proportion of market share in very high volume markets such as China and India.
	3,807		-	Tencent Holdings		1.2	-
				Tencent Holdings is China's largest internet company by revenue, and offers a full suite of online services - primarily entertainment and communication related - to users. The company originally started out as an 'instant messaging' service provider back in 1999, and has gone on to dominate this market in China with over 400 million active accounts. The company are now successfully monetising this enormous 'community' via add-on services such as online gaming.
	3,663		4,302	Taiwan Semiconductor		1.2	1.6
				TSMC is the world's largest semiconductor foundry, providing a full range of services from design to product delivery. The company is becoming increasingly dominant at the leading-edge of the technology road-map, where smaller rivals are struggling to adequately resource their product offerings.
	3,251		-	AsiaInfo		1.0	-
				AsiaInfo is a provider of telecom software solutions and services in China. The company played a major role in the construction of the national backbone for China's national telecom carriers in the 1990s. Consequently the company has strong historic and strategic ties with the (now de-regulated) biggest customers in the industry. AsiaInfo are now successfully up-selling a wide range of services to these customers built around a core billing platform.
	2,850		-	Hon Hai Precision Industries	Computing	0.9	-
	2,809		-	Baidu	Consumer, Media & Internet	0.9	-
	2,644		-	Fujitsu	Services	0.9	-
	2,472		-	ASM Pacific Technology	Components	0.8	-
	38,933			Total investments over 0.75%		12.5
	18,422			Other investments		5.9
	57,355			Total Asian investments		18.4

SHAREHOLDER INFORMATION

Directors

RKA Wakeling (chairman)

BJD Ashford-Russell

PF Dicks

DJ Gamble

RAS Montagu

MB Moule

Investment Manager

Polar Capital LLP

Authorised and regulated by the Financial Services Authority

Fund Manager

Ben Rogoff

Deputy Fund Manager

Craig Mercer

Secretary

Polar Capital Secretarial Services Limited, represented by

Neil Taylor FCIS

Registered Office

4 Matthew Parker Street, London SW1H 9NP

020 7227 2700

Copies

Copies of this statement are available from the company's registered office at 4 Matthew Park Street London SW1H 9NP or from its website at www.polarcapitaltechnologytrust.co.uk.

Copies of the printed half yearly report will be dispatched to shareholders in early January 2010 and will be available from the registered office and from the website. 

 

END

 

 

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