Portfolio Update

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 30 June 2018 and unaudited.
Performance at month end is calculated on a cum income basis

	One Month	Three months	One year	Three years	Five years
Net asset value	2.5	11.5	23.9	71.0	138.3
Share price	4.1	16.9	34.3	82.8	160.0
Benchmark*	-0.3	6.0	7.4	29.5	71.1

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. The five year period indices have been blended to reflect this.

At month end
Net asset value capital only:	605.43p
Net asset value incl. income:	613.29p
Share price	560.00p
Discount to cum income NAV	8.7%
Net yield1:	1.6%
Total Gross assets2:	£448.5m
Net market exposure as a % of net asset value3:	107.6%
Ordinary shares in issue4:	73,130,326
2017 ongoing charges* (excluding performance fees)5,6:	0.9%
2017 ongoing charges* ratio (including performance fees)5,6,7:	2.2%

*Ongoing Charges: The management fee rate reductions, as detailed in the notes below, will impact management fees in 2017 and onwards.   The impact of the new fee arrangements, assuming the same level of performance from the manager and assuming all other charges remain the same, would be to reduce the level of Ongoing Charges borne by the Company.

1. Calculated using the 2017 interim dividend declared on 24 July 2017 and the 2017 final dividend declared on 12 February 2018 and paid on 29 March 2018.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long positions less short positions as a percentage of net asset value.
4. Excluding 7,400,000 shares held in treasury.
5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2017.
6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.
7. Effective 1st December 2017 the annual performance fee arrangements for the Company have changed.  The annual performance fee is now calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total fees (comprising the base management fee of 0.35% and a potential  performance fee of 0.90%) will therefore fall to 1.25% of average month end gross assets on a two year rolling basis (from 1.70% of average annual gross assets).

Sector Weightings	% of Total Assets
Industrials	32.3
Financials	22.4
Consumer Services	15.1
Technology	9.6
Consumer Goods	7.8
Health Care	6.6
Basic Materials	3.4
Oil & Gas	1.9
Net current assets	0.9
	-----
Total	100.0
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Market Exposure (Quarterly)
	31.08.17	30.11.17	28.02.18	31.05.18
Long	115.3	116.9	119.6	115.9
Short	5.8	6.3	8.4	10.0
Gross exposure	121.1	123.2	128.0	125.9
Net exposure	109.5	110.6	111.2	105.9

Ten Largest Investments
Company	% of Total Gross Assets
Ascential	2.9
Dechra Pharmaceuticals	2.6
Workspace Group	2.3
Fever-Tree Drinks	2.3
CVS Group	2.2
Robert Walters	2.2
Integrafin	2.2
YouGov	2.1
SSP	2.0
Restore	2.0

Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:

June was another strong month for the Company, outperforming the benchmark by +2.8%*, with both the longs (+2.4%*) and shorts (+0.2%*) delivering a positive return against a market that was broadly flat (NAV performance figures are in sterling terms with income reinvested and net of fees; the contribution from long and short positions is stated gross of fees). The largest individual contributors during the month came mainly from long positions, delivering good updates and responding to positive newsflow.

Video game developer Sumo Group delivered good interim results, citing continued strong demand for the group’s services and a positive outlook on the opportunities in its fast growing global markets. Another notable contributor was from our long-held position in UK veterinary practice consolidator, CVS Group, which rallied as Mars, the US consumer goods company, announced a series of acquisitions of veterinary practices across the UK and Europe as they expand beyond the US.  We expect further consolidation in this industry due to the fragmentation of the market and the buyers’ belief in long term secular drivers. The portfolio also benefitted from our holdings within financial services during the month, particularly asset managers Polar Capital and Liontrust, which both delivered strong final results, with profits in both companies doubling as a result of rising markets and strong fund performance generating more in performance fees. Other notable contributors included premium mixer supplier Fever-Tree, wine producer Chapel Down and media business Ascential.

Detractors during the month were limited. The largest negative contributor came from XLMedia, which fell in response to a trading update warning that revenues and profits are expected to be lower as a result of regulatory changes in the Australian market at the end of 2017, and ongoing uncertainty in certain European markets. We had been reducing the position prior to the profit warning, therefore the position only cost the portfolio 0.11% in performance, and we have subsequently fully exited the position.

We remain confident in the Company’s overall positioning and the stock and industry risks that we are currently taking. Trading activity during the month has been limited, mainly centred around trimming some of our strongest performers to manage position sizing, whilst continuing to build positions in some of our new international holdings, such as Xero. The only notable position exit was Melrose as it is now a FTSE 100 company.

*Source: BlackRock as at 30 June 2018

20 July 2018

ENDS

Latest information is available by typing www.blackrock.co.uk/thrg on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.