Half-year Report

To:  PR Newswire

From:  Capital Gearing Trust P.l.c.

LEI:   213800T2PJTPVF1UGW53

Date:  13 November 2023

Capital Gearing Trust P.l.c. (the “Company”)

Announcement of the Half-Year Financial Report for the six months ended 30 September 2023

Chairman’s Statement

Investment Performance

At the half year to 30 September 2023, the net asset value per share (‘NAV’) was 4,674.9p, compared to 4,797.3p at 31 March 2023. This represents a NAV total return of -1.3% over the past six months. This return was better than the global aggregate bond index and the investment trust index which returned -3.8% and -1.7% respectively in Sterling terms. Whilst it is always disappointing to report negative returns the defensive orientation of the portfolio did provide some protection from simultaneously weak bond and equity markets. The returns lagged Consumer Price Index (‘CPI’) inflation of 2.4% in the period.

The share price ended the half year at 4,585p, a fall of 1.8%. During the period 2,218,929 shares, with an aggregate value of £102.1m, were bought back under the Company’s discount control policy (‘DCP’).

Discount Control Policy Update

Since 2015 the Company has operated the DCP which aims to ensure that, in normal market conditions, the shares trade consistently close to their underlying NAV.

As announced on 31 October 2023, the Company was in the process of seeking approval from the Northern Irish Courts to reclassify its share premium account as a distributable reserve to continue to support the DCP. In our announcement, we referred to this process having been subject to significant delays as a result of various “technical and administrative issues”. It is now clear that these issues comprise a series of errors and omissions on the part of third parties. As a result, the Board has decided to take direct control over this process and has agreed a revised timetable to take this through to a successful conclusion. This will start with refreshing the requisite shareholder authority at a soon to be convened General Meeting and should result in the reserves being created in the early part of next year. The Board is extremely frustrated by the delay caused in the process and the fact that it was not made aware of this until very recently. The Board intends to investigate matters further and seek compensation for any costs incurred whilst reserving all the Company’s other rights.

Following the cancellation of the share premium account the Company will have very significant headroom in its reserves to support the DCP for the foreseeable future. Shareholders should be assured that the Board remains fully committed to the DCP and any temporary modifications will be reversed as soon as the Northern Irish Court process is concluded.

Performance Comparators

The Company does not have a formal benchmark but over the years has compared its performance against Retail Price Index (‘RPI’) inflation and the MSCI UK index. RPI inflation is no longer classified as a national statistic by the Office for National Statistics due to methodological flaws. It has been replaced by CPI inflation, which we will now refer to as a comparator. As a number of shareholders have pointed out, neither our investment objective nor our portfolio construction reflect the UK equity market, so the Company will no longer use the MSCI UK index as a comparator but may refer to equity indices more generally when looking at specific components of performance.

Board Update

We are pleased to welcome Ravi Anand as a non-executive Director with effect from 1 August 2023. Ravi has already made a positive impact on our discussions pulling on his experience of investment trusts and financial services more generally.

Wendy Colquhoun has been appointed as Chair of the Nominations Committee to lead our Board succession planning. Robin Archibald will retire at the 2024 AGM after nine years on the Board. As noted in the Annual Report, to avoid two long standing Directors departing at the same time, it has been agreed that I will remain on the Board for a further period of one or two years beyond 2024 to enable a further Board member to be recruited and to oversee an orderly handover to a new Chairman.

Outlook

It seems likely that the second half of the year will continue to be challenging, as all asset markets are buffeted by a deteriorating geopolitical backdrop, high interest rates and lingering inflation. Against this backdrop the Company remains defensively positioned, with a relatively constrained allocation to equities and significant exposure to short duration high quality bonds. However, with volatile markets come opportunities and the investment manager will seek to exploit falling prices in the bond and equity markets when values become compelling.

Jean Matterson

Chairman

10 November 2023

Investment Manager’s Report

Investment Review

The first half of the financial year has proven challenging with a negative return of 1.3%. The six month period was characterised by rising interest rates in developed markets which proved a headwind to our bond portfolios and rising investment trust discounts, particularly in the alternatives sector, which were a challenge to our risk assets.

Despite the headwinds, corporate bonds and risk assets made positive contributions to the portfolio. Detracting from performance were nominal government bonds, index-linked bonds, and gold. The Company’s nominal government bonds comprise treasury bills and short duration bonds. A significant majority of these are denominated in Sterling and generated positive returns. However, the holdings of Japanese treasury bills (2%) and Swedish government bonds (2%) both made negative contributions as sterling appreciated by 10.1% and 3.6% against the Japanese Yen and Swedish Krona, respectively.

Since the start of 2021, the Yen has risen from 141 to the pound to 182. Adjusting for relative inflation, it has depreciated by over 30%. We remain convinced of the Yen’s attraction and have a 9% weighting to the currency. This is both on valuation grounds and portfolio composition. On all purchasing power parity (‘PPP’) measures, the Yen appears to be extraordinarily cheap. The portfolio role for the Yen is also important. Japan is the single largest overseas holder of US government bonds. There is a concern, justified in our view, that a change in Japanese monetary policy could result in huge sales of treasuries and repatriation of the proceeds. Were this to happen, rising yields on US government bonds should be accompanied by gains on the Yen.

Index-linked bonds were the other source of negative returns. The Company’s holdings of UK index-linked bonds (23% of the portfolio) made positive contributions, helped by the very short duration. We took advantage of weakness over the summer to lengthen duration adding to 5 year bonds on very attractive yields. US TIPS were the chief detractor during the period as 10 year yields rose by around 100 basis points.

Corporate bonds delivered positive returns of 1.9% over the six months. Gains were broad based. The portfolio currently has a duration of around 2.5 years and yields around 7% with the vast majority carrying an investment grade credit rating. While pleased with the performance of our credit portfolio, with credit spreads tight and a deteriorating macroeconomic environment, we are reluctant to increase the Company’s allocation to the asset class or take on additional duration risk.

Risk assets contributed positively over the six-month period with conventional equities returning over 5%. Our two largest holdings the SPDR Europe Energy ETF and the iShares MSCI Japan ESG ETF returned 13.6% and 5.9% respectively. Our property holdings contributed 6.5%, buoyed by Civitas Social Housing being subject to a takeover bid. The only significant drag on return was our infrastructure holdings which delivered a negative return of 11%. We have taken the opportunity to add to our infrastructure holdings on the back of share price weakness. They offer, based on conservative assumptions, prospective real returns of mid-single digits: equal or higher than the long-term return on equities with considerably lower risk. Such returns are very appetising.

With discounts so wide in the alternatives sector it is reasonable to ask whether the stated NAVs can be relied upon. Our answer is a cautious “yes”. The evidence of solidity is mounting with asset disposals at or above book value being announced across many trusts in multiple sectors. If the valuations can be relied upon why are so many trusts trading at large discounts? It is simply a question of supply, demand and the quantity theory of asset prices. Huge amounts of capital have been raised in the alternative space in recent years. Over the last 18 months multi-asset funds have seen large redemptions and wealth managers have switched their focus to highly tax efficient low coupon gilts. With demand falling and the supply remaining constant, the balancing variable – price – must take the strain, with all too painful consequences. The diagnosis reveals the cure. With no prospect for a change in demand, supply needs to be withdrawn from the sector. For now the only contraction comes from takeovers. It would be preferable for the sector to help itself by selling assets and buying-back shares or returning capital to shareholders. We see precious little evidence of this to date and have generally been frustrated by the attitudes of boards and management teams. We will continue to engage with boards and hope to report greater progress to you in the full year results.

Outlook

The key feature of the last six months has been the surprising resilience of the US economy (and, to a lesser extent, Europe and the UK). This has resulted in the market coming to believe the Federal Reserve when they said that rates needed to be “higher for longer”. Accompanying this realisation is a growing chorus of voices calling for a “soft landing”. We remain sceptical of this outcome: the effects of the rate hiking cycle have not fully flowed into the economy, credit availability is falling rapidly, and the money supply is shrinking. As Niall Ferguson recently put it “The US economy’s not a plane and it won’t land gently”. Nor is history on the side of the optimists, indeed the swelling chorus may itself be a siren song. There was a huge spike in the number of articles containing the phrase “soft landing” in both 1999/2000 and 2007/08. We worry that history will repeat itself.

Markets do not share our concerns: credit spreads and equity risk premia are low. In the full year results we wrote that the most rapid rate hiking cycle, following on from an extended period of ultra-cheap money, might result in the financial system breaking. So far this has not come to pass. That crises at Credit Suisse and Silicon Valley Bank were contained does not mean that future crises will be avoided. To give an example, at the end of Q3 Bank of America’s losses on its hold to maturity portfolio – mostly comprising agency mortgage bonds – were $130 bn, around 58% of its tier 1 capital. Given the subsequent moves in rates we can only assume those losses have grown. This is just one bank and one part of its balance sheet. The scale of losses throughout the financial system must be very large indeed.

Ordinarily a financial crisis or a recession would be bullish for long bonds. While this may yet occur, it is by no means certain. Short dated bonds will rally as markets anticipate rate cuts from the Federal Reserve. What happens to longer dated bonds is less clear. If the Fed is forced to cut rates before inflation has been brought under control, then long term interest rates may rise as investors price higher inflation and demand additional term premium to compensate for volatility.

Such a move might be exacerbated by concerns over debt sustainability. This year the US budget deficit is forecast to be 7.7% of GDP – a truly staggering $2tn. A recession would only make this figure worse. As the Federal Government rolls over its debts (around one third over the next 12 months) it is paying real interest rates of around 2.5%. This is higher than the trend growth rate of the economy. The formula r – g(1) neatly encapsulates the problem. It shows that the debt to GDP ratio would rise even if it were to run a balanced primary budget. For the past two decades the increasing debt stock of the US has been financed by relatively price insensitive buyers(2). The appetite of these buyers is waning and new buyers will need to be found. The price of money may rise to enable the market to clear. The knock-on impact to other asset classes is unknown but fiscal dominance and crowding out must be a risk.

Eventually, these high yields are the source of their own destruction. There are only two ways in which government borrowings can be made sustainable. Either countries must run balanced budgets or, through financial repression, reduce the interest rate they pay on their debts. With no political constituency for fiscal prudence the latter becomes the only viable route.

The destination is clear, but the timing and the path taken are not. There are only three things of which we can be reasonably certain. First, the attempt by markets to price a bi-stable regime (comprising the present regime of rising real yields and a future regime of financial repression) will bring volatility to bond markets. Second, long duration nominal bonds are likely to be a poor investment across both regimes. Third, index-linked bonds will fair much better than their nominal cousins and thrive when the financial repression eventually comes. For the time being, we accept our inability to forecast the future and therefore adopt a cautious stance, positioning the portfolio to withstand and ultimately, we hope, profit from what lies ahead.

Peter Spiller   Alastair Laing   Christopher Clothier

10 November 2023

(1) Where r is the real cost of debt and g the trend growth of the economy

(2) These have ranged from global FX reserve managers, yield starved Japanese pension funds, the Federal Reserve conducting QE and – in recent years – domestic banks trying to invest a glut of post-Covid deposits

Interim Management Report

A review of the half year and the outlook for the Company can be found in the Chairman’s Statement and the Investment Manager’s Report above.

Principal Risks and Uncertainties

The principal risks and uncertainties facing the Company were explained in detail within the Annual Report issued in May 2023.

There remain heightened uncertainties for global economies and financial markets, with rapid changes in interest rates, higher levels of inflation, volatility in bond and equity markets and continued heightened geopolitical risks impacting on energy supply and costs, global trade and economic activity. Recent conflict in the Middle East has heightened geopolitical risk and is likely to continue to have an adverse impact on world markets.

As announced on 31 October 2023, the Company has placed temporary limits on buy backs under its discount control policy while it awaits approval from the Northern Irish Court to cancel the Company’s share premium account and create additional distributable reserves. While this progresses, there is heightened risk around the premium and discount at which the shares will trade, the continued operation of the DCP and the Company’s third party service providers responsible for monitoring the DCP and providing administration services. The DCP is expected to be restored in full following receipt of Court approval.

The Directors continue to work with the agents and advisers to the Company to manage the risks, including any emerging risks the best they can.

Related Party Transactions

Details of related party transactions are contained in the Annual Report issued in May 2023. There have been no material changes to be reported.

Going Concern

The Company’s investment objective and business activities, together with the main trends and factors likely to affect its development and performance are monitored continuously by the Board. The Directors believe that the Company is reasonably well placed to manage its business risks and, having reassessed the principal risks, consider it appropriate to continue to adopt the going concern basis of accounting in preparing the interim financial information.

Statement of Directors’ Responsibilities

Each Director confirms that, to the best of their knowledge:

(i)                  the condensed set of financial statements has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting);

(ii)                 the Half-Year Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months of the financial year and description of principal risks and uncertainties for the remaining six months of the financial year) and includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein); and

(iii)               the Half-Year Report, taken as a whole, is fair, balanced and understandable and provides information necessary for shareholders to access the Company’s performance, position and strategy.

For and on behalf of the Board

Jean Matterson

Chairman

10 November 2023

Investments of the Company
at 30 September 2023
The top ten investments in each asset category are listed below.
	30 September 2023   £'000	31 March 2023 £'000
Index-Linked Government Bonds
Index-Linked Bonds - United Kingdom	257,996	267,376
Index-Linked Bonds - United States	177,113	248,154
Index-Linked Bonds - Japan	27,553	29,840
Index-Linked Bonds - Canada	15,036	16,693
Index-Linked Bonds - Sweden	11,003	10,997
Index-Linked Bonds - Australia	4,414	4,834
Index-Linked Bonds - Germany	-	5,236
	493,115	583,130
Conventional Government Bonds
Conventional Government Bonds - United Kingdom	104,392	95,319
Conventional Government Bonds - Sweden	23,399	19,304
Conventional Government Bonds - Japan	22,783	34,978
Conventional Government Bonds - United States	-	5,638
	150,574	155,239
Preference Shares / Corporate Debt
Grainger 3.375% 2028	7,824	7,484
Akelius Residential Property 2.375% 2025	6,252	5,123
BP Capital Perpetual Bond	5,277	-
Burford Capital 6.125% 2025	5,170	4,878
Network Rail 1.75% 2027	4,715	-
Liberty Living Finance 2.625% 2024	4,648	3,179
Land Securities 1.974% 2026	4,631	-
RMS IL 2.8332% 2035	4,364	3,074
NB Private Equity Partners ZDP 2024	4,213	-
Deutsche Pfandbriefbank 7.625% 2025	4,155	4,207
Other Preference Shares/Corporate Debt Investments	114,517	145,842
	165,766	171,787
Funds / Equities
iShares MSCI Japan ESG Screened UCITS ETF	42,855	46,301
SPDR MSCI Europe Energy UCITS ETF	32,622	34,236
Lyxor STOXX Europe 600 Basic Resources UCITS ETF	17,707	18,670
North Atlantic Smaller Companies Investment Trust	16,078	15,335
Greencoat UK Wind	14,801	14,815
Grainger	10,887	11,327
iShares S&P 500 Energy Sector UCITS ETF	8,392	7,795
International Public Partnerships	7,023	7,558
GCP Infrastructure Investments	6,053	7,618
Aker Asa	6,048	8,838
Other Fund/Equity Investments	144,877	156,104
	307,343	328,597
Gold
Wisdomtree Physical Swiss Gold	11,250	13,048
Total investments	1,128,048	1,251,801
Cash	5,006	13,766
Total	1,133,054	1,265,567

Income Statement
			Six months ended 30 September 2023 (unaudited)
				Revenue				Capital					Total
				£’000				£’000					£’000
Net losses on investments			-					(27,390)				(27,390)
Net currency losses			-					(82)				(82)
Investment income (note 2)			13,627					-				13,627
Other income			160					-				160
Gross return			13,787					(27,472)				(13,685)
Investment management fee			(2,188)					-				(2,188)
Other expenses			(538)					-				(538)
Net return before tax			11,061					(27,472)				(16,411)
Tax charge on net return			(1,818)					-				(1,818)
Net return attributable to equity shareholders			9,243					(27,472)				(18,229)
Net return per Ordinary Share (note 3)			36.47p					(108.40)p				(71.93)p

Income Statement
		Six months ended 30 September 2022 (unaudited)
		Revenue		Capital		Total
		£’000		£’000		£’000
Net losses on investments		-		(59,969)		(59,969)
Net currency gains		-		131		131
Investment income (note 2)		12,711		-		12,711
Other income		-		-		-
Gross return		12,711		(59,838)		(47,127)
Investment management fee		(2,247)		-		(2,247)
Other expenses		(482)		-		(482)
Net return before tax		9,982		(59,838)		(49,856)
Tax charge on net return		(656)		-		(656)
Net return attributable to equity shareholders		9,326		(59,838)		(50,512)
Net return per Ordinary Share (note 3)		39.75p		(255.07)p		(215.32)p

Income Statement
				Year ended 31 March 2023 (audited)
				Revenue		Capital	Total
				£’000		£’000	£’000
Net losses on investments				-		(68,449)	(68,449)
Net currency losses				-		(547)	(547)
Investment income (note 2)				24,846		-	24,846
Other income				93		-	93
Gross return				24,939		(68,996)	(44,057)
Investment management fee				(4,620)		-	(4,620)
Other expenses				(974)		-	(974)
Net return before tax				19,345		(68,996)	(49,651)
Tax charge on net return				(1,739)		-	(1,739)
Net return attributable to equity shareholders				17,606		(68,996)	(51,390)
Net return per Ordinary Share (note 3)				70.67p		(276.96)p	(206.29)p
The total column of this statement represents the Income Statement of the Company. The Revenue return and Capital return columns are supplementary to this and are prepared under guidance issued by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. There are no gains or losses other than those recognised in the Income Statement.

Statement of Changes in Equity (unaudited) for the six months ended 30 September 2023
	Called-up share capital	Share premium account		Capital re-demption reserve	Unrealised capital reserve	Realised capital reserve*	Revenue reserve*	Total
	£’000	£’000		£’000	£’000	£’000	£’000	£’000
Opening balance at 1 April 2023	6,645	1,101,753		16	(7,973)	140,426	18,852	1,259,719
Net return attributable to equity shareholders and total comprehensive income for the period	-	-		-	(24,365)	(3,107)	9,243	(18,229)
Shares bought back (note 6)	-	-		-	-	(102,065)	-	(102,065)
Dividends paid (note 4)	-	-		-	-	-	(15,577)	(15,577)
Total transactions with owners recognised directly in equity	-	-		-	-	(102,065)	(15,577)	(117,642)
Closing balance at 30 September 2023	6,645	1,101,753		16	(32,338)	35,254	12,518	1,123,848

for the six months ended 30 September 2022

	Called-up share capital	Share premium account			Capital re-demption reserve		Unrealised capital reserve	Realised capital reserve*	Revenue reserve*	Total
	£’000	£’000			£’000		£’000	£’000	£’000	£’000
Opening balance at 1 April 2022	5,223	816,009				16	57,222	159,561	11,804	1,049,835
Net return attributable to equity shareholders and total comprehensive income for the period	-	-				-	(72,894)	13,056	9,326	(50,512)
New shares issued (note 6)	1,198	242,390				-	-	-	-	243,588
Dividends paid (note 4)	-	-				-	-	-	(10,558)	(10,558)
Total transactions with owners recognised directly in equity	1,198	242,390				-	-	-	(10,558)	233,030
Closing balance at 30 September 2022	6,421	1,058,399				16	(15,672)	172,617	10,572	1,232,353

*These reserves are regarded as being available for distribution.

Statement of Financial Position (unaudited)

at 30 September 2023

	(unaudited)		(unaudited)		(audited)
	30 September 2023		30 September 2022		31 March 2023
	£’000		£’000		£’000
Fixed assets
Investments held at fair value through profit or loss	1,128,048		1,211,490		1,251,801
Current assets
Debtors	4,276		8,045		7,892
Cash at bank and in hand	5,006		42,578		13,766
	9,282		50,623		21,658
Creditors: amounts falling due within one year	(13,482)		(29,760)		(13,740)
Net current (liabilities)/assets	(4,200)		20,863		7,918
Total assets less current liabilities	1,123,848		1,232,353		1,259,719
Capital and reserves
Called-up share capital	6,645		6,421		6,645
Share premium account	1,101,753		1,058,399		1,101,753
Capital redemption reserve	16		16		16
Capital reserve	2,916		156,945		132,453
Revenue reserve	12,518		10,572		18,852
Total equity shareholders’ funds	1,123,848		1,232,353		1,259,719
Net asset value per Ordinary Share	4,674.9p		4,798.4p		4,797.3p

The Half-Year Financial Report for the six months ended 30 September 2023 was approved by the Board of Directors on 10 November 2023 and signed on its behalf by:

Jean Matterson

Chairman

10 November 2023

Cash Flow Statement (unaudited)

for the six months ended 30 September 2023

	(unaudited)		(unaudited)		(audited)
	6 months ended 30 September 2023		6 months ended 30 September 2022		Year  ended 31 March  2023
	£’000		£’000		£’000
Net cash inflow from operating activities (note 5)	5,821		7,767		16,499
Payments to acquire investments	(339,122)		(522,583)		(1,037,482)
Receipts from sale of investments	440,413		264,802		713,875
Net cash inflow/(outflow) from investing activities	101,291		(257,781)		(323,607)
Equity dividends paid	(15,577)		(10,558)		(10,558)
Repurchase of Ordinary shares	(100,185)		-		(15,315)
Proceeds from the issue of Ordinary shares	-		253,075		297,172
Cost of shares issues	-		(536)		(1,036)
Cost of share buybacks	(110)		-		-
Net cash (outflow)/inflow from financing activities	(115,872)		241,981		270,263
Decrease in cash and cash equivalents	(8,760)		(8,033)		(36,845)
Cash and cash equivalents at start of period	13,766		50,611		50,611
Cash and cash equivalents at end of period	5,006		42,578		13,766

Notes to the Financial Statements

1 Basis of preparation

The condensed Financial Statements for the six months to 30 September 2023 comprise the Income Statement, the Statement of Changes in Equity, the Statement of Financial Position and the Cash Flow Statement, together with the notes set out below. They have been prepared in accordance with FRS 104 ‘Interim Financial Reporting’, the AIC’s Statement of Recommended Practice issued in 2022 (“SORP”), UK Generally Accepted Accounting Principles (“UK GAAP”) and using the same accounting policies as set out in the Company’s Annual Report and Accounts at 31 March 2023.

2 Investment income

	(unaudited)	(unaudited)	(audited)
	6 months ended 30 September 2023	6 months ended 30 September 2022	Year ended 31 March 2023
	£’000	£’000	£’000
Income from investments
Interest from UK bonds	5,116	2,570	6,049
Income from UK equity and non-equity investments	4,740	6,375	11,057
Interest from overseas bonds	3,474	1,505	4,973
Income from overseas equity and non-equity investments	297	2,261	2,767
Total income	13,627	12,711	24,846

3 Net return per Ordinary share

The calculation of return per Ordinary share is based on results after tax divided by the weighted average number of shares in issue during the period, excluding shares held in treasury, of 25,344,195 (30 September 2022: 23,459,021, 31 March 2023: 24,912,016).

The revenue, capital and total return per Ordinary share is shown in the Income Statement. 

4 Dividends paid

		(unaudited)	(unaudited)	(audited)
		6 months ended 30 September 2023	6 months ended 30 September 2022	Year ended 31 March 2023
		£’000	£’000	£’000
2022 dividend paid 15 July 2022 (46.0p per share)		-	10,558	10,558
2023 dividend paid 10 July 2023 (60.0p per share)		15,577	-	-

5 Reconciliation of net return on ordinary activities before tax to net cash inflow from operating activities

		(unaudited)	(unaudited)	(audited)
		6 months ended 30 September 2023	6 months ended 30 September 2022	Year ended 31 March 2023
		£’000	£’000	£’000
Net return before tax		(16,411)	(49,856)	(49,651)
Adjustments for:
Capital return before tax		27,472	59,838	68,996
Decrease/(increase) in prepayments		16	28	(5)
Increase in accruals and deferred income		16	102	39
Overseas withholding tax paid		(29)	(59)	(115)
Decrease/(increase) in recoverable tax		3	(10)	(10)
UK Corporation tax paid		(1,006)	(243)	(874)
(Increase)/decrease in dividends receivable		(326)	(307)	186
Increase in accrued interest		(3,832)	(1,857)	(1,520)
Realised (losses)/gains on foreign currency transactions		(82)	131	(547)
Net cash inflow from operating activities		5,821	7,767	16,499

6 Ordinary Shares

During the period, the Company bought back 2,218,929 Ordinary shares (six months to 30 September 2022: nil and year to 31 March 2023: 321,500) for a cash consideration totalling £102,065,000 (six months to 30 September 2022: nil and year to 31 March 2023: £15,334,000).

During the period, the Company issued no new Ordinary shares and no Ordinary shares were issued from treasury (six months to 30 September 2022: 4,790,460 new Ordinary shares issued for proceeds totalling £243,588,000 and no Ordinary shares were issued from treasury, year to 31 March 2023: 5,688,288 new Ordinary shares issued for proceeds totalling £287,166,000 and no Ordinary shares were issued from treasury).

At 30 September 2023, there were 26,580,263 Ordinary shares in issue (30 September 2022: 25,682,435 and 31 March 2023: 26,580,263). At 30 September 2023 2,540,429 Ordinary shares were held in treasury (30 September 2022: nil and 31 March 2023: 321,500).

 7 Fair value of financial assets and liabilities

Financial Reporting Standard 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1: valued using unadjusted quoted prices in active markets for identical assets;

Level 2: valued using observable inputs other than quoted prices included within Level 1; and

Level 3: valued using inputs that are unobservable and are valued by the Directors using International Private Equity and Venture Capital Valuation (‘IPEV’) guidelines, such as earnings multiples, recent transactions and net assets, which equate to their fair values.

The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at 30 September 2023 as follows:

Financial assets at fair value through profit or loss	Level 1 £000	Level 2 £000	Level 3 £000	2023 Total £000
Quoted securities	1,127,386	–	–	1,127,386
Delisted equities	–	–	662	662
Net fair value	1,127,386	–	662	1,128,048

8 General information

 The financial information contained 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 half-years ended 30 September 2023 and 30 September 2022 have not been audited. The abridged financial information for the year ended 31 March 2023 has been extracted from the Company’s statutory accounts for that period, which have been filed with the Registrar of Companies. The report of the Auditors on those accounts was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

Enquiries:

Juniper Partners Limited

Company Secretary

Email: [e-mail]

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