GLOBAL OPPORTUNITIES TRUST PLC

Interim / Quarterly Report • Sep 4, 2024

National Storage Mechanism | Additional information

Global Opportunities Trust Plc - Half-Yearly Results to 30 June 2024

PR Newswire

LONDON, United Kingdom, September 04

Global Opportunities Trust plc

Legal Entity Identifier: 2138005T5CT5ITZ7ZX58

Half-Yearly Results for the six months to 30 June 2024 (unaudited)

Financial Highlights

INCREASE IN NET ASSET VALUE PER SHARE 1.4%	NET ASSET VALUE TOTAL RETURN* 3.1%
SHAREHOLDERS’ FUNDS £107.9m	DISCOUNT TO NET ASSET VALUE* 19.8%

	30 June 2024	31 December 2023	% Change
Net Assets/Shareholders’ Funds (£)	107,896,000	106,411,000	1.4
Shares in issue	29,222,180	29,222,180	–
Net Asset Value per share (pence)*	369.2	364.1	1.4
Share Price (pence)	296.0	298.0	(0.7)
Share Price Discount to Net Asset Value (%)*	19.8	18.2	n/a

* Alternative Performance Measure.

CHAIRMAN’S STATEMENT

I am pleased to present the Company’s interim report for the six months to 30 June 2024.

Investment performance

For the six months to 30 June 2024, the Company generated positive returns. Net Asset Value (‘NAV’) Total Return increased by 3.1% whilst Share Price Total Return increased by 1.0%, with dividends assumed to be reinvested. In comparison, the FTSE All-World Index rose 12.2% on a total return basis, with the strong performance experienced at the end of 2023 continuing into the first half of 2024. The Bloomberg Global Aggregate Bond Index on the other hand declined by approximately 2%. We would continue to remind shareholders however, that the Company has no stated benchmark against which it seeks to outperform. Its objective is to achieve real long-term total return through investing globally in undervalued assets.

As at 30 June 2024 the Company had Net Assets of £107.9m (31 December 2023: £106.4m), the NAV per ordinary share was 369.2p (31 December 2023: 364.1p) and the middle market price per share on the London Stock Exchange was 296.0p (31 December 2023: 298.0p), representing a discount of 19.8% to NAV.

Share capital and discount

The widening of the Company’s discount from its year-end position of 18.2% is disappointing albeit the discount averaged a comparable 18.4% during the period. The average discount of the ‘Flexible Investment’ sector of the Association of Investment Companies (‘AIC’) (of which the Company is a member) was 22.2% as at 30 June 2024. The narrowing of the Company’s discount is a focus of the Board and the opportunities to expand the Company’s reach by appealing to a wider shareholder base are continuing to be explored. No share buybacks were undertaken during the period.

2024 Annual General Meeting

I chaired my third Annual General Meeting of the Company which was held on 16 May 2024 (‘the AGM’). On behalf of the Board, I would like to thank all those shareholders for their engagement, either in person or by way of proxy, and was pleased to note that all resolutions were formally passed by the requisite majority at the AGM.

Portfolio Information

Shareholders can keep up to date on the performance of the portfolio through the Company’s website at www.globalopportunitiestrust.com where you will find information on the Company, a monthly factsheet and research articles by our Executive Director, Dr Nairn. There is also an option to sign-up to receive the latest publications directly via email.

Outlook

In the short to medium term the outlook is dominated by geopolitical events. A large number of Western countries are facing elections. In the UK we have the prospect of reasonable stability with the election of a new Labour government which is emphasising fiscal responsibility and growth. The outlook is less stable when one considers the recent results of the French elections and the looming US Presidential election. The war in Ukraine grinds on with shocking loss of life and China has been making ominous noises about Taiwan for some time now. Equity markets have been remarkably resilient against this backdrop such that they are close to historically high valuations on a cyclically adjusted basis. This leaves us with a continued risk averse approach albeit with some opportunities beginning to appear, particularly further down the market capitalisation scale.

Keep in Touch

As always, the Board welcomes communication from shareholders and I can be contacted through the Company Secretary at cosec@junipartners.com.

Cahal Dowds

Chairman

3 September 2024

EXECUTIVE DIRECTOR’S REPORT

The first six months of 2024 broadly followed the pattern of 2023 albeit that equity returns were particularly skewed towards the artificial intelligence (‘AI’) theme and a small number of US technology stocks in particular. Whilst AI has been widely used since the 1980’s the ‘new’ AI relates to its ability to process the written word through ‘large language models’ (‘LLMs’). This element of AI is still in the early stages and whilst it will inevitably bring productivity improvements in a range of areas it is not the economic panacea that markets seem to believe. We remain in an environment with elevated valuations and meaningful government debt overhangs which have to constrain policy. This reality is dawning on electorates which are reacting to the realisation that incumbent governments cannot satisfy all the promises that have been made. This will lead to more political instability with France as an early example. Against this backdrop the UK stands out as an area of relative stability.

Whilst bond markets have corrected, equity market valuations remain at historically high levels which implies substantial risk, even if the economic and political background were more supportive. For this reason, the portfolio remains conservatively positioned. However, the composition is more nuanced since we still see opportunities, particularly outside of the mega-caps. In the first half we initiated positions in Qinetiq and Jet2 for example. Qinetiq has leadership positions in a number of defence related areas and Jet2, whilst affected by the economic cycle, combines a low valuation with a high-quality management team. This has been part of increasing exposure to the UK equities. The portfolio also reoriented part of the Japanese exposure from larger companies which had performed well into the AVI Japan Special Situations Fund to take advantage of the value in the over-capitalised Japanese small-cap companies.

We anticipate that the stark economic choices facing the major economies will prove increasingly difficult to ignore and will become ever more evident in company results/ forecasts. Combining this with an unfolding election season and the global geopolitical tensions suggests that the seemingly unshakeable optimism of equity markets will be severely tested.

The portfolio has been constructed to try and provide positive returns through the cycle including periods of asset market decline. For this reason, one of the characteristics has been a volatility level around one third that of equity markets. The target has been to identify attractive investments without taking on meaningful broad equity market risk. There will come a time when it is appropriate to take a more sanguine view of risk and we are prepared to do this when the potential returns justify.

Dr Sandy Nairn

Executive Director

3 September 2024

PORTFOLIO OF INVESTMENTS

as at 30 June 2024 (unaudited)

Company	Sector	Country	Valuation £’000	% of Net assets
Templeton European Long-Short Equity SIF 1	Financials	Luxembourg	16,113	14.9
AVI Japan Special Situations Fund	Financials	Japan	8,097	7.5
Volunteer Park Capital Fund SCSp 2	Financials	Luxembourg	7,842	7.3
TotalEnergies	Energy	France	3,749	3.5
Unilever	Consumer Staples	United Kingdom	3,345	3.1
Samsung Electronics	Information Technology	South Korea	2,902	2.7
Qinetiq	Industrials	United Kingdom	2,658	2.5
ENI	Energy	Italy	2,606	2.4
Lloyds Banking	Financials	United Kingdom	2,360	2.2
Imperial Brands	Consumer Staples	United Kingdom	2,276	2.1
Jet2	Industrials	United Kingdom	2,204	2.0
Alibaba	Consumer Discretionary	Hong Kong	2,186	2.0
Tesco	Consumer Staples	United Kingdom	2,163	2.0
Orange	Communication Services	France	2,110	2.0
Dassault Aviation	Industrials	France	1,954	1.8
General Dynamics	Industrials	United States	1,952	1.8
Sanofi	Health Care	France	1,820	1.7
RTX	Industrials	United States	1,804	1.7
Panasonic	Consumer Discretionary	Japan	1,753	1.6
Verizon Communications	Communication Services	United States	1,512	1.4
Total investments			71,406	66.2
Cash and other net current assets			36,490	33.8
Net assets			107,896	100.0

1 Luxembourg Specialised Investment Fund

2 Luxembourg Special Limited Partnership

DISTRIBUTION OF INVESTMENTS

as at 30 June 2024 (% net assets)

Sector Distribution			Geographical Distribution
Sector	%		Region / country	%
Financials: Long-Short Fund	14.9		Europe ex UK	11.4
Financials: Japan Fund	7.5		Europe: Long-Short Fund	14.9
Financials: Private Equity Fund	7.3		Total Europe	26.3
Financials: Direct Equities	2.2		North America: Private Equity Fund	7.3
Total Financials	31.9		North America: Direct Equities	4.9
Industrials	9.8		Total North America	12.2
Consumer Staples	7.2		United Kingdom	13.9
Energy	5.9		Japan	9.1
Consumer Discretionary	3.6		Asia Pacific ex Japan	4.7
Communication Services	3.4		Cash and other net assets*	33.8
Information Technology	2.7
Health Care	1.7
Cash and other net assets*	33.8

The figures detailed in the sector distribution represent the Company’s exposure to those sectors.

The figures detailed in the geographical distribution represent the Company’s exposure to these countries or regional areas through its investments and cash.

The geographical distribution is based on each investment’s principal stock exchange listing or domicile, except in instances where this would not give a proper indication of where its activities predominate.

*The geographical distribution of cash and other net assets as at 30 June 2024 is based on currencies held in the following regions/countries:

US Dollar	24.8%
British Pound	6.4%
Swiss Franc	2.2%
Euro	0.3%
Japanese Yen	0.1%
	33.8%

DIRECTORS’ STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES

The important events that have occurred during the period under review and the key factors influencing the Financial Statements are set out in the Chairman’s Statement and Executive Director’s Report on pages 3 to 5 of the Interim Report. The principal factors that could impact the remaining six months of the financial year are also detailed in the Chairman’s Statement and Executive Director’s Report.

Principal Risks and Uncertainties

The Board has considered the principal and emerging risks facing the Company. The Board has concluded that there are no significant additional risks facing the Company other than those detailed below and in the Annual Report and Financial Statements for the year ended 31 December 2023.

The Board considers that the following risks remain the principal risks associated with investing in the Company: investment and strategy risk, key person risk, discount volatility risk, price risk, foreign currency risk, liquidity risk, operational risk and regulatory risk. Other risks associated with investing in the Company include, but are not limited to, credit risk, interest rate risk and gearing risk. These risks, and the way in which they are managed, are described in more detail under the heading “Principal risks and uncertainties” within the Strategic Report in the Company’s Annual Report and Financial Statements for the year ended 31 December 2023.

The emerging risks facing the Company have largely remained unchanged since those detailed in the Annual Report for the year ended 31 December 2023, namely those risks arising from heightened geopolitical tensions.

The risks identified by the Board as detailed above are not exhaustive and various other risks may apply to an investment in the Company. Potential investors may wish to obtain independent financial advice as to the suitability of investing in the Company.

Going Concern

The Half-Yearly Report has been prepared on a going concern basis. The Directors consider that this is the appropriate basis as they have a reasonable expectation that the Company has adequate resources to continue in operational existence and meet its financial commitments as they fall due for a period of at least 12 months from the date of approval of the unaudited financial statements.

DIRECTORS’ STATEMENT OF RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Directors confirm that to the best of their knowledge:

• The condensed set of Financial Statements, prepared in accordance with Financial Reporting Standard (“FRS”) 104: “Interim Financial Reporting”, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

• This Half-Yearly Report includes a fair review of the information required by:

(a)     Disclosure Guidance and Transparency Rule 4.2.7R, being an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of Financial Statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b)     Disclosure Guidance and Transparency Rule 4.2.8R, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could do so.

This Half-Yearly Report has not been audited or reviewed by the Company’s auditor.

This Half-Yearly Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:

Cahal Dowds

Chairman

3 September 2024

INCOME STATEMENT

for the six months to 30 June 2024 (unaudited)

	Six months to 30 June 2024			Six months to 30 June 2023
	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Gains on investments at fair value through profit or loss	–	2,288	2,288	–	564	564
Unrealised foreign exchange losses on current assets	–	(157)	(157)	–	(2,278)	(2,278)
Realised foreign exchange losses on current assets	–	(342)	(342)	–	(7)	(7)
Income	1,623	–	1,623	1,539	–	1,539
Management fee	(20)	(48)	(68)	(25)	(58)	(83)
Other expenses	(299)	–	(299)	(348)	–	(348)
Net return before finance costs and taxation	1,304	1,741	3,045	1,166	(1,779)	(613)
Finance costs
Interest payable and related charges	(9)	–	(9)	(8)	–	(8)
Net return before taxation	1,295	1,741	3,036	1,158	(1,779)	(621)
Taxation – overseas withholding tax	(90)	–	(90)	(182)	–	(182)
Net return after taxation	1,205	1,741	2,946	976	(1,779)	(803)
Return per share	4.1p	6.0p	10.1p	3.3p	(6.1)p	(2.8)p

All revenue and capital items in the above statement derive from continuing operations.

The total column of this statement is the profit and loss account of the Company.

The revenue and capital columns are prepared in accordance with guidance issued by the Association of Investment Companies (“AIC”).

A separate Statement of Comprehensive Income has not been prepared as all gains and losses are included in the Income Statement.

BALANCE SHEET

as at 30 June 2024 (unaudited)

	30 June 2024 (unaudited) £’000	31 December 2023 (audited) £’000
Fixed asset investments
Investments at fair value through profit or loss	71,406	64,083
Current assets
Debtors	587	374
Cash at bank and short-term deposits	36,030	42,105
	36,617	42,479
Current liabilities
Creditors	(127)	(151)
	(127)	(151)
Net current assets	36,490	42,328
Net assets	107,896	106,411
Capital and reserves
Called-up share capital	645	645
Share premium	1,597	1,597
Capital redemption reserve	14	14
Special reserve	9,760	9,760
Capital reserve	92,022	90,281
Revenue reserve	3,858	4,114
Total shareholders’ funds	107,896	106,411
Net asset value per share	369.2	364.1

STATEMENT OF CHANGES IN EQUITY

for the six months to 30 June 2024 (unaudited)

Six months to 30 June 2024	Share capital £’000	Share premium £’000	Capital redemption reserve £’000	Special reserve £’000	Capital reserve £’000	Revenue reserve £’000	Total £’000
At 31 December 2023	645	1,597	14	9,760	90,281	4,114	106,411
Net return after taxation	–	–	–	–	1,741	1,205	2,946
Dividends paid	–	–	–	–	–	(1,461)	(1,461)
At 30 June 2024	645	1,597	14	9,760	92,022	3,858	107,896

Six months to 30 June 2023	Share capital £’000	Share premium £’000	Capital redemption reserve £’000	Special reserve £’000	Capital reserve £’000	Revenue reserve £’000	Total £’000
At 31 December 2022	645	1,597	14	9,760	90,098	4,030	106,144
Net return after taxation	–	–	–	–	(1,779)	976	(803)
Dividends paid	–	–	–	–	–	(1,461)	(1,461)
At 30 June 2023	645	1,597	14	9,760	88,319	3,545	103,880

STATEMENT OF CASH FLOW

For the six months to 30 June 2024 (unaudited)

	Six months to 30 June 2024 £’000	Six months to 30 June 2023 £’000
Cash flows from operating activities
Net return on ordinary activities before taxation	3,036	(621)
Adjustments for:
Gains on investments	(2,288)	(564)
Interest payable	9	8
Purchases of investments*	(15,132)	(52)
Sales of investments*	10,077	4,383
Dividend income	(921)	(1,105)
Other income	(702)	(434)
Dividend income received	877	1,064
Other income received	610	456
Increase in receivables	(39)	(2)
Decrease in payables	(24)	(76)
Overseas withholding tax deducted	(108)	(185)
	(7,641)	3,493
Net cash flows from operating activities	(4,605)	2,872
Cash flows from financing activities
Equity dividends paid from revenue	(1,461)	(1,461)
Interest paid	(9)	(9)
Net cash flows from financing activities	(1,470)	(1,470)
Net (decrease)/increase in cash and cash equivalents	(6,075)	1,402
Cash and cash equivalents at the start of the period	42,105	36,629
Cash and cash equivalents at the end of the period	36,030	38,031

* Receipts from the sale of, and payments to acquire, investment securities have been classified as components of cash flows from operating activities because they form part of the Company’s dealing operations.

NOTES TO THE FINANCIAL STATEMENTS

for the six months to 30 June 2024

1. Accounting policies

Basis of accounting

The Company applies Financial Reporting Standard (“FRS”) 102: “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and the Statement of Recommended Practice as issued by the AIC. The Company has prepared the Financial Statements for the six months to 30 June 2024 in accordance with FRS 104: “Interim Financial Reporting”.

The accounting policies are set out in the Company’s Annual Report and Financial Statements for the year ended 31 December 2023 and remain unchanged. 70% of management fees and finance costs relating to borrowings are charged to capital, with 30% of these costs charged to revenue, as detailed in the Income Statement.

Going concern

The financial statements have been prepared on a going concern basis and on the basis that approval as an investment trust company will continue to be met.

The Directors have made an assessment of the Company’s ability to continue as a going concern and are satisfied that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date when these financial statements were approved.

The Directors have noted that the Company, holding a portfolio consisting principally of liquid listed investments and cash balances, is able to meet the obligations of the Company as they fall due, any future funding requirements and finance future additional investments. The Company is a closed end fund, where assets are not required to be liquidated to meet day-to-day redemptions.

The Directors have reviewed stress tests assessing the impact of changes and scenario analysis to assist them in determination of going concern. In making this assessment, the Directors have considered plausible downside scenarios that have been financially modelled. These tests apply to any set of circumstances in which asset value and income are significantly impaired. The conclusion was that in a plausible downside scenario, the Company could continue to meet its liabilities. Whilst the economic future is uncertain, and the Directors believe that it is possible the Company could experience further reductions in income and/or market value, the opinion of the Directors is that this is unlikely to be to a level which would threaten the Company’s ability to continue as a going concern.

The Company and its key service providers have put in place contingency plans to minimise disruption. Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern, having taken into account the liquidity of the Company’s investment portfolio and the Company’s financial position in respect of its cash flows, borrowing facilities and investment commitments. Therefore, the financial statements have been prepared on the going concern basis.

Comparative information

The financial information for the six months to 30 June 2024 and for the six months to 30 June 2023 have not been audited or reviewed by the Company’s Auditor pursuant to the Auditing Practices Board guidance on such reviews. The financial information contained in this report does not constitute statutory accounts as defined in the Companies Act 2006.

The latest published audited financial statements which have been delivered to the Registrar of Companies are the Annual Report and Financial Statements for the year ended 31 December 2023; the report of the Independent Auditor thereon was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. Information shown for the year ended 31 December 2023 is extracted from that Annual Report and Financial Statements.

Segmental reporting

The Directors are of the opinion that the Company is engaged in a single segment of business, being investment business. The Company primarily invests in listed companies.

1. Income

	Six months to 30 June 2024 £’000	Six months to 30 June 2023 £’000
Revenue
Income from investments
UK dividend income	278	257
Overseas dividend income	643	848
	921	1,105
Total income comprises
Dividend income	921	1,105
Rebate income	38	30
Bank interest	664	404
	1,623	1,539

1. Dividends

	Six months to 30 June 2024 £’000	Six months to 30 June 2023 £’000
2023 final dividend of 5.0p per ordinary share paid in May 2024	1,461	–
2022 final dividend of 5.0p per ordinary share paid in May 2023	–	1,461
	1,461	1,461

1. Return per share

	Six months to 30 June 2024		Six months to 30 June 2023
	Net return £’000	Per share pence	Net return £’000	Per share pence
Revenue return after taxation	1,205	4.1	976	3.3
Capital return after taxation	1,741	6.0	(1,779)	(6.1)
Total return	2,946	10.1	(803)	(2.8)

The returns per share for the six months to 30 June 2024 are based on 29,222,180 shares (six months to 30 June 2023: 29,222,180 shares), being the weighted average number of shares, excluding shares held in treasury, in circulation during the period.

1. Investments

	Six months to 30 June 2024 £’000	Year to 31 December 2023 £’000
Opening book cost	54,044	60,663
Changes in fair value of investments	10,039	8,620
Opening fair value	64,083	69,283
Movements in the period:
Purchases at cost	15,132	949
Sales – proceeds	(10,097)	(8,420)
Sales – realised gains on sales	280	852
Changes in fair value of investments	2,008	1,419
Closing fair value	71,406	64,083
Closing book cost	59,359	54,044
Changes in fair value of investments	12,047	10,039
Closing fair value	71,406	64,083

The fair value hierarchy for investments held at fair value at the period end is as follows:

	30 June 2024 £’000	31 December 2023 £’000
Level 1	47,451	41,135
Level 2	16,113	14,699
Level 3	7,842	8,249
	71,406	64,083

1. Cash at bank and short-term deposits

	30 June 2024 £’000	31 December 2023 £’000
US dollar	26,702	25,904
Sterling	6,805	5,011
Swiss franc	2,302	2,441
Euro	123	125
Japanese yen	88	8,613
South Korean won	10	11
	36,030	42,105

During the period, the Company opened a new US dollar notice account with The Royal Bank of Scotland International Limited. As at 30 June 2024 £10,500,000 was placed on deposit (31 December 2023: £nil).

The Company also opened two new US dollar liquidity funds with Goldman Sachs and JPMorgan respectively. As at 30 June 2024 £7,685,000 was placed in each fund, totalling £15,370,000 (31 December 2023: £nil).

1. Net asset value per share and share capital

The NAV is based on net assets at 30 June 2024 of £107,896,000 (31 December 2023: £106,411,000) and on 29,222,180 shares (31 December 2023: 29,222,180 shares), being the number of shares, excluding shares held in treasury, in circulation at the period end.

During the six months to 30 June 2024, no shares were repurchased or issued from Treasury by the Company.

As at 30 June 2024 there were 64,509,642 shares in issue of which 35,287,462 shares were held in treasury, resulting in there being 29,222,180 shares in circulation.

1. Related party transactions

Dr Sandy Nairn is the Executive Director of the Company and is a substantial shareholder.

The Company has invested in Volunteer Park Capital Fund SCSp (“VPC”). The Alternative Investment Fund Manager of VPC is Goodhart Partners LLP (“Goodhart”). Goodhart Partners S.a.r.l. is the general partner to VPC and is 100% owned by Goodhart. Goodhart was also appointed to provide investment sub-advisory services to the Company with effect from 31 May 2023.

Dr Nairn is the sole controller of a company which holds a significant shareholding (30.61%) in Goodhart and will be a beneficiary of the management fees and carried interest payable to Goodhart related companies. Given Dr Nairn’s interests in Goodhart, it was agreed with him, in March 2023, that his salary would be reduced (such reduction equalling the entire salary, if necessary) by his share (through his minority interest in Goodhart) of amounts credited in the same period in respect of (i) any carried interest on co-investments made by the Company alongside Goodhart and (ii) any partnership profit allocations attributable to Goodhart’s net profits on fees earned from the Company (including the Company’s existing investment in VPC and any carried interest attributable to VPC earned by Goodhart or any Goodhart-sponsored vehicle).

1. Post balance sheet events

There were no events subsequent to the half-year end and up to 3 September 2024, the date of this report.

1. Availability of Half-Yearly Report

The Half-Yearly Report will shortly be available to view on the Company's website at www.globalopportunitiestrust.com where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

A copy of the Half-Yearly Report will shortly be submitted to the Financial Conduct Authority’s National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

For further information please contact:

Juniper Partners Limited

Company Secretary

e-mail: cosec@junipartners.com

3 September 2024

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