Quarterly Report • Oct 31, 2018
Quarterly Report
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Half-Yearly financial report for the six months ended 31 october 2018
| Group summary |
1 |
|---|---|
| Performance & financial highlights |
2 |
| Chairman's Statement |
4 |
| Investment Manager's Review |
6 |
| Twenty-Five Largest Investments |
10 |
| Portfolio of investments |
11 |
| Portfolio analysis |
13 |
| Condensed income statement |
14 |
| Condensed statement of financial position |
15 |
| Condensed statement of changes in equity |
16 |
| Condensed statement of cash flows |
17 |
| Notes to the Half-Yearly Financial Report |
18 |
| Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report |
23 |
| Information for shareholders |
24 |
| General information |
28 |
To provide long-term capital and income growth by investing predominantly in listed companies and to achieve a net asset value total return greater than the total return of the FTSE All-Share Index.
The Investment Manager follows an unconstrained and opportunistic approach with the aim of generating sustainable outperformance of the FTSE All-Share Index. The Investment Manager will seek to identify and invest in companies with the following characteristics: attractive valuations, strong business models, favourable long-term industry fundamentals and high quality management teams.
As a result of this approach, stock market capitalisations and sector and geographic weightings are of secondary consideration. Accordingly, there are no pre-defined maximum or minimum exposure levels for each individual sector, country or geographic region, but these exposures are reported to, and monitored by, the Board in order to ensure that the Company's portfolio is invested and managed in a manner consistent with spreading investment risk.
Given the Investment Manager's particular focus on the UK market, the majority of the portfolio is expected to be invested in UK listed companies. However, the overall geographical profile of the portfolio will change from time to time depending on where opportunities are found. The Company's policy is not to invest more than 10 per cent of net assets in any one investment. The total number of holdings in the portfolio will vary over time but the top positions will have a proportionally larger weighting.
There is no restriction on the amount of cash or cash equivalent instruments that the Company may hold and there may be times when the Investment Manager considers it appropriate for the Company to have a significant cash or cash equivalent position instead of being fully invested.
The Company may, but normally does not, invest up to 15 per cent of its total assets in other listed closed-ended investment funds.
The Company will not invest more than 10 per cent of its total assets in unquoted companies, excluding follow-on investments that may be made in existing unquoted investments in order to preserve the Company's economic interests in such investments. Any new or follow-on investments in unquoted companies require the prior approval of the Board.
The Company may use derivatives and similar instruments for the purpose of capital preservation, hedging currency risk and gearing.
The Company may employ gearing of up to 25 per cent of net assets. The effect of gearing may be achieved without borrowing by investing in a range of different types of instruments, including derivatives.
Limits referred to in the investment policy are measured at the time of investment or, in the case of gearing, at the time of draw-down or/and when derivative transactions are entered into.
The Company will seek to grow dividends paid in respect of each financial year at a rate greater than inflation, as defined by the UK Consumer Prices Index, in respect of the immediately preceding financial year of the Company.
The obligation to propose a continuation resolution at each fifth AGM was removed from the Company's Articles as approved by shareholders on 7 June 2018. In its place, the Company will arrange tender offers every three years, starting in 2021, with each tender offer being for up to 25 per cent of the issued ordinary shares, which will be subject to shareholder approval at the relevant AGM. The Board may, at its sole discretion, decide not to proceed with a tender offer if the ordinary shares are trading at a premium to the estimated tender price. The tender price will be the prevailing NAV (cum-income) per ordinary share (or, if the Board elects to use a tender realisation pool, the net proceeds of realising the assets in that pool) less the tender offer costs and less a discount of 3 per cent.
The capital structure of the Company as at 31 October 2018 consisted of 40,980,974 ordinary shares of 1p each.
| Total returns |
Six months ended 31 October 2018 |
|---|---|
| Net asset value per ordinary share Ordinary share price FTSE All-Share Index |
(9.2)% (8.0)% (3.5)% |
Source: Artemis/Datastream. *Alternative Performance Measure (see page 27)
| Capital | As at 31 October 2018 |
As at 30 April 2018 |
As at 31 October 2017 |
|---|---|---|---|
| Net assets Net asset value per ordinary share Ordinary share price Gearing* |
£145.1m 354.13p 295.00p 0.0% |
£161.7m 394.62p 325.00p 7.1% |
£151.7m 366.67p 302.00p 5.7% |
| Returns for the period |
For the six months ended 31 October 2018 |
For the year ended 30 April 2018 |
For the six months ended 31 October 2017 |
*Alternative Performance Measure (see page 27)
| Total returns |
1 year |
3 years |
5 years |
10 years |
Since launch** |
|---|---|---|---|---|---|
| Net asset value per ordinary share* |
(1.8)% | 18.7% | 13.7% | 134.4% | 492.7% |
| Ordinary share price* |
(0.4)% | 20.0% | 6.7% | 109.1% | 414.6% |
| FTSE All-Share Index |
(1.5)% | 25.4% | 30.5% | 156.7% | 240.6% |
* Alternative Performance Measure (see page 27).
** 1 June 2003 - the date when Artemis was appointed as Investment Adviser.
Source of data: Artemis/Datastream
In the six months to 31 October 2018 the Company's net asset value per share and share price declined by 9.2% and 8.0% respectively on a total return basis. The FTSE All-Share Index decreased by 3.5% over the same period.
The UK market has continued to be weak as a result of the extraordinary political uncertainties surrounding Brexit. October was particularly turbulent in markets with a heightened level of fear and volatility.
It is disappointing that our performance continues to suffer from the legacy unquoted holdings and that a number of our listed holdings have been negatively affected by market sentiment since the interim stage.
More detailed information on performance and the portfolio is set out in the Investment Manager's Review which follows.
In June, the Company held a general meeting at which all resolutions put to shareholders in connection with the revised investment strategy were overwhelmingly approved. The background to this was described in the circular sent to shareholders in May and the new strategy is set out on pages 1 and 2 of this report.
The unquoted percentage of the portfolio continued to reduce over the period under review, helped by the realisation of Metapack (4.5% of the portfolio) which made a positive contribution of 0.7% to the net asset value.
Conversely, the disappointing underperformance of Starcount Group contributed a loss of 1.6%, whilst the liquidation of URICA, as reported in the 2018 annual report, also detracted significantly from performance by 3.5%.
The Company's unquoted exposure as at 31 October 2018 had significantly reduced to 12.0% from the 20.7% level at the April 2018 year-end. With the completion of the sale of Gundaline in December, the unquoted exposure has reduced to 10.4%
Our fund managers continue to look for realisation opportunities whilst mindful of the need to maximise value for shareholders.
Revenue earnings per share for the six months to 31 October 2018 were 3.02p, an increase of 13.5% (2017: 2.66p). The Board has declared a first interim dividend of 2.00p per ordinary share (2017: 1.75p) which will be paid on 25 January 2019 to shareholders on the register as at 4 January 2019. This represents an increase of 14.3% over the equivalent dividend last year. Under our revised dividend policy, the Board targets an annual increase in the dividend in excess of the level of the Consumer Prices Index which stood at 2.2% as at April 2018.
The discount continued to narrow slightly and was 16.7% at 31 October 2018. The Company will consider buying back shares when this is necessary to address imbalances between supply and demand. No shares were bought back during the period.
Although the revised investment policy implemented from 7 June 2018 allows the Company to employ gearing of up to 25% of net assets, there was no gearing as at 31 October 2018. In November the existing £30 million borrowing facility with the Royal Bank of Scotland was replaced by a £20 million one year facility.
No doubt the UK market will continue to be volatile and valuations are likely to remain depressed while political uncertainty continues.
However, our fund managers believe that this volatility can provide opportunities in stocks which have been unfairly marked down.
Duncan Budge Chairman
19 December 2018
The period was a challenging one for markets. Concerns mounted over the impact of rising interest rates in the US and political uncertainty in the UK and Europe. The FTSE All-Share, which gains a majority of its earnings overseas, fell by 3.5% – despite sterling falling by 7% against the US dollar. The UK domestically orientated FTSE 250 fell by 5.4%.
The Company's NAV fell by 9.2%. It suffered from its exposure to smaller companies, which tend to fall further than larger companies when markets go down. The legacy unquoted portfolio also had a negative impact of 4.9% in the period. The write-downs we suffered were in part a consequence of our decision not to invest further capital in certain companies that required funding but this was not supported by the investment case. Although this has affected our NAV in the short term, we think shareholders' capital is better invested elsewhere, and that this should result in more consistent and stronger performance over the longer term.
The portfolio continues to undergo significant change in line with the review of strategy previously announced. We have rationalised our active holdings from 79 to 58. That will allow us to manage the portfolio more efficiently and concentrate capital in areas of higher conviction. We have improved greatly the liquidity of the portfolio as our weighting in unquoted equities has fallen from 20.7% to 12.0% and as at the date of this report was 10.4%. Similarly, our weighting in mid and large cap equities has risen from 33.5% to 44.9% as we have been drawn to opportunities in those parts of the market.
We have also been net sellers of stocks as we perceived asset prices to be high and in order to provide us with flexibility to implement our revised investment strategy. The Company started the period with gearing of 7.1% and had 3.2% net cash by the end of September, before deploying cash in October's sell-off. That saw us end the period close to fully invested, with scope to employ leverage as we balance the time-lag between rationalising existing holdings and investing in new opportunities.
So we have made the portfolio more liquid, concentrated and efficiently managed. We are confident that this will not only benefit shareholders through improved NAV per share performance, but also help close the Company's discount to NAV, which started the period at 17.6% and ended at 16.7%, despite the changes made.
| Market | Contribution % |
|
|---|---|---|
| Metapack | Unquoted | 0.7 |
| Miton Group | AIM | 0.4 |
| IGas Energy | AIM | 0.4 |
| Hornby | AIM | 0.4 |
| Augean | AIM | 0.3 |
| Market | Contribution % |
|
|---|---|---|
| URICA | Unquoted | (3.5) |
| Starcount Group | Unquoted | (1.6) |
| Sports Direct International | LSE | (0.6) |
| FootAsylum | AIM | (0.6) |
| Lamp Group | Unquoted | (0.4) |
The largest detractor in the period was the unquoted company URICA, which we have commented on before. We wrote down the majority of the investment in Starcount and generated modest proceeds from a sale of half of the investment. Management had failed to deliver against plans and required to raise money to which we were unwilling to contribute. The situation was similar in Lamp Group, an insurance company, and we wrote down the investment to zero.
In the listed portfolio Sports Direct International and FootAsylum cost us 1.2% in aggregate. Sports Direct fell due to negative sentiment towards the sector, whilst FootAsylum suffered from a profits warning. Despite the challenges facing the retail sector, we believe there will be winners and losers both of which we are following closely.
The top contributor in the period was Metapack, a private software business that provides retailers with logistic solutions. The company was sold to a US-listed company, Stamps.com, for a 24.8% premium to our carrying value. Miton Group, the boutique asset manager, rose 24.6% over the period as the business continues to generate strong performance and net inflows. IGas Energy, the UK-based shale operator, rose 40.1% due to developments in the sector and a strong oil price. Augean, the UK hazardous waste management company, rose 35.6% in response to stronger than expected trading. Hornby, the company which owns the Hornby, Scalectrix and Airfix brands, was up 27.5% as strategic initiatives outlined by new management were well received. We are encouraged by the company's actions to build a sustainable future for its hobby products through a reduction in discounting and a fresh focus on customers.
We have also been pleased by the operational progress made by other companies in the portfolio. Rocket Internet (5.9% of portfolio) raised capital in the public markets for two of its more mature portfolio companies and continued to make disposals of assets, leaving it in a position of significant liquidity. Tesco (5.0%) has traded well, demonstrating the resilience of grocery retail in a testing consumer market. Following work on its own label range, the company's price offering is the most competitive it has been in several years. In time we expect this to result in higher sales and cashflow. Hurricane Energy (4.1%) announced the farmout of two licences (Lincoln and Warwick) to Spirit Energy which is likely to accelerate its field development.
Broadly speaking, we believe many of our companies continue to make underlying progress that is not being reflected in share prices. We think this is a good sign of value to come.
In the period, we rationalised a significant portion of the portfolio and were net sellers of assets as we reduced gearing from 7.1% to zero. On the unquoted side, we sold Metapack as mentioned above (4.5%) and Oxford Sciences Innovation (1.7%). The sale of Gundaline was completed on 17 December (1.9%), meaning our unquoted exposure will be reduced to around 10% and nine holdings. On the listed side, we sold our holdings in Avation (previously 2.2%), BP (1.4%), Samarang Asian Prosperity Fund (1.4%), Dick's Sporting Goods (0.9%), Mountview Estates (0.9%), FreeAgent Holdings (0.9%) and City of London Investment Group (0.8%). These holdings did not fit our revised investment criteria.
The majority of the proceeds was invested in existing holdings. This is where we considered the most attractive opportunities to be. We added to holdings where we felt share price performance was most out of kilter with fundamentals. Our largest investment was in Dixons Carphone (2.4%). We are drawn to the business as it is the market leader by a considerable measure in retailing electric goods in the UK, Scandinavia and Greece. It has a substantial opportunity to address inefficiencies in its capital allocation. Over £1 billion of working capital is invested in the Carphone Warehouse business, earning a minimal return. As the entire company's market cap is £1.8 billion, a more productive allocation or distribution of some of this capital would make a substantial difference to overall returns. We believe new management is actively exploring this as well as the wider opportunity to leverage economies of scale over smaller competitors – in a tough market environment.
We increased our holding in Sports Direct by 2.1% to 4.1%. Its share price fell by 20% even though the company has continued to trade well. We think this is largely due to perceptions over Mike Ashley's governance of the company. We have monitored the business closely for at least three years and think that the reality is very different. Ashley is a skilled retailer who considers the needs of all stakeholders (consumers, employees and shareholders) in his management of the business. The core business has fundamentally attractive characteristics: a low cost base and dominant position in UK sports retail with strategic ownership of strong brands such as Everlast, Slazenger and Karrimor. We think the current valuation significantly undervalues the core UK retail business, whilst placing minimal value on the company's growing position in luxury retail (Flannels) and optionality in the US and UK department stores. We more than doubled our holding in the period.
Other existing holdings that we have continued to add to include Capital & Counties (1.5%), Rocket Internet (1.0%), Plus500 (0.9%), IWG (0.8%) and Dignity (0.6%).
Two new investments were made in Facebook (1.2%) and Just Eat (0.6%). We have continued to add to them both since the end of this reporting period. Facebook has fallen following fears over regulation and mismanagement. Rupert Murdoch once described newspapers as "rivers of gold"; and through its dominant position in social media, we think Facebook is effectively akin to the world's largest newspaper. It also has the additional financial benefits of having no newsrooms (its users make the content) and the technology to serve highly targeted advertisements. The resulting business should continue to achieve strong margins and has economies of scale that seem difficult to replicate.
The investment in Just Eat follows on from our investment in peer Delivery Hero (1.7%), both
companies being online food delivery platforms operating in different markets. We are drawn to the sector as dominant operators benefit from network platform effects (more restaurants means more customers). And while the industry is in a relatively early stage of growth, share is taken from traditional channels and the frequency of orders is stimulated by improvements in customer experiences. The opportunity in Just Eat has come about following concerns that its UK business faced competitive threats from Uber Eats/Deliveroo. We think the market is large enough to have more than one operator serving different customer segments. We also believe there is a margin of safety arising from the company's Brazilian asset that is often overlooked in valuations as it is accounted for as a joint venture with minimal earnings.
We consider both companies to have attractive and resilient business models which bring diversified exposures to our existing portfolio. We had been looking for an entry point and used volatility in October to start modest positions. Facebook is representative of our stated objective to consider making more investments overseas than we had previously. A year ago, 9.4% of the portfolio was invested overseas, today this is 14.9%. We believe this brings important geographic and business model diversification to the portfolio.
Recent months have seen a heightened level of fear and volatility in the market. We think this is a more attractive environment for investing, relative to the preceding period of unusual calm. Whilst we have been monitoring a number of potential holdings which reached attractive valuation levels, in the current environment we are minded to favour assets less exposed to the economic cycle. Shareholders should continue to expect portfolio activity to be elevated in periods of volatility.
Investors' horizons tend to contract when bearish sentiment prevails. Currently this seems to be the case in certain segments, with the UK market being the most evident example: it suffers from the uncertainty of Brexit and UK politics. Our view is that when starting valuations are low, the prospect for future returns is high.
Although 85.1% of the portfolio is invested in UKbased companies, we estimate that only 48% is directly exposed to the domestic economy. We believe this is an appropriate balance between having diversified exposures and seeking to exploit particularly compelling valuations. We are pleased with the progress made in the underlying transition of the portfolio, optimistic about its prospects and remain flexibly positioned to take advantage of further opportunities presented.
John Dodd & Kartik Kumar Fund managers Artemis Fund Managers Limited
19 December 2018
| Investment | Business activity | Market Value £'000 |
% of total investments |
|---|---|---|---|
| Rocket Internet | Internet conglomerate | 8,380 | 5.9 |
| Tesco | UK grocery retailer | 7,146 | 5.0 |
| Sports Direct International | UK sports retailer | 5,734 | 4.1 |
| Hurricane Energy1 Liontrust Asset Management |
Oil & gas exploration Asset management |
5,727 5,510 |
4.1 3.9 |
| Dignity | Funeral services | 5,392 | 3.8 |
| Polar Capital Holdings1 | Asset management | 5,215 | 3.7 |
| Reaction Engines2 | Rocket propulsion systems | 5,147 | 3.6 |
| Gleeson (M.J.) Group | UK housebuilding | 4,746 | 3.3 |
| IWG | Business office facilities | 4,485 | 3.2 |
| Plus500 | Online trading platform | 4,355 | 3.1 |
| Dixons Carphone | Specialist electrical & telecommunications retailer | 4,152 | 2.9 |
| Miton Group1 | Asset management | 3,965 | 2.8 |
| Hornby1 | Hobby and toy brands | 3,783 | 2.7 |
| Capital & Counties Properties | London property company | 3,754 | 2.7 |
| Inmarsat | Mobile satellite communications | 3,466 | 2.5 |
| Ramsdens Holdings1 | Financial services provider & retailer | 3,002 | 2.1 |
| Fitbit | Health & fitness devices | 2,776 | 2.0 |
| Gresham Technologies | Financial software services | 2,700 | 1.9 |
| Gundaline2 | Australian agriculture | 2,663 | 1.9 |
| Nintendo | Video games | 2,450 | 1.7 |
| Helical | Property development | 2,410 | 1.7 |
| Delivery Hero | Online food ordering company | 2,383 | 1.7 |
| Vectura Group | Drug delivery specialist | 2,284 | 1.6 |
| GlaxoSmithKline | Global healthcare company | 2,267 | 1.6 |
| Top 25 investments | 103,892 | 73.5 |
1 AIM quoted investment
2 Unquoted investment
| Country of | Market Value |
% of total |
||
|---|---|---|---|---|
| Investment | Business activity | incorporation | £'000 | investments |
| Consumer Services Claremont Alpha2 Criteo Dignity Dixons Carphone Footasylum1 Hardlyever2 Just Eat Maison Seven2 Majestic Wine1 Revolution Bars Rocket Internet ROK Entertainment 2 ROK Global 2 Sports Direct International |
Taiwan casino developments Web advertising services Funeral services Specialist electrical & telecommunications retailer UK lifestyle fashion retailer Online portal selling pre-owned luxury goods Online and mobile food ordering Online fashion retailing Specialist wine retailer UK operator of premium bars Internet conglomerate Global mobile entertainment group Global mobile entertainment group UK sports retailer |
Isle of Man France UK UK UK UK UK UK UK UK Germany USA UK UK |
1,734 2,199 5,392 4,152 841 1,085 835 – 1,369 1,535 8,380 – – 5,734 |
1.2 1.5 3.8 2.9 0.6 0.8 0.6 – 1.0 1.1 5.9 – – 4.1 |
| Starcount Group2 Tesco Zinc Media Group1 |
Data consultancy UK grocery retailer Media production |
UK UK UK |
390 7,146 453 |
0.3 5.0 0.3 |
| Total Consumer Services | 41,245 | 29.1 | ||
| Financials Capital & Counties Properties GLI Finance1 Hawk Group2 Helical Just Group Lamp Group2 Liontrust Asset Management LumX Group Menhaden Capital Miton Group1 N1 Singer2 Newriver REIT (warrants) Och-Ziff Capital Plus500 Polar Capital Holdings1 Premier Asset Management 1 Property Franchise Group1 Ramsdens Holdings1 Retail Money Market 2 URICA2,3 |
London property company Peer-to-peer lending investments SME finance solutions Property development Specialist retirement products & services Healthcare & specialist insurance Asset management Asset management UK-listed investment company Asset management Stockbroking UK retail property investments Asset management Online trading platform Asset management Asset management Estate agent services Financial services provider & retailer Peer-to-peer lender Payment network for SMEs |
UK Guernsey Luxembourg UK UK UK UK Switzerland UK UK UK UK USA Israel UK UK UK UK UK UK |
3,754 460 – 2,410 1,775 – 5,510 693 529 3,965 1,527 45 473 4,355 5,215 759 1,181 3,002 2,150 – |
2.7 0.3 – 1.7 1.3 – 3.9 0.5 0.4 2.8 1.1 – 0.3 3.1 3.7 0.5 0.8 2.1 1.5 – |
| Total Financials | 37,803 | 26.7 | ||
| Consumer Goods Chateau Rieussec 20102 Gleeson (M.J.) Group Gundaline2 |
Physical wine holding UK housebuilding Australian agriculture |
France UK Australia |
10 4,746 2,663 |
– 3.3 1.9 |
1 AIM quoted investment
2 Unquoted investment
3 Includes fixed interest element
| Investment Business activity incorporation £'000 |
investments 2.7 |
|---|---|
| Consumer Goods (continued) Hornby1 Hobby and toy brands UK 3,783 Houseology Design Group2 Home interiors & furniture design UK 676 Nintendo Video games Japan 2,450 Pittards1 High performance leather goods UK 1,706 Springfield Properties1 Property development UK 2,200 |
0.5 1.7 1.2 1.6 |
| Total Consumer Goods 18,234 |
12.9 |
| Industrials Augean1 Specialist waste management UK 1,840 Fox Marble1 Kosovo marble mining UK 628 IWG Business office facilities Jersey 4,485 MBA Polymers2 Post-consumer recycled USA – plastics producer Rated People2 Home maintenance services UK 1,241 Reaction Engines2 Rocket propulsion systems UK 5,147 |
1.3 0.4 3.2 – 0.9 3.6 |
| Total Industrials 13,341 |
9.4 |
| Technology Attraqt Group1 Online visual merchandising UK 1,600 Delivery Hero Online food ordering company Germany 2,383 Fitbit Health & fitness devices USA 2,776 Gresham Technologies Financial software services UK 2,700 Mporium Group1 Mobile retail design UK 617 Social networking website USA 1,782 |
1.1 1.7 2.0 1.9 0.4 1.3 |
| Total Technology 11,858 |
8.4 |
| Oil & Gas Ceramic Fuel Cells2 Electric fuel cells Australia – Energy Equity Resources (Norway)2 African oil & gas exploration UK – Homeland Renewable Energy2 US renewable energy production USA – Hurricane Energy1 Oil & gas exploration UK 5,727 IGas Energy1 UK onshore gas production UK 2,255 Leed Resources2 Natural resources investments UK – PetroHunter Energy2 US oil & gas exploration USA – Trinity Exploration & Production1 Oil & gas exploration UK 1,271 |
– – – 4.1 1.6 – – 0.9 |
| Total Oil & Gas 9,253 |
6.6 |
| Health Care Eden Research1 Agricultural chemicals UK 1,425 GlaxoSmithKline Global healthcare company UK 2,267 Physiolab Technologies2,3 Cryotherapy technology UK 306 Vectura Group Drug delivery specialist UK 2,284 |
1.0 1.6 0.2 1.6 |
| Total Health Care 6,282 |
4.4 |
| Telecommunications Inmarsat Mobile satellite communications UK 3,466 |
2.5 |
| Total Telecommunications 3,466 Total investments 141,482 |
2.5 100.0 |
1 AIM quoted investment
2 Unquoted investment
3 Includes fixed interest element
Large cap – market cap equivalent to FTSE 100 companies; Mid cap – market cap equivalent to FTSE 250 companies; Small cap – market cap equivalent to companies below FTSE 250.
for the six months ended 31 october 2018
| Six months ended 31 October 2018 (unaudited) |
Six months ended 31 October 2017 (unaudited) |
Year ended 30 April 2018 (audited) |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Note | Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
| Investment income | 1,566 | – | 1,566 | 1,387 | – | 1,387 | 3,250 | – | 3,250 |
| Other income | 12 cccccccccccccccccccccccccccccccccccccccccccccccccc |
– cccccccccccccccccccccccccccccccccccccccccccccccccc |
12 cccccccccccccccccccccccccccccccccccccccccccccccccc |
1 cccccccccccccccccccccccccccccccccccccccccccccccccc |
– cccccccccccccccccccccccccccccccccccccccccccccccccc |
1 cccccccccccccccccccccccccccccccccccccccccccccccccc |
– cccccccccccccccccccccccccccccccccccccccccccccccccc |
– cccccccccccccccccccccccccccccccccccccccccccccccccc |
– cccccccccccccccccccccccccccccccccccccccccccccccccc |
| Total revenue | 1,578 | – | 1,578 | 1,388 | – | 1,388 | 3,250 | – | 3,250 |
| (Losses)/gains | |||||||||
| on investments | – | (15,184) | (15,184) | – | 3,624 | 3,624 | – | 13,454 | 13,454 |
| Currency gains/(losses) | – cccccccccccccccccccccccccccccccccccccccccccccccccc |
15 cccccccccccccccccccccccccccccccccccccccccccccccccc |
15 cccccccccccccccccccccccccccccccccccccccccccccccccc |
– cccccccccccccccccccccccccccccccccccccccccccccccccc |
11 cccccccccccccccccccccccccccccccccccccccccccccccccc |
11 cccccccccccccccccccccccccccccccccccccccccccccccccc |
– cccccccccccccccccccccccccccccccccccccccccccccccccc |
(46) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(46) cccccccccccccccccccccccccccccccccccccccccccccccccc |
| Total income/(loss) | 1,578 | (15,169) | (13,591) | 1,388 | 3,635 | 5,023 | 3,250 | 13,408 | 16,658 |
| Expenses | |||||||||
| Investment management fee | (52) | (469) | (521) | (46) | (410) | (456) | (92) | (829) | (921) |
| Other expenses | (227) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(88) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(315) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(218) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(16) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(234) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(433) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(24) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(457) cccccccccccccccccccccccccccccccccccccccccccccccccc |
| Profit/(loss) before | |||||||||
| finance costs and tax | 1,299 | (15,726) | (14,427) | 1,124 | 3,209 | 4,333 | 2,725 | 12,555 | 15,280 |
| Finance costs | (17) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(150) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(167) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(20) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(179) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(199) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(39) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(352) cccccccccccccccccccccccccccccccccccccccccccccccccc |
(391) cccccccccccccccccccccccccccccccccccccccccccccccccc |
| Profit/(loss) before tax | 1,282 | (15,876) | (14,594) | 1,104 | 3,030 | 4,134 | 2,686 | 12,203 | 14,889 |
| Tax | (46) | – | (46) | (13) | – | (13) | (83) | – | (83) |
| Profit/(loss) for the period per ordinary share |
1,236 | (15,876) | (14,640) | 1,091 | 3,030 | 4,121 | 2,603 | 12,203 | 14,806 |
| Earnings/(loss) for the period 2 |
3.02p | (38.74)p | (35.72)p | 2.66p | 7.39p | 10.05p | 6.35p | 29.77p | 36.12p |
The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards. The supplementary revenue and capital columns are both 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 shareholders of Artemis Alpha Trust plc. There are no minority interests.
| Note | 31 October 2018 (unaudited) £'000 |
31 October 2017 (unaudited) £'000 |
30 April 2018 (audited) £'000 |
|---|---|---|---|
| Non-current assets | |||
| Investments | 141,482 | 158,864 | 169,206 |
| Investments in subsidiary undertaking | 3,368 ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvv |
3,094 ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvvv |
3,213 ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvv |
| 144,850 | 161,958 | 172,419 | |
| Current assets | |||
| Other receivables | 376 | 206 | 734 |
| Cash and cash equivalents | 6,252 ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvv |
1,401 ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvvv |
1,126 ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvv |
| 6,628 | 1,607 | 1,860 | |
| Total assets | 151,478 | 163,565 | 174,279 |
| Current liabilities | |||
| Other payables | (1,351) | (1,822) | (1,559) |
| Bank loan | (5,000) ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvv |
(10,000) ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvvv |
(11,000) ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccvvvvvvvvvvvvvvvvv |
| (6,351) | (11,822) | (12,559) | |
| Net assets | 145,127 | 151,743 | 161,720 |
| Equity attributable to equity holders | |||
| Share capital | 410 | 481 | 480 |
| Share premium | 676 | 667 | 676 |
| Special reserve | 50,134 | 50,202 | 50,202 |
| Capital redemption reserve | 180 | 109 | 110 |
| Retained earnings - revenue | 2,218 | 2,072 | 2,867 |
| Retained earnings - capital 5 |
91,509 | 98,212 | 107,385 |
| Total equity | 145,127 | 151,743 | 161,720 |
| Net asset value per ordinary share (undiluted) |
354.13p | 370.30p | 394.62p |
| Net asset value per ordinary share (diluted)1,2 |
354.13p | 366.67p | 394.62p |
1 As at 31 October 2018, there was no dilution effect as the subscription shares were converted into deferred shares and immediately cancelled on 18 June 2018.
2 As at 30 April 2018, there was no dilution effect as the rights attached to the subscription shares lapsed on 16 January 2018.
Half-Yearly financial report
for the six months ended 31 october 2018
| Six months ended 31 October 2018 (unaudited) | |||||||
|---|---|---|---|---|---|---|---|
| Share capital £'000 |
Share premium £'000 |
Special reserve £'000 |
Capital redemption reserve £'000 |
Retained earnings Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| At 1 May 2018 | 480 | 676 | 50,202 | 110 | 2,867 | 107,385 | 161,720 |
| Total comprehensive income: Profit/(loss) for the period Transactions with owners recorded directly to equity: |
– | – | – | – | 1,236 | (15,876) | (14,640) |
| Cancellation of ordinary shares from treasury | (2) | – | – | 2 | – | – | – |
| Repurchase of deferred shares Conversion of subscription shares to |
– | – | (68) | – | – | – | (68) |
| deferred shares | (68) | – | – | 68 | – | – | – |
| Dividends paid | – | – | – | – | (1,885) | – | (1,885) |
| At 31 October 2018 | 410 | 676 | 50,134 | 180 | 2,218 | 91,509 | 145,127 |
| Six months ended 31 October 2017 (unaudited) | |||||||
|---|---|---|---|---|---|---|---|
| Share capital £'000 |
Share premium £'000 |
Special reserve £'000 |
Capital redemption reserve £'000 |
Retained earnings Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| At 1 May 2017 | 492 | 657 | 50,646 | 98 | 2,928 | 95,182 | 150,003 |
| Total comprehensive income: Profit for the period Transactions with owners recorded directly to equity: |
– | – | – | – | 1,091 | 3,030 | 4,121 |
| Repurchase of ordinary shares into treasury | – | – | (444) | – | – | – | (444) |
| Cancellation of ordinary shares from treasury | (11) | – | – | 11 | – | – | – |
| Conversion of subscription shares | – | 10 | – | – | – | – | 10 |
| Dividends paid | – | – | – | – | (1,947) | – | (1,947) |
| At 31 October 2017 | 481 | 667 | 50,202 | 109 | 2,072 | 98,212 | 151,743 |
| Year ended 30 April 2018 (audited) | |||||||
|---|---|---|---|---|---|---|---|
| Share capital £'000 |
Share premium £'000 |
Special reserve £'000 |
Capital redemption reserve £'000 |
Retained earnings Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| At 1 May 2017 | 492 | 657 | 50,646 | 98 | 2,928 | 95,182 | 150,003 |
| Total comprehensive income: Profit for the year Transactions with owners recorded directly to equity: |
– | – | – | – | 2,603 | 12,203 | 14,806 |
| Repurchase of ordinary shares into treasury | – | – | (444) | – | – | – | (444) |
| Cancellation of ordinary shares from treasury | (12) | – | – | 12 | – | – | – |
| Conversion of subscription shares | – | 19 | – | – | – | – | 19 |
| Dividends paid | – | – | – | – | (2,664) | – | (2,664) |
| At 30 April 2018 | 480 | 676 | 50,202 | 110 | 2,867 | 107,385 | 161,720 |
for the six months ended 31 october 2018
| Six months ended | Six months ended | Year ended | |
|---|---|---|---|
| 31 October 2018 | 31 October 2017 | 30 April 2018 | |
| (unaudited) | (unaudited) | (audited) | |
| £'000 | £'000 | £'000 | |
| Operating activities (Loss)/profit before tax |
(14,594) | 4,134 | 14,889 |
| Interest payable | 167 | 199 | 391 |
| Losses/(gains) on investments | 15,184 | (3,624) | (13,454) |
| Currency (gains)/losses | (15) | (11) | 46 |
| Decrease/(increase) in other receivables Increase in other payables |
199 20 cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
211 211 cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
(179) 252 ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
| Net cash inflow from operating activities before interest and tax |
961 | 1,120 | 1,945 |
| Interest paid Irrecoverable overseas tax suffered |
cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (167) (46) cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (199) (13) cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (391) (83) ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
| Net cash inflow from operating | 748 | 908 | 1,471 |
| activities | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
| Investing activities | (25,789) | (24,051) | (52,510) |
| Purchase of investments | 38,105 | 25,904 | 53,337 |
| Sales of investments | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
| Net cash inflow from investing activities |
12,316 | 1,853 | 827 |
| Financing activities Repurchase of ordinary shares into treasury |
cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc – |
cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (444) |
ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (444) |
| Conversion of subscription shares | – | 10 | 19 |
| Repurchase of deferred shares | (68) | – | – |
| Dividends paid | (1,885) | (1,947) | (2,664) |
| Decrease in inter-company loan | – | (2) | (49) |
| Net cash outflow from financing | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
| activities | (1,953) | (2,383) | (3,138) |
| cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | |
| Net decrease/(increase) in net debt | 11,111 | 378 | (840) |
| cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | |
| Net debt at the start of the period Effect of foreign exchange rate changes |
(9,874) 15 |
(8,988) 11 |
(8,988) (46) |
| Net funds/(debt) at the end | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc | ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc |
| of the period | 1,252 | (8,599) | (9,874) |
| Bank loan Cash and cash equivalents |
cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (5,000) 6,252 |
cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (10,000) 1,401 |
ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc (11,000) 1,126 |
| 1,252 | (8,599) | (9,874) |
Half-Yearly financial report
The Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', the provisions of the Companies Act 2006 and with the guidance set out in the Statement of Recommended Practice for Investment Trust Companies and Venture Capital Trusts ("SORP") issued by the Association of Investment Companies in November 2014.
The Half-Yearly Financial Report has been prepared under the same accounting policies as the Annual Financial Statements for the year ended 30 April 2018.
| Six months ended 31 October 2018 |
Six months ended 31 October 2017 |
Year ended 30 April 2018 |
|
|---|---|---|---|
| Earnings/(loss) per ordinary share is based on: Revenue earnings (£'000) Capital (loss)/earnings (£'000) |
1,236 (15,876) |
1,091 3,030 |
2,603 12,203 |
| Total (loss)/earnings (£'000) | (14,640) | 4,121 | 14,806 |
| Weighted average number of ordinary shares in issue during the period (basic and diluted) |
40,980,974 | 41,006,257 | 40,992,533 |
| As at 31 October 20181 |
As at 31 October 2017 |
As at 30 April 20182 |
|
|---|---|---|---|
| Net asset value per ordinary share is based on: Net assets (£'000) |
145,127 | 151,743 | 161,720 |
| Number of shares in issue at the end of the period (basic) |
40,980,974 | 40,978,267 | 40,980,974 |
| Number of shares in issue at the end of the period (diluted) |
40,980,974 | 47,834,613 | 40,980,974 |
1 There was no dilution to the Net Asset Value for the period ended 31 October 2018, as the subscription shares were converted into deferred shares and immediately cancelled on 18 June 2018.
2 There was no dilution to the Net Asset Value for the year ended 30 April 2018, as the rights attached to the subscription shares lapsed on 16 January 2018.
During the period the Company cancelled 152,500 shares from treasury (six months ended 31 October 2017: repurchased 152,500 shares into treasury; year ended 30 April 2018: repurchased 152,500 shares into treasury). 6,853,639 subscription shares were converted into deferred shares, repurchased for par value and immediately cancelled during the period (six months ended 31 October 2017: 2,792 subscription shares were exercised and the same number of ordinary shares were issued in respect of these; year ended 30 April 2018: 5,499 subscription shares were exercised and the same number of ordinary shares were issued in respect of these).
| Six months ended 31 October 2018 £'000 |
Six months ended 31 October 2017 £'000 |
Year ended 30 April 2018 £'000 |
|
|---|---|---|---|
| Second interim dividend for the year ended | |||
| 30 April 2017 – 2.75p | – | 1,127 | 1,127 |
| First interim dividend for the year ended 30 April 2018 – 1.75p |
– | – | 717 |
| Second interim dividend for the year ended | |||
| 30 April 2018 – 3.00p | 1,229 | – | – |
| Special dividend for the year ended | |||
| 30 April 2018 – 1.60p (2017: 2.00p) | 656 | 820 | 820 |
| 1,885 | 1,947 | 2,664 |
A first interim dividend for the year ending 30 April 2019 of £820,000 (2.00p per ordinary share) has been declared. This will be paid on 25 January 2019 to those shareholders on the register at close of business on 4 January 2019.
| As at 31 October 2018 £'000 |
As at 31 October 2017 £'000 |
As at 30 April 2018 £'000 |
|
|---|---|---|---|
| Retained earnings - capital (realised) Retained earnings - capital (unrealised) |
100,191 (8,682) |
90,297 7,915 |
98,942 8,443 |
| 91,509 | 98,212 | 107,385 |
The financial information for the six months ended 31 October 2018 and 31 October 2017 has not been audited and does not constitute statutory financial statements as defined in Section 234 of the Companies Act 2006.
The information for the year ended 30 April 2018 has been extracted from the Audited Financial Statements for the year ended 30 April 2018. These financial statements contained an unqualified auditor's report and have been lodged with the Registrar of Companies and did not contain a statement required under Section 498 of the Companies Act 2006.
Pursuant to DTR 4.2.7R of the Disclosure Guidelines and Transparency Rules, the principal risks faced by the Company include general market price risk, liquidity risk, regulatory, and financial risks.
These risks, which have not materially changed since the Annual Financial Report for the year ended 30 April 2018, and the way in which they are managed, are described in more detail in the Annual Financial Report for the year ended 30 April 2018 which is available on the website artemisalphatrust.co.uk.
The amounts paid to the Investment Manager are disclosed in the Condensed income statement on page 14. However, the existence of an independent Board of Directors demonstrates that the Company is free to pursue its own financial and operating policies and therefore, under IAS 24: Related Party Disclosures, the Investment Manager is not considered to be a related party.
IFRS 7 'Financial Instruments: Disclosures' requires an entity to provide an analysis of investments held at fair value through profit and loss using a fair value hierarchy that reflects the significance of the inputs used in making the measurements of fair value. The hierarchy used to analyse the fair values of financial assets is set out below.
Level 1 - investments with quoted prices in an active market;
Level 2 - investments whose fair value is based directly on observable current market prices or is indirectly derived from market prices; and
Level 3 - investments whose fair value is determined using a valuation technique based on assumptions that are not supported by observable current market prices or are not based on observable market data.
The investments held at the balance sheet date fell into the categories, Level 1, Level 2 and Level 3. The values in these categories are summarised as part of this note. Any investments that are delisted or suspended from a listed stock exchange are transferred from Level 1 to Level 3.
| As at 31 October 2018 £'000 |
As at 31 October 2017 £'000 |
As at 30 April 2018 £'000 |
|
|---|---|---|---|
| UK quoted investments (Level 1) | |||
| – UK listed | 63,075 | 54,083 | 61,789 |
| – AIM quoted | 40,297 | 46,580 | 49,472 |
| Overseas quoted investments (Level 1) | 21,136 | 14,920 | 19,222 |
| Mutual funds (Level 2) | – | 5,318 | 3,522 |
| Forward foreign exchange contracts (level 2) | – | 100 | 73 |
| Warrants (level 2) | 45 | – | 61 |
| Unquoted investments (Level 3) | |||
| – Equities and warrants | 15,819 | 33,609 | 30,563 |
| – Fixed interest | 200 | 700 | 950 |
| – Preference shares | 910 | 3,554 | 3,554 |
| 141,482 | 158,864 | 169,206 |
The valuation of the Level 3 investments would not be significantly different had reasonably possible alternative valuation bases been applied.
Notes to the half-yearly Hnancial report (continued)
Details of the movements in Level 3 assets during the six months ended 31 October 2018 are set out in the table below.
| £'000 | |
|---|---|
| Level 3 investments Opening book cost Opening fair value adjustment |
37,430 (2,363) |
| Opening valuation | 35,067 |
| Movements in the period: Purchases at cost Sales – proceeds Sales – realised gains on sales (Decrease)/increase in fair value adjustment |
50 (9,096) 4,827 (13,919) |
| Closing valuation | 16,929 |
| Closing book cost Closing fair value adjustment |
33,211 (16,282) |
| 16,929 |
The Directors confirm that to the best of their knowledge, in respect of the Half-Yearly Financial Report for the six months ended 31 October 2018:
(b) Disclosure Guidance and Transparency Rule 4.2.8R (related party transactions).
The Half-Yearly Financial Report for the six months ended 31 October 2018 was approved by the Board and the above responsibility statement was signed on its behalf by:
19 December 2018
The Company's ordinary shares are traded on the London Stock Exchange and can be bought or sold through a stockbroker. The Company is a qualifying investment trust for ISA purposes.
London Stock Exchange (SEDOL) number: 0435594 ISIN number: GB0004355946 Reuters code: ATS.L Bloomberg code: ATS:LN LEI: 549300 MQXY2QXEIL3756 GIIN: PIK2NS.00002.SF.826
All administrative enquiries relating to shareholder queries concerning holdings, dividend payments, notification of change of address or loss of certificate should be addressed to the Company's registrars at: Shareholder Services Department, Link Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU or by calling 0871 664 0300 (calls cost 12p per minute plus your phone company's access charge. If you are outside the United Kingdom please call +44 371 664 0300. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales).
If you would like to receive dividend payments directly into your bank account, please contact the Company's registrar at the address above.
Shareholders are able to re-invest their cash dividends using the Plan operated by Link Registrars. To find out more about the Plan, including the terms and conditions, please contact Link by calling 0871 664 0300 (calls cost 12p per minute plus your phone
company's access charge. If you are outside the United Kingdom please call +44 371 664 0300. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9.00 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales).
The Company's net asset value is calculated daily and released to the London Stock Exchange. The ordinary share price is listed in the Financial Times and also on the TrustNet website (trustnet.com). Up to date information can be found on the website (artemisalphatrust.co.uk), including a factsheet which is updated monthly. Shareholders can also contact the Chairman to express any views on the Company or to raise any questions they have using the email address [email protected].
For capital gains purposes, the cost of the Company's ordinary shares at 31 March 1982 was 13.22p per share.
The Company is a member of The Association of Investment Companies ("AIC") which publishes monthly statistics on the majority of investment trusts. Further details can be obtained by contacting the AIC on 020 7282 5555 or at its website theaic.co.uk.
The Company currently conducts its affairs so that the shares in issue can be recommended by financial advisers to ordinary retail investors in accordance with the Financial Conduct Authority's ("FCA") rules in relation to non-mainstream investment products and the Company intends to do so for the foreseeable future. The shares are excluded from the FCA's restrictions which apply to non-mainstream investment products because they are shares in an Investment Trust.
With effect from 1 January 2016 tax legislation requires investment trust companies to provide information to HMRC on certain investors who purchase shares in investment trusts. Accordingly, the Company may have to provide information annually to HMRC on the tax residencies of those certificated shareholders that are tax resident outwith the UK, in those countries that have signed up to the OECD's ('Organisation for Economic Co-operation and Development') Common Reporting Standard for Automatic Exchange of Financial Account Information (the 'Common Reporting Standard'), or the United States (under the Foreign Account Tax Compliance Act, 'FATCA').
All new shareholders, excluding those whose shares are held in CREST, who enter the share register from 1 January 2016 will be sent a certification form from the Registrar to complete. Existing shareholders may also be contacted by the Registrar should any extra information be needed to correctly determine their tax residence.
Failure to provide this information may result in the account being reported to HMRC.
For further information, please see HMRC's Quick Guide: Automatic Exchange of Information – information for account holders: gov.uk/government/publications/exchange-ofinformation-account-holders.
Year End
30 April
Interim: December/January Annual: July
January and August
September/October
An alternative performance measure is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework.
If the share price of an investment trust is lower than the net asset value per share, the shares are said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the net asset value per share and is usually expressed as a percentage of the net asset value per share. If the share price is higher than the net asset value per share, the shares are said to be trading at a premium.
Gearing is the process whereby changes in the total assets of a company have an exaggerated effect on the net assets of that company's ordinary shares due to the use of borrowings.
| As at 31 October 2018 £'000 |
As at 2018 £'000 |
As at 30 April 31 October 2017 £'000 |
|
|---|---|---|---|
| Total assets Cash and cash |
151,478 | 174,279 | 163,565 |
| equivalents | (6,252) 555 |
(1,126) 555 |
(1,401) 555 |
| Net assets | 145,226 145,127 |
173,153 161,720 |
162,164 151,743 |
| Net gearing | 0.0% | 7.1% | 5.7% |
Leverage is defined in the AIFMD as any method by which an AIFM increases the exposure of an Alternative Investment Fund it manages, whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means.
There are two measures of calculating leverage:
Net asset value represents the total value of the Company's assets less the total value of its liabilities, and is normally expressed on a per share basis.
Total expenses (excluding finance costs, performance fees and taxation) incurred by the Company as a percentage of average net asset values.
| Six months ended 31 October 2018 £'000 |
Year ended 2018 £'000 |
Six months ended 30 April 31 October 2017 £'000 |
|
|---|---|---|---|
| Investment management fees Other expenses Total expenses Average net assets (12 months) |
521 315 555 836 158,299 |
921 457 555 1,378 151,782 |
456 234 555 690 143,507 |
| Ongoing charges* | 0.9% | 0.9% | 0.9% |
* Ongoing charges are based on expenses waived over the prior twelve month period and so may be slightly different to the arithmetic calculation.
The total return on an investment is made up of capital appreciation (or depreciation) and any income paid out (which is deemed to be reinvested) by the investment. Measured over a set period, it is expressed as a percentage of the value of the investment at the start of the period.
| 31 October 2018 p |
2018 p |
30 April 31 October 2017 p |
|
|---|---|---|---|
| Opening net asset value Closing net asset |
394.62 | 361.89 | 361.89 |
| value Dividends paid |
354.13 4.60 |
394.62 6.50 |
366.67 4.75 |
| (9.2)% | 11.0% | 2.7% |
| 31 October 2018 p |
2018 p |
30 April 31 October 2017 p |
|
|---|---|---|---|
| Opening share price Closing share price Dividends paid |
325.00 295.00 4.60 |
293.50 325.00 6.50 |
293.50 302.00 4.75 |
| (8.0)% | 13.2% | 4.6% |
The total returns percentages assumes that dividends paid out by the Company are re-invested into shares at the value on the ex-dividend date and so the figure will be slightly different to the arithmetic calculation.
Duncan Budge (Chairman) John Ayton Jamie Korner Blathnaid Bergin Tom Cross Brown (retired 11 October 2018)
Artemis Investment Management LLP Cassini House 57-59 St James's Street London SW1A 1LD
An investment company as defined under Section 833 of the Companies Act 2006.
Registered in England Number: 253644.
Website artemisalphatrust.co.uk
Artemis Fund Managers Limited Cassini House 57-59 St James's Street London SW1A 1LD
Telephone: 0800 092 2051 Email: [email protected]
The Investment Manager is authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London E20 1JN
J.P. Morgan Europe Limited 25 Bank Street Canary Wharf London E14 5JP
Cantor Fitzgerald Europe One America Square 17 Crosswall London EC3N 2LS
J.P. Morgan Europe Limited 25 Bank Street Canary Wharf London E14 5JP
PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh EH3 8EX
Link Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
J.P. Morgan Chase Bank N.A. 25 Bank Street Canary Wharf London E14 5JP
Dickson Minto W.S. Broadgate Tower Primrose Street London EC2A 2EW
Ernst & Young LLP Atria One 144 Morrison Street Edinburgh EH3 8EX is page is intentionally blank
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