AI Terminal
abrdn Diversified Income and Growth plc
Quarterly Report • Jun 27, 2024
5122_ir_2024-06-27_2d16a4d0-ce54-4a81-8c87-1855e36c5546.html
Quarterly Report
Open in ViewerOpens in native device viewer
National Storage Mechanism | Additional information 
RNS Number : 0346U
abrdn Diversified Income and Growth
27 June 2024
abrdn Diversified Income and Growth plc
Half Yearly Report 31 March 2024
abrdndiversified.co.uk
Investment Objective (from 27 February 2024)
The Company's investment objective is to conduct an orderly realisation of its assets in a manner that seeks to optimise the value of the Company's investments whilst progressively returning cash to shareholders in a timely manner.
Financial Highlights
Financial Highlights
| | 31 March 2024 | 30 September 2023 | % change |
| Total assets less current liabilities (before deducting prior charges) | £321,982,000 | £355,264,000 | -9.4 |
| Total shareholders' funds (Net Assets) | £321,982,000 | £339,534,000 | -5.2 |
| Ordinary share price (mid market) | 72.00p | 83.60p | -13.9 |
| Net asset value per Ordinary share (debt at par value) | 106.88p | 112.70p | -5.2 |
| Discount to net asset value on Ordinary shares (debt at par value)A | 32.6% | 25.8% | |
| Net (cash)/gearing (debt at par value) AB | (13.82%) | (1.60%) | |
| Ongoing charges ratioA | 1.83% | 1.74% | |
| A Considered to be an Alternative Performance Measure. Details of the calculation can be found below.. | |||
| B Increase in net cash and cash equivalents held at the period end ahead of early redemption of the 6.25% Bonds 2031 effected on 9 April 2024. | |||
| | | | |
| | Six months ended | Six months ended | |
| | 31 March 2024 | 31 March 2023 | % change |
| Net revenue return after taxation | £5,201,000 | £7,740,000 | -32.8 |
| Revenue return per share | 1.73p | 2.52p | -31.3 |
| Interim dividendsA | 1.42p | 2.84p | -50.0 |
| A Further information on interim dividends, including those paid during the period may be found in the Chairman's Statement and in Note 6 to the Financial Statements. |
Chairman's Statement
Approval of the Managed Wind-Down of the Company
Following an extensive review of the Company's strategy and discussions with shareholders, a circular was issued by the Company in January 2024 setting out a new investment objective and policy as part of proposals for a Managed Wind-Down of the Company. These proposals were approved by shareholders at the General Meeting held on 27 February 2024.
In accordance with the Managed Wind-Down, the Company has commenced an orderly realisation of its assets in a manner that seeks to optimise the value of the Company's investments for the benefit of shareholders.
Proposed initial return of capital to shareholders
The Company announced on 17 June 2024, by way of a circular to shareholders (the "Circular"). proposals to return approximately £115 million, representing approximately 38 pence per Ordinary share, to shareholders (the "Initial Return of Capital"), pursuant to a bonus issue, on a pro rata basis, of B shares to all shareholders, followed by the redemption of such B shares (the "B Share Scheme").
The Circular, which may be viewed on the Company's website at www.abrdndiversified.co.uk, contains further details of the Initial Return of Capital and the notice convening a General Meeting. This followed Court approval being obtained for the Company to reduce its share capital and cancel the amounts standing to the credit of its share premium account and capital redemption reserve to provide the Company with sufficient flexibility and distributable reserves to deliver the Managed Wind-Down as planned.
The introduction of the B Share Scheme is conditional on shareholder approval at a General Meeting to be held on 3 July 2024. If approval is forthcoming, the Company expects to distribute funds to shareholders by 10 July 2024.
Further returns of capital to shareholders
The Board anticipates further returns of capital to follow as value is realised from the Company's private markets portfolio as follows:
· approximately £101 million of the Company's private markets portfolio (valued as at 31 May 2024) is expected to mature between 2024 and 2027 (the "Tranche 1").
· the remaining, approximately £91 million of the private markets portfolio (valued as at 31 May 2024) is expected to mature between 2029 and 2033 (the "Tranche 2").
It is intended that the proceeds from both Tranche 1 and Tranche 2 will be returned to Shareholders in a timely manner as the investments mature. Further information on portfolio realisations may be found in the Investment Manager's Report.
Performance
Over the six months ended 31 March 2024, the Company's net asset value ("NAV") per share total return was +0.2%. The Company's share price total return was -8.8% with the share price discount to NAV widening from 25.8% to 32.6% over the period.
Dividends
In relation to the year ended 30 September 2024, interim dividends of 1.42p per share were paid to shareholders in October 2023 and January 2024 while a special dividend of 1.65 pence per share was paid to shareholders in December 2023. A further interim dividend of 1.42p per share was paid to shareholders in March 2024.
Following Court approval on 7 June 2024 and in the absence of unforeseen circumstances, it is the current intention of the Board to declare another interim dividend, for the year ended 30 September 2024, to be paid around mid-October 2024. Thereafter, it is likely that dividends will be paid in smaller, less regular amounts principally for the purpose of maintaining the Company's investment trust status while capital will be returned progressively to shareholders in larger, infrequent amounts by the most tax-efficient mechanism available.
The Board intends to continue to pay a sufficient level of dividend to ensure that the Company will not retain more than 15 per cent. of its income in an accounting period so as to maintain the Company's investment trust status during the Managed Wind-Down. The Directors will declare certain dividends based on the Company's net income but the quantum and timing of any dividends in future will be at the sole discretion of the Board.
There can be no guarantee as to the payment, quantum or timing of dividends during the Managed Wind-Down of the Company.
Share buybacks and Treasury shares policy
During the six months ended 31 March 2024, the Company bought back no shares, resulting in 301,265,952 Ordinary 25p shares with voting rights and another 22,485,854 shares held in treasury, at 31 March 2024.
Following the approval by the Court, on 7 June 2024, of the reduction in the Company's share capital, the nominal value per Ordinary share was reduced from 25p to 1p.
Gearing and Bond repayment
Subsequent to the period end, on 9 April 2024, the Company redeemed and cancelled the remaining £16,096,000 of its 6.25% Bonds due 2031 (the "Bonds"). As announced on 8 March 2024, the redemption price was 114.983%, which was calculated in accordance with the terms of the trust deed of the Bonds. The total cost of the redemption, including accrued interest, was £18,587,000. As a result, the Company has no further Bonds outstanding nor any other borrowings.
Davina Walter
Chairman
26 June 2024
Interim Management Report and Directors' Responsibility Statement
The Chairman's Statement and the Investment Manager's Report provide details of the important events which have occurred during the period and their impact on the financial statements.
Principal Risks and Uncertainties
The principal risks faced by the Company can be divided into various areas as follows:
· Performance risk;
· Portfolio risk;
· Gearing risk;
· Income/dividend risk;
· Regulatory risk;
· Operational risk;
· Market risk; and
· Financial risks.
The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 30 September 2023 (the "Annual Report"); a detailed explanation can be found in the Strategic Report on pages 14 to 16 of the Annual Report which is available on the Company's website: abrdndiversified.co.uk
The Board continues to monitor the volatility and risks associated with heightened political and economic uncertainty, particularly the impact of the higher interest rate environment and market volatility associated with specific geopolitical risks.
The Board is also conscious of the elevated threat posed by climate change and continues to monitor, through its Investment Manager, the potential risk that its portfolio investments may fail to adapt to the requirements imposed by climate change.
In the view of the Board, there have not been any other changes to the fundamental nature of the principal risks and uncertainties facing the Company since the previous Annual Report, which are considered to be equally applicable to the remaining six months of the financial year to 30 September 2024 as they were to the six months under review, other than gearing risk, which is no longer applicable following the redemption of the 6.25% Bonds 2031 on 9 April 2024.
Going Concern
The Financial Statements of the Company have been prepared on a going concern basis. The Directors have assessed the financial position of the Company as outlined above and in the Chairman's Statement.
The forecast projections and actual performance have been reviewed on a regular basis throughout the period and the Directors believe that the going concern basis remains appropriate as the Company is financially sound with adequate resources to continue in operational existence for the foreseeable future (being a period of twelve months from the date that these financial statements were approved). The Company is able to meet all of its liabilities from its assets, including its ongoing operating expenses.
Related Party Disclosures and Transactions with the Alternative Investment Fund Manager and Investment Manager
abrdn Fund Managers Limited ("AFML") has been appointed as the Company's alternative investment
fund manager.
AFML has (with the Company's consent) delegated certain portfolio and risk management services, and other ancillary services, to abrdn Investments Limited and abrdn Holdings Limited, which are regarded as related parties under the UKLA's Listing Rules. Details of the fees payable to AFML are set out in note 3 to the condensed financial statements.
Directors' Responsibility Statement
The Disclosure and Transparency Rules of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.
The Directors confirm to the best of their knowledge that:
· the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with applicable UK Accounting Standard FRS 104 'Interim Financial Reporting' and give a true and fair view of the assets, liabilities, financial position and return of the Company for the period ended 31 March 2024; and
· the Interim Management Report, together with the Chairman's Statement and Investment Manager's Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules.
The Half-Yearly Financial Report was approved by the Board and the above Directors' Responsibility Statement was signed on its behalf by the Chairman.
For and on behalf of the Board
Davina Walter
Chairman
26 June 2024
Investment Manager's Report
The last mile for inflation is taking time to resolve. Having appeared to be slowly reducing to target, we have seen sequential inflation nudging back up. Economically, and from a capital markets perspective, the US leads the rest of the developed world with few signs of economic stress while the UK and pockets of Europe have experienced technical recessions, providing diverging challenges for central bankers. Geopolitical risks remain high, and with many countries holding elections this year, instability is unlikely to dissipate.
Concentrated market returns
In the last two Annual Reports, we noted that inflation was the number one factor driving markets with data remaining stubbornly higher than central bank targets globally, forcing central bankers to keep rates at elevated levels. While inflation had appeared to be slowly reducing to target towards the end of 2023, sequential inflation was observed nudging back up in Q1 2024. As things stand, central banks are lacking supporting evidence for rate cuts. Indeed, growing market chatter about the next move in the US is leaning towards a hike over a cut, but remains a minority view. This has fed into corporate debt, with spreads having tightened across credit markets in early 2024, but particularly in the high yield market, making valuations in the asset class look full.
Away from the great rate debate, equity market returns have been dominated by tech names, with the 'Magnificent 7' driving over half of S&P 500 returns on the back of optimism over an artificial intelligence-backed productivity super-cycle. Growth has been driven by higher expectations of future earnings, rather than increases in valuation multiple, distinguishing this tech-driven market from the dot com bubble of the late 1990s. Developed market earnings growth appears to have moved through cyclical lows and should recover further if economies experience a soft landing. Chinese equity markets have stabilised thanks to policy moves, but house price falls across the country have weighed on GDP growth. Touching on property, on a global basis, most pain is behind investors now in March 2024. There is a little more yield revaluation to go but the cyclicality of the market and a current lack of new construction starts mean rental growth should start to pick up in key sectors.
Performance
Although the NAV, including income, demonstrated the low volatility that we seek, the performance over the six months was disappointing in comparison to the favourable backdrop of equity and bond markets. The Company delivered a total return of 0.2% with 3.2% volatility. This compared with a 5.2% return in equities as measured by the FTSE All-Share Index with 9.8% volatility, and a 6.2% return on government bonds as measured by the ICE BofA UK Gilt Index with a volatility of 8.1%. Higher Yielding Fixed Income securities were the top performers with Defensive Assets also performing well. The Company's Real Assets holdings detracted from returns in the period.
In Higher Yield Fixed Income, the standout performers were Emerging Market Bonds and Asset-Backed holdings. Returns from Equities were negative over the period for the Company with the Chinese market underperforming broader global indices. Our Diversifying Opportunities positions were broadly flat, with mixed performance spread across the asset class.
We discuss performance, gross of management fees and expenses directly attributable to the Company, in greater detail below.
How did the portfolio produce returns during this period?
Equity Growth
Equities returned -2.3% over the period, contributing -0.3% to the Company. This was driven predominantly by underperformance of the holding in China A-shares. Chinese economic growth has been lower than expected, impacting corporate earnings growth. Equity markets have stabilised since policy stance has become more supportive, but Chinese equities have not yet benefitted from this, despite the screening as cheap on a forward P/E ratio.
There was also negative performance from Private Equity, where good performance from Aberdeen Standard Secondary Opportunities Fund IV was outweighed by a reduction in value at TrueNoord , the regional aircraft leasing company, where new equity was raised at a slightly lower valuation.
Higher Yielding Fixed Income
Higher Yielding Fixed Income led return generation over the six months, adding 1.3%. Within this, Asset-Backed Securities were the top performer, contributing 0.5%. TwentyFour Asset Backed Opportunities led returns with the floating rate nature of the debt benefitting the investment, within a higher interest rate environment.
The tilt to floating rate lending also provided higher returns within the Private Credit portfolio. Mount Row II in particular has seen income paid rise as the semi-annual rates of the underlying securities reset at higher coupons. The slightly delayed effect of this means that the increased income from higher interest rates is yet to be fully reflected and will be positive to portfolio income for several months following a potential move down in rates.
Real Assets
Real assets detracted from performance, returning -1.1% over the six months.
Property assets have suffered from continued underperformance due to their susceptibility to rising rates. As central banks have increased rates this has also increased the yield on government bonds. These are typically used as the risk-free rate in discounted cashflow calculations that drive the valuations for real assets. A higher risk-free rate increases the discount rate and reduces the present value of future cashflows. As rates remain high, this resulted in lower valuations and has also depressed the demand for real estate assets in particular. Real estate is highly cyclical, and in the current environment, few people are starting new construction projects. In the long run, this has the impact of reducing supply, which means valuations will start to turn as rates begin to drop, and demand will quickly outstrip supply. The Company owned no public real estate assets over the 6 month period to 31 March 2024, but the private assets underperformed.
While NAVs for our infrastructure positions have been more resilient to rising interest rates, given the high inflation linkage of underlying revenues for assets in the privately held portfolio, there were a couple of stock specific negative contributions to the portfolio which weighed on returns. Firstly, investors voted to approve a liquidity window for the Aberdeen Global Infrastructure Partners II Fund, which means the fund has been looking to realise is underlying portfolio. Pleasingly, it has received bids for assets in line with NAV, but the faster than anticipated return of cash mechanically increases the Internal Rate of Return assumption and crystallises a larger performance fee, reducing the carrying value of the investment. Secondly, the SL Capital Infrastructure Fund raised equity for a digital infrastructure asset at a lower valuation than anticipated, reducing the value of this holding.
Shortly after the 31 March 2024 balance sheet date, information was received from the manager of Aberdeen European Residential Opportunities Fund that necessitated a further write down in the value of the investment, reflected in the Company's daily NAV published for 2 April 2024. The adjustment principally related to the persistent high interest rate environment and a slower than expected transactional market in the real estate sector. In addition, investor caution continued to affect adversely the marketing and divestment of the underlying property assets.
Diversifying Opportunities
The basket of Diversifying Opportunities contributed 0.1% to the performance of the Company over the period. Performance was broadly spread across several assets, with positive returns from the private HealthCare Royalty Partners IV fund and the publicly listed healthcare provider BioPharma Credit, and shipping group Tufton Oceanic Shipping, being offset by a slight markdown in Burford Opportunity Fund.
Defensive Assets
Our exposure to defensive assets, such as government bonds and cash, increased over the period firstly as an investment decision, as rates appeared to be peaking, and a movement down in yields increases the value of these assets. This proved to be the case with both the Government Bond and Investment Grade Credit positions performing positively, contributing 0.5% and 0.3% respectively.
What portfolio changes did we make?
Following shareholder approval on 27 February 2024 to put the Company into a managed wind-down, the public assets in the Equity Growth, Real Assets, Diversifying Opportunities and Higher Yielding Fixed Income were sold in an orderly manner with the proceeds reinvested in the Defensive Assets basket to preserve capital value and reflecting the lower appetite for risk.
Future portfolio realisations
The Chairman's Statement sets out the expected timescale for realisation of the Company's private market investments, in terms of Tranche 1 and Tranche 2.
In the first three months of 2024, approximately £3m was received from the underlying assets in Tranche 1, including £1m from Burford Opportunity Fund as it received payment on completion of further cases, and £1m from Maj IV, in respect of the sale of the stake in Sticks N Sushi, in line with its carrying value. We will continue to realise the stakes in Tranche 1 assets, and look opportunistically to generate liquidity in the Tranche 2 assets.
Nalaka De Silva
Simon Fox
Nic Baddeley
abrdn Investments Limited
Investment Manager
26 June 2024
Ten Largest Investments
As at 31 March 2024
| | At | At |
| | 31 March | 30 September |
| | 2024 | 2023 |
| | % of Total | % of Total |
| | investmentsA | investments |
| SL Capital Infrastructure IIBC | 8.9 | 8.1 |
| European economic infrastructure | | |
| Aberdeen Standard Global Private Markets FundB | 7.3 | 5.9 |
| Multi-strategy private markets exposure | | |
| TwentyFour Asset Backed Opportunities Fund | 7.3 | 5.7 |
| Mortgages, SME loans originated in Europe | | |
| Bonaccord Capital Partners I-AC | 5.8 | 4.7 |
| Investments in alternative asset management companies | | |
| Burford Opportunity FundC | 5.7 | 5.1 |
| Litigation finance investments initiated by Burford Capital | | |
| Healthcare Royalty Partners IVC | 5.7 | 4.7 |
| Healthcare royalty streams primarily in the US | | |
| Andean Social Infrastructure Fund IBC | 5.4 | 4.4 |
| Infrastructure project investments in the Andean region of South America | | |
| Aberdeen Standard Secondary Opportunities Fund IVBC | 4.7 | 3.8 |
| Diversified Private Equity portfolio which invests through secondary transactions | | |
| UK (Govt Of) 0% 20/05/24D | 4.6 | - |
| UK gilt | | |
| UK T-Bill 0% 10/06/24D | 4.5 | - |
| UK gilt | | |
| A Weightings for 31 March 2024 have increased due to the disposal of other portfolio holdings, in advance of the redemption of the 6.25% Bonds 2031 effected on 9 April 2024 and the planned return of capital to shareholders. | ||
| B Denotes abrdn plc managed products. | ||
| C Unlisted holdings. | ||
| D Purchased as part of the managed wind-down of the portfolio, in advance of the redemption of the 6.25% Bonds 2031 effected on 9 April 2024 and the planned return of capital to shareholders. |
Investment Portfolio - Private Markets
| ## As at 31 March 2024 | ## | ## | ## |
|---|---|---|---|
| | Valuation | Valuation | Valuation |
| --- | --- | --- | --- |
| | 31 March 2024 | 31 March 2024 | 30 September 2023 |
| --- | --- | --- | --- |
| Company | £'000 | % | £'000 |
| --- | --- | --- | --- |
| Infrastructure | | | |
| SL Capital Infrastructure IIAB | 24,711 | 8.9 | 27,419 |
| Andean Social Infrastructure Fund IAB | 15,024 | 5.4 | 15,016 |
| BlackRock Renewable Income - UKB | 7,324 | 2.7 | 8,199 |
| Aberdeen Global Infrastructure Partners II (AUD)AB | 3,858 | 1.4 | 4,541 |
| Pan European Infrastructure FundB | 904 | 0.3 | 1,205 |
| Total Infrastructure | 51,821 | 18.7 | |
| Private Equity | | | |
| Bonaccord Capital Partners I-AB | 16,088 | 5.8 | 16,091 |
| Aberdeen Standard Secondary Opportunities Fund IVAB | 12,996 | 4.7 | 12,940 |
| TrueNoord Co-InvestmentB | 7,835 | 2.8 | 8,765 |
| Maj Invest Equity 5B | 2,286 | 0.8 | 2,432 |
| HarbourVest International Private Equity VIB | 1,465 | 0.5 | 1,678 |
| Mesirow Financial Private Equity IVB | 452 | 0.2 | 599 |
| HarbourVest VIII Venture Fund | 96 | 0.1 | 123 |
| Mesirow Financial Private Equity IIIB | 95 | - | 117 |
| Maj Invest Equity 4B | 50 | - | 1,205 |
| HarbourVest VIII Buyout FundB | 25 | - | 160 |
| Top ten holdings | 41,388 | 14.9 | |
| Other holdings | 10 | - | |
| Total Private Equity | 41,398 | 14.9 | |
| Real Estate | | | |
| Aberdeen Property Secondaries Partners IIAB | 8,584 | 3.1 | 9,385 |
| Aberdeen European Residential Opportunities FundAB | 8,337 | 3.0 | 7,524 |
| Cheyne Social Property Impact FundB | 3,305 | 1.2 | 3,299 |
| Total Real Estate | 20,226 | 7.3 | |
| Private Credit | | | |
| Mount Row Credit Fund IIB | 9,281 | 3.3 | 10,166 |
| PIMCO Private Income Fund Offshore Feeder I LPB | 7,150 | 2.6 | 7,662 |
| ASI Hark IIIAB | 6,331 | 2.3 | 6,042 |
| Total Private Credit | 22,762 | 8.2 | |
| Other | | | |
| Aberdeen Standard Global Private Markets FundAB | 20,257 | 7.3 | 19,934 |
| Burford Opportunity FundB | 15,985 | 5.7 | 17,272 |
| Healthcare Royalty Partners IVB | 15,714 | 5.7 | 16,235 |
| Markel CATCo Reinsurance Fund Ltd - LDAF 2018 SPIB | 418 | 0.1 | 333 |
| Markel CATCo Reinsurance Fund Ltd - LDAF 2019 SPIB | 145 | 0.1 | 81 |
| Total Other | 52,519 | 18.9 | |
| Total Private Markets | 188,726 | 68.0 | |
| A Denotes abrdn plc managed products. | | | |
| B Unlisted holdings. | | | |
Investment Portfolio - Equities
| ## As at 31 March 2024 | ## | ## | ## |
| | Valuation | Valuation | Valuation |
| | 31 March 2024 | 31 March 2024 | 30 September 2023 |
| Company | £'000 | % | £'000 |
| Infrastructure Sub-Fund | | | |
| Cordiant Digital Infrastructure | 520 | 0.2 | 1,831 |
| Total Infrastructure Sub-Fund | 520 | 0.2 | |
| Alternative Income Sub-Fund | | | |
| SME Credit Realisation | 44 | - | 44 |
| Total Alternative Income Sub-Fund | 44 | - | |
| Renewables Infrastructure Sub-Fund | | | |
| Foresight Solar Fund | 528 | 0.2 | 1,463 |
| Total Renewables Infrastructure Sub-Fund | 528 | 0.2 | |
| Reinsurance Sub-Fund | | | |
| CATCo Reinsurance Opportunities Fund | 81 | - | 84 |
| Total Reinsurance Sub-Fund | 81 | - | |
| Total Equities | 1,173 | 0.4 | |
Investment Portfolio - Fixed Income & Credit
| ## As at 31 March 2024 | ## | ## | ## |
| | Valuation | Valuation | Valuation |
| | 31 March 2024 | 31 March 2024 | 30 September 2023 |
| Company | £'000 | % | £'000 |
| Structured Credit | | | |
| TwentyFour Asset Backed Opportunities Fund | 20,161 | 7.3 | 19,292 |
| Fair Oaks Income Fund | 436 | 0.2 | 1,046 |
| Blackstone/GSO Loan Financing | 385 | 0.1 | 615 |
| Total Structured Credit | 20,982 | 7.6 | |
| Developed Market Government Treasury Bills | | | |
| Uk(Govt Of) 0% 20/05/24 Gbp | 12,907 | 4.6 | - |
| Uk T-Bill 0% 10/06/24 Gbp | 12,373 | 4.5 | - |
| Uk (Govt Of) T-Bill 0% 29/07/24 Gbp | 11,894 | 4.3 | - |
| Uk(Govt Of) T-Bill 0% 29/04/24 Gbp | 9,958 | 3.6 | - |
| Uk(Govt Of) 0% 22/07/24 Gbp | 8,462 | 3.0 | - |
| Uk (Govt Of) T-Bill 0% 07/05/24 Gbp | 6,429 | 2.3 | - |
| Uk (Govt Of) T-Bill 0% 02/04/24 Gbp | 2,999 | 1.1 | - |
| Uk(Govt Of) T-Bill 0% 17/06/24 Gbp | 1,582 | 0.6 | - |
| Total Developed Market Government Bonds | 66,604 | 24.0 | |
| Total Fixed Income & Credit | 87,586 | 31.6 | |
Investment Portfolio - Net Assets Summary
| ## As at 31 March 2024 | ## | ## | ## | ## |
| | Valuation | Net assets | Valuation | Net assets |
| | 31 March 2024 | 31 March 2024 | 30 September 2023 | 30 September 2023 |
| | £'000 | % | £'000 | % |
| Total investments | 277,485 | 86.2 | 339,972 | 100.1 |
| Cash and cash equivalentsA | 63,012 | 19.6 | 21,087 | 6.2 |
| Forward contracts | 847 | 0.2 | (5,615) | (1.6) |
| 6.25% Bonds 2031B | (18,508) | (5.7) | (15,730) | (4.6) |
| Other net assets | (854) | (0.3) | (180) | (0.1) |
| Net assets | 321,982 | 100.0 | 339,534 | 100.0 |
| A Includes outstanding settlements. | ||||
| B See note 7. |
Condensed Statement of Comprehensive Income (unaudited)
| | | Six months ended | Six months ended | ||||
| | | 31 March 2024 | 31 March 2023 | ||||
| | | Revenue | Capital | Total | Revenue | Capital | Total |
| | Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Losses on investments | | - | (7,184) | (7,184) | - | (13,384) | (13,384) |
| Foreign exchange gains | | - | 5,720 | 5,720 | - | 14,058 | 14,058 |
| Income | 2 | 7,399 | - | 7,399 | 9,118 | - | 9,118 |
| Investment management fees | 3 | (267) | (267) | (534) | (291) | (291) | (582) |
| Administrative expenses | | (572) | (159) | (731) | (461) | (21) | (482) |
| Net return/(loss) before finance costs and taxation | | 6,560 | (1,890) | 4,670 | 8,366 | 362 | 8,728 |
| | | | | | | | |
| Finance costs | | (262) | (3,021) | (3,283) | (259) | (259) | (518) |
| Net return/(loss) before taxation | | 6,298 | (4,911) | 1,387 | 8,107 | 103 | 8,210 |
| | | | | | | | |
| Taxation | 4 | (1,097) | (37) | (1,134) | (367) | (927) | (1,294) |
| Return/(loss) attributable to equity shareholders | | 5,201 | (4,948) | 253 | 7,740 | (824) | 6,916 |
| | | | | | | | |
| Return/(loss) per Ordinary share (pence) | 5 | 1.73 | (1.65) | 0.08 | 2.52 | (0.27) | 2.25 |
| | | | | | | | |
| The total column of the Condensed Statement of Comprehensive Income is the profit and loss account of the Company. There has been no other comprehensive income during the period, accordingly, the return/(loss) attributable to equity shareholders is equivalent to the total comprehensive income/(loss) for the period. | |||||||
| All revenue and capital items in the above statement derive from continuing operations. | |||||||
| The accompanying notes are an integral part of these condensed financial statements. |
Condensed Statement of Financial Position (unaudited)
| | | As at | As at |
| | | 31 March 2024 | 30 September 2023 |
| | | (unaudited) | (audited) |
| | Notes | £'000 | £'000 |
| Non-current assets | | | |
| Investments at fair value through profit or loss | | 277,485 | 339,972 |
| | | 277,485 | 339,972 |
| | | | |
| Current assets | | | |
| Debtors | | 3,711 | 1,549 |
| Derivative financial instruments | | 1,702 | 87 |
| Cash and cash equivalents | | 60,096 | 21,025 |
| | | 65,509 | 22,661 |
| | | | |
| Creditors: amounts falling due within one year | | | |
| Derivative financial instruments | | (855) | (5,702) |
| 6.25% Bonds 2031 | 7 | (18,508) | - |
| Other creditors | | (1,649) | (1,667) |
| | | (21,012) | (7,369) |
| Net current assets | | 44,497 | 15,292 |
| Total assets less current liabilities | | 321,982 | 355,264 |
| | | | |
| Non-current liabilities | | | |
| 6.25% Bonds 2031 | 7 | - | (15,730) |
| Net assets | | 321,982 | 339,534 |
| | | | |
| Capital and reserves | | | |
| Called up share capital | 9 | 80,938 | 80,938 |
| Share premium account | | 116,556 | 116,556 |
| Capital redemption reserve | | 37,043 | 37,043 |
| Capital reserve | | 64,769 | 69,717 |
| Revenue reserve | | 22,676 | 35,280 |
| Total shareholders' funds | | 321,982 | 339,534 |
| | | | |
| Net asset value per Ordinary share (pence) | 10 | | |
| Bonds at par value | | 106.88 | 112.70 |
| Bonds at fair value | | n/a | 112.59 |
| | | | |
| The accompanying notes are an integral part of these condensed financial statements. |
Condensed Statement of Changes in Equity (unaudited)
| ## Six months ended 31 March 2024 | |||||||
| | | | Share | Capital | | | |
| | | Share | premium | redemption | Capital | Revenue | |
| | | capital | account | reserve | reserve | reserve | Total |
| | Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 1 October 2023 | | 80,938 | 116,556 | 37,043 | 69,717 | 35,280 | 339,534 |
| Return after taxation | | - | - | - | (4,948) | 5,201 | 253 |
| Dividends paid | 6 | - | - | - | - | (17,805) | (17,805) |
| At 31 March 2024 | | 80,938 | 116,556 | 37,043 | 64,769 | 22,676 | 321,982 |
| | | | | | | | |
| | | | | | | | |
| ## Six months ended 31 March 2023 | |||||||
| | | | Share | Capital | | | |
| | | Share | premium | redemption | Capital | Revenue | |
| | | capital | account | reserve | reserve | reserve | Total |
| | Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 1 October 2022 | | 91,352 | 116,556 | 26,629 | 89,560 | 39,261 | 363,358 |
| Ordinary shares purchased for treasury | 9 | - | - | - | (5,003) | - | (5,003) |
| Return after taxation | | - | - | - | (824) | 7,740 | 6,916 |
| Dividends paid | 6 | - | - | - | - | (12,954) | (12,954) |
| At 31 March 2023 | | 91,352 | 116,556 | 26,629 | 83,733 | 34,047 | 352,317 |
| | | | | | | | |
| The accompanying notes are an integral part of these condensed financial statements. |
Condensed Statement of Cash Flows (unaudited)
| | Six months ended | Six months ended |
| | 31 March 2024 | 31 March 2023 |
| | £'000 | £'000 |
| Operating activities | | |
| Net return before finance costs and taxation | 4,670 | 8,728 |
| Adjustments for: | | |
| Dividend income | (5,961) | (7,613) |
| Fixed interest income | (1,035) | (1,349) |
| Interest income | (259) | (136) |
| Other income | (6) | (20) |
| Dividends received | 6,051 | 7,529 |
| Fixed interest income received | 1,514 | 1,324 |
| Interest received | 207 | 136 |
| Other income received | 6 | 20 |
| Unrealised gains on forward contracts | (6,462) | (9,266) |
| Foreign exchange gains/(losses) | 71 | (246) |
| Losses on investments | 7,184 | 13,384 |
| (Increase)/decrease in other debtors | (2) | 36 |
| (Decrease)/increase in accruals | (236) | 40 |
| Corporation tax paid | (873) | (359) |
| Taxation withheld | 17 | (34) |
| Net cash flow from operating activities | 4,886 | 12,174 |
| | | |
| Investing activities | | |
| Purchases of investments | (73,475) | (42,572) |
| Sales of investments and return of capital | 126,043 | 59,893 |
| Net cash flow from investing activities | 52,568 | 17,321 |
| | | |
| Financing activities | | |
| Purchase of own shares to treasury | - | (4,837) |
| Interest paid | (507) | (503) |
| Equity dividends paid (note 6) | (17,805) | (12,954) |
| Net cash flow used in financing activities | (18,312) | (18,294) |
| Increase in cash and cash equivalents | 39,142 | 11,201 |
| | | |
| Analysis of changes in cash and cash equivalents during the period | | |
| Opening balance | 21,025 | 7,179 |
| Foreign exchange | (71) | 246 |
| Increase in cash and cash equivalents as above | 39,142 | 11,201 |
| Closing balance | 60,096 | 18,626 |
| | | |
| The accompanying notes are an integral part of these condensed financial statements. |
Notes to the Financial Statements
For the year ended 31 March 2024
| ## 1. | ## Accounting policies - Basis of accounting |
| | The condensed financial statements have been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting) and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in July 2022 and with the Disclosure Transparency Rules issued by the Financial Reporting Council. Taking into account the Company's debt-free position, working capital requirements and maintenance of "Level 1" and "Level 2" assets (listed on recognisable exchanges and realisable within a short timescale), the Directors believe that adopting a going concern basis of accounting remains appropriate. The condensed financial statements have also been prepared on the assumption that approval as an investment trust will continue to be granted by HMRC and that the annual continuation vote will be passed at the Company's Annual General Meeting. Annual financial statements are prepared under Financial Reporting Standard 102. |
| | The interim financial statements have been prepared using the same accounting policies as the preceding annual financial statements. There have been no new standards, amendments or interpretations, specific to the Company, effective for the first time for this interim period that require a change in accounting policies. |
| | Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the use of certain significant accounting judgements, estimates and assumptions which requires Directors to exercise their judgement in the process of applying the accounting policies. The area where judgements, estimates and assumptions have the most significant effect on the amounts recognised in the financial statements are the determination of the fair value of unlisted investments (Level 3 assets in the Fair Value Hierarchy table in note 12). |
| ## 2. | ## Income | ## | ## |
| | | Six months ended | Six months ended |
| | | 31 March 2024 | 31 March 2023 |
| | | £'000 | £'000 |
| | Income from investments | | |
| | UK listed dividends | 474 | 1,260 |
| | Overseas listed dividends | 2,395 | 2,802 |
| | Unquoted Limited Partnership income | 3,092 | 3,551 |
| | Treasury bill income | 138 | - |
| | Fixed interest income | 1,035 | 1,349 |
| | | 7,134 | 8,962 |
| | | | |
| | Other income | | |
| | Interest | 259 | 136 |
| | Other income | 6 | 20 |
| | Total income | 7,399 | 9,118 |
| ## 3. | ## Investment management fee | ||||||
| | | Six months ended | Six months ended | ||||
| | | 31 March 2024 | 31 March 2023 | ||||
| | | Revenue | Capital | Total | Revenue | Capital | Total |
| | | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| | Investment management fee | 267 | 267 | 534 | 291 | 291 | 582 |
| | | | | | | | |
| | The investment management fee is levied by abrdn Fund Managers Limited at the following tiered levels: | ||||||
| | - 0.50% per annum in respect of the first £300 million of the net asset value (with the 6.25% Bonds 2031 at fair value until 8 March 2024 then at redemption value thereafter); and | ||||||
| | - 0.45% per annum in respect of the balance of the net asset value (with the 6.25% Bonds 2031 at fair value until 8 March 2024 then at redemption value thereafter). | ||||||
| | The Company also receives rebates in respect of underlying investments in other funds managed by the Group (where an investment management fee is charged by the Group on that fund) in the normal course of business to ensure that no double counting occurs. Any investments made in funds managed by the Manager which themselves invest directly into alternative investments including, but not limited to, infrastructure and property are charged at the Manager's lowest institutional fee rate. To avoid double charging, such investments are excluded from the overall management fee calculation. | ||||||
| | At the period end, an amount of £174,000 (31 March 2023 - £288,000) was outstanding in respect of management fees due by the Company. |
| ## 4. | ## Taxation |
| | The taxation charge for the period represents withholding tax suffered on overseas dividend income and fixed interest income and applicable corporation tax. |
| | The Company has not recognised a deferred tax asset (2023 - £240,000) as it is considered unlikely that sufficient taxable profits will be generated in the future to utilise these amounts and therefore no deferred tax asset has been recognised. |
| | The Company does not apply the marginal method of allocation of tax relief. |
| ## 5. | ## Return per Ordinary share | ## | ## |
| | | Six months ended | Six months ended |
| | | 31 March 2024 | 31 March 2023 |
| | | p | p |
| | Revenue return | 1.73 | 2.52 |
| | Capital loss | (1.65) | (0.27) |
| | Total return | 0.08 | 2.25 |
| | | | |
| | The figures above are based on the following: | | |
| | | | |
| | | Six months ended | Six months ended |
| | | 31 March 2024 | 31 March 2023 |
| | | £'000 | £'000 |
| | Revenue return | 5,201 | 7,740 |
| | Capital loss | (4,948) | (824) |
| | Total return | 253 | 6,916 |
| | | | |
| | Weighted average number of shares in issueA | 301,265,952 | 307,154,680 |
| | A Calculated excluding shares held in treasury. |
| ## 6. | ## Dividends | ## | ## |
| | | Six months ended | Six months ended |
| | | 31 March 2024 | 31 March 2023 |
| | | £'000 | £'000 |
| | Third interim dividend for 2023 - 1.42p (2022 - 1.40p) | 4,278 | 4,319 |
| | Special dividend for 2023 - 1.65p (2022 - nil) | 4,971 | - |
| | Fourth interim dividend for 2023 - 1.42p (2022 - 1.40p) | 4,278 | 4,314 |
| | First interim dividend for 2024 - 1.42p (2023 - 1.42p) | 4,278 | 4,321 |
| | | 17,805 | 12,954 |
| | | | |
| | On 13 September 2023, the Board declared a third interim dividend of 1.42 pence per share which was paid on 19 October 2023 to shareholders on the register on 21 September 2023. On 26 October 2023, the Board declared a special dividend of 1.65p per share which was paid on 1 December 2023 to shareholders on the register on 2 November 2023. On 1 December 2023, the Board declared a fourth interim dividend of 1.42 pence per share which was paid on 22 January 2024 to shareholders on the register on 21 December 2023. | ||
| | On 29 February 2024, the Board declared an interim dividend of 1.42 pence per share (2023 - 1.42p) which was paid on 27 March 2024 to shareholders on the register on 7 March 2024. From the adoption of the managed wind-down investment policy, irregular dividends will be paid only to ensure that the Company continues to maintain its investment trust status. |
| ## 7. | ## 6.25% Bonds 2031 | ## | ## |
| | | Six months ended | Year ended |
| | | 31 March 2024 | 30 September 2023 |
| | | £'000 | £'000 |
| | Balance at beginning of period | 15,730 | 15,694 |
| | Loss on redemption | 2,759 | - |
| | Amortisation of discount and issue expenses | 19 | 36 |
| | Balance at end of period | 18,508 | 15,730 |
| | | | |
| | As at 31 March 2024, the Company had in issue £16,096,000 (2023 - 16,096,000) Bonds 2031 which were issued at 99.343%. The Bonds have been accounted for in accordance with accounting standards, which require any discount or issue costs to be amortised over the life of the bonds. The Bonds are secured by a floating charge over all of the assets of the Company with interest paid in March and September each year. | ||
| | Under the covenants relating to the Bonds, the Company was required to ensure that, at all times, the aggregate principal amount outstanding in respect of monies borrowed by the Company did not exceed an amount equal to its share capital and reserves. | ||
| | The 6.25% Bonds were repaid on 9 April 2024 at a total cost of £18,587,000, including accrued interest thereon and as at 31 March 2024 were valued in accordance with the redemption price of 114.983%, which was announced on 8 March 2024. |
| ## 8. | ## Analysis of changes in net debt | |||||
| | | At | Currency | | Non-cash | At |
| | | 1 October 2023 | differences | Cash flows | movements | 31 March 2024 |
| | | £000 | £000 | £000 | £000 | £000 |
| | Cash and cash equivalents | 21,025 | - | 39,071 | - | 60,096 |
| | Debt due within one year | (15,730) | - | - | (2,778) | (18,508) |
| | Total | 5,295 | - | 39,071 | (2,778) | 41,588 |
| | | | | | | |
| | | | | | | |
| | | At | Currency | | Non-cash | At |
| | | 1 October 2022 | differences | Cash flows | movements | 30 September 2023 |
| | | £000 | £000 | £000 | £000 | £000 |
| | Cash and cash equivalents | 7,179 | - | 13,846 | - | 21,025 |
| | Debt due after one year | (15,694) | - | - | (36) | (15,730) |
| | Total | (8,515) | - | 13,846 | (36) | 5,295 |
| ## 9. | ## Called up share capital |
| | During the period no Ordinary shares of 25p each were purchased (year ended 30 September 2023 - 7,181,362 to be held in treasury at a cost of £6,292,000). |
| | At the end of the period there were 301,265,952 (30 September 2023 - 301,265,952) Ordinary shares in issue and 22,485,854 (30 September 2023 - 22,485,854) shares held in treasury. |
| ## 10. | ## Net asset value per Ordinary share | ## | ## |
| | | As at | As at |
| | | 31 March 2024 | 30 September 2023 |
| | Debt at par | | |
| | Net asset value attributable (£'000) | 321,982 | 339,534 |
| | Number of Ordinary shares in issue excluding treasury | 301,265,952 | 301,265,952 |
| | Net asset value per share (p) | 106.88 | 112.70 |
| | | | |
| | Debt at fair value | £'000 | £'000 |
| | Net asset value attributable | n/a | 339,534 |
| | Add: Amortised cost of 6.25% Bonds 2031 | n/a | 15,730 |
| | Less: Market value of 6.25% Bonds 2031 | n/a | (16,069) |
| | | n/a | 339,195 |
| | | | |
| | Number of Ordinary shares in issue excluding treasury | 301,265,952 | 301,265,952 |
| | Net asset value per share (p) | n/a | 112.59 |
| ## 11. | ## Transaction costs | ## | ## |
| | During the period expenses were incurred in acquiring or disposing of investments classified as fair value though profit or loss. These have been expensed through capital and are included within losses on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows: | ||
| | | | |
| | | Six months ended | Six months ended |
| | | 31 March 2024 | 31 March 2023 |
| | | £'000 | £'000 |
| | Purchases | 6 | 17 |
| | Sales | 66 | 23 |
| | | 72 | 40 |
| ## 12. | ## Fair value hierarchy | ## | ## | ## | ## | |||
| | FRS 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 - Quoted prices in active markets for identical instruments. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The Company does not adjust the quoted price for these instruments. | |||||||
| | Level 2 - Valuation techniques using observable inputs. This category includes instruments valued using quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. | |||||||
| | Valuation techniques used for non-standardised financial instruments such as over-the-counter derivatives, include the use of comparable recent arm's length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity specific inputs. | |||||||
| | Level 3 - Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs could have a significant impact on the instrument's valuation. | |||||||
| | This category also includes instruments that are valued based on quoted prices for similar instruments where significant entity determined adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The investment manager considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. | |||||||
| | The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. | |||||||
| | Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. | |||||||
| | The financial assets and liabilities measured at fair value in the Condensed Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows: | |||||||
| | | | | | | |||
| | | Level 1 | Level 2 | Level 3 | Total | |||
| | As at 31 March 2024 | £'000 | £'000 | £'000 | £'000 | |||
| | Financial assets/(liabilities) at fair value through profit or loss | | | | | |||
| | Equity investments | 1,995 | 20,161 | 188,725 | 210,881 | |||
| | Loan investments | - | - | - | - | |||
| | Fixed interest instruments | 66,604 | - | - | 66,604 | |||
| | Forward currency contracts - financial assets | - | 1,702 | - | 1,702 | |||
| | Forward currency contracts - financial liabilities | - | (855) | - | (855) | |||
| | Net fair value | 68,599 | 21,008 | 188,725 | 278,332 | |||
| | | | | | | |||
| | | | | | | |||
| | | Level 1 | Level 2 | Level 3 | Total | |||
| | As at 30 September 2023 | £'000 | £'000 | £'000 | £'000 | |||
| | Financial assets/(liabilities) at fair value through profit or loss | | | | | |||
| | Equity investments | 90,332 | 19,292 | 198,450 | 308,074 | |||
| | Loan investments | - | 2,279 | - | 2,279 | |||
| | Fixed interest instruments | - | 29,619 | - | 29,619 | |||
| | Forward currency contracts - financial assets | - | 87 | - | 87 | |||
| | Forward currency contracts - financial liabilities | - | (5,702) | - | (5,702) | |||
| | Net fair value | 90,332 | 45,575 | 198,450 | 334,357 | |||
| | | | | | | |||
| | | | | | | |||
| | | | | As at | As at | |||
| | | | | 31 March 2024 | 30 September 2023 | |||
| | Level 3 Financial assets at fair value through profit or loss | | | £'000 | £'000 | |||
| | Opening fair value | | | 198,450 | 209,065 | |||
| | Purchases including calls (at cost) | | | 4,231 | 26,083 | |||
| | Disposals and return of capital | | | (4,559) | (26,368) | |||
| | Total gains or losses included in losses on investments in the Statement of Comprehensive Income: | | | | | |||
| | - assets disposed of during the period | | | 1,012 | 8,253 | |||
| | - assets held at the end of the period | | | (10,409) | (18,583) | |||
| | Closing balance | | | 188,725 | 198,450 | |||
| | | | | | | |||
| | | | | | | |||
| | The Company's holdings in unlisted investments are classified as Level 3. Unquoted investments, including those in Limited Partnerships ("LPs") are valued by the Directors at fair value using International Private Equity and Venture Capital Valuation Guidelines. | |||||||
| | The Company's investments in LPs are subject to the terms and conditions of the respective investee's offering documentation. The investments in LPs are valued based on the reported Net Asset Value ("NAV") of such assets as determined by the administrator or General Partner of the LPs and adjusted by the Directors in consultation with the Manager to take account of concerns such as liquidity so as to ensure that investments held at fair value through profit or loss are carried at fair value. The reported NAV is net of applicable fees and expenses including carried interest amounts of the investees and the underlying investments held by each LP are accounted for, as defined in the respective investee's offering documentation. While the underlying fund managers may utilise various model-based approaches to value their investment portfolios, on which the Company's valuations are based, no such models are used directly in the preparation of fair values of the investments. The NAV of LPs reported by the administrators may subsequently be adjusted when such results are subject to audit and audit adjustments may be material to the Company. | |||||||
| ## 13. | ## Related party disclosures | ## |
| | Transactions with the Manager. The investment management fee is levied by aFML at the following tiered levels, payable monthly in arrears: | |
| | - 0.50% per annum in respect of the first £300 million of the net asset value (with debt at fair value until 8 March 2024 then at redemption value thereafter); and | |
| | - 0.45% per annum in respect of the balance of the net asset value (with debt at fair value until 8 March 2024 then at redemption value thereafter). | |
| | During the period, the Manager charged the Company £nil (2023 - £93,000) in respect of promotional activities carried out on the Company's behalf. | |
| | The Company also receives rebates with regards to underlying investments in other funds managed by abrdn plc (the "Group") (where an investment management fee is charged by the Group on that fund) in the normal course of business to ensure that no double counting occurs. Any investments made in funds managed by the Group which themselves invest directly into alternative investments including, but not limited to, infrastructure and property are charged at the Group's lowest institutional fee rate. To avoid double charging, such investments are excluded from the overall management fee calculation. | |
| | The table below details all investments held at 31 March 2024 that were managed by the Group. | |
| | | |
| | | 31 March 2024 |
| | | £'000 |
| | SL Capital Infrastructure IIB | 24,711 |
| | Aberdeen Standard Global Private Markets FundB | 20,257 |
| | Andean Social Infrastructure Fund IB | 15,024 |
| | Aberdeen Standard Secondary Opportunities Fund IVC | 12,996 |
| | Aberdeen Property Secondaries Partners IIC | 8,584 |
| | Aberdeen European Residential Opportunities FundB | 8,337 |
| | ASI Hark IIIB | 6,331 |
| | Aberdeen Global Infrastructure Partners II (AUD)D | 3,858 |
| | | 100,098 |
| | A The Company is invested in a share class which is not subject to a management charge from the Group. | |
| | B The value of this holding is removed from the management fee calculation to ensure that no double counting occurs. | |
| | C An amount equivalent to the management fee received by the Manager on the underlying is offset against the management fee payable by the Company to ensure that no double counting occurs. | |
| | D The invested capital commitment is removed from the management fee calculation to ensure that no double counting occurs. |
| ## 14. | ## Segmental information |
| | The Directors are of the opinion that the Company is engaged in a single segment of business being investment business. |
| ## 15. | ## Subsequent events |
| | On 9 April 2024, following the agreement of shareholders to the proposal to put the Company into managed wind-down, the Company redeemed and cancelled the remaining £16,096,000 in aggregate principal amount of its 6.25% Bonds due in 2031. As announced on 8 March 2024, the redemption price was 114.983%. Total costs of the redemption including accrued interest thereon was £18,587,000. On 7 June, the Company received Court approval for a reduction in the nominal value of its ordinary shares from 25p to 1p. Together with an associated cancellation of the amounts standing to the credit of the share premium account and capital redemption reserve a new distributable capital reserve has been created in order to facilitate capital distributions to shareholders. |
| ## 16. | ## Half-Yearly Report |
| | The financial information in this Report does not comprise statutory accounts within the meaning of Section 434 - 436 of the Companies Act 2006. The financial information for the year ended 30 September 2023 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified and contained no statement under Section 498 (2), (3) or (4) of the Companies Act 2006. The interim accounts have been prepared using the same accounting policies as the preceding annual accounts. |
| | PricewaterhouseCoopers LLP has reviewed the financial information for the six months ended 31 March 2024 pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information. |
| ## 17. | This Half-Yearly Report was approved by the Board and authorised for issue on 26 June 2024. |
Alternative Performance Measures
| Alternative Performance Measures ("APMs") are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies. | |||||
| ## Net asset value per Ordinary share - debt at par value | |||||
| The net asset value per Ordinary share with debt at par value is calculated as follows: | |||||
| | | | | | |
| | | | As at | As at | |
| | | | 31 March 2024 | 30 September 2023 | |
| | | | £'000 | £'000 | |
| Net asset value attributable | | | 321,982 | 339,534 | |
| Number of Ordinary shares in issue excluding treasury shares | 301,265,952 | 301,265,952 | |||
| Net asset value per share (p ) | | | 106.88 | 112.70 | |
| | | | | | |
| ## Discount to net asset value per Ordinary share - debt at par value | |||||
| The discount is the amount by which the Ordinary share price is lower than the net asset value per Ordinary share - debt at fair value, expressed as a percentage of the net asset value - debt at par value. The Board considers this to be the most appropriate measure of the Company's discount. | |||||
| | | | | | |
| | | | 31 March 2024 | 30 September 2023 | |
| Net asset value per Ordinary share (p) | | a | 106.88 | 112.70 | |
| Share price (p) | | b | 72.00 | 83.60 | |
| Discount | | (a-b)/a | 32.6% | 25.8% | |
| | | | | | |
| ## Dividend yield | ## | ## | ## | ## | |
| The annual dividend per Ordinary share divided by the share price, expressed as a percentage. | |||||
| | | | | | |
| | | | 31 March 2024 | 30 September 2023 | |
| Dividend per Ordinary share (p) | | a | 5.68 | 7.33 | |
| Share price (p) | | b | 72.00 | 83.60 | |
| Dividend yield | | a/b | 7.9% | 8.8% | |
| | | | | | |
| ## Net (cash)/gearing - debt at par value | |||||
| Net (cash)/gearing with debt at par value measures the total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due to and from brokers at the period end, in addition to cash and short term deposits. | |||||
| | | | | | |
| | | | 31 March 2024 | 30 September 2023 | |
| Borrowings (£'000) | | a | 18,508 | 15,730 | |
| Cash (£'000) | | b | 60,096 | 21,025 | |
| Amounts due from brokers (£'000) | | d | 2,916 | 62 | |
| Shareholders' funds (£'000) | | e | 321,892 | 339,534 | |
| Net (cash)/gearing | | (a-b+c-d)/e | -13.8% | -1.6% | |
| | | | | | |
| ## Ongoing charges | |||||
| The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average daily net asset values with debt at fair value published throughout the year. The ratio for 31 March 2024 is based on forecast ongoing charges for the year ending 30 September 2024. | |||||
| | | | | | |
| | | | 31 March 2024 | 30 September 2023 | |
| | | | £ | £ | |
| Investment management fees | | | 1,050,000 | 1,126,000 | |
| Administrative expenses | | | 981,000 | 1,184,000 | |
| Less: non-recurring chargesA | | | (62,000) | (31,000) | |
| Ongoing charges | | | 1,969,000 | 2,279,000 | |
| Average net assets B | | | 327,135,000 | 351,878,000 | |
| Ongoing charges ratio (excluding look-through costs) | | | 0.60% | 0.65% | |
| Look-through costsC | | | 1.23% | 1.09% | |
| Ongoing charges ratio (including look-through costs) | | | 1.83% | 1.74% | |
| A Professional services considered unlikely to recur. | |||||
| B Debt at fair value until 8 March 2024, debt ar par value thereafter. | |||||
| C Calculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis. | |||||
| | | | | | |
| The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes financing and transaction costs. This can be found within the literature library section of the Company's website: abrdndiversified.co.uk. | |||||
END
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
IR MZGZVVVDGDZM