DJ Half-yearly Results
New Star Investment Trust PLC (NSI)
Half-yearly Results
24-March-2025 / 07:01 GMT/BST
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NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31st DECEMBER 2024
INVESTMENT OBJECTIVE
The Company's objective is to achieve long-term total return through capital growth and income.
FINANCIAL HIGHLIGHTS
31st December 30th June %
2024 2024 Change
PERFORMANCE
Net assets (GBP '000) 120,167* 137,861 (12.84)
Net asset value per Ordinary share 169.19p* 194.11p (12.84)
Mid-market price per Ordinary share 107.50p* 131.50p (18.25)
Discount of price to net asset value 36.5% 32.3%
Six months ended Six months ended
31st December 2024 31st December 2023
Total Return** 0.41% 3.38%
IA Mixed Investment 40-85% Shares (total return) 2.89% 5.52%
MSCI AC World Index (total return, sterling adjusted) 6.76% 7.19%
MSCI UK Index (total return) 1.64% 5.58%
Six months ended Six months ended
31st December 31st December
2024 2023
REVENUE
Return (GBP'000) 1,801 1,467
Return per Ordinary share 2.54p 2.07p
Proposed dividend per Ordinary share 1.70p 1.70p
Dividend paid per Ordinary share 1.70p 1.70p
TOTAL RETURN**
Return (GBP'000) 689 4,238
Net assets (dividend and B Share issue added back) 0.41% 3.38%
Net assets* (12.84)% 2.41% * After return of capital (B Shares)
** The total return figure for the Company represents the revenue and capital return shown in the statement of comprehensive income before dividends paid, the B Share redemption payment and after deducting B Share issue costs.
INTERIM REPORT
CHAIRMAN'S STATEMENT
PERFORMANCE
Your Company generated a total return of 0.41% over the six months to 31st December 2024. After dividends and the return of capital the net asset value (NAV) per ordinary share fell to 169.19p. By comparison, the Investment Association's Mixed Investment 40-85% Shares Index gained 2.89%. The MSCI AC World Total Return Index gained 6.76% in sterling while the MSCI UK Total Return Index rose 1.64%. Over the period, UK government bonds declined 1.06%. Further information is provided in the investment manager's report.
Your Company made a revenue profit for the six months of GBP1,801,000 (2023: GBP1,467,000).
RETURN OF CAPITAL
Following a general meeting in July 2024, GBP17 million was returned to shareholders in August by way of a "B" share issue and a subsequent redemption of the shares at a price of 24p per B share. Following the scheme, your Company's total issued share capital and voting rights were unchanged. The scheme involved reducing your Company's holdings across the board with a view broadly to maintaining in percentage terms the asset allocation, including the allocation to cash. As a result, the portfolio's risk profile was broadly unchanged.
CHANGE OF INVESTMENT OBJECTIVE
At the annual general meeting on 5th December 2024, shareholders approved the proposal by your Board to change the investment objective from long-term capital growth to long-term total return through capital growth and income.
GEARING AND DIVIDENDS
Your Company has no borrowings. It ended the period under review with cash representing 13.56% of its NAV and is likely to maintain a significant cash position. In respect of the six months to 31st December 2024, your Directors have declared an interim dividend of 1.70p per share (2023: 1.70p).
DISCOUNT
Your Company's shares continued to trade at a significant discount to their NAV during the period under review. The Board keeps this issue under review.
OUTLOOK President Trump's policies of deregulation, tax cuts and import tariffs should generate economic growth in the US and provide an element of support for US stocks in the short term but may stoke inflation. If overall equity markets weaken in response to renewed inflation fears, lowly-rated equities in the UK and in emerging markets may prove defensive. US and UK inflation is already proving more persistent than previously expected, with the result that the Federal Reserve and the Bank of England may keep their official interest rates higher for longer. In such circumstances, investments in shorter-dated bonds should provide a measure of protection while your Company's significant allocation to cash will generate income.
NET ASSET VALUE
Your Company's unaudited NAV at 28th February 2025 was 169.15p.
Geoffrey Howard-Spink
Chairman
24th March 2025
INVESTMENT MANAGER'S REPORT
MARKET REVIEW
Investor enthusiasm about the commercial potential of artificial intelligence (AI) led to gains for US technology stocks, up 8.56% in sterling over the period under review. As a result, concentration in the US equity market ended 2024 at an historically high level, with just ten companies accounting for 32% of the market. While prospects for technology companies seemed clear, high valuations and exuberant investor sentiment left some stocks priced for perfection.
Since taking office, President Trump has expanded on his policy agenda of trade tariffs, immigration control, onshoring of manufacturing, deregulation and lower taxes. These policies may stimulate the economy in the short-term but they could ultimately prove inflationary and lead to interest rates remaining higher for longer. The Federal Reserve cut its official rate in December by a quarter percentage point to 4.25-4.5% but the pace of cuts is expected to slow, with rates expected to fall by just one half of a point in 2025.
UK equities underperformed, up only 1.64%, with the economy having stalled. In February 2025, the Bank of England cut its official rate by a quarter point to 4.5% and reduced its growth forecast for this year to just 0.75%. Inflation is, however, proving sticky, with the Bank forecasting a peak of 3.7% in 2025, well above its 2% target. Low growth and higher prices are an unattractive combination, suggesting the need for caution about prospects for smaller companies, which tend to be more sensitive to domestic trends than larger stocks trading on low valuations. UK government bonds fell 1.06% over the period as investor fears about higher public sector borrowing intensified.
Dollar strength proved a headwind for equities in emerging markets and Asia excluding Japan, up 1.28% and 3.31% in sterling respectively over the period. Chinese policy makers increased economic stimulus but slower growth, inflation close to zero and President Trump's tariffs weighed on investor sentiment. Equities in Europe excluding the UK fell 4.04% in sterling because of fractured political leadership in France and Germany and the impact of cheap Chinese electric vehicle imports on Germany's economy. By contrast with the US and UK however, the European Central Bank (ECB) expects eurozone inflation to be close to target in 2025 and 2026. In response, the ECB cut its key policy rate by a quarter point to 3% in December, with a similar cut in March 2025. Japan's economy is growing faster than its long-term potential growth rate and the Bank of Japan is confident price increases are sustainable at its 2% target.
PORTFOLIO REVIEW
Your Company's total return was 0.41% over the six months to 31st December 2024. By comparison, the Investment Association (IA) Mixed Investment 40-85% Shares sector, a peer group of multi-asset funds with allocations to equities in the 40-85% range, rose 2.89%. The MSCI AC World Total Return and MSCI UK All Cap Total Return Indices rose 6.76% and 1.64% respectively while global bonds rose 2.47%.
In August 2024, GBP17 million was returned to shareholders via a "B" share issue and subsequent redemption. This was achieved through sales of portfolio investments on a broadly pro-rata basis to ensure the portfolio retained a similar investment exposure.
Your Company has maintained the dividend per share for the six months ended 31st December 2024 despite the significant return of capital to shareholders, which reduced the size of the portfolio while the number of shares in issue remained unchanged. The significant number of portfolio holdings managed in accordance with an income mandate, the allocation to bond investments and the cash allocation support the commitment to paying an income.
Polar Capital Global Technology, your Company's largest holding, rose 8.93% over the period. The Polar technology team believes AI is in its infancy, comparing the likely trajectory of capital investment to the rollout of other technological advances such as the 19th century development of the railways. The Polar team has favoured hardware companies supplying AI infrastructure such as Nvidia, the leading designer of graphics processing units. In January, Polar took profits from Nvidia and some other infrastructure stocks in the wake of the announcement by DeepSeek, a Chinese company, that it has produced a large language model at a fraction of the cost of US competitors and made the code freely available. President Trump hailed this development as a "wake-up call" to US companies and the announcement sent ripples through the sector as investors reduced their forecasts for AI capital spending. Technology sector gains also contributed to a 9.59% return for the iShares S&P 500 exchange-traded fund (ETF). Your Company's Polar Capital Global Technology investment was reduced by GBP3 million in October on grounds that high valuations left the sector vulnerable to disappointment.
The relatively high equity allocation to emerging markets and Asia excluding Japan hurt performance overall but there were strong performances from Sector Emerging Market Equities and Prusik Asian Equity Income, which returned 8.23% and 6.45% respectively. Sector Emerging Markets Equity, whose experienced manager has a high-conviction investment style, was launched in September 2023. It has a bias towards India and is highly concentrated, with ten stocks accounting for about half the portfolio. The holding was increased by GBP1.25 million in October 2024. By contrast, Prusik Asian Equity Income has a bias towards Hong Kong and South Korea, holding long-established companies such as CK Hutchison, Jardine Matheson and Standard Chartered. The contrarian approach has resulted in a dividend yield in excess of 5%, contributing to your Company's ability to pay dividends.
Stewart Investors Indian Subcontinent fell 4.85%, lagging the Indian market's 3.11% fall in sterling. Longer-term prospects for Indian equities remain positive because of high economic growth and the pro-business policies of the prime minister, Narendra Modi. Valuations were, however, relatively high over the period, leading to underperformance against some other emerging markets.
UK stocks rose just 1.64% but smaller companies did better, rising 3.84%. Within the portfolio's UK holdings, Man GLG Income performed best, returning 1.55%. Two small company holdings, Chelverton UK Equity Income and Aberforth Geared Value & Income, were, however, conspicuously weak, returning 0.38% and falling 17.00% respectively. Aberforth Geared Value & Income was launched close to net asset value (NAV) on 1st July 2024 but the investment trust's small size and specialist nature led to the shares falling to a large discount to NAV. The trust has a planned winding-up date of 30th June 2031 when investors will be offered an opportunity to redeem shares at close to NAV.
Within your Company's fixed income allocation, the shorter-dated Schroder Strategic Credit holding performed best, returning 4.20%, while the longer-dated iShares Treasury Bond 7-10 Year sterling-hedged ETF and Franklin Templeton Emerging Market Bond returned 0.50% and 0.51% respectively. Your Company's significant cash deposits in sterling and dollars contributed to your Company's ability to pay a dividend.
OUTLOOK
There are grounds to be positive about equity market prospects overall. President Trump's expansionary policies of lower regulation, lower taxation and trade protectionism are supportive for US stocks in the short term. Lowly-valued UK and emerging market equities provide diversification and may prove defensive should overall markets fall. US and UK inflation is proving more persistent than expected and US and UK interest rates are, therefore, likely to remain higher for longer. In this environment, shorter-dated bond investments provide some protection while your Company's cash provides a defensive source of income.
Brompton Asset Management Limited 24th March 2025
DIRECTORS' REPORT
PERFORMANCE
In the six months to 31st December 2024 the total return per Ordinary share was 0.41% (2023: 3.38%) before the return of capital. The NAV per ordinary share decreased to 169.19p, whilst the share price decreased to 107.50p. The fall in the NAV per ordinary share was due to the B Share issue and redemption of GBP17,046,000. The total return compares to an increase of 2.89% in the IA Mixed Investment 40-85% Shares Index.
The Company made a revenue profit for the six months of GBP1,801,000 (2023: GBP1,467,000). Costs remained relatively constant, but income increased by GBP345,000 (20.9%), as the Company increased its investment in income funds. The higher income was achieved despite the B Share redemption.
The management fee charged directly by Brompton is allocated to the capital account.
DIVIDEND
The Directors propose an interim dividend of 1.70p per Ordinary share in respect of the six months ended 31st December 2024 (2023: 1.70p). The dividend will be paid on 29th April 2025 to shareholders on the register at the close of business on 4th April 2025 (ex-dividend 3rd April 2025).
INVESTMENT OBJECTIVE
The Company's investment objective is to achieve long-term total return through capital growth and income.
INVESTMENT POLICY
The Company's investment policy is to allocate assets to global investment opportunities through investment in equity, bond, commodity, real estate, currency and other markets. The Company's assets may have significant weightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded funds, futures, options, limited partnerships and direct investments in relevant markets. The Company may invest up to 15% of its net assets in direct investments in relevant markets.
The Company will not follow any index with reference to asset classes, countries, sectors or stocks. Aggregate asset class exposure to any one of the United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or Emerging Markets and to any individual industry sector will be limited to 50% of the Company's net assets, such values being assessed at the time of investment and for funds by reference to their
published investment policy or, where appropriate, their underlying investment exposure.
The Company may invest up to 20% of its net assets in unlisted securities (excluding unquoted pooled investment vehicles), such values being assessed at the time of investment.
The Company will not invest more than 15% of its net assets in any single investment, such values being assessed at the time of investment.
Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. Derivatives may also be used outside of efficient portfolio management to meet the Company's investment objective. The Company may take outright short positions in relation to up to 30% of its net assets, with a limit on short sales of individual stocks of up to 5% of its net assets, such values being assessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company's total assets may be invested in other closed-ended investment funds except where such funds have themselves published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.
SHARE CAPITAL
The Company's share capital comprises 305,000,000 Ordinary shares of 1p each, of which 71,023,695 (2023: 71,023,695) have been issued and fully paid. No Ordinary shares are held in treasury, and none were bought back or issued during the six months ending 31st December 2024.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks identified by the Board, and the steps the Board takes to mitigate them, are discussed below. The Audit and Risk Committee reviews existing and emerging risks on a six-monthly basis. The Board continues to monitor the geopolitical, societal, economic and market focused implications of the events since 2022.
Investment strategy: Inappropriate long-term strategy, asset allocation and fund selection could lead to underperformance. The Board discusses investment performance at each of its meetings and the Directors receive reports detailing asset allocation, investment selection and performance.
Business conditions and general economy: The Company's future performance is heavily dependent on the performance of different equity and currency markets. The Board cannot mitigate the risks arising from adverse market movements. However, diversification within the portfolio will reduce the impact. Further information is given in the portfolio risks below.
Macro-economic event risk: The scale and potential adverse impact of a macro-economic event, such as a pandemic and the outbreak of localised wars, has highlighted the possibility of a number of identified risks such as market risk, currency risk, investment liquidity risk and operational risk having an adverse impact at the same time. The risk may impact on the value of the Company's investment portfolio, its liquidity, meaning investments cannot be realised quickly, or the Company's ability to operate if the Company's suppliers face financial or operational difficulties. The Directors closely monitor these areas and currently maintain a significant cash balance.
Portfolio risks - market price, foreign currency and interest rate risks: Investment returns will be influenced by interest rates, inflation, investor sentiment, availability/cost of credit and general economic and market conditions in the UK and globally. A significant proportion of the portfolio is in investments denominated in foreign currencies and movements in exchange rates could significantly affect their sterling value. The Investment Manager takes all these factors into account when making investment decisions, but the Company does not normally hedge against foreign currency movements. The Board's policy is to hold a spread of investments to reduce the impact of the risks arising from the above factors, investing in a spread of asset classes and geographic regions.
Net asset value discount: The discount in the price at which the Company's shares trade to net asset value means that shareholders cannot realise the real underlying value of their investment. The Company's share price has been at a significant discount to the Company's net asset value for a number of years. The Directors regularly review the level of discount, however given the investor base of the Company, the Board is very restricted in its ability to influence the discount to net asset value.
Investment Manager: The quality of the team employed by the Investment Manager is an important factor in delivering good performance and the loss of key staff could adversely affect returns. A representative of the Investment Manager attends each Board meeting and the Board is informed if any major changes to the investment team employed by the Investment Manager are proposed. The Investment Manager regularly informs the Board of developments and any key implications for either the investment strategy or the investment portfolio.
Tax and regulatory risks: A breach of The Investment Trust (Approved Company) (Tax) Regulations 2011 (the 'Regulations') could lead to capital gains realised within the portfolio becoming subject to UK capital gains tax. A breach of the FCA Listing Rules could result in suspension of the Company's shares, while a breach of company law could lead to criminal proceedings, financial and/or reputational damage. The Board employs Brompton Asset Management Limited as Investment Manager, and Apex Fund Administration Services (UK) Limited as Secretary and Administrator, to help manage the Company's legal and regulatory obligations.
Operational: Disruption to, or failure of, the Investment Manager's or Administrator's accounting, dealing or payment systems, or the Custodian's records, could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service. The Board monitors its service providers, with an emphasis on their business interruption procedures.
The Directors confirm that they have carried out a robust assessment of the risks and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity.
INVESTMENT MANAGEMENT ARRANGEMENTS AND RELATED PARTY TRANSACTIONS
In common with most investment trusts the Company does not have any executive directors or employees. The day-to-day management and administration of the Company, including investment management, accounting and company secretarial matters, and custodian arrangements are delegated to specialist third party service providers.
Details of related party transactions are contained in the Annual Report. There have been no unusual material transactions with related parties during the period which have had a significant impact on the performance of the Company.
GOING CONCERN AND VIABILITY
The Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the interim report as the assets of the Company consist mainly of securities that are readily realisable or cash and bank deposits and it has no significant liabilities and limited financial commitments. Investment income has exceeded annual expenditure and current liquid net assets cover current annual expenses for many years. Accordingly, the Board is of the opinion that the Company has adequate financial resources to continue in operational existence for the foreseeable future, which is considered to be in excess of five years. Five years is considered a reasonable period for investors when making their investment decisions. In reaching this view the Directors reviewed the anticipated level of expenditure against the cash and liquid assets within the portfolio. The Directors have also considered the risks the Company faces.
CHANGE OF AUDITORS
The Company's auditor resigned during the period. Forvis Mazars LLP has been appointed auditors until the next annual general meeting, where their reappointment will be subject to approval by shareholders.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with UK adopted international accounting standard. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting". The Chairman's statement, the Investment Manager's report and the Directors' report include a fair review of important events that have occurred during the first six months of the financial year and their impact on the financial statements.
The Chairman's statement and the Investment Manager's report include a fair review of the potential risks and uncertainties for the remaining six months of the year.
The Director's report and note 9 to the interim financial report include a fair review of the information concerning transactions with the investment manager and changes since the last annual report.
By order of the Board
Apex Fund Administration Services (UK) Limited
24th March 2025
SCHEDULE OF TOP TWENTY INVESTMENTS at 31st December 2024
30th June 2024 Purchases/ 31st Dec 2024
Movement % of Net Assets
GBP'000 (Sales) GBP'000
Polar Capital Global Technology 12,243 (4,800) 430 7,873 6.55
iShares Core S&P 500 UCITS ETF 6,643 (1,001) 487 6,129 5.10
Baillie Gifford Global Income Growth 7,326 (1,075) (169) 6,082 5.06
Man GLG UK Income Fund 7,180 (1,073) (52) 6,055 5.04
TM Redwheel Global Equity Income Fund 7,221 (1,051) (181) 5,989 4.98
Stewart Investors Indian Subcontinent Fund 5,698 (841) (236) 4,621 3.84
Aquilus Inflection Fund 5,066 (590) (182) 4,294 3.57
MI Chelverton UK Equity Income Fund 4,609 (677) (109) 3,823 3.18
EF Brompton Global Conservative Fund 4,757 (1,035) 49 3,771 3.14
EF Brompton Global Equity Fund 4,267 (631) 120 3,756 3.13
Vietnam Enterprise Investments 3,497 - 136 3,633 3.02
FTF Clearbridge Global Infrastructure Inc. Fund 3,907 (565) 82 3,424 2.85
MI Polen Asia Income Fund 4,147 (605) (138) 3,404 2.83
EF Brompton Global Adventurous Fund 3,774 (559) 75 3,290 2.74
Schroder Asian Income Maximiser L Inc. GBP 4,065 (591) (185) 3,289 2.74
Schroder Strategic Credit Fund L Income GBP 3,050 - 33 3,083 2.57
EF Brompton Global Growth Fund 3,563 (528) 48 3,083 2.57
Aberforth Geared Value and Income Trust - 3,542 (617) 2,925 2.43
Aberforth Split Level Income Trust 4,065 (4,041) (24) - -
iShares USD Treasury Bond 7-10yr UCITS ETF 2,945 - (36) 2,909 2.42
98,023 (16,121) (469) 81,433 67.76
Balance not held in investments above 23,693 (756) (339) 22,598 18.81
Total investments (excluding cash) 121,716 (16,877) (808) 104,031 86.57
Cash 16,009 17,220 (16,937) 16,292 13.56
Other net current assets liabilities 136 (343) - (156) (0.13)
Net Assets 137,861 - (17,694) 120,167 100.00
All of the above investments are investment funds with the exception of Aberforth Geared Value and Income Trust and Vietnam Enterprise Investments which are investment companies.
The investment portfolio, excluding cash, can be further analysed as follows: GBP'000
Investment funds 82,017
Unquoted investments 2,881
Investment companies and exchange traded funds 18,619
Other quoted investments 514
104,031
STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2024 (unaudited)
Six months ended
31st December 2024
(unaudited)
Total
Revenue Return Capital Return
GBP '000 Return
GBP '000 GBP '000
Notes
INCOME
Investment income 1,662 - 1,662
Other operating income 337 - 337
Total income 2 1,999 - 1,999
GAINS AND LOSSES ON INVESTMENTS
Gains/(losses) on investments at fair value through profit or loss
5 - (808) (808)
Other exchange (losses)/gains - 70 70
1,999 (738) 1,261
EXPENSES
Management fees 3 - (374) (374)
Other expenses (198) - (198)
(198) (374) (572)
PROFIT/(LOSS) BEFORE FINANCE COSTS AND TAX 1,801 (1,112) 689
Finance costs - - -
PROFIT/(LOSS) BEFORE TAX 1,801 (1,112) 689
Tax - - -
PROFIT/LOSS FOR THE PERIOD 1,801 (1,112) 689
EARNINGS PER SHARE
Ordinary shares 4 2.54p (1.56)p 0.98p
The total return column of this statement represents the Group's profit and loss account, prepared in accordance with IFRS. The supplementary Revenue Return and Capital Return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.
All income is attributable to the equity holders of the Company. There are no minority interests.
STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2023 and the year ended 30th June 2024
Six months ended Year ended
31st December 2023 30th June 2024
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
Notes Return Return Return Return Return Return
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
INCOME
Investment income 1,180 - 1,180 2,373 - 2,373
Other operating income 474 - 474 883 - 883
Total income 2 1,654 - 1,654 3,256 - 3,256
GAINS AND LOSSES ON INVESTMENTS
Gains/(losses) on investments at fair value
through profit or loss - 3,206 3,206
5 - 12,575 12,575
Other exchange (losses)/gains - (43) (43) - 35 35
Trail rebates - 1 1 - 4 4
1,654 3,164 4,818 3,256 12,614 15,870
EXPENSES
Management fees 3 - (393) (393) - (811) (811)
Other expenses (187) - (187) (375) - (375)
(187) (393) (580) (375) (811) (1,186)
PROFIT/(LOSS) BEFORE TAX 1,467 2,771 4,238 2,881 11,803 14,684
Tax - - - - - -
PROFIT/(LOSS) FOR THE PERIOD 1,467 2,771 4,238 2,881 11,803 14,684
EARNINGS PER SHARE
Ordinary shares 4 2.07p 3.90p 5.97p 4.05p 16.62p 20.67p
The total return column of this statement represents the Group's profit and loss account, prepared in accordance with IFRS. The supplementary Revenue Return and Capital Return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the periods.
All income is attributable to the equity holders of the parent company. There are no minority interests.
STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2024 (unaudited)
Share Share Special Capital Revenue
premium reserve Capital redemption reserve reserve
capital reserve Total
GBP'000
GBP '000 GBP '000 GBP'000 GBP '000
GBP '000 GBP '000
AT 30TH JUNE 2024 710 21,573 56,908 - 56,049 2,621 137,861
Total comprehensive income for
the period
- - - - (1,112) 1,801 689
Dividend paid - - - - - (1,207) (1,207)
Issue of B Shares 17,046 (17,046) - - - - -
B Share issue costs - - - - (130) - (130)
Redemption of B Shares (17,046) - - 17,046 (17,046) - (17,046)
AT 31ST DECEMBER 2024 710 4,527 56,908 17,046 37,761 3,215 120,167
STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2023 (unaudited)
Share Share Special Capital Revenue
premium reserve Capital redemption reserve reserve
capital reserve Total
GBP'000
GBP '000 GBP '000 GBP'000 GBP '000
GBP '000 GBP '000
AT 30TH JUNE 2023 710 21,573 56,908 - 44,246 2,155 125,592
Total comprehensive income for
the period
- - - - 2,771 1,467 4,238
Dividend paid - - - - - (1,207) (1,207)
AT 31ST DECEMBER 2023 710 21,573 56,908 - 47,017 2,415 128,623
STATEMENT OF CHANGES IN EQUITY
for the year ended 30th June 2024 (audited)
Share Share Special Capital Revenue
premium reserve Capital redemption reserve reserve
capital reserve Total
GBP'000
GBP '000 GBP '000 GBP'000 GBP '000
GBP '000 GBP '000
AT 30TH JUNE 2023 710 21,573 56,908 - 44,246 2,155 125,592
Total comprehensive income for
the year
- - - - 11,803 2,881 14,684
Dividend paid - - - - - (2,415) (2,415)
AT 30TH JUNE 2024 710 21,573 56,908 - 56,049 2,621 137,861
BALANCE SHEET
at 31st December 2024
31st December 31st December 30th June
2024 2023 2024
Notes
(unaudited) (unaudited) (audited)
GBP '000 GBP '000 GBP '000
NON-CURRENT ASSETS
Investments at fair value through profit or loss 5 104,031 112,717 121,716
CURRENT ASSETS
Other receivables 161 323 479
Cash and cash equivalents 16,292 18,913 10,236
Other financial assets (longer-term deposits)
- - 5,773
16,453 19,236 16,488
TOTAL ASSETS 120,484 131,953 138,204
CURRENT LIABILITIES
Other payables (317) (3,330) (343)
TOTAL ASSETS LESS CURRENT LIABILITIES
120,167 128,623 137,861
NET ASSETS 120,167 128,623 137,861
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Called-up share capital 710 710 710
Share premium 4,527 21,573 21,573
Special reserve 56,908 56,908 56,908
Capital redemption reserve 6 17,046 - -
Capital reserve 7 37,761 47,017 56,049
Revenue reserve 3,215 2,415 2,621
TOTAL EQUITY 120,167 128,623 137,861
NET ASSET VALUE PER ORDINARY SHARE 8 169.19p 181.10p 194.11p
The interim report was approved and authorised for issue by the Board on 24th March 2025.
CASH FLOW STATEMENT
for the six months ended 31st December 2024
Six months Six months Year
ended ended ended
31st 31st 30th June
December December
2024
2024 2023
(audited)
(unaudited) (unaudited)
GBP '000
GBP '000 GBP '000
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,719 4,129 1,985
INVESTING ACTIVITIES
Purchase of investments (720) (11,374) (32,535)
Sale of investments 17,597 10,164 31,695
Longer term deposits - - (5,773)
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES 16,877 (1,210) (6,613)
FINANCING ACTIVITIES
B Share issue redemption (17,046) - -
B Share issue costs (130) - -
Equity dividend paid (1,207) (1,207) (2,415)
NET CASH (OUTFLOW) / INFLOW FROM FINANCING ACTIVITIES (18,383) (1207) (2,415)
INCREASE/( DECREASE) IN CASH 213 1,712 (7,043)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN CASH AND CASH EQUIVALENTS
(Decrease)/ Increase in cash resulting from cash flows 213 1,712 (7,043)
Exchange movements 70 (43) 35
Movement in net funds 283 1,669 (7,008)
Net funds at start of period/year 16,009 17,244 17,244
CASH AND CASH EQUIVALENTS AT END OF PERIOD/YEAR 16,292 18,913 10,236
RECONCILIATION OF PROFIT BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM
OPERATING ACTIVITIES
Profit before finance costs and taxation * 689 4,238 14,684
Losses/(gains) on investments 808 (3,206) (12,575)
Exchange movements (70) 43 (35)
Capital trail rebates - (1) (4)
Net revenue gains before taxation 1,427 1,074 2,070
Decrease/(increase) in debtors 318 22 (134)
(Decrease)/increase in creditors (26) 3,032 45
Taxation - - -
Capital trail rebates - 1 4
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,719 4,129 1,985
* Includes dividends received in cash of GBP1,315,000 (30th June 2024: GBP2,132,000) (2023: GBP1,052,000), accumulation income of GBP269,000 (30th June 2024: GBP253,000) (2023: GBP250,000) and interest received of GBP805,000 (30th June 2024: GBP726,000) (2023: GBP113,000).
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 31st December 2024
1. ACCOUNTING POLICIES
The condensed interim financial statements comprise the unaudited results of the Company for the six months ended 31st December 2024. The comparative information for the six months ended 31st December 2023 and the year ended 30th June 2024 are a condensed set of accounts and do not constitute statutory accounts under the Companies Act 2006. Full statutory accounts for the year ended 30th June 2024 included an unqualified audit report, did not contain any statements under section 498 of the Companies Act 2006, and have been filed with the Registrar of Companies.
The half year financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', and are presented in pounds sterling, as this is the Company's functional currency.
The same accounting policies have been followed in the interim financial statements as applied to the accounts for the year ended 30th June 2024, which were prepared in accordance with IFRSs.
No segmental reporting is provided as the Company is engaged in a single segment.
2. TOTAL INCOME
Year ended 30th June
Six months ended 31st December 2024
Six months ended 31st December 2023 2024
GBP'000
GBP'000
GBP'000
Income from Investments
UK net dividend income 1,434 1,047 2,102
Unfranked investment income 228 104 91
UK fixed interest - 29 180
1,662 1,180 2,373
Other Income
Bank interest 337 474 883
337 474 883
Year ended 30th June
Six months ended 31st December 2024
Six months ended 31st December 2023 2024
GBP'000
GBP'000
GBP'000
Total income comprises
Dividends 1,662 1,151 2,193
Interest income 337 503 1,063
1,999 1,654 3,256
3. MANAGEMENT FEES
Year ended 30th June
Six months ended 31st December 2024
Six months ended 31st December 2023 2024
GBP'000
GBP'000
GBP'000
Investment management fee 374 393 811
374 393 811
The Investment Manager receives a management fee, payable quarterly in arrears, equivalent to an annual 0.75 per cent of total assets after the deduction of the value of any investments managed by the Investment Manager or its associates (as defined in the investment management agreement).
4. RETURN PER ORDINARY SHARE
Year ended 30th
Six months ended 31st December June
2024 Six months ended 31st December
2023 2024
GBP'000
GBP'000
GBP'000
Revenue return 1,801 1,467 2,881
Capital return (1,112) 2,771 11,803
Total return 689 4,238 14,684
Weighted average number of Ordinary 71,023,695 71,023,695 71,023,695
shares
Revenue return per Ordinary share 2.54p 2.07p 4.05p
Capital return per Ordinary share (1.56)p 3.90p 16.62p
Total return per Ordinary share 0.98p 5.97p 20.67p
5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
At
At At
30th June
31st December 2024 31st December 2023
2024
GBP'000 GBP'000
GBP'000
COMPANY 104,031 112,717 121,716
ANALYSIS OF INVESTMENT
PORTFOLIO
Six months ended 31st December 2024
Total
Quoted* Unquoted**
(level 1 and 2) (level 3)
GBP'000
GBP'000 GBP'000
Opening book cost 89,127 10,972 100,099
Opening investment holding gains/(losses) 29,836 (8219) 21,617
Opening valuation 118,963 2,753 121,716
Movement in period:
Purchases at cost 512 208 720
Sales
- Proceeds (17,582) (15) (17,597)
- Realised gains on sales 7,404 - 7,404
Movement in investment holding gains/(losses) (8,147) (65) (8,212)
Closing valuation at 31st December 2024 101,150 2,881 104,031
Closing book cost 79,461 11,165 90,626
Closing investment holding gains/(losses) 21,689 (8,284) 13,405
Closing valuation 101,150 2,881 104,031
* Quoted investments include unit trust and OEIC funds which are valued at quoted prices. Included within Quoted Investments is one monthly valued investment fund of GBP4,294,000 (30th June 2024 GBP5,066,000) (2023: GBP4,719,000).
** The Unquoted investments, representing just over 2% of the Company's NAV, have been valued in accordance with IPEVC valuation guidelines. The largest unquoted investment amounting to GBP1,215,000 (30th June 2024: GBP1,215,000) (2023: GBP1,215,000) was valued at the latest transaction price. The second largest investment is an illiquid private equity fund which has been valued at Net Asset Value, based on fair value valuations. A 10% increase or decrease in the earnings of either of these investments would not have a material impact on the valuation of those investments.
Year
Six months ended Six months ended ended
31st December 2024 31st December 2023 30th June
GBP'000 GBP'000 2024
GBP'000
ANALYSIS OF CAPITAL (LOSSES)/GAINS
Realised gains on sales of investments 7,404 4,363 10,249
(Decrease)/increase in investment holding gains (8,212) (1,157) 2,326
(808) 3,206 12,575
6. CAPITAL REDEMPTION RESERVE
Year
Six months ended Six months ended ended
31st December 2024 31st December 2023 30th June
GBP'000 GBP'000 2024
GBP'000
Capital redemption reserve 17,046 - -
17,046 - -
On 8th August 2024 the Company returned GBP17,046,000 to its shareholders by way of a B share scheme. A bonus issue of one new B Share was made for each Ordinary share which was then redeemed for cash.
GBP17,046,000 B Shares were allotted and paid up out of the share premium account. Shares of GBP17,046,000 were redeemed out of realised capital profits. A Capital Redemption Reserve ('CRR') of GBP17,046,000 was created. The CRR is not a distributable reserve, but it can be used to pay up new shares allotted to shareholders as fully paid bonus shares or reduced or cancelled in a similar way to Share Premium.
7. CAPITAL RESERVE
At At
At
31st December 2024 30th June
31st December 2023
GBP'000 2024
GBP'000
GBP'000
Realised gains brought forward 34,432 24,955 24,955
Realised during the period 7,404 4,363 10,249
Management fees (374) (393) (811)
Foreign currency 70 (43) 35
Trail fees - 1 4
Redemption of B Shares (17,046) - -
B share issue costs (130) - -
Realised gains carried forward 24,356 28,883 34,432
Unrealised gains brought forward 21,617 19,291 19,291
(Decrease)/increase in investment holding gains (8,212) (1,157) 2,326
Unrealised gains carried forward 13,405 18,134 21,617
Total 37,761 47,017 56,049
The Memorandum and Articles were amended at the 2024 Annual General Meeting. The Realised gains of GBP24,356,000 are now available for distribution (30th June 2024: GBP34,432,000) (31st December 2023: GBP28,883,000).
8. NET ASSET VALUE PER ORDINARY SHARE
31st December 2024 30th June
31st December 2023
GBP'000 2024
GBP'000
GBP'000
Net assets attributable to Ordinary shareholders
120,167 128,623 137,861
Ordinary shares in issue at end of period
71,023,695 71,023,695 71,023,695
Net asset value per Ordinary share 169.19p 181.10p 194.11p
9. TRANSACTIONS WITH THE INVESTMENT MANAGER
During the period there have been no new related party transactions that have affected the financial position or performance of the Group.
Since 1st January 2010 Brompton has acted as Investment Manager to the Company. This relationship is governed by an agreement dated 17th May 2018.
Mr Duffield is the Chairman of Brompton Asset Management Group Limited the ultimate parent of Brompton. Mr Duffield owns a majority (59.14%) of the shares in the Company.
Mr Gamble has an immaterial holding in Brompton Property Management Group LLP and Brompton Asset Management Group Limited.
The total investment management fee payable to Brompton for the half year ended 31st December 2024 was GBP374,000 (30th June 2024: GBP811,000) (2023: GBP393,000) and at the half year GBP186,000 (30th June 2024: GBP212,000) (2023: GBP196,000) was accrued.
The Company's investments include seven funds managed by Brompton or its associates valued at GBP21,255,000 (30th June 2024: GBP24,631,000) (2023: GBP22,981,000). No investment management fees were payable directly by the Company in respect of these investments.
The Company has an equity investment of GBP100,000 (30th June 2024: GBP100,000) (2023: GBP100,000) in an investment management company in which a related party of Mr Duffield holds a minority stake. All loans made to that Company have been fully repaid.
10. AUDITORS
Johnston Carmichael LLP has resigned as the Company's auditor. Forvis Mazars LLP has been appointed as the Company auditor for the year ending 30th June 2025.
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ISIN: GB0002631041 Category Code: IR TIDM: NSI OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews Sequence No.: 379826 EQS News ID: 2104728 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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(END) Dow Jones Newswires
March 24, 2025 03:02 ET (07:02 GMT)
