Final Results

BlackRock Throgmorton Trust plc Annual Report 30 November 2013 Financial Highlights As at As at 30 November 30 November Change 2013 2012 % Assets Net assets £240.8m £174.1m +38.3 Net asset value per share 329.21p 238.02p +38.3 - with income reinvested +40.1 Ordinary share price (mid-market) 290.00p 193.25p +50.1 -with income reinvested +52.3 Year Year ended ended 30 November 30 November Change 2013 2012 % Revenue Net revenue after taxation £3.7m £2.7m +37.1 Revenue return per ordinary share 4.99p 3.64p +37.1 ----- ----- ----- Dividends - Interim 0.75p 0.62p +21.0 - Final 3.25p 2.70p +20.4 ----- ----- ----- Total dividends paid and payable in respect of the year ended 30 November 4.00p 3.32p +20.5 ===== ===== ===== Chairman's statement Performance Markets have made substantial progress during the financial year under review, supported by better economic news from the UK and the US in particular, and a reduction in the perceived risks to the financial system. Against this background I am pleased to be able to report a very strong year for the Company over the twelve months to 30 November 2013, both in absolute and relative terms. The Company's net asset value per share ('NAV') returned 40.1% compared with a return of 31.6% for the Numis Smaller Companies plus AIM (excluding investment companies) Index, (the benchmark for the period under review). Over the same period the share price increased by 52.3%. Since the year end the NAV has increased by 5.8%. (All percentages in sterling terms with income reinvested.) This performance was achieved through a combination of excellent returns from stock selection in the long only portfolio and the CFD portfolio, where gains on the long CFDs substantially exceeded losses on the short CFD positions. Further details of the factors which have contributed to performance are set out in the Investment Manager's Report. The Company has outperformed its benchmark in the year by 11.8 percentage points (after adjusting for fees and dividends paid) which resulted in combined revenue and capital returns of £75.5m for the year. Based on an average performance fee market value of £266m, this has resulted in a performance fee of £3.9m being payable. Revenue Return and Dividend It is pleasing to note that revenue return per share for the year amounted to 4.99 pence compared with 3.64 pence for the previous year, an increase of 37.1%. The increase in revenue arose from a combination of healthy dividend increases from underlying portfolio companies, changes in the composition of the portfolio and a higher incidence of special dividends this year. In recognition of this the Directors are proposing an increased final dividend of 3.25 pence per share. This together with the interim dividend of 0.75 pence paid on 23 August 2013 makes a total dividend for the year of 4.00 pence per share compared with the 3.32 pence per share paid in respect of the financial year ended 30 November 2012. The final dividend is payable on 4 April 2014 to shareholders on the Company's register on 21 February 2014. The ex-dividend date is 19 February 2014. Board of Directors Harry Westropp, who has served on the Board since 2003, will retire as a Director at the forthcoming AGM. I would like to thank Harry on behalf of the Board for his outstanding contribution and wise counsel to the Board over the last 10 years. I am pleased to report that Loudon Greenlees has agreed to join the Board in March 2014 and will also become a member of the Audit, Management Engagement and Nomination committees. Loudon is a qualified Chartered Accountant and brings a wealth of commercial and financial experience gained in the financial services sector. He is currently a non executive director of Nevsky Capital LLP. Annual General Meeting The Annual General Meeting of the Company will be held at BlackRock's offices at 12 Throgmorton Avenue, London EC2N 2DL on Wednesday, 26 March 2014 at 11.00 a.m. The Investment Manager will make a presentation to shareholders on the Company's progress and the outlook for the smaller companies sector. Company Objective and Policy, Benchmark and Name Change The Company held a general meeting on 27 November 2013 at which shareholders resolved to change the Company's investment objective and policy, including the adoption of a new benchmark, with effect from 1 December 2013. Following approval of the revised investment policy the Company's investment management agreement was also amended to reflect the lowering of the performance fee cap with effect from 1 December 2013. The Company's name was also changed to BlackRock Throgmorton Trust plc on 29 November 2013. Further details of these changes are set out in the Strategic Report and in the Directors' Report of the annual report. Outlook The pace of UK economic activity appears to have accelerated markedly in recent months, supported by renewed strength in the housing market and improving consumer confidence. Against this, the still high levels of personal and government indebtedness and the - at best very modest - growth in real wages both suggest that any return to a more normal growth trajectory could well take some time. Our Investment Manager has in the past proved adept at identifying attractive smaller companies with strong secular growth characteristics. This ability, together with the added scope to hold both short and long positions provided by our CFD portfolio, gives us confidence for the future. Crispin Latymer Chairman 10 February 2014 Historical record Assets Year to 30 November Mid-market Equity NAV price shareholders' per Total per funds share return share £m p % p Compound annual growth rate - 9.4% - 10.1% over the ten year period 2013 240.8 329.2 +40.1 290.0 2012 174.1 238.0 +19.4 193.3 2011 147.8 202.1 -3.9 170.0 2010 127.3 212.8 +51.7 163.0 2009 106.9 144.3 +63.7 115.8 2008 77.0 (1) 93.5 -51.4 (4) 62.8 2007 272.5 194.6 (2) -1.6 152.0 2006 326.2 199.4 (2) +15.4 164.3 2005 313.4 (2) 171.6 (2,3) +29.1 142.0 2004 308.6 (3) 134.3 (2,3) +31.8 110.3 1. Reduction from a tender offer and reorganisation of the Company in 2008, as well as market movements. 2. Prior charges at par. 3. Restated for changes in accounting policies: the principal changes were to value investments at bid (previously mid) market value and to account for dividends in the period in which they are paid. 4. Includes £5.5 million in respect of the write-back of prior years' VAT. Revenue Net Revenue revenue return Dividends after per per Year to 30 November taxation share share £m (6) p (6) p Compound annual growth rate over the ten year period - 12.4% 9.6% 2013 3.7 4.99 4.00 2012 2.7 3.64 3.32 2011 2.1 3.29 3.15 2010 1.9 2.85 3.00 2009 3.1 3.86 2.75 (5) 2008 4.8 3.85 2.40 (5) 2007 2.3 1.54 2.20 2006 3.3 1.84 2.00 2005 3.2 1.58 1.75 2004 3.6 1.55 1.60 5. Dividends per share do not include special dividends of 2.00 pence per share paid in 2009 and 3.00 pence per share paid in 2008. 6. Net revenue after taxation and revenue return per share for the years ended 30 November 2013 and 2012 relate to the parent company and for the years up to 30 November 2011, related to the Group including subsidiary companies. Strategic report The Directors present the strategic report of the Company for the year ended 30 November 2013. Principal activity The Company carries on business as an investment trust and its principal activity is portfolio investment. Objective and name change (with effect from 1 December 2013) The Company held a general meeting on 27 November 2013 at which it was resolved to amend the Company's investment objective and policy principally through the adoption of a new benchmark index to reflect the focus on UK smaller and mid capitalisation companies. Under the authority provided in the Articles of Association, the Directors also resolved to change the Company's name to BlackRock Throgmorton Trust plc and to lower the cap on the Investment Manager's performance fee. These changes were effective on 29 November 2013 and 1 December 2013 respectively. The Company's objective is to provide shareholders with capital growth and an attractive total return through investment primarily in UK smaller and mid-capitalisation companies listed on the main market of the London Stock Exchange. Strategy, Business Model and investment policy The Company's performance is now measured against the Numis Smaller Companies excluding AIM (excluding investment companies) Index (the "Index"). Prior to 1 December 2013 performance was measured by reference to the Numis Smaller Companies plus AIM (excluding investment companies). The Company may hold up to 25 per cent. of its gross assets, at the time of acquisition, in equities or collective investment vehicles traded on the AIM market of the London Stock Exchange (previously there was a limit of 50% by value in AIM stocks). The Investment Manager may invest in companies outside the Index without restriction subject to the limits noted above. In addition to holding a conventional long only portfolio of UK smaller and mid-capitalisation equities, the Company will hold approximately 30 per cent. of its net assets in a portfolio of contracts for difference ("CFD") and/or comparable equity derivatives which provide both long and short exposure. Under normal circumstances, the long only portfolio is expected to comprise 100 per cent. of the Company's net assets. Therefore, the Company can have gross exposure of 130 per cent. of net assets, albeit that some of this exposure represents short positions. Portfolio risk will be mitigated by investment in a diversified portfolio of companies. No more than 5 per cent. of the Company's gross assets (previously 15 per cent.), at the time of acquisition, may be invested in any one single company and the Company will not invest more than 10 per cent. of its gross assets, at the time of the acquisition, in other listed closed-ended investment funds, unless such companies have a stated investment policy not to invest more than 15 per cent. of their gross assets in other listed closed-ended investment funds, in which case the limit is 15 per cent. of gross assets. The Board's policy is that borrowing less cash should not exceed 20 per cent. of gross assets. However, the Company is geared primarily through its CFD portfolio. No material change will be made to the amended investment objective and policy without shareholder approval. Performance In the year to 30 November 2013, the Company's NAV per share increased by 40.1% and the Ordinary share price rose by 52.3%, (all percentages calculated in sterling terms with income reinvested). The Investment Manager's report includes a review of the main developments during the year, together with information on investment activity within the Company's portfolio. Results and dividends The results for the Company are set out in the Statement of Comprehensive Income. The total return for the year, after taxation, was £69,210,000 (2012: £28,587,000) of which the revenue return amounted to £3,651,000 (2012: £2,660,000), and the capital return £65,559,000 (2012: £25,927,000). Details of the dividends declared in respect of the year are set out in the Chairman's statement. Key performance indicators At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives. The key performance indicators (`KPIs') used to measure the progress and performance of the Company over time, which are comparable to those reported by other investment trusts, are set out below. Year Year ended ended 30 November 30 November 2013 2012 Net asset value (1) 40.1% 19.4% Ordinary share price (2) 52.3% 15.6% Benchmark (3) 31.6% 16.5% Discount to cum income net asset value 11.9% 18.8% Revenue return per share 4.99p 3.64p Dividends 4.00p 3.32p Ongoing charges (1) 1.1% 1.1% 1. Calculated in accordance with the Association of Investment Companies ('AIC') guidelines. 2. Calculated on a mid to mid basis with income reinvested. 3. Numis Smaller Companies plus AIM (excluding investment companies) Index. The Board monitors the KPIs at each meeting. Additionally, it regularly reviews a number of indices and ratios to understand the impact on the Company's relative performance of the various components such as asset allocation and stock selection. This includes an assessment of the Company's performance and ongoing charges against its peer group of investment trusts with similar investment objectives. The Directors recognise that it is in the long term interests of shareholders that shares do not trade at a significant discount to their prevailing NAV. In the year under review the discount to NAV of the ordinary shares on a cum income basis has ranged between 6.6% and 20.4%, with the average being 14.4%. The shares ended the year at a discount of 11.9% on a cum income basis. Your Board believes that the best way of addressing the discount over the longer term is to continue to generate good performance and to create demand for the Company's shares in the secondary market through broadening awareness of the Company's unique structure. The Board will also be seeking to renew the authority from shareholders to buy back shares when it believes that it is in the interests of shareholders to do so, having taken into account all relevant factors including the size of the Company and the liquidity of its shares. Principal risks The key risks faced by the Company are set out below. The Board regularly reviews and agrees policies for managing each risk, as summarised below. Performance risk - The Board is responsible for deciding the investment strategy to fulfil the Company's objective and for monitoring the performance of the Investment Manager and the implementation of the strategy. An inappropriate strategy may lead to under performance against the benchmark index and the Company's peer group. To manage this risk the Investment Manager provides an explanation of significant stock selection decisions and the rationale for the composition of the investment portfolio. The Board monitors the spread of investments in order to minimise the risks associated with factors specific to individual companies and sectors, based on the diversification requirements inherent in the Company's investment policy. Market price risk - Market price risk arises from changes to the prices of the Company's investments. It represents the potential loss the Company might suffer through holding investments whose prices decline.. The Board considers diversification of the portfolio, asset allocation, stock selection, unquoted investments and levels of gearing on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by the Investment Manager. The Board monitors the implementation and results of the investment process with the Investment Manager. Income/dividend risk - The amount of dividends and future dividend growth will depend on the performance of the Company's underlying portfolio. Any change in the tax treatment of the dividends or interest received by the Company may reduce the level of dividends received by shareholders. The Board monitors this risk through the receipt of detailed income forecasts and considers the level of income at each meeting. Financial risks - The Company's investment activities expose it to a variety of financial risks that include foreign currency risk and interest rate risk. At 30 November 2013, the Company has approximately 26.6% of its net portfolio value invested in AIM traded securities, and, by the very nature of its investment objective, largely invests in smaller companies. Liquidity in these securities can from time-to-time become constrained, making these investments difficult to realise at or near published prices. There are also risks linked to the Company's use of derivative transactions including CFDs. Operational risk - In common with most other investment trust companies, the Company has no employees. The Company therefore relies upon the services provided by third parties and is dependent on the control systems of the Investment Manager and the Company's other service providers. The security, for example, of the Company's assets, dealing procedures, accounting records and maintenance of regulatory and legal requirements, depend on the effective operation of these systems. These are regularly tested and monitored and an internal control report, which includes an assessment of risks together with procedures to mitigate such risks, is prepared by the Investment Manager and reviewed by the Audit Committee at least twice a year. The Investment Manager and custodian BNYM each produce a Service Organisation Controls report (SOC 01), which are reviewed by their auditor and gives assurance regarding the effective operation of controls. The reports are also reviewed by the Audit Committee on an annual basis, or in the case of BNYM a quarterly basis. The Board also considers succession arrangements for key employees of the Investment Manager and the business continuity arrangements for the Company's key service providers. Regulatory risk - The Company operates as an investment trust in accordance with Chapter 4 of Part 24 of the Corporation Tax Act 2010. As such, the Company is exempt from capital gains tax on the profits realised from the sale of its investments. The Investment Manager monitors investment movements, the level of forecast income and expenditure and the amount of dividends paid to ensure that the provisions of Chapter 4 of Part 24 of the Corporation Tax Act 2010 are not breached and the results are reported to the Board at each meeting. The Board and the Investment Manager also monitor changes in government policy and legislation which may have an impact on the Company. Future Prospects The Board’s main focus is on the achievement of capital growth and the future of the Company is dependent upon the success of the investment strategy. The outlook for the Company is discussed in the Chairman’s Statement and in the Investment Manager’s report. Directors, Employees and Gender Representation The Directors of the Company on 30 November 2013, all of whom held office throughout the year, are set out in the corporate governance statement of the Annual Report and Financial Statements. The Board consists of four male Directors and one female Director. Mr Greenlees has agreed to join the Board in March 2014. Mr Westropp will retire at the Annual General Meeting on 26 March 2014. The Company does not have any employees. By order of the Board BlackRock Investment Management (UK) Limited Secretary 10 February 2014 Related party transactions The related party transaction with BlackRock Investment Management (UK) Limited is set out in the Directors’ Report. The investment management fee for the year charged by BlackRock was £1,864,000 (2012: £1,476,000). In addition a performance fee was payable of £3,939,000 (2012: £1,261,000). At the year end, an amount of £4,944,000 was outstanding in respect of these fees (2012: £2,007,000). In addition to the above services, with effect from 1 November 2013, BlackRock has provided the Company with marketing services. The total fees paid or payable for these services for the year ended 30 November 2013 amounted to £16,000 including VAT (2012: nil) of which £16,000 (2012: nil) was outstanding at 30 November 2013. The Board consists of five non-executive Directors, all of whom are considered to be independent by the Board. None of the Directors has a service contract with the Company. The Chairman receives an annual fee of £34,000, the Chairman of the Audit and Management Engagement Committee receives an annual fee of £25,000 and each other Director receives an annual fee of £22,000. As at 30 November 2013, all five members of the Board held shares in the Company. Lord Latymer held 30,000 ordinary shares, Simon Beart held 39,079 ordinary shares (including 11,589 ordinary shares held by Mrs Beart), Eric Stobart held 19,734 ordinary shares (including 7,347 ordinary shares held by Mrs Stobart), Harry Westropp held 24,000 ordinary shares and Jean Matterson held 18,000 ordinary shares. All of the holdings of the Directors are beneficial. Since the year end there have been a number of changes to the Directors’ share interests. At the date of this report Mr Beart holds 29,712 ordinary shares (including 6,921 ordinary shares held by Mrs Beart), Lord Latymer holds 30,096 ordinary shares and Mr Stobart holds 20,054 ordinary shares (including 7,667 ordinary shares held by Mrs Stobart). All other shareholdings remain unchanged. Statement of directors’ responsibilities The Directors are responsible for preparing the annual report, the Directors’ Remuneration Report and the financial statements in accordance with applicable United Kingdom law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors are required to prepare the financial statements under IFRS as adopted by the European Union. Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to: - present fairly the financial position, financial performance and cash flows of the Company; - select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently; - present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; - make judgements and estimates that are reasonable and prudent; - state whether the financial statements have been prepared in accordance with IFRS as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; - provide additional disclosures when compliance with the specific requirements in IFRS as adopted by the European Union is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company‘s financial position and financial performance; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible for preparing the Strategic Report, Directors’ Report, the Directors’ Remuneration Report and the Corporate Governance Statement in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure and Transparency Rules. The Directors have delegated responsibility to the Investment Manager for the maintenance and integrity of the Company’s corporate and financial information included on the Investment Manager’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Each of the Directors as at the date of this report confirm to the best of their knowledge that: - the financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and net return of the Company; and - the annual report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces. The 2012 UK Corporate Governance Code also requires Directors to ensure that the Annual Report and Financial Statements are fair, balanced and understandable. In order to reach a conclusion on this matter, the Board has requested that the Audit Committee advise on whether it considers that the Annual Report and Financial Statements fulfils these requirements. The process by which the Committee has reached these conclusions are set out in the Report of the Audit Committee in the Annual Report. As a result, the Board has concluded that the Annual Report and Financial Statements for the year ended 30 November 2013, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy. For and on behalf of the Board Crispin Latymer Chairman Investment manager's report Market Review and Overall Investment Performance During the financial year stockmarkets moved steadily ahead. Economic data from the UK has been rather better than expected and GDP growth looks to be accelerating. In the US the data from the private sector has also been supportive and economic momentum looks to be building slowly. The economies in Continental Europe seem to be stabilising, especially in Germany. Data from Asia and emerging markets has been mixed some currencies have been under pressure and overall sentiment seems to be weak. The main setback that we saw in the period related to the likely earlier than expected reduction in quantitative easing in the US and ultimately the expectation of increases in interest rates in due course. Over the year the Company's NAV per share returned 40.1% to 329.21p; the benchmark returned 31.6%, whilst the FTSE 100 Index returned 17.5%, (all percentages in sterling terms with income reinvested). Performance review The long only portfolio performed well helped by good stock selection, and net gains of £3.2m were achieved in the CFD portfolio. Significant gains on the long CFDs substantially exceeded losses on the short CFDs. Sector allocation in the long only portfolio was slightly positive. Looking at stock selection, the most significant positive contributors to relative performance were our holdings in Xaar, Blinkx, Optimal Payments, Howden Joinery Group, Polar Capital and Ashtead Group. Good contributions were also made by other core holdings ITE Group, Booker Group and Workspace Group. All of these companies, except Optimal Payments and Polar Capital, are owned both in the long only and the CFD portfolio. Xaar, the leading manufacturer of printheads used in inkjet printers, issued a number of positive trading updates culminating in interim results which showed organic sales growth of 78% and earnings per share which had more than trebled. This performance is largely down to Xaar's success with the sales of its platform 3 inkjet heads, which are mainly being sold to enable the decoration of ceramic tiles; Xaar has taken significant market share. The company remains well positioned and is looking at other applications for its printheads. We have held Xaar shares for many years, and through difficult periods of trading, so it is very pleasing to see management deliver such outstanding performance; shares in Xaar rose by 278% during the year. Blinkx, the leading supplier of internet video search capability and content, announced interim results to 30 September 2013 with revenues up by 36% and earnings up by 49%, another strong performance. Optimal Payments is a leading online payments provider, which released interim results showing sharply higher profits and good cash generation, both are expected to continue. Both Blinkx and Optimal Payments have benefited from the growth of internet traffic and the desire to monetise this. Howden Joinery Group has continued to gain market share in the supply of good quality kitchens to the UK market, focusing on local builders. Ashtead Group continues to trade well in the US where it is the second largest plant hire company. The company has benefited from the pick-up in the new-build housing market in the US, and from having a well invested fleet. Like Howden Group it should continue to gain market share. Polar Capital announced that assets under management had grown strongly on the back of consistently good investment performance and successful new fund launches. On the negative side the largest detractors from relative performance were Ocado Group and Thomas Cook Group, two companies which are constituents of our benchmark index and whose shares performed very strongly over the year. We did not own shares in Ocado Group. We did buy a holding in Thomas Cook Group but not before its shares had already risen significantly. Amongst companies which we did own, the biggest disappointment was AZ Electronic Materials. The company announced that it had had a weaker start to the year and expected this to continue into the second quarter; earnings were downgraded, not for the first time. We were impatient and sold our holding. In December AZ Electronic Materials was bid for by Merck at a good premium, by which time we had sold. Turning to sector allocation, we benefited from our overweight positions in housebuilders and food and drug retailers, where we hold Booker Group, and our underweight positions in oil & gas and mining shares. These gains were reduced by our underweight position in support services which performed well. Activity We participated in a number of IPOs and placings during the year; in the second half these included Foxtons, the London focused estate agent, and Judges Scientific, a designer of precision instruments. We also took part in a placing in Tyman, a company which manufactures door fittings and window seals. The company is benefiting from an increase in new housebuilding activity in the US, and in due course will benefit from a pick-up in home improvements and repairs. Tyman announced the purchase of Truth and with this, 60% of its sales are now concentrated in North America. We took profits in some non-core holdings exposed to emerging markets given concerns about their short term growth potential. We also added to our UK property exposure where we saw good value after the pull back during the early summer. We bought a holding in Quintain Estates and reintroduced Shaftesbury to the portfolio. Both companies give us further exposure to the London property market. We also added a holding in Grainger, which is exposed to rising UK house prices. Towards the end of the year we took profits in a number of our holdings with the largest market capitalisations and we are looking to reinvest the proceeds into some of our favourite smaller cap holdings. Portfolio positioning We have sought to maintain good exposure to strong themes notably the strengthening US and UK housing markets; improving UK consumer confidence, the strength of the London economy, increasing flows into equities; leading technologies; and the increasing use of advanced, often online, payments. We remain underweight the usual areas: support services, especially suppliers to the Government, and food producers. We also hold short positions in a number of stocks within these sectors. The portfolio remains well diversified with just under 150 holdings in the long only portfolio the largest of which is about 2.5% of net assets. All of our larger holdings are well established companies. Positions in very small companies are taken where we believe the upside is potentially very attractive, but position sizing is small, recognising the greater risk of disappointment. Outlook Company newsflow has been generally good for UK domestically exposed stocks, especially the housebuilders, the better retailers and leisure and property companies. With the stronger UK GDP growth we expect this to continue. Industrial companies have had to contend with varying demand levels around the world and the strength of sterling. We expect 2014 to be a slightly easier year for most of our industrial holdings. In the UK and the US, interest rates look likely to rise over the next few years, but this will be in reaction to stronger economic growth and so, arguably, should not be bad for equities. However, in the short term we are seeing greater volatility in markets. Valuations are beginning to look full for more companies and markets have moved up a long way. We think share prices will be driven more by earnings growth in 2014 and further earnings multiple expansion looks unlikely for many companies. However, we do expect good earnings growth from our holdings and this should be reflected in share prices, although a repeat of 2013's performance is unlikely. Mike Prentis Richard Plackett BlackRock Investment Management (UK) Limited 10 February 2014 Performance Fifty largest investments as at 30 November 2013 % Market of Prospective value net PE Company £'000 assets ratio* Description Bellway Ordinary 5,693 3.1 16.1 House building shares Long CFD 1,695 position Senior Ordinary 4,790 2.8 15.7 Manufacture and Engineering shares supply of components for Long CFD 1,938 the aerospace and position automotive sector Booker Group Ordinary 4,962 2.8 30.5 Wholesale of shares grocery products Long CFD 1,722 position ITE Group Ordinary 4,626 2.6 15.2 Organisation of shares trade exhibitions in Russia and Long CFD 1,540 other emerging position markets Xaar Ordinary 4,301 2.5 26.2 Design and shares manufacture of industrial Long CFD 1,824 printheads used position in inkjet printers Howden Joinery Ordinary 4,385 2.5 20.7 Design and Group shares manufacture of kitchens sold to Long CFD 1,712 local builders position Workspace Group Ordinary 4,936 2.5 36.9 Supply of shares flexible workspace to Long CFD 1,010 businesses in position London Restaurant Group Ordinary 3,479 2.2 20.5 Operation of shares branded restaurants Long CFD 1,730 position Oxford Ordinary 3,830 2.2 23.7 Design and Instruments shares manufacture of tools and systems Long CFD 1,376 to analyse and position manipulate matter at the atomic level Dunelm Group Ordinary 3,840 2.0 20.9 Supply of home shares furnishings Long CFD 900 position Blinkx# Ordinary 3,633 1.9 45.1 Supply of video shares technology and an online catalogue Long CFD 1,007 to enable video position clips to be viewed Optimal Payments Ordinary 4,543 1.9 24.7 Provision of shares online payments solutions Bovis Homes Group Ordinary 2,611 1.8 17.0 House building shares Long CFD 1,752 position Ted Baker Ordinary 2,690 1.7 32.5 Design and sale shares of fashion clothing globally Long CFD 1,503 position Victrex Ordinary 2,895 1.7 18.1 Manufacture and shares supply of PEEK thermoplastic Long CFD 1,273 products position Rathbone Brothers Ordinary 2,356 1.6 18.0 Private client shares fund management Long CFD 1,556 position SIG Ordinary 2,204 1.6 20.5 Distribution of shares speciality building products Long CFD 1,549 in the UK and position Continental Europe Hyder Consulting Ordinary 3,733 1.6 14.6 Provision of shares engineering design services Polar Capital Ordinary 3,684 1.5 18.7 Investment Holdings# shares management Aveva Group Ordinary 1,854 1.5 23.9 Development and shares marketing of engineering Long CFD 1,680 computer software position Avon Rubber Ordinary 3,445 1.4 16.0 Design and shares manufacture of protection masks and dairy related consumable products Elementis Ordinary 3,381 1.4 17.4 Manufacture of shares additives that enhances the feel, flow and finish of everyday products Big Yellow Ordinary 2,182 1.4 23.3 Operation of self shares storage properties mainly Long CFD 1,197 in London position Abcam# Ordinary 2,185 1.4 25.5 Production and shares distribution of research grade Long CFD 1,190 antibodies and position associated products Headlam Group Ordinary 3,293 1.4 17.9 Distribution of shares carpets and other floor coverings Keller Group Ordinary 1,943 1.3 14.5 Provision of shares ground engineering Long CFD 1,136 solutions position St Modwen Ordinary 3,068 1.3 45.1 Property Properties shares investment and development Paypoint Ordinary 2,551 1.3 19.5 Provision of shares payment solutions Long CFD 509 position Paragon Group Ordinary 3,012 1.3 12.1 Provisions of shares loans mainly to buy to let landlords Thomas Cook Group Ordinary 3,006 1.2 13.9 Operation of shares holidays and tours BlackRock Units 2,923 1.2 - Money market fund Institutional Cash Fund Fuller Smith & Ordinary 1,643 1.2 21.1 Ownership of pubs Turner shares in the London area Long CFD 1,181 position Fidessa group Ordinary 2,723 1.1 28.0 Development and shares marketing of financial trading and connectivity software Savills Ordinary 2,720 1.1 15.4 Provision of shares property services Jupiter Fund Ordinary 2,688 1.1 14.6 Investment Management shares management Shaftesbury Ordinary 1,254 1.1 45.5 Ownership and shares management of retail and Long CFD 1,387 leisure property position in the West End of London Ashtead Group Ordinary 1,556 1.1 16.9 Hire of plant shares predominantly in the US Long CFD 1,084 position Lookers Ordinary 2,613 1.1 14.1 Supply of cars shares and after market parts and services LSL Property Ordinary 2,586 1.1 16.1 Provision of Services shares residential property services Galliford Try Ordinary 2,574 1.1 13.3 House building shares and construction Telecom Plus Ordinary 2,510 1.0 38.5 Supply of shares telecom, gas, electricity and other utility services UTV Media Ordinary 2,427 1.0 15.1 Television and shares radio broadcasting Close Brothers Ordinary 2,386 1.0 13.3 Provision of shares financial services Consort Medical Ordinary 2,322 1.0 20.6 Design and shares manufacture of drug delivery devices Tyman Ordinary 2,316 1.0 17.4 Manufacture and shares supply of window and door components Gooch & Housego Ordinary 2,296 0.9 19.0 Design and shares manufacture of precision optical components, subsystems and instruments used to transmit and measure light James Fisher & Ordinary 2,287 0.9 19.8 Provision of Sons shares marine services Dechra Ordinary 2,253 0.9 20.3 Development and Pharmaceuticals shares supply of pharmaceutical and other products focused on the veterinary market Faroe Petroleum# Ordinary 1,860 0.9 15.8 Exploration for shares oil and gas offshore UK and Long CFD 363 Norway position Inchcape Ordinary 2,223 0.9 13.4 Distribution and shares retail of cars and aftermarket services ------- ----- 50 largest investments 183,085 76.1 ------- ----- * Prospective PE ratio derived using late 2013 analyst estimates and relates to the next set of full year results for each company. # Traded on the Alternative Investment Market ('AIM') of the London Stock Exchange. All investments are in equity shares unless otherwise stated. Disclosure of the Company's smaller holdings would not add materially to shareholders' understanding of the Company's portfolio structure and priority investment themes, hence only the fifty largest investments have been disclosed. Performance Fifty largest investments Comparative for Ten Largest Investments 30 November 2012 % Market of value net Company £'000 assets Bellway Ordinary shares 4,317 3.2 Long CFD 1,247 position Senior Engineering Ordinary shares 3,871 2.9 Long CFD 1,212 position Booker Group Ordinary shares 3,247 2.5 Long CFD 1,174 position ITE Group Ordinary shares 2,614 2.1 Long CFD 976 position Xaar Ordinary shares 1,206 1.1 Long CFD 669 position Howden Joinery Group Ordinary shares 4,027 3.1 Long CFD 1,395 position Workspace Group Ordinary shares 3,051 1.9 Long CFD 293 position Restaurant Group Ordinary shares 2,473 2.1 Long CFD 1,150 position Oxford Instruments Ordinary shares 3,533 2.9 Long CFD 1,591 position Dunelm Group Ordinary shares 2,504 1.8 Long CFD 615 position Distribution of Investments as at 30 November 2013 % % % % of of of of long long short net only CFD CFD asset Sector portfolio portfolio portfolio value Oil & Gas Producers 2.2 0.1 0.0 2.3 Oil Equipment, Services & Distribution 0.0 0.0 -0.7 -0.7 ---- ---- ----- ---- Oil & Gas 2.2 0.1 -0.7 1.6 ---- ---- ----- ---- Chemicals 2.6 0.6 -0.3 2.9 Industrial Metals & Mining 0.7 0.0 0.0 0.7 Mining 2.4 0.1 0.0 2.5 ---- ---- ----- ---- Basic Materials 5.7 0.7 -0.3 6.1 ---- ---- ----- ---- Construction & Materials 2.9 0.6 -0.8 2.7 Aerospace & Defence 2.2 0.8 -0.4 2.6 General Industrials 0.0 0.0 -0.9 -0.9 Electronic & Electrical Equipment 2.4 1.8 -1.0 3.2 Industrial Engineering 1.6 0.6 0.0 2.2 Industrial Transportation 2.5 0.0 -0.3 2.2 Support Services 5.9 2.4 -2.4 5.9 ---- ---- ----- ---- Total Industrials 17.5 6.2 -5.8 17.9 ---- ---- ----- ---- Beverages 0.4 0.0 -0.3 0.1 Food Producers 0.1 0.0 -0.4 -0.3 Leisure Goods 0.6 0.0 0.0 0.6 Household Goods & Home Construction 6.4 3.4 0.0 9.8 ---- ---- ----- ---- Consumer Goods 7.5 3.4 -0.7 10.2 ---- ---- ----- ---- Health Care Equipment and Services 2.1 0.0 -0.3 1.8 Pharmaceuticals & Biotechnology 4.3 0.9 0.0 5.2 ---- ---- ----- ---- Health Care Equipment and Services 6.4 0.9 -0.3 7.0 ---- ---- ----- ---- Food & Drug Retailers 2.5 2.1 -0.4 4.2 General Retailers 4.4 0.6 -0.9 4.1 Media 4.1 1.0 0.0 5.1 Personal Goods 1.7 0.6 -0.2 2.1 Travel & Leisure 7.6 1.9 -0.8 8.7 ---- ---- ----- ---- Consumer Services 20.3 6.2 -2.3 24.2 ---- ---- ----- ---- Fixed Line Telecommunications 1.7 0.0 -0.3 1.4 Mobile Telecommunications 0.0 0.0 -0.1 -0.1 ---- ---- ----- ---- Telecommunications 1.7 0.0 -0.4 1.3 ---- ---- ----- ---- Gas, Water & Multiutilities 0.4 0.0 0.0 0.4 ---- ---- ----- ---- Utilities 0.4 0.0 0.0 0.4 ---- ---- ----- ---- Real Estate Investment & Services 6.6 0.4 0.0 7.0 Real Estate Investment Trusts 1.9 2.0 0.0 3.9 Financial Services 11.4 0.6 0.0 12.0 ---- ---- ----- ---- Financials 19.9 3.0 0.0 22.9 ---- ---- ----- ---- Software & Computer Services 5.2 2.4 -0.4 7.2 Technology Hardware & Equipment 1.4 0.2 -0.4 1.2 ---- ---- ----- ---- Technology 6.6 2.6 -0.8 8.4 ---- ---- ----- ----- Total Investments 88.2 23.1 -11.3 100.0 ==== ==== ===== ===== The above percentages are calculated based on the portfolio at 30 November 2013. The net portfolio is calculated as long equity portfolio plus long CFD portfolio less short CFD portfolio. Distribution of Investments Portfolio by Main Index Membership at 30 November 2013 Gross Basis(1) FTSE 250 53.9% FTSE AIM 22.7% FTSE Fledgling 1.4% FTSE Small Cap 17.7% Other 4.3% Net Basis(2) FTSE 250 48.6% FTSE AIM 26.6% FTSE Fledgling 1.8% FTSE Small Cap 18.0% Other 5.0% Source: BlackRock. 1. Long and short CFD portfolios in aggregate plus long only portfolio. 2. Long CFD portfolio less short CFD portfolio plus long only portfolio. Market Capitalisation as at 30 November 2013 - number of positions Short positions Long positions* £1bn to £3.5bn 14 39 £400m to £1bn 18 53 £100m to £400m 5 67 £0m to 100m 1 40 Source: BlackRock *Long positions (long only and long CFD) Position Size as at 30 November 2013 - number of positions Short positions Long positions* £0m to £1m 36 84 £1m to £2m 2 73 £2m+ 0 42 *Long positions (long only and long CFD) Source: BlackRock Financial statements Statement of comprehensive income for the year ended 30 November 2013 Revenue Revenue Capital Capital Total Total 2013 2012 2013 2012 2013 2012 Notes £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments held at fair value through profit or loss - - 67,573 26,425 67,573 26,425 Net returns on contracts for difference (102) (52) 3,336 1,870 3,234 1,818 Exchange gains - - 3 - 3 - Income from investments held at fair value through profit or loss 3 4,672 3,478 - - 4,672 3,478 Other income 3 1 9 - - 1 9 ----- ----- ------ ------ ------ ------ Total revenue 4,571 3,435 70,912 28,295 75,483 31,730 ----- ----- ------ ------ ------ ------ Investment management and performance fees 4 (466) (369) (5,337) (2,368) (5,803) (2,737) Other expenses 5 (446) (404) (16) - (462) (404) ----- ----- ------ ------ ------ ------ Total operating expenses (912) (773) (5,353) (2,368) (6,265) (3,141) ----- ----- ------ ------ ------ ------ Net profit before finance costs and taxation 3,659 2,662 65,559 25,927 69,218 28,589 Finance costs - (2) - - - (2) ----- ----- ------ ------ ------ ------ Profit on ordinary activities before taxation 3,659 2,660 65,559 25,927 69,218 28,587 ----- ----- ------ ------ ------ ------ Taxation charge on ordinary activities (8) - - - (8) - ----- ----- ------ ------ ------ ------ Net profit for the year after taxation 3,651 2,660 65,559 25,927 69,210 28,587 ----- ----- ------ ------ ------ ------ Earnings per ordinary share - basic and diluted 7 4.99p 3.64p 89.65p 35.45p 94.64p 39.09p ===== ===== ====== ====== ====== ====== The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ('IFRS'), as adopted by the European Union. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ('AIC'). All items in the above statement derive from continuing operations. All income is attributable to the equity holders of BlackRock Throgmorton Trust plc. The Company does not have any other recognised gains or losses. The net profit disclosed above represents the Company's total comprehensive income. Statement of changes in equity for the year ended 30 November 2013 Called Share up premium Capital share premium Special redemption Capital Revenue capital account reserve reserve reserves reserve Total Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 For the year ended 30 November 2013 At 30 November 2012 4,026 21,049 35,272 11,905 96,680 5,135 174,067 Total Comprehensive Income: Net profit for the year - - - - 65,559 3,651 69,210 Dividends paid and declared (see (a) below) 6 - - - - - (2,523) (2,523) ----- ------ ------ ------ ------ ----- ------- At 30 November 2013 4,026 21,049 35,272 11,905 162,239 6,263 240,754 ----- ------ ------ ------ ------ ----- ------- For the year ended 30 November 2012 At 30 November 2011 4,026 21,049 35,272 11,905 70,737 4,785 147,774 Total Comprehensive Income: Net profit for the year - - - - 25,927 2,660 28,587 Transactions with owners, recorded directly to equity: Write back of share issue costs - - - - 6 - 6 Write back of subscription share issue costs - - - - 10 - 10 Refund of unclaimed dividends - - - - - 8 8 Dividends paid and declared (see (b) below) 6 - - - - - (2,318) (2,318) ----- ------ ------ ------ ------ ----- ------- At 30 November 2012 4,026 21,049 35,272 11,905 96,680 5,135 174,067 ----- ------ ------ ------ ------ ----- ------- a. Final dividend of 2.70p per share for the year ended 30 November 2012, declared on 8 February 2013 and paid on 4 April 2013, interim dividend of 0.75p per share for the year ended 30 November 2013, declared on 23 July 2013 and paid on 23 August 2013. b. Final dividend of 2.55p per share for the year ended 30 November 2011, declared on 22 February 2012 and paid on 5 April 2012 and interim dividend of 0.62p per share for the year ended 30 November 2012, declared on 27 July 2012 and paid on 24 August 2012. Statement of financial position as at 30 November 2013 2013 2012 Notes £'000 £'000 Non current assets Investments held at fair value through profit or loss 247,127 175,555 ------- ------- Current assets Other receivables 1,012 590 Amounts due in respect of contracts for difference 736 377 Cash 1,098 390 ------- ------- 2,846 1,357 ------- ------- Total assets 249,973 176,912 Current liabilities Other payables (7,355) (2,543) Amounts payable in respect of contracts for difference (1,035) - Collateral pledged in respect of contracts for difference (829) (302) ------- ------- (9,219) (2,845) ------- ------- Net assets 240,754 174,067 ------- ------- Equity attributable to equity holders Called up share capital 8 4,026 4,026 Share premium account 9 21,049 21,049 Special reserve 9 35,272 35,272 Capital redemption reserve 9 11,905 11,905 Capital reserves 9 162,239 96,680 Revenue reserve 9 6,263 5,135 ------- ------- Total equity shareholders' funds 240,754 174,067 ------- ------- Net asset value per ordinary share 7 329.21p 238.02p ======= ======= Cash flow statement for the year ended 30 November 2013 2013 2012 £'000 £'000 Operating activities Net profit before taxation 69,218 28,587 Add back interest paid 279 299 Gains on investments and contracts for difference held at fair value through profit or loss including transaction costs (71,188) (28,594) Exchange gains (3) - Sales of investments held at fair value through profit or loss 128,673 84,256 Purchases of investments held at fair value through profit or loss (132,672) (86,224) Net realised gains on contracts for difference 4,291 2,607 Decrease in other receivables 76 12 Increase in amounts due from brokers (514) (361) Increase in amounts due to brokers 1,497 37 Increase/(decrease) in other payables 3,315 (1,426) ----- ----- Net cash inflow/(outflow) from operating activities before interest and taxation 2,972 (807) ----- ----- Interest paid (279) (299) Taxation recovered on overseas income 8 (13) ----- ----- Net cash inflow/(outflow) from operating activities 2,701 (1,119) ----- ----- Financing activities Refund of unclaimed dividends - 8 Dividends paid (2,523) (2,318) ----- ----- Net cash outflow from financing activities (2,523) (2,310) ----- ----- Increase/(decrease) in cash and cash equivalents 178 (3,429) Exchange movements 3 - ----- ----- Cash and cash equivalents at the start of year 88 3,517 ----- ----- Cash and cash equivalents at the end of the year 269 88 ----- ----- Comprised of: Cash 1,098 390 Collateral pledged in respect of contracts for difference (829) (302) ----- ----- Total 269 88 ===== ===== Notes to the financial statements 1. Principal activity The principal activity of the Company is that of an investment trust company within the meaning of section 1158 of the Corporation Tax Act 2010. The Company had two subsidiaries, The Third Throgmorton Trust Limited the principal activity of which was investment dealing in shares and other securities and T.T. Finance PLC which acted as a financing subsidiary. The Third Throgmorton Trust Limited was put into member's voluntary liquidation on 17 July 2013 and as at the year end the liquidation was in progress. T. T. Finance PLC was struck off from the Companies House register on 26 November 2013. Both subsidiaries were immaterial. 2. Accounting policies The policies set out below have been applied consistently throughout the year. (a) Basis of preparation The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006. These comprise standards and interpretations of the International Accounting Standards and Standard Interpretations Committee as approved by the International Accounting Standards Committee that remain in effect, to the extent that IFRS have been adopted by the European Union. Insofar as the Statement of Recommended Practice ('SORP'), revised in January 2009, is compatible with IFRS, the financial statements have been prepared in accordance with guidance set out in the SORP for investment trust companies and venture capital trusts issued by the AIC. As noted in note 1 above, as one of the subsidiaries has been struck off and the other subsidiary is in liquidation as at the year end, these financial statements are not prepared on a consolidated basis. The functional currency of the Company is UK pounds sterling as this is the currency of the primary economic environment in which the Company operates. All values are rounded to the nearest thousand pounds (£'000) except where otherwise stated. A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after December 2012, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the measurement of the amounts recognised in the financial statements of the Company. However, IFRS 9 'Financial Instruments' issued in November 2009 will change the classification of financial assets, but is not expected to have an impact on the measurement basis of the financial assets since the majority of the Company's financial assets are measured at fair value through profit or loss. IFRS 9 deals with classification and measurement of financial assets and its requirements represent a significant change from the existing requirements in IAS 39 in respect of financial assets. The standard contains two primary measurement categories for financial assets: at amortised cost and fair value. A financial asset would be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, and the asset's contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. All other financial assets would be measured at fair value. The standard eliminates the existing IAS 39 categories of 'held to maturity', 'available for sale' and 'loans and receivables'. The standard has not yet been approved by the EU. IFRS 10 Consolidated Financial Statements (effective 1 January 2014) establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgement to determine which entities are controlled, and therefore are required to be consolidated by a parent. The standard is not likely to have any impact on the Company. IFRS 11 Joint Arrangements (effective 1 January 2014) removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. This is not applicable to the Company as it holds no interests in joint arrangements. IFRS 12 Disclosure of Involvement with Other Entities (effective 1 January 2014) now requires additional disclosures that relate to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. This standard is not expected to apply to the Company as it does not invest in structured entities. IFRS 13 Fair Value measurement (effective 1 January 2013) establishes a single source of guidance under IFRS for all fair value measurements. It does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. There will be no material impact from these standards on the financial position and performance of the Company given the simplicity of the portfolio. (b) Presentation of Statement of Comprehensive Income In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and a capital nature has been presented alongside the Statement of Comprehensive Income. (c) Investments held at fair value through profit or loss The Company's investments are classified as held at fair value through profit or loss in accordance with IAS 39 'Financial Instruments: Recognition and Measurement' and are managed and evaluated on a fair value basis in accordance with its investment strategy. All investments are designated upon initial recognition as held at fair value through profit or loss. Purchases of investments are recognised on a trade date basis. The sales of assets are recognised at the trade date of the disposal. Proceeds are measured at fair value, which is regarded as the proceeds of sale less any transaction costs. The fair value of the long only portfolio is the bid price of the securities, without deduction for estimated future selling costs. Unquoted investments are valued by the Directors at fair value using International Private Equity and Venture Capital Valuation Guidelines. These policies apply to all current and non current asset investments of the Company. Changes in the value of investments held at fair value through profit or loss and gains and losses on disposal are recognised in the Statement of Comprehensive Income as 'Gains or losses on investments held at fair value through profit or loss'. Also included within this heading are transaction costs in relation to the purchase or sale of investments. (d) Derivatives Derivatives are held at fair value based either on traded prices or Directors' fair valuation to the extent that traded prices are unavailable. Gains and losses on derivative transactions are recognised in the Statement of Comprehensive Income. They are recognised as capital and are shown in the capital column of the Statement of Comprehensive Income if they are of a capital nature, and are recognised as revenue and shown in the revenue column of the Statement of Comprehensive Income if they are of a revenue nature. To the extent that any gains or losses are of a mixed revenue and capital nature, they are apportioned between revenue and capital accordingly. (e) Segmental reporting The Directors are of the opinion that the Company is engaged in a single segment of business being investment business. (f) Income Dividends receivable on equity shares are recognised on an ex-dividend basis. Where no ex-dividend date is available, dividends receivable on or before the year end are treated as revenue for the year. Provisions are made for any dividends not expected to be received. Fixed returns on non equity securities are recognised on a time apportionment basis so as to reflect the effective yield of the security. Special dividends are treated as a capital receipt or revenue receipt depending on the facts or circumstances of each particular case. Interest income and expenses are accounted for on an accruals basis. (g) Expenses All expenses, including finance costs, are accounted for on an accruals basis. Expenses have been charged wholly to the revenue column of the Statement of Comprehensive Income, except as follows: - expenses including finance costs which are incidental to the acquisition or disposal of investments are included within the cost of the investments. - the investment management fee has been allocated 75% to the capital column and 25% to the revenue column of the Statement of Comprehensive Income in line with the Board's expected long term split of returns, in the form capital gains and income respectively, from the investment portfolio. - performance fees have been allocated 100% to the capital column of the Statement of Comprehensive Income, as performance has been predominantly generated through capital returns of the investment portfolio. (h) Finance costs Finance costs are accounted for on an accruals basis. Finance costs are allocated, insofar as they relate to the financing of the Company's investments, 75% to the capital column and 25% to the revenue column of the Statement of Comprehensive Income, in line with the Board's expected long term split of returns, in the form capital gains and income respectively, from the investment portfolio. (i) Taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that were applicable at the balance sheet date. Deferred taxation is recognised in respect of all temporary differences at the financial reporting date, where transactions or events that result in an obligation to pay more taxation in the future or right to pay less taxation in the future have occurred at the financial reporting date. This is subject to deferred taxation assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted. Where expenses are allocated between capital and revenue any tax relief in respect of the expenses is allocated between capital and revenue returns on the marginal basis using the Company's effective rate of corporation taxation for the accounting period. (j) Dividends payable Under IFRS, final dividends, should not be accrued in the financial statements unless they have been approved by shareholders before the financial reporting date. Interim dividends should not be accrued in the financial statements unless they have been paid. Dividends payable to equity shareholders are recognised in the Statement of Changes in Equity when they have been approved by shareholders in the case of a final dividend, or paid in the case of an interim dividend, and have become a liability of the Company. (k) Cash and cash equivalents Cash comprises cash in hand and demand deposits. Cash equivalents are short term, highly liquid investments, that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value. 3. Income 2013 2012 £'000 £'000 Investment Income: UK listed dividends 4,202 3,204 Overseas listed dividends 237 174 Dividends from subsidiary company 233 100 ----- ----- 4,672 3,478 ----- ----- Other income: Deposit interest 1 9 ----- ----- 1 9 ----- ----- Total 4,673 3,487 ----- ----- Total income comprises: Dividends 4,672 3,478 Interest 1 9 ----- ----- 4,673 3,487 ===== ===== 4. Investment management and performance fees 2013 2012 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Investment management fee 466 1,398 1,864 369 1,107 1,476 Performance fee - 3,939 3,939 - 1,261 1,261 --- ----- ----- --- ----- ----- Total 466 5,337 5,803 369 2,368 2,737 === ===== ===== === ===== ===== Performance fees have been wholly allocated to the capital column of the Statement of Comprehensive Income as the performance has been predominantly generated through capital returns from the investment portfolio. As at 30 November 2013, there was a performance fee payable to the Investment Manager of £3,939,000 (2012: £1,261,000). Details of the investment management agreement are disclosed in the Directors' Report in the Annual Report and Financial Statements 5. Other operating activities 2013 2012 Total Total £'000 £'000 (a) Other operating expenses Auditor's remuneration: - audit services 28 28 - other assurance services 5 5 Registrar's fee 27 32 Directors' remuneration 125 110 Other administrative costs 261 229 --- --- 446 404 --- --- The Company's ongoing charges, calculated as a percentage of average net assets for the year and using expenses, excluding performance fee and interest costs were: 1.1% 1.1% ==== ==== Auditor's remuneration for other assurance services comprised £5,000 which relates to the interim review (2012: £5,000 interim review). 6. Dividends 2013 2012 Record date Payment date £'000 £'000 Dividends paid or proposed on equity shares: 2011 final of 2.55p 24 February 2012 5 April 2012 - 1,865 2012 interim of 0.62p 27 July 2012 24 August 2012 - 453 2012 final of 2.70p 22 February 2013 4 April 2013 1,975 - 2013 interim of 0.75p 2 August 2013 23 August 2013 548 - ----- ----- 2,523 2,318 ===== ===== The Directors have proposed a final dividend of 3.25p per share (2012: final 2.70p). The dividend will be paid on 4 April 2014, subject to shareholders' approval on 26 March 2014, to shareholders on the Company's register on 21 February 2014. The proposed final dividend has not been included as a liability in these financial statements as final dividends are only recognised in the financial statements when they have been approved by shareholders. The total dividends payable in respect of the year which form the basis of section 1158 of the Corporation Tax Act 2010 and section 833 of the Companies Act 2006, and the amounts proposed meet the relevant requirements as set out in this legislation and are as follows: 2013 2012 £'000 £'000 Dividends paid or proposed on equity shares: Interim paid 0.75p (2012: 0.62p) 548 453 Final proposed of 3.25p (2012: 2.70p)* 2,377 1,975 ----- ----- 2,925 2,428 ----- ----- * Based upon 73,130,326 (2012: 73,130,326) ordinary shares. 7. Earnings and net asset value per ordinary share Revenue and capital earnings per share are shown below and have been calculated using the following: 2013 2012 Net revenue profit attributable to ordinary shareholders (£'000) 3,651 2,660 Net capital profit attributable to ordinary shareholders (£'000) 65,559 25,927 ------- ------- Total profit attributable to ordinary shareholders (£'000) 69,210 28,587 ======= ======= Equity shareholders' funds (£'000) 240,754 174,067 ------- ------- The weighted average number of ordinary shares in issue during each year, on which the return per ordinary share was calculated was 73,130,326 73,130,326 ---------- ---------- The number of ordinary shares in issue at the end of the year, on which the net asset value was calculated was 73,130,326 73,130,326 ========== ========== Return per share - basic and diluted Revenue earnings per share 4.99p 3.64p Capital earnings per share 89.65p 35.45p ------- ------- Total earnings per share 94.64p 39.09p ======= ======= Net asset value per share 329.21p 238.02p ------- ------- Ordinary share price 290.00p 193.25p ======= ======= The Company does not have any dilutive securities. 8. Called up share capital Ordinary shares in Treasury Total issue shares shares number number number £'000 Allotted, called up and fully paid share capital comprised: Ordinary shares of 5p each: At 1 December 2012 73,130,326 7,400,000 80,530,326 4,026 ---------- --------- ---------- ----- At 30 November 2013 73,130,326 7,400,000 80,530,326 4,026 ========== ========= ========== ===== No ordinary shares were issued, purchased or cancelled in the year (2012: nil). The ordinary shares carry the right to receive any dividends and have one voting right per ordinary share. There are no restrictions on the voting rights of the ordinary shares or on the transfer of ordinary shares. 9. Share premium and reserves Capital reserve Capital (arising reserve on (arising revaluation Share Capital on of premium Special redemption investments investments Revenue account reserve reserve sold) held) reserve Company £'000 £'000 £'000 £'000 £'000 £'000 At 1 December 2012 21,049 35,272 11,905 69,265 27,415 5,135 Movement during the year: Net profit for the year - - - - - 3,651 Gains on realisation of investments - - - 15,600 - - Exchange gains - - - 3 - - Change in investment holding gains - - - - 51,973 - Gains/(losses) on contracts for difference taken to capital - - - 4,012 (676) - Finance costs, investment management and performance fee charged to capital after taxation - - - (5,353) - - Dividends paid during the year - - - - - (2,523) ------ ------ ------ ------ ------ ------ At 30 November 2013 21,049 35,272 11,905 83,527 78,712 6,263 ====== ====== ====== ====== ====== ====== 10. Publication of non statutory accounts The financial information contained in this announcement does not constitute statutory accounts as defined in the Companies Act 2006. The 2013 annual report and financial statements will be filed with the Registrar of Companies shortly. The report of the Auditor for the year ended 30 November 2013 contains no qualification or statement under section 498(2) or (3) of the Companies Act 2006. The comparative figures are extracts from the audited financial statements of BlackRock Throgmorton Trust plc for the year ended 30 November 2012, which have been filed with the Registrar of Companies. The report of the Auditor on those accounts contained no qualification or statement under section 498 of the Companies Act. This announcement was approved by the Board of Directors on 10 February 2014. 11. Annual Report Members will be notified that the annual report is available shortly or if a hard copy has been requested this will be sent shortly. It will also be available from the registered office, c/o The Company Secretary, BlackRock Throgmorton Trust plc, 12 Throgmorton Avenue, London EC2N 2DL. 12. Annual General Meeting The Annual General Meeting of the Company will be held at 12 Throgmorton Avenue, London EC2N 2DL on Wednesday, 26 March 2014 at 11:00 a.m. ENDS The Annual Report will also be available on the BlackRock Investment Management website at http://www.blackrock.co.uk/literature/annual-report/blackrock-throgmorton-trust-plc-annual-report-2013.pdf . Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement. For further information, please contact: Simon White, Managing Director, Investment Companies, BlackRock Investment Management (UK) Limited Tel: 020 7743 5284 Mike Prentis, BlackRock Investment Management (UK) Limited Tel: 020 7743 2312 Richard Plackett, BlackRock Investment Management (UK) Limited Tel: 020 7743 4869 Alexandra Ring, Media & Communication, BlackRock Investment Management (UK) Limited Tel: 020 7743 3583 10 February 2014 12 Throgmorton Avenue London EC2N 2DL

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