Portfolio Update

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 December 2017 and unaudited.
Performance at month end is calculated on a cum income basis

	One Month	Three months	One year	Three years	Five years
Net asset value	4.4	6.9	34.0	80.0	147.7
Share price	4.3	8.1	39.4	82.7	161.7
Benchmark*	3.5	4.0	19.5	46.8	89.1

Sources: BlackRock and Datastream

*With effect from 1 December 2013 the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies plus AIM (excluding Investment Companies) Index as the Company’s benchmark. The five year period indices have been blended to reflect this.

At month end
Net asset value capital only:	557.47p
Net asset value incl. income:	566.50p
Share price	477.00p
Discount to cum income NAV	15.8%
Net yield1:	1.7%
Total Gross assets2:	£414.3m
Net market exposure as a % of net asset value3:	112.4%
Ordinary shares in issue4:	73,130,326
2016 ongoing charges* (excluding performance fees5,6:	1.1%
2016 ongoing charges* ratio (including performance fees)5,6,7:	1.3%

*Ongoing Charges: The recently announced management fee rate reductions, as detailed in the notes below, will impact management fees in 2017 and onwards.   As a result, the 2016 Ongoing Charge figures above should not be used as a guide to future costs.  The impact of the new fee arrangements, assuming the same level of performance from the manager and assuming all other charges remain the same, would be to reduce the level of Ongoing Charges borne by the trust.

1. Calculated using 2017 interim dividend declared on 24 July 2017 and 2016 final dividend declared on 6 February 2017.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long positions less short positions as a percentage of net asset value.
4. Excluding 7,400,000 shares held in treasury.
5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2016.
6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.
7. Effective 1st December 2017 the annual performance fee arrangements for the Company have changed.  The annual performance fee will be calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable will effectively be reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company will accrue this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total fees (comprising the base management fee of 0.35% and a potential  performance fee of 0.90%) will therefore fall to 1.25% of average month end gross assets on a two year rolling basis (from 1.70% of average annual gross assets).

Sector Weightings	% of Total Assets
Industrials	35.3
Financials	20.5
Consumer Services	14.1
Consumer Goods	11.5
Basic Materials	8.4
Health Care	5.4
Technology	4.3
Oil & Gas	2.3
Net current liabilities	(1.8)
	-----
Total	100.0
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Market Exposure (Quarterly)

	28.02.17	31.05.17	31.08.17	30.11.17
Long	121.4	117.3	115.3	116.9
Short	6.7	6.1	5.8	6.3
Gross exposure	128.1	123.4	121.1	123.2
Net exposure	114.7	111.2	109.5	110.6

Ten Largest Investments
Company	% of Total Gross Assets
Dechra Pharmaceuticals	2.8
4imprint Group	2.5
Ibstock	2.4
Hill & Smith	2.2
Big Yellow	2.2
CVS Group	2.1
Ascential	2.1
Robert Walters	2.0
Johnson Service Group	2.0
Restore	1.9

Commenting on the markets, Mike Prentis and Dan Whitestone, representing the Investment Manager noted:

During December the Company’s NAV per share rose by 4.4% to 566.50p on a cum income basis whilst our benchmark (the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index) rose by 3.5%; the FTSE 100 Index rose 5.0% (all performance figures are with income reinvested and net of ongoing charges and any applicable performance fees).

Stock selection was the primary driver of outperformance during the month while sector allocation also contributed positively.

The largest positive contributors to performance during December were our holdings in Central Asia Metals and Kaz Minerals which both performed well along with the wider mining sector which benefited from the strength in metals prices at the end of the year. Premium mixer supplier Fever-Tree finished the year strongly and was one of the top contributors to performance in December. During the month the company announced the launch of their US office, which the management said “signalled Fever-Tree’s commitment to and focus on the North American market.” Success in the US would materially increase their addressable market and prospects for profits. Shares in Premier Asset Management performed well with the company being a beneficiary of strong market returns whilst also seeing continuing inflows into its multi-asset products where it has first quartile performance.

The largest stock specific detractor during the month was LED lighting manufacturer Luceco. The shares fell in response to a trading update warning that gross margin weakness due to an incorrect assessment of stock, would cause a 20% hit to full year 2017 earnings. We have spoken to management to gain a better understanding of the issue; we have maintained our holding.

Short positions were a detractor during December reflecting an absence of any stock specific “wins” and a rising market which catalysed short covering across a range of sectors, resulting in many of the portfolio’s shorts grinding higher through the month.

Activity during December included participating in the IPOs (Initial Public Offering) of video game developer Sumo Group, and motor insurance company Sabre Insurance. As noted in previous updates we have continued to reduce some of our UK domestically exposed holdings.

15 January 2018

ENDS

Latest information is available by typing www.blackrock.co.uk/thrg on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  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.