Portfolio Update

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 October 2019 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	1.0	0.3	14.2	56.4	105.7
Share price	2.8	4.7	25.8	95.6	136.8
Benchmark*	0.7	-0.5	1.7	15.4	36.9

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. The performance of the indices have been blended to reflect this.

At month end
Net asset value capital only:	588.21p
Net asset value incl. income:	593.72p
Share price	586.00p
Discount to cum income NAV	1.3%
Net yield1:	1.7%
Total Gross assets2:	£434.2m
Net market exposure as a % of net asset value3:	95.2%
Ordinary shares in issue4:	73,130,326
2018 ongoing charges (excluding performance fees)5,6:	0.6%
2018 ongoing charges ratio (including performance fees)5,6,7:	1.3%

1. Calculated using the 2019 interim dividend declared on 23 July 2019 and paid on 28 August 2019, together with the 2018 final dividend declared on 12 February 2019 and paid on 28 March 2019.

2. Includes current year revenue and excludes gross exposure through contracts for difference.

3. Long exposure less short exposure 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 2018.

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 is calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively 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 now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total management fees (comprising the base management fee of 0.35% and a potential performance fee of 0.90%) are therefore 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
Consumer Services	26.3
Industrials	23.3
Financials	20.3
Consumer Goods	7.2
Technology	6.8
Health Care	6.6
Telecommunications	2.2
Basic Materials	1.2
Oil & Gas	0.4
Net current assets	5.7
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Total	100.0
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Market Exposure (Quarterly)
	30.11.18	28.02.19	31.05.19	31.08.19
Long	103.7	108.7	113.7	109.1
Short	10.5	14.9	13.2	11.2
Gross exposure	114.2	123.6	126.9	120.3
Net exposure	93.2	93.8	100.5	97.9

Ten Largest Investments
Company	% of Total Gross Assets
4imprint Group	3.0
Workspace Group	2.9
IntegraFin	2.8
WH Smith	2.8
YouGov	2.8
SSP	2.8
Serco Group	2.7
Dechra Pharmaceuticals	2.5
Aveva	2.2
Gamma Communications	2.2

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

During October the Company’s NAV per share rose by 1.0% to 593.72p on a cum income basis, whilst our benchmark index, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index, rose by 0.7%. While both the long and short books contributed positively during the month, the primary driver of outperformance came from some key holdings on the long side.

Despite the challenging environment, where value outperformed growth, the portfolio was able to deliver a positive return and outperform our benchmark index, with a number of our longs continuing to deliver positive stock specific updates.

The largest positive contributor was our holding in specialist media publisher, Future, which rose strongly in response to an underlying earnings upgrade in addition to a significant accretive acquisition. Aveva announced a strong trading update which showed organic revenue growth had accelerated in the most recent period, driven by their customers’ desire to spend on the digital transformation. WH Smith announced robust trading and an exciting acquisition in the US. While the acquisition is accretive to earnings, it is of much more strategic importance to the group in its pursuit of concessions expansion in the US where the market structure differs to the UK.

The largest detractor during the month was Zotefoams, the global manufacturer of specialty foams. The company which makes technical foams for Nike trainers, reported growth in these high performance products, however the challenging economic growth environment has resulted in a slowdown in sales in its industrial division. Hiscox also fell on concerns over insurance profitability in light of recent catastrophe events, while Integrafin gave back some recent strong performance on no stock specific news.

Overall, October was a fairly quiet month in terms of UK corporate newsflow. However, we did benefit from our exposure to non-UK listed holdings. RingCentral, a cloud based unified communications provider, performed strongly in response to a strategic partnership with Avaya. While the market environment was unhelpful during the month, thereby creating a headwind to our strategy, detractors were limited and only Zotefoams resulted in us reducing our position due to the challenges discussed above. Importantly, we continue to believe that recent market moves will be transitory, and the long-term prospects for many of our core holdings remains as attractive as ever. Where some of our holdings have been impacted by the reversal witnessed in recent months, this has created opportunities for us to add to some great businesses at attractive valuations. Overall, we feel it is prudent to utilise the enhanced toolkit available within our portfolio and therefore continue to operate with a lower than average gross and net exposure, at c.114%¹ and c.95%¹ respectively.

¹Source: BlackRock as at 31 October 2019

18 November 2019

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.