Half-year Report

RNS Number : 3290G

European Assets Trust PLC

23 July 2019

 

To:                   RNS

From:               European Assets Trust PLC

Date:                23 July 2019

UNAUDITED INTERIM RESULTS - SIX MONTHS TO 30 JUNE 2019

·       Total return* performance for the six months ended 30 June 2019

	Sterling	Euro
EMIX Smaller European Companies (ex UK) Index	16.0%	16.4%
Net asset value per share	19.6%	19.9%
Market price per share	25.5%	25.9%
·       The annual dividend for 2019, net of Dutch withholding tax∞, is 6.84c per share equivalent to 6% of the closing net asset value per share on 31 December 2018.

	Sterling	Euro
January 2019 dividend per shareˆ	£0.0149	€0.0171
March 2019 dividend per shareˆ	£0.0146	€0.0171
Two further dividends of €0.0171 per share will be paid on 31 July and 31 October 2019 by European Assets Trust PLC

                * Capital performance with dividends reinvested

                ∞ Dutch withholding tax was payable on dividends paid by European Assets Trust NV.   On 16 March 2019 the Company migrated to the United Kingdom.  Dividends payable by European Assets Trust PLC are subject to UK tax credits.

                ˆ Net of Dutch withholding tax, paid by European Assets Trust NV

Chairman's Statement

Fellow shareholders,

European Assets Trust PLC ('the Company') recorded a Sterling net asset value ('NAV') total return for the six-month period ended 30 June 2019 of 19.6%*. This compares to the total return of its benchmark the EMIX Smaller European Companies (ex UK) Index which rose 16.0% during the same period.  With the share price discount reducing to 5.5% at the period end in comparison to 9.5%* as at 31 December 2018, the Sterling share price return for the period was an impressive 25.5%*.

The six-month period ended 30 June 2019 has been positive for both European Smaller Companies and our own NAV and share price performance. When we last reported, equities had been volatile as global trade tensions heightened at the same time as expectations of a tightening interest rate cycle in the US were increasing. While trade tensions have not dissipated, interest rate expectations have changed entirely with central banks, in the face of disappointing economic data, adopting an increasingly accommodative stance. Markets have responded well to this and so has the portfolio.

We are of course pleased to report good results, but what is particularly satisfying is that this performance has come from good stock selection with our holdings reporting strong operational progress in aggregate. The Investment Manager's Review, which follows, discusses the Company's performance in more detail.

Migration

On 16 March 2019, the Company migrated its legal seat and structure from the Netherlands to the United Kingdom by means of a cross border merger (the "migration"). The migration resulted in the entire portfolio of investments of its predecessor, European Assets Trust NV ("EAT NV"), transferring to the Company, with shareholders entitled to receive one ordinary share in the Company in exchange for each share held in EAT NV.  EAT NV then effectively dissolved without liquidation.

The Board believes that the benefits associated with the migration include:

·      a simplified corporate structure.  The Company is now a United Kingdom resident investment trust.  An investment vehicle that is widely accepted and understood in the UK intermediated and retail marketplace;

·      a single jurisdiction for current and future regulation - the United Kingdom;

·      a reduction in the ongoing charges rate; and

·      a premium listing on the London Stock Exchange and with effect from 24 June 2019 inclusion in the FTSE UK All Share and Small Cap indices.

EAT NV was a Dutch company. The migration to the United Kingdom has resulted in an English registered, London Market premium listed, UK investment trust, which the Board believes provides a long-term stable structure for the Company.

Financial reporting

As disclosed within the prospectus of the Company issued on 27 November 2018, the Company has accounted for the migration as if it had occurred on 1 January 2019 notwithstanding the effective date of 16 March 2019.  This treatment is consistent with the Board's goal, throughout the merger process, of minimising the impact of the migration on the day to day operations and reporting to shareholders of the Company.

Brexit

I wrote in my Chairman's statement in the 2018 Annual Report that the Board has continued to monitor the potential impact of Brexit on the Company.  This remains the case and following the migration of the Company from the Netherlands to the United Kingdom, the Company has ensured that it will have continuity of investment management services, governance and regulatory oversight.  The Board continues to believe that while the impact of Brexit on financial and currency markets both in the United Kingdom and the European Union cannot be assessed, any volatility would be managed as part of our normal investment processes. 

Directorate Change

As part of an orderly succession process, a search company was commissioned to find a new director for the Company.  Following a rigorous selection process Stuart Paterson has been appointed to the Board with effect from 22 July 2019.  The first director to retire under the succession plan will be Professor Robert van der Meer, Deputy Chair and Chair of the Audit and Risk Committee.  It is anticipated that Robert will retire at the conclusion of the Company's Annual General Meeting in May 2020 and that Stuart will assume the role of Chair of the Audit and Risk Committee at that time. Stuart's appointment therefore provides for a period of valuable overlap regarding this role.

Stuart is a co-founder and partner of Scottish Equity Partners, one of Europe's leading technology growth equity investors.  He is an experienced technology investor with over 20 years of equity investing in European private companies.  The Board looks forward to working with Stuart and to the fresh perspectives that he will bring to its deliberations.

Outlook

This market cycle, which is now more than a decade old, has been characterised as much by the prevailing interest rate and liquidity environment, as economic growth. The current stance of the most important central banks suggest that monetary conditions will remain accommodative. We cannot however take this for granted, nor make any definitive predictions on economic progress or political outcomes. While cognisant of these macroeconomic uncertainties, we prefer to focus on companies, and invest in businesses, where the long-term prospects of cash flow growth are good. We want these companies to be managed by competent and well incentivised people. Our portfolio characteristics represent this strategy and we believe is the best way to look after our shareholders' capital over the long term.

Jack Perry CBE

Chairman

*European Assets Trust NV prior to the migration, effective 16 March 2019.

Investment Manager's Review

Market Review

European smaller companies have had a strong half, recovering the losses they endured in 2018. That weakness was driven by concerns, particularly in the final quarter, of the effects on global liquidity of a tightening cycle by the US Federal Reserve at the same time as the US trade dispute with China was dragging back global growth. These liquidity concerns have not only abated but completely reversed with expectations of further monetary support from central banks globally. The US Federal reserve is now expected to reduce rates, while the current president of the European Central Bank, Mario Draghi, has indicated further monetary stimulus if growth or inflation fall short of the Bank's expectations. While the trade tensions have not yet been resolved, a further dose of liquidity has been enough to fuel this recovery, extending this market cycle which has been characterised as much by the exceptionally low rate environment as economic growth. 

Portfolio Review

Our portfolio has had a good first half with our total NAV return comfortably ahead of our index and our share price outperforming this due to a small narrowing of our discount.

It is pleasing that this performance has not come as a result of leverage or a portfolio highly geared to a rising market, but from the operational performance of our holdings which in aggregate has been very encouraging. The pattern of our performance illustrates this with our relative returns being strongest during the months when the companies released their results, and in May when the markets fell significantly.

It is perhaps no surprise that our best performance came from our stocks in the Consumer Discretionary and Industrial Sectors, both sectors that tend to do better during rising markets. Of note is our strongest performer in Consumer Discretionary, Dometic, the Swedish listed supplier of products mainly for the Recreational Vehicle market, which rose +65.5%. Having performed poorly during the last quarter of 2018 the share's recovery this year was supported by good results and an encouraging presentation by the new CEO at their capital markets day. We have however used this strength to take some profits.

One of our relatively recent consumer related holdings also performed well. Takeaway.com, the Dutch listed online food ordering platform, rose +40.9%. The shares performed well following the completion of the acquisition of the German assets of Delivery Hero giving them an exceptionally strong position in that large market. They also announced strong order growth.

Within Industrials our strongest performers were Tomra, which rose +48.7%, and IMCD, which rose +44.4%. Tomra is the market leader in the production of reverse vending machines, which help in the recycling of plastic bottles. While the company delivered strong results, the sentiment around their end markets continued to improve with well-publicised governmental attempts to reduce plastic waste. IMCD, one of our largest positions, and a leading specialist chemical distributor, was rewarded for continued good delivery of profit growth.

Our holdings in financials also performed well. This is noteworthy given that the prevailing rate environment is not necessarily supportive for the sector.  While our two regional bank holdings Ringkjoebing Landbobank and Sparebank performed robustly, much of the performance was driven by our best performer over the half, Azimut, which rose +93.1%. While this leading Italian asset manager benefitted from rising equity markets, the strong performance was because they announced a change to their fee structure, reducing their reliance on performance fees.

If we look at what cost us over the period, our holdings in the Consumer Staples sector was most detrimental. We suffered as we are both overweight a sector that, not surprisingly, lagged the rising market, but our holdings also underperformed. None of our stocks, however, performed too badly, with our worst performer being Origin Enterprises, the Irish listed agronomist, falling -11.9%. With exposure to farmers in the UK the stock suffered as a definitive decision on 'Brexit' was delayed further.

Our worst performer was the German industrial, Norma Group, which fell by -13.6%. As alluded to earlier, most industrials have enjoyed a good year so far, with the exception of those exposed to the automotive sector which has felt the full force of the supply side disruption caused by the international trade conflict between the US and China. Norma is one such business and has similarly suffered. Both sales and margins have been weaker than expected. Currently we view this as a temporary issue that at some point will reverse, but it is fair to say that this temporary period has so far lasted longer than expected.

Other poor performers of note are Metall Zug, the Swiss industrial conglomerate, which fell -8.7% following a warning on higher costs than expected from the implementation of a new enterprise wide software system, and the construction of a new manufacturing facility. Aareal Bank, the pan European property lender, also fared poorly as a change in business mix impacted margins.

Portfolio Activity

When we wrote our last interim statement after the first half of 2018, we reported on trading activity at a higher level than usual. The changes made at that time reinforced the quality of the portfolio and laid the foundations for the good performance thus far this year. In this statement we report a much lower level of activity, more in line with what we would expect with our philosophy of long-term investing.

In terms of outright sales, we only sold one holding, our position in the French automotive supplier Plastic Omnium. The shares have performed well for us since we bought the stock in 2013. We decided to sell the position following a strong recovery in the share price at the start of the year. Ultimately the investment case had changed, with the company needing to invest a substantial amount of capital to reposition the business in the light of the changes in the automotive industry.

We also only added one new position in the half, Marel, the market leader in meat processing machinery. The shares have been listed on the Icelandic stock exchange, but we initiated a position when the company issued new shares on the Amsterdam exchange at a discount. The company should benefit from increasing automation in the meat processing industry, whilst we also expect them to utilise their strong balance sheet to consolidate the market and improve their competitive position.

Outlook

The monetary stimulus that has led to low interest rates has been the defining factor of the market cycle since the financial crisis, and the first half of the year continued this trend with central banks looking to support their economies further. This led to a welcome recovery in assets thus far this year. We cannot however make predictions on the decisions of central banks nor the outcome of political events such as trade disputes and Brexit, or the direction of economic output, for that matter. We can however select stocks with characteristics that give us the best opportunity to deliver good returns for our shareholders through the market cycle.  We want to hold good companies, run by good managers, and we do not want to pay too much for these businesses. Our portfolio in aggregate reflects these characteristics and should, therefore, in our opinion deliver good returns for our shareholders.

Sam Cosh

Lead Investment Manager

BMO Investment Business Limited

 

 

UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME

Six months to 30 June 2019*

						Revenue		Capital		Total
			Note			€000		€000		€000
Gains on investments held at fair value					-		75,402		75,402
Investment income					10,231		-		10,231
Management fee					(359)		(1,435)		(1,794)
Other expenses					(616)		(108)		(724)
Net return before finance costs and taxation						9,256		73,859		83,115
Finance costs						(22)		(87)		(109)
Net return on ordinary activities before taxation						9,234		73,772		83,006
Taxation						(1,547)		-		(1,547)
Total comprehensive income for the period						7,687		73,772		81,459
						Euro		Euro		Euro
Earnings per share			3			0.021		0.205		0.226

The total column of this statement represents the Company's Income Statement and Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.

All income is attributable to the equity holders of European Assets Trust PLC.

*European Assets Trust NV prior to the migration, effective 16 March 2019.

UNAUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME

Six months to 30 June 2018*

						Revenue		Capital		Total
			Note			€000		€000		€000
Losses on investments held at fair value					-		(10,916)		(10,916)
Investment income					11,216		-		11,216
Management fee					(404)		(1,616)		(2,020)
Other expenses					(734)		-		(734)
Net return before finance costs and taxation						10,078		(12,532)		(2,454)
Finance costs						(8)		(34)		(42)
Net return on ordinary activities before taxation						10,070		(12,566)		(2,496)
Taxation						-		-		-
Total comprehensive income/(loss) for the period						10,070		(12,566)		(2,496)
						Euro		Euro		Euro
Earnings per share			3			0.0283		(0.0353)		(0.007)

The total column of this statement represents the Company's Income Statement and Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.

All income is attributable to the equity holders of European Assets Trust PLC.

*European Assets Trust NV prior to the migration, effective 16 March 2019.

AUDITED CONDENSED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 December 2018*

						Revenue		Capital		Total
			Note			€000		€000		€000
Losses on investments held at fair value					-		(88,792)		(88,792)
Investment income					14,933		-		14,933
Management fee					(808)		(3,234)		(4,042)
Other expenses					(1,403)		(1,700)		(3,103)
Net return before finance costs and taxation						12,722		(93,726)		(81,004)
Finance costs						(31)		(123)		(154)
Net return on ordinary activities before taxation						12,691		(93,849)		(81,158)
Taxation						-		-		-
Total comprehensive income/(loss) for the period						12,691		(93,849)		(81,158)
						Euro		Euro		Euro
Earnings per share			3			0.035		(0.262)		(0.227)

The total column of this statement represents the Company's Income Statement and Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.

All income is attributable to the equity holders of European Assets Trust PLC.

*European Assets Trust NV prior to the migration, effective 16 March 2019.

 

CONDENSED STATEMENT OF FINANCIAL POSITION

			30 June 2019 (Unaudited)	30 June  2018 *  (Unaudited)	31 December  2018 *    (Audited)*
	Note		€000	€000	€000
Fixed assets
Investments at fair value through profit or loss			478,444	495,173	414,714
Current assets
Other receivables and prepayments			3,193	4,566	1,111
Investment in subsidiary			-	-	57
Cash and cash equivalents			21,078	8,314	-
Total current assets			24,271	12,880	1,168
Current liabilities
Borrowings		4	(22,880)	-	(3,647)
Other payables			(179)	(1,007)	(641)
Total current liabilities			(23,059)	(1,007)	(4,288)
Net current assets/(liabilities)			1,212	11,873	(3,120)
Total assets less current liabilities			479,656	507,046	411,594
Equity
Share capital			42,178	35,960	35,976
Share premium account		5	-	271,384	271,344
Special reserve		5	418,225	-	-
Other reserves			19,253	199,702	104,274
Total equity			479,656	507,046	411,594
Net asset value per ordinary share		6	€1.33	€1.41	€1.14

*European Assets Trust NV prior to the migration, effective 16 March 2019.

 

CONDENSED STATEMENT OF CHANGES IN EQUITY

Half-year ended 30 June 2019 (unaudited)*	Share capital	Share premium (note 5)	Other reserves	Special reserves (note 5)	Total shareholders' funds
	€000	€000	€000	€000	€000
Balance at 31 December 2018	35,976	271,344	104,274	-	411,594
Total comprehensive income for the period	-	-	81,459	-	81,459
Interim dividends distributed	7	(7)	(13,397)	-	(13,397)
Cancelled on merger (note 1)	(35,983)	(271,337)	(153,083)	-	(460,403)
Issued on merger (note 1)	42,178	418,225	-	-	460,403
Cancelled by court process	-	(418,225)	-	-	(418,225)
Arising from cancellation of share premium	-	-	-	418,225	418,225
Balance at 30 June 2019	42,178	-	19,253	418,225	479,656

The net asset value of European Assets Trust NV on 15 March 2019 was €460.4 million. This was composed of share capital of €36.0 million, share premium of €271.3 million and other reserves of €153.1 million. Upon migration the opening net asset value of European Assets Trust PLC was composed of share capital of €42.2 million and share premium of €418.2 million.

Half-year ended 30 June 2018 (unaudited)*	Share capital	Share premium (note 5)	Other reserves	Special reserves (note 5)	Total shareholders' funds
	€000	€000	€000	€000	€000
Balance at 31 December 2017	15,982	273,936	218,233	-	508,151
Total comprehensive loss for the period	-	-	(2,496)	-	(2,496)
Interim dividends distributed	5	(5)	(16,035)	-	(16,035)
Issue of shares	627	16,799	-	-	17,426
Redenomination of share capital	19,346	(19,346)	-	-	-
Balance at 30 June 2018	35,960	271,384	199,702	-	507,046

Year ended 31 December 2018 (audited)*	Share capital	Share premium (note 5)	Other reserves	Special reserves (note 5)	Total shareholders' funds
	€000	€000	€000	€000	€000
Balance at 31 December 2017	15,982	273,936	218,233	-	508,151
Total comprehensive loss for the period	-	-	(81,158)	-	(81,158)
Interim dividends distributed	20	(20)	(32,801)	-	(32,801)
Issue of shares	628	16,774	-	-	17,402
Redenomination of share capital	19,346	(19,346)	-	-	-
Balance at 31 December 2018	35,976	271,344	104,274	-	411,594

*European Assets Trust NV prior to the migration, effective 16 March 2019.

 

CONDENSED STATEMENT OF CASH FLOWS

			30 June 2019 (Unaudited)	30 June  2018 (Unaudited)	31 December  2018 (Audited)
			Note                €000	€000	€000
Proceeds from sale of financial assets			31,531	120,089	159,027
Purchase of financial assets and settlement of financial liabilities			(19,799)	(118,146)	(152,655)
Investment in subsidiary			57	-	(57)
Dividends received			6,866	9,903	15,073
Investment management fee paid			(1,794)	(2,020)	(4,042)
Other expenses paid			(1,496)	(697)	(2,705)
Interest expenses paid			(123)	(29)	(75)
Cash flows from operating activities			15,242	9,100	14,566
Financing activities
Dividends paid			(13,397)	(15,400)	(32,801)
Proceeds from shares issued and sold			-	17,362	17,336
Net proceeds from/(redemption of) banking facility			4                      19,233	(2,748)	899
Cash flows from financing activities			5,836	(786)	(14,566)
Net movement in cash and cash equivalents			21,078	8,314	-
Cash and cash equivalents at the beginning of the period			-	-	-
Cash and cash equivalents at the end of the period			21,078	8,314	-

Statement of Principal Risks and Uncertainties

Most of the Company's principal risks and uncertainties are market related and no different from those of other investment trusts investing in listed equities. These risks, and the way in which they are managed, are described in more detail under the heading "Principal Risks and Viability Statement" within the Strategic Report in the Company's 2018 Annual Report. They have not changed materially since the date of that report and are not expected to change materially for the remainder of the Company's financial year.

The risks include Share Price Discount/Premium, Tax Exempt Status, Investment Policy, Key People, Reputation and Currency Risk.

Statement of Directors' Responsibilities in Respect of the Half-Yearly Financial Report

In accordance with Chapter 4 of the Disclosure Guidance and Transparency Rules, the Directors confirm that to the best of their knowledge:

·     the condensed set of financial statements have been prepared in accordance with applicable International Financial Reporting Standards on a going concern basis and give a true and fair view of the assets, liabilities, financial position and return of the Company;

·      the half-yearly report includes a fair review of the development and performance of the Company and important events that have occurred during the first six months of the financial year and their impact on the financial statements;

·      the Directors' Statement of Principal Risks and Uncertainties shown above is a fair review of the principal risks and uncertainties for the remainder of the financial year; and

·      the half yearly report includes a fair review of the related party transactions that have taken place in the first six months of the financial year.

On behalf of the Board

Jack Perry CBE

Chairman

23 July 2019

 

Notes

1.  The migration

During the reporting period from 1 January 2019 to 30 June 2019, European Assets Trust PLC ("the Company") migrated its investment enterprise from the Netherlands to the United Kingdom. This migration was achieved by the absorption of the assets and liabilities of European Assets Trust NV by the Company, which was, at that time, a wholly owned subsidiary of European Assets Trust NV.

This migration was effective on 16 March 2019 by means of a cross border merger under the European Cross-Border Merger Regulations of the Company with European Assets Trust NV. Following the merger, the Company continued the investment activities of European Assets Trust NV and European Assets Trust NV was dissolved and ceased to exist without going into liquidation. Upon merger, shareholders received one share in the Company for each share held in European Assets Trust NV.

The merger was approved by the shareholders of European Assets Trust NV during an extraordinary shareholders' general meeting held on 9 January 2019. On 12 February 2019, the Dutch notary issued the merger compliance certificate confirming compliance with the Dutch Cross-Border Merger Regulations and, at a hearing held on 20 February 2019, the UK High Court approved the completion of the migration.

European Assets Trust NV shares delisted from the Euronext Amsterdam on 14 March 2019. The Board of European Assets Trust NV applied to the Financial Conduct Authority for the cancelation of the standard listing of European Assets Trust NV on the Official List, and to the London Stock Exchange to cancel the admission to trading of it shares on the Main Market, effective 18 March 2019. Application was made for the Company's shares to be admitted to the premium segment of the Official List and trading on the premium segment of the Main Market of the London Stock Exchange began at 8.00 am on 18 March 2019.

Following the merger, the Company became a publicly traded investment trust with a premium listing on the London Stock Exchange.

2.  Basis of preparation

The unaudited interim results, have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (IFRS) and the Statement of Recommended Practice for the Financial Statements of Investment Trust Companies and Venture Capital Trusts (SORP), issued by the Association of Investment Companies in November 2014 and updated in February 2018.

As disclosed within the prospectus of the Company issued on 27 November 2018, pursuant to the Cross-Border Merger Regulations, the reporting period commenced on 1 January 2019. The Company has therefore accounted for the migration as if it had occurred on 1 January 2019, notwithstanding the effective date.

Comparative reporting has been extracted from the financial reports of the Company's predecessor European Assets Trust NV:

-     for the six-month period ended 30 June 2018, as restated to IFRS, within the prospectus of the Company issued on 27 November 2018; and

-     for the year ended 31 December 2018 from the audited 2018 Report and Accounts of European Assets Trust NV, also restated to IFRS.

The notes and financial statements are presented in Euros (functional and reporting currency) and are rounded to the nearest thousand except where otherwise indicated.

Upon migration the equity of European Assets Trust NV was accounted for as share capital and share premium of European Assets Trust PLC. The balance of the share premium account was subsequently cancelled by a court process to create the special reserve (Note 5).

The accounting policies applied are set out in the annual report of European Assets Trust NV for the year ended 31 December 2018.

3.  Earnings per Share

Earnings per ordinary share attributable to shareholders reflects the overall performance of the Company in the period. Net revenue recognised in the first six months is not necessarily indicative of the total likely to be received in the full accounting year.

	Half-year ended 30 June 2019	Half-year ended 30 June 2018	Year ended      31 December 2018
	€000	€000	€000
Revenue return	7,687	10,070	12,691
Capital return	73,772	(12,566)	(93,849)
Total return	81,459	(2,496)	(81,158)
Weighted average ordinary shares in issue	359,808,132	332,050,577	357,988,309
Earnings per share	€0.226	€(0.007)	€(0.227)

There have been no diluting factors to earnings per share during these reporting periods.

4.  Loans

In March 2019, the Company entered into a €45.0 million revolving loan facility with The Royal Bank of Scotland International expiring March 2020 and subject to compliance with the loan covenants. These covenants have all been met during the period. The interest rate on the amount drawn down and commitment fees payable on undrawn amounts are based on the commercial terms agreed with The Royal Bank of Scotland International.

At the period end, the amount of the loan drawn down was €22.9 million.

5.  Special reserve and share premium account

Special reserve

On 7 May 2019, by an Order of the High Court of Justice, Chancery Division, the cancellation of the Company's share premium account by special resolution was confirmed. The special reserve was created by this cancellation of the share premium account. This reserve is available as distributable profits to be used for the payment of dividends.

Share premium account

The surplus of net proceeds received from the issuance of new shares or value of shares arising from conversion over their par value is credited to this account and the related issue costs are deducted from this account. The reserve is non-distributable. As noted above, the balance of this account which arose as a result of the shares issued at merger was subsequently cancelled by court process to create the special reserve.

6.  Net asset value per ordinary share

	30 June 2019	30 June 2018	31 December 2018
Net asset value per share	€1.33	€1.41	€1.14
Net assets attributable at the period end (€000)	479,656	507,046	411,594
Number of ordinary shares in issue at the period end	359,828,307	359,610,590	359,755,323

7.  Going concern

The Company's investment objective, strategy and policy are subject to a process of regular Board monitoring and are designed to ensure that the Company is invested in listed securities and that the level of borrowings is restricted. The Company retains title to all assets held by the custodian and an agreement covers its borrowing facility. Cash is held with banks approved and regularly reviewed by the manager.

The Directors believe that the Company's objective and policy continue to be relevant to investors; the Company operates within a robust regulatory environment; and the Company has sufficient resources and arrangements to continue operating within its stated policy for the twelve-month period commencing from these results. Accordingly, the financial statements have been drawn up on the basis that the Company is a going concern.

8.  Related party transactions

During the six-month period ended 30 June 2019, no transactions with related parties have taken place which have materially affected the financial position or performance of the Company.

9.  Results

The Company's auditor, PwC, has not audited or reviewed the Interim Report to 30 June 2019 pursuant to the Auditing Practices Board guidance on 'Review of Interim Financial Information'. These are not full statutory accounts in terms of Section 434 of the Companies Act 2006 and are unaudited. 

No full statutory accounts in respect of any period after 31 December 2018 have been reported on by the Company's auditor or delivered to the Registrar of Companies. The Interim Report will be posted to shareholders shortly and is available on the website: www.europeanassets.co.uk 

For further information, please contact:

Sam Cosh

BMO Investment Business Ltd, Investment Manager                                        0207 628 8000

Scott McEllen,

BMO Investment Business Ltd, Company Secretary                                         0207 628 8000

 

END

 

 

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