Annual Financial Report
LEI: 213800RAR6ZDJLZDND86
Impax Environmental Markets plc
Annual Report & Accounts
For the year ended 31 December 2022
Investment Objective
The investment objective of Impax Environmental Markets plc (the "Company" or "IEM") is to enable investors to benefit from growth in the markets for cleaner or more efficient delivery of basic services of energy, water and waste.
Investments are made predominantly in quoted companies which provide, utilise, implement or advise upon technology-based systems, products or services in environmental markets, particularly those of alternative energy and energy efficiency, water treatment and pollution control, and waste technology and resource management (which includes sustainable food, agriculture and forestry).
FINANCIAL INFORMATION
|
At 31 December |
2022
|
2021 |
|
Net asset value ("NAV") per ordinary share
|
419.5p
|
496.4p |
|
Ordinary share price
|
419.5p
|
547.0p |
|
Ordinary share price premium to NAV1
|
0.0%
|
10.2% |
|
Net assets
|
£1,276m |
£1,4580m |
|
Ongoing charges1
|
0.81%
|
0.85% |
PERFORMANCE SUMMARY2
|
For the year ended 31 December 2022 % Change |
2 022 |
2 032 |
|
NAV total return per ordinary share1
|
-15.0%
|
2 1.3% |
|
Share price total return per ordinary share1
|
-22.8%
|
3 0.1% |
|
MSCI AC world index3
|
-8.1%
|
1 9.6% |
|
FTSE ET100 index3
|
-20.1%
|
1 3.1% |
1. These are alternative performance measures
2. Total returns in sterling for the year to 31 December 2022
3. Source: Bloomberg and FactSet
ALTERNATIVE PERFORMANCE MEASURES ("APMS")
The disclosures as indicated in footnote 1 above are considered to represent the Company's APMs. Definitions of these APMs and other performance measures used by the Company, together with how these measures have been calculated, can be found in the annual report.
STRATEGIC REPORT
Chairman's Statement
The year ended 31 December 2022 has seen the outbreak of a war in Europe, the return of inflation and the highest interest rates in 15 years. These factors created a difficult backdrop for financial markets across most asset classes and especially for the higher rated 'growth' companies in which Impax Environmental Markets plc tends to invest. Thus, after several years of strong performance, IEM's share price declined and the Company's net asset value underperformed its global equity comparator index during the year (the MSCI ACWI index), while outperforming its environmental markets comparator index (the FTSE Environmental Technology 100 index).
High inflation, driven by surging energy and food prices, and continuing supply chain bottlenecks, were among the defining features of 2022. Global consumer prices rose by 8.8%, prompting central banks to tighten monetary policy dramatically. Rising interest rates typically act to the detriment of smaller and growth companies, as the value ascribed to their future cashflows is discounted at a higher rate. This process, often referred to as 'de-rating', has been seen across our portfolio and, while painful for our existing holdings, is now creating interesting investment opportunities. There are signs that inflation may be close to peaking, and that we may be near to the end of the interest rate rises planned by central banks.
More than a year on from Russia's invasion of Ukraine, the war continues to hang as a black cloud over the outlook for all western economies. It is a deeply unpleasant conflict in which new horrors emerge on a weekly basis; however, as noted in my previous report, for IEM there is something of a silver lining within that cloud. High energy prices and Russia's use of hydrocarbon exports as a weapon are causing a major re-think on fuel usage and security of supply. This in turn is increasing the West's focus on renewable sources of energy, while elevated gas prices drive up returns on investment in solar, wind and other green power technologies.
PERFORMANCE
After many years of outperformance, there is no disguising the fact that 2022 was a difficult year for IEM, both on an absolute and relative basis, with IEM losing ground relative to its global equity comparator index (the MSCI All Countries World Index or "MSCI ACWI"). IEM's net asset value ("NAV") per share on a total return basis declined by‑15.0%, compared to a fall in the MSCI ACWI of -8.1%. As our Manager, Impax Asset Management (AIFM) Limited (the "Manager", or "Impax"), explains in more detail, much of this was due to the valuations at which our investee company holdings trade coming under pressure, but some underperformance was also due to the fact that we do not invest in sectors such as fossil fuels and commodity companies, which performed strongly during 2022.
IEM's NAV did, however, outperform its environmental markets comparator, the FTSE Environmental Technology 100 index ("FTSE ET100"), which fell by -20.1% over the year. This index was greatly affected by sharp declines in some expensive technology companies which dominate that index, including electric car companies Tesla and Nio, and semiconductor names including Tokyo Electron and Infineon Technologies, all of which are types of investment which our Manager tends to avoid.
IEM's share price total return was -22.8% over the year, affected by the -15.0% decline in NAV per share and exacerbated by the evaporation of the premium at which our shares were trading at the start of the year. We ended the year with our share price on par with NAV.
Notwithstanding the disappointing outcome for 2022, the longer term returns for IEM remain very respectable: three-year annualised performance of the share price and NAV are 9.0% and 10.6%, respectively, compared to 7.4% for MSCI ACWI. Over five years, the annualised returns are 11.4% for the share price and 9.5% for the NAV versus 7.7% for MSCI ACWI.
THE INVESTMENT CASE
The Board enthusiastically supports the Manager's belief that companies offering solutions to the sustainability challenges facing the world will tend to outperform the wider market over the longer term.
The rise in energy prices that is causing financial hardship is expected, over the longer-term, to be a boost for IEM and the sectors in which it invests. High fossil fuel prices and concerns about energy security, allied with efforts to mitigate and adapt to climate change, support the economics of energy efficiency investments and reinforce the case for the transition away from hydrocarbons and towards renewables. This is a message which IEM has been preaching for many years; what is new for 2022 is that the outrageous behaviour of Russia should be the factor to validate the thesis beyond doubt.
"We welcome the sharply increased scrutiny by investors, media and regulators of the ESG credentials of sustainable investment products, of which IEM has been one for more than two decades."
This transition is being supported by continuing positive policy developments. The EU has responded to the energy crisis by redoubling its policy support for clean energy, with the introduction of its €210 billion REPowerEU package of legislation. 1 In an unexpected development in July 2022, the US Senate passed the Inflation Reduction Act ("IRA"), President Joe Biden's re-badged climate legislation. This contains US$369 billion in subsidies for green technologies. 2 Changes of government in both Australia and Brazil have improved the climate policy outlook in those important economies. In China, meanwhile, the 14 th Five ‑ Year Plan is driving the deployment of renewables.
There was a meaningful agreement to tackle biodiversity loss at the COP15 biodiversity summit in December 2022. An important pledge was made to protect 30% of the world's land and oceans, alongside commitments on reducing risks posed to nature from nutrients and pesticides, and a pledge to direct US$200 billion towards protecting biodiversity by 2030 3 . While it arguably fell short of what some had hoped for, it provides a framework for starting to address the global crisis in nature. Society has come to understand that it cannot address climate change without solving biodiversity challenges, and vice versa.
The financial services industry is trying to catch up rapidly and is now offering investors many products purporting to be sympathetic to environmental concerns. We welcome the sharply increased scrutiny by investors, media and regulators of the environmental, social and governance (ESG) credentials of sustainable investment vehicles, of which IEM has been one for more than two decades. The Company has always been transparent in its approach to, and management of, ESG factors (even before the term ESG was invented), and in recent years the Company has tracked and disclosed measures of the impact that the portfolio investments make on a number of environmental metrics. We also report our climate risks and opportunities, which we continue to develop in line with the recommendations of the Task Force on Climate-related Financial Disclosures.. Ensuring that we continue to follow leading market practice in this area is squarely on the Board's agenda.
DIVIDEND
IEM's net revenue return for the year was £13.6 million, compared with £9.4 million earned during 2021. The increase reflects the recovery in earnings seen in our underlying investments as they put behind them the effects of the Covid-19 pandemic.
IEM's dividend policy, as approved by shareholders at the May 2022 AGM, is to declare two dividends each year. On 28 July 2022, the Board announced a first interim dividend for this financial year of 1.5 pence per Ordinary Share which was paid on 26 August. The second interim dividend, of 2.5 pence per Ordinary Share, was declared on 1 February 2023 and paid on 10 March 2023. The total dividend per share paid for 2022 is therefore 4.0 pence per share, an increase of 42.9% on the 2.8 pence paid in respect of 2021.
It remains the Board's intention to pay out substantially all earnings by way of dividends, the quantum of which is affected both by the level of dividends received by the Company and by the number of shares in issue at the relevant record date.
GEARING
At 31 December 2022, IEM's net gearing was 2.1%, slightly above the 1.6% net gearing at the end of 2021. In recent years IEM has made little use of gearing, allocating whatever new capacity was available from our Manager to issue additional equity and thereby meet the strong investor demand that prevailed. The Manager continues to advise of capacity constraints with our investment bias towards the smaller end of the market; any increase in our capital by way of borrowings results in a concomitant reduction in our ability to issue equity. However, as discussed below, IEM is now trading close to NAV and expanding the investment capacity via increased gearing has become an option which is under active consideration; credit facilities are due for renewal in September 2023.
PREMIUM AND DISCOUNT CONTROL
IEM's Ordinary Shares traded at a premium to NAV of 10.2% on 31 December 2021, at NAV (no premium or discount) on 31 December 2022 and traded during the year between a premium of 14.1% and a discount of -6.6%.
The premium or discount to underlying NAV is actively monitored by the Board and our brokers. Having started the year with continued investor demand and issuing shares at a premium, in February 2022 - with the onset of the Ukraine war and in tandem with many other investment companies - IEM's shares moved to a discount. Since then, the Board has used its authority judiciously to purchase its own shares, to prevent a material discount from emerging.
The Board's intention remains to keep IEM's shares trading close to NAV during normal market conditions and it will continue to exercise its authority to buy back or to issue shares accordingly.
There were 298.1 million Ordinary Shares in issue at the start of the year, increasing to 304.2 million by the year end, reflecting new shares issued of 7.6 million with 3.1 million bought back into treasury. Of the shares bought back, 1.6 million were subsequently reissued from treasury, resulting in there being 1.5 million shares in treasury at the year end.
1 https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3131
2 https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/
3 https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7834
THE BOARD
The Board has established a Sustainability Reporting Committee to consider and help the Board to assess the relevance to IEM of the growing body of sustainability issues. The Committee will receive reports from the Manager regarding its sustainability activities as they relate to IEM's portfolio, the outcomes of such activities and its sustainability metrics. The Committee will review and discuss the relevance of such activities and metrics in meeting IEM's investment objective, investment policy and stakeholders' expectations, make recommendations to the Board, and oversee IEM's regulatory and voluntary sustainability reporting
At the AGM in May 2022, I was re-elected to the Board to serve for a tenth year, taking account of the circumstances following the death of chairman-designate Simon Fraser. I am delighted to report that Glen Suarez joined the Board in August 2022 and will succeed me as Chairman at the conclusion of the 2023 AGM, whereupon I will retire from the Board. Glen, who is currently executive chairman at Knight Vinke Asset Management, was previously chairman of Edinburgh Investment Trust plc, and earlier spent eight years as head of European energy, infrastructure and utilities investment banking at Morgan Stanley.
As previously announced, Vicky Hastings is retiring at the conclusion of the 2023 AGM after 10 years and Nick Hurd stepped down from the Board at the end of 2022. I would like to thank both Vicky and Nick for their excellent service and invaluable contributions to the Company during their tenures. Recruitment is underway to find their replacements.
ANNUAL GENERAL MEETING
This year's annual general meeting will be held at 7th Floor, 30 Panton Street, London, SW1Y 4AJ on Tuesday,
16 May 2023 at 3.00pm.
We are pleased to invite shareholders to attend the AGM in person to meet the Board and our investment managers. There will be a presentation and the opportunity to ask questions. Shareholders are welcome to join through our website at www.impaxenvironmentalmarkets.co.uk. As is our normal practice, there will be live voting for those physically present at the AGM. We are not able to offer live voting via the website, and we therefore request all shareholders, and particularly those who cannot attend physically, to submit their votes by proxy, ahead of the deadline of 3.00pm on 12 May 2023, to ensure that their vote counts at the AGM.
Shareholders' questions for either the Board or the investment managers should be submitted to
clientservices@impaxam.com
by midday on 12 May 2023.
IEM's website at www.impaxenvironmentalmarkets.co.uk can be used to access more insights and also subscribe for regular communications.
OUTLOOK
After the macro-economic and geopolitical challenges of the past year, I am hopeful that 2023 will provide a more encouraging backdrop for environmental markets generally and for IEM in particular. While there appears to be no immediate prospect of the war in Ukraine coming to an end, we are adapting to the supply and price shocks it has created. High energy prices and energy security considerations have strengthened the case for investment in alternative sources and accelerated the net-zero transition.
Geopolitical tensions make that transition less smooth than might otherwise have been the case. COP27 demonstrated the difficulty of maintaining momentum in global policy in the context of intense geopolitical rivalry and wars, both actual and (dis)informational. For the time being, we are seeing the regionalisation of climate policy, with progress in some parts of the world being at odds with foot dragging (or worse) in others. As discussed in more detail in the Manager's Report, the Inflation Reduction Act in the US and REPowerEU in Europe show how progress at the regional and country level can maintain the overall momentum in environmental policy.
When IEM was founded in 2002, with an initial market value of £50 million, it faced a lonely existence in an investment sector which had yet to be properly classified. 21 years on, ESG is on everyone's lips and the sector - which our investment managers at Impax Asset Management have played a large part in defining - is now centre stage, looking at an investable universe which is many times deeper than two decades ago. Taking advantage of this, IEM has delivered a 16.1% annualised share price total return over the past 10 years and the Company is now a member of the FTSE 250 index, with a market capitalisation at 25 March 2023 of some £1.3 billion. The Board takes this opportunity to record its appreciation to Bruce Jenkyn ‑ Jones (who has been at the helm from the start), Jon Forster (who has also been on board since inception) and Fotis Chatzimichalakis (who became one of our investment managers in October 2021), but also to the rest of the team for their collective achievement in steering IEM with such a steady hand.
It has been deeply rewarding for those of us who have been able to observe this transformation in the fortunes of environmentally-friendly investing, a good example of how you can make money for investors while leaving the world a better and cleaner place. Notwithstanding the substantial market correction we saw in 2022, widespread recognition of the urgent need to address the world's environmental and social challenges provides our investment managers with the continuing opportunity to generate above-market returns. I remain convinced of the merits of the investment mandate on which the Company is based.
John Scott,
Chairman
31 March
2023
Manager's Report
Following strong performance in the last three years, 2022 proved a challenging year for most parts of the market, including IEM. Since the interim report, performance was broadly in line with MSCI ACWI and ahead of the FTSE ET100, leading to full year NAV performance nearly 7% behind MSCI ACWI but slightly more than 5% ahead of the FTSE ET100.
Many of the themes highlighted in the interim report remained relevant for the full year. As discussed in the Chairman's Statement, rising interest rates led to a 'de-rating' or decline of valuation multiples for growth companies which are a core focus of IEM, and a switch into cheaper value sectors such as energy and financials to which IEM has no exposure since these companies generally do not meet our criterion of having a minimum of 50% revenues generated from environmental products or services. This trend continued in the second half, with the underperformance of MSCI ACWI Growth Index vs. MSCI ACWI Value Index widening from 17.3% at the interim report to 23.5% for the full year. This provided a challenging backdrop for IEM's performance and was seen across a broad swathe of environmental markets and regions.
Whilst there were other challenges, as discussed below, portfolio holdings mostly did a creditable job navigating the difficulties of disrupted supply chains and an inflationary environment, and crucially demonstrated the pricing power essential to maintaining profitability. Ongoing strength in renewable energy holdings and a resurgence of M&A activity for some stocks in the portfolio which then performed well, are also discussed below.
KEY DEVELOPMENTS AND DRIVERS FOR ENVIRONMENTAL MARKETS
Energy and climate
The Russian invasion of Ukraine, and its subsequent use of energy exports as a weapon against the West, upended energy markets in 2022 and created wider economic disruption with dramatic increases in energy prices generating a significant reaction from consuming countries. With widespread concerns of recession across Europe, prompt action by the EU in particular - both by increasing the supply of natural gas from other sources and influencing demand - along with a relatively warm winter, has enabled sufficient gas to be stored in Europe, allowing power and gas prices to retreat from their August highs.
The response is also triggering a faster transition away from fossil fuels. The International Energy Agency said the energy crisis is driving "a sharp acceleration" in the installation of renewables; and has increased its five ‑ year forecast by 30% over the last year as energy security concerns have prompted governments to increase policy support for renewables. 4
Specifically, the EU's REPowerEU package directs funding to increase renewable energy generation, raises the bloc's energy efficiency target and sets ambitious goals for hydrogen production. In addition, the EU has tightened the emission reduction targets in its 'Fit for 55' package, phasing out free allowances more quickly, and creating a social climate fund to support vulnerable households and small businesses. 5
The EU is also pursuing measures to ensure that its climate policy does not simply export its greenhouse gas emissions to countries without equivalent costs on carbon. From October 2023, it will begin introducing its Carbon Border Adjustment Mechanism, which will require exporters of carbon-intensive commodities such as iron and steel, cement, fertilisers and aluminium to either buy EU carbon allowances or demonstrate they have paid a carbon price domestically. 6 While this is a contentious application of carbon pricing to international trade, we would expect that, over time, it will encourage tighter climate policy within exporting countries.
4 https://www.iea.org/news/renewable-power-s-growth-is-being-turbocharged-as-countries-seek-to-strengthen-energy-security
5 https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55-the-eu-plan-for-a-green-transition/
6 https://taxation-customs.ec.europa.eu/green-taxation-0/carbon-border-adjustment-mechanism_en
Across the Atlantic, the US Inflation Reduction Act - so named to win the crucial casting vote of conservative Democratic Senator Joe Manchin - provided an unexpected boost to the clean energy agenda. Manchin's support revived a version of President Biden's Build Back Better legislation which, while considerably smaller in dollar terms than the original proposal, still represents the largest financial commitment to addressing climate change in any individual policy yet crafted. It provides US$369 billion in a balanced package of clean energy, electric vehicle and clean technology tax incentives and subsidies, including support for domestic manufacturing. These measures will get the US close to the 40% reduction in greenhouse gas emissions by 2030 7 that the Biden administration committed to when it re-joined the Paris Agreement. As far as IEM is concerned, it will provide a material boost in earnings to a range of our holdings with material US exposure (44% of the portfolio has end market exposure to the US), including SolarEdge (Solar Energy Generation Equipment, US), Ormat (Renewable Energy Developers & IPPs, US) and EDP Renovaveis (Renewable Energy Developers & IPPs, Portugal).
Despite these positive developments, the world is still on course to exceed the Paris Agreement's less ‑ ambitious goal of holding warming below 2°C - let alone stay below the preferred 1.5°C threshold. Current policies around the world would lead to a range of 2.2°C to 3.4°C of warming by the end of the century, according to Climate Action Tracker. 8 While this is a sobering observation, the implication that governments are likely to take further policy action to promote the transition to net zero should support our investments that are exposed to this theme. More investment will also be needed in adaptation to the effects of climate change. IEM invests in climate adaptation in Water Distribution & Infrastructure (Advanced Drainage Systems and Zurn Elkay Water Solutions, both US) and Water Treatment (Amiad Water Systems, Israel and Pentair, US), as well as backup power solutions and power storage, as provided by Generac (Power Storage & UPS, US).
Within climate and energy, we favour energy efficiency names rather than renewable energy generators. The latter continue to face obstacles to growth, particularly around planning and permitting, and the sub-sector continues to face uncertainties around the exact shape of regulatory intervention in energy markets. Energy efficiency, however, tends to be a more straightforward investment proposition driven, as it is, by simple economics. These become much more compelling when energy prices are high, benefitting amongst others industrial steam specialist Spirax Sarco Engineering (UK), heat pump supplier Nibe (Sweden) and efficient lighting company Signify (Netherlands).
Biodiversity and sustainable food production
While the UN climate talks may have underwhelmed in 2022, a breakthrough international agreement was reached on biodiversity at the end of the year. At COP15 of the Convention on Biological Diversity in Montreal, a Global Biodiversity Framework ("GBF") was agreed, setting important targets for the protection of nature by 2030 and pledges for US$30 billion/year in financing for biodiversity protection in poor countries by that date. 9 Important targets in the GBF include a goal of protecting 30% of land and oceans, cutting nutrient pollution and overall risks from pesticides and toxic chemicals by half by 2030.
Agreement on an ambitious GBF, which hung in the balance over two years of negotiations, coincides with growing concerns about biodiversity loss and rising interest among companies and investors in reducing their impacts and dependencies on nature.
Many of the themes pursued by IEM help to reduce pressures on biodiversity, caused by drivers such as land-use change, overexploitation of organisms, climate change, pollution and invasive non-native species. For example, solutions around food waste reduction, plant-based proteins, alternative feeds to soy, resource efficiency and circularity help to reduce pressures on tropical forests. Alternative animal feeds and sustainable aquaculture can help to address overexploitation of species, while our clean energy and energy efficiency picks help to address climate change, which puts stress on biodiversity.
The Company's investments in water treatment, pollution control and testing all contribute to efforts to reduce run-off and pollutants that harm nature, while its investments in companies which recycle and treat plastics can help reduce pressures on marine biodiversity, in particular. IEM also invests in Amiad Water Systems (Water Treatment, Israel) that treats ballast water transported around the world by shipping companies, which helps to address the spread of non ‑ native invasive species.
IEM has published its Policy on Nature, Biodiversity, and Deforestation on the website and a section on biodiversity features in the annual report.
Biodiversity loss, climate change and food production are intimately linked, and the three themes were prominently addressed at COP27. At the climate talks, food security was "a fundamental priority", highlighted on the summit's cover decision for the first time, alongside protecting nature and water. At the talks, the UN Food and Agricultural Organization committed to developing a net-zero, nature positive roadmap for the sector, which accounts for around one-fifth of global emissions. IEM's investments in sustainable food and agriculture are well-positioned to help deliver against such a roadmap.
7 https://www.science.org/content/article/surprise-climate-bill-will-meet-ambitious-goal-40-cut-us-emissions-energy-models#:~:text=The%20 backers%E2%80%94Senate%20Majority%20Leader,by%202030%2C%20compared%20with%202005.
8 https://climateactiontracker.org/
9 https://www.unep.org/news-and-stories/story/cop15-ends-landmark-biodiversity-agreement
ABSOLUTE PERFORMANCE CONTRIBUTORS AND DETRACTORS
Contributors
The themes highlighted in the Interim Report remain relevant for the year as a whole.
Renewable energy holdings continued to deliver solid performance, benefitting from supportive policy momentum, elevated power prices and a normalisation of supply chains. The strength was across both project developers such as Terna Energy (Greece), Ormat (US) and Northland Power (Canada), and renewable energy equipment manufacturers like SolarEdge Technologies (Solar Energy Generation Equipment, US) and Vestas (Wind Power Generation Equipment, Denmark).
After a reset in valuations, M&A activity in environmental markets has picked up. Those companies in the portfolio targeted for merger or acquisition performed well. Switch (Cloud Computing, US) has been taken private at an attractive premium - from the initial indication of a likely takeover in August 2021, to the deal announcement in May 2022, the share price of the company appreciated 62%. For 2022, Switch positively contributed 0.53% to the portfolio's performance. Terna Energy (Renewable Energy Developers & IPPs, Greece) also benefitted from takeover interest, contributing 0.64% to performance, with the company being viewed as a potential takeout target, while Brambles (Resource Circularity & Efficiency, Australia) contributed 0.44% to performance as the company attracted interest from private equity buyers.
Another cluster of strength during the year was companies with a 'value' orientation, with CIA Saneamento Basico (Water Utilities, Brazil) and Graphic Packaging (Food Safety & Packaging, US) standing out. The former is a regulated water utility in Sao Paolo, Brazil and during the year rose on expectations of more favourable regulatory conditions that could lead to an eventual privatisation of the company. Graphic Packaging, a packaging company with a high recycled inputs content, performed well, supported by resilient consumer end-markets and an improving price / cost environment.
Finally, earnings delivery has been solid overall during the year with holdings navigating this challenging market and exhibiting pricing power in the current inflationary environment. Clean Harbors (Hazardous Waste Management, US) delivered very good results, reflecting its dominant market position in a supply constrained market. PTC (Efficient IT, US) benefitted from a subscription-based business model and a resilient growth profile.
Detractors
The market rotation from 'growth' towards 'value' companies continued throughout the year and has led to a material de-rating of holdings exposed to these style factors. These companies' share prices dropped as investors took into account rising interest rates when assessing future cashflows, resulting in lower valuations today. Names most impacted include Cryoport (Resource Circularity & Efficiency, US), Spirax Sarco Engineering (Industrial Energy Efficiency, UK), Eurofins (Environmental Testing & Monitoring, France), Croda (Recycled, Recyclable Products, UK) and Nibe (Buildings Energy Efficiency, Sweden).
Against the backdrop of rising interest rates and increased likelihood of a recession, companies exposed to cyclical end-markets suffered during the year. Holdings exposed to construction activity have been particularly weak, with water infrastructure and treatment companies like Aalberts (Netherlands), Advanced Drainage (US), Zurn Elkay Water Solutions (US), and Pentair (US) standing out. Similarly, Lenzing (Resource Circularity & Efficiency, Austria) fell following weakness in textile markets and rising energy costs.
Finally, Generac (Power Storage & UPS, US) suffered during the year due to supply chain constraints and on the back of concerns around the company's sales outlook for 2023 after two years of strong growth. Royal DSM (Sustainable Agriculture, Netherlands) struggled with rising input costs (namely energy) and concerns around the resilience of the nutrition business in a recessionary environment.
We remain positive on the long-term prospects for the holdings discussed in this section and made selective additions to our holdings over the year.
RELATIVE PERFORMANCE ANALYSIS
|
PERFORMANCE RELATIVE TO MSCI ACWI |
12 MONTHS ENDED 31 DECEMBER 2022 % |
|
NAV total return |
(15.0) |
|
MSCI ACWI total return |
(8.1) |
|
Relative performance |
(6.9) |
|
Analysis of relative performance |
|
|
Portfolio total return |
(13.5) |
|
MSCI ACWI total return |
(8.1) |
|
Portfolio underperformance |
(5.4) |
|
Borrowing: |
|
|
Gearing effect |
(0.4) |
|
Finance costs |
(0.1) |
|
Management fee |
(0.7) |
|
Other expenses |
(0.1) |
|
Trading Costs |
(0.1) |
|
Share transactions: |
|
|
Issues |
0.1 |
|
Buy-backs |
- |
|
Tax |
(0.2) |
|
Total relative NAV performance |
(6.9) |
|
PERFORMANCE RELATIVE TO FTSE ET100 |
12 MONTHS ENDED 31 DECEMBER 2022 % |
|
NAV total return |
(15.0) |
|
FTSE ET100 total return |
(20.1) |
|
Relative performance |
5.1 |
|
Analysis of relative performance |
|
|
Portfolio total return |
(13.5) |
|
FTSE ET100 total return |
(20.1) |
|
Portfolio outperformance |
6.6 |
|
Borrowing: |
|
|
Gearing effect |
(0.4) |
|
Finance costs |
(0.1) |
|
Management fee |
(0.7) |
|
Other expenses |
(0.1) |
|
Trading Costs |
(0.1) |
|
Share transactions: |
|
|
Issues |
0.1 |
|
Buy-backs |
- |
|
Tax |
(0.2) |
|
Total relative NAV performance |
5.1 |
PORTFOLIO POSITIONING, ACTIVITY, VALUATION AND RISK
At the end of the year, IEM's portfolio comprised 58 listed holdings with no active unlisted investments following the write down to zero in December of the legacy unlisted position (previously 0.05%) in Ensyn. Portfolio detail is provided on and positioning by sector and region is set out in the annual report. Positioning is consistent with that presented in the interim report. The portfolio maintains a balance of high-quality cyclical and defensive names across a broad range of environmental markets and, whilst maintaining a high exposure to more economically defensive business models, activity is progressively shifting to cyclical and growth names with beaten down valuations and strong balance sheets.
Activity in the second half of the year saw further consolidation of holdings with the sale of Itron (Smart & Efficient Grids, US) following ongoing execution challenges and Salmar (Sustainable Aquaculture, Norway) following the announcement by the Norwegian government of a proposed 40% resource tax for salmon farmers, negatively impacting industry economics and growth prospects.
Rational (Technology & Logistics, Germany), a leading supplier of high efficiency ovens into restaurants, fast food outlets and institutional markets (schools, hospitals, etc), was added back into the portfolio following a share price collapse prompted by recession fears and the impact on its customer base. With best-in ‑ class margins and returns on capital and a strong 'net cash' balance sheet, this company is well positioned to weather the current challenges and provides exposure to a compelling growth story as restaurants aim to reduce food waste, improve efficiency and simultaneously cope with ongoing labour shortages.
DS Smith (Food Safety & Packaging, UK) was exited in favour of Smurfit Kappa Group (Food Safety & Packaging, Ireland), a market leading fibre-based packaging company with a consistent track record of organic growth, compelling positioning in growth markets in Latin America and attractive financial metrics.
Switch (Cloud Computing, US) was exited on the completion of the recent M&A which resulted in the company being taken private.
Regarding valuation, the portfolio experienced a significant fall or 'de-rating' in its next 12 months' (or forward) price-to-earnings ratio, from an undoubtedly high level of 24.6x, as flagged in the last annual report, to 18.4x at the end of the year. This forward price ‑ to ‑ earnings ratio is in line with long-term average levels, despite an investment case that is considered stronger given drivers including the recent policy push towards net-zero emissions and actions to address energy security issues.
OUTLOOK
Equity markets have had a volatile start to 2023, with early strength reversed in March by the sudden collapse of Silicon Valley Bank in the US and forced takeover of Credit Suisse by UBS in Europe. Fears of a new credit crisis have driven material underperformance of small and mid-cap markets in which IEM invests vs MSCI ACWI overall. With this backdrop, the recent focus has been on economically defensive sectors and business models and on companies with strong balance sheets, which are well placed to weather these near-term challenges.
Notwithstanding the above, with a medium-term perspective we believe that the investment case underpinning IEM remains compelling, and that companies providing innovative solutions to environmental challenges will continue to thrive and experience superior growth relative to the global economy. Continued strong policy support, energy price volatility and a renewed focus on energy security are supportive of opportunities across a wide range of environmental markets. Recent volatility leaves the portfolio valuation in line with long term average levels, which is considered attractive given the strengthening underlying investment case.
Investment Managers
Bruce Jenkyn-Jones
Jon Forster
Fotis Chatzimichalakis
31 March 2023
PRINCIPAL RISKS AND UNCERTAINTIES
The Board is responsible for the management of risks faced by the Company and, through delegation to the Audit Committee, has established procedures to manage risk, oversee the internal control framework and determine the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives. The Audit Committee carries out, at least annually, a robust assessment of the principal risks and uncertainties and reviews ongoing monitoring of both risks and controls. This ensures heightened and emerging risks are identified outside of the normal cycle of Board and Audit Committee meetings.
Risks are documented on a risk register, grouped into four main categories: Strategic and Business Objective Risks; Investment Management Risks; Operations - Service Providers Risks; and Compliance, Regulatory and Corporate Governance Risks. Risks are then rated before and after mitigating controls by impact and likelihood of occurrence, with the assessed ratings charted on risk matrices. The risk register is reviewed on an ongoing basis in an attempt to capture all risks and to ensure appropriate mitigation is in place. Reviews take into account changing factors including, but not restricted to, changes to markets (both macro and micro), stakeholders, operations, regulation and emerging risks. The top risks identified by this process are set out in the table which follows, and the Board considers these to be the principal risks of the Company.
The Board considered the risks posed by global economic conditions including higher inflation and interest rates as a result of the war in Ukraine and the secondary effects of the COVID-19 pandemic, with updates on market impact and operational resilience received from the Manager, Administrator and other key service providers. The Board is satisfied that the key service providers had, and continue to have, the ability to continue their operations efficiently in a remote or virtual working environment, whilst safeguarding their staff.
The Manager continues to provide regular updates to the Board on the financial impacts on the portfolio performance and investee companies, as well as the long-term effects and opportunities for the sectors in which the Company invests.
Emerging risks are considered by the Board at its quarterly meetings and by the Audit Committee as part of its risk management and internal control review. Failure to identify emerging risks may cause reactive actions rather than being proactive and the Company could be forced to change its structure, objective or strategy and, in worst case, could cause the Company to become unviable or otherwise fail.
The experience and knowledge of the Directors is invaluable in consideration of emerging risks, as are update papers and advice received from the Board's key service providers such as the Company's Manager, broker, Company Secretary and auditor. The AIC also provides regular updates and draws members' attention to forthcoming industry and/or regulatory issues.
TREND: INCREASING NEUTRAL REDUCING
|
POTENTIAL RISK |
MITIGATION |
TREND |
|
STRATEGIC AND BUSINESS OBJECTIVE RISKS |
|
|
|
Price movements of the Company's investments are highly correlated to the performance of global equities in general and small and mid-cap equities in particular. Falls in stock markets are likely to adversely affect the performance of the Company's investments. Changes in general economic and market conditions, such as currency exchange rates, interest rates, rates of inflation, industry conditions, tax laws, political events and trends can substantially and adversely affect the value of investments. Market risk includes the potential impact of events which are outside the Company's control such as the Russian invasion of Ukraine. The Company invests in companies with small market capitalisations, which are likely to be subject to higher valuation uncertainties and liquidity risks than larger capitalisation securities. The Company may also invest in unquoted securities which generally have greater valuation uncertainties and liquidity risks than securities listed or traded on a regulated market. |
The Manager will not normally hedge against foreign currency movements, but the Manager takes account of the risk when making investment decisions. Further details on financial risks and risk mitigation are disclosed in note 16 to the accounts. The high risk rating remains unchanged, however, this reflects continued uncertainty in markets, though for changed reasons. Covid-19 and Covid-19 secondary effects have decreased, however, uncertainty continues due to inflation, interest rates and cost concerns following the Ukraine war, added to which are possible negative consequences arising from the recent tensions being seen in the financial system. |
|
|
Environmental markets The Company invests in companies operating in environmental markets. Such companies carry risks that governments may alter the regulatory and financial support for environmental improvement, costs of technology may not fall, capital spending by their customers is reduced or deferred and their products or services are not adopted. |
The Company invests in a broad portfolio of investments which are spread amongst several environmental market sectors. The Manager has a rigorous investment process which takes into account relevant factors prior to investment decisions taking place. As well as reviews of the portfolio and relevant industry matters at quarterly Board meetings, the Board has an annual strategy day at which the overall strategy of the Company is discussed. |
|
|
Share price trades at excessive premium to net asset value Market demand combined with limited capacity results in excessive share price premium to NAV and returns to shareholders may be affected. Excessive premium may also result in being unable to grow the Company through share issuance. |
The Board has made a statement on premium/discount control in normal market conditions as detailed in the annual report and in the Chairman's Statement. The Company utilises its powers to issue and buy back shares when circumstances are appropriate, following consultation with the Manager and the Company's broker. The Board monitors the level of premium/discount and receives regular shareholder feedback from the Company's Manager and broker. |
Decreasing |
|
Share price trades at excessive discount to net asset value It is in the long-term interests of shareholders that shares do not trade at a significant discount to their net asset value. Investor demand for the shares fell with the onset of the Ukraine war, in tandem with other investment company shares. This moved the shares from a premium to NAV to a discount. As explained in the Chairman's Statement, the Board's intention remains to keep the Company's shares trading close to NAV. Even so, and especially where markets are volatile, the discount may increase. |
Increasing |
|
|
Financing risk The Company may borrow money for investment purposes. If investment markets fall in value, any borrowing will enhance the level of loss. Capacity constraints on the availability of desirable companies for investment may mean the Company is unable to achieve the level of gearing wanted. |
The Board has authorised the Manager to use its discretion to utilise gearing up to 10% of net assets. Any borrowing above this level requires Board approval. Borrowing facilities are renewed on a cost effective and timely basis. The Manager keeps under regular review the opportunities for enhancing returns by the prudent use of gearing. The Company's fixed rate loans and revolving credit facility both expire on 6 September 2023. Higher interest rates will increase the cost of borrowings for the Company and borrowings may not be available of acceptable types, amounts and/or interest rates. |
|
|
OPERATIONS - SERVICE PROVIDERS RISKS |
|
|
|
Failure or breach of Information Technology (IT) - including cyber- security, and physical security risks Failure of IT or physical security could potentially lead to breaches of confidentiality, data records being compromised and the inability to make investment decisions. In addition, unauthorised physical access to buildings could lead to damage or loss of equipment. The underlying risks primarily exist in the third party service providers to whom the Company has outsourced its depositary, registration, administration and investment management activities. |
The Company's key service providers report periodically to the Board on their procedures to mitigate cyber security risks including their alignment with industry standards, their physical and data security procedures and their business continuity planning. The Board also meets with its service providers on a periodic basis. |
|
|
Operational risk The Board has contractually delegated to third party service providers the management of the investment portfolio, and services covering: depositary and custody; registrar; company secretarial and fund accounting. The security of the Company's assets, dealing procedures, accounting records and adherence to regulatory and legal requirements depend on the effective operation of the systems of these third party service providers. Failure by any service provider to carry out its obligations to the Company could have a material adverse effect on the Company's performance. Disruption to the accounting, payment systems or custody records (including cyber security risk) could prevent the accurate reporting and monitoring of the Company's financial position. |
Due diligence is undertaken before contracts are entered into with third party service providers, taking into account the quality and cost of services offered, including policies and procedures, and risk management and controls systems in operation in so far as they are relevant to the Company. Thereafter, the performance of the provider is subject to regular review and report to the Board. The Board monitors key persons as part of this oversight. The control of risks related to the Company's business areas is described in detail in the corporate governance report. The risk rating is increased to reflect the acquisition during the year of Sanne Fund Services (UK) Limited ("Sanne") by Apex. A transition plan to move and integrate the two companies was presented to the Board. This set out a programme to ensure the seamless move of the fund accounting and company secretarial services provided by Sanne, with no diminution of service quality either at or after transition, and recognised the importance to the Company of IEM-experienced staff. |
|
|
Whilst not being identified as principal risks after mitigation controls are applied, other relevant risks to the Company include the following: |
||
|
STRATEGIC AND BUSINESS OBJECTIVE RISKS |
|
|
|
Global pandemic risk The rapid spread of infectious disease may cause governments to implement policies to restrict the gathering, interaction or movement of people and take other measures as deemed appropriate to prevent its spread, causing disruption to markets generally, investee companies, the operations of the Company and its key service providers. |
The Manager spreads the investment risk over a wide portfolio of investments. Risk analysis includes scenario analysis of possible negative market events. The Company's key service providers report periodically to the Board on their business continuity plans and procedures. The Board monitors the adequacy of controls in place at the key service providers and their planned response to an extended period of disruption, to ensure that the impact to the Company is limited. During times of elevated volatility and market stress, the Company's closed-end fund structure protects it from the liquidity requirements that can arise for open-ended funds. |
|
|
Physical climate change risk While efforts to mitigate climate change continue, the physical impacts are already emerging in the form of changing weather patterns. Extreme weather events can result in flooding, drought, fires and storm damage, potentially impairing the operations of an investee company at a certain location, or impacting locations of companies within their supply chain. |
Physical climate change risk is still an emerging topic for investors as well as for the management teams of investee companies. It has been a focus area of research and engagement by the Manager to identify companies particularly exposed to this risk and to open a dialogue with them on management options. Details of engagement with investee companies are given in the annual report. The Company invests in a broad portfolio of companies which are spread geographically, limiting the impact of location specific weather events. |
|
|
INVESTMENT MANAGEMENT RISKS |
|
|
|
Financial risks The Company's investment activities expose it to a variety of financial risks which include foreign currency risk, portfolio liquidity risk and interest rate risk. The Company invests in securities which are not denominated or quoted in sterling. Movements of exchange rates between sterling and other currencies in which the Company's investments are denominated may have an unfavourable effect on the return on the investments made by the Company. |
The Company will not normally hedge against foreign currency movements affecting the value of its investments, although, the Manager takes account of this risk when making investment decisions. The Company invests in range of global listed equities and the Manager monitors the foreign currency exposure and liquidity of holdings within the portfolio and reports on these to the Board at each meeting. Interest rate risk is limited due to the low level of gearing. Further details on financial risks and risk mitigation are disclosed in note 16 to the accounts. |
|
|
COMPLIANCE, REGULATORY AND CORPORATE GOVERNANCE RISKS |
|
|
|
Regulatory risks Loss of investment trust status would lead to the Company being subject to tax on any gains on the disposal of its investments. Breaches of the FCA's rules applicable to listed entities could result in financial penalties or suspension of trading of the Company's shares. Breaches of the Companies Act 2006 could result in financial penalties or legal proceedings against the Company or its Directors. Failure of the Manager to meet its regulatory obligations could have adverse consequences on the Company. |
The Company has contracted out relevant services to appropriately qualified professionals, who monitor, and report to the Board on regulatory compliance. In addition, the Company's broker, auditor, Company Secretary and Manager provide the Board with regulatory updates on a regular basis. The Manager reports on regulatory matters to the Board on a quarterly basis. The assessment of regulatory risks forms part of the Board's risk assessment programme. |
|
VIABILITY STATEMENT
The continuation of the Company is subject to the approval of shareholders every three years. The continuation of the Company was approved at the Company's 2022 AGM with 99.99% votes in favour of the continuation resolution. The next vote will take place at the Company's 2025 AGM.
The Directors have assessed the viability of the Company for the period to 31 December 2027 (the "Viability Period"). The Board believes that the Viability Period, being approximately five years, is an appropriate time horizon over which to assess the viability of the Company, particularly when taking into account the long-term nature of the Company's investment strategy, the principal risks outlined above such as a severe market downturn or climate change and its gearing. Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue to operate and to meet its liabilities as they fall due over the Viability Period.
The Board reviewed the Company's income and expenditure projections and other funding requirements.in normal and worst case market conditions. The level of the ongoing charges is dependent to a large extent on the level of net assets, the most significant contributor being the investment management fee. The Company's income from investments and cash from the sale of investments (which are readily realisable) provide substantial cover to the Company's operating expenses, and any other expenditure likely to be faced by the Company over the Viability Period. Such expenditure to include buybacks of shares in order to operate the Company's discount control policy and repayment of the Company's borrowings, which at the date of this report represented less than 4.0% of the Company's investments.
In its assessment of the prospects of the Company, the Board considered each of the principal risks and uncertainties and the liquidity and solvency of the Company.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations.
Company law requires the Directors to prepare accounts for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'. 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 as at the end of the year and of the net return for the year. In preparing these accounts, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and estimates which are reasonable and prudent; and
· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the accounts 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 accounts are published on the www.impaxenvironmentalmarkets.co.uk and www.impaxam.com websites which are maintained by the Company's Manager, Impax Asset Management (AIFM) Limited ("Impax"). The work carried out by the auditor does not involve consideration of the maintenance and integrity of these websites and, accordingly, the auditor accepts no responsibility for any changes that have occurred to the accounts since being initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' confirmation statement
The Directors each confirm to the best of their knowledge that:
(a) the accounts, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
(b) this Annual Report includes a fair review of the development and performance of the business and position of the Company, together with a description of the principal risks and uncertainties that it faces.
Having taken advice from the Audit Committee, the Directors consider that the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
For and on behalf of the Board
John Scott
Chairman
31 March 2023
Income Statement
|
|
|
YEAR ENDED 31 DECEMBER 2022 |
YEAR ENDED 31 DECEMBER 2021 |
||||
|
|
|
REVENUE |
CAPITAL |
TOTAL |
REVENUE |
CAPITAL |
TOTAL |
|
|
NOTES |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
(Losses)/gains on investments |
2 |
- |
(226,293) |
(226,293) |
- |
239,534 |
239,534 |
|
Net foreign exchange losses |
|
- |
(2,778) |
(2,778) |
- |
(314) |
(314) |
|
Income |
3 |
20,160 |
- |
20,160 |
15,195 |
- |
15,195 |
|
Investment management fees |
4 |
(2,420) |
(7,258) |
(9,678) |
(2,471) |
(7,412) |
(9,883) |
|
Other expenses |
5 |
(1,037) |
- |
(1,037) |
(1,360) |
- |
(1,360) |
|
(Loss)/return on ordinary activities before finance costs and taxation |
|
16,703 |
(236,329) |
(219,626) |
11,364 |
231,808 |
243,172 |
|
Finance costs |
6 |
(475) |
(1,424) |
(1,899) |
(368) |
(1,103) |
(1,471) |
|
(Loss)/return on ordinary activities before taxation |
|
16,228 |
(237,753) |
(221,525) |
10,996 |
230,705 |
241,701 |
|
Taxation |
7 |
(2,956) |
211 |
(2,745) |
(1,605) |
342 |
(1,263) |
|
(Loss)/return on ordinary activities after taxation |
|
13,272 |
(237,542) |
(224,270) |
9,391 |
231,047 |
240,438 |
|
(Loss)/return per Ordinary Share |
8 |
4.37p |
(78.18p) |
(73.81p) |
3.29p |
81.06p |
84.35p |
The total column of the Income Statement is the profit and loss account of the Company.
The supplementary revenue and capital columns are provided for information purposes in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.
Return on ordinary activities after taxation is also the "Total comprehensive income for the year".
Balance Sheet
|
|
|
AS AT |
AS AT |
|
|
|
31 DECEMBER |
31 DECEMBER |
|
|
|
2022 |
2021 |
|
|
NOTES |
£'000 |
£'000 |
|
Fixed assets |
|
|
|
|
Investments at fair value through profit or loss |
2 |
1,302,605 |
1,503,750 |
|
Current assets |
|
|
|
|
Dividend receivable |
|
512 |
274 |
|
Taxation recoverable |
|
90 |
23 |
|
Other debtors |
|
108 |
- |
|
Cash and cash equivalents |
|
26,327 |
28,319 |
|
|
|
27,037 |
28,616 |
|
Creditors: amounts falling due within one year |
|
|
|
|
Trade and other payables |
10 |
(1,929) |
(3,036) |
|
Bank loans and credit facility |
11 |
(51,606) |
- |
|
|
|
(53,535) |
(3,036) |
|
Net current (liabilities)/assets |
|
(26,498) |
25,580 |
|
Total assets less current liabilities |
|
1,276,107 |
1,529,330 |
|
Creditors: amounts falling due after more than one year |
|
|
|
|
Capital gains tax provision |
7 |
(169) |
(579) |
|
Bank loans and credit facility |
11 |
- |
(49,113) |
|
Net assets |
|
1,275,938 |
1,479,638 |
|
Capital and reserves: equity |
|
|
|
|
Share capital |
12 |
30,562 |
29,806 |
|
Share premium account |
|
423,098 |
388,262 |
|
Capital redemption reserve |
|
9,877 |
9,877 |
|
Share purchase reserve |
|
141,872 |
147,855 |
|
Capital reserve |
13 |
657,373 |
894,915 |
|
Revenue reserve |
|
13,156 |
8,923 |
|
Shareholders' funds |
|
1,275,938 |
1,479,638 |
|
Net assets per Ordinary Share |
14 |
419.49p |
496.42p |
Approved by the Board of Directors and authorised for issue on 31 March 2023 and signed on their behalf by:
John Scott
Chairman
Impax Environmental Market plc incorporated in England with registered number 4348393.
Statement of Changes in Equity
|
|
|
|
|
CAPITAL |
|
|
|
|
|
|
|
|
SHARE |
REDEMP- |
SHARE |
|
|
|
|
|
|
SHARE |
PREMIUM |
TION |
PURCHASE |
CAPITAL |
REVENUE |
|
|
YEAR ENDED |
|
CAPITAL |
ACCOUNT |
RESERVE |
RESERVE |
RESERVE |
RESERVE |
TOTAL |
|
31 DECEMBER 2022 |
NOTE |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening equity as at 1 January 2022 |
|
29,806 |
388,262 |
9,877 |
147,855 |
894,915 |
8,923 |
1,479,638 |
|
Dividends paid |
9 |
- |
- |
- |
- |
- |
(9,039) |
(9,039) |
|
Net proceeds from issue of new |
|
|
|
|
|
|
|
|
|
shares |
12 |
756 |
34,162 |
- |
- |
- |
- |
34,918 |
|
Net proceeds of shares sold from |
|
|
|
|
|
|
|
|
|
treasury |
12 |
- |
674 |
- |
6,904 |
- |
- |
7,578 |
|
Cost of share buybacks |
12 |
- |
- |
- |
(12,887) |
- |
- |
(12,887) |
|
(Loss)/return for the year |
|
- |
- |
- |
- |
(237,542) |
13,272 |
(224,270) |
|
Closing equity as at 31 December 2022 |
|
30,562 |
423,098 |
9,877 |
141,872 |
657,373 |
13,156 |
1,275,938 |
|
|
|
|
|
CAPITAL |
|
|
|
|
|
|
|
|
SHARE |
REDEMP- |
SHARE |
|
|
|
|
|
|
SHARE |
PREMIUM |
TION |
PURCHASE |
CAPITAL |
REVENUE |
|
|
YEAR ENDED |
|
CAPITAL |
ACCOUNT |
RESERVE |
RESERVE |
RESERVE |
RESERVE |
TOTAL |
|
31 DECEMBER 2021 |
NOTE |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Opening equity as at 1 January 2021 |
|
26,588 |
239,059 |
9,877 |
147,855 |
663,868 |
6,033 |
1,093,280 |
|
Dividends paid |
9 |
- |
- |
- |
- |
- |
(6,501) |
(6,501) |
|
Net proceeds from issue of new |
|
|
|
|
|
|
|
|
|
shares |
12 |
3,218 |
149,203 |
- |
- |
- |
- |
152,421 |
|
Return for the year |
|
- |
- |
- |
- |
231,047 |
9,391 |
240,438 |
|
Closing equity as at 31 December 2021 |
|
29,806 |
388,262 |
9,877 |
147,855 |
894,915 |
8,923 |
1,479,638 |
Statement of Cash Flows
|
|
|
YEAR ENDED |
YEAR ENDED |
|
|
|
31 DECEMBER |
31 DECEMBER |
|
|
|
2022 |
2021 |
|
|
NOTES |
£'000 |
£'000 |
|
Operating activities |
|
|
|
|
(Loss)/return on ordinary activities before finance costs and taxation* |
|
(219,626) |
243,172 |
|
Less: Tax deducted at source on income from investments |
|
(3,155) |
(1,776) |
|
Foreign exchange non cash flow losses |
|
2,775 |
205 |
|
Adjustment for losses/(gains) on investments |
|
226,293 |
(239,534) |
|
Special dividends received as capital |
|
393 |
- |
|
Increase in other debtors |
|
(413) |
(99) |
|
(Decrease)/increase in other creditors |
|
(1,142) |
821 |
|
Net cash flow from operating activities |
|
5,125 |
2,789 |
|
Investing activities |
|
|
|
|
Sale of investments |
|
313,189 |
336,772 |
|
Purchase of investments |
|
(338,730) |
(485,732) |
|
Net cash flow used in investing |
|
(25,541) |
(148,960) |
|
Financing activities |
|
|
|
|
Equity dividends paid |
9 |
(9,039) |
(6,501) |
|
Repayment of revolving credit facility |
|
(282) |
- |
|
Finance costs paid |
|
(1,864) |
(1,467) |
|
Net proceeds from issue of new shares |
12 |
34,918 |
152,421 |
|
Net proceeds of shares sold from treasury |
12 |
7,578 |
- |
|
Cost of share buybacks |
12 |
(12,887) |
- |
|
Net cash flow from financing |
12 |
18,424 |
144,453 |
|
Decrease in cash |
|
(1,992) |
(1,718) |
|
Cash and cash equivalents at start of year |
|
28,319 |
30,037 |
|
Cash and Cash equivalents at end of year |
|
26,327 |
28,319 |
* Cash inflow includes dividend income received during the year ended 31 December 2022 of £20,348,000 (2021: £15,117,000) and bank interest of £205,000 (2021: £nil).
Changes in net debt note
|
|
YEAR ENDED |
YEAR ENDED |
|
|
31 DECEMBER |
31 DECEMBER |
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Net debt at start of year |
(20,794) |
(18,871) |
|
Decrease in cash and cash equivalents |
(1,992) |
(1,718) |
|
Foreign exchange movements |
(2,775) |
(205) |
|
Repayment of revolving credit facility |
282 |
- |
|
Net debt at end of year |
(25,279) |
(20,794) |
Notes to the Financial Statements
1 ACCOUNTING POLICIES
The Company is an investment company within the meaning of Section 833 of the Companies Act 2006.
The accounts have been prepared in accordance with applicable UK accounting standards. The particular accounting policies adopted are described below.
(a) Basis of accounting
The accounts are prepared in accordance with UK Generally Accepted Accounting Practice ('UK GAAP') including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice 'Financial statements of investment trust companies and venture capital trusts' ('SORP') issued by the Association of Investment Companies in July 2022.
The accounts have been prepared on a going concern basis. Details of the Directors' assessment of the going concern status of the Company, which considered the adequacy of the Company's resources and the macroeconomic backdrop such as higher inflation and interest rates and possible recession, are given in the annual report..
Amounts in the accounts have been rounded to the nearest £'000 unless otherwise stated.
(b) Investments
Securities of companies quoted on regulated stock exchanges and the Company's holdings in unquoted companies have been classified as 'at fair value through profit or loss' and are initially recognised on the trade date and measured at fair value in accordance with sections 11 and 12 of FRS 102. Investments are measured at subsequent reporting dates at fair value by reference to their market bid prices. Any unquoted investments are measured at fair value which is determined by the Directors in accordance with the International Private Equity and Venture Capital guidelines.
Changes in fair value are included in the Income Statement as a capital item.
(c) Reporting currency
The accounts are presented in sterling which is the functional currency of the Company. Sterling is the reference currency for this UK registered and listed company.
(d) Income from investments
Investment income from shares is accounted for when the Company's right to receive the income is established, which is usually considered to be the ex-dividend date. Overseas income is grossed up at the appropriate rate of tax but UK dividend income is not grossed up for tax credits.
Special dividends are assessed on their individual merits and may be credited to the Income Statement as a capital item if considered to be closely linked to reconstructions of the investee company or other capital transactions. All other investment income is credited to the Income Statement as a revenue item.
(e) Nature and purpose of equity and reserves:
Share capital represents the 10p nominal value of the issued share capital.
The share premium account arose from the net proceeds of new shares and from the excess proceeds received on the sale of shares from treasury over the repurchase cost.
The capital redemption reserve represents the nominal value of shares repurchased for cancellation.
The share purchase reserve was created following shareholders' approval and confirmation of the Court, through the cancellation and transfer of £44,125,000 in December 2002 and £246,486,789 in July 2009 from the share premium account. This reserve may only be used for share repurchases, both into treasury or for cancellation. When shares are subsequently reissued from treasury, the amount equal to their repurchase cost is reflected in this reserve, with any proceeds in excess of the repurchase cost transferred to the share premium account.
The capital reserve reflects any:
· gains or losses on the disposal of investments;
· exchange movements of a capital nature;
· the increases and decreases in the fair value of investments which have been recognised in the capital column of the income statement; and
· expenses which are capital in nature.
Any gains in the fair value of investments that are not readily convertible to cash are treated as unrealised gains in the capital reserve.
The revenue reserve reflects all income and expenditure recognised in the revenue column of the income statement and is distributable by way of dividend.
The Company's distributable reserves consists of the share purchase reserve, the capital reserve attributable to realised profits and the revenue reserve. The share purchase reserve may only be used for share repurchases, both into treasury or for cancellation.
(f) Expenses
All expenses are accounted for on an accruals basis. Expenses are recognised through the Income Statement as revenue items except as follows:
Management fees
In accordance with the Company's stated policy and the Directors' expectation of the split of future returns, three quarters of investment management fees are charged as a capital item in the Income Statement. There is no performance fee arrangement with the Manager.
Finance costs
Finance costs include interest payable and direct loan costs. In accordance with Directors' expectation of the split of future returns, three quarters of finance costs are charged as capital items in the Income Statement. Loan arrangement costs are amortised over the term of the loan.
Transaction costs
Transaction costs incurred on the acquisition and disposal of investments are charged to the Income Statement as a capital item.
(g) Taxation
Irrecoverable taxation on dividends is recognised on an accruals basis in the Income Statement.
Deferred taxation
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the financial reporting date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the financial reporting date. This is subject to deferred tax 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 timing differences can be deducted. Deferred tax assets and liabilities are measured at the rates applicable to the legal jurisdictions in which they arise.
(h) Foreign currency translation
All transactions and income in foreign currencies are translated into sterling at the rates of exchange on the dates of such transactions or income recognition. Monetary assets and liabilities and financial instruments carried at fair value denominated in foreign currency are translated into sterling at the rates of exchange at the balance sheet date. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the Income Statement as either a capital or revenue item depending on the nature of the gain or loss.
(i) Financial liabilities
Bank loans and overdrafts are measured at amortised cost. They are initially recorded at the proceeds received net of direct issue costs.
(j) Cash and cash equivalents
Cash comprises cash and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash, are subject to insignificant risks of changes in value, and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.
(k) Estimates and assumptions
The preparation of financial statements requires the Directors to make estimates and assumptions that affect items reported in the Balance Sheet and Income Statement. Although these estimates are based on management's best knowledge of current facts, circumstances and, to some extent, future events and actions, the Company's actual results may ultimately differ from those estimates, possibly significantly.
The assumptions regarding the valuation of unquoted financial instruments are disclosed in note 2.
(l) Dividend payable
Final dividends payable to equity shareholders are recognised in the financial statements when they have been approved by shareholders and become a liability of the Company. Interim dividends payable are recognised in the period in which they are paid. The capital reserve attributable to realised profits and revenue reserve may be used to fund dividend distributions.
(m) Treasury shares
Treasury shares are recognised at cost as a deduction from equity shareholders' funds. Subsequent consideration received for the sale of such shares is also recognised in equity, with any difference between the sale proceeds and the original cost being taken to share premium account. No gain or loss is recognised in the financial statements on transactions in treasury shares.
2 INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
(a) Summary of valuation |
|
|
|
Analysis of closing balance: |
|
|
|
UK quoted securities |
88,985 |
118,644 |
|
Overseas quoted securities |
1,213,620 |
1,384,524 |
|
Overseas unquoted securities |
- |
582 |
|
Total investments |
1,302,605 |
1,503,750 |
|
(b) Movements during the year: |
|
|
|
Opening balance of investments, at cost |
1,031,903 |
748,272 |
|
Additions, at cost |
338,730 |
484,211 |
|
Disposals, at cost |
(248,327) |
(200,580) |
|
Cost of investments at 31 December |
1,122,306 |
1,031,903 |
|
Revaluation of investments to fair value: |
|
|
|
Opening balance of capital reserve - investments held |
471,847 |
364,617 |
|
Unrealised (losses)/gains on investments held |
(291,548) |
107,230 |
|
Balance of capital reserve - investments held at 31 December |
180,299 |
471,847 |
|
Fair value of investments at 31 December |
1,302,605 |
1,503,750 |
|
(c) Gains/(losses) on investments in year (per Income Statement) |
|
|
|
Gains on disposal of investments |
65,492 |
132,716 |
|
Net transaction costs |
(630) |
(412) |
|
Special dividends received as capital |
393 |
- |
|
Unrealised (losses)/gains on investments held |
(291,548) |
107,230 |
|
(Losses)/gains on investments |
(226,293) |
239,534 |
During the year, the Company incurred transaction costs on purchases totalling in aggregate £588,000 (2021: £508,000) and on disposals totalling in aggregate £313,000 (2021: £246,000). Following MiFID II, the Manager has rebated £271,000 (2021: £299,000) in respect of transaction research costs for the year ended 31 December 2022, and nil (2021: £43,000) in relation to prior periods. Transaction costs are recorded in the capital column of the Income Statement.
The Company received £327,757,000 (2021: £333,296,000) from investments sold in the year. The book cost of these investments when they were purchased was £262,265,000 (2021: £200,580,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
Classification of financial instruments
FRS 102 requires classification of financial instruments within the fair value hierarchy be determined by reference to the source of inputs used to derive the fair value and the lowest level input that is significant to the fair value measurement as a whole. The classifications and their descriptions are below:
Level 1
The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.
Level 2
Holdings in companies with no quoted prices. Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.
Level 3
Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
The classification of the Company's investments held at fair value is detailed in the table below:
|
|
31 DECEMBER 2022 |
31 DECEMBER 2021 |
||||||
|
|
LEVEL 1 |
LEVEL 2 |
LEVEL 3 |
TOTAL |
LEVEL 1 |
LEVEL 2 |
LEVEL 3 |
TOTAL |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investments at fair value |
|
|
|
|
|
|
|
|
|
- Quoted |
1,302,605 |
- |
- |
1,302,605 |
1,503,168 |
- |
- |
1,503,168 |
|
- Unquoted |
- |
- |
- |
- |
- |
- |
582 |
582 |
|
|
1,302,605 |
- |
- |
1,302,605 |
1,503,168 |
- |
582 |
1,503,750 |
The movement on the Level 3 unquoted investments during the year is shown below:
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Opening balance |
582 |
577 |
|
Writedown of investment to nil |
(582) |
- |
|
Foreign exchange movements |
- |
5 |
|
Closing balance |
- |
582 |
Unquoted investments are valued using relevant financial data available on those investments and applying International Private Equity and Venture Capital guidelines. This includes, where appropriate, consideration of price of recent market transactions, earnings multiples, discounted cash flows, net assets and liquidity discounts.
At the year end the Company had one unlisted holding (2021: one).
3 INCOME
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Dividends from UK listed investments |
2,295 |
1,484 |
|
Dividends from overseas listed investments |
17,660 |
13,711 |
|
Bank interest received |
205 |
- |
|
Total Income |
20,160 |
15,195 |
Dividends from overseas limited investments includes special dividends of £283,000 (2021: nil).
4 INVESTMENT MANAGEMENT FEES
|
|
2022 |
2021 |
||||
|
|
REVENUE |
CAPITAL |
TOTAL |
REVENUE |
CAPITAL |
TOTAL |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment management fees |
2,420 |
7,258 |
9,678 |
2,471 |
7,412 |
9,883 |
At 31 December 2022, investment management fees accrued were £1,601,000 (2021: 2,730,000).
5 OTHER EXPENSES
|
|
|
2022 |
|
|
2021 |
|
|
|
REVENUE |
CAPITAL |
TOTAL |
REVENUE |
CAPITAL |
TOTAL |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Secretary and administrator fees |
250 |
- |
250 |
276 |
- |
276 |
|
Depository fees* |
104 |
- |
104 |
162 |
- |
162 |
|
Depository fees refund* |
(66) |
- |
(66) |
- |
- |
- |
|
Custody fees* |
170 |
- |
170 |
219 |
- |
219 |
|
Custody fees refund* |
(55) |
- |
(55) |
- |
- |
- |
|
Directors' fees- see below |
171 |
- |
171 |
162 |
- |
162 |
|
Directors' expenses |
3 |
- |
4 |
- |
- |
- |
|
Directors' other costs- see below |
9 |
- |
8 |
17 |
- |
17 |
|
Directors' D&O insurance |
16 |
- |
16 |
13 |
- |
13 |
|
Director recruitment fees |
20 |
- |
20 |
20 |
- |
20 |
|
Broker retainer |
24 |
- |
24 |
50 |
- |
50 |
|
Auditor's fee |
42 |
- |
42 |
37 |
- |
37 |
|
Tax advisor fees |
9 |
- |
9 |
8 |
- |
8 |
|
Association of Investment Companies |
21 |
- |
21 |
21 |
- |
21 |
|
Registrar's fees |
119 |
- |
119 |
146 |
- |
146 |
|
Marketing fees |
61 |
- |
61 |
75 |
- |
75 |
|
FCA and listing fees |
107 |
- |
107 |
64 |
- |
64 |
|
Printing fees |
30 |
- |
30 |
30 |
- |
30 |
|
Other expenses |
2 |
- |
2 |
60 |
- |
60 |
|
|
1,037 |
- |
1,037 |
1,360 |
- |
1,360 |
Full detail on Directors' fees in the year is provided in the Directors' Remuneration Implementation Report. Employer's National Insurance upon the fees is included as appropriate in Directors' other costs. At 31 December 2022, Directors' fees, Directors' expenses and national insurance fees outstanding were £7,000 (2021: £1,000).
* Refunds of £66,000 and £55,000 were received respectively for depository and custody fees charged in 2021 due to revised depository and custody fee rates being retrospectively applied from 1 January 2021.
6 FINANCE COSTS
|
|
2022 |
2021 |
||||
|
|
REVENUE |
CAPITAL |
TOTAL |
REVENUE |
CAPITAL |
TOTAL |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Interest charges |
471 |
1,414 |
1,885 |
364 |
1,091 |
1,455 |
|
Direct finance costs |
4 |
10 |
14 |
4 |
12 |
16 |
|
Total |
475 |
1,424 |
1,899 |
368 |
1,103 |
1,471 |
Facility arrangement costs amounting to £72,000 are amortised over the life of the facility on a straight-line basis.
7 TAXATION
(a) Analysis of charge in the year
|
|
2022 |
2021 |
||||
|
|
REVENUE |
CAPITAL |
TOTAL |
REVENUE |
CAPITAL |
TOTAL |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Overseas taxation |
2,956 |
59 |
3,015 |
1,605 |
- |
1,605 |
|
Decrease in CGT provision |
- |
(270) |
(270) |
- |
(342) |
(342) |
|
Taxation |
2,956 |
(211) |
2,745 |
1,605 |
(342) |
1,263 |
(b) Factors affecting total tax charge for the year:
The standard UK corporation tax rate at 31 December 2022 was 19% (2021: 19.00%). The tax charge differs from the charge resulting from applying the standard rate of UK corporation tax for an investment trust company.
The differences are explained below:
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
(Loss)/return on ordinary activities before taxation |
(221,525) |
241,701 |
|
Corporation tax at 19.00% (2021: 19.00%) |
(42,090) |
45,923 |
|
Effects of: |
|
|
|
Non-taxable UK dividend income |
(436) |
(282) |
|
Non-taxable overseas dividend income |
(3,355) |
(2,605) |
|
Non-taxable interest income |
(39) |
- |
|
Movement in unutilised management expenses |
2,036 |
2,136 |
|
Movement on non-trade relationship deficits |
361 |
280 |
|
Losses/(gains) on investments not taxable |
42,995 |
(45,512) |
|
Loss in foreign currency movement |
528 |
60 |
|
Capital gains tax provision movement |
(270) |
(342) |
|
Overseas taxation |
3,015 |
1,605 |
|
Total tax charge for the year |
2,745 |
1,263 |
(c) Investment companies which have been approved by the HM Revenue & Customs under section 1158 of the Corporation Tax Act 2010 are exempt from tax on capital gains. Due to the Company's status as an Investment Trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided for deferred tax on any capital gains or losses arising on the revaluation of investments.
(d) The capital gains tax provision represents an estimate of the amount of tax provisionally payable by the Company on direct investment in Indian equities. It is calculated based on the long term or short term nature of the investments and the unrealised gain thereon at the applicable tax rate at the year end.
Movements on the capital gains tax provision for the year
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Provision brought forward |
579 |
1,092 |
|
Capital gains tax paid |
(140) |
(171) |
|
Decrease in provision in year |
(270) |
(342) |
|
Provision carried forward |
169 |
579 |
(e) The Company has unrelieved excess management expenses and non-trade relationship deficits of £90,629,000 (2021: £78,015,000). It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and therefore no deferred tax asset has been recognised. The unrecognised deferred tax asset calculated using a rate of 25% (2021: 25%) amounts to £22,657,000 (2021: £19,500,000). The March 2021 Budget announced an increase to the main rate of corporation tax to 25% from 1st April 2023. This increase in the standard rate of corporation tax was substantively enacted on 24th May 2021 and became effective from 2nd June 2021.
8 RETURN PER SHARE
|
|
YEAR ENDED |
YEAR ENDED |
|
|
31 DECEMBER |
31 DECEMBER |
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Revenue return after taxation (£'000s) |
13,272 |
9,391 |
|
Capital (loss)/return after taxation (£'000s) |
(237,542) |
231,047 |
|
Total net (loss)/return after tax (£'000s) |
(224,270) |
240,438 |
|
Weighted average number of Ordinary Shares |
303,853,145 |
285,059,568 |
Net return per Ordinary Share is based on the above totals of revenue and capital and the weighted average number of Ordinary Shares in issue during each year.
There is no dilution to return per share as the Company has only Ordinary Shares in issue.
9 DIVIDENDS
(a) Dividends paid in the year
|
|
2022 |
2021 |
||
|
|
RATE |
£'000 |
RATE |
£'000 |
|
Interim in lieu of final for the previous year |
1.50p |
4,471 |
1.00p |
2,734 |
|
First interim for the current year |
1.50p |
4,568 |
1.30p |
3,767 |
|
|
3.00p |
9,039 |
2.30p |
6,501 |
(b) Dividends paid and payable in respect of the financial year, which is the basis on which the requirements of s1158-1159 of the Corporation Tax Act 2010 are considered
|
|
2022 |
2021 |
||
|
|
RATE |
£'000 |
RATE |
£'000 |
|
First interim for the current year |
1.50p |
4,568 |
1.30p |
3,767 |
|
Second interim in lieu of final for the current year |
2.50p |
7,604 |
1.50p |
4,471 |
|
|
4.00p |
12,172 |
2.80p |
8,238 |
The Board declared two dividends in respect of the year and expects to continue paying two dividends annually.
10 TRADE AND OTHER PAYABLES
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Finance costs payable |
133 |
98 |
|
Accrued management fees |
1,601 |
2,730 |
|
Other accrued expenses |
195 |
208 |
|
Total |
1,929 |
3,036 |
11 BANK LOANS AND CREDIT FACILITY
On 6 September 2018, the Company entered into five-year fixed rate multi-currency US$20 million and £15 million loans with Scotiabank Europe plc ("Scotiabank"). The loans expire on 6 September 2023.
The Company also has a £20 million multi-currency revolving credit facility ("RCF") with Scotiabank which was fully drawn in two currencies, US $12.2 million and £10 million throughout the year. The facility expires on 6 September 2023.
A summary of the Company's loans follows.
|
|
|
2022 |
2021 |
||
|
BANK LOANS-FIXED RATE |
INTEREST RATE |
LOAN CURRENCY AMOUNT |
£'000 |
LOAN CURRENCY AMOUNT |
£'000 |
|
Sterling |
2.910% |
15,000,000 |
15,000 |
15,000,000 |
15,000 |
|
Non-sterling |
4.504% |
20,000,000 |
16,531 |
20,000,000 |
14,777 |
|
|
|
|
31,531 |
|
29,777 |
|
RCF-FLOATING RATE |
|
|
|
|
|
|
Sterling |
Six month SONIA +1.7% |
10,000,000 |
10,000 |
10,000,000 |
10,000 |
|
Non-sterling |
Six month SOFR +1.7% |
12,185,017 |
10,075 |
12,637,000 |
9,336 |
|
|
|
|
51,606 |
|
49,113 |
The maturity profile of the bank loans and credit facility as follows:
|
|
|
2022 |
2021 |
|
PAYABLE AT 31 DECEMBER |
|
£'000 |
£'000 |
|
Bank loans payable less than one year |
|
31,531 |
- |
|
Bank loans payable after more than one year |
- |
29,777 |
|
|
Revolving credit facility payable less than one year |
20,075 |
- |
|
|
Revolving credit facility payable after more than one year |
- |
19,336 |
|
|
|
|
51,606 |
49,113 |
The Company's loans and revolving credit facility contain the following covenants, with which failure to comply could necessitate the early repayment of the loan:
1) Adjusted asset coverage should not be less than 4:1.
2) Net Asset Value should not be less than £260,000,000.
3) The maximum permitted borrowing should not exceed that permitted in the Company's Articles of Association as described in the Gearing section of the Investment Policy.
12 SHARE CAPITAL
|
|
2022 |
|
2021 |
|
|
|
NUMBER |
£'000 |
NUMBER |
£'000 |
|
Issued and fully paid shares of 10p each |
|
|
|
|
|
Brought forward |
298,061,439 |
29,806 |
265,877,138 |
26,588 |
|
New shares issued in year |
7,562,100 |
756 |
32,184,301 |
3,218 |
|
Shares bought back and held in treasury |
(3,119,400) |
(312) |
- |
- |
|
Treasury shares issued in year |
1,662,900 |
166 |
- |
- |
|
Carried forward |
304,167,039 |
30,416 |
298,061,439 |
29,806 |
|
Treasury shares of 10p each |
|
|
|
|
|
Brought forward |
- |
- |
- |
- |
|
Shares bought back and held in treasury |
3,119,400 |
312 |
|
|
|
Issued in year |
(1,662,900) |
(166) |
- |
- |
|
Carried forward |
1,456,500 |
146 |
- |
- |
|
Share capital |
305,623,539 |
30,562 |
298,061,439 |
29,806 |
The Company received aggregate gross proceeds of £35,126,000 (2021: £153,493,000) from the issue of shares and net proceeds of £34,918,000 (2021: £152,421,000) after issue costs of £208,000 (2021: £1,072,000). During the year, the Company bought back a total of 3,119,400 Ordinary Shares (2021: nil) held in treasury for a total cost of £12,887,000 after purchase costs of £90,000. In addition, 1,662,900 Ordinary Shares (2021: Nil) have been re-issued for net proceeds of £7,578,000 after reissue costs of £91,000.
As at 27 March 2023, the latest practicable date before publication of this report, 725,000 Ordinary Shares have been
bought back at a total cost of £3,244,000 after purchase costs of £23,000.
13 CAPITAL RESERVE
Realised capital reserve
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Opening balance |
423,068 |
299,251 |
|
Gains on disposal of investments |
65,492 |
132,716 |
|
Net transaction costs |
(630) |
(412) |
|
Net foreign exchange losses |
(2,778) |
(314) |
|
Investment management fees charged to capital |
(7,258) |
(7,412) |
|
Finance costs charged to capital |
(1,424) |
(1,103) |
|
Special dividends received as capital |
393 |
- |
|
Taxation credit to capital |
211 |
342 |
|
Balance at 31 December |
477,074 |
423,068 |
Unrealised gains on investments
|
|
2022 |
2021 |
|
|
£'000 |
£'000 |
|
Unrealised gains brought forward |
471,847 |
364,617 |
|
Unrealised (losses)/gains on investments held |
(291,548) |
107,230 |
|
Unrealised gains carried forward |
180,299 |
471,847 |
|
Capital reserve balance at 31 December |
657,039 |
894,915 |
14 NET ASSET VALUE PER SHARE
|
|
2022 |
2021 |
|
Net asset value (£'000) |
£1,275,938 |
1,479,638 |
|
Shares in issue (excluding shares held in treasury) |
304,167,039 |
298,061,439 |
|
Net asset value per share at 31 December |
419.49p |
496.42p |
15 TRANSACTIONS WITH THE MANAGER AND RELATED PARTY TRANSACTIONS
Details of the management contract can be found in the Directors' Report. Fees payable to the Manager are detailed in note 4. Since 1 January 2018, the Manager has agreed to rebate commission which relates to research fees to the Company with such amount disclosed in note 2.
The Directors' fees are disclosed in note 5 and the Directors' shareholdings are disclosed in the Directors' Remuneration Implementation Report.
16 FINANCIAL RISK MANAGEMENT
As an investment trust, the Company invests in equities for the long-term so as to enable investors to benefit from growth in the markets for cleaner or more efficient delivery of basic services of energy, water and waste, as stated in the Company's investment objective which can be found in the annual report. In pursuing its investment objective, the Company is exposed to a variety of risks that could result in either a reduction in the Company's net assets or a reduction of the profits available for dividends. These risks include market risk (comprising currency risk, interest rate risk, and other price risk), credit risk and liquidity risk and the Directors' approach to the management of them is set out below. These metrics are monitored by the AIFM. The objectives, policies and processes for managing the risks, and the methods used to measure the risks, are set out below.
Market risks
The potential market risks are (i) currency risk, (ii) interest rate risk, and (iii) other price risk. Each is considered in turn below.
(i) Currency risk
The Company invests in global equity markets and therefore is exposed to currency risk as it affects the value of the shares in the base currency. These currency exposures are not hedged. The Manager monitors currency exposure as part of its investment process. Currency exposures for the Company as at 31 December 2022 are detailed in the table at the end of this note.
Currency sensitivity
The below table shows the strengthening/(weakening) of sterling against the local currencies over the financial year for the Company's financial assets and liabilities held at 31 December 2022.
|
|
2022 |
2021 |
|
|
%CHANGE1 |
%CHANGE1 |
|
Australian Dollar |
(4.7%) |
4.6% |
|
Canadian Dollar |
(4.2%) |
(1.8%) |
|
Danish Krone |
(4.9%) |
6.0% |
|
Euro |
(5.0%) |
6.1% |
|
Hong Kong Dollar |
(10.6%) |
(0.3%) |
|
Indian Rupee |
(1.1%) |
0.9% |
|
Israeli Shekel |
1.3% |
(4.6%) |
|
Korean Won |
(5.4%) |
7.7% |
|
Norwegian Krone |
(0.5%) |
1.7% |
|
Swedish Krona |
3.1% |
8.3% |
|
Swiss Franc |
(9.3%) |
2.1% |
|
Taiwanese Dollar |
(1.4%) |
(2.3%) |
|
US Dollar |
(10.7%) |
(0.9%) |
1 Percentage change of Sterling against local currency from 1 January to 31 December.
Based on the financial assets and liabilities at 31 December 2022 and all other things being equal, if sterling had weakened by 10%, the profit after taxation for the year ended 31 December 2022 and the Company's net assets at 31 December 2022 would have increased by the amounts shown in the table below. If sterling had strengthened by 10% this would have had the opposite effect.
|
|
2022 |
2021 |
|
|
POTENTIAL |
POTENTIAL |
|
|
EFFECT |
EFFECT |
|
|
£'000 |
£'000 |
|
Australian Dollar |
3,335 |
3,127 |
|
Canadian Dollar |
5,606 |
6,925 |
|
Danish Krone |
2,777 |
2,595 |
|
Euro |
25,237 |
23,141 |
|
Hong Kong Dollar |
1,955 |
3,017 |
|
Indian Rupee |
2,249 |
2,492 |
|
Israeli Shekel |
461 |
537 |
|
Korean Won |
1,486 |
2,067 |
|
Norwegian Krone |
2,336 |
4,706 |
|
Swedish Krona |
2,135 |
3,052 |
|
Swiss Franc |
5,655 |
4,751 |
|
Taiwanese Dollar |
6,451 |
8,475 |
|
US Dollar |
59,587 |
71,532 |
|
Total |
119,270 |
136,417 |
(ii) Interest rate risk
The Company is typically fully invested in global equities but will from time to time hold interest bearing assets. These assets are cash balances that earn interest at a floating rate and, typically, UK Treasury Bills when large amounts of cash are held.
With the exception of cash, no significant interest rate risks arise in respect of any current asset. The Company, generally, does not hold significant cash balances, with short-term borrowings being used when required. Cash held as a current asset is sterling and is held at the variable interest rates of the custodian. Movement in interest rates will not materially affect the Company's income and as such no sensitivity analysis is required.
The Company had two bank loans in place during the year. The loan interest on the current loans is based on a fixed rate as such no sensitivity analysis is required.
The Company's £20 million multi-currency revolving credit facility is based on a floating reference interest rate plus a margin of 1.70% per annum. If interest rates had increased or decreased by 350 basis points, which is regarded as reasonable based upon interest rate movements observed during the year, the impact to the Company's profit or loss would be:
|
|
2022 |
2021 |
||
|
|
PROFIT OR LOSS £'000 |
PROFIT OR LOSS £'000 |
||
|
|
350 BPS |
350 BPS |
25 BPS |
25 BPS |
|
|
INCREASE |
DECREASE |
INCREASE |
DECREASE |
|
31 December |
|
|
|
|
|
Non-sterling Revolving Credit Facility |
(353) |
353 |
(23) |
23 |
|
Sterling Revolving Credit Facility |
(350) |
350 |
(25) |
25 |
(iii) Other price risk
The principal price risk for the Company is the price volatility of shares that are owned by the Company. The Company is well diversified across different sub-sectors and geographies and has a volatility level similar to global stock market indices such as the MSCI ACWI Index to which the Company has had an annualised tracking error of 6.8% (2021: 6.4%) over the ten year period to 31 December 2022. The historic 3-year (annualised) volatility of the Company to 31 December 2022 is 19.9% (2021: 16.6%).
At the year end the Company held investments with an aggregate market value of £1,302,605,000 (2021: £1,503,750,000). All other things being equal, the effect of a 10% increase or decrease in the share prices of the investments held at the year end would have been an increase or decrease of £130,260,500 (2021: £150,375,000) in the profit after taxation for the year ended 31 December 2022 and the Company's net assets at 31 December 2022.
Overall sensitivity
The Manager has used the Parametric VaR to calculate value at risk ('VAR'). This model has been used to estimate the maximum expected loss from the portfolio held at 31 December 2022 over 1 day, 5 day, 10 day and 21 day periods given the historical performance of the fund over the previous five years. The data in the previous five years is analysed under discrete periods to provide 1 in 10, 1 in 20 and 1 in 100 possible outcomes. The results of the analysis are shown below.
|
|
2022 |
2021 |
||
|
|
EXPECTED AS PERCENTAGE AT LIMIT |
EXPECTED AS PERCENTAGE AT LIMIT |
||
|
|
1 IN 20 |
1 IN 100 |
1 IN 20 |
1 IN 100 |
|
|
(95%) |
(99%) |
(95%) |
(99%) |
|
1 day return |
1.87 |
2.64 |
1.46 |
2.07 |
|
5 day return |
4.18 |
5.91 |
3.27 |
4.63 |
|
10 day return |
5.90 |
8.35 |
4.63 |
6.54 |
|
21 day return |
8.76 |
12.39 |
6.86 |
9.70 |
The above analysis has been based on the following main assumptions:
· The distribution of share price returns will be the same in the future as they were in the past.
· The portfolio weightings will remain as they were at 31 December 2022.
The above results suggest, for example, that there is a 5% or less chance of the NAV falling by 4.18% or more over a 5 day period. Similarly, there is a 1% or less chance of the NAV falling by 2.64% or more on any given day.
Credit risks
BNP Paribas Securities Services (the 'Depositary') has been appointed as custodian and depositary to the Company.
Cash at bank at 31 December 2022 included £25,835,000 (2021: £27,887,000) held in its bank accounts at the Depositary. The Company also held £492,000 (2021: £432,000) in its accounts with NatWest Group plc. The Board has established guidelines that, under normal circumstances, the maximum level of cash to be held at any one bank should be the lower of i) 5% of the Company's net assets and ii) £30 million. These are guidelines and there may be instances when this amount is exceeded for short periods of time.
Substantially all of the assets of the Company at the year end were held by the Depositary or sub-custodians of the Depositary. Bankruptcy or insolvency of the Depositary may cause the Company's rights with respect to securities held by the Depositary to be delayed or limited. The Depositary segregates the Company's assets from its own assets and only uses sub-custodians on its approved list of sub-custodians. At the year end, the Depository held £1,302,605,000 (2021: £1,503,168,000) in respect of quoted investments.
The credit rating of the Depositary, which is a Fitch rating of A+, was reviewed at the time of appointment and is reviewed on a regular basis by the Manager and/or the Board.
Credit risk arising on transactions with brokers relates to transactions awaiting settlement. Risk relating to unsettled transactions is considered to be low as trading is almost always done on a delivery versus payment basis.
There is credit risk on dividends receivable during the time between recognition of the income entitlement and actual receipt of dividend.
Liquidity risks
The Company invests in a range of global equities with different market capitalisations and liquidities and therefore needs to be conscious of liquidity risk. The Manager monitors the liquidity risk by carrying out a 'Maturity Analysis' of the Company's listed equities based on the 3 Month Average Liquidities of each investment and assuming 15% of the daily traded volume.
Quantitative disclosures
The results of the Managers maturity analysis at 31 December 2022 are reported in the following table as a percentage of the portfolio that could be liquidated over different time periods. On 31 December 2022, 2.59% (2021: 2.37%) of the portfolio by value (excluding unquoted investments) might have taken more than three months to be realised.
|
|
2022 |
2021 |
|
Percentage of portfolio by value that could be liquidated in one week |
65.9 |
64.5 |
|
Percentage of portfolio by value that could be liquidated in one month |
92.4 |
92.1 |
|
Percentage of portfolio by value that could be liquidated in three months |
97.4 |
97.6 |
|
Percentage of portfolio by value that could be liquidated in one year |
98.9 |
98.6 |
The Company may invest up to 10% of its net assets into pre-IPO investments which are possible candidates for flotation.
Liquidity risk
This is the risk that the Company will encounter difficulty in meeting its obligations for financial liabilities as they fall due. This risk is minimised because a majority of the Company's investments are in readily realisable securities which can be sold to meet funding commitments. The maturity profile analysis of the Company's financial liabilities is shown below. The Company does not have derivative financial liabilities and the amounts shown are undiscounted.
Financial liabilities by maturity at the year end are shown below on an undiscounted basis:
|
|
2022 |
2021 |
||||
|
|
|
WITHIN |
|
|
WITHIN |
|
|
|
WITHIN 1 YEAR |
1-3 YEARS |
TOTAL |
WITHIN 1 YEAR |
1-3 YEARS |
TOTAL |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Bank loans |
31,531 |
- |
31,531 |
- |
29,777 |
29,777 |
|
Revolving credit facility |
20,075 |
- |
20,075 |
- |
19,336 |
19,336 |
|
Interest cash flows on bank loans |
887 |
- |
887 |
1,102 |
827 |
1,929 |
|
Interest cash flows on revolving credit facility |
794 |
- |
794 |
401 |
304 |
705 |
|
Cash flows on other creditors |
1,796 |
- |
1,796 |
2,938 |
- |
2,938 |
|
|
55,083 |
- |
55,083 |
4,441 |
50,244 |
54,685 |
Financial assets and liabilities
All liabilities carrying amount approximates fair value.
The Company's financial assets and liabilities at 31 December 2022 comprised:
|
|
2022 |
2021 |
||||
|
|
INTEREST |
NON-INTEREST |
|
INTEREST |
NON-INTEREST |
|
|
|
BEARING |
BEARING |
TOTAL |
BEARING |
BEARING |
TOTAL |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investments |
|
|
|
|
|
|
|
Australian Dollar |
- |
33,347 |
33,347 |
- |
31,273 |
31,273 |
|
Canadian Dollar |
- |
55,901 |
55,901 |
- |
69,087 |
69,087 |
|
Danish Krone |
- |
27,769 |
27,769 |
- |
25,948 |
25,948 |
|
Euro |
- |
252,369 |
252,369 |
- |
231,414 |
231,414 |
|
Hong Kong Dollar |
- |
19,548 |
19,548 |
- |
30,167 |
30,167 |
|
Indian Rupee |
- |
23,074 |
23,074 |
- |
25,496 |
25,496 |
|
Israeli Schekel |
- |
4,608 |
4,608 |
- |
5,370 |
5,370 |
|
Korean Won |
- |
14,856 |
14,856 |
- |
20,673 |
20,673 |
|
Norwegian Krone |
- |
23,356 |
23,356 |
- |
47,060 |
47,060 |
|
Sterling |
- |
88,985 |
88,985 |
- |
118,644 |
118,644 |
|
Swedish Krona |
- |
21,346 |
21,346 |
- |
30,524 |
30,524 |
|
Swiss Franc |
- |
56,551 |
56,551 |
- |
47,512 |
47,512 |
|
Taiwanese Dollar |
- |
64,511 |
64,511 |
- |
84,747 |
84,747 |
|
US Dollar |
- |
616,384 |
616,384 |
- |
735,835 |
735,835 |
|
|
- |
1,302,605 |
1,302,605 |
- |
1,503,750 |
1,503,750 |
|
Other assets and liabilities |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
Sterling |
23,705 |
- |
23,705 |
24,722 |
- |
24,722 |
|
Canadian Dollar |
- |
- |
- |
97 |
- |
97 |
|
Taiwanese Dollar |
14 |
- |
14 |
- |
- |
- |
|
US Dollar |
2,608 |
- |
2,608 |
3,500 |
- |
3,500 |
|
|
26,327 |
- |
26,327 |
28,319 |
- |
28,319 |
|
Short term net (creditors)/debtors |
|
|
|
|
|
|
|
Sterling |
(25,000) |
(1,588) |
(26,588) |
- |
(2,918) |
(2,918) |
|
Canadian Dollar |
- |
68 |
68 |
- |
60 |
60 |
|
US Dollar |
(26,606) |
211 |
(26,395) |
- |
96 |
96 |
|
|
(51,606) |
(1,309) |
(52,915) |
- |
(2,762) |
(2,762) |
|
Long term creditors |
|
|
|
|
|
|
|
Sterling |
- |
- |
- |
(25,000) |
- |
(25,000) |
|
US Dollar |
- |
- |
- |
(24,113) |
- |
(24,113) |
|
|
- |
- |
- |
(49,113) |
- |
(49,113) |
|
Total |
(25,279) |
1,301,296 |
1,276,017 |
(20,794) |
1,500,988 |
1,480,194 |
Capital management
The Company considers its capital to consist of its share capital of Ordinary Shares of 10p each, its distributable reserves and its borrowings.
At 31 December 2022 there were 305,623,539 Ordinary Shares in issue (2021: 298,061,439) of which 1,456,500 Ordinary Shares were held in treasury (2021: nil).
The Company has a stated premium/discount control policy. The Manager and the Company's broker monitor the demand for the Company's shares and the Directors review the position at Board meetings. Further details on share issues and buy backs during the year and the Company's policies for issuing further shares and buying back shares (including the Company's premium/discount control policy) can be found in the Directors' Report.
The Company's policy on borrowings is detailed in the Directors' Report.
Alternative Performance Measures (APMs)
APMs are often used to describe the performance of investment companies although they are not specifically defined under FRS 102. The Directors assess the Company's performance against a range of criteria which are viewed as relevant to both the Company and its market sector. APM calculations for the Company are shown below.
GEARING
A way to magnify income and capital returns, but which can also magnify losses. A bank loan is a common method of gearing.
|
AT 31 DECEMBER |
|
2022 |
2021 |
|
Total assets less cash/cash equivalents (£'000) |
a |
1,303,315 |
1,504,047 |
|
Net assets (£'000) |
b |
1,275,938 |
1,479,638 |
|
Gearing (net) |
(a÷b)-1 |
2.1% |
1.6% |
LEVERAGE
Under the Alternative Investment Fund Managers Directive ("AIFMD"), leverage is any method by which the exposure of an Alternative Investment Fund ("AIF") is increased through borrowing of cash or securities or leverage embedded in derivative positions.
Under AIFMD, leverage is broadly similar to gearing, but is expressed as a ratio between the assets (excluding borrowings) and the net assets (after taking account of borrowing). Under the gross method, exposure represents the sum of the Company's positions after deduction of cash balances, without taking account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the deduction of cash balances and after certain hedging and netting positions are offset against each other.
ONGOING CHARGES
A measure, expressed as a percentage of the average daily net asset values during the year, of the regular, recurring annual costs of running an investment company.
|
YEAR END 31 DECEMBER |
|
2022 |
2021 |
|
Average NAV (£'000) |
a |
1,321,438 |
1,324,967 |
|
Investment Management fees (£'000) |
b |
9,678 |
9,883 |
|
Other expenses (£'000) |
c |
1,037 |
1,360 |
|
|
(b+c)÷a |
0.81% |
0.85% |
PREMIUM/(DISCOUNT)
The amount, expressed as a percentage, by which the share price is more/(less) than the Net Asset Value per Ordinary Share.
|
AT 31 DECEMBER |
|
2022 |
2021 |
|
NAV per Ordinary Share (p) |
a |
419.49 |
496.42 |
|
Share price (p) |
b |
419.50 |
547.00 |
|
Premium/(discount) |
(b÷a)-1 |
0.0% |
10.2% |
TOTAL RETURN
A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of dividends paid out by the Company into its Ordinary Shares on the ex-dividend date.
|
|
|
SHARE |
|
|
YEAR ENDED 31 DECEMBER 2022 |
|
PRICE |
NAV |
|
Opening at 1 January 2022 (p) |
a |
547.00 |
496.42 |
|
Closing at 31 December 2022 (p) |
b |
419.50 |
419.49 |
|
Dividend/income adjustment factor 1 |
c |
1.0066 |
1.0059 |
|
Adjusted closing (d = b x c) |
d |
422.28 |
421.96 |
|
Total return |
(d÷a)-1 |
(22.8)% |
(15.0)% |
|
|
|
SHARE |
|
|
YEAR ENDED 31 DECEMBER 2021 |
|
PRICE |
NAV |
|
Opening at 1 January 2021 (p) |
a |
422.50 |
411.20 |
|
Closing at 31 December 2021 (p) |
b |
547.00 |
496.42 |
|
Dividend/income adjustment factor 1 |
c |
1.0049 |
1.0048 |
|
Adjusted closing (d = b x c) |
d |
549.67 |
498.79 |
|
Total return |
(d÷a)-1 |
30.1% |
21.3% |
1. The dividend adjustment factor is calculated on the assumption that dividends paid out by the Company are reinvested into the shares of the Company at NAV at the ex-dividend date.
FINANCIAL INFORMATION
This announcement does not constitute the Company's statutory accounts. The financial information for the year to 31 December 2022 is derived from the statutory accounts for 2022, which will be delivered to the Registrar of Companies. The auditor has reported on the 2022 accounts; their report was unqualified and did not include a statement under Section 498(2) or (3) of the Companies Act 2006.
The Annual Report for the year ended 31 December 2022 was approved on 31 March 2023. It will be made available on the Company's website at www.impaxenvironmentalmarkets.co.uk.
The Annual Report will be submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
This announcement contains regulated information under the Disclosure Guidance and Transparency Rules of the FCA.
For further information contact:
|
Impax Asset Management |
p.french@impaxam.com |
|
Paul French |
0203 912 3032 |
|
|
|
|
Montfort Communications |
iem@montfort.london |
|
Gay Collins/Nita Shah/Lesley Wang |
07798 626282 |
|
|
|
|
Apex Listed Companies Services (UK) Limited |
020 3327 9720 |
|
Company Secretary |
|
END
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