Annual Financial Report

RNS Number : 2371K
Majedie Investments PLC
20 December 2022
 

MAJEDIE INVESTMENTS PLC

 

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2022

 

The Directors of Majedie Investments PLC are pleased to announce the Annual Report and Accounts ("Annual Report") for the year ended 30 September 2022. The Annual Report can be obtained from the Company's website at www.majedieinvestments.com or by contacting the Company Secretary on telephone number 07936 332 503.

 

 

INVESTMENT OBJECTIVE

 

The Company's investment objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term.

 

Highlights

2022

2021

Total shareholder return (including dividends):

-24.9%

37.1%

Net asset value total return (debt at fair value including dividends):

-18.2%

22.5%

Net asset value total return (debt at par including dividends):

-19.8%

20.6%

Total dividends (per share):

10.4p

11.4p

Directors' valuation of investment in Majedie Asset Management Limited:

 

Sold

£25.2m

 

YEAR'S SUMMARY

Capital Structure

Note

(see below)

 

2022

2021

%

As at 30 September


 



Total assets

1

£137.6m

£173.0m

-20.4

Which are attributable to:


 



Financial liabilities (debt at par value)

2

£20.8m

£20.8m

-23.1

Equity Shareholders Funds


£116.9m

£152.2m


Gearing

3

12.6%

12.3%


Potential Gearing

3

17.8%

13.7%


Total returns (capital growth plus dividends)

4

 



Net asset value per share (debt at par value)

5

-19.8%

+20.6%


Net asset value per share (debt at fair value)

5

-18.2%

+22.5%


Share price


-24.9%

+37.1%


Capital returns


 



Net asset value per share (debt at par value)

5

220.6p

287.1p

-23.1

Net asset value per share (debt at fair value)


220.5p

281.4p

-21.7

Share price


163.5p

230.0p

-30.4

Discount of share price to net asset value per share


 



Debt at par value


27.5%

19.9%


Debt at fair value


27.4%

18.3%


Revenue and dividends


 



Net revenue available to Equity Shareholders


£2.8m

£5.0m


Net revenue return per share


5.2p

9.4p

-44.7

Total dividends per share


10.4p

11.4p

-8.7

Total administrative expenses and management fees


£1.6m

£1.6m


Ongoing Charges Ratio

6

1.3%

1.2%








 

Notes:

Alternative Performance Measures (APM) definitions used in the Annual Report are as follows:

1.  Total Assets : Total assets are defined as total assets less current liabilities.

2.  Debt at par or fair value : Par value is the carrying value of the debenture which will equate to the nominal value at maturity. Fair value is the estimated market value the Company would pay (on the relevant reporting date), as a willing buyer, to a debenture holder, as a willing seller, in an arms-length transaction.

3.  Gearing and Potential Gearing : Gearing represents the amount of borrowing that a company has and is calculated using the Association of Investment Companies (AIC) guidance. It is usually expressed as a percentage of equity shareholders' funds and a positive percentage or ratio above one shows the extent of the level of borrowings. Gearing is calculated as borrowings less net current assets to arrive at a net borrowings figure. Potential Gearing excludes cash from the calculation. Details of the calculation for the Company are in note 22.

4.  Total Return : Total returns include any dividends paid as well as capital returns as a result of an increase or decrease in a company's share price or NAV.

5.  Net Asset Value : The Net Asset Value (NAV) is the value of all of the Company's assets less all liabilities. The NAV is usually expressed as an amount per share.

6.  Ongoing Charges Ratio (OCR) : Ongoing charges are a measure of the regular ongoing administration costs of running a company, as calculated in accordance with AIC guidance. Further information is shown in the Business Review section of the Strategic Report contained within the full Annual Report.

 

 

Year's high/low


2022

2021

Share price

 

high

243.0p

252.5p

low

160.0p

176.0p

Net asset value - debt at par

 

high

297.1p

304.2p

low

220.7p

245.0p

Discount - debt at par

 

high

28.7%

30.0%

low

14.9%

13.3%

Discount - debt at fair value

 

high

28.5%

27.9%

low

13.4%

11.2%



 

Ten Year Record

to 30 September 2022

 

Year End

Total

Assets ++

£000

Equity share-holders' Funds

£000

NAV Per Share (Debt at par value)

Pence

Share
Price
Pence

Discount

%

Earnings Pence

Total Dividend** Pence

Gearing†

%

Potential Gearing†

%

Ongoing Charges Ratio#

%

2013

159,013

125,166

240.5

160.0

33.47

6.80

10.50

21.47

27.04

1.73

2014

167,934

134,061

256.7

229.0

10.79

9.36

7.50

23.39

25.27

1.66

2015

183,708

149,807

281.9

257.3

8.74

9.42

8.00

21.25

22.63

1.88

2016

203,917

169,986

318.1

257.1

19.18

9.25

8.75

18.46

19.96

1.58

2017

216,507

182,544

341.6

281.5

17.59

11.14

9.75

17.09

18.61

1.54

2018

199,151

178,626

334.3

277.5

16.99

12.47

11.00

10.01

11.49

1.33

2019

175,621

155,074

292.3

256.0

12.42

12.92

11.40

11.50

13.25

1.34

2020

152,153

131,333

247.7

176.5

28.74

9.11

11.40

10.97

15.85

1.34

2021

172,951

152,153

287.1

230.0

19.89

9.41

11.40

12.26

13.67

1.25

2022

137,647

116,887

220.6

163.5

27.50

5.20

10.40

12.65

17.80

1.34

 

Notes:

** Dividends disclosed represent dividends that relate to the Company's financial year. Under UK adopted International Accounting Standards dividends are not accrued until paid or approved. Total dividends include special dividends paid, if any.

† Calculated in accordance with AIC guidance.

# As of May 2012, under AIC guidance, Ongoing Charges Ratio replaced previous cost ratios.

++ Total Assets are defined as total assets less current liabilities.

STRATEGIC REPORT

 

CHAIRMAN'S STATEMENT

 

The year ended 30 September 2022 was very disappointing for shareholders as the NAV at par and fair value (net asset value with debt at par and fair value) fell by 19.8% and 18.2% respectively on a total return basis. The share price fell by 24.9% also on a total return basis. By way of comparison, the FTSE All-Share Index fell by 4.0% and the MSCI All Country Index fell by 4.2% in sterling terms and in both cases, on a total return basis.

 

The sale of Majedie Asset Management Limited (MAM) to Liontrust Asset Management PLC (Liontrust) announced in December 2021 was completed on 1 April 2022. In May 2022 Majedie Investments PLC (the Company) announced that the Board was considering the Company's investment objective together with the range of assets that should be considered for inclusion in the Company's portfolio, as well as its own responsibilities for portfolio allocation.

 

On 10 November 2022 the Company announced that, following an extensive review of the Company's investment management arrangements, it had entered into a conditional agreement to appoint Marylebone Partners LLP (Marylebone) as the Company's investment manager. Following its recent approval by the FCA, a Shareholder Resolution to implement the new investment policy will be voted on by shareholders at the General Meeting on 25 January 2023.

 

The Board believes the change in investment manager and the adoption of the new investment policy will provide the following benefits to shareholders:

 

· Potential for differentiated and repeatable investment performance, enabled by a transition to a liquid endowment model. The model is a long-term strategy that focusses on fundamental investments and incorporates multi-asset return sources that are realisable within a 2-3 year time horizon. It will not feature private equity, venture capital, infrastructure or property. Over the three years to 30 September 2022, Marylebone representative track record has delivered net annualised performance in GBP of +8.4%, some 4% ahead of the U.K. Consumer Price Index.

 

· A differentiated return profile, complementing shareholders' other investments. Given the opportunity across its three core activities, Marylebone believes it should be possible to deliver capital appreciation, whilst funding a dividend out of a combination of underlying income and capital growth.

 

· Alignment of interests and participation in the future growth of Marylebone. The Company will receive, for no consideration, an interest in Marylebone entitling it to 7.5% of residual profits and capital.

 

· The Board is aware of investors (including parties connected to Marylebone) who have expressed an interest in becoming shareholders. The Board and Marylebone believe this may help narrow the discount to Net Asset Value at which the Company's shares trade currently, whilst potentially improving liquidity and paving the way for future growth.

 

· Cost mitigation. Marylebone will reduce the management fee payable by Majedie by 50% for a period of twelve months and make a significant ongoing contribution to the cost of marketing the Company.

 

 

Results and Dividends

 

In the twelve months to 30 September 2022 the Company had a capital loss of £31.9m which includes

£12.0m resulting from the decline in value of the Liontrust shares received as part of the MAM transaction.

 

Total income received from investments was £3.9m compared to £6.1m in the twelve months to 30 September 2021. The dividend received from MAM was £1.2m, compared to £4.0m the previous year and the income from MAM Funds was £2.7m compared to £2.1m in 2021. Total administration costs and management fees and finance costs were £1.7m and £1.5m respectively.

 

The net revenue return after tax decreased from £5.0m in the year to 30 September 2021 to £2.8m in the year to 30 September 2022. The interim dividend was maintained at 4.4p and the Board is recommending a final dividend of 4.2p and a special dividend of 1.8p. The reduction in the final dividend reflects the reduction in net revenue and the special dividend reflects the new dividend policy of paying circa 0.75% of NAV quarterly.

 

The final dividend will be payable on 27 January 2023 to shareholders on the register at 13 January 2023 and the Company's shares go ex-dividend on 12 January 2023.

 

Investment Performance

 

The investment performance of the funds in which the Company is invested was disappointing both on an absolute and relative basis with the notable exception of the Tortoise Fund which increased by 8.6%. The CEO's report which follows gives further detail on the reasons behind this.

 

As a result of the sale of MAM the Company received a combination of shares in Liontrust and cash which was valued at £22.4m on 7 December 2021, the date the transaction with Liontrust was announced, compared with the valuation of the Company's holding in MAM at 30 September 2021 of £25.2m. Subsequent to the announcement the share price of Liontrust declined and at 30 September 2022 the transaction value had reduced by a further £9.2m to £13.2m including dividends received from Liontrust, a loss for the year of £12.0m.

 

The Company was able to negotiate the removal of the lock up on selling Liontrust shares in July 2022. Subsequently, it has sold 108,000 Liontrust shares for an average price of 908p per share. At 30 September 2022 the Company had a holding of 539,207 shares in Liontrust.

 

Notwithstanding the writedowns in the stake in MAM in recent years the Company has benefitted from providing seed capital to MAM in 2002 both in terms of capital growth and receipt of dividends. The Board would like to thank the team for their hard work and dedication in growing the business and wishes them well in their new role as the Global Fundamental Team at Liontrust.

 

Investment Management Arrangements

 

As described earlier the Company has announced it has entered into a conditional agreement to appoint Marylebone as its investment manager. Founded in 2013 Marylebone is an independent firm, currently managing US $400m for professional and institutional clients which includes charities, foundations, family offices and high net worth individuals.

 

With equities at its heart, Marylebone's long-term fundamental approach is aligned with Majedie's ethos. Their proposition met the Board's criteria for an investment manager who could deliver differentiated investment outcomes and bring a new and relevant proposition to the investment trust sector, whilst developing the Company's culture and history.

 

The Board selected Marylebone for its ability to identify differentiated investment opportunities and reputation for protecting and growing the wealth of its clients. Marylebone's investment approach includes three core strategies, comprising special investments, allocations to specialist funds managed by third parties and a focused portfolio of listed equities. Marylebone sources investments through a global network, which its principals have built over nearly three decades at industry leading firms. The Board believes it will be increasingly important to identify differentiated sources of performance from the large and growing set of less researched opportunities that are available within this wider investment mandate, in addition to those in other major asset classes.

 

In order to proceed with the appointment of Marylebone, the Company intends to amend its investment policy at a General Meeting. This will enable Majedie to pursue a high-conviction, long-term approach that is unconstrained by geographic limitations or any formal benchmark. Following adoption of the new investment strategy, the Company will target annualised total returns (net of fees and expenses, in GBP) of at least 4% above the UK Consumer Price Index, measured over rolling five-year periods. The target total return will include an annual dividend, paid quarterly.

 

Each quarterly dividend payment is initially expected to comprise 0.75% of the relevant quarter-end Net Asset Value, leading to an annual dividend of approximately 3% of Net Asset Value. Further details are included in an accompanying circular for General Meeting.

 

Marketing

 

The Company normally conducts marketing through face-to-face meetings together with research from Kepler to targeted wealth managers. The review of the Company's investment management arrangements has curtailed such meetings, but following the announcement a number of such meetings have taken place both virtually and in person. It is intended that this will continue once the new managers are in place. The Company also uses doceo, a web portal that provides financial information and video presentations to retail investors on Investment Companies. There is currently a video presentation by William Barlow on the appointment of Marylebone and an overview from Dan Higgins, CIO of Marylebone on doceo via the link https://doceo.tv/funds/majedie-investments/.

 

Outlook

 

The previous twelve months have been painful for investors, as all asset classes with the exception of

commodities have fallen. The realisation that inflation was not transitory and that authorities were behind the curve caused Central Banks, led by the US, to raise interest rates aggressively. This was exacerbated by the Ukraine conflict which put significant pressure on commodity prices. After a decade of ultra-loose monetary policy following the financial crisis and COVID, the change in policy was a shock for investors. Bond rates rose significantly and equity markets sold off and there was significant rotation away from growth stocks.

 

The Board will retain the Company's exposure to markets until the shareholders have approved the proposed changes to the Company's investment management arrangements because the equity valuations had approached attractive levels at the year end. There is evidence that inflation is peaking as the supply side shocks from COVID are easing and commodity prices have appeared to have peaked.

 

Turbulence in markets has greatly expanded the opportunity set available to Marylebone to pursue a

liquid endowment strategy, in particular in equities and credit. Illiquid strategies that were favoured by low interest rates no longer offer an attractive risk reward for investors. The multi asset approach that will be pursued uses the Investment Company structure to add value and provide differentiated returns over the long term. The Board has consistently stated that it wishes to grow the Company for the benefit of all shareholders and has already seen significant investment from new investors since the announcement in November. Over time with good investment performance the Board is confident that the discount will narrow and new shares will be issued.

 

Arrangements for the AGM

 

The AGM will be held at the City of London Club, 19 Old Broad Street, London EC2N 1DS at 12.00pm on Wednesday 25 January 2023. Dan Higgins, CIO of Marylebone, will present the new investment strategy. I very much look forward to welcoming shareholders in person after the last two years meetings have been restricted.

 

Christopher Getley

Chairman

19 December 2022

 

 

 

 

 

 

 

CHIEF EXECUTIVE'S REPORT

 

During the year under review the Company's assets were allocated at the discretion of the Board between four investment strategies managed by Liontrust. The Company has no overall benchmark; rather each fund has its own benchmark. The monthly factsheets of the relevant Liontrust funds are available on the Company's website, as are the monthly factsheets of the Company which show the allocation between the funds and the top thirty holdings on a look through basis. The Company's total assets at 30 September 2022 were £137.6m.

 

The Company's 17.6% stake in MAM was realised in April 2022, as part of the purchase of MAM by Liontrust for a mixture of cash and shares in Liontrust, the removal of a lock up clause on the Liontrust shares was successfully negotiated in July and the Company has since sold 108,000 Liontrust shares. The proceeds have been invested in the Liontrust Global Fund and Liontrust International Fund.

 

Asset Allocation at 30 September 2022

Value

£000

% of Total Assets

UK Equity Segregated Portfolio

40.5

Global Equity Fund

39,610

28.8

International Equity Fund

11,081

8.0

Tortoise Fund

23,668

17.2

Liontrust

3,936

2.9

Net cash/realisation fund*

3,490

2.6

Total Assets

137,647

100.0

 

*Net cash and realisation fund does not include cash held in the UK Equity Segregated Portfolio or any Liontrust funds.

 

MAM/Liontrust

 

Following the sale of MAM to Liontrust the Company received shares in Liontrust and cash. At 30 September having sold 108,000 shares in Liontrust for £1.0m, the remaining shares were valued at £3.9m. The Company also received a dividend from MAM of £1.2m, a special dividend from MAM of £6.5m, a final cash distribution of £0.4m and a dividend from Liontrust of £0.3m. The valuation of the consideration that was received from the transaction in cash and shares at 30 September 2022 was £13.2m (inclusive of the Liontrust dividend) compared to the valuation of MAM at 30 September 2021 of £25.2m. The Company places no value on the potential deferred payment that is dependent on the Liontrust Global Fundamental team's performance and their AUM growth which are not expected to be met.

 

Liontrust/MAM Performance

 

It is disappointing that the funds underperformed their respective benchmarks in the twelve months to 30 September 2022 with the exception of the Tortoise Fund. This fund has been a cornerstone of the Company's allocation to provide protection in turbulent markets and a provider of differentiated returns. In such a volatile year the fund has been a shining light. The Global and International Funds, whilst having a difficult year, have provided strong relative and absolute returns since the Company invested in them.

 


12 months to 30 September 2022

Since MI invested

% Fund return

% Benchmark

return

% Relative
performance

% Fund return

% Benchmark

return

% Relative performance

UK Equity Segregated

    (14.7)

   (4.0)

  (10.7)

    20.0

    41.3

    (21.3)

Global Equity Fund

(10.0)

(4.2)

 (5.8)

138.2

130.1

8.1

International Equity Fund

(17.4)

(9.4)

(8.0)

16.0

5.1

10.9

Tortoise Fund

8.6



26.0



MAM/Liontrust

(47.3)






 

Development of Net Asset Value

 

The chart below outlines the change in the Company's NAV (debt at par) over the year to 30 September 2022. In aggregate the NAV has decreased by £35.3m, comprised of net investment losses at the Liontrust/MAM Funds of £14.1m, a loss on the investment in MAM/Liontrust of £12.0m (after dividends received from MAM), expenses and finance costs of £3.2m and dividends paid to shareholders of £6.0m.

 

NAV 30.09.21

£152.2m

UK Equity Segregated Portfolio

(£9.2m)

Tortoise Fund 

 1.8m

Global Equity Fund

(£4.4m)

International Equity Fund

(£2.3m)

MAM/Liontrust

(£12.0m)

Admin Costs & Other

(£1.6m)

Finance Costs

(£1.6m)

Share Buybacks

 Nil

Dividend Paid

(£6.0m)

NAV 30.09.22

£116.9m

* MAM Funds comprise the UK Income Fund, Global Equity Fund, International Equity Fund, US Equity Fund and Tortoise Fund.

 

UK Equity Segregated Portfolio

 

The UK Equity Fund launched in March 2003. Its objective is to produce a total return in excess of the FTSE All-Share Index after costs, over any five year period, through a diversified portfolio of predominantly UK Equities with the flexibility to invest up to 20% in shares listed outside the UK. The fund incorporates a dedicated investment in smaller companies. The Company's assets are invested in a segregated portfolio that is managed pari passu to the UK Equity Fund and since the Company invested in the portfolio to 30 September 2022 the portfolio has returned 20.0% net of fees compared to the benchmark return of 41.3%. In the year to 30 September 2022, the UK Equity Segregated Portfolio returned -14.7% net of fees which is an underperformance of 10.7% against its benchmark.

 

The most significant positive and negative sector contributors to the relative performance of the UK Equity Segregated Portfolio for the twelve months to 30 September 2022, in %

 

Real Estate

0.73

Underweight

Financials

0.32

Underweight

Telecommunications

0.06

Underweight

Utilities

0


Industrials

-0.43

Overweight

Health Care

-0.72

Underweight

Energy

-0.90

Underweight

Basic Materials

-1.07

Underweight

Technology

-1.14

Overweight

Consumer Discretionary

-2.47

Overweight

Consumer Staples

-2.71

Underweight

 

The table below shows most significant positive and negative stock contributors to the relative performance of the UK Equity Segregated Portfolio for the year to 30 September 2022, in %

 

Prudential

0.55

Underweight

Serco

0.39

Overweight

Scottish Mortgage Investment Trust

0.34

Underweight

Flutter Entertainment

0.28

Underweight

Compass

0.28

Overweight

Glencore

-0.90

Underweight

BP

-0.95

Underweight

Fevertree Drinks

-1.23

Overweight

Ascential

-1.29

Overweight

UK Smaller Companies

-2.17

Overweight

 

The principal overweight and underweight sector positions of the UK Equity Segregated Portfolio at 30 September 2022 relative to the FTSE All-Share Index, in %

 

Industrials

15.1

Overweight

Consumer Discretionary

6.6

Overweight

Technology

5.2

Overweight

Healthcare

-1.0

Underweight

Telecommunications

-1.1

Underweight

Utilities

-1.8

Underweight

Real Estate

-2.7

Underweight

Energy

-3.4

Underweight

Basic Materials

-5.0

Underweight

Consumer Staples

-7.0

Underweight

Financials

-7.3

Underweight

 

The table below shows the principal overweight and underweight positions of the UK Equity Segregated Portfolio at 30 September 2022 relative to the FTSE All-Share Index, in %

 

RSGroup

2.7

Overweight

NatWest

2.7

Overweight

AVEVA

2.7

Overweight

3i

2.1

Overweight

Serco

1.8

Overweight

HSBC

-2.6

Underweight

Glencore

-2.9

Underweight

British American Tobacco

-3.4

Underweight

BP

-3.8

Underweight

Diageo

-4.0

Underweight

 

The Global Equity Fund

 

The Global Equity Fund was launched in June 2014 and its objective is to produce a total return in excess of the MSCI All Country World Index after costs over any five year period through investment in a diversified portfolio of global equities. Since inception to 30 September 2022 the Global Equity Fund has returned 138.2% net of fees for the sterling share class, which represents an outperformance of 7.9% against its benchmark. In the year to 30 September 2022 the Global Equity Fund returned -10.0% net of fees which represents an underperformance of 5.8%.

 

The most significant positive and negative sector contributors were to the relative performance of the Global Equity Fund for twelve months to 30 September 2022, in %

 

Materials

1.13

Overweight

Real Estate

0.04

Underweight

Financials

0.03

Underweight

Industrials

-0.09

Overweight

Information Technology

-0.12

Underweight

Utilities

-0.40

Underweight

Consumer Discretionary

-0.57

Overweight

Consumer Staples

-1.01

Underweight

Energy

-1.08

Underweight

Health Care

-1.26

Overweight

Communication Services

-1.51

Overweight

 

The table below shows most significant positive and negative stock contributors to the relative performance of the Global Equity Fund for the year to 30 September 2022, in %

 

Sociedad Quimica y Minera de Chile

0.99

Overweight

Will Scot Mobile Mini

0.56

Overweight

Elevance Health

0.53

Overweight

Ionis Pharmaceuticals

0.43

Overweight

Centene

0.32

Overweight

M3

-0.55

Overweight

Frontdoor

-0.55

Overweight

Sea

-0.58

Overweight

Apple

-0.66

Underweight

Vertiv

-0.75

Overweight

 

The principal overweight and underweight sector positions of the Global Equity Fund at 30 September 2022 relative to the MSCI All Country Index, in %

 

Consumer Discretionary

6.0

Overweight

Health Care

5.5

Overweight

Communication Services

5.3

Overweight

Industrials

2.1

Overweight

Materials

1.6

Overweight

Real Estate

-2.7

Underweight

Utilities

-3.1

Underweight

Consumer Staples

-3.9

Underweight

Information Technology

-4.0

Underweight

Energy

-4.3

Underweight

Financials

-5.9

Underweight

 

The table below shows the principal overweight and underweight positions of the Global Equity Fund at 30 September 2022 relative to the MSCI All Country Index, in %

 

Electronic Arts

2.8

Overweight

Fiserv

2.6

Overweight

Royal KPN

2.0

Overweight

L3 Harris Technologies

2.0

Overweight

Will Scot Mobile Mini

1.8

Overweight

Exon Mobil Corporation

-0.7

Underweight

Johnson & Johnson

-0.8

Underweight

United Health

-0.9

Underweight

Tesla

-1.4

Underweight

Apple

-4.3

Underweight

 

The International Equity Fund

 

The International Equity Fund was launched in December 2019 and its objective is to produce a total return in excess of the MSCI All Country World Index ex US after costs over any period of five years. It is a high conviction portfolio which captures developed and emerging market opportunities and can invest up to a maximum of 10% in US equities. Since inception the International Equity Fund has returned 16.0% net of fees for the sterling share class, which represents an outperformance of 10.9% against it benchmark. In the year to 30 September 2022 the International Equity Fund returned -17.4% net of fees which represents an underperformance of 8.0%.

 

The most significant positive and negative sector contributors to relative performance of the International Equity Fund for the twelve months to 30 September 2022, in %

 

Materials

3.23

Overweight

Industrials

0.67

Underweight

Consumer Discretionary

0.21

Overweight

Real Estate

0.11

Underweight

Utilities

-0.26

Underweight

Information Technology

-0.50

Overweight

Energy

-0.95

Underweight

Financials

-1.53

Underweight

Consumer Staples

-1.67

Underweight

Communication Services

-2.44

Overweight

Health Care

-3.10

Overweight

 

The table below shows most significant positive and negative stock contributors to the relative performance of the International Equity Fund for the year to 30 September 2022, in %

 

Sociedad Quimica y Minera de Chile

2.58

Overweight

Novo Nordisk

0.97

Overweight

Ionis Pharmaceuticals

0.91

Overweight

Credicorp

0.79

Overweight

Anglo American

0.75

Overweight

Fevertree Drinks

-0.96

Overweight

Ambu

-1.09

Overweight

NAVER

-1.14

Overweight

M3

-1.31

Overweight

Sea

-1.72

Overweight

 

The principal overweight and underweight sector positions of the International Equity Fund at 30 September 2022 relative to the MSCI All Country Index ex US, in %

 

Health Care

13.1

Overweight

Information Technology

6.4

Overweight

Consumer Services

5.9

Overweight

Communication Discretionary

5.0

Overweight

Materials

4.0

Overweight

Real Estate

-2.4

Underweight

Utilities

-3.4

Underweight

Industrials

-3.6

Underweight

Energy

-6.2

Underweight

Consumer Staples

-8.3

Underweight

Financials

-13.1

Underweight

 

The table below shows the principal overweight and underweight positions of the International Equity Fund at 30 September 2022 relative to the MSCI All Country Index ex US, in %

 

Prosus

4.3

Overweight

Novo Nordisk

4.2

Overweight

MercadoLibre

4.2

Overweight

Sociedad Quimica y Minera de Chile

4.1

Overweight

Samsung SDI

4.0

Overweight

ASML

-0.9

Underweight

Shell

-1.0

Underweight

Tencent

-1.1

Underweight

Roche

-1.2

Underweight

Nestle

-1.6

Underweight

 

The Tortoise Fund

 

The Tortoise Fund is a global absolute return fund which was launched in August 2007. Its objective is to achieve positive absolute returns in all market conditions, through investment primarily in long and synthetic short positions in equities over rolling three-year periods, with less volatility than a conventional long only equity fund. Since inception the Tortoise Fund has returned 26% net of fees. In the year to 30 September 2022 the Tortoise Fund returned 8.6% net of fees.

 

The table below shows most significant positive and negative stock contributors to the relative performance of the Tortoise Fund for the year to 30 September 2022, in %

 

Futures

3.53

Short

Health Care

2.41

Long

Energy

1.83

Long

Financials

1.25

Long

Materials

1.04

Long

Real Estate

0.50

Long

Utilities

0.10

Long

Communication Services

0.03

Long

Information Technology

-0.04

Long

Consumer Staples

-0.13

Long

Industrials

-0.73

Long

Consumer Discretionary

-2.28

Long

 

The table below shows most significant positive and negative stock contributors to the relative performance of the Tortoise Fund for the year to 30 September 2022, in %

 

Cardinal Health

0.90

Long

Shell

0.85

Long

Coinbase Global

0.85

Short

BAE Systems

0.68

Long

Gold Fields Limited

0.67

Long

Compagnie de Saint-Gobain

-0.64

Long

easyJet

-0.74

Long

Rolls-Royce

-0.82

Long

Intel

-0.89

Long

THG

-0.96

Long

 

The principal long and short sector positions of the Tortoise Fund at 30 September 2022, in %

 

Industrials

16.7

Long

Financials

11.0

Long

Consumer Staples

9.6

Long

Health Care

8.5

Long

Materials

7.7

Long

Information Technology

6.9

Long

Communication Services

6.5

Long

Consumer Discretionary

6.3

Long

Energy

5.5

Long

Utilities

2.2

Long

Real Esate

1.0

Long

Futures

-39.2

Short

 

The table below shows the principal long and short stock positions of the Tortoise Fund at 30 September 2022, in %

 

Shell

2.3

Long

Haleon

2.2

Long

TotalEnergies

2.2

Long

Publicis Groupe

2.1

Long

Compagnie de Saint-Gobain

2.1

Long

Union Pacific

-1.0

Short

 

Geographic and Sector Exposure

 

Europe ex UK

UK

 

Emerging Markets

Asia Pacific

North America

Cash

Total

Basic Materials


1.4

1.3


2.2


4.9

Consumer Goods

0.2

4.6

0.1

0.3

1.6


6.8

Consumer Services

1.6

7.0

2.1

0.6

5.5


16.8

Financials

1.2

7.0

0.7

0.5

2.2


11.6

Real Estate





0.2


0.2

Health Care

4.1

4.5

0.5

0.7

4.9


14.7

Industrials

3.3

10.2

0.1

0.7

4.3


18.6

Oil & Gas

0.8

3.9



0.2


4.9

Technology

0.4

3.1

4.1

0.2

4.8


12.6

Telecommunications

1.5

0.6


0.8



2.9

Utilities

0.3

0.8





1.1

Cash






4.9

4.9

Total

13.4

43.1

8.9

3.8

25.9

4.9

100.0

Futures*

 

 

 

 

(7.1)

 

 

 

* The Tortoise Fund has short futures positions on the S&P 500 and NASDAQ 100 indices.

 

The assets analysed above are the net exposure of the UK Equity Segregated Portfolio, Global Equity Fund, International Equity Fund and the Tortoise Fund. The Tortoise Fund, an absolute return fund invests through equities, CFDs for short positions and futures. The net exposure is shown in the table. The aggregate of the funds represents 94.7% of the Company's total assets.

 

Exposures are classified by the stock exchange on which the underlying equity is listed and by the relevant FTSE sector classification.

 

The Liontrust funds have all performed strongly since the year end, both in absolute and relative terms. The Tortoise Fund, in particular, has risen by 9.7%. The Board intends to retain the current exposure until the General Meeting on 25 January 2023. If shareholders approve the appointment of Marylebone it is anticipated that the capital will be deployed relatively quickly into the new investment strategy, although the Special Investments part of the portfolio, will take longer to be fully invested.

 

 

 

 

 

 

 

 

Thirty Largest Holdings at 30 September 2022

 


Value
£000


% of Total Assets

Shell Plc

5,102


3.7

Liontrust Asset Management Limited

3,936


2.9

AstraZeneca PLC

2,565


1.9

NatWest Group PLC

2,247


1.6

Unilever PLC

2,004


1.5

Anglo American PLC

1,711


1.2

RS Group plc

1,616


1.2

Microsoft Corporation

1,539


1.1

AVEVA Group plc

1,512


1.1

Royal KPN NV

1,509


1.1

Thales SA

1,493


1.1

3i Group plc

1,470


1.1

Tesco PLC

1,443


1.0

Barrick Gold Corporation

1,379


1.0

Compass Group PLC

1,320


1.0

Ashtead Group plc

1,313


1.0

Novo Nordisk A/S

1,303


0.9

RELX PLC

1,256


0.9

Standard Chartered PLC

1,252


0.9

Amazon.com, Inc.

1,245


0.9

BAE Systems PLC

1,199


0.9

Novartis AG

1,176


0.9

Sociedad Quimica y Minera de Chile S.A.

1,138


0.8

MercadoLibre, Inc.

1,133


0.8

L3 Harris Technologies, Inc.

1,129


0.8

Electronic Arts Inc.

1,129


0.8

Samsung SDI Co., Ltd

1,093


0.8

Fiserv, Inc.

1,081


0.8

Taiwan Semiconductor Manufacturing Co., Ltd.

1,077


0.8

Weir Group PLC

1,075


0.8


48,345

 

35.2

 

Outlook

 

Markets have bounced from the lows in September as investors' expectations, particularly in the bond market, are beginning to discount the peak of inflation. Central Banks have raised interest rates aggressively and the distortions of the pandemic are easing, particularly in the global supply chain. For equities, earnings expectations have yet to catch up with slowing economic growth forecasts into 2023, but looking into the next five years, the economic background will be different from that which prevailed in the last decade of quantitative easing, low inflation and stagnant nominal GDP Growth. Interest rates will be higher offering an alternative to equities for investors and long duration growth stocks will be less attractive. Careful stock selection based on good fundamental analysis of equities and credit opportunities should offer shareholders good returns and the Board believes that Marylebone is well placed to deliver from this outlook.

 

J William Barlow

CEO

19 December 2022



 

 

Final Dividend and Special Dividend

Subject to shareholder approval at the AGM on 25 January 2023, a final dividend of 4.2p per share and a special dividend of 1.8p per share will be paid on 27 January 2023 to shareholders on the register at 13 January 2023. The ex-dividend date will be 12 January 2023.

 

Annual General Meeting

The Company's Annual General Meeting will be held on Wednesday 25 January 2023 at City of London Club, 19 Old Broad Street, London EC2N 1DS.

 

Further Information

The Annual Report and Accounts for the year ended 30 September 2022 can be obtained from the Company's website at www.majedieinvestments.com.

 

A copy of the Annual Report and Accounts will be submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism , in accordance with DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

 

 

ENQUIRIES

If you have any enquiries regarding this announcement, please contact Mr William Barlow on 020 7382 8185.

 

END

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.

 

LEI: 2138007QEY9DYONC2723

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