Half-year Report

RNS Number : 9764P

Martin Currie Global Portfolio Tst

06 September 2017

 

Martin Currie Global Portfolio Trust plc

Half-year financial report

Six months to 31 July 2017

A copy of the half-year report for the six months ended 31 July 2017 has been submitted to the National Storage Mechanism.  This will be available for viewing at www.hemscott.com/nsm.do.

A copy of this half-year report can be downloaded at www.martincurrieglobal.com.

Financial Highlights

Total returns*

	Six months ended 31 July 2017	Six months ended 31 July 2016
Net asset value per share**	7.0%	17.6%
Benchmark	6.4%	20.3%
Share price	6.2%	19.8%

Income

	Six months ended 31 July 2017	Six months ended 31 July 2016
Revenue per share***	2.25p	2.56p
Dividend per share	1.80p	1.80p

Ongoing Charges**** (as a percentage of shareholders' funds)

	Six months ended 31 July 2017	Six months ended 31 July 2016
Ongoing charges	0.68%	0.75%
Performance fee	-	-
Ongoing charges plus performance fee	0.68%	0.75%

*        The combined effect of the rise and fall in the share price, net asset value (cum income) or benchmark together with any dividend paid.

**       The net asset value is inclusive of income with dividends reinvested. 

***      For details of calculation, refer to note 2 below.

****     Ongoing charges (as a percentage of shareholders' funds) are calculated using average net assets over the period. The ongoing charges figure has been calculated in line with the Association of Investment Companies ('AIC') recommended methodology.

Chairman's Statement

Welcome to the half-yearly report covering the six months to 31 July 2017.

During the period, global equity markets continued to rise reflecting both global growth and continuing monetary stimulus by the major central banks. Both European and UK markets did well while the US, in which a significant portion of the portfolio is currently invested, rose at a slower pace. Your Company performed well delivering a share price total return of 6.2% and net asset value per share ('NAV') total return of 7.0% compared with the benchmark return of 6.4%.

It is now 10 years since the 'credit crunch' shock of August 2007 sparked the global financial crisis, the consequences of which are still affecting the world's economies. The immediate effect of the 2007 shock on the Company was a relatively short 20 month decline in the share price followed by over 8 years of sustained rises. Shorter-term performance over this period has not always beaten the benchmark but the record of outperformance over each 10 year rolling period since inception continues. The share price has now climbed almost 150% above the 2007 pre-shock level which is both ahead of the peer group median and a cumulative 23.3% above the benchmark. This is impressive against the background of the significant political and economic surprises over the last 10 years, which have effectively become the new 'normal' for financial markets.

The long-term consistency of your Company's performance is an outcome of the manager's high conviction, active stock picking of a focused global portfolio of high quality stocks. This was recognised by the AIC in May*, when the Company was rated as one of the most consistently performing investment trusts over the last decade.

* Source: AIC press release 22 May 2017 "A quarter of most consistently top performing investment companies over the last decade are in the Global Sector."

Outlook

The overall economic outlook is for moderate global growth, and slowly rising inflation and interest rates. However, the prospect of continuing political surprises leaves considerable uncertainty about the direction and timing of market returns. Against this background our global portfolio offers access to good investment opportunities as they arise and our manager's focus on the most resilient stocks globally will be the key to the Company's continued successful long term investment performance.

Tom Walker gives his views of the market and a more detailed explanation of the portfolio performance in his report below.

Income and Dividends

The Company's costs have been controlled during the period and the ongoing charges ratio has therefore reduced. This has helped to offset a modest reduction in revenue per share compared with the same period last year. The next quarterly dividend of 0.9p will be paid on 13 October 2017 to shareholders on the register at 22 September 2017. This follows the first interim payment of 0.9p paid on 21 July 2017 and brings the total dividend for the period to 1.8p.

Your Company has successfully operated a progressive dividend policy since launch, and the dividend per share has never been cut. The current dividend yield of 1.8% continues to be above the sector average.

Environment, Social and Corporate Governance ('ESG')

The Board believes that good ESG behaviours contribute to long term value and seeks to play its role in delivering good stewardship in the companies in which the Company invests. The Company is compliant with the UK Stewardship Code and its Stewardship Policy is published on the website. The UN Principles for Responsible Investment ('PRI') has awarded Martin Currie an 'A+' (highest performance band) for all three top-level categories: 'strategy and governance', 'incorporation' and 'active ownership'. This provides shareholders with confidence that the Company and its investment manager are committed to good stewardship and active ownership.

Keeping in touch

The Company's website at www.martincurrieglobal.com is a comprehensive source of information and includes regular manager updates and outlook videos, monthly performance factsheets and independent research reports.

I encourage you to visit and register for email updates that will keep you abreast of information relating to your Company. I thank you for your continued support. Please contact me if you have any questions at [e-mail].

Neil Gaskell

Chairman,

Martin Currie Global Portfolio Trust plc

6 September 2017

 

Manager's Review

In the six months to the end of July 2017, global equities (as represented by the FTSE World index) returned 6.4% in sterling terms, while the trust's NAV return was slightly better, rising 7.0%. Since their post financial crisis low in March 2009, global equities have enjoyed a strong rise. Despite significant uncertainties - be they geopolitical or economic in nature - this eight-year-plus run has occurred with only limited interruptions.

Global equities did fall back in early spring around 5%. In the US, President Trump was failing to deliver on his promises of reform, while in Europe the UK's invocation of Article 50 led to increased verbal spats across the English Channel. However, the support of central banks around the world, tangibly (in the shape of low interest rates) and emotionally (in terms of soothing words), meant that the interruption to the rising trend in markets was once again shallow and short-lived.

There has, however, been a clear downward shift in sentiment towards the US. While still growing faster than most other developed economies, data in the US has tended to disappoint, and previously elevated expectations of President Trump's ability to jump-start the economy have fallen to earth with a bump. The multi-year appreciation of the US dollar has been halted and partially reversed.

It is Europe that has surprised positively in recent months and this change in sentiment has been reflected in currency and equity markets alike. Elections in various European countries, and solidarity in the approach to negotiations over Brexit, appear to have boosted support for the European 'project' and confidence in the region's economic prospects.

Europe has been the strongest performing regional equity market, followed closely by Asia ex-Japan and emerging markets. North America and Japan have both lagged.

However, the more significant dispersion in equity returns was by sector, not region. Energy has fallen by around 7% in sterling terms as the oil price tumbled on fears of oversupply and even a late recovery in the Brent crude price to above US$50 per barrel has done little to boost the sector. In contrast, the technology sector rose more than 11%. Much has been written about the stratospheric share price rise in some of America's high-profile technology stocks, particularly the 'FAANGs' - Facebook, Apple, Amazon, Netflix and Google. To this could also be added China's Alibaba and Tencent. Of course, we acknowledge the attractive business models of most of these stocks but, in some cases, find the valuations too rich. Facebook, Apple and Alibaba are however all held in the portfolio and have contributed strongly to performance.

Three other stocks that made strong contributions in this half year period are Unilever, which was subject to a takeover bid, albeit quickly withdrawn, by Kraft; Prudential continues to enjoy strong growth in Asia; and automotive parts manufacturer Delphi Automotive is slowly convincing investors of its growth potential in a world of increasing automation and electrification of vehicles.

As consumers increasingly shop at their computer screens, many retailers have seen reduced traffic in stores and share prices have suffered as a result. L Brands (better known as Victoria's Secret) and TJX (trading as TK Maxx in the UK) are held in the portfolio. With distinctive business models and merchandising, they have been highly rated stocks in the past. However, recently they have been severely de-rated and were two of the worst contributors to performance in this period. We continue to hold these stocks in the portfolio, as we believe their share prices have fallen too far and offer long term value.

During the period, we made a number of changes to the portfolio. Among purchases, we added US technology company, Automatic Data Processing ('ADP'). In contrast to many in its sector, ADP has recently experienced a period of underperformance due to some temporary softness in earnings. ADP continues to generate high and rising returns on invested capital underlining its quality so we saw this as a good opportunity to invest. Sales included Japanese bank Mitsubishi UFJ, which had performed extremely well on hopes of higher global interest rates - hopes that we feel are elevated - and Mylan, the generic drug producer where pricing is under severe pressure. The share price has fallen significantly since we sold.

Outlook

Sentiment towards the investment prospects for different parts of the world has undoubtedly shifted - we highlight above the greater enthusiasm for Europe and concomitant downward shift in sentiment to the US. However, sentiment swings around readily and we still believe the US economy holds the key to global economic prospects. In that respect, if there has been any change in interest rate expectations at all this year, it is that the Federal Reserve may be more cautious in raising rates than had been thought at the start of 2017. Certainly, the sharp upward move in long-term interest rates that accompanied President Trump's arrival has been halted and slightly reversed.

The rise in consumer debt is a concern. There was a time when higher interest rates may have been applied to dampen demand for credit, but central bankers seem reluctant to use a blunt tool like interest rates which could, if applied clumsily, lead to another economic downturn. As a result, it is hard to see interest rates moving meaningfully higher anywhere in the world for the foreseeable future - there is little inflation, only modest growth and - perhaps with the exception of the FAANGs - the general mood is perhaps better described as 'fragile', rather than 'euphoric'.

So while our caution mounts as new highs are achieved on markets, low interest rates have underwritten equity markets for some time and may continue to do so.

Tom Walker

6 September 2017

Risk and mitigation

The Company's business model is longstanding and resilient to most of the short term operational uncertainties that it faces. The Board believes these uncertainties are effectively mitigated by the Company's internal controls and its oversight of the investment manager, as described in the latest annual report.

The Company's principal risks and uncertainties are therefore considered to be more long term in nature and driven by the inherent uncertainties of investing in global equity markets. The Board believes that it is able to respond to these longer term risks and uncertainties with effective mitigation so that both the potential impact and the likelihood of these seriously affecting shareholders' interests are materially reduced.

Risks are regularly monitored at board meetings and the Board's planned mitigation measures are described in the latest annual report. As part of its annual strategy meeting, the Board carries out a robust assessment of the principal risks facing the Company.

The Board has identified the following principal risks to the Company:

·      Loss of s1158-9 tax status

·      Sustained investment underperformance

·      Decline in overall size of the Company / mandate falls out of favour

·      Deterioration of shareholder sentiment

Further details of these risks and how the Board manages them can be found in the latest annual report and on the Company's website www.martincurrieglobal.com.

Statement of directors' responsibility

In accordance with Chapter 4 of the Disclosure and Transparency Rules and to the best of their knowledge, each director of the Company confirms that the financial statements have been prepared in accordance with the United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014. The directors are satisfied that the financial statements give a true and fair view of the assets, liabilities, financial position and profit of the Company. Furthermore, each director certifies that the interim management report includes an indication of important events that have occurred during the first six months of the financial year and their impact on the financial statements together with a description of the principal risks and uncertainties that the Company faces. In addition, each director of the Company confirms that, with the exception of management and secretarial fees, directors' fees and directors' shareholdings, there have been no related party transactions during the first six months of the financial year.

Going concern status

The Company's business activities, together with the factors likely to affect its future development, performance and position, are set out in the chairman's statement and manager's review.

The financial position of the Company as at 31 July 2017 is shown on the condensed statement of financial position below. The statement of cash flow of the Company is also set out below.

In accordance with the Financial Reporting Council's guidance on going concern and liquidity risk issued in October 2009 and C1.3. of the 2016 UK Corporate Governance Code, the directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a very short timescale. The directors are mindful of the principal risks disclosed above. They have reviewed revenue forecasts and believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future, and for at least one year from the date of signing of these financial statements. Accordingly, the directors continue to adopt the going concern basis in preparing these financial statements.

By order of the Board

Neil Gaskell

Chairman

6 September 2017

 

Portfolio Summary

Portfolio distribution by region	31 July 2017 Company %	31 July 2017 FTSE World index %	31 January 2017 Company %	31 January 2017 FTSE World index %
North America	55.3	57.1	56.9	58.5
Developed Europe	25.7	22.7	21.0	21.6
Global Emerging Markets	7.1	4.8	5.9	4.6
Developed Asia Pacific ex Japan	6.2	6.4	6.7	6.2
Japan	3.7	8.8	7.5	8.9
Middle East	2.0	0.2	2.0	0.2
	100.0	100.0	100.0	100.0

By sector	31 July 2017 Company %	31 July 2017 FTSE World index %	31 January 2017 Company %	31 January 2017 FTSE World index %
Financials	20.6	22.5	23.8	22.1
Consumer services	14.7	10.8	14.8	11.0
Technology	14.6	12.6	12.7	12.1
Healthcare	13.0	10.8	11.6	10.6
Industrials	12.2	13.0	9.0	12.8
Consumer goods	10.6	13.3	11.0	13.4
Telecommunications	5.1	3.1	5.6	3.2
Oil and gas	4.4	5.8	4.8	6.6
Basic materials	3.0	4.8	5.0	5.0
Utilities	1.8	3.3	1.7	3.2
	100.0	100.0	100.0	100.0

By asset class	31 July 2017 %	31 January 2017 %
Equities	98.6	99.6
Cash	1.4	0.4
	100.0	100.0

Largest 10 holdings	31 July 2017 Market value £000	31 July 2017 % of total portfolio	31 January 2017 Market value £000	31 January 2017 % of total portfolio
JP Morgan Chase	9,743	4.4	10,239	4.8
Facebook	9,617	4.4	7,758	3.6
Apple	8,627	3.9	7,371	3.5
VISA	8,519	3.9	7,417	3.5
Alibaba Group	8,331	3.8	5,710	2.6
Prudential	7,124	3.2	5,906	2.7
Delphi Automotive	6,441	2.9	5,228	2.4
Lockheed Martin	6,337	2.9	5,712	2.6
Verizon Communications	5,826	2.7	6,182	2.9
Philip Morris International	5,587	2.5	4,821	2.2

Unaudited Condensed Statement of Comprehensive Income

		(Unaudited) Six months ended 31 July 2017			(Unaudited) Six months ended 31 July 2016
	Note	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Net gains on investments	5	-	13,342	13,342	-	28,181	28,181
Net currency (losses)/gains		(54)	42	(12)	-	(110)	(110)
Revenue	3	2,868	-	2,868	3,273	-	3,273
Investment management fee		(183)	(366)	(549)	(157)	(314)	(471)
Other expenses		(211)	-	(211)	(213)	-	(213)
Net return on ordinary activities before taxation		2,420	13,018	15,438	2,903	27,757	30,660
Taxation on ordinary activities	4	(274)	-	(274)	(359)	-	(359)
Net return attributable to shareholders		2,146	13,018	15,164	2,544	27,757	30,301
Net returns per ordinary share	2	2.25p	13.65p	15.90p	2.56p	27.93p	30.49p

The total columns of this statement are the profit and loss accounts of the Company.

The revenue and capital items are presented in accordance with the Association of Investment Companies ('AIC') Statement of Recommended Practice 2014.

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued in the six months.

The notes below form part of these financial statements. 

Unaudited Condensed Statement of Financial Position

		(Unaudited) As at 31 July 2017		(Unaudited) As at 31 July 2016		(Audited) As at 31 January 2017
	Note	£000	£000	£000	£000	£000	£000
Fixed assets
Investments at fair value through profit or loss	5		219,444		197,923		215,619
Current assets
Receivables	6	208		1,082		252
Cash and cash equivalents		3,053		1,319		974
			3,261		2,401		1,226
Current liabilities
Payables	7	(329)		(310)		(348)
			(329)		(310)		(348)
Total assets less current liabilities			222,376		200,014		216,497
Equity
Called-up share capital		5,179		5,179		5,179
Capital redemption reserve		10,838		10,838		10,838
Special distributable reserve*		95,352		104,517		102,349
Capital reserve		105,410		73,590		92,392
Revenue reserve*		5,597		5,890		5,739
Total shareholders' funds			222,376		200,014		216,497
Net asset value per ordinary share	2		237.2p		204.7p		223.9p

* These reserves are distributable.

The notes below form part of these financial statements. 

Martin Currie Global Portfolio Trust plc is registered in Scotland, company number 192761.

The financial statements were approved by the Board of directors on 6 September 2017 and signed on its behalf by Neil Gaskell, Chairman.

Unaudited Statement of Changes in Equity

Statement of changes in equity for the period to 31 July 2017	Called up ordinary share capital £000	Capital redemption reserve £000	Special distributable reserve* £000	Capital reserve £000	Revenue reserve* £000	Total £000
As at 31 January 2017	5,179	10,838	102,349	92,392	5,739	216,497
Net return attributable to shareholders**	-	-	-	13,018	2,146	15,164
Ordinary shares bought back during the period	-	-	(6,997)	-	-	(6,997)
Dividends paid	-	-	-	-	(2,288)	(2,288)
As at 31 July 2017	5,179	10,838	95,352	105,410	5,597	222,376

Statement of changes in equity for the period to 31 July 2016	Called up ordinary share capital £000	Capital redemption reserve £000	Special distributable reserve* £000	Capital reserve £000	Revenue reserve* £000	Total £000
As at 31 January 2016	5,179	10,838	110,581	45,833	5,676	178,107
Net return attributable to shareholders**	-	-	-	27,757	2,544	30,301
Ordinary shares bought back during the period	-	-	(6,064)	-	-	(6,064)
Dividends paid	-	-	-	-	(2,330)	(2,330)
As at 31 July 2016	5,179	10,838	104,517	73,590	5,890	200,014

Statement of changes in equity for the period to 31 January 2017	Called up ordinary share capital £000	Capital redemption reserve £000	Special distributable reserve* £000	Capital reserve £000	Revenue reserve* £000	Total £000
As at 31 January 2016	5,179	10,838	110,581	45,833	5,676	178,107
Net return attributable to shareholders**	-	-	-	46,559	4,138	50,697
Ordinary shares bought back during the year	-	-	(8,232)	-	-	(8,232)
Dividends paid	-	-	-	-	(4,075)	(4,075)
As at 31 January 2017	5,179	10,838	102,349	92,392	5,739	216,497

 

* These reserves are distributable.

** The Company does not have any other income or expenses that are included in the 'Net return attributable to shareholders' as disclosed in the Condensed Statement of Comprehensive Income above and therefore is also the 'Total comprehensive income for the period'. 

The notes below form part of these financial statements. 

Unaudited Statement of Cash Flow

		(Unaudited) Six months ended 31 July 2017		(Unaudited) Six months ended 31 July 2016		(Audited) Year ended 31 January 2017
	Note	£000	£000	£000	£000	£000	£000
Cash flows from operating activities
Profit before tax			15,438		30,660		51,269
Adjustments for:
Gains on investments^	5	(13,342)		(28,181)		(47,347)
Capital distribution received*	5	-		1,569		1,568
Purchases of investments**		(13,360)		(28,598)		(48,515)
Sales of investments**		22,877		31,456		53,660
Dividend income		(2,846)		(3,233)		(5,278)
Stock dividend income		-		-		(9)
Interest income		-		-		(1)
Stocklending income		(22)		(40)		(94)
Dividend received		2,889		3,268		5,336
Stock dividend received		-		-		9
Interest received		-		-		1
Stocklending income received		23		43		96
Increase in receivables		-		(1)		(1)
Decrease in payables		(36)		(282)		(244)
Overseas withholding tax suffered		(274)		(351)		(572)
			(4,091)		(24,350)		(41,391)
Net cash flows from operating activities			11,347		6,310		9,878
Cash flows from financing activities
Repurchase of ordinary share capital		(6,980)		(6,064)		(8,232)
Equity dividends paid	4	(2,288)		(2,330)		(4,075)
Net cash flows from financing activities			(9,268)		(8,394)		(12,307)
Net increase/(decrease) in cash and cash equivalents			2,079		(2,084)		(2,429)
Cash and cash equivalents at the start of the period			974		3,403		3,403
Cash and cash equivalents at the start of the period			3,053		1,319		974

^Restated for the six months to 31 July 2016.

*This relates to the proceeds from the 'Exchange offer' between BG Group and Royal Dutch Shell.

**Receipts from the sale of, and payments to acquire, investment securities have been classified as components of cash flows from operating activities because they form part of the Company's dealing operations.

The notes below form part of these financial statements. 

 

Notes to the Condensed Financial Statements

Note 1: Accounting policies

For the period ended 31 July 2017 (and the year ended 31 January 2017), the Company is applying FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland ('FRS 102'), which forms part of the revised Generally Accepted Accounting Practice ('UK GAAP') issued by the Financial Reporting Council ('FRC') in 2012 and 2013.

These condensed financial statements have been prepared on a going concern basis in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority, FRS 102 issued by the FRC in September 2015, FRS 104 Interim Financial Reporting issued by the FRC in March 2015 and the revised Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ('SORP') issued by the AIC in November 2014.

The accounting policies applied for the condensed set of financial statements are set out in the Company's annual report for the year ended 31 January 2017. 

Note 2: Returns and net asset value

	(Unaudited) Six months ended 31 July 2017	(Unaudited) Six months ended 31 July 2016	(Audited) Year ended 31 January 2017
The return and net asset value per ordinary shares are calculated with reference to the following figures:
Revenue return
Revenue return attributable to ordinary shareholders	£2,143,000	£2,544,000	£4,138,000
Weighted average number of shares in issue during the period	95,369,922	99,379,371	98,207,595
Revenue return per share	2.25p	2.56p	4.21p
Capital return
Capital return attributable to ordinary shareholders	£13,018,000	£27,757,000	£46,559,000
Weighted average number of shares in issue during the period	95,369,922	99,379,371	98,207,595
Return per ordinary share	13.65p	27.93p	47.41p
Total return
Total return per ordinary share	15.90p	30.49p	51.62p

There are no dilutive or potentially dilutive shares in issue.

	(Unaudited) As at 31 July 2017	(Unaudited) As at 31 July 2016	(Audited) As at 31 January 2017
Net asset value per share
Net assets attributable to shareholders	£222,376,000	£200,014,000	£216,497,000
Number of shares in issue at the period end	93,739,036	97,733,894	96,713,730
Net asset value per share	237.2p	204.7p	223.9p

During the six months ended 31 July 2017 2,974,694 shares were bought back to be held in treasury at a cost of £6,996,000. (Six months ended 31 July 2016 3,311,062 shares bought back to be held in treasury at a cost of £6,064,000, twelve months ended 31 January 2017 4,331,226 shares bought back to be held in treasury at a cost of £8,232,000). Between 1 August and 4 September 2017, 130,508 ordinary shares of 5p each were bought back to be held in treasury at a cost of £312,000. There have been no shares issued from treasury during the six months ended 31 July 2017. (Six months ended 31 July 2016 no shares were issued from treasury, twelve months ended 31 January 2017 no shares were issued from treasury.) There have been no shares cancelled from treasury during the six months ended 31 July 2017. (Six months ended 31 July 2016 no shares were cancelled from treasury, twelve months ended 31 January 2017 no shares were cancelled from treasury).

Note 3: Revenue from investments

	(Unaudited) Six months to 31 July 2017 £000	(Unaudited) Six months to 31 July 2016 £000	(Audited) Year to 31 January 2017 £000
From listed investments
UK equities	333	449	903
International equities	2,513	2,784	4,375
Stock dividend	-	-	9
Other revenue
Interest on deposits	-	-	1
Stock lending	22	40	94
	2,868	3,273	5,382

There were no capital dividends received during the six months ended 31 July 2017 (six months ended 31 July 2016 no capital dividends). There were no capital dividends received during the year ended 31 January 2017.

Note 4: Taxation on ordinary activities

	(Unaudited) Six months ended 31 July 2017			(Unaudited) Six months ended 31 July 2016			(Audited)     Year ended 31 January 2017
	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000	Revenue £000	Capital £000	Total £000
Overseas tax suffered	274	-	274	359	-	359	572	-	572

Note 5: Investments at fair value through profit or loss

	(Unaudited) Six months ended 31 July 2017 £000	(Unaudited) Six months ended 31 July 2016 £000	(Audited) Six months ended 31 January 2017 £000
Opening valuation	215,619	174,976	174,976
Opening unrealised gains	(68,132)	(27,657)	(27,657)
Opening cost	147,487	147,319	147,319
Purchases at cost	13,360	28,598	48,515
Disposal proceeds	(22,877)	(32,263)	(53,660)
Net profit / (loss) on disposal of investments	(3,601)	(456)	5,304
Disposal at cost	(19,276)	(32,719)	(48,356)
Closing cost	141,571	143,198	147,478
Stock dividend	-	-	9
Closing unrealised gains	77,873	54,725	68,132
Valuation as at 31 July	219,444	197,923	215,619
	(Unaudited) As at 31 July 2017 £000	(Unaudited) As at 31 July 2016 £000	(Audited) As at 31 January 2017 £000
Gains on investments
Net profit/ (loss) on disposal of investments	3,601	(456)	5,304
Net gain on revaluation of investments	9,741	27,068	40,475
Capital distribution received*	-	1,569	1,568
	13,342	28,181	47,347

*This relates to the proceeds from the 'Exchange offer' between BG Group and Royal Dutch Shell.

The transaction cost in acquiring investments for the six months ended 31 July 2017 was £31,000 (six months ended 31 July 2016: £44,000, twelve months ended 31 January 2017: £111,000). For disposals, transaction costs were £28,000 for the six months ended 31 July 2017 (six months ended 31 July 2016: £41,000, twelve months ended 31 January 2017: £63,000).

Note 6: Receivables: amounts falling due within one year

	(Unaudited) As at 31 July 2017 £000	(Unaudited) As at 31 July 2016 £000	(Audited) As at 31 January 2017 £000
Dividends receivable	113	151	125
Due from brokers	-	807	-
Taxation recoverable	86	115	117
Other receivables	6	6	6
Stock lending income receivable	3	3	4
	208	1,082	252

Note 7: Payables

	(Unaudited) As at 31 July 2017 £000	(Unaudited) As at 31 July 2016 £000	(Audited) As at 31 January 2017 £000
Due to Martin Currie	289	248	269
Other payables	40	62	79
	329	310	348

Note 8: Stock lending

The Company has a Securities Lending Authorisation Agreement with State Street Bank & Trust Company.

As at 31 July 2017 £27,307,000 of investments were subject to stock lending agreements (six months ended 31 July 2016: £19,459,000, twelve months ended 31 January 2017: £21,549,000) and £29,655,000 was held in collateral (six months ended 31 July 2016: £20,910,000, twelve months ended 31 January 2017: £23,104,000). The collateral was held in the form of cash (in USD or EUR), government securities issued by any of the OECD countries or equity securities listed and/or traded on an exchange in the following countries: Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, Switzerland and USA.

The gross earnings and the fees paid for the six months ended 31 July 2017 are £29,000 (six months ended 31 July 2016: £53,000, twelve months ended 31 January 2017: £125,000) and £7,000 (six months ended 31 July 2016: £13,000, twelve months ended 31 January 2017: £31,000).

Note 9: Interim report

The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in s434 - 6 of the Companies Act 2006. The financial information for the six months ended 31 July 2017 has not been audited or reviewed by the Company's independent auditors.

The information for the year ended 31 January 2017 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under s498 (2), (3) or (4) of the Companies Act 2006.

Note 10: Fair value hierarchy

The Company has adopted the amendments to FRS 102, where an entity is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the following levels:

- 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: 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 financial assets measured at fair value through profit and loss are grouped into the fair value hierarchy as follows:

The financial assets measured at fair value through profit and loss are grouped into the fair value hierarchy as follows:

	As at 31 July 2017 (Unaudited)
	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000
Financial assets at fair value through profit or loss
Quoted equities	219,444	-	-	219,444
Net fair value	219,444	-	-	219,444
	As at 31 July 2016 (Unaudited)
	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000
Financial assets at fair value through profit or loss
Quoted equities	197,923	-	-	197,923
Net fair value	197,923	-	-	197,923
	As at 31 January 2017 (Audited)
	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000
Financial assets at fair value through profit or loss
Quoted equities	215,619	-	-	215,619
Net fair value	215,619	-	-	215,619

Note 11: Post balance sheet event

Since 1 August 2017, a further 130,508 ordinary shares of 5p each have been bought back to be held in treasury at a cost of £312,000.

 

END

 

 

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