Results for the year to 30 April 2015
|
RNS Announcement: Preliminary Results |
|
The Monks Investment Trust PLC |
|
Results for the year to 30 April 2015 |
¾ In the year to 30 April 2015, the net asset value total return, with borrowings at fair value, was 13.0% and the share price total return was 18.8%. The total return of the FTSE World Index in sterling terms was 18.0%.
¾ Performance detractors included geographic allocation and exposure to the Oil and Gas sector. Good stock selection in Emerging Markets and Japan was offset by poor relative returns in the UK, North America and Europe (ex UK).
¾ A final dividend of 3.45p (3.45p) makes for an unchanged total of 3.95p (3.95p).
¾ Towards the end of the financial year, responsibility for managing the portfolio moved to a different team within Baillie Gifford. This team is led by Charles Plowden and he is supported by Spencer Adair and Malcolm MacColl. They manage Baillie Gifford's 'Global Alpha' investment strategy, which has a well established process and strong performance record. The narrowing of the Company's discount followed this change.
¾ Charles Plowden and his colleagues are long-term fundamental growth investors, who take an active approach to equity investment and portfolio construction.
¾ The Company's Policy and Objective, to achieve capital growth, is unaltered following the change in portfolio management responsibilities.
3 June 2015
The Monks Investment Trust PLCinvests globally in order to achieve capital growth, which takes priority over income and dividends. Monks is managed by Baillie Gifford, an independent fund management group, which has around £126 billion under management and advice as at 2 June 2015.
Past performance is not a guide to future performance. Monks is a listed UK company. The value of its shares and any income from them can fall as well as rise and investors may not get back the amount invested. The Company is listed on the London Stock Exchange and is not authorised or regulated by the Financial Conduct Authority. You can find up to date performance information about Monks at www.monksinvestmenttrust.co.uk‡
‡ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.
For further information please contact:
Anzelm Cydzik, Baillie Gifford & Co
Tel: 0131 275 3276
Roland Cross, Director, Broadgate Mainland
Tel: 0207 726 6111
|
Chairman's Statement |
Performance
In the year to 30 April 2015 the net asset value (NAV) total return (capital and income), with borrowings at fair value, was 13.0% and the share price total return was 18.8%. Over the same period the total return for the FTSE World Index was 18.0%.
Geographic allocation was a notable detractor to relative performance over the financial year, accounting for 3.6 percentage points of underperformance. Good stock selection in Emerging Markets and Japan was offset by poor relative returns in the UK, North America and Europe (ex UK). The relative overweight to the UK market was also unhelpful, as was our Oil and Gas exposure, with Enquest, Seadrill, North Atlantic Drilling and IGas Energy in particular performing poorly.
Earnings and Dividend
Earnings per share were 4.74p compared with 4.87p the previous year, a decrease of 2.7%. Monks invests with the aim of achieving capital growth rather than income and all costs are charged to the Revenue Account. The Board is recommending a final dividend of 3.45p, which together with the interim (0.50p) already paid, would make the total dividend for the year 3.95p, unchanged from the previous year. At this stage, we are expecting a lower earnings figure for the current year.
Change in Portfolio Management Responsibilities
In 2013, the Board and the Managers undertook a thorough review of the causes of the Company's relative underperformance in recent years. Actions were taken to improve performance, including the strengthening of the team managing the portfolio. Although there were some initial encouraging signs, performance did not improve markedly.
More recently, I have met a number of shareholders who wished to discuss the Company's performance and portfolio management arrangements, independently of the Managers. During the course of these meetings, it became apparent to me that these shareholders supported the Board's view that Baillie Gifford were held in high regard as investment trust managers, but that patience was waning with the existing portfolio management team.
Following further formal review, the Board took the decision to appoint a different portfolio management team within Baillie Gifford. As a result, since 27 March 2015 Monks has been managed by Charles Plowden, supported by Spencer Adair and Malcolm MacColl: they are all members of Baillie Gifford's 'Global Alpha' investment team, which has a well established process and strong performance record. They are all Partners at Baillie Gifford and have been working together since 2005. Charles is one of two joint senior partners.
It is important to note that the Company's investment policy and objective have not altered as a result of this change in portfolio responsibilities. The Company's goal remains long-term capital growth, by investing globally and principally in equities.
Approximately 56% of the Company's portfolio by value was reorganised following the announced changes and as at the end of the Company's year was, with some very minor exceptions, positioned as the new portfolio management team wished. Further details on the Managers' investment approach and the portfolio are set out below.
Buybacks and Discount
During the year to 30 April 2015 £55.1m was spent buying back 13.9m shares at a discount to NAV, representing 6.1% of the shares in issue at the start of the year.
The discount (at fair value) ended the financial year at 8.6% compared to 13.0% at the prior year end. The narrowing occurred towards the end of the period and reflected the market's reaction following the change in portfolio management responsibilities announced 27 March 2015. The Board monitors the level of discount and has authorised the repurchase of shares when this will be of benefit to continuing shareholders.
Gearing
During the second half of the year the Company made use of its short term loan facilities and at the year end the Company had drawings of ¥15.5bn with National Australia Bank Limited and effective gearing, net of cash, stood at 7.2%. After offsetting bonds, the Company was ungeared to equities at its year end.
The Board and new portfolio managers have held discussions on the use of gearing and concluded that, at present, the gearing range should be 5% net cash to plus 10% invested in equities, achieved through utilising borrowings. The portfolio managers are at liberty to move freely within these parameters without the prior approval of the Board. However, as equity valuations have run hard recently, gearing is not being deployed immediately. Gearing parameters are reviewed at each Board meeting.
Outlook
Charles Plowden and his colleagues are long-term fundamental growth investors. While cognisant of the macroeconomic environment and the impact that market sentiment might have on individual stocks in the short term, it will be company fundamentals that drive longer term portfolio returns. The Board is confident that the portfolio will benefit from this approach.
The Board
Jeremy Tigue joined the Board on 30 September 2014 and was appointed Chairman of the Company's Audit Committee on 1 May 2015. He has extensive experience of the management of investment trusts. In accordance with the Company's Articles, Mr Tigue will be submitted for election at the forthcoming AGM.
AGM
I encourage shareholders to attend the Annual General Meeting, which will be held on 4 August 2015 at 11.00am at the Institute of Directors. Our portfolio managers will give a short presentation and there will be an opportunity to ask questions and to meet the managers and Directors informally.
James Ferguson
Chairman
3 June 2015
Past performance is not a guide to future performance.
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Managers' Report |
As detailed in the Chairman's Statement on page above, responsibility for managing the portfolio was moved to Charles Plowden, supported by Spencer Adair and Malcolm MacColl, at the end of March 2015. The portfolio was subsequently realigned to reflect their favoured stocks. The report that now follows, written by the new portfolio managers, introduces their investment process and portfolio.
How we invest
Our investment approach has three features which together underpin our ability to outperform: a differentiated, active portfolio; a diversified range of growth stocks; and a patient approach. The discipline of applying these features consistently is the key. Taking each in turn:
Active. To deliver superior returns, a portfolio must be distinctive. We select stocks purely on their fundamental attractions, unconstrained by the shackles of the index. The result is a unique, truly differentiated portfolio. At the year end some 93% of Monks equity portfolio differed from its comparative index (as measured by Active Share1).
Growth. We choose to harness the powers of growth and long-term compounding. We believe that stock prices are ultimately driven by company fundamentals and that higher than average growth will ultimately be reflected in price outperformance. We target businesses with the ability to compound their earnings and cash flows by at least 10% per annum over a five year period - more than twice the market's long-term average. We buy these stocks when this growth is not fully reflected in their prices.
Patience. We allow compounding to do its work and accept that, in the real world, progress is rarely smooth. We hold stocks for as long as our investment cases stand and ignore short-term noise. This is reflected in low portfolio turnover; in the ten years that we have together managed global equities our average holding period has been more than five years. This has enabled long-term fundamentals to drive portfolio returns, whilst also minimising underlying trading costs.
Diversified sources of growth
We classify our stocks into four growth categories: Stalwarts, Rapid, Cyclical and Latent. This structure is how we think about the portfolio on a day-to-day basis and is therefore how we will frame our reporting. We have a clear view of the inefficiencies we are exploiting within each growth category and the reasons we expect these to outperform. These provide us with a valuable means of monitoring the operating performance of our investments. Importantly, the framework also encourages diversity: you are not dependent on one flavour of growth.
We have included a short description of each growth category in the equity portfolio by growth category table below. Looking at each in a little more detail:
Growth stalwarts. These stocks have durable franchises and we expect them to deliver robust profits largely independent of the economic backdrop. Within this area we are often drawn to businesses where the competitive advantages include dominant local scale, customer loyalty and strong brands. Examples include the consumer goods business, Colgate Palmolive, the payment processor, MasterCard, and the global lift and escalator manufacturer, Schindler. We expect our Stalwarts to produce earnings and cash flow growth of around 10% per annum over the long term. These are the types of long-duration businesses where the market fails to appreciate the benefit of compounding, as they may appear unexciting relative to more rapid or cyclical growth stocks.
Rapid growth. Stocks in this category are typically earlier stage businesses growing quickly by developing new markets, often applying innovative technologies and taking market share from incumbents. An example is Schibsted, a Norwegian media stock which is quickly diversifying away from traditional print media towards the fast growing on-line classified sector. Further examples include the financial groups AIA (Asian life insurance and savings) and HDFC (Indian mortgage lending) that operate in emerging economies and which should capitalise on rising levels of disposable consumer incomes. We set the bar high for these businesses, expecting long-term earnings growth of 15-25% per annum. Our rapid growth stocks are often examples of where our long-term perspective allows us to look beyond optically high near term valuations and to focus on the scale of the ultimate opportunity.
Cyclical growth: Stocks in this category have strong secular growth prospects, but are also subject to the influence of macroeconomic or capital cycles, and sometimes both. Here we look for businesses which are adaptable and management teams that we trust to allocate capital skilfully. Examples of holdings which have displayed these attributes over recent years include the cruise line operator, Royal Caribbean, the Taiwanese semiconductor manufacturer, TSMC, and the Swedish based bank, Svenska Handelsbanken. We expect stocks in this segment to increase their earnings by 10-15% per annum over a full business cycle. These businesses most commonly become mispriced due to the market's lack of patience and tendency to extrapolate near term trading conditions. We take advantage of this short-termism and capitalise on the myopic view of others.
Latent growth: These are stocks with often unspectacular recent operating records. The market expects them to shrink or produce very little growth, but our analysis has identified a company-specific catalyst which can allow above average growth to re-emerge. An example is CRH, a building materials supplier, which has struggled for some years against a tough economic backdrop and over supply. There appears to be little growth factored in to current market expectations. However, we are excited about structural improvements within its underlying operations driven by consolidation, most notably CRH's purchase of assets from Lafarge/Holcim. These Latent stocks reflect our time horizon and willingness to embrace change in order to exploit inefficiencies.
Portfolio construction and position sizing
Careful consideration is given to the holding size of individual stocks. We utilise three broad groups of stock weightings: high conviction (c.2%), average sized (c.1%), and incubator (c.0.5%). Current examples of high conviction holdings include the Asian and developed market life insurer, Prudential, and the North American online broker, TD Ameritrade. Incubators are exciting stocks, with a broad range of potential outcomes, where we see the risk/reward skewed towards the upside. These include the Japanese online advertising and media business, CyberAgent, and the biotechnology business, Seattle Genetics. A breakdown of the equity portfolio by these holding sizes is set out in a table below.
Idea generation and decision making
We harness the full strength of Baillie Gifford's c.90 analysts to generate ideas. They collectively cover all of the world's major equity markets searching for businesses with the potential to deliver superior long-term growth. Recommendations flow to us via a proven process involving a monthly meeting of the Portfolio Review Group, which comprises the three of us and a range of other analysts from across Baillie Gifford. All ideas are tested against three questions: how does the business compare globally?; where do we have insight on the stock?; and will the business bring diversity to the portfolio?. Full responsibility for decision-making rests with the three of us.
Diversification and current positioning
We strongly believe in the merits of managing a portfolio which is both distinct in nature and well diversified. Whilst our growth categories ensure a good degree of balance, we also consider the forward-looking risks within the portfolio through regular analysis of underlying thematic drivers. This analysis allows us to look beyond traditional parameters and to consider the real long-term risk concentrations within the portfolio. At present roughly 35% of the Company's portfolio can be classified as economically agnostic, where the primary driver of operating performance is not related to GDP growth. Many of the stocks in this area are innovative businesses creating new markets and attacking incumbent profit pools. Approximately 23% of the portfolio is likely to be a beneficiary of the continued recovery of the United States, and 14% is exposed to potential healing within the European and Japanese economies. A further 15% is thematically exposed to the long-term secular growth trends within developing markets, and Asia in particular. The remaining 13% is predominantly comprised of bonds and net liquid assets.
(Further detail of the thematic exposures is detailed below).
What does the future hold?
We are excited about the stocks we have selected. We believe they offer the prospect of above average growth which should translate over time into attractive returns. This confidence comes from our understanding of their fundamentals and our patient investment approach. There will be periods when fundamentals are not reflected in shareholder returns, such as when our growth style is out of favour. However, we are confident that our process will create significant value for investors over the long term.
Charles Plowden,
Spencer Adair
Malcolm MacColl
3 June 2015
Past performance is not a guide to future performance.
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Equity Portfolio by Growth Category (unaudited) |
At 30 April 2015
|
Category |
Company characteristics |
% of |
|
Growth Stalwarts (c.10%p.a. earnings growth) |
¾ Durable franchise ¾ Deliver robust profitability in most macroeconomic environments ¾ Competitive advantage includes dominant local scale, customer loyalty and strong brands
|
21.6 |
|
Rapid Growth (c.15% to 25% p.a. earnings growth)
|
¾ Early stage businesses with vast growth opportunity ¾ Innovators attacking existing profit pools or creating new markets |
30.8 |
|
Cyclical Growth (c.10% to 15% p.a. earnings growth through a cycle)
|
¾ Subject to macroeconomic and capital cycles with significant structural growth prospects ¾ Strong management teams highly skilled at capital allocation |
31.1 |
|
Latent Growth (earnings growth to accelerate over time) |
¾ Company specific catalyst will drive above average earnings in future ¾ Unspectacular recent operational performance and therefore out of favour |
16.5 |
|
|
|
100.0 |
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Equity Portfolio by Holding Size (unaudited) |
At 30 April 2015
|
Category |
Description |
% of |
|
Highest Conviction |
Holdings c.2.0% each |
25.9 |
|
Average Sized |
Holdings c.1.0% each |
44.7 |
|
Incubator Holdings |
Holdings c.0.5% each |
29.4 |
|
|
|
100.0 |
|
Total Assets by Thematic Risk Category (unaudited) |
At 30 April 2015
|
Category |
% of |
|
Economically Agnostic |
35.3 |
|
US Re-emergence |
22.5 |
|
Developing Market Growth |
14.7 |
|
European and Japanese Healing |
14.2 |
|
Bonds and Net Liquid Assets |
10.9 |
|
Other |
2.4 |
|
|
100.0 |
|
List of Investments (unaudited) |
At 30 April 2015
|
Name |
Business |
Growth category |
Fair value £'000 |
% of total assets |
Cumulative % of total assets |
|||
|
Naspers |
Media and e-commerce |
Rapid |
32,233 |
2.8 |
|
|||
|
Prudential |
International financial services |
Stalwart |
30,194 |
2.6 |
|
|||
|
Royal Caribbean Cruises |
Cruise line operator |
Cyclical |
26,150 |
2.3 |
|
|||
|
Anthem |
Healthcare insurer |
Stalwart |
20,819 |
1.8 |
|
|||
|
Amazon.com |
Online retailer |
Rapid |
20,614 |
1.8 |
|
|||
|
TSMC |
Semiconductor manufacturer |
Cyclical |
19,830 |
1.7 |
|
|||
|
Ryanair |
Low cost airline |
Rapid |
17,929 |
1.6 |
|
|||
|
TD Ameritrade |
Online brokerage |
Cyclical |
17,849 |
1.6 |
|
|||
|
MS&AD Insurance |
Non-life insurer |
Latent |
16,475 |
1.4 |
|
|||
|
AIA |
Insurance |
Rapid |
16,339 |
1.4 |
19.0 |
|||
|
|
Online search engine |
Rapid |
15,632 |
1.4 |
|
|||
|
Nestle |
Food and beverage producer |
Stalwart |
15,500 |
1.3 |
|
|||
|
Markel |
Speciality insurance |
Cyclical |
15,221 |
1.3 |
|
|||
|
First Republic Bank |
Retail bank |
Cyclical |
14,547 |
1.3 |
|
|||
|
CRH |
Diversified building materials |
Latent |
14,050 |
1.2 |
|
|||
|
Carmax |
Sells and retails new and used cars and light trucks |
Cyclical |
13,692 |
1.2 |
|
|||
|
Moody's |
Credit rating agency |
Stalwart |
13,589 |
1.2 |
|
|||
|
Nanoco |
Quantum dot manufacturer |
Rapid |
13,309 |
1.2 |
|
|||
|
EOG Resources |
Natural gas explorer and producer |
Cyclical |
12,780 |
1.1 |
|
|||
|
SAP |
Enterprise software |
Stalwart |
12,734 |
1.1 |
31.3 |
|||
|
M&T Bank |
Retail and commercial bank |
Cyclical |
12,546 |
1.1 |
|
|||
|
Inpex |
Oil and gas producer |
Latent |
12,386 |
1.1 |
|
|||
|
Schindler |
Elevator and escalator manufacturer |
Stalwart |
12,307 |
1.1 |
|
|||
|
Baidu |
Chinese internet search engine |
Rapid |
12,259 |
1.1 |
|
|||
|
Samsung Electronics |
Consumer and industrial electronic equipment |
Latent |
12,258 |
1.1 |
|
|||
|
Wolseley |
Building materials distributor |
Cyclical |
12,173 |
1.1 |
|
|||
|
MercadoLibre |
Latin American e-commerce platform |
Rapid |
11,901 |
1.0 |
|
|||
|
Harley-Davidson |
Motorcycle manufacturer |
Cyclical |
11,616 |
1.0 |
|
|||
|
Ebay |
Internet auction and payment |
Rapid |
11,600 |
1.0 |
|
|||
|
MasterCard |
Global electronic payments network |
Stalwart |
11,084 |
1.0 |
41.9 |
|||
|
Svenska Handelsbanken |
Retail bank |
Cyclical |
11,007 |
1.0 |
|
|||
|
Visa |
Global electronic payments network |
Stalwart |
10,983 |
1.0 |
|
|||
|
Atlas Copco |
Industrial compressors and mining equipment producer |
Cyclical |
10,647 |
0.9 |
|
|||
|
Martin Marietta Materials |
Cement and aggregates producer |
Cyclical |
10,637 |
0.9 |
|
|||
|
American Express |
Global payment and travel company |
Stalwart |
10,566 |
0.9 |
|
|||
|
Fairfax Financial |
Financial services holding company |
Latent |
10,546 |
0.9 |
|
|||
|
Dragon Oil |
Oil and gas exploration and production |
Rapid |
10,427 |
0.9 |
|
|||
|
Rolls Royce |
Power systems manufacturer |
Cyclical |
10,051 |
0.9 |
|
|||
|
Waters |
Liquid chromatography products and services |
Stalwart |
10,009 |
0.9 |
|
|||
|
TripAdvisor |
Online travel review platform |
Rapid |
9,990 |
0.9 |
51.1 |
|||
|
Schibsted |
Print and online newspapers and classifieds |
Rapid |
9,775 |
0.9 |
|
|||
|
Monsanto |
Agricultural biotechnology |
Stalwart |
9,643 |
0.8 |
|
|||
|
Flir Systems |
Infra-red technology |
Latent |
9,105 |
0.8 |
|
|||
|
Sumitomo Mitsui Trust Bank
|
Trust bank and investment manager |
Latent |
8,881 |
0.8 |
|
|||
|
|
List of Investments (unaudited) (Ctd) |
|
||||||
|
Name |
Business |
Growth category |
Fair value £'000 |
% of total assets |
Cumulative % of total assets |
|
SMC |
Factory automation equipment producer |
Cyclical |
8,873 |
0.8 |
|
|
Dolby Laboratories |
Audio noise reduction and encoding/compression |
Latent |
8,715 |
0.8 |
|
|
ICICI Bank |
Banking and financial services |
Rapid |
8,636 |
0.8 |
|
|
IP Group |
Intellectual property commercialisation |
Rapid |
8,631 |
0.8 |
|
|
Juridica Investments |
Litigation financing |
Latent |
8,607 |
0.7 |
|
|
Lincoln Electric |
Welding equipment manufacturer |
Cyclical |
8,308 |
0.7 |
59.0 |
|
Myriad Genetics |
Genetic testing |
Rapid |
8,297 |
0.7 |
|
|
Colgate-Palmolive |
Consumer goods |
Stalwart |
8,282 |
0.7 |
|
|
Bank of Ireland |
Retail and commercial bank |
Latent |
8,174 |
0.7 |
|
|
Brambles |
Pallet pool operator |
Cyclical |
7,935 |
0.7 |
|
|
Man Group |
Hedge fund manager |
Cyclical |
7,883 |
0.7 |
|
|
THK |
Linear motion systems manufacturer |
Cyclical |
7,781 |
0.7 |
|
|
CH Robinson Worldwide |
Delivery and logistics |
Cyclical |
7,561 |
0.7 |
|
|
Tesla Motors |
Electric cars |
Rapid |
7,524 |
0.7 |
|
|
Carlsberg |
Brewer |
Latent |
7,517 |
0.7 |
|
|
Shimano |
Cycling component manufacturer |
Stalwart |
7,462 |
0.6 |
65.9 |
|
Qualcomm |
Semiconductor manufacturer and wireless patents |
Stalwart |
7,413 |
0.6 |
|
|
Yandex |
Internet search and other services |
Rapid |
7,296 |
0.6 |
|
|
Silk Invest Africa Food Fund* |
Africa-focused private equity fund |
Latent |
7,292 |
0.6 |
|
|
Ultra Petroleum |
Oil and gas exploration and production |
Latent |
7,268 |
0.6 |
|
|
Teradyne |
Semiconductor testing equipment manufacturer |
Cyclical |
7,229 |
0.6 |
|
|
Victrex |
Speciality high-performance chemicals manufacturer |
Cyclical |
7,183 |
0.6 |
|
|
Dia |
Discount food retailer |
Stalwart |
7,059 |
0.6 |
|
|
Mindray Medical International |
Develops, manufactures and markets medical devices |
Rapid |
6,901 |
0.6 |
|
|
Xilinx |
Programmable logic semiconductors |
Stalwart |
6,897 |
0.6 |
|
|
Renishaw |
Measurement and calibration equipment manufacturer |
Rapid |
6,897 |
0.6 |
71.9 |
|
Richemont |
Luxury goods designer and manufacturer |
Cyclical |
6,694 |
0.6 |
|
|
Olympus |
Optics manufacturer |
Stalwart |
6,558 |
0.6 |
|
|
China Resource Enterprises
|
Chinese conglomerate |
Latent |
6,492 |
0.6 |
|
|
Shiseido |
Personal and household goods |
Stalwart |
6,489 |
0.6 |
|
|
Jardine Matheson |
Trading company |
Cyclical |
6,343 |
0.6 |
|
|
Deutsche Boerse |
Stock exchange operator |
Cyclical |
6,316 |
0.6 |
|
|
Fiat Chrysler Autos |
Vehicle manufacturer |
Latent |
6,302 |
0.5 |
|
|
DistributionNOW |
Oilfield drilling equipment distributor |
Cyclical |
6,220 |
0.5 |
|
|
Rohm |
Semiconductor manufacturer |
Latent |
6,217 |
0.5 |
|
|
Praxair |
Industrial gas supplier |
Stalwart |
6,150 |
0.5 |
77.5 |
|
Volvo |
Commercial vehicle manufacturer |
Cyclical |
6,099 |
0.5 |
|
|
Toyota Tsusho |
Trading company |
Latent |
5,807 |
0.5 |
|
|
iRobot |
Domestic robots |
Rapid |
5,772 |
0.5 |
|
|
Financial Engines |
Investment advisory firm |
Rapid |
5,679 |
0.5 |
|
|
Hays |
Recruitment and human resources |
Cyclical |
5,581 |
0.5 |
|
* Denotes an unlisted security
|
List of Investments (unaudited) (Ctd) |
|
Name |
Business |
Growth category |
Fair value £'000 |
% of total assets |
Cumulative % of total assets |
||
|
Cyberagent |
Internet advertising and content |
Rapid |
5,566 |
0.5 |
|
||
|
Softbank |
Telecom operator and internet investor |
Rapid |
5,020 |
0.4 |
|
||
|
Doric Nimrod Air One |
Aircraft leasing |
Latent |
4,940 |
0.4 |
|
||
|
|
Social networking |
Rapid |
4,905 |
0.4 |
|
||
|
Japan Exchange |
Stock exchange operator |
Rapid |
4,904 |
0.4 |
82.1 |
||
|
MarketAxess |
Electronic bond trading platform |
Rapid |
4,812 |
0.4 |
|
||
|
Ritchi Bros Auctioneers |
Industrial equipment auctioneer |
Cyclical |
4,763 |
0.4 |
|
||
|
Zillow |
US online real estate services |
Rapid |
4,762 |
0.4 |
|
||
|
Alnylam Pharmaceuticals |
Biotechnology |
Rapid |
4,456 |
0.4 |
|
||
|
SK Hynix |
Semiconductor manufacturer |
Cyclical |
4,437 |
0.4 |
|
||
|
Leucadia National |
Holding company |
Cyclical |
4,295 |
0.4 |
|
||
|
Qiagen |
Biotechnology equipment |
Rapid |
4,284 |
0.4 |
|
||
|
M3 |
Online medical database |
Rapid |
4,284 |
0.4 |
|
||
|
Howard Hughes |
Real estate developer |
Latent |
4,280 |
0.4 |
|
||
|
BMF Bovespa |
Stock exchange operator |
Rapid |
4,258 |
0.4 |
86.1 |
||
|
Seattle Genetics |
Biotechnology treatments for cancer |
Rapid |
4,250 |
0.4 |
|
||
|
Coca Cola HBC |
Soft drink producer and distributor |
Stalwart |
4,000 |
0.3 |
|
||
|
HDFC |
Indian mortgage provider |
Rapid |
3,753 |
0.3 |
|
||
|
Tsingtao Brewery |
Brewer |
Stalwart |
3,605 |
0.3 |
|
||
|
Alibaba |
Online and mobile commerce |
Rapid |
3,541 |
0.3 |
|
||
|
Stratasys |
3D printer manufacturer |
Rapid |
3,083 |
0.3 |
|
||
|
Aggreko |
Power generation equipment rental |
Cyclical |
2,838 |
0.2 |
|
||
|
Intuitive Surgical |
Surgical robots |
Rapid |
2,744 |
0.2 |
|
||
|
Altus Resource Capital |
Mining investment fund |
Latent |
2,434 |
0.2 |
|
||
|
|
Social network |
Rapid |
2,195 |
0.2 |
88.8 |
||
|
Ferro Alloy Resources* |
Vanadium mining |
Cyclical |
1,949 |
0.2 |
|
||
|
President Energy |
Oil and gas exploration and production |
Cyclical |
1,185 |
0.1 |
|
||
|
NBNK Investments |
Shell company |
Latent |
464 |
- |
|
||
|
Total Equity Investments |
|
|
1,022,230 |
89.1 |
89.1 |
||
|
|
|
|
|
|
|
||
|
Bonds |
|
|
|
|
|
||
|
US Treasury 0.625% 31/12/16 |
US sovereign debt |
|
55,123 |
4.8 |
|
||
|
Athena Debt Opportunities Fund* |
Fund of asset-backed securities and other structured finance instruments |
|
11,496 |
1.0 |
|
||
|
Credit Suisse 0% Swap Rate Linked Note 2017* |
Variable redemption linked to 30 year GBP swap rate |
|
6,606 |
0.6 |
|
||
|
K1 Life Settlements 0% 2016* |
Bond linked to life insurance policies |
|
1,170 |
0.1 |
|
||
|
Total Bonds |
|
|
74,395 |
6.5 |
|
||
|
Total Investments |
|
|
1,096,625 |
95.6 |
95.6 |
||
|
Net Liquid Assets |
|
|
50,995 |
4.4 |
|
||
|
Total Assets at Fair Value |
|
|
1,147,620 |
100.0 |
100.0 |
||
* Denotes an unlisted security
|
Income statement (unaudited) |
The following is the unaudited preliminary statement for the year to 30 April 2015 which was approved by the Board on 3 June 2015. The Directors of The Monks Investment Trust PLC are recommending to the Annual General Meeting of the Company to be held on 4 August 2015 the payment of a final dividend of 3.45p (3.45p last year) per ordinary share, making a total of 3.95p (3.95p last year) per ordinary share for the year ended 30 April 2015.
|
|
For the year ended 30 April 2015 |
For the year ended 30 April 2014 |
||||
|
|
Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
Gains on investments |
- |
99,275 |
99,275 |
- |
31,448 |
31,448 |
|
Currency gains/(losses) |
- |
4,892 |
4,892 |
- |
(2,799) |
(2,799) |
|
Income |
20,215 |
- |
20,215 |
21,585 |
- |
21,585 |
|
Investment management fee |
(4,668) |
- |
(4,668) |
(4,778) |
- |
(4,778) |
|
Other administrative expenses |
(1,087) |
- |
(1,087) |
(903) |
- |
(903) |
|
Net return before finance costs and taxation |
14,460 |
104,167 |
118,627 |
15,904 |
28,649 |
44,553 |
|
Finance costs of borrowings |
(2,846) |
- |
(2,846) |
(3,783) |
- |
(3,783) |
|
Net return on ordinary activities before taxation |
11,614 |
104,167 |
115,781 |
12,121 |
28,649 |
40,770 |
|
Tax on ordinary activities |
(1,065) |
- |
(1,065) |
(940) |
- |
(940) |
|
Net return on ordinary activities after taxation |
10,549 |
104,167 |
114,716 |
11,181 |
28,649 |
39,830 |
|
Net return per ordinary share (note 2) |
4.74p |
46.84p |
51.58p |
4.87p |
12.49p |
17.36p |
|
Note: Dividends per share paid and payable in respect of the year (note 3) |
3.95p |
|
|
3.95p |
|
|
The total column of this statement represents the profit and loss account of the Company.
All revenue and capital items in this statement derive from continuing operations.
A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.
|
Balance sheet (unaudited) |
|
|
At 30 April 2015 £'000 |
At 30 April 2014 £'000 |
|
Fixed assets |
|
|
|
Investments held at fair value through profit or loss |
1,096,625 |
973,559 |
|
Current assets |
|
|
|
Debtors |
2,032 |
2,139 |
|
Cash and deposits |
50,815 |
41,592 |
|
|
52,847 |
43,731 |
|
Creditors |
|
|
|
Amounts falling due within one year (note 4) |
(86,136) |
(4,682) |
|
Net current (liabilities)/assets |
(33,289) |
39,049 |
|
Total assets less current liabilities |
1,063,336 |
1,012,608 |
|
Creditors |
|
|
|
Amounts falling due after more than one year (note 4) |
(39,745) |
(39,712) |
|
Net assets |
1,023,591 |
972,896 |
|
Capital and reserves |
|
|
|
Called up share capital |
10,698 |
11,394 |
|
Share premium |
11,100 |
11,100 |
|
Capital redemption reserve |
8,700 |
8,004 |
|
Capital reserve |
943,958 |
894,882 |
|
Revenue reserve |
49,135 |
47,516 |
|
Shareholders' funds |
1,023,591 |
972,896 |
|
Net asset value per ordinary share (after deducting borrowings at fair value) |
476.0p |
425.2p |
|
Net asset value per ordinary share (after deducting borrowings at par) |
478.3p |
426.8p |
|
Ordinary shares in issue (note 5) |
213,963,859 |
227,887,859 |
|
Reconciliation of movements in shareholders' funds (unaudited) |
For the year ended 30 April 2015
|
|
Share £'000 |
Share premium £'000 |
Capital redemption reserve £'000 |
Capital reserve £'000 |
Revenue reserve £'000 |
Shareholders' £'000 |
|
Shareholders' funds at 1 May 2014 |
11,394 |
11,100 |
8,004 |
894,882 |
47,516 |
972,896 |
|
Net return on ordinary activities after taxation |
- |
- |
- |
104,167 |
10,549 |
114,716 |
|
Shares purchased for cancellation (note 5) |
(696) |
- |
696 |
(55,091) |
- |
(55,091) |
|
Dividends paid during the year (note 3) |
- |
- |
- |
- |
(8,930) |
(8,930) |
|
Shareholders' funds at 30 April 2015 |
10,698 |
11,100 |
8,700 |
943,958 |
49,135 |
1,023,591 |
For the year ended 30 April 2014
|
|
Share £'000 |
Share premium £'000 |
Capital redemption reserve £'000 |
Capital reserve £'000 |
Revenue reserve £'000 |
Shareholders' £'000 |
|
Shareholders' funds at 1 May 2013 |
12,017 |
11,100 |
7,381 |
910,342 |
45,387 |
986,227 |
|
Net return on ordinary activities after taxation |
- |
- |
- |
28,649 |
11,181 |
39,830 |
|
Shares purchased for cancellation |
(623) |
- |
623 |
(44,109) |
- |
(44,109) |
|
Dividends paid during the year (note 3) |
- |
- |
- |
- |
(9,052) |
(9,052) |
|
Shareholders' funds at 30 April 2014 |
11,394 |
11,100 |
8,004 |
894,882 |
47,516 |
972,896 |
|
Condensed cash flow statement (unaudited) |
|
|
Year ended 30 April 2015 |
Year ended 30 April 2014 |
||
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
Net cash inflow from operating activities |
|
13,454 |
|
15,903 |
|
Servicing of finance |
|
|
|
|
|
Interest paid |
(2,809) |
|
(3,743) |
|
|
Net cash outflow from servicing of finance |
|
(2,809) |
|
(3,743) |
|
Taxation |
|
|
|
|
|
Overseas tax incurred |
(987) |
|
(955) |
|
|
Total tax paid |
|
(987) |
|
(955) |
|
Financial investment |
|
|
|
|
|
Acquisitions of investments |
(956,481) |
|
(280,577) |
|
|
Disposals of investments |
930,889 |
|
375,942 |
|
|
Net cash (outflow)/inflow from financial investment |
|
(25,592) |
|
95,365 |
|
Equity dividends paid |
|
(8,930) |
|
(9,052) |
|
Net cash (outflow)/inflow before financing |
|
(24,864) |
|
97,518 |
|
Financing |
|
|
|
|
|
Shares purchased for cancellation |
(55,089) |
|
(51,718) |
|
|
Borrowings drawn down/(repaid) |
84,382 |
|
(40,000) |
|
|
Net cash inflow/(outflow) from financing |
|
29,293 |
|
(91,718) |
|
Increase in cash |
|
4,429 |
|
5,800 |
|
Reconciliation of net cash flow to movement in net (debt)/funds |
|
|
|
|
|
Increase in cash in the year |
|
4,429 |
|
5,800 |
|
Translation difference |
|
4,892 |
|
(2,799) |
|
Net cash (inflow)/outflow from borrowings (drawn down)/repaid |
|
(84,382) |
|
40,000 |
|
Other non-cash changes |
|
(33) |
|
(33) |
|
Movement in net (debt)/funds in the year |
|
(75,094) |
|
42,968 |
|
Net funds/(debt) at 1 May |
|
1,880 |
|
(41,088) |
|
Net (debt)/funds at 30 April |
|
(73,214) |
|
1,880 |
|
Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities |
|
|
|
|
|
Net return before finance costs and taxation |
|
118,627 |
|
44,553 |
|
Gains on investments |
|
(99,275) |
|
(31,448) |
|
Currency (gains)/losses |
|
(4,892) |
|
2,799 |
|
Amortisation of fixed interest book cost |
|
(444) |
|
(974) |
|
(Increase)/decrease in accrued income |
|
(309) |
|
574 |
|
Increase in debtors |
|
(373) |
|
(78) |
|
Increase in creditors |
|
120 |
|
477 |
|
Net cash inflow from operating activities |
|
13,454 |
|
15,903 |
|
Notes to the condensed financial statements (unaudited) |
|
1. |
The financial information within this preliminary announcement has been extracted from the unaudited financial statements for the year to 30 April 2015 which have been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 30 April 2014. |
|||||||
|
|
|
|
|
|
||||
|
2. |
Net Return per Ordinary Share |
2015 |
|
2014 |
||||
|
Revenue return |
4.74p |
|
4.87p |
|||||
|
Capital return |
46.84p |
|
12.49p |
|||||
|
Total return |
51.58p |
|
17.36p |
|||||
|
Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £10,549,000 (2014 - £11,181,000) and on 222,374,615 (2014 - 229,470,589) ordinary shares of 5p, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on the net capital gain for the financial year of £104,167,000 (2014 - £28,649,000) and on 222,374,615 (2014 - 229,470,589) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no dilutive or potentially dilutive shares in issue. |
||||||||
|
3. |
Ordinary Dividends
|
2015 |
2014 |
2015 £'000 |
2014 £'000 |
|||
|
Amounts recognised as distributions in the year: |
|
|
|
|
||||
|
Previous year's final (paid 8 August 2014) |
3.45p |
3.45p |
7,824 |
7,911 |
||||
|
Interim (paid 30 January 2015) |
0.50p |
0.50p |
1,106 |
1,141 |
||||
|
|
3.95p |
3.95p |
8,930 |
9,052 |
||||
|
|
We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £10,549,000 (2014 - £11,181,000).
|
|||||||
|
|
Ordinary Dividends
|
2015 |
2014 |
2015 £'000 |
2014 £'000 |
|||
|
Amounts paid and payable in respect of the financial year: |
|
|
|
|
||||
|
Adjustment to previous year's final dividend re shares bought back |
- |
- |
(38) |
(380) |
||||
|
Interim (paid 30 January 2015) |
0.50p |
0.50p |
1,106 |
1,141 |
||||
|
Proposed final (payable 7 August 2015) |
3.45p |
3.45p |
7,382 |
7,862 |
||||
|
|
3.95p |
3.95p |
8,450 |
8,623 |
||||
|
|
If approved the recommended final dividend will be paid on 7 August 2015 to shareholders on the register at the close of business on 10 July 2015. The ex-dividend date is 9 July 2015. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 17 July 2015. |
|||||||
|
Notes to the condensed financial statements (unaudited) (ctd) |
|
4. |
At 30 April 2015 the book value of the Company's borrowings amounted to £124m (2014 - £40m), comprising a £40m 6 3/8% debenture stock repayable in 2023 (2014 - £40m) and a short-term bank loan of ¥15.5bn (2014 - nil). The fair value of borrowings at 30 April 2015 was £129m (2014 - £44m). |
|
5. |
In the year to 30 April 2015 the Company bought back 13,924,000 ordinary shares with a nominal value of £696,000 at a total cost of £55,091,000. At 30 April 2015 the Company had authority to buy back a further 21,894,085 ordinary shares, being 10.2% of the shares in issue at the year end. |
|
6. |
The Report and Accounts will be available on the Managers' website www.monksinvestmenttrust.co.uk‡ on or around 25 June 2015. |
|
7. |
The financial information set out above does not constitute the Company's statutory accounts for the year ended 30 April 2015. The financial information for 2014 is derived from the statutory accounts for 2014 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2014 accounts; their report was unqualified and it did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The statutory accounts for 2015 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. |
|
8. |
None of the views expressed in this document should be construed as advice to buy or sell a particular investment. |
‡ Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.
- ends -
This information is provided by RNS
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