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Aberdeen New Dawn IT (ABD)

  Print          Annual reports

Thursday 16 December, 2021

Aberdeen New Dawn IT

Half-year Report

RNS Number : 8030V
Aberdeen New Dawn Invest Trust PLC
16 December 2021
 

ABERDEEN NEW DAWN INVESTMENT TRUST PLC

HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 OCTOBER 2021

Legal Entity Identifier:  5493002K00AHWEME3J36

 

 

INVESTMENT OBJECTIVE

To provide shareholders with a high level of capital growth through equity investment in the Asia Pacific countries ex Japan.

 

BENCHMARK

MSCI All Countries Asia Pacific ex Japan Index (Sterling adjusted)

 

PERFORMANCE HIGHLIGHTS

 

Share price total return AB

 


Net asset value total return AB

 


Benchmark total return B

 

Six months ended 31 October 2021

-2.5%


Six months ended 31 October 2021

-0.7%


Six months ended 31 October 2021

 

 -4.7%

Year ended 30 April 2021

+48.3%


Year ended 30 April 2021

+43.4%


Year ended 30 April 2021

+35.7%









Ongoing chargesA


Revenue return per share


Interim dividend per Ordinary share

 

Six months ended 31 October 2021

1.10%


Six months ended 31 October 2021

2.49p


Six months ended 31 October 2021

 1.00p

Year ended 30 April 2021

1.09%


Six months ended 31 October 2020

2.38p


Six months ended 31 October 2020

1.00p






A   Considered to be an Alternative Performance Measure.

B   Total return represents capital return plus dividends reinvested.

 

FINANCIAL HIGHLIGHTS

 


31 October 2021

30 April 2021

% change

Total assets including current year income A

£425,918,000

£435,701,000

-2.2

Total equity shareholders' funds

£393,140,000

£403,005,000

-2.4

Share price (mid-market) B

317.00p

328.50p

-3.5

Net asset value per share (including current year income) B

364.01p

369.97p

-1.6

Net asset value per share (excluding current year income) B C

361.51p

366.71p

-1.4

Discount to net asset value (including current year income) B C

12.9%

11.2%


Discount to net asset value (excluding current year income) B C

12.3%

10.4%


MSCI AC Asia Pacific ex Japan Index (currency adjusted) B

883.76

941.03

-6.1

Net gearing  C

6.1%

7.2%


Interim dividend per share D

1.0p

1.0p

-

Ongoing charges ratio C

1.10%

1.09%


A Total assets which includes current year income, less current liabilities, before deducting any prior charges.

B Percentage change figures are on a capital return basis.

C Considered to be an Alternative Performance Measure.

D Interim dividend relating to the first six months of the financial year.

 

For further information, please contact:

 

Stephanie Hocking

Aberdeen Standard Investments  0207 463 6403

 

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested.



INTERIM BOARD REPORT - Chairman's Statement

 

Results and Dividends

The six month period to 31 October 2021 was difficult for Asia as markets lost momentum in the face of several challenges. Chief among these were the fresh outbreaks of Covid-19 that prompted governments to return to lockdown-like conditions that threatened the economic recovery. Concerns over rising inflation and fears about regulatory tightening in China added to the downbeat mood.

 

Unsurprisingly, share prices faltered, with the benchmark MSCI Asia Pacific ex Japan Index falling by 4.7% in total return terms. The Company was not immune to the market challenges, but held up relative to the benchmark, with the net asset value ("NAV") falling by 0.7% and the share price falling by 2.5%, both in total return terms.

 

The share price at the end of the period was 317.0p, representing a discount to the NAV of 12.3% (excluding current year income) compared to a 10.4% discount at the beginning of the period.

 

The Board has declared an unchanged interim dividend for the year of 1.0p per Ordinary share, which will be paid on 11 February 2022 to shareholders on the register on 7 January 2022 (the relevant ex-dividend date being 6 January 2022). As in previous years, future dividends will depend on the level of income from the portfolio and the Board will decide on the level of the final dividend at the time of reviewing the outcome for the financial year.

 

Although it is disappointing to report negative returns, the relative outperformance of the benchmark reflects the Investment Manager's preference for high-quality companies with solid fundamentals, which enables them to stay resilient in tougher times. This is reflected in the Company's longer term performance record where it has outperformed the benchmark over one, three and five years.

 

Overview

Over the period under review, the coronavirus pandemic remained very present. With an uneven vaccine rollout, the spread of the Delta strain of the virus hit parts of Asia especially hard. India suffered a devastating wave, with daily cases exceeding 400,000 at its peak. Previous virus-management exemplars, including Australia, New Zealand, Singapore and Vietnam, were forced to backpedal, re-introducing more stringent restrictions as infections spiked. Some governments also drew on experience from earlier phases of the pandemic, imposing more nuanced measures that lessened the economic fallout. Although the situation had begun to stabilise, with the help of faster inoculation rates, concerns have grown again following the emergence of the Omicron variant.

 

In addition to the resurgence of Covid-19, inflation was another issue that influenced the market. Broadly, global price pressures increased due to higher energy costs and worsening production chain bottlenecks, amid widely spread disruption to labour, manufacturing and logistics. In response, major central banks began to move away from the loose monetary policies that had positively impacted asset prices. Notably, the US Federal Reserve signalled that it would slow its asset purchases, with interest rate increases expected from 2022. In Asia, South Korea and Singapore have already tightened their monetary policies. Fortunately, inflationary pressures in other parts of the region still look fairly benign. Other central banks are, therefore, keeping borrowing costs low for now to support the economic recovery.

 

A third theme fuelling market volatility was the series of regulatory developments in China. Starting with internet platforms, these rule changes swiftly widened out to other areas, including education, gaming and online entertainment. The authorities imposed fines on Alibaba and Meituan Dianping with fines for alleged breaches of anti-monopoly rules, and ordered private tutoring providers to become non-profit enterprises. Compounding these issues were growing worries that property group Evergrande's potential debt default would cause contagion across the real estate sector. Ultimately, the Investment Manager believes that the policy changes should be viewed within the context of Beijing's desire to push "common prosperity". This includes alleviating income inequality by encouraging socially-responsible businesses, fairer competition and more wealth-redistributive policies. If executed well, the campaign could create a broader-based consumer-led economy, while encouraging more sustainable development over the long term.

 

From a portfolio point of view, however, the regulatory uncertainties had an impact on some of the Company's Chinese holdings. Among these was Tencent, which fell in value after it was fined and ordered to end its music licensing deals. Although the new regulations may force it to change its business model slightly, the Investment Manager believes that Tencent remains the dominant company in a growing sector. Another detractor to performance was developer China Resources Land, tracking the real estate sector lower, whereas concerns over its property-investment exposure had an adverse impact on Ping An Insurance. The Investment Manager has since exited this last holding.

 

Notwithstanding these issues, the Company's exposure to China still contributed significantly to performance over the period. This is because certain segments, such as those involved in renewable energy and clean technology, comfortably outperformed the market. With green development now a priority for China, the Investment Manager's careful selection of high-quality companies that are committed to this area proved rewarding. Notably, this included Yunnan Energy New Material, which makes separators used in batteries for electric vehicles, whose shares more than doubled in value on upbeat demand forecasts. The shift towards renewable sources also bolstered solar module maker LONGi Green Energy Technology and power-grid services provider NARI Technology.

 

Given the still-uncertain near-term outlook for China, the Investment Manager sold several holdings seen as susceptible to regulatory pressure, including Ping An Insurance, Meituan Dianping and JD Health International. The proceeds of these sales were used to take advantage of the market weakness to establish positions in companies with healthy fundamentals and prospects that are closely tied to key structural drivers of growth. For instance, the addition of Sungrow Power Supply ties in with the positive outlook for renewable energy. As the world's leading supplier of inverters, an essential component in solar energy systems, Sungrow is well-placed to benefit from the government's clean-energy goals. Another promising area is healthcare, with rising income levels and an ageing society expected to drive demand for products and services. To that end, the Investment Manager initiated a holding in Shenzhen Mindray Bio-medical Electronics, China's largest medical equipment maker. It has a diversified portfolio and is known for its product quality, which is grounded in consistent investment into research and development.

 

Outside China, the Aberdeen Standard SICAV I - Indian Equity Fund was a meaningful contributor to performance. The Indian stock market performed well over the period as the Covid-19 situation improved, with favourable policy reforms, a buoyant property cycle and an exciting pipeline of new listings. Similarly, the Company's exposure to Southeast Asia was positive for performance. Notable performers in these markets included Indonesian lender Bank Central Asia and Vietnamese group Mobile World.

 

Less positively, Samsung Electronics, one of the portfolio's long-time core holdings, was a source of weakness. After a period of outperformance, the Korean technology giant had a tougher time on fears that memory chip prices may have peaked. Nonetheless, the Investment Manager continues to believe in the long-term appeal of the company, given demand for more complex chips to power advanced technologies.

 

The Investment Manager made several other changes to the portfolio. This included investing into growth areas beyond China that offer similarly appealing growth potential yet with fewer regulatory risks. A notable addition was South Korean internet company Kakao Corp, which has developed an attractive ecosystem of online services, ranging from electronics payments to entertainment, centered around its flagship messaging platform, KakaoTalk. Another two initiations were from Australia. One was Nanosonics, a medical device maker specialising in disinfection technology. The other was Oz Minerals, a pure-play copper miner with attractive long-term prospects on the back of various trends, including de-carbonisation and the increasing adoption of electric vehicles. Against these, the Investment Manager exited Kerry Logistics Network following a partial takeover, and Singapore Telecommunication, in view of better opportunities elsewhere.

 

As previously indicated, during the period the Investment Manager completed the planned replacement of the Aberdeen Standard SICAV - China A Share Equity Fund with appropriate direct Chinese A-share holdings. Following extensive due diligence carried out by the Investment Manager over the past few years, they decided to take this more direct approach which has created a concentrated portfolio of high conviction holdings.

 

Gearing

At the end of the period, the Company's borrowing facilities amounted to £40 million, comprising a fixed rate loan of £20 million, which matures in December 2023 (with an interest rate of 2.626%), and a £20 million multi-currency revolving loan facility maturing in June 2024. An aggregate Sterling equivalent of £32.8 million was drawn at the period end and gearing (net of cash) was 6.1% as at 31 October 2021, compared to 7.2% at the beginning of the period.

 

Share Buy Backs

In common with other investment trusts, the Company has bought back shares with the aim of providing a degree of liquidity to the market at times when the discount to the NAV has widened. It is the view of the Board that this policy is in the interests of all shareholders. The Board closely monitors the discount and we review the operation of the share buy back policy at each Board meeting as well as considering other options for managing the discount.

 

During the period, the Company bought back 927,000 Ordinary shares, representing 0.85% of the issued share capital. These shares were bought back and held in treasury. The Company's stated policy on treasury shares is that these can only be re-issued to the market at a premium to the NAV per share at that time.

 

Company Name

Shareholders may be aware that the Company's Manager has recently changed its name to abrdn plc. The Board has discussed the impact of this on the name of the Company and considers that there are benefits in aligning the Company's name to the name and branding of the management company. It is therefore the Board's intention to change the name of the Company to "abrdn New Dawn Investment Trust PLC", with the change to take effect after the end of the current financial year. Under the terms of the Company's Articles of Association, the name of the Company may be changed by a resolution of the Directors. Shareholder approval is therefore not required. It is not anticipated that the Company's London Stock Exchange identifier or website address will change.

 

Further details of the timing of the change of name wi l l be provided with the announcement of the annual results in July 2022.

 

Outlook

Just as the world seemed to be turning a corner on the pandemic, the discovery of the new Omicron variant underscores the fragility of the situation. The news has impacted financial markets, while many countries are already re-imposing restrictions. Whilst the situation is worrying, , vaccination rates today are far higher than when the Delta variant surfaced, which should help keep severe case counts low. Moreover, in Asia, most governments are evolving their strategies and are starting to treat Covid-19 as just another endemic disease. This should support a further easing of curbs and the cautious resumption of cross-border travel, which will strengthen the economic recovery and boost corporate earnings.

 

China's changing regulatory landscape will likely be an overhang for markets there for some time. However, the government will be sensitive to the need to support the economy, given signs that growth may be moderating. Meanwhile, the country's ongoing tensions with the US will further drive its push towards self-sufficiency, especially in high-tech areas, such as semiconductors, indicating that investing in China still presents tremendous opportunities. Segments that are closely aligned to key policy goals, which include domestic consumption, green technology and healthcare, should be well-positioned for long-term growth, despite the near-term uncertainties.

 

More broadly, the long-term appeal of Asia's investment landscape is undimmed. Dynamic and increasingly affluent populations can be expected to drive demand for a range of products, services and infrastructure. The region is now home to innovative businesses at the forefront of emergent trends, including cloud computing, fintech, electric vehicles, block chain and more advanced virtual reality technologies. Investing in quality companies remains a sound way to access these exciting opportunities. In this regard, the Investment Manager's patient and disciplined approach, focusing on businesses with market-leading positions and clear competitive advantages, remains appropriate. The sound fundamentals of these businesses, combined with solid financials, should give them resilience against the immediate challenges and enable them to thrive in the long run.

 

 

Donald Workman,

Chairman

16 December 2021

 

 



INTERIM BOARD REPORT - OTHER MATTERS

 

Directors' Responsibility Statement

The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with applicable laws and regulations. The Directors confirm that to the best of

their knowledge:

 

-  the condensed set of financial statements within the Half-Yearly Financial Report has been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting';

-  the Interim Board Report (constituting the Interim Management Report) includes a fair review of the information required by rule 4.2.7R of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period, and any changes in the related party transactions described in the last Annual Report that could do so).

 

Principal Risks and Uncertainties

The Board regularly reviews the principal risks and uncertainties faced by the Company together with the mitigating actions it has established to manage the risks. These are set out within the Strategic Report contained within the Annual Report for the year ended 30 April 2021 and comprise the following risk headings:

 

-  Investment strategy and objectives

-  Investment management

-  Income/dividends

-  Financial

-  Gearing

-  Regulatory

-  Operational

-  Exogenous risks

 

In addition to these risks, the Board is conscious of the impact on financial markets caused by the Covid-19 pandemic. The Board considers that this is a risk that could have further implications for global financial markets, economies and on the operating environment of the Company, the impact of which is difficult to predict at the current juncture. Since the outbreak of the virus in 2020, the Board has been liaising closely with the Manager to seek assurances that the operations of the Manager and those of other third party service providers are operating effectively.

 

The Company's principal risks and uncertainties have not changed materially since the date of the Annual Report and are not expected to change materially for the remaining six months of the Company's financial year.

 

Going Concern

The Company's assets consist substantially of equity shares in companies listed on recognised stock exchanges and in most circumstances are realisable within a short timescale. The Board regularly reviews income and expenditure projections, has set limits for borrowing and reviews compliance with banking covenants, including the headroom available. The Company has two loan facilities which expire in December 2023 and June 2024 respectively.

 

Having taking these factors into account the Directors believe that, after making enquiries, the Company has adequate resources to continue in operational existence for the foreseeable future and has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of this Report.  Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.

 

On behalf of the Board

Donald Workman,

Chairman

16 December 2021

 

 



 

INVESTMENT PORTFOLIO




As at 31 October 2021










Valuation

Total assets

Company

Country

£'000

%

Aberdeen Standard SICAV - Indian Equity Fund A

India

47,695

11.2

Taiwan Semiconductor Manufacturing Company

Taiwan

38,758

9.1

Samsung Electronics Pref

South Korea

31,558

7.4

Tencent Holdings

China

25,933

6.1

AIA Group

Hong Kong

20,257

4.8

CSL

Australia

12,784

3.0

ASML

Netherlands

10,372

2.4

Bank Central Asia

Indonesia

9,677

2.3

BHP Group B

Australia

9,158

2.1

Alibaba Group

China

8,556

2.0

Top ten investments


214,748

50.4

Wuxi Biologics (Cayman)

China

8,430

2.0

LG Chem

South Korea

8,346

2.0

Hong Kong Exchanges & Clearing

Hong Kong

8,314

2.0

Yunnan Energy New Material - A shares

China

8,307

1.9

Oversea-Chinese Banking Corporation

Singapore

8,279

1.9

Aberdeen New India Investment Trust A B

India

8,074

1.9

China Merchants Bank - A shares

China

8,063

1.9

DBS Group Holdings

Singapore

7,884

1.8

Cochlear

Australia

7,595

1.8

China Tourism Group Duty Free - A shares

China

7,553

1.8

Top twenty investments


295,593

69.4

Aristocrat Leisure

Australia

7,285

1.7

LONGi Green Energy Technology - A shares

China

7,259

1.7

Ayala Land

Philippines

6,513

1.5

NARI Technology - A shares

China

5,181

1.2

China Conch Venture Holdings

China

4,970

1.2

M.P. Evans Group B

United Kingdom

4,926

1.2

Samsung Biologics

South Korea

4,761

1.1

Budweiser Brewing

Hong Kong

4,435

1.0

Mobile World

Vietnam

4,207

1.0

GDS - Class A

China

4,183

1.0

Top thirty investments


349,313

82.0

Xero

New Zealand

4,081

1.0

Kweichow Moutai - A shares

China

3,995

0.9

China Resources Land

China

3,875

0.9

Raffles Medical

Singapore

3,745

0.9

Siam Cement (Foreign)

Thailand

3,726

0.9

Sungrow Power Supply - A shares

China

3,696

0.9

Shenzhen Mindray Bio-Medical Electronics - A shares

China

3,427

0.8

Aberdeen Standard Asia Focus A B

Other Asia

3,407

0.8

Rio Tinto B

Australia

3,342

0.8

Fisher & Paykel Healthcare

New Zealand

3,174

0.7

Top forty investments


385,781

90.6

John Keells Holdings

Sri Lanka

3,153

0.7

Hangzhou Tigermed Consulting C

China

2,894

0.7

Vietnam Dairy Products

Vietnam

2,838

0.7

Kakao

South Korea

2,787

0.7

Centre Testing International Group - A shares

China

2,706

0.6

Nanosonics

Australia

2,619

0.6

Venture Corp

Singapore

2,514

0.6

Sands China

China

2,464

0.6

Oz Minerals

Australia

2,297

0.5

Shenzhen Inovance Technology - A shares

China

2,119

0.5

Top fifty investments


412,172

96.8

Samsung SDI

South Korea

2,108

0.5

Swire Properties

Hong Kong

1,685

0.4

City Developments

Singapore

1,095

0.2

Total investments


417,060

97.9

Net current assets D


8,858

2.1

Total assets E


425,918

100.0




A   Holding also managed by abrdn but not subject to double charging of management fees.

B   London Stock Exchange listing.

C   Holding comprises A & H shares.

D   Excluding short-term bank loans of £12,806,000.

E   Total assets which includes current year income, less current liabilities, before deducting any prior charges.

Note: Unless otherwise stated, foreign stock is held and all investments are equity holdings.



 

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)







Six months ended

Six months ended

 



31 October 2021

31 October 2020

 



Revenue

Capital

Total

Revenue

Capital

Total

 


Notes

£'000

£'000

£'000

£'000

£'000

£'000

 

(Losses)/gains on investments


-

(5,254)

(5,254)

-

59,251

59,251

 

Income

2

4,076

-

4,076

3,953

-

3,953

 

Management fee


(622)

(622)

(1,244)

(550)

(550)

(1,100)

 

Administrative expenses


(380)

-

(380)

(383)

-

(383)

 

Exchange gains/(losses)


-

67

67

-

(15)

(15)

 

Net return before finance costs and taxation


3,074

(5,809)

(2,735)

3,020

58,686

61,706

 









 

Finance costs


(202)

(202)

(404)

(173)

(173)

(346)

 

Return before taxation


2,872

(6,011)

(3,139)

2,847

58,513

61,360

 









 

Taxation

3

(169)

-

(169)

(233)

-

(233)

 

Return after taxation


2,703

(6,011)

(3,308)

2,614

58,513

61,127

 









 

Return per Ordinary share (pence)

5

2.49

(5.53)

(3.04)

2.38

53.17

55.55

 









 

The total column of the Condensed Statement of Comprehensive Income represents the profit and loss account of the Company.

 

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

 

The accompanying notes are an integral part of these condensed set of interim financial statements.

 

 

 



 

 

CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

 






As at

As at



31 October 2021

30 April 2021


Notes

£'000

£'000

Fixed assets




Investments at fair value through profit or loss

9

417,060

431,486





Current assets




Debtors


693

3,418

Cash and short-term deposits


9,846

2,364



10,539

5,782





Creditors: amounts falling due within one year




Loans


(12,806)

(12,731)

Other creditors


(1,681)

(1,567)



(14,487)

(14,298)

Net current liabilities


(3,948)

(8,516)

Total assets less current liabilities


413,112

422,970





Non-current creditors




Loans


(19,972)

(19,965)

Net assets


393,140

403,005





Share capital and reserves




Share capital


5,855

5,855

Share premium account


17,955

17,955

Capital redemption reserve


10,699

10,699

Capital reserve


346,153

355,134

Revenue reserve


12,478

13,362

Equity shareholders' funds


393,140

403,005





Net asset value per Ordinary share (pence)

6

364.01

369.97





The accompanying notes are an integral part of these condensed set of interim financial statements.

 

 



 

CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)


Six months ended 31 October 2021











Share

Capital






Share

premium

redemption

Capital

Revenue




capital

account

reserve

reserve

reserve

Total


Notes

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 30 April 2021


5,855

17,955

10,699

355,134

13,362

403,005

Buy back of Ordinary shares for treasury

-

-

-

(2,970)

-

(2,970)

Return after taxation


-

-

-

(6,011)

2,703

(3,308)

Dividend paid

4

-

-

-

-

(3,587)

(3,587)

Balance at 31 October 2021


5,855

17,955

10,699

346,153

12,478

393,140

















Six months ended 31 October 2020











Share

Capital






Share

premium

redemption

Capital

Revenue




capital

account

reserve

reserve

reserve

Total


Notes

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 30 April 2020


6,011

17,955

10,543

241,342

13,434

289,285

Buy back of Ordinary shares for treasury

-

-

-

(3,198)

-

(3,198)

Return after taxation


-

-

-

58,513

2,614

61,127

Dividend paid

4

-

-

-

-

(3,623)

(3,623)

Balance at 31 October 2020


6,011

17,955

10,543

296,657

12,425

343,591









The accompanying notes are an integral part of these condensed set of interim financial statements.

 

 



 

CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)










Six months ended

Six months ended



31 October 2021

31 October 2020


Notes

£'000

£'000

Operating activities




Net return before finance costs and taxation


(2,735)

61,706

Adjustment for:




Losses/(gains) on investments


5,254

(59,251)

Currency (gains)/losses


(67)

15

Dividend income


(4,076)

(3,953)

Dividend income received


4,567

4,320

Increase in other debtors


(26)

(23)

(Decrease)/increase in other creditors


(21)

459

Stock dividends included in investment income


(152)

(237)

Overseas withholding tax


(225)

(316)

Net cash flow from operating activities


2,519

2,720





Investing activities




Purchases of investments


(39,128)

(31,472)

Sales of investments


50,870

45,408

Net cash from investing activities


11,742

13,936





Financing activities




Interest paid


(395)

(336)

Equity dividend paid

4

(3,587)

(3,623)

Buyback of Ordinary shares for treasury


(2,939)

(3,198)

Loan repayment


-

(8,665)

Loan drawdown


-

2,182

Net cash used in financing activities


(6,921)

(13,640)

Increase in cash


7,340

3,016





Analysis of changes in cash during the period




Opening balance


2,364

3,647

Effect of exchange rate fluctuations on cash held


142

(130)

Increase in cash as above


7,340

3,016

Closing balances


9,846

6,533





The accompanying notes are an integral part of these condensed set of interim financial statements.

 

 



 

NOTES TO THE FINANCIALSTATEMENTS

 

For the period ended 31 October 2021

 

1.

Accounting policies


Basis of accounting. The condensed financial statements have been prepared in accordance with Financial Reporting Standard 104 'Interim Financial Reporting' and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.


The interim financial statements have been prepared using the same accounting policies as the preceding annual financial statements.

 

2.

Income





Six months ended

Six months ended



31 October 2021

31 October 2020



£'000

£'000


Income from investments




UK dividend income

1,038

307


Overseas dividends

2,886

3,409


Stock dividends

152

237


Total income

4,076

3,953

 

3.

Taxation. The taxation charge for the period represents withholding tax suffered on overseas dividend income (31 October 2020 - same).

 

4.

Dividends. Ordinary dividends on equity shares deducted from reserves are analysed below:







Six months ended

Six months ended



31 October 2021

31 October 2020



£'000

£'000


2021 final dividend - 3.30p (2020 - 3.30p)

3,587

3,623






An interim dividend of 1.0p (31 October 2020 - 1.00p) per share will be paid on 11 February 2022 to shareholders on the register on 7 January 2022. The ex-dividend date will be 6 January 2022.

 

5.

Return per Ordinary share





Six months ended

Six months ended



31 October 2021

31 October 2020



p

p


Revenue return

2.49

2.38


Capital return

(5.53)

53.17


Total return

(3.04)

55.55






The figures above are based on the following attributable returns:








£'000

£'000


Revenue return

2,703

2,614


Capital return

(6,011)

58,513


Total return

(3,308)

61,127






Weighted average number of Ordinary shares in issue

108,629,299

110,041,027

 

6.

Net asset value per share





As at

As at



31 October 2021

30 April 2021


Net assets per Condensed Statement of Financial Position

£393,140,000

£403,005,000


Number of Ordinary shares in issue A

108,002,348

108,929,348


Net asset value per Ordinary share

364.01p

369.97p


A Excluding shares held in treasury.



 

7.

Transaction costs. During the six months ended 31 October 2021 expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within (losses)/gains on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows:







Six months ended

Six months ended



31 October 2021

31 October 2020



£'000

£'000


Purchases

37

39


Sales

63

60



100

99

 

8.

Analysis of changes in net debt








At




At



30 April

Currency

Cash

Non-cash

31 October



2021

differences

flows

movements

2021



£'000

£'000

£'000

£'000

£'000


Cash and short term deposits

2,364

142

7,340

-

9,846


Debt due within one year

(12,731)

(75)

-

-

(12,806)


Debt due after more than one year

(19,965)

-

-

(7)

(19,972)



(30,332)

67

7,340

(7)

(22,932)










At




At



30 April

Currency

Cash

Non-cash

31 October



2020

differences

flows

movements

2020



£'000

£'000

£'000

£'000

£'000


Cash and short term deposits

3,647

(130)

3,016

-

6,533


Debt due within one year

(13,693)

115

6,483

-

(7,095)


Debt due after more than one year

(19,951)

-

-

(7)

(19,958)



(29,997)

(15)

9,499

(7)

(20,520)









A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences from the above analysis.

 

9.

Fair value hierarchy. FRS 102 requires an entity 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 has the following classifications:


Level 1: unadjusted quoted prices 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 (ie developed using market data) for the asset or liability, either directly or indirectly.


Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.


The financial assets and liabilities measured at fair value in the Condensed Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:









Level 1

Level 2

Level 3

Total


As at 31 October 2021

£'000

£'000

£'000

£'000


Financial assets at fair value through profit or loss






Quoted equities

369,365

-

-

369,365


Collective investment schemes

-

47,695

-

47,695


Total fair value

369,365

47,695

-

417,060









Level 1

Level 2

Level 3

Total


As at 30 April 2021

£'000

£'000

£'000

£'000


Financial assets at fair value through profit or loss






Quoted equities

388,904

-

-

388,904


Collective investment schemes

-

42,582

-

42,582


Total fair value

388,904

42,582

-

431,486








Quoted equities. The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.


Collective investment schemes. The fair value of the Company's investments in collective investment schemes has been determined by reference to their quoted net asset values at the reporting date and hence are categorised in Fair Value Level 2.

 

10.

Share capital. During the six months ended 31 October 2021 the Company purchased 927,000 (31 October 2020 - 1,232,000; year ended 30 April 2021 - 1,642,000) Ordinary shares for treasury at a cost of £2,970,000 (31 October 2020 - £3,198,000; 30 April 2021 - £4,525,000).


Subsequent to the period end, the Company has bought back for treasury a further 412,500 Ordinary shares at a cost of £1,342,000.

 

11.

Related party transactions and transactions with the Manager. Mr Young is also a director of the Company's Investment Manager, abrdn Asia Limited, which is a wholly-owned subsidiary of abrdn plc. Management, promotional activities and secretarial and administration services are provided to the Company by Aberdeen Standard Fund Managers Limited ("ASFML").


The management fee is payable monthly in arrears based on an annual amount of 0.85% of the net asset value of the Company valued monthly, with the following provisions for commonly managed funds:


-   the Company's investments in Aberdeen Standard SICAV - Indian Equity Fund, Aberdeen Standard Asia Focus PLC and Aberdeen New India Investment Trust PLC are excluded from the calculation of the investment management fee.  The total value of such commonly managed funds at the period end was £59,176,000 (31 October 2020 - £72,863,000 which also included Aberdeen Standard SICAV - China A Share Equity Fund).


-   the Company receives a rebate from the Manager for the amount of fees in excess of 0.85%, of net assets charged by the Manager for any commonly managed fund.


During the period £1,244,000 (31 October 2020 - £1,100,000) of management fees were payable, with a balance of £400,000 (31 October 2020 - £755,000) being due to ASFML at the period end. Management fees are charged 50% to revenue and 50% to capital.


The promotional activities fee is based on an annual amount of £168,000 (31 October 2020 - £157,000), payable quarterly in arrears. During the period £84,000 (31 October 2020 - £79,000) of fees were payable, with a balance of £14,000 (31 October 2020 - £52,000) being due to ASFML at the period end.

 

12.

Segmental information. The Company is engaged in a single segment of business, which is to invest in equity securities. Accordingly, all significant operating decisions are based on the Company as one segment.

 

13.

The financial information contained in this Half-Yearly Report does not constitute statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the six months ended 31 October 2021 and 31 October 2020 has not been audited by the Company's external auditor.


The financial information for the year ended 30 April 2021 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the Independent Auditor on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006.

 

14.

This Half-Yearly Financial Report was approved by the Board on 16 December 2021.

 

 



ALTERNATIVE PERFORMANCE MEASURES

 

Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP.  

Total return. NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.

The tables below provide information relating to the NAVs and share prices of the Company on the dividend reinvestment dates during the six months ended 31 October 2021 and year end 30 April 2021.

Dividend

Share

Six months ended 31 October 2021

rate

NAV

price

30 April 2021

N/A

369.97p

328.50p

5 August 2021

3.30p

359.57p

324.00p

31 October 2021

N/A

364.01p

317.00p

Total return

-0.7%

-2.5%

Dividend

Share

Year ended 30 April 2021

rate

NAV

price

30 April 2020

N/A

261.63p

225.00p

6 August 2020

3.30p

299.84p

255.00p

7 January 2021

1.00p

369.32p

329.00p

30 April 2021

N/A

369.97p

328.50p

Total return

+43.4%

+48.3%

Discount to net asset value per Ordinary share (including current year income). The amount by which the market price per Ordinary share is lower than the net asset value per Ordinary share (including current year income), expressed as a percentage of the net asset value per Ordinary share.

31 October 2021

30 April 2021

Net asset value per Ordinary share (p)

a

364.01

369.97

Share price (p)

b

317.00

328.50

Discount

(a-b)/a

12.9%

11.2%

Discount to net asset value per Ordinary share (excluding current year income). The amount by which the market price per Ordinary share is lower than the net asset value per Ordinary share (excluding current year income), expressed as a percentage of the net asset value per Ordinary share.

31 October 2021

30 April 2021

Net asset value per Ordinary share (p)

a

361.51

366.71

Share price (p)

b

317.00

328.50

Discount

(a-b)/a

12.3%

10.4%

 

 

 

 

 

Net asset value per Ordinary share (excluding current year income). The Company also uses net asset value (excluding current year income) per share as an alternative performance measure. This is calculated as follows:





31 October 2021

30 April 2021

Net assets attributable (£'000)

393,140

403,005

Less: Revenue for the year (£'000)

(2,703)

(4,644)

Add: Dividends paid during the year (£'000)

-

1,093

Net assets (ex income) (£'000)

390,437

399,454

Number of Ordinary shares in issue

108,002,348

108,929,348

NAV (ex income) per Ordinary share

361.51p

366.71p




Net gearing . Net gearing measures total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes net amounts due to and from brokers at the period end as well as cash and short-term deposits.







 31 October 2021

30 April 2021

Borrowings (£'000)

a

32,778

32,696

Cash (£'000)

b

9,846

2,364

Amounts due to brokers (£'000)

c

1,039

905

Amounts due from brokers (£'000)

d

18

2,334

Shareholders' funds (£'000)

e

393,140

403,005

Net gearing

(a-b+c-d)/e

6.1%

7.2%





Ongoing charges. The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average net asset values throughout the year. The ratio for 31 October 2021 is based on forecast ongoing charges for the year ending 30 April 2022.





 31 October 2021

30 April 2021

Investment management fees (£'000)

2,446

2,392

Administrative expenses (£'000)

745

754

Less: non-recurring charges (£'000)

-

(56)

Ongoing charges (£'000)

3,191

3,090

Average net assets (£'000)

393,311

359,529

Ongoing charges ratio (excluding look-through costs)

0.81%

0.86%

Look-through costs A

0.29%

0.23%

Ongoing charges ratio (including look-through costs)

1.10%

1.09%

A Calculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis.

During both periods net asset values with debt at fair value equate to net asset value with debt at amortised cost due to the short-term nature of the bank loans.

The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes amongst other things, the cost of borrowings and transaction costs.

 

 

The Half-yearly Report and Accounts will be posted to shareholders. Copies may be obtained during normal business hours from the Secretary, Aberdeen Asset Management PLC, 1 George Street, Edinburgh EH2 2LL or from the Company's website, www.newdawn-trust.co.uk*.

 

By order of the Board

Aberdeen Asset Management PLC

Company Secretary

16 December 2021

 

 

* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

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