Majedie

Half-year Report
RNS Number : 7939Z
Majedie Investments PLC
26 May 2021
 

Majedie Investments PLC

Half-Yearly Financial Report

31 March 2021

 

The Half-Yearly Financial Report for the six months ended 31 March 2021 can be found on the Majedie Investments PLC website:

https://www.majedieinvestments.com/reporting 

 

Financial Highlights

           

 

Half Year ended

31 March 2021

 

Total shareholder return (including dividends):

 

+38.0%

 

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

 

+15.9%

 

NAV total return (debt at fair value including dividends):

 

+17.1%

 

 

NAV per share (debt at par value):

280.2p

 

NAV per share (debt at fair value):

 

273.3p

 

 

Revenue Return per share:

5.9p

 

Interim Dividend:

 

4.4p

 

Directors' valuation of investment in Majedie Asset Management Limited:

 

£25.3m

 

Total assets*:

 

£169.3m

 

 

* Total assets are defined as total assets less current liabilities.

 

 

Investment Objective and Policy Statement

 

Investment Objective

 

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

 

General

The Company invests principally in securities of publicly quoted companies worldwide and in funds managed by its investment manager, though it may invest in unquoted securities up to levels set periodically by the Board, including its investment in Majedie Asset Management Limited (MAM). Investments in unquoted securities, other than those managed by its investment manager or made prior to the date of adoption of this investment policy, (measured by reference to the Company's cost of investment) will not exceed 10% of the Company's gross assets.

 

Risk Diversification

Whilst the Company will at all times invest and manage its assets in a manner that is consistent with spreading investment risk, there will be no rigid industry, sector, region or country restrictions. The overall approach is based on an analysis of global economies sector trends with a focus on companies and sectors judged likely to deliver strong growth over the long term. The number of investments held, together with the geographic and sector diversity of the portfolio, enable the Company to spread its risks with regard to liquidity, market volatility, currency movements and revenue streams.

 

The Company will not invest in any holding that would, at the time of investment, represent more than 15% of the value of its gross assets save that the Company may invest up to 25% of its gross assets in any single fund managed by its investment manager where the Board believes that the investment policy of such funds is consistent with the Company's objective of spreading investment risk.

 

The Company may utilise derivative instruments including index-linked notes, contracts for difference, covered options and other equity-related derivative instruments for efficient portfolio management and investment purposes.

 

Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments, as described above.

 

Asset Allocation

The assets of the Company will be allocated principally between investments in publicly quoted companies worldwide, in investments intended to provide an absolute return (in each case either directly or through other funds or collective investment schemes managed by the Company's investment manager) and the Company's investment in MAM itself.

 

Benchmark

The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently. Any investments made into funds managed by the Company's investment manager will be measured against the benchmark or benchmarks, if any, whose constituent investments appear to the Company to correspond most closely to those investments. It is important to note that in all cases investment decisions and portfolio construction are made on an independent basis. The Board however sets various specific portfolio limits for stocks and sectors in order to restrict risk levels from time to time, which remain subject to the investment restrictions set out in this section.

 

Gearing

The Company uses gearing currently via long term debentures. The Board has the ability to borrow up to 100% of adjusted capital and reserves. The Board also reviews the level of net gearing (borrowings less cash) on an on-going basis and sets a range at its discretion as appropriate. The Company's current debenture borrowings are limited by covenant to 66 2/3%, and any additional indebtedness is not to exceed 20%, of adjusted capital and reserves.

 

Chief Executive's Report

 

In the six months ended 31 March 2021 the NAV at par and the NAV at FV (net asset value with debt at par and at fair value) rose by 15.9% and 17.1% respectively, on a total return basis. The share price rose by 38.0%  over the period, also on a total return basis. Over the six months the FTSE All-Share index rose by 18.5% and the MSCI All Country Index rose by 12.4% in sterling terms.

 

Stock markets, having consolidated their recovery from the March 2020 lows, rallied strongly following the announcement of successful vaccine trials in November 2020 and continued into 2021 as the vaccine programme was rolled out. Market leadership shifted away from Technology and Growth stocks which had dominated the market as beneficiaries of lockdowns and low interest rates. Markets were led by more cyclical areas of the market which had been overlooked as investors focussed on companies that will benefit from economies opening up. Ongoing fiscal and monetary measures globally have also helped restore confidence to equity markets. It is encouraging that all the Majedie Asset Management Funds, in which the Company is invested at 31 March 2021, have outperformed their respective index benchmarks.

 

However, the Company has been informed by Majedie Asset Management (MAM) that it has received notification that St. James's Place has taken the decision to move to a more style specific investment approach. Therefore, after ten years as client, they have decided to remove their segregated mandates from MAM. The Company remains confident in the flexible investment style of MAM that has generated excellent performance over the long term and particularly over the last twelve months across its fund range. The MAM valuation set out later in this report fully reflects the impact on management fees that will result from the reduction in assets under management from £8.0bn to £6.4bn.

 

Results and Dividends

The Company had a capital gain for the six months to 31 March 2021 of £17.8m despite a reduction in value for the Company's holding in MAM from £31.0m to £25.3m, excluding dividends received.

 

Total income received from investments was £3.7m compared to £4.0m in the six months to 31 March 2020. The dividend received from MAM was £2.9m, the same as in the six months to 31 March 2020 while the income from the MAM Funds decreased by £0.3m. Total administration and management fees were unchanged at £0.8m and finance costs of £0.8m were also unchanged.

 

The net revenue return after tax was £3.1m compared to £3.4m in the six months to 31 March 2020.

 

The Board has declared an interim dividend of 4.4p (2020: 4.4p) which will be paid on 18 June 2021 to shareholders on the register on 4 June 2021.

 

Asset Allocation

The Company invests through a number of equity investment strategies, across all geographies, managed by MAM, the highly regarded boutique fund manager that the Company seeded in 2003. It retains an equity holding in MAM of 17.2%. The Company has no overall benchmark; rather each fund has its own benchmark and it is expected that performance will be generated by stock picking at the fund level. The monthly factsheets of the relevant MAM Funds can be found on the Company's website together with the monthly factsheets of the Company itself which show the allocation between the funds and the top twenty holdings on a look through basis. The Company's total assets at 31 March 2021 were £169.3m as defined above.

 

There were no sales of MAM shares over the period. In the six months to 31 March 2021, in order to consolidate the Company's asset allocation, the board took the decision to redeem its holdings in the UK Income Fund and US Equity Fund and reinvested the proceeds into the UK Equity Segregated Portfolio and Global Equity Fund respectively. The reallocation has reduced the allocation to the US equity market and increased the exposure to Emerging Markets. The UK equity exposure is broadly unchanged.

 

Allocation of Total Assets at 31 March 2021

 

 

Value
£000s

%of Total
Assets

 

UK Equity Segregated Portfolio

 

61,469

 

36.3

 

Global Equity Fund

 

42,664

 

25.2

 

International Equity Fund

 

13,473

 

8.0

 

Tortoise Fund

 

22,726

 

13.4

 

MAM

 

25,310

 

14.9

 

Net cash/realisation portfolio*

 

3,697

 

2.2

 

Total Assets

 

169,339

 

100.0

 

*Net cash and the realisation portfolio do not include cash held in the UK Equity Segregated Portfolio of MAM funds.

 

Investment Performance

 

It is particularly heartening that all funds in which the Company was invested, at 31 March 2021, have outperformed their respective benchmarks in the last six months as well as over the last year, given the volatility of markets and style rotation. It is a sound endorsement of MAM's flexible investment process built on fundamental analysis rather than more binary style processes. The Company's underlying portfolio is diverse and includes many different investment themes.

 

The Tortoise Fund, in particular, after a slow few years, has navigated recent market conditions extremely well. Having recognised the undervaluation of cyclical companies in the summer of 2020 it ran a significant net long position whilst retaining a low gross exposure to manage overall risk. In recent months to protect the downside the managers have taken out short futures positions on the S&P 500 and NASDAQ 100 indices.

 

 

 

6 months to 31 March 2021

Since MI invested (per annum)

 

%

Fund

return

%

Benchmark

return

%

Relative performance

%

Fund

return

%

Benchmark

return

%

Relative performance

UK Equity Segregated Portfolio

18.7

18.5

0.2

3.6

4.4

(0.8)

 

UK Income Fund

16.3

17.4

(1.1)

3.5

4.3

(0.8)

 

Global Equity Fund

19.5

12.4

7.1

14.9

12.5

2.4

 

International Equity Fund

16.8

13.4

3.4

29.1

8.3

20.8

 

US Equity Fund

8.5

4.7

3.8

14.4

15.5

(1.1)

 

Tortoise Fund

41.5

 

 

2.7

 

 

 

Notes:

All Fund returns are quoted in Sterling, net of fees.

The initial investment in the UK Equity Segregated Portfolio was made on 22 January 2014.

The initial investment in the UK Income Fund was made on 29 January 2014 and the total investment was redeemed on 6 January 2021. The funds were transferred to the UK Equity Segregated Portfolio.

The initial investment in the Global Equity Fund was made on 30 June 2014.

The initial investment in the International Equity Fund was made on 12 December 2019.

The initial investment in the US Equity Fund was made on 27 June 2014 and the total investment was redeemed on 3 December 2020. The Funds were transferred to the Global Equity Fund.

The initial investment in the Tortoise Fund was made on 29 January 2014.

 

Majedie Asset Management

The Company, having taken external advice has adopted a valuation policy for its holding in MAM that annualises the most recent quarterly earnings of MAM and applies the median peer group price earnings multiple with an unlisted liquidity discount of 20% which the Directors may adjust to reflect market conditions. Performance fee multiples are further discounted by 50%. Surplus net assets are then added after deducting 200% of Regulatory Capital.

 

In the six months to 31 March 2021 MAM's AUM declined from £8.1bn to £8.0bn, reflecting higher markets but a net outflow of funds. The outflow of funds is mainly due ongoing derisking by defined benefit pension schemes.

 

In order to reflect the recent notification of a future outflow of funds from St James's Place, the Board believe it to be prudent to recognise the future reduction in management fees in the valuation of the Company's holding in MAM at 31 March 2021.

 

The valuation methodology is as follows-:

 

 

 

3 months to
31 December
2020

3 months to
31 March

including

subsequent

outflows

 

Earnings after tax (last 3 months, annualised)

 

£11.7m

 

£8.3m*

 

Peer group median PE multiple

 

15.4

 

14.7

 

Liquidity discount

 

20%

 

20%

 

Peer Group PE median multiple after liquidity discount

 

 

12.3

 

 

11.8

 

Performance fee earnings after tax (12 month rolling)

 

 

£2.0m

 

 

£2.2m

 

50% of peer group median PE multiple

 

7.7

 

7.4

 

50% of peer group median PE multiple after liquidity discount

 

 

6.2

 

 

5.9

 

Surplus net assets having deducted 200% of Regulatory Capital

 

 

£33.4m

 

 

£36.4m

 

Valuation of MAM

 

£189.7m

 

£147.3m

 

Valuation of the Company's 17.2% holding in MAM

 

£32.6m

 

£25.3m

 

*adjusted to reflect the notified outflow by St James's Place

 

Development of Net Asset Value

The chart below outlines the change in the Company's Net Asset Value (debt at par) over the six months ended 31 March 2021. In aggregate, the NAV has increased by £17.2m, comprised of net investment gains at the MAM funds, including the UK Equity Segregated Portfolio, of £25.3m, a net write-down of the investment in MAM by £2.8m, expenses and interest of £1.6m and dividends paid to shareholders of £3.7m.

 

Nav 30.09.20

£131.3m

UK Equity Segregated Portfolio

£8.4m

Tortoise Fund

£6.7m

UK Income Fund

£1.5m

Global Equity Fund

£6.0m

International Equity Fund

£2.0m

US Equity Fund

£0.7m

MAM

(£2.8m)

Admin Costs & Other

(£0.8m)

Finance Costs

(£0.8m)

Dividend Paid

(£3.7m)

NAV 31.03.21

£148.5m

 

MAM Funds

The UK Equity Fund launched in March 2003. Its objective is to produce a total return in excess of the FTSE All-Share Index after costs over any five year period through a diversified portfolio of predominantly UK Equities with the flexibility to invest up to 20% of assets in shares listed outside the UK and incorporating a dedicated investment in smaller companies. Since its inception to 31 March 2021 it has returned 10.4% per annum net of fees, with a relative outperformance of 2.4% against its benchmark. The Company's assets are invested in a segregated portfolio which is managed pari passu to the UK Equity Fund.

 

The most significant positive and negative sector contributors to the relative performance of the UK Equity Segregated Portfolio for the six months to 31 March 2021, in %

 

Industrials

1.6

Overweight

Consumer Staples

0.7

Overweight

Utilities

0.5

Underweight

Health Care

0.2

Underweight

Real Estate

0.2

Underweight

Financials

0

 

Consumer Discretionary

-0.1

Overweight

Telecommunications

-0.1

Underweight

Technology

-0.1

Overweight

Energy

-0.9

Underweight

Basic Materials

-1.5

Underweight

 

The most significant positive and negative stock contributors to the relative performance of the UK Equity Segregated Portfolio for the six months to 31 March 2021, in %

 

GlaxoSmithKline

0.9

Underweight

NatWest

0.9

Overweight

Electrocomponents

0.5

Overweight

AstraZeneca

0.5

Underweight

Reckitt Benckiser

0.4

Underweight

Royal Dutch Shell

-0.5

Underweight

Roche

-0.6

Overweight

Fevertree Drinks

-0.6

Overweight

Barrick Gold

-0.6

Overweight

HSBC

-0.8

Underweight

 

The table below shows the principal overweight and underweight sector positions of the UK Equity Segregated Portfolio at 31 March 2021 relative to the FTSE All-Share Index, in %

Industrials

7.4

Overweight

UK Smaller Companies

7.3

Overweight

Consumer Discretionary

5.4

Overweight

Technology

2.5

Overweight

Telecommunications

-0.2

Underweight

Consumer Staples

-0.6

Underweight

Health Care

-1.0

Underweight

Utilities

-1.7

Underweight

Real Estate

-3.0

Underweight

Energy

-3.7

Underweight

Basic Materials

-5.1

Underweight

Financials

-8.8

Underweight

 

The table below shows the principal overweight and underweight stock positions of the UK Equity Segregated Portfolio at 31 March 2021 relative to the FTSE All-Share Index, in %

 

Electrocomponents 

2.7

Overweight

NatWest

2.4

Overweight

Fevertree Drinks

2.2

Overweight

AVEVA

2.2

Overweight

Tesco

2.1

Overweight

Prudential

-1.8

Underweight

BP

-2.6

Underweight

British American Tobacco

-2.8

Underweight

GlaxoSmithKline

-2.8

Underweight

HSBC

-3.1

Underweight

 

 

The Global Equity Fund was launched in June 2014. Its objective is to produce a total return in excess of the MSCI All Country World Index after costs over any five year period through investment in a diversified portfolio of global equities.

 

The most significant positive and negative sector contributors to the relative performance of the Global Equity Fund for the six months to 31 March 2021, in %

 

Information Technology

4.0

Underweight

Consumer Discretionary

1.7

Overweight

Consumer Staples

1.6

Underweight

Industrials

1.6

Overweight

Communication Services

0.5

Overweight

Health Care

0.3

Overweight

Utilities

0.3

Underweight

Materials

0.2

Overweight

Real Estate

0.2

Underweight

Energy

-0.5

Underweight

Financials

-1.6

Underweight

 

The most significant positive and negative stock contributors to the relative performance of the Global Equity Fund for the six months to 31 March 2021, in %

 

ON Semiconductor

0.8

Overweight

NXP Semiconductors

0.7

Overweight

A.P. Moller - Maersk

0.7

Overweight

US Foods

0.6

Overweight

Samsung SDI

0.6

Overweight

Tesla

-0.2

Underweight

Electronic Arts

-0.3

Overweight

New Oriental Education & Technology

-0.3

Overweight

Seagen

-0.5

Overweight

Barrick Gold

-0.8

Overweight

 

The table below shows the principal overweight and underweight sector positions of the Global Equity Fund at 31 March 2021 relative to the MSCI All Country Index, in %

 

Communication Services

9.5

Overweight

Consumer Discretionary

6.3

Overweight

Materials

1.8

Overweight

Industrials

0.7

Overweight

Health Care

0.6

Overweight

Information Technology

-1.6

Underweight

Real Estate

-2.6

Underweight

Energy

-2.7

Underweight

Utilities

-2.9

Underweight

Financials

-5.0

Underweight

Consumer Staples

-5.4

Underweight

 

The table below shows the principal overweight and underweight stock positions of the Global Equity Fund at 31 March 2021 relative to the MSCI All Country Index, in %

 

SoftBank

2.7

Overweight

A.P. Moller - Maersk

2.7

Overweight

Facebook

2.5

Overweight

Fiserv

2.4

Overweight

NXP Semiconductors

2.4

Overweight

Alibaba

-0.7

Underweight

Johnson & Johnson

-0.7

Underweight

JPMorgan Chase

-0.8

Underweight

Tesla

-0.8

Underweight

Apple

-3.4

Underweight

 

The International Equity Fund was launched in December 2019. Its objective is to produce a total return in excess of the MSCI All Country World ex US Index over any five year period after costs. It is a high conviction portfolio which captures developed and emerging markets opportunities and can invest up to 10% in US equities.

 

The most significant positive and negative sector contributors to the relative performance of the International Equity Fund for the six months to 31 March 2021, in %

 

Information Technology

2.2

Overweight

Industrials

1.3

Underweight

Communication Services

1.3

Overweight

Consumer Staples

0.7

Underweight

Health Care

0.6

Overweight

Consumer Discretionary

0.3

Overweight

Materials

0.2

Overweight

Utilities

0.2

Underweight

Real Estate

0.1

Underweight

Energy

-0.5

Underweight

Financials

-1.7

Underweight

 

The most significant positive and negative stock contributors to the relative performance of the International Equity Fund for the six months to 31 March 2021, in %

 

Samsung SDI

1.3

Overweight

Anglo American

1.2

Overweight

Sociedad Quimica y Minera de Chile

1.1

Overweight

Alibaba

1.0

Underweight

Copa

0.8

Overweight

Ionis Pharmaceuticals

-0.5

Overweight

Kao

-0.5

Overweight

Novozymes

-0.5

Overweight

New Oriental Education & Technology

-0.9

Overweight

Barrick Gold

-1.1

Overweight

 

The table below shows the principal overweight and underweight sector positions of the International Equity Fund at 31 March 2021 relative to the MSCI All Country Index ex US, in %

 

Health Care

11.4

Overweight

Consumer Discretionary

9.5

Overweight

Communication Services

4.3

Overweight

Materials

2.8

Overweight

Information Technology

2.7

Overweight

Real Estate

-2.6

Underweight

Utilities

-3.2

Underweight

Industrials

-3.9

Underweight

Energy

-4.5

Underweight

Consumer Staples

-6.9

Underweight

Financials

-11.2

Underweight

 

The table below shows the principal overweight and underweight stock positions of the International Equity Fund at 31 March 2021 relative to the MSCI All Country Index ex US, in %

 

Prosus

5.1

Overweight

Anglo American

4.2

Overweight

SoftBank

4.2

Overweight

Samsung SDI

3.9

Overweight

MercadoLibre

3.5

Overweight

Roche

-0.9

Underweight

ASML

-0.1

Underweight

Nestle

-1.2

Underweight

Alibaba

-1.6

Underweight

Tencent

-1.7

Underweight

 

The Tortoise Fund is a global absolute return product which was launched in August 2007. Its objective is to achieve positive absolute returns in all market conditions, through investment primarily in long and synthetic short positions in equities over rolling three year periods, with less volatility than a conventional long only equity fund. Since inception to 31 March 2021 the Tortoise Fund has returned 7.2% per annum net of fees.

 

The most significant positive and negative sector contributors to the performance of the Tortoise Fund for the six months to 31 March 2021, in %

 

Financials

8.6

Long

Consumer Discretionary

7.0

Long

Industrials

5.7

Long

Energy

4.0

Long

Information Technology

3.9

Long

Materials

3.7

Long

Communication Services

3.6

Long

Consumer Staples

1.3

Long

Real Estate

0.6

Long

Utilities

0.6

Long

Health Care

-0.5

Long

US Future Short

-1.2

Short

 

The most significant positive and negative stock contributors to the performance of the Tortoise Fund for the six months to 31 March 2021, in %

 

Freeport-McMoRan

2.7

Long

Banco Santander

2.0

Long

ON Semiconductor

1.9

Long

Daimler

1.8

Long

NatWest

1.7

Long

Sanofi

-0.2

Long

Viatris

-0.3

Long

Nokia

-0.3

Long

Barrick Gold

-0.4

Long

Gold Fields

-0.7

Long

 

The Table below shows the principal long and short sector positions of the Tortoise Fund at 31 March 2021, in %

 

Financials

13.5

Long

Consumer Discretionary

11.6

Long

Health Care

10.8

Long

Materials

10.4

Long

Information Technology

9.0

Long

Communication Services

8.5

Long

Energy

7.7

Long

Industrials

7.0

Long

Consumer Staples

5.5

Long

Real Estate

3.9

Long

Utilities

1.3

Long

US Future Short

-63.7

Short

 

The Table below shows the principal long and short stock positions of the Tortoise Fund at 31 March 2021, in %

 

Volkswagen

2.7

Long

Freeport-McMoRan

2.6

Long

Banco Santander

2.5

Long

Citigroup

2.5

Long

Daimler

2.5

Long

Union Pacific

-0.9

Short

Home Depot

-0.1

Short

 

As noted in the Report and Accounts at 30 September 2020 the Company and its fund manager provided a detailed report on Responsible Capitalism and its approach to ESG. Additional information can be found on the Company's website under the Portfolio & Performance tab. A further update will be given in the full year Report and Accounts.

 

Discount

The Board continues to monitor the Company's discount to NAV and will take action when appropriate. The Company has not bought back any shares during the period and notes that Aviva plc has reduced its holding from 12.98% to below 3%.

 

Outlook

Stock markets have reacted positively to the improving economic outlook due to the massive levels of fiscal and monetary stimulus to help support economies through lockdowns. In addition, the effective roll out of the vaccine programmes in the developed world has boosted confidence from investors that some form of a return to normality will be forthcoming. Growth figures are being revised upwards and it is notable that following corporate Q1 results in the US and Europe the proportion of companies beating forecasts as well as their magnitude is the highest for a decade. Investors' concerns have shifted to rising inflation and interest rates from deflation and negative interest rates. The rise in US Treasury bond yields, albeit from historic lows reflect these concerns. For stock markets this has caused a major rotation away from growth at any cost to previously unloved cyclical companies. Markets are expected to remain volatile having recovered so strongly from March 2020. This market background should favour fund managers with a proven flexible investment process such as MAM. Their investment returns since the outbreak of the pandemic reinforces our confidence that MAM will gain assets under management as investment performance tends to be a leading indicator of asset growth.

 

 

William Barlow

Chief Executive
For and on behalf of the Board

 

25 May 2021

 

 

Fund Analysis

at 31 March 2021

 

Geographic and Sector Analysis at 31 March 2021

 

 

 

%

 Europe

%

United Kingdom

%

Emerging Markets

%

Asia Pacific

%
North America

 

%

Cash

 

%

Total

 

Basic Materials

 

0.2

 

2.5

 

1.1

 

 

1.9

 

 

5.7

 

Consumer Goods

 

 

7.1

 

 

0.1

 

1.0

 

 

8.2

 

Consumer Services

 

2.2

 

8.9

 

2.4

 

0.4

 

6.7

 

 

20.6

 

Financials

 

1.3

 

7.3

 

0.8

 

0.5

 

2.5

 

 

12.4

 

Real Estate

 

 

0.1

 

 

 

0.6

 

 

0.7

 

Health Care

 

4.1

 

2.8

 

 

0.6

 

3.7

 

 

11.2

 

Industrials

 

2.5

 

8.9

 

 

0.8

 

2.9

 

 

15.1

 

Oil & Gas

 

0.9

 

1.8

 

 

 

0.4

 

 

3.1

 

Technology

 

0.5

 

2.6

 

5.1

 

0.2

 

6.9

 

 

15.3

 

Telecommunications

 

1.9

 

0.9

 

 

1.3

 

0.1

 

 

4.2

 

Utilities

 

 

0.5

 

 

 

 

 

0.5

 

Cash

 

 

 

 

 

 

3.0

 

3.0

 

 

 

 

 

 

 

 

 

13.6

43.4

9.4

3.9

26.7

3.0

100.0

 

Futures*

 

 

 

 

 

(10.3)

 

 

 

Notes:

The assets analysed above are the net exposure of the UK Equity Segregated Portfolio, Global Equity Fund, International Equity Fund and the Tortoise Fund. The Tortoise Fund, as an absolute return fund, invests through CFDs, futures and the net exposure of the fund is shown in the table. The aggregate of the funds represents a total of 82.9% of the Company's total assets.

 

Exposures are classified by the stock exchange on which the underlying is listed and by the relevant FTSE

sector classification.

 

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

 

Thirty Largest Portfolio Holdings 

at 31 March 2021

 

 

Company

Fair Value

£000

% of

Total Assets

 

Majedie Asset Management Ltd

 

25,310

 

14.9%

 

Royal Dutch Shell PLC  

 

2,390

 

1.4%

 

AstraZeneca PLC

 

2,293

 

1.4%

 

A.P. Moller - Maersk A/S

 

2,234

 

1.3%

 

NatWest Group PLC

 

2,172

 

1.3%

 

Unilever PLC

 

2,129

 

1.3%

 

Anglo American PLC

 

2,086

 

1.2%

 

Tesco PLC

 

2,030

 

1.2%

 

SoftBank Group Corp

 

1,881

 

1.1%

 

RELX PLC

 

1,836

 

1.1%

 

Electrocomponents PLC

 

1,799

 

1.1%

 

NXP Semiconductors NV

 

1,668

 

1.0%

 

Taiwan Semiconductor Manufacturing Co., Ltd.

 

1,563

 

0.9%

 

Royal KPN NV

 

1,547

 

0.9%

 

Facebook, Inc.

 

1,541

 

0.9%

 

3i Group PLC

 

1,517

 

0.9%

 

Amazon.com, Inc.

 

1,466

 

0.9%

 

AVEVA Group PLC

 

1,437

 

0.8%

 

Fevertree Drinks PLC

 

1,374

 

0.8%

 

Ashtead Group PLC

 

1,360

 

0.8%

 

Samsung SDI Co., Ltd

 

1,343

 

0.8%

 

St. James's Place PLC

 

1,299

 

0.8%

 

Weir Group PLC

 

1,229

 

0.7%

 

QinetiQ Group PLC

 

1,220

 

0.7%

 

Serco Group PLC

 

1,208

 

0.7%

 

Samsung Electronics Co., Ltd.

 

1,163

 

0.7%

 

Alphabet Inc.

 

1,153

 

0.7%

 

MercadoLibre, Inc.

 

1,118

 

0.7%

 

Reckitt Benckiser Group PLC

 

1,105

 

0.7%

 

Bellway PLC

 

1,100

 

0.6%

 

Total

 

71,571

 

42.3%

 

The assets analysed above show the Company's largest thirty holdings on a look through basis across all funds. 

 

Interim Management Report                

 

The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal uncertainties for the remaining six months of the financial year are set out in the Chief Executive's Report above. This Half-Yearly Financial Report has not been audited or reviewed by the Company's auditor.

 

The financial statements continue to be prepared on a going concern basis. The approach used for the Annual Report is applied, giving proper consideration to financial and cashflow forecasts, including any COVID-19 impacts, and it is believed that the Company has adequate financial resources to continue to operate for a period of at least twelve months from the date on which these financial statements were approved.

 

The principal risks facing the Company remain unchanged since the date of the Annual Report for the year ended 30 September 2020, as set out in the Business Review section of the Strategic Report (pages 31 to 32). COVID-19 continues to provide uncertainty in global equity markets, both economically and politically, and the impact on the Company is set out in the Chief Executive's Report. The Company and its service providers have implemented Business Continuity Plans and operations and service levels have been maintained. Risks faced by the Company include, but are not limited to, market risk, discount volatility, compliance risk (including non-compliance with Section 1158 of the Corporation Tax Act 2010), operational risk and financial risk.

 

Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report

 

In accordance with the Disclosure Guidance and Transparency Rules 4.2.7R and 4.2.8R, we confirm that to the best of our knowledge:

 

(a)  the condensed set of financial statements has been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as required by the Disclosure Guidance and Transparency Rule 4.2.4R, and gives a true and fair view of the assets, liabilities and financial position of the Company;

 

(b)  the Chief Executive's Report includes a fair review of the information required to be disclosed under the Disclosure Guidance and Transparency Rule 4.2.7R, interim management report. This includes (i) 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 presented in the Half-Yearly Financial Report and (ii) a description of the principal risks and uncertainties for the remaining six months of the financial year; and

 

(c)  there were no changes in the transactions or arrangements with related parties as described in the Annual Report for the year ended 30 September 2020 that would have had a material effect on the financial position or performance of the Company in the first six months of the current financial year.

 

 

David Henderson

Chairman

For and on behalf of the Board

25 May 2021

Condensed Statement of Comprehensive Income  

for the half year ended 31 March 2021                                       

 

 

 

Half year ended
31 March 2021

(unaudited)

Half year ended
31 March 2020

(unaudited)

Year ended
30 September 2020

(audited)

 

Notes

Revenue
return
£'000

Capital
return
£'000

Total
£'000

Revenue
return
£'000

Capital
return
£'000

Total
£'000

Revenue
return
£'000

Capital
return
£'000

Total
£'000

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

 

 

 

 

 

 

 

 

 

Gains/(losses) on investments at fair value

through profit or loss

 

 

18,808

18,808

 

(36,287)

(36,287)

 

(20,385)

(20,385)

 

Net investment result

 

 

 

 

 

18,808

 

 

 

18,808

 

 

 

 

(36,287)

 

 

 

(36,287)

 

 

 

 

(20,385)

 

 

 

(20,385)

 

Income

 

 

 

 

 

 

 

 

 

 

 

Income from investments

2

3,662

 

3,662

3,981

 

3,981

5,958

 

5,958

 

Other income

2

44

 

44

55

 

55

76

 

76

 

Total income

 

3,706

 

3,706

4,036

 

4,036

6,034

 

6,034

 

Management fees

 

(35)

(106)

(141)

(41)

(122)

(163)

(68)

(203)

(271)

 

Administration expenses

 

(366)

(324)

(690)

(350)

(324)

(674)

(742)

(704)

(1,446)

 

Return/(loss) before finance costs and taxation

 

3,305

18,378

21,683

3,645

(36,733)

(33,088)

5,224

(21,292)

(16,068)

 

Finance costs

 

(194)

(572)

(766)

(190)

(571)

(761)

(381)

(1,143)

(1,524)

 

Net return/(loss) before taxation

 

3,111

17,806

20,917

3,455

(37,304)

(33,849)

4,843

(22,435)

(17,592)

 

Taxation

3

(9)

 

(9)

(7)

 

(7)

(10)

 

(10)

 

Net return/(loss) after taxation for the period

 

3,102

17,806

20,908

3,448

(37,304)

(33,856)

4,833

(22,435)

(17,602)

 

Return per ordinary share:

 

pence

pence

pence

pence

pence

pence

pence

pence

pence

 

Basic

4

5.9

33.6

39.5

6.5

(70.4)

(63.9)

9.1

(42.3)

(33.2)

 

 

 

 

 

 

 

 

 

 

 

The total column of this statement is the statement of Comprehensive Income of the Company. The supplementary revenue return and capital return columns are prepared under guidance published by the Association of Investment Companies (AIC).

 

See notes 1 to 16. 

Condensed Statement of Changes in Equity

for the half year ended 31 March 2021

 

 

Notes

Share
capital
£'000

Share
premium
£'000

Capital
redemption
reserve
£'000

Capital
reserve
£'000

Retained earnings
£'000

Total
£'000

 

 

 

 

 

 

 

 

Half year ended 31 March 2021 (unaudited)

 

 

 

 

 

 

 

 

1 October 2020

 

5,301

3,054

99

97,518

25,361

131,333

 

Net return after taxation for
the period

6

 

 

 

17,806

3,102

20,908

 

Dividends declared and paid
in period

 

 

 

 

 

 

 

(3,711)

 

 

(3,711)

 

31 March 2021

 

5,301

3,054

99

115,324

24,752

148,530

 

 

 

 

 

 

 

 

Half year ended 31 March 2020 (unaudited)

 

 

 

 

 

 

 

 

1 October 2019

 

5,305

3,054

95

120,046

26,574

155,074

 

Share buybacks for
cancellation

12

(2)

 

2

(66)

 

(66)

 

Net return/(loss) after taxation
for the period

 

 

 

 

(37,304)

3,448

(33,856)

 

Dividends declared and paid
in period

6

 

 

 

 

(3,713)

(3,713)

 

31 March 2020

 

5,303

3,054

97

82,676

26,309

117,439

 

 

 

 

 

 

 

 

Year ended 30 September 2020 (audited)

 

 

 

 

 

 

 

 

1 October 2019

 

5,305

3,054

95

120,046

26,574

155,074

 

Share buybacks for
cancellation

12

(4)

 

4

(93)

 

(93)

 

Net return/(loss) after taxation
for the period

 

 

 

 

(22,435)

4,833

(17,602)

 

Dividends declared and paid
in period

6

 

 

 

 

(6,046)

(6,046)

 

30 September 2020

 

5,301

3,054

99

97,518

25,361

131,333

 

 

Condensed Balance Sheet

at 31 March 2021     

 

 

Notes

31 March
2021

(unaudited)
£'000

31 March
2020

(unaudited)
£'000

30 September
2020

(audited)
£'000

Non-current assets

 

 

 

 

 

Property and equipment

 

 

277

 

14

 

309

 

Investments at fair value through profit or loss

7, 8

164,567

126,422

145,471

 

 

 

 

164,844

 

126,436

 

145,780

Current assets

 

 

 

 

 

Trade and other receivables

 

 

546

 

503

 

269

 

Cash and cash equivalents

 

 

5,256

 

12,228

 

7,525

 

 

 

 

5,802

 

12,731

 

7,794

 

Total assets

 

170,646

139,167

 

153,574

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

 

 

(1,307)

 

(1,170)

(1,421)

 

Total assets less current liabilities

 

 

169,339

 

137,997

 

152,153

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Debentures and lease liability

14

(20,809)

(20,558)

(20,820)

 

Total liabilities

 

(22,116)

(21,728)

(22,241)

 

Net assets

 

148,530

117,439

131,333

 

 

 

 

 

Represented by:

 

 

 

 

 

Ordinary share capital

 

12

5,301

5,303

5,301

 

Share premium account

 

3,054

3,054

3,054

 

Capital redemption reserve

 

99

97

99

 

Capital reserve

 

115,324

82,676

97,518

 

Revenue reserve

 

24,752

26,309

25,361

 

Equity Shareholders' Funds

 

148,530

117,439

131,333

 

Net asset value per share

 

pence

pence

pence

 

Basic

 

280.2

221.5

247.7

 

 

Condensed Cash Flow Statement

for the half year ended 31 March 2021

 

 

Notes

Half year ended
31 March
2021

(unaudited)
£'000

Half year ended
31 March
2020

(unaudited)
£'000

Year ended
30 September
2020

(audited)
£'000

 

 

 

 

 

Net cash inflow from operating activities

13

2,218

13,360

11,770

 

Investing activities

 

 

 

 

 

Purchase of tangible assets

 

(2)

(1)

(1)

 

Initial direct costs incurred for the

right-of-use asset

 

(6)

 

(2)

 

Net cash outflow from investing 
activities

 

 

(8)

(1)

(3)

 

Financing activities

 

 

 

 

 

Interest paid on debentures

 

14

(750)

(750)

(1,501)

 

Interest paid on lease liability

 

14

(4)

 

 

 

Dividends paid

 

6

(3,711)

(3,713)

(6,046)

 

Lease liability principal payments

 

14

(14)

 

 

 

Share buybacks for cancellation

 

12

 

(66)

(93)

 

 

 

 

 

Net cash outflow from financing
activities

 

(4,479)

(4,529)

(7,640)

 

(Decrease) / increase in cash and cash
equivalents for the period

 

(2,269)

8,830

4,127

 

 

 

 

 

Cash and cash equivalents at start of
period

 

7,525

3,398

3,398

 

 

 

 

 

Cash and cash equivalents at end of
period

 

5,256

12,228

7,525

 

 

 

Notes to the Accounts

as at 31 March 2021

 

1. Accounting Policies

The Condensed Financial Statements above comprise the unaudited results of the Company for the six months to 31 March 2021 and are presented in pounds sterling, as this is the functional currency of the Company.

 

The Condensed Financial Statements have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all financial information required for full financial statements. The Condensed Financial Statements have been prepared using the accounting policies adopted in the audited financial statements for the year ended 30 September 2020.

 

New standards, interpretations and amendments adopted by the Company  

The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 30 September 2020 and since 1 October 2020 no new standards were adopted.

 

2. Income

 

 

 

Half year ended
31 March
2021
£'000

Half year ended
31 March
2020
£'000

Year ended

30 September
2020
£'000

 

 

 

3,528

3,809

5,631

76

119

253

58

53

74

3,662

3,981

5,958

 

 

 

 

 

 

44

55

76

44

55

76

3,706

4,036

6,034

 

 

 

440

652

1,167

58

53

74

288

400

690

2,876

2,876

4,027

3,662

3,981

5,958

 

 

 

* Includes MAM dividend income of £2,876,000 (half year to 31 March 2020: £2,876,000 and the year ended

30 September 2020: £4,027,000) and Property Income Distribution (PID) dividend income of £Nil (half year to 31 March 2020: £12,000 and the year ended 30 September 2020: £13,000).

 

3. Taxation

The charge for the half year to 31 March 2021 is £9,000 (half year to 31 March 2020: £7,000; year ended 30 September 2020: £10,000). These amounts represent irrecoverable withholding tax paid on overseas investment income.

 

The Company has an effective corporation tax rate of 0%. As investment gains are exempt from tax owing to the Company's status as an approved Investment Trust, and as there is currently an excess of management expenses over taxable income, there is no charge for corporation tax.

 

4. Calculation of returns per ordinary share

Basic returns per ordinary share in each period are based on the return on ordinary activities after taxation attributable to equity shareholders. Basic return per ordinary share for the period is based on 53,013,887 shares (half year ended 31 March 2020: 53,035,310 shares, and the year ended 30 September 2020: 53,027,870), being the weighted average number of shares in issue.

 

5. Business segments

For management purposes the Company is organised into one principal activity, being investing activities, as described below:

 

Investing activities

The Company's investment objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term. The Company operates as an investment trust company and its portfolio contains investments in companies listed in a number of countries. Geographical information about the portfolio is provided above.

 

6. Dividends

In accordance with IAS 10: Events After the Balance Sheet Date, interim dividends are not accounted for until paid. The following table summarises the amounts recognised as distributions to equity holders in the relevant period:

 

 

Half year ended 31 March
2021

£'000

Half year ended 31 March
2020

£'000

Year ended

30 September
2020

£'000

2020 Final dividend of 7.00p paid on
26 January 2021

 

3,711

 

 

 

2020 Interim dividend of 4.40p paid on
19 June 2020

 

 

 

 

2,333

 

2019 Final dividend of 7.00p paid on

28 January 2020

 

3,713


 

3,713

 

 

 

3,711

 

3,713

 

6,046

 

Distributable reserves of the Company comprise the Capital and Revenue Reserves.

 

Dividends for the half year ended 31 March 2021 (and for the half year ended 31 March 2020 and the year ended 30 September 2020) have been solely made from the Revenue Reserve.

 

7. Investments

All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price for listed securities, depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or open ended investment companies are valued at the closing price, the bid price or the single price as appropriate, released by the relevant investment manager.

 

Fair values for unquoted investments, or investments for which the market is inactive, are established by using various valuation techniques in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEV). These may include recent arm's length market transactions, the current fair value of another instrument which has substantially the same earnings multiples, discounted cash flow analysis and option pricing models. Where there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised.

 

8. Fair Value Hierarchy

Except for the Company's 7.25% 2025 Debenture Stock, which is measured at amortised cost under the effective interest rate method, financial assets and liabilities of the Company (re investments) are carried in the Balance Sheet at their fair value. Additionally the balance sheet amount is a reasonable approximation of fair value (re amounts in respect of sales for future settlement, dividends receivable, cash at bank, purchases for future settlement and the lease liability). The fair value is the amount at which the asset could be sold or the liability transferred in a current transaction between market participants, other than a forced or liquidation sale.

 

The table below sets out fair value measurements of financial assets in accordance with the IFRS 13 fair value hierarchy:

 

 

Half year ended 31 March 2021

 

Level 1

Level 2

Level 3

Total

Financial assets

£'000

£'000

£'000

£'000

 

Financial assets held at fair value
through profit or loss

 

 

 

 

 

Equities and managed funds

 

 

 

 

 

Listed equity securities

55,917

 

 

55,917

 

Unlisted equity securities (MAM Funds)

 

83,305

 

83,305

 

Unlisted equity securities

 

 

25,345

25,345

 

 

55,917

83,305

25,345

164,567

 

 

Half year ended 31 March 2020

 

Level 1

Level 2

Level 3

Total

Financial assets

£'000

£'000

£'000

£'000

 

Financial assets held at fair value
through profit or loss

 

 

 

 

 

Equities and managed funds

 

 

 

 

 

Listed equity securities

32,555

 

 

32,555

 

Unlisted equity securities (MAM Funds)

 

63,235

 

63,235

 

Unlisted equity securities

 

 

30,632

30,362

 

 

32,555

63,235

30,632

126,422

 

 

 

 

Year ended 30 September 2020

 

Level 1

Level 2

Level 3

Total

Financial assets

£'000

£'000

£'000

£'000

 

Financial assets held at fair value
through profit or loss

 

 

 

 

 

Equities and managed funds

 

 

 

 

 

Listed equity securities

38,647

 

 

38,647

 

Unlisted equity securities (MAM Funds)

 

75,782

 

75,782

 

Unlisted equity securities

 

 

31,042

31,042

 

 

38,647

75,782

31,042

145,471

 

There have been no transfers during the period between Levels 1, 2 and 3.

 

Investments whose values are based on quoted market prices in active markets, and are therefore classified as Level 1, include active listed equities. The Company does not adjust the quoted price for these instruments in normal market conditions (although it may invoke its fair value pricing policy in times of market disruption - this was not the case for 31 March 2021, 31 March 2020 or 30 September 2020).

 

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified as Level 2. As Level 2 instruments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information (the MAM funds are priced daily, remain highly liquid and are not subject to any such adjustments).

 

Instruments classified within Level 3 have significant unobservable inputs. Level 3 instruments include private equity and corporate debt securities. As observable prices are not available for these securities, the Company has used valuation techniques to derive fair value. In respect of unquoted instruments, or where the market for a financial instrument is not active, fair value is established by using recognised valuation methodologies, in accordance with IPEV Valuation Guidelines. New instruments are initially valued at cost, for a limited period, being the price of the most recent investment in the investee. This is in accordance with IPEV Guidelines as the cost of recent investments will generally provide a good indication of fair value. Fair value is the price that would be received to sell and asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

 

The Company's current level 3 classified investments comprise certain individually immaterial unlisted investments, which total in aggregate £35,000, and the investment in MAM valued at £25,310,000. Under the new valuation approach the carrying value of MAM is usually assessed and approved quarterly by the Board following the relevant recommendation by the Audit Committee. The revised methodology for valuation and the calculation for 31 March 2021 carrying value are as shown in the Chief Executives Report above. The significant input in assessing the price is the earnings of MAM and a 5.0% increase/decrease in MAM's earnings would result in an increase/decrease of 3.3% in the carrying value of MAM.

 

The table below sets out the movement in Level 3 instruments for the period:

 

 

31 March 2021

 

 

Total
£'000

Equity investments
£'000

 

Opening balance

 

31,042

 

31,042

 

Total net loss for the period included in the Condensed
Statement of Comprehensive Income



(5,697)



(5,697)

 

 

 

25,345

 

25,345

 

The fair value of the Company's debenture stock is calculated using a standard present value methodology and by reference to the market yields of a comparable UK Treasury Bond instrument with a 2.50% risk premium being added.

 

 

Half year ended

31 March

2020

Half year ended

31 March

2020

Year ended

30 September

2020

Financial liabilities

Book value
£'000

Fair value
£'000

Book value
£'000

Fair

value
£'000

Book value
£'000

Fair value
£'000

 

£20.7m (2016: £20.7m) 7.25%

2025 debenture stock

20,582

24,208

20,558

25,094

20,570

24,939

 

Lease liability (including

current portion)

282

282

 

 

287

287

 

 

20,864

24,490

20,558

25,094

20,857

25,226

 

The above financial liabilities would be classified as Level 3 financial instruments in the IFRS 13 Fair Value Hierarchy.

 

 

9. Principal financial risks

The principal risks which the Company faces include exposure to:

 

• Market risk

• Foreign currency risk

• Interest rate risk

• Other price risk

• Credit risk

• Liquidity risk

 

Further details of the Company's management of these risks and the exposure to them are set out in Note 22 of the Company's Annual Report for the year ended 30 September 2020, as issued on 9 December 2020. There have been no changes to the management of these risks since that date.

 

10. Majedie Asset Management Limited (MAM)

As at 31 March 2021, the Company had a 17.2% equity shareholding in MAM, which provides investment management and advisory services across a range of UK and global equity strategies.

 

The carrying value of the investment in MAM is included in the Condensed Balance Sheet as part of investments at fair value through profit or loss:

 

 

31 March
2021
£'000

31 March
2020
£'000

30 September
2020
£'000

 

 

 

 

Cost of investment

540

540

540

 

Holding gains

 

24,770

 

30,054

 

30,465

 

Fair value at period end

 

25,310

 

30,594

 

31,005

 

The carrying value of MAM in the 31 March 2021 Condensed Financial Statements is its fair value as assessed by the Audit Committee and approved by the Board as at that date.

 

11. Net Asset Value

The net asset value per share has been calculated based on Equity Shareholders' Funds and on 53,013,887 (31 March 2020: 53,027,638 and 30 September 2020: 53,013,887) ordinary shares, being the number of shares in issue at the relevant period end.

 

12. Share capital                     

           

 

Half year ended
31 March
2021

Half year ended
31 March
2020

Year ended
30 September
2020

 

Opening balance

53,013,887

 

53,055,483

53,055,483

 

Shares purchased for cancellation

 

 

(27,845)

 

(41,596)

 

Closing balance

 

53,013,887

 

53,027,638

 

53,013,887

 

Share buybacks are debited against the Capital Reserve in accordance with the Company's articles.

 

13. Reconciliation of Operating Profit to Operating Cash Flow

 

 

Half year ended
31 March
2021
£'000

Half year ended
31 March
2020
£'000

Year ended
30 September
2020
£'000

 

Net gain/(loss) before taxation

20,917

(33,849)

(17,592)

 

Adjustments for:

 

 

 

 

(Gains)/losses on investments

 

(18,808)

 

36,287

 

20,385

 

Accumulation dividends

 

(76)

 

(119)

 

(253)

 

Depreciation

 

34

 

6

 

17

 

Foreign exchange losses

 

(2)

 

(2)

 

Purchases of investments

 

(39,344)

 

(23,233)

 

(41,824)

 

Sales of investments

 

38,787

 

33,534

 

49,500

 

 

 

1,508

 

12,626

 

10,231

 

 

 

 

Finance costs

766

761

1,524

 

Operating cash flows before movements in
working capital

2,274

13,387

11,755

 

Increase/(decrease) in trade and other payables

18

(34)

(21)

 

(Increase)/decrease in trade and other receivables

(80)

10

42

 

Net cash flow from operating activities before tax

2,212

13,363

11,776

 

Tax recovered

 

17

 

8

 

11

 

Tax on overseas dividends

(11)

(11)

(17)

 

Net cash inflow from operating activities


2,218

 

13,360

 

11,770

 

14. Reconciliation of changes in liabilities arising from financing activities

 

 

 

1 October 2020
£000

Cash flows

£000


 

Other

(non cash)
£000

Amortisation

of expenses (non cash)

£000

 


31 March

2021

£000

Long term borrowings

 

 

 

 

 

 

£20.7m 7.25% 2025 debenture stock

20,570

 

 

12

20,582

 

Lease Liability

250

 

(14)

 

(9)

 

 

227

 

Interest payable on lease liability

 

 

(4)

 

 

4

 

 

Interest payable on debenture stock

 

 

(750)

 

 

750

 

 

Total liabilities from financing
activities

20,820

(768)


 

(9)

766

20,809

 

 

 

1 October 2019

 £000

Cash flows

£000

 

 

 

Other

(non cash)
£000

Amortisation

of expenses (non cash)

£000

 

 

 

31 March

2020

£000

Long term borrowings

 

 

 

 

 

 

£20.7m 7.25% 2025 debenture stock

20,547

 

 

11

20,558

 

Interest payable on debenture stock

 

 

(750)

 

 

750

 

 

Total liabilities from financing
activities

20,547

(750)

 

761

20,558

 

 

 

1 October  2019

 £000

Cash flows

£000



New
lease
£000


 

Other

(non cash)
£000

Amortisation

of expenses (non cash)

£000

 

 

30 September

2020

£000

Long term borrowings

 

 

 

 

 

 

 

£20.7m 7.25% 2025

debenture stock

20,547

 

 

 

23

20,570

 

Lease liability

 

 

 

287

 

(37)

 

250

 

Interest payable on  
debenture stock

 


 

(1,501)

 

 


 

1,501

 

 

Total liabilities from

financing activities

20,547

(1,501)

 

 

287

 

 

(37)

1,524

20,820

 

15. Related Party Transactions

Majedie Asset Management (MAM)

MAM is the Company's Investment Manager providing investment management services under an Investment Agreement. The agreement provides for MAM to manage the Company's investment assets on both a segregated portfolio basis and also by investments into various MAM collective investment vehicles or funds. Details of the Investment Agreement are contained in the material contracts section of the Directors' Report in the Company's Annual Report for the year ended 30 September 2020. As Investment Manager, MAM is entitled to receive investment management fees. In respect of the Segregated Portfolio these are charged directly to the Company and are shown as an expense in its accounts. Any management fees due in respect of the investments made into any MAM funds are charged in the fund and are therefore included as part of the investment value of the relevant holding. MAM is also entitled to performance fees in respect of the investment in the MAM Tortoise fund. The fees crystallise annually on 30 September and are calculated and charged against each individual investor. As such these are also shown as an expense in the Company's accounts and are charged wholly to capital. Details concerning the Company's investments in the period in the MAM funds are shown in the Chief Executive's Report above.

 

In addition to the above, the Company retains an investment in MAM itself. Mr JWM Barlow is a non-executive director of MAM but receives no remuneration for this role. MAM is accounted for as an investment in the Company accounts and is valued at fair value through profit or loss. Details concerning the Company's investment in MAM are included in the Chief Executive's Report above.

 

The table below discloses the transactions and balances between those entities:

               

 

Half year ended

Half year ended

Year ended

 

31 March

31 March

30 September

 

2021

£'000

2020

£'000

2020

£'000

Transactions during the period:

 

 

 

 

Dividend income received from MAM

2,876

2,876

4,027

 

Management fee income due to MAM  (Segregated Portfolio only)

141

163

271

 

Balances outstanding at the period end:

 

 

 

 

Between the Company and MAM (Segregated
Portfolio investment management fees)

70

75

65

 

Value of the Company's investment in MAM

25,310

30,594

31,005

 

Transactions between related party companies during the period were made on terms equivalent to those that occur in arm's length transactions.

 

16. Financial Information

The financial information contained in this Half-Yearly Financial Report does not constitute full statutory accounts as defined in section 434 of the Companies Act 2006.

 

The information for the year ended 30 September 2020 has been extracted from the latest published audited accounts. Those accounts have been filed with the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. Those statutory accounts were prepared in accordance with IFRS, as adopted by the European Union.

 

Company Information

 

Board of Directors

Depositary

R D C Henderson, Chairman

The Bank of New York Mellon

J M Lewis

(International) Limited

J W M Barlow (Executive)

1 Canada Square

A M J Little

London E14 5AL

CD Getley

R W Killingbeck

 

All Directors are non-executive unless indicated

 

 

The Depositary acts as global custodian and may delegate safekeeping to one or more global sub-custodians. The Depositary has delegated safe keeping of the assets of the Company to The Bank of New York Mellon SA/NV and the Bank of New York Mellon.

Registered Office

1 King's Arms Yard

London EC2R 7AF

Telephone: 020 7382 8170

E-mail: majedie@majedieinvestments.com

Registered number: 109305 England

 

Company Secretary

Link Company Matters Limited

6th Floor

65 Gresham Street

London EC2V 7NQ

 

Fund Manager

Majedie Asset Management Limited

10 Old Bailey

London EC4M 7NG

Telephone: 020 7618 3900

E-mail: info@majedie.com

 

 

AIFM

Majedie Investments PLC

 

Registrars

Computershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

Telephone: 0370 707 1159

 

Auditors

Ernst & Young LLP

25 Churchill Place

Canary Wharf

London E14 5EY

 

Stockbrokers

J.P. Morgan Cazenove

25 Bank Street

London E14 5JP

 

Solicitor

Dickson Minto W.S.

16 Charlotte Square

Edinburgh EH2 4DF

Website

www.majedieinvestments.com

 

 

Financial Calendar

Year end

30 September

Annual results

December

Half year results

May

Annual General Meeting                                 

January

Dividends paid                                               

January and June

 

 

2021 Interim Dividend Timetable

 

The interim dividend for the period ended 31 March 2021 is 4.4p per share.

 

 

Ex-dividend date

3 June

Record date

4 June

Payment date

18 June

 

 

 

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