Interim Management Statement
24 Juli 2009 - 1:08PM
UK Regulatory
TIDMGIR
24 July 2009
GARTMORE IRISH GROWTH FUND PLC
INTERIM MANAGEMENT STATEMENT (UNAUDITED)
This interim management statement covers the period from 1 April 2009 to 30
June 2009. It has been produced for the sole purpose of providing information
to the Company's shareholders in accordance with the requirements of the UK
Listing Authority's Disclosure and Transparency Rules. It should not be relied
upon for any other purpose.
Investment Objective
The Company seeks to provide shareholders with long-term capital growth through
investment in quoted companies which are either incorporated in the Republic of
Ireland or Northern Ireland or, if elsewhere, derive the majority of their
turnover or profits from the Republic of Ireland or Northern Ireland.
Manager's Comments
Highlights - Three months to 30 June 2009
Irish equities rebounded strongly over the quarter. The ISEQ Index rose by
13.4%* in sterling terms, whereas the Company's diluted NAV ended the quarter
33.4% higher. Sentiment towards equities was underpinned during the second
quarter by better-than-expected results from several US and European financial
groups, with comments from US Federal Reserve Chairman Ben Bernanke raising
optimism that the world's largest economy could return to growth by the end of
the year. In April, the Irish government delivered an emergency budget
involving cuts in public spending and tax rises, which subsequently won praise
from the International Monetary Fund.
Investment Strategy
Having maintained a very underweight exposure to financials for more than a
year, we raised our exposure during the quarter via purchases of shares in
Allied Irish Banks and Bank of Ireland. Our decision was informed by the
emergence of overly-depressed stock valuations and by the potential for
Ireland's leading banks to strengthen their capital bases and profit from the
buying back of some of their own bonds at depressed levels. Together with our
holding in Irish Life & Permanent, these positions contributed very positively
to performance over the quarter.
Our holding in the oil & gas firm Dragon Oil also made a strongly positive
contribution to returns. During April, Dragon cheered the market with news of a
leap in production, though a bigger price surge was to come in early June after
Emirates National Oil, already Dragon's majority owner, announced that it had
made an approach to acquire the remainder of the shares.
Our holding in the fruit distributor, Fyffes, increased markedly in value over
the quarter, although it is still below the original purchase price. Having
reassured the market that it remains on course to meet forecasts, Fyffes
predicted a rise in full-year profits and increased its selling prices. Our
substantial holding in foods producer, Total Produce, was a strong performer.
Conversely, building-materials supplier, CRH, which has featured prominently
among the Company's top holdings for much of the last year, performed poorly
during the latest quarter after the company warned over its first-half profits.
Though CRH cited unseasonable weather as a key factor affecting its
international business, our decision to make further reductions in our exposure
- following sales during the first quarter of the year - served to limit the
negative impact on the portfolio as CRH shares subsequently moved sharply lower
in June.
Investment Outlook
While Ireland's economy undeniably faces a challenging period, we continue to
believe that many internationally-exposed Irish-listed companies were hit
indiscriminately during last year's market downturn. In particular, we believe
that growth-orientated multinational businesses such as Origin, Fyffes and
Andor offer the prospect of excellent medium to long-term returns for investors
prepared to look beyond the present uncertainties. Moreover, we see
opportunities for successful quoted businesses to purchase remarkably cheap
assets with scope for share price recovery.
Material Events and Transactions
Over the three months to 30 June 2009 the Company repurchased 34,500 Ordinary
shares at a price of 519.19p per share excluding expenses (at a discount to net
asset value including current period revenue of 13.14%). Subsequent to the end
of the period under review, the Company has repurchased 74,400 Ordinary shares
at prices ranging from 484.00p to 526.33p per share, excluding expenses (at
discounts to net asset value of between 9.39% and 15.33%). The shares in issue
now total 10,859,442, none of which are held in Treasury. The Company will
continue, as and when appropriate, to exercise its powers to buy back shares,
with the objective of enhancing the NAV per share and of providing more
liquidity in the quote.
In his statement in the Company's Report and Accounts for the year ended 31
March 2009, the Chairman announced that, in conjunction with its advisers, the
Company was conducting a review of its position and that a range of options is
being carefully considered to enhance liquidity and returns. It is expected
that an announcement on the Board's conclusions and recommendations will be
made before the Annual General Meeting scheduled for 3 September 2009.
* Source: Thomson DataStream, capital returns, three months to 30.06.09
10 Largest Equity Holdings at 30 June 2009:
Company Market value % of net
GBP'000 assets
Allied Irish Banks 4,799 7.40%
Dragon Oil 4,002 6.17%
Irish Life & Permanent 3,855 5.95%
Total Produce 3,745 5.78%
Fyffes 3,563 5.50%
FBD Holdings 3,418 5.27%
Andor Technology 3,226 4.98%
CRH 3,080 4.75%
Origin Enterprises 2,983 4.60%
DCC 2,928 4.52%
Sectoral Spread of Investments at 30 June 2009:
% of net
assets
Cyclical Services 27.5
Financials 27.1
Non-Cyclical Consumer Goods 17.2
Information Technology 9.1
Resources 5.6
Basic Industries 5.0
General Industrials 5.0
Non-Cyclical Services 0.5
Net current assets 3.0
100.0
Financial Position: As at 30.06. As at 31.03.
09 09
(unaudited) (audited)
GBPm GBPm
Investments 62.9 46.5
Cash and other net current assets 1.9 2.3
Net assets 64.8 48.8
Net assets attributable to Ordinary shares* 64.8 48.8
pence pence
Net asset value per Ordinary share* 592.8 444.91
* Includes current period revenue.
Maximum Exposure Limits
The maximum holding in any single investment (Company or Group) is limited to
15% of the Company's gross assets at the time of investment.
Performance*:
As at % increase/(decrease) over
30.06.09** 3 months 1 year 3 years 5 years 10 years
Net asset value per 592.83p 33.4 (23.2) (21.9) 29.2 189.4
Ordinary share*
Share price - Ordinary 526.00p 50.7 (21.1) (26.5) 32.0 243.8
shares
Discount 11.3%
* Source: Thomson Financial Datastream. Basis: Capital performance only, debt
at par.
** With effect from 31 March 2008 NAV's include current period revenue. Prior
period figures exclude current period revenue and are therefore not directly
comparable.
Price and Performance Information:
The Company's Ordinary shares are listed on the London and Irish Stock
Exchanges and the price is published in the Financial Times and The Daily
Telegraph under `Investment Companies'. Real-time share price information is
available on 09058 171 690. Calls are charged at 75p per minute from a BT
landline.
The Company's net asset value is calculated daily and can be viewed on the
London Stock Exchange website at www.londonstockexchange.com and via a link
from the Company's web site at www.gartmoreirishgrowthfund.com.
Information on the Company is available on the Gartmore internet site,
www.gartmore.co.uk. The Company's discrete area on the site can be accessed via
the "Fund range" menu or directly using www.gartmoreirishgrowthfund.com. This
information includes the latest annual and interim reports and fact sheets,
together with the latest regulatory news announcements and net asset values.
Further information can be obtained from Gartmore Investment Limited, as
follows:
Free investor helpline: 0800 289 336
Internet address: www.gartmore.co.uk
Email address: helpline@gartmore.com
The Directors are not aware of any significant events or transactions which
have occurred between 30 June 2009 and the date of publication of this
statement which have had a material impact on the financial position of the
Company. For latest performance information, please refer to the Company's
website.
The information provided in this statement should not be considered as a
financial promotion.
By order of the Board
Capita Sinclair Henderson Limited
(trading as Capita Financial Group - Specialist Fund Services)
Company Secretary
24 July 2009
END
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