To:
RNS
From:
Personal Assets Trust plc
LEI:
213800Z7ABM7RLQ41516
Date:
19 June 2024
Results for the year ended 30 April 2024
The
Directors of Personal Assets Trust plc ("PAT" or "the Company") are
pleased to announce the Company's results for the year ended 30
April 2024.
The key points are as
follows:
·
PAT's investment policy is to protect and increase
(in that order) the value
of shareholders' funds per share over the long term.
·
Over the year to 30 April 2024 PAT's net asset
value per share ("NAV") rose by 1.2%. This compares to a rise of
3.4% in the FTSE All-Share Index. PAT's share price rose by
2.00p during the year and at 30 April 2024 was 483.00p. An analysis
of performance is provided in the Chairman's Statement and
Investment Manager's Report below.
·
Percentage changes to 30 April 2024:
|
Percentage
Changes
|
|
1 Year
|
3 years
|
5 Years
|
10 Years
|
Since 1990
(1)
|
|
|
|
|
|
|
Share Price
|
0.4
|
2.5
|
18.4
|
45.5
|
1,122.8
|
NAV per Share
(2)
|
1.2
|
4.7
|
20.3
|
45.9
|
759.5
|
FTSE All-Share Index
|
3.4
|
11.2
|
8.9
|
22.4
|
324.7
|
Share Price Relative to FTSE
All-Share
|
(2.9)
|
(7.8)
|
8.7
|
18.9
|
187.9
|
Share Price Total
Return(2)
|
2.1
|
7.0
|
26.7
|
67.9
|
2,247.0
|
NAV per Share Total
Return(2)
|
1.3
|
9.2
|
28.7
|
68.3
|
1,441.4
|
Retail Price Index (RPI)
|
3.3
|
27.9
|
33.6
|
50.6
|
207.8
|
Consumer Price Index (CPI)
|
2.4
|
21.3
|
24.1
|
33.4
|
142.1
|
FTSE All-Share Total
Return
|
7.5
|
23.9
|
30.1
|
75.8
|
1,298.8
|
Share Price Total Return relative to
FTSE All-Share Total Return
|
(5.0)
|
(13.6)
|
(2.6)
|
(4.5)
|
67.8
|
Share Price Total Return relative to
RPI
|
(1.2)
|
(16.3)
|
(5.2)
|
11.5
|
662.5
|
Share Price Total Return relative to
CPI
|
(0.3)
|
(11.8)
|
2.1
|
25.9
|
869.4
|
(1) The Company became
self-managed in 1990.
(2) Alternative
Performance Measure. Please see pages 64 and 65 of the Annual
Report for a glossary of terms and definitions.
·
During the year the Company's shares continued to
trade close to NAV. The Company did not issue any Ordinary shares
and bought back 49,244,828 Ordinary shares during the
year.
·
During the year, PAT continued to maintain a high
level of liquidity. At 30 April 2024, liquidity was 72.5%. This
included 11.8% in UK Gilts, UK index-linked bonds, UK cash,
overseas cash, and net current assets and 60.6% in various classes
of non-equity risk assets: 36.5% in US TIPS, 11.6% in US Treasuries
and 12.5% in Gold Bullion. This compared to holdings as at 30 April
2023 of 17.7% in UK Gilts, UK cash, overseas cash, and net current
liabilities and 58.2% in various classes of non-equity risk assets:
33.9% in US TIPS, 14.8% in US Treasuries and 9.5% in Gold
Bullion.
The
Chairman, Iain Ferguson, said:
We continue to live in a world of
great uncertainty and increasing volatility with little expectation
for improvement in the immediate future. We still have a war raging
in Europe, particularly poignant as we commemorate the 80th
anniversary of 'D-Day', and we now have a very intractable conflict
in the Middle East. There are obvious growing international
tensions across the globe and the outcome of the election in the
United States will have literally 'world changing' ramifications.
In the UK we are now in the General Election process and by the
time of our AGM in July we will know the outcome. Most pundits are
predicting a change of government. This is the challenging context
in which we seek to deliver our core investment proposition, which
is to protect and increase (in that order) the value of
shareholders' funds per share (also known as net asset value
('NAV') per share) over the long term. The Directors and our
Investment Managers at Troy Asset Management Limited ('Troy'),
Sebastian Lyon and Charlotte Yonge, are shareholders in the
Company. As such, we are all strongly aligned and are advocates for
this investment proposition. As Directors, we work closely with the
Troy team, bringing our collective experience to complement,
inform, challenge and support. This close but independent
relationship is particularly important when we are seeking to
navigate uncertain and turbulent markets together.
We track the performance of the
Company from 1990. Since then, the NAV has grown at an annual
compound rate of +6.5% compared to +3.4% for the UK Retail Price
Index and +4.3% for the FTSE All-Share Index, our two main
comparators. We also track the degree of risk experienced in
achieving our financial performance. The results are tabulated in
the Key Features section on page 2 of the Annual
Report and the volatility experienced is indicated on the chart on
page 11 of the Annual Report. This shows that over the last
24 years the Company has been less volatile than equities in
general and also less volatile than the AIC Flexible Investment
Sector. Whilst this combination of above comparator financial
performance and below-sector volatility is the outcome of a focus
on capital preservation, these metrics are by no means a target.
The Investment Manager's focus remains on the avoidance of
permanent capital loss (our preferred definition of risk) and on
growing the real value of the Company's capital over the long run.
In his report on pages 6 and 7 of the Annual
Report, Sebastian Lyon, our Investment Manager, provides
further details of our investment performance and describes the
particular challenges of the last year.
The Company aims to pay as
consistent and sustainable a dividend as is compatible with
protecting and increasing the value of its shareholders' funds and
maintaining its investment flexibility. The Board remains committed
to paying an annual dividend of 5.60p per share in line with this
policy. High levels of inflation during the year, particularly in
the United States, mean that the Company has again this year earned
significantly more income on its holding of US TIPS than in
previous years. Accordingly, in order to meet the investment trust
distribution requirements, the Board has resolved to pay an
additional special dividend for the year to 30 April 2024 of 1.60p
per share. This dividend will be paid to shareholders in July 2024
alongside the first interim dividend of 1.40p per share for the
year to 30 April 2025.
During the year we bought back
49,244,828 Ordinary shares into Treasury under the Company's
discount control policy, for a net outflow of £232 million. As at
30 April 2024 we had 342,325,372 Ordinary shares in issue, with
50,479,828 Ordinary shares in Treasury. It is the policy of the
Company to aim to ensure that, in normal market conditions, its
Ordinary shares always trade at or close to NAV and this policy is
enshrined in the Articles of Association. It is reassuring to
report that since November 1999, when investment trusts were
empowered to use capital to buy back shares and hence control the
discount to NAV at which their shares trade, the Company's share
price has closely tracked the NAV both through periods of
significant issuance and as demonstrated in the last year through a
period of sustained buy back. Given the persistence of discounts
for investment trusts generally, buyback activity throughout the
year has been pronounced across the industry more widely. For the
Company, the year ending 30 April 2024 will be the first since 2007
when the number of shares in issue has declined year on
year.
The Board membership has enjoyed a
further year of stability and I am grateful for the continuing
commitment and wise counsel of my colleagues. We appointed Jennifer
Thomas to the Board with effect from 1 May 2024. She brings more
than 25 years of experience in leading communications in several
international companies and we look forward to her contribution to
our work. During 2022 Board Level Partners conducted an independent
review of the performance of the Board and its Committees. Whilst
this did not highlight any material weaknesses or concerns, it did
identify some areas for further focus. These include planning for
Board member succession, development of shareholder communications
and closer monitoring of our relationships with our key service
providers, Troy and Juniper Partners Limited ('Juniper'). During
2023 and 2024 we conducted internal reviews, and it is pleasing to
record that we have made significant progress in each of the focus
areas. Further detail can be found on page 29 of
the Annual Report.
As part of our oversight of our key
service providers, we introduced a more formal annual review
process with Troy in 2023 and this has been repeated in 2024. The
review process is led by Mandy Clements and includes open
discussions with all the Directors and several members of the
senior team at Troy. We have all found this to be a positive and
helpful exercise. In summary, our relationship with Troy continues
to be excellent and we are increasingly benefitting from access to
the shared resources and focused support from the wider Troy team.
We now hold two Board meetings each year in the Troy offices in
London which is helping us to get to know more members of the Troy
team and to deepen our relationship on a broader base. As our
shareholder funds continue to be above £1.5 billion, we are
benefitting from the revised fee structure agreed in 2021. Details
of the fee structure are shown on page 15 of the
Annual Report. We also pay particular attention to ensuring
the competitiveness of our ongoing charges ratio, which was 0.65%
for the year ended 30 April 2024, having reduced from 0.89% in 2013
and remains in line with last year's figure.
We had adopted a similar annual
review process with Juniper in 2022 and have now completed our
third review cycle. As with Troy, this process is led by Mandy
Clements. Our relationship with Juniper, which provides our
administrative, company secretarial, AIFM and discount control
services, continues to be excellent with a very open and supportive
culture. Juniper provides a first-class service to the Company and
works in close association with Troy to provide a seamless service
to the PAT Board and shareholders.
We recognise the continuing
evolution of the Company's shareholder base and the increasing
number of investors holding shares through retail platforms who may
not have direct access to communications with the Company. This is
a challenge which is often discussed by the Board as we seek to
improve communication and interaction with investors. We hope that
our website (www.patplc.co.uk), our Quarterlies, our Annual and
Interim Reports and our monthly Factsheet are providing investors
with easy and effective access to information about PAT and we will
continue to seek innovative ways of improving our dialogue with
shareholders and with potential shareholders.
We are looking forward to holding
the AGM on Friday 19 July 2024 at The Kimpton Charlotte Square
Hotel in Edinburgh. The Investment Manager's presentation will also
be made available on our website following the AGM for those who
cannot attend in person. I would encourage all shareholders to
submit any questions for the AGM to our Company Secretary by email
in advance of the meeting at cosec@junipartners.com by Tuesday, 16
July 2024. In the meantime, I wish you all good health and thank
you for entrusting your investment to PAT.
Iain Ferguson CBE
Chariman
18
June 2024
The
Investment Manager, Sebastian Lyon, said:
Over the year to 30 April 2024, the
net asset value per share ('NAV') of Personal Assets Trust (the
'Company') rose by 1.2% while our traditional comparator, the FTSE
All-Share Index rose by 3.4%. The UK Retail Price Index ('RPI'),
which we also use as a comparator (see the inside front cover of
this Report and Key Features and Record 1990-2024 on pages 2 and 3 of the Annual Report respectively),
rose by 3.3%. Over the past five years the NAV (total return) per
share rose by 28.7% compared to FTSE All-Share return which rose by
30.1% and RPI which rose by 33.6%. The Company's NAV and share
price (thanks to the discount control policy) continued to
demonstrate below average volatility compared to peers and the
stock market.
A year ago, we wrote about the
burgeoning effects of rising interest rates and our expectation of
slower economic growth combined with the risks of a recession.
Signs of stress in the banking sector abated following the collapse
of Silicon Valley Bank and Credit Suisse. The sting of tighter
monetary policy has, thus far, largely been offset by aggressive
fiscal stimulus, especially in the United States. Nevertheless,
monetary policy always works with a lag, usually of 12 to 24
months, so with interest rates having peaked as recently as the
summer of 2023, we are unlikely to have experienced their full
effect. In the meantime, equity markets have been buoyed by the
excitement surrounding generative Artificial Intelligence ('AI')
and large language models such as ChatGPT-4. We have been taken
aback by investors' willingness to speculate so soon after the
profitless tech boom of 2020/21, which quickly turned to bust.
Whether history will repeat itself is open to question. However,
the scale of investment in capacity is reminiscent of the
investment made in fibre during the dotcom boom. How sustainable
this is, and whether such investment ultimately earns an economic
return, remains to be seen but benefits are likely to accrue to
more sustainable and recurring business models, such as Microsoft
and Alphabet, which the Company continues to have exposure
to.
Despite renewed speculation in some
parts of the equity market, bond markets have continued to
disappoint. The secular bear market in bonds, which began in 2020
when yields troughed during the pandemic, has continued with rising
yields (and falling prices). It is becoming clear that we have
entered a new era of upward yield pressure and a commensurate
rising cost of capital. While western bond markets have performed
poorly, this may take time to be reflected in equity valuations,
which remain high by historic levels. This new regime is the
reverse of the 2010s, when benign inflation and low growth meant
rate hike expectations were continuously dashed and bond yields
ground ever lower. At the beginning of 2024, the consensus forecast
was for no less than six interest rate cuts over the coming year
from the US Federal Reserve and the Bank of England. Yet four
months on, interest rate cuts have not been forthcoming. Fewer
cuts, when they eventually arrive, may imply interest rates bottom
at a higher level than many expect, with further implications for
long-dated bonds and equities. As a result, we continue to keep
duration risk low, which served us well in 2022 where we avoided
material drawdowns from rising yields. We suspect there is a need
to acclimatise to this new environment. Despite easy comparisons
from price levels of a year ago, inflation has remained stickier
than expected with core levels still stubbornly above targets in
the US and the UK. This plays into our preference for holding
inflation-linked bonds, which offer positive real
yields.
Our equity selection made a positive
contribution to returns despite our modest exposure. Alphabet,
American Express, Microsoft and Visa performed well. In contrast,
consumer staples Diageo and Nestlé detracted. We continue to have
confidence in the long-term prospects for these companies, which
have a track record of providing strong returns to their
shareholders over time. Portfolio activity was relatively modest,
as is our natural proclivity, but we did add to the Company's
holdings in Diageo, following its profit warning in
November.
During the year we acquired a new
holding in Heineken. Heineken's shares have been weak, and the
valuation now sits around the same level as its 2020 low. This
follows difficult macroeconomic conditions in some of the company's
emerging markets, particularly Vietnam. We have been following
Heineken for several years and are enthusiastic about its
prospects. Heineken operates in the growing premium segment of the
attractive beer category, with a strong portfolio of brands
distributed over a diversified range of geographic exposures.
Around 70% of its profits come from fast-growing emerging markets.
Current management are still in the early stages of their tenure
and are bringing renewed dynamism to the company's productivity,
pricing and digitisation efforts. This combines with the company's
long-term approach to capital allocation, supported by an ongoing
history of family ownership, and should lead to attractive value
creation over the long run.
Since 2017, the Company has been
invested in Franco-Nevada, a gold-focused royalty and streaming
company. Franco-Nevada had an excellent track record in allocating
capital to mining projects without the complexity, or capital,
required to run the mining operation, providing its shareholders
with geared exposure to the price of gold. This model worked well
when Franco-Nevada was smaller but as the company has grown it has
become harder to find investments that 'move the needle'. This has
resulted in increased concentration across a handful of larger
investments, most notably in the Panamanian gold and copper mine
Cobre Panama, which comprises just under 20% of Franco-Nevada's
assets. Growing social pressures in Panama led the government to
question the constitutionality of the mine's concession agreement
and to suspend its operations. We reduced our holding in December
2022 when these pressures first reared their head. After an
apparent resolution in early 2023, the issue resurfaced, and we
sold the remainder of our shares in November 2023. Franco-Nevada
generated good returns and provided helpful diversification for the
Company over the life of the investment. We sold the shares at an
average price of $130, versus an average entry price of $65 in
2017. Its sale from the portfolio reflects a change in the facts
and highlights our approach to managing stock-specific
risk.
Despite the sale of Franco-Nevada,
gold remains essential portfolio insurance and provides
diversification for the Company. During the financial year, the
price of the yellow metal rose by +15% to $2,295oz. (+16% in
Sterling). This strength has caught many investors by surprise as
higher interest rates implied a higher opportunity cost for holding
a zero-yielding asset like gold. Yet gold has outperformed the
S&P 500 US equity index this century, demonstrating its
substance and scarcity in an increasingly febrile and financialised
world. Heightened geopolitical tensions and the gradual reversal of
globalisation explain the continued attraction of an asset that is
no one's liability, as well as sustained demand from central banks
seeking to diversify their reserve assets away from western
currencies, a process described as 'de-dollarisation'. Savers may
also be seeking protection from sticky and stubborn inflation.
Those with long memories will recall that higher interest rates and
bond yields did not stop the price of gold rising in the 1970s.
With ballooning deficits, in a post-Covid world, politicians have
long forgotten fiscal rectitude. The US government debt situation
no longer looks sustainable and yet warnings are being ignored by
both presidential candidates. It is not entirely surprising that
international investors are seeking to diversify into the longest
standing reserve asset.
The Chairman's Statement highlights
the continued share buybacks, which began in March 2023, following
a prolonged period of share issuance. We retain an intentionally
liquid portfolio, which we can liquidate in a few days in normal
market conditions. During a difficult period for the investment
trust sector, which has witnessed a material widening of trust
discounts to net asset values (NAV), our shareholders continue to
be protected from PAT's discount widening.
The Company's cautious asset
allocation has not rewarded shareholders over the last year, but
ample liquidity and the portfolio's defensive positioning provide a
solid platform if we enter more challenging times. Grounds for
caution remain. There is evidence of retail investor speculation
including participation in cryptocurrencies and 'meme' stocks.
Meanwhile the most recent Bank of America global fund manager
survey highlights that fund managers are at their most bullish
since the last equity market peak in November 2021. This is a time
for patience and prudence, not ebullience.
Sebastian Lyon
Investment Manager, Troy Asset Management
18
June 2024
For
further information, please contact:
Sebastian Lyon
Investment Manager
Tel: 0207 499 4030
Carron Dobson
Juniper Partners, Company
Secretary
Tel: 0131 378 0500
Income Statement
|
Year ended 30 April
2024
|
|
Revenue
|
Capital
|
|
|
return
|
return
|
Total
|
|
£'000
|
£'000
|
£'000
|
Investment income
|
|
|
|
Calculated using the effective
interest rate method
|
17,456
|
-
|
17,456
|
Other investment income
|
27,410
|
-
|
27,410
|
Other operating income
|
991
|
-
|
991
|
Gains on investments held at fair
value through profit or loss
|
-
|
20,816
|
20,816
|
Foreign exchange losses
|
-
|
(4,132)
|
(4,132)
|
Total income
|
45,857
|
16,684
|
62,541
|
|
|
|
|
Expenses
|
(5,047)
|
(6,242)
|
(11,289)
|
Return before taxation
|
40,810
|
10,442
|
51,252
|
|
|
|
|
Taxation
|
(8,552)
|
1,560
|
(6,992)
|
Return for the year
|
32,258
|
12,002
|
44,260
|
|
|
|
|
Return per share
|
8.77p
|
3.26p
|
12.03p
|
The 'Return for the Year' is also
the 'Total Comprehensive Income for the Year', as defined in IAS1
(revised), and no separate Statement of Comprehensive Income has
been presented.
The "Total" column of this statement
represents the Company's Income Statement, prepared in accordance
with International Financial Reporting Standards.
The Revenue and Capital return
columns are supplementary to this and are prepared under guidance
published by the Association of Investment Companies.
Return per share (both basic and
diluted) is calculated on 367,849,279 (2023: 386,416,856) shares,
being the weighted average number in issue (excluding Treasury
shares) during the year.
All items in the above statement
derive from continuing operations.
|
|
|
|
|
Dividend Information
|
2024
|
|
2023
|
|
|
|
|
Dividends paid
|
£'000
|
|
£'000
|
First interim dividend of 1.40p per
share (2023: 1.40p per share) paid on 28 July 2023
|
5,431
|
|
5,278
|
Special dividend of 2.10p per share
(2023: 1.40p per share) paid on 28 July 2023
|
8,146
|
|
5,278
|
Second interim dividend of 1.40p per
share (2023: 1.40p per share) paid on 6 October 2023
|
5,290
|
|
5,416
|
Third interim dividend of 1.40p per
share (2023: 1.40p per share) paid on 24 January 2024
|
5,064
|
|
5,448
|
Fourth interim dividend of 1.40p per
share (2023: 1.40p per share) paid on 16 April 2024
|
4,881
|
|
5,499
|
|
28,812
|
|
26,919
|
Income Statement
|
Year
ended 30 April 2023
|
|
Revenue
|
Capital
|
|
|
return
|
return
|
Total
|
|
£'000
|
£'000
|
£'000
|
Investment income
|
|
|
|
Calculated using the effective
interest rate method
|
27,819
|
-
|
27,819
|
Other investment income
|
20,455
|
-
|
20,455
|
Other operating income
|
1,107
|
-
|
1,107
|
Losses on investments held at fair
value
through profit or loss
|
-
|
(54,976)
|
(54,976)
|
Foreign exchange gains
|
-
|
9,419
|
9,419
|
Total income/(loss)
|
49,381
|
(45,557)
|
3,824
|
|
|
|
|
Expenses
|
(5,304)
|
(6,660)
|
(11,964)
|
Return before taxation
|
44,077
|
(52,217)
|
(8,140)
|
|
|
|
|
Taxation
|
(7,436)
|
1,290
|
(6,146)
|
Return for the year
|
36,641
|
(50,927)
|
(14,286)
|
|
|
|
|
Return per share
|
9.48p
|
(13.18p)
|
(3.70p)
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Statement of Financial
Position
|
|
|
As at
30 April
2024
|
|
|
As
at
30 April
2023
|
|
|
|
£'000
|
|
|
£'000
|
Non-current assets
|
|
|
|
|
|
|
Investments held at fair value though
profit or loss
|
|
|
1,640,632
|
|
|
1,805,933
|
Property
|
|
|
1,730
|
|
|
1,730
|
Total non-current assets
|
|
|
1,642,362
|
|
|
1,807,663
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Receivables
|
|
|
6,209
|
|
|
6,159
|
Corporation tax receivable
|
|
|
1,069
|
|
|
-
|
Financial assets held at fair value
though profit or loss
|
|
|
-
|
|
|
24,070
|
Cash and cash equivalents
|
|
|
29,475
|
|
|
50,014
|
Total current assets
|
|
|
36,753
|
|
|
80,243
|
Total assets
|
|
|
1,679,115
|
|
|
1,887,906
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Financial liabilities held at fair
value though profit or loss
|
|
|
(8,733)
|
|
|
-
|
Corporation tax payable
|
|
|
-
|
|
|
(692)
|
Other payables
|
|
|
(3,101)
|
|
|
(2,862)
|
Total liabilities
|
|
|
(11,834)
|
|
|
(3,554)
|
|
|
|
|
|
|
|
Net
assets
|
|
|
1,667,281
|
|
|
1,884,352
|
|
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
|
|
Ordinary share capital
|
|
|
49,100
|
|
|
49,100
|
Share premium
|
|
|
-
|
|
|
1,349,680
|
Capital redemption reserve
|
|
|
219
|
|
|
219
|
Special reserve
|
|
|
1,372,145
|
|
|
22,517
|
Treasury share reserve
|
|
|
(238,314)
|
|
|
(5,847)
|
Capital reserve -
unrealised
|
|
|
198,806
|
|
|
202,745
|
Capital reserve - realised
|
|
|
262,501
|
|
|
246,560
|
Revenue reserve
|
|
|
22,824
|
|
|
19,378
|
|
|
|
|
|
|
|
Total equity
|
|
|
1,667,281
|
|
|
1,884,352
|
Shares in issue at year end
|
|
|
342,325,372
|
|
|
391,570,200
|
Net
asset value per Ordinary share
|
|
|
487.05p
|
|
|
481.23p
|
Statement of Changes in Equity
|
|
|
|
|
Distributable
reserves
|
|
For
the year ended
30
April 2024
|
Ordinary share
capital
|
Share
premium
|
Capital redemption
reserve
|
Capital reserve
unrealised
|
Treasury share
reserve
|
Special
reserve
|
Capital reserve
realised
|
Revenue
reserve
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 May 2023
|
49,100
|
1,349,680
|
219
|
202,745
|
(5,847)
|
22,517
|
246,560
|
19,378
|
1,884,352
|
|
Return for the year
|
-
|
-
|
-
|
(3,939)
|
-
|
-
|
15,941
|
32,258
|
44,260
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(28,812)
|
(28,812)
|
|
Share buybacks
|
-
|
-
|
-
|
-
|
(232,467)
|
-
|
-
|
-
|
(232,467)
|
|
Reduction and reclassification of
Share premium account *
|
-
|
(1,349,680)
|
-
|
-
|
-
|
1,349,680
|
-
|
-
|
-
|
|
Cost of reduction and
reclassification of Share premium account
|
-
|
-
|
-
|
-
|
-
|
(52)
|
-
|
-
|
(52)
|
|
Balance at 30 April 2024
|
49,100
|
-
|
219
|
198,806
|
(238,314)
|
1,372,145
|
262,501
|
22,824
|
1,667,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributable
reserves
|
|
For
the year ended
30
April 2023
|
Ordinary share
capital
|
Share
premium
|
Capital redemption
reserve
|
Capital reserve
unrealised
|
Treasury share
reserve
|
Special
reserve
|
Capital reserve
realised
|
Revenue
reserve
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 May 2022
|
46,100
|
1,235,636
|
219
|
324,095
|
-
|
22,517
|
176,137
|
9,656
|
1,814,360
|
|
Return for the year
|
-
|
-
|
-
|
(121,350)
|
-
|
-
|
70,423
|
36,641
|
(14,286)
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(26,919)
|
(26,919)
|
|
Issue of Ordinary shares
|
3,000
|
114,044
|
-
|
-
|
4,340
|
-
|
-
|
-
|
121,384
|
|
Share buybacks
|
-
|
-
|
-
|
-
|
(10,187)
|
-
|
-
|
-
|
(10,187)
|
|
Balance at 30 April 2023
|
49,100
|
1,349,680
|
219
|
202,745
|
(5,847)
|
22,517
|
246,560
|
19,378
|
1,884,352
|
|
*On 24 April 2024 the Court of
Session in Scotland (the 'Court') approved the reduction of the
Company's share premium account and the crediting of an equivalent
amount to the Company's distributable reserves. The Order of the
Court approving the reduction became effective on 26 April 2024
when it was registered with the Registrar of Companies.
Share premium. The share
premium represents the difference between the nominal value of new
Ordinary shares issued and the consideration the Company receives
for these shares.
Capital redemption reserve. The
capital redemption reserve represents the nominal value of Ordinary
shares bought back for cancellation since authority to do this was
first obtained at a General Meeting in April 1999.
Special reserve. The cost of
any shares bought back for cancellation is deducted from the
special reserve, which was created from the share premium,
following General Meetings in April 1999 and in January 2024 and
the subsequent Court approvals.
Treasury share reserve.
The net cost of any shares bought back and held in
treasury.
Capital reserve unrealised. Increases and decreases in the valuation of investments held
at the year end and unrealised exchange differences of a capital
nature are accounted for in this Reserve.
Capital reserve realised. Gains
and losses on the realisation of investments, realised exchange
differences of a capital nature and returns of capital are
accounted for in this Reserve.
Revenue reserve. Any
surplus/deficit arising from the revenue return for the year is
taken to/from this Reserve.
Cash Flow Statement
|
Year ended
30 April
|
Year
ended
30
April
|
Year
ended
30
April
|
|
2024
|
2023
|
2022
|
|
£'000
|
£'000
|
£'000
|
Cash
flows from operating activities
|
|
|
|
Return before taxation
|
51,252
|
(8,140)
|
108,630
|
Income calculated using the effective
interest rate method
|
(17,456)
|
(27,819)
|
(25,942)
|
(Gains)/losses on
investments
|
(20,816)
|
54,976
|
(129,897)
|
Foreign exchange
losses/(gains)
|
4,132
|
(9,419)
|
49,813
|
|
|
|
|
Operating cash flow before movements
in working capital
|
17,112
|
9,598
|
2,604
|
Increase in accrued income,
prepayments and other receivables
|
(51)
|
(4,792)
|
(222)
|
Decrease in other payables
|
(244)
|
(38)
|
577
|
|
|
|
|
Net cash from operating activities
before taxation
|
16,817
|
4,768
|
2,959
|
|
|
|
|
Taxation
|
(8,752)
|
(6,914)
|
(1,064)
|
|
|
|
|
Net cash inflow/(outflow) from
operating activities
|
8,065
|
(2,146)
|
1,895
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
Purchase of investments - equity
shares
|
(45,766)
|
(15,793)
|
(61,064)
|
Purchase of investments - fixed
interest and other investments
|
(355,442)
|
(1,251,794)
|
(835,033)
|
Disposal of investments - equity
shares
|
22,785
|
260,144
|
126,691
|
Disposal of investments - fixed
interest and other investments
|
581,996
|
965,581
|
579,399
|
Settled forward foreign exchange
gains/(losses)
|
28,571
|
(39,670)
|
(23,807)
|
|
|
|
|
Net cash inflow/(outflow) from
investing activities
|
232,144
|
(81,532)
|
(226,126)
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
Equity dividends paid
|
(28,812)
|
(26,919)
|
(19,254)
|
Issue of Ordinary shares
|
-
|
120,090
|
220,618
|
Cost of share buybacks
|
(231,984)
|
(10,187)
|
-
|
Cost of share premium
cancellation
|
(52)
|
-
|
|
Issue of shares from
Treasury
|
-
|
4,340
|
-
|
|
|
|
|
Net cash (outflow)/inflow from
financing activities
|
(260,848)
|
87,324
|
201,364
|
|
|
|
|
(Decrease)/increase in cash and cash
equivalents
|
(20,639)
|
3,646
|
(22,867)
|
Cash and cash equivalents at the
start of the year
|
50,014
|
47,944
|
70,907
|
Effect of exchange rate
changes
|
100
|
(1,576)
|
(96)
|
Cash
and cash equivalents at the year end
|
29,475
|
50,014
|
47,944
|
|
|
|
|
|
|
|
|
Net
cash inflow from operating activities includes the
following:
|
|
|
|
Dividends received
|
8,050
|
10,831
|
9,474
|
Interest received
|
20,199
|
9,974
|
4,262
|
Principal Risks and Risk Management
The Board has carried out a careful
assessment of the principal risks facing the Company, including the
ongoing current geopolitical risks and the ongoing impacts of
inflation levels and heightened interest rates. The Board has
established and maintains, with the assistance of the Company
Secretary, a risk matrix which identifies the key risks to the
Company. This register is formally reviewed on a regular basis.
Emerging risks that could impact the Company are considered and
discussed at each Board meeting, or on an ad hoc basis as required,
along with any proposed mitigating actions.
The principal risks and
uncertainties facing the Company, together with a summary of the
mitigating action the Board takes to manage these risks and how
these risks have changed over the period, are set out
below.
The arrows denote if the relevant
risk has increased, decreased or remained the same during the year
after considering the mitigating actions.
Emerging
Risk
The conflicts in Ukraine and the
Middle East continue to bring risk to economic growth and
investors' risk appetites and consequently can impact the valuation
of companies in the portfolio. There is also an increasing
awareness of the challenges and emerging risks posed by climate
change as well as the impact and pace of technological developments
on the companies in the investment universe.
Mitigation
The Board seeks to mitigate these
emerging risks through maintaining a broadly diversified global
equity portfolio and appropriate asset and geographical allocation.
In respect of climate change risks, the investment process
considers ESG factors, as set out in the Strategic Review. Overall
the specific potential effects of climate change and developing
technology are difficult, if not impossible, to predict and the
Board and Investment Manager will continue to monitor developments
in this area. The Board is in regular communication with the
Investment Manager on emerging matters which may impact on the
portfolio.
↑ Increased risk
Economic
Risk
The Board believes that the
principal risk to shareholders and the Company's investments are
events or developments, including the emerging risks noted above,
which can affect the general level of share prices and other
securities within the portfolio. These include for instance,
inflation or deflation, economic recessions and movement in
interest rates and currencies which could cause losses within the
portfolio.
Mitigation
The Board regularly monitors the
investment environment and the management of the Company's
investment portfolio, and applies the principles detailed in the
guidance provided by the Financial Reporting Council. Further
details on the Company's financial risks are contained in the Notes
to the Accounts on pages 47 to 59 of the Annual Report.
The Company's strategy is reviewed
formally on at least an annual basis considering investment
performance, market developments and shareholder communication. The
Board receives regular updates on the composition of the Company's
portfolio. Investment performance and the portfolio composition has
been monitored specifically in the light of the emerging risks
noted above.
↑ Increased risk
Operational
Risk
The Company is reliant on service
providers including Troy as Investment Manager, Juniper as AIFM,
Company Secretary, Administrator and discount and premium control
provider, J.P. Morgan as Depositary and Custodian and Equiniti as
Registrar. Failure of the internal control systems of these
parties, including in relation to cybersecurity measures, could
result in losses to the Company.
Mitigation
The Board formally reviews the
Company's service providers on an annual basis, including reports
on their internal controls where available. As part of the annual
review the Board considers the business continuity plans in place
with each of its key suppliers and the measures taken to mitigate
cyber threats. The Company's internal controls are described in
more detail on pages 33 and 34 of the Annual Report.
→ Risk remains relatively
unchanged.
Legal and Regulatory
Risk
Breach of legal and regulatory rules
could lead to the suspension of the Company's Stock Exchange
listing, financial penalties, or a qualified audit report. Breach
of Section 1158 of the Corporation Tax Act 2010 could lead to the
Company being subject to tax on realised capital gains.
Mitigation
Compliance with the Company's
regulatory obligations is monitored on an ongoing basis by the
AIFM, the Investment Manager and other professional advisers as
required who report to the Board regularly.
→ Risk remains relatively
unchanged.
Discount and Premium Control
Risk
The share price could be impacted by
a number of external factors which could cause significant discount
and premium fluctuations.
Mitigation
The Company's discount and premium
control policy, which is enshrined in the Articles of Association,
is to ensure that shares always trade at close to net asset value.
The level of share buybacks or issuance under the policy is
reported via an RIS on an ongoing basis.
→ Risk remains relatively
unchanged.
Directors' Responsibility
Statement
The Directors are responsible for
preparing the Annual Report and the financial statements in
accordance with applicable law and regulation.
Company law requires the Directors
to prepare financial statements for each financial year. Under that
law the directors have prepared the financial statements in
accordance with UK-adopted international accounting
standards.
Under company law, Directors must
not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
In preparing the financial statements, the Directors are required
to:
• select suitable accounting
policies and then apply them consistently;
• state whether applicable
UK-adopted international accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
• make judgements and accounting
estimates that are reasonable and prudent; and
• prepare the financial statements
on the going concern basis unless it is inappropriate to presume
that the Company will continue in business.
Going Concern
The Directors believe, in the light
of the controls and review processes reported in the Report of the
Audit and Risk Committee on pages 33 and 34
of the Annual Report and bearing in mind the nature of the
Company's business and assets, which are considered to be readily
realisable if required, that the Company has adequate resources to
continue operating for at least twelve months from the date of
approval of the financial statements. For this reason, they
continue to adopt the going concern basis in preparing the
accounts.
As part of the going concern
assessment a sensitivity analysis was performed. If the market had
dropped by 25% and no dividend income became available the Company
would be able to continue operating for the foreseeable
future.
Related Party Transactions
Investment management services are
provided by Troy Asset Management Limited. The fee for the year
ended 30 April 2024 was £9,603,000 (2023: £10,246,000). An amount
of £2,359,000 was outstanding to the Investment Manager at 30 April
2024 (2023: £2,610,000).
Directors of the Company received
fees for their services. An amount of £19,000 was outstanding to
the Directors at 30 April 2024 (2023: £18,000).
Further details are provided in the Directors' Remuneration Report
on pages 30 to 32 of the Annual Report. The Directors'
shareholdings are also detailed on pages 12, 13 and 26 of the
Annual Report.
Notes:
1. The financial
statements of the Company have been prepared in accordance with
UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. This change constitutes a change
in accounting framework. However, there is no impact on
recognition or disclosure in the period reported as a result of the
change in framework.
The financial statements have been
prepared on a going concern basis.
The financial statements are
presented in Sterling and all values are rounded to the nearest
thousand pounds (£'000) except where otherwise
indicated.
The financial statements have been
prepared on the historical cost basis, modified by revaluation of
financial assets and financial liabilities held at fair value. The
material accounting policies adopted are set out in pages 47 to 49
of the Annual Report. These have been applied consistently, other
than where new policies have been adopted. Where the presentational
guidance set out in the Statement of Recommended Practice (the
''SORP'') for investment trusts issued by the Association of
Investment Companies (the ''AIC'') in July 2022 is consistent with
the requirements of IFRSs, the Directors have sought to prepare the
financial statements on a basis compliant with the recommendation
of the SORP.
2. During the year
the Company bought back 49,244,828 Ordinary shares which were held
in Treasury at a cost of £232,467,000.
3. At 30 April
2024 the sterling value of the US Treasury stocks and part of the
US equities were protected by a forward currency
contract.
4. The Company
held the following categories of financial instruments as at 30
April 2024:
|
Level 1
£'000
|
Level 2
£'000
|
Level 3
£'000
|
Total
£'000
|
Investments
|
1,640,632
|
-
|
-
|
1,640,632
|
Financial liabilities
|
-
|
(8,733)
|
-
|
(8,733)
|
Total
|
1,640,632
|
(8,733)
|
-
|
1,631,899
|
Level 1 reflects financial
instruments quoted in an active market. The Company's investment in
Gold Bullion has been included in this level.
Level 2 reflects financial
instruments the fair value of which is evidenced by comparison with
other observable current market transactions in the same instrument
or based on a valuation technique the variables of which include
only data from observable markets. The Company's forward currency
contract has been included in this level as fair value is achieved
using the foreign exchange spot rate and forward points which vary
depending on the duration of the contract.
Level 3 reflects financial
instruments the fair value of which is determined in whole or in
part using a valuation technique based on assumptions that are not
supported by prices from observable market transactions in the same
instrument and not based on available observable market
data.
There have been no changes to
valuation technique over the year.
5. These are not
statutory accounts in terms of Section 434 of the Companies Act
2006. Full audited accounts for the year to 30 April 2024
will be sent to shareholders in June 2024 and will be available for
inspection at 28 Walker Street, Edinburgh EH3 7HR, the registered
office of the Company. The full Annual Report will be available on
the Company's website www.patplc.co.uk.
6. The audited
accounts for the year ended 30 April 2024 will be lodged with the
Registrar of Companies.