Schroder Oriental Income Fund
Limited
Half Year
Report
Schroder Oriental Income Fund
Limited (the "Company") hereby submits its Half Year Report for the
six months ended 29 February 2024 as required by the Financial
Conduct Authority's Disclosure Guidance and Transparency Rule
4.2.
Key
highlights
• Strong NAV per
share performance of the Company at 7.5% over the six months under
review, considerably ahead of the MSCI AC Pacific ex Japan Index
(the "Reference Index") return of 1.9%, with a share price total
return of 5.6%.
• The Company has
enjoyed significant outperformance of the wider markets in recent
years and this latest period builds upon that. In the three-year
period to 29 February 2024, the Company's NAV total return
outperformed the Reference Index by 23.6%, testament to the fact
that a skilful active management approach in Asia has the ability
to deliver significant value to investors.
• Over the
six-month period, we repurchased 5,670,000 shares at an average
discount of 6.0%. Please be assured that we will continue to do so
when we believe that it is in the best interests of
shareholders.
• The Company has
an 18-year track record of progressive and significant dividend
growth having grown its dividend every year since launch. The
Company is classed in the AIC's next generation of dividend
heroes.
• During the
period under review, two interim dividends have been declared
totalling 7.8 pence per share (2023: 7.6 pence per
share).
Paul Meader, Chairman of Schroder Oriental Income,
commented:
"As we approach our 20th
anniversary, it is worth reflecting that, since inception, a
shareholder has received a total return of 489.0%, whereas a
passive investment in the Reference Index would have generated
288.5%."
The Half Year Report is also being
published in hard copy format and an electronic copy of that
document will shortly be available to download from the Company's
web pages: schroders.com/orientalincome
and can be viewed at https://schro.link/orientalhyr24.
The Company has submitted a copy of
its Half Year Report to the National Storage Mechanism and it will
shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Enquiries:
Schroder Investment Management Limited
Augustine Chipungu
(Press)
|
020 7658 2106
|
Matthew Riley
|
020 7658 6000
|
Half
Year Report for the six months ended 29 February
2024
CHAIRMAN'S STATEMENT
"As we approach our
20th anniversary, it is worth reflecting that, since
inception, a shareholder has received a total return
of 489.0%, whereas a passive investment in the Reference Index
would have generated 288.5%."
In the six month period to 29
February 2024, Asian equity markets largely ended up where they
started. Our reference index, the MSCI AC Pacific ex Japan Index
(the "Reference Index"), in Sterling terms, rose by a modest 1.9%
over the period. Your Company performed much more strongly, the NAV
total return producing a highly creditable 7.5% over the six months
with the share price total return a little less at 5.6%.
The Company has enjoyed significant
outperformance of the wider markets in recent years and this latest
period builds upon that. In the three year period to 29 February
2024, the Company's NAV total return outperformed the Reference
Index by 23.6%, testament to the fact that a skilful active
management approach in Asia has the ability to deliver significant
value to investors. Of course, an active management approach can
never assure consistent outperformance, but the Company has
exceeded the Reference Index notably over one, three, five and 10
years, as well as since inception in 2005. Similarly, that
outperformance is reflected against our peers where clear blue
water lies between us and our nearest competitor. As we approach
our 20th anniversary, it is worth reflecting that, since inception,
a shareholder has received a total return of 489.0%, whereas a
passive investment in the Reference Index would have generated
288.5%.
Asia's performance over the six
month period is in contrast to that seen across developed equity
markets in North America and Europe. The relative lack of growth
can be laid at the door of China: China on its own is not Asia as a
whole, but it has been casting a shadow over the region in the
last year or so. As outlined in the Investment Manager's Review,
sentiment towards Chinese equities is now very poor indeed, in
contrast to the post-lockdown frenzy. Now, valuations are not at
all demanding and are near multi-year lows. It is hard to predict
when things may improve but when they do, any recovery could be
swift. This would be likely to buoy the region as a whole. Our
Investment Manager, having avoided significant China exposure for
some years, is alert to this but they continue to believe that
opportunities in other regional markets remain more compelling for
the medium term, despite detailed re-analysis of individual Chinese
shares. Fundamentally, we are stock pickers and do not seek to
predict macro-economic trends or geopolitics. Opportunities in
quality stocks with strong balance sheets, attractive dividends and
good governance are easier to find elsewhere in the region. We are
likely to remain underweight to China, albeit with
a counterbalancing overweight to Hong Kong, which has also
been under a pall.
Whatever the vagaries in the short
term, our medium to long term returns will be driven by the quality
of earnings from our portfolio of companies. It is in identifying
these quality companies that our Investment Manager excels.
Earnings from those companies is the power that drives our total
return and our dividend to you, our shareholders. In the last
couple of years, earnings growth has been muted in the Asian region
but the cycle should turn soon as global interest rates begin to
fall and the US dollar weakens, as is widely predicted. That should
then be reflected in our dividend receipts because payout ratios in
the region remain low, giving plenty of scope for dividend growth.
The Company has an 18 year track record of progressive and
significant dividend growth and, absent a catastrophe, we do
not see any reason why this growth should not continue in the
future. As we have grown our dividend over all those years, so too
we have grown our revenue reserve. This reserve of undistributed
income is important because it enables us, in a lean year, to
maintain our own dividend growth. We are happy to use this "rainy
day fund" for short periods, if needed, in order to give you the
confidence to rely upon our dividend payments.
Despite the excellent performance
and strong dividend growth, our shares continue to trade at a
modest discount to NAV. This discount is all the more frustrating
because it cannot reflect any discount for illiquidity which has
plagued some investment trusts. Our underlying portfolio is highly
liquid and there is good daily liquidity in our own shares. Rather,
it seems that the position reflects poor sentiment towards the
Asian region by global investors and poor sentiment towards
investment trusts. Both of those factors should pass in due course
and we should not be too despondent as our discount is modest in
comparison to most. In the meantime, we have been doing two things.
We have redoubled our efforts to spread the message of the
Company's attractions and, indeed, the Company has been recommended
as an attractive investment in many national newspapers as well as
specialist websites. This lays the foundations to broaden the
investor base over time. Secondly, we have been happy to repurchase
shares at a discount. Over the six month period, we
repurchased 5,670,000 shares at an average discount of 6.0%. Please
be assured that we will continue to do so when we believe that it
is in the best interests of shareholders.
Finally, as noted in my last report
to you, during the period, Kate Cornish-Bowden resigned as a
director due to other commitments. We have commenced the
recruitment process to appoint a new director and anticipate being
able to make an announcement in early summer. My own tenure as a
director is also drawing to a close as a part of long-term
planning. I will not be standing for re-election at the Annual
General Meeting in December this year, having completed nearly nine
years as a director. Whilst we did not expect to lose Kate as a
director when we did, good succession planning in the past has
meant that, even with her departure and mine before year end, we
will have a strong mix of continuity, corporate memory and new
perspectives. My report to you in the autumn will be my last and
I look forward to writing to you then.
Paul
Meader
Chairman
22 May 2024
INVESTMENT MANAGER'S REVIEW
"…although uncertainties remain
around China's outlook, the region's inexpensive aggregate
valuations… and a potentially recovering goods export cycle
does set up a more constructive backdrop for Asian markets in
2024..."
The NAV per share of the Company
recorded a positive total return of 7.5% over the six months to end
February 2024. During the period under review, two interim
dividends have been declared totalling 7.8 pence per share (2023:
7.6 pence per share).
Asian markets were volatile over the
six months to end February 2024 finishing up 1.9% in Sterling
terms. Although positive, this performance lagged global equity
markets, which were up strongly over the period, driven by
continuing disinflationary trends across major global economies,
and the resultant increased confidence that developed market
central banks would be moving into an interest rate-cutting cycle
in 2024.
Mirroring global performance, the
strongest sector in Asia over the period, by far, was IT, where
stocks benefitted from the improving cycle, as well as the
longer-term benefits to demand of the impact of Artificial
Intelligence ("AI"). The excess inventory, which surged after
economies opened-up post-Covid, has been a major overhang on IT
stocks (and other goods exporters) throughout much of the last two
years, as companies have had to slash prices and production to
reduce inventory levels. The prospect of potentially improving
end-demand as interest rates come down, alongside the hope that
destocking is finally coming to an end, proved a potent catalyst
for IT stocks with anything remotely AI related seeing additional
gains. This helped Taiwan and Korea, the two Asian markets most
exposed to the sector, outperform the Reference Index.
Australia was the only other major
country which outperformed the Reference Index over the
period. It benefitted from the same disinflationary trends seen in
other major markets, with inflation appearing to be peaking,
leading to hopes that rates can start to be cut following 13
successive hikes. Banks performed strongly against this
backdrop.
The major laggard in the region was
China. It has been a challenging period for Chinese stocks, as the
ongoing slow recovery from Covid, lack of significant fiscal
stimulus, rock-bottom consumer confidence, and international
investor concerns around geopolitical and domestic regulatory risks
all combined to see the market sell off once again. An announcement
in December 2023 of tighter restrictions on videogames led to big
falls in several index heavyweights in that sector. Although the
government appeared to backtrack quite quickly following the
negative market reaction, it was another reminder of the
unpredictable policy environment of the last few years in China. On
a more positive note, there was some relief around geopolitical
tensions, with the meeting of Presidents Xi and Biden at the
November 2023 APEC summit in California. Despite the handshakes,
however, there is little sign of any easing of US policies towards
China and, with a presidential election looming in the US later in
the year, little reason to expect much on this front in the
short-term.
Dividends continue to be largely
driven by earnings, so for stocks in more cyclical areas such as
Australian resources, or other economically-sensitive industries,
where there has been some downward pressure in 2023 we have seen
some cuts, but in areas such as financials, including the banks,
interest rate rises have helped margins and earnings which has fed
through into dividend increases in many cases. In year-on-year
terms, Sterling has also generally been firmer against most
currencies which has been a headwind.
Positioning and performance
The Company made a positive return
over the period, with, as noted above, a NAV total return of 7.5%
which was considerably better than the Reference Index return
of 1.9%. Our significant underweight allocation to, and strong
stock selection in, China was a major positive contributor to
relative performance. Strong selection came from stocks such as
Midea Group, a manufacturer
of branded white goods including air conditioners, and an absence
of internet platform companies that pay little or no dividend.
Although our overweight to Hong Kong was a headwind, our stock
selection there more than offset that, with telecom operator
HKT Trust and HKT the
standout performer. Positive stock selection in both Taiwan and
Korea was also noteworthy, with IT companies including fabless
design house MediaTek,
foundry Taiwan Semiconductor
Manufacturing Company ("TSMC") and memory manufacturer
Samsung Electronics all
performing strongly. In Korea, increasing focus on companies that
could benefit from an improvement in shareholder focus also did
well, including non-life insurance company Samsung Fire and Marine. The smaller
markets of Indonesia and the Philippines also made positive stock
contributions through holdings such as Bank Mandiri and port operator
International Container Terminal
Services. Stock selection in Australia lagged, as our
positive return in financials was offset by our positions in
resources and telecom operator Telstra. From a sectoral
perspective, stock selection in, and overweight to, IT, our
underweight to consumer discretionary and stock selection in
communication services all added value, as did our overweight to
financials. The overweight to real estate was a
drag.
The geographic exposure in the
Company's portfolio continues to be mainly spread between
Taiwan, Australia, Korea, Singapore, and China. Over the period we
added to positions in Australia and Korea as well as smaller
markets such as Indonesia. China remains a substantial
underweight but is, in part, offset by the overweight to the Hong
Kong market which, in general, looks more attractive from a
valuation perspective, albeit we have reduced exposure to some of
the real estate names, such as Fortune REIT, which had performed
relatively well. Elsewhere, we continue to like Singapore, with
positions in the banks and Singapore Telecom, as well as
overweights to some of the smaller markets such as Indonesia and
the Philippines.
From a sectoral perspective our main
additions were into some of the traditionally more defensive areas
that had underperformed, such as consumer staples and health care,
where we added to positions in Australia, such as supermarket
operator Coles, and
diagnostics company Sonic
Healthcare. These were, in part, financed by reductions to
banks, including the Australian names and Sumitomo Mitsui Financial Group in
Japan, that had done well. We also reduced the overweight to real
estate, trimming a number of names across the region.
Financials and IT remain the Company's two largest exposures, with
the IT exposure predominantly coming through positions in Taiwan
and Korea, where both the cycle and long term outlook remains
favourable.
Investment outlook and policy
Most of 2023 and the start of this
year have been disappointing for Asian markets relative to global
equities, with the region lagging developed markets. Much of this
performance gap was driven by a divergence in valuation
multiples through the year, with China and Hong Kong in particular
experiencing significant de-rating for reasons outlined
above.
Geopolitics has been another concern
overhanging the region, with tensions around US-China relations,
Taiwan, Ukraine and most recently the Middle East all contributing
to investor caution. Positively, despite having the potential to
escalate cross-strait tensions, the recent Taiwanese election
passed off uneventfully with a result which was broadly in line
with expectations. However, later in the year, we have the US
elections and there remains the potential for heightened market
volatility as these approach, where rhetoric on China is likely to
heat up once again after a more restrained period recently. This
can already be seen by a number of bills and policies that are
aimed at restricting Chinese growth and influence.
Nevertheless, there are some reasons
to be a little more optimistic on the outlook for the Chinese
market in 2024. Most obviously, consensus expectations are now very
low, compared to the post-reopening euphoria seen in the market at
the start of 2023, and this is reflected in lower valuations than a
year ago. There is clearly therefore scope for better market
performance, should growth surprise on the upside. Although
sentiment around the property market remains very poor, activity in
that industry is already subdued, and consumer confidence is again
at extremely depressed levels. That is not to say that there can't
be further deterioration, of course, but a large degree of
pessimism has already been priced in at this point. Given our
underweight to China, we continue to look for higher-quality stocks
that have sold off to levels which look attractive on a long-term
view. However, the reality is that it has been hard for us to find
new names that are attractive from an income perspective as many
concerns remain when it comes to investing in the Chinese market -
poor capital allocation, structurally lower nominal growth,
unpredictable regulatory and policy shifts, high debt levels - and
we remain significantly underweight the market.
We retain our preference for Hong
Kong, where valuations are generally lower and shareholder returns
are more of a focus for management teams. Although visitor numbers
to Hong Kong have picked up significantly since the borders
re-opened, the US dollar linked exchange rate system has meant that
interest rates have followed the path of US rates which has
depressed activity. If US rates do start to ease, the corollary for
Hong Kong is expected to be that monetary conditions are likely to
also improve which should be positive for the market.
Australia continues to be a market
that has historically offered great long-term returns, in large
part due to the reinvestment of dividends, but valuations are not
obviously cheap versus the rest of the region, given its strong
outperformance. Our principal exposure continues to be through the
materials and financial sectors, but a de-rating of the health
care sector and underperformance of consumer staples has seen us
add to exposure there. More recently, the prospects of a soft
landing have also seen banks perform strongly, which has led us to
reduce our exposure to them. In the South-East Asian region, we are
most exposed to Singapore, which is benefitting from its increasing
status as a regional wealth management hub, as well as the growth
of its ASEAN neighbours.
As noted above, the last 18 months
or so have been tough for many Asian exporters, with excess
inventories piling up in a variety of sectors whether in bicycles,
textiles, power tools or semiconductors, to name a few. Of course,
the demand outlook for Asian exports in 2024 remains uncertain, but
the supply-side response of manufacturers, which is more under
their control (i.e. cutting capital expenditure and production),
has led to encouraging progress on destocking across many areas.
Should expectations of a US "soft landing" come to pass, that would
likely be positive for Asian goods exports, which historically has
been supportive of Asian markets.
We remain overweight in IT, the best
performing sector in 2023, as valuations moved higher on the back
of normalising inventories, as well as the impact of AI on industry
growth rates. Despite this, we view our holdings as still trading
at relatively attractive valuations given the long-term growth
outlook for the sector.
We also remain overweight to
financials - a diverse sector spanning not only banks, but also
insurers and exchange companies. The banks we own are generally
well-capitalised, with strong deposit franchises. Many of our
holdings are in more mature markets, such as Singapore, which in
general trade at attractive valuations and decent dividend yields,
but also have exposure to their faster growing hinterland. Direct
exposure to faster growing markets, where credit penetration is
relatively low, includes Indonesia. We also continue to be
overweight Real Estate, albeit we have reduced the size of that
overweight.
As mentioned, we have narrowed some
of the underweights in those areas of the market typically
perceived as more defensive, including consumer staples, health
care and utilities. Given underperformance, relative valuations
here are starting to look more interesting.
Korea has recently benefitted from
an expectation that we might see an improvement in shareholder
returns, similar to that which has been seen in Japan over the last
few years. Korea has always looked cheap versus the region, and
this in part has been due to perceived poor corporate governance
and low shareholder returns. The government's 'Corporate Value-up'
programme is meant to improve that, and companies that could
benefit from that have performed better. We do have exposure to
several companies that have already started to demonstrate
improvement in shareholder returns, but have increased exposure to
this theme through a holding in automaker Kia.
Turning to the wider region, the
dividend yield looks relatively attractive at the moment versus a
global benchmark. In the medium to long term, dividends tend to
follow earnings and earnings have recovered materially from the
Covid lows. However, earnings growth during 2023 has faced some
ongoing pressures, as has been seen in earnings revisions trends,
particularly in some of the more cyclical areas (areas where
earnings follow the cycles of the economy) such as amongst the
energy and resource names. This year, if consensus earnings are
anything to go by, earnings growth should recover which should be a
positive, albeit we would caution that there is risk to these
earnings numbers. Still, we believe overall payout ratios in Asia
do not look extended in an absolute sense and corporates in Asia
remain relatively lowly geared (a relatively low rate of debt)
which should be supportive of dividends. The arguably more
significant impact on dividends received comes from the performance
of Sterling, which was quite strong over the past 12 months,
thus impacting the progression of dividend growth.
Overall, aggregate valuations for
the region are now trading at around long-term averages. However,
this masks a large variation across individual markets where
Singapore, China and Hong Kong, amongst others, look relatively
cheap versus history. Historically, easing global interest rates
and a weaker US dollar have been positive for Asia given the
knock-on impact to domestic monetary conditions. Therefore, if
rates do start to fall later this year, and it should be said that
recent expectations have seen the timings for cuts shift further
out, it could be a potential catalyst for the markets given where
starting valuations are.
So in conclusion, although
uncertainties remain around China's outlook, the region's
inexpensive aggregate valuations, alongside potentially easing
global interest rates, a weaker US dollar and a recovering goods
export cycle does set up a more constructive backdrop for Asian
markets in 2024, barring a global hard landing, or a more extreme
geopolitical risk event.
Sectoral breakdown of portfolio (gearing* at
5.5%)
|
Portfolio Weight
(%)
|
Information Technology
|
30.2
|
Banks
|
23.7
|
Communication Services
|
9.8
|
Other Financials
|
9.5
|
Real Estate
|
9.4
|
Materials
|
6.9
|
Consumer Discretionary
|
5.6
|
Consumer Staples
|
4.6
|
Industrials
|
2.8
|
Energy
|
1.9
|
Health Care
|
1.1
|
Utilities
|
-
|
Source: Schroders as at 29 February
2024.
Regional breakdown of portfolio (gearing* at
5.5%)
|
Portfolio Weight
(%)
|
Australia
|
21.8
|
Taiwan
|
21.5
|
Korea
|
15.9
|
Singapore
|
14.5
|
China
|
10.9
|
Hong Kong
|
10.1
|
Indonesia
|
4.5
|
Thailand
|
1.8
|
Philippines
|
1.7
|
Japan
|
1.6
|
Vietnam
|
1.2
|
Malaysia
|
-
|
New Zealand
|
-
|
Source: Schroders as at 29 February
2024.
*Borrowings used for investment
purposes, less cash, expressed as a percentage of net
assets.
Past Performance is not a guide to future performance. The
value of investments and the income from them may go down as well
as up and investors may not get back the amounts originally
invested. Any reference to
regions/countries/sectors/stocks/securities is for illustrative
purposes only and not a recommendation to buy or sell any
financial instruments or adopt a specific investment
strategy.
Schroder Investment Management Limited
22 May 2024
INVESTMENT PORTFOLIO
as at 29 February 2024
Investments are classified by the
Investment Manager in the region or country
of their main business operations or listing. Stocks in bold are
the 20 largest investments, which by value account for 57.9% (28
February 2023: 56.7% and 31 August 2023: 57.9%) of total
investments.
|
£'000
|
%
|
Australia
|
|
|
BHP
Billiton1
|
18,796
|
2.7
|
Telstra
|
17,825
|
2.6
|
National Australia Bank
|
16,808
|
2.4
|
Rio
Tinto1
|
15,354
|
2.2
|
ANZ
Group
|
10,600
|
1.5
|
Coles Group
|
10,597
|
1.5
|
Westpac Banking
|
10,103
|
1.4
|
Suncorp
|
8,861
|
1.3
|
ASX
|
8,184
|
1.2
|
Sonic Healthcare
|
6,712
|
1.0
|
Orica
|
6,166
|
0.9
|
Deterra Royalties
|
4,947
|
0.7
|
Woolworths
|
4,055
|
0.6
|
Woodside Energy
|
3,340
|
0.4
|
Mirvac
|
3,006
|
0.4
|
Total Australia
|
145,354
|
20.8
|
Taiwan
|
|
|
TSMC
|
65,544
|
9.3
|
MediaTek
|
18,877
|
2.7
|
ASE
Technology
|
14,015
|
2.0
|
Delta Electronics
|
11,033
|
1.6
|
Hon Hai Precision
Industries
|
10,172
|
1.5
|
United Microelectronics
|
9,014
|
1.3
|
Uni-President Enterprises
|
7,483
|
1.1
|
CTBC Financial
|
6,607
|
0.9
|
Total Taiwan
|
142,745
|
20.4
|
South Korea
|
|
|
Samsung Electronics (including
|
|
|
preference shares)
|
63,912
|
9.1
|
Samsung Fire and Marine Insurance
|
|
|
(including preference shares)
|
13,886
|
2.0
|
SK Telecom
|
10,481
|
1.5
|
Kia Corporation
|
7,478
|
1.1
|
KB Financial
|
7,419
|
1.1
|
LG Chemical preference
shares
|
1,151
|
0.2
|
Total South Korea
|
104,327
|
15.0
|
|
|
|
Singapore
|
|
|
Oversea-Chinese Banking
|
21,217
|
3.0
|
Singapore Telecommunications
|
17,942
|
2.5
|
DBS
|
12,977
|
1.9
|
CapitaLand Integrated
Commercial
|
|
|
Trust (REIT^)
|
9,030
|
1.3
|
Singapore Exchange
|
8,780
|
1.3
|
Venture
|
7,552
|
1.1
|
United Overseas Bank
|
6,691
|
1.0
|
Mapletree Industrial Trust
(REIT^)
|
6,445
|
0.9
|
Mapletree Logistics Trust
(REIT^)
|
5,110
|
0.7
|
Total Singapore
|
95,744
|
13.7
|
Mainland China
|
|
|
Midea Group warrants2 08/07/2024
|
|
|
and
A shares
|
20,024
|
2.9
|
China Petroleum & Chemical H
shares3
|
9,500
|
1.4
|
Shenzou
International3
|
8,240
|
1.2
|
China Pacific
Insurance3
|
7,474
|
1.1
|
Sany Heavy Industry A
shares
|
7,194
|
1.0
|
China Construction
Bank3
|
7,069
|
1.0
|
China Resources
Land3
|
5,524
|
0.8
|
Ping An Insurance H
shares3
|
5,341
|
0.8
|
Total Mainland China
|
70,366
|
10.2
|
Hong
Kong (SAR)
|
|
|
BOC
Hong Kong
|
18,458
|
2.6
|
HKT
Trust and HKT
|
10,484
|
1.5
|
Link REIT^
|
9,669
|
1.4
|
Hong Kong Exchanges &
Clearing
|
8,701
|
1.2
|
Swire Properties
|
5,748
|
0.8
|
Kerry Properties
|
4,585
|
0.7
|
Hang Lung Properties
|
3,839
|
0.5
|
Hang Lung Group
|
3,459
|
0.5
|
Swire Pacific B
|
3,144
|
0.5
|
Total Hong Kong (SAR)
|
68,087
|
9.7
|
Indonesia
|
|
|
Bank
Mandiri
|
16,363
|
2.3
|
Telekomunikasi Indonesia
|
8,372
|
1.2
|
Bank Negara Indonesia
|
5,820
|
0.8
|
Total Indonesia
|
30,555
|
4.3
|
Thailand
|
|
|
Kasikornbank NVDR*
|
6,728
|
1.0
|
Land and Houses NVDR*
|
5,172
|
0.7
|
Total Thailand
|
11,900
|
1.7
|
Philippines
|
|
|
International Container Terminal
|
|
|
Services
|
11,125
|
1.6
|
Total Philippines
|
11,125
|
1.6
|
Japan
|
|
|
Sumitomo Mitsui Financial
Group
|
10,186
|
1.5
|
Total Japan
|
10,186
|
1.5
|
Vietnam
|
|
|
Vietnam Dairy Products
|
7,777
|
1.1
|
Total Vietnam
|
7,777
|
1.1
|
Total Investments4
|
698,166
|
100.0
|
1 Listed in the UK
|
|
|
2 Listed in Luxembourg
|
|
|
3 Listed in Hong Kong
|
|
|
4 Total investments comprises:
|
|
|
|
|
|
|
£'000
|
%
|
Equities and NVDR
|
622,557
|
89.2
|
Preference shares
|
57,541
|
8.2
|
Warrants
|
18,068
|
2.6
|
Total Investments
|
698,166
|
100.0
|
* "NVDR" means non-voting depositary
receipts
^ "REIT" means real estate
investment trust
INTERIM MANAGEMENT STATEMENT
Investment Policy
The investment policy of the Company
is to invest in a diversified portfolio of investments, primarily
equities and equity-related investments, of companies which are
based in, or derive a significant proportion of their revenues
from, the Asia Pacific region. The portfolio is diversified across
a number of industries and a number of countries in that
region. The portfolio may include government, quasi-government,
corporate and high yield bonds and preferred shares.
Equity-related investments which the
Company may hold include investments in other collective investment
undertakings (including real estate investment trusts and related
stapled securities), warrants, depositary receipts, participation
certificates, guaranteed performance bonds, convertible bonds,
other debt securities, equity-linked notes and similar instruments
(whether or not investment grade) which give the Company access to
the performance of underlying equity securities, particularly where
the Company may be restricted from directly investing in such
underlying equity securities or where the Manager considers that
there are benefits to the Company in holding such investments
instead of directly holding the relevant underlying equity
securities. Such investments may be listed or traded outside the
Asia Pacific region. Such investments may subject the Company to
credit risk against the issuing entity. The Company may also
participate, subject to regulatory and tax implications, in
debt-to-equity conversion programmes.
The Manager may consider writing
calls over some of the Company's holdings, as a low risk way of
enhancing the returns from the portfolio, although it has not
written any to date. The Company may only invest in derivatives for
the purposes of efficient portfolio management. The Board has set a
limit such that covered calls cannot be written over portfolio
holdings representing in excess of 15% of gross assets. Investors
should note that the types of equity-related investments listed
above are not exhaustive of all of the types of securities and
financial instruments in which the Company may invest, and the
Company will retain the flexibility to make any investments unless
these are prohibited by the investment restrictions applicable to
the Company.
Although the Company has the
flexibility to invest in bonds and preferred shares as described
above, the intention of the directors is that the assets of the
Company which are invested (that is to say, which are not held in
cash, money funds, debt securities, interest bearing gilts or
treasuries) will predominantly comprise Asia Pacific equities and
equity-related investments.
Principal risks and uncertainties
The principal risks and
uncertainties of the Company's business fall into the following
categories: geopolitical, market, currency/exchange rate,
investment performance, climate change, service provider
performance, and cyber.
A detailed explanation of the risks
and uncertainties in each of these categories can be found on pages
24 to 26 of the Company's published annual report and accounts for
the year ended 31 August 2023.
These principal risks and
uncertainties have not materially changed during the six months
ended 29 February 2024.
Going concern
Having assessed the principal risks
and uncertainties, and the other matters discussed in connection
with the viability statement as set out on pages 26 and 27 of the
Company's published annual report and accounts for the year ended
31 August 2023, the directors consider it appropriate to adopt the
going concern basis in preparing the accounts.
Related party transactions
There have been no transactions with
related parties that have materially affected the financial
position or the performance of the Company during the six months
ended 29 February 2024.
Directors' responsibility statement
The directors confirm that, to the
best of their knowledge, this set of condensed financial statements
has been prepared in accordance with the Companies (Guernsey) Law,
2008, International Financial Reporting Standards and with the
Statement of Recommended Practice, "Financial Statements of
Investment Companies and Venture Capital Trusts" issued in July
2022 and that this Interim Management Report includes a fair review
of the information required by 4.2.7R and 4.2.8R of the Financial
Conduct Authority's Disclosure Guidance and Transparency
Rules.
Paul
Meader
Chairman
For and on behalf of the
Board
22 May 2024
STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 29 February
2024 (unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
For the six
months
|
For the six
months
|
For the
year
|
|
ended 29 February
2024
|
ended 28 February
2023
|
ended 31 August
2023
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Gains/(losses) on
investments
|
|
|
|
|
|
|
|
|
|
|
held at fair value through
profit
|
|
|
|
|
|
|
|
|
|
|
or loss
|
|
-
|
41,051
|
41,051
|
-
|
1,460
|
1,460
|
-
|
(55,772)
|
(55,772)
|
Net foreign currency
(losses)/gains
|
|
-
|
(118)
|
(118)
|
-
|
1,539
|
1,539
|
-
|
3,262
|
3,262
|
Income from investments
|
|
9,541
|
504
|
10,045
|
11,174
|
199
|
11,373
|
36,430
|
386
|
36,816
|
Other income
|
|
84
|
-
|
84
|
55
|
-
|
55
|
142
|
-
|
142
|
Total income/(loss)
|
|
9,625
|
41,437
|
51,062
|
11,229
|
3,198
|
14,427
|
36,572
|
(52,124)
|
(15,552)
|
Management fee
|
|
(925)
|
(1,387)
|
(2,312)
|
(995)
|
(1,492)
|
(2,487)
|
(1,935)
|
(2,903)
|
(4,838)
|
Administrative expenses
|
|
(584)
|
(1)
|
(585)
|
(556)
|
(2)
|
(558)
|
(1,130)
|
(3)
|
(1,133)
|
Profit/(loss) before finance
|
|
|
|
|
|
|
|
|
|
|
costs and taxation
|
|
8,116
|
40,049
|
48,165
|
9,678
|
1,704
|
11,382
|
33,507
|
(55,030)
|
(21,523)
|
Finance costs
|
|
(547)
|
(820)
|
(1,367)
|
(378)
|
(567)
|
(945)
|
(854)
|
(1,280)
|
(2,134)
|
Profit/(loss) before taxation
|
|
7,569
|
39,229
|
46,798
|
9,300
|
1,137
|
10,437
|
32,653
|
(56,310)
|
(23,657)
|
Taxation
|
4
|
(445)
|
-
|
(445)
|
(691)
|
-
|
(691)
|
(2,254)
|
-
|
(2,254)
|
Net
profit/(loss) and total
|
|
|
|
|
|
|
|
|
|
|
comprehensive income/(expenses)
|
|
7,124
|
39,229
|
46,353
|
8,609
|
1,137
|
9,746
|
30,399
|
(56,310)
|
(25,911)
|
Earnings/(loss)
|
|
|
|
|
|
|
|
|
|
|
per
share (pence)
|
5
|
2.84
|
15.66
|
18.50
|
3.32
|
0.44
|
3.76
|
11.81
|
(21.88)
|
(10.07)
|
The "Total" column of this statement
represents the Company's Statement of Comprehensive Income,
prepared in accordance with International Financial Reporting
Standards. The "Revenue" and "Capital" columns represent
supplementary information prepared under guidance issued by the
Association of Investment Companies. The Company has no other items
of other comprehensive income, and therefore the net profit/(loss)
for the period is also the total comprehensive income/(loss) for
the period.
All revenue and capital items in the
above statement derive from continuing operations. No operations
were acquired or discontinued in the period.
STATEMENT OF CHANGES IN EQUITY
For the six months ended 29 February
2024 (unaudited)
|
|
|
Treasury
|
Capital
|
|
|
|
|
|
|
Share
|
share
|
redemption
|
Special
|
Capital
|
Revenue
|
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
reserves
|
reserve
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 31 August 2023
|
|
234,347
|
(46,118)
|
39
|
150,374
|
272,701
|
36,865
|
648,208
|
Repurchase of ordinary shares into
treasury
|
|
-
|
(13,857)
|
-
|
-
|
-
|
-
|
(13,857)
|
Net profit and total comprehensive
income
|
|
-
|
-
|
-
|
-
|
39,229
|
7,124
|
46,353
|
Dividends paid in the
period
|
6
|
-
|
-
|
-
|
-
|
-
|
(19,525)
|
(19,525)
|
At
28 February 2024
|
|
234,347
|
(59,975)
|
39
|
150,374
|
311,930
|
24,464
|
661,179
|
For the six months ended 28 February
2023 (unaudited)
|
|
|
|
Treasury
|
Capital
|
|
|
|
|
|
|
Share
|
share
|
redemption
|
Special
|
Capital
|
Revenue
|
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
reserves
|
reserve
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 31 August 2022
|
|
234,347
|
(25,991)
|
39
|
150,374
|
329,011
|
36,367
|
724,147
|
Repurchase of shares into
treasury
|
|
-
|
(7,797)
|
-
|
-
|
-
|
-
|
(7,797)
|
Net profit and total comprehensive
income
|
|
-
|
-
|
-
|
-
|
1,137
|
8,609
|
9,746
|
Dividends paid in the
period
|
6
|
-
|
-
|
-
|
-
|
-
|
(19,692)
|
(19,692)
|
At
28 February 2023
|
|
234,347
|
(33,788)
|
39
|
150,374
|
330,148
|
25,284
|
706,404
|
For the year ended 31 August 2023
(audited)
|
|
|
|
Treasury
|
Capital
|
|
|
|
|
|
|
Share
|
share
|
redemption
|
Special
|
Capital
|
Revenue
|
|
|
|
capital
|
reserve
|
reserve
|
reserve
|
reserves
|
reserve
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 31 August 2022
|
|
234,347
|
(25,991)
|
39
|
150,374
|
329,011
|
36,367
|
724,147
|
Repurchase of ordinary shares into
treasury
|
|
-
|
(20,127)
|
-
|
-
|
-
|
-
|
(20,127)
|
Net (loss) /profit and total
comprehensive
|
|
|
|
|
|
|
|
|
(expenses)/income
|
|
-
|
-
|
-
|
-
|
(56,310)
|
30,399
|
(25,911)
|
Dividends paid in the year
|
6
|
-
|
-
|
-
|
-
|
-
|
(29,901)
|
(29,901)
|
At
31 August 2023
|
|
234,347
|
(46,118)
|
39
|
150,374
|
272,701
|
36,865
|
648,208
|
STATEMENT OF FINANCIAL POSITION
as at 29 February 2024
(unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
|
Note
|
£'000
|
£'000
|
£'000
|
Non-current assets
|
|
|
|
|
Investments at fair value through
profit or loss
|
|
698,166
|
740,122
|
676,323
|
Current assets
|
|
|
|
|
Receivables
|
|
3,130
|
3,158
|
4,271
|
Cash and cash equivalents
|
|
3,044
|
7,087
|
11,000
|
|
|
6,174
|
10,245
|
15,271
|
Total assets
|
|
704,340
|
750,367
|
691,594
|
Current liabilities
|
|
|
|
|
Payables
|
|
(43,161)
|
(43,963)
|
(43,386)
|
Net
assets
|
|
661,179
|
706,404
|
648,208
|
Equity attributable to shareholders
|
|
|
|
|
Share capital
|
7
|
234,347
|
234,347
|
234,347
|
Treasury share reserve
|
|
(59,975)
|
(33,788)
|
(46,118)
|
Capital redemption reserve
|
|
39
|
39
|
39
|
Special reserve
|
|
150,374
|
150,374
|
150,374
|
Capital reserves
|
|
311,930
|
330,148
|
272,701
|
Revenue reserve
|
|
24,464
|
25,284
|
36,865
|
Total equity attributable to shareholders
|
|
661,179
|
706,404
|
648,208
|
Net
asset value per share (pence)
|
8
|
267.12
|
273.73
|
256.01
|
Registered in Guernsey
Company registration number:
43298
CASH
FLOW STATEMENT
for the six months ended 29 February
2024 (unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
For the six
|
For the six
|
For the
|
|
months
ended
|
months
ended
|
year ended
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
|
£'000
|
£'000
|
£'000
|
Operating activities
|
|
|
|
Profit/(loss) before finance costs
and taxation
|
48,165
|
11,382
|
(21,523)
|
Add back net foreign currency
losses/(gains)
|
118
|
(1,539)
|
(3,262)
|
(Gains)/losses on investments at fair
value through profit or loss
|
(41,051)
|
(1,460)
|
55,772
|
Net sales of investments at fair
value through profit or loss
|
17,038
|
11,659
|
20,161
|
Decrease in receivables
|
1,903
|
1,044
|
274
|
Increase in payables
|
1,149
|
1,194
|
10
|
Overseas taxation paid
|
(427)
|
(487)
|
(2,247)
|
Net
cash inflow from operating activities
|
26,895
|
21,793
|
49,185
|
Financing activities
|
26,895
|
21,793
|
49,185
|
Interest paid
|
(1,365)
|
(979)
|
(2,168)
|
Repurchase of ordinary shares into
treasury
|
(13,911)
|
(8,059)
|
(20,022)
|
Dividends paid
|
(19,525)
|
(19,692)
|
(29,901)
|
Net
cash outflow from financing activities
|
(34,801)
|
(28,730)
|
(52,091)
|
Decrease in cash and cash equivalents
|
(7,906)
|
(6,937)
|
(2,906)
|
Cash and cash equivalents at the
start of the period
|
11,000
|
14,155
|
14,155
|
Effect of foreign exchange rate
changes on cash and cash equivalents
|
(50)
|
(131)
|
(249)
|
Cash
and cash equivalents at the end of the period
|
3,044
|
7,087
|
11,000
|
Dividends received during the period
amounted to £11,800,000 (period ended 28 February 2023: £12,428,000
and year ended 31 August 2023: £37,004,000) and bond and deposit
interest receipts amounted to £100,000 (period ended 28 February
2023: £45,000 and year ended 31 August 2023: £117,000).
NOTES TO THE FINANCIAL STATEMENTS
1. Principal activity
The Company carries on business as a
Guernsey closed-ended investment company.
2. Financial statements
The financial information for the
six months ended 29 February 2024 and 28 February 2023 has not been
audited or reviewed by the Company's auditor. These financial
statements do not include all of the information required to be
included in annual financial statements and should be read in
conjunction with the financial statements of the Company for the
year ended 31 August 2023.
3. Accounting policies
(a)
Basis of accounting
The financial statements have been
prepared in accordance with International Accounting Standard 34
"Interim Financial Reporting" and the accounting policies set out
in the statutory accounts of the Company for the year ended 31
August 2023. Where presentational guidance set out in the Statement
of Recommended Practice (the "SORP") for investment trusts issued
by the Association of Investment Companies in July 2023 is
consistent with the requirements of International Financial
Reporting Standards, the financial statements have been prepared on
a basis compliant with the recommendations of the SORP.
(b) Accounting
estimates
In common with many other investment
companies, the Board has chosen to adopt the 'allocation approach',
as set out in the SORP, and has determined that basis of allocation
of expenses to capital should reflect the long term split of
returns in the form of capital gains and income. The Company
allocates 60% of the management fee and finance costs to capital
and the remaining 40% to revenue. The Board monitors the
assumptions that underpin the basis of allocation.
4. Taxation
Taxation comprises irrecoverable
overseas withholding tax deducted from dividends receivable. The
Company became resident in the United Kingdom for taxation purposes
on 1 September 2020 and has been granted approval as an investment
trust under Sections 1158 and 1159 of the Corporation Tax Act 2010,
from that date.
5. Earnings/(losses) per share
|
(Unaudited)
|
(Unaudited)
|
|
|
Six months
|
Six months
|
(Audited)
|
|
ended
|
ended
|
Year ended
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
|
£'000
|
£'000
|
£'000
|
Net revenue profit
|
7,124
|
8,609
|
30,399
|
Net capital profit/(loss)
|
39,229
|
1,137
|
(56,310)
|
Net
total profit
|
46,353
|
9,746
|
(25,911)
|
Weighted average number of shares in
issue during the period
|
250,573,464
|
259,185,344
|
257,369,408
|
Revenue earnings per share
(pence)
|
2.84
|
3.32
|
11.81
|
Capital earnings/(loss) per share
(pence)
|
15.66
|
0.44
|
(21.88)
|
Total earnings/(loss) per share (pence)
|
18.50
|
3.76
|
(10.07)
|
6. Dividends paid
|
(Unaudited)
|
(Unaudited)
|
|
|
Six months
|
Six months
|
(Audited)
|
|
ended
|
ended
|
Year ended
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
|
£'000
|
£'000
|
£'000
|
2023 fourth interim dividend of 5.80p
(2022: 5.60p)
|
14,547
|
14,527
|
14,527
|
First interim dividend of 2.00p
(2023: 2.00p)
|
4,978
|
5,165
|
5,165
|
Second interim dividend of
2.00p
|
-
|
-
|
5,124
|
Third interim dividend of
2.00p
|
-
|
-
|
5,085
|
Total dividends paid in the period
|
19,525
|
19,692
|
29,901
|
A second interim dividend of 2.00p
(2023: 2.00p) per share, amounting to £4,899,000 (2023: £5,124,000)
has been declared payable in respect of the year ending 31 August
2024.
7. Share capital
Changes in the number of shares in
issue during the period were as follows:
|
(Unaudited)
|
(Unaudited)
|
|
|
Six months
|
Six months
|
(Audited)
|
|
ended
|
ended
|
Year ended
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
Ordinary shares of 1p each, allotted,
called-up and fully paid
|
|
|
|
Opening balance of shares in issue,
excluding shares held in treasury
|
253,193,024
|
261,203,024
|
261,203,024
|
Repurchase of shares into
treasury
|
(5,670,000)
|
(3,135,000)
|
8,010,000
|
Closing balance of shares in issue, excluding shares held in
treasury
|
247,523,024
|
258,068,024
|
253,193,024
|
Shares held in treasury
|
23,710,000
|
13,165,000
|
18,040,000
|
Closing balance of shares in issue
|
271,233,024
|
271,233,024
|
271,233,024
|
8. Net asset value per share
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
Net assets attributable to
shareholders (£'000)
|
661,179
|
706,404
|
648,208
|
Shares in issue at the period end,
excluding shares held in treasury
|
247,523,024
|
258,068,024
|
253,193,024
|
Net asset value per share
(pence)
|
267.12
|
273.73
|
256.01
|
9. Financial instruments measured at fair
value
The Company's portfolio of
investments, comprising investments in companies and any
derivatives, are carried in the balance sheet at fair value. Other
financial instruments held by the Company comprise amounts due to
or from brokers, dividends and interest receivable, accruals, cash
and drawings on the credit facility. For these instruments, the
balance sheet amount is a reasonable approximation of fair value.
The recognition and measurement policies for financial instruments
measured at fair value have not changed from those set out in the
statutory accounts of the Company for the year ended 31 August
2023.
The investments in the Company's
portfolio are categorised into a hierarchy comprising the following
three levels:
Level 1 - valued using quoted prices
in active markets.
Level 2 - valued by reference to
valuation techniques using observable inputs other than quoted
market prices included within Level 1.
Level 3 - valued by reference to
valuation techniques using inputs that are not based on observable
market data.
Categorisation within the hierarchy
has been determined on the basis of the lowest level input that is
significant to the fair value measurement of the relevant
asset.
At 29 February 2024, the Company's
investment portfolio and derivative financial instruments were
categorised as follows:
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
|
£'000
|
£'000
|
£'000
|
Level 1
|
680,098
|
721,538
|
658,116
|
Level 2
|
18,068
|
18,584
|
18,207
|
Level 3
|
-
|
-
|
-
|
Total
|
698,166
|
740,122
|
676,323
|
Level 2 investments comprise one
holding in Midea Group warrants.
There have been no transfers between
Levels 1, 2 or 3 during the period (period ended 28 February 2023
and year ended 31 August 2023: nil).
10. Events after the interim period
that have not been reflected in the financial statements for
the interim period
The directors have evaluated the
period since the interim date and have not noted any significant
events which have not been reflected in the financial
statements.
ALTERNATIVE PERFORMANCE MEASURES ("APMS") AND DEFINITIONS OF
FINANCIAL TERMS
The
terms and performance measures below are those commonly used by
investment companies to assess values, investment performance and
operating costs. Numerical calculations are given where relevant.
Some of the financial measures below are classified APMs as defined
by the European Securities and Markets Authority. Under this
definition, APMs include a financial measure of historical
financial performance or financial position, other than
a financial measure defined or specified in the applicable
financial reporting framework. APMs have been marked with an
asterisk.
Net
asset value ("NAV") per share
The NAV per share of 267.12p (31
August 2023: 256.01p) represents the net assets attributable to
equity shareholders of £661,179,000 (31 August 2023:
£648,208,000) divided by the number of shares in issue, excluding
shares held in treasury of 247,523,024 (31 August 2023:
253,193,024).
The change in the NAV amounted to
+4.3% (year ended 31 August 2023: -7.7%) over the period. However
this performance measure excludes the positive impact of dividends
paid out by the Company during the period. When these dividends are
factored into the calculation, the resulting performance measure is
termed the "total return". Total return calculations and
definitions are given below.
Total return*
The combined effect of any dividends
paid, together with the rise or fall in the share price or NAV per
share. Total return statistics enable the investor to make
performance comparisons between investment companies with different
dividend policies. Any dividends received by a shareholder are
assumed to have been reinvested in either the assets of the Company
at its NAV per share at the time the shares were quoted ex-dividend
(to calculate the NAV per share total return) or in additional
shares of the Company (to calculate the share price total
return).
The NAV total return for the period
ended 29 February 2024 is calculated as follows:
Opening NAV at 31/8/23
|
256.01p
|
Closing NAV at 29/2/24
|
267.12p
|
|
|
NAV on
|
|
Cumulative
|
Dividend received
|
XD date
|
XD date
|
Factor
|
factor
|
5.80p
|
16/11/23
|
257.58p
|
1.0225
|
1.0225
|
2.00p
|
1/2/24
|
256.89p
|
1.0078
|
1.0305
|
NAV total return, being the closing
NAV, multiplied
by the cumulative factor, expressed
as a percentage
|
|
|
increase in the opening
NAV:
|
+7.5%
|
The NAV total return for the six
months ended 28 February 2023 is calculated as follows:
Opening NAV at 31/8/22
|
277.24p
|
Closing NAV at 28/2/23
|
273.73p
|
|
|
NAV on
|
|
Cumulative
|
Dividend received
|
XD date
|
XD date
|
Factor
|
factor
|
5.60p
|
10/11/22
|
250.92p
|
1.0223
|
1.0223
|
2.00p
|
26/1/23
|
286.60p
|
1.0070
|
1.0295
|
|
|
|
|
| |
NAV total return, being the closing
NAV, multiplied
by the cumulative factor, expressed
as a percentage
increase in the opening
NAV:
|
1.6%
|
The share price total return for the
period ended 29 February 2024 is calculated as follows:
Opening share price at
31/8/23
|
|
|
|
244.50p
|
Closing share price at
29/2/24
|
|
|
|
250.00p
|
|
|
Share
|
|
|
|
|
price on
|
|
Cumulative
|
Dividend received
|
XD date
|
XD date
|
Factor
|
factor
|
5.80p
|
16/11/23
|
243.00p
|
1.0239
|
1.0239
|
2.00p
|
1/2/24
|
241.00p
|
1.0083
|
1.0324
|
Share price total return, being the
closing share
|
|
price, multiplied by the cumulative
factor, expressed
|
|
as a percentage increase in the
opening share price:
|
+5.6%
|
The share price total return for the
six months ended 28 February 2023 is calculated as
follows:
|
|
Opening share price at
31/8/22
|
264.00p
|
Closing share price at
28/2/23
|
264.00p
|
|
|
Share
|
|
|
|
|
price on
|
|
Cumulative
|
Dividend received
|
XD date
|
XD date
|
Factor
|
factor
|
5.60p
|
10/11/22
|
248.00p
|
1.0226
|
1.0226
|
2.00p
|
26/1/23
|
277.50p
|
1.0072
|
1.0300
|
|
|
|
|
|
|
| |
Share price total return, being the
closing share price,
multiplied by the cumulative factor,
expressed as a
percentage increase in the opening
share price:
|
3.0%
|
Discount/premium*
The amount by which the share price
of an investment trust is lower (discount) or higher (premium) than
the NAV per share. If shares are trading at a discount, investors
would be paying less than the value attributable to the shares by
reference to the underlying assets. A premium or discount is
generally the consequence of supply and demand for the shares on
the stock market. The discount or premium is expressed as a
percentage of the NAV per share. The discount at the period end
amounted to 6.4% (31 August 2023: 4.5%), as the closing share price
at 250.00p (31 August 2023: 244.50p) was 6.4% (31 August 2023:
4.5%) lower than the closing NAV of 267.12p (31 August 2023:
256.01p).
Gearing*
The gearing percentage reflects the
amount of borrowings (i.e. bank loans or overdrafts) which the
Company has drawn down and invested in the market. This figure is
indicative of the extra amount by which shareholders' funds would
move if the Company's investments were to rise or fall. Gearing is
defined as: borrowings used for investment purposes, less cash,
expressed as a percentage of net assets. The gearing figure at the
relevant period/year end is calculated as follows:
|
|
29 February
|
31 August
|
|
|
2024
|
2023
|
|
|
£'000
|
£'000
|
Borrowings used for investment
purposes, less cash
|
|
36,536
|
28,459
|
Net assets
|
|
661,179
|
648,208
|
Gearing
|
|
5.5%
|
4.4%
|
Ongoing charges ratio*
Ongoing charges ratio is calculated
in accordance with the AIC's recommended methodology and represents
the management fee and all other operating expenses excluding
finance costs and transaction costs, amounting to £5,869,000 (31
August 2023: £5,971,000), expressed as a percentage of the average
daily net asset values during the period of £651.1 million (31
August 2023: £678.7 million).
SHAREHOLDER INFORMATION
Warning to shareholders
Companies are aware that their
shareholders have received unsolicited telephone calls or
correspondence concerning investment matters. These are typically
from overseas-based 'brokers' who target UK shareholders, offering
to sell them what often turn out to be worthless or high risk
shares or investments.
These operations are commonly known
as 'boiler rooms'. These 'brokers' can be very persistent and
extremely persuasive.
Shareholders are advised to be wary
of any unsolicited advice, offers to buy shares at a discount or
offers of free company reports. If you receive any unsolicited
investment advice:
• Make sure you get
the correct name of the person and organisation
• Check that they
are properly authorised by the FCA before getting involved by
visiting register.fca.org.uk
• Report the matter
to the FCA by calling 0800 111 6768 or visiting
fca.org.uk/consumers/report-scam-unauthorised-firm
• Do not deal with
any firm that you are unsure about
If you deal with an unauthorised
firm, you will not be eligible to receive payment under the
Financial Services Compensation Scheme. The FCA provides a list of
unauthorised firms of which it is aware, which can be accessed at
fca.org.uk/consumers/unauthorised-firms-individuals#list.
More detailed information on this or
similar activity can be found on the FCA website at
fca.org.uk/consumers/protect-yourself-scams.
Dividends
Paying dividends into a bank or
building society account helps reduce the risk of fraud and will
provide you with quicker access to your funds than payment by
cheque. Applications for an electronic mandate can be made by
contacting the Registrar. If your dividend is paid directly into
your bank or building society account, you will receive an annual
consolidated dividend confirmation, which will be sent to you in
September each year at the time the interim dividend is paid.
Dividend confirmations are available electronically at
investorcentre.co.uk to those Shareholders who have their payments
mandated to their bank or building society accounts and who have
expressed a preference for electronic communications.