21/05/2019 16:29:00

Portfolio Update

BlackRock Throgmorton Trust Plc - Portfolio Update

PR Newswire

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)

 

All information is at 30 April 2019 and unaudited.

Performance at month end is calculated on a cum income basis

One

Month

%

Three

months

%

One

year

%

Three

years

%

Five

years

%

Net asset value5.710.81.057.482.4
Share price7.512.75.177.096.6
Benchmark*4.15.7-5.023.132.9

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. The performance of the indices have been blended to reflect this.

At month end

Net asset value capital only:563.77p
Net asset value incl. income:567.76p
Share price544.00p
Discount to cum income NAV4.2%
Net yield1:1.8%
Total Gross assets2:£415.2m
Net market exposure as a % of net asset value3:95.6%
Ordinary shares in issue4:73,130,326
2018 ongoing charges (excluding performance fees)5,6:0.6%
2018 ongoing charges ratio (including performance fees)5,6,7:1.3%

1. Calculated using the 2018 interim dividend declared on 26 July 2018 and paid on 29 August 2018, together with the 2018 final dividend declared on 12 February 2019 and paid on 28 March 2019.

2. Includes current year revenue and excludes gross exposure through contracts for difference.

3. Long exposure less short exposure as a percentage of net asset value.

4. Excluding 7,400,000 shares held in treasury.

5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2018.

6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.

7. Effective 1st December 2017 the annual performance fee is calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total management fees (comprising the base management fee of 0.35% and a potential performance fee of 0.90%) are therefore 1.25% of average month end gross assets on a two year rolling basis (from 1.70% of average annual gross assets).

Sector Weightings

% of Total Assets

Consumer Services26.1
Financials23.6
Industrials20.7
Technology8.5
Health Care7.3
Consumer Goods6.7
Basic Materials2.4
Telecommunications1.3
Net current assets                                 3.4
-----

Total

100.0
=====

   

Market Exposure (Quarterly)

31.05.18

%

31.08.18

%

30.11.18

%

28.02.19

%

Long115.9119.4103.7108.7
Short10.09.610.514.9
Gross exposure125.9129.0114.2123.6
Net exposure105.9109.893.293.8

   

Ten Largest Investments

Company

% of Total Gross Assets

JD Sports Fashion3.1
SSP3.0
Aveva3.0
4imprint Group3.0
Dechra Pharmaceuticals3.0
IntegraFin2.9
YouGov2.7
Bodycote2.5
Workspace Group2.4
Craneware2.3

Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:

During April the Company’s NAV per share rose by 5.7% to 567.76p on a cum income basis, outperforming our benchmark index, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index, which rose by 4.1%.

This was a strong month for the Company in both absolute and relative terms, benefitting from stock specific alpha driven by positive updates from some of our core holdings, and also from stock selection as we avoided some high profile profit warnings from companies in our benchmark and in some cases benefitted from being short in these companies.

The largest positive contributor to performance during the month came from our long position in JD Sports, which rallied strongly in response to another “beat and raise” from the company at their full year results. This generated over 0.5% of positive performance. What this company has achieved in sales and profit growth, not just over the last 12 months, but over the last 5 years, is truly impressive considering the pressures facing bricks and mortar retailing and illustrates the differentiated proposition and multi-channel approach to retailing that this management team have created. The second and third largest contributors to performance were from companies in our benchmark that fell heavily but which we did not own, namely Saga and Funding Circle. Both of these companies reveal how the active decision not to own a position in them can be as beneficial to performance as picking the winners like JD Sports.

The three largest detractors to performance were from long positions in YouGov, WH Smith and Dechra Pharmaceuticals. YouGov delivered another set of robust results in the month but gave back a little of its recent gains. We had a positive update with the company and it remains one of the larger positions in the portfolio. Dechra and WH Smith are also two of the larger positions in the Company, so fairly insignificant share price movements can weigh on returns, with both of these investments costing the Company less than 0.2% each. Decrha didn’t update the market so its small share price retreat wasn’t news flow related and WH Smith delivered strong results in our opinion, with further positive revisions to forecasts, however the shares gave back a little over the month which we think reflects a brief period of consolidation after a strong run in the shares.

The extension of the Brexit process might provide a temporary respite from the endless media headlines and political machinations, so maybe a little more attention can return to shares and fundamentals. We remain hopeful and continue to highlight the importance of stock specifics in the current environment and the greater dispersion in winners and losers that this market regime and political backdrop can generate. Whether they are key contributors or detractors, focusing on company and industry fundamentals will be the driver of this Company’s returns. Thankfully during April we have been on the right side of company updates in the vast majority of cases, and we could point to many other examples of companies that have continued to deliver which have helped drive April’s returns, e.g. RWS and IntegraFin. April also benefited from some stock specific wins in the short book, notably in Support Services and Technology. We therefore continue to feel comfortable with the portfolio positioning. While the gross and net exposures remain lower than normal levels, reflecting increased risks in the current environment, we believe the portfolio can continue to generate alpha driven by stock and industry specific outcomes, regardless of the wider macro environment. 

1Source: BlackRock as at 30 April 2019

21 May 2019

ENDS

Latest information is available by typing www.blackrock.co.uk/thrg on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

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