TIDMCGT
To:PR Newswire
From:Capital Gearing Trust P.l.c.
LEI: 213800T2PJTPVF1UGW53
Date:13 November 2023
Capital Gearing Trust P.l.c. (the "Company")
Announcement of the Half-Year Financial Report for the six months ended 30
September 2023
Chairman's Statement
Investment Performance
At the half year to 30 September 2023, the net asset value per share (`NAV') was
4,674.9p, compared to 4,797.3p at 31 March 2023. This represents a NAV total
return of -1.3% over the past six months. This return was better than the global
aggregate bond index and the investment trust index which returned -3.8% and
-1.7% respectively in Sterling terms. Whilst it is always disappointing to
report negative returns the defensive orientation of the portfolio did provide
some protection from simultaneously weak bond and equity markets. The returns
lagged Consumer Price Index (`CPI') inflation of 2.4% in the period.
The share price ended the half year at 4,585p, a fall of 1.8%. During the period
2,218,929 shares, with an aggregate value of £102.1m, were bought back under the
Company's discount control policy (`DCP').
Discount Control Policy Update
Since 2015 the Company has operated the DCP which aims to ensure that, in normal
market conditions, the shares trade consistently close to their underlying NAV.
As announced on 31 October 2023, the Company was in the process of seeking
approval from the Northern Irish Courts to reclassify its share premium account
as a distributable reserve to continue to support the DCP. In our announcement,
we referred to this process having been subject to significant delays as a
result of various "technical and administrative issues". It is now clear that
these issues comprise a series of errors and omissions on the part of third
parties. As a result, the Board has decided to take direct control over this
process and has agreed a revised timetable to take this through to a successful
conclusion. This will start with refreshing the requisite shareholder authority
at a soon to be convened General Meeting and should result in the reserves being
created in the early part of next year. The Board is extremely frustrated by the
delay caused in the process and the fact that it was not made aware of this
until very recently. The Board intends to investigate matters further and seek
compensation for any costs incurred whilst reserving all the Company's other
rights.
Following the cancellation of the share premium account the Company will have
very significant headroom in its reserves to support the DCP for the foreseeable
future. Shareholders should be assured that the Board remains fully committed to
the DCP and any temporary modifications will be reversed as soon as the Northern
Irish Court process is concluded.
Performance Comparators
The Company does not have a formal benchmark but over the years has compared its
performance against Retail Price Index (`RPI') inflation and the MSCI UK index.
RPI inflation is no longer classified as a national statistic by the Office for
National Statistics due to methodological flaws. It has been replaced by CPI
inflation, which we will now refer to as a comparator. As a number of
shareholders have pointed out, neither our investment objective nor our
portfolio construction reflect the UK equity market, so the Company will no
longer use the MSCI UK index as a comparator but may refer to equity indices
more generally when looking at specific components of performance.
Board Update
We are pleased to welcome Ravi Anand as a non-executive Director with effect
from 1 August 2023. Ravi has already made a positive impact on our discussions
pulling on his experience of investment trusts and financial services more
generally.
Wendy Colquhoun has been appointed as Chair of the Nominations Committee to lead
our Board succession planning. Robin Archibald will retire at the 2024 AGM after
nine years on the Board. As noted in the Annual Report, to avoid two long
standing Directors departing at the same time, it has been agreed that I will
remain on the Board for a further period of one or two years beyond 2024 to
enable a further Board member to be recruited and to oversee an orderly handover
to a new Chairman.
Outlook
It seems likely that the second half of the year will continue to be
challenging, as all asset markets are buffeted by a deteriorating geopolitical
backdrop, high interest rates and lingering inflation. Against this backdrop the
Company remains defensively positioned, with a relatively constrained allocation
to equities and significant exposure to short duration high quality bonds.
However, with volatile markets come opportunities and the investment manager
will seek to exploit falling prices in the bond and equity markets when values
become compelling.
Jean Matterson
Chairman
10 November 2023
Investment Manager's Report
Investment Review
The first half of the financial year has proven challenging with a negative
return of 1.3%. The six month period was characterised by rising interest rates
in developed markets which proved a headwind to our bond portfolios and rising
investment trust discounts, particularly in the alternatives sector, which were
a challenge to our risk assets.
Despite the headwinds, corporate bonds and risk assets made positive
contributions to the portfolio. Detracting from performance were nominal
government bonds, index-linked bonds, and gold. The Company's nominal government
bonds comprise treasury bills and short duration bonds. A significant majority
of these are denominated in Sterling and generated positive returns. However,
the holdings of Japanese treasury bills (2%) and Swedish government bonds (2%)
both made negative contributions as sterling appreciated by 10.1% and 3.6%
against the Japanese Yen and Swedish Krona, respectively.
Since the start of 2021, the Yen has risen from 141 to the pound to 182.
Adjusting for relative inflation, it has depreciated by over 30%. We remain
convinced of the Yen's attraction and have a 9% weighting to the currency. This
is both on valuation grounds and portfolio composition. On all purchasing power
parity (`PPP') measures, the Yen appears to be extraordinarily cheap. The
portfolio role for the Yen is also important. Japan is the single largest
overseas holder of US government bonds. There is a concern, justified in our
view, that a change in Japanese monetary policy could result in huge sales of
treasuries and repatriation of the proceeds. Were this to happen, rising yields
on US government bonds should be accompanied by gains on the Yen.
Index-linked bonds were the other source of negative returns. The Company's
holdings of UK index-linked bonds (23% of the portfolio) made positive
contributions, helped by the very short duration. We took advantage of weakness
over the summer to lengthen duration adding to 5 year bonds on very attractive
yields. US TIPS were the chief detractor during the period as 10 year yields
rose by around 100 basis points.
Corporate bonds delivered positive returns of 1.9% over the six months. Gains
were broad based. The portfolio currently has a duration of around 2.5 years and
yields around 7% with the vast majority carrying an investment grade credit
rating. While pleased with the performance of our credit portfolio, with credit
spreads tight and a deteriorating macroeconomic environment, we are reluctant to
increase the Company's allocation to the asset class or take on additional
duration risk.
Risk assets contributed positively over the six-month period with conventional
equities returning over 5%. Our two largest holdings the SPDR Europe Energy ETF
and the iShares MSCI Japan ESG ETF returned 13.6% and 5.9% respectively. Our
property holdings contributed 6.5%, buoyed by Civitas Social Housing being
subject to a takeover bid. The only significant drag on return was our
infrastructure holdings which delivered a negative return of 11%. We have taken
the opportunity to add to our infrastructure holdings on the back of share price
weakness. They offer, based on conservative assumptions, prospective real
returns of mid-single digits: equal or higher than the long-term return on
equities with considerably lower risk. Such returns are very appetising.
With discounts so wide in the alternatives sector it is reasonable to ask
whether the stated NAVs can be relied upon. Our answer is a cautious "yes". The
evidence of solidity is mounting with asset disposals at or above book value
being announced across many trusts in multiple sectors. If the valuations can be
relied upon why are so many trusts trading at large discounts? It is simply a
question of supply, demand and the quantity theory of asset prices. Huge amounts
of capital have been raised in the alternative space in recent years. Over the
last 18months multi-asset funds have seen large redemptions and wealth managers
have switched their focus to highly tax efficient low coupon gilts. With demand
falling and the supply remaining constant, the balancing variable - price - must
take the strain, with all too painful consequences. The diagnosis reveals the
cure. With no prospect for a change in demand, supply needs to be withdrawn from
the sector. For now the only contraction comes from takeovers. It would be
preferable for the sector to help itself by selling assets and buying-back
shares or returning capital to shareholders. We see precious little evidence of
this to date and have generally been frustrated by the attitudes of boards and
management teams. We will continue to engage with boards and hope to report
greater progress to you in the full year results.
Outlook
The key feature of the last six months has been the surprising resilience of the
US economy (and, to a lesser extent, Europe and the UK). This has resulted in
the market coming to believe the Federal Reserve when they said that rates
needed to be "higher for longer". Accompanying this realisation is a growing
chorus of voices calling for a "soft landing". We remain sceptical of this
outcome: the effects of the rate hiking cycle have not fully flowed into the
economy, credit availability is falling rapidly, and the money supply is
shrinking. As Niall Ferguson recently put it "The US economy's not a plane and
it won't land gently". Nor is history on the side of the optimists, indeed the
swelling chorus may itself be a siren song. There was a huge spike in the number
of articles containing the phrase "soft landing" in both 1999/2000 and 2007/08.
We worry that history will repeat itself.
Markets do not share our concerns: credit spreads and equity risk premia are
low. In the full year results we wrote that the most rapid rate hiking cycle,
following on from an extended period of ultra-cheap money, might result in the
financial system breaking. So far this has not come to pass. That crises at
Credit Suisse and Silicon Valley Bank were contained does not mean that future
crises will be avoided. To give an example, at the end of Q3 Bank of America's
losses on its hold to maturity portfolio - mostly comprising agency mortgage
bonds - were $130 bn, around 58% of its tier 1 capital. Given the subsequent
moves in rates we can only assume those losses have grown. This is just one bank
and one part of its balance sheet. The scale of losses throughout the financial
system must be very large indeed.
Ordinarily a financial crisis or a recession would be bullish for long bonds.
While this may yet occur, it is by no means certain. Short dated bonds will
rally as markets anticipate rate cuts from the Federal Reserve. What happens to
longer dated bonds is less clear. If the Fed is forced to cut rates before
inflation has been brought under control, then long term interest rates may rise
as investors price higher inflation and demand additional term premium to
compensate for volatility.
Such a move might be exacerbated by concerns over debt sustainability. This year
the US budget deficit is forecast to be 7.7% of GDP - a truly staggering $2tn. A
recession would only make this figure worse. As the Federal Government rolls
over its debts (around one third over the next 12 months) it is paying real
interest rates of around 2.5%. This is higher than the trend growth rate of the
economy. The formula r - g(1) neatly encapsulates the problem. It shows that the
debt to GDP ratio would rise even if it were to run a balanced primary budget.
For the past two decades the increasing debt stock of the US has been financed
by relatively price insensitive buyers(2). The appetite of these buyers is
waning and new buyers will need to be found. The price of money may rise to
enable the market to clear. The knock-on impact to other asset classes is
unknown but fiscal dominance and crowding out must be a risk.
Eventually, these high yields are the source of their own destruction. There are
only two ways in which government borrowings can be made sustainable. Either
countries must run balanced budgets or, through financial repression, reduce the
interest rate they pay on their debts. With no political constituency for fiscal
prudence the latter becomes the only viable route.
The destination is clear, but the timing and the path taken are not. There are
only three things of which we can be reasonably certain. First, the attempt by
markets to price a bi-stable regime (comprising the present regime of rising
real yields and a future regime of financial repression) will bring volatility
to bond markets. Second, long duration nominal bonds are likely to be a poor
investment across both regimes. Third, index-linked bonds will fair much better
than their nominal cousins and thrive when the financial repression eventually
comes. For the time being, we accept our inability to forecast the future and
therefore adopt a cautious stance, positioning the portfolio to withstand and
ultimately, we hope, profit from what lies ahead.
Peter Spiller Alastair Laing Christopher Clothier
10 November 2023
(1) Where r is the real cost of debt and g the trend growth of the economy
(2) These have ranged from global FX reserve managers, yield starved Japanese
pension funds, the Federal Reserve conducting QE and - in recent years -
domestic banks trying to invest a glut of post-Covid deposits
Interim Management Report
A review of the half year and the outlook for the Company can be found in the
Chairman's Statement and the Investment Manager's Report above.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Company were explained in
detail within the Annual Report issued in May 2023.
There remain heightened uncertainties for global economies and financial
markets, with rapid changes in interest rates, higher levels of inflation,
volatility in bond and equity markets and continued heightened geopolitical
risks impacting on energy supply and costs, global trade and economic activity.
Recent conflict in the Middle East has heightened geopolitical risk and is
likely to continue to have an adverse impact on world markets.
As announced on 31 October 2023, the Company has placed temporary limits on buy
backs under its discount control policy while it awaits approval from the
Northern Irish Court to cancel the Company's share premium account and create
additional distributable reserves. While this progresses, there is heightened
risk around the premium and discount at which the shares will trade, the
continued operation of the DCP and the Company's third party service providers
responsible for monitoring the DCP and providing administration services. The
DCP is expected to be restored in full following receipt of Court approval.
The Directors continue to work with the agents and advisers to the Company to
manage the risks, including any emerging risks the best they can.
Related Party Transactions
Details of related party transactions are contained in the Annual Report issued
in May 2023. There have been no material changes to be reported.
Going Concern
The Company's investment objective and business activities, together with the
main trends and factors likely to affect its development and performance are
monitored continuously by the Board. The Directors believe that the Company is
reasonably well placed to manage its business risks and, having reassessed the
principal risks, consider it appropriate to continue to adopt the going concern
basis of accounting in preparing the interim financial information.
Statement of Directors' Responsibilities
Each Director confirms that, to the best of their knowledge:
(i) the condensed set of financial statements has been prepared
in accordance with Financial Reporting Standard 104 (Interim Financial
Reporting);
(ii) the Half-Year Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule 4.2.7R
(indication of important events during the first six months of the financial
year and description of principal risks and uncertainties for the remaining six
months of the financial year) and includes a fair review of the information
required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of
related party transactions and changes therein); and
(iii) the Half-Year Report, taken as a whole, is fair, balanced
and understandable and provides information necessary for shareholders to access
the Company's performance, position and strategy.
For and on behalf of the Board
Jean Matterson
Chairman
10 November 2023
Investments of the
Company
at 30 September 2023
The top ten investments
in each asset category
are listed below.
30 September 2023 31 March 2023
£'000 £'000
Index-Linked Government
Bonds
Index-Linked Bonds - 257,996 267,376
United Kingdom
Index-Linked Bonds - 177,113 248,154
United States
Index-Linked Bonds - 27,553 29,840
Japan
Index-Linked Bonds - 15,036 16,693
Canada
Index-Linked Bonds - 11,003 10,997
Sweden
Index-Linked Bonds - 4,414 4,834
Australia
Index-Linked Bonds - - 5,236
Germany
493,115 583,130
Conventional Government
Bonds
Conventional Government 104,392 95,319
Bonds - United Kingdom
Conventional Government 23,399 19,304
Bonds - Sweden
Conventional Government 22,783 34,978
Bonds - Japan
Conventional Government - 5,638
Bonds - United States
150,574 155,239
Preference Shares /
Corporate Debt
Grainger 3.375% 2028 7,824 7,484
Akelius Residential 6,252 5,123
Property 2.375% 2025
BP Capital Perpetual Bond 5,277 -
Burford Capital 6.125% 5,170 4,878
2025
Network Rail 1.75% 2027 4,715 -
Liberty Living Finance 4,648 3,179
2.625% 2024
Land Securities 1.974% 4,631 -
2026
RMS IL 2.8332% 2035 4,364 3,074
NB Private Equity 4,213 -
Partners ZDP 2024
Deutsche Pfandbriefbank 4,155 4,207
7.625% 2025
Other Preference 114,517 145,842
Shares/Corporate Debt
Investments
165,766 171,787
Funds / Equities
iShares MSCI Japan ESG 42,855 46,301
Screened UCITS ETF
SPDR MSCI Europe Energy 32,622 34,236
UCITS ETF
Lyxor STOXX Europe 600 17,707 18,670
Basic Resources UCITS ETF
North Atlantic Smaller 16,078 15,335
Companies Investment
Trust
Greencoat UK Wind 14,801 14,815
Grainger 10,887 11,327
iShares S&P 500 Energy 8,392 7,795
Sector UCITS ETF
International Public 7,023 7,558
Partnerships
GCP Infrastructure 6,053 7,618
Investments
Aker Asa 6,048 8,838
Other Fund/Equity 144,877 156,104
Investments
307,343 328,597
Gold
Wisdomtree Physical Swiss 11,250 13,048
Gold
Total investments 1,128,048 1,251,801
Cash 5,006 13,766
Total 1,133,054 1,265,567
Income
Statement
Six months
ended 30
September
2023
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Net losses - (27,390) (27,390)
on
investments
Net currency - (82) (82)
losses
Investment 13,627 - 13,627
income (note
2)
Other income 160 - 160
Gross return 13,787 (27,472) (13,685)
Investment (2,188) - (2,188)
management
fee
Other (538) - (538)
expenses
Net return 11,061 (27,472) (16,411)
before tax
Tax charge (1,818) - (1,818)
on net
return
Net return 9,243 (27,472) (18,229)
attributable
to equity
shareholders
Net return 36.47p (108.40)p (71.93)p
per
Ordinary
Share (note
3)
Income Statement
Six months
ended 30
September
2022
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Net losses on - (59,969) (59,969)
investments
Net currency gains - 131 131
Investment income (note 12,711 - 12,711
2)
Other income - - -
Gross return 12,711 (59,838) (47,127)
Investment management (2,247) - (2,247)
fee
Other expenses (482) - (482)
Net return before tax 9,982 (59,838) (49,856)
Tax charge on net (656) - (656)
return
Net return attributable 9,326 (59,838) (50,512)
to equity shareholders
Net return per 39.75p (255.07)p (215.32)p
Ordinary Share (note 3)
Income
Statement
Year
ended 31
March
2023
(audited)
Revenue Capital Total
£'000 £'000 £'000
Net losses on - (68,449) (68,449)
investments
Net currency - (547) (547)
losses
Investment 24,846 - 24,846
income (note
2)
Other income 93 - 93
Gross return 24,939 (68,996) (44,057)
Investment (4,620) - (4,620)
management
fee
Other (974) - (974)
expenses
Net return 19,345 (68,996) (49,651)
before tax
Tax charge on (1,739) - (1,739)
net return
Net return 17,606 (68,996) (51,390)
attributable
to equity
shareholders
Net return 70.67p (276.96)p (206.29)p
per
Ordinary
Share (note
3)
The total
column of
this
statement
represents
the Income
Statement of
the Company.
The Revenue
return and
Capital
return
columns are
supplementary
to this and
are prepared
under
guidance
issued by the
Association
of Investment
Companies.
All revenue
and capital
items in the
above
statement
derive from
continuing
operations.
There are no
gains or
losses other
than those
recognised in
the Income
Statement.
Statement of
Changes in
Equity
(unaudited)
for the six
months
ended 30
September
2023
Called Share Capital Unrealised Realised Revenue
Total
-up premium re reserve*
share account -demption capital capital
capital
reserve reserve*
reserve
£'000 £'000 £'000 £'000 £'000 £'000
£'000
Opening 6,645 1,101,753 16 (7,973) 140,426 18,852
1,259,719
balance at 1
April 2023
Net return - - - (24,365) (3,107) 9,243
(18,229)
attributable
to equity
shareholders
and total
comprehensive
income for
the period
Shares bought - - - - (102,065) -
(102,065)
back
(note 6)
Dividends - - - - - (15,577)
(15,577)
paid (note 4)
Total - - - - (102,065) (15,577)
(117,642)
transactions
with
owners
recognised
directly in
equity
Closing 6,645 1,101,753 16 (32,338) 35,254 12,518
1,123,848
balance at 30
September
2023
for the six months ended 30 September 2022
Called Share Capital Unrealised Realised Revenue
Total
-up premium re reserve*
share account -demption capital capital
capital
reserve reserve*
reserve
£'000 £'000 £'000 £'000 £'000 £'000
£'000
Opening 5,223 816,009 16 57,222 159,561 11,804
1,049,835
balance at 1
April 2022
Net return - - - (72,894) 13,056 9,326
(50,512)
attributable
to equity
shareholders
and total
comprehensive
income for
the period
New shares 1,198 242,390 - - - -
243,588
issued (note
6)
Dividends - - - - - (10,558)
(10,558)
paid (note 4)
Total 1,198 242,390 - - - (10,558)
233,030
transactions
with
owners
recognised
directly in
equity
Closing 6,421 1,058,399 16 (15,672) 172,617 10,572
1,232,353
balance at 30
September
2022
*These reserves are regarded as being available for distribution.
Statement of Financial Position (unaudited)
at 30 September 2023
(unaudited) (unaudited) (audited)
30 30 September 2022 31 March
September
2023 2023
£'000 £'000 £'000
Fixed assets
Investments held at fair 1,128,048 1,211,490 1,251,801
value through profit or
loss
Current assets
Debtors 4,276 8,045 7,892
Cash at bank and in hand 5,006 42,578 13,766
9,282 50,623 21,658
Creditors: amounts falling (13,482) (29,760) (13,740)
due within one year
Net current (4,200) 20,863 7,918
(liabilities)/assets
Total assets less current 1,123,848 1,232,353 1,259,719
liabilities
Capital and reserves
Called-up share capital 6,645 6,421 6,645
Share premium account 1,101,753 1,058,399 1,101,753
Capital redemption reserve 16 16 16
Capital reserve 2,916 156,945 132,453
Revenue reserve 12,518 10,572 18,852
Total equity shareholders' 1,123,848 1,232,353 1,259,719
funds
Net asset value per 4,674.9p 4,798.4p 4,797.3p
Ordinary Share
The Half-Year Financial Report for the six months ended 30 September 2023 was
approved by the Board of Directors on 10 November 2023 and signed on its behalf
by:
Jean Matterson
Chairman
10 November 2023
Cash Flow Statement (unaudited)
for the six months ended 30 September 2023
(unaudited) (unaudited) (audited)
6 months ended 6 months ended Year
30 September 2023 30 September 2022 ended
31 March
2023
£'000 £'000 £'000
Net cash 5,821 7,767 16,499
inflow from
operating
activities
(note 5)
Payments to
(1,037,482)
acquire (339,122) (522,583)
investments
Receipts 440,413 264,802 713,875
from sale
of
investments
Net cash 101,291 (257,781) (323,607)
inflow/(outf
l
ow)
from
investing
activities
Equity (15,577) (10,558) (10,558)
dividends
paid
Repurchase (100,185) - (15,315)
of Ordinary
shares
Proceeds - 253,075 297,172
from the
issue
of Ordinary
shares
Cost of - (536) (1,036)
shares
issues
Cost of (110) - -
share
buybacks
Net cash (115,872) 241,981 270,263
(outflow)/in
f
low
from
financing
activities
Decrease in (8,760) (8,033) (36,845)
cash and
cash
equivalents
Cash and 13,766 50,611 50,611
cash
equivalents
at start of
period
Cash and 5,006 42,578 13,766
cash
equivalents
at end of
period
Notes to the Financial Statements
1Basis of preparation
The condensed Financial Statements for the six months to 30 September 2023
comprise the Income Statement, the Statement of Changes in Equity, the Statement
of Financial Position and the Cash Flow Statement, together with the notes set
out below. They have been prepared in accordance with FRS 104 `Interim Financial
Reporting', the AIC's Statement of Recommended Practice issued in 2022 ("SORP"),
UK Generally Accepted Accounting Principles ("UK GAAP") and using the same
accounting policies as set out in the Company's Annual Report and Accounts at 31
March 2023.
2Investment income
(unaudited) (unaudited) (audited)
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
£'000 £'000 £'000
Income from investments
Interest from UK bonds 5,116 2,570 6,049
Income from UK equity and 4,740 6,375 11,057
non-equity investments
Interest from overseas 3,474 1,505 4,973
bonds
Income from overseas equity 297 2,261 2,767
and non-equity investments
Total income 13,627 12,711 24,846
3Net return per Ordinary share
The calculation of return per Ordinary share is based on results after tax
divided by the weighted average number of shares in issue during the period,
excluding shares held in treasury, of 25,344,195 (30 September 2022: 23,459,021,
31 March 2023: 24,912,016).
The revenue, capital and total return per Ordinary share is shown in the Income
Statement.
4Dividends paid
(unaudited) (unaudited) (audited)
6 months ended 6 months ended Year
30 September 30 September ended
2023 2022 31 March
2023
£'000 £'000 £'000
2022 - 10,558 10,558
dividend
paid 15
July
2022
(46.0p
per
share)
2023 15,577 - -
dividend
paid 10
July
2023
(60.0p
per
share)
5Reconciliation of net return on ordinary activities before tax to net cash
inflow from operating activities
(unaudited) (unaudited) (audited)
6 months 6 months Year
ended ended ended
30 30 31 March
September September
2023
2023 2022
£'000 £'000 £'000
Net return (16,411) (49,856) (49,651)
before tax
Adjustments
for:
Capital 27,472 59,838 68,996
return
before tax
Decrease/(inc 16 28 (5)
rease) in
prepayments
Increase in 16 102 39
accruals and
deferred
income
Overseas (29) (59) (115)
withholding
tax paid
Decrease/(inc 3 (10) (10)
rease) in
recoverable
tax
UK (1,006) (243) (874)
Corporation
tax paid
(Increase)/de (326) (307) 186
crease in
dividends
receivable
Increase in (3,832) (1,857) (1,520)
accrued
interest
Realised (82) 131 (547)
(losses)/gain
s on foreign
currency
transactions
Net cash 5,821 7,767 16,499
inflow from
operating
activities
6Ordinary Shares
During the period, the Company bought back 2,218,929 Ordinary shares (six months
to 30 September 2022: nil and year to 31 March 2023: 321,500) for a cash
consideration totalling £102,065,000 (six months to 30 September 2022: nil and
year to 31 March 2023: £15,334,000).
During the period, the Company issued no new Ordinary shares and no Ordinary
shares were issued from treasury (six months to 30 September 2022: 4,790,460 new
Ordinary shares issued for proceeds totalling £243,588,000 and no Ordinary
shares were issued from treasury, year to 31 March 2023: 5,688,288 new Ordinary
shares issued for proceeds totalling £287,166,000 and no Ordinary shares were
issued from treasury).
At 30 September 2023, there were 26,580,263 Ordinary shares in issue (30
September 2022: 25,682,435 and 31 March 2023: 26,580,263). At 30 September 2023
2,540,429 Ordinary shares were held in treasury (30 September 2022: nil and 31
March 2023: 321,500).
7Fair value of financial assets and liabilities
Financial Reporting Standard 102 requires an entity to classify fair value
measurements using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy has the
following levels:
Level 1: valued using unadjusted quoted prices in active markets for identical
assets;
Level 2: valued using observable inputs other than quoted prices included within
Level 1; and
Level 3: valued using inputs that are unobservable and are valued by the
Directors using International Private Equity and Venture Capital Valuation
(`IPEV') guidelines, such as earnings multiples, recent transactions and net
assets, which equate to their fair values.
The financial assets and liabilities measured at fair value in the Statement of
Financial Position are grouped into the fair value hierarchy at 30 September
2023 as follows:
Financial assets at fair Level 1 Level 2 Level 3 2023
value through profit or
loss £000 £000 £000 Total
£000
Quoted securities 1,127,386 - - 1,127,386
Delisted equities - - 662 662
Net fair value 1,127,386 - 662 1,128,048
8General information
The financial information contained in this Half-Year Report does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. The
financial information for the half-years ended 30 September 2023 and 30
September 2022 have not been audited. The abridged financial information for the
year ended 31 March 2023 has been extracted from the Company's statutory
accounts for that period, which have been filed with the Registrar of Companies.
The report of the Auditors on those accounts was unqualified and did not contain
a statement under either section 498(2) or section 498(3) of the Companies Act
2006.
Enquiries:
Juniper Partners Limited
Company Secretary
Email: company.secretary@capitalgearingtrust.com
This information was brought to you by Cision http://news.cision.com
END
(END) Dow Jones Newswires
November 13, 2023 02:00 ET (07:00 GMT)
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