TIDMPHI
RNS Number : 7363R
Pacific Horizon Investment Tst PLC
03 March 2023
RNS Announcement
Pacific Horizon Investment Trust PLC ('PHI')
Legal Entity Identifier: VLGEI9B8R0REWKB0LN95
Regulated Information Classification: Half Yearly Financial
Report
Results for the six months to 31 January 2023
The following is the unaudited Interim Financial Report for the
six months to 31 January 2023 which was approved by the Board on 2
March 2023.
Responsibility Statement
We confirm that to the best of our knowledge:
a) the condensed set of Financial Statements has been prepared
in accordance with FRS 104 'Interim Financial Reporting';
b) the Interim Management 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,
their impact on the Financial Statements and a description of the
principal risks and uncertainties for the remaining six months of
the year); and
c) the Interim Financial Report 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).
On behalf of the Board
Angus Macpherson
Chairman
2 March 2023
Summary of Unaudited Results*
31 July
31 January 2022
2023 (audited) % change
===================================== ========== ========== =========
Total assets GBP604.7m GBP610.6m
Borrowings Nil Nil
Shareholders' funds GBP604.7m GBP610.6m
Net asset value per ordinary share 663.08p 664.65p (0.2%)
Share price 670.00p 647.00p 3.6%
MSCI All Country Asia ex Japan Index
(in sterling terms) # 544.2 527.8 3.1%
Premium/(discount) ++ 1.0% (2.7%)
Active share ++ 82% 83%
Six months Six months
to 31 to 31
January January
2023 2022
==================================== ========== ==========
Revenue earnings per ordinary share 0.25p (0.44p)
Six months
to 31 Year to
January 31 July
2023 2022
================================================== ========== ========
Total return # ++
Net asset value per ordinary share 0.3% (14.5%)
Share price 4.1% (19.3%)
MSCI All Country Asia ex Japan Index (in sterling
terms) # 4.0% (8.2%)
Six months to Year to 31 July
31 January 2023 2022
=================================== ================== =================
Period's high and low High Low High Low
Net asset value per ordinary share 699.18p 579.02p 871.11p 656.64p
Share price 684.00p 523.00p 948.00p 602.00p
Premium/(discount) ++ 2.7% (11.7%) 11.4% (10.9%)
* For a definition of terms see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
The MSCI All Country Asia ex Japan Index (in sterling terms) is
the principal index against which performance is measured.
# Source: Baillie Gifford/Refinitiv and relevant underlying
index providers. See disclaimer at the end of this
announcement.
++ Alternative performance measure. See Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Key Performance Indicator.
Past performance is not a guide to future performance.
Interim Management Report
Overview
What defines us is growth. We believe Asia ex Japan will be one
of the fastest growing regions over the coming decades and we
strive to be invested in its fastest growing companies. It is
growth multiplied by growth or, as we like to call it,
'Growth(2)'.
Such an investment style has been rewarded over the longer term,
with the Company's NAV outperforming the comparative index, the
MSCI All Country Asia ex Japan Index (in sterling terms) by 76
percentage points over the past five years, and the share price
returning 99%. Over the reporting period (31 July 2022 to 31
January 2023) the Company's NAV increased by 0.3%, while the share
price increased by 4.1%, compared to the comparative index which
rose 4.0% in sterling terms, all figures total return.
The period was noticeable for its volatility, with markets in
the region falling in aggregate nearly 20%, reaching their nadir as
President Xi cemented his grip on power during the 20th Chinese
Communist Party Congress in October, before rallying as China
abandoned its zero Covid policy, to end the period in positive
territory.
Markets will likely remain volatile. However, we are hopeful
that Asian markets have bottomed and we are very optimistic about
the future. In the near term, China's re-opening will spur
significant growth across the region. Longer term, the region's
structural advantages including demographics and a rising middle
class, combined with the superior financial position of most Asian
economies compared to the west, are likely to result in Asian
growth significantly outperforming over the coming years. In such
an environment we believe our focus on growth companies will
generate substantial returns for investors.
By sector, in absolute terms, our largest exposure remains
focused on the rising middle class, technology and innovation.
However, we continue to have significant exposure to growth
companies in more cyclical industries including materials,
industrials and energy.
The most notable change to the portfolio over the period was
significant additions to China, predominantly in the internet
sector, which we had also been adding to in the prior period.
Funding was from further reductions in India, and selling a number
of smaller positions in South Korea.
Review
For some time, Asia has faced a series of challenges as markets
have grappled with the implications of soaring inflation, interest
rate rises and tapering in the West, armed conflict in Eastern
Europe, a housing collapse in China and a soaring US Dollar to name
a few. Despite all these issues, there has been no Asian crisis,
quite the opposite, Asian economies have remained remarkably
resilient and are generally growing far faster than the majority of
western economies.
This is extremely encouraging and suggests Asian economies are
far better positioned than in the past, especially when compared to
developed markets. There are three key reasons. Firstly, Asian
balance sheets are in superior shape having lacked the profligate
monetary and fiscal stimulus of the west. For example, China's
Covid stimulus has equated to c.10% of GDP compared to c.70% for
many major European countries.
Secondly, while Western markets have, for years, operated with
ultra-low or even negative interest rates, most of Asia has
maintained positive rates for many years. Arguably, it is Asian
countries that have behaved like orthodox developed countries while
much of the developed world has behaved like the emerging markets
of old, (perhaps we are seeing the beginning of the 'converging
markets').
Thirdly, capital flows into Asia have been negative for a decade
and the region therefore far less vulnerable to money outflows than
in the past.
The result is that today, Asia's financial position is superior
to much of the developed world. Combine this with Asia's
structurally faster growth rates and valuations at multi-year lows
relative to developed markets, and the long-term outlook for Asian
investors looks very encouraging.
Why has this positive position not been reflected in the
performance of Asian equities more recently? China has been the key
issue.
Regulatory clampdowns on the private sector, increasing
geopolitical tensions, Covid induced lockdowns and problems in the
property market have led to a collapse in investor sentiment about
the country: the MSCI China Index is down nearly 50% since its 2021
peak, while many Chinese companies listed in the United States have
fallen significantly more. Sentiment reached its nadir at the 20th
Communist Party Congress this October, the results of which
confirmed Xi's iron grip on the government with all the most senior
positions in the country going to Xi loyalists, combined with the
very public removal of the former Chinese leader, Hu Jintao, from
the closing ceremony.
Sentiment, however, turned more positive towards the end of the
year as China suddenly abandoned its zero Covid policies,
effectively ending all forms of lockdowns which were seriously
hurting the economy. With pent up consumer demand, a huge build up
in personal savings (retail deposits at banks have increased by
roughly 60% in the past 18 months) and a government clearly keen to
see a stronger economy, growth in China is likely to accelerate
rapidly and provide a strong backdrop for many domestic
companies.
Over the past year, we have increasingly been finding compelling
investment opportunities in China. This is especially true in the
technology space, where valuations have been extreme. For example,
during the period Dada Nexus' (Chinese e-commerce logistics) market
capitalisation fell to almost the level of cash on its balance
sheet, while Alibaba Group's core e-commerce business (stripping
out cash and subsidiaries) was trading on a low single digit PE
multiple. (We added to both of these holdings over the period).
At the same time, many of the regulatory headwinds that have
affected the sector have subsided. This is in part due to the
geopolitical tensions with the United States, whose recent actions
to stymie China's innovation, including drastic measures to cut
China off from certain semiconductor chips, means China needs its
own technological giants to thrive and innovate and is thus
becoming more supportive of the sector.
With the economy now open and set to grow strongly, we have
further increased our exposure to China by adding c.600bp to
Chinese companies. In addition to the aforementioned Dada Nexus and
Alibaba Group, most of the additions were made to internet firms,
including JD.com (e-commerce), KE Holdings (online property portal)
and Baidu.com (online search engine). We also added to two
financial companies, Ping An Insurance, China's leading private
insurance company, and one of its subsidiaries, Ping An Bank. This
takes the portfolio's exposure to China to 38% (+30bp relative to
the comparative index) compared to 19% of the portfolio (-ve 1240bp
relative) a year ago.
Outside China, additions were made to Nickel Mines, an
Indonesian nickel processing company. Until now, Nickel Mines has
focused solely on processing nickel for use in stainless steel
production, however, the company is now taking a stake in one of
Indonesia's new High Pressure Acid Leach (HPAL) facilities that can
convert Indonesia's low-grade nickel into high-grade nickel
required for electric vehicle batteries.
Such a development is significant news for Indonesia. The
country is already the world's largest nickel producer and, if it
can successfully convert its lower-grade nickel into battery-grade
material, it can greatly enhance the country's prospect of becoming
a key link in the electric vehicle supply chain. Companies
including CATL (the world's largest electric vehicle battery maker)
and LG Energy (Korea's largest battery manufacturer) have already
invested some $25bn in the country's commodity complex, with Tesla
considering a $5bn investment. Versus the comparative index,
Indonesia is the portfolio's largest country overweight
position.
Finally, a new purchase was made in Silergy, a leading designer
of analogue chips in China (listed in Taiwan). The company has the
largest market share among domestic designers and is likely to be a
key beneficiary of Chinese attempts to become self reliant in
semiconductor chips.
Funding for the purchases came from two main sources. The most
significant was a reduction to a number of smaller (<60bps)
holdings in South Korea. These were across a range of sectors
including green energy businesses (LG Energy Solutions, SK IE
Technology and S-Fuelcell), cloud computing (Douzone Bizon) and
speech recognition software (Flitto). Over the period our Korean
weighting reduced from 17.4% of the portfolio to 14.6%.
We also continued to reduce our exposure to India, selling
Zomato, the online food delivery businesses, as the company's unit
economics are not as favourable as we would have hoped, and made a
small reduction to Star Health & Allied Insurance Co (health
insurance). Although India remains our second largest absolute
(19.3%) and relative (+470bp) country position, it is noteworthy
that this has come down significantly from 32.1% (absolute) and
+1720bp (relative) since this time last year. Vietnam is now the
second largest overweight country in the portfolio (+530bp).
By sector, there have been limited changes, with the portfolio
continuing to look different to many of our growth focused peer
funds. In absolute terms, our largest exposures remain focused on
the key themes of the rising middle class, technology and
innovation. However, we have significant exposures to more cyclical
industries including materials, industrials and energy that, after
consumer discretionary, make up the three largest relative
positions within the portfolio.
Overall, the number of names in the portfolio reduced to 77 from
85. Private companies, of which there are 5 in the portfolio,
currently make up 5.4% of the portfolio, and invested gearing is
currently nil.
Performance
We are long-term investors, running a high conviction growth
portfolio that is index agnostic. Performance will be volatile and
there will be short term periods when we underperform. It is
pleasing that over the past 5 years, the timescale on which we
believe our performance should be judged, the portfolio has
generated significant value for shareholders.
Over the six months to 31 January 2023 the Company's NAV
increased by 0.3%, while the share price increased by 4.1%,
compared to the comparative index which rose 4.0% in sterling
terms, all figures total return.
The weakest performing companies over the period were internet
related. The most significant was Delhivery in India (India's
largest private logistics company, with a core focus on e-commerce
logistics). Delhivery was previously held as a private company
until listing in May 2022. Thanks to strong share price performance
the company was a 5.5% holding at the start of the period.
Unfortunately, Delhivery's latest quarterly results were weak.
M&A integration challenges and a slowdown in broader e-commerce
growth in India led the share price down 52% and took 310bp off our
performance. We are hopeful these issues are short term, and with
key private players finding funding far more difficult, e-commerce
a multi decade growth opportunity and Delhivery the clear number
one player, we continue to have faith in the company.
Other detractors in the internet space came from the large
internet platforms in China which appreciated in value. Our
underweight positions in some of the largest platforms, including
Tencent and Alibaba Group, detracted c.110bp.
More positively, the portfolio's significant exposure to more
cyclical sectors, which has been increased significantly over the
past few years, helped offset some of the weakness. Materials were
the largest positive contributor, led by several of our copper
companies including Zijin Mining Group and Merdeka Copper Gold,
that performed strongly on China's reopening. The longer-term
driver remains copper's role in the green transition.
Consumer discretionary was the second largest contributor,
mainly due to the strong performance of our China holdings as the
reopening theme took hold. Dada Nexus (e-commerce logistics) was
the standout performer adding +110bp and was the single largest
stock contributor.
Our increased exposure to China over the period resulted in
China and Hong Kong being the most significant contributors to
performance. This was followed by Indonesia, driven by our
commodity holdings. India was the weakest market in the portfolio
due to the performance of Delhivery and Dailyhunt (Social
media).
The Company's shares ended the period at a 1% premium to the NAV
per share, having been at a 2.7% discount six months earlier. Over
the six months to 31 January 2023, the Company issued 25,000 shares
from treasury and bought back in total 686,593 shares for treasury.
At the end of January 2023 the Company was promoted to the FTSE 250
Index and since period end the Company has issued a further 175,000
shares from treasury at a premium to NAV.
Conclusion
While short term markets may remain volatile, we remain
extremely positive on the long-term outlook for the region. Asia
has already taken up the baton of global demand growth, with China
alone having contributed more to global growth in US dollar terms
than the US over the past decade, while India is overtaking Japan.
Asia is now better positioned financially than much of the
developed world and, with a renewed investment cycle unfolding,
Asian growth is likely to significantly outperform over the coming
years.
We firmly believe the best way to invest in the Asia growth
story is to invest in the region's fastest growing companies.
The principal risks and uncertainties facing the Company are set
out in note 13.
Bailie Gifford & Co Limited
Managers & Secretaries
For a definition of terms see Glossary of Terms and Alternative
Performance Measures at the end of this announcement.
Total return information is sourced from Baillie
Gifford/Refinitiv and relevant underlying index providers. See
disclaimer at the end of this announcement.
Valuing Private Companies
We aim to hold our private company investments at 'fair value',
i.e. the price that would be paid in an open-market transaction.
Valuations are adjusted both during regular valuation cycles and on
an ad hoc basis in response to 'trigger events'. Our valuation
process ensures that private companies are valued in both a fair
and timely manner.
The valuation process is overseen by a valuations committee at
Baillie Gifford, which takes advice from an independent third party
(S&P Global). The valuations committee is independent from the
portfolio managers, as well as Baillie Gifford's Private Companies
Specialist team, with all voting members being from different
operational areas of the firm, and the portfolio managers only
receive final valuation notifications once they have been
applied.
We revalue the private holdings on a three-month rolling cycle,
with one-third of the holdings reassessed each month. The prices
are also reviewed twice per year by the Pacific Horizon Board and
are subject to the scrutiny of external auditors in the annual
audit process.
Recent market volatility has meant that recent pricing has moved
much more frequently than would have been the case with the
quarterly valuations cycle.
Beyond the regular cycle, the valuations committee also monitors
the portfolio for certain 'trigger events'. These may include
changes in fundamentals, a takeover approach, an intention to carry
out an Initial Public Offering ('IPO'), company news which is
identified by the valuation team or by the portfolio managers or
changes to the valuation of comparable public companies.
The valuations committee also monitors relevant market indices
on a weekly basis and update valuations in a manner consistent with
our external valuer's (S&P Global) most recent valuation report
where appropriate. When market volatility is particularly
pronounced the team does these checks daily. Any ad hoc change to
the fair valuation of any holding is implemented swiftly and
reflected in the next published net asset value. There is no
delay.
Pacific Horizon Investment
Trust PLC *
=============================
Instruments valued 6
Revaluations performed 14
Percentage of portfolio
revalued 2 times 83%
Percentage of portfolio
revalued 4 times 17%
======================== ===
* Data reflecting period 1 August 2022 to 31 January 2023 to
align with the Company's reporting period end.
For the six months to 31 January 2023, most revaluations have
been decreases. The average movement in both valuation and share
price for those which have decreased in value is shown below.
Average Average
movement movement
in investee in investee
company share
valuation price
============ ============ ============
Instruments
valued * (6%) (14%)
============ ============ ============
* Data reflecting period 1 August 2022 to 31 January 2023 to
align with the Company's reporting period end.
Share prices have decreased more than headline valuations
because Pacific Horizon typically holds preference stock, which
provides downside protection.
The share price movement reflects a probability-weighted average
of both the regular valuation, which would be realised in an IPO,
and the downside protected valuation, which would normally be
triggered in the event of a corporate sale or liquidation.
Baillie Gifford Statement on Stewardship
Baillie Gifford's over-arching ethos is that we are 'actual'
investors. We have a responsibility to behave as supportive and
constructively engaged long-term investors. We invest in companies
at different stages in their evolution, across vastly different
industries and geographies and we celebrate their uniqueness.
Consequently, we are wary of prescriptive policies and rules,
believing that these often run counter to thoughtful and beneficial
corporate stewardship. Our approach favours a small number of
simple principles which help shape our interactions with
companies.
Our Stewardship Principles
Prioritisation of Long-term Value Creation
We encourage our holdings to be ambitious and focus their
investments on long-term value creation. We understand that it is
easy to be influenced by short-sighted demands for profit
maximisation but believe these often lead to sub-optimal long-term
outcomes. We regard it as our responsibility to steer holdings away
from destructive financial engineering towards activities that
create genuine economic and stakeholder value over the long run. We
are happy that our value will often be in supporting management
when others don't.
A Constructive and Purposeful Board
We believe that boards play a key role in supporting corporate
success and representing the interests of all capital providers.
There is no fixed formula, but it is our expectation that boards
have the resources, information, cognitive and experiential
diversity they need to fulfil these responsibilities. We believe
that good governance works best when there are diverse skillsets
and perspectives, paired with an inclusive culture and strong
independent representation able to assist, advise and
constructively challenge the thinking of management.
Long-term Focused Remuneration with Stretching Targets
We look for remuneration policies that are simple, transparent
and reward superior strategic and operational endeavour. We believe
incentive schemes can be important in driving behaviour, and we
encourage policies which create genuine long-term alignment with
external capital providers. We are accepting of significant payouts
to executives if these are commensurate with outstanding long-run
value creation, but plans should not reward mediocre outcomes. We
think that performance hurdles should be skewed towards long-term
results and that remuneration plans should be subject to
shareholder approval.
Fair Treatment of Stakeholders
We believe it is in the long-term interests of all enterprises
to maintain strong relationships with all stakeholders - employees,
customers, suppliers, regulators and the communities they exist
within. We do not believe in one-size-fits-all policies and
recognise that operating policies, governance and ownership
structures may need to vary according to circumstance. Nonetheless,
we believe the principles of fairness, transparency and respect
should be prioritised at all times.
Sustainable Business Practices
We believe an entity's long-term success is dependent on
maintaining its social licence to operate and look for holdings to
work within the spirit and not just the letter of the laws and
regulations that govern them. We expect all holdings to consider
how their actions impact society, both directly and indirectly, and
encourage the development of thoughtful environmental practices and
'net-zero' aligned climate strategies as a matter of priority.
Climate change, environmental impact, social inclusion, tax and
fair treatment of employees should be addressed at board level,
with appropriately stretching policies and targets focused on the
relevant material dimensions. Boards and senior management should
understand, regularly review and disclose information relevant to
such targets publicly, alongside plans for ongoing improvement.
Thirty Largest Holdings at 31 January 2023 (unaudited)
% of
total
Value assets
Name Geography Business GBP'000 *
Memory, phones and electronic components
Samsung Electronics Korea manufacturer 34,910 5.8
Ping An Insurance H Shares HK/China Life insurance provider 24,034 4.0
JD.com HK/China Online mobile commerce 23,814 3.9
Li Ning HK/China Sportswear apparel supplier 19,668 3.3
Dailyhunt (VerSe Innovation)
Series I Preferred (U) India Indian news aggregator application 14,465 2.4
Dailyhunt (VerSe Innovation)
Series Equity (U) India Indian news aggregator application 2,755 0.4
Dailyhunt (VerSe Innovation)
Series J Preferred (U) India Indian news aggregator application 2,181 0.4
======== =======
19,401 3.2
Jadestone Energy Singapore Oil and gas explorer and producer 18,238 3.0
Alibaba Group HK/China Online and mobile commerce 17,343 2.9
Zijin Mining Group Co H Shares HK/China Gold and copper miner 16,694 2.8
Delhivery (P) India Logistics and courier services provider 15,329 2.5
Samsung SDI Korea Electrical equipment manufacturer 14,975 2.5
Chinese ecommerce distributor of
Dada Nexus ADR HK/China online consumer products 14,868 2.5
Merdeka Copper Gold Indonesia Indonesian miner 14,390 2.4
MMG HK/China Chinese copper miner 13,135 2.2
ByteDance Series E-1 Preferred
(U) HK/China Social media 13,040 2.2
Tata Motors India Indian automobile manufacturer 12,630 2.1
Samsung Engineering Korea Korean construction 12,322 2.0
Reliance Industries India Indian petrochemical company 12,010 2.0
Bank Rakyat Indonesia Consumer bank 11,663 1.9
Sea Limited ADR Singapore Internet gaming and ecommerce 11,559 1.9
Meituan HK/China Local services aggregator 10,533 1.7
Ramkrishna Forgings India Auto parts manufacturer 10,275 1.7
HDBank Vietnam Consumer bank 9,398 1.6
Owner and operator of a chain of
Lemon Tree Hotels India Indian hotels and resorts 9,334 1.5
Nickel Mines Indonesia Base metals miner 9,145 1.5
China Oilfield Services H Shares HK/China Oilfield services 8,970 1.5
LONGi Green Energy A Shares HK/China Chinese semiconductor manufacturer 8,658 1.4
KE Holdings HK/China Chinese real-estate platform 7,825 1.3
KE Holdings ADR HK/China Chinese real-estate platform 721 0.1
======== =======
8,546 1.4
Phoenix Mills India Commercial property manager 8,412 1.4
Midea A Shares HK/China Household appliance manufacturer 8,169 1.4
PT Astra International Indonesia Automobile distributor 8,054 1.3
================================= ========== ========================================= ======== =======
419,517 69.5
====================================================================================== ======== =======
HK/China denotes Hong Kong and China.
* For a definition of terms see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
U Denotes private company (unlisted) security.
P Denotes listed security previously held in the portfolio as a
private company (unlisted) security.
Private
company Net liquid
Listed (unlisted) assets Total
equities securities % assets
% % %
================= =========== ============ ============= =========
31 January 2023 93.6 5.4 1.0 100.0
----------- ------------ ------------- ---------
31 July 2022 93.6 6.1 0.3 100.0
----------------- ----------- ------------ ------------- ---------
Figures represent percentage of total assets.
Includes holdings in ordinary shares and preference shares.
Distribution of Total Assets* (Unaudited)
Geographical Analysis
At At
31 January 31 July
2023 2022
% %
====================================================== ================= ==============
Investments: Hong Kong and China 40.9 32.4
Including 6.8% (2022: 7.1%)
'A' Shares *
India 19.3 24.2
Korea 14.6 17.4
Indonesia 7.9 8.9
Singapore 5.5 6.5
Vietnam 5.3 5.4
Taiwan 4.5 4.5
Other 1.0 0.4
Total investments 99.0 99.7
Net liquid assets* 1.0 0.3
====================================================== ================= ==============
Total assets 100.0 100.0
====================================================== ================= ==============
Sectoral Analysis
At At
31 January 31 July
2023 2022
% %
======================================== ================= ==============
Investments: Communication Services 8.6 9.6
Consumer Discretionary 23.1 20.2
Consumer Staples 0.3 0.3
Energy 6.5 6.9
Financials 13.5 9.9
Healthcare Nil 0.6
Industrials 9.5 13.5
Information Technology 18.9 19.5
Materials 13.1 14.6
Real Estate 5.5 4.6
======================================= ================= ==============
Total investments 99.0 99.7
Net liquid assets* 1.0 0.3
======================================== ================= ==============
Total assets 100.0 100.0
======================================== ================= ==============
* For a definition of terms see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Income Statement (Unaudited)
For the six months ended For the six months ended For the year ended 31
31 January 2023 31 January 2022 July 2022 (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
Losses on investments - (545) (545) - (32,632) (32,632) - (118,594) (118,594)
Currency (losses)/gains - (575) (575) - 652 652 - 1,292 1,292
Income from investments
and interest
receivable 2,821 - 2,821 2,720 - 2,720 11,067 - 11,067
Investment management
fee
(note 3) (1,712) - (1,712) (2,121) - (2,121) (4,036) - (4,036)
Other administrative
expenses (405) - (405) (589) - (589) (1,093) - (1,093)
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
Net return before
finance
costs and taxation 704 (1,120) (416) 10 (31,980) (31,970) 5,938 (117,302) (111,364)
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
Finance costs of
borrowings (201) - (201) (281) - (281) (756) - (756)
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
Net return before
taxation 503 (1,120) (617) (271) (31,980) (32,251) 5,182 (117,302) (112,120)
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
Tax (note 4) (274) 1,578 1,304 (123) 1,153 1,030 (1,352) 5,288 3,936
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
Net return after
taxation 229 458 687 (394) (30,827) (31,221) 3,830 (112,014) (108,184)
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
Net return per ordinary
share (note 5) 0.25p 0.50p 0.75p (0.44p) (34.15p) (34.59p) 4.21p (123.01p) (118.80p)
======================= ========= ======== ======== ========= ======== ======== ========= ========= =========
The total column of this statement represents the profit and
loss account of the Company. The supplementary revenue and capital
columns are prepared under guidance issued by the Association of
Investment Companies.
All revenue and capital items in this statement derive from
continuing operations.
A Statement of Comprehensive Income is not required as the
Company does not have any other comprehensive income and the net
return on ordinary activities after taxation is both the profit and
total comprehensive income for the period.
Balance Sheet (Unaudited)
At 31
July
At 31
January 2022
2023 (audited)
GBP'000 GBP'000
=========================================== ========== ==========
Fixed assets
Investments held at fair value through
profit or loss (note 7) 598,943 608,539
=========================================== ========== ==========
Current assets
Debtors 4,951 1,248
Cash and cash equivalents 3,383 5,399
=========================================== ========== ==========
8,334 6,647
=========================================== ========== ==========
Creditors
Amounts falling due within one year (1,115) (1,620)
=========================================== ========== ==========
Net current assets 7,219 5,027
=========================================== ========== ==========
Total assets less current liabilities 606,162 613,566
=========================================== ========== ==========
Creditors
Amounts falling due after more than one
year:
Provision for tax liability (note 9) (1,438) (3,016)
=========================================== ========== ==========
Net assets 604,724 610,550
=========================================== ========== ==========
Capital and reserves
Share capital (note 10) 9,208 9,208
Share premium account 253,967 253,946
Capital redemption reserve 20,367 20,367
Capital reserve 316,242 319,573
Revenue reserve 4,940 7,456
=========================================== ========== ==========
Shareholders' funds 604,724 610,550
=========================================== ========== ==========
Net asset value per ordinary share *
(after deducting borrowings at book cost) 663.08p 664.65p
=========================================== ========== ==========
Ordinary shares in issue (note 10) 91,199,368 91,860,961
=========================================== ========== ==========
* See Glossary of Terms and Alternative Performance Measures at the end of this announcement.
Statement of Changes in Equity
For the year ended 31 January 2023
Capital Capital
Share Share premium redemption reserve Revenue Shareholders'
capital account reserve * reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Shareholders' funds at 1 August
2022 9,208 253,946 20,367 319,573 7,456 610,550
Net return after taxation - - - 458 229 687
Ordinary shares issued (note - -
10) - - - -
Ordinary shares bought back
into treasury (note 10) - - - (3,940) - (3,940)
Ordinary shares sold from treasury
(note 10) - 21 - 151 - 172
Dividends paid during the period
(note 6) - - - - (2,745) (2,745)
=================================== ======== ============= =========== ======== ======== =============
Shareholders' funds at 31 January
2023 9,208 253,967 20,367 316,242 4,940 604,724
=================================== ======== ============= =========== ======== ======== =============
For the year ended 31 January 2022
Capital Capital
Share Share premium redemption reserve Revenue Shareholders'
capital account reserve * reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Shareholders' funds at 1 August
2021 8,843 221,354 20,367 433,041 3,626 687,231
Net return after taxation - - - (30,827) (394) (31,221)
Ordinary shares issued 365 32,592 - - - 32,957
Ordinary shares bought back
into treasury - - - (1,203) - (1,203)
Ordinary shares sold from treasury - - - - - -
Dividends paid during the period - -
(note 6) - - - -
=================================== ======== ============= =========== ======== ======== =============
Shareholders' funds at 31 January
2022 9,208 253,946 20,367 401,011 3,232 687,764
=================================== ======== ============= =========== ======== ======== =============
* The Capital Reserve balance at 31 January 2023 includes
investment holding gains on investments of GBP103,733,000 (31
January 2022- gains of GBP239,779,000).
Condensed Cash Flow Statement (Unaudited)
Six months Six months
to to
31 January 31 January
2023 2022
GBP'000 GBP'000
========================================== =========== ===========
Cash flows from operating activities
Net return before taxation (617) (32,251)
Net losses on investments 545 32,632
Currency losses/(gains) 575 (652)
Finance costs of borrowings 201 281
Overseas withholding tax (269) (100)
Indian CGT paid on transactions - (1)
Changes in debtors and creditors 98 12
========================================== =========== ===========
Cash from operations * 533 (79)
Interest paid (201) (229)
========================================== =========== ===========
Net cash inflow/(outflow) from operating
activities 332 (308)
========================================== =========== ===========
Cash flows from investing activities
Acquisitions of investments (58,477) (39,234)
Disposals of investments 63,217 39,799
========================================== =========== ===========
Net cash inflow from investing activities 4,740 565
========================================== =========== ===========
Cash flows from financing activities
Ordinary shares bought back into treasury (3,940) (1,203)
Ordinary shares sold from treasury 172 -
Ordinary shares issued - 32,880
Borrowings brought down - 119,372
Borrowings repaid - (122,598)
Equity dividends paid (2,745) -
========================================== =========== ===========
Net cash (outflow)/inflow from financing
activities (6,513) 28,451
========================================== =========== ===========
(Decrease)/increase in cash and cash
equivalents (1,441) 28,708
Exchange movements (575) 2,462
Cash and cash equivalents at start
of period 5,399 31,766
========================================== =========== ===========
Cash and cash equivalents at end
of period 3,383 62,936
========================================== =========== ===========
* Cash from operations includes dividends received of
GBP2,862,000 (31 January 2022 - GBP2,682,000) and interest received
of GBP118,000 (31 January 2022 - nil).
Notes to the Financial Statements
1. Basis of Accounting
The condensed Financial Statements for the six months to 31
January 2023 comprise the statements set out above together with
the related notes below. They have been prepared in accordance with
FRS 104 'Interim Financial Reporting' and the AIC's Statement of
Recommended Practice issued in issued in November 2014 and updated
in October 2019, April 2021 and July 2022 with consequential
amendments. They have not been audited or reviewed by the Auditor
pursuant to the Auditing Practices Board Guidance on 'Review of
Interim Financial Information'. The Financial Statements for the
six months to 31 January 2023 have been prepared on the basis of
the same accounting policies as set out in the Company's Annual
Report and Financial Statements at 31 July 2022.
Going Concern
The Directors have considered the Company's principal risks and
uncertainties, as set out on the inside cover of this report,
together with the Company's current position, investment objective
and policy, the level of demand for the Company's shares, the
nature of its assets, its liabilities and projected income and
expenditure. The Board has, in particular, considered the impact of
heightened market volatility since the Covid-19 pandemic and over
recent months due to macroeconomic and geopolitical concerns. It
does not believe the Company's going concern status is affected. It
is the Directors' opinion that the Company has adequate resources
to continue in operational existence for the foreseeable future.
The Company's assets, the majority of which are investments in
quoted securities which are readily realisable, exceed its
liabilities significantly. All borrowings require the prior
approval of the Board. The Board approves borrowing and gearing
limits and reviews regularly the amounts of any borrowing and the
level of gearing as well as compliance with borrowing covenants.
The Company has continued to comply with the investment trust
status requirements of section 1158 of the Corporation Tax Act 2010
and the Investment Trust (Approved Company) (Tax) regulations 2011.
In accordance with the Company's Articles of Association,
shareholders have the right to vote on the continuation of the
Company every five years, the next vote being in 2026. Accordingly,
the Directors consider it appropriate to adopt the going concern
basis of accounting in preparing these Financial Statements and
confirm that they are not aware of any material uncertainties which
may affect the Company's ability to continue to do so over a period
of at least twelve months from the date of approval of these
Financial Statements.
2. The financial information contained within this Interim
Financial Report does not constitute statutory accounts as defined
in sections 434 to 436 of the Companies Act 2006. The financial
information for the year ended 31 July 2022 has been extracted from
the statutory accounts which have been filed with the Registrar of
Companies. The Auditor's Report on those accounts was not
qualified, did not include a reference to any matters to which the
Auditor drew attention by way of emphasis without qualifying its
report, and did not contain statements under sections 498(2) or (3)
of the Companies Act 2006.
3. Baillie Gifford & Co Limited, a wholly owned subsidiary
of Baillie Gifford & Co, has been appointed by the Company as
its Alternative Investment Fund Manager and Company Secretary.
Baillie Gifford & Co Limited has delegated the investment
management services to Baillie Gifford & Co. Dealing activity
and transaction reporting have been further sub-delegated to
Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong
Kong) Limited. The Managers may terminate the Management Agreement
on six months' notice and the Company may terminate on three
months' notice. The annual management fee is 0.75% on the first
GBP50 million of net assets, 0.65% on the next GBP200 million of
net assets and 0.55% on the remaining net assets. Management fees
are calculated and payable on a quarterly basis.
4. Tax
The revenue tax charge includes the overseas withholding tax
suffered in the period. The capital tax charge results from the
Provision for Tax Liability in respect of Indian capital gains tax
as detailed in note 9.
5. Net Return
Year to
Six months Six months
to 31 January to 31 January 31 July
2023 2022 2022
(audited)
GBP'000 GBP'000 GBP'000
============================== ============== ============== ==========
Revenue return after taxation 229 (394) 3,830
Capital return after taxation 458 (30,827) (112,014)
============================== ============== ============== ==========
Total net return 687 (31,221) (108,184)
============================== ============== ============== ==========
Net return per ordinary share
Revenue return after taxation 0.25p (0.44p) 4.21p
Capital return after taxation 0.50p (34.15p) (123.01p)
============================== ============== ============== ==========
Total net return per ordinary
share 0.75p (34.59p) (118.80p)
============================== ============== ============== ==========
Weighted average number of
ordinary shares
in issue 91,439,600 90,271,035 91,063,205
============================== ============== ============== ==========
The net return per ordinary share figures are based on the above
totals of revenue and capital and the weighted average number of
ordinary shares in issue (excluding treasury shares) during each
period.
There are no dilutive or potentially dilutive shares in
issue.
6. Dividends
Year to
Six months Six months
to 31 January to 31 January 31 July
2023 2022 2022
(audited)
GBP'000 GBP'000 GBP'000
==================================== ============== ============== ==========
Amounts recognised as distributions
in the period:
Previous year's final dividend
of 3.00p (31 July 2021 -
nil), paid 29 November 2022 2,745 - -
==================================== ============== ============== ==========
Amounts paid and payable
in respect of the period:
Final dividend (31 July 2022
- 3.00p) - - 2,745
==================================== ============== ============== ==========
No interim dividend has been declared in respect of the current
period.
7. Fair Value Hierarchy
The Company's investments are financial assets held at fair
value through profit or loss. The fair value hierarchy used to
analyse the basis on which the fair values of financial instruments
held at fair value through the profit and loss account are measured
is described below. The levels are determined by the lowest (that
is the least reliable or least independently observable) level of
input that is significant to the fair value measurement for the
individual investment in its entirety.
Level 1 - using unadjusted quoted prices for identical
instruments in an active market;
Level 2 - using inputs, other than quoted prices included within
Level 1, that are directly or indirectly observable (based on
market data); and
Level 3 - using inputs that are unobservable (for which market
data is unavailable).
An analysis of the Company's financial asset investments based
on the fair value hierarchy described above is shown below.
Investments held at fair value through profit or loss
Level Level Level
As at 31 January 1 2 3 Total
2023 GBP'000 GBP'000 GBP'000 GBP'000
====================== ======== ======== ======== ========
Listed equities 566,347 - - 566,347
Unlisted equities - - 2,910 2,910
Unlisted preference
shares * - - 29,686 29,686
====================== ======== ======== ======== ========
Total financial asset
investments 566,347 - 32,596 598,943
====================== ======== ======== ======== ========
Level Level Level
As at 31 July 2022 1 2 3 Total
(audited) GBP'000 GBP'000 GBP'000 GBP'000
====================== ======== ======== ======== ========
Listed equities 570,801 495 - 571,296
Unlisted equities - - 4,051 4,051
Unlisted preference
shares * - - 33,192 33,192
====================== ======== ======== ======== ========
Total financial asset
investments 570,801 495 37,243 608,539
====================== ======== ======== ======== ========
During the period, Brilliance China listed on the Hong Kong
stock exchange having de-listed on 31 March 2021.
* The investments in preference shares are not classified as
equity holdings as they include liquidation preference rights that
determine the repayment (or multiple thereof) of the original
investment in the event of a liquidation event such as a
take-over.
The fair value of listed security investments is bid price or,
in the case of FTSE 100 constituents and holdings on certain
recognised overseas exchanges, last traded price. Listed
Investments are categorised as Level 1 if they are valued using
unadjusted quoted prices for identical instruments in an active
market and as Level 2 if they do not meet all these criteria but
are, nonetheless, valued using market data. Unlisted investments
are valued at fair value by the Directors following a detailed
review and appropriate challenge of the valuations proposed by the
Managers. The Managers' unlisted investment policy applies
methodologies consistent with the International Private Equity and
Venture Capital Valuation guidelines ('IPEV'). These methodologies
can be categorised as follows: (a) market approach (multiples,
industry valuation benchmarks and available market prices); (b)
income approach (discounted cash flows); and (c) replacement cost
approach (net assets). The Company's holdings in unlisted
investments are categorised as Level 3 as unobservable data is a
significant input to their fair value measurements.
8. The Company has a three year multi-currency revolving credit
facility of up to GBP100 million with Royal Bank of Scotland
International Limited which expires on 14 March 2025. At 31 January
2023 there were no outstanding drawings (31 July 2022 - no
outstanding drawings).
9. Provision for Tax Liability
The tax liability provision at 31 January 2023 of GBP1,438,000
(31 July 2022 - GBP3,016,000) relates to a potential liability for
Indian capital gains tax that may arise on the Company's Indian
investments should they be sold in the future, based on the net
unrealised taxable capital gain at the period end and on enacted
Indian tax rates (long term capital gains are taxed at 10% and
short term capital gains are taxed at 15%). The amount of any
future tax amounts payable may differ from this provision,
depending on the value and timing of any future sales of such
investments and future Indian tax rates.
10. Share Capital
As at 31 January As at 31 July
2023 2022 (audited)
Number GBP'000 Number GBP'000
========================= ============ ======= ============ =======
Allotted, called up
and fully paid ordinary
shares of 10p each in
issue 91,199,368 9,120 91,860,961 9,186
Treasury shares of 10p
each 875,593 88 214,000 22
========================= ============ ======= ============ =======
92,074,961 9,208 92,074,961 9,208
========================= ============ ======= ============ =======
The Company has authority to allot shares under section 551 of
the Companies Act 2006. In the six months to 31 January 2023, the
Company issued 25,000 ordinary shares, from treasury (nominal value
GBP2,500, representing 0.03% of the issued share capital as at 31
July 2022) at a premium to net asset value, raising net proceeds of
GBP172,000 (year to 31 July 2022 - 3,645,257 ordinary shares, at a
premium to net asset value, with a nominal value GBP365,000,
representing 4.1% of the issued share capital at 31 July 2021,
raising net proceeds of GBP32,957,000).
In the six months to 31 January 2023, 686,593 shares,
representing 0.7% of the issued share capital as at 31 July 2022,
were bought back at a total cost of GBP3,940,000 and held in
treasury (year to 31 July 2022 - 214,000 shares, representing 0.2%
of the issued share capital at 31 July 2021, were bought back at a
total cost of GBP1,454,000 and held in treasury).
At 31 January 2023 the Company had authority to allot or sell
from treasury 9,139,320 ordinary shares without application of
pre-emption rights and to buy back 13,667,037 ordinary shares on an
ad hoc basis. In accordance with authorities granted at the last
Annual General Meeting in November 2022, buy-backs will only be
made at a discount to net asset value and the Board has authorised
use of the issuance authorities to issue new shares or sell shares
from treasury at a premium to net asset value in order to enhance
the net asset value per share for existing shareholders and improve
the liquidity of the Company's shares.
Over the period from 31 January 2023 to 1 March 2023 the Company
has issued a further 175,000 shares from treasury. No further
shares have been bought back.
11. During the period, transaction costs on purchases amounted
to GBP84,000 (31 January 2022 - GBP67,000; 31 July 2022 -
GBP225,000) and transaction costs on sales amounted to GBP143,480
(31 January 2022 - GBP55,000; 31 July 2022 - GBP308,000).
12. Related Party Transactions
There have been no transactions with related parties during the
first six months of the current financial year that have materially
affected the financial position or the performance of the Company
during that period and there have been no changes in the related
party transactions described in the last Annual Report and
Financial Statements that could have had such an effect on the
Company during that period.
13. Principal risks and uncertainties
The principal risks facing the Company are financial risk,
investment strategy risk, climate and governance risk, discount
risk, regulatory risk, custody and depositary risk, operational
risk, leverage risk, political and associated economic risk, cyber
security risk and emerging risks. An explanation of these risks and
how they are managed is set out on pages 8 and 9 of the Company's
Annual Report and Financial Statements for the year to 31 July 2022
which is available on the Company's website: pacifichorizon.co.uk
.
The principal risks and uncertainties have not changed since the
date of that report.
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
The printed version of the Interim Financial Report will be sent
to shareholders and will be available on the Company's page on the
Managers' website pacifichorizon.co.uk ++ on or around 13 March
2023.
++ Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers'
website (or any other website) is incorporated into, or forms part
of, this announcement.
Third Party Data Provider Disclaimer
No third party data provider ('Provider') makes any warranty,
express or implied, as to the accuracy, completeness or timeliness
of the data contained herewith nor as to the results to be obtained
by recipients of the data. No Provider shall in any way be liable
to any recipient of the data for any inaccuracies, errors or
omissions in the index data included in this document, regardless
of cause, or for any damages (whether direct or indirect) resulting
therefrom.
No Provider has any obligation to update, modify or amend the
data or to otherwise notify a recipient thereof in the event that
any matter stated herein changes or subsequently becomes
inaccurate.
Wit hout limiting the foregoing, no Provider shall have any
liability whatsoever to you, whether in contract (including under
an indemnity), in tort (including negligence), under a warranty,
under statute or otherwise, in respect of any loss or damage
suffered by you as a result of or in connection with any opinions,
recommendations, forecasts, judgements, or any other conclusions,
or any course of action determined, by you or any third party,
whether or not based on the content, information or materials
contained herein.
MSCI Index Data
Source: MSCI. The MSCI information may only be used for your
internal use, may not be reproduced or redisseminated in any form
and may not be used as a basis for or a component of any financial
instruments or products or indices. None of the MSCI information is
intended to constitute investment advice or a recommendation to
make (or refrain from making) any kind of investment decision and
may not be relied on as such. Historical data and analysis should
not be taken as an indication or guarantee of any future
performance analysis, forecast or prediction. The MSCI information
is provided on an 'as is' basis and the user of this information
assumes the entire risk of any use made of this information. MSCI,
each of its affiliates and each other person involved in or related
to compiling, computing or creating any MSCI information
(collectively, the 'MSCI Parties') expressly disclaims all
warranties (including, without limitation, any warranties of
originality, accuracy, completeness, timeliness, non-infringement,
merchantability and fitness for a particular purpose) with respect
to this information. Without limiting any of the foregoing, in no
event shall any MSCI Party have any liability for any direct,
indirect, special, incidental, punitive, consequential (including,
without limitation, lost profits) or any other damages.
(msci.com).
Sustainable Finance Disclosure Regulation ('SFDR')
The EU Sustainable Finance Disclosure Regulation ('SFDR') does
not have a direct impact in the UK due to Brexit, however, it
applies to third-country products marketed in the EU. As Pacific
Horizon Investment Trust PLC is marketed in the EU by the AIFM,
Baillie Gifford & Co Limited, via the National Private
Placement Regime, ('NPPR') the following disclosures have been
provided to comply with the high-level requirements of SFDR.
The AIFM has adopted Baillie Gifford & Co's Governance and
Sustainable Principles and Guidelines as its policy on integration
of sustainability risks in investment decisions. Baillie Gifford
& Co's approach to investment is based on identifying and
holding high quality growth businesses that enjoy sustainable
competitive advantages in their marketplace. To do this it looks
beyond current financial performance, undertaking proprietary
research to build an in-depth knowledge of an individual company
and a view on its long-term prospects. This includes the
consideration of sustainability factors (environmental, social
and/or governance matters) which it believes will positively or
negatively influence the financial returns of an investment. More
detail on the Managers' approach to sustainability can be found in
the Governance and Sustainability Principles and Guidelines
document, available publicly on the Baillie Gifford website
bailliegifford.com.
Taxonomy Regulation
The Taxonomy Regulation establishes an EU-wide framework of
criteria for environmentally sustainable economic activities in
respect of six environmental objectives. It builds on the
disclosure requirements under SFDR by introducing additional
disclosure obligations in respect of alternative investment funds
that invest in an economic activity that contributes to an
environmental objective. The Company does not commit to make
sustainable investments as defined under SFDR. As such, the
underlying investments do not take into account the EU criteria for
environmentally sustainable economic activities.
Glossary of Terms and Alternative Performance Measures
('APM')
Total Assets
This is the Company's definition of Adjusted Total Assets, being
the total value of all assets held less all liabilities (other than
liabilities in the form of borrowings).
Shareholders' Funds and Net Asset Value
Also described as shareholders' funds, Net Asset Value ('NAV')
is the value of all assets held less all liabilities (including
borrowings). The NAV per share is calculated by dividing this
amount by the number of ordinary shares in issue (excluding shares
held in treasury).
Net Liquid Assets
Net liquid assets comprise current assets less current
liabilities (excluding borrowings) and provisions for deferred
liabilities.
Discount/Premium (APM)
As stockmarkets and share prices vary, an investment trust's
share price is rarely the same as its NAV. When the share price is
lower than the NAV per share it is said to be trading at a
discount. The size of the discount is calculated by subtracting the
share price from the NAV per share and is usually expressed as a
percentage of the NAV per share. If the share price is higher than
the NAV per share, this situation is called a premium.
As at As at
31 July
31 January 2022
2023 (audited)
GBP'000 GBP'000
============================= ============= ============ ==========
Net asset value per ordinary
share (a) 663.08p 664.65p
Share price (b) 670.00p 647.00p
============================= ============= ============ ==========
((b) -
(a)) ÷
Premium/(discount) (a) 1.0% (2.7%)
============================= ============= ============ ==========
Total Return (APM)
The total return is the return to shareholders after reinvesting
the net dividend on the date that the share price goes ex-dividend.
In periods where no dividend is paid, the total return equates to
the capital return.
As at
31 January As at
2023 31 July 2022
============================ =========== ================ ================
Share Share
NAV price NAV price
============================ =========== ======= ======= ======= =======
Closing NAV per share/share
price (a) 663.08p 670.00p 664.65p 647.00p
Dividend adjustment
factor * (b) 1.0051 1.0057 1.0000 1.0000
============================ =========== ======= ======= ======= =======
Adjusted closing NAV (c) = (a)
per share/share price x (b) 666.46p 673.82p 664.65p 647.00p
============================ =========== ======= ======= ======= =======
Opening NAV per share/share
price (d) 664.65p 647.00p 777.15p 802.00p
============================ =========== ======= ======= ======= =======
(c) ÷
Total return (d) -1 0.3% 4.1% (14.5%) (19.3%)
============================ =========== ======= ======= ======= =======
* The dividend adjustment factor is calculated on the assumption
that the final dividend of 3.00p (31 July 2021 - nil) paid by the
Company during the period was reinvested into shares of the Company
at the cum income NAV per share/share price, as appropriate, at the
ex-dividend date.
Turnover (APM)
Annual turnover is calculated on a rolling 12 month basis. The
lower of purchases and sales for the 12 months is divided by the
average assets, with average assets being calculated on assets as
at each month's end.
Ongoing Charges (APM)
The total recurring expenses (excluding the Company's cost of
dealing in investments and borrowing costs) incurred by the Company
as a percentage of the daily average net asset value.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other
public company, an investment trust can borrow money to invest in
additional investments for its portfolio. The effect of the
borrowing on the shareholders' assets is called 'gearing'. If the
Company's assets grow, the shareholders' assets grow
proportionately more because the debt remains the same. But if the
value of the Company's assets falls, the situation is reversed.
Gearing can therefore enhance performance in rising markets but can
adversely impact performance in falling markets.
Invested gearing is borrowings at par less cash and brokers'
balances expressed as a percentage of shareholders' funds.
As at As at
31 January 31 July
2023 2022
(audited)
GBP'000 GBP'000
================================ ==== ============ ==========
Borrowings (at book value) - -
Less: cash and cash equivalents (3,383) (5,399)
Less: sales for subsequent
settlement (4,267) (402)
Add: purchases for subsequent
settlement - 446
====================================== ============ ==========
Adjusted borrowings (a) (7,650) (5,355)
================================ ==== ============ ==========
Shareholders' funds (b) 604,724 610,550
================================ ==== ============ ==========
Gearing: (a) as a percentage
of (b) (1.3%) (0.9%)
====================================== ============ ==========
Potential gearing is the Company's borrowings expressed as a
percentage of shareholders' funds.
As at 31
As at July
31 January 2022
2023 (audited)
GBP'000 GBP'000
=========================== ==== ============ ==========
Borrowings (at book value) (a) - -
Shareholders' funds (b) 604,724 610,550
=========================== ==== ============ ==========
Potential gearing (a) as
a percentage of (b) - -
================================= ============ ==========
Leverage (APM)
For the purposes of the Alternative Investment Fund Managers
Regulations, leverage is any method which increases the Company's
exposure, including the borrowing of cash and the use of
derivatives. It is expressed as a ratio between the Company's
exposure and its net asset value and can be calculated on a gross
and a commitment method. Under the gross method, exposure
represents the sum of the Company's positions after the deduction
of sterling cash balances, without taking into account any hedging
and netting arrangements. Under the commitment method, exposure is
calculated without the deduction of sterling cash balances and
after certain hedging and netting positions are offset against each
other.
Active Share (APM)
Active share, a measure of how actively a portfolio is managed,
is the percentage of the portfolio that differs from its
comparative index. It is calculated by deducting from 100 the
percentage of the portfolio that overlaps with the comparative
index. An active share of 100 indicates no overlap with the index
and an active share of zero indicates a portfolio that tracks the
index.
Compound Annual Return (APM)
The compound annual return converts the return over a period of
longer than one year to a constant annual rate of return applied to
the compound value at the start of each year.
China 'A' Shares
'A' Shares are shares of mainland China-based companies that
trade on the Shanghai Stock Exchange and the Shenzhen Stock
Exchange. Since 2003, select foreign institutions have been able to
purchase them through the Qualified Foreign Institutional Investor
system.
Treasury Shares
The Company has the authority to make market purchases of its
ordinary shares for retention as treasury shares for future
reissue, resale, transfer, or for cancellation. Treasury shares do
not receive distributions and the Company is not entitled to
exercise the voting rights attaching to them.
Private (Unlisted) Company
An unlisted or private company means a company whose shares are
not available to the general public for trading and are not listed
on a stock exchange.
Pacific Horizon Investment Trust PLC (Pacific Horizon) aims to
achieve capital growth through investment in the Asia-Pacific
region (excluding Japan) and in the Indian Sub-continent. At 31
January 2023 the Company had total assets of GBP604.7 million
(before deduction of loans of nil).
Pacific Horizon is managed by Baillie Gifford & Co Limited,
the Edinburgh based fund management group.
Past performance is not a guide to future performance. Pacific
Horizon is a listed UK Company and is not authorised or regulated
by the Financial Conduct Authority. The value of its shares and any
income from those shares can fall as well as rise and you may not
get back the amount invested. Pacific Horizon invests in overseas
securities. Changes in the rates of exchange may also cause the
value of your investment (and any income it may pay) to go down or
up. Pacific Horizon invests in emerging markets (including Chinese
'A' shares) where difficulties in dealing, settlement and custody
could arise, resulting in a negative impact on the value of your
investment. Shareholders in Pacific Horizon have the right to vote
every five years, on whether to continue Pacific Horizon, or wind
it up. If the shareholders decide to wind the Company up, the
assets will be sold and you will receive a cash sum in relation to
your shareholding. The next vote will be held at the Annual General
Meeting in 2026. You can find up to date performance information
about Pacific Horizon on the Pacific Horizon page of the Managers'
website at pacifichorizon.co.uk . Neither the contents of the
Managers' website nor the contents of any website accessible from
hyperlinks on the Managers' website (or any other website) is
incorporated into, or forms part of, this announcement
3 March 2023
For further information please contact:
Anzelm Cydzik, Baillie Gifford & Co
Tel: 0131 275 2000
Jonathan Atkins, Director, Four Communications
Tel: 0203 920 0555 or 07872 495396
- ends -
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END
IR NKBBPOBKDANK
(END) Dow Jones Newswires
March 03, 2023 02:00 ET (07:00 GMT)
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