New Star Investment Trust PLC (NSI)
New Star Investment Trust PLC: Interim ANNOUNCEMENT for the Six Months to 31 12 2020
22-March-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
(MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS FOR THE SIX MONTHSED 31st DECEMBER 2020
INVESTMENT OBJECTIVE
The Company's objective is to achieve long-term capital growth.
FINANCIAL HIGHLIGHTS
30th June %
31st December 2020
2020 Change
PERFORMANCE
Net assets (GBP '000) 122,813 113,885 7.8
Net asset value per Ordinary share 172.92p 160.35p 7.8
Mid-market price per Ordinary share 122.00p 106.00p 15.1
Discount of price to net asset value 29.4% 33.9% n/a
Six months ended Six months ended
31st December 2020 31st December 2019
Total Return* 8.71% 4.02% n/a
IA Mixed Investment 40-85% Shares (total return) 10.00% 4.41% n/a
MSCI AC World Index (total return, sterling adjusted) 12.32% 4.89% n/a
MSCI UK Index (total return) 5.48% 3.03% n/a
Six months ended
Six months ended 31st December
31st December
2020
2019
REVENUE
Return (GBP'000) 279 792
Return per Ordinary share 0.39p 1.11p
Proposed dividend per Ordinary share - -
Dividend paid per Ordinary share 1.40p 1.40p
TOTAL RETURN
Return (GBP'000) 9,922 4,582
Net assets (dividend added back) 8.7% 4.0%
Net assets 7.8% 3.1% * The total return figure for the Group represents the revenue and capital return shown in the consolidated statement of comprehensive income plus dividends paid.
INTERIM REPORT
CHAIRMAN'S STATEMENT
PERFORMANCE
Your Company generated a positive total return of 8.71% over the
six months to 31st December 2020, taking the net asset value (NAV)
per ordinary share to 172.92p. By comparison, the Investment
Association's Mixed Investment 40-85% Shares Index rose 10.00%. The
MSCI AC World Total Return Index rose 12.32% in sterling while the
MSCI UK Total Return Index rose 5.48%. Over the six months, UK
government bonds declined 0.82%. Further information is provided in
the investment manager's report.
Your Company made a revenue profit for the six months of
GBP279,000 (2019: GBP792,000).
GEARING AND DIVIDS
Your Company has no borrowings. It ended the period under review
with cash representing 9.51% of its NAV and is likely to maintain a
significant cash position. Your Company has small retained revenue
reserves and your Directors do not intend to pay an interim
dividend (2019: nil). Your Company paid a dividend of 1.4p per
share (2019: 1.4p) in November 2020 in respect of the previous
financial year. The level of future dividends may, in the short
term, be adversely affected by Covid-19-related dividend cuts.
DISCOUNT
During the period under review, your Company's shares continued
to trade at a significant discount to their NAV. The Board keeps
this issue under review.
OUTLOOK Accommodative monetary and fiscal policies, the roll-out
of Covid-19 vaccination programmes and mild inflation should
underpin equities in early 2021, particularly lowly-valued cyclical
stocks. Geographically, the UK stockmarket appeared attractive in
the early spring of 2021 because of its heavy weightings in
cyclical sectors as did the stockmarkets of Asia excluding Japan
and the emerging markets, where public sector debt levels were low
and where companies were trading on low valuations. Long-dated
government bonds appeared vulnerable at a time of rising inflation
expectations but gold equities may benefit from the current
environment in which inflation is higher than official interest
rates.
NET ASSET VALUE
Your Company's unaudited NAV per share at 28th February 2021 was
170.52p.
Geoffrey Howard-Spink
Chairman
18th March 2021
INVESTMENT MANAGER'S REPORT
MARKET REVIEW
Global equities rose 12.32% in sterling terms over the six
months to 31 December 2020 as monetary and fiscal stimulus proved
supportive and global Covid-19 vaccine rollout programmes began,
increasing expectations of an early return to economic normality.
Global bonds gained 6.03% in local currencies but fell 4.15% in
sterling because of foreign exchange movements.
In the autumn of 2020, increasingly stringent lockdown measures
were introduced in America and Europe to combat a second wave of
the pandemic. Central banks responded with more stimulus to cushion
the impact on businesses and households. The Federal Reserve
shifted its inflation target from the fixed 2% rate it adopted
after the credit crisis to an average of 2%, implying inflation
will be allowed to exceed 2% for some time to compensate for more
than a decade of persistently below-target inflation. The Bank of
England announced GBP150 billion of additional quantitative easing
in November while the European Central Bank announced an additional
EUR500 billion of asset purchases in December. In the US, a further
large-scale fiscal stimulus is on the way, with the new president,
Joe Biden, unveiling a USD1.9 trillion rescue plan in addition to
the USD900 billion relief package enacted in December.
Sterling strengthened as December's European Union-UK trade
agreement averted a hard Brexit. Sterling gained 10.63%, 5.87% and
1.55% respectively against the dollar, yen and euro. UK stocks
underperformed, rising 5.48%, but UK smaller companies, typically
more sensitive to domestic trends, gained 27.56%. UK government
bonds fell 0.82% but sterling corporate investment-grade and
high-yield bonds gained 5.57% and 9.29% respectively as default
fears receded and income-seeking investors bought corporate bonds
in the wake of equity dividend cuts.
US stocks rose 22.16% in dollars but only 10.42% in sterling.
Investors welcomed the initial outcome to November's elections.
These gave the Democrats the presidency and control of the House of
Representatives but not the Senate, initially forestalling investor
fears of higher taxation and increased regulation. Run-off
elections in January, however, gave the Democrats Senate
control.
Asia was largely spared a second wave of Covid-19 infections,
allowing China to ease restrictions. Dollar-weakness and stronger
industrial commodity prices contributed to outperformance by
equities in Asia excluding Japan and emerging markets, which gained
18.84% and 18.77% respectively in sterling. Strong global demand
for Chinese products, particularly electronic goods, contributed to
a record USD78 billion trade surplus.
Inflation data were stronger than anticipated, particularly in
the US and UK, despite unemployment rising significantly above
pre-pandemic levels. In the US, the five-year breakeven inflation
rate, which measures medium-term inflation expectations, rose and
implied that inflation would exceed 2%. In early 2021, commentators
were divided on the long-term inflationary consequences of the
exceptional monetary and fiscal easing in response to the pandemic.
It is likely, however, that higher commodity prices, pent-up
consumer demand and disrupted supply chains will foster inflation
in the short term.
PORTFOLIO REVIEW
Your Company's total return over the period under review was
8.71%. By comparison, the Investment Association (AI) Mixed
Investment 40-85% Shares sector, a peer group of funds with a
multi-asset approach to investing and a typical investment in
global equities in the 40-85% range, rose 10.00%. The MSCI AC World
Total Return Index rose 12.32% in sterling while the MSCI UK Total
Return Index rose 5.48%. Your Company benefited from its
allocations to UK smaller stocks and emerging market equities but
its allocations to dollar cash and gold equities hurt performance.
Income from investments fell over the period as dividends were cut,
cancelled and deferred. This will affect the revenue available to
pay a dividends unless retained reserves are utilised.
Your Company's investment in dollar cash and the allocation to
gold equities within the BlackRock Gold & General portfolio
were hurt by currency movements over the period as extraordinary
monetary and fiscal stimulus weakened the dollar and hopes of a
Brexit deal buoyed the pound. Gold and gold equities rose 3.26% and
0.91% respectively in dollars but fell 6.66% and 8.78% respectively
in sterling because of currency movements. Dollar cash and gold
equities provide diversification, however, and may offer some
capital protection should equity markets in general fall.
Your Company benefited from its relatively-low allocation to US
equities, which underperformed global equites, gaining 10.42% in
sterling. US technology stocks, however, gained 14.45%,
contributing to the 19.13% gain by Polar Capital Technology.
Fundsmith Equity gained only 9.99%, however, despite its heavy
technology weighting.
Good news on vaccines benefited your Company's allocation in
cyclical stocks as investors looked beyond the American and
European pandemic lockdowns and anticipated the reopening of
economies. Aberforth Split Level Income was the best-performing
holding over the period, gaining 50.64%. Its manager invests in UK
smaller companies and follows a value-oriented investment style,
which had been out of favour in an environment of ultra-low
interest rates and below-target inflation. The addition of leverage
from zero-dividend preference shares amplified the sensitivity to
domestic economic trends, contributing to outperformance.
Chelverton UK Equity Income, which focuses on smaller stocks,
rose 22.80% but lagged the gain for UK smaller companies. MI
Brompton UK Recovery and Man GLG Income gained 18.09% and 12.39%
respectively, outperforming UK equities because of their bias
towards small and medium-sized companies. Trojan Income lagged,
rising only 2.24% because of its relatively-high holdings in larger
companies and defensive sectors such as consumer staples. The
allocation to UK equites reduced in July when the investment in the
SPDR FTSE UK All Share exchange-traded fund, which was bought
following the stockmarket falls precipitated by the first lockdown
in March 2020, was sold.
Amongst your Company's emerging market investments, JP Morgan
Emerging Markets Income did best, rising 34.79%. The investment
benefited from its holdings in China and Taiwan and in the
technology sector, with Taiwan Semiconductor and Samsung
Electronics amongst the largest investments. Liontrust Asia Income
marginally underperformed, however, gaining 17.79%.
Stewart Investors India Subcontinent rose 27.86%, outperforming
the 26.08% gain for Indian equities in sterling as the country's
economy recovered from nationwide lockdown earlier in the year. The
prime minister, Narendra Modi, introduced structural reforms in
agriculture and labour markets and the ease of doing business in
India improved according to a World Bank study. Your Company's
allocation to emerging markets increased through purchases of
Matthews Asia ex Japan Dividend and Vietnam Enterprise Investment
Trust while the global equity allocation fell as a result of the
sale of Artemis Global Income.
All the EF Brompton Multi Manager OEIC funds outperformed their
IA benchmarks. Your Company's allocation to more conservative
strategies hurt performance in a rising equity market but may prove
defensive should markets fall.
There were no significant adjustments to the valuations of the
unquoted stocks. Your Company's largest unquoted holding, Embark,
continued to integrate its recent acquisitions. OUTLOOK
At the period end, the outlook for equities appeared positive
because monetary and fiscal policies are likely to remain
accommodative for some time and equities may perform well in an
environment of mild inflation. Strong performance from cyclical
companies, which were typically on low valuations compared to some
growth companies, may persist as vaccine rollout programmes allow
economies to reopen. The UK stockmarket may benefit from this trend
because of its relatively-high weighting in cyclical sectors such
as energy, financials, industrials and mining while smaller
companies may benefit from reviving domestic demand and increasing
takeover activity.
Equities in Asia excluding Japan and emerging markets appeared
particularly attractive because they were trading on lower
valuations while public sector debt levels were lower than in many
developed economies. Dollar weakness and stronger oil and commodity
prices would also prove tailwinds for these markets.
Your Company ended the period under review with no direct
investments in longer-dated bonds, which may fall should inflation
expectations rise whereas gold equities may provide diversification
and perform well at times such as the present time when inflation
is higher than interest rates. Investments in dollar cash and lower
risk multi-asset funds also provide diversification and,
potentially, a measure of capital protection.
Brompton Asset Management LLP 18th March 2021
DIRECTORS' REPORT
PERFORMANCE
In the six months to 31st December 2020 the total return per
Ordinary share was 8.7% (2019: 4.0%) and the NAV per ordinary share
increased to 172.92p, whilst the share price increased by 15.1% to
122.00p. This compares to an increase of 10.0% in the IA Mixed
Investment 40-85% Shares Index.
INVESTMENT OBJECTIVE
The Company's investment objective is to achieve long-term
capital growth.
INVESTMENT POLICY
The Company's investment policy is to allocate assets to global
investment opportunities through investment in equity, bond,
commodity, real estate, currency and other markets. The Company's
assets may have significant weightings to any one asset class or
market, including cash.
The Company will invest in pooled investment vehicles, exchange
traded funds, futures, options, limited partnerships and direct
investments in relevant markets. The Company may invest up to 15%
of its net assets in direct investments in relevant markets.
The Company will not follow any index with reference to asset
classes, countries, sectors or stocks. Aggregate asset class
exposure to any one of the United States, the United Kingdom,
Europe ex UK, Asia ex Japan, Japan or Emerging Markets and to any
individual industry sector will be limited to 50% of the Company's
net assets, such values being assessed at the time of investment
and for funds by reference to their published investment policy or,
where appropriate, their underlying investment exposure.
The Company may invest up to 20% of its net asset value in
unlisted securities (excluding unquoted pooled investment vehicles)
such values being assessed at the time of investment.
The Company will not invest more than 15% of its net assets in
any single investment, such values being assessed at the time of
investment.
Derivative instruments and forward foreign exchange contracts
may be used for the purposes of efficient portfolio management and
currency hedging. Derivatives may also be used outside of efficient
portfolio management to meet the Company's investment objective.
The Company may take outright short positions in relation to up to
30% of its net assets, with a limit on short sales of individual
stocks of up to 5% of its net assets, such values being assessed at
the time of investment. The Company may borrow up to 30% of net
assets for short-term funding or long-term investment purposes. No
more than 10%, in aggregate, of the value of the Company's total
assets may be invested in other closed-ended investment funds
except where such funds have themselves published investment
policies to invest no more than 15% of their total assets in other
listed closed-ended investment funds.
SHARE CAPITAL
The Company's share capital comprises 305,000,000 Ordinary
shares of 1p each, of which 71,023,695 (2019: 71,023,695) have been
issued and fully paid. No Ordinary shares are held in treasury, and
none were bought back or issued during the six months to 31st
December 2020.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks identified by the Board, and the steps the
Board takes to mitigate them, are discussed below. The audit
committee reviews existing and emerging risks on a six monthly
basis. The Board has closely monitored the societal, economic and
market focused implications of the events of the last 12 months to
consider emerging risks.
Investment strategy: Inappropriate long-term strategy, asset
allocation and fund selection could lead to underperformance. The
Board discusses investment performance at each of its meetings and
the Directors receive reports detailing asset allocation,
investment selection and performance.
Business conditions and general economy: The Company's future
performance is heavily dependent on the performance of different
equity and currency markets. The Board cannot mitigate the risks
arising from adverse market movements. However, diversification
within the portfolio will reduce the impact. Further information is
given in portfolio risks below.
Macro-economic event risk: The Covid pandemic has been felt
globally in 2020. The scale and potential adverse impact of a
macro-economic event, such as the Covid pandemic, has highlighted
the possibility of a number of identified risks such as market
risk, currency risk, investment liquidity risk and operational risk
having an adverse impact at the same time. The risk may impact on:
the value of the Company's investment portfolio, its liquidity,
meaning investments cannot be realised quickly, or the Company's
ability to operate if the Company's suppliers face financial or
operational difficulties. The Directors closely monitor these areas
and currently maintain a significant cash balance.
Portfolio risks - market price, foreign currency and interest
rate risks: The largest investments are listed below. Investment
returns will be influenced by interest rates, inflation, investor
sentiment, availability/cost of credit and general economic and
market conditions in the UK and globally. A significant proportion
of the portfolio is in investments denominated in foreign
currencies and movements in exchange rates could significantly
affect their sterling value. The Investment Manager takes all these
factors into account when making investment decisions but the
Company does not normally hedge against foreign currency movements.
The Board's policy is to hold a spread of investments in order to
reduce the impact of the risks arising from the above factors by
investing in a spread of asset classes and geographic regions.
Net asset value discount: The discount in the price at which the
Company's shares trade to net asset value means that shareholders
cannot realise the real underlying value of their investment. Over
the last few years the Company's share price has been at a
significant discount to the Company's net asset value. The
Directors review regularly the level of discount, however given the
investor base of the Company, the Board is very restricted in its
ability to influence the discount to net asset value.
Investment Manager: The quality of the team employed by the
Investment Manager is an important factor in delivering good
performance and the loss of key staff could adversely affect
returns. A representative of the Investment Manager attends each
Board meeting and the Board is informed if any major changes to the
investment team employed by the Investment Manager are proposed.
The Investment Manager regularly informs the Board of developments
and any key implications for either the Investment Strategy or the
investment portfolio.
Tax and regulatory risks: A breach of The Investment Trust
(Approved Company) (Tax) Regulations 2011 (the 'Regulations') could
lead to capital gains realised within the portfolio becoming
subject to UK capital gains tax. A breach of the FCA Listing Rules
could result in suspension of the Company's shares, while a breach
of company law could lead to criminal proceedings, financial and/or
reputational damage. The Board employs Brompton Asset Management
LLP as Investment Manager, and Maitland Administration Services
Limited as Secretary and Administrator, to help manage the
Company's legal and regulatory obligations.
Operational: Disruption to, or failure of, the Investment
Manager's or Administrator's accounting, dealing or payment
systems, or the Custodian's records, could prevent the accurate
reporting and monitoring of the Company's financial position. The
Company is also exposed to the operational risk that one or more of
its suppliers may not provide the required level of service. The
Board monitors its service providers, with an emphasis on their
business interruption procedures.
The Directors confirm that they have carried out an assessment
of the risks facing the Company, including those that would
threaten its business model, future performance, solvency and
liquidity.
INVESTMENT MANAGEMENT ARRANGEMENTS AND RELATED PARTY
TRANSACTIONS
In common with most investment trusts the Company does not have
any executive directors or employees. The day-to-day management and
administration of the Company, including investment management,
accounting and company secretarial matters, and custodian
arrangements are delegated to specialist third party service
providers.
Details of related party transactions are contained in the
Annual Report. There have been no unusual material transactions
with related parties during the period which have had a significant
impact on the performance of the Company.
GOING CONCERN AND VIABILITY
The Directors believe that it is appropriate to continue to
adopt the going concern basis in preparing the accounts as the
assets of the Company consist mainly of securities that are readily
realisable or cash and it has no significant liabilities.
Investment income exceeds annual expenditure and current liquid net
assets cover current annual expenses for many years. Accordingly,
the Company is of the opinion that it has adequate financial
resources to continue in operational existence for the foreseeable
future which is considered to be in excess of five years. Five
years is considered a reasonable time for investors when making
their investment decisions. In reaching this view the Directors
reviewed the anticipated level of annual expenditure against the
cash and liquid assets within the portfolio. The Directors have
also considered the risks the Company faces.
AUDITORS
The half year financial report has been reviewed, but not
audited, by Ernst & Young LLP pursuant to the Auditing
Practices Board guidance on the Review of Interim Financial
Information.
RESPONSIBILITY STATEMENT
The Directors confirm that to the best of their knowledge:
The financial statements contained within the half year
financial report to 31st December 2020 has been prepared in
accordance with International Accounting Standard 34 'Interim
Financial Reporting';
The Chairman's statement, Directors' report or the Investment
Manager's report include a fair review of important events that
have occurred during the first six months of the financial year and
their impact on the financial statements;
The Chairman's statement, Directors' report or the Investment
Manager's report include a fair review of the potential risks and
uncertainties for the remaining six months of the year;
The Director's report and note 8 to the half year financial
report include a fair review of the information concerning
transactions with the investment manager and changes since the last
annual report.
By order of the Board
Maitland Administration Services Limited
18th March 2021
SCHEDULE OF TOP TWENTY INVESTMENTS at 31st December 2020
Bid-market Value
Holding Investment Type % of Net Assets
GBP '000
Fundsmith Equity Fund Investment Fund 9,416 7.67
Polar Capital Global Technology Investment Fund 8,793 7.16
Embark Group Unquoted Investment 6,990 5.69
TM Crux European Special Situations Fund Investment Fund 5,477 4.46
Matthews Asia Ex Japan Fund Investment Fund 5,449 4.44
BlackRock Gold & General Fund Investment Fund 4,741 3.86
EF Brompton Global Conservative Fund Investment Fund 4,622 3.76
BlackRock Continental European Income Fund Investment Fund 4,306 3.50
Aquilus Inflection Fund Investment Fund 4,103 3.34
Baillie Gifford Global Income Growth Investment Fund 3,731 3.04
MI Chelverton UK Equity Income Fund Investment Fund 3,636 2.96
Lindsell Train Japanese Equity Fund Investment Fund 3,483 2.83
EF Brompton Global Equity Fund Investment Fund 3,405 2.77
EF Brompton Global Opportunities Fund Investment Fund 3,309 2.69
Aberforth Split Level Income Trust Investment Company 3,301 2.69
First State Indian Subcontinent Fund Investment Fund 3,127 2.55
EF Brompton Global Growth Fund Investment Fund 3,103 2.53
Liontrust Asia Income Fund Investment Fund 2,990 2.43
MI Brompton UK Recovery Unit Trust Investment Fund 2,736 2.23
EF Brompton Global Balanced Fund Investment Fund 2,551 2.08
89,269 72.68
Balance held in 21 investments 21,992 17.91
Total investments (excluding cash) 111,261 90.59
Net current assets (including cash) 11,552 9.41
Net Assets 122,813 100.00
The investment portfolio, excluding cash, can be further analysed as follows:
GBP'000
Investment funds 94,239
Unquoted investments 8,779
Investment companies and exchange traded funds 6,561
Other quoted investments 1,682
111,261
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2020 (unaudited)
Six months ended
31st December 2020
(unaudited)
Total
Revenue Return Capital Return
GBP '000 Return
GBP '000 GBP '000
Notes
INCOME
Investment income 795 - 795
Other operating income 3 - 3
Total income 2 798 - 798
GAINS AND LOSSES ON INVESTMENTS
Gains on investments at fair value through profit or loss 5
- 10,677 10,677
Other exchange gains - (1,035) (1,035)
Trail rebates - 1 1
798 9,643 10,441
EXPENSES
Management fees 3 (370) - (370)
Other expenses (149) - (149)
(519) - (519)
PROFIT BEFORE TAX 279 9,643 9,922
Tax - - -
PROFIT FOR THE PERIOD 279 9,643 9,922
EARNINGS PER SHARE
Ordinary shares (pence) 4 0.39p 13.58p 13.97p
The total return column of this statement represents the Group's
profit and loss account, prepared in accordance with IFRS. The
supplementary Revenue Return and Capital Return columns are both
prepared under guidance published by the Association of Investment
Companies. All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the
period.
All income is attributable to the equity holders of the parent
company. There are no minority interests.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31st December 2019 and the year ended
30th June 2020
Six months ended Year ended
31st December 2019 30th June 2020
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
Notes Return Return Return Return Return Return
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
INCOME
Investment income 1,127 - 1,127 2,169 - 2,169
Other operating income 167 - 167 250 - 250
Total income 2 1,294 - 1,294 2,419 - 2,419
GAINS AND LOSSES ON INVESTMENTS
Gains/(losses) on investments at fair value
through profit or loss
5
- 5,023 5,023 - (212) (212)
Other exchange (losses)/gains - (612) (612) - 414 414
Trail rebates - 2 2 - 4 4
1,294 4,413 5,707 2,419 206 2,625
EXPENSES
Management and performance fees 3 (364) (623) (987) (697) (623) (1,320)
Other expenses (138) - (138) (397) - (397)
(502) (623) (1,125) (1,094) (623) (1,717)
PROFIT/(LOSS) BEFORE TAX 792 3,790 4,582 1,325 (417) 908
Tax - - - - - -
PROFIT FOR THE PERIOD 792 3,790 4,582 1,325 (417) 908
EARNINGS PER SHARE
Ordinary shares (pence) 4 1.11p 5.34p 6.45p 1.87p (0.59)p 1.28p
The total return column of this statement represents the Group's
profit and loss account, prepared in accordance with IFRS. The
supplementary Revenue Return and Capital Return columns are both
prepared under guidance published by the Association of Investment
Companies. All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the
periods.
All income is attributable to the equity holders of the parent
company. There are no minority interests.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2020 (unaudited)
Share
Share premium Special reserve Retained earnings
capital Total
GBP '000 GBP '000 GBP '000
GBP '000 GBP '000
At 30th JUNE 2020 710 21,573 56,908 34,694 113,885
Total comprehensive income for the period
- - - 9,922 9,922
Dividend paid - - - (994) (994)
At 31st DECEMBER 2020 710 21,573 56,908 43,622 122,813
Included within retained earnings were GBP1,298,000 of Company
reserves available for distribution.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2019 (unaudited)
Share
Share premium Special reserve Retained earnings
capital Total
GBP '000 GBP '000 GBP '000
GBP '000 GBP '000
At 30th JUNE 2019 710 21,573 56,908 34,780 113,971
Total comprehensive income for the period
- - - 4,582 4,582
Dividend paid - - - (994) (994)
At 31st DECEMBER 2019 710 21,573 56,908 38,368 117,559
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th June 2020 (audited)
Share
Share premium Special reserve Retained earnings
capital Total
GBP '000 GBP '000 GBP '000
GBP '000 GBP '000
At 30th JUNE 2019 710 21,573 56,908 34,780 113,971
Total comprehensive income for the year - - - 908 908
Dividend paid - - - (994) (994)
At 30th JUNE 2020 710 21,573 56,908 34,694 113,885
CONSOLIDATED BALANCE SHEET
at 31st December 2020
31st December 31st December 30th June
2020 2019 2020
Notes
(unaudited) (unaudited) (audited)
GBP '000 GBP '000 GBP '000
NON-CURRENT ASSETS
Investments at fair value through profit or loss
5 111,261 101,518 103,015
CURRENT ASSETS
Other receivables 101 100 137
Cash and cash equivalents 11,682 16,786 10,962
11,783 16,886 11,099
TOTAL ASSETS 123,044 118,404 114,114
CURRENT LIABILITIES
Other payables (231) (845) (229)
TOTAL ASSETS LESS CURRENT LIABILITIES
122,813 117,559 113,885
NET ASSETS 122,813 117,559 113,885
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Called-up share capital 710 710 710
Share premium 21,573 21,573 21,573
Special reserve 56,908 56,908 56,908
Retained earnings 6 43,622 38,368 34,694
TOTAL EQUITY 122,813 117,559 113,885
NET ASSET VALUE PER ORDINARY SHARE (PENCE) 7 172.92p 165.52p 160.35p
The interim report was approved and authorised for issue by the
Board on 18th March 2021.
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2020
Six months Six months Year
ended ended ended
31st 31st 30th June
December December
2020
2020 2019
(audited)
(unaudited) (unaudited)
GBP '000
GBP '000 GBP '000
NET CASH INFLOW FROM OPERATING ACTIVITIES 318 501 382
INVESTING ACTIVITIES
Purchase of investments (6,500) (2,722) (12,725)
Sale of investments 8,931 8 3,280
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES
FINANCING 2,431 (2,714) (9,445)
Equity dividend paid (994) (994) (994)
NET CASH INFLOW/(OUTFLOW) AFTER FINANCING
1,755 (3,207) (10,057)
INCREASE /(DECREASE) IN CASH 1,755 (3,207) (10,057)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Increase/(Decrease) in cash resulting from cash flows 1,755 (3,207) (10,057)
Exchange movements (1,035) (612) 414
Movement in net funds 720 (3,819) (9,643)
Net funds at start of period/year 10,962 20,605 20,605
NET FUNDS AT OF PERIOD/YEAR 11,682 16,786 10,962
RECONCILIATION OF PROFIT BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM
OPERATING ACTIVITIES
Profit before finance costs and taxation * 9,922 4,582 908
(Gains)/Losses on investments (10,677) (5,022) 212
Exchange differences 1,035 612 (414)
Management fee rebates (1) (2) (4)
Revenue profit before finance costs and taxation 279 170 702
Decrease in debtors 36 120 81
Increase/(Decrease) in creditors 2 209 (407)
Taxation - - 2
Management fee rebates 1 2 4
NET CASH INFLOW FROM OPERATING ACTIVITIES 318 501 382
* Includes dividends received in cash of GBP693,000 (30th June
2020: GBP1,977,000) (2019: GBP1,013,000), accumulation income of
GBP173,000 (30th June 2020: GBP245,000) (2019: GBP225,000) and
interest income of GBP3,000 (30th June 2020: GBP250,000) (2019:
GBP167,000)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 31st December 2020
1. ACCOUNTING POLICIES
The condensed consolidated interim financial statements comprise
the unaudited results of the Company and its subsidiary, JIT
Securities Limited (together "the Group"), for the six months to
31st December 2020. The comparative information for the six months
to 31st December 2019 and the year to 30th June 2020 are a
condensed set of accounts and do not constitute statutory accounts
under the Companies Act 2006. Full statutory accounts for the year
to 30th June 2020 included an unqualified audit report, did not
contain any statements under section 498 of the Companies Act 2006,
and have been filed with the Registrar of Companies.
The half year financial statements have been prepared in
accordance with International Accounting Standard 34 'Interim
Financial Reporting', and are presented in pounds sterling, as this
is the Group's functional currency.
The same accounting policies have been followed in the interim
financial statements as applied to the accounts for the year ended
30th June 2020, which were prepared in accordance with IFRSs.
No segmental reporting is provided as the Group is engaged in a
single segment.
2. TOTAL INCOME
Year ended 30th June
Six months ended 31st December 2020
Six months ended 31st December 2019 2020
GBP'000
GBP'000
GBP'000
Income from Investments
UK net dividend income 677 1,045 1,844
Unfranked investment income 118 82 325
795 1,127 2,169
Other Income
Bank interest receivable 3 167 250
Loan interest income - - -
3 167 250
Year ended 30th June
Six months ended 31st December 2020
Six months ended 31st December 2019 2020
GBP'000
GBP'000
GBP'000
Total income comprises
Dividends 795 1,127 2,169
Other income 3 167 250
798 1,294 2,419
3. MANAGEMENT FEES
Year ended 30th June
Six months ended 31st December 2020
Six months ended 31st December 2019 2020
GBP'000
GBP'000
GBP'000
Investment management fee 370 364 697
Performance fee - 623 623
370 986 1,320
The Investment Manager receives a management fee, payable
quarterly in arrears, equivalent to an annual 0.75 per cent of
total assets after the deduction of the value of any investments
managed by the Investment Manager or its associates (as defined in
the investment management agreement).
The Company agreed with the Investment Manager that the
performance fee was not appropriate in a low interest rate
environment. Accordingly the performance fee agreement ceased with
effect from 1st January 2020.
4. RETURN PER ORDINARY SHARE
Year ended 30th
Six months ended 31st December June
2020 Six months ended 31st December
2019 2020
GBP'000
GBP'000
GBP'000
Revenue return 279 792 1,325
Capital return 9,643 3,790 (417)
Total return 9,922 4,582 908
Weighted average number of Ordinary 71,023,695 71,023,695 71,023,695
shares
Revenue return per Ordinary share 0.39p 1.11p 1.87p
Capital return per Ordinary share 13.58p 5.34p (0.59)p
Total return per Ordinary share 13.97p 6.45p 1.28p
5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
At
At At
30th June
31st December 2020 31st December 2019
2020
GBP'000 GBP'000
GBP'000
GROUP AND COMPANY 111,261 101,518 103,015
ANALYSIS OF INVESTMENT
PORTFOLIO
Six months ended 31st December 2020
Total
Quoted* Unquoted**
(level 1 and 2) (level 3)
GBP'000
GBP'000 GBP'000
Opening book cost 67,731 8,448 76,179
Opening investment holding gains/(losses) 26,816 20 26,836
Opening valuation 94,547 8,468 103,015
Movement in period:
Purchase at cost 6,033 467 6,500
Sales
- Proceeds (8,931) - (8,931)
- Realised gains on sales 745 - 745
Movement in investment holding gains/(losses) 10,088 (156) 9,932
Closing valuation at 31 December 2020 102,482 8,779 111,261
Closing book cost 65,577 8,915 74,492
Closing investment holding gains/(losses) 36,905 (136) 36,769
Closing valuation 102,482 8,779 111,261
* Quoted investments include unit trust and OEIC funds which are
valued at quoted prices. Included within Quoted Investments is one
monthly valued investment fund of GBP4,103,000 (30th June 2020:
GBP4,076,000) (2019: GBP3,721,000).
** The Unquoted investments, representing just over 7% of the
Company's NAV, have been valued in accordance with IPEVC valuation
guidelines. The largest Unquoted investment amounting to
GBP6,990,000 (30th June 2020: GBP6,990,000) (2019: GBP3,990,000)
was valued at the latest transaction price. The second largest
investment has been valued based on cost and is in its development
phase. A 10% increase or decrease in the earnings of the two
largest investments would not have a material impact on the
valuation of those investments. Neither investment has reached
their maturity and are not valued on the basis of their current
earnings.
There were no reclassifications for assets between Level 1, 2
and 3.
5. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS
continued
Year
Six months ended Six months ended ended
31st December 2020 31st December 2019 30th June
GBP'000 GBP'000 2020
GBP'000
ANALYSIS OF CAPITAL GAINS AND LOSSES
Realised gains on sales of investments 745 8 (2,086)
Increase in investment holding gains/( losses) 9,932 5,014 1,874
10,677 5,022 (212)
6. RETAINED EARNINGS
At At
At
31st December 2020 30th June
31st December 2019
GBP'000 2020
GBP'000
GBP'000
Capital reserve - realised 5,395 6,769 5,686
Capital reserve - revaluation 36,770 29,959 26,836
Revenue reserve 1,457 1,640 2,172
43,662 38,368 34,694
7. NET ASSET VALUE PER ORDINARY SHARE
31st December 2020 30th June
31st December 2019
GBP'000 2020
GBP'000
GBP'000
Net assets attributable to Ordinary shareholders
122,813 117,559 113,885
Ordinary shares in issue at end of period
71,023,695 71,023,695 71,023,695
Net asset value per Ordinary share 172.92p 165.52p 160.35p
8. TRANSACTIONS WITH THE INVESTMENT MANAGER
During the period there have been no new related party
transactions that have affected the financial position or
performance of the Group.
Since 1st January 2010 Brompton has acted as Investment Manager
to the Company. This relationship is governed by an agreement dated
17 May 2018.
Mr Duffield is the senior partner of Brompton Asset Management
Group LLP the ultimate parent of Brompton. Mr Duffield owns a
majority (59.14%) of the shares in the Company.
Mr Gamble has an immaterial holding in Brompton Asset Management
Group Limited LLP.
The total investment management fee payable to Brompton for the
half year ended 31st December 2020 was GBP370,000 (30th June 2020:
GBP697,000) (2019: GBP364,000) and at the half year GBP190,000
(30th June 2020: GBP177,000) (2019: GBP177,000) was accrued. No
performance fee was payable in respect of the six months ended 31st
December 2020 (30th June 2020: GBP623,000) (2019: GBP623,000). The
existing performance fee arrangements ceased with effect from 1
January 2020.
The Group's investments include seven funds managed by Brompton
or its associates valued at GBP21,998,000 (30th June 2020:
GBP19,712,000) (2019: GBP19,680,000). No investment management fees
were payable directly by the Company in respect of these
investments.
-----------------------------------------------------------------------------------------------------------------------
ISIN: GB0002631041
Category Code: IR
TIDM: NSI
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews
3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.: 95947
EQS News ID: 1177081
End of Announcement EQS News Service
=------------------------------------------------------------------------------------
(END) Dow Jones Newswires
March 22, 2021 03:01 ET (07:01 GMT)
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