Artemis Alpha Trust plc (the
'Company')
LEI: 549300MQXY2QXEIL3756
Annual Report for the year ended 30 April 2023
Financial Highlights
|
Year
ended
30 April 2023
|
Year ended
30 April 2022
|
Total
returns
|
|
|
Net asset value
per ordinary share*
|
1.3%
|
(21.9)%
|
Ordinary share price*
|
(1.2)%
|
(24.8)%
|
FTSE All-Share Index
|
6.0%
|
8.7%
|
Revenue
and dividends
|
|
|
Revenue earnings per
ordinary share
|
6.74p
|
6.29p
|
Dividends per ordinary
share
|
6.20p
|
5.60p
|
Ongoing charges*
|
1.08%
|
1.01%
|
|
|
As
at
30 April 2023
|
As
at
30 April 2022
|
Capital
|
|
|
|
Net Assets (£'000)
|
119,817
|
124,101
|
|
Net asset value
per ordinary share
|
366.02p
|
367.65p
|
|
Ordinary share price
|
319.00p
|
329.00p
|
|
Net gearing*
|
13.4%
|
9.4%
|
|
|
|
|
|
|
|
|
Total
returns
to 30
April 2023
|
3 years
|
5 years
|
10 years
|
Since 1 June 2003**
|
Net asset value
per ordinary share*
|
23.5%
|
0.1%
|
41.8%
|
553.4%
|
Ordinary share price*
|
34.4%
|
7.2%
|
28.3%
|
500.5%
|
FTSE All-Share Index
|
45.2%
|
24.1%
|
80.7%
|
338.3%
|
** The date when Artemis was appointed as Investment Adviser
*
Alternative Performance Measure
Source: Artemis/Datastream
Chairman's Statement
Performance
During the year ended 30 April
2023, your Company's net asset value per share rose by 1.3%
and its share price fell 1.2% (on a total return basis). In
comparison the benchmark FTSE All- Share Index rose by 6.0%. The
second half of the year showed a stronger relative performance than
the first half.
Although the FTSE All-Share Index is your Company's formal
benchmark, a significant proportion of the companies in the
portfolio are relatively small and form part of the FTSE 250 Index
which declined by 3.3% over the year. As we have reminded
shareholders in the past, the portfolio bears little relationship
to the FTSE All-Share and the stock-selection is not constrained by
it. As the last two years have shown, short-term performance is
likely to bear very little resemblance to the benchmark; our aim
remains to out-perform it over the long term.
During the year global markets were dominated by Russia's invasion of Ukraine and the resulting sharp increase in
energy prices, inflation and interest rates. The uncertainty caused
by Brexit was exacerbated by the mishandling of the economy by the
Truss government, resulting in weakened sentiment towards the UK
market and, in particular, the consumer-orientated stocks which
feature strongly in our portfolio.
However, the Manager remains confident in the prospects for
individual stocks and convinced of the under-valuation of many UK
companies. Although the portfolio remains dominated by exposure to
UK companies such as retailers, banks and housebuilders, the
Manager has also initiated positions in some non-UK companies
including out-of-favour digital companies such as Nintendo,
Alphabet and Meta.
Revenue earnings and dividends
We are pleased to be able to deliver growth in dividends at a
rate in excess of inflation, in line with our policy.
The Board has declared a final dividend of 3.87p (2022:
3.46p) per share, which will be subject to approval by shareholders
at the Company's Annual General Meeting. The final dividend, if
approved by shareholders, will be paid on 29
September 2023 to those shareholders on the register at
25 August 2023, with an ex-dividend
date of 24 August 2023.
Total dividends declared for the year will therefore amount
to 6.20p per share (2022: 5.60p), an increase of 10.7% on the
previous year and ahead of the increase in the Consumer Prices
Index (9.0% as at April 2022), in
line with our target.
Investment income from our investee companies fell during the
year by 1.5%. The subsidiary company continues to have healthy
reserves with which to support the Company's earnings and
dividends, if required.
Revenue earnings per share stand at 6.74p for the year to
30 April 2023, an increase of 7.2% on
the 6.29p of the prior year.
Share buy backs/discount
The discount to underlying asset value averaged 10.1% over
the course of the year, ranging from 4% to 14%, and at the year end
stood at 12.8%. In general, discounts of investment trusts,
including our own peer group, have widened over the last few months
as a result of adverse market conditions.
During the year, the Company bought back a total of 1,019,766
ordinary shares at a total cost of £3.1 million and an average
discount of 11.1%, adding approximately 1.19p to the net asset
value per share. The policy of buying back shares when in the best
interests of our shareholders will continue. We aim to do so in a
pragmatic fashion, taking into account both market conditions and
the discounts prevailing amongst our peer group; we believe this to
be the most effective way of addressing any imbalance in the supply
and demand for our shares.
Board Succession
As noted last year, Blathnaid Bergin, having joined the Board
in July 2015, retired at the Annual
General Meeting in October 2022.
Blathnaid had served as Chair of the Audit Committee and Senior
Independent Director throughout that time. I am pleased that
Victoria Stewart has agreed to take
on the role of Senior Independent Director.
The Board spent a significant amount of time with its
external advisers in choosing the right candidate to replace
Blathnaid Bergin as Chair of the Audit Committee. The Board
recognises the importance of achieving a balance of skills and
experience whilst paying close attention to the tenure of directors
and the level of diversity. Details of these discussions and the
process followed can be found within the Annual Report. This
process resulted in Tom Smethers
joining the Board in March of this year; he brings outstanding and
relevant experience and I welcome him to the Board.
Annual General Meeting
Your Company's Annual General Meeting ("AGM") will take place
on Thursday, 21 September 2023 at
10.00 a.m. at the London offices of Artemis Fund Managers,
Cassini House, 57 St. James's Street, London, SW1A 1LD. The Directors look forward
to welcoming shareholders.
The Investment Manager will make a presentation and answer
any questions on the portfolio performance and strategy.
I would encourage you to make use of your proxy votes by
completing and returning the form of proxy.
Outlook
Despite continued uncertainty and volatility in markets, our
policy remains one of picking individual stocks in pursuit of
returns over the long term. Our Investment Manager is confident in
the prospects for these companies and the opportunities arising
from the current market dislocation.
Contact us
Shareholders can keep up to date with Company performance by
visiting artemisalphatrust.co.uk where you will find information on
the Company, a monthly factsheet and detailed quarterly updates
from the Investment Manager.
The Board is always keen to hear from shareholders. Should
you wish to, I can be contacted by email on
alpha.chairman@artemisfunds.com.
Duncan
Budge
Chairman
11 July 2023
Investment Manager's Review
In the year ended April 2023,
the Company's NAV increased by 1.3% compared to a 6.0% increase in
the FTSE All-Share Index. In the last 6-month period since our
interim report, performance improved with NAV rising by 17.0%,
compared to a 12.5% increase in its benchmark.
Key factors which influenced equity markets and our portfolio
in the period included:
-
Energy prices rose sharply in
response to the impact of the Russia/Ukraine war on European gas supply, increasing
the cost pressures affecting consumers and corporates, before
falling more recently.
-
UK politics faced a crisis of
confidence in September following the Liz Truss budget. This caused
extreme volatility in UK government bond yields and forced an
abrupt U-turn from the new government under Rishi Sunak.
-
Inflation remained higher than
expected in the United Kingdom,
Europe and the US, although
economic activity proved more resilient to interest rate increases
than first expected.
-
Interest rates rose sharply as
a result, and a high degree of uncertainty remains over their
future path.
This series of events has damaged consumer, corporate and
investor confidence. Confusingly, despite this, employment trends
have remained robust and corporate profitability has been better
than expected.
Idiosyncratic events in the UK hurt sentiment that was
already fragile since Brexit. Markets are now pricing an
idiosyncratic inflation problem in the UK, leaving the UK with
higher long-term bond yields than Greece or Italy.
We continue to anticipate attractive prospective returns from
our portfolio owing to a combination of macroeconomic and bottom-up
factors:
-
Inflation is likely to fall markedly to the benefit of
consumers and businesses worldwide.
-
Discounted UK asset valuations should lead to higher future
returns.
-
Durable equity franchises are attractively valued and provide
a long-term hedge against inflation.
-
Capital cycles are leading to increased profitability in
capital intensive and cyclical sectors.
-
The impact of share buybacks at a time of low valuations
should be very positive.
The current portfolio is characterised by exposures to
capital cycle beneficiaries, structural growth opportunities, and
discounted UK assets.
Airlines (easyJet/Ryanair) and retailers (Frasers/Currys)
stand to see higher returns from limited capacity / consolidation.
Financials (Lloyds/Natwest, Plus500, Hargreaves Lansdown) should be
beneficiaries of interest rates remaining higher than they have
been in recent years whilst the UK housebuilders should benefit if
interest rates ease from current levels. Out-of-favour digital
winners (Nintendo, Delivery Hero, and Alphabet) continue to benefit
from structural trends that should improve their business
economics.
Another reason we are confident in the prospective returns of
the portfolio is the result of the diversification in the sources
of excess return that we have identified. The portfolio also
retains considerable liquidity, with over 80% of the Company able
to be sold within one day, which enables us to take advantage of
movements in the market.
We judge the greatest visible risks to our outlook to reside
in energy markets and geopolitics. Energy markets are fundamentally
tight due to underinvestment following the 2014/15 downturn and
disruptions to European gas supply provoked by the war. Higher
demand or an unforeseen reduction in supply would be damaging to
economies with limited domestic supply. Both the UK and US will
have elections next year and US-China relations remain
strained.
Inflationary pressures likely to
ease
UK inflation markets suggest that inflation will be 4% over
the next 3 years and 3.6% over the next 10 years. Our view is more
sanguine.
Energy prices have fallen markedly in recent months. Luck has
played its part as Europe
experienced an unusually warm winter. Russian oil production has
also proven more resilient than many feared. Following the
re-opening of China, the last
pandemic-induced distortions to supply chains have eased. These
factors suggest downward pressure on goods inflation, when
mathematically, inflation should decline from its peak level, as
the high rates of inflation seen in the second half of 2023 cease
to form part of calculations.
UK labour market tightness has showed signs of easing. In
2022, net migration reached a record net 603,000 against many
predictions of a fall following Brexit. The widespread decline in
real spending power caused by inflation is providing incentives to
seek employment and so the ratio of vacancies to job seekers is
falling.
Monetarists were amongst the few correctly to predict higher
inflation following the abnormal increase in money supply in
response to the pandemic. They are now highlighting marked
contractions in money supply growth in both the US and Europe resulting from the increase in interest
rates and note that current levels of interest rates would be
consistent with the inflation rates seen in the 2010s.
The importance of inflation targeting when making historic
comparisons is a factor that is seemingly overlooked. Inflation
targeting was introduced in 1992, ahead of the Bank of England becoming independent in 1997. The
average annual increase in CPI in the 28 years to 2020 was exactly
2.0%. In the prior 20-year period, the average was 9%.
This illustrates the effectiveness of central banks that have
the intent and authority to target inflation over the long- term.
Whilst a profound policy mistake was made during the pandemic,
central banks remain determined to reassert credibility and have
the authority to do what it takes to bring inflation back down to
target levels. We are sceptical, consequently, both about
expectations of inflation remaining above target and are wary of
falling prey to the excessive pessimism currently on display in
financial markets as a result of recent difficulties.
A decline in inflation and interest rate expectations should
be supportive of risk assets by lowering discount rates and by
enabling debt markets to function effectively, even if the cost in
the short term is higher interest rates and recession. A re-opening
of debt and capital markets would be likely to lead to a pick-up in
corporate and private equity activity.
Low valuations in the UK should lead to higher
returns
The equity risk premium is a measure of the premium you
receive in return for accepting the uncertainty of investing in
equities and demonstrates the cheapness of the UK market. At
current levels, the earnings yield on the FTSE All-Share is 11%. UK
10-year index linked government bonds yield 0.5%. This implies an
equity risk premium of over 10%.
Using the same methodology, the current US and European
equity market risk premia are 4% and 7%, respectively. In our
judgement, this difference is not justified by the long-term
fundamental prospects for corporate profit growth but reflects weak
sentiment towards UK markets. Whilst this point might have been
made at any point in the last five years, it remains
valid.
Our holdings in Natwest
and Lloyds
illustrate the significant value on offer. Both banks trade
on earnings yields in excess of 15% (equating to PE ratios of less
than 7x) and at a discount to their book value. This is despite
being large and enduring franchises that are also beneficiaries of
a normalisation in interest rates. Their combined net interest
income in 2023 is forecast to be 40% (>£7bn) more than in
2019.
All of our holdings across the UK housebuilders, with the
exception of Berkeley
Group, trade below book value. This is
attractive for businesses that have consistently achieved returns
on capital of over 15%. The UK faces an accumulated supply deficit
of over 1 million homes, which has worsened owing to an
increasingly difficult environment for planning
permissions.
Higher interest rates have reduced demand in the short-term,
but this does not impact household formation, which continues every
year. Demand for housing is deferred, not eliminated, when it is
not fulfilled immediately, and so it is logical to expect industry
volumes to recover, as and when mortgage rates
stabilise.
The takeover of Dignity
highlights the neglected value in UK equities. We have
written extensively about the company's irreplicable position
within the end-of-life industry as the only vertically integrated
provider of funerals (725 branches, #2 share), cremations (46
crematoria, #1 share) and pre-need plans (£1.2bn assets, #1
share).
The Board recommended an offer for the business at an
enterprise value of £789m (550p). We have historically noted that
the crematoria assets alone generate £48m of EBITDA, implying a
value of £820m-£960m based on the comparable multiples of European
infrastructure (17-20x). As the bidder offered an opportunity to
roll existing shareholdings into a new private vehicle, the
Takeover Panel required Morgan Stanley to provide an independent
valuation. This was publicly available and indicated a range of
660-990p, 20-80% above the offer price.
We reduced our holding into the cash offer, but we have
retained a considerable exposure to the publicly quoted equity
roll-over vehicle
("Castelnau") as we see
significant value in the business.
Durable equity franchises are attractively valued
long-term hedges against inflation
Equity valuation multiples initially contracted sharply in
response to higher interest rates, reflecting the fact that higher
discount rates reduce equity values. However, higher inflation also
acts favourably for equities which display durable pricing power.
In our view, this is the primary explanation for the resilience of
equity markets that many have found surprising.
The Company has a number of holdings in durable equity
franchises such as
Nintendo,
GSK and
EssilorLuxottica each of which
enjoys significant pricing power.
Nintendo made considerable
progress in the year in its strategy to become a broad
entertainment business, allowing it to improve monetisation of its
uniquely popular intellectual property. This was evident in the
success of the Super Mario Brothers movie, which has become the
second most popular animated movie of all time with global box
office receipts of over $1.3bn.
GSK has successfully
strengthened its balance sheet with the spin-off of its consumer
staples business Haleon. The company had a major pipeline success
with its RSV (Respiratory Syncytial Virus) vaccine, which has more
than 90% efficacy in adults over the age of 50, the cohort at the
greatest risk of hospitalisation with the disease.
EssilorLuxottica is the largest
global eyewear business, operating in a structurally growing
industry and with an R&D budget larger than their four closest
competitors combined. This enables the group to provide innovative
essential eye care solutions to an ageing global
population.
The share prices of Just Eat
Takeaway and Delivery
Hero have been weak as their growth trends
were impacted by consumer confidence and pandemic-related
distortions. Both companies have stemmed their losses far more
quickly than the market expected, despite declining order volumes.
Ultimately, we believe the industry remains in the early stages of
long-term adoption and will be able to achieve levels of
profitability higher than are anticipated by investors.
The Company's principal focus in the year was to take
advantage of volatility to add new holdings in businesses
characterised by the long duration of their earnings
potential.
In July, the Company initiated a holding in global
infrastructure operator Vinci. The company has a portfolio of
world-class infrastructure assets (toll roads and airports) with
inflation- linked revenues. Vinci has funded these investments from
its cash generative contracting business that is benefitting from
significant tailwinds from the energy transition.
In August, the Company initiated a holding in
Berkeley Group, a company with
a unique 16-year land bank and strong record of operational
excellence including a counter cyclical approach to buying land.
London is a structurally
under-supplied market in the <£1m price range. The government
estimates demand for London
housing to be c.90,000 units per annum, and in the last 3 years
deliveries have been less than 30,000 per annum.
The Company received shares in
Haleon when the global personal
care business was spun out of GSK. The Company doubled its holding
in August as we judged concerns over the potential impact of Zantac
litigation to be exaggerated. Haleon owns a number of
market-leading brands in oral care (Sensodyne), pain relief
(Panadol/Advil) and vitamins (Centrum) that have the potential to
grow reliably above GDP owing to trends such as ageing populations,
self-medication, and premiumisation.
In the second half of the year, the Company repurchased a
holding in Meta and
initiated a position in
Alphabet as we felt that
investor pessimism was excessive in the light of the stability of,
respectively, their globally dominant franchises in social media
and internet search. The digital advertising market has grown
rapidly in recent years but remains underpenetrated in many
geographies and industry verticals. Meta and Alphabet are amongst
the global leaders in the field of artificial intelligence and
stand to benefit from the opportunities its development
presents.
A new position was started in Hargreaves
Lansdown in January as the stock was de-rated
sharply in response to slowing industry growth. The company retains
an attractive position with a >40% share of the UK
direct-to-consumer (D2C) investment market. The entire D2C market
has total assets of £300bn, which is only 5% of total UK household
wealth of £15tn. We expect the market to grow as costs fall and
ageing populations move towards greater personal involvement in
their financial planning.
Capital cycles are leading to increased profitability
in capital intensive and cyclical sectors
Disruption from the pandemic and volatile demand patterns
have created tough conditions in many industries meaning a lack of
capital investment is leading to higher returns for those that
survive.
In our view, this is most evident in the aviation industry,
which was one of the hardest hit sectors through the pandemic as
demand evaporated and government support was limited.
Boeing and Airbus combined produced almost 2,000 fewer planes
than expected during the pandemic and have full order books to the
end of the decade. Demand has rebounded strongly, resulting in a
strong pricing environment where it is hard to see how supply can
respond.
Our holdings in low-cost airlines
easyJet and
Ryanair have been strong
performers as earnings expectations have been revised upwards owing
to their ability to increase fares significantly without loss of
volume. Our judgement is that valuations fail to capture the new
environment of higher profitability and the operational gearing of
their business models to higher prices.
Retail is another sector that has seen dramatic changes owing
to the shift to online retail, forced store closures during the
pandemic and unpredictable demand. Frasers
Group has outshone its peers through prudent
cost management and retaining a strong value proposition for
customers.
The company has used its strong cash generation to take
advantage of commercial distress to acquire several businesses such
as Studio Retail, Gieves & Hawkes, Missguided, and
Sportsmaster. The company's efficient infrastructure and
distribution platforms, combined with its frugal approach to cost,
allow it to extract value from businesses which previously
struggled. The current environment continues to create new
opportunities for the business.
Impact of share buybacks
underestimated
Share repurchases are an alternative way of returning cash to
shareholders whose value is theoretically equivalent to a
reinvestment of dividends. In practice, share buybacks can offer a
number of advantages:
-
Corporates can use share repurchases to distribute excess
capital they might not otherwise pay out as dividends.
-
Capital gains taxes are lower than income tax in the
UK.
-
The resulting growth in earnings per share may be valued more
highly by the market than capital returns.
To illustrate the last point, consider a company that trades
on 10x earnings and grows earnings by 5% per annum over 10 years.
Assuming a constant multiple, if 35% of net income is used to
repurchase shares, the company's growth in earnings per share
doubles from 5% to 10%.
This highlights how lower valuations increases the
compounding effect of share repurchases, which in our view is
relevant to the UK equity market and our portfolio today and why
Charlie Munger once said, "Pay close
attention to the cannibals - the businesses that are eating
themselves by buying back their stock."
Plus500 is one such example
within the portfolio. The company's business model allows it to
grow earnings with limited capital required. Since our investment
in 2016, it has invested £330m in repurchasing its own shares and
this has helped it reduce its share count by 21% and grow its grown
earnings by 17% per annum. Plus500 continues to expand into new
geographies and business areas, including the US market, which has
exciting potential.
Portfolio companies, which account for 45% of NAV, are
repurchasing shares. This segment of the portfolio trades on a
weighted average multiple of 10x earnings. Whilst the running
dividend yield of the portfolio is 2%, including pro-rata share
repurchases, the aggregate distribution yield is close to 5%. We
believe that such characteristics offer a sound body for future
returns to shareholders.
John Dodd and Kartik
Kumar
Fund managers
Artemis Fund Managers Limited
11 July 2023
April
2023 -
Key
Sector Exposures
|
Sector
|
2023
|
2022
|
Companies
|
General retail
|
14.8%
|
16.0%
|
Currys, Frasers
|
Housebuilding
|
13.2%
|
11.5%
|
Barratt, Bellway, Berkeley, Redrow, Springfield
|
Airlines
|
12.8%
|
12.7%
|
easyJet, Ryanair
|
Video games & hobbies
|
9.1%
|
10.5%
|
Nintendo, Hornby
|
Banking
|
7.7%
|
5.9%
|
Lloyds, NatWest
|
Funerals
|
6.8%
|
10.1%
|
Dignity
|
Food delivery
|
6.2%
|
8.0%
|
Delivery Hero, Just
Eat Takeaway.com
|
Financial services
|
6.1%
|
3.5%
|
Singer Capital Markets
|
Technology
|
5.9%
|
-
|
Alphabet, Darktrace,
Meta
|
Aerospace & defence
|
5.4%
|
5.2%
|
Reaction Engines
|
Trading platform
|
5.0%
|
5.2%
|
Plus500
|
Consumer staples
|
4.1%
|
2.0%
|
EssilorLuxottica,
Haleon
|
Pharmaceuticals
|
4.1%
|
5.6%
|
GSK
|
China technology
|
3.0%
|
4.9%
|
Prosus
|
Industrials
|
2.1%
|
1.4%
|
Vinci
|
Energy
|
0.9%
|
-
|
BP, Shell
|
Basic materials
|
0.9%
|
-
|
Anglo American
|
Property
|
0.7%
|
0.7%
|
Claremont Alpha
|
Serviced offices
|
-
|
3.1%
|
IWG
|
Leisure
|
-
|
2.7%
|
Flutter Entertainment, J
D Wetherspoon
|
Source: Artemis
ESG & Stewardship at Artemis
Introduction
Artemis believes stewardship activities contribute to
improvement in company performance and to consequently higher
returns for our clients.
Stewardship is a fundamental element of our approach across
all investment strategies. Whilst individual strategies are
distinctive, views and ideas are shared across investment teams.
The Stewardship team supports fund managers by providing insight,
research and analysis, discussion, and challenge on ESG and
stewardship matters.
In 2022 Artemis set goals for the Net Zero Asset Managers
initiative, covering 80% of AuM. Additionally, we published our
first Corporate Social Responsibility report and achieved signatory
status from the FRC. We have developed extensive internal tools to
inform and guide our Stewardship focuses and continue to strengthen
our controls, processes, and actions.
Approach to Stewardship
Our stewardship team is specifically dedicated to supporting
our fund managers by providing insight, research and analysis,
discussion, and challenge on ESG and stewardship matters
including:
-
Identifying and incorporating a wider set of risks and
opportunities into investment processes including ESG
factors
-
Monitoring and escalating issues with companies and
exercising shareholder rights at company meetings, and
-
Working collaboratively to develop and promote best practice
internally and across the industry.
Artemis Alpha Stewardship
approach
The Company employs a long-term value investing strategy to
pick stocks. The framework is based on valuing companies using
fundamental analysis and sizing positions according to the
attractiveness of share prices relative to our view of their value.
The Company's strategy is underpinned by a core principle that the
key driver of long-term value is achieving a high and sustainable
return on capital employed.
Investee companies that do not adhere to strong governance,
look after their employees, or fail to recognise environmental and
societal harm risk inhibiting their long-term potential. The
investment process requires a focus on the ESG risks and
opportunities present in each business and industry.
Risk mitigation
Our view is that ESG factors are most pertinent in their
contribution when creating the risk of a permanent loss of capital,
usually through obsolescence, excessive leverage, misjudged
investment value, misallocations of capital, and
regulation.
This is evident in the portfolio where we are significantly
underweight controversial sectors (as defined by ESG data
providers), and therefore are less exposed to key ESG risks that
may affect the prospects of these businesses.
We actively monitor ESG risks and opportunities primarily
through our fundamental and bottom-up driven research process for
monitoring existing and evaluating prospective investments. We
frequently engage with management teams on strategy, capital
allocation, incentive alignment and communication.
Engagement and voting
The Fund Manager has expanded his engagement with current and potential
holdings, ensuring appropriate monitoring and due
diligence for the portfolio. During the year, the Fund
Manager conducted 220
(vs 114 last
year) company meetings,
127 with existing and 93 with prospective
investments.
During the year we met with the investor forum to
improve the engagement and disclosure of easyJet, and
to represent our views
on the company's capital allocation. Additionally we
raised concerns about the Board's oversight and
responded to concerns about remuneration and share
issuance. As a result of this initiative the company's
chair agreed to meet with investors more
regularly.
The team used
its voting powers
to express its
dissatisfaction with company/management policy.
The number of votes that were not in line with
management guidance grew over the year 6x to 33, with
the proportion of votes not in line with
recommendations rising from 2% to 8%. Votes against
were focussed on compensation, directors, and
non-routine business.
Portfolio carbon emissions
The portfolio's carbon emissions relative to its benchmark,
the FTSE All-Share Index, have remained elevated since the
onset of COVID-19 in
early 2020. This
is because our
airline holdings are
still recovering from
depressed revenues that
penalised their carbon intensity
statistics based on emissions per revenue. Furthermore,
expectations of a strong recovery in revenue have
resulted in increases
in their share
prices, leading to
an increased weighting
in the portfolio
of their temporarily
inflated carbon intensity figures.
We expect this measure to normalise somewhat as airline revenues
fully recover in 2023.
Strategy and Business
Review
Culture, Purpose
& Values
The Directors drive the
culture, purpose and values of Artemis Alpha Trust plc ("the Company") and by
doing so seek to ensure that these three elements
underpin the delivery of strategy.
Culture
The Company is
an externally managed
investment trust and
as such its
culture is created
by the Board of
Directors and the
Investment Manager, Artemis Fund Managers Limited.
Purpose
Our purpose is to provide our shareholders, large or
small, with a diversified and cost-effective
investment opportunity to achieve long-term
growth.
Values
The Company provides access to a portfolio of
investments which the Board expects to be managed with
integrity, transparency and accountability and with
appropriate due diligence to environmental, social and
governance matters. The constructive and openly
discursive nature of the relationship
between the Board
and the Investment
Manager helps ensure their respective values are
aligned and focused on delivering the strategy for our
shareholders.
The core values
that contribute to
the Board culture
include:
-
Integrity: the Board seeks to
comply with all applicable laws and regulations, both
to the letter and in spirit.
-
Accountability:
the Board recognises the need to explain the
Company's performance to
investors and to
highlight the risks in a clear and open manner.
The Board has a key role to encourage and challenge
the performance of its Investment Manager and its
other service providers to help ensure the Company
continues to provide shareholder
value.
-
Respect & Transparency: the
Board seeks to communicate clearly and openly with
shareholders and service providers respecting
individual opinions and expectations. Contact by shareholders via the Chairman's email address is
welcomed.
-
Environmental, Social and Governance ("ESG")
issues: We are stewards of our shareholders'
capital; both the Board and Investment Manager
recognise that this comes with responsibilities. ESG
considerations are integrated within the investment
process.
An overview of the Investment Manager's culture,
values and stewardship activities can be found on the
website at www.artemisfunds.com.
Corporate strategy
& policy
The Company is
incorporated in England as a
public company limited
by shares. Its
business as an
investment trust is to
buy and sell investments with the aim of achieving the
investment objective and in accordance with the
policy.
Gearing
The Company uses gearing (i.e. borrowing) as part of
its investment strategy. The Company's Articles of
Association limit borrowing to 50 per cent of the
Company's net assets. However, the investment policy limits this to 25 per cent of net assets. Subject to
compliance with this restriction, the level of
borrowing is a matter for the Board, whilst the utilisation
of borrowings is delegated to the Investment Manager.
This utilisation may be subject to specific guidelines
established by the
Board from time
to time. The
current guidelines permit
the Investment Manager
to employ borrowings
of up to 20
per cent of net
assets. The Company
had no borrowing
facility as at 30 April 2023 or the prior year. The use of
gearing by the Investment Manager will vary from time
to time, reflecting its views on the potential returns
from stock markets. The Company's gearing is reviewed
by the Board and Investment Manager on an ongoing
basis. At the year end, net gearing was created
through the use of contracts for difference and stood
at 13.4 per cent (9.4 per cent as at 30
April 2022).
Leverage
Leverage is defined in the Alternative Investment Fund
Manager Directive ("AIFMD") as any method by which the
Company can increase its exposure by borrowing cash or
securities, or from leverage that is embedded in
derivative positions. The Company has an agreement
with Northern Trust to utilise contracts for
difference as a form of leverage. A result of 100 per
cent indicates that no leverage has been used. The
Company is permitted by its Articles to borrow up to
50 per cent; however the Company's investment policy
restricts this to 25 per cent. The Company is permitted
to have additional
leverage of up
to 100 per cent
of its net
assets, which results
in permitted total
leverage of 225
per cent under both
ratios. Artemis as the Alternative Investment Fund
Manager ("AIFM"), monitors leverage limits on a daily
basis and reviews them annually. No changes have been
made to these limits during the year. At 30 April 2023, the Company's
leverage was 134.2 per cent as determined using the
gross method and 115.7 per cent under the commitment
method.
The Investment Manager
requires prior Board
approval to:
(i)
enter into any
stocklending agreements;
(ii)
borrow money against
the security of
the Company's investments;
or
(iii)
create any charges
over any of the
Company's investments.
Operating environment
The Company operates as an investment trust company
and is an investment company within the meaning of
section 833 of the Companies Act 2006 (the
"Act").
The Company has
been approved as
an investment trust in
accordance with the requirements of section 1158 of the
Corporation Taxes Act 2010 which remains subject to
the Company continuing to meet the eligibility
conditions and ongoing requirements of the regulations. The Board will manage the Company so as to
continue to meet these conditions.
The Company has no employees and delegates most of its
operational functions to service providers.
Current & future
developments
A summary of the Company's developments during the
year ended 30 April
2023, together with
its prospects for
the future, is set out in the
Chairman's Statement and the Investment
Manager's Review in the Annual Report.
The Board's principal focus is the
delivery of positive long-term returns for
shareholders and this will be dependent on the success
of the investment strategy. The investment strategy,
and factors that may have an influence on it, such as
economic and stock market conditions, are discussed
regularly by the Board and the Investment Manager. The
Board regularly considers the ongoing development and
strategic direction of the Company, including its
promotion and the effectiveness of communication with
shareholders.
Key Performance Indicators
("KPIs")
The performance of
the Company is
reviewed regularly by
the Board and it uses a number of KPIs to assess
the Company's success in meeting its objective. The
KPIs which have been established
for this purpose
and remain unchanged
from the prior year are:
Discrete
annual
total returns
Year
ended
30 April
|
Net
asset
value*
|
Share
price*
|
FTSE
All-Share
Index
|
2018
|
11.0%
|
13.2%
|
8.2%
|
2019
|
(8.6)%
|
(8.9)%
|
2.6%
|
2020
|
(11.3)%
|
(12.5)%
|
(16.7)%
|
2021
|
56.0%
|
80.8%
|
26.0%
|
2022
|
(21.9)%
|
(24.8)%
|
8.7%
|
2023
|
1.3%
|
(1.2)%
|
6.0%
|
Source: Artemis/Datastream
* Alternative Performance Measure
Dividends
per
ordinary share
Year
ended
30
April
|
Ordinary
|
Special
|
Total pence per ordinary
share
|
Ordinary
increase
|
Total
increase/
(decrease)
|
2018
|
4.75p
|
1.60p
|
6.35p
|
10.4%
|
0.8%
|
2019
|
5.00p
|
0.50p
|
5.50p
|
5.3%
|
(13.4)%
|
2020
|
5.20p
|
-
|
5.20p
|
4.0%
|
(5.5)%
|
2021
|
5.30p
|
-
|
5.30p
|
1.9%
|
1.9%
|
2022
|
5.60p
|
-
|
5.60p
|
5.6%
|
5.6%
|
2023
|
6.20p
|
-
|
6.20p
|
10.7%
|
10.7%
|
Ongoing
charges
as a
proportion
of
shareholders' funds
As at
30 April
|
Ongoing charges*
|
2018
|
0.90%
|
2019
|
0.93%
|
2020
|
0.95%
|
2021
|
0.93%
|
2022
|
1.01%
|
2023
|
1.08%
|
* Alternative Performance Measure
Discount management
In addition to the above KPIs, the Board monitors the
discount to the underlying net asset value at which
the shares trade. The discount levels throughout the
financial year are
shown within the
Financial Highlights in the Annual
Report. No specific discount target has
been set, but the Board sets the share buyback policy
and has given the Investment Manager discretion to
exercise the Company's authority to buyback its own
shares from time to time to address any imbalances
between the supply and demand in the Company's shares
or at times where it is believed this is the best use
of available capital to increase NAV per share. This
is reviewed regularly by the Board. The Board will
also use its authority to issue new
ordinary shares from
time to time
should there be
excess demand for the Company's shares. The
Company will also provide tender offers every three
years. The first tender offer was
due in 2021,
for 25 per cent
of the ordinary
shares then in
issue. However, following
a shareholder vote,
this did not
take place. The next proposal for a tender offer
will be in 2024.
Principal risks and
risk management
As required by the 2018 UK Code of Corporate
Governance, the
Board has carried out a robust assessment of the principal and emerging risks
facing the Company. Following consideration of the investment,
regulatory and operational risks, the Board has concluded that
there are no emerging risks facing the Company that require to be
added to the principal risks.
The Board, in
conjunction with the
Investment Manager, has
developed a risk
map which sets
out the principal
risks faced by
the Company and
the controls established
to mitigate these risks. This is an ongoing process and
the risk map, including any emerging risks, is
formally reviewed every six months. The Board has
given particular attention to those risks that might
threaten the long-term viability of the
Company. Further information
on the Company's
internal controls is set out in the corporate
governance section in the Annual Report. As an investment company
the main risks relate to the nature of the individual
investments and the investment activities generally;
these include market price risk, foreign currency
risk, interest rate risk, credit risk and liquidity
risk.
A summary of
the key areas
of risk, their
movement during the
year and their mitigation is set out below:
Movement
|
Principal risk
|
Mitigation/control
|
No change
|
Strategic
risk
Investment objective and policy are not appropriate in
the current market and not favoured by investors.
|
The investment objective and policy of the Company
is set by the Board and is subject to ongoing review
and monitoring in conjunction with the Investment
Manager. Views expressed by the Company's
shareholders are also taken into account.
|
No change
|
Investment risk
The Company's investments are selected on their
individual merits and the performance of the portfolio is not likely to track the
wider UK market (FTSE All-Share Index). Whilst the
focus is on large cap companies the Company also
invests in small cap (listed), AIM traded and
unquoted investments which
can be subject to a
higher degree of risk than that of larger quoted
investments. From time
to time, the
Company may also
have significant exposure to particular industry sectors.
The Investment Manager's high conviction approach
leads to a concentrated portfolio, typically
containing between 25 and 60 stocks, carrying a higher
degree of stock-specific risk than a more diversified
portfolio.
The Company's functional and reporting currency is
Sterling. However, the
investment objective and
policy may result in a proportion of the
Company's portfolio being invested in overseas
equities denominated in currencies
other than Sterling.
As a result,
movements in exchange
rates may affect
the Sterling value
of these investments and their
returns.
The Company may borrow money for investment
purposes or use derivatives to similarly increase
exposure. If the investments fall in value, any
borrowings/use of
derivatives will magnify
the extent of
the losses.
|
The Board considers that this risk is justified by the
longer-term nature of the investment objective and
the Company's closed-ended structure, and that such
investments should be a source of positive returns for
shareholders. Risks are diversified through having a
range of investments in the portfolio covering various
sectors. The Board discusses the investment portfolio
with the Investment Manager at each Board meeting,
and at each month end between Board meetings, and
part of this
discussion includes a
detailed review of
the Company's
unquoted investments, their valuations and future prospects together with their portfolio weighting.
The Board receives management
information concerning the geographical sector split
of the portfolio. The Company is not materially
exposed to foreign currency risk.
All borrowing arrangements
entered into require the prior
approval of the
Board and gearing
levels, provided by the use of
contracts for difference, are regularly discussed and
reviewed by the Board and Investment Manager.
|
No change
|
Legal
and
regulatory risk
A breach of s1158 Corporation Tax Act 2010 could lead
to a loss of investment trust status and the resultant
taxation of realised capital gains.
The principal laws and regulations the Company is
required to comply with are the Companies Act 2006,
the Alternative Investment Fund Managers' Directive,
the Market Abuse
Regulation, the UK
Listing Rules and the
Disclosure Guidance and Transparency Rules.
A breach of the FCA listing rules could lead to
suspension of the Company's shares. A breach of the
Companies Act 2006 could lead to criminal proceedings and reputational
and financial damage.
|
The Investment Manager provides investment,
company secretarial, administration and accounting
services through the use of qualified
professionals.
The Board receives internal
control reports from the Investment Manager confirming
compliance with regulations. These reports also
highlight any matter that the Compliance team feel
should be brought to the Board's attention along with
any items discussed during internal audit
review.
The Board meets each year with the Risk and
Compliance team to discuss the areas of risk
appropriate to the Company and the control
environment.
|
No change
|
Operational risk
Disruption to, or failure of, the Investment Manager's
and/or any other
third-party service
providers' systems which could
result in an inability to report accurately and
monitor the Company's financial position.
Northern Trust became administrator, custodian and
depositary during the
year taking over
from JP Morgan Europe. There was a temporary additional risk in relation to this move due to
the operational changes required.
|
Both the Investment Manager and the Administrator
have established business
continuity plans to
facilitate continued operation in the event of a
major service disruption or disaster.
All of the Investment Manager's
and Administrator's staff can
work from home
with no impact
to operations.
The move to Northern Trust was
planned in detail with contingencies in place as
required. The move has now been completed and the risk
returned to the prior year
level.
|
No change
|
Cyber risk
Failure or disruption
of the Investment
Manager's and/ or
any other third-party
service providers' systems
as a result of a cyber-attack, data
theft, service disruption, etc. Whilst the risk of a
direct financial loss by the Company is low, the risk
of reputational damage and the risk of loss of control
of sensitive information is more
significant.
|
The Company benefits from the
cyber security precautions in place at the Investment Manager and
also those in place at the third-party suppliers such as the
registrar and depositary.
The Board receives regular updates from the Investment Manager and its
service providers which describe the protective
measures taken to enhance security.
|
No change
|
Climate change
Globally, climate change effects are already emerging
in the form of changing weather patterns. Extreme
weather events could
potentially impair the
operations of individual investee companies,
potential investee companies, their supply chains and
their customers.
|
The Investment Manager
takes such risks
into account, along with the downside risk to any company
(whether in the
form of its business prospects or market valuation or sustainability of dividends) that is perceived to be making a detrimental contribution to climate change. The Company invests in a broad portfolio of businesses
with operations spread
geographically, which should
limit the impact
of location- specific
weather events.
|
Increased
|
Geopolitical risk
There is an
increasing risk to
market stability from
geo-political conflicts,
such as between
Russia and Ukraine.
|
The Board discusses such risks as they arise and
continues to monitor the impact on the Company and
its investments through discussion with the Investment Manager as and when
required.
The Company does not have any
direct investments in countries
where there is
geopolitical conflict.
However, the Board is provided with information
from the Investment Manager on the measures it takes to assess the potential impact of
geopolitical events, both on itself
and other service
providers, and any
action taken.
|
Increased
|
Inflationary risk
Central Bank decisions,
the war in
Ukraine or any
other economic or political factors or global
events, may result in increasing levels of inflation
directly affecting economic growth and the underlying investment values.
|
The Board and its Investment Manager have regular
discussions to assess the likely impact of inflation
rates on the economy, corporate profitability and
asset prices.
|
The Pandemic risk noted in the 2022 Annual Report is no longer considered an emerging or principal risk.
Further information on risks and the management of them are set out in the notes to the financial statements
Long-term Viability
Viability statement
In accordance with the Association of Investment Companies
(the "AIC") Code of Corporate Governance, the Board has considered
the longer-term prospects for the Company beyond the twelve months
required by the going concern basis of accounting. The period
assessed is for five years to 30 April
2028. The Board has concluded that this period is
appropriate, carefully taking into account the inherent risk with
equities and the long-term investor outlook.
As part of its assessment of the viability of the Company,
the Board has discussed and considered each of the principal risks,
including matters relating to geopolitical events and inflationary
pressures, and their impact on the Company. Although the damage to
the economy through the total impact of inflation and the
geopolitical effect of Russia/
Ukraine cannot be known with
certainty, the Board has considered these risks and does not
believe they affect the long-term viability of the Company and its
portfolio. The Investment Manager carried out stress testing
scenarios in connection with a longer-lasting damage to the
economy, of the withdrawal of liquidity by the financial
authorities and of a significant and sustained fall in markets. The
Board has also considered the liquidity of the Company's portfolio
to ensure that it will be able to meet its liabilities, as they
fall due. The results demonstrated the impact on the Company's NAV
throughout the five year period and on its expenses and
liabilities. The Board have concluded, given the realisable nature
of the majority of the investments, the level of ongoing expenses
and the availability of gearing that the Company will continue to
be in a position to cover its liabilities.
The Board also made the below assumptions when considering
the viability of the Company:
-
Investors will continue to wish to have
exposure to UK listed companies
-
There will be continued demand for
investment trusts
-
Regulation will not increase to such an
extent as to hinder operational efficiency
The Directors do not expect there to be any significant
change in the current principal risks and the associated mitigating
controls other than the decreased risk in relation to Covid-19. The
Directors also do not envisage any change in strategy or objectives
that would prevent the Company from continuing to operate over the
five-year period. The Company's assets are liquid, its commitments
limited, and it intends to continue as an investment
trust.
The 2024 tender offer of up to 25% of the share capital has
been considered by the Board when assessing the continuing
viability of the Company.
Taking into account the results of the above review, the
Board has a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due
over the period to 30 April
2028.
Life of the Company
The Company operates a triennial liquidity event for
shareholders. The tender offers may be made every three years, with
the next event proposed in 2024, subject to shareholder approval.
Each tender offer will be for up to 25 per cent of the ordinary
shares then in issue (excluding Treasury Shares), save that the
Board may, at its sole discretion, decide not to proceed with a
tender offer if the ordinary shares are trading at a premium to the
estimated tender price.
Share capital
Shareholders authorised the Company to buyback up to 14.99
per cent of the shares in issue at the 2022 AGM.
During the year the Company bought back 1,019,766 ordinary
shares. As at 30 April 2023,
4,525,566 ordinary shares bought back during the year are held in
treasury.
A resolution to renew the Company's buyback authority will be
put to shareholders at the AGM on 21
September 2023.
No ordinary shares were issued during the year.
Duty to Promote the Success of the
Company
How the Directors discharge their duties under s172
of the Companies Act
Under section 172 of the Companies Act 2006, the Directors
have a duty to act in a way they consider, in good faith, would be
likely to promote the success of the Company for the benefit of its
shareholders as a whole, and in doing so have regard to:
a)
the likely consequences of any decision in the long
term;
b)
the interests of the Company's employees;
c)
the need to foster the Company's business relationships with
suppliers, customers and others;
d)
the impact of the Company's operations on the community and
the environment;
e)
the desirability of the Company maintaining a reputation for
high standards of business conduct; and
f)
the need to act fairly as between members of the
Company.
As an externally managed investment trust, the Company has no
employees or physical assets, our stakeholders include our
shareholders and service providers, such as the Investment
Manager.
The below tables describe the impact of engagement with our
stakeholders that has taken place during the year:
Engagement with key stakeholders
Stakeholders
|
Engagement
|
Impact
|
Shareholders and potential
investors
|
The
Board is responsible
for promoting the
long-term sustainable success
and strategic direction of
the Company for
the benefit of the Company's shareholders. Whilst certain responsibilities are
delegated, Directors' responsibilities are set out in
the schedule of matters reserved for the Board and
the terms
of reference of its committees, which are reviewed regularly
by the Board.
To
help the Board
in its aim to
act fairly as
between the Company's
members, it encourages communications with
all shareholders. The Annual and Half-Yearly
reports are issued to shareholders and are
available on the Investment Manager's website
together with other relevant information including
monthly factsheets. The Board receives regular
feedback on shareholder meetings
from the Company's
broker and any shareholder communications are
reviewed and discussed
by the Board to
ensure that shareholder views are taken into consideration as part of any decisions taken by
the Board. The
Chairman is available
to contact via email: alpha.chairman@artemisfunds.com. The
Board considers communication with shareholders
an important function
and Directors are always available to respond to shareholder queries. For further
information see `Relations with
shareholders'.
|
Through the
publication of the Annual Report and the Half-Yearly
Report, monthly factsheets and Fund Manager updates
to the Company's website, shareholders are
kept informed of
Company performance and
portfolio activities.
Shareholders
are encouraged to raise questions and communicate with
the Chairman and the Fund Manager.
|
Artemis as Investment
Manager
-
Fund management
-
Company secretarial
-
Financial reporting
-
Sales & marketing
-
Compliance and internal control
functions
-
Internal audit
-
Investment administration (outsourced to
Northern Trust)
|
The Board has
set the parameters within which the Investment Manager
operates and these are set out in the
Investment Management Agreement and agreed by
the Board.
The
Board receives regular
updates from the Investment Manager and
other service providers and ensures that
information pertaining to its stakeholders is
provided, as required, as part of the information
presented in regular Board meetings. During the year,
additional monthly performance
updates were held between the Board
and Investment Manager to discuss the continuing
impact of geopolitical, inflationary and market
movements events on the Company and its
portfolio. The Board,
with the support
of its Management Engagement Committee,
regularly reviews the performance of the
Investment Manager and other service providers
to ensure that services provided to the Company are
managed efficiently and effectively for the benefit of
the Company's shareholders.
The Board has
reviewed and discussed plans for the future marketing
and development of the Company with the
Investment Manager during the year.
|
During the
year the performance of the Company fell against its
benchmark. Buybacks were performed during the
year to help maintain and narrow the discount.
The liquidity in
the market for
the Company's shares continued to
increase on the prior year, further detail can be
found within the Chairman's Statement and
Investment Manager's Review.
The
Fund Manager worked
on a number of
initiatives to raise the profile of the Company and
generate interest with new investors;
taking part in
various shareholder in-person
events and webinars during the year.
During the year, the investment
administrator changed from
JP Morgan to
Northern Trust. This was discussed
in advance by the Board and approval was
given.
|
Other third-party service providers
-
Northern Trust as Depositary and
Custodian
-
Singer Capital Markets as Broker
-
Link Group as Registrar
-
Johnston Carmichael LLP as
Auditor
|
As
an investment company,
all services are
outsourced to third-party service providers. The Board considers
the Depositary, the Custodian, the Broker, the
Registrar and Auditor to be key
stakeholders.
The Board relies on the Investment
Manager to work alongside these key
stakeholders to meet
the requirements of
the Company. The
Management Engagement
Committee reviews the performance of these
service providers, along with their fee levels,
and provides recommendations to the Board
as required.
The
Investment Manager has constant interaction with the
service providers and provides feedback to and from
the Board as required.
Annual
assurance reports are received to assist the review of
the internal control environments of the Depositary
and Custodian.
The FRC
performs and publishes audit quality reviews on a
sample of audit firms and audits each year.
|
The
performance of the
third-party service providers is continually
monitored throughout the year. As and when
appropriate, third-party
providers present to
the Board.
Following formal review
by the Management
Engagement Committee and Board at the year end,
it was concluded that the service providers were
operating effectively and provided a good level of
service.
Following the
move of administration services,
Depositary and Custodian
services are now provided by Northern
Trust.
|
Investee companies
|
The Board
sets the investment objective and discusses stock selection, asset
allocation, and the ESG qualities of investee companies with the
Fund Manager at each Board meeting.
The Fund
Manager engages with the investee companies, prior to investment
and on an on-going basis.
The Fund
Manager has a dedicated Stewardship Team which supports the Fund
Manager in the investment process.
|
The
engagement of the Fund Manager with the investee companies aids
awareness and understanding of the ESG environment in operation as
well as the valuation and prospects of their businesses.
|
The Association of Investment Companies
("AIC")
|
The Company
is a member of the AIC which is an organisation that represents the
interests of investment trusts, VCTs and other closed-end
funds.
|
The Board
chooses to report under the AIC Code of Corporate Governance. This
Code better reflects the nature of an investment trust in the
context of good corporate governance.
|
Board discussions
and decisions
The following are
the key discussions
and decisions made
by the Board
during the year
ended 30 April 2023:
Topic
|
Background
& discussion
|
Decision
|
Share
buyback policy
|
The level of buybacks and their effect on the
discount is discussed at each Board meeting.
The strategy in relation to buybacks and
investor feedback thereon is discussed
and monitored by
the Board. The
economic environment had
worsened over the
period from when the initial extended
buyback programme had been put in place.
|
The Board weighs up the effectiveness of the
buyback policy in helping to maintain/reduce the discount to NAV against its impact on the Company and the liquidity of its
shares. In light
of market developments, buybacks
were conducted at a reduced pace in the period.
The Board decided to reduce the monetary amount
of buybacks and continue to monitor the rate in line
with discount and liquidity requirements.
|
Environmental, social and governance matters (`ESG')
|
The Board discussed its responsibilities for ESG
and how Artemis, as Investment Manager, undertook the
required steps to ensure ESG was incorporated within
the investment process.
The Board made enquiries of the
Investment Manager as to the ESG credentials of
the underlying
portfolio. The Investment Manager confirmed engagement
with investee boards helped gain an understanding of the governance in
place.
|
The Board received reporting on ESG,
sustainability and voting records quarterly. A
representative of the Risk team presents as
required to the Board.
It was decided that ESG was appropriately
incorporated within the Artemis investment
process and the Board would continue to discuss
and monitor on an on-going basis.
|
Administration, Depositary
and Custodian
arrangements
|
The Board considered and discussed the progress
of the change of administrator, depositary and
custodian to Northern Trust.
|
The Board confirmed satisfaction with the
progress on the migration of third parties and
the change of responsibilities
was completed on 6 March 2023.
|
Gearing
|
The Board discussed the current policy of
providing gearing through Contracts for Difference.
|
The Board decided that this policy continues to
provide gearing at
a reduced cost
compared to a
conventional bank loan.
|
Internal
audit
|
The Audit Committee discussed the possibility of
the Company having its own internal audit
function.
|
The Audit Committee and Board decided the
Company should continue to place reliance on the
internal audit function performed by the
Investment Manager.
|
Director
succession
|
The Board discussed the succession of Directors
taking into account the number of years served, the
mix of skills required to perform the role and the
diversity requirements of
the new legislation.
The recruitment process to replace Ms Bergin was
discussed. A comprehensive list of applicants for the
role of Chairman of the
Audit Committee was
received from Nurole. These were reviewed and discussed at length to ensure the right candidates were chosen for interview. The
Board were keen to see candidates with commercial financial and
audit skills as
well as those
from a more conventional investment trust
background.
|
It was agreed to enlist the services of Nurole
as an external, independent recruitment
consultant to assist with the replacement of
Ms Bergin.
Mrs Stewart became interim Chairman of the
Audit Committee in October 2022 and became
Senior Independent Director on 28 June 2023.
Mr Smethers offered the sought after financial
and audit skills and was agreed to be an excellent addition to the
skills already present on the Board. The Board
approved the recruitment of Mr Smethers and his role
as Chairman of the Audit
Committee.
While the Board acknowledges that it has not been compliant with the gender
diversity guidelines during the second half of the year, its firm intention is
to return to a
position of compliance.
|
The Board's primary focus is to promote the long-term
success of the Company for the benefit of the
Company's shareholders. In
doing so, the
Board has regard
to the impact of its
actions on other stakeholders as described above.
Directors & Diversity
The Directors of the Company and their biographical
details are set out in the Annual Report.
No Director has
a contract of
service with the
Company.
The Board supports the recommendations of the
Hampton-Alexander Review on gender diversity and the Parker
Review on ethnic representation on Boards.
The Board recognises the principles of diversity in
the boardroom and acknowledges the benefits of having
greater diversity, including gender, social and ethnic
backgrounds, and cognitive and personal strengths.
When setting a new appointment brief, the Nomination
Committee considers diversity alongside seeking to
ensure that the overall balance of skills and
knowledge that the Board has remains
appropriate, so that
it can continue
to operate effectively.
The Board's Director
selection policy will,
first and foremost,
seek to identify the person best qualified to
become a Director of the Company, based on merit and
objective criteria.
The Board is currently comprised of four male Directors
and one female Director.
The FCA announced a new policy statement on diversity
and inclusion on company boards in April 2022. Companies are required
to comply with the targets or explain the reasons for
non-compliance. Outlined below is an overview of the
targets and the Company's compliance as at 30 April 2023 in accordance with
Listing Rule 9.8.6R(9):
-
40% of the Board is represented by
women: 40% of the individuals on
the Board were women up to 13 October 2022,
the date of Ms
Bergin's retirement. From
that point to
15 March 2023,
25% of the
Board were women
and from 15
March 2023 to 30 April 2023,
20% of the Board were women. As at 30 April 2023, the Company does not meet
this diversity target and a further explanation is given in
the Annual Report.
-
One
woman
in a
senior
position: as
at 30 April
2023 no woman was in a senior position.
In the absence of Executive roles, the Company
also considers the role of Chairman
of the Audit
Committee, along with
the role of Senior Independent
Director, to qualify as a senior position.
Ms Bergin held
these roles throughout
the year until retirement on 13 October 2022 at which point Mrs
Stewart became interim Chairman of the Audit Committee
until 15 March 2023 and the
appointment of Mr Smethers
to the role.
The Company therefore
does not meet
this diversity target
as at 30 April
2023. Mrs Stewart
subsequently became Senior Independent Director on
28 June 2023.
-
One
individual from a minority ethnic background:
as at 30 April
2023, no individuals
on the Board
are from a
minority ethnic background.
The Company does not
therefore meet this diversity target and a further
explanation is given in the Annual Report.
The following tables
set out the
data on the
diversity of the Directors on the
Company's Board in accordance with Listing Rule
9.8.6R(10) as at 30 April 2023. This
data has been collected through consultation with the
Board. Subsequent to the record date of 30 April 2023, Mrs Stewart became the
Senior Independent Director.
|
Number
of
Board members
|
Percentage
of the
Board
|
Number
of
senior
positions
on the Board
|
Number
in executive
management2
|
Percentage
of
executive management2
|
Men
|
4
|
80%
|
21
|
N/A
|
N/A
|
Women
|
1
|
20%
|
0
|
N/A
|
N/A
|
Not specified/prefer not
to say
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
1 Duncan
Budge is the
Chairman of the
Board, a senior
position as defined
by the Listing
Rules and Mr
Smethers is Chairman
of the Audit Committee.
2
Not applicable as the Company does not have an executive management team.
Number
of
Board members
|
Percentage
of the
Board
|
Number
of
senior
positions
on the Board
|
Number
in executive
management1
|
Percentage
of
executive management1
|
White
British or other
White
|
5
|
100%
|
2
|
N/A
|
N/A
|
Mixed/Multiple ethnic groups
|
0
|
0%
|
0
|
N/A
|
N/A
|
Asian/Asian British
|
0
|
0%
|
0
|
N/A
|
N/A
|
Black/African/Caribbean/Black
British
|
0
|
0%
|
0
|
N/A
|
N/A
|
Other
ethnic group, including
Arab
|
0
|
0%
|
0
|
N/A
|
N/A
|
Not
specified/prefer not to
say
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
1
Not applicable as the Company does not have an executive management team.
Modern Slavery Act
2015
The Company does not fall
within the scope of the Modern Slavery Act 2015 as its turnover is
less than £36m. Therefore, no slavery and human trafficking
statement is included in the Annual Report.
Sustainability and
Environmental, social and governance
(`ESG')
matters
The Board recognises that the
most material way in which the Company can have an impact on ESG is
through responsible ownership of its investments. The Board has
appointed Artemis as Investment Manager, who engages actively with
investee companies undertaking extensive evaluation and engagement
on a variety of matters such as strategy, performance, risk,
dividend policy, governance and remuneration. All risks and
opportunities are considered as part of the investment process in
the context of enhancing the long-term value of shareholders'
investments. This will include matters relating to material
environmental, human rights and social considerations that will
ultimately impact the profitability of a company or its stock
market rating and hence these matters are an integral part of
Artemis' thinking as investors. The ESG and stewardship engagement
of Artemis is detailed in the Annual Report.
Financial
Statements
The financial statements of the
Company are included in the Annual Report.
For and on behalf of the
Board,
Duncan Budge
Chairman
11 July
2023
Statement of Directors' Responsibilities in respect
of the Annual Report
Management Report
Listed companies are required by the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules (the
"Rules") to include a management report in their annual financial
statements. The information required to be in the management report
for the purpose of the Rules is included in the Strategic Report in
the Annual Report. Therefore no separate management report has been
included.
Statement of Directors'
Responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they are
required to prepare the financial statements in accordance with
UK-adopted international accounting standards.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
their profit or loss for that period. In preparing each of the
financial statements, the Directors are required to:
-
select suitable accounting policies and then apply them
consistently;
-
make judgements and estimates that are reasonable
-
and prudent;
-
state whether they have been prepared in accordance with
UK-adopted international accounting standards; and
-
prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They
have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that comply with that law and those regulations.
The financial statements are published on a website,
artemisalphatrust.co.uk, maintained by the Company's Investment
Manager, Artemis. Responsibility for the maintenance and integrity
of the corporate and financial information relating to the Company
on this website has been delegated to the Investment Manager by the
Directors. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Directors' confirmations
Each of the Directors listed in the Annual Report confirm
that, to the best of their knowledge:
a)
the financial statements, prepared in accordance with the
applicable set of UK-adopted international accounting standards,
give a true and fair view of the assets, liabilities and financial
position of the Company as at 30 April
2023, and of the profit or loss of the Company for the year
then ended;
b)
the Strategic Report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that it faces; and
c)
the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
Shareholders to assess the Company's position and performance,
business model and strategy.
In the case of each Director in office at the date the
Directors' Report is approved:
a)
so far as the Director is aware, there is no relevant audit
information of which the Company's Auditor is unaware;
and
b)
they have taken all steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Company's Auditor is aware of
that information.
For and on behalf of the Board
Duncan Budge
Chairman
11 July 2023
Financial
Statements
Statement of
Comprehensive Income
For the year ended 30 April
2023
|
Year ended 30 April
2023
|
Year ended 30 April
2022
|
|
Revenue
£'000
|
Capital
£'000
|
Total
£'000
|
Revenue
£'000
|
Capital
£'000
|
Total
£'000
|
Investment income
|
3,052
|
-
|
3,052
|
3,099
|
-
|
3,099
|
Total
revenue
|
3,052
|
-
|
3,052
|
3,099
|
-
|
3,099
|
Losses on investments
|
-
|
(4,609)
|
(4,609)
|
-
|
(30,511)
|
(30,511)
|
Net gains/(losses) on
derivatives
|
-
|
4,134
|
4,134
|
-
|
(7,770)
|
(7,770)
|
Currency gains/(losses)
|
-
|
140
|
140
|
-
|
(16)
|
(16)
|
Total
income/(loss)
|
3,052
|
(335)
|
2,717
|
3,099
|
(38,297)
|
(35,198)
|
Expenses
|
|
|
|
|
|
|
Investment management fee
|
(154)
|
(615)
|
(769)
|
(219)
|
(875)
|
(1,094)
|
Other expenses
|
(456)
|
(8)
|
(464)
|
(492)
|
(74)
|
(566)
|
Profit/(loss)
before
finance
costs
and tax
|
2,442
|
(958)
|
1,484
|
2,388
|
(39,246)
|
(36,858)
|
Finance costs
|
(115)
|
(461)
|
(576)
|
(9)
|
(36)
|
(45)
|
Profit/(loss)
before tax
|
2,327
|
(1,419)
|
908
|
2,379
|
(39,282)
|
(36,903)
|
Tax
|
(101)
|
-
|
(101)
|
(118)
|
-
|
(118)
|
Profit/(loss)
and
total
comprehensive
income/(expense) for
the year
|
2,226
|
(1,419)
|
807
|
2,261
|
(39,282)
|
(37,021)
|
Earnings/(loss)
per
ordinary share
|
6.74p
|
(4.30p)
|
2.44p
|
6.29p
|
(109.28p)
|
(102.99p)
|
|
|
|
|
|
|
|
|
The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance with International
Financial Reporting Standards. The supplementary revenue and
capital columns are both prepared under guidance
published by the Association of Investment Companies.
All items in
the above statement
derive from continuing
operations.
All income is
attributable to the
equity shareholders of
Artemis Alpha Trust
plc. There are
no minority interests.
Statement of
Financial Position
As at 30 April
2023
|
2023
£'000
|
2022
£'000
|
Non-current assets
|
|
|
Investments
|
109,979
|
119,612
|
Investments in subsidiary
undertaking
|
4,264
|
4,231
|
|
114,243
|
123,843
|
Current assets
|
|
|
Derivative assets
|
2,187
|
492
|
Other receivables
|
2,208
|
781
|
Collateral held
|
-
|
1,970
|
Cash and cash equivalents
|
7,653
|
2,389
|
Total
assets
|
126,291
|
129,475
|
Current liabilities
|
|
Derivative liabilities
|
(106)
|
(308)
|
Collateral pledged
|
(1,930)
|
-
|
Other payables
|
(4,438)
|
(5,066)
|
Total
liabilities
|
(6,474)
|
(5,374)
|
Net assets
|
119,817
|
124,101
|
Equity
attributable
to
equity holders
|
|
Share capital
|
373
|
373
|
Share premium
|
676
|
676
|
Special reserve
|
18,779
|
21,964
|
Capital redemption reserve
|
217
|
217
|
Retained earnings -
revenue
|
3,437
|
3,117
|
Retained earnings -
capital
|
96,335
|
97,754
|
Total
equity
|
119,817
|
124,101
|
Net
asset
value
per
ordinary share
|
366.02p
|
367.65p
|
These financial statements were approved by the Board of Directors and signed on its behalf on 11 July
2023:
Duncan Budge
Chairman
Statement of Changes in Equity
For the year
ended 30 April 2023
|
Share
capital
£'000
|
Share
premium
£'000
|
Special
reserve
£'000
|
Capital
redemption
reserve
£'000
|
Retained
earnings
|
|
Revenue
£'000
|
Capital
£'000
|
Total
£'000
|
For the
year
ended
30
April 2023
|
|
|
|
|
|
|
|
At 1 May 2022
|
373
|
676
|
21,964
|
217
|
3,117
|
97,754
|
124,101
|
Total comprehensive income:
|
|
|
|
|
|
|
|
Profit/(loss) for the
year
|
-
|
-
|
-
|
-
|
2,226
|
(1,419)
|
807
|
Transactions
with owners recorded
directly to equity:
|
|
|
|
|
|
|
|
Repurchase of ordinary
shares into treasury
|
-
|
-
|
(3,185)
|
-
|
-
|
-
|
(3,185)
|
Dividends paid
|
-
|
-
|
-
|
-
|
(1,906)
|
-
|
(1,906)
|
At 30
April 2023
|
373
|
676
|
18,779
|
217
|
3,437
|
96,335
|
119,817
|
For the
year
ended
30
April 2022
|
|
|
|
|
|
|
|
At 1 May 2021
|
382
|
676
|
40,738
|
208
|
2,788
|
137,036
|
181,828
|
Total comprehensive income:
|
|
|
|
|
|
|
|
Profit/(loss) for the
year
|
-
|
-
|
-
|
-
|
2,261
|
(39,282)
|
(37,021)
|
Transactions with owners
recorded directly to equity:
|
|
|
|
|
|
|
|
Repurchase of ordinary
shares into treasury
|
-
|
-
|
(14,683)
|
-
|
-
|
-
|
(14,683)
|
Repurchase and cancellation
of ordinary shares
|
(9)
|
-
|
(4,091)
|
9
|
-
|
-
|
(4,091)
|
Dividends paid
|
-
|
-
|
-
|
-
|
(1,932)
|
-
|
(1,932)
|
At 30
April 2022
|
373
|
676
|
21,964
|
217
|
3,117
|
97,754
|
124,101
|
The notes in the Annual
Report form part
of these
financial statements.
Statement of Cash
Flows
For the year
ended 30 April 2023
|
2023
£'000
|
2022
£'000
|
Operating
activities
|
|
|
Profit/(loss) before tax
|
908
|
(36,903)
|
Interest payable
|
576
|
45
|
Losses on investments
|
4,609
|
30,511
|
Net (gains)/losses on
derivatives
|
(4,134)
|
7,770
|
Currency (gains)/losses
|
(140)
|
16
|
Increase in other
receivables
|
(6)
|
(56)
|
Decrease in accrued
expenses
|
(12)
|
(96)
|
Net
cash
inflow
from
operating
activities
before
interest
and tax
|
1,801
|
1,287
|
Interest paid
|
(576)
|
(45)
|
Irrecoverable overseas tax
suffered
|
(101)
|
(118)
|
Net
cash
inflow
from
operating activities
|
1,124
|
1,124
|
Investing activities
|
|
Purchase of investments
|
(24,601)
|
(25,087)
|
Sale of investments
|
28,584
|
49,583
|
Sale/(purchase) of derivatives
|
583
|
(6,656)
|
Collateral pledged/(held)
|
3,900
|
(2,800)
|
Net
cash
inflow
from
investing activities
|
8,466
|
15,040
|
Financing activities
|
|
Repurchase of ordinary
shares into treasury
|
(3,251)
|
(14,617)
|
Repurchase and cancellation
of ordinary shares
|
-
|
(4,091)
|
Dividends paid
|
(1,906)
|
(1,932)
|
Increase in intercompany
loan
|
691
|
404
|
Net
cash
outflow
from
financing activities
|
(4,466)
|
(20,236)
|
Net
decrease/(increase)
in net
funds
|
5,124
|
(4,072)
|
Net
funds
at the
start
of the
year
|
2,389
|
6,477
|
Effect of foreign
exchange rate changes
|
140
|
(16)
|
Net
funds
at the
end of
the year
|
7,653
|
2,389
|
Cash
and
cash equivalents
|
7,653
|
2,389
|
Notes to the
Financial Statements
1.
Accounting policies
The financial statements have been prepared on a
going concern basis under the historical cost convention modified by the revaluation of financial assets and liabilities held at fair value through profit or loss, in accordance with UK-adopted international accounting
standards ("IFRSs") which comprise
standards and
interpretations issued by
the International Accounting Standards Board ("IASB"),
as applied in accordance with the provisions of the
Companies Act 2006. The principal accounting policies
adopted by the Company are set out below.
Where presentational
guidance set out
in the Statement of
Recommended Practice ("SORP") for investment trusts
and venture capital trusts issued by the Association
of Investment Companies
("AIC") in July
2022 is consistent
with the requirements
of IFRS, the
financial statements have
been prepared in accordance with the
SORP.
The accounting policies which follow set out those
policies which apply
in preparing the
financial statements for
the year ended 30 April 2023 have been applied consistently,
other than where new policies have been
adopted.
The financial statements
are presented in
Sterling, which is the currency of
the primary environment in which the Company operates.
All values are rounded to the nearest thousand pounds
(£'000) except where otherwise indicated.
2.
Income
|
Year
ended
30 April
2023
£'000
|
Year
ended
30 April
2022
£'000
|
Investment income*
|
|
|
UK
dividend income
|
1,812
|
1,920
|
Overseas dividend income
|
662
|
860
|
|
2,474
|
2,780
|
Other income
|
|
Bank interest
|
62
|
25
|
Derivative income
|
507
|
294
|
Liquidity fund income
|
9
|
-
|
|
578
|
319
|
Total
income
|
3,052
|
3,099
|
* All investments are designated at fair value through profit or loss on initial recognition, therefore all investment income arises on investments at fair value through profit
or loss.
A number of UK quoted investments are domiciled in other countries for tax purposes.
3.
Dividends paid and
proposed
Set out below
are the total
dividends recognised in
respect of the
financial year ended
30 April 2023.
|
Year
ended
30 April
2023
£'000
|
Year
ended
30 April
2022
£'000
|
2022 final dividend
of 3.46p per
ordinary share (2021:
3.19p)
|
1,140
|
1,189
|
2023 interim dividend
of 2.33p per
ordinary share (2022:
2.14p)
|
766
|
743
|
|
1,906
|
1,932
|
Dividends are recognised in the period in which they are due
to be paid and are shown through the Statement of Changes in
Equity. Therefore, the Statement of Changes in Equity for the
year ended 30 April 2023 reflects the
final dividend for the year ended 30 April 2022 which was paid on 21 October 2022. For the year ended 30 April 2023, a first interim dividend of 2.33p
has been paid on 26 January
2023 and a final dividend of 3.87p has been proposed for
payment on 29 September 2023. The
final dividend is proposed for approval by the
shareholders at the forthcoming AGM.
Set out below
are the total
dividends paid/proposed in
respect of the
financial year ended
30 April 2023.
|
Year
ended
30 April
2023
£'000
|
Year
ended
30 April
2022
£'000
|
First interim dividend
of 2.33p per
ordinary share (2022:
2.14p)
|
766
|
743
|
Final dividend of
3.87p per ordinary
share (2022: 3.46p)
|
1,267
|
1,168
|
|
2,033
|
1,911
|
4.
Earnings/(loss) per share
The revenue earnings per ordinary share is based on the
revenue profit for the year of £2,226,000 (2022: £2,261,000) and
on 33,033,940 (2022: 35,994,478) ordinary shares,
being the weighted average number of ordinary shares in issue
during the year.
The capital loss per ordinary share is based on the capital
loss for the year of £1,419,000 (2022: £39,282,000) and on
33,033,940 (2022: 35,944,478) ordinary shares, being
the weighted average number of ordinary shares in issue during the
year.
-
Share capital
(a)
Share capital
|
|
2023
Shares
|
2023
£'000
|
2022
Shares
|
2022
£'000
|
Allotted,
called
up and
fully paid:
|
|
|
|
|
Ordinary shares of
1p each
|
32,734,908
|
327
|
33,754,674
|
338
|
Ordinary shares of
1p each held in
treasury
|
4,525,566
|
45
|
3,505,800
|
35
|
|
37,260,474
|
373
|
37,260,474
|
373
|
(b)
Ordinary shares
|
|
|
|
|
|
Shares
|
£'000
|
Movements
in
ordinary
shares
during
the year:
|
|
|
Ordinary shares in
issue on 1 May
2022
|
33,754,674
|
373
|
Repurchase of ordinary
shares into treasury
|
(1,019,766)
|
(45)
|
Ordinary shares
in issue on
30 April 2023
|
32,734,908
|
327
|
The movements in
ordinary shares held
in treasury during
the year are as
follows:
|
2023
Shares
|
2023
£'000
|
2022
Shares
|
2022
£'000
|
Balance
brought forward
|
3,505,800
|
35
|
-
|
-
|
Repurchases of ordinary
shares
|
1,019,766
|
10
|
3,505,800
|
35
|
Balance
carried forward
|
4,525,566
|
45
|
3,505,800
|
35
|
During the year
ended 30 April
2023, the Company
repurchased 1,019,766 shares
into treasury
(2022: 3,505,800). There were no
subscription shares in issue at 30 April
2023 (2022: nil).
6.
Net asset value
per ordinary share
The net asset
value per share
is based on the
net assets of
£119,817,000 (2022:
£124,101,000) and on
32,734,908 (2022:
33,754,674) ordinary shares, being the number of
ordinary shares in issue at the year end.
7.
Transactions with the
Investment Manager and
related parties
The amounts paid
to the Investment
Manager and amounts
outstanding at the
year end are
disclosed in the
Annual Report.
However, the existence
of an independent
Board of Directors
demonstrates that the
Company is free
to pursue its
own financial and
operating policies and
therefore, under IAS
24: Related Party
Disclosures, the Investment
Manager is not
considered to be a
related party.
Fees payable during the year to the Directors and their
interest in shares of the Company are considered to be related
party transactions and are disclosed within the
Directors Remuneration Report, included in the Annual
Report.
All transactions with
subsidiary undertakings were
on an arm's
length basis. During
the year, transactions
in securities between
the Company and its subsidiary undertakings amounted to £nil
(2022: £nil). The subsidiary did not pay a dividend to
Artemis Alpha Trust
plc during the
year to 30
April 2023 (2022:
£nil). Following the
increase in lending
rates over the
year, interest payable
by Artemis Alpha Trust to Alpha Securities Trading in respect
of the intercompany loan over the period is recognized.
8.
Events after the
reporting period
As at 11 July 2023, a further
21,756 shares had been bought back at a cost of £69,000.
9. Annual Report
This Annual Report announcement does not constitute the
Company's statutory accounts for the years ended 30 April 2023 and 30 April
2022 but is derived from those accounts. Statutory accounts
for the year ended 30 April 2022 have
been delivered to the Registrar of Companies.
The statutory accounts for the year ended
30 April 2023 and the year ended
30 April 2022 both received an audit
report which was unqualified and did not include a reference to any
matters to which the auditor drew attention by way of emphasis
without qualifying the report and did not include statements under
section 498 of the Companies Act 2006. The statutory accounts for
the year ended 30 April 2023 have not
yet been delivered to the Registrar of Companies and will be
delivered following the Annual General Meeting.
The audited Annual Report for the year ended 30 April 2023 will be available to shareholders
shortly. Copies may be obtained from the Company's registered
office at Cassini House, 57-59 St James's Street, London SW1A 1LD or at the website
at artemisalphatrust.co.uk.
A copy of the Annual Report will also be submitted to the
FCA's National Storage Mechanism and will soon be available for
inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Annual General Meeting of the Company will be held
on Thursday, 21 September
2023 at 10:00a.m.
For further information, please
contact:
Artemis Fund Managers Limited
Company Secretary
Telephone: 0131 225 7300
12 July
2023