TIDMBBH
RNS Number : 5758G
Bellevue Healthcare Trust PLC
20 July 2023
BELLEVUE HEALTHCARE TRUST PLC
LEGAL ENTITY IDENTIFIER ('LEI'): 213800HQ3J3H9YF2UI82
HALF-YEARLY REPORT
FOR THE SIX MONTHSED 31 MAY 2023
INVESTMENT OBJECTIVE
The investment objective of the Company is to provide
Shareholders with capital growth and income over the long term,
through investment in listed or quoted global healthcare companies.
The Company's specific return objectives are: (i) to beat the total
return of the MSCI World Healthcare Index ("Index") (in sterling)
on a rolling 3 year period (the index total return including
dividends reinvested on a net basis); and (ii) to seek to generate
a double-digit total shareholder return per annum over a rolling 3
year period.
FINANCIAL INFORMATION
As at 31 May As at 30 November
2023 2022
Net asset value ("NAV") per Ordinary Share
(cum income) 159.62p 171.16p
------------ -----------------
Ordinary Share price 147.40p 158.20p
------------ -----------------
Ordinary Share price discount to NAV1 -7.7% -7.6%
------------ -----------------
Ongoing charges ratio ("OCR")1 1.02% 1.04%
------------ -----------------
PERFORMANCE SUMMARY
% change 2,3 % change 2,3
For the six months ended 31 May 2023 2022
Share price total return per Ordinary
Share1 -4.9% -16.1%
------------ ------------
NAV total return per Ordinary Share1 -4.9% -17.3%
------------ ------------
MSCI World Healthcare Index total return
(GBP) -6.9% +4.5%
------------ ------------
1 These are Alternative Performance Measures.
2 Total returns in sterling for the six months period, including dividends reinvested.
3 Source: Bloomberg.
ALTERNATIVE PERFORMANCE MEASURES ('APMS')
The financial information and performance summary data
highlighted in the footnote to the above tables represent APMs of
the Company. Definitions of these APMs together with how these
measures have been calculated can be found in the Interim
Report.
CHAIRMAN'S STATEMENT
Dear Shareholders
This is the seventh semi-annual report of your Company.
In this post-Covid world, we face numerous challenges - many of
which are interlinked. Coming out of Covid we have seen a 'reset'
of global supply chains and a backlog of healthcare demand. The
shortage of workforce has been particularly acute in the healthcare
sector so the 'demand - supply' balance appears to be particularly
out of balance in this sector. The consequences of the invasion of
Ukraine include rising energy prices, rising fertiliser costs and
consequently rising food prices. This has perhaps exacerbated the
inflation we would have seen coming out of Covid - and the
healthcare sector has, in particular, faced increased wage costs.
Inevitably rising interest rates, as central banks seek to tame
demand and hence inflation, has impacted valuations.
Performance review
The Company's specific objective is to beat the benchmark and to
deliver double digit annual returns over a rolling three year
period. We have had what might be called a 'rocky ride' over the
last couple of years and in 2022, we clearly failed on both counts
(indeed I discussed this in our last Annual Report). Though the six
months to 31 May 2023 have seen performance beat the MSCI World
Healthcare Index, it is clearly far too early to extrapolate. The
table below provides more details, showing total returns on a
fiscal year basis.
(Fiscal year ends 2023
30 Nov) 2018 2019 2020 2021 2022 HY
Share price total
return 21.6% 6.9% 22.5% 11.4% (11.9%) (4.9%)
------ ----- ------ ------ -------- -------
NAV total return 24.0% 6.6% 24.6% 10.3% (4.1%) (4.9%)
------ ----- ------ ------ -------- -------
MSCI World Healthcare
Index total return 18.0% 8.1% 10.3% 15.8% 14.1% (6.9%)
------ ----- ------ ------ -------- -------
The Investment Manager's report provides discussion on the
contributors and detractors to performance.
As a reminder, the relatively concentrated portfolio comprises
innovative companies which the Investment Manager anticipates will
grow faster and hence generate superior returns over the longer
term because they deliver tangible benefits to patients and / or
healthcare systems. Nonetheless, adoption is never smooth, and
indeed the challenges I mention, at the beginning of this
statement, contribute to short-term unpredictability e.g. a
hospital short of workforce is going to be less likely to adopt new
technologies or innovations immediately. However, the same stresses
and strains which are impediments in the short term will ensure the
inevitability of change in the long term.
Dividends
In line with Company policy, for the financial year ending 30
November 2023, we will be paying two dividends (interim and final)
of 2.995p each in August 2023 and April 2024, again funded from our
distributable reserves.
Scrip dividends
In our Annual Report for the year ended 30 November 2022, I
mentioned that the Board was monitoring the cost-effectiveness of
the scrip programme.
We had proposed to continue it for this year, however analysis
shows falling take-up since we introduced the facility in 2019.
There are a variety of reasons for this - some of which are
structural in the UK e.g. many investors hold shares via aggregated
nominee accounts and not all such accounts allow individual
selection for scrip dividends. Currently we are trading at a
discount to NAV - since we fulfil the scrip via newly issued shares
at NAV, our current mechanism can lead to the situation where
investors would be better off receiving a cash dividend and then
buying shares in the market rather than receiving newly issued
shares at NAV.
Thus, reluctantly the Board has decided to suspend the scrip
dividend option for the time being. We appreciate that some
shareholders will be disappointed by this but given the low uptake
it is hard to justify the cost for the Company.
Gearing
As of 31 May 2023, the Company's net gearing was GBP8.0 million,
equivalent to 0.9% of the gross exposure. The low figure reflects
caution on the part of the Investment Manager relating to the US
Federal debt ceiling negotiations which were ongoing at the time;
the net gearing is likely to rise in H2 2023.
Discount and share buybacks
During the six months to 31 May 2023, our shares have traded at
an average of 6.6% discount to net asset value ('NAV'). Hence, we
commenced a share buyback programme which is managed at arm's
length by the Company's Broker using parameters set by the Board.
These parameters are regularly reviewed; the Board recognises the
benefits of a robust 'discount management' mechanism but also has
to be mindful of the current discounts in the wider investment
trust market, trading volumes and regulatory requirements.
We purchased 7,490,560 Ordinary Shares in the six months to 31
May 2023 and we anticipate continuing the discount management
programme. Our current shareholder authority (from the last AGM)
permits the Board to repurchase a maximum of 82,516,203 Ordinary
Shares.
Annual Redemption facility
In the Prospectus issued when the Company was first listed the
redemption facility was explained in great detail. The Directors
have absolute discretion to operate the annual redemption facility
which allows for three possible ways that the facility might
operate: matched bargains, from cash resources, or via a redemption
pool. The first two methods referred to allowed for the basis of
the redemption price to be by reference to the Dealing Value per
ordinary share.
In the first five years since inception the uptake for
redemptions was low and the Directors managed the facility by
"matched bargains" where any shares redeemed were matched with
buyers in the market by our Broker. In November 2022 however, we
saw a markedly higher uptake of the redemption facility (30,577,550
Ordinary Shares representing 5.21% of our share capital at that
time). In these circumstances the Directors managed the redemption
uptake using the cash resources and debt facilities available - all
of which were redeemed and cancelled by the Company.
Given current market conditions, and that we continue to trade
at a discount to NAV, were there to be material redemption
requests, the Directors may exercise the redemption pool
method.
Utilising this option sets the basis for the redemption price
that shareholders receive by reference to a separate Redemption
Pool. Were this to be exercised, the costs of establishing the pool
and liquidating proportions of the portfolio to fund the
redemptions would be directly ascribed to the Redemption Pool and
thus borne by shareholders wishing to redeem. Shareholders who wish
to understand this further are referred to the Prospectus published
in November 2016.
The Board has also considered the timeframe for operating the
Redemption process. It was prescribed in the Prospectus that
shareholders wishing to redeem had to finalise instructions to
redeem 20 business days prior to the Redemption Point. With the
Redemption Point of 30 November, the required date for shareholder
instruction is 2 November 2023. For practical reasons the Company
wishes to introduce a record date of 2 September 2023, shareholders
therefore have to be registered as owning Company shares by this
date.
The Directors, in their review on the Redemption requests will
act in the best interest of the Company and shareholders as a
whole.
This should have no practical impact on our long-standing
investors.
Outlook
Covid-19 had a profound impact on healthcare. As backlogs are
processed, and the focus of healthcare systems changes from crisis
management to more strategic issues it is likely that we will see
improved adoption of the products and technologies of the companies
the portfolio is invested in. Indeed, one might argue that the
pressures we have seen on healthcare systems makes this
inevitable.
Your Board remains fully supportive of the approach to
healthcare investing adopted by the Manager and considers that the
Portfolio is well positioned to benefit in the long term.
Randeep Grewal
Chairman
19 July 2023
INVESTMENT MANAGER'S REPORT
Macro environment
Few things irk the portfolio manager more than continued
recourse to superlatives when describing the macro backdrop
influencing the behaviour of the wider equity market. We can say
with some asperity that we are beyond bored with living in
'interesting times'. Nonetheless, we are compelled to record the
reality of another epoch that seems without precedent.
To recapitulate: calendar 2022 witnessed a combination of rising
interest rates and attendant concerns over both the availability
and affordability of credit. This, allied to perceptions that
primary and secondary equity raises will be challenged in these
market conditions, prompted investors to shy away from smaller
companies with negative operating cashflows or those that might
need additional funding on an 18-month+ view. Throughout this
period, sectoral sagacity was of limited value; it was a sub-sector
and macro-led market where 'big' was best and 'boring' was better
still.
Longer duration stories were heavily discounted at much higher
rates than would be imputed by base rate rises. This backdrop
proved very challenging for funds like ours with a bias to
small/mid-cap companies. It also led to a historical disconnect
between the valuations of SMID vs. Large/Meg-Cap companies.
The past six months offered little respite on the novelty front,
throwing a 'mini' US Regional banking crisis reminiscent of 2008/9
in March 2023 and an AI-driven technology mania that began in
November 2022, with many echoes of 1999/2000 on top of the
continuing geopolitical and macroeconomic uncertainties.
Depending on who you believe, AI will either usher in the
much-needed productivity boon that will allow us to overcome the
demographic burden of a rising dependency ratio or result in the
destruction of the human race. As with all these things, the
reality will be much less extreme and take much longer to come to
fruition than anyone currently wishes to speculate, but the market
loves a narrative.
The consequence of this new cocktail of market factors was the
rather unexpected outcome of an equity market that rose (MSCI World
Index sterling total return of +0.2% over the period in review and
the US S&P500 Index total return of -0.4%) as interest rates
rose and the Damoclean declivity of recession hung over the market.
The S&P500 eventually tipped into 'bull market' territory by
mid-June i.e. a rise of >20% from the recent low, which was in
October 2022, albeit via a rally driven predominantly by a handful
of AI-linked technology stocks.
On closer inspection, the remarkable thing about this period has
been the robustness of corporate earnings. Companies have managed
to pass on higher input costs to end customers, preserving profit
margins even as consumer sentiment and discretionary spending power
seemed to come under pressure. Aggregate S&P500 earnings
expectations for 2024-2025 have not fallen during this period, and
instead rose very modestly. Labour markets remain tight and the
cost of living crisis can seem ethereal in big financial centres,
surrounded as they are by packed bars and restaurants and bustling
airports.
The consumer seems indefatigable. As children of the 1970s, your
managers are minded to recall the Asterix comics of their youth
when thinking about current market sentiment. In those books, the
potion-powered and thus undefeatable Gauls have only one fear: that
the sky may fall on their heads tomorrow. But "tomorrow never
comes" urges their Chief, Vitalstatistix.
Investors remain worried that something is going to tip the
market into a sell-off and there are plenty of candidates to choose
from in today's uncertain geopolitical climate. That said, these
same investors aren't really that worried because these threats
don't feel tangible enough or close enough to pull further capital
away. As a consequence, we are living in an era of surprisingly low
volatility and little overall price direction (excluding the
relentless rise of Technology shares).
Even odder in a historical context was to see healthcare
materially underperform the wider market, during this period and
for it to do so to a degree not seen since that same 1999/2000
period despite precisely the sort of uncertain negative economic
backdrop that usually supports a positive relative performance for
a sector with inherent defensive characteristics.
Healthcare Performance review
As noted previously, the MSCI World Healthcare Index generated a
sterling total return of -6.9% over the period in review. The
reasons for this material underperformance have been much debated
by equity strategy types and the most compelling but wholly
unsatisfactory answer would appear to have been positioning:
healthcare was seen as less exciting than technology during this
period and was a source of capital to speculate (and we chose that
word deliberately and judiciously) on AI-linked stocks.
Coming back to fundamentals, it is worth noting that healthcare
has not seen any significant regulatory developments over the
period in review that would prompt a reconsideration of the
longer-term earnings power. It is also worth noting that the
healthcare sub-indices of the S&P500, NASDAQ and Russell 2000
series have outperformed their parent on earnings revisions for
2024-2025 period during our fiscal H1 23 period (which is as one
would expect during a period of negative economic developments
adversely impacting equities as a broad asset class). In addition
to being largely non-cyclical and non-discretionary, early 2023
finally saw the long-hoped for post-COVID 'return to normal'
regarding elective procedures and routine physician
appointments.
Accepting that healthcare did not "work" for investors in the
broadest sense over this period, what worked best within the
sector? The performance by sub-sector is summarised in Figure 1
below:
Figure 1: Performance by sub-sector for the period to 31 May
2023
Weighting Perf (USD) Perf (GBP)
--------- ----------
Dental 0.4% 36.8% 31.9%
Services 2.1% 8.6% 4.7%
Med-Tech 12.6% 6.3% 2.5%
Facilities 1.0% 6.1% 2.2%
Other HC 1.3% -1.9% -1.9%
Distributors 1.6% 0.7% -2.9%
Diversified Therapeutics 37.2% -1.1% -4.7%
Healthcare Technology 0.9% -2.0% -5.6%
Diagnostics 1.5% -2.2% -5.7%
Focused Therapeutics 8.4% -6.6% -9.9%
Tools 8.3% -12.5% -15.6%
Generics 0.4% -12.8% -15.9%
Conglomerate 11.9% -13.3% -16.4%
Managed Care 12.0% -14.4% -17.4%
Healthcare IT 0.6% -17.5% -20.5%
------------------------- --------- ---------- ----------
Index perf -4.3% -7.7%
------------------------- --------- ---------- ----------
This is not such an easy question to answer in a generalised
manner. Intuiting from the comment above regarding normalisation,
one might expect procedural volume beneficiaries to have fared best
(Med-Tech companies and Facilities, i.e. hospital operators) and
those who pay for these procedures (i.e. Managed Care, the US
insurers) to have fared worst. If you are going to hang on to some
healthcare exposure, you might have wanted those defensive
qualities, which applies most to Distributors, Diversified
Therapeutics and Conglomerates, but there is no clear picture
there. If one remains concerned about the impact of rising rates on
asset duration and funding opportunities, then one might eschew the
'biotechnology' companies (Focused Therapeutics) and those
companies providing services to them (Tools and Services), but
again the picture looks more complex than such a reductive,
simplistic top-down approach would suggest.
Dental remains the confounder. This is surely the most consumer
discretionary of all the healthcare sub-sectors and yet continues
to hang on to the material re-rating that it enjoyed at the turn of
the year.
The Diagnostics sector, long a favourite of ours on the basis of
its ability to transform the care paradigm has been a mixed bag,
with a significant dispersion of winners and losers due to a
disparate series of company-specific occurrences. Some of the
valuations currently on offer in this sub-sector are bewilderingly
low.
Trust Performance review
The Bellevue Healthcare strategy is centred around owning
companies that are operationally geared into the adoption of a
selected group of products, technologies and services that we
believe are critical to the evolution of the healthcare delivery
paradigm. Because our approach is 'bottom up' and focused around
this theme of healthcare change, we never expected it to deliver
correlated returns to the wider healthcare sector or the wider
equity market.
By virtue of their focused and innovative nature, the holdings
in the Company's portfolio tend to be more small/mid-cap than
large/mega-cap. This gives us a size factor profile that is the
inverse of the MSCI World Healthcare Index and this, independent of
company specific news flow, has been a significant negative drag on
performance through late 2021 to late 2022, as was discussed in the
interim and annual reports for the previous fiscal year.
As noted in the previous section, this was a challenging period
for the healthcare sector and, whilst we cannot report a positive
absolute development for the Company's net asset value ("NAV")
total return, which declined 4.9% over H1 2022 to 159.62p, this
represented a positive relative performance and glimmers of a more
constructive market dynamic were evident; one that leaves us more
optimistic for the second half of the year.
Although our strategy is unconstrained, we utilise the MSCI
World Healthcare Index in sterling as an internal comparator and
external reference point; its parent index is the MSCI World Index
and our preferred internal metric is rolling three-year annualised
performance, which is also presented in Figure 2 below:
Figure 2: Bellevue Healthcare Trust Financial Performance
Summary for the period to 31 May 2023
(All figures in GBP, to Six months Rolling three Since Inception
31 May 2023) year (ann.)
Return Diff. Return Diff. Return Diff.
(1) vs. Comparator (1) vs. Comparator (1) vs. Comparator
------- ---------------- ------- ---------------- ------- ----------------
Bellevue Healthcare Trust
NAV (inc. dividends from
capital) -4.9% +203bp +3.4% -330bp +94.2% -382bp
------- ---------------- ------- ---------------- ------- ----------------
Bellevue Healthcare Trust
Total Shareholder return -4.9% +207bp +0.7% -606bp +79.3% -1868bp
------- ---------------- ------- ---------------- ------- ----------------
MSCI World Healthcare (GBP)
- Comparator -6.9% n/a +6.7% n/a +98.0%
------- ---------------- ------- ---------------- ------- ----------------
MSCI World Index (GBP) +0.2% +714bp +14.3% +402bp +86.5% -1153bp
------- ---------------- ------- ---------------- ------- ----------------
FTSE All Share Index +0.1% +700bp +12.0% +340bp +39.6% -5843bp
------- ---------------- ------- ---------------- ------- ----------------
(1) Note - the stated total shareholder return assumes the
reinvestment of dividends.
Although we are pleased to report a positive relative
performance during the period, the rolling three-year and 'since
inception' performance highlights how much ground has been lost
since the H1 report for the 2021 fiscal year, when our 'since
inception' total return was 40.1% ahead of the MSCI comparator.
Indeed, it is fair to say that we are rather disappointed by the
overall performance, since we experienced an unexpected setback
around the 'mini' US Regional bank crisis that began with the
collapse of Silicon Valley Bank on 8 March 2023 and from which we
have yet to fully recover, despite there being no consequences for
any depositors nor any of our companies (none of whom held any
material amounts with the lender). The portfolio gave up almost
700bp of relative performance in those few days. The evolution of
the NAV is illustrated in Figure 3 below.
Figure 3: Bellevue Healthcare Trust NAV evolution for the period
to 31 May 2023
We would offer two observations from the portfolio performance
during the first half of fiscal 2023. Firstly, the relative
performance versus the MSCI World Healthcare Index in the period
from 30 November 2022, to the beginning of the 'mini' banking
crisis on 6 March 2023 (+991bp) attests to the relative valuation
opportunity inherent in our portfolio.
Secondly, as we gradually move to more stable market conditions
with a flatter yield curve and cooling inflation, the 'quality
growth' characteristics of our portfolio companies should again
shine through. There are few places where one can be so confident
in the medium-to long-term demand outlook as healthcare.
P ortfolio evolution
The evolution of the portfolio over the period-in-review is
summarised in Figure 4 and reflects the impact of two major
considerations; firstly the normalisation of procedure volume
trends (positive for Med-Tech, more negative for Managed Care) and
secondly, a shift away from pharmaceuticals and biotechnology
(Diversified and Focused Therapeutics respectively) towards what we
saw as more compelling risk-adjusted returns in the Tools and
Healthcare IT sub-sectors. The total number of holdings has
declined from 29 positions to 28, with one addition and two
exits.
Figure 4: Bellevue Healthcare Trust Portfolio evolution for the
period to 31 May 2023
Subsectors Subsectors Change
end May end May
22 23
----------------------- ----------- ----------- ----------
Dental 0.7% 0.9% Increased
Diagnostics 11.9% 11.4% Decreased
Diversified
Therapeutics 8.1% 4.0% Decreased
Focused Therapeutics 24.5% 21.3% Decreased
Healthcare IT 4.9% 8.8% Increased
Healthcare Technology 3.5% 3.0% Decreased
Managed Care 9.8% 7.2% Decreased
Med-Tech 15.2% 18.8% Increased
Services 15.8% 14.9% Decreased
Tools 5.6% 9.6% Increased
----------------------- ----------- ----------- ----------
100.0% 100.0%
----------------------- ----------- ----------- ----------
Figure 5 : Market capitalisation Figure 6 : Geographical breakdown
breakdown (operational HQ)
Mega-Cap 12.6% Europe 0.9%
Large-Cap 14.1% Asia 2.6%
Mid-Cap 53.2% United States 96.5%
Small-Cap 20.1%
----------------------------------
Source: Bellevue Asset Management UK.
Data as of 31 May 2023
Mega Cap >$50bn, Large Cap >$10bn, Small-Cap <$2bn
Full investment portfolio as of 31 May 2023
% of
Company Sub-sector classification gross portfolio
----------------------- ------------------------- ----------------
1 EXACT SCIENCES Diagnostics 6.9
----------------------- ------------------------- ----------------
2 OPTION CARE HEALTH Services 6.1
----------------------- ------------------------- ----------------
3 AXONICS Med-Tech 5.7
----------------------- ------------------------- ----------------
4 INSMED Focused Therapeutics 5.6
----------------------- ------------------------- ----------------
5 PACIFIC BIOSCIENCES Tools 5.4
----------------------- ------------------------- ----------------
6 CHARLES RIVER Services 5.1
----------------------- ------------------------- ----------------
7 EVOLENT HEALTH Healthcare IT 5.1
----------------------- ------------------------- ----------------
8 APELLIS PHARMACEUTICALS Focused Therapeutics 4.5
----------------------- ------------------------- ----------------
9 BIO-RAD LABORATORIES Tools 4.3
----------------------- ------------------------- ----------------
10 UNITED HEALTH GROUP Managed Care 4.2
----------------------- ------------------------- ----------------
Total Top 10 52.9
----------------------- ------------------------- ----------------
11 JAZZ PHARMACEUTICALS Diversified Therapeutics 4.0
----------------------- ------------------------- ----------------
12 ACCOLADE Healthcare IT 3.8
----------------------- ------------------------- ----------------
13 OUTSET MEDICAL Med-Tech 3.7
----------------------- ------------------------- ----------------
14 AMEDISYS Services 3.7
----------------------- ------------------------- ----------------
15 SILK ROAD MEDICAL Med-Tech 3.5
----------------------- ------------------------- ----------------
16 AXSOME THERAPEUTICS Focused Therapeutics 3.3
----------------------- ------------------------- ----------------
17 TANDEM DIABETES CARE Health Tech 3.0
----------------------- ------------------------- ----------------
18 ELEVANCE HEALTH Managed Care 2.9
----------------------- ------------------------- ----------------
19 VERTEX PHARMACEUTICALS Focused Therapeutics 2.9
----------------------- ------------------------- ----------------
20 ATRICURE Med-Tech 2.8
----------------------- ------------------------- ----------------
21 INTUITIVE SURGICAL Med-Tech 2.5
----------------------- ------------------------- ----------------
22 CAREDX Diagnostics 2.4
----------------------- ------------------------- ----------------
23 SAREPTA THERAPEUTICS Focused Therapeutics 2.1
----------------------- ------------------------- ----------------
24 CASTLE BIOSCIENCES Diagnostics 2.1
----------------------- ------------------------- ----------------
25 HUTCHMED Focused Therapeutics 1.9
----------------------- ------------------------- ----------------
26 VERONA PHARMACEUTICALS Focused Therapeutics 1.0
----------------------- ------------------------- ----------------
27 STRAUMANN HOLDINGS Dental 0.9
----------------------- ------------------------- ----------------
28 VENUS MEDTECH Med-Tech 0.6
----------------------- ------------------------- ----------------
Total portfolio 100.0
----------------------- ------------------------- ----------------
Gross exposure GBP883.8 million
----------------------- ------------------------- ----------------
Net value of assets GBP876.1 million
----------------------- ------------------------- ----------------
Paul Major and Brett Darke
Bellevue Asset Management (UK) Ltd
19 July 2023
PORTFOLIO
TOP TEN HOLDINGS
% of net
As at 31 May 2023 asset value
------------------------- --------------
Exact Sciences 6.9
Option Care Health 6.2
Axonics 5.8
Insmed 5.6
Pacific Biosciences 5.4
Charles River 5.2
Evolent Health 5.1
Apellis Pharmaceuticals 4.5
Bio-Rad Laboratories 4.3
UnitedHealth Group 4.3
------------------------- --------------
Top ten holdings 53.3
Other holdings 47.6
Other net liabilities (0.9)
------------------------- --------------
Total 100.0
------------------------- --------------
SUB SECTOR EXPOSURE
% of net
Allocation as at 31 May 2023 asset value
------------------------------ -------------
Focused Therapeutics 21.4
Medical Technology 19.0
Services 15.0
Diagnostics 11.5
Tools 9.7
Healthcare IT 8.9
Managed Care 7.3
Diversified Therapeutics 4.0
Health Technology 3.0
Dental 0.9
Other net liabilities (0.9)
------------------------------ -------------
Total 100.0
------------------------------ -------------
INTERIM MANAGEMENT REPORT
The Directors are required to provide an Interim Management
Report in accordance with the Financial Conduct Authority ("FCA")
Disclosure Guidance and Transparency Rules ("DTR"). The Chairman's
Statement and the Investment Manager's Report in this half-yearly
report provide details of the important events which have occurred
during the period and their impact on the financial statements. The
following statements on principal and emerging risks and
uncertainties, related party transactions, going concern and the
Directors' Responsibility Statement, together constitute the
Interim Management Report of the Company for the six months ended
31 May 2023. The outlook for the Company for the remaining six
months of the year ending 30 November 2023 is discussed in the
Chairman's Statement and the Investment Manager's Report.
PRINCIPAL AND EMERGING RISKS AND UNCERTAINTIES
The Board is responsible for the management of risks faced by
the Company and delegates this role to the Audit and Risk Committee
(the "Committee"). The Committee carries out, at least annually, a
robust assessment of principal and emerging risks and uncertainties
and monitors the risks on an ongoing basis.
The Committee has a dynamic risk management programme in place
to help identify key risks in the business and oversee the
effectiveness of internal controls and processes. The principal
risks and uncertainties facing the Company are as follows:
-- Market risks, including risks associated with the economy, healthcare companies and sectoral diversification
-- Financial risks;
-- Corporate governance and internal control risks;
-- Regulatory risks;
-- Key person risk;
-- Business interruption;
-- Geopolitical risk and
-- ESG and climate change
A detailed explanation of the principal and emerging risks and
uncertainties facing the Company can be found in the Company's most
recent Annual Report and Accounts for the year ended 30 November
2022, which can be found on the Company's website at
www.bellevuehealthcaretrust.com
Since the publication of the 2022 Annual Report and Accounts on
6 March 2023, there continues to be increased risk levels within
the global economy. The ongoing conflict in Ukraine, the subsequent
impact on global economies, deteriorating international relations
and increasing levels of inflation worldwide have undoubtedly
raised investment risk. Rising interest rates and mismatches in
asset liability pricing have led to the failure of three US banks
and created fears of global contagion. The Board closely monitors
and assesses these continued uncertainties as to how they could
impact and effect the Company's trading position with regards our
investment objective, portfolio and thus our Shareholders and where
appropriate endeavour to mitigate the risk.
RELATED PARTY TRANSACTIONS
The Company's Investment Manager is Bellevue Asset Management
(UK) Ltd ('Bellevue UK'). In its role as Alternative Investment
Fund Manager ('AIFM') of the Company, Bellevue UK carry out
portfolio management services and risk management services are
delegated to Bellevue Asset Management AG.
Bellevue UK is considered a related party under the FCA's
Listing Rules. Bellevue UK is entitled to receive management fees
payable monthly in arrears calculated at the rate of one-twelfth of
0.95% (excluding VAT) per calendar month of the market
capitalisation of the Company. There is no performance fee payable
to Bellevue UK. Details of the Investment Manager's fees during the
six months ended 31 May 2023 can be found in the Condensed
Unaudited Statement of Comprehensive Income. There have been no
changes to the related party transactions that could have a
material effect on the financial position or performance of the
Company since the year ended 30 November 2022.
GOING CONCERN
The Board has a reasonable expectation that the Company has
adequate resources to continue in operational existence for at
least the following twelve-month period from the date of this
report. In reaching this conclusion, the Directors have considered
the liquidity of the Company's portfolio of investments as well as
its cash position, income and expense flows. The Company's net
assets as at 31 May 2023 were GBP 876.1 million (31 May 2022:
GBP881.5 million). As at 31 May 2023, the Company held GBP 883.8
million (31 May 2022: GBP987.3 million) in quoted investments and
had cash of GBP49.6million (31 May 2022: GBP15.7million). The total
expenses (excluding finance costs and taxation) for the six months
ended 31 May 2023 were GBP 4.6 million (31 May 2022: GBP5.4
million). As of 31 May 2023, the Company's net gearing was
GBP8.0million (31 May 2022: GBP110million), equivalent to 0.9% of
the gross exposure (31 May 2022: 12.5%).
As part of their assessment, the Board have fully considered and
assessed the Company's portfolio of investments, giving careful
consideration to the consequences for the Company of continuing
uncertainties in the global economy. The Russian invasion of
Ukraine created significant supply chain disruption and
exacerbating inflationary pressures worldwide. A prolonged and deep
stock market decline would lead to falling values in the Company's
investments or interruptions to cash flow. However, the Company
currently has more than sufficient liquidity available to meet any
future obligations.
STATEMENT OF DIRECTORS' RESPONSIBILITIES FOR THE HALF-YEARLY
REPORT
The Directors confirm to the best of their knowledge that:
-- The condensed set of interim financial statements contained
within the Half-yearly report has been prepared in accordance with
IAS 34 Interim Financial Reporting.
-- The interim management report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FCA's DTR.
Randeep Grewal
Chairman
19 July 2023
CONDENSED UNAUDITED STATEMENT
OF COMPREHENSIVE
INCOME
FOR THE SIX
MONTHSED
31
MAY 2023
Six months ended 31 May Six months ended 31 Year ended 30 November
2023 May 2022 2022*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Losses on
investments - (42,408) (42,408) - (171,500) (171,500) - (19,980) (19,980)
Losses on
currency
movements - (451) (451) - (5,493) (5,493) - (9,839) (9,839)
------------- ----- -------- --------- --------- -------- ---------- ---------- --------- --------- ---------
Net
investment
losses - (42,859) (42,859) - (176,993) (176,993) - (29,819) (29,819)
Income 4 1,067 - 1,067 1,328 - 1,328 2,186 - 2,186
------------- ----- -------- --------- --------- -------- ---------- ---------- --------- --------- ---------
Total income 1,067 (42,859) (41,792) 1,328 (176,993) (175,665) 2,186 (29,819) (27,633)
Investment
management
fees (824) (3,297) (4,121) (961) (3,845) (4,806) (1,877) (7,510) (9,387)
Other
expenses (542) - (542) (553) - (553) (1,069) - (1,069)
------------- ----- -------- --------- --------- -------- ---------- ---------- --------- --------- ---------
Loss before finance
costs and
taxation (299) (46,156) (46,455) (186) (180,838) (181,024) (760) (37,329) (38,089)
Finance
costs 5 (408) (1,635) (2,043) (179) (717) (896) (610) (2,440) (3,050)
------------- ----- -------- --------- --------- -------- ---------- ---------- --------- --------- ---------
Operating
loss before
taxation (707) (47,791) (48,498) (365) (181,555) (181,920) (1,370) (39,769) (41,139)
Taxation 6 (85) - (85) (199) - (199) (285) - (285)
------------- ----- -------- --------- --------- -------- ---------- ---------- --------- --------- ---------
Loss for the
period/year (792) (47,791) (48,583) (564) (181,555) (182,119) (1,655) (39,769) (41,424)
------------- ----- -------- --------- --------- -------- ---------- ---------- --------- --------- ---------
Return per
Ordinary
Share 7 (0.14)p (8.63)p (8.77)p (0.10)p (31.52)p (31.62)p (0.28)p (6.84)p (7.12)p
------------- ----- -------- --------- --------- -------- ---------- ---------- --------- --------- ---------
*Audited
There is no other comprehensive income and therefore the 'Loss
for the period/year' is the total comprehensive income for the
period.
The total column of the above statement is the statement of
comprehensive income of the Company. The supplementary revenue and
capital columns, including the earnings per Ordinary Shares, are
prepared under guidance from the Association of Investment
Companies.
All revenue and capital items in the above statement derive from
continuing operations.
The notes are an integral part of these financial
statements.
CONDENSED UNAUDITED STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2023
31 May 2023 31 May 2022 30 November 2022*
Note GBP'000 GBP'000 GBP'000
Non-current assets
Investments held at fair value through profit or loss 3 883,801 987,306 1,043,349
------------------------------------------------------ ---- ----------- ----------- -----------------
Current assets
Cash and cash equivalents 49,633 15,651 46,368
Sales for future settlement - 3,882 855
Other receivables 175 314 392
49,808 19,847 47,615
------------------------------------------------------ ---- ----------- ----------- -----------------
Total assets 933,609 1,007,153 1,090,964
------------------------------------------------------ ---- ----------- ----------- -----------------
Current liabilities
Purchases for future settlement - (5,680) (1,395)
Bank loans payable 5 (56,513) (118,864) (83,731)
Other payables (906) (1,130) (1,512)
------------------------------------------------------ ---- ----------- ----------- -----------------
Total liabilities (57,419) (125,674) (86,638)
------------------------------------------------------ ---- ----------- ----------- -----------------
Net assets 876,190 881,479 1,004,326
------------------------------------------------------ ---- ----------- ----------- -----------------
Equity
Share capital 8 5,577 5,873 5,881
Share premium account 617,709 616,249 617,371
Special distributable reserve - 46,913 28,347
Capital reserve 254,986 212,231 354,017
Revenue reserve (2,082) 213 (1,290)
------------------------------------------------------ ---- ----------- ----------- -----------------
Total equity 876,190 881,479 1,004,326
------------------------------------------------------ ---- ----------- ----------- -----------------
Net asset value per Ordinary share 9 159.62p 150.41p 171.16p
------------------------------------------------------ ---- ----------- ----------- -----------------
*Audited
Approved by the Board of Directors on and authorised for issue
on 19 July 2023 and signed on their behalf by:
Randeep Grewal
Chairman
Registered in England and Wales with registered number
10415235.
The notes are an integral part of these financial
statements.
CONDENSED UNAUDITED STATEMENT OF CHANGES IN
EQUITY
FOR THE SIX MONTHSED 31
MAY 2023
Share Special
Share premium distributable Capital Revenue
Notes Capital account reserve reserve reserve Total
------------------------------- ------ -------- --------- -------------- ---------- -------- ----------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------ -------- --------- -------------- ---------- -------- ----------
Opening balance
as at 01 December
2022 5,881 617,371 28,347 354,017 (1,290) 1,004,326
Loss for the period - - - (47,791) (792) (48,583)
Issue of Ordinary
Shares 8 2 340 - - - 342
Redemption of ordinary
shares 8 (306) - (10,491) (39,454) - (50,251)
Buybacks of ordinary
shares held in
treasury - - - (11,786) - (11,786)
Share issue, Buybacks
and Redemption costs - (2) (81) - - (83)
Dividend paid - - (17,775) - - (17,775)
Closing balance as at
31 May 2023 5,577 617,709 - 254,986 (2,082) 876,190
--------------------------------------- -------- --------- -------------- ---------- -------- ----------
FOR THE SIX MONTHSED 31
MAY 2022
Share Special
Share premium distributable Capital Revenue
Capital account reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------ -------- --------- -------------- ---------- -------- ----------
Opening balance as
at 01 December 2021 5,602 568,910 64,392 393,786 777 1,033,467
Loss for the period - - - (181,555) (564) (182,119)
Issue of Ordinary
Shares 8 271 47,720 - - - 47,991
Ordinary Share issue
costs - (381) - - - (381)
Dividend paid - - (17,479) - (17,479)
Closing balance as at
31 May 2022 5,873 616,249 46,913 212,231 213 881,479
--------------------------------------- -------- --------- -------------- ---------- -------- ----------
FOR THE YEARED 30 NOVEMBER
2022 (Audited)
Share Special
Share premium distributable Capital Revenue
Capital account reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Opening balance as
at 01 December 2021 5,602 568,910 64,804 393,786 365 1,033,467
Loss for the year - - - (39,769) (1,655) (41,424)
Issue of Ordinary
Shares 8 279 48,887 - - - 49,166
Ordinary Share issue costs - (426) - - - (426)
Dividend paid - - (36,457) - - (36,457)
------------------------------- ------ -------- --------- -------------- ---------- -------- ----------
Closing balance as at
30 November 2022 5,881 617,371 28,347 354,017 (1,290) 1,004,326
--------------------------------------- -------- --------- -------------- ---------- -------- ----------
The Company's distributable reserves consist of the special distributable
reserve, capital reserve attributable to realised profit and revenue
reserve.
The Company can use its distributable reserves to fund dividends, redemptions
of Ordinary Shares and share buy backs.
The notes are an integral part of these financial statements.
CONDENSED UNAUDITED STATEMENT OF
CASH FLOWS
FOR THE SIX MONTHSED 31 MAY 2023
Six months Six months Year ended
ended 31 ended 31 30 November
May 2023 May 2022 2022*
GBP'000 GBP'000 GBP'000
Operating activities Cash flows
Income** 1,067 1,328 2,186
Management expenses (4,632) (5,752) (10,794)
Taxation (85) (199) (285)
----------------------------------------- ----------- ----------- -------------
Net cash flow used in operating
activities (3,650) (4,623) (8,893)
----------------------------------------- ----------- ----------- -------------
Investing activities Cash flows
Purchase of investments (113,101) (469,855) (599,039)
Sale of investments 229,701 387,110 610,527
----------------------------------------- ----------- ----------- -------------
Net cash flow from/(used in) investing
activities 116,600 (82,745) 11,488
----------------------------------------- ----------- ----------- -------------
Financing activities Cash flows
Bank loans drawn - 45,238 45,174
Bank loans repaid (24,071) - (44,885)
Finance costs paid (2,463) (628) (2,546)
Dividend paid (17,775) (17,479) (36,457)
Proceeds from issue of Ordinary Shares 342 47,991 49,166
Redemption of ordinary shares (50,251) - -
Buybacks of ordinary shares held (11,786) - -
in treasury
Share issue, Buybacks and Redemption
costs (83) (381) (426)
----------------------------------------- ----------- ----------- -------------
Net cash flow (used in)/from financing
activities (106,087) 74,741 10,026
----------------------------------------- ----------- ----------- -------------
(Decrease)/increase in cash and
cash equivalents (6,863) (12,627) 12,621
----------------------------------------- ----------- ----------- -------------
Cash and cash equivalents at start
of period 46,368 27,994 27,994
----------------------------------------- ----------- ----------- -------------
Effect of foreign currency movements (3,598) 284 5,753
----------------------------------------- ----------- ----------- -------------
Cash and cash equivalents at end
of period 46,633 15,651 46,368
----------------------------------------- ----------- ----------- -------------
*Audited
**Cash inflow from dividends for the financial period was
GBP359,000 (31 May 2022: GBP1,126,000 and 30 November 2022:
GBP1,618,000). Bank deposits interest income received during the
year was GBP623,000 (31 May 2022: GBPnil and 30 November 2022:
GBP283,000).
The table below shows the movement in borrowings
during the period.
Six months Year ended
Six months ended ended 31 May 30 November
31 May 2023 2022 2022*
GBP'000 GBP'000 GBP'000
Opening balance 83,731 67,850 67,850
Repayment of bank loans (24,071) - (44,885)
Proceeds from bank loans - 45,238 45,174
Foreign exchange movements (3,147) 5,776 15,592
-------------------------------- ----------------- ---------------- -------------
Closing balance 56,513 118,864 83,731
-------------------------------- ----------------- ---------------- -------------
The notes are an integral part of these financial
statements.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Reporting entity
Bellevue Healthcare Trust plc (the "Company"), is a closed-ended
investment company, registered in England and Wales on 7 October
2016. The Company's registered office is 6(th) Floor, 125 London
Wall, London, EC2Y 5AS. Business operations commenced on 2 December
2016 when the Company's Ordinary Shares were admitted to trading on
the London Stock Exchange. The financial statements of the Company
are presented for the period from 1 December 2022 to 31 May
2023.
The Company invests in a concentrated portfolio of listed or
quoted equities in the global healthcare industry. The Company may
also invest in American Depositary Receipts (ADRs), or convertible
instruments issued by such companies and may invest in, or
underwrite, future equity issues by such companies. The Company may
utilise contracts for differences for investment purposes in
certain jurisdictions where taxation or other issues in those
jurisdictions may render direct investment in listed or quoted
equities less effective.
The principal activity of the Company is that of an investment
trust company within the meaning of section 1158 of the Corporation
Tax Act 2010.
2. Basis of preparation
Statement of compliance
The condensed unaudited interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting and
the Disclosure Guidance and Transparency Rules ("DTRs") of the UK's
Financial Conduct Authority. They do not include all of the
information required for full annual financial statements and
should be read in conjunction with the financial statements of the
Company as at and for the year ended 30 November 2022. The
financial statements of the Company for the year ended 30 November
2022 were prepared in accordance with UK-adopted International
Accounting Standards and in conformity with the requirements of the
Companies Act 2006. The accounting policies used by the Company are
the same as those applied by the Company in its financial
statements for the year ended 30 November 2022. The financial
information for the year ended 30 November 2022 in the condensed
interim unaudited financial statements has been extracted from the
audited Annual Report and Accounts.
When presentational guidance set out in the Statement of
Recommended Practice ('SORP') for Investment Companies issued by
the Association of Investment Companies ('the AIC') in July 2022 is
consistent with the requirements of UK-adopted International
Accounting Standards, the Directors have sought to prepare the
financial statements on a basis compliant with the recommendations
of the SORP.
Going concern
The Directors have adopted the going concern basis in preparing
the financial statements.
The Directors have a reasonable expectation that the Company has
adequate operational resources to continue in operational existence
for at least twelve months from the date of approval of these
financial statements.
Use of estimates, assumptions and judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an on-going
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected. There have been no estimates, judgements or assumptions,
which have had a significant impact on the financial statements for
the period.
Basis of measurement
The financial statements have been prepared on the historical
cost basis except for financial instruments at fair value through
profit or loss, which are measured at fair value.
Functional and presentation currency
The financial statements are presented in sterling, which is the
Company's functional currency. The Company's investments are
denominated in multiple currencies. However, the Company's shares
are issued in sterling and the majority of its investors are UK
based. In addition, all expenses are paid in GBP as are dividends.
All financial information presented in sterling has been rounded to
the nearest thousand pounds.
Investments
Upon initial recognition investments are designated by the
Company "at fair value through profit or loss". They are accounted
for on the date they are traded and are included initially at fair
value which is taken to be their cost. Subsequently quoted
investments are valued at fair value, which is the bid market
price, or if bid price is unavailable, last traded price on the
relevant exchange. Unquoted investments are valued at fair value by
the Board which is established with regard to the International
Private Equity and Venture Capital Valuation Guidelines by using,
where appropriate, latest dealing prices, valuations from reliable
sources and other relevant factors.
Changes in the fair value of investments held at fair value
through profit or loss and gains or losses on disposal are included
in the capital column of the Statement of Comprehensive Income
within "gains on investments".
Investments are derecognised on the trade date of their
disposal, which is the point where the Company transfers
substantially all the risks and rewards of the ownership of the
financial asset.
Adoption of new and revised standards
At the date of approval of these financial statements, there
were a number of new standards and amendments to standards are
effective for the annual periods beginning after 1 January 2022.
None of these have a significant effect on the measurement of the
amounts recognised in the financial statements of the Company for
the period ended 31 May 2023.
3. Investment held at fair value through
profit or loss
30 November
31 May 2023 31 May 2022 2022
As at GBP'000 GBP'000 GBP'000
------------------------- ----------------- ------------- ------------
Investments held at fair value through
profit or loss
- Quoted overseas 883,801 987,306 1,043,349
---------------------------
Closing valuation 883,801 987,306 1,043,349
--------------------------- ----------------- ------------- ------------
Under IFRS 13 'Fair Value Measurement', an entity is required to
classify investments using a fair value hierarchy that reflects the
significance of the inputs used in making the measurement
decision.
The following shows the analysis of financial assets recognised
at fair value based on:
Level 1
The unadjusted quoted price in an active market for identical
assets or liabilities that the entity can access at the measurement
date.
Level 2
Inputs other than quoted prices included within Level 1 that are
observable (i.e. developed using market data) for the asset or
liability, either directly or indirectly.
Level 3
Inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
The classification of the Company's investments held at fair
value is detailed in the table below:
As at 31 May 2023 As at 31 May 2022
Level Level Level Level Level Level
1 2 3 Total 1 2 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ------------------ ------------------- ------------- ------------- ------------------ -------------------
Investments
at fair
value
through
profit
and loss -
Quoted 883,801 - - 883,801 987,306 - - 987,306
------------- ------------- ------------------ ------------------- ------------- ------------- ------------------ ------------------- -------------
As at 30 November 2022
Level Level Level
1 2 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ------------------ ------------------- -------------
Investments
at fair
value
through
profit
and loss -
Quoted 1,043,349 - - 1,043,349
------------- ------------- ------------------ ------------------- -------------
Fair values of financial assets and financial liabilities
All financial assets and liabilities are recognised in the
financial statements at fair value, with the exception of
short-term assets and liabilities, which are held at nominal value
that approximates to fair value, and loans that are initially
recognised at the fair value of the consideration received, less
directly attributable costs, and subsequently recognised at
amortised cost. The carrying value of the loans approximates to the
fair value of the loans.
There were no transfers between levels during the period ended
31 May 2023 (2022: nil).
4. Income
Six months Six months Year ended
ended 31 ended 31 30 November
May 2023 May 2022 2022
GBP'000 GBP'000 GBP'000
Income from investments
Overseas dividends 444 1,325 1,903
Bank interest on deposits 623 3 283
------------------------------------------------- --------------------- ----------------------- -----------------------
Total income 1,067 1,328 2,186
------------------------------------------------- --------------------- ----------------------- -----------------------
5. Bank loans and finance
costs
The Company has a multi-currency revolving credit facility RCF with The
Bank of Nova Scotia, London Branch. On 16 June 2022, the Company renewed
and amended its RCF. Under the terms of the amended RCF, the Company
may draw down loans up to an aggregate value of USD 280 million (increased
from the previous limit of USD 235 million). The increased facility will
expire in December 2024.
As at 31 May 2023, the aggregate of loans draw down was USD 70,000,000
equivalent of GBP56,513,000 (31 May 2022: GBP118,864,000 and 30 November
2022: GBP83,731,000).
The table below shows the finance costs in relation to the Company's
loans draw down.
Six months ended 31 Six months ended 31
May 2023 May 2022
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan interest 405 1,621 2,026 172 689 861
Other finance costs 3 14 17 7 28 35
--------------------------- --------- --------- --------------------- ------------- ----------------- -------------------
Total 408 1,635 2,043 179 717 896
--------------------------- --------- --------- --------------------- ------------- ----------------- -------------------
Year ended 30 November
2022
Revenue Capital Total
GBP'000 GBP'000 GBP'000
=========================== ========= ========= =====================
Loan interest 597 2,389 2,986
Other finance costs 13 51 64
--------------------------- --------- --------- ---------------------
Total 610 2,440 3,050
--------------------------- --------- --------- ---------------------
6. Taxation
(a) Analysis of tax charge
for the period:
Six months ended 31 Six months ended 31
May 2023 May 2022
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Withholding tax expense 85 - 85 199 - 199
--------------------------- --------- --------- --------------------- ------------- ----------------- -------------------
Total tax charge for the
period 85 - 85 199 - 199
--------------------------- --------- --------- --------------------- ------------- ----------------- -------------------
Year ended 30 November
2022
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Withholding tax expense 285 - 285
--------------------------- --------- --------- ---------------------
Total tax charge for the
year 285 - 285
--------------------------- --------- --------- ---------------------
7. Return per Ordinary
Share
Return per share is based on the weighted average number of Ordinary
Shares in issue during the six months ended 31 May 2023 of 553,461,838
(31 May 2022: 576,006,437 and 30 November 2022: 581,357,335).
As at 31 May 2023 As at 31 May 2022
Revenue Capital Total Revenue Capital Total
Loss for the period
(GBP'000) (792) (47,791) (48,583) (564) (181,555) (182,119)
--------------------------- --------- --------- --------------------- ------------- ----------------- -------------------
Return per Ordinary Share (0.14)p (8.63)p (8.77)p (0.10)p (31.52)p (31.62)p
--------------------------- --------- --------- --------------------- ------------- ----------------- -------------------
As at 30 November 2022
Revenue Capital Total
Loss for the year
(GBP'000) (1,655) (39,769) (41,424)
--------------------------- --------- --------- ---------------------
Return per Ordinary Share (0.28)p (6.84)p (7.12)p
--------------------------- --------- --------- ---------------------
8. Share capital
As at 31 May 2023 As at 31 May 2022
No. of GBP'000 No. of GBP'000
shares shares
Allotted, issued and fully
paid:
Redeemable Ordinary Shares of
1p each ('Ordinary Shares') 548,924,670 5,489 586,057,380 5,860
Shares held in treasury 7,490,560 75 - -
Management Shares of GBP1 each 50,001 13 50,001 13
-------------------------------- ------------- -------- ------------ --------
Total 556,465,231 5,577 586,107,381 5,873
-------------------------------- ------------- -------- ------------ --------
As at 30 November
2022
No. of GBP'000
shares
-------------------------------- ------------- --------
Allotted, issued and fully
paid:
Redeemable Ordinary Shares of
1p each ('Ordinary Shares') 586,783,083 5,868
Management Shares of GBP1 each 50,001 13
Total 586,833,084 5,881
-------------------------------- ------------- --------
Share Movement
During the six months to 31 May 2023, 7,490,560 Ordinary Shares
(31 May 2022: Nil and 30 November 2022: Nil) were bought back into
treasury through the Company's share buyback programme and
30,577,550 (31 May 2022: 514,135 and 30 November 2022: 514,135)
Ordinary Shares were redeemed and cancelled by the Company, in line
with the Company's annual redemption facility. On 5 May 2023, in
line with the Company's Scrip Dividend Scheme, 209,697 Ordinary
Shares were allotted and issued to Shareholders who elected for
their final dividend to be automatically subscribed on their behalf
for new Ordinary Shares.
Since 31 May 2023, a further 183,903 Ordinary Shares have been
bought back into treasury, with aggregate cost of GBP283,000.
9. Net assets per Ordinary Share
Net assets per Ordinary Share as at 31 May 2023 is based on
GBP876,190,000 of net assets of the Company attributable to the
548,924,670 Ordinary Shares in issue (excluding treasury shares) as
at 31 May 2023. The GBP12,500 of net assets as at 31 May 2023 is
attributable to the Management Shares.
10. Dividend
During the six months ended 31 May 2023, the Company paid a
dividend of 3.235p per Ordinary Share in respect of the year ended
30 November 2022.
The Directors have declared an interim dividend for the
six-month period ended 31 May 2023 of 2.995p per Ordinary Share.
The dividend will have an ex-dividend date of 27 July 2023 and will
be paid on 25 August 2023 to Shareholders on the register at 28
July 2023. The dividend will be funded from the Company's
distributable reserves.
11. Related party transactions
Fees payable to the Investment Manager are shown in the
Statement of Comprehensive Income. As at 31 May 2023, the fee
outstanding to the Investment Manager was GBP662,000 (31 May 2022:
GBP714,000 and 30 November 2022: GBP744,000).
Following the year end and with effect from 1 December 2022,
annual fees were increased, resulting in Directors' fees of
GBP67,000 per annum for the Chairman of the Board; GBP49,550 per
annum for the Chair of the Audit and Risk Committee and GBP39,250
per annum for the other Board members. An additional GBP1,000 per
annum is payable to the Senior Independent Director and an
additional GBP1,000 per annum is payable to the Chair of the
Management Engagement Committee. Net fees payable to the Directors
are settled in the Company's Ordinary Shares quarterly, using the
prevailing market price per Share at the relevant quarter end.
The Directors had the following shareholdings in the Company,
all of which are beneficially owned.
As at As at As at
31 May 31 May 30 November
2023 2022 2022
----------------- --------- --------- -------------
Randeep Grewal 133,271 106,776 119,693
Josephine Dixon 106,159 90,170 98,466
Paul Southgate 88,408 77,034 83,084
Tony Young 25,266 13,968 20,018
Kate Bolsover 19,556 7,577 14,232
----------------- --------- --------- -------------
12. Post balance sheet events
There are no post balance sheet events, other than those
disclosed in this report.
13. Status of this report
These interim financial statements are not the Company's
statutory accounts for the purposes of section 434 of the Companies
Act 2006. They are unaudited. The unaudited Half-yearly report will
be made available to the public at the registered office of the
Company. The report will also be available in electronic format on
the Company's website, https://www.bellevuehealthcaretrust.com. The
information for the year ended 30 November 2022 has been extracted
from the last published audited financial statements, unless
otherwise stated. The audited financial statement has been
delivered to the Registrar of Companies. The Company's auditor
reported on those accounts and their report was unqualified, did
not draw attention to any matters by way of emphasis and did not
contain a statement under sections 498(2) or 498(3) of the
Companies Act 2006. The Half-yearly report was approved by the
Board of Directors on 19 July 2023.
ALTERNATIVE PERFORMANCE MEASURES ('APMs')
Discount
The amount, expressed as a percentage, by which the share price is lower
than the NAV per Ordinary Share. As at 31 May 2023 GBP'000
NAV per Ordinary Share (pence) a 159.62
Share price (pence) b 147.40
-------------------------------- --------------- --------
Discount (b÷a)-1 7.7%
-------------------------------- --------------- --------
The Company's average discount for the period ended 31 May 2023 was
6.6%.
Gearing
A way to magnify income and capital returns, but which can also magnify
losses. A bank loan is a common method of gearing. As at 31 May 2023 GBP'000
Total assets less cash/cash
equivalents a 883,976
Net assets b 876,190
----------------------------- --------------- --------
Gearing (net) (a÷b)-1 0.9%
----------------------------- --------------- --------
Leverage
An alternative word for "Gearing" (See gearing for calculations).
Under AIFMD, leverage is any method by which the exposure of an AIF
is increased through borrowing of cash or securities or leverage embedded
in derivative positions.
Under AIFMD, leverage is broadly similar to gearing, but is expressed
as a ratio between the assets (excluding borrowings) and the net assets
(after taking account of borrowing). Under the gross method, exposure
represents the sum of the Company's positions after deduction of cash
balances, without taking account of any hedging or netting arrangements.
Under the commitment method, exposure is calculated without the deduction
of cash balances and after certain hedging and netting positions are
offset against each other.
Ongoing charges
A measure, expressed as a percentage of average net assets, of the regular,
recurring annual costs of running an investment company. Six months ended 31 May 2023 GBP
------------------------------ ------------ ------------
Average NAV a 914,313,725
Annualised expenses b 9,326,000
Ongoing charges (b÷a) 1.02%
------------------------------ ------------- ------------
Total return
A measure of performance that includes both income and capital returns.
This takes into account capital gains and reinvestment of dividends
paid out by the Company into the Ordinary Shares of the Company on the
ex-dividend date. Six months ended 31 May 2023
(Unaudited) Share price NAV
Opening at 1 December 2022
(p) a 158.20 171.16
Closing at 31 May 2023 (p) b 147.40 159.62
Price movement (b÷a)-1 c -6.8% -6.7%
Dividend reinvestment d 1.9% 1.8%
------------------------------ -------- ------------ -------
Total return (c+d) -4.9% -4.9%
------------------------------ -------- ------------ -------
n/a = not applicable.
GLOSSARY
AIC Association of Investment Companies.
--------------------------- -----------------------------------------------------------
Alternative Investment An investment vehicle under AIFMD. Under AIFMD
Fund or "AIF" (see below) the Company is classified as an AIF.
--------------------------- -----------------------------------------------------------
Alternative Investment A European Union directive which came into force
Fund Managers Directive on 22 July 2013 and has been implemented in the
or "AIFMD" UK and remains in force post BREXIT.
--------------------------- -----------------------------------------------------------
American Depositary A negotiable certificate issued by a U.S. bank
Receipt or "ADR" representing a specified number of shares in a
foreign stock traded on a U.S. exchange.
--------------------------- -----------------------------------------------------------
Annual General Meeting A meeting held once a year which shareholders can
or "AGM" attend and where they can vote on resolutions to
be put forward at the meeting and ask Directors
questions about the company in which they are invested.
--------------------------- -----------------------------------------------------------
CFD or Contract for A financial instrument, which provides exposure
Difference to an underlying equity with the provider financing
the cost to the buyer with the buyer receiving
the difference of any gain or paying for any loss.
--------------------------- -----------------------------------------------------------
Custodian An entity that is appointed to safeguard a company's
assets.
--------------------------- -----------------------------------------------------------
Discount The amount, expressed as a percentage, by which
the share price is less than the net asset value
per share. The discount is calculated on the closing
share price.
--------------------------- -----------------------------------------------------------
Depositary Under AIFMD the depositary is appointed under a
strict liability regime to oversee inter alia,
those charged with safekeeping of the Company's
assets and cash monitoring.
--------------------------- -----------------------------------------------------------
Dividend Income receivable from an investment in shares.
--------------------------- -----------------------------------------------------------
ESG Environmental, social and governance.
--------------------------- -----------------------------------------------------------
Ex-dividend date The date from which you are not entitled to receive
a dividend which has been declared and is due to
be paid to shareholders.
--------------------------- -----------------------------------------------------------
Financial Conduct Authority The independent body that regulates the financial
or "FCA" services industry in the UK.
--------------------------- -----------------------------------------------------------
Gearing A term used to describe the extent that a portfolio
has increased in size as a way to magnify income
and capital returns, but which can also magnify
losses. A bank loan is a common method of gearing.
--------------------------- -----------------------------------------------------------
Gross assets The Company's total assets adjusted for any leverage
amount (outstanding bank loan).
--------------------------- -----------------------------------------------------------
Index An independent Market tool which is used to compare
performance across different investment companies
and funds. It quantifies performance of a basket
of stocks which is considered to replicate a particular
stock market or sector.
--------------------------- -----------------------------------------------------------
Investment company A company formed to invest in a diversified portfolio
of assets.
--------------------------- -----------------------------------------------------------
Investment Trust An investment company which is based in the UK
and which meets certain tax conditions which enables
it to be exempt from UK corporation tax on its
capital gains. The Company is an investment trust.
--------------------------- -----------------------------------------------------------
Large-Cap A Company with a market capitalisation above $10
billion.
--------------------------- -----------------------------------------------------------
Leverage An alternative word for "Gearing".
Under AIFMD, leverage is any method by which the
exposure of an AIF is increased through borrowing
of cash or securities or leverage embedded in derivative
positions.
Under AIFMD, leverage is broadly similar to gearing,
but is expressed as a ratio between the assets
(excluding borrowings) and the net assets (after
taking account of borrowing). Under the gross method,
exposure represents the sum of the Company's positions
after deduction of cash balances, without taking
account of any hedging or netting arrangements.
Under the commitment method, exposure is calculated
without the deduction of cash balances and after
certain hedging and netting positions are offset
against each other.
--------------------------- -----------------------------------------------------------
Liquidity The extent to which investments can be sold at
short notice.
--------------------------- -----------------------------------------------------------
Management Shares Non-redeemable preference shares of GBP1.00 each
in the capital of the Company.
--------------------------- -----------------------------------------------------------
Mega-Cap A Company with a market capitalisation above $50
billion.
--------------------------- -----------------------------------------------------------
Mid-Cap A Company with a market capitalisation between
$2 and $10 billion.
--------------------------- -----------------------------------------------------------
Net assets An investment company's assets less its liabilities.
--------------------------- -----------------------------------------------------------
Net asset value (NAV) Net assets divided by the number of Ordinary Shares
per Ordinary Share in issue (excluding any shares held in treasury).
--------------------------- -----------------------------------------------------------
Ongoing charges ratio A measure, expressed as a percentage of average
net assets, of the regular, recurring annual costs
of running an investment company.
--------------------------- -----------------------------------------------------------
Ordinary Shares The Company's redeemable Ordinary Shares of 1p
each.
--------------------------- -----------------------------------------------------------
Portfolio A collection of different investments held in order
to deliver returns to shareholders and to spread
risk.
--------------------------- -----------------------------------------------------------
Premium The amount, expressed as a percentage, by which
the share price is more than the net asset value
per share.
--------------------------- -----------------------------------------------------------
Share buyback A purchase of a company's own shares. Shares can
either be bought back for cancellation or held
in treasury.
--------------------------- -----------------------------------------------------------
Share price The price of a share as determined by a relevant
stock market.
--------------------------- -----------------------------------------------------------
Small-Cap A Company with a market capitalisation less than
$2 billion.
--------------------------- -----------------------------------------------------------
Total return A measure of performance that takes into account
both income and capital returns. This may take
into account capital gains, dividends, interests
and other realised variables over a given period
of time.
--------------------------- -----------------------------------------------------------
Treasury shares A company's own shares which are available to be
sold by a company to raise funds.
--------------------------- -----------------------------------------------------------
Volatility A measure of how much a share moves up and down
in price over a period of time.
--------------------------- -----------------------------------------------------------
DIRECTORS, INVESTMENT MANAGER AND ADVISERS
DIRECTORS INVESTMENT MANAGER ("AIFM")
Randeep Grewal (Chairman) Bellevue Asset Management
Josephine Dixon (UK) Ltd
Paul Southgate 32 London Bridge Street
Professor Tony Young OBE 24th Floor
Kate Bolsover London
SE1 9SG
CORPORATE BROKER SECRETARY & ADMINISTRATOR
J.P. Morgan Cazenove Apex Listed Companies Services
25 Bank Street (UK) Limited
Canary Wharf 6(th) Floor, 125 London Wall
London E14 5JP Barbican
London EC2Y 5AS
DEPOSITARY AUDITORS
CACEIS Bank, UK Branch Ernst & Young LLP
Broadwalk House 25 Churchill Place
5 Appold Street Canary Wharf
London London
EC2A 2DA E14 5EY
REGISTRAR REGISTERED OFFICE*
Link Group 6(th) Floor, 125 London Wall
10th Floor Central Square Barbican
29 Wellington Street London EC2Y 5AS
Leeds
LS1 4DL
LEGAL ADVISER
Stephenson Harwood LLP
1 Finsbury Circus
London
EC2M 7SH
*Registered in England and Wales No. 10415235
COMPANY SECURITY INFORMATION AND IDENTIFICATION CODES
WEBSITE www.bellevuehealthcaretrust.com
ISIN GB00BZCNLL95
SEDOL BZCNLL9
BLOOMBERG TICKER BBH LDN
LEGAL ENTITY IDENTIFIER (LEI) 213800HQ3J3H9YF2UI82
GLOBAL INTERMEDIARY IDENTIFICATION V L68MY.99999.SL.826
NUMBER (GIIN)
Contact information:
Brian Smith/Ciara McKillop 020 3327 9720
Apex Listed Companies Services (UK) Limited
The Half-yearly report will be submitted to the National Storage
Mechanism and will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
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END
IR DKLFFXDLLBBZ
(END) Dow Jones Newswires
July 20, 2023 02:00 ET (06:00 GMT)
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