5 December
2022
LONDON STOCK EXCHANGE ANNOUNCEMENT
The Lindsell Train
Investment Trust plc (the “Company”)
Unaudited
Half-Year Results for the six months ended
30 September 2022
This Announcement is not the Company’s Half-year Report &
Accounts. It is an abridged version of the Company’s full Half-year
Report & Accounts for the six months ended 30 September 2022. The full Half-year Report
& Accounts together with a copy of this announcement, will
shortly be available on the Company’s website at www.ltit.co.uk
where up to date information on the Company, including NAV, share
prices and monthly updates, can also be found.
The Company's Half-year Report & Accounts for the six months
ended 30 September 2022 has been
submitted to the UK Listing Authority, and will shortly be
available for inspection on the National Storage Mechanism (NSM) at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Financial Highlights
| Performance
comparisons 1 April 2022 – 30 September 2022 |
Change |
| Share price total
return per Ordinary Share*^ |
-6.5% |
| Net asset value total
return per Ordinary Share*^ |
-3.0% |
| MSCI World Index total
return (Sterling) |
-7.3% |
| UK RPI Inflation (all
items) |
+7.5% |
- The net asset value and the share price at 30 September 2022 have been adjusted to include
the ordinary dividend of £51.12 per share and a special dividend of
£1.88 per share paid on 13 September
2022, with the associated ex-dividend date of 11 August 2022.
^ Alternative Performance Measure
(“APM”). See Glossary of Terms and Alternative Performance
Measures.
Source: Morningstar/Bloomberg
Investment Objective
The objective of the Company is to maximise long-term total
returns with a minimum objective to maintain the real purchasing
power of Sterling capital.
Investment Policy
The Investment Policy of the Company is to invest:
(i) in a wide range of financial assets
including equities, unlisted equities, bonds, funds, cash and other
financial investments globally with no limitations on the markets
and sectors in which investment may be made, although there is
likely to be a bias towards equities and Sterling assets,
consistent with a Sterling-dominated investment objective. The
Directors expect that the flexibility implicit in these powers will
assist in the achievement of the investment objective;
(ii) in Lindsell Train managed fund products,
subject to Board approval, up to 25% of its gross assets; and
(iii) in LTL and to retain a holding, currently
24.2%, in order to benefit from the growth of the business of the
Company’s Manager.
The Company does not envisage any changes to its objective, its
investment policy, or its management for the foreseeable future.
The current composition of the portfolio as at 30 September 2022, which may be changed at any
time (excluding investments in LTL and LTL managed funds) at the
discretion of the Investment Manager within the confines of the
policy stated above.
Diversification
The Company expects to invest in a concentrated portfolio of
securities with the number of equity investments averaging fifteen
companies. The Company will not make investments for the purpose of
exercising control or management and will not invest in the
securities of, or lend to, any one company (or other members of its
group) more than 15% by value of its gross assets at the time of
investment.
The Company will not invest more than 15% of gross assets in
other closed-ended investment funds.
Gearing
The Directors have discretion to permit borrowings up to 50% of
the Net Asset Value. However, the Directors have decided that it is
in the Company’s best interests not to use gearing. This is in part
a reflection of the increasing size and risk associated with the
Company’s unlisted investment in LTL, but also in response to the
additional administrative burden required to adhere to the full
scope regime of the AIFMD.
Dividends
The Directors’ policy is to pay annual dividends consistent with
retaining the maximum permitted earnings in accordance with
investment trust regulations, thereby building revenue
reserves.
In a year when this policy would imply a reduction in the
ordinary dividend, the Directors may choose to maintain the
dividend by increasing the percentage of revenue paid out or by
drawing down on revenue reserves. Revenue reserves on 31 March 2022 were twice the annual 2022 ordinary
dividend paid on 13 September
2022.
All dividends have been distributed from revenue or revenue
reserves.
Chairman’s Statement
The Company’s net asset value per share (“NAV”) fell by 7.6%
(from £1,113.81 to £1,029.42) over the first six months of the
financial year ending 31 March 2023;
although once the dividend was added in, the total return to
shareholders was minus 3.0%. The total return of the share price
registered a steeper fall of 6.5% with the price falling from
£1,105 to £991 and ended the half year trading at a 3.7% discount
to the NAV. These returns are better than the 7.3% fall in the
benchmark MSCI World Index (including dividends). This fall is
understandable when one considers the background uncertainties
surrounding the conflict in Ukraine, rising inflation and rising interest
rates.
In this environment it was not surprising that the Company’s
24.2% ownership of Lindsell Train Limited (“LTL”), which accounted
for 42.7% of NAV at 30 September
2022, had the most bearing on performance. LTL’s valuation
fell by 10.4% reflecting its reduced funds under management
(“FUM”). FUM fell from £20.5bn to £18.6bn over the six months,
£1.5bn due to net redemptions and £0.4bn due to falling market
prices. LTL has suffered from more than two years of disappointing
relative performance across all its four equity strategies which,
together with widespread outflows from equity funds generally,
underlies this loss of FUM. The experience of recent years
illustrates the investment risk inherent in a fund management
business that has a singular approach to investing. Although LTL
offers four strategies differentiated by geography, all its
portfolios are run following a consistent approach and tend to be
populated with the same type of companies. LTL and the Company’s
Directors strongly believe that this approach will outperform in
the long term, given the Investment Manager’s concentration on
companies that should generate consistently higher returns on
capital over time. However, the strategy can fall out of favour
when it is seen to be generating inferior short-term returns
compared with alternative strategies. Whilst the falls in LTL’s FUM
and valuation (they are inextricably linked through the Directors’
valuation formula) are painful, the total return from the Company’s
investment in LTL over the six months of minus 4.0% is less
negative. This is because LTL’s current profits generate a dividend
yield on LTL’s shares of more than 10% per annum, which negates the
bulk of the fall in the LTL valuation.
Putting LTL’s valuation fall in the context of its peers, the
recent fall in markets has hit the valuation of many quoted fund
management businesses hard. The Directors monitor a universe of
quoted fund managers listed in developed markets and a year ago
they were valued on average at 3.2% of FUM. That same universe was
valued at 1.4% of FUM at the end of September 2022, a 60% fall. It is a sobering
reminder of how today’s reality of falling FUM bears down on the
industry. In this environment, we judge that it is important to be
differentiated, to offer value for money and to be cognisant of the
ESG priorities that clients increasingly demand in addition to
adding value through performance. LTL possesses all these
qualities. We take encouragement that LTL is defined by a
well-articulated investment approach that over the longer term has
generated competitive returns. The costs of delivering that
approach are generally well below the industry average and the type
of companies favoured using this approach rank highly on ESG
credentials. For these reasons we have confidence in LTL’s future
and with what it offers to its clients including you, our
shareholders. It is also for these reasons as well as in
acknowledgment of LTL’s superior profitably (notional operating
margins of approximately 50% versus the peer group average of 35%)
that the Board values LTL at 1.95% of FUM at 30 September 2022.
One way in which the Company can directly assist LTL is to help
seed its new fund launches. The Company has used this option -
limited to a maximum of 25% of NAV at cost - throughout its
history. Today it retains a holding in the Lindsell Train North
American Equity Fund (“LTNA”), which was bought on its inception in
2020. It amounted to 8.2% of net assets on 30 September 2022.
LTNA’s first two years have been burdened with the same sort of
relative underperformance that has affected all LTL strategies.
Since the fund’s inception (on 22 April
2020) to 30 September 2022,
its total return has been 13.0% per annum versus the 17.5% per
annum rise in the MSCI North American Index. The underlying
investments represent many of the same industries and themes that
are present in our other funds but currently with more of a bias to
media and software. And like LTL’s other funds, its companies boast
impressive returns on capital that have been sustained for decades
and well exceed comparative benchmark index returns; this provides
the foundation for the durability in companies that the Manager
seeks. Its largest holdings - all above 5% of the fund’s NAV -
include Estée Lauder, American Express, Alphabet and Pepsi. From
the time the portfolio was created, with 23 constituent companies,
it has not changed aside from the additions of Madison Square Garden Sports later in 2020 and
FICO earlier this year. Now into its third year, LTL and the fund’s
manager James Bullock are beginning
to promote the fund more widely with its recent addition to
multiple investment platforms.
Notwithstanding its relative underperformance, LTNA has made an
important contribution to the Company’s returns through its strong
absolute performance of 13% per annum since inception, from a
market (North America) otherwise
less represented within the Company’s portfolio. We hope that it
will also grow and flourish as a core strategy for LTL in
the future.
I am also pleased to welcome two new additions to the Board.
Roger Lambert and Helena Vinnicombe joined as Non-Executive
Directors at the end of September. They have joined the Audit,
Nomination and Management Engagement Committees. Roger and Helena
will offer themselves for election by shareholders at the 2023 AGM.
Both bring relevant experience and skills and, I dare say, some new
perspectives.
Julian Cazalet
Chairman
4 December 2022
Investment Manager’s Report
“The best is yet to come.” This attitude to life is both
rational and psychologically therapeutic – certainly for those
facing the challenges of investment markets.
I admit that threading through today’s macro-economic and
geopolitical thickets I must work harder than usual to maintain my
native optimism. But when I turn to the prospects for the
businesses we are invested in – they appear brighter and
brighter.
Here are some facts or anecdotes that help justify a view that
the best is still to come for your Company’s key portfolio
holdings.
Nintendo is the creator of some of the most sought-after
entertainment content on the planet. This content includes at least
33% ownership of purportedly the biggest grossing media franchise
of all-time: Pokémon, with estimated lifetime revenues of
$90bn. Nintendo has rights to make
all Pokémon console games, in addition to its ownership stake. Now,
the biggest ever Japanese launch for a Pokémon game was that of
Pokémon Black and White, which sold 2.6m copies in 7 days back in 2010. This was
the biggest first week sale for any game in Japan ever, until September 2022 when Nintendo released Splatoon
3. This relatively new (2015) and fun series, which is 100%
owned by Nintendo, sold 3.6m copies
in 3 days – a new record for a first week – and continues to top
the Japanese charts and perform strongly worldwide. Well done to
Nintendo for creating a new franchise with the potential for
revenues of billions of dollars. Meanwhile, the Mario and Zelda
franchises have sold more games on Switch than any previous
Nintendo device; with Mario Kart 8,
at 55m copies sold, the bestselling
in this series and now the 6th bestselling video game of all time.
Gaming is an immature industry; Nintendo’s content is beloved; new
sales records for its games and devices are likely to be set for
years to come.
RELX’s Elsevier academic publishing division recently
confirmed it publishes 18% of global research articles, but that it
commands 27% of all citations (demonstrating the high calibre of
research submitted to its journals). Reinforcing the value of
Elsevier’s market position, consider the following statistics RELX
shares on its website. Back in 1950, the quantum of medical
research undertaken worldwide was doubling every 50 years. By 2020,
it was doubling every 73 days. Meanwhile, the data handled by
RELX’s legal and business information subsidiary, LexisNexis, is
doubling every year. Finally, note that RELX’s fastest growing
division, Risk, derives 65% of its profits from services that
didn’t exist 7 years ago. It’s hard to conclude anything but that
RELX’s customers are going to need even more of its data and
analytics services in years to come, as business and academic
professionals are required to make sense of exponentially growing
scads of data.
At another data service provider, London Stock Exchange
Group, we were encouraged by the chutzpah demonstrated by CEO
David Schwimmer in July, when he
remarked that in his previous role at Goldman Sachs he had advised
on hundreds of transactions, but he genuinely couldn’t think of a
single one “as transformational and value-creating as this one”
(LSE’s 2021 acquisition of Refinitiv). It has to be said that with
each passing update from the company, Schwimmer’s assertion looks
better and better based. Meanwhile, while turmoil in fixed interest
and currency markets is, of course, troubling for asset owners, it
is not necessarily so for the owners of liquidity pools where
trades are executed, or for providers of post-trade services. It
seems clear volumes are exceptionally strong across LSE’s business
currently.
Ivan Menezes, CEO of
Diageo, was rightly proud to note that in 2022 one in every
ten pints served in a London pub
or bar was a pint of Guinness. That’s a new record and another
milestone for this extraordinary global brand. Guinness is Diageo’s
second biggest brand by sales value and grew at 32% last year and
not all of that is just a rebound from Covid-19. And, sticking to
beer, what to make of the fact that Heineken 0% has become
the world’s #1 non-alcoholic beer brand, 2.5 billion pints sold
last year, growing at 30%? That’s 6% of Heineken’s total business
and it appears it does not cannibalise the rest of group sales. In
other words, this is a new and dynamically growing brand for
Heineken. Heineken shares traded at c.€6 in 1992 and are close to
€90 today. No one will complain if the stock gives another 15-fold
increase over the next three decades – and looking at its brands
and market opportunities – why shouldn’t it?
Of course, I can continue. We don’t own any companies where we
don’t expect their future to be better than the past, however
glorious. To conclude and turning to the geopolitics – we admired
Narendra Modi, India’s prime
minister, when he proclaimed: “I know that today’s era is not the
era of war.” Factually, of course, he is sadly incorrect. But we
must hope that his aspiration is shared around the world,
especially by the young. If he turns out to be right: the best
really is still yet to come.
Nick Train
Lindsell Train Limited
Investment Manager
4 December 2022
Portfolio Holdings at 30 September 2022
(All ordinary shares unless otherwise stated)
|
|
|
|
Look- |
|
|
|
|
through |
|
|
Fair |
% of |
basis: |
|
|
value |
net |
% of
total |
| Holding |
Security |
£’000 |
assets |
assets† |
| 6,450 |
Lindsell Train
Limited |
87,855 |
42.7% |
42.7% |
| 235,000 |
London Stock
Exchange |
17,926 |
8.7% |
8.9% |
| 12,500,000 |
LF Lindsell Train North
American Equity Fund |
16,841 |
8.2% |
0.0% |
| 420,500 |
Diageo |
15,966 |
7.7% |
8.0% |
| 410,000 |
Nintendo |
14,845 |
7.2% |
7.2% |
| 222,000 |
Unilever |
8,811 |
4.3% |
4.4% |
| 363,000 |
RELX |
7,990 |
3.9% |
4.1% |
| 97,400 |
PayPal |
7,510 |
3.6% |
3.9% |
| 150,000 |
Mondelez
International |
7,365 |
3.6% |
4.0% |
| 1,263,393 |
A.G. Barr |
5,748 |
2.8% |
2.8% |
| 89,000 |
Heineken |
5,506 |
2.7% |
2.8% |
| 420,000 |
Finsbury Growth &
Income Trust PLC |
3,322 |
1.6% |
0.0% |
| 36,621 |
Laurent Perrier |
3,092 |
1.5% |
1.5% |
|
The Lindsell Train
Investment |
|
|
|
|
Trust plc Indirect
Holdings |
– |
– |
8.2% |
|
Total Investments |
202,777 |
98.5% |
98.5% |
|
Net current Assets |
3,106 |
1.5% |
1.5% |
|
Net Assets |
205,883 |
100.0% |
100.0% |
† Look-through basis: This
adjusts the percentages held in each security upwards by the amount
held by LTL managed funds and adjusts the funds’ holdings downwards
to account for the overlap. It provides shareholders with a measure
of stock specific risk by amalgamating the direct holdings of the
Company with the indirect holdings held within the LTL funds.
Leverage
The balance sheet positions of the Funds managed by LTL as at
30 September 2022 are shown
below:
|
Net
equity |
| Fund |
exposure |
| LF Lindsell Train North
American Equity Fund Acc |
99.0% |
| Finsbury Growth &
Income Trust PLC |
102.4% |
Analysis of Investment Portfolio at
30 September 2022
Breakdown by location of listing
(look-through basis)^
|
30
September |
|
2022 |
| UK* |
71% |
| USA |
16% |
| Japan |
7% |
| Europe excluding
UK |
4% |
| Cash and
equivalents |
2% |
|
100% |
|
|
| Breakdown by
location of underlying company revenues |
|
| (look-through
basis)^ |
|
| UK^^ |
28% |
| Europe excluding
UK^^ |
30% |
| USA^^ |
26% |
| Rest of the
World^^ |
11% |
| Japan |
3% |
| Cash and
Equivalents |
2% |
|
100% |
|
|
| Breakdown by
sector |
|
| (look-through
basis)^ |
|
| Financials* |
53% |
| Consumer Staples |
26% |
| Communication
services |
8% |
| Information
Technology |
5% |
| Industrials |
5% |
| Cash and
Equivalents |
2% |
| Consumer
Discretionary |
1% |
|
100% |
^ Look-through basis: This
adjusts the percentages held in each asset class, country or
currency by the amount held by LTL managed funds. It provides
Shareholders with a more accurate measure of country and currency
exposure by aggregating the direct holdings of the Company with the
indirect holdings held by the LTL funds.
* LTL accounts for
42.7% and is not listed.
^^ LTL accounts for 18 percentage points of the Europe figure, 19 percentage points of the UK
figure, 5 percentage points of the USA figure, and 1 percentage point of the
Rest of the World figure.
Income Statement
|
|
Six months ended |
Six months ended |
|
|
30 September 2022 |
30 September 2021 |
|
|
Unaudited |
Unaudited |
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
Notes |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
| (Losses)/gains on
investments held at fair value through profit or loss |
|
– |
(13,047) |
(13,047) |
– |
7,764 |
7,764 |
| Exchange (loss)/gains
on currency |
|
– |
(10) |
(10) |
– |
2 |
2 |
| Income |
2 |
7,793 |
– |
7,793 |
7,647 |
– |
7,647 |
| Investment management
fees |
3 |
(586) |
– |
(586) |
(675) |
– |
(675) |
| Other expenses |
4 |
(371) |
– |
(371) |
(340) |
– |
(340) |
| Return/(loss) before
tax |
|
6,836 |
(13,057) |
(6,221) |
6,632 |
7,766 |
14,398 |
| Tax |
5 |
(57) |
– |
(57) |
(42) |
– |
(42) |
| Return/(loss) after
tax for the financial period |
|
6,779 |
(13,057) |
(6,278) |
6,590 |
7,766 |
14,356 |
| Return/(loss) per
Ordinary Share |
6 |
£33.90 |
£(65.29) |
£(31.39) |
£32.95 |
£38.83 |
£71.78 |
All revenue and capital items in the above statement derive from
continuing operations.
The total columns of this statement represent the profit and
loss accounts of the Company. The revenue and capital columns are
supplementary to this and are prepared under the guidance published
by the Association of Investment Companies.
The Company does not have any other recognised gains or losses.
The net loss for the period disclosed above represents the
Company’s total comprehensive income.
No operations were acquired or discontinued during the
period.
Statement of Changes in Equity
|
Share |
Special |
Capital |
Revenue |
|
|
capital |
reserve |
reserve |
reserve |
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
| For the six months
ended 30 September 2022 (unaudited) |
|
|
|
|
|
| At 31 March 2022 |
150 |
19,850 |
180,982 |
21,779 |
222,761 |
| (Loss)/return after tax
for the financial period |
– |
– |
(13,057) |
6,779 |
(6,278) |
| Dividends paid |
– |
– |
– |
(10,600) |
(10,600) |
| At 30 September
2022 |
150 |
19,850 |
167,925 |
17,958 |
205,883 |
|
Share |
Special |
Capital |
Revenue |
|
|
capital |
reserve |
reserve |
reserve |
Total |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
| For the six months
ended 30 September 2021 (unaudited) |
|
|
|
|
|
| At 31 March 2021 |
150 |
19,850 |
198,066 |
19,050 |
237,116 |
| Return after tax for
the financial period |
– |
– |
7,766 |
6,590 |
14,356 |
| Dividends paid |
– |
– |
– |
(10,000) |
(10,000) |
| At 30 September
2021 |
150 |
19,850 |
205,832 |
15,640 |
241,472 |
Statement of Financial Position
|
|
30
September |
31
March |
|
|
2022 |
2022 |
|
|
Unaudited |
Audited |
|
Note |
£’000 |
£’000 |
| Fixed
assets |
|
|
|
| Investments held at
fair value through |
|
|
|
| profit or loss |
|
202,777 |
215,768 |
| Current
assets |
|
|
|
| Other receivables |
|
469 |
513 |
| Cash at bank |
|
2,839 |
6,708 |
|
|
3,308 |
7,221 |
| Creditors: amounts
falling due within one year |
|
|
|
| Other payables |
|
(202) |
(228) |
|
|
(202) |
(228) |
| Net current
assets |
|
3,106 |
6,993 |
| Net assets |
|
205,883 |
222,761 |
| Capital and
reserves |
|
|
|
| Called up share
capital |
|
150 |
150 |
| Special reserve |
|
19,850 |
19,850 |
|
|
20,000 |
20,000 |
| Capital reserve |
|
167,925 |
180,982 |
| Revenue reserve |
|
17,958 |
21,779 |
| Total shareholders’
funds |
|
205,883 |
222,761 |
| Net asset value per
Ordinary Share |
7 |
£1,029.42 |
£1,113.81 |
Cash Flow Statement
|
Six
months ended |
Six
months ended |
|
30
September |
30
September |
|
2022 |
2021 |
|
Unaudited |
Unaudited |
|
£’000 |
£’000 |
| Net (loss)/return
before finance costs and tax |
(6,221) |
14,398 |
| Losses/(gains) on
investments held at fair value |
13,047 |
(7,764) |
| Losses/(gains) on
exchange movements |
10 |
(2) |
| Decrease/(increase) in
other receivables |
13 |
(5) |
| Decrease in accrued
income |
33 |
120 |
| Decrease in other
payables |
(35) |
(2,675) |
| Taxation on investment
income |
(50) |
(49) |
| Net cash inflow from
operating activities |
6,797 |
4,023 |
| Purchase of investments
held at fair value |
(56) |
(47) |
| Sale of investments
held at fair value |
– |
694 |
| Net cash
(outflow)/inflow from investing activities |
(56) |
647 |
| Equity dividends
paid |
(10,600) |
(10,000) |
| Net cash outflow
from financing activities |
(10,600) |
(10,000) |
| Decrease in cash and
cash equivalents |
(3,859) |
(5,330) |
| Cash and cash
equivalents at beginning of period |
6,708 |
5,541 |
| (Losses)/gains on
exchange movements |
(10) |
2 |
| Cash and cash
equivalents at end of period |
2,839 |
213 |
Notes to the Financial Statements
1 Accounting policies
The financial statements of the Company have been prepared under
the historical cost convention modified to include the revaluation
of investments and in accordance with FRS 104 “Interim Financial
Reporting” and with the Statement of Recommended Practice (“SORP”)
“Financial Statements of Investment Trust Companies and Venture
Capital Trusts”, issued by the Association of Investment Companies
updated in July 2022 and the
Companies Act 2006.
The accounting policies followed in this Half-year Report are
consistent with the policies adopted in the audited financial
statements for the year ended 31 March
2022.
2 Income
|
Six
months ended |
Six
months ended |
|
30
September 2022 |
30
September 2021 |
|
Unaudited |
Unaudited |
|
£’000 |
£’000 |
| Income from
investments |
|
|
| Overseas dividends |
493 |
369 |
| UK
dividends |
|
|
| – Lindsell Train
Limited |
6,288 |
6,476 |
| – Other UK
dividends |
1,006 |
802 |
| – Deposit interest |
6 |
– |
|
7,793 |
7,647 |
3 Investment management fees
|
Six
months ended |
Six
months ended |
|
30
September |
30
September |
|
2022 |
2021 |
|
Unaudited |
Unaudited |
|
£’000 |
£’000 |
| Investment management
fee |
644 |
754 |
| Rebate of investment
management fee |
(58) |
(79) |
| Net management
fees |
586 |
675 |
4 Other expenses
|
Six
months ended |
Six
months ended |
|
30
September |
30
September |
|
2022 |
2021 |
|
Unaudited |
Unaudited |
|
£’000 |
£’000 |
| Directors’
emoluments |
61 |
58 |
| Company Secretarial
& Administration fee |
99 |
109 |
| Auditor’s
remuneration†* |
30 |
18 |
| Tax compliance fee |
2 |
2 |
| Other** |
179 |
153 |
|
371 |
340 |
† Remuneration for the audit of
the Financial Statements of the Company.
* Excluding VAT.
** Includes registrar’s fees,
printing fees, marketing fees, safe custody fees, London Stock
Exchange/FCA fees, Key Man and Directors’ and Officers’ liability
insurance, Employer’s National Insurance and legal fees.
5 Effective rate of tax
The effective rate of tax reported in the revenue column of the
income statement for the six months ended 30
September 2022 is 0.83% (six months ended 30 September 2021: 0.63%), based on revenue
profit before tax of £6,836,000 (six months ended 30 September 2021: £6,632,000). This differs from
the standard rate of tax, 19% (six months ended 30 September
2021: 19%) as a result of revenue not taxable for Corporation Tax
purposes.
6 Total (loss)/return per Ordinary
Share
|
Six
months ended |
Six
months ended |
|
30
September |
30
September |
|
2022 |
2021 |
|
Unaudited |
Unaudited |
| Total
(loss)/return |
£(6,278,000) |
£14,356,000 |
| Weighted average number
of Ordinary Shares |
|
|
| in issue during the
period |
200,000 |
200,000 |
| Total (loss)/return per
Ordinary Share |
£(31.39) |
£71.78 |
The total (loss)/return per Ordinary Share detailed above can be
further analysed between revenue and capital, as below:
Revenue return per Ordinary Share
| Revenue return |
£6,779,000 |
£6,590,000 |
| Weighted average number
of Ordinary Shares in issue during the period |
200,000 |
200,000 |
| Revenue return per
Ordinary Share |
£33.90 |
£32.95 |
| Capital
(loss)/return per Ordinary Share |
|
|
| Capital
(loss)/return |
£(13,057,000) |
£7,766,000 |
| Weighted average number
of Ordinary Shares in issue during the period |
200,000 |
200,000 |
| Capital (loss)/return
per Ordinary Share |
£(65.29) |
£38.83 |
7 Net asset value per Ordinary
Share
|
Six
months ended |
Year
ended |
|
30
September |
31
March |
|
2022 |
2022 |
|
Unaudited |
Audited |
| Net assets
attributable |
£205,883,000 |
£222,761,000 |
| Ordinary Shares in
issue at the period/year end |
200,000 |
200,000 |
| Net asset value per
Ordinary Share |
£1,029.42 |
£1,113.81 |
8 Valuation of financial
instruments
The Company’s investments and derivative financial instruments
as disclosed in the Statement of Financial Position are valued at
fair value.
FRS 102 requires an entity to classify fair value measurements
using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Categorisation within the
hierarchy has been determined on the basis of the lowest level
input that is significant to the fair value measurement of the
relevant asset as follows:
- 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 tables below set out fair value measurements of financial
instruments as at the year end by the level in the fair value
hierarchy into which the fair value measurement is categorised.
Financial assets/liabilities at fair
value through profit or loss
|
Level
1 |
Level
2 |
Level
3 |
Total |
| At 30 September
2022 |
£’000 |
£’000 |
£’000 |
£’000 |
| Investments |
98,081 |
16,841 |
87,855 |
202,777 |
|
Level
1 |
Level
2 |
Level
3 |
Total |
| At 31 March 2022 |
£’000 |
£’000 |
£’000 |
£’000 |
| Investments |
101,257 |
17,601 |
96,910 |
215,768 |
Note: Within the above tables, level 1 comprises all the
Company’s ordinary investments, level 2 represents the investment
in LF Lindsell Train North American Equity Fund and level 3
represents the investment in LTL.
During the year ended 31 March
2022 the Board appointed J.P. Morgan Cazenove Ltd to
undertake an independent review of the Company’s valuation
methodology applied to its unlisted investment in LTL. The new
methodology was adopted and applied to monthly valuations from
31 March 2022 onwards.
The new methodology has a single component based on a percentage
of LTL’s funds under management (“FUM”), with the percentage
applied being reviewed monthly and adjusted to reflect the ongoing
profitability of LTL. At the end of each month the ratio of LTL’s
notional annualised net profits* to LTL’s FUM is calculated and,
depending on the result, the percentage of FUM is adjusted
according to the table shown in Appendix 2.
The valuation methodology was formally reviewed previously in
March 2018 and March 2020.
The Board reserves the right to vary its valuation methodology
at its discretion.
* LTL’s notional net profits are
calculated by applying a fee rate (averaged over the last six
months) to the most recent end-month FUM to produce annualised fee
revenues excluding performance fees. Notional staff costs of 45% of
revenues, annualised fixed costs and tax are deducted from revenues
to then produce notional annualised net profits.
9 Sections 1158/1159 of the
Corporation Tax Act 2010
It is the intention of the Directors to conduct the affairs of
the Company so that the Company satisfies the conditions for
approval as an Investment Trust Company set out in Sections
1158/1159 of the Corporation Tax Act 2010.
10 Going Concern
The Directors believe, having considered the Company’s
investment objective, risk management policies, capital management
policies and procedures, and the nature of the portfolio and the
expenditure projections, that the Company has adequate resources,
an appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the
foreseeable future, and, more specifically, that there are no
material uncertainties relating to the Company that would prevent
its ability to continue in such operational existence for at least
twelve months from the date of the approval of this Half-year
Report. For these reasons, they consider there is reasonable
evidence to continue to adopt the going concern basis in preparing
the financial statements. In reviewing the position as at the date
of this Report, the Board has considered the guidance on this
matter issued by the Financial Reporting Council.
As part of their assessment, the Directors have given careful
consideration to the consequences for the Company of continuing
uncertainty in the global economy. As previously reported, stress
testing was also carried out in April
2022 to establish the impact of a significant and prolonged
decline in the Company’s performance and prospects. This included a
range of plausible downside scenarios such as reviewing the effects
of substantial falls in investment values and the impact of the
Company’s ongoing charges ratio.
11 2022 Accounts
The figures and financial information for the year to
31 March 2022 are extracted from the
latest published accounts of the Company and do not constitute
statutory accounts for the year.
Those accounts have been delivered to the Registrar of Companies
and included the Report of the Company’s auditor which was
unqualified and did not contain a reference to any matters to which
the Company’s auditor drew attention by way of emphasis without
qualifying the report, and did not contain a statement under
section 498 of the Companies Act 2006.
Interim Management Report
The Directors are required to provide an Interim Management
Report in accordance with the UK Listing Authority’s Disclosure and
Transparency Rules. They consider that the Chairman’s Statement and
the Investment Manager’s Report, the following statements and the
Directors’ Responsibility Statement below together constitute the
Interim Management Report for the Company for the six months ended
30 September 2022.
Principal Risks and Uncertainties
The Directors continue to review the key risk register for the
Company which identifies the risks that the Company is exposed to,
the controls in place and the actions being taken to mitigate them.
This is set against the backdrop of increased risk levels within
the global economy created by ongoing global supply chain
disruption, rising levels of inflation and interest rates, together
with the consequences of the war in Ukraine and the subsequent long-term effects
on economies and international relations. The Directors have
considered the impact of the continued uncertainty on the Company’s
financial position and, based on the information available to them
at the date of this Report, have concluded that no adjustments are
required to the accounts as at 30 September
2022.
A review of the half-year and the outlook for the Company can be
found in the Chairman’s Statement and in the Investment Manager’s
Review. The principal risks and uncertainties faced by the Company
include the following:
- The Board may have to reduce the Company’s dividend.
- The Company’s share price total return may differ materially
from the NAV per share total return.
- The growth of retail platforms has a detrimental effect on
shareholder engagement.
- The departure of a key individual at the Investment Manager may
affect the Company’s performance.
- The investment strategy adopted by the Investment Manager,
including the high degree of concentration of the investment
portfolio, may lead to an investment return that is materially
lower than the Company’s benchmark index, and/or a possible failure
to achieve the Company’s investment objective.
- The investment in LTL becomes an even greater proportion of the
overall value of the Company’s portfolio.
- Adverse reputational impact of one or more of the Company’s key
service providers which, by association, causes the Company
reputational damage.
- Fraud (including unauthorised payments and cyber-fraud) occurs
leading to a loss.
- The Company is exposed to credit risk.
- The Company is exposed to market price risk.
- The Company and/or the Directors fail(s) to comply with its
legal requirement with any applicable regulations or the regulatory
environment in which the Company operates changes, affecting its
modus operandi.
- The regulatory environment in which the Company operates
changes, affecting the Company’s business model.
- The Company’s valuation of its investment in LTL is materially
misstated.
The Audit Committee identified the following emerging risks
during the year to be included in the risk register.
The invasion of Ukraine by
Russia introduces new risks and
exacerbates existing risks. These include:
- Increased inflationary pressures, that were already elevated
from supply shortages as the Covid-19 pandemic eased.
- Higher inflation is leading policy makers to increase interest
rates. This in turn may lead to a reduction in trade, a threat of
recession and higher unemployment.
- Sanctions damage the prospects of investee companies with
material exposure to Russia.
- Increased market volatility and reduced risk appetites across a
wide variety of asset classes.
- Increased threat of state-sponsored cyber-attacks.
Information on these risks is given in the Annual Report for the
year ended 31 March 2022.
The Board believes that the Company’s principal risks and
uncertainties have not changed materially since the date of that
report and are not expected to change materially for the remaining
six months of the Company’s financial year.
Related Party Transactions
During the first six months of the current financial year, no
transactions with related parties have taken place which have
materially affected the financial position or the performance of
the Company.
Directors’ Responsibilities
The Board of Directors confirms that, to the best of its
knowledge:
- the condensed set of financial statements contained within the
Half-year Report have been prepared in accordance with applicable
United Kingdom Generally Accepted Accounting Practice standards;
and
- the Interim Management Report includes a true and fair review
of the information required by:
- DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the year;
- DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first
six months of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and
- any changes in the related party transactions described in the
last Annual Report that could do so.
The Half-year Report has not been audited by the Company’s
auditors.
This Half-year Report contains certain forward-looking
statements. These statements are made by the Directors in good
faith based on the information available to them up to the date of
this Report and such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying any such forward-looking information.
For and on behalf of the Board
Julian Cazalet
Chairman
4 December 2022
Appendix 1
Half-year review of Lindsell Train
Limited (“LTL”) the Investment Manager of The Lindsell Train
Investment Trust plc (“LTIT”) as at 31 July
2022
Funds under Management
|
Jul
2022 |
Jan
2022 |
Jul
2021 |
| FUM by Strategy |
£m |
£m |
£m |
| UK |
8,099 |
8,475 |
9,483 |
| Global |
10,810 |
12,040 |
13,900 |
| Japan |
624 |
702 |
887 |
| North America |
29 |
28 |
28 |
| Total |
19,562 |
21,245 |
24,298 |
|
|
|
|
| Largest Client
Accounts |
|
|
|
|
Jul
2022 |
Jan
2022 |
Jul
2021 |
|
% of
FUM |
% of
FUM |
% of
FUM |
| Largest Pooled Fund
Asset |
30% |
34% |
37% |
| Largest Segregated
Account |
10% |
10% |
9% |
|
|
|
|
| Financials |
|
|
|
|
Jul
2022 |
Jul
2021 |
% |
| Profit & Loss |
£’000 |
£’000 |
Change |
| Fee Revenue |
|
|
|
| Investment Management
Fee |
49,259 |
60,539 |
-19% |
| Performance Fee |
0 |
2,662 |
-100% |
| Bank Interest &
Other Income |
38 |
4 |
|
|
49,297 |
63,205 |
|
| Staff
Remuneration* |
(15,101) |
(20,700) |
-27% |
| Fixed Overheads |
(2,228) |
(2,207) |
1% |
| Operating Profit |
31,968 |
40,298 |
-21% |
| FX Currency Translation
Gain/(Loss) |
3,005 |
(563) |
|
| Investment Unrealised
(Loss)/Gain |
(14) |
1,154 |
|
| Profit before
taxation |
34,959 |
40,889 |
|
| Taxation |
(6,202) |
(7,919) |
|
| Net Profit |
28,757 |
32,970 |
-13% |
| Dividends |
(25,879) |
(26,751) |
|
| Retained profit |
2,878 |
6,219 |
|
| Capital &
Reserves |
|
|
|
| Called up Share
Capital |
266 |
266 |
|
| Treasury Shares |
(1,794) |
(132) |
|
| Profit and Loss
Account |
95,500 |
86,632 |
|
| Shareholders’
Funds |
93,972 |
86,766 |
|
| Balance
Sheet |
|
|
|
| Fixed Assets |
133 |
185 |
|
| Investments |
6,900 |
7,153 |
|
| Current Assets (inc
cash at bank) |
94,206 |
88,728 |
|
| Liabilities |
(7,267) |
(9,300) |
|
| Net Assets |
93,972 |
86,766 |
|
- Staff costs include permanent staff remuneration, social
security, temporary apprentice levy, introduction fees and other
staff related costs. No more than 25% of fees (other than
LTIT) can be paid as permanent staff remuneration.
Five Year History
|
Jul
2022 |
Jul
2021 |
Jul
2020 |
Jul
2019 |
Jul
2018 |
| Operating Profit
Margin |
65% |
64%** |
66%** |
64%** |
61%** |
| Earnings per share
(£)* |
1,083 |
1,237 |
1,084 |
1,054 |
717 |
| Dividends per share
(£)* |
975 |
1,004 |
949 |
776 |
525 |
| Total Staff Cost as %
of Revenue |
31% |
33% |
29% |
33% |
36% |
| Opening FUM (£m) |
24,298 |
21,151 |
22,563 |
15,304 |
11,326 |
|
|
|
|
|
|
| – Effect of market
movements (£m) |
-1,271 |
3,041 |
-1,385 |
4,568 |
2,044 |
| – Net new fund flows
(£m) |
-3,465 |
106 |
-27 |
2,691 |
1,934 |
Changes in FUM (£m) |
-4,736 |
3,147 |
-1,412 |
7,259 |
3,978 |
| Closing FUM (£m) |
19,562 |
24,298 |
21,151 |
22,563 |
15,304 |
| LTL Open-ended funds as
% of total |
66% |
73% |
72% |
75% |
72% |
| Client
Relationships |
|
|
|
|
|
| – Pooled funds |
5 |
5 |
5 |
4 |
4 |
| – Separate
accounts |
18 |
17 |
17 |
17 |
17 |
|
|
|
|
|
|
| Ownership |
|
|
|
|
|
|
Jul
2022 |
Jan
2022 |
Jul
2021 |
Jan
2021 |
Jul
2020 |
| Michael Lindsell &
spouse |
9,650 |
9,650 |
9,650 |
9,650 |
9,650 |
| Nick Train &
spouse |
9,650 |
9,650 |
9,650 |
9,650 |
9,650 |
| The Lindsell Train
Investment Trust plc |
6,450 |
6,450 |
6,450 |
6,450 |
6,450 |
| Other
Directors/employees |
805 |
778 |
899 |
875 |
871 |
|
26,555 |
26,528 |
26,649 |
26,625 |
26,621 |
| Treasury Shares |
105 |
132 |
11 |
35 |
39 |
| Total
Shares |
26,660 |
26,660 |
26,660 |
26,660 |
26,660 |
* On 1 February 2019 LTL undertook a share split with
each share sub divided into 10 shares of £10 each. The per share
figures in the table above are retrospectively changed in y/e
January 2018 and y/e January 2019 based on 26,660 shares for ease of
comparison.
** Amended from previous Half-year
Reports to exclude the effect of FX translation and unrealised
investment gain/losses.
| Board of Directors |
|
| Nick Train |
Chairman and Portfolio Manager |
| Michael Lindsell |
Chief Executive and Portfolio
Manager |
| Michael Lim |
IT Director and Secretarial |
| Keith Wilson |
Head of Marketing & Client
Services |
| Jane Orr |
Director of Marketing |
| Joss Saunders |
Chief Operating Officer |
| James Alexandroff |
Non-Executive Director |
| Julian Bartlett |
Non-Executive Director |
| Employees |
|
|
|
|
|
|
Jul
2022 |
Jan
2022 |
Jul
2021 |
Jan
2021 |
Jul
2020 |
| Investment Team
(including three Portfolio Managers) |
7 |
7 |
6 |
6 |
6 |
| Client Servicing and
Marketing |
7 |
7 |
6 |
6 |
6 |
| Operations and
Compliance |
12 |
11 |
8 |
7 |
8 |
| Non-Executive
Directors |
2 |
2 |
2 |
2 |
2 |
|
28 |
27 |
22 |
21 |
22 |
Appendix 2
LTIT Director’s valuation of LTL
(unaudited)
|
30 Sept
2022 |
30 Sept
2021^ |
| Notional annualised net
profits (A)* (£’000) |
38,368 |
50,166 |
| Funds under Management
less LTIT holdings (B) (£'000) |
18,548,853 |
23,650,721 |
| Normalised notional net
profits as % of FUM A/B = (C) |
0.207% |
0.212% |
| % of FUM (D) (see table
below to view % corresponding to C) |
1.95% |
2.00% |
| Valuation (E) i.e. B x
D (£’000) |
361,703 |
473,014 |
| Number of shares in
issue (F)† |
26,555 |
26,649 |
| Valuation per share
in LTL i.e. E / F |
£13,621 |
£17,750 |
* Notional annualised
net profits are made up of:
– annualised fee revenue, based
on 6-mth average fee rate applied to most recent month-end AUM
– annualised fee revenue excludes
performance fees
– annualised interest income,
based on 3-mth average
– notional staff costs of 45% of
annualised fee revenue
– annualised operating costs
(excluding staff costs), based on 3-mth normalised average
– notional tax at 19%
^ The 30
September 2021 valuation (shown above) was derived by
applying new valuation methodology, which came into effect from
31 March 2022.
† The reduction in shares in
issue is accounted for by net purchases of Treasury shares from LTL
employees.
| Notional annualised net
profits*/FUM (%) |
Valuation of LTL -
Percentage of FUM |
|
|
| 0.15 –
0.16 |
1.70% |
| 0.16 –
0.17 |
1.75% |
| 0.17 –
0.18 |
1.80% |
| 0.18 –
0.19 |
1.85% |
| 0.19 –
0.20 |
1.90% |
| 0.20
– 0.21 |
1.95% |
| 0.21
– 0.22 |
2.00% |
| 0.22 –
0.23 |
2.05% |
| 0.23 –
0.24 |
2.10% |
| 0.24 –
0.25 |
2.15% |
| 0.25 –
0.26 |
2.20% |
| 0.26 –
0.27 |
2.25% |
Glossary of Terms and Alternative
Performance Measures
Alternative Investment Fund Managers
Directive (“AIFMD”)
The Alternative Investment Fund Managers Directive (the
“Directive”) is a European Union Directive that entered into force
on 22 July 2013. The Directive
regulates EU fund managers that manage alternative investment funds
(this includes investment trusts).
Alternative Performance Measure
(“APM”)
An alternative performance measure is a financial measure of
historical or future financial performance, financial position or
cash flow that is not prescribed by the relevant accounting
standards. The APMs are the discount and premium, dividend yield,
share price and NAV total returns and ongoing charges. The
Directors believe that these measures enhance the comparability of
information between reporting periods and aid investors in
understanding the Company’s performance.
Benchmark
With effect from 1 April 2021 the
Company’s performance benchmark is the MSCI World Index total
return in Sterling.
Prior to 1 April 2021 the
benchmark was the annual average redemption yield on the
longest-dated UK government fixed rate (1.625% 2071) calculated
using weekly data, plus a premium of 0.5%, subject to a minimum
yield of 4.0%.
Discount and premium (APM)
If the share price of an investment trust is higher than the Net
Asset Value (NAV) per share, the shares are trading at a premium to
NAV. In this circumstance the price that an investor pays or
receives for a share would be more than the value attributable to
it by reference to the underlying assets. The premium is the
difference between the share price (based on mid-market share
prices) and the NAV, expressed as a percentage of the NAV.
A discount occurs when the share price is below the NAV.
Investors would therefore be paying less than the value
attributable to the shares by reference to the underlying
assets.
A premium or discount is generally the consequence of the
balance of supply and demand for the shares on the stock
market.
The discount or premium is calculated by dividing the difference
between the share price and the NAV by the NAV.
|
As at |
As at |
|
30
September |
31
March |
|
2022 |
2022 |
|
£ |
£ |
| Share Price |
991 |
1,105 |
| Net Asset Value per
Share |
1,029.42 |
1,113.81 |
| Discount to Net Asset
Value per Share |
3.7% |
0.8% |
MSCI World Index total return in
Sterling
The Company’s benchmark provider requires the following
statement to be included.
“The MSCI information (relating to the Benchmark) may only be
used for your internal use, may not be reproduced or redisseminated
in any form and may not be used as a basis for or a component of
any financial instruments or products or indices. None of the MSCI
information is intended to constitute investment advice or a
recommendation to make (or refrain from making) any kind of
investment decision and may not be relied on as such. Historical
data and analysis should not be taken as an indication or guarantee
of any future performance analysis, forecast or prediction. The
MSCI information is provided on an “as is” basis and the user of
this information assumes the entire risk of any use made of this
information. MSCI, each of its affiliates and each other person
involved in or related to compiling, computing or creating any MSCI
information (collectively, the “MSCI Parties”) expressly disclaims
all warranties (including, without limitation, any warranties of
originality, accuracy, completeness, timeliness, non-infringement,
merchantability and fitness for a particular purpose) with respect
to this information. Without limiting any of the foregoing, in no
event shall any MSCI Party have any liability for any direct,
indirect, special, incidental, punitive, consequential (including,
without limitation lost profits) or any other damages.
(www.msci.com).”
Net asset value (“NAV”) per Ordinary
Share
The NAV is shareholders’ funds expressed as an amount per
individual share. Equity shareholders’ funds are the total value of
all the Company’s assets, at current market value, having deducted
all current and long-term liabilities and any provision for
liabilities and charges.
The NAV of the Company is published weekly and at each month
end.
The figures disclosed in the Statement of Financial Position
have been calculated as shown below:
|
Six
months |
|
|
ended |
Year
ended |
|
30
September |
31
March |
|
2022 |
2022 |
| Net Asset Value
(a) |
£205,883,000 |
£222,761,000 |
| Ordinary Shares in
issue (b) |
200,000 |
200,000 |
| Net asset value per
Ordinary Share (a) ÷ (b) |
£1,029.42 |
£1,113.81 |
Revenue return per share
The revenue return per share is the revenue return profit for
the period divided by the weighted average number of ordinary
shares in issue during the period.
Share price and NAV total return
(APM)
This is the return on the share price and NAV taking into
account both the rise and fall of share prices and valuations and
the dividends paid to shareholders.
Any dividends received by a shareholder are assumed to have been
reinvested in either additional shares (for share price total
return) or the Company’s assets (for NAV total return).
The share price and NAV total returns are calculated as the
return to shareholders after reinvesting the net dividend in
additional shares on the date that the share price goes
ex-dividend.
The figures disclosed in the Financial Highlights and Chairmans
Statement have been calculated as shown below:
|
|
Six months ended |
|
|
30 September 2022 |
|
|
LTIT
NAV |
LTIT
Price |
| NAV/Price at 30
September 2022 |
a |
£1,029.42 |
£991.00 |
| Dividend Adjustment
Factor* |
b |
1.049 |
1.043 |
| Adjusted closing
NAV/Price |
c = a x b |
£1,080.03 |
£1,033.27 |
| NAV/Price 31 March
2022 |
d |
£1,113.81 |
£1,105.00 |
| Total return |
[(c/d)-1]*100 |
-3.0% |
-6.5% |
* The dividend adjustment factor
is calculated on the assumption that the dividends of £53.00 paid
by the Company during the year were reinvested into shares or
assets of the Company at the cum income NAV per share/share price,
as appropriate, at the ex-dividend date.
LTL total return performance
The total return performance for LTL is calculated as the return
after receiving but not reinvesting dividends received over the
period.
|
|
Six
months ended |
|
|
30
September 2022 |
|
|
LTL
valuation |
| Valuation at 31 March
2022 |
a |
£15,205 |
| Valuation at 30
September 2022 |
b |
£13,621 |
| Dividends paid during
the period |
c |
£975 |
| Total return |
[(b-a)+c]/a*100 |
-4.0% |
Treasury Shares
Shares previously issued by a company that have been bought back
from Shareholders to be held by the Company for potential sale or
cancellation at a later date. Such shares are not capable of being
voted and carry no rights to dividends.
-ENDS-
For further information please contact
Victoria Hale
Company Secretary
Frostrow Capital LLP
020 3100 8732