27 June 2024
SCHRODER UK MID CAP FUND
PLC
(the
"Company")
HALF YEAR RESULTS FOR THE SIX
MONTHS ENDED 31 MARCH 2024
Schroder UK Mid Cap Fund plc
announces its half year results for the six months ended 31 March
2024.
· The
Company's NAV achieved a positive return of 9.3% during the period,
however this was below the 11.4% return for the Benchmark. Over the
long term the Company's performance has outperformed the Benchmark
over the last 5 and 10 years.
· UK
Mid-cap indices outperformed the broader UK market and were spurred
by improving fundamentals as well as continued merger and
acquisition activity in the sector.
· Relative performance over the period was impacted by a sharp
and fast rotation within the Mid-cap universe away from long term
growth businesses towards more interest rate sensitive businesses
linked to the interest rate cycle.
· The
Board is pleased to announce an increased interim dividend of 6
pence per share for the financial year ending 30 September
2024.
Robert Talbut, Chairman of Schroder UK Mid Cap,
commented:
"From a valuation perspective the UK stock market represents
one of the cheapest regional equity markets in the world, with the
UK mid-cap sector looking particularly attractive. We continue to
remain optimistic about the outlook for UK Mid-caps and the
Company's portfolio holdings which are largely focused upon longer
term growth businesses and the Portfolio Managers proven ability to
find attractive investment opportunities".
The Half Year Report is also being
published in hard copy format and an electronic copy of that
document will shortly be available to download from the Company's
webpage www.schroders.co.uk/ukmidcap.
The Company has submitted a pdf of
the hard copy format of the Half Year Report to the National
Storage Mechanism and it will shortly be available for inspection
at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Enquiries:
Katherine Fyfe
Company Secretary
|
020 7658 6000
|
Andy Pearce
Public Relations
|
020 7658 6000
|
Half Year Report and Interim Financial Statements for the six
month period ended 31 March 2024
CHAIRMAN'S STATEMENT
Investment and share price performance
During the six-month period to 31
March 2024, while the Company's net asset value ("NAV") rose by
9.3%, this was less than the 11.4% return of the Company's
Benchmark. Across virtually all of the investment trust sector,
discounts to NAV widened and in the case of the Company, this meant
that the share total return price only rose by 5.8% over the
period. More detailed commentary on the performance of your
Company's portfolio can be found in the Investment Manager's
Review.
UK equities rose over the period
under review, in tandem with other equity markets, amid a drop in
interest rate expectations for later this year. UK mid-cap
indices outperformed the broader market and were spurred by
improving fundamentals as well as continued merger and acquisition
activity in the sector, given the very attractive valuations on
offer and increased capital discipline with corporates buying back
their own shares.
Relative performance was impacted by
a sharp and fast rotation within the mid-cap universe away from
long-term growth businesses towards more interest rate sensitive
businesses linked to the interest rate cycle which typically have
more stretched balance sheets and challenged business models. The
strategy of our Investment Manager has always been to focus upon
the former longer-term growth businesses while understanding that
there will be shorter-term periods where the latter type of
businesses perform better. Given this sharp rotation, the Company
unsurprisingly suffered relatively against the Benchmark in Q1 by
4.4% but recovered by 1.7% in Q2. However, it is important to put
this in the context of the Company's long-term performance, which
has consistently outperformed the Company's Benchmark over the last
five and ten years. We retain the view that focusing upon quality
will continue to deliver over time.
Dividend
As portfolio income continues to
recover reflecting the strength of the underlying company holdings,
the Board is pleased to announce an increased interim dividend of 6
pence per share for the financial year ending 30 September 2024, a
9.1% increase on the prior year. This will be payable on 9 August
2024 to shareholders registered at the close of business on 12 July
2024.
Discount management
While the discount of the Company's
share price to NAV widened to 15.2% at the end of March, this was
broadly in line with the Company's peers. We believe that this
reflects selling pressure which was in evidence across the whole of
the investment trust universe. It is pleasing to note, that post
the period end the discount has started to narrow. Our expectation
is that this has further to go. The Board regularly monitors the
discount and will continue to consider share repurchases should it
move to a level at which the Board believes buy-backs are in
shareholders' best long-term interests. During the six-month period
to 31 March 2024, the Company did not buy back any
shares.
Gearing
Net gearing as at 31 March 2024 was
8.2% versus 6.8% at the beginning of the period with £20 million of
the Company's revolving credit facilities deployed. Having such
gearing in place is an attractive feature of the investment trust
structure and it is expected that the Investment Manager will
continue to use this gearing to take advantage of attractive new
investment opportunities and to participate in capital raisings by
portfolio companies.
Outlook
Both the Board and our Investment
Manager remain positive on the outlook for the UK economy, given a
combination of low unemployment, rising household disposable
income, and increased business investment. Additionally, there is
an anticipation of the Bank of England ("BoE") starting to cut
interest rates by the end of 2024. The outcome of the General
Election has the potential to positively influence market sentiment
towards the UK. The fundamentals in many other economies that the
Company's holdings are exposed to are similarly sound. From a
valuation perspective the UK stock market represents one of the
cheapest regional equity markets in the world, with the UK mid-cap
sector looking particularly attractive. We continue to remain
optimistic about the outlook for UK mid-caps, the Company's
portfolio holdings largely focused upon longer term growth
businesses, and the Investment Manager's proven ability to find
attractive investment opportunities with the prospect of long-term
returns for shareholders.
Robert Talbut
Chair
26 June 2024
INVESTMENT MANAGER'S
REVIEW
"The mid 250
is populated by multiple "unique" companies, with strong growth
prospects, generating cash and delivering attractive returns on
capital…as stock pickers we are confident in our ability to find
these attractive investment opportunities."
Market background
UK equities rose over the period.
Mid-caps outperformed the broader market and were spurred on by a
pick-up in overseas inbound bids. Consumer discretionary and real
estate companies performed well amid a sharp drop in interest rate
expectations following a more dovish tone from the BoE. Financials
and industrials also outperformed as economically sensitive areas
of the market in general did well amid an improving outlook for the
global and UK economy. As the period progressed, expectations moved
to price in a sooner-than-expected first UK interest rate cut as
inflation undershot the BoE's forecasts. The Office for National
Statistics confirmed that annual inflation, as measured by the
Consumer Prices Index, had fallen to 3.4% in February 2024, the
lowest rate of price increases since September 2021, and from a
peak of 11.1% in October 2022. Official data showed that the
economy had entered a technical recession in the second half of
2023. This occurred as the tailwind of post-pandemic revenge
spending came to an end and the headwinds of higher inflation and
interest rates weighed on activity. However, the market was more
focused on signs of recovery, with confidence among both consumers
and manufacturers picking up over the course of the period. The
reaction to the Spring Budget was largely muted.
Portfolio performance
The portfolio NAV achieved a
positive return of 9.3% during the period, though it underperformed
the Benchmark by 2.1%. The share price returned 5.8% and the
discount therefore widened, from 12.0% to 15.2% at the period end.
Gearing was a positive factor.
An underweight to the real estate
sector and to more highly indebted companies in the Benchmark more
generally, was the main reason for the portfolio's
underperformance. Given a preference for stronger balance sheets,
investors in the strategy should not find this
surprising.
Turning to individual holdings, an
underweight holding in UK housebuilder Vistry was the lead detractor over the
period. The position was sold too soon, only halfway into what
turned out to be an energetic rally, though some of the proceeds
were reinvested into increasing the holding size in housebuilder
Redrow. Redrow has since
become the subject of an offer from larger housebuilder
Barratt Developments at a
27.2% premium to the undisturbed price.
A small position in power convertor
business XP Power also
detracted from performance as it warned on profits twice during the
period. The warnings were partly due to a cyclical slowdown in the
semiconductor manufacturing equipment market and were exacerbated
by a sub optimal balance sheet, a cogent reminder of why we
prefer to invest primarily in companies with strong balance sheets.
The first warning prompted an equity raising, renegotiation of
banking covenants, a sensible dividend cancellation and an
efficiency plan. At this point, the company also revealed that it
had been in receipt of "a small number of" unsolicited bid
approaches. Although this has been a very disappointing time for
the company, we remain positive on the significant structural
growth opportunities in its global end markets which also include
healthcare.
Animal genetics company Genus delivered an unwelcome post
valentine's day present in the form of an unscheduled negative
trading update. The company reported weakness in both their
ABS (bovine) and PIC (porcine) businesses, with China
particularly weak. In response, management have begun a strategic
review of R&D activities as part of a "Value Acceleration
Programme". There was further disappointing news around US Food and
Drug Administration approval of the "PRP" - Genus' gene-edited,
porcine reproductive and respiratory syndrome ("PRRS") resistant,
pig. FDA approval is now expected to come in 2025 rather than 2024,
though it does now look to be more of a certainty. Fans of
Clarkson's Farm will no doubt be pleased to hear this, given the
huge suffering endured by piglets, that contract the PRRS virus.
Genus is a unique stock, since exposure to this investment theme
cannot be achieved in any other way in the Company's opportunity
set.
Other significant detractors
included Watches of
Switzerland. Continued weakness in the luxury market drove
earnings downgrades weakening the shares. Ongoing uncertainty
caused by the news of the acquisition of luxury watch retailer
Bucherer by Rolex means that the Company has not taken advantage of
the shares' low valuation as yet, instead preferring to wait for
further evidence. The company has since announced the
earnings-enhancing acquisition of a luxury jewellery brand which
should give it more "bench strength".
Finally, despite perfectly
respectable earnings releases, shares in Inchcape were weak during the period
possibly due to fears around new car sales volumes. Since the
period end, the company has announced the disposal of its UK retail
arm which simplifies the business. A supportive £100 million share
buy-back was announced in tandem with the disposal which has given
some relief to the share price.
UK specialist lender Paragon Banking Group was the lead
contributor to performance over the period. This is not the first
time the company's name has appeared in the top-performers charts:
brushing off fears around higher interest rates and regulation
having a dampening effect on the performance of its specialist
buy-to-let mortgage portfolio. The company announced
better-than-expected final results, and a new £50 million share
buy-back to follow on from the £100 million of buy-backs delivered
in the 2023 financial year. The company has bought back 12% of its
shares over the past 18 months thanks to its strong
financials.
Our underweight position in
Indivior, the opioid-use
disorder treatment specialist, was also a positive as the shares
retrenched following prior significant outperformance. The Company
took advantage of share price weakness part way through the period
to initiate a position because we see Indivior as another example
of a unique investment opportunity. The company has since announced
its intention to move its primary listing to the US, news which was
taken positively by the market. Another of our new portfolio
entrants which performed well during the period was Zegona Communications. The Company
participated in a fund raising by the team behind Zegona plc, which
has recently moved from the AIM market to the main market. Zegona
Communications is a company run by a management team with previous
successes in the sector which buys telecoms assets, restructures
them, and then sells them. Post the period end, the company
announced that the Spanish Government had approved its acquisition
of the Spanish assets of Vodafone. This was the final regulatory
hurdle for the deal and welcome news.
Other top performing holdings
included bulk annuities specialist Just Group and shipping business
Clarkson which both
produced strong financial results during the period.
Stocks held - significant positive and negative contributions
versus the Benchmark
Positive contributors
|
|
Weight
|
Relative
|
|
|
Portfolio
|
relative to
|
perfor-
|
|
|
weight1
|
index
|
mance2
|
Impact3
|
Paragon Banking
|
2.7
|
2.1
|
34.4
|
+0.7
|
Indivior
|
0.5
|
-0.3
|
-16.1
|
+0.5
|
Just Group
|
1.8
|
1.4
|
34.8
|
+0.5
|
Clarkson
|
1.7
|
1.3
|
35.3
|
+0.4
|
Zegona
|
0.8
|
0.8
|
48.9
|
+0.4
|
Negative contributors
|
|
Weight
|
Relative
|
|
|
Portfolio
|
relative to
|
perfor-
|
|
|
weight1
|
index
|
mance2
|
Impact3
|
Vistry
|
0.6
|
-0.9
|
23.5
|
-0.7
|
XP Power
|
0.4
|
0.4
|
-66.3
|
-0.5
|
Genus
|
2.1
|
1.5
|
-25.8
|
-0.4
|
Inchcape
|
3.7
|
2.5
|
-15.9
|
-0.4
|
Watches of Switzerland
|
1.3
|
0.8
|
-44.3
|
-0.4
|
Source: Schroders, FactSet, close 30
September 2023 to close 31 March 2024.
1Weights are averages.
2Performance of the stock in the index relative to the FTSE 250
(ex. ITs) Index return.
3Impact is the contribution to performance relative to the FTSE
250 (ex. ITs) Index. Any reference to regions/countries/sectors/
stocks/ securities is for illustrative purposes only and not a
recommendation to buy or sell any financial instruments or adopt
a specific investment strategy.
Stocks not held - significant positive and negative
contributions versus the Benchmark
Not holding UK merchant bank Close
Brothers aided returns over the period, as the shares tumbled
following the FCA's announcement of a review into the motor finance
market, a factor outside the company's control. Of the UK banks,
Close Brothers has the biggest relative exposure to car finance
loans and the news has led the company to cancel any 2024 dividend
"given the significant uncertainty regarding the outcome of the
FCA's review of historical motor finance commissions arrangements
and any potential financial impact as a
result".4
Other stocks which it was right to
avoid during the period included Tate & Lyle, a food and
beverage supplier, which was seen during the period as being a
casualty of the increasing use of weight loss drugs such as
Ozempic. Dowlais, an automotive engineering group, suffered a
significant write-down in its powder metallurgy division as well as
softer than expected trading.
The Company did not own shares in
housebuilder Persimmon, which was the main detractor in terms of
stocks not held. More positive sentiment towards the housebuilders
as expectations of rate cuts took hold, most notably in early
November 2023, drove the shares up. This assisted its promotion
back into the FTSE 100 following the delisting of Dechra (which, as
a reminder, was acquired by private equity).
Not owning travel company TUI also
detracted as the company announced its plans to simplify its
listing structure which caused the shares to bounce back from a
poor position. Easyjet, which the Company also did not own, rallied
strongly in response to favourable demand dynamics that have
resulted in significant price increases (though we note recent
commentary from Ryanair which may indicate that the consumer's
ability or willingness to be "gouged" is starting to wear down
somewhat). In common with Persimmon, it was also promoted to the
FTSE 100 during the period. Finally, not owning highly interest
rate sensitive stocks Intermediate Capital, the debt asset manager,
and real estate company British Land also detracted from
performance.
Positive contributors
|
|
Weight
|
Relative
|
|
|
Portfolio
|
relative to
|
perfor-
|
|
|
weight1
|
index
|
mance2
|
Impact3
|
|
(%)
|
(%)
|
(%)
|
(%)
|
Close Bros
|
-
|
-0.5
|
-61.4
|
+0.4
|
Tate & Lyle
|
-
|
-1.2
|
-20.4
|
+0.3
|
Dowlais group
|
-
|
-0.6
|
-38.7
|
+0.3
|
Abrdn
|
-
|
-1.5
|
-16.1
|
+0.2
|
IDS
|
-
|
-0.8
|
-23.4
|
+0.2
|
Negative contributors
|
|
Weight
|
Relative
|
|
|
Portfolio
|
relative to
|
perfor-
|
|
|
weight1
|
index
|
mance2
|
Impact3
|
|
(%)
|
(%)
|
(%)
|
(%)
|
Persimmon
|
-
|
-1.1
|
25.8
|
-0.5
|
TUI
|
-
|
-1.1
|
33.4
|
-0.3
|
Intermediate Capital
|
-
|
-0.8
|
10.6
|
-0.3
|
British Land Co.
|
-
|
-1.6
|
17.7
|
-0.2
|
Easyjet
|
-
|
-1.3
|
13.6
|
-0.2
|
Source: Schroders, FactSet, close 30
September 2023 to close 31 March 2024.
1Weights are averages.
2Performance of the stock in the index relative to the FTSE 250
(ex. ITs) Index return.
3Impact is the contribution to performance relative to the FTSE
250 (ex. ITs) Index. Any reference to regions/countries/ sectors/
stocks/ securities is for illustrative purposes only and not a
recommendation to buy or sell any financial instruments or adopt
a specific investment strategy.
4Source: Dividends/Close Brothers Group.
Portfolio activity
Purchase and sales
New
holdings
|
The
opportunity
|
Harbour Energy
|
Transformational deal to deliver
geographic diversity
|
Hargreaves Lansdown
|
No.1 UK direct to consumer
investment platform, with cost saving opportunities
|
Indivior
|
Growing share in huge opioid
disorder treatment market
|
Money Supermarket
|
New membership club providing
efficiencies and lowering search engine fees
|
Renishaw
|
Exposure to structural growth trends
e.g. AI, Quantum; net cash balance sheet gives options
|
Zegona Communications
|
Acquisition of leading telecom
assets in Spain
|
Complete sales
|
Rationale
|
A.G Barr
|
Long-term CEO retired
|
Bridgepoint
|
Investment thesis played
out
|
Future
|
Investment thesis played
out
|
IWG
|
Investment thesis played
out
|
James Fisher
|
Investment thesis played
out
|
OSB
|
Application of rules
|
Senior
|
Investment thesis played
out
|
Virgin Money
|
Bid approach
|
Vistry
|
Valuation
|
Source: Schroders, 30 September 2023
to 31 March 2024.
For illustrative purposes only and
not a recommendation to buy or sell shares.
During the period, the Company sold
its position in UK housebuilder Vistry as discussed above, and
reinvested some of the proceedings in peer Redrow, which has since been bid
for.
The Company bought back into
Harbour Energy following
its transformational acquisition of BASF's oil and gas portfolio, a
deal which also strengthens Harbour Energy's balance sheet and
lengthens the life of its assets.
The Company also bought back into
specialist engineer Renishaw, which has been a top
performer for the Company over the years and which we last sold out
of on its promotion into the FTSE 100. The Company was encouraged
by signs of a bottoming out of the machine tooling cycle. This is
a unique company exposed to a number of secular growth
trends such as AI and quantum computing and, crucially, is
underpinned by a net cash balance sheet.
The Company initiated a position in
UK listed Spanish telecoms group Zegona Communications which has
acquired the Spanish arm of Vodafone's assets.
Another new holding is investment
platform Hargreaves
Lansdown. The Company took advantage of share price weakness
as regulatory uncertainties weighed on sentiment towards the
sector. The company is the clear leader in its sector and is
expected to benefit from significant efficiency savings in the
years ahead. The company has published a positive trading statement
in the interim.
Price comparison website group
MoneySupermarket.com also
promises to achieve greater efficiencies and was another new
portfolio addition. Its SuperSaveClub attracted over 300,000
members in its first six months offering lead-generation cost
savings and scope to further enhance already attractive operating
margins at a business generating dependable mid-single digit top
line growth.
The Company added specialty
pharmaceuticals business Indivior to the portfolio, as described
above.
Turning back to disposals, we sold
our holding in Virgin Money
following a bid approach from Nationwide. The announcement of the
retirement of the long-tenured CEO of soft drinks business
A.G. Barr prompted us
to sell the shares, and we used the proceeds to increase our
holding in peer Britvic.
The Company sold residual stakes in
marine services specialist James
Fisher, special interest online media group Future and defence contractor
Senior, using the proceeds
to top up our holdings in Babcock,
QinetiQ, and Chemring. We also sold our residual
position in buy-to-let lending specialist OSB and recycled the profits into
increasing our position in higher quality peer Paragon Banking Group.
Outlook
First, a word on performance.
Although it is disappointing to report a six-month period
where performance, although positive in absolute terms, has fallen
behind the Benchmark, six months is a brief period of time in
investment. When looking at performance on a year-to-date or
12-month basis, your Company's performance is ahead of its
Benchmark, as well as in the longer term (five and
ten years).
The last two quarters of the
financial year 2023 saw the shallowest UK recession on record, but
a recession, nonetheless. However, a decisive +0.6% growth in Q1
2024 would seem to underpin a more optimistic view of growth for
the year ahead and is already well ahead of market expectations.
For example, the OECD's (Organisation for Economic Co-operation and
Development) estimate is gross domestic product growth of
0.4% for 2024 as a whole. This is evidence that the UK economy
can grow even at more "normal" interest rate levels, and counters
some of the more bearish structural arguments against
UK equities.
Confidence among both consumers and
corporates is picking up. Strong corporate results also indicate an
improved outlook, as do more confident management teams pushing
potential buyers to pay a bit more as bid activity and share
buybacks (for example a new programme announced by our top 20
defence holding, Qinetiq) continue to underline the UK market's
lowly valuation. Post period end, the latest portfolio company to
be bid for is Tyman, at a 35.1% premium by a strategic US
investor.Looking forward to the rest of this election year, our
crystal ball suggests that share buy-backs, and merger and
acquisition factors are likely to continue to drive the UK mid-cap
market higher. Balance sheets are healthy and for the US acquiror
in particular it would appear that UK stocks are irresistibly
cheap. The Company notes that the mean premium for UK listed stocks
which were acquired last year was 52%, which compares to a more
usual 30-40%.
There are some regulatory bright
spots on the horizon, with the Spring Budget announcements of a
consultation on a new UK ISA and pension fund disclosure for
defined contribution pension funds. This would require funds to
disclose their percentage allocations towards UK (as opposed to
international equities), albeit by 2027. Not quick fixes by any
means, but supportive in an environment which has hitherto been
lacking support.
The Investment Manager would like to
remind readers that we are fishing in an attractive pond. In terms
of the long-term potential of UK equities, we suggest that
investors willing to look beyond the ongoing negative headlines
will find that the UK punches above its weight. This can be seen in
terms of multi-baggers relative to the US. See our 2023
article on "30-baggers" why the UK has more than its fair share",
and our podcast on the topic, available on the Company's web pages:
https://www.schroders.com/en-gb/uk/individual/insights/30-baggers-why-the-uk-has-more-than-its-fair-share/
This is why the Benchmark has beaten
the S&P 500 return over the 25 years to 30 April 2024 when
measured in local currency. In US dollar terms, it has very
nearly matched the popular US index.
The mid 250 is populated by multiple
"unique" companies with strong growth prospects generating cash and
delivering attractive returns on capital. As stock pickers, we are
confident that the collective strength of our holdings' balance
sheets will continue to provide resilience in all manner of
economic environments. The Company is sticking to its sell
discipline, avoiding companies whose business models are in danger
of being disrupted while seeking out companies which have the
ability to reinvent themselves, or which might be the next mid-cap
disruptor.
|
|
Portfolio
|
Benchmark
|
|
|
|
weight
|
weight
|
Difference
|
|
Sector
|
%
|
%
|
%
|
4imprint
|
Communication Services
|
3.7%
|
0.8%
|
2.9%
|
Dunelm
|
Consumer Discretionary
|
3.3%
|
0.6%
|
2.8%
|
Inchcape
|
Consumer Discretionary
|
4.0%
|
1.2%
|
2.8%
|
Telecom Plus
|
Utilities
|
3.2%
|
0.5%
|
2.7%
|
Computacenter
|
Information Technology
|
3.5%
|
0.8%
|
2.6%
|
Cranswick
|
Consumer Staples
|
3.3%
|
1.0%
|
2.3%
|
Paragon Banking
|
Financials
|
2.9%
|
0.7%
|
2.3%
|
Man Group
|
Financials
|
3.5%
|
1.4%
|
2.1%
|
Qinetiq
|
Industrials
|
2.9%
|
0.8%
|
2.1%
|
Just Group
|
Financials
|
2.6%
|
0.5%
|
2.1%
|
Source: Schroders, as at 31 March
2024, for Schroder UK Mid Cap Fund investment portfolio. Benchmark
refers to FTSE 250 ex Investment Companies.
Schroder Investment Management Limited
26 June 2024
Past performance is not a guide to future performance and may
not be repeated. The value of investments and the income from them
may go down as well as up and investors may not get back the amount
originally invested. Any references to securities, sectors, regions
and/or countries are for illustrative purposes only. The Company
invests in a smaller number of stocks carrying more risk than funds
spread across a larger number of companies. The Company will invest
solely in the companies of one country or region. This can carry
more risk than investments spread over a number of countries or
regions. The Company may borrow money to invest in further
investments, this is known as gearing. Gearing will increase
returns if the value of the investments purchased increase in value
by more than the cost of reduced returns if they fail to do so. As
a result of the fees and finance costs being charged partially to
capital, the distributable income of the Company may be higher, but
the capital value of the trust may be eroded.
INVESTMENT PORTFOLIO
as at 31 March 2024
Stocks in bold are the 20 largest
investments, which by value account for 59.0% (31 March 2023: 61.5%
and 30 September 2023: 59.4%) of total investments. Investment are
all equities.
|
£'000
|
%
|
Industrials
|
|
|
Spectris
|
8,268
|
3.3
|
QinetiQ
|
7,300
|
2.9
|
Grafton
|
7,292
|
2.9
|
Babcock
|
6,240
|
2.5
|
Oxford Instruments
|
6,148
|
2.5
|
Chemring
|
5,521
|
2.2
|
Clarkson
|
5,367
|
2.2
|
Tyman
|
4,053
|
1.6
|
Bodycote International
|
3,831
|
1.5
|
Redde Northgate
|
3,429
|
1.4
|
Redrow
|
3,361
|
1.4
|
Renishaw
|
3,143
|
1.3
|
Keller
|
2,824
|
1.1
|
Essentra
|
1,932
|
0.8
|
Paypoint
|
1,748
|
0.7
|
XP Power
|
816
|
0.3
|
Total Industrials
|
71,273
|
28.6
|
Financials
|
|
|
Man
Group
|
8,811
|
3.5
|
Paragon
|
7,245
|
2.9
|
Just
Group
|
6,346
|
2.6
|
IG
Group
|
6,091
|
2.4
|
Londonmetric Property
|
4,527
|
1.8
|
Hargreaves Landsdown
|
4,268
|
1.7
|
Sirius
|
4,144
|
1.7
|
Savills
|
3,464
|
1.4
|
Safestore
|
3,395
|
1.4
|
Zegona
|
3,136
|
1.2
|
Total Financials
|
51,427
|
20.6
|
Consumer Services
|
|
|
Inchcape
|
9,901
|
4.0
|
4Imprint
|
9,193
|
3.7
|
Dunelm
|
8,313
|
3.3
|
WH
Smith
|
6,448
|
2.6
|
Money Supermarket
|
4,396
|
1.8
|
Pets At Home
|
3,838
|
1.5
|
Watches of Switzerland
|
2,187
|
0.9
|
Total Consumer Services
|
44,276
|
17.8
|
Consumer Goods
|
|
|
Cranswick
|
8,188
|
3.3
|
Games Workshop
|
7,171
|
2.9
|
Britvic
|
6,412
|
2.6
|
Photo-Me
|
4,513
|
1.8
|
Total Consumer Goods
|
26,284
|
10.6
|
Basic Materials
|
|
|
Victrex
|
5,322
|
2.1
|
Johnson Matthey
|
5,008
|
2.0
|
Elementis
|
2,605
|
1.0
|
Ecora resources
|
1,469
|
0.6
|
Total Basic Materials
|
14,404
|
5.7
|
Healthcare
|
|
|
Genus
|
4,911
|
2.0
|
Spire Healthcare
|
4,478
|
1.8
|
Indivior
|
4,404
|
1.8
|
Total Healthcare
|
13,793
|
5.6
|
Technology
|
|
|
Computacenter
|
8,627
|
3.5
|
IP Group
|
2,892
|
1.2
|
Total Technology
|
11,519
|
4.7
|
Telecommunications
|
|
|
Telecom Plus
|
7,919
|
3.2
|
Total Telecommunications
|
7,919
|
3.2
|
Oil
& Gas
|
|
|
Energean Oil and Gas
|
4,711
|
1.9
|
Harbour Energy
|
3,144
|
1.3
|
Total Oil & Gas
|
7,855
|
3.2
|
Total investments
|
248,750
|
100.0
|
INTERIM MANAGEMENT
STATEMENT
Principal risks and uncertainties
The Directors consider that the
principal risks and uncertainties faced by the Company for the
remaining six months of the financial year, which could have a
material impact on performance, remain consistent with those on
pages 18 to 20 in the Annual Report and Financial Statements for
the year ended 30 September 2023.
Going concern
Having assessed the principal risks
and uncertainties, and the other matters discussed in connection
with the viability statement as set out on page 21 of the published
annual report and financial statements for the year ended 30
September 2023, the Directors consider it appropriate to adopt the
going concern basis in preparing the financial
statements.
Related party transactions
There have been no transactions with
related parties that have materially affected the financial
position or the performance of the Company during the six months
ended 31 March 2024.
Directors' responsibility statement
In respect of the half year report
for the six months ended 31 March 2024, we confirm that, to the
best of our knowledge:
- the condensed
set of Financial Statements contained within have been prepared in
accordance with IAS 34 Interim Financial Reporting and give a true
and fair view of the assets, liabilities, financial position and
profit and loss of the Company as at 31 March 2024, as
required by the Disclosure Guidance and Transparency Rule
4.2.4R;
- the half year
report includes a fair review as required by the Disclosure
Guidance and Transparency Rule 4.2.7R, of important events that
have occurred during the six months to 31 March 2024, and their
impact on the condensed set of Financial Statements, and a
description of the principal and emerging risks for the remaining
six months of the financial year; and
- the half year
report includes a fair review of the information concerning
related party transactions as required by the Disclosure Guidance
and Transparency Rule 4.2.8R.
The half year report has not been
reviewed or audited by the Company's auditors.
The half year report for the six
months ended 31 March 2024 was approved by the Board and the above
Responsibilities Statement has been signed on its
behalf.
Robert Talbut
Chair
For and on behalf of the
Board
26 June 2024
STATEMENT OF COMPREHENSIVE
INCOME
For the six months ended 31 March
2024 (unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
For the six
months
|
For the six
months
|
For the
year
|
|
ended 31 March
2024
|
ended 31 March
2023
|
ended 30 September
2023
|
|
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Gains on investments held at fair
value through profit or loss
|
|
-
|
18,365
|
18,365
|
-
|
32,305
|
32,305
|
-
|
26,716
|
26,716
|
Income from investments
|
|
3,158
|
-
|
3,158
|
3,553
|
298
|
3,851
|
9,024
|
298
|
9,322
|
Other interest receivable
and
|
|
|
|
|
|
|
|
|
|
|
similar income
|
|
-
|
-
|
-
|
-
|
-
|
-
|
140
|
-
|
140
|
Gross return
|
|
3,158
|
18,365
|
21,523
|
3,553
|
32,603
|
36,156
|
9,164
|
27,014
|
36,178
|
Investment management fee
|
|
(239)
|
(557)
|
(796)
|
(230)
|
(536)
|
(766)
|
(451)
|
(1,053)
|
(1,504)
|
Administrative expenses
|
|
(425)
|
-
|
(425)
|
(310)
|
-
|
(310)
|
(601)
|
-
|
(601)
|
Net
return before finance costs and taxation
|
|
2,494
|
17,808
|
20,302
|
3,013
|
32,067
|
35,080
|
8,112
|
25,961
|
34,073
|
Finance costs
|
|
(179)
|
(417)
|
(596)
|
(81)
|
(190)
|
(271)
|
(270)
|
(630)
|
(900)
|
Net
return before taxation
|
|
2,315
|
17,391
|
19,706
|
2,932
|
31,877
|
34,809
|
7,842
|
25,331
|
33,173
|
Taxation
|
3
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Net
return after taxation
|
|
2,315
|
17,391
|
19,706
|
2,932
|
31,877
|
34,809
|
7,842
|
25,331
|
33,173
|
Return per share (pence)
|
4
|
6.69
|
50.29
|
56.98
|
8.48
|
92.18
|
100.66
|
22.68
|
73.25
|
95.93
|
The "Total" column of this statement
is the profit and loss account of the Company. The "Revenue" and
"Capital" columns represent supplementary information prepared
under guidance issued by The Association of Investment Companies.
The Company has no other items of other comprehensive income, and
therefore the net return after taxation is also the total
comprehensive income for the period.
All revenue and capital items in the
above statement derive from continuing operations. No operations
were acquired or discontinued in the period.
STATEMENT OF CHANGES IN
EQUITY
For the six months ended 31 March
2024 (unaudited)
|
|
Called-up
|
|
Capital
|
|
Share
|
|
|
|
|
|
share
|
Share
|
redemption
|
Merger
|
purchase
|
Capital
|
Revenue
|
|
|
|
capital
|
premium
|
reserve
|
reserve
|
reserve
|
reserves
|
reserve
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 30 September 2023
|
|
9,036
|
13,971
|
220
|
2,184
|
7,233
|
170,960
|
10,219
|
213,823
|
Net return after taxation
|
|
-
|
-
|
-
|
-
|
-
|
17,391
|
2,315
|
19,706
|
Dividend paid in the
period
|
5
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,187)
|
(5,187)
|
At
31 March 2024
|
|
9,036
|
13,971
|
220
|
2,184
|
7,233
|
188,351
|
7,347
|
228,342
|
For the six months ended 31 March
2023 (unaudited)
|
|
Called-up
|
|
Capital
|
|
Share
|
|
|
|
|
|
share
|
Share
|
redemption
|
Merger
|
purchase
|
Capital
|
Revenue
|
|
|
|
capital
|
premium
|
reserve
|
reserve
|
reserve
|
reserves
|
reserve
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 30 September 2022
|
|
9,036
|
13,971
|
220
|
2,184
|
7,233
|
145,629
|
9,120
|
187,393
|
Net return after taxation
|
|
-
|
-
|
-
|
-
|
-
|
31,877
|
2,932
|
34,809
|
Dividend paid in the
period
|
5
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,841)
|
(4,841)
|
At
31 March 2023
|
|
9,036
|
13,971
|
220
|
2,184
|
7,233
|
177,506
|
7,211
|
217,361
|
For the year ended 30 September 2023
(audited)
|
|
Called-up
|
|
Capital
|
Warrant
|
Share
|
|
|
|
|
|
share
|
Share
|
redemption
|
exercise
|
purchase
|
Capital
|
Revenue
|
|
|
|
capital
|
premium
|
reserve
|
reserve
|
reserve
|
reserves
|
reserve
|
Total
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 30 September 2022
|
|
9,036
|
13,971
|
220
|
2,184
|
7,233
|
145,629
|
9,120
|
187,393
|
Net return after taxation
|
|
-
|
-
|
-
|
-
|
-
|
25,331
|
7,842
|
33,173
|
Dividend paid in the
period
|
5
|
-
|
-
|
-
|
-
|
-
|
-
|
(6,743)
|
(6,743)
|
At
30 September 2023
|
|
9,036
|
13,971
|
220
|
2,184
|
7,233
|
170,960
|
10,219
|
213,823
|
STATEMENT OF FINANCIAL
POSITION
at 31 March 2024
(unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
|
31 March
|
31 March
|
30
September
|
|
|
2024
|
2023
|
2023
|
|
Note
|
£'000
|
£'000
|
£'000
|
Fixed assets
|
|
|
|
|
Investments held at fair value
through profit or loss
|
|
248,750
|
235,373
|
227,950
|
Current assets
|
|
|
|
|
Debtors
|
|
893
|
1,666
|
2,515
|
Cash at bank and in hand
|
|
1,384
|
5,854
|
5,372
|
|
|
2,277
|
7,520
|
7,887
|
Current liabilities
|
|
|
|
|
Creditors: amounts falling due within
one year
|
6
|
(22,685)
|
(25,532)
|
(22,014)
|
Net
current liabilities
|
|
(20,408)
|
(18,012)
|
(14,127)
|
Total assets less current liabilities
|
|
228,342
|
217,361
|
213,823
|
Net
assets
|
|
228,342
|
217,361
|
213,823
|
Capital and reserves
|
|
|
|
|
Called-up share capital
|
7
|
9,036
|
9,036
|
9,036
|
Share premium
|
|
13,971
|
13,971
|
13,971
|
Capital redemption reserve
|
|
220
|
220
|
220
|
Merger reserve
|
|
2,184
|
2,184
|
2,184
|
Share purchase reserve
|
|
7,233
|
7,233
|
7,233
|
Capital reserves
|
|
188,351
|
177,506
|
170,960
|
Revenue reserve
|
|
7,347
|
7,211
|
10,219
|
Total equity shareholders' funds
|
|
228,342
|
217,361
|
213,823
|
Net
asset value per share (pence)
|
8
|
660.31
|
628.55
|
618.32
|
Registered in Scotland as a public
company limited by shares
Company registration number:
SC082551
NOTES TO THE FINANCIAL
STATEMENTS
1. Financial statements
The information contained within the
financial statements in this half year report has not been audited
or reviewed by the Company's independent auditor.
The figures and financial
information for the year ended 30 September 2023 are extracted from
the latest published accounts of the Company and do not constitute
statutory accounts for that year. Those financial statements have
been delivered to the Registrar of Companies and included the
report of the auditor which was unqualified and did not contain a
statement under either section 498(2) or 498(3) of the Companies
Act 2006.
2. Accounting policies
Basis of accounting
The financial statements have been
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, in particular with Financial Reporting
Standard 104 "Interim Financial Reporting" and with the Statement
of Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" issued by the Association of
Investment Companies in July 2022.
All of the Company's operations are
of a continuing nature.
The accounting policies applied to
these financial statements are consistent with those applied in the
financial statements for the year ended 30 September
2023.
3. Taxation
The Company's effective corporation
tax rate is nil, as deductible expenses exceed taxable
income.
4. Return/(loss) per share
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
For the
|
For the
|
For the
|
|
Six months
|
Six months
|
year
|
|
ended
|
ended
|
ended
|
|
31 March
|
31 March
|
30
September
|
|
2024
|
2023
|
2023
|
|
£'000
|
£'000
|
£'000
|
Revenue return
|
2,315
|
2,932
|
7,842
|
Capital return
|
17,391
|
31,877
|
25,331
|
Total return
|
19,706
|
34,809
|
33,173
|
Weighted average number of shares in
issue during the period
|
34,581,190
|
34,581,190
|
34,581,190
|
Revenue return per share
(pence)
|
6.69
|
8.48
|
22.68
|
Capital return per share
(pence)
|
50.29
|
92.18
|
73.25
|
Total return per share (pence)
|
56.98
|
100.66
|
95.93
|
5. Dividends
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
For the
|
For the
|
For the
|
|
Six months
|
Six months
|
year
|
|
ended
|
ended
|
ended
|
|
31 March
|
31 March
|
30
September
|
|
2024
|
2023
|
2023
|
2023 final dividend paid of 15.0p
(2022: 14.0p)
|
5,187
|
4,841
|
5,187
|
Interim dividend of 5.5p
|
-
|
-
|
1,902
|
|
5,187
|
4,841
|
7,089
|
An interim dividend of 6.0p (2023:
5.5p) per share, amounting to £2,075,000 (2023: £1,902,000), has
been declared payable in respect of the six months ended 31
March 2024.
6. Creditors: amounts falling due within one
year
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
31 March
|
31 March
|
30
September
|
|
2024
|
2023
|
2023
|
|
£'000
|
£'000
|
£'000
|
Bank loan
|
20,000
|
25,000
|
20,000
|
Securities purchased awaiting
settlement
|
2,150
|
-
|
1,465
|
Other creditors and
accruals
|
535
|
532
|
549
|
|
22,685
|
25,532
|
22,014
|
The bank loans comprise a £10
million one-year term loan from Bank of Nova Scotia, London Branch
expiring on 27 February 2025, carrying an interest rate based on
the Sterling Overnight Interest Average plus a margin and a £10m
three-year revolving credit facility agreement with Bank of Nova
Scotia, London Branch expiring on 14 February 2025.
7. Called-up share capital
Changes in called-up share capital
during the period were as follows:
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
|
Six months
|
Year
|
|
ended
|
ended
|
ended
|
|
31 March
|
31 March
|
30
September
|
|
2024
|
2023
|
2023
|
|
£'000
|
£'000
|
£'000
|
Opening balance of ordinary shares of
25p each, excluding shares held in treasury
|
8,645
|
8,645
|
8,645
|
Repurchase of shares into
treasury
|
-
|
-
|
-
|
Subtotal of ordinary shares of 25p
each, excluding shares held in treasury
|
8,645
|
8,645
|
8,645
|
Shares held in treasury
|
391
|
391
|
391
|
Closing balance of ordinary shares of
25p each, including shares held in treasury
|
9,036
|
9,036
|
9,036
|
Changes in the number of shares in
issue during the period were as follows:
|
(Unaudited)
|
(Unaudited)
|
(Audited)
|
|
Six months
|
Six months
|
Year
|
|
ended
|
ended
|
ended
|
|
31 March
|
31 March
|
30
September
|
|
2024
|
2023
|
2023
|
|
£'000
|
£'000
|
£'000
|
Changes in the number of shares in
issue during the period were as follows:
|
|
|
|
Ordinary shares of 25p each,
allotted, called-up and fully paid
|
|
|
|
Opening balance of shares in issue,
excluding shares held in treasury
|
34,581,190
|
34,581,190
|
34,581,190
|
Repurchase of shares into
treasury
|
-
|
-
|
-
|
Closing balance of shares in issue,
excluding shares held in treasury
|
34,581,190
|
34,581,190
|
34,581,190
|
Closing balance of shares held in
treasury
|
1,562,500
|
1,562,500
|
1,562,500
|
Closing balance of shares in issue,
including shares held in treasury
|
36,143,690
|
36,143,690
|
36,143,690
|
8. Net asset value per share
Net asset value per share is
calculated by dividing shareholders' funds by the 34,581,190 (31
March 2023: 34,581,190 and 30 September 2023: 34,581,190) shares in
issue, excluding shares held in treasury.
9. Financial instruments measured at fair
value
The Company's financial instruments
that are held at fair value comprise its investment portfolio. At
31 March 2024, all investments in the Company's portfolio were
categorised as Level 1 in accordance with the criteria set out in
paragraph 34.22 (amended) of FRS 102. That is, they are all valued
using unadjusted quoted prices in active markets for identical
assets (31 March 2023 and 30 September 2023: same).
10. Events after the interim period that have not been
reflected in the financial statements for the interim
period
The Directors have evaluated the
period since the interim date and have not noted any events which
have not been reflected in the financial statements.
ALTERNATIVE PERFORMANCE MEASURES
("APMS") AND DEFINITION OF FINANCIAL TERMS
The
terms and performance measures below are those commonly used by
investment companies to assess values, investment performance and
operating costs. Numerical calculations are given where relevant.
Some of the financial measures below are classified APMs as defined
by the European Securities and Markets Authority. Under this
definition, APMs include a financial measure of historical
financial performance or financial position, other than
a financial measure defined or specified in the applicable
financial reporting framework. APMs have been marked with an
asterisk.
Net
asset value ("NAV") per share
The NAV per share of 660.31p (30
September 2023: 618.32p) represents the net assets attributable to
equity shareholders of £228,342,000 (30 September 2023:
£213,823,000) divided by the number of shares in issue, excluding
any shares held in treasury, of 34,581,190 (30 September 2023:
34,581,190).
The change in the NAV amounted to
6.79% (year ended 30 September 2023: 14.10%) over the period.
However this performance measure excludes the positive impact of
dividends paid out by the Company during the year. When these
dividends are factored into the calculation, the resulting
performance measure is termed the "total return". Total return
calculations and definitions are given below.
Total return*
Total return is the combined effect
of any dividends paid, together with the rise or fall in the NAV
per share or share price. Total return statistics enable the
investor to make performance comparisons between investment
companies with different dividend policies. Any dividends received
by a shareholder are assumed to have been reinvested in either the
assets of the Company at its NAV per share at the time the shares
were quoted ex-dividend (to calculate the NAV per share total
return) or in additional shares of the Company (to calculate the
share price total return).
The NAV total return for the period
ended 31 March 2024 is calculated as follows:
NAV at 30/9/23
|
|
|
|
618.32p
|
NAV at 31/3/24
|
|
|
|
660.31p
|
|
|
NAV on
|
|
Cumulative
|
Dividend
|
XD date
|
XD date
|
Factor
|
factor
|
15.00p
|
15/2/24
|
625.90p
|
1.0240
|
1.0240
|
NAV total return, being the closing
NAV, multiplied by the cumulative factor, expressed as a percentage
change in the opening NAV
|
9.3%
|
The NAV total return for the year
ended 30 September 2023 is calculated as follows:
NAV at 30/9/22
|
|
|
|
541.89p
|
NAV at 30/9/23
|
|
|
|
618.32p
|
|
|
NAV on
|
|
Cumulative
|
Dividend
|
XD date
|
XD date
|
Factor
|
factor
|
14.00p
|
12/1/23
|
652.14p
|
1.0215
|
1.0215
|
5.50p
|
13/7/23
|
610.45p
|
1.0090
|
1.0307
|
NAV total return, being the closing
NAV, multiplied by the cumulative factor, expressed as a percentage
change in the opening NAV
|
17.6%
|
The share price total return for the
period ended 31 March 2024 is calculated as follows:
Share price at 30/9/23
|
|
|
|
544.00p
|
Share price at 31/3/24
|
|
|
|
560.00p
|
|
|
Share
|
|
|
|
|
price on
|
|
Cumulative
|
Dividend
|
XD date
|
XD date
|
Factor
|
factor
|
15.00p
|
15/2/24
|
542.00p
|
1.0277
|
1.0277
|
Share price total return, being the
closing share price, multiplied by the cumulative factor, expressed
as a percentage change in the opening share price
|
5.8%
|
The share price total return for the
year ended 30 September 2023 is calculated as follows:
Share price at 30/9/22
|
|
|
|
480.00p
|
Share price at 30/9/23
|
|
|
|
544.00p
|
|
|
Share
|
|
|
|
|
price on
|
|
Cumulative
|
Dividend
|
XD date
|
XD date
|
Factor
|
factor
|
14.00p
|
12/1/23
|
560.00p
|
1.0250
|
1.0250
|
5.50p
|
13/7/23
|
524.00p
|
1.0105
|
1.0358
|
Share price total return, being the
closing share price, multiplied by the cumulative factor, expressed
as a percentage change in the opening share price
|
17.4%
|
Annualised total return*
The annualised total return is the
compound annual rate of return which equates to the total return as
calculated above, for a period of more than one year.
Benchmark
A measure against which the
performance of an investment company is compared, or against which
it sets its objective. The Company's Benchmark is the FTSE 250
(ex-Investment Companies) Index.
Discount/premium*
The amount by which the share price
of an investment trust is lower (discount) or higher (premium) than
the NAV per share. If shares are trading at a discount, investors
would 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 supply and demand for the shares on
the stock market. The discount or premium is expressed as a
percentage of the NAV per share. The discount at the year end
amounted to 15.2% (30 September 2023: 12.0%), as the closing share
price at 560.00p (30 September 2023: 544.00p) was 15.2% (30
September 2023: 12.0%) lower than the closing NAV of 660.31p (30
September 2023: 618.32p).
Gearing*
The gearing percentage reflects the
amount of borrowings (i.e. bank loans or overdrafts) which the
Company has drawn down and invested in the market. This figure is
indicative of the extra amount by which shareholders' funds would
move if the Company's investments were to rise or fall. Gearing is
define as: borrowings used for investment purposes, less cash,
expressed as a percentage of net assets. The gearing figure at the
relevant period/year end is calculated as follows:
|
31 March
|
30
September
|
|
2024
|
2023
|
|
£'000
|
£'000
|
Borrowings used for investment
purposes, less cash
|
18,616
|
14,628
|
Net assets
|
228,342
|
213,823
|
Gearing
|
8.2%
|
6.8%
|
Leverage*
For the purpose of the Alternative
Investment Fund Managers (AIFM) Directive, leverage is any method
which increases the Company's exposure, including the borrowing of
cash and the use of derivatives. It is expressed as the ratio of
the Company's exposure to its net asset value and is required to be
calculated both on a "Gross" and a "Commitment" method. Under the
Gross method, exposure represents the sum of the absolute values of
all positions, so as to give an indication of overall exposure.
Under the Commitment method, exposure is calculated in a similar
way, but after netting off hedges which satisfy certain strict
criteria.
Ongoing Charges*
Ongoing Charges is calculated in
accordance with the AIC's recommended methodology and represents
the management fee and all other operating expenses excluding
finance costs and transaction costs amounting to £2,296,000 (30
September 2023: £2,105,000), expressed as a percentage of the
average daily net asset values during the year of £221,703,000 (30
September 2023: £217,010,000).
SHAREHOLDER INFORMATION
Warning to shareholders
Companies are aware that their
shareholders have received unsolicited telephone calls or
correspondence concerning investment matters. These are typically
from overseas-based 'brokers' who target UK shareholders, offering
to sell them what often turn out to be worthless or high risk
shares or investments.
These operations are commonly known
as 'boiler rooms'. These 'brokers' can be very persistent and
extremely persuasive.
Shareholders are advised to be wary
of any unsolicited advice, offers to buy shares at a discount or
offers of free company reports. If you receive any unsolicited
investment advice:
• Make sure you
get the correct name of the person and organisation
• Check that they
are properly authorised by the FCA before getting involved by
visiting register.fca.org.uk
• Report the
matter to the FCA by calling 0800 111 6768 or visiting
fca.org.uk/consumers/report-scam-unauthorised-firm
• Do not deal with
any firm that you are unsure about
If you deal with an unauthorised
firm, you will not be eligible to receive payment under the
Financial Services Compensation Scheme. The FCA provides a list of
unauthorised firms of which it is aware, which can be accessed at
www.fca.org.uk/consumers/unauthorised-firms-individuals#list.
More detailed information on this or
similar activity can be found on the FCA website at
fca.org.uk/consumers/protect-yourself-scams.
Dividends
Paying dividends into a bank or
building society account helps reduce the risk of fraud and will
provide you with quicker access to your funds than payment by
cheque. Applications for an electronic mandate can be made by
contacting the Registrar, Equiniti. This is the most secure and
efficient method of payment and ensures that you receive any
dividends promptly.
If you do not have a UK bank or
building society account, please contact Equiniti for details of
their overseas payment service. Further information can be found at
www.shareview.co.uk, including how to register with Shareview
Portfolio and manage your shareholding online.
INFORMATION ABOUT THE
COMPANY
www.schroders.co.uk/ukmidcap
Directors
Robert Talbut (Chair)
Wendy Colquhoun
Helen Galbraith
Harry Morley
Registered office
9 Haymarket Square
Edinburgh
Scotland EH3 8FY
Advisers and service providers
Alternative Investment Fund Manager
(the
"Manager" or "AIFM")
Schroder Unit Trusts
Limited
1 London Wall Place
London EC2Y 5AU
Investment Manager and Company Secretary
Schroder Investment Management
Limited
1 London Wall Place
London EC2Y 5AU
Email:
amcompanysecretary@schroders.com
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Lending bank
Scotiabank Europe PLC
201 Bishopsgate
London EC2M 3NS
Corporate broker
Panmure Gordon (UK)
Limited
40 Gracechurch Street,
London
EC3V 0BT
Legal advisers
Shepherd and Wedderburn
LLP
9 Haymarket Square
Edinburgh
EH3 8FY
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder Helpline: +44 (0) 800 032
0641*
Website:
www.shareview.co.uk
*Calls to this number are free of
charge from UK landlines.
Communications with shareholders are
mailed to the address held on the register. Any notifications and
enquiries relating to shareholdings, including a change of address
or other amendment should be directed to Equiniti Limited at the
above address and telephone number.
Independent auditor
KPMG LLP
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
AIFM
Directive disclosures
Certain pre-sale, regular and
periodic disclosures required by the Alternative Investment Fund
Managers ("AIFM") Directive may be found on its webpae required
under the AIFM Directive are published on its webpages.
Other information
Company number
SC082551
Dealing codes
ISIN
Number:
GB0006108418
SEDOL:
0610841
Ticker:
SCP
Global Intermediary Identification Number
(GIIN)
9GN3DU.99999.SL.826
Legal Entity Identifier (LEI)
549300SOEWCYZTK2SP87
Privacy notice
The Company's privacy notice can be
found on its web pages.