TIDMAFMC
RNS Number : 3231F
Aberdeen Frontier Mkts Inv Co Ltd
20 February 2018
19 February 2018
ABERDEEN FRONTIER MARKETS INVESTMENT COMPANY LIMITED
HALF YEARLY FINANCIAL REPORT
For the six months ended 31 December 2017
Investment objective
The investment objective of the Company is to generate long-term
capital growth primarily from investment in equity and equity
related securities of companies listed in, or operating in,
Frontier Markets.
Frontier Market countries may include constituents of the MSCI
Frontier Markets Index or additional countries that the Manager
deems to be, or displays similar characteristics to, Frontier
Market countries.
Management
The Company is managed by Aberdeen Fund Managers Limited (the
'Manager'), which is a wholly owned subsidiary of Aberdeen Asset
Management PLC, which is itself a wholly owned subsidiary of
Standard Life Aberdeen plc, and is authorised and regulated by the
Financial Conduct Authority ('FCA'). The Manager has delegated
day-to-day investment management services to Aberdeen Asset
Managers Limited ('AAML' or the 'Investment Manager').
Performance
For the six months ended 31 December 2017
Net Asset Value ("NAV") per share
(in US dollar terms) +1.67%
Total return, NAV to NAV, gross
income reinvested.
----------------------------------- -------
Share price (in US dollar terms) +0.37%
Share price total return is on a
mid-to-mid basis.
----------------------------------- -------
As at 31 December 2017
NAV per share $0.9248
Share price (in GB pounds) GBP0.6300
Share price (in US dollars) $0.8510
Net Assets $79.0m
CHAIRMAN'S STATEMENT
On behalf of your Board, I present to you the Half-Yearly
Financial Report for Aberdeen Frontier Markets Investment Company
Limited (the 'Company') for the six months ended 31 December
2017.
Performance
Global stock markets raced ahead in 2017, supported by a range
of factors including favourable US political and corporate taxation
developments and a firming demand for oil and commodities. A year
of strong inflows into emerging markets was balanced by more
neutral flows into frontier markets generally, after two years of
outflows, suggesting the investment environment is turning
positive.
During the period under review, the Company reported net asset
value ("NAV") per share and share price total returns of 1.7% and
0.4%, respectively, in US Dollar terms. This compared to a gain of
14.1% for the MSCI Frontier Markets Net Total Return Index.
The Company's under-performance against the benchmark reflected
unusual volatility in frontier markets driven by particular events
at a country-specific level. Strong performance from stock markets
in Argentina and Vietnam, where the Company was underweight, and an
overweight position in Pakistan, both held back performance. Whilst
our Manager's underweights have cost performance over the period
concerns remain over stretched valuations and political issues. We
are overweight Frontier Asian markets, particularly in Bangladesh,
Pakistan and Sri Lanka where our Manager believes the outlook for
earnings is strong. This is further explained in the Manager's
report.
Discount
The discount to NAV at which the Company's shares trade widened
from 6.8% to 8.0% over the period. The Company's issued share
capital was unchanged over the period, comprising 85,452,608
Ordinary shares with voting rights and an additional 450,000 shares
in treasury. The Board keeps the share price discount to net asset
value under constant review and the Company may purchase its own
shares through the market for cash where the Directors believe that
such purchases will enhance Shareholder value and are likely to
assist in narrowing any discount to NAV at which the Ordinary
shares may trade.
Dividend
The Board believes that a sustainable dividend is attractive to
investors and, further to approval at the Company's Annual General
Meeting on 6 December 2017, a final dividend of 0.761832p per
Ordinary share was paid on 13 December 2017 to shareholders on the
register on 17 November 2017. This was the Sterling equivalent of a
dividend of 1.0 cent per share previously announced for the year
ended 30 June 2017 based on a USD/ GBP exchange rate of 1.312625.
The Board expects to declare in May 2018 an interim dividend, for
the year ended 30 June 2018, payable in June.
Aberdeen Asset Managers Limited
The merger on 14 August 2017 between Aberdeen Asset Management
PLC and Standard Life plc, to create Standard Life Aberdeen plc,
resulted in a new investment division under the banner of Aberdeen
Standard Investments. A highly experienced and dedicated
integration team has been set up to ensure that our Manager remains
focused on the best interests of the Company and its shareholders.
The Board will monitor developments closely and ensure that
excellent client service is maintained. The Board do not expect
these developments to have any material impact on the management of
your Company's investment portfolio.
Aberdeen ISA and Share plans
Aberdeen has a long history in managing closed-ended funds and
provides a wealth of experience in their management and promotion.
Investors may access low cost investment in the Company through
Aberdeen's Share Plan, Investment Trust ISA and Investment Plan for
Children. Further details may be found in the Annual Report or via
our website at: aberdeenfrontiermarkets.co.uk.
PRIIPS (Packaged Retail and Insurance-based Investment
Products)
Investors should be aware that the PRIIPS Regulation requires
the Manager, as PRIIP manufacturer, to prepare a key information
document ("KID") in respect of the Company. This KID must be made
available by the Manager to retail investors prior to them making
any investment decision and is available on the Company's website.
The Company is not responsible for the information contained in the
KID and investors should note that the procedures for calculating
the risks, costs and potential returns are prescribed by the law.
The figures in the KID may not reflect the expected returns for the
Company and anticipated performance returns cannot be
guaranteed.
Future prospects
As noted in the Manager's Report, we believe that the case for
investment in frontier markets becomes ever stronger. Looking
further into 2018, corporate earnings are improving across frontier
markets while macroeconomic concerns are falling away. As
institutional investors rotate away from fully-valued equities in
other global stock markets, frontier markets offer compelling
opportunities.
The Manager has a firm belief in its fundamental, stock-picking
approach, balanced by positive views on Vietnam, Bangladesh,
Pakistan and Sri Lanka with mild caution expressed over Argentina.
Whilst our Manager remains benchmark aware, it is never benchmark
driven and seeks to minimise risk through its in-depth company
research. Despite recent performance through this momentum-led
rally, the Manager believes that the Company has a well-constructed
portfolio of companies that offers the opportunity for reliable
returns over time with lower volatility. Some of the very large
weightings to individual countries seen in the index in markets
that offer limited market depth means that our portfolio will at
times diverge, often substantially, from those weightings.
I conclude by thanking my colleagues on the Board for their
diligence and professionalism, the Manager for its continued
efforts and importantly our shareholders for their continued
support and belief in the improving prospects for frontier markets
and our relative portfolio positioning.
John Whittle
19 February 2018
MANAGER'S REPORT
Market environment
Global equity market sentiment was generally constructive over
the period, supported by a robust global growth outlook and hopes
that the passage of US tax legislation would give a boost to the
world's largest economy. Oil prices found further support amid
tensions in the Middle East and supply constraints in the face of
firming demand, while hard commodity prices traded higher on more
balanced supply-demand dynamics despite a cooling property market
in China.
After two years of consecutive outflows, the Frontier Markets
asset class saw a stabilisation in investment flows, with only a
small net outflow registered for the calendar year. This compares
to a year of very strong inflows into emerging markets. In our
view, continued export-led growth in Frontier Asia, progress with
the economic reform programme in Argentina, and economic recovery
taking root in Frontier Africa, bodes well for flows into our asset
class in 2018. Frontier markets capital flows usually follow
emerging markets with a lag; we see no reason why this time should
be different.
Frontier markets generally performed better during the period
under review, with two large index constituents seeing notable
strength: Argentina and Vietnam. Vietnamese equities finished the
year on a 10-year high as GDP growth accelerated to 6.8%, its
fastest annual pace in a decade, supported by sustained export
growth and FDI inflows. Argentina also gained as Moody's upgraded
its credit rating in recognition of President Macri's far-reaching
reform programme.
Frontier Africa also made progress, albeit to a lesser extent,
as economies there recover from recent currency adjustments. Egypt
and Nigeria both grappled with high inflation after devaluing their
currencies, however we expect domestic demand to pick up as
inflationary forces are tamed and interest rates are brought down.
Kenyan equities were volatile going into the election cycle and
finished the period under review ahead on relief that elections
passed without undue disruption.
There was one notable exception, however. Pakistan was a marked
laggard over the period, despite annual GDP growth reaching a
decade high as a result of the much improved security situation and
very substantial investments in infrastructure. Three factors
worked to undermine confidence in the market. Following, the
upgrade of the country to the MSCI Emerging Markets index at the
end of May significant selling pressure over several weeks ensued
as Emerging Market investors stood on the side-lines given
Pakistan's insignificant weighting in its new index. Secondly,
political noise created governance uncertainties as former Prime
Minister Nawaz Sharif and his Finance Minister were disqualified
from office by Pakistan's Supreme Court for failing to properly
declare assets. Thirdly, pressure built on the central bank to
allow the currency to devalue in order to reign in a widening
current account deficit, which also had the effect of undermining
confidence in the equity market. At the end of the year the central
bank allowed a 5% devaluation of the Rupee, but we expect a further
adjustment closer to parliamentary elections in July. While the
upcoming elections in July will no doubt be a source of
conversation, we believe they should pass relatively uneventfully,
although potentially resulting in a coalition government under the
current leadership of the business-friendly PMLN party. Meanwhile
the country's investments in infrastructure, particularly in the
power sector, should work to lessen constraints on industrial
productivity and support employment creation, which we believe
could be transformational for the economy in the longer term.
Performance review
Aberdeen Frontier Markets Investment Company USD for periods
ended 31 December 2017 Cumulative performance
6 Months 1 Year 3 Year 5 Year Inception
% % % % to date
%
--------------- --------- ------- ------- ------- ----------
NAV Total
Return 1.67 11.67 -2.49 19.18 -1.04
Share Price
Total Return 0.37 10.27 1.38 27.35 -11.55
--------------- --------- ------- ------- ------- ----------
Notes
Source: Aberdeen Fund Managers Limited, Bloomberg
Returns assume dividends are reinvested. All performance numbers
are total returns with dividends reinvested as of the ex-dividend
date.
Inception was 15 June 2007 (initial NAV per share after share
issue expenses was USD 0.9685).
During the six months to 31 December 2017 the Company's NAV per
share and share price total returns were 1.7% and 0.4%
respectively. As a point of reference, the MSCI Frontier Markets
Net Total Return Index gained 14.1% over the period while the MSCI
Emerging Markets Net Total Return Index rose by 15.9%. The discount
to NAV at which the Company's shares trade stood at 8.0% at the end
of the period, having widened from 6.8% at the end of June
2017.
The period under review was an unusually volatile one for the
asset class from two perspectives. Firstly, the narrowness of the
rally, being primarily driven by just two countries: Argentina and
Vietnam. More than half (53%) of index performance during the
period derived from index constituents in these two markets alone.
Without them, the index would have risen just 6.6%. Secondly, with
respect to the upgrade of one of the asset class' larger markets,
namely Pakistan, to EM status; this event lifted the Pakistan
market in the first half of the year, followed by a material
retrenchment in the second half post the upgrade. Our investment
style, established upon diligent buy-and- hold investments into
carefully selected companies across a geographically diversified
portfolio lagged the index in this narrow and event-driven
environment.
Pakistan was the major performance detractor from a country
attribution perspective during the period as the market collapsed
post upgrade to EM status as foreign investor outflows precipitated
local selling. Political noise from the disqualification of Nawaz
Sharif from the prime minister's office, negative remarks from
Trump about his commitment to the US-Pakistan bilateral
relationship, and concerns about the widening current account
deficit, further weighed on the market. We continue to categorise
Pakistan as a frontier market and see great potential in the
country and its companies, so will maintain exposure despite the
benchmark change. In that vein, we have been actively adding to our
positions there as the market declined. Operationally speaking, our
companies in Pakistan have delivered good results this year.
Valuations are at highly attractive levels, more than discounting
any risk of a currency adjustment. As at the end of December, our
basket of six names in Pakistan trade on a weighted average
historical PE of just 11x and offer a weighted average dividend
yield of more than 5%. All exhibit a good earnings growth profile,
supported by a still promising macroeconomic outlook.
Argentina was a negative contributor as the market surged to
record levels. Whilst we had three Argentinian securities in the
portfolio through this period, we remain significantly underweight
the market given what we perceive to be stretched valuations as
well as the politically exposed nature of certain key listed
businesses in the country.
Vietnam was the other significant detractor, as the index rose
rapidly in the fourth quarter on mounting portfolio inflows into
what remains a relatively shallow equity market. Investor interest
in Vietnam has risen considerably, attracted by the country's
robust economic expansion and accelerating export sector, which has
kept the trade balance in check and backstopped the currency. At
the stock level, those that have benefited most from the capital
surge have been the liquid index heavyweights, which have foreign
ownership headroom available to incoming investors. These names
rose dramatically and now trade on what we consider to be excessive
valuations. While our holdings delivered robust third quarter
results, two of the three have no remaining foreign ownership
headroom, namely Mobile World Group and FPT Corp, and therefore
lagged the market considerably. That said, both names are likely to
benefit from convergence in valuations over time as local
shareholders see the opportunity to rotate into these less
expensive yet higher quality companies.
The noteworthy positive relative contribution at the country
level came from the fund's underweight to Kuwait, whose market
lagged the index.
Market outlook
The outlook for frontier markets provides plenty of cause for
optimism, in our view. We continue to believe in a research led
investment approach with regular company and country visits made by
the wider team. Our investee companies, we believe, continue to
display strong balance sheets and earnings potential with strong
management capable of guiding their companies through different
market cycles. While corporate earnings rebounded throughout
emerging markets in 2017, that is likely to moderate in 2018;
meanwhile, earnings across several frontier markets have begun to
accelerate, especially in Frontier Africa. In Frontier Asia, where
the fund has significant exposure, we expect another good year for
Vietnam and Bangladesh, while Pakistan and Sri Lanka are due a
recovery, given both markets now lie in value territory. We
anticipate institutional investors will become increasingly
interested in the asset class over the coming year, particularly as
macroeconomic concerns recede in Africa and economies there return
to growth. Furthermore, investors will likely be keen to
participate directly in the rise of Asian frontier markets, most
notably Vietnam.
Aberdeen Fund Managers Limited
19 February 2018
TOP TWENTY HOLDINGS AS AT 31 DECEMBER 2017
Percentage
Value of net
Company Country $'000 assets
-------------------------- ------------ ------- -----------
Vinamilk Vietnam 3,895 4.9%
-------------------------- ------------ ------- -----------
BBVA Banco Frances Argentina 3,508 4.4%
-------------------------- ------------ ------- -----------
John Keells Sri Lanka 3,230 4.1%
-------------------------- ------------ ------- -----------
Safaricom Kenya 3,215 4.1%
-------------------------- ------------ ------- -----------
Guaranty Trust Bank Nigeria 2,928 3.7%
-------------------------- ------------ ------- -----------
FPT Corporation Vietnam 2,635 3.3%
-------------------------- ------------ ------- -----------
Grameenphone Bangladesh 2,511 3.2%
-------------------------- ------------ ------- -----------
BGEO Group Georgia 2,157 2.7%
-------------------------- ------------ ------- -----------
IRSA Propiedades Argentina 2,007 2.5%
-------------------------- ------------ ------- -----------
Coca-Cola Icecek Turkey 1,965 2.5%
-------------------------- ------------ ------- -----------
Mobile World Investment
Corp Vietnam 1,961 2.5%
-------------------------- ------------ ------- -----------
South
MTN Group Africa 1,958 2.5%
-------------------------- ------------ ------- -----------
BRD-Groupe Societe
Generale Romania 1,898 2.4%
-------------------------- ------------ ------- -----------
Yoma Strategic Holdings Myanmar 1,872 2.4%
-------------------------- ------------ ------- -----------
Commercial International
Bank GDR Egypt 1,747 2.2%
-------------------------- ------------ ------- -----------
Fan Milk Ghana 1,721 2.2%
-------------------------- ------------ ------- -----------
Packages Ltd Pakistan 1,653 2.1%
-------------------------- ------------ ------- -----------
Commercial Bank of
Ceylon Sri Lanka 1,561 2.0%
-------------------------- ------------ ------- -----------
Shell Pakistan Pakistan 1,558 2.0%
-------------------------- ------------ ------- -----------
Square Pharmaceuticals Bangladesh 1,508 1.9%
-------------------------- ------------ ------- -----------
Top twenty holdings 45,488 57.6%
---------------------------------------- ------- -----------
Other holdings 31,862 40.3%
---------------------------------------- ------- -----------
Total holdings 77,350 97.9%
---------------------------------------- ------- -----------
Cash and other net
assets 1,674 2.1%
---------------------------------------- ------- -----------
Net assets 79,024 100.0%
---------------------------------------- ------- -----------
Relative country
positions
Fund Benchmark Difference
% % %
----------------------- ------ ---------- -----------
Africa & Middle
East 38.5 48.8 -10.3
----------------------- ------ ---------- -----------
Bahrain - 3.5 -3.5
Egypt 4.9 - +4.9
Ghana 2.2 - +2.2
Ivory Coast - 0.2 -0.2
Jordan 1.3 1.2 +0.1
Kenya 10.7 4.6 +6.1
Kuwait - 16.0 -16.0
Lebanon 1.3 2.3 -1.0
Mauritius - 2.7 -2.7
Morocco 0.9 7.6 -6.7
Nigeria 10.0 7.1 +2.9
Oman 0.8 2.4 -1.6
Senegal - 0.8 -0.8
South Africa 2.9 - +2.9
Tanzania 1.0 - +1.0
Tunisia - 0.4 -0.4
Turkey 2.5 - +2.5
Asia Pacific
ex Japan 41.0 17.6 +23.4
----------------------- ------ ---------- -----------
Bangladesh 7.8 2.7 +5.1
Myanmar 2.3 - +2.3
Pakistan 9.3 - +9.3
Sri Lanka 8.5 1.2 +7.3
Thailand 1.9 - +1.9
Vietnam 11.2 13.7 -2.5
Europe ex UK 6.8 9.6 -2.8
----------------------- ------ ---------- -----------
Belarus 1.1 - +1.1
Croatia - 1.6 -1.6
Estonia - 0.4 -0.4
Georgia 2.7 - +2.7
Kazakhstan - 2.2 -2.2
Lithuania - 0.2 -0.2
Romania 3.0 3.5 -0.5
Serbia - 0.2 -0.2
Slovenia - 1.5 -1.5
Latin America 11.0 24.0 -13.0
----------------------- ------ ---------- -----------
Argentina 8.5 24.0 -15.5
Panama 1.5 - +1.5
Costa Rica 1.0 - +1.0
Cash 2.3 - +2.3
----------------------- ------ ---------- -----------
Other 0.4 - +0.4
----------------------- ------ ---------- -----------
Total 100.0 100.0
----------------------- ------ ---------- -----------
At 31 December 2017, the benchmark index had an adjusted market
cap of US$ 131.27 billion and was composed of 111 companies across
23 countries (source MSCI).
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
Notes Six months Six months Six months Six months Six months Six months to
to 31 to 31 to 31 to 31 to 31 31 December
December December December December December 2016
2017 2017 2017 2016 2016
Revenue Capital Total Revenue Capital Total
$'000 $'000 $'000 $'000 $'000 $'000
Gains on
investments - 1,149 1,149 - 5.666 5,666
Capital
gains/(losses)
on currency
movements - 115 115 - (21) (21)
------------- ------------- ------------- ------------- ------------- --------------
Net investment
gains - 1,264 1,264 - 5,645 5,645
------------- ------------- ------------- ------------- ------------- --------------
Investment
income 641 - 641 771 - 771
------------- ------------- ------------- ------------- ------------- --------------
Total income 641 1,264 1,905 771 5,645 6,416
------------- ------------- ------------- ------------- ------------- --------------
Investment
management fees (131) (261) (392) (281) (563) (844)
Other expenses (411) - (411) (351) (129) (480)
------------- ------------- ------------- ------------- ------------- --------------
Net profit from
operations
before finance
costs and
taxation 99 1,003 1,102 139 4,953 5,092
Finance costs (15) - (15) (42) (84) (126)
------------- ------------- ------------- ------------- ------------- --------------
Net profit
before taxation 84 1,003 1,087 97 4,869 4,966
Taxation 5 (84) - (84) (31) - (31)
------------- ------------- ------------- ------------- ------------- --------------
Net profit after
taxation - 1,003 1,003 66 4,869 4,935
------------- ------------- ------------- ------------- ------------- --------------
Earnings per
ordinary share 4 - 1.17c 1.17c 0.04c 2.87c 2.91c
The total column of this statement represents the Company's
Statement of Comprehensive Income, prepared under IFRS as adopted
by the European Union. The revenue and capital columns, including
the revenue and capital earnings per share data, are supplementary
information prepared under guidance published by the Association of
Investment Companies. The Company does not have any income or
expenses that are not included in the profit for the period and
therefore the "Net profit 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
during the period.
The notes form an integral part of these financial
statements.
UNAUDITED STATEMENT OF FINANCIAL POSITION
Note As at As at As at
31 December 31 December 30 June
2017 2016 2017
$'000 $'000 $'000
----------------------------- ----- ------------- ------------- ---------
Non-current assets
Investments at fair value
through profit or loss 77,350 137,956 74,872
------------------------------ ----- ------------- ------------- ---------
Current assets
Cash and cash equivalents 2,240 4,579 4,847
Sales for future settlement - - 7,313
Other receivables 87 754 390
------------------------------ ----- ------------- ------------- ---------
2,327 5,333 12,550
----------------------------- ----- ------------- ------------- ---------
Total assets 79,677 143,289 87,422
------------------------------ ----- ------------- ------------- ---------
Current liabilities
Purchases for future
settlement 27 - 7,112
Other payables 203 264 158
Tender offer liabilities 423 - 726
------------------------------ ----- ------------- ------------- ---------
653 264 7,996
Total assets less current
liabilities 79,024 143,025 79,426
------------------------------ ----- ------------- ------------- ---------
Capital and reserves
attributable to equity
holders
Share premium account 12,557 88,788 12,254
Capital reserve 66,284 53,339 66,135
Revenue reserve 183 898 1,037
Total Equity 79,024 143,025 79,426
------------------------------ ----- ------------- ------------- ---------
Net assets per ordinary
share (US cents) 6 92.48c 84.63c 92.95c
Exchange rate GBP/USD
(mid market) 0.74030 0.81024 0.76780
Net assets per ordinary
share (pence) 68.46p 68.57p 71.37p
------------------------------ ----- ------------- ------------- ---------
The notes form an integral part of these financial
statements.
UNAUDITED STATEMENT OF CHANGES IN EQUITY
Note Share
premium Capital Revenue
Six months to 31 December account reserve reserve Total
2017 $'000 $'000 $'000 $'000
--------------------------- ----- --------- --------- --------- ---------
Opening equity 12,254 66,135 1,037 79,426
Tender offer 303 - - 303
Profit for the year - 1,003 - 1,003
Equity dividends paid 7 - (854) (854) (1,708)
--------------------------- ----- --------- --------- --------- ---------
Closing equity 12,557 66,284 183 79,024
--------------------------- ----- --------- --------- --------- ---------
Share
premium Capital Revenue
Six months to 31 December account reserve reserve Total
2016 $'000 $'000 $'000 $'000
--------------------------- ----- --------- --------- --------- ---------
Opening equity 88,788 50,854 832 140,474
Profit for the period - 4,869 66 4,935
Equity dividends paid - (2,031) - (2,031)
Purchase of own shares - (353) - (353)
--------------------------- ----- --------- --------- --------- ---------
Closing equity 88,788 53,339 898 143,025
--------------------------- ----- --------- --------- --------- ---------
Share
premium Capital Revenue
For the year ended account reserve reserve Total
30 June 2017 $'000 $'000 $'000 $'000
--------------------------- ----- --------- --------- --------- ---------
Opening equity 88,788 50,854 832 140,474
Tender offer (76,534) - - (76,534)
Purchase of own shares - (310) - (310)
Profit for the year - 17,622 205 17,827
Equity dividends paid - (2,031) - (2,031)
--------------------------- ----- --------- --------- --------- ---------
Closing equity 12,254 66,135 1,037 79,426
--------------------------- ----- --------- --------- --------- ---------
The notes form an integral part of these financial
statements.
UNAUDITED STATEMENT OF CASH FLOWS
Note Six months Six months
to to
31 December 31 December
2017 2016
$'000 $'000
--------------------------------- ----- -------------- --------------
Operating activities
Cash inflow from investment
income and bank interest 974 1,368
Cash outflow from management
expenses (771) (1,195)
Cash inflow from disposal
of investments 26,805 25,502
Cash outflow from purchase
of investments (27,907) (15,572)
Cash outflow from foreign
exchange costs 99 (21)
Cash outflow from taxation (84) (31)
--------------------------------- ----- -------------- --------------
Net cash flow (used in)/from
operating activities (884) 10,051
--------------------------------- ----- -------------- --------------
Financing activities
Repayments of bank borrowings - (4,500)
Finance charges and interest
paid (15) (112)
Equity dividends paid 7 (1,708) (2,031)
Purchase of own shares - (353)
--------------------------------- ----- -------------- --------------
Net cash flow used in financing
activities (1,723) (6,996)
--------------------------------- ----- -------------- --------------
Net (decrease)/increase in
cash & cash equivalents (2,607) 3,055
--------------------------------- ----- -------------- --------------
Cash and cash equivalents
opening balance 4,847 1,524
Cash (outflow)/inflow (2,607) 3,055
--------------------------------- ----- -------------- --------------
Cash and cash equivalents
balance at 31 December 2,240 4,579
--------------------------------- ----- -------------- --------------
The notes form an integral part of these financial
statements.
NOTES
1. Company information
The Company is a closed ended investment company incorporated
and resident in Guernsey. Its ordinary shares are quoted on
AIM.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting. They are
unaudited and do not include all of the information required for
full annual financial statements. These interim financial
statements should be read in conjunction with the financial
statements of the Company as at and for the year ended 30 June
2017. The financial statements of the Company as at and for the
year ended 30 June 2017 were prepared in accordance with
International Financial Reporting Standards ("IFRS") and received
an unqualified audit report. The accounting policies used by the
Company are the same as those applied by the Company in its
financial statements for the year ended 30 June 2017.
Under IFRS, the Statement of Recommended Practice (SORP) issued
by the Association of Investment Companies has no formal status,
but the Company has taken the guidance of the SORP into account to
the extent that it is deemed appropriate and compatible with IFRS
and the Company's circumstances.
The total column of the income statement is the Statement of
Comprehensive Income of the Company. The capital and revenue
columns provide supplementary information.
Investments have been classified as "fair value through profit
and loss".
After initial recognition such investments are valued at fair
value which is determined by reference to:
i) primarily market bid price for investments quoted on
recognised stock exchanges (market mid or last trade price will be
used where deemed to more appropriately reflect fair value);
ii) net asset value per individual investee funds'
administrators for unquoted open-end funds; and
iii) by using other valuation techniques to establish fair value
for any other unquoted investments.
The Company's shares were issued in US dollars and this is
considered to be the functional currency of the Company. Therefore,
it is the Company's policy to present the accounts in US dollars.
The Company's shares are traded in sterling on AIM.
Unless otherwise stated the comparative figures for the prior
year stated in these notes are in respect of the six months ended
31 December 2016.
3. Going concern status
The directors have adopted the going-concern basis in preparing
these interim financial statements. The directors formally
considered the Company's going concern status at the time of the
publication of these interim financial statements and a summary of
the assessment is provided below.
The directors have a reasonable expectation that the Company has
adequate operational resources to continue in existence for at
least twelve months from the date of approval of the interim
financial statements. In reaching this conclusion, the directors
have considered the liquidity of the Company's portfolio of
investments as well as its cash position, income, expenses and
other outflows. The Company has substantial operating expenses
cover.
The directors are satisfied that it is appropriate to adopt the
going concern basis of accounting in preparing these interim
financial statements.
4. Earnings per share
Earnings per share is based on the gain of $1,003,000 (2016:
gain of $4,935,000) attributable to the weighted average of
85,452,608 ordinary shares in issue in the six months to 31
December 2017 (2016: 169,343,640).
5. Taxation
The charge for taxation relates to tax suffered on dividends
received from overseas investments.
6. Net asset value per share
Undiluted net asset value per ordinary share is based on net
assets of $79,024,000 (2016; $143,025,000) divided by 85,452,608
(2016: 169,010,000) ordinary shares in issue (excluding shares held
in treasury) at the period end.
7. Dividends
An interim dividend for the year ended 30 June 2017 of 1.0 cents
(sterling equivalent of 0.766947 pence) per Ordinary Share was paid
out of the capital reserve on 11 August 2017.
A final dividend for the year ended 30 June 2017 of 1.0 cents
(sterling equivalent of 0.761832 pence) per Ordinary Share was paid
to shareholders on 13 December 2017 to shareholders on the register
at the close of business on 17 November 2017. The dividend was
funded from the Company's revenue reserves.
Dividends are paid in sterling.
8. Investment management fees
Fees payable to the Manager are shown in the Unaudited Statement
of Comprehensive Income. At 31 December 2017, Manager's fees of
$67,577 (2016: $138,226) were accrued in the Statement of Financial
Position.
9. Tender offer
On 14 March 2017 the Company received valid tender acceptances
of 97,307,392 Ordinary Shares. Aberdeen Asset Management bought
13,750,000 of such tendered Ordinary Shares ('On-sale Shares') at
the Investment Price of 72.5748 pence per Ordinary Share and
therefore the number of Exit Shares which have been repurchased for
cancellation by the Company was 83,557,392.
Following the Tender Offer the Company has 85,452,608 Ordinary
Shares in issue (excluding shares held in treasury) attributable to
the continuing shareholders.
Proceeds equivalent to $12,129,000 were received from the
On-sale Shares. During the financial year ended 30 June 2017 two
tender offer distributions were made returning an aggregate amount
equivalent to $87,937,000 in respect of validly tendered shares
resulting in a net cost to the Company equivalent to
$75,808,000.
On 26 January 2018 the Company announced that a third and final
distribution equivalent to $423,000 would be made to Tendering
Shareholders on 9 February 2018.
10. Status of this report
These interim financial statements are not the Company's
statutory accounts. They are unaudited. This report will be sent to
shareholders and copies will be made available to the public at the
registered office of the Company. It is also available on the
Company's website, aberdeenfrontiermarkets.co.uk.
The Half-yearly financial report was approved by the Board of
directors on 19 February 2018.
Registered office
11 New Street
St Peter Port
Guernsey
GY1 2PF
Enquiries:
Aberdeen Fund Managers Limited (Investment Manager to Aberdeen
Frontier Markets Investment Company Limited)
William Hemmings / Gary Jones
Tel: +44 (0)20 7463 6000
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett
Tel: +44 (0)20 7383 5100
Numis Securities Limited (Nominated Broker)
David Benda
Tel: +44 (0) 20 7260 1275
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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February 20, 2018 02:00 ET (07:00 GMT)
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