TIDMNAS

RNS Number : 2176Z

North Atlantic Smlr Co Inv Tst PLC

16 September 2020

North Atlantic Smaller Companies Investment Trust plc

Half-Yearly Report for the six months ended 31 July 2020

Registered in England and Wales number 1091347

objective of the company and financial highlights

The objective of the Company is to provide capital appreciation through investment in a portfolio of smaller companies principally based in countries bordering the North Atlantic Ocean.

 
                                                         31 July   31 January 
                                                            2020         2020         % 
                                                     (unaudited)    (audited)    Change 
-------------------------------------------------  -------------  -----------  -------- 
 Net asset value ("NAV") per 5p Ordinary Share*: 
 Basic and diluted                                        3,972p       4,384p     (9.4) 
 Basic and diluted adjusted#                              4,069p       4,505p     (9.7) 
 Mid-market price of the 5p Ordinary Shares               2,880p       3,400p    (15.3) 
 Discount to diluted net asset value                       27.5%        22.4% 
 Discount to diluted adjusted net asset value              29.2%        24.5% 
 Standard & Poor's 500 Composite Index                  2,499.90     2,442.50       2.4 
 Russell 2000 Index                                     1,131.39     1,222.20     (7.4) 
 Ongoing charges (annualised)                               1.3%         1.1% 
 

* Includes current period.

# Adjusted to reflect Oryx International Growth Fund plc ("Oryx") under the equity method of accounting, which is how the Company previously accounted for its share of Oryx, prior to the adoption of IFRS 10. This is useful to the shareholder as it shows the NAV based on valuing Oryx at NAV. See note 6.

Sterling adjusted.

chief executive's review

During the six month period under review the fully diluted net asset value fell by 9.7% (with Oryx under the equity method of accounting) as compared to a rise in the Sterling adjusted Standard & Poors Composite Index of 2.4%. The performance however compares very favourably with appropriate UK indices.

The Company incurred a loss for the period of GBP629,000 (31 July 2019: profit of GBP3,671,000) as dividends were slashed in the UK and interest income on US Treasuries fell to almost nothing.

The Company did not purchase any ordinary shares for cancellation during the period.

quoted portfolio

The COVID pandemic materially impacted a significant part of the quoted portfolio which resulted in some of our businesses such as Gleeson and Ten Entertainment closing entirely for a period. Stobart was also very hard hit as its principal asset Southend Airport ground to a standstill. Whilst these businesses are now once again operating, it most likely will take a long time before they return to normality and their share prices return to former levels.

Against that, it was fortunate that the portfolio has some exposure to life sciences with EKF, Renalytix and Ergomed (which has now been sold) all performing well. Finally, Oryx very significantly outperformed its benchmark again and Odyssian also outperformed, although to a much lesser extent.

US portfolio

The US portfolio, albeit small, materially underperformed the S&P due to its heavy exposure to banks.

unquoted portfolio

The investment in Jaguar Holdings a provider of airline catering services had to be written down, although it is pleasing to note that the group remained cash flow positive throughout the period. Sherwood Holdings (Source Bioscience) however benefitted from COVID testing and was written up in anticipation of a public offering which is expected to occur in September.

It is also expected that Verici DX will be listed in September with very strong demand already in place from institutions.

Finally, there is a possibility that another of the unquoted investments will go public at a very substantial premium to the July valuation although, if this happens, it will be towards the end of the year.

Outlook

Stock markets, and in particular the United States, have performed extraordinarily well given the damage done to public finances and the economy. As worldwide schemes to protect employment are unwound and unemployment rises, it is hard to be overly optimistic about corporate profits in most industries. We do, however, expect a modest level of corporate activity which might give some underpinning to equities.

We did however take the opportunity of the weakness in the market to build new positions in Circassia and Tribal Group, both of which based on end August share prices have performed well since purchase.

Finally, Assetco was largely successful in contesting Grant Thornton's appeal so hopefully the Company will receive a substantial cash injection as the lawsuit reaches conclusion and the company returns cash to investors.

C H B Mills

Chief Executive

16 September 2020

top ten investments as at 31 July 2020

 
                                                                     Fair 
                                                                    value          % of 
                                                                  GBP'000    net assets 
-----------------------------------------  -------------------  ---------  ------------ 
 Oryx International Growth Fund Limited*    UK Listed              74,831          13.3 
 EKF Diagnostics Holdings plc               UK Quoted on AIM       47,628           8.5 
 US Treasury Bills                          US Treasury Stock      43,982           7.8 
 Renalytix AI plc                           UK Quoted on AIM       34,412           6.1 
 Polar Capital Holdings plc                 UK Quoted on AIM       33,390           5.9 
 Augean plc                                 UK Quoted on AIM       33,300           5.9 
 MJ Gleeson Group plc                       UK Listed              32,648           5.8 
 Harwood Private Equity Fund IV LP          UK Unquoted            29,995           5.3 
 Sherwood Holdings Limited                  UK Unquoted            19,544           3.5 
 Ten Entertainment Group plc                UK Listed              13,965           2.5 
                                                                ---------  ------------ 
 
                                                                  363,695          64.6 
                                                                ---------  ------------ 
 

* Traded price under IFRS 10, incorporated in Guernsey.

All investments are valued at fair value.

interim management report

investment objective

The objective of North Atlantic Smaller Companies Investment Trust PLC ("the Company") is to provide capital appreciation to its shareholders through investing in a portfolio of smaller companies which are principally based in countries bordering the North Atlantic Ocean.

material events

The Covid 19 pandemic had a material impact on some of the Company's investments.

material transactions

There were no material transactions during the period.

risk profile

The principal risks and uncertainties for the remaining six months of the year continue to be as described in the Annual Report for the year ended 31 January 2020. The principal risks arising from the Company's financial instruments are market price risk, including currency risk, interest rate risk and other price risk, liquidity risk and credit risk. The Directors review and agree policies with the Manager, Harwood Capital LLP, for managing these risks. The policies have remained substantially unchanged in the six months since the year end.

The Company does not have any significant exposure to credit risk arising from any one individual party. Credit risk is spread across a number of counterparties, each having an immaterial effect on the Company's cash flows, should a default happen. The Company assesses the credit worthiness of its debtors from time to time to ensure that they are neither past due or impaired.

To support its investment in unquoted companies, the Company may periodically agree to guarantee all or part of the borrowings of investee companies. Provision is made for any costs that may be incurred when the Directors consider it likely that the guarantee will crystallise.

The Company's exposure to market price risk comprises mainly movements in the value of the Company's investments. It should be noted that the prices of options tend to be more volatile than the prices of the underlying securities. The Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis.

The functional and presentational currency of the Company is Sterling, and therefore, the Company's principal exposure to foreign currency risk comprises investments priced in other currencies, principally US Dollars.

The Company invests in equities and other investments that are realisable.

related party transactions

These are listed in note 10 to the half yearly condensed financial statements.

By Order of the Board

Peregrine Moncreiffe

Chairman

16 September 2020

responsibility statement

The Directors confirm to the best of their knowledge that:

-- The condensed set of financial statements contained within this half yearly financial report have been prepared in accordance with International Accounting Standard ("IAS") 34 'Interim Financial Reporting' as adopted by the European Union and gives a true and fair view of the assets, liabilities, financial position and profit of the Company; and

-- The half yearly financial report includes a fair review of the information required by the FCA's Disclosure and Transparency Rule 4.2.7R being disclosure of important events that have occurred during the first six months of the financial year, 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; and

-- The half yearly financial report includes a fair review of the information required by the Disclosure and Transparency Rule 4.2.8R being disclosure of related party transactions during the first six months of the financial year, how they have materially affected the financial position of the Company during the period and any changes therein.

The half yearly financial report was approved by the Board on 16 September 2020 and the above responsibility statement was signed on its behalf by:

Peregrine Moncreiffe

Chairman

16 September 2020

condensed statement of comprehensive income (unaudited)

 
                                    Six months ended              Six months ended                 Year ended 
                                         31 July                       31 July                      31 January 
                                           2020                          2019                          2020 
                               Revenue   Capital     Total   Revenue   Capital     Total   Revenue   Capital     Total 
                               GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
----------------------------  --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 Income                          3,061         -     3,061     6,880         -     6,880    12,345         -    12,345 
 Net (losses)/gains on 
  investments at fair value          -  (57,495)  (57,495)         -    53,377    53,377         -    93,536    93,536 
 Currency exchange 
  (losses)/gains                     -     (136)     (136)         -       188       188         -       153       153 
                              --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 
 total income                    3,061  (57,631)  (54,570)     6,880    53,565    60,445    12,345    93,689   106,034 
 
 Expenses 
 Investment management fee 
  (note 10)                    (3,190)         -   (3,190)   (2,705)         -   (2,705)   (5,410)     (709)   (6,119) 
 Other expenses                  (482)         -     (482)     (504)         -     (504)   (1,063)         -   (1,063) 
                              --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 
 return before taxation          (611)  (57,631)  (58,242)     3,671    53,565    57,236     5,872    92,980    98,852 
 
 Taxation                         (18)         -      (18)         -         -         -         -         -         - 
                              --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 
 return for the period           (629)  (57,631)  (58,260)     3,671    53,565    57,236     5,872    92,980    98,852 
                              --------  --------  --------  --------  --------  --------  --------  --------  -------- 
 
 
 earnings per ordinary share 
 (note 5) 
 Basic                                            (411.4)p                        400.2p                        694.2p 
 Diluted                                          (411.4)p                        400.1p                        694.2p 
 

The total column of the statement is the Statement of Comprehensive Income of the Company prepared in accordance with International Financial Reporting Standards ("IFRS"). As adopted by the EU. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice ("SORP") issued by the Association of Investment Companies ("AIC").

All items in the above Statement derive from continuing operations. No operations were acquired or discontinued in the period.

The accompanying notes are an integral part of these financial statements.

condensed statement of changes in equity (unaudited)

 
                                                       Share      Share                  Capital 
                                            Share    options    premium    Capital    redemption    Revenue 
                                          capital    reserve    account    reserve       reserve    reserve      Total 
                                          GBP'000    GBP'000    GBP'000    GBP'000       GBP'000    GBP'000    GBP'000 
--------------------------------------  ---------  ---------  ---------  ---------  ------------  ---------  --------- 
 six months ended 31 July 2020 
 31 January 2020                              708          -      1,301    612,022           162      6,530    620,723 
 Total comprehensive income for the 
  period                                        -          -          -   (57,631)             -      (629)   (58,260) 
                                        ---------  ---------  ---------  ---------  ------------  ---------  --------- 
 
 31 July 2020                                 708          -      1,301    554,391           162      5,901    562,463 
                                        ---------  ---------  ---------  ---------  ------------  ---------  --------- 
 
 six months ended 31 July 2019 
 31 January 2019                              716         24      1,301    524,316           154      4,914    531,425 
 Total comprehensive income for the 
  period                                        -          -          -     53,565             -      3,671     57,236 
 Shares purchased for cancellation            (7)          -          -    (3,927)             7          -    (3,927) 
                                        ---------  ---------  ---------  ---------  ------------  ---------  --------- 
 
 31 July 2019                                 709         24      1,301    573,954           161      8,585    584,734 
                                        ---------  ---------  ---------  ---------  ------------  ---------  --------- 
 
 year ended 31 January 2020 
 31 January 2019                              716         24      1,301    524,316           154      4,914    531,425 
 Total comprehensive income for the 
  year                                          -          -          -     92,980             -      5,872     98,852 
 Dividend paid                                  -          -          -          -             -    (4,256)    (4,256) 
 Shares purchased for cancellation            (8)          -          -    (5,022)             8          -    (5,022) 
 Share option discharge                         -       (24)          -      (252)             -          -      (276) 
                                        ---------  ---------  ---------  ---------  ------------  ---------  --------- 
 
 31 January 2020                              708          -      1,301    612,022           162      6,530    620,723 
                                        ---------  ---------  ---------  ---------  ------------  ---------  --------- 
 

The accompanying notes are an integral part of these financial statements.

condensed balance sheet (unaudited)

 
                                                                  As at      As at         As at 
                                                                31 July    31 July    31 January 
                                                                   2020       2019          2020 
                                                                GBP'000    GBP'000       GBP'000 
------------------------------------------------------------  ---------  ---------  ------------ 
 non current assets 
 Investments at fair value through profit or loss               538,785    569,914       601,168 
                                                              ---------  ---------  ------------ 
 
                                                                538,785    569,914       601,168 
 current assets 
 Trade and other receivables                                      3,150      2,961         3,736 
 Cash and cash equivalents                                       21,044     12,865        17,805 
                                                              ---------  ---------  ------------ 
 
                                                                 24,194     15,826        21,541 
                                                              ---------  ---------  ------------ 
 
 total assets                                                   562,979    585,740       622,709 
                                                              ---------  ---------  ------------ 
 
 current liabilities 
 Trade and other payables                                         (516)    (1,006)       (1,986) 
                                                              ---------  ---------  ------------ 
 
 total liabilities                                                (516)    (1,006)       (1,986) 
                                                              ---------  ---------  ------------ 
 
 total assets less current liabilities                          562,463    584,734       620,723 
                                                              ---------  ---------  ------------ 
 
 net assets                                                     562,463    584,734       620,723 
                                                              ---------  ---------  ------------ 
 
 represented by: 
 Share capital                                                      708        709           708 
 Share options reserve                                                -         24             - 
 Share premium account                                            1,301      1,301         1,301 
 Capital reserve                                                554,391    573,954       612,022 
 Capital redemption reserve                                         162        161           162 
 Revenue reserve                                                  5,901      8,585         6,530 
                                                              ---------  ---------  ------------ 
 
 total equity attributable to equity holders of the company     562,463    584,734       620,723 
                                                              ---------  ---------  ------------ 
 
 net asset value per ordinary share (note 6): 
 Basic                                                           3,972p     4,120p        4,384p 
 Diluted                                                         3,972p     4,118p        4,384p 
 

The accompanying notes are an integral part of these financial statements.

condensed cash flow statement (unaudited)

 
                                                                   Six months ended  Six months ended   Year ended 
                                                                            31 July           31 July   31 January 
                                                                               2020              2019         2020 
                                                                            GBP'000           GBP'000      GBP'000 
-----------------------------------------------------------------  ----------------  ----------------  ----------- 
 cash flows from operating activities 
 Investment income received                                                   2,592             5,502        9,631 
 Deposit interest received                                                        1                13           18 
 Investment Manager's fees and performance fees paid                        (3,892)           (4,463)      (7,168) 
 Share based payment - discharge of options                                       -                 -        (276) 
 Other cash payments                                                          (599)             (987)      (1,225) 
                                                                   ----------------  ----------------  ----------- 
 
 cash (expended)/generated from operations (note 7)                         (1,898)                65          980 
 Taxation paid                                                                 (18)                 -            - 
                                                                   ----------------  ----------------  ----------- 
 
 net cash (outflow)/inflow from 
 operating activities                                                       (1,916)                65          980 
                                                                   ----------------  ----------------  ----------- 
 
 cash flows from investing activities 
 Purchases of investments                                                 (100,948)         (185,307)    (290,621) 
 Sales of investments                                                       106,166           171,297      286,006 
                                                                   ----------------  ----------------  ----------- 
 
 net cash inflow/(outflow) from investing activities                          5,218          (14,010)      (4,615) 
                                                                   ----------------  ----------------  ----------- 
 
 cash flows from financing activities 
 Transfer from subsidiary                                                        95                 -            - 
 Dividend paid                                                                    -                 -      (4,256) 
 Repurchase of Ordinary Shares for cancellation                                   -           (3,927)      (5,022) 
                                                                   ----------------  ----------------  ----------- 
 
 net cash inflow/(outflow) from financing activities                             95           (3,927)      (9,278) 
                                                                   ----------------  ----------------  ----------- 
 
 increase/(decrease) in cash and cash equivalents for the period              3,397          (17,872)     (12,913) 
 cash and cash equivalents at the start of the period                        17,805            30,669       30,669 
 Revaluation of foreign currency balances                                     (158)                68           49 
                                                                   ----------------  ----------------  ----------- 
 
 cash and cash equivalents at the end of the period                          21,044            12,865       17,805 
                                                                   ----------------  ----------------  ----------- 
 

The accompanying notes are an integral part of these financial statements.

notes to the financial statements (unaudited)

1. a) basis of accounting

North Atlantic Smaller Companies Investment Trust plc ("NASCIT") is a company incorporated and registered in England and Wales. The principal activity of the Company is that of an investment trust company within the meaning of Sections 1158/1159 of the Corporation Tax Act 2010.

The condensed financial statements of the Company have been prepared in accordance with International Accounting Standard (IAS) 34 - "Interim Financial Reporting" as adopted by the EU. The accounting policies and methods of computation followed in these half-yearly condensed financial statements are consistent with the most recent annual financial statements for the year ended 31 January 2020 included in the Annual Report.

The financial statements have also been prepared in accordance with the AIC SORP for the financial statements of investment trust companies and venture capital trusts, except to any extent where it is not consistent with the requirements of IFRS.

The financial information contained in this Half-Yearly Report does not constitute statutory accounts as defined in the Companies Act 2006. The financial information for the periods ended 31 July 2020 and 31 July 2019 have not been audited or reviewed by the Company's Auditor. The figure and financial information for the year ended 31 January 2020 are an extract from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the Auditor on those financial statements was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006.

b) functional currency

The functional currency of the Company is Pounds Sterling because this is the primary economic currency in which the Company operates. The financial statements are presented in Pounds Sterling rounded to the nearest thousand, except where otherwise indicated.

c) significant accounting policies

The accounting policies applied are consistent with those of the Annual Financial Report for the year ended 31 January 2020. Since the year end no new standards have been adopted.

d) accounting developments

In the current period, the Company has applied a number of amendments to IFRS, issued by the IASB mandatorily effective for an accounting period that begins on or after 1 January 2020. These include annual improvements to IFRS, changes in standards, legislative and regulatory amendments, changes in disclosure and presentation requirements. The adoption of these has not had any material impact on these condensed financial statements.

e) segmental reporting

The Directors are of the opinion that the Company is engaged in a single segment of business, being investment business. The Company invests in smaller companies principally based in countries bordering the North Atlantic Ocean.

f) going concern

The financial statements have been prepared on a going concern basis and on the basis that approval as an investment trust company will continue to be met. The Directors have made an assessment of the Company's ability to continue as a going concern and are satisfied that the Company has the resources to continue in business for the foreseeable future, being a period of 12 months from the date of this report. In making the assessment, the Directors have considered the likely impacts of the current COVID-19 pandemic on the Company, operations and the investment portfolio. The Directors noted the cash balance exceeds any short term liabilities; the Company holds a portfolio of liquid investments and is able to meet the obligations of the Company as they fall due. The surplus cash enables the Company to meet any funding requirements and finance future additional investments. The Company is a closed end fund, where assets are not required to be liquidated to meet day to day redemptions. The Directors have completed stress tests assessing the impact of changes in market value and income with associated cashflows. Whilst the economic future is uncertain, and the Directors believe it is possible the Company could experience further reductions in income and/or market value that this should not be to a level which would threaten the Company's ability to continue as a going concern. The Directors, the Manager and other service providers have put in place contingency plans to minimise disruption. Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern, having taken into account the liquidity of the Company's investment portfolio and the Company's financial position in respect of its cash flows, borrowing facilities and investment commitments (of which there are none of significance). Therefore, the financial statements have been prepared on the going concern basis.

2. investment management and performance fees

A Performance Fee is only payable if the investment portfolio, including Oryx at the adjusted price, outperforms the Sterling adjusted Standard & Poor's 500 Composite Index at the end of each financial year and is limited to a maximum payment of 0.5% of Shareholders' Funds, and is allocated 100% to capital.

An amount would be included in these financial statements for the Performance Fee that could be payable based on investment performance to 31 July 2020. At that date, no Performance Fee, inclusive of VAT, has been accrued for in the accounts (31 July 2019: GBPnil; 31 January 2020: GBP709,000).

Further details of fees paid to the investment manager can be found in Note 10, Related Party transactions.

3. taxation

The Company has an effective tax rate of 0%. The estimated effective tax rate is 0% as investment gains are exempt from tax owing to the Company's status as an Investment Trust and there is expected to be an excess of management expenses over taxable income and thus there is no charge for corporation tax.

During the half year to 31 July 2020, the Company recognised a total charge of GBP18,000 (half year to 31 July 2019: GBPnil, year ended 31 January 2020: GBPnil), representing irrecoverable withholding tax paid on overseas investment income.

4. dividends

A final dividend for the year ended 31 January 2020 of 30p per Ordinary Share has been declared by the Board, with an Ex date of 20 November 2020 and a payment date of 14 December 2020.

5. earnings per ordinary share

Basic return per Ordinary Share has been calculated using the weighted average number of Ordinary Shares in issue during the period.

 
                                         Revenue                       Capital                          Total 
                                 Net                 Per       Net                  Per       Net                  Per 
                              return    Ordinary   Share    return    Ordinary    Share    return    Ordinary    Share 
                             GBP'000      Shares   pence   GBP'000      Shares    pence   GBP'000      Shares    pence 
--------------------------  --------  ----------  ------  --------  ----------  -------  --------  ----------  ------- 
 six months ended 31 July 
 2020 
 Basic and diluted return 
  per Share                    (629)  14,160,000   (4.4)  (57,631)  14,160,000  (407.0)  (58,260)  14,160,000  (411.4) 
                            --------  ----------  ------  --------  ----------  -------  --------  ----------  ------- 
 
 six months ended 31 July 
 2019 
 Basic return per Share        3,671  14,300,663    25.7    53,565  14,300,663    374.5    57,236  14,300,663    400.2 
 Share options*                    -       5,067                 -       5,067                  -       5,067 
                            --------  ----------  ------  --------  ----------  -------  --------  ----------  ------- 
 
 Diluted return per Share      3,671  14,305,703    25.7    53,565  14,305,703    374.4    57,236  14,305,703    400.1 
                            --------  ----------  ------  --------  ----------  -------  --------  ----------  ------- 
 
 year ended 31 January 
 2020 
 Basic and diluted return 
  per Share                    5,872  14,240,620    41.2    92,980  14,240,620    652.9    98,852  14,240,620    694.2 
                            --------  ----------  ------  --------  ----------  -------  --------  ----------  ------- 
 

Basic return per Ordinary Share has been calculated using the weighted average number of Ordinary Shares in issue during the period.

* Excess of total number of potential shares on Option Conversion over the number that could be issued at the average market price, as calculated in accordance with IAS 33: Earnings per share.

6. net asset value per ordinary share

The basic and diluted net asset value per Ordinary Share are based on net assets of GBP562,463,000 (31 July 2019: GBP584,734,000; 31 January 2020: GBP620,723,000) and on 14,160,000 Ordinary Shares (31 July 2019: 14,192,757; 31 January 2020: 14,160,000) being the number of Ordinary Shares in issue at the period end.

The diluted net asset value per Ordinary Share for 31 July 2019, was calculated on the assumption that the outstanding 10,000 Share Options were exercised at the prevailing exercise prices, giving a total of 14,202,757 issued Ordinary Shares. There is no dilutive effect for 31 July 2020 or 31 January 2020 as there were no options outstanding.

During the period to 31 July 2020, no shares were bought back for cancellation.

adjustment for Oryx

The Company has also reported an adjusted net asset value per share using equity accounting, in accordance with its previous method of valuing its investment in Oryx. The Company has chosen to report this net asset value per share to show the difference derived if equity accounting were to be used. Equity accounting permits the use of net asset value pricing for listed assets which in the case of Oryx is higher than its fair value.

The values of Oryx, as at each period end, are as follows:

 
                                                 31 July 2020 GBP'000   31 July 2019 GBP'000   31 January 2020 GBP'000 
----------------------------------------------  ---------------------  ---------------------  ------------------------ 
 Oryx at Fair value (traded price)                             74,831                 57,960                    72,251 
 Oryx value using Equity Accounting                            88,544                 77,059                    89,502 
 Increase in net assets using Equity 
  Accounting                                                   13,713                 19,099                    17,251 
 
 
                                       31 July 2020   31 July 2019   31 January 2020 
------------------------------------  -------------  -------------  ---------------- 
 Net asset value per Share 
 - Basic                                     3,972p         4,120p            4,384p 
 - Diluted                                   3,972p         4,118p            4,384p 
 
 Net asset value per Share adjusted 
 - Basic                                     4,069p         4,255p            4,505p 
 - Diluted                                   4,069p         4,253p            4,505p 
 

7. share based remuneration

As at 31 July 2020, there were no options remaining in issue (31 July 2019: 10,000; 31 January 2020: nil) under the 2011 options scheme.

8. reconciliation of total return before taxation to cash (expended)/generated from operations

 
                                                 Six months      Six months 
                                                      ended           ended         Year ended 
                                               31 July 2020    31 July 2019    31 January 2020 
                                                    GBP'000         GBP'000            GBP'000 
-------------------------------------------  --------------  --------------  ----------------- 
 Total return before taxation                      (58,242)          57,236             98,852 
 Losses/(gains) on investments                       57,631        (53,565)           (93,689) 
 Interest reinvested                                      -         (1,050)            (2,413) 
 Share option discharge                                   -               -              (276) 
 Net return from Subsidiary                               -             (7)                  - 
 Increase in debtors and accrued income               (584)           (365)              (133) 
 Decrease in creditors and accruals                   (702)         (2,184)            (1,361) 
                                             --------------  --------------  ----------------- 
 
 Cash (expended)/generated from operations          (1,898)              65                980 
                                             --------------  --------------  ----------------- 
 

9. investments

financial assets at fair value through profit or loss

This requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following three levels:

   --      Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. 

-- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

-- Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.

For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes 'observable' requires significant judgement by the Company. The Company considers observable data from investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange quoted market bid prices at the close of business on the Balance Sheet date, without adjustment for transaction costs necessary to realise the asset.

The table below sets out fair value measurements as at the period end, by the level in the fair value hierarchy into which the fair value measurement is categorised.

 
 six months ended 31 July         Total    Level 1    Level 2    Level 3 
  2020                          GBP'000    GBP'000    GBP'000    GBP'000 
----------------------------  ---------  ---------  ---------  --------- 
 Equity investments at fair 
  value                         451,559    380,890          -     70,669 
 Fixed interest investments 
  at fair value                  87,226     43,982          -     43,244 
                              ---------  ---------  ---------  --------- 
 Total                          538,785    424,872          -    113,913 
                              ---------  ---------  ---------  --------- 
 
 six months ended 31 July         Total    Level 1    Level 2    Level 3 
  2019                          GBP'000    GBP'000    GBP'000    GBP'000 
----------------------------  ---------  ---------  ---------  --------- 
 Equity investments at fair 
  value                         447,339    372,822          -     74,517 
 Fixed interest investments 
  at fair value                 122,575     82,249          -     40,326 
                              ---------  ---------  ---------  --------- 
 Total                          569,914    455,071          -    114,843 
                              ---------  ---------  ---------  --------- 
 
 year ended 31 January 2020       Total    Level 1    Level 2    Level 3 
                                GBP'000    GBP'000    GBP'000    GBP'000 
----------------------------  ---------  ---------  ---------  --------- 
 Equity investments at fair 
  value                         494,623    420,331          -     74,292 
 Fixed interest investments 
  at fair value                 106,545     63,841          -     42,704 
                              ---------  ---------  ---------  --------- 
 Total                          601,168    484,172          -    116,996 
                              ---------  ---------  ---------  --------- 
 

reconciliation of level 3 movement - financial assets at 31 July 2020

 
                                                               Total   Equity investments   Fixed interest investments 
                                                             GBP'000              GBP'000                      GBP'000 
---------------------------------------------------------  ---------  -------------------  --------------------------- 
 Opening fair value at 31 January 2020                       116,996               74,292                       42,704 
 Purchases                                                     4,136                4,136                            - 
 Sales                                                       (2,985)              (2,985)                            - 
 Total gains included in gains on investments in the 
 statement of comprehensive income: 
 - on assets sold                                            (1,057)              (1,057)                            - 
 - on assets held at the end of the period                   (3,177)              (3,717)                          540 
                                                           ---------  -------------------  --------------------------- 
 Closing fair value                                          113,913               70,669                       43,244 
                                                           ---------  -------------------  --------------------------- 
 

unquoted at directors' estimate of fair value

Unquoted investments are valued in accordance with the International Private Equity and Venture Capital Valuation ("IPEV") Guidelines. Their valuation incorporates all factors that market participants would consider in setting a price. The primary valuation techniques employed to value the unquoted investments are earnings multiples, recent transactions and the net asset basis. Valuations in local currency are translated into Sterling at the exchange rate ruling on the Balance Sheet date.

Included within the Statement of Comprehensive Income as at 31 July 2020, is a loss of GBP3,177,000 relative to the movement in the fair value of the unquoted investments valued using IPEV valuation techniques.

the valuation techniques applied are based on the following assumptions:

Unquoted investments are usually valued by reference to the valuation multiples of similar listed companies or from transactions of similar businesses. Where appropriate discounts are then applied to those comparable multiples to reflect differences in size and liquidity. These enterprise values are then adjusted for net debt to arrive at an equity valuation. Where companies are in compliance with the loan note terms these loans are generally held at par plus accrued interest (where applicable) unless the enterprise value suggests that the debt cannot be recovered.

10. related party transactions

There have been no changes to the related party arrangements or transactions as reported in the Statutory Annual Financial Report for the year ended 31 January 2020.

The Administrator, Harwood Capital LLP, is regarded as a related party of the Company. The amounts incurred by Harwood Capital LLP and Growth Financial Services Limited in respect of investment management for the period are as follows:

 
                                         Six months ended   Six months ended         Year ended 
                                             31 July 2020       31 July 2019    31 January 2020 
                                                  GBP'000            GBP'000            GBP'000 
--------------------------------------  -----------------  -----------------  ----------------- 
 Fees incurred by Harwood Capital LLP               1,914              1,623              3,246 
 Fees incurred by GFS                               1,276              1,082              2,164 
 Performance fee                                        -                  -                654 
 Irrecoverable VAT thereon                              -                  -                 55 
                                        -----------------  -----------------  ----------------- 
                                                    3,190              2,705              6,119 
                                        -----------------  -----------------  ----------------- 
 

At 31 July 2020, GBP319,000 was payable to Harwood Capital in respect of outstanding management fees (31 July 2019: GBP270,000, 31 January 2020: GBP270,000). No amounts were outstanding to GFS.

Fees paid to Directors, for the six months ended 31 July 2020 amounted to GBP65,000 (six months ended 31 July 2019: GBP65,000; year ended 31 January 2020: GBP130,000).

At 31 July 2020, GBP11,000 was payable to Directors in respect of outstanding fees (31 July 2019: GBP11,000, 31 January 2020: GBP11,000).

shareholder information

financial calendar

 
 Announcement of results and annual report   May 
 Annual General Meeting                      June 
 Half Yearly figures announced               September 
 Half Yearly Report posted                   September 
 

share price

The Company's mid-market share price is quoted daily in the Financial Times appearing under "Investment Companies".

It also appears on:

SEAQ Ordinary Shares: NAS

Trustnet: www.trustnet.com

net asset value

The latest net asset value of the Company can be found on the Company's website: www.nascit.co.uk

share dealing

Investors wishing to purchase more Ordinary Shares or dispose of all or part of their holding may do so through a stockbroker. Many banks also offer this service.

The Company's registrars are Link Asset Services. In the event of any queries regarding your holding of shares, please contact the registrars on: 0871 664 0300, or by email on enquiries@linkgroup.co.uk

Changes of name or address must be notified to the registrars in writing at:

Link Asset Services

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

Directors

Peregrine Moncreiffe (Chairman)

Christopher Mills (Chief Executive)

Lord Howard of Rising

G Walter Loewenbaum

Sir Charles Wake

Administrator

Harwood Capital LLP

(Authorised and regulated by the Financial Conduct Authority)

6 Stratton Street

Mayfair

London W1J 8LD

Telephone: 020 7640 3200

Financial Adviser and Stockbroker

Winterflood Investment Trusts

The Atrium Building

Cannon Bridge

25 Dowgate Hill

London EC4R 2GA

Registered Office

6 Stratton Street

Mayfair

London W1J 8LD

Telephone: 020 7640 3200

Registrars

Link Asset Services

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

Auditors

RSM UK Audit LLP

25 Farringdon Street

London EC4A 4AB

Company Secretary

Derringtons Limited

Hyde Park House

5 Manfred Road

London SW15 2RS

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR EQLFFBKLBBBK

(END) Dow Jones Newswires

September 16, 2020 11:11 ET (15:11 GMT)