TIDMSMT
RNS Number : 5702R
Scottish Mortgage Inv Tst PLC
08 November 2021
RNS Announcement
---------------------------------------------------------------------------
Scottish Mortgage Investment Trust PLC
===============================================================================
Legal Entity Identifier: 213800G37DCS3Q9IJM38
Results for the six months to 30 September 2021
===================================================================================
The following is the unaudited Interim Financial Report for the six months
to 30 September 2021 which was approved by the Board on 5 November 2021.
Interim management report
=============================================================================
Philosophy:
We aim to identify, own and support the world's most exceptional
growth companies whether public or private; companies that offer
the potential of genuinely transformative returns. Over the
long-run, it is such companies that drive stock-market returns.
They make equity investing truly worthwhile.
We see our role as partners to these companies. Supporting them
through the provision of both capital and patience and backing them
to do incredible things. Their path will rarely be a straight-line.
All great companies face periods of difficulty and market doubt, if
not outright hostility. These periods can be difficult to endure
but great returns cannot be achieved without such testing
journeys.
This requires us to be resolutely long-term through both good
times and bad. The road ahead will have its fair share of bumps,
some companies will not work out as hoped but it is through
supporting and holding onto just a small number of extraordinary
companies that exceptional returns can be achieved.
Returns:
This approach has driven our returns. Over ten years Scottish
Mortgage's net asset value per share with debt at fair value (NAV)
has increased by 1,072% versus a 275% increase in the FTSE
All-World index (both in total return terms). Over five years it
has increased by 341% against 83%. Six months of data is always too
short a period to infer much that is useful from stock prices.
However, since the end of March our NAV rose by 16% compared to a
9% increase in the index.
Although our focus remains on long-term capital appreciation we
are aware that a small but consistent dividend is of value to many
shareholders. Acknowledging the Company's recent performance, the
Board is recommending an interim dividend of 1.52p, an increase of
5% over last year's payment of 1.45p.
Portfolio:
Over short periods, such as the last six months, the market has
naturally found various things to worry about. A long-term approach
is helpful here. It enables us to focus not on the cacophony of the
stock-markets but the more predictable drumbeat of deep underlying
progress. It has been the long-term and exponential improvements in
computing technologies, genomic sequencing and energy storage that
continue to strike us as the most important determinates of
long-term returns.
These long-term trends may be too slow to shape financial news
headlines in a single period but they compound over time as they
grow in impact. Moreover, the powerful trends in computing
technologies appear to not just be continuing but broadening in
utility and application beyond the narrow remits of consumer
internet to industries larger and far more diverse.
This broadening is slowly being reflected in the changing shape
of the portfolio. The Trust's investment in healthcare and biology
companies for example has grown from 11.6% a year ago to 21.4%
today. We are finding and supporting a growing number of businesses
that we believe are benefiting from the intersection of biology and
information technology.
Our largest holding, Moderna has been the greatest contributor
to this change, writing what is effectively code in the form of RNA
to program human cells. Moderna has helped the world to start
escaping the tragedies and confinement of the last 18 months.
However, it is the breadth and scalability of its mRNA technology
platform rather than its Covid vaccine that holds the greatest
promise. Its pipeline of programs is both large and growing,
targeting diseases such as flu, Zika, HIV, cancer and many
more.
Recursion Pharmaceuticals and Tempus are successfully leveraging
growing quantities of big data combined with machine learning to
powerful effect in drug discovery and cancer treatment. We took a
new holding in 10x Genomics whose products enable the analysis of
single cells complementing Illumina's next generation sequencing
and enabling a more granular understanding of biology.
We continue to see opportunities for technology platforms to
improve resource allocation in the economy across a growing range
of areas such as freight, food and finance. At the same time the
question of how to regulate big tech platforms continues to
challenge law-makers across the globe. China has taken to this task
with particular vigour. It has demonstrated far greater speed and
forcefulness in approach than elsewhere. This sharp adjustment has
naturally presented challenges both in market sentiment and for
technology businesses that are having to adapt to a rapidly
altering regulatory environment. At the same time there has been a
push for the rewards of China's growing prosperity to be more
evenly distributed. Together these shifts have negatively impacted
the share prices of many of our Chinese holdings.
The underlying progress of the companies however remains
surprisingly strong. Alibaba and Tencent both continue to grow
revenue in excess of 20% whilst Meituan and Pinduoduo are both
growing considerably faster. The companies themselves are keenly
aware of their need to contribute not just to shareholder returns
but to society to ensure true sustainability. We will continue to
assess the long-term implications of the new regulatory approach as
they apply to each of our holdings.
Outlook:
Our attention remains focused on maximising returns over the
next ten years for Scottish Mortgage shareholders. We have no right
to claim insight over the possible gyrations of stock markets over
shorter time periods.
As we anticipate the next decade we are both optimistic and
enthused. It strikes us that there are multiple drivers of change
and thus opportunity. These include the continuing digitisation of
our economy, the intersection of information technology and biology
and the much-needed energy transition. Together they provide an
opportunity set that is profound and diverse. We look forward to
continuing to back the companies and visionaries that drive and
take advantage of these powerful long-term trends.
The principal risks and uncertainties facing the Company are set
out at the end of this document.
5 November 2021
For a definition of terms see Glossary of Terms and Alternative
Performance Measures at the end of this document.
Total return information sourced from Refinitiv/StatPro/Baillie
Gifford.
See disclaimer at end of this document.
Past performance is not a guide to future performance.
Responsibility statement
========================
We confirm that to the best of our knowledge:
a) the condensed set of Financial Statements has been prepared
in accordance with FRS 104 'Interim Financial Reporting';
b) the Interim Management Report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7R
(indication of important events during the first six months, 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
c) the Interim Financial Report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.8R
(disclosure of related party transactions and changes therein).
By order of the Board
Fiona McBain
Chair
5 November 2021
Income statement (unaudited)
============================
For the six months ended For the six months ended
30 September 2021 30 September 2020
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================================== ======== ========= ========= ======== ========= =========
Gains on investments - 2,721,589 2,721,589 - 6,376,063 6,376,063
Currency (losses)/gains - (15,778) (15,778) - 6,895 6,895
Income from investments and interest receivable 13,640 - 13,640 10,659 - 10,659
Investment management fee (note 3) - (27,179) (27,179) - (18,727) (18,727)
Other administrative expenses (3,644) - (3,644) (3,279) - (3,279)
================================================== ======== ========= ========= ======== ========= =========
Net return before finance costs and taxation 9,996 2,678,632 2,688,628 7,380 6,364,231 6,371,611
================================================== ======== ========= ========= ======== ========= =========
Finance costs of borrowings - (19,526) (19,526) - (15,764) (15,764)
================================================== ======== ========= ========= ======== ========= =========
Net return on ordinary activities before taxation 9,996 2,659,106 2,669,102 7,380 6,348,467 6,355,847
================================================== ======== ========= ========= ======== ========= =========
Tax on ordinary activities (1,281) (4,905) (6,186) (387) - (387)
================================================== ======== ========= ========= ======== ========= =========
Net return on ordinary activities after taxation 8,715 2,654,201 2,662,916 6,993 6,348,467 6,355,460
================================================== ======== ========= ========= ======== ========= =========
Net return per ordinary share (note 4) 0.62p 187.38p 188.00p 0.48p 433.36p 433.84p
================================================== ======== ========= ========= ======== ========= =========
Dividends proposed per ordinary share (note 5) 1.52p 1.45p
================================================== ======== ========= ========= ======== ========= =========
The accompanying notes on the following pages are an integral
part of the Financial Statements.
The total column of this statement is the profit and loss
account of the Company. The supplementary revenue and capital
return columns are prepared under guidance published by the
Association of Investment Companies.
All revenue and capital items in this statement derive from
continuing operations.
A Statement of Comprehensive Income is not required as all gains
and losses of the Company have been reflected in the above
statement.
Balance sheet (unaudited)
=========================
At 30 September 2021 At 31 March 2021
(audited)
GBP'000 GBP'000
Fixed assets
Investments held at fair value through profit or loss (note 6) 20,955,958 18,042,688
=============================================================== ==================== ================
Current assets
Debtors 1,892 20,883
Shares sold from treasury awaiting settlement 12,213 -
Cash and cash equivalents 198,835 212,128
=============================================================== ==================== ================
212,940 233,011
=============================================================== ==================== ================
Creditors
Amounts falling due within one year:
Bank loans (note 7) (327,066) (264,550)
Buybacks outstanding and related stamp duty - (25,418)
Other creditors and accruals (24,162) (21,020)
=============================================================== ==================== ================
(351,228) (310,988)
=============================================================== ==================== ================
Net current liabilities (138,288) (77,977)
=============================================================== ==================== ================
Total assets less current liabilities 20,817,670 17,964,711
=============================================================== ==================== ================
Creditors
Amounts falling due after more than one year:
Bank loans (note 7) (504,220) (362,289)
Loan notes (note 7) (682,827) (482,629)
Debenture stocks (note 7) (127,711) (127,864)
Provision for deferred tax liability (4,029) (2,459)
=============================================================== ==================== ================
(1,318,787) (975,241)
=============================================================== ==================== ================
19,498,883 16,989,470
=============================================================== ==================== ================
Capital and reserves
Share capital 74,239 74,239
Share premium account 784,946 781,771
Capital redemption reserve 19,094 19,094
Capital reserve 18,611,889 16,105,297
Revenue reserve 8,715 9,069
=============================================================== ==================== ================
Shareholders' funds 19,498,883 16,989,470
=============================================================== ==================== ================
Net asset value per ordinary share
(after deducting borrowings at book)* 1,381.1p 1,195.1p
=============================================================== ==================== ================
Ordinary shares in issue (note 9) 1,411,799,194 1,421,618,969
=============================================================== ==================== ================
* See Glossary of Terms and Alternative Performance Measures at
the end of this announcement.
The accompanying notes on the following pages are an integral
part of the Financial Statements.
*
Statement of Changes in Equity (unaudited)
==========================================
For the six months ended 30 September 2021
Share premium Capital
Called up share account redemption Capital Shareholders'
capital GBP'000 reserve reserve* Revenue reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================== =============== ================== ================= ========== =============== =============
Shareholders'
funds at 1 April
2021 74,239 781,771 19,094 16,105,297 9,069 16,989,470
Net return on
ordinary
activities after
taxation - - - 2,654,201 8,715 2,662,916
Shares bought back - - - (137,732) - (137,732)
Shares sold from
treasury (note 9) - 3,175 - 9,038 - 12,213
Dividends paid
during the period
(note 5) - - - (18,915) (9,069) (27,984)
================== =============== ================== ================= ========== =============== =============
Shareholders'
funds at 30
September 2021 74,239 784,946 19,094 18,611,889 8,715 19,498,883
================== =============== ================== ================= ========== =============== =============
For the six months ended 30 September 2020
Share premium Capital
Called up share account redemption Capital Shareholders'
capital GBP'000 reserve reserve* Revenue reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================== =============== ================== ================= ========== =============== =============
Shareholders'
funds at 1 April
2020 74,239 764,521 19,094 7,363,915 22,865 8,244,634
Net return on
ordinary
activities after
taxation - - - 6,348,467 6,993 6,355,460
Shares bought back - - - (164,564) - (164,564)
Shares sold from
treasury (note 9) - 58,413 - 128,434 - 186,847
Dividends paid
during the period
(note 5) - - - (4,441) (22,865) (27,306)
================== =============== ================== ================= ========== =============== =============
Shareholders'
funds at 30
September 2020 74,239 822,934 19,094 13,671,811 6,993 14,595,071
================== =============== ================== ================= ========== =============== =============
* The Capital Reserve balance at 30 September 2021 includes
investment holding gains on fixed asset investments of
GBP12,122,474,000 (30 September 2020 - gains of
GBP9,878,399,000).
The accompanying notes on the following pages are an integral
part of the Financial Statements.
Cash flow statement (unaudited)
===============================
Six months to Six months to
30 September 2021 30 September 2020
GBP'000 GBP'000
======================================================== ================== ==================
Cash flows from operating activities
Net return on ordinary activities before taxation 2,669,102 6,355,847
Gains on investments (2,721,589) (6,376,063)
Currency losses/(gains) 15,778 (6,895)
Finance costs of borrowings 19,526 15,764
Overseas capital gains tax incurred (3,335) -
Overseas withholding tax incurred (1,281) (387)
Changes in debtors and creditors 1,657 10,634
======================================================== ================== ==================
Cash from operations (20,142) (1,100)
Interest paid (18,518) (16,477)
======================================================== ================== ==================
Net cash outflow from operating activities (38,660) (17,577)
======================================================== ================== ==================
Net cash (outflow)/inflow from investing activities (172,338) 66,171
======================================================== ================== ==================
Equity dividends paid (note 5) (27,984) (27,306)
Shares bought back into treasury and stamp duty thereon (163,149) (164,534)
Shares sold from treasury - 186,847
Debenture repaid - (20,000)
Bank loans drawn down and loan notes issued (note 7) 386,090 19,972
======================================================== ================== ==================
Net cash inflow/(outflow) from financing activities 194,957 (5,021)
======================================================== ================== ==================
(Decrease)/increase in cash and cash equivalents (16,041) 43,573
Exchange movements 2,748 (4,143)
Cash and cash equivalents at start of period 212,128 38,526
Cash and cash equivalents at end of period 198,835 77,956
======================================================== ================== ==================
Cash and cash equivalents represent cash at bank and short term
money market deposits repayable on demand.
The accompanying notes are an integral part of the Financial
Statements.
Holding period of investments as at 30 September 2021
=====================================================
More than 5 years 2-5 years Less than 2 years
==================================== === =============================== === =====================================
Name % of Name % of Name % of
total total total
assets assets assets
========================== ======== === ===================== ======== === =========================== ========
Illumina (10) 5.8 NIO Inc (p) 2.8 Moderna 9.2
ASML 5.5 Delivery Hero 2.6 MercadoLibre 1.9
ByteDance Ltd
Tesla Inc 4.7 (U) 1.8 Northvolt (U) 1.8
Tencent Holdings Affirm Holdings
(10) 4.1 Inc (p) 1.7 Adyen 1.4
Ginkgo BioWorks
Inc (p) 3.2 Shopify 1.2 Stripe Inc (U) 1.3
Meituan Dianping Space Exploration
(p) 2.9 Technologies (U) 1.2 Carvana 1.0
Amazon.com (10) 2.6 Wayfair 0.9
Recursion
Alibaba Group Pharmaceuticals
(p) 2.5 Inc (p) 1.1 Snowflake Inc (p) 0.8
NVIDIA 2.2 Ocado 0.7
Tempus Labs Inc
Kering (10) 2.1 (U) 1.1 DoorDash 0.7
Netflix 2.0 Zoom 0.9 Epic Games (U) 0.7
Ant International
Wise Plc (p) 1.9 Ltd (U) 0.9 Lilium NV (p) 0.7
Blockstream Corporations
Zalando 1.6 Pinduoduo Inc 0.8 Inc (U) 0.4
Zipline
International
HelloFresh (p) 1.5 Inc (U) 0.7 GoPuff Inc (U) 0.4
Spotify Technology Vir Biotechnology Honor Technology
SA (p) 1.3 Inc (p) 0.6 Inc (U) 0.4
You & Mr Jones The Production
(U) 1.2 Board (U) 0.5 Blockchain.com (U) 0.4
Denali Therapeutics
(p) 1.1 Tanium Inc (U) 0.5 Solugen Inc (U) 0.4
Sana Biotechnology Redwood Materials
Ferrari 1.0 Inc (p) 0.4 Inc (U) 0.4
Housing Development
Finance Corporation Indigo Agriculture
(10) Inc (U) 0.4 Rappi Inc (U) 0.4
Relativity Space
0.6 Carbon Inc (U) 0.4 Inc (U) 0.3
Warby Parker Inc Full Truck Alliance ChargePoint Holdings
(p) 0.5 Ltd (p) 0.3 Inc 0.3
Bolt Threads Inc
Kinnevik 0.5 (U) 0.3 Databricks Inc (U) 0.3
HeartFlow Inc Joby Aviation Inc
Atlas Copco (10) 0.5 (U) 0.2 (p) 0.3
Thumbtack Inc Rubius Therapeutics Jiangxiaobai Holdings
(U) 0.4 Inc (p) 0.2 Ltd (U) 0.3
Aurora Innovation Workrise Technologies
Airbnb Inc (p) 0.3 Inc (U) 0.2 Inc (U) 0.3
Innovation Works 0.2 JRSK Inc (Away) 0.2 Capsule (U) 0.2
(U)
Development Fund Uptake Technologies 0.2 10x Genomics 0.2
(U 10) Inc (U)
Essence Healthcare 0.2 KSQ Therapeutics <0.1 Convoy Inc (U) 0.2
(U) Inc (U)
ARCH Ventures 0.1 ARCH Ventures <0.1 Horizon Robotics 0.2
Fund IX (U) Fund X (U)
Zocdoc Inc (U) 0.1 Overage (U) Nuro Inc (U) 0.2
Sinovation Fund <0.1
III (U)
WI Harper Fund <0.1
VIII (U)
Udacity Inc (U) <0.1
WI Harper Fund <0.1
VII (U 10)
Global AI Opportunities <0.1
Fund -
Intarcia Therapeutics
Inc (U)
ARCH Ventures <0.1 Clear Secure Inc 0.1
Fund X (U)
Clover Health Investments 0.1
(p)
KE Holdings 0.1
Zymergen (p) 0.1
PsiQuantum (U) 0.1
Salt Pay Co Ltd (U) 0.1
ARCH Ventures Fund <0.1
XI (U)
Beam Therapeutics <0.1
Total 50.6 Total 21.2 Total 27.3
========================== ======== ===================== ======== =========================== ========
(U) Denotes unlisted (private company) security.
(p) Denotes listed security previously held in the portfolio as
an unlisted (private company) security (.)
(10) (Denotes security held for more than 10 years.)
(Net liquid assets represent 0.9% of total assets. See Glossary
of Terms and Alternative Performance Measures at the end of this
announcement.)
List of investments at 30 September 2021 (unaudited)
====================================================
Name Business Fair value % of total Contribution Fair value
30 September assets to absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
=============== ================ ============== ============== ============= =============== ==========
Clinical stage
biotechnology
Moderna company 1,943,247 9.2 7.2 646,271
Biotechnology
Illumina equipment 1,221,406 5.8 0.6 1,059,297
ASML Lithography 1,163,871 5.5 1.4 923,130
Electric cars,
autonomous
driving
and solar
Tesla Inc energy 983,770 4.7 0.7 828,668
Tencent Internet
Holdings services 858,577 4.1 (1.4) 1,110,755
Significant
Ginkgo BioWorks Bio-engineering addition to
Inc (p) company 674,515 3.2 2.1 investment 259,544
Meituan Local services
Dianping (p) aggregator 606,440 2.9 (0.7) 717,711
Designs and
manufactures
electric
and autonomous
NIO Inc (p) vehicles 593,453 2.8 (0.1) 634,335
Online food
delivery
Delivery Hero service 549,846 2.6 - 544,212
Online retailer Significant
and cloud reduction to
Amazon.com computing 546,650 2.6 0.4 investment 910,847
Online retailing
Alibaba Group and financial
(p) services 525,851 2.5 (1.5) 792,539
NVIDIA Visual computing 471,257 2.2 1.2 334,991
Luxury goods
producer and
Kering retailer 446,133 2.1 0.3 422,631
Subscription
service for TV
shows
Netflix and movies 420,171 2.0 0.3 351,135
Latin American
e-commerce
MercadoLibre platform 404,568 1.9 0.2 303,802
Online platform
to send and
receive
Wise Plc (p) money 403,024 1.9 1.1 189,200
ByteDance Ltd
Series
E Pref. (U) Social media 199,017 0.9 0.1 173,187
ByteDance Ltd
Series
E-1 Pref. (U) Social media 179,042 0.9 0.1 155,805
============== ============== ============= =============== ==========
378,059 1.8 0.2 328,992
============== ============== ============= =============== ==========
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
Series E1 electric
Pref. (U) vehicles 233,679 1.1 0.1 218,459
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
Series E2 electric
Pref. (U) vehicles 115,663 0.5 - New purchase -
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for Significant
Series A electric addition to
Ord. (U) vehicles 17,499 0.1 - investment 362
Name Business Fair value % of total Contribution Fair value
30 September assets to absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
=============== ================ ============== ============== ============= =============== ==========
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
MIP 1 electric
Warrants (U) vehicles 4,381 0.1 - 4,094
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for Significant
MIP 4 electric addition to
Warrants (U) vehicles 1,495 <0.1 - investment 364
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
MIP 3 electric
Warrants (U) vehicles 1,301 <0.1 - 1,214
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
MIP 2 electric
Warrants (U) vehicles 780 <0.1 - 729
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
Series D1 electric New
Pref. (U) vehicles 551 <0.1 - purchase -
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
MIP 5 electric
Warrants (U) vehicles 473 <0.1 - New purchase -
Battery
developer and
manufacturer,
specialised in
lithium-ion
Northvolt AB technology for
Series D electric
Pref. (U) vehicles 300 <0.1 - 280
376,122 1.8 0.1 225,502
============== ============== ============= =============== ==========
Online platform
which provides
Affirm Holdings lending and
Inc consumer credit
Class A (p) services 198,608 0.9 0.4 114,837
Online platform
which provides
Affirm Holdings lending and
Inc consumer credit
Class B (p) services 163,749 0.8 0.3 94,681
362,357 1.7 0.7 209,518
============== ============== ============= =============== ==========
International
online clothing
Zalando retailer 334,539 1.6 - 290,851
HelloFresh (p) Grocery retailer 318,390 1.5 0.5 253,246
Global payment
Adyen company 304,010 1.4 0.4 237,488
Spotify Online music
Technology SA streaming
(p) service 276,378 1.3 (0.3) 321,399
Stripe Inc
Series G Pref. Online payment
(U) platform 179,483 0.9 0.2 149,651
Stripe Inc
Series Class B Online payment
Common (U) platform 63,191 0.3 0.1 New purchase -
Stripe Inc
Series H Pref. Online payment
(U) platform 26,330 0.1 - 21,954
============== ============== ============= =============== ==========
269,004 1.3 0.3 171,605
============== ============== ============= =============== ==========
Name Business Fair value % of total Contribution to Fair value
30 September assets absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
================ ==================== =============== =============== =============== =============== ==========
Cloud-based commerce
platform
Shopify provider 262,154 1.2 0.3 209,270
Space
Exploration
Technologies Designs,
Corp manufactures and
Series J Pref. launches rockets
(U) and spacecraft 109,142 0.5 0.1 98,196
Space
Exploration
Technologies Designs,
Corp manufactures and
Series N Pref. launches rockets
(U) and spacecraft 87,718 0.4 - 78,921
Space
Exploration
Technologies Designs,
Corp manufactures and Significant
Class A Common launches rockets addition to
(U) and spacecraft 42,790 0.2 - investment 17,404
Space
Exploration
Technologies Designs,
Corp manufactures and
Class C Common launches rockets
(U) and spacecraft 13,198 0.1 - 11,875
252,848 1.2 0.1 206,396
=============== =============== =============== =============== ==========
You & Mr Jones
Class A Units
(U) Digital advertising 185,412 0.9 0.3 135,899
You & Mr Jones
Class C Units
(U) Digital advertising 60,743 0.3 0.1 42,971
=============== =============== =============== =============== ==========
246,155 1.2 0.4 178,870
=============== =============== =============== =============== ==========
Uses image
recognition/machine
learning and
Recursion automation to Significant
Pharmaceuticals improve drug addition to
Inc (p) discovery 238,359 1.1 1.1 investment 55,509
Denali
Therapeutics
(p) Biotechnology 230,020 1.1 - 253,963
Offers molecular
diagnostics tests
for cancer and
Tempus Labs Inc aggregates
Series E Pref. clinical oncology
(U) records 131,682 0.6 - 128,690
Offers molecular
diagnostics tests
for cancer and
Tempus Labs Inc aggregates
Series F Pref. clinical oncology
(U) records 48,066 0.2 - 46,974
Offers molecular
diagnostics tests
for cancer and
Tempus Labs Inc aggregates
Series G-2 clinical oncology
Pref. (U) records 37,082 0.2 - 36,240
Offers molecular
diagnostics tests
for cancer and
Tempus Labs Inc aggregates
Series G Pref. clinical oncology
(U) records 7,758 0.1 - 7,581
=============== =============== =============== =============== ==========
224,588 1.1 - 219,485
=============== =============== =============== =============== ==========
Significant
reduction to
Ferrari Luxury automobiles 211,390 1.0 - investment 304,315
Online platform for
buying used
Carvana cars 205,342 1.0 0.2 174,501
Name Business Fair value % of total Contribution Fair value
30 September assets to absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
=============== =============== =============== =============== ============== ============== ==========
Remote
conferencing
service
Zoom provider 199,386 0.9 (0.1) 239,408
Online
household
Wayfair goods retailer 198,493 0.9 (0.2) 239,353
Ant
International Online
Ltd financial
Class C Ord. services
(U) platform 194,666 0.9 (0.2) 240,306
Chinese
Pinduoduo Inc e-commerce 178,774 0.8 (0.4) 258,258
Developer of a
SaaS-based
cloud data Significant
Snowflake Inc warehousing addition to
(p) platform 174,885 0.8 0.3 investment 74,865
Logistics
company that
designs,
manufactures
and operates
Zipline drones to
International deliver
Inc Series D medical
Pref. (U) supplies 58,975 0.3 - 61,116
Logistics
company that
designs,
manufactures
Zipline and operates
International drones to
Inc deliver
Series C Pref. medical
(U) supplies 50,362 0.2 - 52,190
Logistics
company that
designs,
manufactures
Zipline and operates
International drones to
Inc deliver
Series E Pref. medical
(U) supplies 44,499 0.2 - 46,114
=============== =============== ============== ============== ==========
153,836 0.7 - 159,420
=============== =============== ============== ============== ==========
Online grocery
retailer and Significant
technology addition to
Ocado provider 145,372 0.7 (0.2) investment 124,357
Provides
restaurant
food
delivery
DoorDash services 140,757 0.7 0.3 87,606
Epic Games Inc
(U) Gaming platform 139,741 0.7 (0.1) 155,065
Significant
On demand air addition to
Lilium NV (p) transportation 137,831 0.7 - investment 54,226
Biotechnology
company
Vir developing
Biotechnology anti-infective
Inc (p) therapies 120,578 0.6 (0.1) 136,754
Housing
Development
Finance Indian mortgage
Corporation provider 116,832 0.6 0.1 105,134
The Production Holding company
Board for food
Series A-2 technology
Pref. (U) companies 88,998 0.4 0.3 35,080
The Production Holding company
Board for food
Series A-3 technology
Pref. (U) companies 25,958 0.1 - New purchase -
=============== =============== ============== ============== ==========
114,956 0.5 0.3 35,080
=============== =============== ============== ============== ==========
Online and
physical
Warby Parker glasses
Inc (p) retailer 111,482 0.5 0.3 59,165
Investment
Kinnevik company 111,214 0.5 0.2 150,313
Name Business Fair value % of total Contribution Fair value
30 September assets to absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
=============== =============== =============== =============== ============== ============== ==========
Provides
security and
Tanium Inc systems
Class B management
Common (U) solutions 107,333 0.5 - 106,961
Significant
reduction to
Atlas Copco Engineering 97,185 0.5 - investment 154,175
Biotechnology
company
creating
and delivering
Sana engineered
Biotechnology cells
Inc (p) as medicine 93,260 0.4 (0.3) 134,828
Indigo
Agriculture Analyses plant
Inc microbiomes to
Series D Pref. increase crop
(U) yields 33,570 0.2 - 32,807
Indigo
Agriculture Analyses plant
Inc microbiomes to
Series F Pref. increase crop
(U) yields 17,120 0.1 - 16,731
Indigo
Agriculture Analyses plant
Inc microbiomes to
Series E Pref. increase crop
(U) yields 17,064 0.1 - 17,187
Indigo
Agriculture Analyses plant
Inc microbiomes to
Series G Pref. increase crop
(U) yields 11,125 <0.1 - New purchase -
Indigo Analyses plant
Agriculture microbiomes to
Inc increase crop
Common (U) yields 3,770 <0.1 - 3,685
=============== =============== ============== ============== ==========
82,649 0.4 - 70,410
=============== =============== ============== ============== ==========
Online
directory
Thumbtack Inc service for
Series local
G Pref. (U) businesses 47,802 0.2 0.1 40,115
Online
directory
Thumbtack Inc service for
Series local
I Pref. (U) businesses 14,121 0.1 - New purchase -
Online
directory
Thumbtack Inc service for
Series local
H Pref. (U) businesses 9,560 0.1 - 8,023
Online
directory
Thumbtack Inc service for
Class local
A Common (U) businesses 5,274 <0.1 - New purchase -
Online
directory
Thumbtack Inc service for
Series local
A Pref. (U) businesses 3,110 <0.1 - New purchase -
Online
directory
Thumbtack Inc service for
Series local
C Pref. (U) businesses 910 <0.1 - New purchase -
Online
directory
Thumbtack Inc service for
Series local
B Pref. (U) businesses 211 <0.1 - New purchase -
=============== =============== ============== ============== ==========
80,988 0.4 0.1 48,138
=============== =============== ============== ============== ==========
Manufactures
Carbon Inc and develops
Series D 3D
Pref. (U) printers 49,001 0.2 - 45,876
Manufactures
Carbon Inc and develops
Series E 3D
Pref. (U) printers 30,655 0.2 - 28,700
=============== =============== ============== ============== ==========
79,656 0.4 - 74,576
=============== =============== ============== ============== ==========
Blockstream
Corporation
Inc Financial
Series B-1 software
Pref. (U) developer 78,207 0.4 - New purchase -
GoPuff Inc On demand
(GoBrands) retail
Series G Pref. delivery
(U) service 77,881 0.4 0.1 54,360
Name Business Fair value % of total Contribution to Fair value
30 September assets absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
================= ================ ================ ================ =============== ================ ==========
Honor Technology
Inc Provider of
Series D Pref. home-care
(U) services 48,683 0.3 0.1 36,240
Honor Technology
Inc Provider of
Series E Pref. home-care
(U) services 27,802 0.1 - New purchase -
================ ================ =============== ================ ==========
76,485 0.4 0.1 36,240
================ ================ =============== ================ ==========
Blockchain.com Software
Series platform for
C-1 Pref. (U) digital assets 74,694 0.4 - New purchase -
Provider of an
on-demand
delivery
platform
designed to
Rappi Inc. Series connect
F consumers with
Pref. (U) local stores 74,165 0.4 - New purchase -
Redwood Materials Environmental
Inc. Series C battery
Pref. (U) recycling 74,165 0.4 - New purchase -
Solugen Inc. Specialty
Series chemicals
C-1 Pref. (U) manufacturer 74,165 0.4 - New purchase -
Full Truck Freight-truck
Alliance matching
Ltd (p) platform 71,162 0.3 0.1 51,854
Relativity Space Designs and
Inc builds rockets
Series D Pref. using
(U) 3D printers 48,786 0.2 - 34,930
Relativity Space Designs and
Inc builds rockets
Series E Pref. using
(U) 3D printers 22,249 0.1 0.1 New purchase -
================ ================ =============== ================ ==========
71,035 0.3 0.1 34,930
================ ================ =============== ================ ==========
ChargePoint Electric vehicle
Holdings charging
Inc solutions 67,792 0.3 (0.1) 77,408
Online market
Airbnb Inc Class place for
B travel
Common (p) accommodation 66,852 0.3 (0.1) 73,048
Databricks Inc
Series Data software
H Pref. (U) solutions 66,526 0.3 - New purchase -
Joby Aviation Inc Significant
Series C Pref. Electric addition to
(p) aircraft 56,421 0.3 - investment 18,438
Jiangxiaobai
Holdings Producer of
Ltd Series C alcoholic
Pref. (U) beverages 56,267 0.3 0.1 45,632
Workrise Online platform
Technologies connecting
Inc Series E contractors
Pref. (U) with work 56,250 0.3 - 47,112
Bolt Threads Inc Natural fibres
Series D Pref. and fabrics
(U) manufacturer 30,668 0.2 - 32,360
Bolt Threads Inc Natural fibres
Series E Pref. and fabrics
(U) manufacturer 24,006 0.1 - New purchase -
================ ================ =============== ================ ==========
54,674 0.3 - 32,360
================ ================ =============== ================ ==========
Develops
software for
cardiovascular
HeartFlow Inc disease
Series diagnosis
E Pref. (U) and treatment 53,552 0.2 0.1 37,644
Digital platform
providing home
Capsule Corp delivery of
Series prescription
D Pref. (U) medication 52,201 0.2 - New purchase -
Name Business Fair value % of total Contribution to Fair value
30 September assets absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
================= ================ ================ ================ =============== ================ ==========
Life science and
diagnostics
10x Genomics company 45,776 0.2 - New purchase -
Rubius
Therapeutics
Inc (p) Biotechnology 45,506 0.2 (0.1) 65,822
Aurora Innovation Developer of
Inc driverless
Series B Pref. vehicle
(U) technology 43,141 0.2 - 38,552
JRSK Inc (Away)
Series D Pref. Manufactures
(U) luggage 16,752 0.1 - 15,197
JRSK Inc (Away)
Series Seed Manufactures
Pref. (U) luggage 9,137 0.1 - 7,113
JRSK Inc (Away)
Convertible
Promissory Note Manufactures
(U) luggage 8,716 <0.1 - 8,531
JRSK Inc (Away)
Convertible
Promissory Note Manufactures
2021 (U) luggage 8,158 <0.1 - New purchase -
================ ================ =============== ================ ==========
42,763 0.2 - 30,841
================ ================ =============== ================ ==========
Convoy Inc Series Marketplace for
D truckers and
Pref. (U) shippers 27,110 0.1 - 25,871
Convoy Inc Series Marketplace for
E truckers and
Pref. (U) shippers 14,833 0.1 - New purchase -
================ ================ =============== ================ ==========
41,943 0.2 - 25,871
================ ================ =============== ================ ==========
Uptake Designs and
Technologies develops
Inc Series D enterprise
Pref. (U) software 39,792 0.2 - 35,598
Innovation Works
Development Fund Venture capital
(U) fund 39,697 0.2 0.1 20,622
Essence
Healthcare
Series 3 Pref. Cloud-based
(U) health provider 39,631 0.2 - 45,950
Designer and
developer of AI
chips
and algorithms
principally for
advanced
driving
assistance
Horizon Robotics systems and
Series C Pref. autonomous
(U) vehicles 37,082 0.2 - 36,240
Delivery
business, using
self-driving
purpose-built
Nuro Inc Series C electric
Pref. (U) vehicles 37,082 0.2 - 36,240
Biometric
Clear Secure Inc security firm 30,445 0.1 - New purchase -
Clover Health Healthcare
Investments Corp insurance
(p) provider 28,107 0.1 - 28,214
Chinese real
KE Holdings estate platform 25,392 0.1 (0.3) 77,434
Online platform
for searching
for
doctors and
ZocDoc Inc Series booking
D-2 Pref. (U) appointments 22,029 0.1 - 16,421
Name Business Fair value % of total Contribution to Fair value
30 September assets absolute 31 March
2021 performance* 2021
GBP'000 % Notes GBP'000
================ ================ ================ ================ =============== =============== ==========
Venture capital
fund to invest
ARCH Ventures in
Fund biotech Return of
IX (U) start-ups 21,759 0.1 0.1 capital 18,556
Developer of Significant
molecular addition to
Zymergen Inc (p) technology 21,613 0.1 (0.1) investment 25,368
Developer of
PsiQuantum commercial
Series D quantum
Pref. (U) computing 18,541 0.1 - New purchase -
Salt Pay Co Ltd
Non- Payment and
Voting Ordinary management
Shares (U) solutions 18,540 0.1 - New purchase -
Salt Pay Co Ltd
Voting Payment and
Ordinary Shares management
(U) solutions 1 <0.1 - New purchase -
================ ================ =============== =============== ==========
18,541 0.1 - -
KSQ Therapeutics
Inc
Series C Pref.
(U) Biotechnology 13,947 <0.1 - 13,630
Sinovation Fund Venture capital
III (U) fund 11,000 <0.1 - 8,613
WI Harper Fund Venture capital
VIII (U) fund 9,549 <0.1 - 9,174
Udacity Inc
Series D
Pref. (U) Online education 8,988 <0.1 - 8,928
WI Harper Fund Venture capital
VII (U) fund 7,319 <0.1 - 6,404
Venture capital
fund to invest
ARCH Ventures in
Fund biotech
X Overage (U) start-ups 6,564 <0.1 - 4,144
Venture capital
fund to invest
ARCH Ventures in
Fund biotech
X (U) start-ups 6,126 <0.1 - 3,750
Artificial
intelligence
Global AI based
Opportunities algorithmic
Fund trading 5,275 <0.1 - 5,107
Venture capital
fund to invest
ARCH Ventures in
Fund biotech Additional
XI (U) start-ups 2,825 <0.1 - investment 652
Beam
Therapeutics Biotechnology 663 <0.1 - New purchase -
Intarcia Implantable drug -
Therapeutics delivery system
Inc Common (++)
(U) - - -
Intarcia Implantable drug - - - -
Therapeutics delivery system
Inc Convertible
Bond (++) (U)
Intarcia Implantable drug - - - -
Therapeutics delivery system
Inc Series EE
Pref. (++) (U)
- - - -
================ ================ ================ ================ =============== =============== ==========
Total Investments 20,955,958 99.1
Net Liquid Assets# 188,778 0.9
Total Assets# 21,144,736 100.0
================================== ================ ================ =============== =============== ==========
(*) (Contribution to absolute performance has been calculated on
a total return basis over the period 1 April 2021 to 30 September
2021. For a definition of total return please see the Glossary of
Terms and Alternative Performance Measures at the end of this
announcement.)
(Significant additions and reductions to investments have been
noted where the change is at least a 20% movement from the value of
the holding at 31 March 2021. The change in value over the period
also reflects the share price performance and the movement in
exchange rates) .
# (See Glossary of Terms and Alternative Performance Measures at
the end of this announcement.)
(++) (The Intarcia Therapeutics holdings are valued at nil at 30
September 2021.)
(U) Denotes unlisted (private company) security.
(p) Denotes listed security previously held in the portfolio as
an unlisted (private company) security.
(The following investments were completely sold during the
period: Alnylam Pharmaceuticals, Auto1 Group, CureVac, Eventbrite,
Lyft, Unity Biotechnology and Workday. Grail was acquired by
Illumina in exchange for cash proceeds and Illumina shares.)
(Source: Baillie Gifford/StatPro. See disclaimer at the end of
this announcement.)
(Past performance is not a guide to future performance.)
Distribution of assets (unaudited)
==================================
Geographical Analysis
At At
30 September 2021 31 March 2021
% %
================ ============== ================== ==============
North America 57.1 50.0
United States 55.4 48.9
Canada 1.6 1.1
Caymen Islands 0.1 -
Europe 23.5 24.0
United Kingdom 2.6 1.6
Eurozone 16.4 17.7
Developed Europe (non Euro) 4.5 4.7
South America 1.9 1.7
Brazil 1.9 1.7
Asia 17.5 24.3
China 16.9 23.7
India 0.6 0.6
Total assets * 100.0 100.0
================================ ================== ==============
Sectoral Analysis
=================
At At
30 September 2021 31 March 2021
% %
============ ============ ================== ==============
Consumer Staples 3.4 3.0
Consumer Discretionary 32.1 39.0
Technology 23.3 25.5
Healthcare 21.4 17.2
Financials 4.8 4.1
Industrials 9.0 7.4
Basic Materials 4.4 1.7
Real Estate 0.1 0.4
Energy 0.6 0.7
Net Liquid Assets 0.9 1.0
Total assets * 100.0 100.0
========================== ================== ==============
(*) See Glossary of Terms and Alternative Performance Measures
at end of this announcement .
Unlisted Unlisted
(private (private
company) company) Net liquid
Listed equities securities bonds assets Total
% % % % %
=============== ================ ============ ========== =========== ======
30 September
2021 79.7 19.3 0.1 0.9 100.0
31 March 2021 78.7 20.2 0.1 1.0 100.0
Includes holdings in preference shares and ordinary shares.
http://www.rns-pdf.londonstockexchange.com/rns/5702R_1-2021-11-7.pdf
Absolute Performance to 30 September 2021
=========================================
Total return Total return Total return (%)(#)
(%)(#) (%)(#) since inception
for five years For ten years (2 June 2010) (++)
======================== ================ =============== ====================
Overall investment
portfolio 339.9 1,057.8 1,084.7
Private and previously
private companies 205.6 1,386.3 1,033.3
FTSE All-World Index
(in sterling terms) 83.1 274.8 274.2
# For a definition of total return please see Glossary of Terms
and Alternative Performance Measures at the end of this
announcement.
++ Date of investment in first private company security. Source:
StatPro/Baillie Gifford and underlying index providers.
Notes to the condensed financial statements (unaudited)
=======================================================
1. The condensed Financial Statements for the six months to 30 September 2021 comprise the statements
set out in the previous pages together with the related notes below. They have been prepared
in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended
Practice issued in November 2014 and updated in October 2019 and April 2021 with consequential
amendments. They have not been audited or reviewed by the Auditor pursuant to the Auditing
Practices Board Guidance on 'Review of Interim Financial Information'. The Financial Statements
for the six months to 30 September 2021 have been prepared on the basis of the same accounting
policies as set out in the Company's Annual Report and Financial Statements at 31 March 2021.
Going Concern
The Directors have considered the nature of the Company's assets, its liabilities, projected
income and expenditure together with its investment objective and policy, dividend policy
and principal risks and uncertainties, as set out at the end of this document. The Board has,
in particular, considered the impact of heightened market volatility during the Covid-19 pandemic
but does not believe the Company's going concern status is affected. The Company's assets,
the majority of which are in quoted securities which are readily realisable, exceed its liabilities
significantly. All borrowings require the prior approval of the Board. Gearing levels and
compliance with borrowing covenants are reviewed by the Board on a regular basis. The Company
has continued to comply with the investment trust status requirements of Section 1158 of the
Corporation Tax Act 2010 and the Investment Trust (Approved Company) Regulations 2011. Accordingly,
the Directors considered it appropriate to adopt the going concern basis of accounting in
preparing these Financial Statements and confirm that they are not aware of any material uncertainties
which may affect the Company's ability to continue in operational existence for a period of
at least twelve months from the date of approval of these Financial Statements.
2. The financial information contained within this Interim Financial Report does not constitute
statutory accounts as defined in sections 424 to 436 of the Companies Act 2006. The financial
information for the year ended 31 March 2021 has been extracted from the statutory accounts
which have been filed with the Registrar of Companies. The Auditor's Report on those accounts
was not qualified, did not include a reference to any matter to which the Auditors drew attention
by way of emphasis without qualifying its report and did not contain statements under sections
498 (2) or (3) of the Companies Act 2006.
3. Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been
appointed by the Company as its Alternative Investment Fund Manager (AIFM) and Company Secretary.
The investment management function has been delegated to Baillie Gifford & Co. The management
agreement can be terminated on six months' notice. The annual management fee is 0.30% on the
first GBP4 billion of total assets less current liabilities (excluding short term borrowings
for investment purposes) and 0.25% thereafter, calculated and payable quarterly.
============================================================================================================
4. Net return per ordinary share Six months to Six months to
30 September 2021 30 September 2020
GBP'000 GBP'000
============================================================== ===================== =====================
Revenue return on ordinary activities after taxation 8,715 6,993
Capital return on ordinary activities after taxation 2,654,201 6,348,467
================================================================== ===================== =====================
Total net return 2,662,916 6,355,460
================================================================== ===================== =====================
Weighted average number of ordinary shares in issue 1,416,515,214 1,464,928,674
================================================================== ===================== =====================
Net return per ordinary share figures are based on the above totals of revenue and capital
and the weighted average number of ordinary shares in issue during each period.
There are no dilutive or potentially dilutive shares in issue.
================================================================================================================
Notes to the condensed financial statements (unaudited) (ctd)
=============================================================
5. Dividends Six months to Six months to
30 September 2021 30 September 2020
GBP'000 GBP'000
================================================================ ================== =======================
Amounts recognised as distributions in the period:
Previous year's final dividend of 1.97p (2020 - 1.86p), paid 1 July
2021 27,984 27,306
==================================================================== ================== =======================
27,984 27,306
-------------------------------------------------------------------- ------------------ -----------------------
Dividends proposed in the period:
Interim dividend for the year ending 31 March 2022 of 1.52p (2021 -
1.45p) 21,459 21,167
-------------------------------------------------------------------- ------------------ -----------------------
21,459 21,167
-------------------------------------------------------------------- ------------------ -----------------------
The interim dividend was declared after the period end date and has therefore not been included
as a liability in the Balance Sheet. It is payable on 3 December 2021 to shareholders on the
register at the close of business on 19 November 2021. The ex-dividend date is 18 November
2021. The Company's Registrars offer a Dividend Reinvestment Plan and the final date for elections
for this dividend is 22 November 2021.
-------------------------------------------------------------------------------------------------------------
6. Fair Value
The fair value hierarchy used to analyse the basis on which the fair values of financial instruments
held at fair value through the profit and loss account are measured is described below. The
levels are determined by the lowest (that is the least reliable or least independently observable)
level of input that is significant to the fair value measurement for the individual investment
in its entirety as follows:
Level 1 - using unadjusted quoted prices for identical instruments in an active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that are directly
or indirectly observable (based on
market data); and
Level 3 - using inputs that are unobservable (for which market data is unavailable).
The Company's investments are financial assets designated at fair value through profit or
loss. An analysis of the Company's financial asset investments based on the fair value hierarchy
described above is shown below.
Investments held at fair value through profit or loss
=============================================================================================================
Level 1 Level 2 Level 3 Total
As at 30 September 2021 GBP'000 GBP'000 GBP'000 GBP'000
========================================== ==================== ================== ========= ============
Equities/funds 16,846,771 - - 16,846,771
Private company ordinary shares - - 587,463 587,463
Private company preference shares - - 3,391,581 3,391,581
Private company convertible note - - 16,874 16,874
Warrants - - 8,430 8,430
Limited partnership investments - - 104,839 104,839
============================================== ==================== ================== ========= ============
Total financial asset investments 16,846,771 - 4,109,187 20,955,958
============================================== ==================== ================== ========= ============
Notes to the condensed financial statements (unaudited) (ctd)
=============================================================
Level 1 Level 2 Level 3 Total
As at 31 March 2021 (audited) GBP'000 GBP'000 GBP'000 GBP'000
=============================== =================== ==================== ========= ==================
Equities/funds 14,345,430 - - 14,345,430
Private company ordinary shares - - 597,839 597,839
Private company preference
shares - - 3,004,792 3,004,792
Private company convertible
note - - 15,949 15,949
Warrants - - 6,764 6,764
Limited partnership investments - - 71,914 71,914
=============================== =================== ==================== ========= ==================
Total financial asset
investments 14,345,430 - 3,697,258 18,042,688
=============================== =================== ==================== ========= ==================
During the period, investments with a book cost of GBP281,364,000 were transferred from Level
3 to Level 1 on becoming listed. The fair value of listed investments is bid value or, in
the case of holdings on certain recognised overseas exchanges, last traded price. Listed Investments
are categorised as Level 1 if they are valued using unadjusted quoted prices for identical
instruments in an active market and as Level 2 if they do not meet all these criteria but
are, nonetheless, valued using market data.
Private company investments
The Company's holdings in unlisted (private company) investments are categorised as Level
3. Private company investments are valued at fair value by the Directors following a detailed
review and appropriate challenge of the valuations proposed by the Managers. The Managers'
private company investment policy applies techniques consistent with the International Private
Equity and Venture Capital Valuation Guidelines 2018 ('IPEV'). The techniques applied are
predominantly market-based approaches. The market-based approaches available under IPEV are
set out below and are followed by an explanation of how they are applied in the Company's
private company portfolio:
* Multiples;
* Industry Valuation Benchmarks; and
* Available Market Prices.
The nature of the private company portfolio will influence the valuation technique applied.
The valuation approach recognises that, as stated in the IPEV Guidelines, the price of a recent
investment, if resulting from an orderly transaction, generally represents fair value as at
the transaction date and may be an appropriate starting point for estimating fair value at
subsequent measurement dates. However, consideration is given to the facts and circumstances
as at the subsequent measurement date, including changes in the market or performance of the
investee company. Milestone analysis is used where appropriate to incorporate the operational
progress of the investee company into the valuation. Additionally, the background to the transaction
must be considered. As a result, various multiples-based techniques are employed to assess
the valuations particularly in those companies with established revenues. Discounted cashflows
are used where appropriate. An absence of relevant industry peers may preclude the application
of the Industry Valuation Benchmarks technique and an absence of observable prices may preclude
the Available Market Prices approach. All valuations are cross-checked for reasonableness
by employing relevant alternative techniques.
The private company investments are valued according to a three monthly cycle of measurement
dates. The fair value of the private company investments will be reviewed before the next
scheduled three monthly measurement date on the following occasions:
* At the year end and half year end of the Company; and
* Where there is an indication of a change in fair
value as defined in the IPEV guidelines (commonly
referred to as 'trigger' events).
=========================================================================================================
7. The total value of the borrowings (at book) is GBP1,641,824,000 (31 March 2021 - GBP1,237,332,000).
The bank loans falling due within one year are a US$391 million revolving 3 year loan with
National Australia Bank Limited ('NAB') and a US$50 million revolving 5 year loan with The
Royal Bank of Scotland International Limited ('RBS') (31 March 2021 - US$200 million revolving
3 year loan with NAB, a US$80 million revolving 3 year loan with RBS and a US$85 million revolving
2 year loan with RBS).
The bank loans falling due after more than one year are a US$200 million fixed rate loan and
a US$180 million fixed rate loan with RBS and a US$300 million fixed rate loan with The Bank
of Nova Scotia.
During the period, the US$200 million revolving 3 year loan with NAB was refinanced with a
US$391 million revolving 3 year loan with NAB, the US$80 million revolving 3 year loan with
RBS was refinanced on expiry with a US$180 million 5 year fixed rate credit facility with
RBS and the US$85 million revolving 2 year loan with RBS was part refinanced with a US$50
million revolving 5 year loan with RBS.
During the period the Company issued the following private placement unsecured loan notes:
- GBP100 million at a coupon of 2.03% maturing on 10 August 2036
- GBP100 million at a coupon of 2.30% maturing on 10 August 2046
Following the period end, on 12 October 2021, a US$120 million revolving 3 year loan was drawn
down from Industrial and Commercial Bank of China Limited ('ICBC').
=========================================================================================================
8. The fair value of the borrowings at 30 September 2021 was GBP1,674,997,000
(31 March 2021 - GBP1,309,443,000).
=========================================================================================================
9. At
At 31 March 2021
30 September 2021 (audited)
Number of shares Number of shares
===================================================== ==================== =============================
Share capital: Ordinary shares of 5p each
Allotted, called up and fully paid 1,411,799,194 1,421,618,969
========================================================== ==================== =============================
In the six months to 30 September 2021, the Company sold 850,000 ordinary shares from treasury
with a nominal value of GBP42,500 at a premium to net asset value raising net proceeds of
GBP12,213,000 (year to 31 March 2021 - issued 24,725,000 ordinary shares, with a nominal value
of GBP1,236,250, at a premium to net asset value, raising net proceeds of GBP193,559,000).
In the six months to 30 September 2021, 10,669,775 ordinary shares with a nominal value of
GBP533,000 were bought back at a total cost of GBP137,731,000 and held in treasury (year to
31 March 2021 - 56,365,839 shares with a nominal value of GBP2,818,000 were bought back at
a total cost of GBP613,920,000 and held in treasury). At 30 September 2021 the Company had
authority remaining to buy back 208,586,466 ordinary shares.
10. Transaction costs on acquisitions within the portfolio amounted to GBP382,000 (30 September
2020 - GBP1,364,000) and transaction costs on sales amounted to GBP190,000 (30 September 2020
- GBP88,000). These costs are included in the book cost of acquisitions and in the net proceeds
of disposals.
11. Related Party Transactions
There have been no transactions with related parties during the first six months of the current
financial year that have materially affected the financial position or the performance of
the Company during that period and there have been no changes in the related party transactions
described in the last Annual Report and Financial Statements that could have had such an effect
on the Company during that period.
Glossary of Terms and Alternative Performance Measures (APM)
Total Assets
Total assets less current liabilities, before deduction of all borrowings.
Net Asset Value
Also described as shareholders' funds. Net Asset Value (NAV) is the value of total assets
less liabilities (including borrowings). Net Asset Value is calculated on the basis of borrowings
stated at book value or fair value. An explanation of each basis is provided below. The NAV
per share is calculated by dividing this amount by the number of ordinary shares in issue
(excluding treasury shares).
Net Asset Value (Borrowings at Book)/Shareholders' Funds
Borrowings are valued at adjusted net issue proceeds. The value of the borrowings at book
is set out in note 7 above.
Net Asset Value (Borrowings at Fair Value) (APM)
Borrowings are valued at an estimate of their market worth. The value of the borrowings at
fair is set out in note 8 above and a reconciliation to Net Asset Value with borrowings at
book value is provided below.
========================================================================================================
30 September 2021 31 March 2021
================================================================== =================== ===============
Net Asset Value per ordinary share (borrowings at book value) 1,381.1p 1,195.1p
Shareholders' funds (borrowings at book value) GBP19,498,883k GBP16,989,470k
Add: book value of borrowings GBP1,641,824k GBP1,237,332k
Less: fair value of borrowings (GBP1,674,997k) (GBP1,309,443k)
================================================================== =================== ===============
Net Asset Value (borrowings at fair value) GBP19,465,710k GBP16,917,359k
Shares in issue at year end (excluding treasury shares) 1,411,799,194 1,421,618,969
Net Asset Value per ordinary share (borrowings at fair value) 1,378.8p 1,190.0p
================================================================== =================== ===============
Liquid Assets
Net liquid assets comprise current assets less current liabilities (excluding borrowings).
Discount/Premium (APM)
As stockmarkets and share prices vary, an investment trust's share price is rarely the same
as its NAV. When the share price is lower than the NAV per share it is said to be trading
at a discount. The size of the discount is calculated by subtracting the share price from
the NAV per share and is usually expressed as a percentage of the NAV per share. If the share
price is higher than the NAV per share, it is said to be trading at a premium.
Gearing (APM)
At its simplest, gearing is borrowing. Just like any other public company, an investment trust
can borrow money to invest in additional investments for its portfolio. The effect of the
borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the
shareholders' assets grow proportionately more because the debt remains the same, but if the
value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance
performance in rising markets but can adversely impact performance in falling markets.
Gearing represents borrowings at book value less cash and cash equivalents (including any
outstanding trade settlements) expressed as a percentage of shareholders' funds.
Turnover (APM)
Annual turnover is calculated on a rolling 12 month basis. The lower of purchases and sales
for the 12 months is divided by the average assets, with average assets being calculated on
assets as at each month's end.
Active Share (APM)
Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio
that differs from its comparative index. It is calculated by deducting from 100 the percentage
of the portfolio that overlaps with the comparative index. An active share of 100 indicates
no overlap with the index and an active share of zero indicates a portfolio that tracks the
index.
Total Return (APM)
The total return is the return to shareholders after reinvesting the net dividend on the date
that the share price goes ex-dividend.
30 September 2021 30 September 2020
NAV NAV Share NAV NAV Share
(book) (fair) price (book) (fair) price
========================================== ================= ======== ======== ======== ======== ======= ======
Closing NAV per share/share price (a) 1,381.1p 1,378.8p 1,428.0p 999.8p 992.0p 991.0p
Dividend adjustment factor * (b) 1.0020 1.0012 1.0016 1.0026 1.0025 1.0023
Adjusted closing NAV per share/share price (c = a x b) 1,383.9p 1,380.4p 1,430.3p 1,002.4p 994.5p 993.3p
Opening NAV per share/share price (d) 1,195.1p 1,190.0p 1,137.0p 567.3p 565.7p 573.5p
========================================== ================= ======== ======== ======== ======== ======= ======
Total return (c ÷ d) - 1 15.8% 16.0% 25.8% 76.7% 75.8% 73.2%
========================================== ================= ======== ======== ======== ======== ======= ======
* The dividend adjustment factor is calculated on the assumption
that the final dividend of 1.97p (2020 - 1.86p) paid by the Company
during the period was reinvested into shares of the Company at the
cum income NAV per share/share price, as appropriate, at the
ex-dividend date.
Principal Risks and Uncertainties
The principal risks facing the Company are financial risk, private company investments risk,
investment strategy risk, discount risk, regulatory risk, custody and depositary risk, operational
risk, leverage risk and political risk. An explanation of these risks and how they are managed
is set out on pages 9 and 10 of the Company's Annual Report and Financial Statements for the
year to 31 March 2021 which is available on the Company's website: scottishmortgageit.com
.++
The principal risks and uncertainties have not changed since the date of that report with
the exception of the ongoing situation regarding Covid-19.
Shareholders will be notified on or around 17 November 2021 that
the Interim Financial Report has been published and will be
available on the Scottish Mortgage page of the Managers' website
scottishmortgageit.com . (++)
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
Scottish Mortgage Investment Trust PLC is an actively managed,
low cost investment trust, investing in a concentrated global
portfolio of companies with the aim of maximising its total return
over the long term. It looks for strong businesses with
above-average returns and aims to achieve a greater return than the
FTSE All-World Index (in sterling terms) over a five year rolling
period.
You can find up to date performance information about Scottish
Mortgage on the Scottish Mortgage page of the Managers' website at
scottishmortgageit.com ++
++ Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers'
website (or any other website) is incorporated into, or forms part
of, this announcement.
Scottish Mortgage is managed by Baillie Gifford & Co, the
Edinburgh based fund management group with over GBP363 billion
under management and advice in active equity and bond portfolios
for clients in the UK and throughout the world (as at 5 November
2021).
Investment Trusts are UK public limited companies and are not
authorised or regulated by the Financial Conduct Authority.
Past performance is not a guide to future performance. The value
of an investment and any income from it is not guaranteed and may
go down as well as up and investors may not get back the amount
invested. This is because the share price is determined by the
changing conditions in the relevant stock markets in which the
Company invests and by the supply and demand for the Company's
shares.
5 November 2021
For further information please contact:
Catharine Flood, Baillie Gifford & Co
Tel: 0131 275 2718
Mark Knight, Director, Four Communications
Tel: 0203 761 4438 or 07803 758810
Automatic Exchange of Information
In order to fulfil its obligations under UK tax legislation
relating to the automatic exchange of information, Scottish
Mortgage Investment Trust PLC is required to collect and report
certain information about certain shareholders.
The legislation requires investment trust companies to provide
personal information to HMRC on certain investors who purchase
shares in investment trusts. Accordingly, Scottish Mortgage
Investment Trust PLC will have to provide information annually to
the local tax authority on the tax residencies of a number of
non-UK based certificated shareholders and corporate entities.
Shareholders, excluding those whose shares are held in CREST, who
come on to the share register will be sent a certification form for
the purposes of collecting this information.
For further information, please see HMRC's Quick Guide:
Automatic Exchange of Information - information for account holders
gov.uk/government/publications/exchange-of-information-account-holders.
Third party data provider disclaimer
No third party data provider ('Provider') makes any warranty,
express or implied, as to the accuracy, completeness or timeliness
of the data contained herewith nor as to the results to be obtained
by recipients of the data. No Provider shall in any way be liable
to any recipient of the data for any inaccuracies, errors or
omissions in the index data included in this document, regardless
of cause, or for any damages (whether direct or indirect) resulting
therefrom.
No Provider has any obligation to update, modify or amend the
data or to otherwise notify a recipient thereof in the event that
any matter stated herein changes or subsequently becomes
inaccurate.
Without limiting the foregoing, no Provider shall have any
liability whatsoever to you, whether in contract (including under
an indemnity), in tort (including negligence), under a warranty,
under statute or otherwise, in respect of any loss or damage
suffered by you as a result of or in connection with any opinions,
recommendations, forecasts, judgements, or any other conclusions,
or any course of action determined, by you or any third party,
whether or not based on the content, information or materials
contained herein.
FTSE Index data
FTSE International Limited ('FTSE') (c) FTSE 2021. 'FTSE(R)' is
a trade mark of the London Stock Exchange Group companies and is
used by FTSE International Limited under licence. All rights in the
FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors.
Neither FTSE nor its licensors accept any liability for any errors
or omissions in the FTSE indices and/or FTSE ratings or underlying
data and no party may rely on any FTSE indices, ratings and/or data
underlying data contained in this communication. No further
distribution of FTSE Data is permitted without FTSE's express
written consent. FTSE does not promote, sponsor or endorse the
content of this communication.
- ends -
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 FSDFEWEFSEDF
(END) Dow Jones Newswires
November 08, 2021 02:00 ET (07:00 GMT)
Scottish Mortgage Invest... (LSE:SMT)
Historical Stock Chart
From Oct 2024 to Nov 2024
Scottish Mortgage Invest... (LSE:SMT)
Historical Stock Chart
From Nov 2023 to Nov 2024
