BlackRock Throg Tst Portfolio Update
June 18 2021 - 11:15AM
UK Regulatory
TIDMTHRG
The information contained in this release was correct as at 31 May 2021.
Information on the Company's up to date net asset values can be found on the
London Stock Exchange Website at:
https://www.londonstockexchange.com/exchange/news/market-news/
market-news-home.html.
BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
All information is at 31 May 2021 and unaudited.
Performance at month end is calculated on a cum income basis
One Three One Three Five
Month months year years years
% % % % %
Net asset value 1.0 16.4 62.4 54.9 143.9
Share price 0.6 16.5 63.1 73.9 193.1
Benchmark* 1.2 11.8 55.6 27.2 64.9
Sources: BlackRock and Datastream
*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding
Investment Companies) Index replaced the Numis Smaller Companies excluding AIM
(excluding Investment Companies) Index as the Company's benchmark. The
performance of the indices have been blended to reflect this.
At month end
Net asset value capital only: 878.40p
Net asset value incl. income: 883.41p
Share price 891.00p
Premium to cum income NAV 0.9%
Net yield1: 1.1%
Total Gross assets2: £826.3m
Net market exposure as a % of net asset value3: 119.2%
Ordinary shares in issue4: 93,539,037
2020 ongoing charges (excluding performance fees)5,6: 0.60%
2020 ongoing charges ratio (including performance 1.60%
fees)5,6,7:
1. Calculated using the 2020 interim dividend declared on 23 July 2020 and paid
on 26 August 2020, together with the 2020 final dividend declared on 10
February 2021 and paid on 31 March 2021.
2. Includes current year revenue and excludes gross exposure through contracts
for difference.
3. Long exposure less short exposure as a percentage of net asset value.
4. Excluding 0 shares held in treasury.
5. Calculated as a percentage of average net assets and using expenses,
excluding performance fees and interest costs for the year ended 30 November
2020.
6. With effect from 1 August 2017 the base management fee was reduced from
0.70% to 0.35% of gross assets per annum.
7. Effective 1st December 2017 the annual performance fee is calculated using
performance data on an annualised rolling two year basis (previously, one year)
and the maximum annual performance fee payable is effectively reduced to 0.90%
of two year rolling average month end gross assets (from 1% of average annual
gross assets over one year). Additionally, the Company now accrues this fee at
a rate of 15% of outperformance (previously 10%). The maximum annual total
management fees (comprising the base management fee of 0.35% and a potential
performance fee of 0.90%) are therefore 1.25% of average month end gross assets
on a two-year rolling basis (from 1.70% of average annual gross assets).
Sector Weightings % of Total Assets
Industrials 30.3
Consumer Discretionary 23.0
Financials 17.1
Consumer Staples 9.4
Technology 7.5
Health Care 4.6
Telecommunications 3.6
Basic Materials 2.5
Net current assets 2.0
-----
Total 100.0
=====
Country Weightings % of Total Assets
United Kingdom 90.7
United States 6.4
France 1.1
Australia 0.7
Denmark 0.6
Netherlands 0.4
Israel 0.1
-----
Total 100.0
=====
Market Exposure (Quarterly)
31.08.20 30.11.20 28.02.21 31.05.21
% % % %
Long 121.0 120.4 126.8 121.3
Short 2.4 1.9 1.5 1.5
Gross exposure 123.4 122.3 128.3 122.8
Net exposure 118.6 118.6 125.3 119.8
Ten Largest Investments
Company % of Total Gross Assets
Gamma Communications 3.2
Impax Asset Management 2.8
Electrocomponents 2.7
YouGov 2.6
Watches of Switzerland 2.6
Moonpig Group 2.4
Oxford Instruments 2.2
Pets At Home 2.1
Breedon 2.0
Games Workshop 2.0
Commenting on the markets, Dan Whitestone, representing the Investment Manager
noted:
The Company returned 1.0%1 in May, marginally trailing its benchmark, the Numis
Smaller Companies +AIM ex Investment Trusts, which returned 1.2%1. Performance
during the month was driven by the long book, while the short book was flat.
There remains an ongoing debate about 'value vs growth' and while April
favoured growth, May reversed some of this trend. As mentioned in the past, and
perhaps surprisingly, we really do not see the 'value vs growth' discussion as
a critical issue in investment returns. But rather we see the high level of
ongoing industrial change as creating many more opportunities for alpha, and
far more important in delivering good returns to our investors. It is, however,
true that May favoured value over growth, and that statement would also be true
on average for the past 7 months since November 2020 when a vaccine was first
announced. It's worth highlighting however, that despite this backdrop, the
Company has delivered a positive result in the first half of our financial
year, returning 31.0%1 and outperforming the benchmark by +3.3%1. This, we
believe is very credible and an indicator of just how much opportunity we are
seeing even in an environment that is deemed unfavourable for differentiated
growth companies. We remain very positive on the investments we have made and
expect great things over the coming periods as they deliver on their promise.
We also believe ongoing industry pressures and business model frailties will be
exposed for the struggling companies in our short book as normality returns.
To that end we have experienced another month with strong updates from our long
positions where the share prices of some have appreciated materially, whilst
other shares without updates have drifted. This effect actually gives us some
confidence. We are seeing shares drift only to report strong earnings, which
focuses attention on improved profits, and the shares rise. We see the drifting
as the transitory phase and the value demonstrated by the results as the real
alpha gained over time. The recovery trade continued during May, but in the
most recent days we have seen some of the beneficiaries fall on weak updates
and equity raising as the COVID-19 crisis lingers and ongoing industry
challenges persist. On that basis there may be emerging signs of the end to the
recovery trade, but as mentioned above this is not actually key to our
investment theses or the returns that can be delivered by the portfolio.
The largest contributor was Gamma Communications, where the shares rose to new
highs on the back of another upgrade to forecasts accompanying their strong
trading update. At its core this reflects the strength of demand and operating
momentum in the business as customers upgrade their corporate communications
and embrace the cloud. Shares in Games Workshop rose after the company forecast
that profits for the year ending May 2021 would at least £150m, representing
almost a 70% increase compared to the previous year. Auction Technology Group,
a market leader in digital auction marketplaces, delivered very strong results
in May and has now doubled since we purchased at IPO (Initial Public Offering)
earlier this year.
The largest detractor during the month was speciality pharmaceuticals business,
Ergomed, which gave back some of last month's gains following its announced
expansion into Japan. Our holding in Electrocomponents delivered strong results
in the period but fell back in absence of a material upgrade. The company is
growing organic revenues at double digits as they win market share and we think
its growth has the potential to accelerate further as they solidify their
market position through M&A (Mergers & Acquisitions). Chegg, one of our US
positions, reported a strong update in our opinion but fell back after some
great share price performance in the last year. Of course, in our mind, the
company is so much more than a "Covid trade", having delivered growth that has
exceeded analyst forecasts for several years pre-dating the pandemic given the
strength of its offering and the huge changes happening in the education
market. Chegg clearly saw an acceleration during the pandemic, but we believe
it has the potential for many more years of growth when COVID-19 is firmly in
the rear view mirror.
Overall, we see May as period of consolidation after a very strong April and
another stepping stone. The bigger picture is unchanged as is our optimism and
conviction. The reporting season continues to validate our long book holdings
which gives confidence that they are doing the right things and over time we
expect higher revenues, profits and share prices. Whilst we've outlined three
key contributors, there are many other shares that we could discuss that have
driven performance this month on the back of positive updates such as 4Imprint,
or Impax Asset Management. Our outlook for 2021 remains very positive and we
expect to see continued rapid industry change that will deliver huge
opportunities in emerging companies. We are therefore making sure we work hard
to capture new opportunities and to monetise our existing ideas. We continue to
operate a net position of around 120%, which is the highest that it has been
under my management, reflecting the vast opportunity we see for differentiated
growth companies. We thank shareholders for their ongoing support.
1Source: BlackRock as at 31 May 2021
18 June 2021
ENDS
Latest information is available by typing www.blackrock.com/uk/thrg on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal). Neither the contents of the Manager's website nor the contents of
any website accessible from hyperlinks on the Manager's website (or any other
website) is incorporated into, or forms part of, this announcement.
END
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