BlackRock Throgmorton Trust beat its benchmark by more than 10% over the year that ended on 30 November 2015. The Company’s net asset value per share returned 23.2% compared with a return of 11.9% for the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index. Shareholders did even better – the share price return was 27.7%. They say the returns were derived principally from both stock selection in the long only portfolio, which returned 19.9%, and net gains from the CFD portfolio which returned 4.4% and was positive in each of the twelve months of the year under review. They are paying dividends totalling 6.7p up from 4.4p the year before.
The long only portfolio benefited from strong share price performances from CVS Group, Fevertree Drinks, Hutchison China Meditech, 4imprint Group and Betfair.
CVS Group announced at its AGM that in the 4 months to 31 October 2015 like-for-like sales grew by 3.2%, and 31 surgeries had been acquired. This period follows good full year results which showed revenues up by 17% and
earnings per share up by 30%. Fevertree Drinks released a trading update ahead of its December year end. This confirmed that Fevertree Drinks has continued to perform strongly in the second half of the year and the board anticipates results for the full year to be materially ahead of expectations.
Hutchison China Meditech announced that it had filed for an Initial Public Offering (IPO) in the US on NASDAQ, which was well received.They had a good meeting with management who were very confident about the prospects for their key oncology drugs. 4imprint Group announced interim pre-tax profits up by 25%. A subsequent trading update indicated that the group continues to experience strong organic growth. Betfair shares have been very strong. The company continues to trade well and announced a recommended merger with Paddy Power,
which was well received by investors.
The largest detractors from relative outperformance during the period were holdings in Northbridge Industrial Services and Polar Capital Holdings. Northbridge Industrial Services continues to be impacted by the decline in the oil price. Polar Capital Holdings has seen outflows from their large Japanese fund although performance has improved; other funds managed by Polar Capital have seen net inflows. Interim results for the period to 30 September 2015 show pre-tax profits flat and earnings per share up by 6.6%.
Within the long only portfolio, overweight positions in housebuilders, software companies and chemicals companies were significant positive contributors to outperformance. They had little in oil related and mining companies which helped performance as they were weak contributors. This was mitigated by an underweight position in food retailers which detracted from relative performance.
2015 was a strong year for the CFD portfolio. The long book contributed 4.7% over the year, with the
short book detracting marginally, in 8 of the 12 months of the year the short book generated a positive return.
The standout gain in the CFD portfolio was JD Sports, a position initiated in early April that has subsequently doubled through the remainder of the year. JD Sports has successfully built a very strong market position in the UK and become the key European partner for the likes of Nike and Adidas. Under a very strong management team, these companies have benefited from the growth in sports footwear and clothing, but have also driven multi-channel and international roll-out to deliver like-for-like sales growth in excess of 10% for the year.
THRG : BlackRock Throgmorton gets its stock selection right