For the six months ended 31 May 2016, BlackRock Throgmorton’s net asset value per share returned +1.9% compared with a return of +1.7% for the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index. The FTSE All Share Index returned just 0.1% over the same period (all figures in sterling terms with income reinvested). The revenue return per share for the period amounted to 3.75 pence compared to 4.57 pence earned during the comparative period last year when the Company received a number of large special dividends, including dividends received in respect of the long CFD portfolio. This was partially offset by an increase in underlying dividend income from UK companies of 11.7%. The Board is pleased to declare an interim dividend of 1.25 pence per share (2015: 1.10 pence per share).
The CFD portfolio contributed 1.1% to NAV and the long only portfolio performed in line with the benchmark index, both stated before costs. The long CFD portfolio added 1.3% to NAV with the shorts detracting by 0.2% (all calculations stated before deduction of costs). The largest contributor to the long CFD portfolio was our position in JD Sports. JD Sports announced strong full year results with revenues up by 20% and earnings per share up by 57%. They also saw good contributions from other consumer stocks including Just Eat, Betfair and Fevertree Drinks.
On the short side, the largest loss was only 0.1% of NAV which was incurred in a heavily indebted mining company whose shares performed strongly, mainly, they believe, due to short closing. Their largest gain on a short position, just below 0.2% of NAV, related to another consumer stock faced with the challenge of supplying an increasingly competitive market.
In the long only portfolio the largest positive contributors to performance were holdings in JD Sports, Skyepharma, Fevertree Drinks and Accesso Technology. Skyepharma announced a merger with Vectura. Fevertree Drinks released a trading update for the four months to the end of April 2016 which confirmed strong business momentum and indicated full year 2016 results are expected to be materially ahead of expectations. Accesso Technology also announced that 2016 had got off to a strong start and management were pleased with the level of new business wins.
The fund’s holding in Avon Rubber performed poorly during the period, down by 16.3%, but recent interim results were better than expected and, they say, management were in confident mood when they met them.
The largest detractor from relative performance from a sector point of view was an underweight position in the mining sector. This sector performed strongly and the underweight position detracted just over 1.0% in aggregate from relative performance. Also, they did not own two benchmark stocks which were bid for, Home Retail and Darty, which in aggregate detracted by 0.6% from relative performance.
THRG : Throgmorton ahead of benchmark