TIDMWINV
RNS Number : 7451J
Worsley Investors Limited
15 December 2022
15 December 2022
Worsley Investors Limited
(the "Company")
Half Year Report for the six months ended 30 September 2022
The Company is pleased to announce the release of its half year
report and unaudited consolidated financial statements for the six
months ended 30 September 2022 (the "Half Year Report"). A copy of
the Half Year Report will be posted to shareholders and will be
available to view on the Company's website shortly at:
www.worsleyinvestors.com
For further information, please contact:
Worsley Associates LLP (Investment Advisor)
Blake Nixon
Tel: +44 (0) 203 873 2288
Shore Capital (Financial Adviser and Broker)
Robert Finlay / Anita Ghanekar
Tel: +44 (0) 20 74080 4090
Sanne Fund Services (Guernsey) Limited (Administrator and
Secretary)
Chris Bougourd / Matt Falla
Tel: +44 (0) 1481 737600
LEI: 213800AF85VEZMDMF931
Performance Summary
30 September 31 March
2022 2022 % change
-----------------------------
Net Asset Value ("NAV") per
share 40.24p 39.91p 0.83%
-------------- ---------- ---------
Share price(1) 23.20p 27.70p -16.25%
-------------- ---------- ---------
Share price discount to NAV 42.35% 30.59%
-------------- ----------
Six month Six month
period period
ended ended
30 September 30 September
2022 2021
-----------------------
Earnings per share(2) -0.62p 0.95p
-------------- --------------
Total return Six month Six month
period ended period ended
30 September 30 September
2022 2021
NAV Total Return(3) 0.83% 3.11%
-------------- --------------
Share price Total Return(4)
-------------- --------------
- Worsley Investors Limited -16.25% 10.00%
-------------- --------------
- FTSE All Share Index -8.31% 7.95%
-------------- --------------
- FTSE Real Estate Investment
Trust Index -33.24% 11.86%
-------------- --------------
Worsley Associates LLP ('Worsley Associates') was appointed on
31 May 2019 as Investment Advisor (the "Investment Advisor") to
Worsley Investors Limited (the "Company"). On 28 June 2019, the
current Investment Objective and Policy, which are set out as
below, were adopted.
Past performance is not a guide to future performance.
(1) Mid-market share price (source: Shore Capital and Corporate
Limited).
(2) Earnings per share based on the net loss for the period of
GBP0.209 million (30 September 2021: net profit for the period of
GBP0.321 million) and the weighted average number of Ordinary
Shares in issue during the period of 33,740,929 (30 September 2021:
33,740,929).
(3) NAV Total Return is a measure showing how the NAV per share
has performed over a period of time, taking into account both
capital returns and any dividends paid to shareholders.
(4) A measure showing how the share price has performed over a
period of time, taking into account both capital returns and any
dividends paid to shareholders.
Source : Worsley Associates LLP and Shore Capital and Corporate
Limited
Chairman's Statement
The Company achieved a positive NAV net return of +0.8% over the
six months. Within that, the total return on the capital invested
over the period in our equity portfolio was -1.7%. Both of these
compare very favourably to the wider market returns on both UK
equities and real estate investment companies and particularly on
smaller company equities, which significantly underperformed larger
company shares. Over the period, the total return on the FTSE All
Share Index was -8.3%, on the FTSE Small Capitalisation Index
-13.9% and on the FTSE Real Estate Investment Trust Index -33.2%.
Of course, our portfolio is invested to achieve absolute returns
and not to track or outperform a particular index but equally we
cannot completely divorce ourselves from the market context --
especially where market movements are dominated by short term
stresses rather than the operational performances of our specific
investees, which tend to assert themselves over longer timescales.
It was particularly frustrating to see the prices of a number of
our investments retreat even though the companies themselves were
proceeding according to expectations or indeed exceeding them.
The Company's main asset continues to be the Curno cinema. As
shareholders will recall, this is let under a long lease with a
little less than 13 years unexpired to a subsidiary of UCI, one of
the largest global cinema operators. The lease benefits from an
annual upwards-only indexation to Italian CPI, which up to the end
of November had risen by just over 11% since the end of 2021.
Assuming that the consumer price index does not fall over the final
two months of 2022, then the gross rental income for 2023 will
increase by EUR107,000 to EUR1.057 million. Once again, in valuing
the cinema for the purposes of these financial statements, the
independent valuer felt it appropriate to increase further the
implied yield, the corollary of which is a further reduction in the
local currency value of the property. The combination of the
increasing rental flow and the reduced valuation appraisal means
that the prospective yield on the 2023 passing rental will be in
excess of 12.4% on the basis set out above.
At our corporate level, the most frustrating short-term aspect
was that this relatively good investment performance did not
translate into a correspondingly good share price performance for
our shareholders. Although our NAV per share increased over the
quarter, the share price fell from 27.7 pence per share to 23.2
pence per share, which meant that the discount widened from 30.6%
to 42.3%. As a very small company, it is to be expected that our
share price recovery will lag the wider market recovery and the
Board will continue to monitor this closely. In the meantime, we
believe that the Company's shares represent compelling value,
especially given the prospective returns on our assets, some of
which is already playing out.
I am pleased to say that the share prices of several of our
principal equity exposures, such as Smiths News and Amadeo Air Four
Plus, have recovered strongly since the period end. More detail is
given in the Investment Advisor's Report on the following pages.
The significant increase in dividends with, we believe, more to
come, together with the prospective rental on Curno will serve to
enhance the Company's already strong cash flow.
Outlook
In many ways, the outlook as at the time of writing this report
is very much the same as when we published last year's financial
statements in mid-July. The Ukrainian war grinds on, China is only
now starting to move away from a zero-Covid policy with the
consequent disruption to global supply chains, while in the West
Covid is fading from the day-to-day lives of most people. Inflation
remains elevated but likely to plateau soon before falling back as
the pre-Ukrainian war price index levels drop out of the trailing
12-month comparison and interest rate normalisation continues
apace. Domestically, in the sense that the UK is the home market
for our core equity strategy, we had a truly astonishing quarter
with three prime ministers in quick succession. The short-lived
Truss administration in its public pronouncements had clearly not
appreciated the extent to which the supposedly staid UK pension
fund industry had in fact been running highly-leveraged derivative
strategies. I shall refrain from commenting on whether or not such
strategies are truly appropriate but, in the circumstances, it is
hardly surprising that the Bank of England was forced to intervene
in markets with liquidity on a massive scale to ensure stability.
The repudiation of the Truss pro-growth and low tax policies by the
Sunak administration has brought a degree of market recovery, but
the prospect of rising taxes, lower growth and squeezed living
standards will inevitably restrain general market performance.
That said, we do not invest in market averages but rather in
specific companies and so we are confident that with struggling
indices the scope for positively-differentiated performance is
improving. With Curno, we are fortunate to enjoy a strong cash
flow, no debt to service nor covenants to adhere to. A prospective
income yield approaching 12.5% from a good covenant with a long
lease and inflation protection should provide a return in excess of
general market levels until such time as confidence returns to
local potential purchasers who value the secure cash flow as we do.
We are under no compulsion to sell.
The performance of our investee companies and the simple
arithmetic at Curno continues to validate the Worsley strategy and
underpins our confidence for future prospects. The Company's share
price performance and widening discount over the six months, albeit
on very little traded volume, was disappointing and it has brought
the Company's share price to a 43% discount on an NAV which is
itself pregnant with unrealised value. We believe that this is a
compelling proposition.
Once again and on behalf of the Board, I would like to thank our
Investment Advisor, Worsley Associates LLP, for the steady progress
they have made in developing our portfolio and to thank you, our
shareholders, for your continuing support.
W. Scott
Chairman
14 December 2022
Investment Advisor's Report
Investment Advisor
The Investment Advisor, Worsley Associates LLP, is regulated by
the FCA and is authorised to provide investment management and
advisory services.
In the period under review, the equities portfolio continued to
be around 90% invested, and the Investment Advisor has concentrated
on portfolio development and oversight of the management of the
Curno cinema, investor interest in which has been very affected by
Italy's protracted exit from COVID-19 restrictions and the economic
fallout from the conflict in Ukraine.
Curno Cinema Complex
The Group's Italian multiplex cinema complex, located in Curno,
on the outskirts of Bergamo, is let in its entirety to UCI Italia
S.p.A. ("UCI").
The cinema lease documentation remains as amended in June
2020.
The key rental terms of the lease, which has a final termination
date of 31 December 2042, are:
Base Rent
1 April 2022 to 31 December 2022 - EUR949,770 per annum.
From 1 January 2022, at which point it increased by 3.8%, base
rental is indexed annually to 100% of the Italian ISTAT Consumer
Index on an upwards-only basis. The ISTAT Consumer Index in the
eleven months to 30 November has already risen 11.3%.
Variable Rent
Incremental rent is payable at the rate of EUR1.50 per ticket
sold above a minimum threshold of 350,000 tickets per year up to
450,000 tickets per year, rising in 50,000 ticket stages above this
level up to EUR2.50 per extra ticket.
Tenant Guarantee
The lease benefits from a rental guarantee of an initial EUR13
million, reducing over 15 years to EUR4.5 million, given by a U.K.
domiciled intermediate holding company for the UCI group's European
operations, United Cinemas International Acquisitions Limited,
which has latest published shareholders' funds of GBP308.8
million.
Tenant break option
UCI has the right to terminate the lease on 30 June 2035.
Trading
The cinema was open throughout the period. The requirement for
COVID-19 passes was lifted on 30 April and that for the wearing of
masks ceased on 15 June.
Ticket sales in the first quarter were subdued, with a paucity
of 'medium size' films and few releases of local Italian films.
However, as the period progressed the restored ability post
COVID-19 to sell food and beverages benefited total revenue per
customer. The industry saw soft trading in August and September
with a dearth of big movie releases. There is a much more robust
film slate in the third quarter and post 30 September ticket sales
have picked up well.
Rentals were current throughout the half.
Valuation
As at 30 September 2022, the Group's independent asset valuer,
Knight Frank LLP, fair valued the Curno cinema at EUR8.5 million
(31 March 2022: EUR8.7 million), and this figure has been adopted
in these Financial Statements.
Since the June 2020 lease amendment, the Board's expectation has
been that the valuation of the Curno cinema would increase once the
enhanced rental began to be generated by the property from 1 March
2021 onwards. The current rental is some 14% higher than the pre
amendment level and, based on 2022 Italian inflation to date, this
is set to increase to an increment of over 25% on 1 January
2023.
Nevertheless, the valuer during the half has chosen to increase
the yield at which it capitalised the rental stream by 0.25%, which
was had the effect of reducing the valuation by some 2.3%. This
increased conservativism follows an across the board increase in
European rental yields in reaction to the Ukrainian conflict and
the yield continues to reflect the fact that there is still very
limited market evidence upon which to rely.
Notwithstanding the cinema now being fully free from all
COVID-19 constraints, the conflict in Ukraine has had the proximate
impact of causing potential investors to pause for thought and to
await developments. The Group will retain the Curno cinema until a
disposal can be effected at a price which the board believes
properly reflects its medium term prospects.
Investment Strategy
The Investment Advisor's strategy allies the taking of holdings
in British quoted securities priced at a deep discount to their
intrinsic value, as determined by a comprehensive and robust
research process. Most of these companies will have smaller to
mid-sized equity market capitalisations, which will in general not
exceed GBP600 million. It is intended to secure influential
positions in such British quoted securities, with the employment of
activism as necessary to drive highly favourable outcomes.
Since the annual report, U. K. political manoeuvrings, and their
impact on monetary policy, have replaced inflation concerns as the
largest influence on the U.K. market.
At the end of August, the US Federal Reserve Chair's
uncompromising speech regarding its approach to rampant US
inflation sent the British stock market, which had been enjoying a
rally on positive economic news, sharply into reverse. A modest
recovery was then seen after the new Prime Minister, Elizabeth
Truss, announced a multibillion pound Government support package to
limit increases in domestic energy prices.
Events took an extraordinary turn on 22 September when the Bank
of England ('BoE') disappointed the U.K. gilt market, raising base
rates by 0.50%, significantly less than the market had been
expecting. The next day the new Government released its
mini-budget, which sought to rekindle growth, but involved very
substantial unfunded reversals of tax increases. Pounds sterling
hit a 37-year low against the US dollar, 30-year gilt yields rose
precipitously and the U.K. stock market slumped abruptly.
At that point, the BoE announced details of a GBP40 billion
intervention to stabilise the gilt market, which had been suffering
an extreme liquidity squeeze as large pension funds faced
multibillion pound margin calls on their leveraged derivative
exposure to plummeting long gilts. News of the intervention caused
an immediate easing of gilt yields, and the share market recovered
accordingly.
However, in the following week or so a resurgence of inflation
fears saw transatlantic bond yields kick back up. This, allied to
negative U.K. growth prognostications from the International
Monetary Fund, resulted in another sharp fall in U.K. equities and
two days later, Kwasi Kwarteng, the Chancellor of the Exchequer,
was sacked and replaced by Jeremy Hunt.
Sentiment altered dramatically on these developments and the
British share market began to swing upwards. Momentum for this was
strengthened on 20 October when Truss was forced to resign as Prime
Minister, being replaced the following Monday by Rishi Sunak. After
a brief dip on higher than expected U.K. inflation figures, the
Autumn Statement restored the underlying uptrend, and the market
strength has broadly continued since.
During the short-lived Truss administration, U.K. base rates
were forecast to increase to a level of over 6%, but the outlook
has softened on subsequent news, with a peak level of 4.5% or so
now foreseen for mid-2023. Reflecting this, the overall U.K. stock
market, which had delivered a total return of minus 8.3% in the six
months to 30 September, was, as of the close on 12 December, some
5.7% above its level at the time of the mini-budget.
In the Company's target universe of British smaller companies,
the total return over the six months to 30 September was minus
13.9%. Share prices in this section of the market, after further
precipitous falls in the first fortnight of October, have also
recovered, albeit less strongly, ending up approximately 0.9% over
the last two and a half months.
The Company's portfolio has remained quite fully invested during
the half. This includes a previously undisclosed holding of some
2.5% of the Group's Net Assets in Daniel Thwaites PLC ('THW'). THW
is an English company whose shares are traded on the Aquis Exchange
unlisted market. THW has a market capitalisation of GBP60.3 million
and, following the sale of its Blackburn brewery in 2015, the group
trades principally through two divisions. The pub division owns a
portfolio of around 215 tenanted pubs, together with a number of
managed inns, largely located in the North West of England. ' The
House of Daniel Thwaites' operates 10 hotels situated across
England. The vast majority of THW's sites are owned freehold. The
shares at 102.5p sell at a very substantial discount to their
stated NAV/share as at 30 September of some GBP3.82.
The largest portfolio position continues to be a shareholding in
excess of 4% in Smiths News plc, England's major distributor of
newspapers and magazines. In early November, Smiths News published
its 2022 preliminary results, which revealed slightly reduced
profitability, very strong 'one shot' (in particular football and
Pokémon trading cards) sales, modest ongoing reorganisation costs,
and robust debt reduction, which continued to exceed expectations.
The shares, after modest progress in the first three months of our
reporting period, for most of the second quarter resumed their
underperformance of the previous year, so the Company took the
opportunity to increase its holding at the depressed prices. Post
period end the shares have recovered well, being up circa 60% from
their recent trough.
The holding In Amedeo Air Four Plus Limited ('AA4') is
unchanged. In early October, after continued improvement in the
hours flown by the group's aircraft operated by Thai Air, its board
announced a 20% increase in the annual dividend to six pence per
share. Once Thai Air trading has fully normalised, there is scope
to return by way of capital return the GBP15 million held by AA4 as
a capital buffer, and to increase further the level of annual
dividend. The shares have performed very well subsequent to the
dividend announcement.
The Northamber plc shareholding was increased further in the
half year (and since has been raised to over 5% of the company) and
that in Shepherd Neame Limited was also topped up. Preliminary
(less than 2% of Net Assets) holdings are also held in 9 other
companies. During the second half, we exited our Hurricane Energy
bonds, as previously reported and sold down another three holdings,
crystallising substantial gains over their cost. One new position
was initiated.
Following the strong recovery since 30 September, the Company's
portfolio as at 1 December 2022 had a total cost of GBP4.53 million
and a combined market value of GBP7.00 million, and comprised 15
stocks. The surplus on the portfolio was a little over 54% of cost,
and the annualised return on capital invested since the new
strategy was adopted remains very acceptable and at the time of
writing remains in excess of 30%.
Results for the six month period
Cash revenue from Curno for the period to 30 September 2022 was
EUR474,900 (GBP405,000) ( 30 September 2021: EUR457,500
(GBP393,000)). There were no rental holidays in either period and
the increase reflected the inflationary rental adjustment, from 1
January 2022, which applied throughout the current half.
Property expenses, mainly local Curno property taxes, of some
EUR86,000 (GBP73,000) (( 30 September 2021: EUR85,000 (GBP73,000)),
were incurred.
General and administrative expenses of GBP260,000 ( 30 September
2021: GBP267,000) were slightly lower than the 2021 run rate, and
were in line with expectations. Administration expenses at
Multiplex 1 SRL, our Italian subsidiary, in the absence of one-off
projects were significantly lower in the half, but Group general
expenses were somewhat higher, which mainly reflected elevated
registry costs. Those were unusually high in the period, in part
owing to timing, but also abnormal costs relating to FATCA and CRS
reporting. In a reversal from the previous year, the reduction in
the independent valuation of the cinema led to a de crease in
AUM-based costs in the current half.
Transaction charges incurred on equity acquisitions were
GBP4,000 ( 30 September 2021: GBP2,000), mirroring a more usual
level of activity than in the corresponding half last year.
We continue to expect that the Group's ongoing operating costs
in the full year will be similar to the 2022 level. Prior to the
ultimate sale of Curno there is limited scope for significant
reduction in the overall cost base.
The equities portfolio suffered a small downturn in the first
quarter before a comparable reduction in the second, resulting for
the half as a whole in a GBP446,000 net investment mark-to-market
reduction (30 September 2021: GBP185,000 gain). Investment Income
for the half, predominantly dividends, was GBP203,000 and net
investment gains realised added GBP168,000. In consequence, the
total return on capital invested in the portfolio over the half
came out at minus 1.7%.
Taxation is payable on an ongoing basis on Italian income and in
Luxembourg. For the half, an Italian operating tax charge of
GBP36,000 ( 30 September 2021: GBP14,000) was incurred. In
addition, irrecoverable VAT in Luxembourg of some GBP3,000 was
suffered.
The outlook continues to be for operating cash flow (that is
prior to allowance for equity income) to be broadly neutral on an
ongoing basis.
Net Assets at 30 September 2022 were GBP13.577 million, which
compares with the GBP13.466 million contained in the 31 March 2022
Annual Report. The increase arose from the loss in the half of
GBP209,000, of which GBP170,000 (EUR200,000) related to the
reduction in the Euro valuation of the Curno property, being more
than offset by a GBP320,000 increase in the pounds sterling fair
value of Euro-denominated assets, principally the property.
Financial Position
The Group's Statement of Financial Position improved in the
period, with GBP676,000 in cash held at 30 September 2022 and no
debt. Augmented by the ample secondary liquidity of the equity
portfolio and positive ongoing cash flows the financial position
continues to be robust.
In due course the sale of the Curno cinema will provide
significant additional resources for equity investment.
Euro
As at 30 September 2022, circa 55.4% of Net Assets (31 March
2022: 55.2%) are denominated in Euros, and the Curno property
represented some 53.3% of Total Assets (31 March 2022: 52.6%). The
pounds sterling Euro cross rate moved slightly during the period
from 1.187 as at 31 March 2022 to 1.139 as at 30 September 2022.
This cross rate will remain a potentially significant influence on
the level of Group Net Assets until Curno's disposal.
Outlook
Despite a tightening in monetary conditions mid-year, by August
U.K. long term gilt yields were standing at levels which bore
little relationship to the obvious path of short term interest
rates. British equities were thus highly vulnerable to the gilt
market catching up with events, which occurred with breakneck speed
following the mini-budget in late September.
Nevertheless, U.K. stock market prices have recovered well to
close at considerably above their opening level at the beginning of
July, in what would appear to be a positive endorsement of the new
U.K. Government.
It seems clear that the direct impact of COVID-19 is now behind
us. That said, there is little doubt that in respect of recent
unbridled inflation it provided the fuel which was ignited by the
Russian crisis in Ukraine.
Cinemas in Italy are no longer subject to operational
constraints, and our rentals are current. However, the spiralling
cost of living in Italy has fed into substantial rises in
medium-term financing costs for cinema investors, almost all of
whom employ leverage. This in turn has heavily diminished the
prospects of a near turn disposal. In the meantime, the asset is an
excellent generator of inflation protected cash flow for the
Group.
Although the British stock market now seems to be discounting
the major impact of inflation on U.K. company earnings, we believe
the full, sustained, impact of normalised interest rates on overall
demand in the economy is yet to be seen. Recent pronouncements by
some U.K. companies that they are seeing the beginnings of recovery
therefore appear to us to be somewhat premature.
As we foreshadowed in the Annual Report, during the period
numerous negative trading updates were announced by British
companies. In consequence, numerous smaller stocks have,
unsurprisingly, seen their prices fall abruptly.
While care must be taken to avoid the vast majority of
situations where such drops are well justified, there is inevitably
a proportion of stocks which during such downgrades become
seriously mispriced. Such conditions have historically proven rich
hunting grounds for our strategy and others like it.
The Company's equity portfolio is well founded, and
notwithstanding the economic headwinds it remains well placed to
prosper.
Worsley Associates LLP
14 December 2022
Interim Management Report
A description of the important events which have occurred during
the first six months of the financial year and their impact on the
performance of the Company as shown in the Financial Statements is
given in the Chairman's Statement, the Investment Advisor's Report
and the Notes to the Financial Statements and are incorporated here
by reference.
Statement of principal risks and uncertainties
The Board is responsible for the Company's system of internal
controls and for reviewing its effectiveness. The Board, through
its Risk Committee, has carried out a robust assessment of the
principal risks and uncertainties facing the Company, using a
comprehensive risk matrix as the basis for analysing the Company's
system of internal controls while monitoring the investment limits
and restrictions set out in the Company's investment objective and
policy.
The principal risks assessed by the Board relating to the
Company were disclosed in the Annual Financial Report for the year
ended 31 March 2022. The principal risks disclosed include
investment risk, operational risk, accounting, legal and regulatory
risk, financial risks, foreign exchange risk and COVID-19. A
detailed explanation of these can be found on page 18 of the Annual
Financial Report. The Board and Investment Advisor do not consider
these risks, other than that in respect of COVID-19, which has
abated, to have changed materially during the six months ended 30
September 2022 and they are not expected to change in the remainder
of the financial year.
Going concern
The Directors, at the time of approving the Financial
Statements, have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
next 12 months. The lease income generates enough cash flows to pay
on-going expenses. The Directors have considered the cash position
and performance of the current capital invested of the Group and
concluded that it is appropriate to adopt the going concern basis
in the preparation of these Financial Statements.
Going concern is assessed over a minimum period of 12 months
from the approval of these Financial Statements. The Board
considers there to be no material uncertainty owing to the fact
that the Group currently has no borrowing, retains a significant
cash balance and that the Company's equity investments comprise
predominantly readily realisable securities.
Interim Report is Unaudited
This Interim Report has not been audited, nor reviewed by
auditors pursuant to the Auditing Practices Board guidance on
Review of Interim Financial Information.
Responsibility Statement
We confirm to the best of our knowledge that:
-- the Condensed Unaudited Interim Financial Statements have
been prepared in accordance with International Accounting Standard
34 'Interim Financial Reporting'; as required by Disclosure
Guidance & Transparency Rule ("DTR") 4.2.4R of the UK's
Financial Conduct Agency ("FCA"); and
-- the Interim Management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events which have occurred during the
first six months of the financial year and 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
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions which have taken place in the first six
months of the current financial year and which have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last Annual Report which could do so.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website, and for the preparation and dissemination of
financial statements. Legislation in Guernsey governing the
preparation and dissemination of financial statement may differ
from legislation in other jurisdictions.
On behalf of the Board
W. Scott
Chairman
14 December 2022
Condensed Unaudited Consolidated Statement of Comprehensive
Income
For the six months ended 30 September 2022
For the six For the six
month period month period
to to
30 September 30 September
2022 2021
(Unaudited) (Unaudited)
Notes GBP000s GBP000s
---- ------ --------------------------------------- ------ -------------- --------------
3 &
Gross property income 6 380 369
3 &
Property operating expenses 6 (73) (73)
Net property income 307 296
----------------------------------------------------- ------ -------------- --------------
Net (loss)/gain on investments at
fair value through profit or loss 7 (75) 275
Unrealised valuation loss on investment (170) -
property
Lease incentive movement 3 25 24
Other income - 7
General and administrative expenses 4 (260) (267)
---- ----------------------------------------------- ------ -------------- --------------
Operating (loss)/profit (173) 335
----------------------------------------------------- ------ -------------- --------------
(Loss)/profit before tax (173) 335
----------------------------------------------------- ------ -------------- --------------
Income tax expense (36) (14)
(Loss)/profit for the period (209) 321
----------------------------------------------------- ------ -------------- --------------
Other comprehensive income
Foreign exchange translation gain 320 113
------------------------------------------------ ------ -------------- --------------
Total items which are or may be reclassified
to profit or loss 111 434
----------------------------------------------------- ------ -------------- --------------
Total comprehensive profit for the
period 111 434
----------------------------------------------------- ------ -------------- --------------
Basic and diluted (loss)/earnings
per ordinary share (pence) 5 (0.62) 0.95
----------------------------------------------------- ------ -------------- --------------
The accompanying notes form an integral part of these Financial
Statements
Condensed Unaudited Consolidated Statement of Changes in
Equity
For the six months ended 30 September 2022
Foreign
Revenue Distributable currency Total
reserve reserve reserve equity
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP000s GBP000s GBP000s GBP000s
---------------------------- ------------ -------------- ------------ ------------
Balance at 1 April 2022 (45,477) 47,263 11,680 13,466
Loss for the period (209) - - (209)
Other comprehensive income - - 320 320
Balance at 30 September
2022 (45,686) 47,263 12,000 13,577
----------------------------- ------------ -------------- ------------ ------------
For the six months ended 30 September 2021
Foreign
Revenue Distributable currency Total
reserve reserve reserve equity
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP000s GBP000s GBP000s GBP000s
---------------------------- ------------ -------------- ------------ ------------
Balance at 1 April 2021 (44,972) 47,263 11,728 14,019
Profit for the period 321 - - 321
Other comprehensive income - - 113 113
Balance at 30 September
2021 (44,651) 47,263 11,841 14,453
----------------------------- ------------ -------------- ------------ ------------
The accompanying notes form an integral part of these Financial
Statements
Condensed Unaudited Consolidated Statement of Financial
Position
As at 30 September 2022
30 September
2022 31 March 2022
(Unaudited) (Audited)
Notes GBP000s GBP000s
--------- -------------------------------- ------ ------------- --------------
Non-current assets
Investment property 6 6,678 6,550
Lease incentive 785 778
------------------------------------------ ------ ------------- --------------
Total non-current assets 7,463 7,328
Current assets
Cash and cash equivalents 676 576
Investments held at fair value
through profit or loss 7 5,816 5,973
Trade and other receivables 8 36 34
Tax receivable 14 52
------------------------------------------ ------ ------------- --------------
Total current assets 6,542 6,635
Total assets 14,005 13,963
------------------------------------------- ------ ------------- --------------
Non-current liabilities
Deferred tax payable 75 72
------------------------------------------ ------ ------------- --------------
Total non-current liabilities 75 72
Current liabilities
Trade and other payables 9 212 254
Tax payable 141 171
------------------------------------------ ------ ------------- --------------
Total current liabilities 353 425
Total liabilities 428 497
------------------------------------------- ------ ------------- --------------
Total net assets 13,577 13,466
------------------------------------------- ------ ------------- --------------
Equity
Revenue reserve (45,686) (45,477)
Distributable reserve 47,263 47,263
Foreign currency reserve 12,000 11,680
Total equity 13,577 13,466
------------------------------------------- ------ ------------- --------------
Number of ordinary shares 33,740,929 33,740,929
Net asset value per ordinary share
(pence) 11 40.24 39.91
------------------------------------------- ------ ------------- --------------
The Financial Statements were approved by the Board of Directors
and authorised for issue on 14 December 2022. They were signed on
its behalf by:
W. Scott
Chairman
The accompanying notes form an integral part of these Financial
Statements
Condensed Unaudited Consolidated Statement of Cash Flows
For the sixth months ended 30 September 2022
For the six For the six
month period month period
to to
30 September 30 September
2022 2021
(Unaudited) (Unaudited)
Notes GBP000s GBP000s
------------------------------------------ ------ -------------- --------------
Operating activities
(Loss)/profit before tax (173) 335
Adjustments for:
Net loss/(gain) on investments
held at fair value through profit
or loss 7 75 (275)
Investment income 203 66
Unrealised valuation loss on investment
property 170 -
(Increase)/decrease in trade and
other receivables (32) 168
Increase in provisions - 1
Decrease in trade and other payables (42) (23)
Purchase of investments held at
fair value through profit or loss 7 (533) (529)
Sale of investments held at fair
value through profit or loss 7 412 80
Net cash from/(used in) from operations 80 (177)
--------------------------------------------------- -------------- --------------
Tax (paid)/received (27) 65
Net cash inflow/(outflow) from operating
activities 53 (112)
--------------------------------------------------- -------------- --------------
Effects of exchange rate fluctuations 47 44
Increase/decrease in cash and cash equivalents 100 (68)
--------------------------------------------------- -------------- --------------
Cash and cash equivalents at start
of the period 576 486
Cash and cash equivalents at the period
end 676 418
--------------------------------------------------- -------------- --------------
The accompanying notes form an integral part of these Financial
Statement
1. Operations
Worsley Investors Limited (the "Company") is a limited
liability, closed-ended investment company incorporated in
Guernsey. The Company historically invested in commercial property
in Europe which was held through Subsidiaries. The Company's
current investment objective is to provide Shareholders with an
attractive level of absolute long-term return, principally through
the capital appreciation and exit of undervalued securities. The
existing real estate asset of the Company will be realised in an
orderly manner, that is with a view to optimising the disposal
value of such asset.
The Condensed Unaudited Consolidated Financial Statements (the
"Financial Statements") of the Company for the period ended 30
September 2022 comprise the Financial Statements of the Company and
its Subsidiaries (together referred to as the "Group").
Worsley Associates LLP was appointed on 31 May 2019 as
Investment Advisor to the Company.
Please refer to the Investment Policy below. The Company's
registered office is included below.
2. Significant accounting policies
Basis of preparation
These Financial Statements have been prepared in accordance with
International Accounting Standard ("IAS") 34 'Interim Financial
Reporting' as required by DTR 4.2.4R, the Listing Rules of the
London Stock Exchange and applicable legal and regulatory
requirements. They do not include all the information and
disclosures required in Annual Financial Statements and should be
read in conjunction with the Company's last Annual Report and
Audited Consolidated Financial Statements for the year ended 31
March 2022.
The same accounting policies and methods of computation are
followed in the Interim Financial Report as compared with the most
recent Annual Financial Statements for the year ended 31 March
2022.
Going concern
The Directors, at the time of approving the Financial
Statements, have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
next 12 months. The lease income generates enough cash flows to pay
on-going expenses. The Directors have considered the cash position
and performance of the current capital invested of the Group and
concluded that it is appropriate to adopt the going concern basis
in the preparation of these Financial Statements.
Going concern is assessed over a minimum period of 12 months
from the approval of these Financial Statements. The Board consider
there to be no material uncertainty owing to the fact that the
Group currently has no borrowing, retains a significant cash
balance and that the Company's equity investments comprise
predominantly readily realisable securities.
3. Gross property income
Gross property income for the period ended 30 September 2022
amounted to GBP0.380 million (30 September 2021: GBP0.369 million).
The Group leases out its investment property under an operating
lease which is structured in accordance with local practices in
Italy. The Group's lease agreement in place as at 30 September 2022
was unchanged from that disclosed in the Company's Audited Annual
Financial Statements for the year ended 31 March 2022.
Property income
30 September 30 September
2022 2021
GBP000s GBP000s
(Unaudited) (Unaudited)
------------------------------------------ ------------- -------------
Property income received (gross of lease
incentives) 405 393
Straight-lining of lease incentives (25) (24)
------------------------------------------ ------------- -------------
Property income 380 369
------------------------------------------ ------------- -------------
Expense from services to tenants, other property operating and
administrative expenses
30 September 30 September
2022 2021
GBP000s GBP000s
(Unaudited) (Unaudited)
------------------------------------------- ------------- -------------
Property expenses arising from investment
property which generates income 73 73
------------------------------------------- ------------- -------------
Total property operating expenses 73 73
------------------------------------------- ------------- -------------
There were no p roperty expenses arising from investment
property which did not generate income.
4. General and administrative expenses
30 September 30 September
2022 2021
GBP000s GBP000s
(Unaudited) (Unaudited)
------------------------ ---------------------------- ------------- -------------
Administration fees 54 60
General expenses 37 31
Audit fees 25 22
Legal and professional fees 9 17
Directors' fees
(note 13) 23 23
Insurance costs 14 12
Corporate broker fees 13 13
Investment Advisor fees (note 13) 85 89
Total 260 267
---------------------------------------------------------- ------------- -------------
5. Basic and diluted earnings per ordinary share (pence)
The basic and diluted earnings per share for the Group is based
on the net loss for the period of GBP0.209 million (30 September
2021: net profit of GBP0.321 million) and the weighted average
number of Ordinary Shares in issue during the period of 33,740,929
(30 September 2021: 33,740,929). There are no instruments in issue
which could potentially dilute earnings or loss per Ordinary
Share.
6. Investment property
6 months
ended Year ended
30 September
2022 31 March 2022
(Unaudited) (Audited)
GBP000s GBP000s
------------------------------------------------- ------------- --------------
Valuation of investment property before lease
incentive adjustment
at beginning of period/year 7,328 8,170
Fair value adjustment (170) (770)
Foreign exchange translation 305 (72)
Independent external valuation 7,463 7,328
Adjusted for: Lease incentive* (785) (778)
Fair value of investment property at the
end of the period/year 6,678 6,550
--------------------------------------------------- ------------- --------------
* The Lease incentive is separately classified as a non-current
asset within the Consolidated Statement of Financial Position and,
to avoid double counting, is hence deducted from the independent
property valuation to arrive at fair value for accounting
purposes.
The property is carried at fair value. The lease incentive
granted to the tenant is amortised over the term of the lease. In
accordance with IFRS, the external independent valuation is reduced
by the carrying amount of the lease incentive as at the valuation
date.
Quarterly valuations are carried out at 31 March, 30 June, 30
September and 31 December by Knight Frank LLP, external independent
valuers. The valuation of the investment property is recorded in
Euros and converted into pounds sterling at the end of each
reporting period. The rates used were as follows:
30 September 2022 31 March 2022
(Unaudited) (Audited)
------------ ------------------ --------------
Euro / GBP 1.139 1.187
The resultant fair value of investment property is analysed
below by valuation method, according to the levels of the fair
value hierarchy. The different levels have been defined as
follows:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1
which are observable for asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices);
Level 3: inputs for the asset or liability which are not based
on observable market data (unobservable inputs).
The investment property (Curno) is classified as Level 3.
The significant assumptions made relating to its independent
valuation are set out below:
Significant assumptions 30 September 2022 31 March 2022
(Unaudited) (Audited)
---------------------------------------------------- ------------------ --------------
Gross estimated rental value per square metre p.a. EUR114.00 114.00EUR
Equivalent yield 10.77% 10.53%
The external valuer has carried out its valuation using the
comparative and investment methods. The external valuer has made
the assessment on the basis of a collation and analysis of
appropriate comparable investment and rental transactions. The
market analysis has been undertaken using market knowledge,
enquiries of other agents, searches of property databases, as
appropriate and any information provided to them. The external
valuer has adhered to the RICS Valuation - Professional
Standards.
An increase/decrease in ERV (Estimated Rental Value) will
increase/decrease valuations, while an increase/decrease to yield
decreases/increases valuations. The information below sets out the
sensitivity of the independent property valuation to changes in
Fair Valu
If market rental increases by 10% then property value increases
by 2.47%, being EUR209,974 (31 March 2022: 2.41%, being
EUR210,484).
If market rental decreases by 10% then property value decreases
by 2.47% being EUR209,974 (31 March 2022: 2.41%, being
EUR210,484).
If yield increases by 1% then property value decreases by 7.72%,
being EUR657,101 (31 March 2022: 8.36%, being EUR728,913).
If yield decreases by 1% then property value increases by 9.30%,
being EUR791,890 (31 March 2022: 10.06%, being EUR877,169).
Property assets are inherently difficult to value owing to the
individual nature of each property. As a result, valuations are
subject to uncertainty. There is no assurance that estimates
resulting from the valuation process will reflect the actual sales
price even where a sale occurs shortly after the valuation date.
Rental income and the market value for properties are generally
affected by overall conditions in the local economy, such as growth
in Gross Domestic Product ("GDP"), employment trends, inflation and
changes in interest rates. Changes in GDP may also impact
employment levels, which in turn may impact the demand for
premises. Furthermore, movements in interest rates may affect the
cost of financing for real estate companies.
Both rental income and property values may be affected by other
factors specific to the real estate market, such as competition
from other property owners, the perceptions of prospective tenants
of the attractiveness, convenience and safety of properties, the
inability to collect rents because of the bankruptcy or the
insolvency of tenants, the periodic need to renovate, repair and
release space and the costs thereof, the costs of maintenance and
insurance, and increased operating costs. The Investment Advisor
addresses market risk through a selective investment process,
credit evaluations of tenants, ongoing monitoring of tenants and
through effective management of the property.
7. Investments at fair value through profit or loss
("FVTPL")
6 months ended Year ended
30 September 2022 31 March 2022
GBP000s GBP000s
(Unaudited) (Audited)
Opening book cost 3,983 3,353
Total unrealised gains at beginning of period 1,990 2,151
---------------------------------------------------------------- ------------------ --------------
Fair value of investments at FVTPL at beginning of period 5,973 5,504
Purchases 533 867
Sales (412) (283)
Realised gains 168 46
Unrealised losses (446) (161)
---------------------------------------------------------------- ------------------ --------------
Total investments at FVTPL 5,816 5,973
---------------------------------------------------------------- ------------------ --------------
Closing book cost 4,272 3,983
Total unrealised gains at end of period 1,544 1,990
Total investments at FVTPL 5,816 5,973
----------------------------------------------- ----------- -----------
30 September 2022 30 September 2021
GBP000s GBP000s
(Unaudited) (Unaudited)
Realised gains 168 24
Unrealised (losses)/gains (446) 185
--------------------------------------------------------- ------------------ ------------------
Total (losses)/gains on investments at FVTPL (278) 209
--------------------------------------------------------- ------------------ ------------------
Investment income 203 66
--------------------------------------------------------- ------------------ ------------------
Total (losses)/gains on financial assets at FVTPL (75) 275
--------------------------------------------------------- ------------------ ------------------
The fair value of investments at FVTPL are analysed below by
valuation method, according to the levels of the fair value
hierarchy. The different levels have been defined as follows:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1
which are observable for asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices);
Level 3: inputs for the asset or liability which are not based
on observable market data (unobservable inputs).
The following table analyses within the fair value hierarchy the
Company's financial assets at fair value through profit or
loss:
30 September 2022 Level 1 Level 2 Level 3 Total
GBP000s GBP000s GBP000s GBP000s
Fair value through profit or loss
----------- -------- -------- --------
- Investments 4,170 1,646 - 5,816
----------- -------- -------- --------
As at 30 September 2022, within the Company's financial assets
classified as Level 2, securities totalling GBP1,106,936 are traded
on the London Stock Exchange or AIM, with securities of GBP539,350
being traded on the Aquis Exchange and GBPnil being traded on The
International Stock Exchange. The Level 2 securities are valued at
the traded price as at the period end and no adjustment has been
deemed necessary to these prices. However, although these are
traded, they are not regularly traded in significant volumes and
hence have been classified as level 2.
31 March 2022 Level 1 Level 2 Level 3 Total
GBP000s GBP000s GBP000s GBP000s
Fair value through profit or loss
----------- -------- -------- --------
- Investments 4,189 1,784 - 5,973
----------- -------- -------- --------
As at 31 March 2022, within the Company's financial assets
classified as Level 2, securities totalling GBP1,148,932 are traded
on the London Stock Exchange or AIM, securities of GBP335,000 being
traded on the Aquis Exchange and securities of GBP300,154 being
traded in The International Stock Exchange.
The valuation and classification of the investments are reviewed
on a regular basis. The Board determines whether or not transfers
have occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input which is
significant to the fair value measurement as a whole) at the end of
each reporting period.
8. Trade and other receivables
30 September
2022 31 March 2022
GBP000s GBP000s
(Unaudited) (Audited)
------------- ------------- --------------
Prepayments 36 34
Total 36 34
--------------- ------------- --------------
The carrying values of trade and other receivables are
considered to be approximately equal to their fair value.
9. Trade and other payables
30 September
2022 31 March 2022
GBP000s GBP000s
(Unaudited) (Audited)
-------------------------------------- ------------- --------------
Investment Advisor's fee (note 13) 18 17
Administration fees 66 37
Audit fee 25 40
Directors' fees payable (note 13) 5 2
Other 98 158
Total 212 254
-------------------------------------- ------------- --------------
Trade and other payables are non-interest bearing and are
normally settled on 30-day terms. The carrying values of trade and
other payables are considered to be approximately equal to their
fair value.
10. Share capital
6 months ended Year ended
30 September 2022 31 March 2022
Number of shares Number of shares
(Unaudited) (Audited)
Shares of no par value issued and fully paid
Balance at the start of the period/year 33,740,929 33,740,929
Balance at the end of the period/year 33,740,929 33,740,929
---------------------------------------------- ------------------ -----------------
6 months ended Year ended
30 September 2022 31 March 2022
GBP000s GBP000s
(Unaudited) (Audited)
------------------------------------------------------------------ ------------------ --------------
Balance at the start of the period/year 13,466 14,019
Profit/(loss) for the period/year and other comprehensive income 111 (553)
Balance at the end of the period/year 13,577 13,466
------------------------------------------------------------------ ------------------ --------------
No shares were issued by the Company during the period (31 March
2022: none).
11. Net asset value per ordinary share
The Net Asset Value per Ordinary Share at 30 September 2022 is
based on the net assets attributable to the ordinary shareholders
of GBP13.577 million (31 March 2022: GBP13.466 million) and on
33,740,929 (31 March 2022: 33,740,929) ordinary shares in issue at
the Consolidated Statement of Financial Position date.
12. Financial risk management
The Company's financial risk management objectives and policies
are consistent with those disclosed in the Company's Audited Annual
Financial Statements for the year ended 31 March 2022.
13. Related party transactions
The Directors are responsible for the determination of the
Company's investment objective and policy and have overall
responsibility for the Group's activities including the review of
investment activity and performance.
Mr Nixon, a Director of the Company, is also Founding Partner
and a Designated Member of Worsley Associates LLP ("Worsley"). The
total charge to the Consolidated Income Statement during the period
in respect of Investment Advisor fees to Worsley was GBP85,450 (30
September 2021: GBP89,023) of which GBP17,711 (31 March 2022:
GBP8,713) remained payable at the period end.
Upon appointment of Worsley as Investment Advisor (31 May 2019),
Mr Nixon waived his future Director's fee as he is a member of the
Investment Advisor.
As at 30 September 2022, Mr Nixon held 29.88% of the shares in
the Company (31 March 2022: 29.88%).
As at 30 September 2022, Mr Scott held 1.91% of the shares in
the Company (31 March 2022: 1.19%).
The aggregate remuneration and benefits in kind of the Directors
and directors of its subsidiaries in respect of the period ended 30
September 2022 amounted in respect of the Group to GBP22,975 (30
September 2021: GBP23,019), of which GBP17,500 (30 September 2021:
GBP17,500) was in respect of the Company. At the period end
GBP4,939 remained payable (31 March 2022: GBP1,579).
All the above transactions were undertaken at arm's length.
14. Capital commitments and contingent liability
As at 30 September 2022 the Company has no capital commitments
(31 March 2021: no commitments).
Disposal of the Curno property may, depending on the terms,
incur Italian taxes which would be material in the context of
Shareholders' Funds. As at 30 September 2022 and up to the date of
approval, no disposal was in discussion. As a result, no provision
has been included in these Financial Statements.
15. Segmental analysis
As at 30 September 2022, the Group has two segments (31 March
2022: two).
The following summary describes the operations in each of the
Group's reportable segments for the current period:
Property Group Management of the Group's property asset.
Parent Company Parent Company, which holds listed equity investments
Information regarding the results of each reportable segment is
shown below. Performance is measured based on segment profit/(loss)
for the period, as included in the internal management reports that
are reviewed by the Board, which is the Chief Operating Decision
Maker ("CODM"). Segment profit is used to measure performance as
management believes that such information is the most relevant in
evaluating the results of certain segments relative to other
entities that operate within these industries.
The accounting policies of the reportable segments are the same
as the Group's accounting policies.
(a) Group's reportable segments
Continuing Operations
30 September 2022 Property Group Parent Company Total
GBP000 GBP000 GBP000
External revenue
Gross property income 380 - 380
Property operating expenses (73) - (73)
Net loss on investments at fair value through profit or loss - (75) (75)
Unrealised valuation loss on investment property (170) - (170)
Lease incentive movement 25 - 25
--------------- --------------- -------
Total segment revenue 162 (75) 87
Expenses
General and administrative expenses (63) (197) (260)
--------------- --------------- -------
Total operating expenses (63) (197) (260)
Profit/(loss) before tax 99 (272) (173)
Income tax charge (36) - (36)
--------------- --------------- -------
Profit/(loss) after tax 63 (272) (209)
Profit/(loss) for the period 63 (272) (209)
--------------- --------------- -------
Total assets 7,789 6,216 14,005
--------------- --------------- -------
Total liabilities 269 159 428
--------------- --------------- -------
(b) Geographical information
The Company is domiciled in Guernsey. The Group has subsidiaries
incorporated in Europe.
The Group's revenue from external customers from continuing
operations and information about its segment non-current assets by
geographical location (of the country of incorporation of the
entity earning revenue or holding the asset) are detailed
below:
Revenue from External Customers Non-Current Assets
For the six months ended
30 September 2022 30 September 2022
GBP000 GBP000
-------- -------------------------------- -------------------
Europe 380 7,463
380 7,463
-------------------------------- -------------------
Revenue from External Customers Non-Current Assets
For the six months ended
30 September 2021 31 March 2022
GBP000 GBP000
-------- -------------------------------- -------------------
Europe 369 7,328
369 7,328
-------------------------------- -------------------
16. Subsequent events
There were no post period end events which require disclosure in
these Financial Statements.
Portfolio statement (unaudited)
as at 30 September 2022
Fair value % of Group
Currency GBP'000 Net Assets
------------------------------------- ---------- ----------- ------------
UCI Curno EUR 7,463 54.97%
Less: lease incentive EUR (785) (5.78%)
----------- ------------
Total 6,678 49.19%
----------- ------------
Smiths News Plc GBP 3,387 24.95%
Amedeo Air Four Plus Limited GBP 541 3.98%
Northamber Plc GBP 516 3.80%
Daniel Thwaites PLC GBP 338 2.49%
Shepherd Neame Limited GBP 201 1.48%
Total disclosed securities 4,983 36.70%
Other securities (none greater than
2% of Net Assets) 833 6.13%
Total securities 5,816 42.83%
----------- ------------
Total investments 12,494 92.02%
----------- ------------
Investment Policy
Investment Objective and Policy Change
At an EGM held on 28 June 2019, an ordinary resolution was
passed to adopt a new Investment Objective and Policy.
Investment Objective
The Company's investment objective is to provide shareholders
with an attractive level of absolute long-term return, principally
through the capital appreciation and exit of undervalued
securities. The existing real estate asset of the Company will be
realised in an orderly manner, that is with a view to optimising
the disposal value of such asset.
Investment Policy
The Company aims to meet its objectives through investment
primarily, although not exclusively, in a diversified portfolio of
securities and related instruments of companies listed or admitted
to trading on a stock market in the British Isles (defined as (i)
the United Kingdom of Great Britain and Northern Ireland; (ii) the
Republic of Ireland; (iii) the Bailiwicks of Guernsey and Jersey;
and (iv) the Isle of Man). The majority of such companies will also
be domiciled in the British Isles. Most of these companies will
have smaller to mid-sized equity market capitalisations (the
definition of which may vary from market to market, but will in
general not exceed GBP600 million). It is intended to secure
influential positions in such British quoted securities with the
deployment of activism as required to achieve the desired
results.
The Company, Property Trust Luxembourg 2 SARL and Multiplex 1
SRL ("the Group") may make investments in listed and unlisted
equity and equity-related securities such as convertible bonds,
options and warrants. The Group may also use derivatives, which may
be exchange traded or over-the-counter.
The Group may also invest in cash or other instruments including
but not limited to: short, medium or long term bank deposits in
pounds sterling and other currencies, certificates of deposit and
the full range of money market instruments; fixed and floating rate
debt securities issued by any corporate entity, national
government, government agency, central bank, supranational entity
or mutual society; futures and forward contracts in relation to any
other security or instrument in which the Group may invest; put and
call options (however, the Group will not write uncovered call
options); covered short sales of securities and other contracts
which have the effect of giving the Group exposure to a covered
short position in a security; and securities on a when-issued basis
or a forward commitment basis.
The Group pursues a policy of diversifying its risk. Save for
the Curno Asset until such time as it is realised, the Group
intends to adhere to the following investment restrictions:
-- not more than 30 per cent. of the Gross Asset Value at the
time of investment will be invested in the securities of a single
issuer (such restriction does not, however, apply to investment of
cash held for working capital purposes and pending investment or
distribution in near cash equivalent instruments including
securities issued or guaranteed by a government, government agency
or instrumentality of any EU or OECD Member State or by any
supranational authority of which one or more EU or OECD Member
States are members);
-- the value of the four largest investments at the time of
investment will not constitute more than 75 per cent of Gross Asset
Value;
-- the value of the Group's exposure to securities not listed or
admitted to trading on any stock market will not exceed in
aggregate 35 per cent. of the Net Asset Value;
-- the Group may make further direct investments in real estate
but only to the extent such investments will preserve and/or
enhance the disposal value of its existing real estate asset. Such
investments are not expected to be material in relation to the
portfolio as a whole but in any event will be less than 25 per
cent. of the Gross Asset Value at the time of investment. This
shall not preclude Property Trust Luxembourg 2 SARL and Multiplex 1
SRL (the "Subsidiaries") from making such investments for
operational purposes;
-- the Company will not invest directly in physical commodities,
but this shall not preclude its Subsidiaries from making such
investments for operational purposes;
-- investment in the securities, units and/or interests of other
collective investment vehicles will be permitted up to 40 per cent.
of the Gross Asset Value, including collective investment schemes
managed or advised by the Investment Advisor or any company within
the Group; and
-- the Company must not invest more than 10 per cent. of its
Gross Asset Value in other listed investment companies or listed
investment trusts, save where such investment companies or
investment trusts have stated investment policies to invest no more
than 15 per cent. of their gross assets in other listed investment
companies or listed investment trusts.
The percentage limits above apply to an investment at the time
it is made. Where, owing to appreciation or depreciation, changes
in exchange rates or by reason of the receipt of rights, bonuses,
benefits in the nature of capital or by reason of any other action
affecting every holder of that investment, any limit is breached by
more than 10 per cent., the Investment Advisor will, unless
otherwise directed by the Board, ensure that corrective action is
taken as soon as practicable.
Borrowing and Leverage
The Group may engage in borrowing (including stock borrowing),
use of financial derivative instruments or other forms of leverage
provided that the aggregate principal amount of all borrowings
shall at no point exceed 50 per cent. of Net Asset Value. Where the
Group borrows, it may, in order to secure such borrowing, provide
collateral or security over its assets, or pledge or charge such
assets.
Corporate Information
Directors (All non-executive) Registered Office
W. Scott (Chairman) Sarnia House
R. H. Burke Le Truchot
B. A. Nixon St Peter Port
Guernsey, GY1 1GR
Investment Advisor Administrator and Secretary
Worsley Associates LLP Sanne Fund Services (Guernsey) Limited
First Floor Sarnia House
Barry House Le Truchot
20 - 22 Worple Road St Peter Port
Wimbledon, SW19 4DH Guernsey, GY1 1GR
United Kingdom
Financial Adviser Corporate Broker
Shore Capital and Corporate Limited Shore Capital Stockbrokers Limited
Cassini House Cassini House
57 St James's Street 57 St James's Street
London, SW1A 1LD London SW1A 1LD
United Kingdom United Kingdom
Independent Auditor Registrar
BDO Limited Computershare Investor Services (Guernsey)
Place du Pr é Limited
Rue du Pr é 1(st) Floor
St Peter Port Tudor House
Guernsey, GY1 3LL Le Bordage
St Peter Port
Guernsey, GY1 1DB
Registration Number
43007
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END
IR BLBDDBDBDGDS
(END) Dow Jones Newswires
December 15, 2022 02:00 ET (07:00 GMT)
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