Artemis Alpha Trust Plc - Annual Financial Report
LEI: 549300MQXY2QXEIL3756
Annual Report for the year ended
Financial Highlights
Yearended Year ended 30 April2024 30 April 2023 Totalreturns Net asset value per ordinary share* 15.1% 1.3% Ordinary share price* 12.3% (1.2)% FTSE All-Share Index 7.5% 6.0% Revenueanddividends Revenue earnings per ordinary share 7.89p 6.74p Dividends per ordinary share 6.80p 6.20p Ongoing charges* 1.06% 1.08%
Asat As at 30 April2024 30 April 2023 Capital Net Assets (£’000) 135,329 119,817 Net asset value per ordinary share 413.68p 366.02p Ordinary share price 351.00p 319.00p Net gearing* 13.1% 13.4%
Totalreturnsto30April2024 3years 5years 10years Since 1 June2003** Net asset value per ordinary share* (8.9)% 26.0% 43.3% 652.0% Ordinary share price* (16.5)% 32.1% 39.9% 574.6% FTSE All-Share Index 23.9% 30.1% 75.8% 371.2%
** The date when Artemis was appointed as Investment Adviser
* Alternative Performance Measure
Source: Artemis/Datastream
Chairman’s statement
Performance
During the year ended
During the second half of the year your portfolio enjoyed a stronger absolute and relative performance after a difficult first half dominated by uncertainty and volatility. In the six months to the end of
Although the FTSE All-Share Index is our formal benchmark, a significant proportion of the companies in the portfolio form part of the
Portfolio
The year to
The Manager remains optimistic about the
Revenue earnings and dividends
We are pleased to be able to deliver growth in dividends at a rate in excess of inflation, in line with our policy.
The Board has declared a final dividend of 4.26p (2023: 3.87p) per share, which will be subject to approval by shareholders at the Company’s Annual General Meeting on
Total dividends declared for the year will therefore amount to 6.80p per share (2023: 6.20p), an increase of 9.7% on the previous year and ahead of the increase in the Consumer Prices Index (8.7% as at
Investment income from our investee companies increased significantly during the year by 18.5%. The subsidiary company continues to have healthy reserves with which to support the Company’s earnings and dividends, if required.
Revenue earnings per share stand at 7.89p for the year to
Share buy backs/discount
We have maintained a pragmatic approach to buying back our shares throughout the year, aiming to do so when we believe this is in the best interests of our shareholders. Adverse market conditions and sentiment have resulted in wider discounts amongst our peer group and in the investment trust sector generally. Despite a widening in the Company’s discount, from 12.8% to 15.2%, particularly towards the end of 2023, buyback activity was limited. Our judgement was that the risk of impacting the liquidity in our shares was likely to outweigh the scope to create material accretion in net asset value per share. The Company bought back 21,756 shares at a total cost of £70,075 and an average discount of 13.0%.
The discount to underlying asset value averaged 14.2% over the course of the year, ranging from 8% to 22%, and at the year-end stood at 15.2%. As at 28
th
Triennial liquidity events
Under the arrangements approved by shareholders in 2021, a tender offer for up to 25% of the Company’s shares is due to take place later this year, subject to the level of the discount prevailing at that time as well as shareholder approval. We will be writing to shareholders nearer the time to outline our plans.
Annual General Meeting
Your Company’s Annual General Meeting (“AGM”) will take place on Thursday,
The Investment Manager will make a presentation and answer any questions on the portfolio performance and strategy.
I would encourage you to make use of your proxy votes by completing and returning the form of proxy enclosed with this report.
Outlook
I am pleased that we have been able to deliver stronger returns for shareholders, particularly during the second half of the year. The Manager remains optimistic about the prospects for the stocks which are held in the portfolio; current conditions appear to offer an improved environment in which our investee companies can thrive.
Board succession
During the year the Board will be looking for a successor to take over from me as Chairman as I will have completed the recommended tenure for that role. In the meantime I look forward to being able to report further progress for your Company.
Contact us
Shareholders can keep up to date with Company performance by visiting artemisalphatrust.co.uk where you will find information on the Company, a monthly factsheet and detailed quarterly updates from the Investment Manager.
The Board is always keen to hear from shareholders. Should you wish to, I can be contacted by email on alpha.chairman@artemisfunds.com.
Chairman
Investment Manager’s Review
In the 12-month period ending
Returns for the year were driven primarily by strong performance in the second half, a period in which the Trust’s NAV rose by 27.3% compared to a 14.2% rise in the FTSE-All Share. A number of holdings contributed over 1% each to NAV performance including Ryanair (+32.7%/+2.1%), Alphabet (+53.0%/+2.0%), Plus500 (+39.9%/+1.8%), Nintendo (+18.7/+1.3%), Redrow (+29.8%/+1.3%), Rolls-Royce (+32.4%/+1.3%), Frasers Group (+6.2%/+1.2%), and NatWest (+26.9%/+1.2%).
A positive aspect of the year’s performance, which is evident from the names above, was that it came from a wide variety of industries driven by different factors. Another is the validation of our activity, as NatWest (
The year witnessed a rise in stock prices even as bond yields increased. Several factors contributed to this outcome. Inflation indicators moderated as pressures diminished, resulting in less uncertainty about the future path of interest rates. This happened without a significant deceleration in economic activity, which meant corporate earnings were stronger than expected. Also, continued hope for the benefits of artificial intelligence lifted stock performance, especially in the US market.
We are optimistic about the portfolio’s potential returns, based on a combination of bottom-up and top-down factors that can be summarised as follows:
-- Macro headwinds toUK corporate earnings and confidence are set to ease. -- Low valuations inUK domestic assets (e.g. Housebuilding/ Banking) should lead to high future returns. -- “Wide moat” businesses (e.g. Technology/Media) continue to offer up attractive opportunities. -- Capital intensive industries (e.g. Retail/Aerospace) are benefitting from a capital cycle.
In the following sections, we review the reasoning behind these views, major events in the year, and any adjustments to positioning. Compared to the prior year, our views are broadly unchanged and if anything, conviction has been strengthened by recent developments. For this reason, portfolio turnover has been low.
For all that has been written about the inexpensiveness of
One main reason for this view is improved prospects for consumer spending.
The energy shock hit the
Gas prices have fallen to more normal levels owing to lower demand in
Another reason is the prospect of a more stable political environment. Betfair odds suggest that
The rise in mergers and acquisitions activity shows growing confidence in
Approximately 50% of NAV is invested in companies primarily exposed to the
We also have a stake in the end-of-life industry through Castelnau, which is a unique opportunity with excellent potential returns as it changes its business to leverage its strong position in a resilient and growing industry.
The
The recent depressed market has only served to compound the undersupply of housing in the
The low valuation of
Wide moat businesses offer attractive returns
Approximately 30% of the Trust’s assets are invested in businesses that are characterised by their visible competitive advantage. This includes holdings in Technology and Media (Alphabet/UMG/
A holding was purchased in Alphabet in 2022 and increased significantly in early 2023 as concerns over the potential impact of OpenAI on Google’s market position led to share price weakness.
Alphabet’s share price has recovered as product releases such as Gemini have demonstrated its advantages in AI as a first mover and with vertical integration (semiconductors, products, and distribution). Earnings have also been supported by a greater focus on cost efficiency. Despite its share price performance, we continue to see attractive returns in Alphabet, supported by a reasonable starting valuation (20x PE) and strong earnings growth prospects.
In a similar vein, Universal Music Group (UMG) suffered price weakness as concerns grew that generative AI would impact industry revenue adversely as the shift to online streaming did in the early 2000s. We purchased a holding in
Music preferences are slow to change because of the human phenomenon of “ear worm” (the experience of a song or melody becoming stuck in the brain). This means that UMG in effect owns a royalty on the music industry, which is growing as streaming penetration continues to grow and we were able to purchase it an attractive price due to the opportunity created by AI uncertainty.
The trust has been invested in Nintendo since 2016 and it has been a major holding since 2021. We have always believed that the fluctuations in earnings from the video gaming cycle have caused the market to undervalue its intellectual property, as it hides both the potential and the longevity of its earnings.
The most important development for Nintendo in the year was the successful launch of its Mario movie, which earned over
Capital cycles leading to improved profitability
Approximately 30% of the Trust’s capital is invested in sectors benefitting from a capital cycle that should lead to improved profitability. This includes Airlines (Easyjet/Ryanair), Aerospace (Rolls Royce) and Food Delivery (Delivery Hero/ Just Eat).
The pandemic had a severe effect on the aerospace industry as it caused huge cash losses and supply chain problems. Boeing and Airbus made nearly 2,000 fewer planes during this time, which together with ageing fleets and now resurgent demand, have resulted in plane order books being full until the end of the decade.
Supply chain challenges have been hard to overcome. Pratt and Whitney’s troubles with the GTF engine and Boeing’s production difficulties mean that no amount of money can resolve the capacity shortage that has emerged in recent years. We think this will likely increase the earnings power of our positions in low-cost carriers Ryanair and Easyjet as it implies that the outlook for yields is robust. Easyjet in particular, is trading at an attractive valuation as its market value is barely more than the total value of its £1bn of net cash and owned Airbus planes.
We began investing in Rolls Royce at the beginning of 2024 because we think it is benefitting from similar dynamics. Engine makers have unmatched ability to increase prices because demand exceeds supply, meaning they do not need to compete for market share.
Aftermarket pricing increased by more than 10% in 2023 and peer Safran has guided for future increases to be 3-4% ahead of inflation. As aftermarket spare parts typically have a gross margin of 60%, price increases have a geared impact on profitability, especially for Rolls Royce where the starting point is an 11% operating margin.
The food delivery industry has seen valuations fall sharply as the cost of capital has risen. This is leading to market rationalisation and consolidation. Since fixed capital investments are low, capacity should adapt to market changes, and increase profitability. We still think that the service is in the beginning stages of adoption and so industry growth rates will improve.
Fund Managers
Current positioning
April2024–KeySectorExposures 2024 2023 Sector Companies 13.3% 13.2% Housebuilding Redrow, Bellway, Berkeley, Springfield 13.2% 14.8% General Retail Frasers Group, Currys 12.5% 6.1% Financial Services Plus500, Hargreaves Lansdown, Singer Capital Markets 12.0% 12.8% Airlines easyJet, Ryanair 10.8% 7.7% Banking Lloyds, NatWest 9.5% 5.4% Aerospace & Defence Reaction Engines, Rolls Royce, Melrose Industries 8.7% 9.1% Video Games & Hobbies Nintendo, Hornby 8.6% 5.9% Technology & Media Alphabet, Universal Music,Auto Trader 6.5% 4.1% Pharmaceuticals & Staples GSK, Haleon 6.1% 6.8% Funeral Services Castelnau 5.5% 6.2% Food Delivery Delivery Hero, Just Eat Takeaway 4.6% 2.1% Infrastructure Vinci, AENA
Source: Artemis
ESG & Stewardship at Artemis
Introduction
Artemis believes stewardship activities contribute to improvement in company performance and to consequently higher returns for our clients.
At Artemis, ESG analysis and integration is the responsibility of each individual fund management team. Whilst individual strategies are distinctive, views and ideas are shared across investment teams. The Stewardship team provides a dedicated resource to support and challenge our investment teams, on ESG integration, engagement, voting and related activities.
As part of the Net Zero Asset Managers initiative, in
Additionally, we have submitted our 2023 Stewardship Report to the
We use a number of data service providers to support our stewardship activities and have developed internal tools to inform and guide our stewardship focus and continue to strengthen our controls and processes.
Approach to stewardship
Our Stewardship team is specifically dedicated to supporting our fund managers by providing insight, research and analysis, discussion, and challenge on ESG and stewardship matters including:
-- Identifying and incorporating a wider set of risks and opportunities into investment processes including ESG factors -- Monitoring and escalating issues with companies and exercising shareholder rights at company meetings, and -- Working collaboratively to develop and promote best practice internally and across the industry.
The Company employs a long-term value investing strategy to pick stocks. The framework is based on valuing companies using fundamental analysis and sizing positions according to the attractiveness of share prices relative to our view of their value. The Company’s strategy is underpinned by a core principle that the key driver of long-term value is achieving a high and sustainable return on capital employed.
Investee companies that do not adhere to strong governance, look after their employees, or fail to recognise environmental and societal harm risk inhibiting their long-term potential. The investment process requires a focus on the ESG risks and opportunities present in each business and industry.
Risk mitigation
Our view is that ESG factors are most pertinent in their contribution when creating the risk of a permanent loss of capital, usually through obsolescence, excessive leverage, misjudged investment value, misallocations of capital, and regulation.
This is evident in the portfolio where we are significantly underweight controversial sectors (as defined by ESG data providers), and therefore are less exposed to key ESG risks that may affect the prospects of these businesses.
We actively monitor ESG risks and opportunities primarily through our fundamental and bottom-up driven research process for monitoring existing and evaluating prospective investments. We frequently engage with management teams on strategy, capital allocation, incentive alignment and communication.
Engagement and voting
The Fund Manager continues to engage with current and potential holdings, ensuring appropriate monitoring and due diligence for the portfolio. During the year, the Fund Manager conducted 119 (vs 220 last year) company meetings, 42 with existing and 77 with prospective investments.
During the year we engaged with Ryanair and easyJet on actions being taken to meet transition plan targets. Areas of focus are on aircraft fleet renewal and other operational efficiencies, sustainable aviation fuel (SAF) capacity in the short to medium term (next 10 years), and the role of new technology in the longer term. This is a challenging sector to decarbonise which is also reliant on behaviour change and Government policy support to deliver the right incentives. We will continue to engage on both the short and longer-term transition strategies.
Additionally, at the end of 2023, we conducted a thematic review of the largest
Portfolio carbon emissions
The portfolio’s carbon emissions relative to its benchmark, the FTSE All-Share Index, have remained elevated since the onset of COVID-19 in early 2020. This is because our airline holdings are still recovering from depressed revenues that penalised their carbon intensity statistics based on emissions per revenue. Furthermore, expectations of a strong recovery in revenue have resulted in increases in their share prices, leading to an increased weighting in the portfolio of their temporarily inflated carbon intensity figures. We expect this measure to normalise somewhat as airline revenues fully recover in 2024. The chart below shows that the Company’s carbon intensity excluding its airlines weighting is significantly better than that of the benchmark.
Strategy and Business Review
Culture, Purpose & Values
The Directors drive the culture, purpose and values of
Culture
The Company is an externally managed investment trust and as such its culture is created by the Board of Directors and the Investment Manager,
Purpose
Our purpose is to provide our shareholders, large or small, with a diversified and cost-effective investment opportunity to achieve long-term growth.
Values
The Company provides access to a portfolio of investments which the Board expects to be managed with integrity, transparency and accountability and with appropriate due diligence to environmental, social and governance matters. The constructive and openly discursive nature of the relationship between the Board and the Investment Manager helps ensure their respective values are aligned and focused on delivering the strategy for our shareholders.
The core values that contribute to the Board culture include:
-- Integrity: the Board seeks to comply with all applicable laws and regulations, both to the letter and in spirit. -- Accountability: the Board recognises the need to explain the Company’s performance to investors and to highlight the risks in a clear and open manner. The Board has a key role to encourage and challenge the performance of its Investment Manager and its other service providers to help ensure the Company continues to provide shareholder value. -- Respect & Transparency: the Board seeks to communicate clearly and openly with shareholders and service providers respecting individual opinions and expectations. Contact by shareholders via the Chairman’s email address is welcomed. -- Environmental, Social and Governance (“ESG”) issues: We are stewards of our shareholders’ capital; both the Board and Investment Manager recognise that this comes with responsibilities. ESG considerations are integrated within the investment process.
An overview of the Investment Manager’s culture, values and stewardship activities can be found on the website at www.artemisfunds.com.
Corporate strategy & policy
The Company is incorporated in
Gearing
The Company uses gearing (i.e. borrowing) as part of its investment strategy. The Company’s Articles of Association limit borrowing to 50 per cent of the Company’s net assets. However, the investment policy limits this to 25 per cent of net assets. Subject to compliance with this restriction, the level of borrowing is a matter for the Board, whilst the utilisation of borrowings is delegated to the Investment Manager. This utilisation may be subject to specific guidelines established by the Board from time to time. The current guidelines permit the Investment Manager to employ borrowings of up to 20 per cent of net assets. The Company had no borrowing facility as at
Leverage
Leverage is defined in the
The Investment Manager requires prior Board approval to:
-- enter into any stock lending agreements; -- borrow money against the security of the Company’s -- investments; or -- create any charges over any of the Company’s investments.
Operating environment
The Company operates as an investment trust company and is an investment company within the meaning of section 833 of the Companies Act 2006 (the “Act”).
The Company has been approved as an investment trust in accordance with the requirements of section 1158 of the Corporation Taxes Act 2010 which remains subject to the Company continuing to meet the eligibility conditions and ongoing requirements of the regulations. The Board will manage the Company so as to continue to meet these conditions.
The Company has no employees and delegates most of its operational functions to service providers.
Current & future developments
A summary of the Company’s developments during the year ended
Key Performance Indicators (“KPIs”)
The performance of the Company is reviewed regularly by the Board and it uses a number of KPIs to assess the Company’s success in meeting its objective. The KPIs which have been established for this purpose and remain unchanged from the prior year are
Discrete annual total returns
FTSE Yearended30April Netassetvalue* Share price* All-Share Index 2019 (8.6)% (8.9)% 2.6% 2020 (11.3)% (12.5)% (16.7)% 2021 56.0% 80.8% 26.0% 2022 (21.9)% (24.8)% 8.7% 2023 1.3% (1.2)% 6.0% 2024 15.1% 12.3% 7.5%
Source: Artemis/Datastream
* Alternative Performance Measure
Dividends per ordinary share
Totalpenceperordinary Totalincrease/ Yearended30April Ordinary Special Ordinaryincrease (decrease) share 2019 5.00p 0.50p 5.50p 5.3% (13.4)% 2020 5.20p – 5.20p 4.0% (5.5)% 2021 5.30p – 5.30p 1.9% 1.9% 2022 5.60p – 5.60p 5.7% 5.7% 2023 6.20p – 6.20p 10.7% 10.7% 2024 6.80p – 6.80p 9.7% 9.7%
Ongoing charges as a proportion of shareholders’ funds
Asat30April Ongoingcharges* 2019 0.93% 2020 0.95% 2021 0.93% 2022 1.01% 2023 1.08% 2024 1.06%
* Alternative Performance Measure
Discount management
In addition to the above KPIs, the Board monitors the discount to the underlying net asset value at which the shares trade. The discount levels throughout the financial year are shown within the Financial Highlights. No specific discount target has been set, but the Board sets the share buyback policy and has given the Investment Manager discretion to exercise the Company’s authority to buyback its own shares from time to time to address any imbalances between the supply and demand in the Company’s shares or at times where it is believed this is the best use of available capital to increase NAV per share. This is reviewed regularly by the Board. The Board will also use its authority to issue new ordinary shares from time to time should there be excess demand for the Company’s shares. The Company will also provide tender offers every three years. The first tender offer was due in 2021, for 25 per cent of the ordinary shares then in issue. However, following a shareholder vote, this did not take place. The next proposal for a tender offer will be in 2024
Principal risks and risk management
As required by the 2018 UK Code of Corporate Governance, the Board has carried out a robust assessment of the principal and emerging risks facing the Company. Following consideration of the investment, regulatory and operational risks, the Board has concluded that there are no emerging risks facing the Company that require to be added to the principal risks.
The Board, in conjunction with the Investment Manager, has developed a risk map which sets out the principal risks faced by the Company and the controls established to mitigate these risks. This is an ongoing process and the risk map, including any emerging risks, is formally reviewed every six months. The Board has given particular attention to those risks that might threaten the long-term viability of the Company. Further information on the Company’s internal controls is set out in the corporate governance section. As an investment company the main risks relate to the nature of the individual investments and the investment activities generally; these include market price risk, foreign currency risk, interest rate risk, credit risk and liquidity risk.
A summary of the key areas of risk, their movement during the year and their mitigation is set out below:
Movement Principalrisk Mitigation/control The investment objective and policy of the Company is set by the Board and is subject to ongoing review and monitoring in conjunction with the Investment Manager. Views expressed by the Company’s shareholders are also taken into account. Strategicrisk The Investment Manager reviews the absolute level of discount and Investment objective and policy relative discount against the are not appropriate in the current sector. The Company is authorised market and not favoured by to buy back its own shares and an investors. agreed buy back policy has been established by the Board and Increased The share price performance lags communicated to shareholders. net asset value performance resulting in widening discount. The Company operates a triennial liquidity event for shareholders. The Company's net assets decline The tender offers may be made every to a level where it becomes three years, with the next event uneconomic to continue. due in 2024, subject to the level of the discount prevailing at that time as well as shareholder approval. The Board regularly reviews the Company’s overall strategy, its net assets and ongoing running costs. Going concern and viability assessments are considered at each period end. Investmentrisk The Company’s investments are selected on their individual merits and the performance of the portfolio is not likely to track the widerUK market (FTSE All-Share Index). Whilst the focus is on large cap companies the Company also invests in small cap (listed), AIM traded and unquoted The Board considers that this risk investments which can be subject is justified by the longer-term to a higher degree of risk than nature of the investment objective that of larger quoted investments. and the Company’s closed-ended From time to time, the Company may structure, and that such also have significant exposure to investments should be a source of particular industry sectors. positive returns for shareholders. Risks are diversified through The Investment Manager’s high having a range of investments in conviction approach leads to a the portfolio covering various concentrated portfolio, typically sectors. The Board discusses the containing between 25 and 60 investment portfolio and stocks, carrying a higher degree performance with the Investment of stock-specific risk than a more Manager at each Board meeting, and diversified portfolio. at each month end between Board meetings, and part of this No change The Company is dependent upon the discussion includes a detailed Investment Manager’s ability to review of the Company’s unquoted create an investment portfolio investments, their valuations and capable of generating attractive future prospects together with returns. Failure to do so may mean their portfolio weighting. the Company becomes unattractive to investors. The Board receives management information concerning the The Company’s functional and geographical sector split of the reporting currency is Sterling. portfolio. However, the investment objective and policy may result in a All borrowing arrangements entered proportion of the Company’s into require the prior approval of portfolio being invested in the Board and gearing levels, overseas equities denominated in provided by the use of contracts currencies other than Sterling. As for difference, are regularly a result, movements in exchange discussed and reviewed by the Board rates may affect the Sterling and Investment Manager. value of these investments and their returns. The Company may borrow money for investment purposes or use derivatives to similarly increase exposure. If the investments fall in value, any borrowings/use of derivatives will magnify the extent of the losses. Legalandregulatoryrisk The Investment Manager provides A breach of s1158 Corporation Tax investment, company secretarial, Act 2010 could lead to a loss of administration and accounting investment trust status and the services through the use of resultant taxation of realised qualified professionals. capital gains. The Board receives internal control The principal laws and regulations reports from the Investment Manager the Company is required to comply confirming compliance with with are the Companies Act 2006, regulations. These reports also No change theAlternative Investment Fund highlight any matter that the Managers’ Directive, the Market Compliance team feel should be Abuse Regulation, theUK Listing brought to the Board’s attention Rules and the Disclosure Guidance along with any items discussed and Transparency Rules. during internal audit review. A breach of theFCA listing rules The Board meets each year with the could lead to suspension of the Risk and Compliance team to discuss Company’s shares. A breach of the the areas of risk appropriate to Companies Act 2006 could lead to the Company and the control criminal proceedings and environment. reputational and financial damage Both the Investment Manager and the Administrator have established business continuity plans to facilitate continued operation in Operational risk the event of a major service disruption or disaster. Disruption to, or failure of, the Investment Manager’s and/or any All of the Investment Manager’s and other third-party service Administrator’s staff can work from providers’ systems which could home with no impact to operations No change result in an inability to report accurately and monitor the The Investment Manager has a Company’s financial position. breadth of expertise across the fund management team with The Investment Manager loses the appropriate succession plans in portfolio manager or other key place. Regular engagement is had staff. with the Board to allow consideration of any change and discussion on continued support of the Investment Manager as necessary. Cyberrisk The Company benefits from the cyber Failure or disruption of the security precautions in place at Investment Manager’s and/ or any the Investment Manager and also other third-party service those in place at the third party providers’ systems as a result of suppliers such as the registrar and No change a cyber-attack, data theft, depositary. service disruption, etc. Whilst the risk of a direct financial The Board receives regular updates loss by the Company is low, the from the Investment Manager and its risk of reputational damage and service providers which describe the risk of loss of control of the protective measures taken to sensitive information is more enhance security significant The Investment Manager takes such Climatechange risks into account, along with the downside risk to any company Globally, climate change effects (whether in the form of its are already emerging in the form business prospects or market of changing weather patterns. valuation or sustainability of No change Extreme weather events could dividends) that is perceived to be potentially impair the operations making a detrimental contribution of individual investee companies, to climate change. The Company potential investee companies, invests in a broad portfolio of their supply chains and their businesses with operations spread customers. geographically, which should limit the impact of location- specific weather events The Board discusses such risks as they arise and continues to monitor the impact on the Company and its investments through discussion with the Investment Manager as and when required. The Company does have one holding Geopoliticalrisk in an area operating in a conflict, Plus 500 (Israel ), however, the Increased There remains a risk to market Investment Manager is comfortable stability from geo-political that there are contingencies and conflicts, such as the Middle robust systems in place to cope East,Russia andUkraine . with such a period. The Board is provided with information from the Investment Manager on the measures it takes to assess the potential impact of geopolitical events, both on itself and other service providers, and any action taken. Inflationaryrisk The Board and its InvestmentCentral Bank decisions, the war in Manager have regular discussions toUkraine or any other economic or assess the likely impact of Increased political factors or global inflation rates on the economy, events, may result in increasing corporate profitability and asset levels of inflation directly prices. affecting economic growth and the underlying investment values.
Further information on risks and the management of them are set out in the notes to the financial statements
Long-term Viability
Viability statement
In accordance with the
As part of its assessment of the viability of the Company, the Board has discussed and considered each of the principal risks, including matters relating to geopolitical events and inflationary pressures and their impact on the Company. Although the damage to the economy through the total impact of inflation and the geopolitical effect of
The Board also made the below assumptions when considering the viability of the Company:
-- Investors will continue to wish to have exposure toUK listed companies -- There will be continued demand for investment trusts -- Regulation will not increase to such an extent as to hinder operational efficiency
The Directors do not expect there to be any significant change in the current principal risks and the associated mitigating controls. The Directors also do not envisage any change in strategy or objectives that would prevent the Company from continuing to operate over the five-year period. The Company’s assets are liquid, its commitments limited, and it intends to continue as an investment trust.
The tender offers in 2024 and 2027 of up to 25% of the share capital have been considered by the Board when assessing the continuing viability of the Company.
Taking into account the results of the above review, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period to
Life of the Company
The Company operates a triennial liquidity event for shareholders. The tender offers may be made every three years, with the next event due in 2024, subject to shareholder approval. Each tender offer will be for up to 25 per cent of the ordinary shares then in issue (excluding Treasury Shares), save that the Board may, at its sole discretion, decide not to proceed with the tender offer if the ordinary shares are trading at a premium to the estimated tender price. The tender price will be the prevailing NAV (cum-income) per ordinary share (or, if the Board elects to use a tender realisation pool, the net proceeds of realising the assets in that pool) less the tender offer costs and less a discount of 3 per cent.
Share capital
Shareholders authorised the Company to buyback up to 14.99 per cent of the shares in issue at the 2023 AGM.
During the year, the Company bought back 21,756 ordinary shares. As at
A resolution to renew the Company’s buyback authority will be put to shareholders at the AGM on
Duty to Promote the Success of the Company
How the Directors discharge their duties under s172 of the Companies Act
Under section 172 of the Companies Act 2006, the Directors have a duty to act in a way they consider, in good faith, would be likely to promote the success of the Company for the benefit of its shareholders as a whole, and in doing so have regard to:
a) the likely consequences of any decision in the long term;
b) the interests of the Company’s employees;
c) the need to foster the Company’s business relationships with suppliers, customers and others;
d) the impact of the Company’s operations on the community and the environment;
e) the desirability of the Company maintaining a reputation for high standards of business conduct; and
f) the need to act fairly as between members of the Company.
As an externally managed investment trust, the Company has no employees or physical assets, our stakeholders include our shareholders and service providers, such as the Investment Manager.
The below tables describe the impact of engagement with our stakeholders that has taken place during the year:
Engagement with key stakeholders
Stakeholders Engagement Impact Through the publication of the Annual Report The Board is responsible for and the Half-Yearly promoting the long-term Report, monthly sustainable success and factsheets and Fund strategic direction of the Manager updates to the Company for the benefit of the Company’s website, Company’s shareholders. Whilst shareholders are kept Shareholders and certain responsibilities are informed of Company potential investors delegated, Directors’ performance and responsibilities are set out in portfolio activities. the schedule of matters reserved for the Board and the terms of Shareholders are reference of its committees, encouraged to raise which are reviewed regularly by questions and the Board. communicate with the Chairman and the Fund Manager. To help the Board in its aim to act fairly as between the Company’s members, it welcomes communications with all shareholders and encourages attendance at the AGM. The Annual and Half-Yearly reports are issued to shareholders and are available on the Investment Manager’s website together with other relevant information including monthly factsheets. The Board receives regular feedback on shareholder meetings from the Company’s broker and any shareholder communications are reviewed and discussed by the Board to ensure that shareholder views are taken into consideration as part of any decisions taken by the Board. The Chairman is available to contact via email: alpha.chairman@artemisfunds.com. The Board considers communication with shareholders an important function and Directors are always available to respond to shareholder queries. For further information see ‘Relations with shareholders’. The Board has set the parameters During the year, the within which the Investment performance of the Manager operates and these are Company rose set out in the Investment significantly versus Management Agreement and agreed its benchmark. Buybacks by the Board. were limited during the year as adverse market The Board receives regular conditions and updates from the Investment sentiment resulted in Manager and other service wider discounts across Artemis as Investment providers and ensures that the investment trust Manager information pertaining to its sector. It was felt stakeholders is provided, as that additional -- Fund management required, as part of the buybacks may have -- Company information presented in regular limited impact on secretarial Board meetings. During the year, material NAV accretion -- Financial additional monthly performance with the potential risk reporting updates were held between the of reducing liquidity -- Sales & Board and Investment Manager to in the market for the marketing discuss the continuing impact of Company’s shares, which -- Compliance and geopolitical, inflationary and marginally increased on internal market movements events on the the prior year. Further control Company and its portfolio. The detail can be found functions Board, with the support of its within the Chairman’s -- Internal audit Management Engagement Committee, Statement and -- Investment regularly reviews the Investment Manager’s administration performance of the Investment Review. (outsourced to Manager and other service Northern Trust) providers to ensure that The Fund Manager worked services provided to the Company on a number of are managed efficiently and initiatives to raise effectively for the benefit of the profile of the the Company’s shareholders. Company and generate interest with new The Board has reviewed and investors; taking part discussed plans for the future in various shareholder marketing and development of the in-person events and Company with the Investment webinars during the Manager during the year. year. As an investment company, all services are outsourced to third-party service providers. The Board considers the Depositary, the Custodian, the Broker, the Registrar and Auditor to be key stakeholders. The performance of the third-party service The Board relies on the providers is Investment Manager to work continually monitored alongside these key stakeholders throughout the year. to meet the requirements of the Assurance is sought Company. The Management through regular due Other third-party Engagement Committee reviews the diligence to ensure service providers performance of these service high standards of providers, along with their fee governance are in -- Northern Trust levels, and provides place. Cost as Depositary recommendations to the Board as effectiveness is also and Custodian required. tracked through regular -- Singer Capital benchmarking. As and Markets as The Investment Manager has when appropriate, Broker constant interaction with the third-party providers -- Link Group as service providers and provides present to the Board. Registrar feedback to and from the Board -- Johnston as required. Following formal review Carmichael LLP by the Management as Auditor Annual assurance reports are Engagement Committee received to assist the review of and Board at the year the internal control end, it was concluded environments of the Depositary that the service and Custodian. providers were operating effectively Reporting from the Company’s and provided a good broker, auditor and Company level of service. Secretary alerts the Board to proposed changes in regulations and market practice. This helps the Board plan and manage risks as well as complying with relevant regulations. The Board sets the investment objective and discusses stock selection, asset allocation, and the ESG qualities of investee companies with the Fund Manager The engagement of the at each Board meeting. Fund Manager with the investee companies aids The Fund Manager often engages awareness and with the investee companies, understanding of the prior to investment and on an ESG environment in on-going basis. operation as well as Investee companies the valuation and The Fund Manager has prospects of their discretionary powers to exercise businesses. the Company’s voting rights on resolutions proposed by the During the year, the investee companies within the Fund Manager voted at Company’s portfolio. shareholder meetings The Fund Manager has a dedicated Stewardship Team which supports the Fund Manager in the investment process. The Board chooses to report under the AIC The Company is a member of the Code of Corporate The Association of AIC which is an organisation Governance. This Code Investment Companies that represents the interests of better reflects the (“AIC”) investment trusts, VCTs and nature of an investment other closed-end funds. trust in the context of good corporate governance.
Board discussions and decisions
The
following
are
the
key
discussions
and
decisions
made
by
the
Board
during
the
year
ended
Topic Background&discussion Decision The Board weighs up the effectiveness of the buyback policy in helping The level of buybacks and to maintain/reduce the their effect on the discount to NAV against its discount is discussed at impact on the Company and each Board meeting. the liquidity in its Share buyback policy shares. In light of the The Board discussed the intended tender offer in current strategy in 2024, the Board decided to relation to buybacks and continue its current the proposed tender offer. strategy and continue to monitor the level of discount in line with discount and liquidity requirements. The Board discussed the proposed tender offer for 2024, which was in line with its objective to provide such a mechanism The Company broker was every three years. approached to discuss actions required. Triennial Tender Offer Discussions were held to plan any steps required to Discussions on this are complete this corporate on-going. action such as potential costs of third parties, timetable and the movement in the share price discount during the year. The Board discussed the The Board decided that this current policy of policy continues to provide Gearing providing gearing through gearing at a reduced cost Contracts for Difference. compared to a conventional bank loan. The Audit Committee and The Audit Committee Board continue to believe regularly discusses the that the Company should Internal audit possibility of the Company continue to place reliance having its own internal on the internal audit audit function. function performed by the Investment Manager. The Board continued to discuss the structure of The Board acknowledged that the Board and succession it had not been compliant of Directors taking into with the gender diversity Board structure and account the number of guidelines during the year, Director succession years served, the mix of reiterating its commitment skills required to perform to return to a position of the role and the diversity compliance as part of its requirements of the new succession plan. legislation. The Management Engagement Committee and the Board The Board concluded that it Administrator, Custodian, discussed each of the new was satisfied that the Depositary, Banker service providers to the services were being Company to ensure service provided in accordance with level agreement KPIs were the agreed KPIs. being met.
The Board’s primary focus is to promote the long-term success of the Company for the benefit of the Company’s shareholders. In doing so, the Board has regard to the impact of its actions on other stakeholders as described above.
Directors & Diversity
The Directors of the Company and their biographical details are set out in the Annual Report.
No Director has a contract of service with the Company.
The Board supports the recommendations of the Hampton-Alexander Review on gender diversity and the Parker Review on ethnic representation on Boards.
The Board recognises the principles of diversity in the boardroom and acknowledges the benefits of having greater diversity, including gender, social and ethnic backgrounds, and cognitive and personal strengths. When setting a new appointment brief, the Nomination Committee considers diversity alongside seeking to ensure that the overall balance of skills and knowledge that the Board has remains appropriate, so that it can continue to operate effectively. The Board’s Director selection policy will, first and foremost, seek to identify the person best qualified to become a Director of the Company, based on merit and objective criteria.
The Board is currently comprised of four male Directors and one female Director.
The
-- 40% of the Board is represented by women: As at30 April 2024 , and during the year, 20% of the individuals on the Board were women and therefore, the Company does not meet this diversity target and a further explanation is given in the Annual Report. -- Onewomaninaseniorposition: as at30 April 2024 one woman was in a senior position. In the absence of Executive roles, the Company considers the role of Senior Independent Director, to qualify as a senior position.Mrs Stewart held the role of Senior Independent Director from28 June 2023 . -- One individual from a minority ethnic background: as at30 April 2024 , no individuals on the Board are from a minority ethnic background. The Company does not therefore meet this diversity target.
The
following
tables
set
out
the
data
on
the
diversity
of
the Directors on the Company’s Board in accordance with
Listing Rule 9.8.6R(10) as at
NumberofBoardmembers PercentageoftheBoard Numberofseniorpositionson Numberinexecutivemanagement2 Percentageofexecutivemanagement2 the Board Men 4 80% 11 N/A N/A Women 1 20% 1 N/A N/A Not specified/prefer N/A N/A N/A N/A N/A not to say
1
2 Not applicable as the Company does not have an executive management team.
Numberof Numberofseniorpositionson PercentageoftheBoard the Board Numberinexecutivemanagement1 Percentageofexecutivemanagement1 Boardmembers White British or other White 5 100% 2 N/A N/A Mixed/Multiple ethnic groups 0 0% 0 N/A N/A Asian/Asian British 0 0% 0 N/A N/A Black/African/Caribbean/Black 0 0% 0 N/A N/A British Other ethnic group, including 0 0% 0 N/A N/A Arab Not specified/prefer not to N/A N/A N/A N/A N/A say
1 Not applicable as the Company does not have an executive management team.
Modern Slavery Act 2015
The Company does not fall within the scope of the Modern Slavery Act 2015 as its turnover is less than £36m. Therefore, no slavery and human trafficking statement is included in the Annual Report.
Sustainability and Environmental, social and governance
(‘ESG’) matters
The Board recognises that the most material way in which the Company can have an impact on ESG is through responsible ownership of its investments. The Board has appointed Artemis as Investment Manager, who engages actively with investee companies undertaking extensive evaluation and engagement on a variety of matters such as strategy, performance, risk, dividend policy, governance and remuneration. All risks and opportunities are considered as part of the investment process in the context of enhancing the long-term value of shareholders’ investments. This will include matters relating to material environmental, human rights and social considerations that will ultimately impact the profitability of a company or its stock market rating and hence these matters are an integral part of Artemis’ thinking as investors. The ESG and stewardship engagement of Artemis is detailed in the Annual Report.
Financial Statements
The financial statements of the Company are included in the Annual Report.
For and on behalf of the Board
Chairman
Statement of Directors’ Responsibilities in respect of the Annual Report
Management report
Listed companies are required by the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules (the “Rules”) to include a management report in their annual financial statements. The information required to be in the management report for the purpose of the Rules is included in the Strategic Report. Therefore no separate management report has been included.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of their profit or loss for that period. In preparing each of the financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent; -- state whether they have been prepared in accordance withUK -adopted international accounting standards; and -- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.
The financial statements are published on a website, artemisalphatrust.co.uk, maintained by the Company’s Investment Manager, Artemis. Responsibility for the maintenance and integrity of the corporate and financial information relating to the Company on this website has been delegated to the Investment Manager by the Directors. Legislation in the
Directors’ confirmations
Each of the Directors confirm that, to the best of their knowledge:
-- the financial statements, prepared in accordance with the applicable set ofUK -adopted international accounting standards, give a true and fair view of the assets, liabilities and financial position of the Company as at30 April 2024 , and of the profit or loss of the Company for the year then ended; -- the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces; and -- the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s position and performance, business model and strategy.
In the case of each Director in office at the date the Directors’ Report is approved:
-- in so far as the Director is aware, there is no relevant audit information of which the Company’s Auditor is unaware; and -- they have taken all steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information.
For and on behalf of the Board
Chairman
Financial Statements
Statement of Comprehensive Income
For the year ended 30 April 2024
Year ended 30 April Year ended 30 April 2023 2024 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Investment income 3,617 – 3,617 3,052 – 3,052 Totalrevenue 3,617 – 3,617 3,052 – 3,052 Gains/(losses) on investments – 13,261 13,261 – (4,609) (4,609) Net gains on derivatives – 3,511 3,511 – 4,134 4,134 Currency (losses)/gains – (65) (65) – 140 140 Totalincome 3,617 16,707 20,324 3,052 (335) 2,717 Expenses Investment management fee (155) (619) (774) (154) (615) (769) Other expenses (502) (4) (506) (456) (8) (464) Profit/ 2,960 16,084 19,044 2,442 (958) 1,484 (loss)beforefinancecostsandtax Finance costs (247) (986) (1,233) (115) (461) (576) Profit/(loss)beforetax 2,713 15,098 17,811 2,327 (1,419) 908 Tax (131) – (131) (101) – (101) Profitandtotalcomprehensiveincome/ 2,582 15,098 17,680 2,226 (1,419) 807 (expense)fortheyear Earningsperordinaryshare 7.89p 46.15p 54.05p 6.74p (4.30p) 2.44p
The
total
column
of
this
statement
represents
the
Statement
of
Comprehensive
Income
of
the
Company,
prepared
in
accordance
with International Financial Reporting Standards. The supplementary revenue and capital columns are both prepared under
guidance published by the
All items in the above statement derive from continuing operations.
All income is attributable to the equity shareholders of Artemis Alpha Trust plc. There are no minority interests.
Statement of Financial Position
As at 30 April 2024
2024 2023 £’000 £’000 Non-currentassets Investments 132,752 109,979 Investments in subsidiary undertaking 4,548 4,264 137,300 114,243 Currentassets Derivative assets 6 2,187 Other receivables 1,590 2,208 Cash and cash equivalents 1,685 7,653 Totalassets 140,581 126,291 Currentliabilities Derivative liabilities (227) Collateral pledged (280) (1,930) Other payables (4,745) (4,438) Totalliabilities (5,252) (6,474) Netassets 135,329 119,817 Equityattributabletoequityholders Share capital 373 Share premium 676 676 Special reserve 18,709 18,779 Capital redemption reserve 217 217 Retained earnings – revenue 3,921 3,437 Retained earnings – capital 111,433 96,335 Totalequity 135,329 119,817 Netassetvalueperordinaryshare 413.68p 366.02p
These
financial
statements
were
approved
by
the
Board
of
Directors
and
signed
on
its
behalf
on
Duncan Budge
Chairman
Statement of Changes in Equity
For the year ended 30 April 2024
Capitalredemption Retainedearnings Sharecapital Sharepremium Specialreserve reserve Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 Fortheyearended30April2024 At 1 May 2023 373 676 18,779 217 3,437 96,335 119,817 Total comprehensive income: Profit for the year – – – – 2,582 15,098 17,680 Transactions with owners recorded directly to equity: Repurchase of ordinary – – (70) – – – (70) shares into treasury Dividends paid – – – – (2,098) – (2,098) At30April2024 373 676 18,709 217 3,921 111,433 135,329 Fortheyearended30April2023 At 1 May 2022 373 676 21,964 217 3,117 97,754 124,101 Total comprehensive income: Profit/(loss) for the year – – – – 2,226 (1,419) 807 Transactions with owners recorded directly to equity: Repurchase of ordinary – – (3,185) – – – (3,185) shares into treasury Dividends paid – – – – (1,906) – (1,906) At30April2023 373 676 18,779 217 3,437 96,335 119,817 Fortheyearended30April2024
The notes in the Annual Report form part of these financial statements.
Statement of Cash Flows
For the year ended 30 April 2024
2024 2023 £’000 £’000 Operatingactivities Profit before tax 17,811 908 Interest payable 1,233 576 (Gains)/losses on investments (13,261) 4,609 Net gains on derivatives (3,511) (4,134) Currency losses/(gains) 65 (140) Increase in other receivables (255) (6) Increase/(decrease) in accrued expenses 51 (12) Netcashinflowfromoperatingactivitiesbeforeinterestandtax 2,133 1,801 Interest paid (1,233) (576) Irrecoverable overseas tax expense (138) (101) Netcashinflowfromoperatingactivities 762 1,124 Investingactivities Purchase of investments (31,032) (24,601) Sale of investments 22,272 28,584 Sale of derivatives 5,586 583 Collateral pledged (1,650) 3,900 Netcash(outlow)/inflowfrominvestingactivities (4,824) 8,466 Financingactivities Repurchase of ordinary shares into treasury (70) (3,251) Dividends paid (2,098) (1,906) Increase in intercompany loan 327 691 Netcashoutflowfromfinancingactivities (1,841) (4,466) Net(decrease)/increaseinnetfunds (5,904) 5,124 Netfundsatthestartoftheyear 7,653 2,389 Effect of foreign exchange rate changes (65) 140 Netfundsattheendoftheyear 1,685 7,653 Cashandcashequivalents 1,685 7,653
Notes to the Financial Statements
1. Accounting policies
The financial statements have been prepared on a going concern basis under the historical cost convention modified by the revaluation of financial assets and liabilities held at fair value through profit or loss, in accordance with
Where presentational guidance set out in the Statement of Recommended Practice (“SORP”) for investment trusts and venture capital trusts issued by the
The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended
2. Income
Yearended Yearended 30April 30April 2024 2023 £’000 £’000 Investmentincome* UK dividend income 1,970 1,812 Overseas dividend income 797 662 2,767 2,474 Otherincome Bank interest 42 62 Derivative income 606 507 Liquidity fund income 202 9 850 578 Totalincome 3,617 3,052
* All investments are designated at fair value through profit or loss on initial recognition, therefore all investment income arises on investments at fair value through profit or loss.
A
number
of
3. Dividends paid and proposed
Set out below are the total dividends recognised in respect of the financial year ended 30 April 2024.
Yearended Yearended 30April 30April 2024 2023 £’000 £’000 2023 final dividend of 3.87p per ordinary share (2022: 1,267 1,140 3.46p) 2024 interim dividend of 2.54p per ordinary share (2023: 831 766 2.33p) 2,098 1,906
Dividends are recognised in the period in which they are due to be paid and are shown through the Statement of Changes in Equity. Therefore, the Statement of Changes in Equity for the year ended
Set out below are the total dividends paid/proposed in respect of the financial year ended
Yearended Yearended30April 30April 2023 2024 £’000 £’000 First interim dividend of 2.54p per ordinary share 831 766 (2023:2.33p) Final dividend of 4.26p per ordinary share (2023: 1,394 1,267 3.87p) 2,225 2,033
4. Earnings/(loss) per share
The revenue earnings per ordinary share is based on the revenue profit for the year of £2,582,000 (2023: £2,226,000) and on 32,713,342 (2023: 33,033,940) ordinary shares, being the weighted average number of ordinary shares, excluding Treasury Shares, in issue during the year.
The capital gain per ordinary share is based on the capital gain for the year of £15,187,000 (2023: £1,419,000 capital loss) and on 32,713,342 (2023: 33,033,940) ordinary shares, being the weighted average number of ordinary shares, excluding Treasury Shares, in issue during the year.
1. Share capital
(a)Sharecapital 2024 2024 2023 2023 Shares £’000 Shares £’000 Allotted,calledupandfullypaid: Ordinary shares of 1p each 32,713,152 327 32,734,908 327 Ordinary shares of 1p each held in treasury 4,547,322 46 4,525,566 46 37,260,474 373 37,260,474 373 (b)Ordinaryshares
Shares £’000 Movementsinordinarysharesduringtheyear: Ordinary shares in issue on1 May 2023 32,734,908 327 Repurchase of ordinary shares into treasury (21,756) – Ordinaryshares inissue on30 April2024 32,713,152 327
The movements in ordinary shares held in treasury during the year are as follows:
2024 2024 2023 2023 Shares £’000 Shares £’000 Balancebroughtforward 4,525,566 46 3,505,800 35 Repurchases of ordinary shares 21,756 - 1,019,766 11 Balancecarriedforward 4,547,322 46 4,525,566 46
During the year ended
There were no subscription shares in issue at
6. Net asset value per ordinary share
The net asset value per share is based on the net assets of £135,329,000 (2023: £119,817,000) and on 32,713,152 (2023: 32,734,908) ordinary shares, being the number of ordinary shares in issue at the year end, excluding Treasury Shares.
7. Transactions with the Investment Manager and related parties
The amounts paid to the Investment Manager and amounts outstanding at the year-end are disclosed in this Annual Report.
However, the existence of an independent Board of Directors demonstrates that the Company is free to pursue its own financial and operating policies and therefore, under IAS 24: Related Party Disclosures, the Investment Manager is not considered to be a related party.
Fees payable during the year to the Directors and their interest in shares of the Company are considered to be related party transactions and are disclosed within the Directors Remuneration Report.
All transactions with subsidiary undertakings were on an arm’s length basis. During the year, transactions in securities between the Company and its subsidiary undertakings amounted to £nil (2023: £nil). The subsidiary did not pay a dividend to
8. Events after the reporting period
As a consequence of company activities, the Company’s investment in Rated People was written down by 40% from £500,000 at year end to £300,000.
9. Annual Report
This Annual Report announcement does not constitute the Company's statutory accounts for the years ended
The audited Annual Report for the year ended
A copy of the Annual Report will also be submitted to the
The Annual General Meeting of the Company will be held on
Thursday,
For further information, please contact:
Company Secretary
Telephone: 0131 225 7300