BlackRock Latin American Investment Trust Plc - Half-year Report
(Legal Entity Identifier: UK9OG5Q0CYUDFGRX4151)
Information disclosed in accordance with Article 5 Transparency Directive and DTR 4.2
Half Yearly Financial Results Announcement for Period Ended
As at As at
30 June 31 December
2024
2023
Net assets (US$’000)1 144,237 189,719
Net asset value per ordinary share (US$ cents) 489.79 644.24
Ordinary share price (mid-market) (US$ cents)2 437.38 569.84
Ordinary share price (mid-market) (pence) 346.00 447.00
Discount3 10.7% 11.5%
========= =========
For the For the
six months year
ended
ended 31 December
30 June
2024 2023
Performance (with dividends reinvested)
Net asset value per share (US$ cents)3 -22.0% 37.8%
Ordinary share price (mid-market) (US$ cents)2,3 -21.0% 35.3%
Ordinary share price (mid-market) (pence)3 -20.3% 27.6%
MSCI EM Latin America Index (net return, on a US Dollar -15 .7% 32.7%
basis)4
========= =========
For the six For the six
months ended months ended Change
30 June 2024 30 June 2023 %
Revenue
Net profit on ordinary activities 3,786 4,494 -15.8
after taxation (US$’000)
Revenue earnings per ordinary share 12.86 15.26 -15.7
(US$ cents)
-------------- -------------- --------------
Dividends per ordinary share (US$
cents)
Quarter to 31 March 7.39 6.21 +19.0
Quarter to 30 June 6.13 7.54 -18.7
-------------- -------------- --------------
Total dividends payable/paid 13.52 13.75 -1.7
========= ========= =========
1 The change in net assets reflects the portfolio movements during the period and dividends paid.
2 Based on an exchange rate of
3 Alternative Performance Measures, see Glossary contained within the Half Yearly Financial Report.
4 The Company’s performance benchmark index (the MSCI EM Latin America Index) may be calculated on either a gross or a net return basis. Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes using the tax rates applicable to non-resident institutional investors, and hence give a lower total return than indices where calculations are on a gross basis (which assumes that no withholding tax is suffered). As the Company is subject to withholding tax rates for the majority of countries in which it invests, the NR basis is felt to be the more accurate, appropriate, consistent and fair comparison for the Company.
Chairman’s Statement
Dear Shareholder,
Market Overview
Latin American markets have underperformed both developed markets and the MSCI Emerging Markets indices over the period under review, with the MSCI EM Latin America Index net return of -15.7% in US Dollar terms, compared to a rise in the MSCI Emerging Markets EMEA Index net return of 2.9% in US Dollar terms and an increase in the MSCI World Index net return of 12.0% in US Dollar terms. All performance figures are calculated in US Dollar terms with dividends reinvested.
Performance
Over the six months ended
This followed the Mexican presidential landslide win in early
Further information on investment performance is given in the Investment Manager’s Report below.
Gearing
The Board’s view is that 105% of NAV is the neutral level of gearing over the longer term and that gearing should be used actively in an approximate range of plus or minus 10% around this as measured at the time that gearing is instigated. The Board is pleased to note that the Investment Managers have used gearing actively throughout the period with a high at 111.4% of NAV in
Dividends declared in respect of the year to
Dividend Pay date
Quarter to 30 September 2023 7.02 cents 9 November 2023
Quarter to 31 December 2023 8.05 cents 9 February 2024
Quarter to 31 March 2024 7.39 cents 16 May 2024
Quarter to 30 June 2024 6.13 cents 13 August 2024
--------------
Total 28.59 cents
=========
Revenue Returns and Dividends
Revenue return for the six months ended
The Company has declared interim dividends totalling
Discount Management and New Discount Control Mechanism
The Board remains committed to taking appropriate action to ensure that the Company’s shares do not trade at a significant discount to their prevailing NAV and have sought to reduce discount volatility by offering shareholders a new discount control mechanism covering the four years to
(i) the annualised total NAV return of the Company does not exceed the annualised benchmark index (being the MSCI EM Latin America Index US Dollar (net return)) by more than 50 basis points over the four-year period from
(ii) the average daily discount to the cum-income NAV exceeds 12% as calculated with reference to the trading of the shares over the Calculation Period.
In respect of the above conditions, the Company’s annualised total NAV return on a US Dollar basis for the period from
The cum-income discount of the Company’s ordinary shares over the calculation period has averaged 11.0%.
For the current six month period under review the cum-income discount has ranged from 16.5% to 4.5%, ending the period under review on a discount of 10.7% at
The Company has not bought back any shares during the six month period ended
Outlook
We have seen the first reduction in US interest rates, which should benefit Latin American economies. Declining interest rates throughout the region should result in better economic activity going forward and thus see a favourable environment for asset prices. While both absolute and relative performance in the first half have been disappointing, we strongly believe that investing in
Chairman
Investment Manager’s Report
Market Overview
Strong economic data out of the US at the beginning of the year weighed on emerging markets more broadly as expectations of a
Elsewhere in our universe,
Performance Review and Positioning
The Company underperformed its benchmark over the six month period ended
The most notable positive contributor to performance was our precious metals exposure in
However, these positives were more than offset by developments in
Within
Over the period, we have increased our exposure to
Elsewhere, we exited Chilean pulp and paper company Empresas CMPC on the back of relative performance. Pulp prices went up on supply disruptions and we believe the overall market will become more oversupplied going forward. In
Outlook
We remain optimistic about the outlook for Latin. Central banks have been proactive in increasing interest rates to help control inflation, which has fallen significantly across the region. As such we have started to see central banks beginning to lower interest rates, which is supporting both economic activity and asset prices. In addition, the whole region is benefitting from being relatively isolated from global geopolitical conflicts. We believe that this will lead to both an increase in foreign direct investment and an increase in allocation from investors across the region.
We remain positive on the outlook for the Mexican economy as it is a key beneficiary of the friend-shoring of global supply chains.
We continue to closely monitor the political and economic situation in
The recent data in
and
Portfolio Analysis as at
Geographical weighting (gross market exposure) vs MSCI EM Latin America Index
% of net assets MSCI EM Latin America Index %
Brazil 65.9 58.8
Mexico 35.0 29.5
Chile 4.2 6.1
Argentina 2.5 0.0
Colombia 2.3 1.4
Panama 1.6 0.0
Peru 0.0 4.2
Sources: BlackRock and MSCI.
Sector allocation (gross market exposure) vs MSCI EM Latin America Index
% of net assets MSCI EM Latin America Index %
Financials 29.2 25.3
Consumer Staples 18.4 16.5
Industrials 17.2 10.5
Materials 13.8 18.3
Consumer Discretionary 11.6 1.6
Energy 11.3 13.7
Health Care 4.5 1.5
Real Estate 2.9 1.1
Information Technology 2.4 0.6
Communication Services 0.2 4.2
Utilities 0.0 6.7
Sources: BlackRock and MSCI.
Ten Largest Investments as at
Together, the ten largest investments represented 54.8% of total investments of the Company’s portfolio as at
1 ▲ Petrobrás (2023: 2nd)
Energy
Market value – American depositary receipt (ADR):
Market value – preference shares ADR:
Market value – ordinary shares:
Share of investments: 10.1% (2023: 8.6%)
is a Brazilian integrated oil and gas group, operating in the exploration and production, refining, marketing, transportation, petrochemicals, oil product distribution, natural gas, electricity, chemical-gas and biofuel segments of the industry. The group controls significant assets across
2 ▼ Vale (2023: 1st)
Materials
Market value – American depositary share (ADS):
Market value – ordinary shares:
Share of investments: 8.3% (2023: 9.6%)
is one of the world’s largest mining groups, with other business in logistics, energy and steelmaking. Vale is the world’s largest producer of iron ore and nickel but also operates in the coal, copper, manganese and ferro-alloys sectors.
3 ▲ Grupo Financiero Banorte (2023: 10th)
Financials
Market value – ordinary shares:
Share of investments: 7.2% (2023: 3.1%)
is a Mexican banking and financial services holding company and is one of the largest financial groups in the country. It operates as a universal bank and provides a wide array of products and services through its broker dealer, annuities and insurance companies, retirements savings funds (Afore), mutual funds, leasing and factoring company and warehousing.
4 ► Walmart de México y Centroamérica (2023: 4th)
Consumer Staples
Market value – ordinary shares:
Share of investments: 5.8% (2023: 5.9%)
is also known as Walmex, it is the Mexican and Central American Walmart division.
5▼Banco Bradesco (2023: 3rd)
Financials
Market value – ADR:
Market value – preference shares:
Share of investments: 5.6% (2023: 6.2%)
is one of Brazil’s largest private sector banks. The bank divides its operations into two main areas – banking and insurance services and management of complementary private pension plans and savings bonds.
6 ▼ B3 (2023: 5th)
Financials
Market value – ordinary shares:
Share of investments: 4.4% (2023: 5.1%)
is a stock exchange located in
7 ▲ Grupo Aeroportuario del Pacifico (2023: 8th)
Industrials
Market value – ADS:
Share of investments: 4.1% (2023: 4.0%)
is a
8 ▲ Itaú Unibanco (2023: 9th)
Financials
Market value - ADR:
Share of investments: 3.3% (2023: 3.8%)
is a Brazilian financial services group that services individual and corporate clients in
9 ▲ Hapvida Participacoes (2023: 11th)
Health Care
Market value – ADR:
Share of investments: 3.1% (2023: 3.0%)
is a Brazilian holding healthcare company. The company operates with a vertical service structure and is one of the largest healthcare solutions providers in the country. The company provides medical assistance and dental care plans and their operating structure includes facilities such as hospitals, walk-in emergencies, clinics and diagnostic imaging units.
10 ▲ Lojas Renner (2023: 21st)
Consumer Discretionary
Market value – ordinary shares:
Share of investments: 2.9% (2023: 2.0%)
is a fashion and lifestyle company operating in
All percentages reflect the value of the holding as a percentage of total investments. For this purpose, where more than one class of securities is held, these have been aggregated.
The percentages in brackets represent the value of the holding as at
Arrows indicate the change in relative ranking of the position in the portfolio compared to its ranking as at
Portfolio of Investments as at
Market
value % of
US$’000 investments
Brazil
Petrobrás - ADR 9,165
Petrobrás - preference shares ADR 3,803 } 10.1
Petrobrás 3,310
Vale - ADS 11,882
} 8.3
Vale 1,460
Banco Bradesco - ADR 6,248
} 5.6
Banco Bradesco - preference shares 2,759
B3 7,045 4.4
Itaú Unibanco – ADR 5,317 3.3
Hapvida Participacoes 4,914 3.1
Lojas Renner 4,602 2.9
Rumo 4,315 2.7
EZTEC Empreendimentos e Participacoes 3,742 2.3
Sendas Distribuidora 3,671 2.3
Arezzo Industria e Comercio 3,253 2.0
Alpargatas 3,064 1.9
XP 3,006 1.9
IRB Brasil Resseguros 2,782 1.7
Vamos 2,494 1.5
AmBev - ADR 2,039
} 1.5
AmBev 406
CCR 2,118 1.3
Grupo De Moda Soma 2,027 1.3
Rede D'or Sao Luiz 1,582 1.0
--------------- ---------------
95,004 59.1
========= =========
Mexico
Grupo Financiero Banorte 11,664 7.2
Walmart de México y Centroamérica 9,268 5.8
Grupo Aeroportuario del Pacifico - ADS 6,635 4.1
MAG Silver Corp 4,228 2.6
Fibra Uno Administracion - REIT 4,155 2.6
Becle Sab De 3,528 2.2
Kimberly-Clark 3,012 1.9
PINFRA 2,810 1.7
FEMSA - ADR 2,536 1.6
Grupo México 2,289 1.4
America Movil - ADR 277 0.2
--------------- ---------------
50,402 31.3
========= =========
Chile
Sociedad Química Y Minera - ADR 4,080 2.5
Cia Cervecerias Unidas 1,209
} 1.3
Cia Cervecerias Unidas - ADR 877
--------------- ---------------
6,166 3.8
========= =========
Argentina
Globant 3,558 2.2
--------------- ---------------
3,558 2.2
========= =========
Colombia
Bancolombia 3,332 2.1
--------------- ---------------
3,332 2.1
========= =========
Panama
Copa Holdings 2,355 1.5
--------------- ---------------
2,355 1.5
========= =========
Total investments 160,817 100.0
========= =========
All investments are in equity shares unless otherwise stated.
The total number of investments held at
Interim Management Report and Responsibility Statement
The Chairman’s Statement and the Investment Manager’s Report above give details of the events which have occurred during the period and their impact on the financial statements.
Principal Risks and Uncertainties
The principal risks faced by the Company can be divided into various areas as follows:
· Counterparty;
· Investment performance;
· Income/dividend;
· Legal and regulatory compliance;
· Operational;
· Market;
· Financial; and
· Marketing.
The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended
The Board and the Investment Manager continue to monitor investment performance in line with the Company’s investment objectives, and the operations of the Company and the publication of net asset values are continuing.
In the view of the Board, there have not been any changes to the fundamental nature of the principal risks and uncertainties since the previous report and these are equally applicable to the remaining six months of the financial year as they were to the six months under review.
Going Concern
The Board is mindful of the risk that unforeseen or unprecedented events including (but not limited to) heightened geopolitical tensions such as the wars in
Related Party Disclosure and Transactions with the Manager
The related party transactions with the Directors are set out in note 12 to the financial statements.
Directors’ Responsibility Statement
The Disclosure Guidance and Transparency Rules of the
The Directors confirm to the best of their knowledge that:
·
the condensed set of financial statements contained within the Half Yearly Financial Report has been prepared in accordance with the applicable
· the Interim Management Report, together with the Chairman’s Statement and Investment Manager’s Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA’s Disclosure Guidance and Transparency Rules.
The Half Yearly Financial Report has not been audited or reviewed by the Company’s Auditors.
The Half Yearly Financial Report was approved by the Board on
For and on behalf of the board
Income statement
for the six months ended
Six months ended Six months ended Year ended
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
(Losses)/gains
on investments
held at fair – (44,039) (44,039) – 33,031 33,031 – 45,717 45,717
value through
profit or loss
Gains on
foreign – 46 46 – 25 25 – 22 22
exchange
Income from
investments
held at fair 2 4,674 – 4,674 5,503 – 5,503 10,915 – 10,915
value through
profit or loss
Other income 2 13 – 13 21 – 21 49 – 49
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total income/ 4,687 (43,993) (39,306) 5,524 33,056 38,580 10,964 45,739 56,703
(loss)
======= ======= ======= ======= ======= ======= ======= ======= =======
Expenses
Investment 3 (158) (476) (634) (161) (482) (643) (339) (1,019) (1,358)
management fee
Other
operating 4 (395) (4) (399) (382) (7) (389) (724) (19) (743)
expenses
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total
operating (553) (480) (1,033) (543) (489) (1,032) (1,063) (1,038) (2,101)
expenses
======= ======= ======= ======= ======= ======= ======= ======= =======
Net profit/
(loss) on
ordinary
activities 4,134 (44,473) (40,339) 4,981 32,567 37,548 9,901 44,701 54,602
before finance
costs and
taxation
Finance costs (83) (248) (331) (43) (128) (171) (88) (263) (351)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net profit/
(loss) on
ordinary 4,051 (44,721) (40,670) 4,938 32,439 37,377 9,813 44,438 54,251
activities
before
taxation
Taxation (265) – (265) (444) – (444) (846) – (846)
charge
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net profit/
(loss) on
ordinary 3,786 (44,721) (40,935) 4,494 32,439 36,933 8,967 44,438 53,405
activities
after taxation
Earnings/
(loss) per 7 12.86 (151.86) (139.00) 15.26 110.15 125.41 30.45 150.90 181.35
ordinary share
(US$ cents)
======= ======= ======= ======= ======= ======= ======= ======= =======
The total columns of this statement represent the Company’s profit and loss account. The supplementary revenue and capital accounts are both prepared under guidance published by the
The net profit/(loss) on ordinary activities for the period disclosed above represents the Company’s total comprehensive income/(loss).
Statement of Changes in Equity
for the six months ended
Called Share Capital Non-
up share premium redemption distributable Capital Revenue
capital account reserve reserve reserves reserve Total
Note US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
For the six
months ended
30 June 2024
(unaudited)
At 31 December 3,163 11,719 5,824 4,356 158,781 5,876 189,719
2023
Total
comprehensive
(loss)/income:
Net
(loss)/profit – – – – (44,721) 3,786 (40,935)
for the period
Transactions
with owners,
recorded
directly to
equity:
Dividends 5 – – – – – (4,547) (4,547)
paid1
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 30 June 3,163 11,719 5,824 4,356 114,060 5,115 144,237
2024
========= ========= ========= ========= ========= ========= =========
For the six
months ended
30 June 2023
(unaudited)
At 31 December 3,163 11,719 5,824 4,356 114,343 8,706 148,111
2022
Total
comprehensive
income:
Net profit for – – – – 32,439 4,494 36,933
the period
Transactions
with owners,
recorded
directly to
equity:
Dividends 5 – – – – – (7,509) (7,509)
paid2
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 30 June 3,163 11,719 5,824 4,356 146,782 5,691 177,535
2023
========= ========= ========= ========= ========= ========= =========
For the year
ended 31
December 2023
(audited)
At 31 December 3,163 11,719 5,824 4,356 114,343 8,706 148,111
2022
Total
comprehensive
income:
Net profit for – – – – 44,438 8,967 53,405
the year
Transactions
with owners,
recorded
directly to
equity:
Dividends 5 – – – – – (11,797) (11,797)
paid3
-------------- -------------- -------------- -------------- -------------- -------------- --------------
At 31 December 3,163 11,719 5,824 4,356 158,781 5,876 189,719
2023
========= ========= ========= ========= ========= ========= =========
1 Quarterly dividend of
2 Quarterly dividend of
3 Quarterly dividend of
For information on the Company’s distributable reserves, please refer to note 9 below.
Balance Sheet
as at
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
Notes US$’000 US$’000 US$’000
Fixed assets
Investments held at fair 160,817 172,973 190,875
value through profit or loss
-------------- -------------- --------------
Current assets
Debtors 1,336 1,671 2,135
Cash and cash equivalents 1,886 4,076 274
-------------- -------------- --------------
Total current assets 3,222 5,747 2,409
========= ========= =========
Creditors - amounts falling
due within one year
Bank overdraft (18,560) – (2,658)
Other creditors (1,218) (1,161) (883)
-------------- -------------- --------------
Total current liabilities (19,778) (1,161) (3,541)
========= ========= =========
Net current (16,556) 4,586 (1,132)
(liabilities)/assets
-------------- -------------- --------------
Total assets less current 144,261 177,559 189,743
liabilities
========= ========= =========
Creditors – amounts falling
due after more than one year
Non-equity redeemable shares 6 (24) (24) (24)
-------------- -------------- --------------
(24) (24) (24)
========= ========= =========
Net assets 144,237 177,535 189,719
========= ========= =========
Capital and reserves
Called up share capital 8 3,163 3,163 3,163
Share premium account 11,719 11,719 11,719
Capital redemption reserve 5,824 5,824 5,824
Non-distributable reserve 4,356 4,356 4,356
Capital reserves 114,060 146,782 158,781
Revenue reserve 5,115 5,691 5,876
-------------- -------------- --------------
Total shareholders’ funds 7 144,237 177,535 189,719
========= ========= =========
Net asset value per ordinary 7 489.79 602.86 644.24
share (US$ cents)
========= ========= =========
Statement of Cash Flows
for the six months ended
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
US$’000 US$’000 US$’000
Operating activities
Net (loss)/profit on ordinary (40,670) 37,377 54,251
activities before taxation
Add back finance costs 331 171 351
Losses/(gains) on investments held
at fair value through profit or 44,039 (33,031) (45,717)
loss
Gains on foreign exchange (46) (25) (22)
Sales of investments held at fair 47,126 65,988 114,570
value through profit or loss
Purchase of investments held at (61,107) (47,848) (101,634)
fair value through profit or loss
Decrease/(increase) in other 799 (93) (569)
debtors
Increase/(decrease) in other 335 207 (71)
creditors
Taxation on investment income (265) (444) (846)
-------------- -------------- --------------
Net cash (used in)/generated from (9,458) 22,302 20,313
operating activities
========= ========= =========
Financing activities
Interest paid (331) (171) (351)
Dividends paid (4,547) (7,509) (11,797)
-------------- -------------- --------------
Net cash used in financing (4,878) (7,680) (12,148)
activities
========= ========= =========
(Decrease)/increase in cash and (14,336) 14,622 8,165
cash equivalents
Cash and cash equivalents at the (2,384) (10,571) (10,571)
beginning of the period/year
Effect of foreign exchange rate 46 25 22
changes
-------------- -------------- --------------
Cash and cash equivalents at the (16,674) 4,076 (2,384)
end of the period/year
========= ========= =========
Comprised of:
Cash at bank 1,886 4,076 274
Bank overdraft (18,560) — (2,658)
-------------- -------------- --------------
(16,674) 4,076 (2,384)
========= ========= =========
Notes to the Financial Statements
for the six months ended
1. Principal activity and basis of preparation
The principal activity of the Company is that of an investment trust company within the meaning of Section 1158 of the Corporation Tax Act 2010.
The financial statements of the Company are prepared on a going concern basis in accordance with Financial Reporting Standard 104 Interim Financial Reporting (FRS 104) applicable in the
The accounting policies and estimation techniques applied for the condensed set of financial statements are as set out in the Company’s Annual Report and Financial Statements for the year ended
At
2. Income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
US$’000 US$’000 US$’000
Investment income:
Overseas dividends 4,464 5,261 10,339
Overseas REIT distributions 198 212 416
Overseas special dividends 12 30 160
-------------- -------------- --------------
Total investment income 4,674 5,503 10,915
========= ========= =========
Other income:
Deposit interest 13 21 47
Interest from Cash Fund – – 2
-------------- -------------- --------------
13 21 49
========= ========= =========
Total income 4,687 5,524 10,964
========= ========= =========
Dividends and interest received in cash during the period amounted to
There were no special dividends recognised in capital in the period (six months ended
3. Investment Management Fee
Six months ended Six months ended Year ended
30 June 2024 30 June 2023 31 December 2023
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Investment
management 158 476 634 161 482 643 339 1,019 1,358
fee
========= ========= ========= ========= ========= ========= ========= ========= =========
Under the terms of the investment management agreement, BFM is entitled to a fee of 0.80% per annum based on the Company’s daily Net Asset Value (NAV). The fee is levied quarterly.
The investment management fee is allocated 25% to the revenue account and 75% to the capital account of the Income Statement. There is no additional fee for company secretarial and administration services.
4. Other Operating Expenses
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
US$’000 US$’000 US$’000
Allocated to revenue:
Custody fee 17 15 33
Depositary fees1 8 7 16
Auditors’ remuneration2 30 31 58
Registrar’s fees 20 21 40
Directors’ emoluments 102 117 222
Marketing fees 41 48 104
Postage and printing fees 65 46 65
AIC fees – – 2
Broker fees 21 22 45
Employer NI contributions 11 16 27
FCA fees 5 6 10
Write back of prior year expenses3 – (6) (6)
Other administration costs 75 59 108
-------------- -------------- --------------
395 382 724
========= ========= =========
Allocated to capital:
Custody transaction charges4 4 7 19
-------------- -------------- --------------
399 389 743
========= ========= =========
1 All expenses other than depositary fees are paid in Sterling and are therefore subject to exchange rate fluctuations.
2 No non-audit services are provided by the Company’s Auditor.
3 No expenses have been written back during the six month period ended
4 For the six month period ended
The direct transaction costs incurred on the acquisition of investments amounted to
5. Dividend
The Company’s cum-income US Dollar NAV at
In accordance with FRS 102 Section 32 Events After the End of the Reporting Period, the final dividend payable on ordinary shares is recognised as a liability when approved by shareholders. Interim dividends are recognised only when paid.
Dividends on equity shares paid during the period were:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
US$’000 US$’000 US$’000
Quarter to 31 December 2022 – – 1,852 1,852
dividend of 6.29 cents
Year to 31 December 2022 – dividend – 3,828 3,828
of 13.00 cents
Quarter to 31 March 2023 – dividend – 1,829 1,829
of 6.21 cents
Quarter to 30 June 2023 – dividend – – 2,221
of 7.54 cents
Quarter to 30 September 2023 – – – 2,067
dividend of 7.02 cents
Quarter to 31 December 2023 – 2,371 – –
dividend of 8.05 cents
Quarter to 31 March 2024 – dividend 2,176 – –
of 7.39 cents
-------------- -------------- --------------
4,547 7,509 11,797
========= ========= =========
6. Creditors – amounts falling due after more than one year
As at As at As at
30 June 30 June 31 December
2024 2023
(unaudited) (unaudited) 2023
(audited)
US$’000 US$’000 US$’000
Non-equity redeemable shares 24 24 24
========= ========= =========
The redeemable shares of £1 each carry the right to receive a fixed dividend at the rate of 0.1% per annum on the nominal amount thereof. They are capable of being redeemed by the Company at any time and confer no rights to receive notice of, attend or vote at general meetings except where the rights of holders are to be varied or abrogated. On a winding up, the capital paid up on such shares ranks pari passu with, and in proportion to, any amounts of capital paid to the holders of ordinary shares, but does not confer any further right to participate in the surplus assets of the Company.
7. (Loss)/earnings and net asset value per ordinary share
Total revenue, capital (loss)/earnings and net asset value per ordinary share are shown below and have been calculated using the following:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
(unaudited) (unaudited) (audited)
Net revenue profit attributable to 3,786 4,494 8,967
ordinary shareholders (US$’000)
Net capital (loss)/profit
attributable to ordinary (44,721) 32,439 44,438
shareholders (US$’000)
-------------- -------------- --------------
Total (loss)/profit attributable to (40,935) 36,933 53,405
ordinary shareholders (US$’000)
========= ========= =========
Total shareholders’ funds (US$’000) 144,237 177,535 189,719
========= ========= =========
Earnings per share
The weighted average number of
ordinary shares in issue during the 29,448,641 29,448,641 29,448,641
period on which the earnings per
ordinary share was calculated was:
The actual number of ordinary
shares in issue at the end of the
period on which the net asset value 29,448,641 29,448,641 29,448,641
per ordinary share was calculated
was:
Revenue earnings per share (US$ 12.86 15.26 30.45
cents ) - basic and diluted
Capital (loss)/earnings per share (151.86) 110.15 150.90
(US$ cents) - basic and diluted
-------------- -------------- --------------
Total (loss)/earnings per share (139.00) 125.41 181.35
(US$ cents) - basic and diluted
========= ========= =========
As at As at As at
30 June 30 June 31 December
2024 2023
(unaudited) (unaudited) 2023
(audited)
Net asset value per ordinary share (US$ 489.79 602.86 644.24
cents )
Ordinary share price (mid-market) (US$ 437.38 513.63 569.84
cents)1
========= ========= =========
1 Based on an exchange rate of
There were no dilutive securities at
8. Called up share capital
Ordinary Treasury Total Nominal
shares shares shares value
(unaudited) number number number US$’000
Allotted, called up
and fully paid share
capital comprised:
Ordinary shares of
10 cents each:
At 31 December 2023 29,448,641 2,181,662 31,630,303 3,163
-------------- -------------- -------------- --------------
At 30 June 2024 29,448,641 2,181,662 31,630,303 3,163
========= ========= ========= =========
During the six months ended
The ordinary shares give shareholders voting rights, the entitlement to all of the capital growth in the Company’s assets, and to all income from the Company that is resolved to be distributed.
9. Reserves
The share premium account and capital redemption reserve are not distributable reserves under the Companies Act 2006. In accordance with ICAEW Technical Release 02/17BL on Guidance on Realised and Distributable Profits under the Companies Act 2006, the capital reserve may be used as distributable reserves for all purposes and, in particular, the repurchase by the Company of its ordinary shares and for payments such as dividends. In accordance with the Company’s Articles of Association, capital reserve and the revenue reserve may be distributed by way of dividend. The loss on the capital reserve arising on the revaluation of investments of
10. Financial risks and valuation of financial instruments
The Company’s investment activities expose it to the various types of risk which are associated with the financial instruments and markets in which it invests. The risks are substantially consistent with those disclosed in the previous annual financial statements with the exception of those outlined below.
Market risk arising from price risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting similar financial instruments traded in the market. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, climate change or other events could have a significant impact on the Company and the market price of its investments and could result in increased premiums or discounts to the Company’s net asset value.
Valuation of financial instruments
Financial assets and financial liabilities are either carried in the Balance Sheet at their fair value (investments) or at an amount which is a reasonable approximation of fair value (due from brokers, dividends and interest receivable, due to brokers, accruals, cash and cash equivalents and overdrafts). Section 34 of FRS 102 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Company are explained in the accounting policies note on pages 90 and 91 of the Annual Report and Financial Statements for the year ended
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset.
The fair value hierarchy has the following levels:
Level 1 - Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted prices are readily available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis. These include exchange traded derivatives. The Company does not adjust the quoted price for these instruments.
Level 2 - Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for similar instruments in markets that are considered less than active, or other valuation techniques where all significant inputs are directly or indirectly observable from market data.
Valuation techniques used for non-standardised financial instruments such as over-the-counter derivatives, include the use of comparable recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity specific inputs.
Level 3 - Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique includes inputs not based on market data and these inputs could have a significant impact on the instrument’s valuation.
This category also includes instruments that are valued based on quoted prices for similar instruments where significant entity determined adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The Investment Manager considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability, including an assessment of the relevant risks including but not limited to credit risk, market risk, liquidity risk, business risk and sustainability risk. The determination of what constitutes ‘observable’ inputs requires significant judgement by the Investment Manager and these risks are adequately captured in the assumptions and inputs used in measurement of Level 3 assets or liabilities.
Fair values of financial assets and financial liabilities
The table below is an analysis of the Company’s financial instruments measured at fair value at the balance sheet date.
Financial assets at fair value through Level 1 Level 2 Level 3 Total profit or loss at 30 US$’000 US$’000 US$’000 US$’000June 2024 (unaudited) Equity investments 160,817 – – 160,817 -------------- -------------- -------------- -------------- Total 160,817 – – 160,817 ========= ========= ========= =========
Financial assets at fair value through Level 1 Level 2 Level 3 Total profit or loss at 30 US$’000 US$’000 US$’000 US$’000June 2023 (unaudited) Equity investments 172,973 – – 172,973 -------------- -------------- -------------- -------------- Total 172,973 – – 172,973 ========= ========= ========= =========
Financial assets
at fair value Level 1 Level 2 Level 3 Total
through profit or US$’000 US$’000 US$’000 US$’000
loss at 31
December 2023
(audited)
Equity investments 190,875 – – 190,875
-------------- -------------- -------------- ----------------
Total 190,875 – – 190,875
========= ========= ========= =========
The Company held no Level 3 securities as at
For exchange listed equity investments the quoted price is the bid price. Substantially all investments are valued based on unadjusted quoted market prices. Where such quoted prices are readily available in an active market, such prices are not required to be assessed or adjusted for any business risks, including climate change risk, in accordance with the fair value related requirements of the Company’s financial reporting framework.
11. Transactions with the Investment Manager and AIFM
Further details of the investment management contract are disclosed on page 51 of the Directors’ Report in the Company’s Annual Report and Financial Statements for the year ended
The investment management fee is levied quarterly, based on 0.80% per annum of the net asset value. The investment management fee due for the six months ended
In addition to the above services BIM (
During the period, the Manager pays the amounts due to the Directors. These fees are then reimbursed by the Company for the amounts paid on its behalf. As at
The ultimate holding company of the Manager and the Investment Manager is BlackRock, Inc., a company incorporated in
12. Related party disclosure
Directors’ emoluments
The Board consists of four non-executive Directors, all of whom are considered to be independent of the Manager by the Board. None of the Directors has a service contract with the Company. The Chairman receives an annual fee of £52,800, the Chairman of the Audit Committee receives an annual fee of £40,600, the Senior Independent Director and Chairman of the Remuneration Committee receives an annual fee of £38,100 and each of the other Directors receives an annual fee of £36,100.
At the period end members of the Board held ordinary shares in the Company as set out below:
As at As at As at
30 June 30 June 31 December
2024 2023
Ordinary Ordinary 2023
Ordinary
shares shares shares
Carolan Dobson (Chairman) 6,842 4,792 4,792
Craig Cleland 12,000 12,000 12,000
Laurie Meister 2,915 2,915 2,915
Nigel Webber 5,000 5,000 5,000
Significant holdings
The following investors are:
a. funds managed by the
b. investors (other than those listed in (a) above) who held more than 20% of the voting shares in issue in the Company and are as a result, considered to be related parties to the Company (
Total % of shares Number of
held Significant Investors
by Significant
Total % of shares Investors who are not
who are not affiliates
held by Related affiliates of BlackRock Group or
BlackRock Funds of BlackRock Group or
BlackRock, Inc.
BlackRock, Inc.
As at 30 June 2024 1.0 22.2 1
As at 30 June 2023 1.2 21.2 1
As at 31 December 1.0 21.6 1
2023
13. Contingent liabilities
There were no contingent liabilities at
14. Publication of non statutory accounts
The financial information contained in this Half Yearly Financial Report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The financial information for the six months ended
The information for the year ended
15. Annual results
The Board expects to announce the annual results for the year ending
For further information, please contact:
Sarah Beynsberger, Director,
Tel: 020 7743 3000
Press enquiries:
E-mail: BlackRockInvestmentTrusts@lansons.com or
EdH@lansons.com
END
The Half Yearly Financial Report will also be available on the
