TIDMMNL
MANCHESTER AND LONDON INVESTMENT TRUST PUBLIC LIMITED COMPANY
(the "Company")
Half-yearly report for the six months ended 31 January 2021
A copy of the Half-Yearly Report can be accessed via the Company's website at
www.mlcapman.com/manchester-london-investment-trust-plc or by contacting the
Company Secretary by telephone on 01392 477500.
Summary of Results
At At
31 January 31 July Change
2021 2020
Net assets attributable to Shareholders (£ 256,791 225,933 13.66%
'000)
Net asset value ("NAV") per Ordinary Share 633.62 625.23 1.34%
(pence)
Six months
to 31 January
2021
Total return to Shareholders* 2.4%
Benchmark - MSCI UK Investable Market Index (MXGBIM)* 11.8%
* Total NAV return including dividends reinvested, as sourced from Bloomberg.
Six months Six months
to to Change
31 January 31 January
2021 2020
Interim dividend per Ordinary Share (pence) 7.00 7.00 0.00
Dates for the interim dividend
Ex-dividend date 15 April 2021
Record date 16 April 2021
Payment date 4 May 2021
Chairman's Statement
Results for the half year ended 31 January 2021
During the half year under review, the total NAV per Share return was 2.4 per
cent, compared to an increase in the benchmark of 11.8 per cent.
It has been a period where small capitalisation stocks, unprofitable Technology
hopes, Cryptocurrencies and Reflation Value plays have been in vogue, whilst
mega-capitalisation Technology (with the exception of Apple and Tesla) has
lagged.
The portfolio has remained focused on stocks with profitable and cash
generative business models that are aligned with some of the most exciting
forward-looking themes.
The Manager's Report sets out in more detail the reasons for the
underperformance against the benchmark.
Dividends
With these results, we have announced an interim dividend of 7.0 pence per
Ordinary Share. This is the same level as the prior year (31 January 2020: 7.0
pence per Ordinary Share).
Other
During the period the Company has actively increased its issued share capital
with the aim of improving liquidity in the shares and spreading fixed operating
costs over a larger asset base. The Company released a prospectus at the end
2020 providing material capacity for future fund raising and issued its first
shares under this authority to the market via a new Blocklisting programme.
The number of Shares in issue at the period end was roughly 12 per cent higher
than at the start of the year.
The Company has also applied to reduce its Share Premium account, thereby
increasing the amount of distributable reserves available for future dividends.
Outlook
Key variables for our second half performance are likely to be the success of
Covid-19 vaccine rollouts, movements in the US sovereign yield curve, the
GBPUSD foreign exchange rates, whether there is any material shakeout in
certain crowded trades (such as unprofitable Technology stocks), and the
regulation of Technology companies globally. Since this interim period end,
the Fund has reported a new all-time high Net Asset Value per Share hence our
exciting Journey continues through the Era of Software.
Please do not forget to consider the fund for this year's ISA allowance.
David Harris
Chairman
16 March 2021
Manager's Report
Portfolio management
The portfolio delivered a total return of 2.4 per cent which was a 9.4 per cent
underperformance against the benchmark. The relative underperformance was
driven partly by a period of rotation from growth to value stocks, which saw
Big Technology plays materially lag cyclical sectors (to which the benchmark is
significantly more exposed). The 4.7 per cent increase in value of the British
Pound compared to the US Dollar, was once again a strong foreign exchange
translation headwind for the portfolio's Net Asset Value per Share return.
A more up to date analysis of our portfolio can be found in our Fund
Factsheets: https://mlcapman.com/manchester-london-investment-trust-plc/
The Total return of the portfolio broken down by sector holdings in local
currency (excluding costs and foreign exchange) is shown below:
Total return of underlying sector holdings in local currency
(excluding costs and foreign exchange)
Information technology 2.7%
Consumer services 3.6%
Consumer discretionary (0.1%)
Other investments (including beta hedges) 2.5%
Foreign exchange, costs & carry (6.3%)
Total NAV per Share return 2.4%
Source: Bloomberg L.P.
Information Technology
Material positive contributors to the portfolio's performance included
Microsoft Corporation (which accounted for more than half of the sector's
return), AMSL Holding NV and Visa Inc.
Material negative contributors included Adobe Inc. and Salesforce.com Inc.
During the period, we disposed of both Visa and Mastercard Inc. due to their
greater sensitivity to Covid lockdowns, the growth of Cryptocurrencies and
their failure to fit with our new requirement that our investments have
predominantly virtual or digital business models rather than physical.
The portfolio's delta-adjusted exposure to this sector at period end was around
28 per cent of net assets.
Communication Services
Material positive contributors from this sector for the portfolio included
Alphabet Inc. and Tencent Holdings Ltd which together accounted for nearly all
of the sector's return. There were no material negative contributors.
The portfolio's delta-adjusted exposure to this sector at the period end was
around 29 per cent of net assets.
Consumer Discretionary
Amazon.com, Inc was the only material positive contributor to this sector.
There were no material negative contributors, although Alibaba Group Holding
Ltd had a volatile 2nd half of the period due to the suspension of the ANT IPO
and expectations of increased regulatory scrutiny going forward.
Overall, the portfolio's delta-adjusted exposure to the sector at the period
end was around 29 per cent of net assets, of which the vast majority related to
Amazon and Alibaba.
Other investments including beta hedges
Material positive contributors for the portfolio included the CSOP Hang Seng
Tech Index ETF and the iShares Expanded Tech-Software Sector ETF (IGV). There
were no material negative contributors.
The portfolio's delta-adjusted exposure to equity investments in this sector at
the period end was around 15 per cent of net assets.
Please:
Visit our website: https://mlcapman.com/about/
Follow our Tweets at: https://twitter.com/MLCapMan
Read our previous articles at https://www.linkedin.com/company/m-&
-l-capital-management-ltd/
Long the Future.
M&L Capital Management Limited
Manager
@MLCapMan
16 March 2021
Equity Exposures
Equity exposures (longs)
As at 31 January 2021
Company Sector* Exposure % of net
assets
Amazon.com, Inc.** Consumer Discretionary 44,615 17.37
Microsoft Corporation** Information Technology 43,859 17.08
Alphabet Inc.** Communication services 39,749 15.48
Alibaba Group Holdings Ltd*** Consumer Discretionary 32,712 12.74
Tencent Holdings Ltd*** Information Technology 29,909 11.65
Adobe Inc.** Information Technology 22,321 8.69
Csop Hang Seng Tech Index ETF** ETF 22,257 8.67
Facebook Inc.** Communication services 21,732 8.46
Salesforce.com, inc.** Information Technology 17,686 6.89
Netflix, Inc.** Communication services 17,178 6.69
ASML Holding N.V. CFD *** Information Technology 11,082 4.32
Kraneshares CSI China Internet F* ETF 10,773 4.20
*
Prosus N.V.** Consumer Discretionary 10,132 3.95
Polar Capital Technology Trust Fund 6,470 2.52
plc
Zynga Inc.** Communication services 5,338 2.08
iShares MSCI China ETF** ETF 4,143 1.61
NetEase, Inc. CFD*** Communication services 229 0.08
Total long equities exposure 340,185 132.48
Cash and other assets and (83,394) (32.48)
liabilities (inc Options)
Net assets 256,791 100
* GICS - Global Industry Classification Standard.
** Including equity swap exposures.
*** CFD - Contract for differences
Interim Management Report
The important events that have occurred during the period under review and the
key factors influencing the financial statements are set out in the Chairman's
Statement and the Manager's Report above.
The principal risks facing the Company are substantially unchanged since the
date of the latest Annual Report and Financial Statements and continue to be as
set out in the Strategic Report and note 16 of that report. Risks faced by the
Company include, but are not limited to, investment performance risk; key man
risk and reputational risk; fund valuation risk; risk associated with
engagement of third-party service providers; regulatory risk; fiduciary risk;
fraud risk; market risk; interest rate risk; liquidity risk; currency rate
risk; and credit and counterparty risk. Details of the Company's management of
these risks are set out in the Annual Report and Financial Statements.
M&M Investment Company plc is the controlling Shareholder of the Company. This
company was controlled throughout the six months ended 31 January 2021, and
continues to be controlled by Mark Sheppard, who forms part of the investment
management team at M&L Capital Management Limited. Details of related party
disclosures are set out in note 7 of this Report.
Statement of Directors' Responsibilities
The Directors confirm that to the best of their knowledge:
. the condensed set of financial statements has been prepared in accordance
with International Accounting Standard 34, Interim Financial Reporting; and
gives a true and fair view of the assets, liabilities, financial position and
return of the Company; and
. this Half-Yearly Report includes a fair review of the information required
by:
a. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
b. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related
party transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the Company during that period; and any changes in the related
party transactions described in the last Annual Report that could do so.
This Half-Yearly Report was approved by the Board of Directors and the above
responsibility statement was signed on its behalf by:
David Harris
Chairman
16 March 2021
Condensed Statement of Comprehensive Income
For the six months ended 31 January 2021
(Unaudited) (Unaudited) (Audited)
Six months ended Six months ended Year ended
31 January 2021 31 January 2020 31 July 2020
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains / (losses) on 93 7,932 8,025 (305) 8,938 8,633 (285) 27,368 27,083
investments at fair
value through
profit or loss
Investment income 375 - 375 400 - 400 647 - 647
Gross return 468 7,932 8,400 95 8,938 9,033 362 27,368 27,730
Expenses
Management fee (941) - (941) (673) - (673) (1,470) - (1,470)
Other operating (464) (464) (245) - (245) (555) - (555)
expenses
Total expenses (1,405) (1,405) (918) - (918) (2,025) - (2,025)
Return before (937) 7,932 6,995 (823) 8,938 8,115 (1,663) 27,368 25,705
finance costs and
taxation
Finance costs (19) (501) (520) (15) (956) (971) (37) (1,572) (1,609)
(956) 7,431 6,475
Return on ordinary (956) 7,431 6,475 (838) 7,982 7,144 (1,700) 25,796 24,096
activities before
tax
Taxation (26) - (26) (38) - (38) (59) - (59)
Return on ordinary (982) 7,431 6,449 (876) 7,982 7,106 (1,759) 25,796 24,037
activities after
tax
Return per Ordinary (2.63) 19.90 17.27 (2.88) 26.20 23.32 (5.47) 80.21 74.74
Share:
Basic and fully
diluted (pence)
The total column of this statement represents the Condensed Statement of
Comprehensive Income, prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006. The
supplementary revenue and capital columns are both prepared under the Statement
of Recommended Practice published by the Association of Investment Companies
("AIC SORP").
All items in the above statement are derived from continuing operations. No
operations were acquired or discontinued during the period.
There is no other comprehensive income, and therefore the return for the period
after tax is also the total comprehensive income.
The notes below form part of these financial statements.
Condensed Statement of Changes in Equity
For the six months ended 31 January 2021
For the six months from 1 August Share Share Capital Retained Total
2020 to capital premium reserve earnings £'000
31 January 2021 (unaudited) £'000 £'000 £'000 £'000
Balance at 1 August 2020 9,034 107,188 99,161 10,550 225,933
Total comprehensive income / - - 7,431 (982) 6,449
(loss)
Shares issued 1,098 25,929 - - 27,027
Equity dividends paid - - (2,618) (2,618)
Balance at 31 January 2021 10,132 133,117 106,592 6,950 256,791
For the six months from 1 August Share Share Capital Retained Total
2019 to capital premium reserve earnings £'000
31 January 2020 (unaudited) £'000 £'000 £'000 £'000
Balance at 1 August 2019 7,341 68,987 73,365 17,288 166,981
Total comprehensive income / - - 7,982 (876) 7,106
(loss)
Shares issued 812 16,888 - - 17,700
Equity dividends paid - - - (2,609) (2,609)
Balance at 31 January 2020 8,153 85,875 81,347 13,803 189,178
For the year from 1 August 2019 to Share Share Capital Retained Total
31 July 2020 (audited) capital premium reserve earnings £'000
£'000 £'000 £'000 £'000
Balance at 1 August 2019 7,341 68,987 73,365 17,288 166,981
Total comprehensive income / - - 25,796 (1,759) 24,037
(loss)
Shares issued 1,693 38,201 - - 39,894
Equity dividends paid - - - (4,979) (4,979)
Balance at 31 July 2020 9,034 107,188 99,161 10,550 225,933
The notes below form part of these financial statements.
Condensed Statement of Financial Position
As at 31 January 2021
(Unaudited) (Unaudited) (Audited)
31 January 31 January 31 July
2021 2020 2020
£'000 £'000 £'000
Non-current assets
Investments held at fair value through 165,834 130,406 137,333
profit and loss
Current assets
Unrealised derivative assets 34,673 16,929 29,229
Trade and other receivables (25) 35 18
Cash and cash equivalents 73,064 52,419 86,177
107,712 69,383 115,424
Gross assets 273,546 199,789 252,757
Current liabilities
Unrealised derivative liabilities (16,476) (10,355) (24,278)
Trade and other payables (279) (256) (2,546)
(16,755) (10,611) (26,824)
Net assets 256,791 189,178 225,933
Equity attributable to equity holders
Ordinary Share capital 10,132 8,153 9,034
Share premium 133,117 85,875 107,188
Capital reserves 106,592 81,347 99,161
Retained earnings 6,950 13,803 10,550
Total equity Shareholders' funds 256,791 189,178 225,933
Net asset value per Ordinary Share 633.62 580.11 625.23
(pence)
The notes below form part of these financial statements.
Condensed Statement of Cash Flows
For the six months ended 31 January 2021
Six months to Six months to Year ended
31 January 31 January 31 July
2021 2020 2020
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash flow from operating activities
Return on operating activities before tax 6,475 7,144 24,096
Interest expense 520 971 1,609
(Gains) / losses on investments held at (9,244) (10,346) (30,119)
fair value through profit or loss
(Increase) / decrease in receivables 33 102 32
(Decrease) / increase in payables (58) (32) 192
Derivative instruments cash flows (13,039) (110) (3,028)
Tax paid (26) (38) (59)
Net cash generated from operating (15,339) (2,309) (7,277)
activities
Cash flow from investing activities
Purchase of investments (80,249) (11,079) (38,134)
Sale of investments 58,586 18,989 65,630
Net cash used in investing activities (21,663) 7,910 27,496
Cash flow from financing activities
Equity dividends paid (2,618) (2,609) (4,979)
Share issue 27,027 17,700 39,894
Interest paid (520) (1,153) (1,837)
Net cash generated from financing 23,889 13,938 33,078
activities
Net increase in cash and cash equivalents (13,113) 19,539 53,297
Cash and cash equivalents at the beginning 86,177 32,880 32,880
of the period
Cash and cash equivalents at the end of 73,064 52,419 86,177
the period
The notes below form part of these financial statements.
Notes to the Condensed Financial Statements
1. Significant accounting policies
Basis of preparation
The condensed financial statements of the Company have been prepared in
accordance with international accounting standards, International Accounting
Standard 34 "Interim Financial Reporting", in conformity with the requirements
of the Companies Act 2006.
The accounting policies used by the Company are as set out in the Annual Report
for the year ended 31 July 2020.
Going concern
The financial statements have been prepared on a going concern basis and on the
basis that approval as an investment trust company will continue to be met. The
Directors have made an assessment of the Company's ability to continue as a
going concern and are satisfied that the Company has the resources to continue
in business for the foreseeable future, being a period of at least 12 months
from the date these financial statements were approved. In making the
assessment, the Directors have considered the likely impacts of the current
COVID-19 pandemic on the Company, its operations and the investment portfolio.
The Directors noted that the cash balance exceeds any short term liabilities,
the Company holds a portfolio of liquid listed investments and is able to meet
the obligations of the Company as they fall due. The surplus cash enables the
Company to meet any funding requirements and finance future additional
investments. The Company is a closed end fund, where assets are not required to
be liquidated to meet day to day redemptions. The Directors have completed
stress tests assessing the impact of changes in market value and income with
associated cashflows. Whilst the economic future is uncertain, and it is
possible the Company could experience further reductions in income and/or
market value the Directors believe that this should not be to a level which
would threaten the Company's ability to continue as a going concern.
The Directors, the Manager and other service providers have put in place
contingency plans to minimise disruption. Furthermore, the Directors are not
aware of any material uncertainties that may cast significant doubt upon the
Company's ability to continue as a going concern, having taken into account the
liquidity of the Company's investment portfolio and the Company's financial
position in respect of its cash flows, borrowing facilities and investment
commitments (of which there are none of significance). Therefore, the financial
statements have been prepared on the going concern basis.
Comparative information
The financial information contained in this Half-Yearly Report does not
constitute statutory accounts as defined by the Companies Act 2006. The
financial information for the periods ended 31 January 2021 and 31 January 2020
have not been audited or reviewed by the Company's Auditors. The comparative
figures for the year ended 31 July 2020 are an extract from the latest
published audited statements and do not constitute the Company's statutory
accounts for that financial year. Those accounts have been reported on by the
Company's Auditor and delivered to the Registrar of Companies. The report of
the Auditor was unqualified, did not include a reference to any matters to
which the Auditor drew attention by way of emphasis without qualifying their
report, and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
2. Return per Ordinary Share
Returns per Ordinary Share are based on the weighted average number of Shares
in issue during the period. Normal and diluted return per Share are the same as
there are no dilutive elements of share capital.
Six months to Six months to Year ended
31 January 2021 31 January 2020 31 July 2020
(unaudited) (unaudited) (audited)
Net Net Net
return Per Share return Per Share Return Per Share
£'000 pence £'000 Pence £'000 Pence
Return on ordinary
activities after tax
Revenue (982) (2.63) (876) (2.88) (1,759) (5.47)
Capital 7,431 19.90 7,982 26.20 25,796 80.21
Total return on 6,449 17.27 7,106 23.32 24,037 74.74
ordinary activities
Weighted average 37,333,536 25,639,432 32,160,449
number of Ordinary
Shares
3. Share capital
Six months to Six months to Year ended
31 January 31 January 31 July
2021 2020 2020
(unaudited) (unaudited) (audited)
25p Ordinary Shares Number £'000 Number £'000 Number £'000
Opening Ordinary Shares in 36,135,738 9,034 29,363,930 7,341 29,363,930 7,341
issue
Shares issued 4,392,500 1,098 3,246,808 812 6,771,808 1,693
Closing Ordinary Shares in 40,528,238 10,132 32,610,738 8,153 36,135,738 9,034
issue
The Company's Share capital comprises Ordinary Shares of 25p each with one vote
per Share.
During the six months to 31 January 2021, the Company issued 4,392,500 Ordinary
Shares (six months to 31 January 2020: 3,246,808; year ended 31 July 2020:
6,771,808), with net consideration of £27,027,000 (six months to 31 January
2020: £17,700,000; year ended 31 July 2020: £39,938,000).
4. Dividends per Ordinary Share
The Board has declared an interim dividend of 7p per Ordinary Share (2020:
interim dividend of 7p per Ordinary Share) which will be paid on 4 May 2021 to
Shareholders registered at the close of business on 16 April 2021.
This dividend has not been included as a liability in these financial
statements.
5. Net asset value per Ordinary Share
Net asset value per Ordinary Share is based on net assets of £256,791,000 (31
January 2020: £189,178,000; 31 July 2020: £225,933,000) at the period end and
40,528,238 (31 January 2020: 32,610,738; 31 July 2020: 36,135,738) Ordinary
Shares in issue at the period end.
6. Fair value hierarchy
The Company measures fair values using the following hierarchy that reflects
the significance of the inputs used in making the measurements.
The fair value is the amount at which the asset could be sold in an ordinary
transaction between market participants, at the measurement date, other than a
forced or liquidation sale.
The Company measures fair values using the following hierarchy that reflects
the significance of the inputs used in making the measurements. 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 as
follows:
* Level 1 - valued using quoted prices, unadjusted in active markets for
identical assets and liabilities.
* Level 2 - valued by reference to valuation techniques using observable
inputs for the asset or liability other than quoted prices included in
Level 1.
* Level 3 - valued by reference to valuation techniques using inputs that are
not based on observable market data for the asset or liability.
The tables below set out fair value measurement of financial instruments,
by the level in the fair value hierarchy into which the fair value
measurement is categorised.
Financial assets at fair value through profit or loss at 31 January 2021
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Equity investments 165,834 - 165,834
Derivatives - assets - 34,673 34,673
Total 165,834 34,673 200,507
Financial assets at fair value through profit or loss at 31 January 2020
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Equity investments 130,269 - - 130,269
Debentures - 137 - 137
Derivatives - assets - 16,929 - 16,929
Total 130,269 17,066 - 147,335
Financial assets at fair value through profit or loss at 31 July 2020
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Equity investments 137,333 - 137,333
Derivatives - assets - 29,229 29,229
Total 137,333 29,229 166,562
Financial liabilities at fair value through profit or loss at 31 January 2021
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Derivatives - liabilities - 16,476 - 16,476
Financial liabilities at fair value through profit or loss at 31 January 2020
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Derivatives - liabilities - 10,355 - 10,355
Financial liabilities at fair value through profit or loss at 31 July 2020
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Derivatives - liabilities - 24,278 24,278
7. Transactions with the Manager and related parties
M&L Capital Management Limited ("MLCM"), a company controlled by Mark Sheppard,
acts as Manager to the Company. Mark Sheppard is also a director of M&M
Investment Company plc ("MMIC") which is the controlling Shareholder of the
Company.
During the six months to 31 January 2021, MMIC subscribed for 4,392,500
Ordinary, with net consideration of £27,027,000. As at 31 January 2021, MMIC
was interested in a total of 22,619,772 Ordinary Shares of 25 pence each in the
Company, representing 55.81% of the issued share capital.
Total fees charged by the Manager for the six months to 31 January 2021 were £
941,000 (six months to 31 January 2020: £673,000; year ended 31 July 2020: £
1,470,000), of which £168,000 was outstanding as at 31 January 2021 (31 January
2020: £125,000; 31 July 2020: £148,000).
The fees payable to Directors are set out in the 2020 Annual Report.
There were no other related party transactions in the period.
8. Post Statement of Financial Position event
Following Court approval and the subsequent registration of the Court order
with the Registrar of Companies on 10 February 2021, the reduction of the
Company's share premium account became effective. Accordingly, the amount of £
107,188,488 previously held in the share premium account was transferred to the
special reserve. The special reserve is distributable.
There were no other significant events since the end of the reporting period.
Investment Objective
The investment objective of the Company is to achieve capital appreciation.
Investment Policy
Asset allocation
The Company's investment objective is sought to be achieved through a policy of
actively investing in a diversified portfolio, comprising any of global
equities and/or fixed interest securities and/or derivatives.
The Company may invest in derivatives, money market instruments, currency
instruments, contracts for differences ("CFDs"), futures, forwards and options
for the purposes of (i) holding investments and (ii) hedging positions against
movements in, for example, equity markets, currencies and interest rates.
The Company seeks investment exposure to companies whose shares are listed,
quoted or admitted to trading. However, it may invest up to 10% of gross assets
(at the time of investment) in the equities and/or fixed interest securities of
companies whose shares are not listed, quoted or admitted to trading.
Risk diversification
The Company intends to maintain a diversified portfolio and it is expected that
the portfolio will have between approximately 20 to 100 holdings. No single
holding will represent more than 20% of gross assets at the time of investment.
In addition, the Company's five largest holdings (by value) will not exceed (at
the time of investment) more than 75% of gross assets.
Although there are no restrictions on the constituents of the Company's
portfolio by geography, industry sector or asset class, it is intended that the
Company will hold investments across a number of geographies and industry
sectors. During periods in which changes in economic, political or market
conditions or other factors so warrant, the Manager may reduce the Company's
exposure to one or more asset classes and increase the Company's position in
cash and/or money market instruments.
The Company will not invest more than 15% of its total assets in other listed
closed-ended investment funds. However, the Company may invest up to 50% of
gross assets (at the time of investment) in an investment company subsidiary,
subject always to the other restrictions set out in this investment policy and
the Listing Rules.
Gearing
The Company may borrow to gear the Company's returns when the Manager believes
it is in Shareholders' interests to do so. The Company's Articles of
Association ("Articles") restrict the level of borrowings that the Company may
incur up to a sum equal to two times the net asset value of the Company as
shown by the then latest audited balance sheet of the Company.
The effect of gearing may be achieved without borrowing by investing in a range
of different types of investments including derivatives. Save with the approval
of Shareholders, the Company will not enter into any investments which have the
effect of increasing the Company's net gearing beyond the limit on borrowings
stated in the Articles.
General
In addition to the above, the Company will observe the investment restrictions
imposed from time to time by the Listing Rules which are applicable to
investment companies with shares listed on the Official List of the Financial
Conduct Authority ("FCA").
No material change will be made to the investment policy without the approval
of Shareholders by ordinary resolution.
In the event of any breach of the investment restrictions applicable to the
Company, Shareholders will be informed of the remedial actions to be taken by
the Board and the Manager by an announcement issued through a regulatory
information service approved by the FCA.
Investment Strategy and Style
The fund's portfolio is constructed with flexibility but is more often than not
focused on stock that exhibit the attributes of growth.
Target Benchmark
The Company was originally set up by Brian Sheppard as a vehicle for British
retail investors to invest in with the hope that total returns would exceed the
total returns on the UK equity market. Hence, the benchmark the Company uses
to assess performance is one of the many available UK equity indices being the
MSCI UK Investable Market Index (MXGBIM). The Company is not set on just using
this index for the future and currently uses this particular UK index because
at the current time it is viewed as the most cost advantageous. However, once
the Company announces the use of an index, then this index will be used across
all of the Company's documentation.
Investments for the portfolio are not selected from constituents of this index
and hence the investment remit is in no way constrained by the index, although
the Manager's management fee is varied depending on performance against the
benchmark. It is suggested that Shareholders review the Company's Active Share
Ratio that is on the fund factsheets as this illustrates to what degree the
holdings in the portfolio vary from the underlying benchmark.
Environmental, Social, Community and Governance
The Company considers that it does not fall within the scope of the Modern
Slavery Act 2015 and it is not, therefore, obliged to make a slavery and human
trafficking statement. In any event, the Company considers its supply chains to
be of low risk as its suppliers are typically professional advisers.
In its oversight of the Manager and the Company's other service providers, the
Board seeks assurances that they have regard to the benefits of diversity and
promote these within their respective organisations. The Company has given
discretionary voting powers to the Manager. The Manager votes against
resolutions they consider may damage Shareholders' rights or economic interests
and report their actions to the Board. The Company believes it is in the
Shareholders' interests to consider environmental, social, community and
governance factors when selecting and retaining investments and has asked the
Manager to take these issues into account. The Manager does not exclude
companies from their investment universe purely on the grounds of these factors
but adopts a positive approach towards companies which promote these factors.
The portfolio's Sustainalytic's Environmental Percentile was 75.8 per cent as
at the Latest Factsheet date.
Shareholder Information
Investing in the Company
The Shares of the Company are listed on the Official List of the FCA and traded
on the London Stock Exchange. Private investors can buy or sell Shares by
placing an order either directly with a stockbroker or through an independent
financial adviser.
Electronic communications from the Company
Shareholders now have the opportunity to be notified by email when the
Company's Annual Report, Half-Yearly Report and other formal communications are
available on the Company's website, instead of receiving printed copies by
post. This reduces the cost to the Company as well as having an environmental
benefit in the reduction of paper, printing, energy and water usage. If you
have not already elected to receive electronic communications from the Company
and now wish to do so, visit www.signalshares.com . All you need to register is
your investor code, which can be found on your Share certificate or your
dividend confirmation statement.
Alternatively, you can contact Link's Customer Support Centre which is
available to answer any queries you have in relation to your shareholding:
By phone: 0371 664 0300 (from overseas call +44 (0) 371 664 0300). Calls cost
12p per minute plus your phone company's access charge. Calls outside the
United Kingdom will be charged at the applicable international rate. Lines are
open between 09:00 - 17:30, Monday to Friday excluding public holidays in
England and Wales.
By email - shareholder.enquiries@linkgroup.co.uk
By post - Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds,
LS1 4DL.
Frequency of NAV publication
The Company's NAV is released to the London Stock Exchange on a weekly basis
and also published in the Investment Companies sector of The Financial Times.
Sources of further information
Copies of the Company's Annual and Half-Yearly Reports, factsheets and further
information on the Company can be obtained from its website: www.mlcapman.com/
manchester-london-investment-trust-plc.
Key dates
Half-Yearly results March
announced
Interim dividend payment May
Company's year end 31 July
Annual results announced October
Annual General Meeting November
Expected final dividend November
payment
Company's half-year end 31 January
Corporate Information
Directors and advisers
Directors Auditor
David Harris (Chairman) Deloitte LLP
Brett Miller Saltire Court
Sir James Waterlow 20 Castle Terrace
Daniel Wright (Senior Independent Director) Edinburgh EH1 2DB
Manager and Alternative Investment Fund Manager Administrator
M&L Capital Management Limited Link Alternative Fund Administrators
12a Princes Gate Mews Limited
London SW7 2PS Beaufort House
Tel: 0207 584 5733 51 New North Road
ir@mlcapman.com Exeter EX4 4EP
www.mlcapman.com
Company Secretary Registrar
Link Company Matters Limited Link Group
Beaufort House 10th Floor
51 New North Road Central Square
Exeter EX4 4EP 29 Wellington Street
Tel: 01392 477 500 Leeds LS1 4DL
Tel: 0871 664 0300
Email:
shareholder.enquiries@linkgroup.co.uk
Depositary Bank
Indos Financial Limited National Westminster Bank plc
54 Fenchurch Street 11 Spring Gardens
London EC3M 3JY Manchester M60 2DB
COMPANY DETAILS
Registered office Country of incorporation
12a Princes Gate Mews Registered in England and Wales
London SW7 2PS Company Number: 01009550
Company website
www.mlcapman.com/manchester-london-investment-trust-plc
National Storage Mechanism
A copy of the Half-Yearly Report will be submitted shortly to the National
Storage Mechanism ('NSM') and will be available for inspection at the NSM,
which is situated at www.morningstar.co.uk/uk/NSM.
Neither the contents of the Company's website nor the contents of any website
accessible through hyperlinks on the Company's website (or any website) or this
announcement is incorporated into, or forms part of this announcement.
LEI: 213800HMBZXULR2EEO10
17 March 2021
END
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