*References to NAV in our Interim Management Report and our Investment Manager’s Review are to NAV with debt at fair value since this is the measure that the board considers best reflects the value to shareholders. However, NAV with debt at par value is reported above. 1) Debt at fair value 2) Debt at par
The Net Asset Value per ordinary share of the company increased by 12.6% on a total return basis, outperforming the benchmark (50% FTSE All-Share Index and 50% FTSE World Ex UK Index until 21 March 2017, and 70% FTSE World Ex UK Index and 30% FTSE All-Share Index from 22 March 2017), by 1.5%.
Earnings increased by 14.6% to 10.2p per ordinary share in the six months to 31 May 2017 (2016: 8.9p).
The gearing at 30 November 2016 was 6.9% and at 31 May 2017 was 5.7%. Gearing is calculated after deducting cash held to offset some of the long term debentures issued.
In continuation of the policy to distribute income more evenly throughout the year, the board declared a first quarterly dividend of 3.50p per ordinary share which was paid on 30 June 2017. The board has now declared a second quarterly dividend of 3.50p per ordinary share payable on 20 September 2017 to holders on the register of members at the close of business on 18 August 2017. Accordingly, this has no implication for the growth of the final dividend for the year. A third quarterly payment will be made in December and the final dividend will be proposed for payment in March 2018.
In the six month period ended 31 May 2017 the following material events and transactions have taken place.
There were no related party transactions in the period.
Since the period end, no further ordinary shares have been purchased for cancellation.
The principal risks facing the company over the next six months are broadly unchanged from those described in the Annual Financial Report for the year ended 30 November 2016. These are set out in a table in the Strategic Report on page 12 of the annual report, together with commentary on the board’s approach to mitigating the risks, under the following headings: Portfolio Risk; Business Risk; and Operational Risk.
In addition to the principal risks, the company faces the risks associated with the provision of services by third parties and general business risks including accounting, legal and regulatory matters. The board oversees a detailed review of the principal risks by the audit committee at least twice a year to ensure the risk assessment is current and relevant, adjusting mitigating factors and procedures as appropriate.
The directors believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the company consist mainly of securities which are readily realisable and accordingly, the company has adequate financial resources to continue in operational existence for the foreseeable future.
The directors confirm to the best of their knowledge that:
The half-yearly financial report was approved by the board on 18 July 2017 and the above responsibility statement was signed on its behalf by the Chairman.
Carolan Dobson Chairman