BlackRock Throgmorton Trust Plc - Portfolio Update
PR Newswire
LONDON, United Kingdom, July 29
The information contained in this release was correct as at 30 June 2025. Information on the Company's up to date net asset values can be found on the London Stock Exchange Website at:
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
All information is at 30 June 2025 and unaudited.
Performance at month end is calculated on a cum income basis
| One | Three | One | Three | Five |
Net asset value | 1.9 | 12.1 | 1.2 | 20.1 | 31.1 |
Share price | 3.3 | 13.3 | 2.4 | 17.7 | 17.8 |
Benchmark* | 3.2 | 13.6 | 7.8 | 15.2 | 42.1 |
Sources: BlackRock and Deutsche Numis
*With effect from 15 January 2024 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index to Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies).
At month end | |
Net asset value capital only: | 653.92p |
Net asset value incl. income: | 664.69p |
Share price | 597.00p |
Discount to cum income NAV | 10.2% |
Net yield1: | 3.0% |
Total Gross assets2: | £511.7m |
Net market exposure as a % of net asset value3: | 109.5% |
Ordinary shares in issue4: | 76,981,864 |
2024 ongoing charges (excluding performance fees)5,6: | 0.56% |
2024 ongoing charges ratio (including performance | 0.82% |
1. Calculated using the Final Dividend declared on 20 February 2025 payable on 11 April 2025, together with the Interim Dividend declared on 24 July 2024 paid on 21 August 2024.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long exposure less short exposure as a percentage of net asset value.
4. Excluding 26,228,000 shares held in treasury.
5. The Company's ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, excluding performance fees, finance costs, direct transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 30 November 2024.
6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum. The Company's ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses, including performance fees, but excluding finance costs, direct transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 30 November 2023.
7. Effective 1st December 2017 the annual performance fee is calculated using performance data on an annualised rolling two-year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total management fees (comprising the base management fee of 0.35% and a potential performance fee of 0.90%) are therefore 1.25% of average month end gross assets on a two-year rolling basis (from 1.70% of average annual gross assets).
Sector Weightings | % of Total Assets |
|
|
Industrials | 35.1 |
Financials | 24.2 |
Consumer Discretionary | 8.2 |
Technology | 6.0 |
Basic Materials | 5.9 |
Consumer Staples | 4.0 |
Real Estate | 3.9 |
Health Care | 2.4 |
Energy | 1.3 |
Communication Services | 1.1 |
|
|
Net Current Assets | 7.9 |
| ----- |
Total | 100.0 |
| ===== |
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|
Country Weightings | % of Total Assets |
|
|
United Kingdom | 92.0 |
United States | 6.8 |
Australia | 0.7 |
Germany | 0.5 |
|
|
| ----- |
Total | 100.0 |
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Market Exposure (Quarterly) | ||||
| ||||
| 31.08.24 | 30.11.24 | 28.02.25 | 31.05.25 |
Long | 111.7 | 111.9 | 117.8 | 108.4 |
Short | 2.7 | 3.4 | 4.9 | 2.8 |
Gross exposure | 114.4 | 115.3 | 122.7 | 111.1 |
Net exposure | 109.0 | 108.5 | 112.9 | 105.6 |
Ten Largest Investments | |
| |
Company | % of Total Gross Assets |
|
|
Tatton Asset Management | 3.2 |
XPS Pensions Group | 3.0 |
Rosebank Industries | 3.0 |
GPE | 3.0 |
Grafton Group | 2.9 |
Morgan Sindall | 2.8 |
Boku | 2.8 |
Bellway | 2.7 |
IntegraFin | 2.6 |
Oxford Instruments | 2.4 |
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Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:
The Company returned 1.9% in June, underperforming its benchmark, the Deutsche Numis Smaller Companies +AIM (excluding Investment Companies) Index, which returned 3.2%.1
June continued where May left off, with equity markets continuing their ascent on the back of better economic data and strong company reporting, amidst a calmer period on the trade war front. No month in recent memory seems to be devoid of a large macro or geo-political event. In June we saw a sudden spike in the oil price on the back of Israel bombing Iran, and then the subsequent US bombing of uranium enrichment facilities. A brief period of consternation over Iran's response gave way to relief as Iran telegraphed their retaliation and the oil price duly fell as the focus switched back to an oversupplied market. Throughout the month, as has indeed been the case for most of the quarter, US economic data remained resilient, with scant evidence of an impending local or global economic crash on the back of tariffs. Admittedly it is hard to say with precision what is "underlying" versus "pull forward", not to mention the myriad idiosyncratic cycles that many industrial and consumer industries and supply chains are contending with.
In the UK, we have observed some weakness in the labour market (to date mainly within industries most exposed to the changes in employers' National Insurance), softer retail sales data and most pertinently downward revisions to growth and productivity. The lack of growth in the UK, combined with Labour's U-turns over the winter fuel allowance and welfare reform leave the UK in an increasingly precarious fiscal position. Ultimately taxes will have to go up and my fear is that this will lead to months of speculation as to what will be taxed. That backdrop is unlikely to be conducive to a healthy consumer spending environment or a stimulant for businesses to invest. I expect the outflows we've seen in the sector (46 of the last 48 months) to continue.
Contributors to performance were well diversified by sector during the month. The largest contributor was UK construction firm Morgan Sindall, which rose sharply on another positive trading update with mid-teens upgrades to FY25 profits, which rolls forward into a higher base in FY26. Digital payments business, Boku, reversed some of its recent weakness, as we were told a large institutional seller had been cleared that had been weighing on the share price. Tatton Asset Management saw its shares rally in response to impressive full year results, which highlighted better than expected revenue and profit growth, driven by net inflows which resulted in record level of AUM (assets under management), up 24% on last year. Furthermore, management flagged the strong start that they have made to the year, with £600 million of inflows in the first 10 weeks, and reiterated their long-term growth target of £30 billion AUM by 2029.
The biggest detractor was entirely stock specific, with brick manufacturer Ibstock shocking the market with a surprise profit warning on a combination of increased costs from adding back capacity whilst at the same time seeing pricing pressure across some product lines. Following meetings with management we have reduced the position materially. The second biggest detractor was Breedon which fell circa 15% on smallish (c.5%) profit downgrades from some sell-side analysts in advance of the company reporting to reflect ongoing adverse weather in the US as well as softer trading in UK as recovery in GB volumes seems to be being pushed out to the right (again). The share price fall seems an extreme overreaction to a modest reduction in forecasts, but this is symptomatic of the UK mid-cap stock market right now. On any medium term view the recovery in volumes for the likes of Breedon and Ibstock make these shares very cheap on a "recovered earnings" basis. For Breedon specifically, they have a dominant market position with strong pricing power and have opened up a new growth market in the US but trade like an ex-growth share on less than 10x p/e (price to earnings ratio), with a 4.5% DY (dividend yield) and a double digit FCF (free cash flow) yield with plenty of growth ahead. The third largest detractor was low-cost housebuilder, MJ Gleeson, which issued a profit warning due to the slower pace of the housing market recovery and gross margin pressure from rising build costs, incentives and flat average selling prices. We have exited the position.
There are increasing concerns over the UK macroeconomic backdrop, and whilst the sector is undoubtedly cheap with myriad undervalued opportunities where we think the upside is significant on any medium-term view (be it "recovered profits" or just higher earnings base), in the near term the risk of earnings downgrades has increased as recovery is delayed.
The potential for the Bank of England (BoE) to cut interest rates offers a glimmer of hope, but recent inflation data may give them pause for thought as MPC members wrestle with the competing demands of inflation and a weakening jobs market (although clearly some MPC members seem more sensitive to growth and labour market weakness). A recession in the UK can be avoided, but that is not really a reason to celebrate, as I think we are braced for a prolonged period of anaemic growth. The U-shaped recovery continues to elongate and demand for growth continues to be pushed out.
Consequently, we have reduced our domestic exposure as we have concerns that the current backdrop is not conducive to encouraging consumers to spend, thus elevated savings rates are likely to remain as such, with big ticket consumption likely to be most at risk. Accordingly, we have exited or reduced several positions across Travel & Leisure and Retail, as well as other consumption related exposures (like housebuilders, RMI (repair, maintenance and improvement) and related supply chains). Contemporaneously, we have increased our shorts in this area too.
We are fortunate however to have the capacity to allocate up to 15% in non-UK listed shares, and I have added or have been adding to several names in recent weeks and months across European Defence (Renk, Hensoldt), Aerospace (Crane), differentiated US consumer companies (Boot Barn), technology (SPS Commerce) as well as software companies we think will benefit from the increased adoption of AI (Artificial Intelligence)we are witnessing across a broader suite of tools (Gitlab).
We approach the rest of year with increased caution and that is reflected with a gross that at the time of writing is now around 117% and a net exposure that is around 108%. An obvious question would be why not run with a lower gross and net considering our concerns. The answer lies with the increased allocation to non-UK shares, while our net in the UK including the short book is in the low 90s.
We thank shareholders for your ongoing support.
1Source: BlackRock as at 30 June 2025
29 July 2025
ENDS
Latest information is available by typing www.blackrock.com/uk/thrg on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). Neither the contents of the Manager's website nor the contents of any website accessible from hyperlinks on the Manager's website (or any other website) is incorporated into, or forms part of, this announcement.
