Global Opportunities Trust Plc - Half-Yearly Results to 30 June 2024
Legal Entity Identifier: 2138005T5CT5ITZ7ZX58
Half-Yearly Results for the six months to
Financial Highlights
___________________________________________________________________ |INCREASE IN NET ASSET VALUE PER SHARE|NET ASSET VALUE TOTAL RETURN*| | | | |1.4% |3.1% | |_____________________________________|_____________________________| |SHAREHOLDERS’ FUNDS |DISCOUNT TO NET ASSET VALUE* | | | | |£107.9m |19.8% | |_____________________________________|_____________________________|
___________________________________________________________________________ | |30 June |31 December|% | | | | | | | |2024 |2023 |Change| |____________________________________________|___________|___________|______| |Net Assets/Shareholders’ Funds (£) |107,896,000|106,411,000|1.4 | |____________________________________________|___________|___________|______| |Shares in issue |29,222,180 |29,222,180 |– | |____________________________________________|___________|___________|______| |Net Asset Value per share (pence)* |369.2 |364.1 |1.4 | |____________________________________________|___________|___________|______| |Share Price (pence) |296.0 |298.0 |(0.7) | |____________________________________________|___________|___________|______| |Share Price Discount to Net Asset Value (%)*|19.8 |18.2 |n/a | |____________________________________________|___________|___________|______|
* Alternative Performance Measure.
CHAIRMAN’S STATEMENT
I am pleased to present the Company’s interim report for the six months to
Investment performance
For the six months to
As at
Share capital and discount
The widening of the Company’s discount from its year-end position of 18.2% is disappointing albeit the discount averaged a comparable 18.4% during the period. The average discount of the ‘Flexible Investment’ sector of the
2024 Annual General Meeting
I chaired my third Annual General Meeting of the Company which was held on
Portfolio Information
Shareholders can keep up to date on the performance of the portfolio through the Company’s website at www.globalopportunitiestrust.com where you will find information on the Company, a monthly factsheet and research articles by our Executive Director,
Outlook
In the short to medium term the outlook is dominated by geopolitical events. A large number of Western countries are facing elections. In the
Keep in Touch
As always, the Board welcomes communication from shareholders and I can be contacted through the Company Secretary at cosec@junipartners.com.
Chairman
EXECUTIVE DIRECTOR’S REPORT
The first six months of 2024 broadly followed the pattern of 2023 albeit that equity returns were particularly skewed towards the artificial intelligence (‘AI’) theme and a small number of US technology stocks in particular. Whilst AI has been widely used since the 1980’s the ‘new’ AI relates to its ability to process the written word through ‘large language models’ (‘LLMs’). This element of AI is still in the early stages and whilst it will inevitably bring productivity improvements in a range of areas it is not the economic panacea that markets seem to believe. We remain in an environment with elevated valuations and meaningful government debt overhangs which have to constrain policy. This reality is dawning on electorates which are reacting to the realisation that incumbent governments cannot satisfy all the promises that have been made. This will lead to more political instability with
Whilst bond markets have corrected, equity market valuations remain at historically high levels which implies substantial risk, even if the economic and political background were more supportive. For this reason, the portfolio remains conservatively positioned. However, the composition is more nuanced since we still see opportunities, particularly outside of the mega-caps. In the first half we initiated positions in Qinetiq and Jet2 for example. Qinetiq has leadership positions in a number of defence related areas and Jet2, whilst affected by the economic cycle, combines a low valuation with a high-quality management team. This has been part of increasing exposure to the
We anticipate that the stark economic choices facing the major economies will prove increasingly difficult to ignore and will become ever more evident in company results/ forecasts. Combining this with an unfolding election season and the global geopolitical tensions suggests that the seemingly unshakeable optimism of equity markets will be severely tested.
The portfolio has been constructed to try and provide positive returns through the cycle including periods of asset market decline. For this reason, one of the characteristics has been a volatility level around one third that of equity markets. The target has been to identify attractive investments without taking on meaningful broad equity market risk. There will come a time when it is appropriate to take a more sanguine view of risk and we are prepared to do this when the potential returns justify.
Dr
Executive Director
PORTFOLIO OF INVESTMENTS
as at
Valuation % of
Company Sector Country
£’000 Net assets
Templeton European
Long-Short Equity Financials Luxembourg 16,113 14.9
SIF1
AVI Japan Special Financials Japan 8,097 7.5
Situations Fund
Volunteer Park Financials Luxembourg 7,842 7.3
Capital Fund SCSp2
TotalEnergies Energy France 3,749 3.5
Unilever Consumer Staples United Kingdom 3,345 3.1
Samsung Electronics Information Technology South Korea 2,902 2.7
Qinetiq Industrials United Kingdom 2,658 2.5
ENI Energy Italy 2,606 2.4
Lloyds Banking Financials United Kingdom 2,360 2.2
Imperial Brands Consumer Staples United Kingdom 2,276 2.1
Jet2 Industrials United Kingdom 2,204 2.0
Alibaba Consumer Discretionary Hong Kong 2,186 2.0
Tesco Consumer Staples United Kingdom 2,163 2.0
Orange Communication Services France 2,110 2.0
Dassault Aviation Industrials France 1,954 1.8
General Dynamics Industrials United States 1,952 1.8
Sanofi Health Care France 1,820 1.7
RTX Industrials United States 1,804 1.7
Panasonic Consumer Discretionary Japan 1,753 1.6
Verizon Communication Services United States 1,512 1.4
Communications
Total investments 71,406 66.2
Cash and other net 36,490 33.8
current assets
Net assets 107,896 100.0
1
2
DISTRIBUTION OF INVESTMENTS
as at
Sector Distribution Geographical Distribution Sector % Region / country % Financials: Long-Short Fund 14.9 Europe ex UK 11.4 Financials: Japan Fund 7.5 Europe: Long-Short Fund 14.9 Financials: Private Equity Fund 7.3 Total Europe 26.3 Financials: Direct Equities 2.2 North America: Private Equity Fund 7.3 Total Financials 31.9 North America: Direct Equities 4.9 Industrials 9.8Total North America 12.2 Consumer Staples 7.2 United Kingdom 13.9 Energy 5.9 Japan 9.1 Consumer Discretionary 3.6 Asia Pacific ex Japan 4.7 Communication Services 3.4 Cash and other net assets* 33.8 Information Technology 2.7 Health Care 1.7 Cash and other net assets* 33.8
The figures detailed in the sector distribution represent the Company’s exposure to those sectors.
The figures detailed in the geographical distribution represent the Company’s exposure to these countries or regional areas through its investments and cash.
The geographical distribution is based on each investment’s principal stock exchange listing or domicile, except in instances where this would not give a proper indication of where its activities predominate.
*The geographical distribution of cash and other net assets as at
US Dollar 24 .8%
British Pound 6 .4%
Swiss Franc 2 .2%
Euro 0.3%
Japanese Yen 0 .1%
33.8%
DIRECTORS’ STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES
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 Executive Director’s Report on pages 3 to 5 of the Interim Report. The principal factors that could impact the remaining six months of the financial year are also detailed in the Chairman’s Statement and Executive Director’s Report.
Principal Risks and Uncertainties
The Board has considered the principal and emerging risks facing the Company. The Board has concluded that there are no significant additional risks facing the Company other than those detailed below and in the Annual Report and Financial Statements for the year ended
The Board considers that the following risks remain the principal risks associated with investing in the Company: investment and strategy risk, key person risk, discount volatility risk, price risk, foreign currency risk, liquidity risk, operational risk and regulatory risk. Other risks associated with investing in the Company include, but are not limited to, credit risk, interest rate risk and gearing risk. These risks, and the way in which they are managed, are described in more detail under the heading “Principal risks and uncertainties” within the Strategic Report in the Company’s Annual Report and Financial Statements for the year ended
The emerging risks facing the Company have largely remained unchanged since those detailed in the Annual Report for the year ended
The risks identified by the Board as detailed above are not exhaustive and various other risks may apply to an investment in the Company. Potential investors may wish to obtain independent financial advice as to the suitability of investing in the Company.
Going Concern
The Half-Yearly Report has been prepared on a going concern basis. The Directors consider that this is the appropriate basis as they have a reasonable expectation that the Company has adequate resources to continue in operational existence and meet its financial commitments as they fall due for a period of at least 12 months from the date of approval of the unaudited financial statements.
DIRECTORS’ STATEMENT OF RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The Directors confirm that to the best of their knowledge:
-- The condensed set of Financial Statements, prepared in accordance with
Financial Reporting Standard (“FRS”) 104: “Interim Financial Reporting”,
gives a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company; and
-- This Half-Yearly Report includes a fair review of the information
required by:
(a) Disclosure Guidance and Transparency Rule 4.2.7R, 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) Disclosure Guidance and Transparency Rule 4.2.8R, 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 has not been audited or reviewed by the Company’s auditor.
This Half-Yearly Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by:
Chairman
INCOME STATEMENT
for the six months to
Six months Six months
to 30 June 2024 to 30 June 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Gains on investments at fair value – 2,288 2,288 – 564 564
through profit or loss
Unrealised foreign exchange losses – (157) (157) – (2,278) (2,278)
on current assets
Realised foreign exchange losses – (342) (342) – (7) (7)
on current assets
Income 1,623 – 1,623 1,539 – 1,539
Management fee (20) (48) (68) (25) (58) (83)
Other expenses (299) – (299) (348) – (348)
Net return before finance costs 1,304 1,741 3,045 1,166 (1,779) (613)
and taxation
Finance costs
Interest payable and related (9) – (9) (8) – (8)
charges
Net return before taxation 1,295 1,741 3,036 1,158 (1,779) (621)
Taxation – overseas withholding (90) – (90) (182) – (182)
tax
Net return after taxation 1,205 1,741 2,946 976 (1,779) (803)
Return per share 4.1p 6.0p 10.1p 3.3p (6.1)p (2.8)p
All revenue and capital items in the above statement derive from continuing operations.
The total column of this statement is the profit and loss account of the Company.
The revenue and capital columns are prepared in accordance with guidance issued by the
A separate Statement of Comprehensive Income has not been prepared as all gains and losses are included in the Income Statement.
BALANCE SHEET
as at
30 June 31 December
2024 2023
(unaudited) (audited)
£’000 £’000
Fixed asset investments
Investments at fair value through profit or loss 71,406 64,083
Current assets
Debtors 587 374
Cash at bank and short-term deposits 36,030 42,105
36,617 42,479
Current liabilities
Creditors (127) (151)
(127) (151)
Net current assets 36,490 42,328
Net assets 107,896 106,411
Capital and reserves
Called-up share capital 645 645
Share premium 1,597 1,597
Capital redemption reserve 14 14
Special reserve 9,760 9,760
Capital reserve 92,022 90,281
Revenue reserve 3,858 4,114
Total shareholders’ funds 107,896 106,411
Net asset value per share 369.2 364.1
STATEMENT OF CHANGES IN EQUITY
for the six months to
Capital
Share Share Special Capital Revenue
Six months to redemption Total
capital premium reserve reserve reserve
30 June 2024 reserve £’000
£’000 £’000 £’000 £’000 £’000
£’000
At 31 December 2023 645 1,597 14 9,760 90,281 4,114 106,411
Net return after
– – – – 1,741 1,205 2,946
taxation
Dividends paid – – – – – (1,461) (1,461)
At 30 June 2024 645 1,597 14 9,760 92,022 3,858 107,896
Capital
Share Share Special Capital Revenue
Six months to redemption Total
capital premium reserve reserve reserve
30 June 2023 reserve £’000
£’000 £’000 £’000 £’000 £’000
£’000
At 31 December 2022 645 1,597 14 9,760 90,098 4,030 106,144
Net return after
– – – – (1,779) 976 (803)
taxation
Dividends paid – – – – – (1,461) (1,461)
At 30 June 2023 645 1,597 14 9,760 88,319 3,545 103,880
STATEMENT OF CASH FLOW
For the six months to
Six months to Six months to
30 June 2024 30 June 2023
£’000 £’000
Cash flows from operating activities
Net return on ordinary activities before taxation 3,036 (621)
Adjustments for:
Gains on investments (2,288) (564)
Interest payable 9 8
Purchases of investments* (15,132) (52)
Sales of investments* 10,077 4,383
Dividend income (921) (1,105)
Other income (702) (434)
Dividend income received 877 1,064
Other income received 610 456
Increase in receivables (39) (2)
Decrease in payables (24) (76)
Overseas withholding tax deducted (108) (185)
(7,641) 3,493
Net cash flows from operating activities (4,605) 2,872
Cash flows from financing activities
Equity dividends paid from revenue (1,461) (1,461)
Interest paid (9) (9)
Net cash flows from financing activities (1,470) (1,470)
Net (decrease)/increase in cash and cash equivalents (6,075) 1,402
Cash and cash equivalents at the start of the period 42,105 36,629
Cash and cash equivalents at the end of the period 36,030 38,031
* Receipts from the sale of, and payments to acquire, investment securities have been classified as components of cash flows from operating activities because they form part of the Company’s dealing operations.
NOTES TO THE FINANCIAL STATEMENTS
for the six months to
1. Accounting policies
Basis of accounting
The Company applies Financial Reporting Standard (“FRS”) 102: “The Financial Reporting Standard applicable in the
The accounting policies are set out in the Company’s Annual Report and Financial Statements for the year ended
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 adequate resources to continue in operational existence for a period of at least 12 months from the date when these financial statements were approved.
The Directors have noted that the Company, holding a portfolio consisting principally of liquid listed investments and cash balances, is able to meet the obligations of the Company as they fall due, any future 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 reviewed stress tests assessing the impact of changes and scenario analysis to assist them in determination of going concern. In making this assessment, the Directors have considered plausible downside scenarios that have been financially modelled. These tests apply to any set of circumstances in which asset value and income are significantly impaired. The conclusion was that in a plausible downside scenario, the Company could continue to meet its liabilities. Whilst the economic future is uncertain, and the Directors believe that it is possible the Company could experience further reductions in income and/or market value, the opinion of the Directors is that this is unlikely to be to a level which would threaten the Company’s ability to continue as a going concern.
The Company and its key 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 on 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. Therefore, the financial statements have been prepared on the going concern basis.
Comparative information
The financial information for the six months to
The latest published audited financial statements which have been delivered to the Registrar of Companies are the Annual Report and Financial Statements for the year ended
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single segment of business, being investment business. The Company primarily invests in listed companies.
1. Income
Six months to Six months to
30 June 2024 30 June 2023
£’000 £’000
Revenue
Income from investments
UK dividend income 278 257
Overseas dividend income 643 848
921 1,105
Total income comprises
Dividend income 921 1,105
Rebate income 38 30
Bank interest 664 404
1,623 1,539
1. Dividends
Six months to Six months to
30 June 2024 30 June 2023
£’000 £’000
2023 final dividend of 5.0p per ordinary share paid 1,461 –
in May 2024
2022 final dividend of 5.0p per ordinary share paid – 1,461
in May 2023
1,461 1,461
1. Return per share
Six months Six months to
to
30 June 2023
30 June 2024
Net Per Net Per
return share return share
£’000 pence £’000 pence
Revenue return after taxation 1,205 4.1 976 3.3
Capital return after taxation 1,741 6.0 (1,779) (6.1)
Total return 2,946 10.1 (803) (2.8)
The returns per share for the six months to
1. Investments
Six months to Year to
30 June 2024 31 December 2023
£’000 £’000
Opening book cost 54,044 60,663
Changes in fair value of investments 10,039 8,620
Opening fair value 64,083 69,283
Movements in the period:
Purchases at cost 15,132 949
Sales – proceeds (10,097) (8,420)
Sales – realised gains on sales 280 852
Changes in fair value of investments 2,008 1,419
Closing fair value 71,406 64,083
Closing book cost 59,359 54,044
Changes in fair value of investments 12,047 10,039
Closing fair value 71,406 64,083
The fair value hierarchy for investments held at fair value at the period end is as follows:
30 June 2024
31 December 2023
£’000 £’000
Level 1 47,451 41,135
Level 2 16,113 14,699
Level 3 7,842 8,249
71,406 64,083
1. Cash at bank and short-term deposits
30 June 31 December
2024 2023
£’000 £’000
US dollar 26,702 25,904
Sterling 6,805 5,011
Swiss franc 2,302 2,441
Euro 123 125
Japanese yen 88 8,613
South Korean won 10 11
36,030 42,105
During the period, the Company opened a new US dollar notice account with
The Company also opened two new US dollar liquidity funds with Goldman Sachs and JPMorgan respectively. As at
1. Net asset value per share and share capital
The NAV is based on net assets at
During the six months to
As at
1. Related party transactions
Dr
The Company has invested in Volunteer Park Capital Fund SCSp (“VPC”).
1. Post balance sheet events
There were no events subsequent to the half-year end and up to
1. Availability of Half-Yearly Report
The Half-Yearly Report will shortly be available to view on the Company's website at www.globalopportunitiestrust.com where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.
A copy of the Half-Yearly Report will shortly be submitted to the Financial Conduct Authority’s National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
For further information please contact:
Company Secretary
e-mail: cosec@junipartners.com
[END]
