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THE EUROPEAN INVESTMENT TRUST PLC
Annual Financial Report for the year ended 30 September 2018
The full Annual Report and Financial Statements can be accessed via the Company's website at www.theeuropeaninvestmenttrust.com or by contacting the Company Secretary by telephone on 0131 270 3800.
|Results for year||30 September 2018||30 September 2017||Change|
|Net asset value per ordinary share (“NAV”)||1004.3p||1047.9p||(4.2)%|
|Share price per ordinary share||908.0p||919.5p||(1.3)%|
|Share price discount to NAV||9.6%||12.3%|
30 September 2018
30 September 2017
|Revenue return per ordinary share1||27.4p||25.8p|
|Capital return per ordinary share1||(50.3)p||219.7p|
|Total return per ordinary share1||(22.9)p||245.5p|
|Interim dividend per ordinary share||9.0p||8.0p|
|Special interim dividend per ordinary share||-||1.5p|
|Final dividend per ordinary share||18.0p2||13.5p|
|Total dividend per ordinary share||27.0p||23.0p|
1 Based on the weighted average number of shares in issue during the year.
2 Proposed final dividend for the year.
30 September 2018
30 September 2017
|NAV – high||1069.6p||1061.8p|
|Share price – high||974.0p||940.0p|
|Share price discount to NAV|
30 September 2018
30 September 2017
|NAV total return1||(2.1)%||29.9%|
|FTSE All-World Europe ex UK Index total return1||2.4%||22.6%|
1 In sterling.
The NAV total returns are sourced from Edinburgh Partners Limited (“Edinburgh Partners” or the “Investment Manager”) and include dividends reinvested. The index performance figures are sourced from Thomson Reuters Datastream.
Cost of running the Company
30 September 2018
30 September 2017
1 Based on total expenses, excluding finance costs, transaction costs and certain non-recurring items for the year, as a percentage of the average monthly net asset value.
Past performance is not a guide to future performance.
In the year to 30 September 2018, the NAV total return was -2.1% compared to a total return of 2.4% for the FTSE All-World Europe ex UK Index, adjusted to sterling. The share price total return over the year was 1.2%, boosted by the reduction in the share price discount to NAV from 12.3% to 9.6%. Markets have seen a return to sporadic volatility. This is a change after some years of fairly uninterrupted appreciation for higher growth companies. Longer-term returns are more important than any one year’s performance and the Company’s longer-term record can be reviewed in the Ten Year Record in the full Annual Report and Financial Statements.
Our Investment Manager, Edinburgh Partners, adopts a consistent, long-term approach to investing which is focused on company valuations. This results in a high conviction approach, with a concentrated portfolio, low turnover and high active share. At the year end, there were 40 holdings and turnover for the year was 23%. Active share was 80% at the year end and was around this level during the year under review. Active share, as defined in the Glossary in the full Annual Report and Financial Statements, measures the extent of the portfolio’s divergence from the benchmark index. The higher the active share, the lower the overlap and the less the portfolio resembles the index. Whilst these features, together, are no guarantor of investment success, they demonstrate that our Investment Manager is acting in accordance with its stated style and philosophy. The Investment Manager’s Report contains detailed commentary on the portfolio and the performance for the year.
REVENUE AND DIVIDEND
Revenue per share for the year was 27.4p, an increase of 6.2% over the prior year figure of 25.8p. Over half of the increase can be attributed to the revenue per share benefitting from the change in the allocation of the management fee and finance costs relating to borrowings from 1 October 2017. Two-thirds of these costs are now charged to capital to reflect more accurately the expected future (and observed past) returns from capital and income. In addition, dividend income increased from £12.2 million in 2017 to £13.8 million in the year ended 30 September 2018, mainly attributable to dividend increases from companies in the portfolio.
An interim dividend of 9.0p was paid in July 2018 and the Board is now recommending a final dividend of 18.0p per share to give a total dividend for the year of 27.0p per share. This represents a 25.6% increase compared to the previous year’s figure of 21.5p per share, which excludes the special interim dividend of 1.5p per share from exceptional income relating to historic overseas withholding tax reclaims. Subject to the approval of shareholders at the Annual General Meeting (“AGM”) of the Company to be held on Tuesday, 22 January 2019, the dividend will be paid on Thursday, 31 January 2019 to shareholders on the register at Friday, 4 January 2019. The ex-dividend date will be Thursday, 3 January 2019.
The Company has a €30 million bank overdraft facility with The Northern Trust Company. At the year end, the facility was partially utilised, with €14.2 million having been drawn down. Under normal circumstances, your Board believes that the portfolio should have a modest level of gearing and the facility provides the Investment Manager with flexibility to take advantage of opportunities when valuations are attractive. The Investment Manager employs a disciplined, valuation-driven strategy which should be well-suited to help determine an appropriate level of gearing within strategic parameters set by the Board.
The ongoing charges figure for the year was 0.61%, which compares favourably with other actively-managed investment funds and particularly well against other European focused investment trusts. The comparable figure for last year was 0.59%.
DISCOUNT AND SHARE BUY BACKS
We do not have a formal discount target but we monitor the discount closely. We are prepared to buy back shares opportunistically, taking into account the level of the discount and the valuation of the portfolio. During the year, we purchased 750,500 shares at an average share price discount to NAV of 10.3% at a total cost of £6.9 million. This enhanced the NAV by 1.9p. The discount at the end of the year was 9.6%, a reduction from 12.3% at the start of the year. Since the year end, we have bought back a further 90,000 shares at a total cost of £746,000, at an average discount of 9.9%.
OBJECTIVE AND INVESTMENT POLICY
At the AGM held on 11 January 2018, shareholders approved changes to the Company’s objective and investment policy. As detailed in the prior year Annual Report, the objective needed updating to reflect developments in the markets in which the Company invests. The investment policy was also revised, principally to reflect the belief that the diverse markets of the region promise attractive long-term growth and that investment returns come from a mixture of capital growth and dividends. The revised objective and the investment policy are detailed below.
In January 2018, Franklin Resources, Inc. announced the acquisition of Edinburgh Partners Limited, our Investment Manager. The acquisition completed on 1 May 2018. Importantly, there has been no change in the individuals responsible for the investment management of your Company, nor to the investment process or the way that Edinburgh Partners itself is managed.
Following negotiation with the AIFM, Edinburgh Partners AIFM Limited, the Board agreed a revised management fee structure. Prior to 1 June 2018, the management fee was 0.55% per annum of the Company’s equity market capitalisation, irrespective of the level of the equity market capitalisation. From 1 June 2018, the annual management fee has been calculated at 0.55% per annum of the Company’s equity market capitalisation up to £500 million, reducing to 0.50% per annum of the equity market capitalisation which exceeds this amount. The Board continues to believe that by paying the management fee calculated on a market capitalisation basis, rather than a percentage of assets basis, the interests of the AIFM are more closely aligned with those of shareholders.
As a consequence of the revised rules under the Markets in Financial Instruments Directive II (“MiFID II”), research costs were required to be unbundled from trading commission on the purchase and sale of investments with effect from 3 January 2018. During the year ended 30 September 2018, the Company agreed to pay £12,000 as a contribution to research costs incurred by the Investment Manager. The cost has been included in other expenses as detailed in the note 4 to the Financial Statements below, with £4,000 allocated to revenue and £8,000 to capital. The additional expense incurred on research costs has been more than offset by a reduction in trading commissions which, despite an increase in trading activity, have reduced by £42,000 to £133,000 in 2018 from £175,000 in 2017, as detailed in note 10 to the Financial Statements.
NEW ZEALAND SHARE DELISTING
In September 2017, the Company announced the cancellation of its share listing in New Zealand. The costs outweighed the benefits to the Company, given the small and decreasing number of shareholders on the New Zealand share register and the reduced number of trades being undertaken. The cancellation occurred on 2 November 2017 and the New Zealand listed shares were transferred to the Company's UK share register.
Last year, there was an upgrading of the Company’s Annual Report and it is pleasing to note that the Company received a special mention in the Best Report and Accounts – Specialist section at the AIC Shareholder Communication Awards in May 2018. As a continuation of this process of developing the Company’s shareholder communications, with a view to improved ease of use and clarity, the Board has reviewed both the Company’s website and factsheet and considered both should be updated. Operating in conjunction with Edinburgh Partners and a website developer, the projects are progressing well and we anticipate that both the updated website and factsheet will be available in early 2019.
Bill Eason is to retire from the Board at the AGM. The Board wishes to thank Bill wholeheartedly for his wise counsel, experience and commitment to the Company over 11 years of service. In conjunction with an independent external consultancy, the Directors conducted a detailed search for candidates to join the Board. Following an extensive review process, the Board interviewed a number of potential candidates and we are delighted to welcome two new non-executive Directors with effect from 1 January 2019, who will also become members of the Audit Committee. Sue Inglis, until June 2018 a senior corporate financier in Cantor Fitzgerald’s investment companies team, is chair-elect of The Bankers Investment Trust PLC, and a director of Baillie Gifford US Growth Trust plc and BMO Managed Portfolio Trust plc. Andrew Watkins, until his retirement in June 2017, was head of client relations, sales and marketing for Invesco Perpetual’s listed investment funds business; he is currently chairman of Ashoka India Equity Investment Trust plc, and a director of BMO UK High Income Trust plc and Chelverton UK Dividend Trust plc. We are delighted to welcome two such experienced Directors to the Board. Between them, Sue and Andrew offer comprehensive experience of the investment trust market, and we look forward enormously to exploiting their talents on behalf of shareholders, who will be asked to approve their appointments at the AGM. For a short period, the Board will thus consist of six non-executive Directors.
ANNUAL GENERAL MEETING
The AGM will be held at 11.00am on Tuesday, 22 January 2019 at Brewers’ Hall, Aldermanbury Square, London EC2V 7HR. I look forward to meeting shareholders who are able to attend.
This has been a challenging period for European investment and Europe in general. Slightly improved economic growth does not tell the story very well. Tectonic plates appear to be shifting. Underlying stresses within the European Union and the populations comprising it have come increasingly to the surface, as has been the case elsewhere. Diverging economic outcomes between nations and within them remain quite extreme. Trends within stock markets have been equally marked and every bit as apparent. Lowly valued companies have been swept aside by fervour for more clearly rapidly growing businesses. The combination of low interest rates, low discount rates and high assumed future revenue and profits growth has dominated other factors. Your Company’s portfolio, to some degree, represents the view that mean reversion in both interest rates and stock markets has not entirely disappeared, that slow and steady does it over time, and that banks, oil companies, telecommunications and pharmaceuticals businesses, for example, are still capable of generating worthwhile absolute long-term returns for their shareholders from a position of some competitive strength and undemanding initial valuations.
28 November 2018
INVESTMENT MANAGER’S REPORT
OUR INVESTMENT APPROACH
At Edinburgh Partners, we believe that time horizon is the key market imperfection and that investors spend too much time focusing on short-term quarterly and annual data. Empirical research on markets undertaken by our investment team supports the common sense contention that the value of a business depends upon its long-term ability to generate profits. This strongly indicates that company analysis should be concentrated on a longer term, five-year horizon.
As a result, our investment approach is to forecast individual company earnings five years into the future. We aim to identify and buy undervalued companies and have the patience to hold them until share prices reflect their long-term earnings potential. Instead of being pushed off course by short-term reactions, fear of being different from the crowd or a particular index, our judgments are based purely on long-term analysis of prospective risk and reward. This approach is, by definition, contrarian, but for the patient investor, we believe it is the most reliable way to achieve superior returns over the long term.
The year under review delivered a NAV total return of -2.1% compared to 29.9% in the previous year. We lagged our benchmark by 4.5% compared to the previous year when we exceeded the benchmark by 7.3%. While disappointed with this outcome, we believe the performance should be seen in the context of a significant market shift.
Since 2008, central banks have focused on supporting and stimulating economic growth through a policy approach described as quantitative easing. By purchasing financial assets, such as government bonds, they have kept interest rates artificially low and provided support to asset prices. As evidence of economic recovery has become more solid, the process of unwinding this policy has begun, led by the US Federal Reserve. This represents unknown territory for investors and volatility is to be expected. What we do know, however, is that higher interest rates reduce the discounted cash flows generally used to value growth stocks and they raise the risk profile of companies with weak balance sheets.
During the year, we have seen periodic bouts of volatility as the market has reacted to political risks such as US trade policy and Italian budget deficits. These periods of volatility have tended to weigh heavily on cyclical sectors such as financials, particularly banking stocks, and industrials.
Within our overall framework of risk management, we focus on individual stocks. Therefore, we have analysed the performance for the year in terms of significant contributors and detractors, at both a sector and individual stock level.
Significant contributions to absolute performance - year to 30 September 2018
|Oil & Gas||+4.2%|
The largest contribution from an individual sector came from Oil & Gas where our holdings in the major energy companies Total, ENI and Royal Dutch Shell all performed well. Demand has continued to rise while supply has been pressurised by a range of factors, including US sanctions on Iran and shortfalls from individual countries such as Venezuela and Libya. The best performing stock was seismic specialist, Petroleum Geo-Services, which continued to recover thanks to reductions in industry capacity and improving demand for data.
Health Care stocks made a positive contribution to performance led by Getinge and BB Biotech. These positive contributions were offset by a sharp fall in the share price of Bayer towards the end of the period. Bayer has completed the acquisition of Monsanto, strengthening its crop science division which represents c.40% of the pro forma profits of the group and now has leading positions in both seeds and treatments. A recent jury decision in the US found that RoundUp, a well-known Monsanto product containing Glyphosate used to kill weeds, was linked to cancer and awarded punitive damages to the plaintiff. Bayer believes that RoundUp is a safe and effective product which farmers need and that the weight of scientific evidence supports this position and, accordingly, is appealing this decision. We believe that the valuation now discounts an extremely pessimistic outcome.
Within the Financials sector, in the previous year, banks performed very well whereas this year, they have lagged. Banks are beneficiaries of rising interest rates and were impacted when the rise in bond yields, which was evident in 2017, stalled in 2018. Banking stocks represent our largest exposure at 20.7% of net assets and their weak performance this year was a major factor in our performance. Within the Financials sector, we did however achieve a significant contribution from the venture capital specialist, Rocket Internet. Following public listings for three of its portfolio holdings, the company has a strong balance sheet with around half of its market capitalisation in cash.
Industrial stocks performed poorly in aggregate, reversing the good performance of the prior year. There was a positive contribution from Airbus where increasing production from the core A320 models is driving profitability higher. However, there were negative contributions from a number of cyclical stocks including auto supplier Leoni. The auto sector is grappling with a number of issues, including the diesel slowdown and a new emissions testing regime as well as an increase in US tariffs and slowing Chinese growth. As the leading provider of wiring harnesses for the European auto sector, Leoni is directly affected by these issues. However, we believe Leoni will navigate the short-term market weakness and benefit from long-term structural growth in electronic content in cars, boosted by the growth of electric and hybrid vehicles which require more complex systems.
In the Consumer Services sector, good performance from our holding in Ahold Delhaize was more than offset by a significant deterioration in the performance of food retailer Distribuidora Internacional (“DIA”). In its main market in Spain, DIA is facing increased competition and its South American businesses have been hit by currency weakness. An external investor has taken a 25% stake in the business and instigated management change, which could lead to a change of control. However, the business is performing poorly and after a profits warning probably requires a fresh injection of capital. We sold our holding after the year end.
During the year, we disposed of four holdings and took positions in seven new stocks. The stocks we sold were Telecom Italia, where we considered the strategy had become unclear amidst boardroom division, and Ubisoft Entertainment, where the valuation had become stretched. Both Gemalto and TDC were the subject of takeovers. The purchases were Cyfrowy Polsat, Mediobanca, Glanbia, Orange, ISS, Getinge and Indra Sistemas. Detailed below are comments on two of the purchases, Glanbia and Getinge.
Glanbia has completed a transition from being a traditional dairy business to a protein nutrition specialist with its own suite of branded products. Its largest market is North America where demand for whey protein in food and beverages is growing strongly, especially in sports nutrition. Underlying growth has been obscured by currency movements which do not impact the long-term growth prospects.
Getinge supplies medical equipment with a focus on instruments and tools used in the operating theatre. After several years of underperformance, a new management team is undertaking a restructuring of the business to improve profitability, which sits well below its competitors. If the profitability does not improve, we believe it is possible that the company could become a takeover target for larger medical device groups.
Over the course of the year, the composition of the portfolio has not altered significantly. Our Telecommunications exposure reduced with the sale of TDC, while Health Care increased with the addition of Getinge. We have reduced our cyclical exposure slightly but retain a procyclical bias, principally through our holdings in the Financials, Industrials and Oil & Gas sectors. At the year end, the Company had net borrowings amounting to 2.7% of net assets, compared to a cash balance of 2.0% at the start of the financial year. This borrowing position was temporary and the sale of two holdings in early October 2018 restored the net cash position which we had held for most of the year.
Economic fundamentals remain positive in Europe. Employment is growing and wage inflation is in evidence. The European Central Bank has confirmed the end of monetary easing with asset purchases to cease in December 2018 and that interest rates are likely to rise in the second half of 2019. However, there are a number of threats to this positive growth outlook. In Italy, an unusual alliance of the political left and right is proposing to increase government spending and reverse some of the structural reforms of the previous government. These policies put Italy at odds with the European Commission and could lead to renewed sovereign debt fears. The unresolved Brexit process represents another threat, particularly to countries and sectors with substantial trading links with the UK. However, the most significant risk comes from US trade policy, where the imposition of protectionist trade tariffs is bound up with an aggressive approach to China, which is adversely impacting industrial stocks and companies with emerging market exposures.
Our central investment case is for ongoing recovery and modest economic growth in Europe, supporting a rise in the cost of money. This should lead to a reduction in the valuations of highly rated growth stocks and an improvement in the performance of stocks with lower growth expectations and starting valuations. However, with growing threats to the growth outlook, it is essential to maintain a focus on risk as well as reward.
28 November 2018
PORTFOLIO OF INVESTMENTS
as at 30 September 2018
|5||8||Royal Dutch Shell2||Oil & Gas||Netherlands||13,951||3.4||3.1|
|7||13||Total||Oil & Gas||France||12,345||3.0||3.0|
|10||10||ENI||Oil & Gas||Italy||12.141||2.9||3.0|
|16||34||Ahold Delhaize||Consumer Services||Netherlands||11,351||2.7||2.0|
|31||29||Petroleum Geo-Services||Oil & Gas||Norway||8,850||2.1||2.3|
|34||16||BB Biotech||Health Care||Switzerland||8,528||2.0||2.9|
|37||-||Cyfrowy Polsat||Consumer Services||Poland||7,939||1.9||-|
|Prior year investments sold during the year||8.7|
|Total equity investments||425,493||102.7||98.0|
|Cash and other net current assets||1,481||0.4||2.0|
1 The investment is in non-voting preference shares.
2 The investment is in A Shares.
3 For details regarding the Company's borrowings, please see note 6 to the Financial Statements.
Of the ten largest portfolio investments as at 30 September 2018, the valuations at the previous year end, 30 September 2017, were Roche £12,739,000; Sanofi £14,577,000; PostNL £16,490,000; Novartis £14,937,000; Royal Dutch Shell £13,658,000; Getinge £nil; Total £13,007,000; Nokia £12,862,000; ING £12,514,000 and ENI £13,274,000.
DISTRIBUTION OF INVESTMENTS
as at 30 September 2018 (% of net assets)
|Oil & Gas||11.4|
|Cash and other net current assets||0.4|
|Cash and other net current assets||0.4|
As at 30 September 2018, the net assets of the Company were £414,319,000.
All of the Directors are non-executive and independent of the AIFM and the Investment Manager.
Michael MacPhee (Chairman)
Michael Moule (Senior Independent Director)
Dr Michael Woodward (Chairman of Audit Committee)
Craig Armour LLB, CA
STRATEGY AND BUSINESS MODEL
The current objective and investment policy of the Company is detailed below:
The objective of the Company is to achieve attractive investment returns over the long term from a diversified portfolio of European securities.
The Board believes that investment in the diverse markets of the region promises attractive long-term capital and income growth. It further considers that the structure of the Company as a UK listed investment trust, with an independent Board of Directors, is well suited to meeting this aim.
The Company is invested in a diversified portfolio which is expected to consist of approximately 30 to 50 securities. The Company may not invest more than 10% of the value of the portfolio in any one individual stock at the time of investment.
The Board recognises that investment in some European countries can be riskier than in others. Investment risks are diversified through holding a wide range of securities in different countries and industrial sectors. No more than 10% of the value of the portfolio in aggregate may be held in securities in those countries which are not included in the FTSE All-World European indices.
The Board has the authority to hedge the Company’s exposure to movements in the rate of exchange of currencies, principally the euro, in which the Company’s investments are denominated, against sterling, its reporting currency. However, it is not generally the Board’s practice to do this and the portfolio is not currently hedged.
No investments in unquoted stocks can be made without the prior approval of the Board. The level of gearing within the portfolio is agreed by the Board and should not exceed 20% in normal market conditions.
No more than 10% of the total assets of the Company may be invested in other listed investment companies (including investment trusts) except in those that have stated that they will invest no more than 15% of their total assets in other listed investment companies. In this case, the limit is 15%.
The Investment Manager’s compliance with the limits set out in the investment policy is monitored by the Board and the AIFM.
Investments are selected for the portfolio only after extensive research, which the Investment Manager believes to be key. The whole process through which an equity must pass in order to be included in the portfolio is very rigorous. Only a security where the Investment Manager believes that the price will be significantly higher in the future will pass the selection process. The Company’s Investment Manager believes the key to successful stock selection is to identify the long-term value of a company’s shares and to have the patience to hold the shares until that value is appreciated by other investors. Identifying long-term value involves detailed analysis of a company’s earnings prospects over a five-year time horizon.
Business and status of the Company
The principal activity of the Company is to carry on the business of an investment trust company.
The Company is registered as a public limited company and is an investment company within the terms of Section 833 of the Companies Act 2006 as amended (the “Act”). The Company has been approved by HM Revenue & Customs as an investment trust under Sections 1158 and 1159 of the Corporation Tax Act 2010 as amended (“CTA”), subject to there being no subsequent serious breaches of the regulations. In the opinion of the Board, the Company has directed its affairs so as to enable it to continue to qualify for such approval.
The Company’s shares have a premium listing on the Official List of the UK Listing Authority and are traded on the main market of the London Stock Exchange.
The Company is a member of the Association of Investment Companies (“AIC”), a trade body which promotes investment companies and also develops best practice for its members.
A detailed review of how the Company’s assets have been invested is contained in the Investment Manager’s Report above. A detailed list of all the Company’s investments is contained in the Portfolio of Investments above. The portfolio consisted of 40 investments, excluding cash and other net current assets and borrowings, as at 30 September 2018, thus ensuring that the Company has a suitable spread of investment risk. A sector and geographical distribution of investments is shown above.
RESULTS AND DIVIDENDS
The results for the year are set out in the Income Statement and the Statement of Changes in Equity below.
For the year ended 30 September 2018, the net revenue return attributable to shareholders was £11.5 million (2017: £10.9 million) and the net capital return was a negative £21.0 million (2017: a positive £92.3 million). Total shareholders’ funds decreased by 5.9% to £414.3 million (2017: £440.2 million).
Details of the interim dividend paid and the final dividend recommended by the Board are set out below.
KEY PERFORMANCE INDICATORS
At each Board meeting, the Directors consider a number of performance measures to assess the Company’s success in achieving its objective. The key performance indicators used to measure progress and performance of the Company over time are established industry measures and are as follows:
Net asset value
In the year to 30 September 2018, the NAV decreased by 4.2% from 1047.9p to 1004.3p. After taking account of dividends paid in the year of 22.5p, the NAV total return was -2.1% (2017: 29.9%), as detailed in the Investment Manager’s Report above. This compares with the total return of 2.4% (2017: 22.6%) from the FTSE All-World Europe ex UK Index, adjusted to sterling.
The NAV total return since the appointment of Edinburgh Partners as Investment Manager on 1 February 2010 to 30 September 2018 was 101.8%. This compares with the total return of 109.1% from the FTSE All-World Europe ex UK Index, adjusted to sterling.
In the year to 30 September 2018, the Company’s share price decreased by 1.3% from 919.5p to 908.0p. The share price total return, taking account of the 22.5p of dividends paid in the year, was 1.2% (2017: 32.2%).
The share price total return since the appointment of Edinburgh Partners as Investment Manager on 1 February 2010 to 30 September 2018 was 117.3%. This compares with the total return of 109.1% from the FTSE All-World Europe ex UK Index, adjusted to sterling.
Share price discount to NAV
The share price discount to NAV narrowed from 12.3% to 9.6% in the year to 30 September 2018.
Revenue return per ordinary share
There was an increase in the revenue per share in the year to 30 September 2018 of 6.2% from 25.8p to 27.4p.
Dividends per ordinary share
The Directors are recommending a final dividend of 18.0p per ordinary share. After including the interim dividend of 9.0p per ordinary share, this makes a total dividend of 27.0p per ordinary share for the year. This compares to the previous year’s figure of 21.5p per ordinary share, which excludes the special interim dividend of 1.5p per ordinary share from exceptional income relating to historic overseas withholding tax reclaims.
Subject to approval by shareholders at the AGM to be held on Tuesday, 22 January 2019, the final dividend will be payable on Thursday, 31 January 2019 to all shareholders on the register at the close of business on Friday, 4 January 2019. The ex-dividend date will be Thursday, 3 January 2019.
The Company continues to have low expenses. The ongoing charges figure was 0.61% in the year to 30 September 2018 (2017: 0.59%).
The longer-term records of the key performance indicators are shown in the Ten Year Record in the full Annual Report and Financial Statements.
The Board also takes into consideration how the Company performs compared to other investment trusts investing in Europe.
In order to comply with the Alternative Investment Fund Managers’ Directive (“AIFMD”), the Company appointed Edinburgh Partners AIFM Limited as its AIFM with effect from 17 July 2014. Edinburgh Partners AIFM Limited has been approved as an AIFM by the UK’s Financial Conduct Authority (“FCA”). With the approval of the Board, the AIFM appointed Edinburgh Partners as Investment Manager to the Company pursuant to a delegation agreement with effect from 17 July 2014.
As set out the Chairman’s Statement above, with effect from 1 June 2018, the AIFM receives a management fee of 0.55% per annum of the Company’s equity market capitalisation up to £500 million and 0.50% per annum on the equity market capitalisation above £500 million, payable quarterly in arrears. Prior to this, the management fee was set at a rate of 0.55% per annum of the Company’s equity market capitalisation, irrespective of the level of the equity market capitalisation.
The Management Agreement may be terminated by either party giving three months’ written notice. No additional compensation is payable to the AIFM on the termination of this agreement other than the fees payable during the notice period. No performance fee will be paid.
As a consequence of the revised rules under MiFID II, research costs were required to be unbundled from trading commission on the purchase and sale of investments with effect from 3 January 2018. During the year ended 30 September 2018, the Company agreed to pay £12,000 as a contribution to research costs incurred by the Investment Manager (2017: £nil). This cost has been included in other expenses as detailed in note 4 to the Financial Statements below, with £4,000 allocated to revenue and £8,000 to capital.
CONTINUING APPOINTMENT OF THE AIFM
The Board keeps the performance of the AIFM under review on a regular basis. As the AIFM has delegated the investment management function to Edinburgh Partners, the performance of the Investment Manager is also regularly reviewed. The Investment Manager adopts a consistent, long-term approach to investing which is focused on company valuations. This results in a high conviction approach, with a concentrated portfolio, low turnover and high active share. However, this approach can lead to material differences in terms of the Company’s investment performance relative to its benchmark index and peer group. In the Directors’ opinion, the remuneration of the AIFM is reasonable both in absolute terms and compared to that of managers of comparable investment companies. Further, the Directors believe that by paying the management fee calculated on a market capitalisation basis rather than a percentage of assets basis, the interests of the AIFM are more closely aligned with those of shareholders. Accordingly, following a review of the key performance indicators and other relevant factors, it is the opinion of the Directors that the continuing appointment of the AIFM on the terms agreed is in the interests of shareholders as a whole.
AIFM REMUNERATION DISCLOSURES
In accordance with the AIFMD, information in relation to the remuneration of the Company’s AIFM, Edinburgh Partners AIFM Limited, is required to be made available to investors. The AIFM’s remuneration policy is incorporated within a group policy which is available at www.edinburghpartners.com. The disclosure also includes those remuneration disclosures in respect of the AIFM’s staff and ‘identified staff’ for the reporting period.
RISK MANAGEMENT BY THE AIFM
As required under the AIFMD, the AIFM has established and maintains a permanent and independent risk management function to ensure that there is a comprehensive and effective risk management policy in place and to monitor compliance with risk limits. This risk policy covers the risks associated with the management of the investment portfolio, and the AIFM reviews and approves the adequacy and effectiveness of the policy on at least an annual basis, including the risk management processes and controls and limits for each risk area.
The AIFM sets risk limits that take into account the risk profile of the Company’s investment portfolio, as well as its objective and strategy. The AIFM monitors the risk limits, including leverage, and periodically assesses the portfolio’s sensitivity to key risks.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board considers that the following are the principal financial risks associated with investing in the Company: investment and strategy risk, discount volatility risk, market risk (comprising interest rate risk, currency risk and price risk), liquidity risk, credit risk and gearing risk. An explanation of these risks and how they are managed and the policy and practice with regard to financial instruments are contained in note 17 to the Financial Statements below.
In addition, the Board also considers the following as principal risks:
Relevant legislation and regulations which apply to the Company include, but are not limited to, the Act, the CTA, the Listing Rules and the Disclosure Guidance and Transparency Rules of the FCA, the AIFMD, the General Data Protection Regulation (“GDPR”), the Foreign Account Tax Compliance Act and the Common Reporting Standard.
A breach of the CTA could result in the Company losing its status as an investment trust and becoming subject to capital gains tax, whilst a breach of the Listing Rules of the FCA might result in censure by the FCA and suspension of the trading of the Company’s shares on the London Stock Exchange.
The Directors note the new corporate offence of failure to prevent tax evasion and believe all necessary steps have been taken to prevent facilitation of tax evasion.
The implementation of GDPR provides for greater data privacy. While the risk to the Company is deemed to be low, the impact of fines should they occur could be significant. The Directors are satisfied that all necessary steps have been taken to prevent any breach of GDPR, including ensuring that all third party service providers have appropriate GDPR policies in place.
At each Board meeting, the status of the Company is considered and discussed, so as to ensure that all applicable regulations are being adhered to by the Company and its service providers.
The Board is not aware of any breaches of laws or regulations during the year under review and up to the date of this report.
Although not considered to be a principal risk for the Company, the Board continues to monitor developments around the UK’s departure from the European Union. Any portfolio of European equities will be exposed to the outcome of the Brexit negotiations, positively and negatively. We believe the Company’s portfolio has a relatively modest exposure to the UK, but the Board and Investment Manager remain alert to developments at both a macro-economic level and a stock-specific level.
In common with most other investment companies, the Company has no employees. The Company therefore relies upon the services provided by third parties. There are a number of operational risks associated with the fact that third parties undertake the Company’s administration, depositary and custody functions. The main risk is that the third parties may fail to ensure that statutory requirements, such as compliance with the Act and the Listing Rules and the Disclosure Guidance and Transparency Rules of the FCA, are met. In addition, the Company’s service providers are exposed to the possibility of cyber security and fraud risks.
The Board regularly receives and reviews management information from third parties which the Company Secretary compiles. In addition, each of the third parties provides a copy of its report on internal controls (ISAE 3402, SSAE 16 or equivalent) to the Board, through the Audit Committee, each year to evidence that adequate controls are in place and are operating satisfactorily.
Other financial risk
It is possible that inappropriate accounting policies or failure to comply with current or new accounting standards may lead to a breach of regulations.
The AIFM utilises the services of an independent administrator to prepare all financial statements and the Audit Committee meets with the independent Auditor at least once a year to discuss audit issues, including appropriate accounting policies.
The above summary of risks does not purport to be a exhaustive list of all the risk factors relating to an investment in the Company. Various other risks may apply and investors may wish to obtain independent financial advice in this regard.
The Board undertakes a robust annual assessment and review of all the risks stated above and in note 17 to the Financial Statements below, together with a review of any new risks which may have arisen during the year, including those that could threaten its business model, future performance, solvency or liquidity. These risks are formalised within the Company’s risk assessment matrix.
INTERNAL FINANCIAL CONTROL
In accordance with the guidance issued to directors of listed companies, the Directors confirm that they have carried out a review of the effectiveness of the systems of internal financial control during the year ended 30 September 2018, as set out in the full Annual Report and Financial Statements. There were no matters arising from this review that required further investigation and no significant failings or weaknesses were identified.
Leverage is defined in the AIFMD as any method by which the Company increases its exposure, whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means. As detailed in the Chairman’s Statement above and notes 5 and 6 to the Financial Statements below, during the year ended 30 September 2018, the Company utilised a borrowing facility. The Company did not use any derivative instruments during the year ended 30 September 2018.
In accordance with the detailed requirements of the AIFMD, leverage has been measured in terms of the Company’s exposure and is expressed as a ratio of net asset value. The AIFMD requires this ratio to be calculated in accordance with both the Gross Method and the Commitment Method. Details of these methods of calculation can be found by referring to the AIFMD. In summary, these methods express leverage as a ratio of the exposure of debt, non-sterling currency, equity or currency hedging and derivatives exposure against the net asset value. The principal difference between the two methods is that the Commitment Method enables derivative instruments to be netted off to reflect hedging arrangements and the exposure is effectively reduced, while the Gross Method aggregates the exposure.
The AIFMD introduced a requirement for the AIFM to set maximum levels of leverage for the Company. The Company’s AIFM has set a maximum limit of 1.20 for both the Gross and Commitment Methods of calculating leverage. However, the AIFM anticipates that the figures are likely to be lower than this under normal market conditions. At 30 September 2018, the Company’s Gross ratio was 1.03 and its Commitment ratio was 1.03. In accordance with the AIFMD, any changes to the maximum level of leverage set by the Company will be communicated to shareholders.
The Board has appointed Northern Trust Global Services Limited to act as its depositary (the “Depositary”). The Depositary is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority. Custody services are provided by The Northern Trust Company (as a delegate of the Depositary). A fee of 0.01% per annum of the net assets of the Company, plus fees in relation to safekeeping and other activities undertaken to facilitate the investment activity of the Company, are payable to the Depositary. The Company and the Depositary may terminate the Depositary Agreement at any time by giving six months’ written notice. The Depositary may only be removed from office when a new depositary is appointed by the Company.
MAIN TRENDS AND FUTURE DEVELOPMENT
A review of the main features of the year and the outlook for the coming year can be found in the Chairman’s Statement and the Investment Manager’s Report above. The Board’s main focus is on the investment return and approach, with attention paid to the integrity and success of the investment approach and on factors which may have an impact on this approach.
This Strategic Report contains “forward-looking statements” with respect to the Company’s plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events that are beyond the Company’s control. Factors that could cause actual results to differ materially from those estimated by the forward-looking statements include, but are not limited to:
As a result, the Company’s actual future condition, performance and results may differ materially from the plans set out in the Company’s forward-looking statements. The Company undertakes no obligation to update the forward-looking statements contained within the Strategic Report or any other forward-looking statements it makes.
EMPLOYEES, HUMAN RIGHTS AND COMMUNITY ISSUES
The Board recognises the requirement under the Act to detail information about employees, human rights and community issues, including information about any policies it has in relation to these matters and the effectiveness of these policies. These requirements do not apply to the Company as it has no employees, all the Directors are non-executive and it has outsourced all its functions to third party service providers. The Company has therefore not reported further in respect of these provisions.
As at 30 September 2018, the Board of Directors of the Company comprised four male Directors. The appointment of any new Director is made on the basis of merit.
As detailed in the Chairman’s Statement above, following the retirement of William Eason and subject to the election of Sue Inglis and Andrew Watkins at the forthcoming Annual General Meeting, the Board will comprise four male Directors and one female Director.
SOCIAL, ENVIRONMENTAL AND ETHICAL POLICY
The Company seeks to invest in companies that are well managed, with high standards of corporate governance, as the Directors believe this creates the proper conditions to enhance long-term value for shareholders. The Company adopts a positive approach to corporate governance and engagement with companies.
In pursuit of the above objective, the Directors believe that proxy voting is an important part of the corporate governance process. It is the policy of the Company to vote, as far as is practicable, at all shareholder meetings of investee companies. The Company follows the relevant regulatory and legislative requirements, with the guiding principles being to make proxy voting decisions which favour proposals that will lead to maximising shareholder value while avoiding any conflicts of interest. To this end, voting decisions take into account corporate governance, including disclosure and transparency, board composition and independence, control structures, remuneration, and social and environmental issues.
The day-to-day management of the Company’s business has been delegated by the AIFM to the Company’s Investment Manager, Edinburgh Partners, which has an Environmental, SRI and Corporate Governance (“ESG”) policy in place. The ESG policy statement, which can be found on the website at www.edinburghpartners.com, describes the manner in which the principles of the UK Stewardship Code are incorporated within the investment process. The assessment of the quality of investee companies in relation to environmental considerations, socially responsible investment and corporate governance is embedded in the Investment Manager’s stock selection process. The ESG policy is fully consistent with the guidance and principles set out within the UK Stewardship Code and the United Nations-backed Principles for Responsible Investment.
The assessment of the quality of investee companies in relation to environmental considerations, socially responsible investment and corporate governance is embedded in the Investment Manager’s stock selection process.
This Strategic Report has been approved by the Board and signed on its behalf by:
28 November 2018
EXTRACTS FROM THE DIRECTORS’ REPORT
As at 30 September 2018, the Company had 41,256,269 ordinary shares of 25p each in issue. No shares were held in treasury during the year or as at the date of this report as all shares purchased are cancelled.
At general meetings of the Company, ordinary shareholders are entitled to one vote on a show of hands and on a poll, one vote for each ordinary share held.
Issue of shares
No shares were issued during the year.
Purchase of shares
The Board continued to monitor the discount at which the ordinary shares of the Company trade relative to the NAV per share. During the year ended 30 September 2018, the Company purchased in the stock market 750,500 ordinary shares (with a nominal value of £187,625) for cancellation, at a total cost of £6,884,000. This represented 1.79% of the issued share capital at 30 September 2017.
Subsequent to the year end, and up to the date of this report, the Company purchased 90,000 ordinary shares (with a nominal value of £22,500) for cancellation, at a total cost of £746,000, representing 0.22% of the issued share capital as at 30 September 2018.
The Company’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Strategic Report above. In addition, notes 17 and 18 to the Financial Statements below include the Company’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its risk exposure. The Company’s principal risks are detailed in the Strategic Overview above. The Company’s assets consist principally of a diversified portfolio of listed European equity shares, which in most circumstances are realisable within a short period of time and exceed its liabilities to creditors by a significant amount.
The Directors have concluded that the Company has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date this Annual Report is approved. For this reason, they have adopted the going concern basis in preparing the Financial Statements.
LONG-TERM VIABILITY STATEMENT
In accordance with the AIC Code, the Directors have assessed the prospects of the Company over a longer period than the one year required by the ‘Going Concern’ provision of the AIC Code. The Board considers that, for a company investing in European securities, a period of five years is an appropriate period to consider for the purpose of the Long-term Viability Statement.
The Board has undertaken an assessment of the Company’s future prospects in order for it to have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.
In making its assessment, the Board considered a number of factors, including those detailed below:
The Board’s assessment was based on the following assumptions;
As a consequence of its assessment, the Board considers that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period of their assessment.
The full Annual Report and Financial Statements contain the following statements regarding responsibility for the Annual Report and Financial Statements.
DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law, the Directors have prepared the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising Financial Reporting Standard (FRS) 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and applicable law). Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these Financial Statements, the Directors are required to:
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006 and include the information required by the Listing Rules of the FCA. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Each of the Directors, whose names are set out above, confirms that, to the best of his knowledge:
The Annual Report and Financial Statements, taken as a whole, are considered by the Board to be fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.
The Directors are responsible for ensuring the Annual Report and Financial Statements are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein.
On behalf of the Board
28 November 2018
The financial information set out below does not constitute the Company’s statutory Financial Statements for the year ended 30 September 2018 but is derived from those Financial Statements. Statutory Financial Statements for the year ended 30 September 2018 will be delivered to the Registrar of Companies in due course. The Auditors have reported on those Financial Statements; their report was (i) unqualified, (ii) did not include a reference to any matters to which the Auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditors’ report can be found in the Company’s full Annual Report and Financial Statements on the Company’s website at www.theeuropeaninvestmenttrust.com and on the website of Edinburgh Partners at www.edinburghpartners.com.
for the year ended 30 September 2018
|(Losses)/gains on investments at fair value||10||-||(19,648)||(19,648)||-||92,580||92,580|
|Foreign exchange gains/(losses)||37||47||84||35||(307)||(272)|
|Net return before finance costs and taxation||12,602||(21,021)||(8,419)||10,238||92,273||102,511|
|Net return before taxation||12,582||(21,032)||(8,450)||10,188||92,273||102,461|
|Tax on ordinary activities||7||(1,121)||-||(1,121)||665||-||665|
|Net return attributable to shareholders||11,461||(21,032)||(9,571)||10,853||92,273||103,126|
|Net return per ordinary share1||9||27.4||(50.3)||(22.9)||25.8||219.7||245.5|
1 Based on the weighted average number of shares in issue during the year. The return per ordinary share is both the basic and diluted return per ordinary share.
All revenue and capital items in the above statement derive from continuing operations.
The total column of this statement is the Income Statement of the Company. The revenue and capital columns are prepared under guidance published by the AIC.
There were no items of other comprehensive income in the year and therefore the profit for the year is also the total comprehensive income for the year.
The notes form part of these Financial Statements.
as at 30 September 2018
|Fixed asset investments:|
|Investments at fair value through profit or loss||10||425,493||431,537|
|Cash at bank and short-term deposits||63||10,129|
|Net current assets/(liabilities)||(11,174)||8,663|
|Capital and reserves:|
|Called-up share capital||14||10,314||10,501|
|Share premium account||123,749||123,749|
|Capital redemption reserve||8,497||8,310|
|Total shareholders’ funds||414,319||440,200|
|Net asset value per ordinary share||15||1004.3||1047.9|
The Financial Statements were approved and authorised for issue by the Board of Directors of The European Investment Trust plc on 28 November 2018 and were signed on its behalf by:
Registered in England and Wales No. 01055384
The notes form part of these Financial Statements.
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2018
|Year ended 30 September 2018|
|At 1 October 2017||10,501||123,749||8,310||287,758||9,882||440,200|
|Net return after taxation for the year||-||-||-||(21,032)||11,461||(9,571)|
|Shares purchased for cancellation||14||(187)||-||187||(6,884)||-||(6,884)|
|At 30 September 2018||10,314||123,749||8,497||259,842||11,917||414,319|
|Year ended 30 September 2017|
|At 1 October 2016||10,513||123,749||8,298||195,838||12,261||350,659|
|Net return after taxation for the year||-||-||-||92,273||10,853||103,126|
|Shares purchased for cancellation||14||(12)||-||12||(353)||-||(353)|
|At 30 September 2017||10,501||123,749||8,310||287,758||9,882||440,200|
The notes form part of these Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 September 2018
1 Accounting policies
Basis of accounting
These Financial Statements are prepared under FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and in accordance with the AIC SORP.
The Company has applied the exemption detailed in FRS 102 Section 7.1A, electing to exclude the Cash Flow Statement for the year ended 30 September 2018.
The principal accounting policies detailed below have been applied consistently throughout the period. As detailed above, the Directors consider that it is appropriate for the Financial Statements to be prepared on a going concern basis, being a period of at least twelve months from the date these Financial Statements were approved.
Dividend and other investment income is included as revenue (except where, in the opinion of the Directors, its nature indicates it should be recognised as capital) on the ex-dividend date or, where no ex-dividend date is quoted, when the Company’s right to receive payment is established. Income arising on holdings of fixed income securities is recognised on a time apportionment basis so as to reflect the effective interest rate on that security. Deposit and other interest is included on an accruals basis.
Dividends are accounted for on the basis of income actually receivable. Dividends from overseas companies are shown gross of withholding tax.
Where the Company has elected to receive its dividends in the form of additional shares rather than in cash (scrip dividends), the amount of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend foregone is recognised in the capital reserve.
Loans and overdrafts are recorded at the proceeds received, net of issue costs, irrespective of the duration of the instrument.
Finance costs, including interest, are accrued using the effective interest rate method. See below for allocation of finance costs within the Income Statement.
Expenses and finance costs
All expenses are accounted for on an accruals basis. With effect from 1 October 2017, management fees, detailed in note 3, and finance costs related to borrowings, detailed in note 5, are apportioned between revenue and capital in the Income Statement, with one-third to revenue and two-thirds to capital. Prior to 1 October 2017, management fees and finance costs related to borrowings were all apportioned to revenue. No performance fees are charged by the AIFM.
All other operating expenses are charged to revenue in the Income Statement, except the Company’s contribution to the Investment Manager’s research costs, as detailed in note 4, which are charged between capital and revenue in the Income Statement on the same basis as the management fees and finance costs. Other transaction costs are included within the gains and losses on investment sales, as disclosed in the Income Statement
All investments held by the Company are classified as ‘fair value through profit or loss’. Investments are initially recognised at cost, being the fair value of the consideration given. Interest accrued on fixed interest rate securities at the date of purchase or sale is accounted for separately as accrued income, so that the value or purchase price or sale proceeds is shown net of such items.
After initial recognition, investments are measured at fair value, with changes in the fair value of investments and impairment of investments recognised in the Income Statement and allocated to capital. Gains and losses on investments sold are calculated as the difference between sales proceeds and cost.
For investments actively traded in organised financial markets, fair value is generally determined by reference to stock exchange quoted market bid prices at the close of business on the Balance Sheet date, without adjustment for transaction costs necessary to realise the asset. Investments which are not quoted or which are not frequently traded are stated at Directors’ best estimate of fair value, using the guidelines on valuation published by the International Private Equity and Venture Capital Association. This represents the Directors’ view of the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction. This does not assume that the underlying business is saleable at the reporting date or that its current shareholders have any intention to sell their holding in the near future. Where no reliable fair value can be estimated, investments may be carried at cost less any provision for impairment.
Cash at bank and short-term deposits
Cash at bank and short-term deposits comprise cash in hand and demand deposits that mature within three months. The carrying value of cash at bank and short-term deposits is equal to its fair value.
The functional and presentational currency of the Company is sterling because that is the currency of the primary economic environment in which the Company operates.
Transactions denominated in foreign currencies are converted to sterling at the actual exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies and non-monetary items that are measured at fair value in a foreign currency are reported at the rate of exchange to sterling at the Balance Sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the capital reserve or in revenue depending on whether the gain or loss is of a capital or revenue nature.
The share premium reserve represents the excess of the issue price over the nominal value of shares issued less transaction costs incurred on the issue of the shares.
The charge for taxation is based on the net return for the year and takes into account taxation deferred or accelerated because of timing differences between the treatment of certain items for accounting and taxation purposes. Full provision for deferred taxation is made under the liability method, without discounting, on all timing differences that have arisen but not been reversed by the Balance Sheet date, unless such provision is not permitted by FRS 102. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company’s taxable profits and its results as stated in the Financial Statements which are capable of reversal in one or more subsequent years.
Capital redemption reserve
The nominal value of ordinary share capital purchased and cancelled is transferred out of called-up share capital and into the capital redemption reserve on the relevant trade date.
The following are accounted for in this reserve:
The revenue reserve is distributable by way of a dividend.
Dividends payable to shareholders
Final dividends are recognised as a liability in the year in which they have been approved by shareholders in a general meeting. Interim dividends are recognised as a liability in the period in which they have been declared and paid.
|Income from investments:|
Other income in the year ended 30 September 2017 related to interest received on successful reclaims of withholding tax previously written off as detailed in note 7(c).
3 Management fee
On 17 July 2014, the Company appointed Edinburgh Partners AIFM Limited as its AIFM. With effect from 1 June 2018, the AIFM receives a management fee of 0.55% per annum of the Company’s equity market capitalisation up to £500 million and 0.50% per annum on the equity market capitalisation above £500 million, payable quarterly in arrears. Prior to this, the management fee was set at a rate of 0.55% per annum of the Company’s equity market capitalisation, irrespective of the level of the equity market capitalisation.
With effect from 1 October 2017, management fees are apportioned between revenue and capital on the basis of a one-third to revenue and two-thirds to capital. Prior to 1 October 2017, management fees were apportioned entirely to revenue.
During the year ended 30 September 2018, the management fees payable to the AIFM totalled £2,118,000 (2017: £1,958,000). At 30 September 2018, there was £346,000 outstanding payable to the AIFM (2017: £175,000) in relation to management fees.
As a consequence of the new MiFID II regulations which became effective on 3 January 2018, an unbundling of research costs from trading commission on the purchase and sale of investments was required to be made. During the year ended 30 September 2018, the Company agreed to pay £12,000 as a contribution to research costs incurred by the Investment Manager (2017: £nil). The cost has been included in other expenses as detailed below, with £4,000 allocated to revenue and £8,000 to capital.
4 Other expenses
|Audit fees and expenses 1||17||-||17||17||-||17|
|Directors’ remuneration 2||104||-||104||98||-||98|
|Directors’ national insurance||8||-||8||9||-||9|
|Depositary and custodian fees||119||-||119||103||-||103|
|Marketing and website costs||54||-||54||32||-||32|
|Legal and professional fees||29||-||29||12||-||12|
|London Stock Exchange and FCA fees||23||-||23||22||-||22|
|AIC membership fee||20||-||20||20||-||20|
|New Zealand listing fee 3||8||-||8||12||-||12|
|Other costs 4||26||8||34||20||-||20|
1 Comprises an Audit fee of £16,000 (2017: £16,000) and expenses incurred during the audit of £1,000 (2017: £1,000).
2 See the Directors’ Remuneration Report in the full Annual Report and Financial Statements.
3 The Company delisted from the New Zealand stock exchange on 2 November 2017.
4 Includes the Company’s contribution to the Investment Manager’s research costs of £4,000 to revenue and £8,000 to capital.
5 Finance costs
|Negative interest on cash balances||15||-||15||9||-||9|
|Loan arrangement fee||1||2||3||3||-||3|
|Revolving credit facility interest||4||9||13||38||-||38|
With effect from 1 October 2017, finance costs related to borrowings are apportioned between revenue and capital, on the basis of one-third to revenue and two-thirds to capital. Prior to 1 October 2017, finance costs related to borrowings were all apportioned to revenue.
The Company has a euro 30,000,000 bank overdraft credit facility agreement with The Northern Trust Company (the “Bank”) for the purpose of pursuing its investment objective. As at 30 September 2018, euro 14,208,000, the equivalent of £12,655,000, had been drawn down under the facility (2017: nil). The facility is uncommitted. Interest, detailed in note 5, is charged at 1% above the euro overnight index average (“EONIA”) rate.
The maximum aggregate principal amount which may be outstanding under the facility at any time is the lower of euro 30,000,000 or 20% of the aggregated value of unencumbered assets acceptable to the Bank. The facility contains covenants preventing the Company from creating any security interest over any assets of the Company held by the Bank or incurring any other financial indebtedness without the express permission of the Bank. The Company is required to maintain its status as an investment trust authorised by HMRC and to maintain the appointments of Northern Trust Global Services Limited, Edinburgh Partners AIFM Limited and Edinburgh Partners Limited as its Depositary, AIFM and Investment Manager, respectively. The facility also demands automatic repayment in the event of an unremedied breach by the Company or should the Company become insolvent or subject to insolvency, winding-up or administrative proceedings.
7 Tax on ordinary activities
|a) Analysis of charge for the year||2018||2017|
|UK corporation tax||-||-||-||-||-||-|
|Overseas tax suffered||1,140||-||1,140||933||-||933|
|Overseas tax recovered previously
The Company has no corporation tax liability for the year ended 30 September 2018 (2017: nil).
b) The standard rate of corporation tax in the UK (“corporation tax rate”) was 19% in the year to 31 March 2018 and is 19% in the year to 31 March 2019. It was 20% in the year to 31 March 2017. Accordingly, the Company’s profits for the year ended 30 September 2018 are taxed at an effective rate of 19% (2017: 19.5%). The corporation tax rate is expected to remain at 19% for the year beginning 1 April 2019 and, as a consequence, the effective rate of corporation tax for the Company for the year ending 30 September 2019 would be 19%.
The taxation charge for the Company for the year ended 30 September 2018 is lower (2017: lower) than the enacted rate of 19% (2017: 19.5%). The differences are explained below:
|Net return before taxation||12,582||(21,032)||(8,450)||10,188||92,273||102,461|
|Theoretical tax at UK corporation tax rate of 19% (2017: 19.5%)||2,391||(3,996)||(1,605)||1,986||17,993||19,979|
|- Foreign dividends that are not taxable||(2,624)||-||(2,624)||(2,390)||-||(2,390)|
|- Non-taxable investment losses/(gains)||-||3,724||3,724||-||(17,993)||(17,993)|
|- Disallowable expenses||1||1||1||-||1|
|- Deferred tax not recognised||232||272||504||403||-||403|
|- Overseas tax suffered||1,140||-||1,140||933||-||933|
|- Overseas tax recovered previously written off||(19)||-||(19)||(1,598)||-||(1,598)|
|- Accrued income taxable on receipt||-||-||-||-||-||-|
c) Overseas tax recovered
During the year ended 30 September 2018, the Company received amounts to totalling £19,000 on withholding tax previously written off.
During the year ended 30 September 2017, the Company received amounts totalling euro 2,226,000, equivalent to £1,965,000, in relation to successful claims for the receipt of French withholding tax suffered during the years 2009 to 2014, which had previously not been considered recoverable. Included within this amount is interest of euro 414,000 equivalent to £367,000, recognised within other income detailed in note 2.
d) Factors that may affect future tax charges
At 30 September 2018 the Company had unrelieved management expenses of £13,091,000 (2017: £10,438,000) that are available to offset future taxable revenue. A deferred tax asset of £2,225,000 (2017: £1,774,000) has not been recognised because the Company is not expected to generate sufficient taxable income in future periods in excess of the available deductible expenses and, accordingly, the Company is unlikely to be able to reduce future tax liabilities through the use of existing surplus losses.
Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the Company meets (and intends to continue for the foreseeable future to meet) the conditions for approval as an investment trust company.
e) Contingent assets
The Company is currently pursuing two potential reclaims of tax. The first relates to Franked Investment Group (FII GLO) computational based claims, filed on the basis that the tax treatment of dividends received from EU-resident companies is contrary to Article 43 (freedom of establishment) and/or Article 56 (free movement of capital and payments) of the European Community Treaty. The second relates to retrospective reclaims for overseas withholding tax suffered above treaty rates. Potential tax reclaims which remain outstanding are treated as contingent assets. Contingent assets have not been recognised in these Financial Statements as in all instances at the balance sheet date the amounts receivable were not certain.
Declared and paid
|Interim dividend for the year ended 30 September 2018 of 9.0p||31 July 2018||3,755||-|
|Final dividend for the year ended 30 September 2017 of 13.5p||31 January 2018||5,671||-|
|Interim dividend for the year ended 30 September 2017 of 8.0p||31 July 2017||-||3,361|
|Interim special dividend for the year ended 30 September 2017 of 1.5p||31 July 2017||-||630|
|Final dividend for the year ended 30 September 2016 of 16.0p||31 January 2017||-||6,721|
|Special dividend for the year ended 30 September 2016 of 6.0p||31 January 2017||-||2,520|
The Directors recommend a final dividend in respect of the year ended 30 September 2018 of 18.0p which is payable on Thursday, 31 January 2019 to all shareholders on the register at the close of business on Friday, 4 January 2019. The ex-dividend date will be Thursday, 3 January 2019. The recommended final dividend is subject to approval by shareholders at the AGM to be held on Thursday, 22 January 2019. At the date of this report, the total dividend payment will amount to £7,410,000 as detailed below.
|2018 final dividend of 18.0p (2017: 13.5p) per ordinary share1||7,410||5,671|
1 Based on 41,166,269 shares in issue at 28 November 2018.
The total dividend for the year ended 30 September 2018 is 27.0p (2017: 23.0p), consisting of the interim dividend of 9.0p and the proposed final dividend of 18.0p (2017: interim dividend of 8.0p, special interim dividend of 1.5p and final dividend of 13.5p).
9 Return per ordinary share
|Net revenue return after taxation||11,461||41,849,606||27.4||10,853||42,011,049||25.8|
|Net capital return after taxation||(21,032)||41,849,606||(50.3)||92,273||42,011,049||219.7|
1 Weighted average number of ordinary shares in issue during the year.
10 Listed investments
|Analysis of investment portfolio movements|
|Opening book cost||369,691||369,635|
|Opening investment holdings gains/(losses)||61,846||(8,570)|
|Movements in the year:|
|Purchases at cost||115,182||86,202|
|Sales – proceeds||(101,578)||(108,310)|
|– realised gains on sales||22,502||22,164|
|Investment holding (losses)/gains||(42,150)||70,416|
|Closing book cost||405,797||369,691|
|Closing investment holding gains||19,696||61,846|
|Analysis of capital gains/(losses)|
|Gains on sales||22,502||22,164|
|Investment holding (losses)/gains||(42,150)||70,416|
|(Losses)/gains on investments||(19,648)||92,580|
Fair value hierarchy
In accordance with FRS 102, the Company must disclose the fair value hierarchy that classifies financial instruments measured at fair value at one of three levels according to the relative reliability of the inputs used to estimate the fair values.
|Level 1||Valued using quoted prices in active markets for identical assets|
|Level 2||Valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1|
|Level 3||Valued by reference to valuation techniques using inputs that are not based on observable market data|
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 valuation techniques used by the Company are explained in note 1 above. All of the Company’s investments fall into Level 1, being valued at quoted prices in active markets.
During the year ended 30 September 2018, the Company incurred transaction costs of £76,000 (2017: £79,000) and £57,000 (2017: £96,000) on purchases and sales of investments respectively. During the year ended 30 September 2018, additional costs of £177,000 (2017: £9,000) relating to stamp duty and financial transaction taxes was charged on purchases of investments. These amounts are included in (losses)/gains on investments at fair value, as disclosed in the Income Statement above.
11 Significant holdings
The Company had no holdings of 3% or more of the share capital of any portfolio companies.
|Prepayments and accrued income||242||206|
|Due to brokers||-||2,861|
|Other creditors and accruals||413||150|
|Management fee accrued||346||175|
14 Called-up share capital
|Allotted, called-up and fully paid:|
|Cancelled ordinary shares of 25p||(187)||(12)|
|41,256,269 (2017: 42,006,769) ordinary shares of 25p each||10,314||10,501|
During the year ended 30 September 2018, 750,500 (2017: 46,781) ordinary shares were purchased and cancelled at a total cost of £6,884,000 (2017: £353,000).
Duration of the Company
The Company neither has a termination date nor the requirement for any periodic continuation votes.
15 Net asset value per ordinary share
|Net asset value per ordinary share||1004.3||1047.9|
The net asset value per ordinary share is based on net assets of £414,319,000 (2017: £440,200,000) and on 41,256,269 (2017: 42,006,769) ordinary shares, being the number of ordinary shares in issue at the year end.
16 Analysis of financial assets and liabilities
The currency profile of the Company’s financial assets and liabilities were:
|Foreign exchange rates|
17 Risk analysis
The Company is an investment company, whose shares are traded on the London Stock Exchange. It conducts its affairs so as to qualify in the UK as an investment trust under the provisions of Sections 1158 and 1159 of the CTA. In so qualifying, the Company is exempted in the UK from corporation tax on capital gains on its portfolio of investments.
As an investment trust, the Company invests in equities and makes other investments so as to achieve its objective. In pursuing its objective, the Company is exposed to risks which could result in a reduction of either or both of the value of the net assets and the profits available for distribution by way of dividend. The Board, together with the AIFM, is responsible for the Company’s risk management, as set out in the Strategic Report above.
The principal risks the Company faces are:
investment and strategy risk;
discount volatility risk;
market risk (comprising interest rate risk, currency risk and price risk);
credit risk; and
The AIFM monitors the risks affecting the Company on an ongoing basis within the policies and guidelines determined by the Board. The Directors receive financial information, which is used to identify and monitor risk, quarterly. The Company may enter into derivative contracts to manage risk but has not done so to date. A description of the principal risks the Company faces is detailed below and in the Strategic Report above.
Investment and strategy risk
There can be no guarantee that the objective of the Company will be achieved due to the possibility of poor stock selection or as a result of being geared in a falling market.
The Investment Manager meets regularly with the Board to discuss the portfolio performance and strategy. The Board receives regular reports from the Investment Manager detailing all portfolio transactions and any other significant changes in the market or stock outlooks. Details of the investment policy are given above.
Discount volatility risk
The Board recognises that it is in the long-term interests of shareholders to reduce discount volatility in order to ensure that movements in the Company’s share price reflect as closely as possible movements in the NAV and believes that the prime driver of discounts over the longer term is investment performance. The Company is permitted to employ gearing, a process whereby funds are borrowed principally for the purpose of purchasing securities, should the Board consider that it is appropriate to do so. The use of gearing can magnify discount volatility.
The Board actively monitors the discount at which the Company’s shares trade but it does not intend to issue a precise discount target at which shares will be bought back as it believes that the announcement of specific targets is likely to hinder rather than help the successful execution of a buy back policy. Equally, the Company will issue shares in order to meet demand as it arises.
The Board’s commitment to allot or repurchase ordinary shares is subject to the Directors being satisfied that any offer to allot or to purchase shares is in the best interests of shareholders of the Company as a whole.
During the year ended 30 September 2018, 750,500 (2017: 46,781) ordinary shares were purchased and cancelled at a total cost of £6,884,000 (2017: £353,000). Subsequent to the year ended 30 September 2018 and up to the date of signing this report, 90,000 shares were bought back for cancellation at a total cost of £746,000.
Interest rate risk
The Company’s interest rate exposure as at 30 September 2018 is disclosed in note 16 above. It comprises cash at bank and short-term deposits, and borrowings (the euro bank overdraft credit facility). As at 30 September 2018, euro 14,208,000, the equivalent of £12,655,000, had been drawn down under the euro bank overdraft credit facility (2017: nil). As at 30 September 2018, this represented a borrowing level of 3.1% of the Company’s net assets.
The majority of the Company’s assets were non-interest bearing during the year ended and as at 30 September 2018. Some of the Company's cash at bank and short-term deposits were subject to a negative interest charge during the year ended and as at 30 September 2018. There was exposure to interest bearing liabilities during the year ended 30 September 2018 through the bank overdraft credit facility agreement.
If interest rates had reduced by 0.25% (2017: 0.25%) from those obtained as at 30 September 2018, it would have the effect, with all other variables held constant, of increasing the net return before taxation and therefore increasing net assets on an annualised basis by £31,000 (2017: £25,000). If there had been an increase in interest rates of 0.25% (2017: 0.25%), there would have been an equal and opposite effect in the net return before taxation. The calculations are based on cash at bank, short-term deposits and bank overdrafts as at 30 September 2018 and these may not be representative of the year as a whole. This level of change is considered to be reasonable based on observation of current market conditions.
The base currency of the Company is sterling. The international nature of the Company’s investment activities gives rise to a currency risk which is inherent in the performance of its overseas investments. The Company’s overseas income is also subject to currency fluctuations.
It is not the Company’s policy to hedge this risk on a continuing basis.
The Company’s foreign currency risk exposure as at 30 September 2018 is disclosed in note 16 above. It comprises equity shares, cash at bank and short-term deposits, debtors, borrowings (the euro bank overdraft credit facility) and creditors.
If sterling had strengthened by 10% against all other currencies on 30 September 2018, with all other variables held constant, it would have had the effect of reducing the net return before taxation by £41,498,000 (2017: £44,042,000) and the net revenue return before taxation by £1,376,000 (2017: £1,254,000) and therefore would have reduced net assets by £42,875,000 (2017: £45,296,000). If sterling had weakened by 10% against all other currencies, there would have been an equal and opposite effect on both the net capital return and net revenue return before taxation. This level of change is considered to be reasonable based on observation of current market conditions.
The Company is exposed to market risk due to fluctuations in the market prices of its investments. Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s business. It represents the potential loss the Company might suffer through holding market positions in the face of price movements. The Investment Manager monitors the prices of financial instruments held by the Company on an ongoing basis.
The Investment Manager actively monitors market and economic data and reports to the Board, which considers investment policy on a regular basis. The NAV of the Company is released daily to the London Stock Exchange and is also available on the Company’s website at www.theeuropeaninvestmenttrust.com and on the website of Edinburgh Partners at www.edinburghpartners.com.
Fixed asset investments are valued at their fair value. Details of the Company’s investment portfolio as at 30 September 2018 are disclosed above. In addition, an analysis of the investment portfolio by sector and geographical distribution is detailed above.
The maximum exposure to price risk at 30 September 2018 is the fair value of investments of £425,493,000 (2017: £431,537,000).
If the investment portfolio valuation decreased by 20% from the amount detailed in the Financial Statements as at 30 September 2018, it would have the effect, with all other variables held constant, of reducing the net capital return before taxation and therefore reducing net assets by £85,099,000 (2017: £86,307,000). An increase of 20% in the investment portfolio valuation would have an equal and opposite effect on the net capital return before taxation. The calculations are based on the Company’s price risk at 30 September 2018 and may not be representative of the year as a whole. This level of change is considered to be reasonable based on observation of current market conditions.
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s policy with regard to liquidity is to ensure continuity of funding. Short-term flexibility is achieved through cash management and increased borrowing, including the use of overdraft facilities.
Liquidity risk is not considered significant as the Company’s assets comprise of readily realisable securities which are industrially and geographically diverse and which can be sold freely to meet funding requirements if necessary. Securities listed on a recognised stock exchange have been valued at bid prices and exchange rates ruling at the close of business on 30 September 2018. In certain circumstances, the market prices at which investments are valued may not represent the realisable value of those investments, taking into account both the size of the Company’s holding and the frequency with which such investments are traded. The Company does not normally invest in derivative products. The Investment Manager reviews liquidity at the time of making each investment decision. The Board reviews liquidity exposure at each meeting.
Credit risk is the risk of financial loss to the Company if the contractual party to a financial instrument fails to meet its contractual obligations.
The carrying amounts of cash and debtors best represent the maximum credit risk exposure at the Balance Sheet date. There are no financial assets which are either past due or impaired.
The Company’s listed investments are held on its behalf by The Northern Trust Company acting as the Company’s custodian. Bankruptcy or insolvency of the custodian may cause the Company’s rights with respect to securities held by the custodian to be delayed. The Board monitors the Company’s risk by reviewing the custodian’s internal controls reports.
Investment transactions are carried out with a number of brokers, whose creditworthiness is reviewed by the Investment Manager. Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company’s custodian ensures that the counterparty to any transaction entered into by the Company has delivered in its obligations before any transfer of cash or securities away from the Company is completed.
Cash is only held at banks that have been identified by the Board as reputable and of high credit quality. As at 30 September 2018, The Northern Trust Company London Branch had a long-term rating from Standard and Poor’s of AA-.
The maximum exposure to credit risk as at 30 September 2018 was £2,240,000 (2017: £11,849,000). The calculation is based on the Company’s credit risk exposure as at 30 September 2018 and this may not be representative of the year as a whole.
The aim of gearing is to enhance long-term returns to shareholders by investing borrowed funds in equities and other assets. The Company is permitted to employ gearing should the Board consider it appropriate to do so. The Board’s policy is that the level of gearing should not exceed 20% of net assets in normal market conditions. The use of gearing can cause both gains and losses in the asset value of the Company to be magnified.
As detailed in notes 5 and 6, during the year ended and as at 30 September 2018, the Company utilised a borrowing facility.
The Board undertakes an annual assessment and review of all the risks stated in this note 17 and in the Strategic Report above together with a review of any new risks which may have arisen during the year. These risks are formalised within the Company’s risk assessment matrix.
18 Capital management policies
The Board has a responsibility for ensuring the Company’s ability to continue as a going concern. It must therefore maintain an optimal capital structure through varying market conditions. This involves the ability to: issue and buy back share capital within limits set by the shareholders in general meeting; borrow monies in the short and long-term; and pay dividends to shareholders out of current year revenue earnings as well as out of brought-forward revenue reserves.
The Company is subject to externally imposed capital requirements, including the requirement as a public company to have a minimum share capital of £50,000, which have been met throughout the year.
Any changes to the ordinary share capital are set out in note 14 and in the Directors’ Report above. Dividend payments are set out in note 8 above.
The Company’s capital comprises:
|Called-up share capital||10,314||10,501|
|Share premium account||123,749||123,749|
|Capital redemption reserve||8,497||8,310|
|Total shareholders’ funds||414,319||440,200|
The capital reserve consists of realised capital reserves of £240,146,000 and unrealised capital gains of £19,696,000 (2017: realised capital reserves of £225,924,000 and unrealised capital gains of £61,834,000). The unrealised capital gains of £19,696,000 consist wholly of unrealised investment holding gains (2017: investment holding gains of £61,846,000 and unrealised foreign exchange losses of £12,000).
The realised capital reserve, net of any unrealised losses, is distributable by way of a dividend. Unrealised gains are non-distributable.
The Company’s objectives for managing capital are the same as the previous year and have been complied with throughout the year.
19 Transactions with the AIFM and the Investment Manager
Information with respect to transactions with the AIFM and the Investment Manager is detailed in the Strategic Report and in note 3 above.
20 Related parties
The Directors, who are considered to be key management personnel, received fees for the year as detailed in the Directors’ Remuneration Report in the full Annual Report and Financial Statements. Under the AIC SORP, an investment manager is not considered to be a related party of the Company.
21 Post balance sheet events
As detailed in note 17 above, subsequent to the year end of 30 September 2018 and up to the date of signing this report, 90,000 shares were bought back for cancellation at a cost of £746,000.
As detailed in the Chairman's Statement above, Sue Inglis and Andrew Watkins will be appointed as Directors on 1 January 2019 and will be subject to election by shareholders at the AGM on 22 January 2019.
Annual General Meeting
The Company’s forty-sixth Annual General Meeting will be held at 11.00am on Tuesday, 22 January 2019 at Brewers’ Hall, Aldermanbury Square, London EC2V 7HR.
National Storage Mechanism
A copy of the Annual Report and Financial Statements 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.
A copy of the Annual Report and Financial Statements and Notice of Annual General Meeting will be delivered to shareholders shortly and can also be found on the Company’s website at www.theeuropeaninvestmenttrust.com and on the website of Edinburgh Partners at www.edinburghpartners.com.
Kenneth J Greig
Edinburgh Partners AIFM Limited
Telephone: 0131 270 3800
The Company’s registered office address is:
51 New North Road
28 November 2018
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