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RNS

Half-year Report

Released 07:00 26-Jul-2019

RNS Number : 7760G
Scottish American Investment Co PLC
26 July 2019
 

RNS Announcement

 

The Scottish American Investment Company P.L.C. (SAINTS)

 

Legal Entity Identifier: 549300NF03XVC5IFB447

Regulated Information Classification: Interim Financial Report.

 

Results for the six months to 30 June 2019

 

The following is the unaudited Interim Financial Report for the six months to 30 June 2019.

 

Interim Management Report

 

The net asset value total return for the first six months of 2019 was 17.3% and the share price total return was 17.5%. The total return on global equities, as measured by the FTSE All World Index in sterling, was 16.4%. This partly reflects a rebound from the sharp sell-off that we saw in equity markets at the end of 2018.    

Earnings per share for the six months rose slightly to 6.58p compared to 6.55p in the same period last year. Dividend income from equities was higher, reflecting growth in ordinary dividends and an increased allocation to equities, though fewer special dividends were received than in the first half of 2018. Property rental income was flat, and bond income fell due to the reduced allocation to fixed income. 

A first interim dividend of 2.925p was paid at the end of June and a second interim dividend of 2.95p is payable at the end of September. The total amount of these dividends, 5.875p, is 3.5% higher than the amount paid for the corresponding period in 2018.  Inflation, as measured by CPI, was 2.0% over the year to end June 2019.

Over the six month period 3,025,000 shares (representing just over 2.1% of issued share capital at 1 January 2019) were issued at a premium to net asset value, with SAINTS' share price ending the period modestly above net asset value.

Operational updates from SAINTS' equity holdings have been generally encouraging.  Our holdings reported dividend growth of around 7-8% on average, with outstanding dividend growth and operational performance from businesses such as Kering, the owner of Gucci, and the Brazilian stock exchange B3.

There is not an obvious "theme" behind the holdings that are doing well. Rather, the results show that SAINTS is benefitting from owning an eclectic portfolio of businesses, which have their own stock-specific drivers of growth, and where the management teams are each executing well on the opportunities ahead of them.

Given this, we continue to believe that one of SAINTS' great advantages is its global investment universe, which allows us to invest in the broadest possible set of growth businesses, rather than being restricted to the narrower set of opportunities available in the UK market.

The Company remained fully invested over the period, during which modest net reductions were made to the fixed income portfolio and re-invested in equities.  Turnover within the equity portfolio remained consistent with a five year holding period, reflecting our long-term, stock driven approach to investment. The Company's aim is to continue to provide shareholders with a dependable source of income, together with growth in income and capital that exceeds inflation over time. We would acknowledge that trade barriers and Brexit could present challenges in the future, and that SAINTS' significant overseas investments make the Company's assets and income sensitive to the level of sterling compared to other currencies.  Nonetheless, given the solid growth prospects we see for the assets held across the portfolio, we remain confident in achieving the Company's aims over the long-term.  

We remain confident of achieving this aim, given the solid growth prospects we see for the assets held across the portfolio.

 

 

The principal risks and uncertainties facing the Company are set out at the end of this report. Related party transaction disclosures are set out in note 10.

 

Baillie Gifford & Co

25 July 2019

 

*    See disclaimer at the end of this announcement.

Past performance is not a guide to future performance.

Responsibility Statement

 

 

We confirm that to the best of our knowledge:

a)   the condensed set of Financial Statements has been prepared in accordance with FRS 104 'Interim Financial Reporting';

b)   the Interim Management Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (indication of important events during the first six months, their impact on the Financial Statements and a description of principal risks and uncertainties for the remaining six months of the year); and

c)   the Interim Financial Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

 

By order of the Board

Peter Moon

Chairman

25 July 2019

 

Income Statement (unaudited)

 

For the six months ended

30 June 2019

For the six months ended

30 June 2018

For the year ended

31 December 2018

(audited)

 

Revenue

£'000

Capital

£'000

Total

£'000

Revenue

£'000

Capital

£'000

Total

£'000

Revenue

£'000

Capital

£'000

Total

£'000

Gains on sales of investments - securities

17,319 

17,319 

10,722 

10,722 

6,976 

6,976 

(Losses)/gains on sales of investments - property

(63)

(63)

746 

746 

Changes in fair value of investments - securities

57,082 

57,082 

(20,077)

(20,077)

(38,194)

(38,194)

Changes in fair value of investments - property

2,441 

2,441 

2,435 

2,435 

Currency gains/(losses)

72 

72 

(45)

(45)

(159)

(159)

Income - dividends and interest

9,910 

9,910 

9,285 

9,285 

16,566 

16,566 

Income - rent and other

2,604 

2,604 

2,617 

2,617 

5,177 

-      

5,177 

Management fees

(504)

(937)

(1,441)

(458)

(850)

(1,308)

(926)

(1,720)

(2,646)

Other administrative expenses

(813)

(813)

(682)

(682)

(1,073)

(1,073)

Net return before finance costs and taxation

11,197 

73,536 

84,733 

10,762 

(7,872)

2,890 

19,744 

(29,916)

(10,172)

Finance costs of borrowings

(985)

(1,829)

(2,814)

(993)

(1,844)

(2,837)

(1,986)

(3,688)

(5,674)

Net return on ordinary activities before taxation

10,212 

71,707 

81,919 

9,769 

(9,716)

53 

17,758 

(33,604)

(15,846)

Tax on ordinary activities

(856)

114 

(742)

(804)

218 

(586)

(1,528)

464 

(1,064)

Net return on ordinary activities after taxation

9,356 

71,821 

81,177 

8,965 

(9,498)

(533)

16,230 

(33,140)

(16,910)

Net return per ordinary share (note 4)

6.58p

50.53p

57.11p

6.55p

(6.94p)

(0.39p)

11.75p

(23.99p)

(12.24p)

Note:

Dividends paid and payable per share

(note 5)

5.875p

 

 

5.675p

 

 

11.50p

 

 

 

The accompanying notes are an integral part of the Financial Statements.

The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in the above statements derive from continuing operations.

A Statement of Comprehensive income is not required as all gains and losses of the Company have been reflected in the above statement.

Balance Sheet (unaudited)

 

 

At 30 June 2019

£'000

At 31 December 2018

(audited)

£'000

Non-current assets

 

 

Investments - securities

557,538 

476,497 

Investments - property

83,500 

83,500 

Deferred expenses

207 

 

641,245 

559,997 

Current assets

 

 

Debtors

2,510 

1,739 

Cash and deposits

9,822 

7,464 

 

12,332 

9,203 

Creditors

 

 

Amounts falling due within one year

(3,244)

(3,046)

Net current assets

9,088 

6,157 

Total assets less current liabilities

650,333 

566,154 

Creditors

 

 

Debenture stock (note 7)

(82,315)

(82,701)

Net assets

568,018 

483,453 

Capital and reserves

 

 

Share capital

35,989 

35,233 

Share premium account

38,643 

27,694 

Capital redemption reserve

22,781 

22,781 

Capital reserve

452,313 

380,492 

Revenue reserve

18,292 

17,253

Shareholders' funds

568,018 

483,453 

Net asset value per ordinary share*

394.6p

343.0p

Ordinary shares in issue (note 8)

143,955,943 

140,930,943 

*      See Glossary of Terms and Alternative Performance Measures at the end of this announcement.

 

The accompanying notes are an integral part of the Financial Statements.

 

 

 

 

Statement of Changes in Equity (unaudited)

 

 

For the six months ended 30 June 2019

 

Share
capital

£'000

Share

premium

account

£'000

Capital redemption reserve

£'000

Capital reserve*

£'000

Revenue reserve

£'000

Shareholders'
funds

£'000

Shareholders' funds at 1 January 2019

35,233

27,694

22,781

380,492

17,253 

483,453 

Shares issued

756

10,949

-

-

11,705 

Net return on ordinary activities after taxation

-

-

-

71,821

9,356 

81,177 

Dividends paid (note 5)

-

-

-

-

(8,317)

(8,317)

Shareholders' funds at 30 June 2019

35,989

38,643

22,781

452,313

18,292 

568,018 

 

 

For the six months ended 30 June 2018

 

Share
capital

£'000

Share

premium

account

£'000

Capital redemption reserve

£'000

Capital reserve*

£'000

Revenue reserve

£'000

Shareholders'
funds

£'000

Shareholders' funds at 1 January 2018

33,994

10,744

22,781

413,632 

16,787 

497,938 

Shares issued

605

8,202

-

8,807 

Net return on ordinary activities after taxation

-

-

-

(9,498)

8,965 

(533)

Dividends paid (note 5)

-

-

-

(7,740)

(7,740)

Shareholders' funds at 30 June 2018

34,599

18,946

22,781

404,134 

18,012 

498,472 

*      The Capital Reserve balance at 30 June 2019 includes investment holding gains of £168,784,000 (30 June 2018 - gains of £129,825,000).

 

The accompanying notes are an integral part of the Financial Statements.

 

Condensed Cash Flow Statement (unaudited)

 

 

Six months to

30 June 2019

£'000

Six months to

30 June 2018

£'000

Cash flows from operating activities

 

 

Net return on ordinary activities before taxation

81,919 

53 

Net (gains)/losses on investments - securities

(74,401)

9,355 

Net gains on investments - property

(2,378)

Currency (gains)/losses

(72)

45 

Finance costs of borrowings

2,814 

2,837 

Overseas withholding tax

(729)

(586)

Changes in debtors and creditors

(793)

(500)

Other non-cash changes

(18)

(63)

Cash from operations

8,720 

8,763 

Interest paid

(3,200)

(3,200)

Net cash inflow from operating activities

5,520 

5,563 

Cash flows from investing activities

 

 

Acquisitions of investments

(68,227)

(39,564)

Disposals of investments

61,605 

41,378 

Net cash (outflow)/inflow from investing activities

(6,622)

1,814 

Equity dividends paid

(8,317)

(7,740)

Shares issued

11,705 

8,807 

Net cash inflow from financing activities

3,388 

1,067 

Increase in cash and cash equivalents

2,286 

8,444 

Exchange movements

72 

(45)

Cash and cash equivalents at start of period*

7,464 

2,894 

Cash and cash equivalents at end of period*

9,822 

11,293 

 

*     Cash and cash equivalents represent cash at bank and short term money market deposits repayable on demand.

 

The accompanying notes are an integral part of the Financial Statements.
 

 

Performance Attribution (unaudited)

 

 

 

 

 

 

Portfolio Breakdown

Average allocation

Total return

SAINTS

%

Benchmark

%

SAINTS

%

Benchmark

%

Global equities

95.1 

100.0

17.4 

16.4

Bonds

3.3 

 

17.6 

 

Direct property

15.8 

 

3.1 

 

Deposits

1.4 

 

 

Debenture at book value

(15.6)

 

3.4 

 

Portfolio total return (debenture at book value)

 

 

17.1 

16.4

Other items*

 

 

(0.2)

 

Fund total return (debenture at book value)

 

 

16.9 

 

Adjustment for change in fair value of debenture

 

 

0.4 

 

Fund total return (debenture at fair value)

 

 

17.3 

16.4

 

 

The above returns are calculated on a total return basis with net income reinvested.

Source: Baillie Gifford and relevant underlying index providers.

*      Includes Baillie Gifford and OLIM management fees.

†         See disclaimer at end of this announcement

Past performance is not a guide to future performance.

 

 

Twenty Largest Equity Holdings (unaudited)

 

 

Name

Business

Value at

 30 June

2019

£'000

% of
total assets*

Coca Cola

Beverage manufacturer

17,462

2.7

Procter & Gamble

Household product manufacturer

16,244

2.5

Deutsche Boerse

Securities exchange owner/operator

15,193

2.3

Edenred

Voucher programme outsourcer

14,713

2.3

Sonic Healthcare

Laboratory testing

14,446

2.2

Pepsico

Snack and beverage manufacturer

14,400

2.2

B3 S.A.

Securities exchange owner/operator

13,830

2.1

Microsoft

Computer software

13,528

2.1

Fastenal

Distribution and sales of industrial supplies

13,398

2.1

Roche Holdings

Pharmaceuticals

13,356

2.1

CH Robinson

Delivery and logistics

13,148

2.0

McDonald's

Fast food restaurants

12,691

1.9

Admiral

Car insurance

12,396

1.9

Nestlé

Food producer

12,363

1.9

Prudential

Life insurer

11,617

1.8

Experian

Credit scoring and marketing services

11,268

1.7

Partners Group

Asset management

11,148

1.7

United Parcel Service

Courier services

10,515

1.6

Analog Devices

Integrated circuits

10,254

1.6

GlaxoSmithKline

Pharmaceuticals, vaccines and consumer healthcare

10,145

1.6

 

 

262,115

40.3

*      Before deduction of the debenture.

 

 

 

 

 

Notes to the Condensed Financial Statements (unaudited)

 

1.    

The condensed Financial Statements for the six months to 30 June 2019 comprise the statements set out on the previous pages together with the related notes below. They have been prepared in accordance with FRS 104 'Interim Financial Reporting' and the AIC's Statement of Recommended Practice issued in November 2014 and updated in February 2018 with consequential amendments and have not been audited or reviewed by the Auditor pursuant to the Auditing Practices Board Guidance 'Review of Interim Financial Information'. The Financial Statements for the six months to 30 June 2019 have been prepared on the basis of the same accounting policies as set out in the Company's Annual Report and Financial Statements at 31 December 2018.

Going Concern

Having considered the nature of the Company's principal risks and uncertainties, as set out below, together with its current position, investment objective and policy, its assets and liabilities and projected income and expenditure, together with the Company's dividend policy, it is the Directors' opinion that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. The Company has no short term borrowings and the redemption date for the Company's debenture is April 2022. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements and confirm that they are not aware of any material uncertainties which may affect the Company's ability to continue to do so over a period of at least twelve months from the date of approval of these Financial Statements.

2.    

The financial information contained within this Interim Financial Report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the year ended 31 December 2018 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditor's Report on those accounts was not qualified, and did not contain statements under sections 498(2) or (3) of the Companies Act 2006.

3.    

Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed by the Company as its Alternative Investment Fund Manager (AIFM) and Company Secretary. The investment management function has been delegated to Baillie Gifford & Co. The management agreement can be terminated on six months' notice. The annual fee is 0.45% of total assets less current liabilities, excluding the property portfolio, calculated on a quarterly basis.

As AIFM, Baillie Gifford & Co Limited has delegated the management of the property portfolio to OLIM Property Limited. OLIM receives an annual fee of 0.5% of the value of the property portfolio, subject to a minimum quarterly fee of £6,250. The agreement can be terminated on three months' notice.

4.    

Net return per ordinary share

Six months to

 30 June

 2019

£'000

 

Revenue return on ordinary activities after taxation

9,356

8,965 

 

Capital return on ordinary activities after taxation

71,821

(9,498)

 

Total net return

81,177

(533)

 

Weighted average number of ordinary shares in issue

142,128,144

136,832,244 

 

Net return per ordinary share is based on the above totals of revenue and capital and the weighted average number of ordinary shares in issue during each period.

There are no dilutive or potentially dilutive shares in issue.

         

Notes to the Condensed Financial Statements (unaudited) (ctd)

 

 

 

5.    

Dividends

Six months to

 30 June

 2019

£'000

Six months to

30 June

 2018

£'000

Amounts recognised as distributions in the period:

 

 

Previous year's final of 2.925p (2018 - 2.825p), paid 11April 2019

4,132

3,848

First interim of 2.925p (2018 - 2.825p), paid 21 June 2019

4,185

3,892

 

8,317

7,740

 

 

 

 

 

Amounts paid and payable in respect of the period:

 

 

First interim of 2.925p (2018 - 2.825p), paid 21 June 2019

4,185

3,892

Second interim of 2.95p (2018 - 2.85p)

4,255

3,953

 

8,440

7,845

 

The second interim dividend was declared after the period end date and therefore has not been included as a liability in the Balance Sheet. It is payable on 20 September 2019 to shareholders on the register at the close of business on 16 August 2019.  The ex-dividend date is 15 August 2019. The Company's Registrars offer a Dividend Reinvestment Plan and the final date for elections for this dividend is 30 August 2019.

6.    

Fair Value Hierarchy

The fair value hierarchy used to analyse the basis on which the fair values of financial instruments held at fair value through the profit or loss account are measured is described below. Fair value measurements are categorised on the basis of the lowest level input that is significant to the fair value measurement.

Level 1 - using unadjusted quoted prices for identical instruments in an active market;

Level 2 - using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable

               (based on market data); and

Level 3 - using inputs that are unobservable (for which market data is unavailable).

An analysis of the Company's financial asset investments based on the fair value hierarchy described above is shown below.

 

As at 30 June 2019

Level 1

£'000

Level 2

£'000

Level 3

£'000

Total

£'000

 

Securities

 

 

 

 

 

Listed equities/funds

541,538

-

265

541,803

 

Bonds

-

15,735

-

15,735

 

Property

 

 

 

 

 

Freehold

-

-

83,500

83,500

 

Total financial asset investments

541,538

15,735

83,765

641,038

                 
 

Notes to the Condensed Financial Statements (unaudited) (ctd)

 

 

As at 31 December 2018

Level 1

£'000

Level 2

£'000

Level 3

£'000

Total

£'000

 

Securities

 

 

 

 

 

Listed equities/funds

451,888

-

265

452,153

 

Bonds

-

16,362

7,982

24,344

 

Property

 

 

 

 

 

Freehold

-

-

83,500

83,500

 

Total financial asset investments

451,888

16,362

91,747

559,997

 

There have been no transfers between levels of the fair value hierarchy during the period. The fair value of listed investments is bid value or, in the case of holdings on certain recognised overseas exchanges, last traded price. They are categorised as Level 1 if they are valued using unadjusted quoted prices for identical instruments in an active market and Level 2 if they do not meet all these criteria but are, nonetheless, valued using market data. The fair value of unlisted investments is determined using valuation techniques, determined by the Directors, based upon observable and/or non-observable data such as latest dealing prices, stockbroker valuations, net asset values and other information, as appropriate. The Company's holdings in unlisted investments are categorised as Level 3 as the valuation techniques applied include the use of non-observable data.

7.    

The market value of the 8% Debenture Stock 2022 at 30 June 2019 was £91.5m (31 December 2018 - £92.0m).

8.    

At 30 June 2019, the Company had the authority to buy back 21,166,770 ordinary shares, and to issue 12,205,592 ordinary shares without application of pre-emption rights, in accordance with the authorities granted at the AGM in April 2019. During the six months to 30 June 2019, 3,025,000 (31 December 2018 - 4,955,000) shares were issued at a premium to net asset value raising proceeds of £11,705,000 (31 December 2018 - £18,189,000). Between 1 July 2019 and 25 July 2019, the Company issued a further 485,000 shares at a premium to net asset value raising proceeds of £2,008,000. No shares were bought back (31 December 2018 - nil).

9.    

During the period, transaction costs on equity purchases amounted to £73,000 (30 June 2018 - £64,000) and on equity sales £24,000 (30 June 2018 - £15,000). Transaction costs on property purchases amounted to nil (30 June 2018 - £51,000) and on property sales nil (30 June 2018 - £57,000).

10. 

Related party transactions

There have been no transactions with related parties during the first six months of the current financial year that have materially affected the financial position or the performance of the Company during that period and there have been no changes in the related party transactions described in the last Annual Report and Financial Statements that could have had such an effect on the Company during that period.

11. 

The Interim Financial Report will be available on the SAINTS page of the Managers' website: www.saints-it.com on or around 9 August 2019.

 

Principal Risks and Uncertainties

The principal risks facing the Company are financial risk, investment strategy risk, regulatory risk, custody and depositary risk, operational risk, discount risk, leverage risk and political risk. An explanation of these risks and how they are managed is set out on pages 7 and 8 of the Company's Annual Report and Financial Statements for the year to 31 December 2018 which is available on the Company's website: www.saints-it.com. The principal risks and uncertainties have not changed since the date of that report.

 

Glossary of Terms and Alternative Performance Measures

Total Assets

Total assets less current liabilities, before deduction of all borrowings.

Net Asset Value

Net Asset Value (NAV) is the value of total assets less liabilities (including borrowings). The NAV per share is calculated by dividing this amount by the number of ordinary shares in issue.

Net Asset Value (Debenture at Fair Value) (APM)

Borrowings are valued at an estimate of their market worth.

Net Asset Value (Debenture at Book Value)

Borrowings are valued at adjusted net issue proceeds. Book value approximates amortised cost.

 

 

30 June 2019

31 December 2018

 

Shareholders' funds (debenture at book value)

£568,018,000 

£483,453,000 

 

Add: book value of debenture

£82,315,000 

£82,701,000 

 

Less: fair value of debenture

(£91,456,000)

(£92,000,000)

 

Shareholders' funds (debenture at fair value)

£558,877,000 

£474,154,000 

 

Shares in issue

143,955,943 

140,930,943 

 

Net Asset Value per ordinary share (debenture at fair value)

388.2p

336.4p

 

Discount/Premium (APM)

As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, this situation is called a premium.

Total Return (APM)

The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend.

 

 

Net Asset Value

 

30 June 2019

31 December 2018

 

Opening NAV per share (debenture at book value)

 

343.0p

366.2p

 

Closing NAV per share (debenture at book value)

(a)

394.6p

343.0p

 

Total dividend adjustment factor*

(b)

1.016219%

1.031195%

 

Adjusted closing NAV per share

(c = a x b)

(c)

401.0p

353.7p

 

Total return on net assets with debenture at book value

 

16.9%

(3.4%)

 

*          The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the cum income NAV at the ex-dividend date.

                   

 

 

 

Share Price

 

30 June 2019

31 December 2018

 

 

Opening share price

 

351.0p

368.0p

 

 

Closing share price

(a)

406.0p

351.0p

 

 

Total dividend adjustment factor

(b)

1.015764%

1.031624%

 

 

Adjusted closing NAV per share

(c = a x b)

(c)

412.4p

362.1p

 

 

Total return on share price

 

17.5%

(1.6%)

 

 

†      The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the last traded price quoted at the ex-dividend date.

 

 

Ongoing Charges (APM)

The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average net asset value (with debt at fair value).  The ongoing charges have been calculated on the basis prescribed by the Association of Investment Companies.

Performance Attribution (APM)

Analysis of how the Company achieved its performance relative to its benchmark.

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets.

Gearing represents borrowings at book less cash and cash equivalents expressed as a percentage of shareholders' funds.

Potential gearing is the Company's borrowings expressed as a percentage of shareholders' funds.

Equity gearing is the Company's borrowings adjusted for cash, bonds and property expressed as a percentage of shareholders' funds.

Leverage (APM)

For the purposes of the Alternative Investment Fund Managers (AIFM) Directive, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

Active Share (APM)

Active share, a measure of how actively a portfolio is managed, is the percentage of the listed equity portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

 

‡    Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

 

SAINTS' objective is to deliver real dividend growth by increasing capital and growing income. Its policy is to invest mainly in equity markets, but other investments may be held from time to time including bonds, property and other asset classes.

 

Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, is appointed as investment managers and secretaries to SAINTS. Baillie Gifford & Co, the Edinburgh based fund management group has around £212 billion under management and advice as at 25 July 2019.

Past performance is not a guide to future performance. SAINTS is a listed UK company. As a result, the value of its shares and any income from those shares is not guaranteed and could go down as well as up. You may not get back the amount you invested. As SAINTS invests in overseas securities, changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up. You can find up to date performance information about SAINTS on the SAINTS page of the Managers' website www.saints-it.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

For further information please contact:

James Budden, Baillie Gifford & Co

Tel: 0131 275 2816

Roland Cross, Director, Four Broadgate

Tel: 020 3697 4200 or 07831 401309

 

 

AGM

 

At the Company's AGM in April there was a significant (over 20 per cent.) vote against Resolution 14, although the resolution was passed by the requisite majority. As explained fully in the Annual Report, Resolution 14 (issue of shares at a discount to NAV) was designed solely to prevent an inadvertent and technical breach of the Listing Rules but the Directors' continued intention is only to issue shares on a basis which protects or enhances shareholder value. The Board has nevertheless endeavoured to write to certain major shareholders who voted against Resolution 14 in order to reiterate the context in which the resolution was proposed and to offer the opportunity for those shareholders to meet with Company representatives to discuss in more detail the rationale behind the resolution and why the Board believes it to be in the best interests of SAINTS and of its shareholders as a whole.

 

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FTSE Index data

 

FTSE International Limited ('FTSE') © FTSE 2019. 'FTSE®' is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data and no party may rely on any FTSE indices, ratings and/or data underlying data contained in this communication. No further distribution of FTSE Data is permitted without FTSE's express written consent. FTSE does not promote, sponsor or endorse the content of this communication.

 

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