TIDMATT
RNS Number : 2882V
Allianz Technology Trust PLC
08 August 2022
8 August 2022
ALLIANZ TECHNOLOGY TRUST PLC
HALF-YEARLY FINANCIAL REPORT
For the six months ended 30 June 2022
HIGHLIGHTS
30 June 31 December %
2022 2021 Change
Net Asset Value per Ordinary Share 241.5p 347.9p -30.6
Ordinary Share Price 208.0p 352.5p -41.0
(Discount) premium of Ordinary Share
Price to Net Asset Value (13.9%) 1.3% n/a
Dow Jones World Technology Index (sterling
adjusted, total return) 1,924.1 2,489.3 -22.7
Shareholders' Funds GBP1,001.7m GBP1,472.4m -32.0
Interim Management Report
Chairman's Statement
Harsh economic and geopolitical realities
This has been a tough period for growth investors and tougher
still for those seeking returns from innovative technology. The
combination of unexpectedly high inflation, rising interest rates
and Putin's war against Ukraine has caused a broad exodus from
growth assets as investors worry about the possibilities of
recession and stagflation.
Performance
Against this challenging backdrop we are reporting disappointing
performance for the six months to the end of June. Net asset value
per share (NAV) fell by 30.6% against a fall in our benchmark index
of 22.7%, underperformance of 7.9 percentage points. It is small
consolation to report that over this period the pound weakened
against the US dollar which has mitigated the fall due to the
preponderance of US dollar based assets in the portfolio.
As explained in the Investment Manager's Review, the main
reasons for this underperformance are rooted in our strategic
overweight positions in stocks with high growth potential -
unfortunately the same stocks that have been hit the hardest in the
market sell-off.
The sharp downturn in investor sentiment over the period has
caused a steady and significant downward movement in the Company's
share price compared to NAV. At the end of last year the share
price was at a modest premium to NAV but has finished the half year
period at a discount of 13.9%. Again it is scant consolation for
Shareholders, but over this period discounts have widened across
most investment companies and across our technology focused peers
in particular.
The Board has paid close attention to the level of discount over
the period and, through the Company's brokers, the Board has been
active in buying back shares. Over the period 8,416,659 shares were
bought back at an average discount of 12.4%. Since the period end
on 30 June 2022, a further 2,006,383 shares have been bought back.
All shares repurchased are held in treasury rather than cancelled
so that they may be reissued if sufficient demand arises.
Shareholder funds dropped from GBP1,472.4 million at the start
of the year to GBP1,001.7 million at the period end.
Given the nature of the Company's investments and its stated
investment objective to achieve capital growth, no dividend is
proposed in respect of the current period and the Board considers
it unlikely that any dividend will be declared in the near
future.
Portfolio management team changes
In the Annual Report we announced that Walter Price, the lead
manager since 2007, was stepping back and that Mike Seidenberg, his
deputy on the portfolio for more than a decade, was to take over
from him. This transition happened at the end of the reporting
period and from 1 July Mike has been leading the management of the
portfolio. Walter is staying involved with the running of ATT's
portfolio up until the end of the year, after which he will be
enjoying a well-deserved retirement.
The Board wishes to record its sincere thanks to Walter for his
leadership of the technology investment team over the past decade
and a half. The realigned investment strategy that they initiated
has delivered truly exceptional returns to Shareholders over this
period and has made your company an established choice for both
retail and professional investors as one of the UK's leading
investment trusts.
The Board is pleased to have the continuity of portfolio
management that comes from Mike taking over the lead role and we
look forward to working closely with him over the coming months and
years. Mike is a highly accomplished investor in his own right, but
in his own words has, whilst working alongside Walter, been
learning from a mentor who is undoubtedly a "legend" of the
sector.
Investment management corporate changes
Allianz Global Investors (AllianzGI) announced on 13 June that
they were entering into a strategic partnership in the US with Voya
Investment Management (Voya) that would see the majority of their
US investment capability (including the San Francisco based Global
Technology team) transfer to Voya in exchange for AllianzGI taking
a significant shareholding in Voya.
The impact of this proposed transaction on the Company was the
separation of AllianzGI's role
as Alternative Investment Fund Manager (AIFM) including the
provision of company secretarial, administrative, and sales and
marketing functions from AllianzGI's provision of Portfolio
Management services via its US subsidiary which moves to be part of
Voya.
Since the announcement of the proposed transaction the Board has
considered these proposals carefully and taken appropriate
independent advice. In particular the Board has received assurances
that the investment team in San Francisco are enthusiastic about
the new arrangements, that there are no significant changes to
their investment processes and that the Company's ability to have
oversight over the investment activities will be unchanged. The
aggregate fees paid by the Company to AllianzGI and Voya do not
change. The Board concluded that the new arrangements remain in the
best interests of Shareholders.
Consequently the Board gave its consent to the change in
management arrangements and
a tripartite agreement was signed between the Company, AllianzGI
as AIFM and Voya as Portfolio Manager on 19 July 2022 and took
effect on 25 July 2022 being the date that the transfer of
AllianzGI US staff to Voya took place.
Board updates
Following the appointment of Tim Scholefield to the Board last
December the Board undertook a search process during the first half
of this year to recruit an additional new director as part of the
Company's Board succession plan. Katya Thomson was appointed to the
Board with effect from 18 July. Katya is currently a non-executive
director of AVI Japan Opportunity Trust plc, Henderson EuroTrust
plc and MIGO Opportunities Trust plc. She is a chartered accountant
with a focus on corporate finance and strategy during her executive
career.
We are delighted that Katya has joined the Board. She brings a
wealth of experience across a breadth of sectors and businesses and
we all look forward to working with her.
AGM
The Company's AGM was held on 26 April 2022. After two years of
virtual meetings, it was pleasing to hold a physical meeting and be
able to greet Shareholders in person. Taking on Board the lessons
of the pandemic though, the Board put in place arrangements for
Shareholders to also attend the AGM electronically, ask questions
and vote in real time, by using their computer, tablet or
smartphone. I am pleased to report that all resolutions put to
Shareholders at the AGM were passed and I would like to thank
Shareholders for their support, particularly in these testing
times.
A recording of the AGM, including a presentation from portfolio
manager Walter Price, can be found on the company's website or via
the QR code to the left.
Outlook
There appears little to be encouraged about in the macroeconomic
and global political outlook. The world has been shaken by a series
of shocks over the past few years - pestilence, war and now very
possibly famine to use old fashioned terms. Quantitative easing and
the other policy tools that have been deployed by governments to
mitigate these shocks may prove in part to have merely deferred
rather than avoided some of the adverse consequences associated
with similar shocks in the past. Naturally we should all hope for
better outcomes but we know that this will not be easily achieved
in a world heading towards greater political fragmentation and
reducing global collaboration. That said, the fortunes of economies
and the fortunes of individual companies are not necessarily
inextricably linked, and markets can also move in a different
direction to what the prevailing backdrop might suggest when
investors eye emerging opportunity.
What we do know is that technology has been and will remain a
key enabler of economic progress. Whilst the short term direction
of share prices is almost impossible to predict, the likelihood is
that superior long term returns will continue to be possible from
investment in technology led businesses. The Manager continues to
construct the Company's portfolio with a diversified mix of
higher-growth companies, as well as access to cyclical/value
stocks. We remain confident in the Manager's ability to drive
long-term relative performance through the team's high conviction
expertise as they continue to focus on identifying trends that have
the potential to uncover tomorrow's Apple or Microsoft.
Principal risks and uncertainties for the remainder of the
financial year
The principal risks and uncertainties facing the Company are
broadly unchanged from those described in the annual report for the
year ended 31 December 2021. These are set out in the Strategic
Report on pages 36-41 of that report, together with commentary on
the Board's approach to mitigating the risks and uncertainties.
Given the global macroeconomic and geopolitical backdrop, market
risk remains front of mind and the Board and Investment Manager
continue to monitor the situation carefully.
The Board performs a high-level review of the principal risks at
every meeting to ensure that the risk assessment is current and
relevant, adjusting mitigating factors and procedures as
appropriate.
Keeping in touch
Shareholders are reminded that the Company's revamped website
www.allianztechnologytrust. com is the 'go-to' destination for the
very latest news, views and broadcast content relating to the
Company. We continue to offer an ongoing email communications
programme distributing monthly factsheets, insights and other
occasional Company updates to all those who opt in to receive them.
If you would enjoy receiving these targeted communications you can
sign up easily via the Company's website, which can also be
accessed via the QR code to the right.
Going concern
The Directors believe that it is appropriate to adopt the going
concern basis in preparing the financial statements as the assets
of the Company consist mainly of securities that are readily
realisable and the Company's assets are significantly greater than
its liabilities. The Directors have assessed the impact of the
change in management arrangements and the continued operational
resilience of the Company's service providers and have concluded
that the Company has adequate financial resources to continue in
operational existence for twelve months after approval of these
financial statements.
The Company is subject to a continuation vote of the
Shareholders every five years. The last continuation vote was put
to Shareholders at the AGM in 2021.
Related party transactions
In accordance with the definition as provided by the Listing
Rules 11.1.4, the only related party arrangement in place is the
relationship between the Directors, AIFM and Portfolio Manager.
The services provided by the AIFM and Portfolio Manager under
the Investment Management Agreement form a significant contract but
are not deemed to be a related party transaction. There have been
no material transactions which have affected the financial position
of the Company other than fees paid to directors in the normal
course of business.
Following the end of the Temporary Permissions Regime put in
place after the UK's exit from the European Union, the Board
understands that Allianz Global Investors plan to replace Allianz
Global Investors GmbH, UK Branch as the management company with
Allianz Global Investors UK Ltd. This is subject to Allianz Global
Investors UK Ltd. being granted the necessary authorisation from
the FCA.
Responsibility statement
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within the
half-yearly financial report has been prepared in accordance with
FRS 102 and FRS 104, as set out in Note 1 and the Accounting
Standards Board's Statement: 'Half-Yearly Financial Reports';
- the interim management report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7 R,
of important events that have occurred during the first six months
of the financial year, their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
- the interim management report includes a fair review of the
information concerning related party transactions as required by
Disclosure and Transparency Rule 4.2.8 R. The half-yearly financial
report was approved by the Board on 8 August 2022 and signed on its
behalf by the Chairman.
Robert Jeens
Chairman
8 August 2022
.
INVESTMENT MANAGER'S REVIEW
Investment Review
Global equities tumbled over the first half of 2022, posting
their worst two-quarter drop since 2009, as Russia's invasion of
Ukraine sparked the biggest energy price shock since the 1970s.
Inflation accelerated sharply, and concerns grew that major central
banks would need to be more aggressive in raising rates and that a
period of negative growth may be needed to tame rising prices.
China's strict zero-Covid policy further undermined sentiment as it
led to lockdowns in major cities which hit demand and added to
supply chain disruptions.
At a sector level, energy was a rare bright spot in major
indexes, with share prices surging along with oil and gas prices.
Elsewhere, however, sector returns were steeply negative. The
consumer discretionary, communication services and information
technology sectors fell the most, with 'new technology' stocks
declining sharply as the prospect of higher interest rates lessened
the appeal of companies that may not generate meaningful earnings
until well into the future, e.g. Snapchat.
As inflation surged to multi-decade highs, central banks in
developed markets responded - although they were viewed as being
'behind the curve' compared to many emerging market central banks
which had already started to raise rates. In March, the US Federal
Reserve (Fed) hiked rates for the first time since 2018 and
implemented two more increases in April and May, with each becoming
more aggressive. The European Central Bank (ECB) finally abandoned
its dovish stance in the second quarter, signalling it would likely
raise rates by 0.25% in July and would implement more aggressive
rate rises later in the year. China and Japan were outliers, with
the former becoming more supportive, particularly to its
beleaguered property sector, while the Bank of Japan maintained its
dovish stance.
During the period, we reduced exposure to some high growth
companies we felt would struggle to deliver enough earnings growth
to justify high valuations. The team also increased exposure to
some cyclical companies in the semiconductor and hardware segments.
We continue to hold our positions in high growth companies that we
believe are well-positioned to maintain steady growth rates. As a
result, the portfolio continues to have a balance of high growth
and cyclical/value stocks.
The transition to a post-Covid economy has been complicated by a
sharp rise in inflation, persistent supply chain challenges, and
more hawkish central banks. However, we continue to expect
technology to be the persistent driver of long-term economic
growth.
Top Contributors and Detractors
The Allianz Technology Trust underperformed the Dow Jones World
Technology Index (sterling adjusted, total return) by 7.9
percentage points and the FTSE All-Share Index by 26.0 percentage
points during the period. The portfolio's underperformance has been
largely due to the market rotation from growth stocks amid concerns
around inflation and rising interest rates.
Our underweight position in Facebook's parent company, Meta
Platforms, was a top relative contributor. During the period, the
company reported disappointing quarterly results, and management
provided muted guidance. The company's fundamentals were negatively
impacted by greater than anticipated challenges associated with
Apple's privacy changes (IDFA). Additionally, Meta is seeing a
rapid migration of users toward short-form videos where the company
faces stiff competition and lower current monetisation rates.
Finally, the company is investing aggressively in the metaverse,
which is in the very early stage of development and a long way from
commercial roll out.
Our position in security software vendor, CrowdStrike, was also
a top relative contributor. The company is emerging as a leader in
the next-generation endpoint security market. Shares gained after
the company reported better than expected revenues and profits in
the most recent quarter driven by strong momentum in new client
sales and growth with current customers. Management also gave
guidance that suggested strong growth and profitability would
persist for the current fiscal year. We continue to believe
CrowdStrike's best-in-class endpoint security solutions are
particularly relevant in the new distributed workforce context that
many enterprises find themselves in today.
Other top active contributors included our overweight positions
in Palo Alto Networks and Box, as well as an underweight to
NVIDIA.
Our position in cloud-based data storage and analytics company
Snowflake was a top relative detractor. The company reported strong
quarterly financial results with 102% year-on-year revenue growth,
but this fell short of elevated expectations. Snowflake had record
bookings during the quarter and added another fourteen Fortune 500
customers and twenty one in the Forbes Global 2000. Snowflake has
built a highly advanced cloud-native architecture that represents a
major leap over traditional analytical databases that have been in
the market for decades. In our view, the company should deliver
rapid growth for several years as it benefits from the cloud
transition and the rising demand for cloud security solutions.
Our position in cloud security company Zscaler was also a top
relative detractor amid the growth software sell-off. The company
reported quarterly financial results that exceeded expectations
driven by strong billings growth. Despite the volatile market
environment, we believe the company remains well-positioned to
produce very attractive long-term growth. Zscaler is a first mover
in cloud security that has essentially created a new market in the
cyber security world with an innovative product umbrella and
strategic focus, which should disrupt the competitive landscape for
years to come.
Other active detractors included overweight positions in Okta
and Lyft, and an underweight to Apple.
Outlook
In our view, the technology sector continues to benefit from
strong tailwinds which should continue to drive attractive
long-term appreciation. There is no question in our minds that the
Covid-19 crisis has already spurred the use of technology and will
continue to change how we live and work in the future.
Additionally, many businesses are struggling to find workers to
meet customer demand and need technology solutions to improve
productivity of limited staffs. As companies need to reduce costs
and improve productivity, we expect to see accelerating demand for
innovative and more productive solutions such as cloud,
software-as-a-service, artificial intelligence, cyber security,
etc. We are in a period of rapid change, where the use of
technology is key to the prosperity of most industries. This
environment is likely to provide attractive growth opportunities in
many technology stocks over the next several years.
We continue to believe the technology sector can provide some of
the best absolute and relative return opportunities in the equity
markets - especially for bottom-up stock pickers.
Walter Price & Mike Seidenberg
8 August 2022
.
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 30 June 2022
Total
Revenue Capital Return GBP'000s
(Note 1) GBP'000s GBP'000s
--------------------------------------- ----------- ----------- -----------------
Losses on investments held at
fair value through profit or loss - (455,025) (455,025)
Exchange gains on currency balances 43 6,039 6,082
Income 3,158 - 3,158
Investment management and performance
fee (Note 2) (3,604) - (3,604)
Administration expenses (510) - (510)
----------- ----------- -----------------
(Loss) profit before finance
costs and taxation (913) (448,986) (449,899)
Finance costs: Interest payable
and similar charges - - -
----------- ----------- -----------------
(Loss) profit on ordinary activities
before taxation (913) (448,986) (449,899)
Taxation (393) - (393)
----------- ----------- -----------------
(Loss) profit attributable to
Ordinary Shareholders (1,306) (448,986) (450,292)
----------- ----------- -----------------
(Loss) earnings per Ordinary
Share (Note 3) (0.31p) (106.81p) (107.12p)
.
BALANCE SHEET
as at 30 June 2022
GBP'000s
------------------------------------------ -------------
Investments held at fair value through
profit or loss (Note 4) 914,379
Cash and cash equivalents 88,275
Other net current liabilities (943)
-------------
Total Net Assets 1,001,711
-------------
Called up Share Capital 10,719
Share Premium Account 334,191
Capital Redemption Reserve 1,021
Capital Reserve 689,189
Revenue Reserve (33,409)
Shareholders' Funds 1,001,711
-------------
Net Asset Value per Ordinary Share 241.5p
The net asset value is based on ordinary
shares in issue of 414,774,931
Treasury shares in issue 13,981,749
.
INCOME STATEMENT
for the six months ended 30 June 2021
Total
Revenue Capital Return GBP'000s
(Note 1) GBP'000s GBP'000s
--------------------------------------- ----------- ----------- -----------------
Gains on investments held
at fair value through profit or
loss - 89,035 89,035
Exchange losses on currency balances (23) (873) (896)
Income 2,259 - 2,259
Investment management and performance
fee (Note 2) (3,960) - (3,960)
Administration expenses (679) - (679)
----------- ----------- -----------------
(Loss) profit before finance
costs and taxation (2,403) 88,162 85,759
Finance costs: Interest payable
and similar charges - - -
----------- ----------- -----------------
(Loss) profit on ordinary activities
before taxation (2,403) 88,162 85,759
Taxation (285) - (285)
----------- ----------- -----------------
(Loss) profit attributable to
Ordinary Shareholders (2,688) 88,162 85,474
----------- ----------- -----------------
(Loss) earnings per Ordinary
Share (Note 3) (0.63p) 20.61p 19.98p
.
BALANCE SHEET
as at 30 June 2021
GBP'000s
-------------------------------------------- ------------
Investments held at fair value through
profit or loss (Note 4) 1,305,272
Cash and cash equivalents 28,496
Other net current liabilities (2,267)
------------
Total Net Assets 1,331,501
------------
Called up Share Capital 10,719*
Share Premium Account 334,191*
Capital Redemption Reserve 1,021
Capital Reserve 1,015,228*
Revenue Reserve (29,658)
Shareholders' Funds 1,331,501
------------
Net Asset Value per Ordinary Share 311.6p
The net asset value is based on ordinary
shares in issue of 427,285,625
Treasury shares in issue 1,471,055
* Comparative figures have been restated
(Note 8)
.
BALANCE SHEET
as at 31 December 2021
GBP'000s
------------------------------------------ ----------------------------------
Investments held at fair value through
profit or loss (Note 4) 1,428,136
Cash and cash equivalents 45,968
Other net current liabilities (1,732)
----------------------------------
Total Net Assets 1,472,372
----------------------------------
Called up Share Capital 10,719
Share Premium Account 334,191
Capital Redemption Reserve 1,021
Capital Reserve 1,158,544
Revenue Reserve (32,103)
Shareholders' Funds 1,472,372
----------------------------------
Net Asset Value per Ordinary Share 347.9p
The net asset value is based on ordinary
shares in issue of 423,191,590
Treasury shares in issue 5,565,090
.
STATEMENT OF CHANGES IN EQUITY
Called Share Capital
up Premium Redemption Capital Revenue
Share Account Reserve Reserve Reserve Total
Capital GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
GBP'000s
----------------------------- ---------- ---------- ------------ ----------- ----------- -----------
Six months ended 30 June
2022
Net assets at 1 January
2022 10,719 334,191 1,021 1,158,544 (32,103) 1,472,372
Revenue loss - - - - (1,306) (1,306)
Shares repurchased into
treasury during the period
(Note 5) - - - (20,369) - (20,369)
Capital loss - - - (448,986) - (448,986)
Net assets at 30 June 2022 10,719 334,191 1,021 689,189 (33,409) 1,001,711
---------- ---------- ------------ ----------- ----------- -----------
Six months ended 30 June
2021
Net assets at 1 January
2021 10,549 313,360 1,021 931,227 (26,970) 1,229,187
Revenue loss - - - - (2,688) (2,688)
Shares issued from block
listing facility during
the period (Note 5) 170 20,831 - - - 21,001
Shares repurchased into
treasury during the period
(Note 5) - - - (4,161) - (4,161)*
Capital profit - - - 88,162 - 88,162
Net assets at 30 June 2021 10,719* 334,191* 1,021 1,015,228* (29,658) 1,331,501
----------------------------- ---------- ---------- ------------ ----------- ----------- -----------
*Comparative figures have been restated (Note 8)
.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Note 1 - Summary Statement of Accounting Policies and Basis of
Preparation
The condensed set of financial statements have been prepared in
accordance with FRS 102 'Interim Financial Reporting' (FRS 104)
issued by the FRC in March 2015 and the Statement of Recommended
Practice - 'Financial Statements of Investment Trust Companies and
Venture Capital Trusts' (SORP) issued by the Association of
Investment Companies (AIC) in April 2021.
The accounting policies applied for the condensed set of
financial statements with regard to measurement and classification
have not changed from those set out on the Company's annual report
for the year ended 31 December 2021.
The total column of the Income Statement is the profit and loss
account of the Company. All revenue and capital items derive from
continuing operations. No operations were acquired or discontinued
in the period. A Statement of Total Recognised Gains and Losses is
not required as all gains and losses of the Company have been
reflected in the Income Statement.
Note 2 - Management
Allianz Global Investors GmbH, UK Branch was the appointed
Investment Manager up to 25 July 2022. Effective from 25 July 2022,
AllianzGI entered into a strategic partnership with Voya Investment
Management (Voya). AllianzGI will continue its role as Alternative
Investment Fund Manager, providing company secretarial,
administrative and sales and marketing services and Portfolio
Management services will be provided by Voya. The aggregate fees
paid by the Company to AllianzGI and Voya do not change. The
management agreement provides for a base fee of 0.8% per annum
payable quarterly in arrears and calculated on the average value of
the market capitalisation of the Company at the last business day
of each month in the relevant quarter. The base fee reduces to 0.6%
for any market capitalisation between GBP400m and GBP1 billion, and
0.5% for any market capitalisation over GBP1 billion. Additionally
there is a fixed fee of GBP55,000 per annum.
In each year, in accordance with the management contract, the
Investment Manager is entitled to a performance fee subject to
various performance conditions. For years beginning on or after 1
January 2022, the performance fee entitlement is equal to 10.0% (1
December 2013 to 31 December 2021: 12.5%) of the outperformance of
the adjusted NAV per share total return as compared to the
benchmark index, the Dow Jones World Technology Index (sterling
adjusted, total return). Any underperformance brought forward from
previous years is taken into account in the calculation of the
performance fee.
A performance fee is only payable where the NAV per share at the
end of the relevant Performance Period is greater than the NAV per
share at the end of the financial year in which a performance fee
was last paid. At 31 December 2021 this 'high water mark' (HWM) was
297.2p per share. In the event the HWM is not reached in any year,
any outperformance shall instead be carried forward to future
periods to be applied as detailed below. Any performance fee
payable is capped at 1.75% of the average daily NAV of the Company
over the period (2020: 2.25% of year-end NAV). For this purpose,
the NAV is calculated after deduction of the associated performance
fee payable.
Any outperformance in excess of the cap (or where the HWM has
not been met) shall be carried forward to future years to be
available for offset against future underperformance but not to
generate a performance fee. To the extent the Company has
underperformed the benchmark, such underperformance is carried
forward and must be offset by future outperformance before a
performance fee can be paid. Underperformance/outperformance
amounts carried forward do so indefinitely until offset.
The performance fee accrued for as at 30 June 2022 was GBPnil
(30 June 2021: GBPnil; 31 December 2021: GBPnil).
The Investment Manager's fee is charged 100% to Revenue and the
performance fee is charged 100% to Capital.
Note 3 - Earnings per Ordinary Share
The earnings per Ordinary share is based on the net loss for the
half year of GBP450,292,000 (30 June 2021: net profit of
GBP85,474,000, 31 December 2021: net profit of GBP238,956,000) and
on the weighted average number of Ordinary shares in issue during
the period of 420,370,209 (30 June 2021: 427,710,854, 31 December
2021: 426,291,035).
Note 4 - Valuation of Investments
I nvestments are designated as held at fair value through profit
or loss in accordance with FRS 102 sections 11 and 12. Investments
are initially recognised at Fair Value, which is determined to be
their cost. Subsequently, investments are revalued at Fair Value,
which is the bid market price for listed investments.
FRS 102 sets out three fair value hierarchy levels for
disclosure.
Level 1: The unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the
measurement date.
Level 2: Inputs other than quoted prices included within Level 1
that are observable (i.e. developed using market data) for the
asset or liability, either directly or indirectly.
Level 3: Inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
As at 30 June 2022, the financial assets at fair value through
profit or loss of GBP914,379,000 (31 December 2021:
GBP1,428,136,000) are categorised as follows:
As at As at
30 June 31 December
2022 2021
GBP'000s GBP'000s
--------- --------- -------------
Level 1 914,379 1,428,136
Level 2 - -
Level 3 - -
--------- -------------
914,379 1,428,136
--------- -------------
Note 5 - Called up Share Capital
At 30 June 2022 there were 414,774,931 Ordinary shares in issue
(30 June 2021: 427,285,625; 31 December 2021: 423,191,590). During
the half-year ended 30th June 2022 the Company repurchased
8,416,659 Ordinary shares into treasury (half-year ended 30 June
2021: 1,471,055; and year ended 31 December 2021: 5,565,090).
During the same period the Company issued nil shares into the
market from the Ordinary shares held in treasury, (half-year ended
30 June 2021: nil shares; year ended 31 December 2021: nil shares).
The Company issued a further nil Ordinary shares, from the
authorised block listing facility, during the period (half-year
ended 30 June 2021: 6,800,000; and year ended 31 December 2021:
6,800,000). The proceeds from the total number of Ordinary shares
issued amounted to nil (half-year ended 30 June 2021:
GBP21,001,000; and year ended 31 December 2021: GBP21,001,000).
Since the period end a further 2,006,383 Ordinary shares have
been repurchased into treasury.
Note 6 - Investments
Purchases for the half-year ended 30 June 2022 were
GBP433,944,000 (30 June 2021: GBP524,186,000) and sales were
GBP492,676,000 (30 June 2021: GBP523,493,000).
Note 7 - Transaction Costs
Brokers commission costs on equity purchases for the half-year
ended 30 June 2022 amounted to GBP104,000 (30 June 2021: GBP83,000)
and on sales amountedto GBP134,000 (30 June 2021: GBP85,000).
Note 8 - Restatement of 2021 Comparative Information
Shares repurchased into treasury are presented in the Capital
Reserve in the Statement of Changes in Equity with comparatives
restated. In 2021 the nominal amount paid/payable was disclosed in
Called up Share Capital (GBP37,000) and the amount in excess of
this was disclosed in the Share Premium Account (GBP4,124,000). The
change in presentation has no impact on the net assets. Share
Capital has increased from GBP10,682,000 to GBP10,719,000, the
Share Premium Account has increased from GBP330,067,000 to
GBP334,191,000 and Capital Reserves decreased from GBP1,019,389,000
to GBP1,015,228,000.
Note 9 - Comparative Information
The half yearly financial report to 30 June 2022 and the
comparative information to 30 June 2021 have neither been audited
nor reviewed by the Company's auditors and do not constitute
statutory accounts as defined in section 434 of the Companies Act
2006 for the respective periods. The financial information for the
year ended 31 December 2021 has been extracted from the statutory
accounts for that year which have been delivered to the Registrar
of Companies. The auditor's report on those financial statements
was unqualified and did not contain a statement under Section 498
(2) or (3) of the Companies Act 2006.
.
INVESTMENT PORTFOLIO
As at 30 June 2022
Investment Sector(#) Sub sector(#) Country Valuation
GBP'000s % of Portfolio
----------------------- ---------------------- ---------------------- ---------------- ---------- ---------------
Microsoft Software Systems Software United States 62,713 6.8
Technology, Hardware Technology, Hardware
Storage & Storage &
Apple Peripherals Peripherals United States 62,131 6.8
Interactive Media Interactive Media
Alphabet & Services & Services United States 57,118 6.2
Automobile
Tesla Automobiles Manufacturers United States 42,852 4.7
Semiconductors
& Semiconductor
ON Semiconductor Equipment Semiconductors United States 37,242 4.1
Semiconductors
& Semiconductor
Broadcom Equipment Semiconductors United States 35,936 3.9
CrowdStrike Software Systems Software United States 34,988 3.8
Taiwan Semiconductor Semiconductors
Manufacturing & Semiconductor
ADR Equipment Semiconductors Taiwan 34,515 3.8
Palo Alto Networks Software Systems Software United States 33,434 3.7
Semiconductors
& Semiconductor
Micron Technology Equipment Semiconductors United States 29,861 3.3
Top ten investments 430,790 47.1
----------------------------------------------- --------------------------------------- ---------- ---------------
Technology, Hardware Technology, Hardware
Storage & Storage &
Seagate Technology Peripherals Peripherals Ireland 29,824 3.3
Semiconductors
& Semiconductor
Infineon Technologies Equipment Semiconductors Germany 28,635 3.1
Aspen Technology Software Application Software United States 26,371 2.9
Box Software Application Software United States 25,638 2.8
Datadog Software Application Software United States 24,957 2.7
Zscaler Software Systems Software United States 24,559 2.7
Semiconductors
& Semiconductor
SK Hynix Equipment Semiconductors South Korea 21,062 2.3
Paycom Software Software Application Software United States 19,087 2.1
Internet Services
MongoDB IT Services & Infrastructure United States 17,977 2.0
Oracle Software Systems Software United States 17,038 1.9
Top Twenty Investments 665,938 72.9
----------------------------------------------- --------------------------------------- ---------- ---------------
Semiconductors
& Semiconductor
NVIDIA Equipment Semiconductors United States 16,550 1.8
KnowBe4 Software Systems Software United States 16,518 1.8
Data Processing
& Outsourced
Mastercard IT Services Services United States 16,110 1.8
Hotels, Restaurants Hotels, Resorts
Booking & Leisure & Cruise Lines United States 15,006 1.6
Nortonlifelock Software Systems Software United States 14,172 1.5
Communications Communications
Arista Networks Equipment Equipment United States 13,263 1.5
Semiconductors
& Semiconductor
STMicroelectronics Equipment Semiconductors Netherlands 12,419 1.4
Internet Services
Okta IT Services & Infrastructure United States 12,249 1.3
Data Processing
& Outsourced
Adyen IT Services Services Netherlands 10,724 1.2
Semiconductors
& Semiconductor Semiconductor
Applied Materials Equipment Equipment United States 10,567 1.1
Top Thirty Investments 803,516 87.9
----------------------------------------------- --------------------------------------- ---------- ---------------
IT Consulting
Computacenter IT Services & Other Services United Kingdom 9,638 1.1
Lyft Road & Rail Trucking United States 9,418 1.0
Electronic Equipment Electronic
Instruments & Manufacturing
Flex Components Services Singapore 9,003 1.0
Uber Technologies Road & Rail Trucking United States 8,603 0.9
Take-Two Interactive Interactive Home
Software Entertainment Entertainment United States 6,431 0.7
Communications Communications
F5 Equipment Equipment United States 6,155 0.7
Semiconductors
& Semiconductor
Marvell Technology Equipment Semiconductors United States 6,025 0.7
Technology, Hardware Technology, Hardware
Storage & Storage &
Samsung Electronics Peripherals Peripherals South Korea 6,002 0.7
Interactive Media Interactive Media
ZoomInfo Technologies & Services & Services United States 5,973 0.7
Altair Engineering Software Application Software United States 5,846 0.5
----------------------- ---------------------- ---------------------- ---------------- ---------- ---------------
Top Forty Investments 876,610 95.9
----------------------------------------------------------------------------------------- ---------- ---------------
Internet Services
Snowflake IT Services & Infrastructure United States 5,531 0.6
Semiconductors
& Semiconductor Semiconductor
ASML Equipment Equipment Netherlands 5,335 0.6
Data Processing
Automatic Data & Outsourced
Processing IT Services Services United States 5,321 0.6
Smartsheet Software Application Software United States 5,141 0.6
Workday Software Application Software United States 4,649 0.5
Data Processing
& Outsourced
Block IT Services Services United States 4,310 0.5
Semiconductors
Advanced Micro & Semiconductor
Devices Equipment Semiconductors United States 3,908 0.4
Electronic Equipment
Instruments & Electronic Equipment
Cognex Components & Instruments United States 3,574 0.3
Total Investments 914,379 100.0
----------------------------------------------------------------------------------------- ---------- ---------------
#GICS Industry classifications
.
PORTFOLIO ANALYSIS
As at 30 June 2022
% of % of
By Sector(#) Portfolio By Country Portfolio
-------------------------------- ----------- ---------------- -----------
Software 34.5 United States 81.7
Semiconductors & Semiconductor
Equipment 26.5 Taiwan 3.8
Technology, Hardware
Storage & Peripherals 10.7 Ireland 3.3
IT Services 9.0 Germany 3.1
Interactive Media & Services 6.9 Netherlands 3.1
Automobiles 4.7 South Korea 3.0
Communications Equipment 2.1 United Kingdom 1.1
Road & Rail 2.0 Singapore 1.0
Hotels, Restaurants &
Leisure 1.6
Electronic Equipment
Instruments & Components 1.4
Entertainment 0.7
Total Portfolio 100.0 Total Portfolio 100.0
--------------------------------- ----------- ---------------- -----------
(#) GICS Industry Classifications
As cash is excluded and the weightings for each sector are
rounded to the nearest tenth of a percent, the aggregate weights
may not
equal 100%.
For further information, please contact:
Kelly Nice Stephanie Carbonneil
Company Secretary Head of Investment Trusts
Allianz Technology Trust PLC Allianz Global Investors GmbH, UK
Tel: 020 3246 7475 Branch
Tel: 020 3246 7256
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