TIDMGHS

RNS Number : 4846T

Gresham House Strategic PLC

24 November 2021

Gresham House Strategic plc

("GHS" or the "Company")

Net Asset Value Update

The Board of GHS announces that it has today been advised by its recently appointed investment manager, Harwood Capital LLP, that the realisation of the Augean proceeds, which gave rise to a gain of GBP18.8m, together with other recent profitable sales will give rise to a tax liability which was not provided for in the NAV calculations and that as a result, its weekly net asset values have been incorrectly stated since 30 July 2021, the date on which an offer for Augean was formally announced.

The net impact of the overstatement was approximately GBP1.3 million as at 19 November 2021 (approximately 2% of NAV), the date of the last NAV released by GHS. The amount is made up of a tax provision of approximately GBP1.6 million less an overpayment of management and performance fees to Gresham House Asset Management (GHS's former investment manager) of approximately GBP0.3m (inclusive of VAT), which the Board now intends to reclaim.

Whilst the Company has significant brought forward capital losses, changes to the tax legislation which became effective on 1 April 2020 limit the use of capital losses against realised gains to GBP5 million per year. Thereafter, 50 per. cent of realised gains are subject to corporation tax. The net effect is that realised gains over GBP5 million per annum are currently taxed at 9.5 per cent. and not zero as was previously the case.

Further, the Board has been advised that if the entire GHS portfolio was liquidated today at current market prices which follows the announcement of the proposed takeover of Universe Group yesterday and which will, if concluded give rise to a gain of GBP3 million, there would be an additional corporation tax liability of approximately GBP1.3 million (approximately 2% of NAV).

The Board is arranging for all the weekly NAV calculations to be recalculated since 30 July 2021 and they will be released to the market when this exercise is concluded.

A further announcement will be made in due course.

Enquiries:

 
 Gresham House Strategic 
  Ken Lever, Senior Independent Director         +44 (0) 20 7220 0500 
 
 Harwood Capital LLP 
  Christopher Mills                              + 44 (0) 20 7640 3200 
 
 finnCap (Nominated Adviser and Joint Broker 
  to GHS) 
  William Marle / Ed Frisby / Mark Whitfeld / 
  Pauline Tribe                                  +44 (0) 20 7220 0500 
 Panmure Gordon (UK) Limited (Joint Broker to 
  GHS) 
  Sapna Shah / Alex Collins                      +44 (0) 20 7886 2500

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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November 24, 2021 08:13 ET (13:13 GMT)

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