TIDMHAN TIDMHAN TIDMHANA
RNS Number : 6738G
Hansa Investment Company Limited
26 November 2020
Hansa , investing to create
long-term growth
Interim Report
Six months ended
30 September 2020
2020
Welcome
I'm pleased to present the 2020 Interim Report for Hansa
Investment Company Ltd ("the Company", "HICL") to the
shareholders.
As you know, 2020 has been an unprecedented year as the Covid-19
pandemic swept around the globe with a speed and reach that
surprised many. It has caused multiple waves of infection, sadly
leading to increased mortality rates in many countries. It has also
caused economic contraction, forcing governments to implement a
variety of restrictive measures to try to reduce the spread of the
virus, whilst awaiting medical science's development of effective
vaccines. As I write this welcome to you, there are several
encouraging signs that a number of long-hoped-for vaccines are
ending their trial periods and have been found to be safe and
effective, which offers hope that 2021 will see a gradual return to
some new normality.
Your Company's portfolio has shown resilience during the past
six months. I am pleased to say that the majority of the decline in
NAV seen during March 2020 as the markets reacted negatively to the
pandemic, has reversed in the last six months and has continued to
do so following the period covering this Report. I am also pleased
to say your Company and its suppliers have continued to operate
successfully during this period, which is testament to their
planning and resourcefulness.
Of course, Covid-19 has not been the only news in 2020. The
result of the US election seems to have been decided in favour of
Joe Biden whilst the UK's exit from the EU is still being
negotiated. Despite all this, stock markets are at or near record
highs in most countries. I have noted a number of these themes in
my Chairman's Statement and I also draw your attention to the
Portfolio Manager's Review of the period where many of these topics
are expanded upon.
Finally, by the time this Report is published, you will no doubt
have noted that the second quarterly interim dividend, totalling
0.8p per share for the year to 31 March 2021 was paid on 30
November 2020.
I wish you and your families well in these difficult times.
Yours sincerely
THIS DOCUMENT IS IMPORTANT and if you are a holder of Ordinary
shares it requires your immediate attention. If you are in doubt as
to the action you should take or the contents of this document, you
should seek advice from an independent financial advisor,
authorised if in the UK under the Financial Services and Markets
Act 2000, or other appropriately authorised financial advisor if
outside of the UK. If you have sold or transferred your Ordinary
shares in the Company, you should send this document, immediately
to the purchaser or transferee; or to the stockbroker, bank or
other agent through whom the sale or transfer was effected for
onward transmission as soon as practicable.
COMPANY REGISTRATION AND NUMBER: The Company is registered in
Bermuda under company number 54752.
Interim Report
Chairman's Report to the Shareholders
Interim Management Report
Portfolio Manager's Report
Portfolio Statement
Financial Statements
Condensed Income Statement
Condensed Balance Sheet
Condensed Statement of Changes in Equity
Condensed Cash Flow Statement
Notes to the Condensed Financial Statements
Pro-Forma Financial Statements
Condensed Pro-Forma Income Statement for the combined Hansa
Investment Company Ltd Group
Condensed Pro-Forma Balance Sheet for the combined Hansa
Investment Company Ltd Group
Condensed Pro-Forma Statement of Changes in Equity for the
combined Hansa Investment Company Ltd Group
Condensed Pro-Forma Cash Flow Statement for the combined Hansa
Investment Company Ltd Group
Notes to the Condensed Pro-Forma Financial Statements
Investor Information
Company Information
Glossary of Terms
Chairman's Report to the Shareholders
JONATHAN DAVIE
Chairman
Introduction
I am pleased to be able to report that our Portfolio Manager and
the other suppliers of services to Hansa Investment Company Ltd
("the Company", "HICL") have not been badly affected by the Covid
-- 19 problem with the result that we have not experienced any
additional consequential risks to the management of the
Company.
SHAREHOLDER RETURNS
The past six months have shown an increase in net asset value
("NAV") from 230.2p per share to 261.4p, whilst the discount has
narrowed from 43.1% to 37.3% for the Ordinary shares and from 41.2%
to 34.6% for the "A" Ordinary shares.
The Core Regional and Thematic silos of our portfolio have shown
good returns for the past six months. Unfortunately, these have
been overshadowed by the continuing disappointing performance of
our long-term holding in Ocean Wilson Holdings Ltd ("OWHL") which
declined by 6.1% during the period, not helped by the continuing
decline of the Brazilian Real against the US Dollar. However, it is
useful to remind ourselves of the excellent returns investors have
experienced from our investment in OWHL over the past 50 years or
so, together with the encouraging recent news that Wilson Sons Ltd
and OWHL have decided to fully restore their dividend for the year.
History also teaches us that the Real is probably due at least a
bounce against the US Dollar due to the improving economy in Brazil
and the first signs of some headwinds for the US Dollar. Brazil,
like many Emerging Markets, tends to be hit hardest during periods
of extreme market weakness but, being leveraged, plays on the
subsequent recovery and may do much better in an environment of
improving global growth due to greater fiscal impetus.
The performance of our Global Equities silo has also
underperformed, which is due to most of these holdings being in the
value category which continues to disappoint against growth.
Alec Letchfield continues to manage our Fund portfolio very
effectively, manifested by resisting the temptation to sell any of
the portfolio during the market slide in March and April.
PROSPECTS
I write this after the US election has taken place, with a
continuing resurgence in the number of Covid -- 19 cases in the
Northern Hemisphere as winter approaches and little sign of a China
rapprochement with the West. However, the extremely positive news
on a number of vaccine candidates has possibly given the market
some impetus for the long-awaited rotation out of Growth Stocks
into Cyclicals and Value together with steepening yield curves. It
goes without saying that the positive effects for the beaten down
travel and hospitality industries will be immense. The potential
spending by prospective clients will very substantial, due to the
large increases in the savings ratios and the pent-up desire to get
out and have some fun with friends. However, the Schiller
cyclically adjusted price-to-earnings ratio remains very high, only
surpassed in 1929 and 1999 and the increase in IPOs, particularly
using Special Purpose Acquisition Companies ("SPACs"), together
with heightened Merger and Acquisition activity and increasing
retail involvement in the options market leads one to the
inevitable conclusion that a bubble may be forming, particularly in
the growth stocks.
Notwithstanding the above, there continue to be significant
amounts of liquidity on the sidelines which, together with the
greater use of fiscal policy, ongoing economic improvement as the
impact of Covid-19 diminishes with the commencement of vaccination
programmes. This leads us to remain supportive of risk assets. As a
result, whilst we wouldn't be surprised to see increased market
volatility in the coming months, we continue to focus on the upside
in view of our long-term investment horizon.
Despite all the aforementioned challenges, I have great faith
that Alec Letchfield, in his position as the CIO of our Portfolio
Manager, will continue to find quality investments for our
portfolio.
May I take this opportunity to wish the best outcome for all our
shareholders by staying safe and healthy in these challenging and
uncertain times.
Jonathan Davie
Chairman
26 November 2020
Interim Management Report
The Directors present their Report and Condensed Financial
Statements for the period to 30 September 2020.
THE BOARD'S OBJECTIVES
The Board's primary objective is to achieve growth of
shareholders' value over the medium to long -- term.
THE BOARD
Your Board consists of the following persons, each of whom
brings certain individual and complementary skills and experience
to the Board's workings:
Jonathan Davie (Chairman of the Board and Management Engagement
Committee), Richard Lightowler (Chairman of the Audit Committee),
Simona Heidempergher (Chairman of the Remuneration Committee),
William Salomon and Nadya Wells (Chairman of the Nomination
Committee).
Individual profiles for each member of the Board can be found in
the Company's Annual Report each year and on our website.
BUSINESS REVIEW FOR THE PERIOD TO 30 SEPTEMBER 2020
The Business Review, which includes a discussion of important
events which occurred within the period to 30 September 2020, is
covered in the Chairman's Report to the Shareholders and the
Portfolio Manager's Report.
Hansa Investment Company Ltd is a Bermudan company formed in
June 2019 to take on the business of Hansa Trust PLC ("Hansa
Trust"). As a company, HICL has limited financial history only
having taken on the business of Hansa Trust in August 2019. As a
result, the Board present two sets of financial reports for
shareholders' review. Firstly, the HICL set of financial reports
covering the six months to 30 September 2020 and comparables for
the period 21 June 2019 (date of incorporation) to 30 September
2019. In addition, the Board includes a pro -- forma set of
accounts amalgamating the financial performance of Hansa Trust for
the comparable period 1 April 2019 to 29 August 2019, with the
results of HICL for the period 21 June 2019 to 30 September 2019.
The Board has prepared these to enable shareholders to make
meaningful comparisons between these pro-forma accounts and
comparables from Hansa Trust for previous periods.
KEY RISKS FOR THE FINANCIAL YEAR TO 31 MARCH 2021
The key risks and uncertainties relating to the period ended 30
September 2020 and for the year ended 31 March 2021 are materially
the same as those reported in the Period-end Report for the Company
for the period ended 31 March 2020.
GOING CONCERN BASIS OF ACCOUNTING FOR THE PERIOD TO 30 SEPTEMBER
2020
The Directors consider it appropriate to adopt the going concern
basis of accounting in preparing these Interim Financial
Statements. The Directors do not know of any material uncertainties
to the Company's ability to continue to adopt this approach over a
period of at least 12 months from the date of approval of these
Financial Statements.
The Directors will include a Long-Term Viability Statement in
each Annual Report.
RELATED PARTY TRANSACTIONS
During the period, Hansa Capital Partners LLP charged portfolio
management fees and company secretarial fees to the Company,
amounting to GBP1,291,000 excluding VAT (six months to 30 September
2019: GBP1,289,000; year to 31 March 2020: GBP2,579,000). Amounts
outstanding at 30 September 2020 were GBP219,000 (30 September
2019: GBP237,000; 31 March 2020: GBP392,000).
THE BOARD'S RESPONSIBILITIES
The Board is charged by the shareholders with responsibility for
oversight of the affairs of the Company. It involves the
stewardship of the Company's assets and liabilities and the pursuit
of growth of shareholder value. These responsibilities remain
unchanged from those detailed in the last Annual Report.
The Directors confirm to the best of their knowledge that:
The statutory condensed set of Financial Statements contained
within the Interim Financial Report further down has been prepared
in accordance with International Accounting Standard 34 'Interim
Financial Reporting' and on a going concern basis.
This Interim Management Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FCA's Disclosure
and Transparency Rules.
The above Interim Management Report, including the
Responsibility Statement, was approved by the Board on 26 November
2020 and was signed on its behalf by:
Jonathan Davie
Chairman
26 November 2020
Don't look down, but Stock Markets might be walking a
tightrope
Market backdrop
Whilst a little unnerving at times, we have remained steadfastly
pro-equities throughout 2020. The year started well enough but then
the Covid-19 induced sell-off in March caused us to pause and
question whether or not we had misjudged the situation and, with
it, missed calling the next protracted bear market. Ultimately we
concluded that the combination of governments and central banks
adopting a shock and awe approach to policy making, together with
the longer-term attraction of risk assets generally, suggested it
wasn't right to pivot.
Happily, this proved to be the correct decision albeit, if we're
honest, the strength of the subsequent recovery has surprised us
both in terms of its size and speed. Global equities, for example,
bounced by 23.8% over the six months to the end of September and by
3.7% in the third quarter. Driving much of this performance was the
US stock market and the technology sector in particular, which rose
by 27.6% and 40.7% respectively over the six month period. China,
reflecting the fact that it was both first into the crisis and has
high exposure to technology, was also robust and rose by 24.5% over
the period in question.
Even the market laggards generated positive performance over the
past six months. At the regional level, despite still being down
over the year-to-date, Europe, the emerging markets ex-Asia and the
UK were all up for the six month period, rising 19.6%, 15.0% and
3.3% respectively. Similarly, financials rose by 9.0% over the last
six months and is now down by 20.3% year-to-date, while energy fell
another 1.3% to leave it down 40.8% year-to-date.
Other asset classes were also positive, with exceptionally
strong returns from oil, with WTI up by almost 90% for the six
month period and gold up another 14.1%. Hedge funds were typically
more muted albeit again positive for the period.
Stock markets are increasingly walking a tightrope
Whilst encouraged by the strength of stock market performance in
recent months, it does feel the path markets are walking is rapidly
becoming a tightrope. With the coming months likely to see rising
event risk, combined with increasing signs of market excess, we
continue to consider whether or not markets can sustain their
current trajectory, or are in danger of falling off it.
Starting with excesses, and even if we ignore the fact that
markets have risen incredibly strongly since the March lows, a
number of red flags have started to appear over recent months:
Flag 1.......increasing stock market concentration
A classic feature of stock market tops is one where a handful of
companies and sectors drive performance. With one of the
consequences of Covid-19 being the acceleration of many of the
trends in the technology sector, increasingly we are seeing
adoption rates that we had expected to occur over years compressed
into months if not weeks. Online shopping, the transition to the
cloud and online banking, to name a few, have all been forced upon
us whether we liked it or not. As a result of this and the
subsequent outperformance of the technology sector, stock markets
have been driven by a handful of large cap technology names, with
many old economy companies still very much in bear market
territory. Hence whilst the global market is up for the year, in
reality this has been driven by the US, which in turn has largely
been driven by the 10 mega-cap growth stocks. In fact if we strip
out these 10 stocks we find that the US stock market performance is
remarkably close to that of the European Index.
Flag 2.......the growing use of financial engineering
Another warning flag is the growth in financial engineering and
a willingness to take on higher risk, most recently in the growing
use of SPACs. Special Purpose Acquisition Companies are companies
formed with no commercial operations, but instead seek to raise
capital to buy another company and are often called 'blank cheque
companies'. The last 18 months have seen record numbers of SPACs
being created, with well-known names such as Bill Ackman of
Pershing Square fame jumping on the bandwagon with his creation of
a $4 billion SPAC which is the largest ever. Whilst the current
SPACs are undoubtedly of a higher quality than some of the SPACs
listed in the past, they are still a sign that people are prepared
to hand over cash for doing deals as yet unannounced. Maybe it
really is different this time but one cannot help but note that in
the past a rise in the number of SPACs was often associated with
fraud and the end of bull markets.
Flag 3.......records being set
Often when markets enter their more mature phase records start
to be set. One such record has been the level of outperformance of
growth versus value. On a rolling 12-month basis to the end of
September the Russell 1000 Growth Index has outperformed the
Russell 1000 Value Index by some 43.6%. To put this into context
this level of outperformance has never happened before and it is
even larger than the outperformance that occurred at the height of
the internet bubble in the late 1990s, which was followed by seven
years of the Value Index outperforming the Growth Index.
Combining these excesses with a period of more challenging news
flow makes markets particularly vulnerable to any disappointment.
Most obviously on this front is the US presidential election. From
a stock market perspective, whilst Trump is undoubtedly a marmite
character, he was positive for the US stock market. He judged his
own success through the level of the S&P 500, introduced market
friendly tax cuts and harangued Jerome Powell, Chairman of the US
Federal Reserve, into lowering interest rates. Initially the
prospect of a Democratic government was met with caution by
markets. Whilst Biden himself is seen as a known entity, a
relatively moderate Democrat and not someone to be feared by stock
markets, his running mate, Kamala Harris, is seen as leaning more
to the left in terms of her views and policies. The fear is that if
the more radical left leaning side of the party exerts greater
power under a Biden led government then we could see some more
extreme policy measures enacted. With Bernie Sanders and Elizabeth
Warren both calling for greater taxation, healthcare reform and the
break-up of the large cap technology companies, such a shift in US
politics could weigh heavily on stock markets globally.
More recently, however, market sentiment has shifted from
focusing on some of the longer-term potential negatives of a
Democratic led government to the more immediate prospect of greater
stability under Biden and potentially more fiscal spending under a
Democratled government. With monetary policy increasingly exhausted
in terms of its effectiveness in supporting economies, the
consensus has shifted from a post -- Global Financial Crisis belief
that countries should aspire to balance their budgets, to one of
viewing greater fiscal spending as key to restoring global
economies to health post the impact of Covid-19 and the resultant
lockdowns. Typically this is positive for economic growth,
companies and stock markets, at least in the early days of its
implementation.
Biden will become the next President of the United States. As to
who gets control of the Senate, current polls, for what they are
worth, suggest that the Republicans are set to retain control
albeit the Democrats may still achieve a clean sweep if they win
the run-off elections in January. Even if the Republicans do retain
control of the Senate under a Democratic president we are not
overly cautious on this point. Generally in the early years of a
new presidency, it is incumbent upon the Senate to respect the
nation's decision and not to undermine the power of the President
purely for the sake of partisan gain. This would especially be the
case in a post -- Covid-19 world with the US population unlikely to
look favourably upon a party which prevents fiscal spending
designed to save jobs and underpin the economy. Arguably stock
markets may actually view the split as being positive with some of
the more extreme Democratic policies unlikely to be enacted under a
split system.
The other key event risk is that of a second wave in Covid-19
cases as we enter the colder winter months in the Northern
hemisphere and as economies reopen, with governments attempting to
return countries back to some form of normality. Arguably this
should come as little surprise to markets. Even a cursory look at
prior epidemics and pandemics, such as SARS, shows that rolling
waves in reinfection are entirely normal and to be expected as
human contact picks up post-lockdown. Nonetheless one can't help
but feel a little cautious if the flare up in infection rates leads
to a return of more widespread and protracted lockdowns and the
consequential scarring to economies and affected sectors,
especially in light of just how strong markets have rebounded
post-March.
Our view is that whilst a meaningful return to lockdowns would
undoubtedly weigh on markets in the near-term, we see a number of
mitigating factors that suggest limited action by long-term
investors, such as ourselves, may be the best strategy. The first
point is that whilst infection rates have picked up sharply, the
number of people being hospitalised has fallen significantly from
the first wave. Moreover the mortality rates are also down
dramatically. Whilst still very much in the learning phase as to
what we know about the virus and its treatment, there are a whole
host of reasons underlying these improvements. Doctors have a much
better understanding of treatments to both prevent hospitalisation,
but also to significantly reduce death rates for those
hospitalised. Infection rates have also risen much more sharply in
younger people this time round where the potential impacts of the
disease are considerably more muted. There is also an active debate
as to whether the virulence of the disease is lessening over time
and the potential for community immunity as more people are exposed
to the disease.
Perhaps the main game changer however is the recent positive
news flow on several of the potential vaccine candidates. The
interim results of clinical trials were better than anyone had
hoped with several vaccines appearing to be over 90% effective.
Whilst still very much work in progress, the initial signs are
extremely positive and bode well for the other vaccine candidates.
Irrespective of the timing of availability, or how long it would
take to vaccinate a sufficient proportion of the population to make
them effective, we think the main point is that a working
vaccine(s) will become available. Stock markets are forward looking
discounting machines and the mere prospect of a solution is likely
to be enough to enable them to look through the shorter-term
challenges as to how and over what time frame a vaccine is brought
to market.
From an economic perspective there are also a number of
potential negative events that could weigh on stock markets. As
alluded to above, the consensus has increasingly shifted from the
view that governments should aspire to be fiscally prudent, to one
of seeing public spending as preferable to austerity. Even the IMF,
which was a staunch advocate of balanced budgets post the Global
Financial Crisis, is now arguing that countries should spend their
way out of the current malaise. Such policy measures do however
come at a cost. Global public debt is expected to hit a record high
of almost 100% of the world's GDP in 2020 and classically large
scale fiscal policy is typically inflationary.
Clearly if both debt levels and inflation start to spiral out of
control this would be a major issue for global stock markets. There
is however a scenario that could actually see the current backdrop
as providing something of a goldilocks scenario for equity markets.
Given the desire by central banks to maintain zero or even negative
interest rates, the cost of funding these deficits is negligible
(rather perversely in Japan, where two thirds of debt is on
negative yields, a big debt burden is actually good for the
government finances!). Hence governments can sustain high levels of
debt and at the same time increase spending - albeit ensuring they
maintain the confidence of financial markets is key if they are to
continue accessing funding and if currencies are not to go into
freefall.
Equally it would seem entirely logical that governments would
pursue a more inflationary backdrop. When debt levels are at such
high levels, inflating your way out of the problem seems eminently
sensible. The US Federal Reserve's shift to targeting average
inflation rates throughout cycles, rather than at one set point,
seems to reinforce this view. At this stage we're wary of calling a
shift from a multi-year deflationary trend, driven by the
deflationary triangle of technology, globalisation and the
diminishing power of the labour force, but there is certainly a
scenario whereby we could see more inflation entering the system
and potentially a more normal interest rate cycle on the back of
it. This blend of higher spending and modest inflation is typically
very attractive for equities and certainly much better than for
bonds at current yields.
Such a scenario as described above also has the potential to
change some of the key themes seen in markets in recent times.
Better economic growth typically sees emerging markets outperform
developed markets due to their higher beta (especially if the US
Dollar continues to weaken), cyclicals and real assets may start to
perform and, perhaps most importantly, value may start to
outperform growth. We note these for now but will develop our
thoughts in greater detail in future Hansa House Views.
Conclusion
Clearly the coming months will be testing for global markets. As
discussed above, the blend of potential event risk with more mature
markets beginning to show some of the characteristics of a
market-top undoubtedly makes them more vulnerable to any
missteps.
Despite this, for long-term investors such as ourselves we are
not minded to attempt to time the markets and we favour sticking to
our central view of favouring equities over defensive assets such
as government bonds. For all the reasons we have articulated
before, such as there being few real alternatives to equities, an
abundance of liquidity and an expectation that economies continue
to rebound as we emerge from the Covid-19 induced lockdowns, we see
little reason for changing our current stance. That is not to say
we are dismissive of the risks faced by markets from potential bad
news in the coming months. Clearly when stock markets are mature,
valuations are high and one starts to see signs of excess, they are
undoubtedly vulnerable to any disappointment on the news flow
front. Nonetheless, on balance, we see the longer-term upside as
reason to maintain a more pro-risk position. As discussed above
there are a set of circumstances that could see this outlook
improve even further, through a combination of higher growth on the
back of higher fiscal expenditure together with modest
inflation.
Portfolio Review and Activity
Your Company has returned 14.2% over the financial year to date
and -4.7% over the past 12 months on a NAV total return basis. The
key performance indicators for the period were 23.8% for the MSCI
ACWI NR Index (GBP), 1.2%% for the FTSE UK Gilts All Stocks TR
Index, and 0.5% for UK CPI. Over the last 12 months these KPIs were
5.1%, 3.4%, and 0.6%, respectively. The Company's NAV per share
increased from 230.2 pence per share at the end of March 2020 to
261.4 pence at the end of September 2020. The Core and Thematic
funds continued to perform well this half, while Ocean Wilsons
Holdings and Global Equities struggled with the challenging
underlying environment in Brazil impacting Wilson Sons. Markets
continued to recover from their Covid-19 induced declines with the
US and Emerging Markets performing better than European and Latin
American markets.
In line with our House View we continue to maintain an equity
bias, with a relatively modest exposure to defensive assets which
account for just over 10% of the total assets. Undoubtedly the
exposure to Brazil has weighed heavily on the Fund in recent years,
but with Wilson Sons now accounting for under 10% of NAV we view
this as unwarranted in light of the quality of the assets held
within the other silos. As noted before the current discount, at
35.5% and 45.8% if we include the discount at Oceans Wilson
Holdings looks distinctly unjustified and Wilson Sons is arguably
'in for free'! Ultimately whilst Brazil is highly cyclical we would
see the holding in Wilson Sons as providing additional leverage to
the Fund as the country exits a multi-year recession and the
challenges of Covid-19 start to recede into the background.
Core and Thematic Funds
The Core Regional and Thematic silos both enjoyed comparatively
strong halves, returning 24.8% and 36.4% respectively. Over the
past 12 months the Core Regional silo was up 9.2% and the Thematic
silo was up 29.6%.
In the Core Regional silo, the Fund's US and Japanese holdings
were the largest contributors to the return over the half. Pershing
Square Holdings was a top contributor, returning 44.6% during the
period. Our positions in Lowe's and Chipotle Mexican Grill also
contributed positively as the lockdown ended in the US and
consumers started spending. Lowe's, in particular, has been a
direct beneficiary from the growth in home improvement activity.
Chipotle benefitted from an increase in take-out eating during the
Covid-19 crisis and with lockdowns easing has seen strong
performance as more customers return to eating in. Other strong
performers in the US were Findlay Park American, Select Equity and
Vulcan Value Equity which were up 21.7%, 22.7% and 27.8%,
respectively, over the half.
Of the Japanese funds in the Core Regional silo, Indus Japan
Long Only enjoyed a strong half returning 27.9%. This was mainly
driven by strong performance in August as investor confidence
increased on the hope that progress was being made towards a
Covid-19 vaccine. LIXIL, a producer of sanitary ware and home
building materials, surged on the back of the sale of two non-core
divisions and the streamlining of its product lines as a
restructuring plan started to take effect. Retailer Ryohin Keikaku
also performed well as it accelerated its restructuring and started
selling more merchandise online. Goodhart Partners: Hanjo Fund was
slightly more subdued this half, up 14.2%.
Some of the emerging market holdings performed well over the
half. Schroder Asian Total Return and NTAsian Discovery Fund were
the main contributors in this sector, returning 33.6% and 28.7%,
respectively. For the Schroder fund, Taiwan Semiconductor was a
strong performer as it reported increased revenues in July and
August, while estimates of the potential size of the semiconductor
market continued to grow in advance of the launch of Apple's first
5G iPhone. Alibaba was also a positive contributor after reporting
record sales in June and the expectation that its cloud-computing
business would turn a profit in 2021. Performance for NTAsian was
driven by BFI Finance and Mobile World. BFI resumed loan
disbursements in July as the lockdown eased in Indonesia, while
Mobile reported solid revenue growth in July and August as its
grocery chain scaled up. Prince Street DigDec Fund also had a
strong half, returning 55.5%.
RA Capital Healthcare was one of the top contributors in the
Thematic bucket, returning 34.7% over the half. A position in
Zogenix performed well after their fenfluramine drug for treatment
of the most severe cases of epilepsy syndrome was approved by US
regulators. Axsome Therapeutics also positively contributed after
several trials produced positive indications in MDD, migraine and
Alzheimer's agitation for a combination therapy it has been
developing for some years. The other biotechnology holding, BB
Biotech, performed well, returning 28.9%. Other strong performers
in the Thematic bucket were GAM Star Disruptive Growth (up 40.2%)
and Impax Enviromental Markets (up 34.2%). Impax has benefitted
from stock markets broadly rising during the period with Generac, a
power systems manufacturer, performing particularly strongly off
the back of strong earnings growth and a new home power storage
product being launched. DSM, a provider of health, nutrition and
materials solutions, also performed well as its animal nutrition
business continued to produce strong earnings.
Diversifying Funds
The Diversifying silo ended the half with a return of 3.5%
taking the return over the last 12 months to -0.1%. The holdings in
this silo are designed to show lower correlation to the equity
market.
Apollo Total Return was one of the bigger contributors over the
half returning 8.5%. The fund benefitted from broad gains in both
Emerging Markets and US High Yield credit early in the period.
Lower rated credits continued to outperform their higher rated
counterparts throughout the half. The fund continues to be more
defensively positioned than the broader market given the concerns
over the response of markets to Covid-19. The CTA funds both
struggled this half with GAM Systematic Core Macro down 1.8% and
Schroder GAIA BlueTrend down 8.3%. The GAM fund generally performs
more strongly when markets are more stable, which is what was seen
during this half explaining its slightly better performance.
BlueTrend performs more strongly when markets are choppy and fast
changing.
Global Event Partners recovered after a difficult period at the
end of the previous financial year, gaining 19.3% this half. Hard
and soft catalyst positions have contributed positively as the US
market strongly rebounded from the collapse seen in March. A soft
catalyst investment in Elanco Animal Health was a large
contributor, following the completion of a merger with Bayer Animal
Health which led to enhanced earnings power. An investment in
Howmet also gained. BioPharma Credit and Hudson Bay both performed
well this half, up 13.4% and 6.4% respectively.
Ocean Wilsons Holdings
Brazil has been hard hit by Covid-19 since the start of this
financial year, leading to a dramatic slowdown in economic
activity. For the half, the MSCI Brazil was up 14.1% (in GBP terms)
with a notable pick up in the financial markets towards the end of
the period. The Brazilian Real has continued to devalue which was a
drag on the performance of the stock market when looking at it in
Sterling terms.
The performance of Wilson Sons this half has been resilient.
During the period the results for the first half of 2020 were
released, which showed that revenues were down 13% to $174.2
million compared to the same period in 2019 ($199.2 million),
principally due to the currency devaluation, a decline in logistics
revenues and lower offshore support base revenues. In BRL terms
revenues actually rose 11%. That said, operating profit was $4.2
million higher than the comparative period in 2019 at $39.3
million, principally due to improved operating margins in the
period. Wilson Sons continues to perform well in challenging
conditions.
Port terminals and logistics revenue is predominantly
denominated in BRL and so was hardest hit by the devaluation of the
BRL against the USD, declining 26%. Container terminal revenue was
16% lower at $67.4 million (2019: $80.6 million) mainly due to the
higher average USD/BRL exchange rate. Container volumes handled at
the Rio Grande container and Salvador container terminals for the
period were marginally lower than the comparative period. Lower
international trade and cabotage volumes were partially offset by
higher trans -- shipment and inland navigation volumes. Cabotage
and import volumes decreased 11%, reflecting a slowdown in domestic
consumption and industrial activity in Brazil due to the Covid-19
pandemic. Logistics revenue declined 42% to $14.8 million (2019
$25.2 million) due to the end of a specific high-volume contract,
the impact of the Covid-19 outbreak on import volumes and the
weaker BRL. Brasco revenue decreased $7.0 million to $4.5 million
(2019: $11.5 million) against a backdrop of a weak oil and gas
sector.
Towage revenue, which is predominantly denominated in USD,
increased 11% to $82.3 million (2019: $74.1 million) reflecting an
improved sales mix and higher revenue from special operations.
Special operations revenue at $8.4 million, was $4.8 million higher
than the comparative period (2019: $3.6 million) principally due to
higher activity for LNG and an increase in salvage operations.
Wilson Sons has made extensive operational changes during the
Covid pandemic to protect staff and maintain continuity of business
operations. For example, mandatory pre-boarding Covid-19 testing of
towage and offshore support vessel crew and increases in the length
of crew shifts to significantly reduce contact risks, together with
numerous other precautions have all helped to minimise the risk of
Covid contamination in the workplace.
Following a turbulent year so far in global equity markets the
valuation of the investment portfolio and cash under management is
slightly down at $281.8 million at 30 September 2020, from the 31
December 2019 valuation of $285.3 million, although two dividends
of $2.5 million each were paid to Ocean Wilsons Holdings in May and
August 2020. The portfolio continues to be biased towards equities,
both public and private, reflecting its long-term nature, but also
includes some assets which display lower correlation to equity
markets.
The Ocean Wilsons Holdings share price fell 2.6% during the
half, which takes account of the 24.3 pence dividend paid to the
Company in June 2020. Over the last 12 months the share price has
fallen by 30.7%, or by 28.2% on a total return basis, also taking
account of the June 2020 dividend. The share price represents a
discount to the look-through NAV of 49%, based on the market value
of the Wilson Sons shares, together with the latest valuation of
the investment portfolio.
Alec Letchfield
November 2020
Portfolio Statement
as at 30 September 2020
Investments Fair value Percentage of
GBP000 Net Assets
Core Regional Funds
Findlay Park American Fund 22,882 7.3
Vulcan Value Equity Fund 16,243 5.2
Select Equity Offshore Ltd 14,898 4.8
BlackRock European Hedge 13,100 4.2
Goodhart Partners: Hanjo Fund 12,346 3.9
Adelphi European Select Equity Fund 12,260 3.9
Schroder ISF Asian Total Return 8,862 2.8
Pershing Square Holdings Ltd 6,958 2.2
Indus Japan Long-Only Fund 6,457 2.1
Egerton Long-Short Fund Ltd 6,346 2.0
Prince Street Institutional Offshore Ltd 5,633 1.8
BlackRock Frontiers Investment Trust PLC 2,503 0.8
NTAsian Discovery Fund 2,466 0.8
SR Global Fund Inc. Frontiers Markets 2,358 0.8
Vanguard FTSE Developed Europe ex UK Equity
Index Fund 1,936 0.6
Total Core Regional Funds 135,248 43.2
Strategic
Ocean Wilsons Holdings Investments Limited
(through the holding
in Ocean Wilsons Holdings)* 29,667 9.5
Wilson Sons (through our holding in Ocean Wilsons
Holdings)* 27,385 8.7
Total Strategic 57,052 18.2
Global Equities
Interactive Brokers Group Inc 4,770 1.5
Exor NV 3,858 1.2
Nexon Co. Ltd 3,444 1.1
Samsung Electronics Co Ltd 3,340 1.1
Iridium Communications Inc 3,323 1.1
Dollar General 2,553 0.8
CK Hutchison 2,484 0.8
Berkshire Hathaway Inc 2,338 0.7
Hilton Food Group PLC 2,079 0.7
Alphabet Inc 2,039 0.7
Orion Engineered Carbons SA 1,916 0.6
Grupo Catalana Occidente SA 1,853 0.6
CVS Health Corp 1,829 0.6
Arch Capital Group Ltd 1,696 0.5
TripAdvisor Inc 1,295 0.4
Subsea 7 1,192 0.4
C&C Group PLC 1,057 0.3
Coats Group PLC 978 0.3
Total Global Equities 42,044 13.4
Diversifying
Global Event Partners Ltd 9,018 2.9
DV4 Ltd** 8,417 2.7
Hudson Bay International Fund Ltd 4,101 1.3
Vanguard US Govt Bond Index Fund 3,004 1.0
MKP Opportunity Offshore Ltd 2,953 0.9
Selwood AM Liquid Credit Strategy 2,544 0.8
Keynes Systematic Absolute Return Fund 2,277 0.7
Apollo Total Return Fund 2,272 0.7
BioPharma Credit PLC 1,421 0.5
CZ Capital Absolute Alpha UCITS Fund 1,231 0.4
GAM Systematic Core Macro (Cayman) Fund 1,003 0.3
Schroder GAIA Blue Trend 773 0.3
DV3 Ltd** 30 0.0
Total Diversifying 39,044 12.5
Thematic
GAM Star Fund PLC - Disruptive Growth 21,308 6.8
Impax Environmental Markets Fund 3,768 1.2
BB Biotech AG 3,571 1.1
RA Capital International Healthcare Fund 3,259 1.0
Worldwide Healthcare Trust PLC 2,258 0.7
Total Thematic 34,164 10.8
Total Investments 307,552 98.1
Net Current Assets 2,905 0.9
Non-Current Assets 3,179 1.0
Net Assets 313,636 100.0
*Hansa Investment Company Ltd owns 9,352,770 shares in Ocean
Wilsons Holdings Limited ("OWHL"). The two subsidiaries of OWHL,
Wilson Sons and Ocean Wilsons (Investments) Ltd ("OWIL"), are shown
separately above. The fair value of the Company's holding in OWHL
has been apportioned across the two subsidiaries in the ratio of
the latest reported NAV of OWIL, that being the NAV of OWIL shown
per the 30 June 2020 OWHL quarterly update, to the market value of
OWHL's holding in Wilson Sons, that being the bid share price of
Wilson Sons multiplied by the number of shares held by OWHL at 30
September 2020.
**DV3 Ltd and DV4 Ltd are unlisted Private Equity holdings. As
such, its value is estimated as described in Note 1(k) to the
Statutory Financial Statements and they are listed as a Level 3
Asset in note 21 of the Statutory Financial Statements and Note 10
of the Pro-forma Financial Statements 31 March 2020. All other
valuations are either derived from information supplied by listed
sources, or from pricing information supplied by third party fund
managers.
Condensed Income Statement
For the six months ended 30 September 2020
(Unaudited) (Unaudited) (Audited)
21 June 2019 21 June 2019
Six months ended to to
30 September 30 September
2020 2019 31 March 2020
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Gains/(losses) on investments
held at
fair value through profit
or loss - 38,310 38,310 - 2,989 2,989 - (50,965) (50,965)
Foreign exchange losses - (47) (47) - - - - (104) (104)
Investment income 2,817 - 2,817 149 - 149 1,159 - 1,159
2,817 38,263 41,080 149 2,989 3,138 1,159 (51,069) (49,910)
Portfolio management fees (1,231) - (1,231) (227) - (227) (1,441) - (1,441)
Other expenses (592) - (592) (750) - (750) (1,488) - (1,488)
(1,823) - (1,823) (977) - (977) (2,929) - (2,929)
Profit/(loss) before finance
costs 994 38,263 39,257 (828) 2,989 2,161 (1,770) (51,069) (52,839)
Finance costs - - - (1) - (1) (1) - (1)
Profit/(loss) for the period 994 38,263 39,257 (829) 2,989 2,160 (1,771) (51,069) (52,840)
Return per Ordinary and 'A'
non -- voting Ordinary share 0.8p 31.9p 32.7p (0.7)p 2.5p 1.8p (1.5)p (42.6)p (44.1)p
The Company does not have any income or expense not included in
the Profit for the period. Accordingly the "Profit for the period"
is also the "Total Comprehensive Income for the period", as defined
in IAS 1 (revised) and no separate Statement of Comprehensive
Income has been presented.
The total column of this Statement represents the Income
Statement, prepared in accordance with IAS 34. The supplementary
revenue and capital return columns are both prepared under guidance
published by the Association of Investment Companies.
All revenue and capital items in the above Statement derive from
continuing operations.
Condensed Balance Sheet
as at 30 September 2020
(Unaudited) (Unaudited) (Audited)
30 September 30 September 31 March
2020 2019 2020
GBP000 GBP000 GBP000
Non -- current assets
Investments in subsidiary at fair value through
profit or loss^ 3,179 138,179 3,179
Investments held at fair value through profit
or loss 307,552 333,139 273,264
310,731 471,318 276,443
Current assets
Trade and other receivables 102 116 2,503
Cash and cash equivalents 6,380 1,330 1,066
6,482 1,446 3,569
Current liabilities
Trade and other payables (3,577) (138,585) (3,713)
Net current assets/(liabilities) 2,905 (137,139) (144)
Net assets 313,636 334,179 276,299
Capital and reserves
Called up share capital 1,200 1,200 1,200
Contributed surplus 326,979 330,819 327,939
Retained earnings (14,543) 2,160 (52,840)
Total equity shareholders' funds 313,636 334,179 276,299
Net asset value per Ordinary and 'A' non --
voting Ordinary share 261.4p 278.5p 230.2p
^This represents Hansa Investment Company Ltd's investment in
Hansa Trust and its associated intercompany loan at fair value.
Condensed Statement of Changes in Equity
For the six months ended 30 September 2020
(Unaudited)
Contributed
Share Surplus Retained
capital reserve earnings Total
GBP000 GBP000 GBP000 GBP000
Net assets at 1 April 2020 1,200 327,939 (52,840) 276,299
Profit for the period - - 39,257 39,257
Dividends - (960) (960) (1,920)
Net assets at 30 September 2020 1,200 326,979 (14,543) 313,636
Condensed Statement of Changes in Equity
For the period 21 June 2019 to 30 September 2019
(Unaudited)
Contributed
Share Surplus Retained
capital reserve earnings Total
GBP000 GBP000 GBP000 GBP000
Net assets at 21 June 2019 - - - -
Issue of share capital 29 August 2019 1,200 - - 1,200
Transfer of assets from Hansa Trust - 330,819 - 330,819
Profit for the period - - 2,160 2,160
Net assets at 30 September 2019 1,200 330,819 2,160 334,179
Condensed Statement of Changes in Equity
For the period 21 June 2019 to 31 March 2020
(Audited)
Contributed
Share Surplus Retained
capital reserve earnings Total
GBP000 GBP000 GBP000 GBP000
Net assets at 21 June 2019 - - - -
Issue of share capital 29 August 2019 1,200 - - 1,200
Transfer of assets from Hansa Trust - 330,819 - 330,819
Loss for the period - - (52,840) (52,840)
Dividends - (2,880) - (2,880)
Net assets at 30 September 2019 1,200 327,939 (52,840) 276,299
Condensed Cash Flow Statement
For the six months ended 30 September 2020
(Unaudited) (Audited)
(Unaudited) Period Period
Six months 21 June 21 June
ended 2019 to 2019 to
30 September 30 September 31 March
2020 2019 2020
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit/(loss) before finance costs 39,257 2,161 (52,839)
Adjustments for:
Realised losses/(gains) on investments 4,028 - (644)
Unrealised (gains)/losses on investments (42,338) (2,989) 51,609
Foreign exchange 47 - 104
Decrease/(Increase) in trade and other receivables 2,401 (116) (2,503)
(Decrease)/Increase in trade and other payables (136) 363 534
Purchase of non-current investments (8,412) - (17,059)
Sale of non-current investments 12,434 - 22,980
Net cash inflow/(outflow) from operating activities 7,281 (581) 2,182
Cash flows from financing activities
Interest paid on bank loans - (1) (1)
Drawdown of loan - 43 -
Inter-Company Loan with Hansa Trust - 1,869 1,869
Dividends paid (1,920) - (2,880)
Net cash (outflow)/inflow from financing activities (1,920) 1,911 (1,012)
Increase in cash and cash equivalents 5,361 1,330 1,170
Cash and cash equivalents at start of year/period 1,066 - -
Foreign exchange (47) - (104)
Cash and cash equivalents at end of period 6,380 1,330 1,066
Notes to the Condensed Financial Statements
1 ACCOUNTING POLICIES
(a) Basis of preparation
The Financial Statements of the Company have been prepared in
accordance with International Financial Reporting Standards
("IFRS"). These comprise standards and interpretations approved by
the International Accounting Standards Board ("IASB"), together
with interpretations of the International Accounting Standards and
Standing Interpretations Committee approved by the International
Accounting Standards Committee ("IASC") that remain in effect, to
the extent that IFRS have been adopted by the European Union.
These Financial Statements are presented in Sterling because
that is the currency of the primary economic environment in which
the Company operates.
The Financial Statements have been prepared on an historical
cost and going concern basis, and also in line with the Board's
analysis of the impact of Covid-19 on the Company except for the
valuation of investments. The Financial Statements have also been
prepared in accordance with the AIC Statement of Recommended
Practice ("SORP") for investment trusts, issued by the AIC in
October 2019 to the extent that the SORP does not conflict with
IFRS. The principal accounting policies adopted are set out
below.
(b) Basis of non-consolidation
IFRS 10 stipulates that subsidiaries and associates of
Investment Entities are not consolidated but, rather, stated at
fair value unless the conditions for certain exemptions from this
treatment are met. Hansa Investment Company Ltd meets all three
characteristics of an Investment Entity as described by IFRS 10.
The Company has one, 100% owned, subsidiary Hansa Trust PLC. The
Company became the 100% owner of Hansa Trust's shares as part of
the Scheme of Arrangement on 29 August 2019. It is the Intention
for Hansa Trust PLC to be dissolved now that the legal title of the
portfolio Investments have been transferred to the Company.
(c) Presentation of Income Statement
In order to better reflect the activities of an investment
company and in accordance with guidance issued by the AIC,
supplementary information which analyses the Income Statement
between items of a revenue and capital nature, has been presented
alongside the Income Statement.
(d) Non-current investments
As the Company's business is investing in financial assets, with
a view to profiting from their total return in the form of income
received and increases in fair value, investments are classified at
fair value through profit or loss on initial recognition in
accordance with IFRS 9. The Company manages and evaluates the
performance of these investments on a fair value basis, in
accordance with its investment strategy and information about the
investments is provided on this basis to the Board of
Directors.
Investments are recognised and de-recognised on the trade date.
For listed investments fair value is deemed to be bid market
prices, or closing prices for SETS stocks sourced from the London
Stock Exchange. SETS is the London Stock Exchange's electronic
trading service, covering most of the market including all FTSE 100
constituents and most liquid FTSE 250 constituents, along with some
other securities.
Fund investments are stated at fair value through profit or loss
as determined by using the most recent available valuation. In some
cases, this will be by reference to the most recent valuation
statement supplied by the fund's manager. In other cases, values
may be available through the fund being listed on an exchange or
via pricing sources such as Bloomberg.
Private equity Investments are stated at fair value through
profit or loss as determined by using various valuation techniques,
In accordance with the International Private Equity and Venture
Capital Valuation Guidelines. In the absence of a valuation at the
balance sheet date, additional procedures to determine the
reasonableness of the fair value estimate for Inclusion In the
financial statements may be used. These could Include direct
enquiries of the manager of the Investment to understand, amongst
others, the valuation process and techniques used, external experts
used in the valuation process and updated details of underlying
portfolio. In addition, the Company can obtain external Independent
valuation data and compare this to historic valuation movements of
the asset. Further, recent arms-length market transactions between
knowledgeable and willing parties where available might also be
considered. The investment in the Company's subsidiary undertaking
Is stated at fair value.
Unrealised gains and losses, arising from changes in fair value,
are included in net profit or loss for the period as a capital item
in the Income Statement and are ultimately recognised in the
Capital Reserves.
(e) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, short-term
deposits and cash funds with an original maturity of three months
or less and are subject to an insignificant risk of changes in
capital value.
(f) Investment Income and return of capital
Dividends receivable on equity shares are recognised on the
ex-dividend date. Where no ex-dividend date is quoted, dividends
are recognised when the Company's right to receive payment is
established. Dividends and Real Estate Investment Trusts' ("REIT")
income are all stated net of withholding tax. In many cases,
Bermudan companies cannot recover foreign incurred taxes withheld
on dividends and capital transactions. As a result, any such taxes
incurred will be charged as an expense and included here.
When an investee company returns capital to the Company, the
amount received is treated as a reduction in the book cost of that
investment and is classified as sale proceeds.
(g) Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged through the revenue column of the Income Statement
except as follows:
(i) expenses which are incidental to the acquisition or disposal
of an investment are included in gains on investments held at fair
value through profit or loss in the Income Statement.
(h) Taxation
Under current Bermuda law, the Company is not required to pay
taxes in Bermuda on either income or capital gains. The Company has
received an undertaking from the Bermuda government exempting it
from all local income, withholding and capital gains taxes being
imposed and will be exempted from such taxes until 31 March
2035.
(i) Foreign Currencies
Transactions denominated in foreign currencies are recorded in
the local currency, at the actual exchange rates as at the date of
the transaction. Assets and liabilities denominated in foreign
currencies at the balance sheet date are reported at the rate of
exchange prevailing at the balance sheet date. Any gain or loss
arising from a change in exchange rates, subsequent to the date of
the transaction, is included as an exchange gain or loss in the
capital or revenue column of the Income Statement, depending on
whether the gain or loss is of a capital or revenue nature
respectively.
(j) Reserves
Contributed surplus
The following are credited or charged to this reserve via the
capital column of the Income Statement:
gains and losses on the disposal of investments;
exchange differences of a capital nature;
expenses charged to the capital column of the Income Statement
in accordance with the above accounting policies; and
increases and decreases in the valuation of investments held at
the balance sheet date.
Retained Earnings
The following are credited or charged to this reserve via the
revenue column of the Income Statement:
-- net revenue recognised in the revenue column of the Income Statement.
(k) Significant Judgements and Estimates
The key significant estimate to report, concerns the Company's
valuation of its holding in DV4 Ltd. DV4 is valued using the most
recent estimated NAV as advised to the Company by DV4, adjusted for
any further drawdowns, distributions or redemptions between the
valuation date and 30 September 2020. The most recent valuation
statement was received on 25 August 2020 stating the value of the
Company's holding as at 30 June 2020. The Company has considered
the ongoing impact of Covid-19, the associated financial impact on
certain industries and its potential impact on asset values. In the
absence of a valuation for 30 September 2020 from DV4, the Company
performed additional procedures to determine the reasonableness of
the fair value estimate for inclusion in the Financial Statements.
Direct enquiries of the manager of DV4 were made in July 2020 to
understand, amongst others, valuation process and techniques used,
external experts used in the valuation process and updated details
of underlying property portfolio. In addition, the Company has
obtained external independent valuation data and compared the
historic valuation movements of DV4 to that data. Based on the
information obtained and additional analysis performed the Company
is satisfied that DV4 is carried in these Financial Statements at
an amount that represents its best estimate of fair value at 30
September 2020. It is believed the value of DV4 as at 30 September
2020 will not be materially different, but this valuation is based
on historic valuations by DV4, does not have a readily available
third party comparator and, as such, is an estimate. There are no
significant judgements.
(l) Intercompany loan
The Intercompany loan Is recognised at cost, being the fair
value of the consideration receivable. The amounts falling due for
repayment within one year are Included under current liabilities In
the Balance Sheet.
2 INCOME
(Unaudited) (Unaudited) (Audited)
21 June
Six months 21 June 2019 to
ended to 31 March
30 September 30 September
2020 2019 2020
GBP000 GBP000 GBP000
Income from quoted investments
Dividends 2,817 149 1,158
Other income
Interest receivable on AAA rated money market
funds - - 1
Total income 2,817 149 1,159
3 DIVIDS PAID
(Unaudited) (Unaudited) (Audited)
21 June
Six months 21 June 2019 to
ended to 31 March
30 September 30 September
2020 2019 2020
GBP000 GBP000 GBP000
Third interim dividend for 2020 (paid 28 February
2020): 0.8p - - 960
Fourth interim dividend for 2020 (paid 29 May
2020): 0.8p 960 - -
First interim dividend for 2021 (paid 28 August
2020): 0.8p
(2020: First and Second interim dividends: 1.6p) 960 - 1,920
1,920 - 2,880
Note: The second interim dividend payable for the period ended
31 March 2021 was announced on 13 October 2020. The payment
totalling 0.8p per share (GBP0.96 million) was paid on 30 November
2020.
4 RETURN PER SHARES
The returns stated below are based on 120,000,000 shares, being
the weighted average number of shares in issue during the
period.
Revenue Capital Total
Pence Pence Pence
GBP000 per share GBP000 per share GBP000 per share
Six months ended 30 September
2020 (Unaudited) 994 0.8 38,263 31.9 39,257 32.7
Period 21 June to 30 September
2019 (Unaudited) (829) (0.7) 2,989 2.5 2,160 1.8
Period 21 June 2019 to 31 March
2020 (Audited) (1,771) (1.5) (51,069) (42.6) (52,840) (44.1)
5 FINANCIAL INFORMATION
The financial information for the six months ended 30 September
2020 was approved by a committee of the Board of Directors on 26
November 2020.
6 NET ASSET VALUE PER SHARE
The NAV per share is based on the net assets attributable to
equity shareholders of GBP313,636,000 (30 September 2019:
GBP334,179,000; 31 March 2020 GBP279,299,000) and on 120,000,000
shares, being the number of shares in issue at the period ends.
7 COMMITMENTS AND CONTINGENCIES
The Company has no outstanding commitments as at 30 September
2020 (30 September 2019: GBPnil; 31 March 2020: GBPnil.)
8 PRINCIPAL RISKS AND UNCERTAINTIES
The principal financial and related risks faced by the Company
fall into the following broad categories - External and Internal.
External risks to shareholders and to their returns are those that
can significantly influence the investment environment within which
the Company operates, including: government policies, taxation,
economic recession, declining corporate profitability, rising
inflation and interest rates and excessive stock market
speculation. Internal and operational risks to shareholders and to
their returns are: portfolio (stock and sector selection and
concentration), balance sheet (gearing), and/or administrative
mismanagement.
A review of the current period and the outlook for the Company
can be found in the Chairman's Report to the Shareholders and in
the Portfolio Manager's Review.
Information on each of these areas is given in the Strategic
Report within the Period End Report for the period ended 31 March
2020. In the view of the Board these principal risks and
uncertainties are applicable to the remaining six months of the
financial year as they were to the six months under review.
9 FAIR VALUE HIERARCHY
Fair Value Hierarchy
IFRS 13 'Fair Value Measurement' requires an entity to classify
fair value measurements, using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The
fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability not based on
observable market data (unobservable inputs).
The financial assets and liabilities measured at fair value in
the Statement of Financial Position are grouped into the fair value
hierarchy, as detailed below:
Level Level Level
1 2 3 Total
30 September 2020 (Unaudited) GBP000 GBP000 GBP000 GBP000
Financial assets at fair value through
profit or loss
Quoted equities 115,807 - - 115,807
Unquoted equities - - 8,447 8,447
Fund investments - 183,298 - 183,298
Investment in subsidiary - - 3,179 3,179
Fair value 115,807 183,298 11,626 310,731
Level Level Level
1 2 3 Total
30 September 2019 (Unaudited) GBP000 GBP000 GBP000 GBP000
Financial assets at fair value through
profit or loss
Quoted equities 157,652 - - 157,652
Unquoted equities - - 9,340 9,340
Fund investments 3,508 162,639 - 166,147
Investment in subsidiary - - 138,179 138,179
Fair value 161,160 162,639 147,519 471,318
Level Level Level
1 2 3 Total
31 March 2020 (Audited) GBP000 GBP000 GBP000 GBP000
Financial assets at fair value through
profit or loss
Quoted equities 116,310 - - 116,310
Unquoted equities - - 9,276 9,276
Fund investments - 147,678 - 147,678
Investment in subsidiary - - 3,179 3,179
Fair value 116,310 147,678 12,455 276,443
There have been no transfers during the period between
levels.
The Company's policy is to recognise transfers into and out of
the different fair value hierarchy levels at the date of the event
or change in circumstances that caused the transfer to occur.
A reconciliation of fair value measurements in Level 3 is set
out in the following table:
(Unaudited) (Unaudited) (Audited)
30 September 30 September 31 March
2020 2019 2020
Equity Equity Equity
investments investments investments
GBP000 GBP000 GBP000
Opening Balance 12,455 - -
Purchases (Capital Drawdown) - 9,340 9,276
Purchase of Hansa Trust PLC - 332,019 332,019
Distributions received from Hansa Trust PLC - (193,840) (328,840)
Total gains or losses included in gains on investments
in the Income Statement:
- on assets sold - - -
- on assets held at year end (829) - -
Closing Balance 11,626 147,519 12,455
As at 30 September 2020, the investments in DV3 and DV4 Ltd have
been classified as Level 3. The investments in DV3 and DV4 have
been valued using the most recent estimated NAV as advised to the
Company by DV3 and DV4, adjusted for any further drawdowns,
distributions or redemptions between the valuation date and 30
September 2020. The most recent valuation statement was received on
25 August 2020, with an estimated NAV based on the unaudited
capital statement of DV3 and DV4 as at 30 June 2020. If the value
of the unquoted Level 3 equity investments were to increase or
decrease by 10%, while all other variables had remained constant,
the return and net assets attributable to shareholders for the
period ended 30 September 2020 would have increased or decreased by
GBP844,700 respectively. Additionally, the investment in the
Company's subsidiary at 30 September is also shown as a Level 3
asset.
Introduction to the Pro-Forma Financial Statements
For the six months ended 30 September 2020
NOTE OF EXPLANATION:
During the 12 month period ended 31 March 2020, the Scheme of
Arrangement ("the Scheme") to re-domicile the business of HICL's
predecessor, Hansa Trust, via a Scheme was brought to shareholders
for their consideration. At a series of shareholder votes on 29
July 2019, the Scheme received strong support from shareholders
which, following Court approval, resulted in the transfer of the
business (all assets and liabilities) on 29 August 2019 from Hansa
Trust to HICL (HICL having been incorporated on 21 June 2019). At
the same time, the shares of Hansa Trust were de-listed and
cancelled before being reissued to HICL. HICL then issued new
shares to the former Hansa Trust shareholders with the same two
share classes being retained, but with five HICL shares being
issued for every one share of Hansa Trust that had been
cancelled.
From the perspective of an ongoing shareholder, whilst there are
a number of legal, jurisdictional and Board changes as a result of
the Scheme, the key facets of the business remain unchanged. The
investment strategy and policy remain unchanged.
HICL was incorporated on 21 June 2019 for the sole purpose of
continuing the business of Hansa Trust. As a result, International
Accounting Standards require that the Financial Statements for HICL
present only the results of HICL from the date of incorporation (21
June 2019) and do not incorporate comparable information from Hansa
Trust. The Board believes it is more meaningful to present to
shareholders the results of operations of Hansa Trust and HICL on a
pro-forma combined basis for the six month period from 1 April 2020
to 30 September 2020 and include comparable information for the
period 1 April 2019 to 30 September 2019. The comparable
information incorporates elements of Hansa Trust operations (1
April 2019 to 30 September 2019) as well as HICL (21 June 2019 to
30 September 2019). Therefore, in addition to the required Interim
Financial Statements further down, the Board also presents a number
of relevant pro-forma statements further down that amalgamate Hansa
Trust and HICL, on a pro--forma basis, and are shown as "Hansa
Investment Company Ltd Group" or "Combined Group". The pro-forma
Financial Statements seek to paint a fuller picture of the
historical performance of the business, regardless of which legal
entity that business sat in at a point in time. Similarly, the
Board presents the results of the Combined Group for the 12 months
to 31 March 2020 as a relevant comparative period.
Condensed Pro-Forma Income Statement for the combined Hansa
Investment Company Ltd Group
For the six months ended 30 September 2020
(Unaudited)
Six months (Unaudited)
(Unaudited) ended Year ended
Six months ended 30 September 31 March
30 September 2020 2019 2020
Hansa
Hansa Investment
Trust Company Combined
Total Total Total Combined Combined
GBP000 GBP000 GBP000 Total GBP000 Total GBP000
Gains/(losses) on investments
held at fair value through profit
or loss - 38,310 38,310 (4,015) (57,969)
Foreign exchange losses - (47) (47) 8 (96)
Investment income - 2,817 2,817 6,112 7,122
- 41,080 41,080 2,105 (50,943)
Portfolio management fees - (1,231) (1,231) (1,227) (2,441)
Other expenses - (592) (592) (2,128) (2,866)
- (1,823) (1,823) (3,355) (5,307)
Profit/(Loss) before finance costs - 39,257 39,257 (1,250) (56,250)
Finance costs - - - (1) (1)
Profit/(Loss) for the period - 39,257 39,257 (1,251) (56,251)
Return per Ordinary and 'A' non
-- voting Ordinary share - 32.7p 32.7p (1.0)p (46.9)p
The Group does not have any income or expense not included in
the Profit/(Loss) for the period. Accordingly the "Profit/(Loss)
for the period" is also the "Total Comprehensive Income for the
period", as defined in IAS 1 (revised) and no separate Statement of
Comprehensive Income has been presented.
Separate revenue and capital return columns are not shown above
to aid the reader and avoid unnecessary complexity.
Condensed Pro-Forma Balance Sheet for the combined Hansa
Investment Company Ltd Group
as at 30 September 2020
(Unaudited) (Unaudited) (Unaudited)
Combined Combined Combined
Group Group Group
30 September 30 September 31 March
2020 2019 2020
GBP000 GBP000 GBP000
Non -- current assets
Investments held at fair value through profit
or loss 307,552 333,139 273,264
Current assets
Trade and other receivables 102 116 2,503
Cash and cash equivalents 6,380 1,330 1,066
6,482 1,446 3,569
Current liabilities
Trade and other payables (398) (406) (534)
Net current assets 6,084 1,040 3,035
Net assets 313,636 334,179 276,299
Capital and reserves
Called up share capital 1,200 1,200 1,200
Contributed surplus reserve 326,979 330,819 327,939
Retained earnings (14,543) 2,160 (52,840)
Total equity shareholders' funds 313,636 334,179 276,299
Net asset value per Ordinary and 'A' non --
voting Ordinary share 261.4p 278.5p 230.2p
Condensed Pro-Forma Statement of Changes in Equity for the
combined Hansa Investment Company Ltd Group
For the six months ended 30 September 2020 (Unaudited)
Capital Contributed
Share redemption surplus Retained
capital reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
Net assets at 1 April 2020 1,200 - 327,939 (52,840) 276,299
Profit for the period - - - 39,257 39,257
Dividends - - (960) (960) (1,920)
Net Assets 30 September 2020 1,200 - 326,979 (14,543) 313,636
Condensed Pro-Forma Statement of Changes in Equity for the
combined Hansa Investment Company Ltd Group
For the six months ended 30 September 2019 (Unaudited)
Capital Contributed
Share redemption surplus Retained
capital reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
Net assets at 1 April 2019 1,200 300 - 335,850 337,350
Hansa Trust loss for the period - - - (3,411) (3,411)
Dividends paid by Hansa Trust - - - (1,920) (1,920)
Capital reorganisation as part of the
scheme - (300) 330,819 (330,519) -
Hansa Investment Company Ltd profit for
the period - - - 2,160 2,160
Net assets at 30 September 2019 1,200 - 330,819 2,160 334,179
Condensed Pro-Forma Statement of Changes in Equity for the
combined Hansa Investment Company Ltd Group
For the year ended 31 March 2020 (Unaudited)
Capital Contributed
Share redemption surplus Retained
capital reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
Net assets at 1 April 2019 1,200 300 - 335,850 337,350
Hansa Trust loss for the year - - - (3,411) (3,411)
Dividends paid by Hansa Trust - - - (1,920) (1,920)
Capital reorganisation as part of the
scheme - (300) 330,819 (330,519) -
Hansa Investment Company Ltd loss for
the year - - - (52,840) (52,840)
Dividends paid by Hansa Investment Company
Ltd - - (2,880) - (2,880)
Net assets at 31 March 2020 1,200 - 327,939 (52,840) 276,299
Condensed Pro-Forma Cash Flow Statement for the combined Hansa
Investment Company Ltd Group
For the six months ended 30 September 2020
(Unaudited) (Unaudited) (Unaudited)
Combined Combined Combined
Group Group Group
30 September 30 September 31 March
2020 2019 2020
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit/(loss) before finance costs 39,257 (1,250) (56,250)
Adjustments for:
Realised losses/(gains) on investments 4,028 (2,407) (3,051)
Unrealised (gains)/losses on investments (42,338) 6,422 61,020
Foreign exchange 47 (8) 96
Decrease/(increase) in trade and other receivables 2,401 1,002 (1,385)
(Decrease) in trade and other payables (136) (1,670) (1,499)
Purchase of non-current investments (8,412) (12,925) (29,984)
Sale of non-current investments 12,434 11,562 34,542
Net cash inflow from operating activities 7,281 726 3,489
Cash flows from financing activities
Interest paid on bank loans - (1) (1)
Drawdown of loan - 43 -
Dividends paid (1,920) (1,920) (4,800)
Net cash (outflow) from financing activities (1,920) (1,878) (4,801)
Increase/(decrease) in cash and cash equivalents 5,361 (1,152) (1,312)
Cash and cash equivalents at 1 April 1,066 2,474 2,474
Foreign exchange (47) 8 (96)
Cash and cash equivalents at end of period/year 6,380 1,330 1,066
Notes to the Condensed Pro-Forma Financial Statements
1 ACCOUNTING POLICIES
(a) Basis of preparation
The Pro-Forma Financial Statements of the Company have been
prepared under the historical cost convention, except for the
measurement at fair value of investments, and primarily using the
principles of International Financial Reporting Standards ("IFRS")
as adopted by the European Union, with the following significant
departures:
Hansa Investment Company Ltd and, as of the implementation of
the Scheme of Arrangement on 29 August 2019, its 100% subsidiary
Hansa Trust PLC together are referred to as the "Group" or
"Combined Group" for the purposes of the Pro-Forma Financial
Statements. Under IFRS 10 'Consolidated Financial Statements', from
29 August 2019 onwards, Hansa Investment Company Limited ('HICL')
meets the definition of an investment entity and as such any
subsidiaries, namely Hansa Trust PLC, are accounted for at fair
value through profit or loss in accordance with IFRS 9 'Financial
Instruments'. These Pro-Forma Financial Statements have been
prepared assuming any subsidiaries are consolidated, rather than
accounted for at fair value. Prior to 29 August 2019, Hansa Trust
was a standalone entity - itself deemed to be an investment
entity.
A consequence of the consolidation of subsidiaries is that these
Pro-Forma Financial Statements are Consolidated Financial
Statements and therefore contain comparative and historical
information which encompasses the whole Group. Practically,
comparative and historical information is derived from Hansa
Trust.
The Group has not presented a Consolidated Income Statement in
accordance with the Guidance Issued by the Association of
Investment Companies with respect to the allocation between Income
and Capital. Income and Capital columns have been combined for each
consolidated entity to simplify the presentation of the Statement
itself.
EPS / NAV per share for comparable numbers brought forward from
Hansa Trust have been restated to reflect the new number of Hansa
Investment Company Ltd shares in issue. EPS and NAV per share
throughout the Interim Report reflect the number of Hansa
Investment Company Ltd shares in issue.
The Directors have adopted the proposed departures, as they
believe the results of the Pro-Forma Financial Statements better
enable shareholders to understand the elements of the value of the
Company at the year end as well as compared to prior years.
These Pro-Forma Financial Statements are presented in Sterling,
the currency of the primary economic environment in which the
Company operates.
2 INCOME
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Hansa Hansa Combined Combined
Trust Investment Group Group
Six months Six months (Unaudited) Six months Year
ended ended Combined ended ended
30 September 30 September Group 30 September 31 March
2020 2020 Total 2019 2020
GBP000 GBP000 GBP000 GBP000 GBP000
Income from quoted investments
Dividends - 2,817 2,817 6,108 7,117
Other income
Interest receivable on AAA rated
money market funds - - - 4 5
Total income - 2,817 2,817 6,112 7,122
3 DIVIDS PAID & DECLARED
(Unaudited) (Unaudited)
Combined Combined (Unaudited)
Group Group Combined
Six months Six months Group
ended ended Year
30 September 30 September ended
2020 2019 31 March
GBP000 GBP000 2020 GBP000
Second interim dividend for Hansa Trust 2019
(paid May 2019): 1.6p - 1,920 1,920
First interim dividend for 2021 (paid August
2020): 0.8p (2020: 0.8p) 960 - 960
Second interim dividend for 2020 (paid November
2019): 0.8p (2019: 0.8p) - - 960
Third interim dividend for 2020 (paid February
2020): 0.8p - - 960
Fourth interim dividend for 2020 (paid May 2020):
0.8p 960 - 960
1,920 1,920 5,760
Note: The second interim dividend for 2021, paid by HICL in
November 2020, was 0.8p per share.
4 RETURN PER SHARES
The returns stated below are based on 120,000,000 shares, being
the weighted average number of shares in issue during the
period.
Hansa Investment
Hansa Trust Company
Six months Six months
ended ended
30 September 30 September Combined Group
Pence Pence Pence
GBP000 per share GBP000 per share GBP000 per share
Six months ended 30 September
2020 (Unaudited) - - 39,257 32.7 39,257 32.7
Six months ended 30 September
2019 (Unaudited) (3,411) (2.8) 2,160 1.8 (1,251) (1.0)
Year ended 31 March 2020 (Unaudited) (3,411) (2.8) (52,840) (44.1) (56,251) (46.9)
5 FINANCIAL INFORMATION
The Interim pro-forma financial information was approved by a
committee of the Board of Directors on 26 November 2020.
6 NET ASSET VALUE PER SHARE
The NAV per share is based on the net assets attributable to
equity shareholders of GBP313,636,000 (30 September 2019:
GBP334,179,000; 31 March 2020: GBP276,299,000) and on 120,000,000
shares, being the number of shares in issue at the period end for
HICL.
7 COMMITMENTS AND CONTINGENCIES
The Company has no outstanding commitments as at 30 September
2020 (30 September 2019: GBPnil; 31 March 2020: GBPnil).
8 FAIR VALUE HIERARCHY
IFRS 13 'Fair Value Measurement' requires an entity to classify
fair value measurements, using a fair value hierarchy that reflects
the significance of the inputs used in making the measurements. The
fair value hierarchy has the following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); an
Level 3: inputs for the asset or liability not based on
observable market data (unobservable inputs).
The financial assets and liabilities measured at fair value in
the Statement of Financial Position are grouped into the fair value
hierarchy - are detailed below:
30 September 2020 (Combined Group) (Unaudited) Level Level Level Total
1 2 3 GBP000
GBP000 GBP000 GBP000
Financial assets at fair value through
profit or loss
Quoted equities 115,807 - - 115,807
Unquoted equities - - 8,447 8,447
Fund investments - 183,298 - 183,298
Net fair value 115,807 183,298 8,447 307,552
30 September 2019 (Combined Group) (Unaudited) Level Level Level Total
1 2 3 GBP000
GBP000 GBP000 GBP000
Financial assets at fair value through
profit or loss
Quoted equities 157,652 - - 157,652
Unquoted equities - - 9,340 9,340
Fund investments 3,508 162,639 - 166,147
Net fair value 161,160 162,639 9,340 333,139
31 March 2020 (Combined Group) (Unaudited) Level Level Level Total
1 2 3 GBP000
GBP000 GBP000 GBP000
Financial assets at fair value through
profit or loss
Quoted equities 116,310 - - 116,310
Unquoted equities - - 9,276 9,276
Fund investments - 147,678 - 147,678
Net fair value 116,310 147,678 9,276 273,264
There have been no transfers between levels during the
period.
The Group's policy is to recognise transfers into and out of the
different fair value hierarchy levels at the date of the event or
change in circumstances that caused the transfer to occur.
A reconciliation of fair value measurements in Level 3 is set
out in the following table. For the purposes of these pro-forma
accounts, transfers of assets from Hansa Trust to HICL have not
been deemed to represent a purchase/sale:
(Unaudited) (Unaudited) (Unaudited)
Combined Combined Combined
Group Group Group
September September March
2020 2019 2020
Equity Equity Equity
investments investments investments
GBP000 GBP000 GBP000
Opening Balance 9,276 10,393 10,393
Transferred from Level 1: - - -
Purchases (Capital Distribution) - - -
Sales (Capital Distribution) - (2,254) (2,254)
- on assets sold - - -
- on assets held at year end (829) 1,201 1,137
Closing Balance 8,447 9,340 9,276
As at 30 September 2020, the investments in DV3 and DV4 Ltd have
been classified as Level 3. The investments in DV3 and DV4 have
been valued using the most recent estimated NAV as advised to the
Company by DV3 and DV4, adjusted for any further drawdowns,
distributions or redemptions between the valuation date and 30
September 2020. The most recent valuation statement was received on
25 August 2020, with an estimated NAV based on the unaudited
capital statement of DV3 and DV4 as at 30 June 2020. If the value
of the unquoted Level 3 equity investments were to increase or
decrease by 10%, while all other variables had remained constant,
the return and net assets attributable to shareholders for the
period ended 30 September 2020 would have increased or decreased by
GBP844,700 respectively. Additionally, the investment in the
Company's subsidiary at 30 September is also shown as a Level 3
asset.
Investor Information
The Company currently manages its affairs so as to be a
qualifying investment company for ISA purposes, for both the
Ordinary and 'A' non-voting Ordinary shares. It is the present
intention that the Company will conduct its affairs so as to
continue to qualify for ISA products. In addition, the Company
currently conducts its affairs so shares issued by Hansa Investment
Company Ltd can be recommended by independent financial advisers to
ordinary retail investors, in accordance with the Financial Conduct
Authority's ("FCA") rules in relation to non -- mainstream
investment products and intends to continue to do so for the
foreseeable future. The shares are excluded from the FCA's
restrictions which apply to non -- mainstream investment products,
because they are excluded securities as defined in the FCA Handbook
Glossary. Finally, Hansa Investment Company Ltd is registered as a
Reporting Financial Institution with the US IRS for FATCA
purposes.
Investor Disclosure
AIFMD
Hansa Investment Company Ltd's AIFMD Investor Disclosure
document can be found on its website. The document is a regulatory
requirement and summarises key features of the Company for
investors. It can be viewed at:
www.hansaicl.com/shareholder-information/regulatory-information.aspx
Packaged Retail and Insurance-based Investment Products
("PRIIPs")
The Company's AIFM, Hanseatic Asset Management LBG, is
responsible for applying the product governance rules defined under
the MiFID II legislation on behalf of Hansa Investment Company Ltd.
Therefore, the AIFM is deemed to be the 'Manufacturer' of Hansa
Investment Company's two share classes. Under MiFID II, the
Manufacturer must make available Key Information Documents ("KIDs")
for investors to review if they so wish ahead of any purchase of
the Company's shares. Links to these documents can also be found on
the Company's website for good measure:
www.hansaicl.com/shareholder-information/regulatory-information.aspx
Capital Structure
The Company has 40,000,000 Ordinary shares of 1p each and
80,000,000 'A' non -- voting Ordinary shares of 1p each in issue.
The Ordinary shareholders are entitled to one vote per Ordinary
share held. The 'A' non -- voting Ordinary shares do not entitle
the holders to vote or receive notice of meetings, but in all other
respects they have the same rights as the Company's Ordinary
shares.
Contact Details
Email: hiclenquiry@hansacap.com
Website: www.hansaicl.com
Company Secretary (and Company's Registered Office)
Conyers Corporate Services (Bermuda) Limited
Clarendon House, 2 Church Street
PO Box HM666, Hamilton HM CX
Bermuda
Phone: +1 441 279 5373
Website: www.conyers.com
Please contact the Portfolio Manager, as below, if you have any
queries concerning the Company's investments or performance.
Portfolio Manager
Hansa Capital Partners LLP
50 Curzon Street
London W1J 7UW
Telephone: +44 (0) 207 647 5750
Email: hiclenquiry@hansacap.com
Website: www.hansagrp.com
The Company's website includes the following:
- Monthly Fact Sheets
- Stock Exchange Announcements
- Details of the Board Statements
- Annual and Interim Reports
- Share Price Data Reports
- Shareholder Presentations
Please contact the Registrars, as below, if you have a query
about a certificated holding in the Company's shares.
Registrars
Link Market Services (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St. Sampson
Guernsey GY2 4LH
(If you do not have internet access you can call the Shareholder
Support Centre on 0871 664 0300 if calling from the UK (calls cost
12p per minute plus your phone company's access charge) or +44 371
664 0300 if not calling from the UK (calls outside the UK will be
charged at the applicable international rate).
The Registrars are open between 09:00 - 17:30, Monday to Friday
excluding public holidays in England and Wales.
Email: enquiries@linkgroup.co.uk
www.linkassetservices.com
Share Price Listings
The price of your shares can be found on our website and in the
Financial Times under the heading 'Investment Companies'.
In addition, share price information can be found under the
following:
ISIN Code
Ordinary shares BMG428941162
'A' non-voting Ordinary shares BMG428941089
SEDOL
Ordinary shares BKLFC18
'A' non-voting Ordinary shares BKLFC07
Reuters
Ordinary shares HAN.L
'A' non-voting Ordinary shares HANA.L
Bloomberg
Ordinary shares HAN LN
'A' non-voting Ordinary shares HANA LN
TIDM
Ordinary shares HAN
A' non--voting Ordinary shares HANA
Legal Entity Identifier: 213800RS2PWJXSZQDF66
Useful Internet Addresses
Association of Investment Companies www.theaic.co.uk
London Stock Exchange www.londonstockexchange.com
TrustNet www.trustnet.com
Interactive Investor www.iii.co.uk
Morningstar www.morningstar.com
Edison www.edisongroup.com
Financial Calendar
Company year end 31 March
Annual Report sent to shareholders June
Annual General Meeting July
Announcement of Half Year results November
Interim Report sent to shareholders December
Interim dividend payments August,
November,
February & May
Company Information
Registered in Bermuda company number: 54752
BOARD OF DIRECTORS
Jonathan Davie (Chairman)
Simona Heidempergher
Richard Lightowler
William Salomon
Nadya Wells
SECRETARY AND REGISTERED OFFICE
Conyers Corporate Services (Bermuda) Limited
Clarendon House
2 Church Street
PO Box HM666
Hamilton HM CX
Bermuda
PORTFOLIO MANAGER and Additional administrative services
provider
Hansa Capital Partners LLP
50 Curzon Street
London W1J 7UW
AUDITOR
PricewaterhouseCoopers LTD
Washington House
4th Floor, 16 Church Street
Hamilton HM11
Bermuda
SOLICITORS - BERMUDA
Conyers Dill & Pearman Limited
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
SOLICITORS - UK
Dentons
1 Fleet Place
London EC4M 7RA
REGISTRAR
Link Market Services (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St. Sampson
Guernsey
GY2 4LH
CUSTODIAN
Banque Lombard Odier & Cie SA
11 Rue de la Corraterie
1204 Geneva
Switzerland
STOCKBROKER
Winterflood Investment Trusts
The Atrium Building
Cannon Bridge
25 Dowgate Hill
London EC4R 2GA
ADMINISTRATOR
Maitland Administration Services Limited
Springfield Lodge
Colchester Road
Chelmsford
Essex CM2 5PW
ALTERNATIVE INVESTMENT FUND MANAGER
Hanseatic Asset Management LBG
Tudor House
Le Bordage
St Peter Port
Guernsey
GY1 1WD
Glossary of Terms
Association of Investment Companies ("AIC")
The Association of Investment Companies is the UK trade
association for closed-ended investment companies. It represented
Hansa Trust. Despite the Company not being UK domiciled, the
Company is UK listed and the Board considers that the AIC's
guidance is still very relevant to the operations of the
Company.
Alternative Investment Fund Managers Directive ("AIFMD")
The AIFMD is a regulatory framework for alternative investment
fund managers ("AIFMs"), including managers of hedge funds, private
equity firms and investment trusts. Its scope is broad and, with a
few exceptions, covers the management, administration and marketing
of alternative investment funds ("AIFs"). Its focus is on
regulating the AIFM rather than the AIFs.
Annual Dividend / Dividend
The amount paid by the Company to shareholders in dividends
(cash or otherwise) relating to a specific financial year of the
Company. The Company's dividend policy is to announce its expected
level of dividend payment at the start of each financial year.
Barring unforeseen circumstances, the Company then expects to make
four interim dividend payments each year - at the end of August,
November and February during that financial year and at the end of
May following the end of the financial year.
Bid Price
The price at which you can sell shares determined by supply and
demand.
Capital Structure
The stocks and shares that make up a company's capital i.e. the
amount of ordinary and preference shares, debentures and unsecured
loan stock etc. which are in issue.
Closed-ended
A company with a fixed number of shares in issue.
Depositary/Custodian
A financial institution acting as a holder of securities for
safekeeping.
Discount
When the share price is lower than the NAV, it is referred to as
trading at a discount. The discount is expressed as a percentage of
the NAV.
Expense Ratio
An expense ratio is determined through an annual calculation,
where the operating expenses are divided by the average NAV. Note
there is also a description of an additional PRIIPs KID Ongoing
Charges Ratio explained in the 31 March 2020 Period End Report.
Five Year Rolling NAV Return (per annum)
The rate at which, compounded for five years, will equal the
five year NAV total return to end March, assuming dividends are
always reinvested at pay date.
Five Year NAV and Share Price Total Return
Rebased from 0% at the start of the five year period, this is
the rate at which the Company's NAV and share prices would have
returned at any period from that starting point, assuming dividends
are always reinvested at pay date. The Company will continue to
quote results from its predecessor, Hansa Trust PLC, as part of
that reporting so shareholders can see the longer-term performance
of the portfolio.
Gearing
Gearing refers to the level of borrowing related to equity
capital.
Hedging
Strategy used to reduce risk of loss from movements in interest
rates, equity markets, share prices or currency rates.
Issued Share Capital
Issued share capital is the total number of shares subscribed to
by the shareholders.
Key Information Document ("KID")
This is a document of a form stipulated under the PRIIPs
Regulations. It provides basic, pre-contractual, information about
the Company and its share classes in a simple and accessible
manner. It is not marketing material.
Key Performance Indicators ("KPIs")
A set of quantifiable measures that a company uses to gauge its
performance over time. These metrics are used to determine a
company's progress in achieving its strategic and operational goals
and also to compare a company's finances and performance against
other businesses within its industry.
Market Capitalisation
The market value of a company's shares in issue. This figure is
found by taking the stock price and multiplying it by the total
number of shares outstanding.
Mid Price
The average of the Bid and Offer Prices of a particular traded
share.
Net Asset Value ("NAV")
The value of the total assets minus liabilities of the
company.
Net Asset Value Total Return
See Total Return.
Offer Price
The price at which you can buy shares determined by supply and
demand.
Ordinary Shares
Shares representing equity ownership in a company allowing
investors to receive dividends. Ordinary shareholders have the
pro--rata right to a company's residual profits. In other words,
they are entitled to receive dividends if any are available after
payments to financial lenders and dividends on any preferred shares
are paid. They are also entitled to their share of the residual
economic value of the company should the business unwind.
Hansa Investment Company Ltd has two classes of Ordinary share.
The Ordinary (40 million shares) and the 'A' non-voting Ordinary
shares (80 million shares). Both have the same financial interest
in the underlying assets of the Company and receive the same
dividend, but differ only in that only the former shares have
voting rights, whereas the latter do not. They trade separately on
the London Stock Exchange, nominally giving rise to different share
prices at any given time.
Premium
When the share price is higher than the NAV it is referred to as
trading at a premium. The premium is expressed as a percentage of
the NAV.
Packaged Retail and Insurance-based Investment Product
("PRIIP")
Packaged retail investment and insurance-based products
("PRIIPs") make up a broad category of financial assets that are
regularly provided to consumers in the European Union. The term
PRIIPs, created by the European Commission to regulate the
underlying market, is defined as any product manufactured by the
financial services industry, to provide investment opportunities to
retail investors, where the amount repayable is subject to
fluctuation because of exposure to reference values, or the
performance of underlying assets not directly purchased by the
retail investor.
Shareholders' Funds/Equity Shareholders' Funds
This value equates to the NAV of the Company. See NAV.
Spread
The difference between the Bid and Ask price.
Tradable Instrument Display Mnemonics ("TIDM")
A short, unique code used to identify UK-listed shares. The TIDM
code is unique to each class of share and to each company. It
allows the user to ensure they are referring to the right share.
Previously known as EPIC.
Total Return
When measuring performance, the actual rate of return of an
investment or a pool of investments over a given evaluation period.
Total return includes interest, capital gains, dividends and
distributions realised over a given period of time.
Total Return - Shareholder
The Total Return to a shareholder is a measure of the
performance of the company's share price over time. It combines
share price appreciation/depreciation and dividends paid to show
the total return to the shareholder expressed as an annualised
percentage.
VIX Index
The VIX, or the CBOE Volatility Index, is a widely used measure
of the implied volatility of the stock market, based on S&P 500
index options. It is calculated and published by the Chicago Board
Options Exchange.
Hansa Investment Company Ltd
Clarendon House
2 Church Street
PO Box HM666
Hamilton HM CX
Bermuda
T : +44 (0) 207 647 5750
E : hiclenquiry@hansacap.com
Visit us at
www.hansaicl.com
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END
IR EQLFLBFLFFBV
(END) Dow Jones Newswires
November 26, 2020 10:23 ET (15:23 GMT)
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