Majedie Investments PLC
Interim Management Statement
The Board of Majedie Investments PLC announces its first Interim Management
Statement for the year ending 30 September 2014, as required by the UK Listing
Authority's Disclosure and Transparency Rules. This Statement is in respect of
the period from 1 October 2013.
Majedie Investments PLC is an investment trust listed on the London Stock
Exchange. The original company was established in 1910 and owned several rubber
estates in Malaysia. It evolved into an investment company and obtained
investment trust status in 1985.
The Company owns a significant stake in the asset management boutique, Majedie
Asset Management Limited (MAM), and on 13 January 2014 it appointed MAM to
manage the Company's assets.
To maximise total shareholder return whilst increasing dividends by more than
the rate of inflation over the long term.
Key Facts at 31 December 2013
Share Price 200.0p
NAV per Share (debt at par) 251.2p
Dividend Yield (excluding 5.3%
Five Year Dividend Growth 10.8%
Net Gearing 18.9%
Net Assets £130.7m
Market Capitalisation £105.1m
Total Assets £164.5m
Sector Global Growth
% Performance to 31 December 2013
Total Return 3 Months to 31 Calendar Year Fiscal Year
Net Asset Value 4.4% 18.8% 16.9%
Share Price 25.0% 32.9% 9.7%
Core Portfolio 6.1% 19.2% 17.4%
Balance Sheet at 31 December 2013
£ Mil % Notes
Core Portfolio 81.8 50% Long-only equity portfolio invested in
mainstream global stocks with a focus on
dividends. Its benchmark is 70% FTSE
All-Share & 30% FTSE World ex. UK Index
(sterling) on a total return basis.
Javelin Capital 29.5 18% A UCITS absolute return, emerging markets
Emerging Markets equity market neutral fund.
Non Core Portfolio 5.7 3% Investments in private equity and listed
equities with low liquidity. Also includes
cash held awaiting reinvestment.
Total Equities 117.0 71%
Majedie Asset 45.0 28% A 26.2% stake in an unlisted asset
Management management company.
Javelin Capital LLP 2.6 1% 75% stake in an unlisted asset management
Other Assets (0.1) 0%
Total Assets 164.5 100%
Net Assets 130.7
Top Ten Investments at 31 December 2013
Majedie Asset Management 27.3%
Javelin Capital Emerging Markets Alpha 18.0%
Royal Dutch Shell 2.5%
BP PLC 1.7%
Rio Tinto 1.3%
Barclays PLC 1.3%
Figures are % of total assets
Regional Allocation in Core Portfolio at 31 December 2013
North America 17%
Europe ex UK 9%
Rest of World 5%
Sector Allocation in Core Portfolio at 31 December 2013
Basic Materials 11%
Consumer Goods 9%
Consumer Services 11%
Equity Investment 0%
Health Care 8%
Oil & Gas 14%
Material Events or transactions
UK and Eurozone equities trended higher over the second half of 2013,
outperforming in sterling equity markets in the US, Japan and the Pacific Rim.
Guidance that UK interest rates would remain at historically very low levels
for the foreseeable future, combined with some strong evidence of an
acceleration in UK economic growth, provided a supportive background for
equities. Sovereign bond markets in both the US and UK were unsettled by the
prospects for renewed growth and a potential upwards move in interest rates
during 2014. Best performing areas of the UK equity market were Mobile
Telecoms, where the expectation of a large return of capital to shareholders
during 2014 excited investment interest in Vodafone, followed by Life Insurance
where both Prudential and Aviva enjoyed reratings. After a torrid first half of
2013, mining stocks selectively came back into fashion; the scaling back of
capital commitments by some of the major companies was greeted positively and
Rio Tinto attracted renewed interest having reached a low point during early
July. On a negative tack, emerging markets remained somewhat depressed as
concerns over a slowdown in economic growth in China intensified. Major banking
stocks with exposure to Far East markets such as HSBC and Standard Chartered
Bank were lacklustre over the second half of 2013, as was Unilever, given its
exposure to consumer end-markets in Asia. Hopes of strengthening economic
growth in the UK caused a rotation away from more defensive areas of the market
such as utilities and here two of the major stocks in the sector, Centrica and
SSE, were also negatively impacted by a policy initiative from the Labour Party
calling for an energy price freeze.
In 4Q 2013, the Company's NAV and share price returned 4.4% and 25.0%
respectively. The Core Portfolio returned 6.1% and the investment in the UCITS
Javelin Capital Emerging Markets Alpha Fund was down by 3.5% over the quarter.
Majedie Asset Management (MAM) paid a final 2013 dividend to the Company of £
2.7 million in December 2013, whilst the Company itself raised £1.1 million
through the sale of MAM stock to the MAM Employee Benefit Trust which reduced
the Company's holding to 26.2%.
On 13 January 2014, the Company announced that it appointed MAM to manage the
Company's assets with immediate effect. At the same time the Company had
decided to close Javelin Capital LLP, and to rebase the Company's dividend
Additionally MAM has agreed to repurchase 10% of its capital from the Company
by, at the latest, 31 March 2014 which will realise approximately £18 million.
The Company has also agreed to progressively reduce its stake in MAM by up to
2.5% per annum over each of the following four years.
Following the appointment of MAM the Company is transferring the Core portfolio
to MAM to be managed as a separate portfolio under a mandate intended to
replicate the performance of MAM's UK Equity Fund. The Company intends to
invest the £18 million sale proceeds in MAM's UK Income Fund. The Company
intends to realise its investment in the Javelin Capital Emerging Markets Alpha
Fund as soon as practicable and to use the proceeds by investing approximately
£30 million into MAM's Tortoise Fund, so retaining the Company's current
absolute return allocation.
To allow the target investments in the Tortoise Fund and the UK Income Fund
proposed by the Board, and to reflect the change in investment manager
generally, it will be necessary to change the Company's investment policy. In
accordance with the Listing Rules, any material amendments to the Company's
investment policy require the approval of the Company's shareholders.
Accordingly, a shareholder circular setting out the proposed changes to the
investment policy and a notice of an Extraordinary General Meeting to approve
such changes will be published in due course.
There have been no other material events or transactions that have taken place
between 31 December 2013 and the date of publication of this statement.
This Interim Management Statement has been issued by Majedie Investments PLC on
15January 2014. The news, information, and data in this statement should not be
deemed as a financial promotion or recommendation. Majedie Investments PLC is
not authorised to give financial advice
-0- Jan/15/2014 17:41 GMT
Press spacebar to pause and continue. Press esc to stop.