Majedie Investments PLC
Half-Year Financial Report
31 March 2023
Majedie Investments plc (“Majedie” or the “Company”) is pleased to present its Half-Year Financial Report for the six months ended 31 March 2023.
The Half-Year Financial Report can be found on the Company’s website at https://www.majedieinvestments.com/reporting or by contacting the Company Secretary on telephone number 07936 332 503.
Financial Highlights
| Half Year ended31 March 2023 | |
| Total shareholder return (including dividends): | 32.6% |
| Net asset value (NAV) total return (debt at par including dividends): | 13.9% |
| NAV total return (debt at fair value including dividends): | 13.8% |
| NAV per share (debt at par value): | 245.0p |
| NAV per share (debt at fair value): | 244.2p |
| Revenue Return per share: | 0.7p |
| Quarterly Dividend: | 1.8p |
| Total assets*: | £150.6m |
| * Total assets are defined as total assets less current liabilities. |
Chief Executive’s Report
In the six months ended 31 March 2023 the NAV at par and the NAV at fair value (net asset value with debt at par and fair value) rose by 13.9% and 13.8% respectively on a total return basis. Total shareholder return (including dividends) increased by 32.6%.
The Company announced a change to its Investment Management Arrangements in November 2022 and held a General Meeting on 25 January 2023 at which shareholders approved the appointment of Marylebone Partners LLP (Marylebone) and a change in its Investment Policy. Subsequent to the meeting, Marylebone took over the management of the Company’s portfolio and by 31 March it had been largely transitioned to the new investment policy.
Since the announcement of the appointment of Marylebone, it is encouraging that the discount to NAV of the Company has narrowed, especially as many peers’ discounts have widened. The Board also notes the higher turnover in the Company’s shares and that several new investors have joined the share register.
Results and Dividends
The Company had a capital gain for the six months to 31 March 2023 of £15.8m. Total income from investments fell to £1.2m compared to £2.0m in the six months to 31 March 2022 largely due to the absence of a dividend from Majedie Asset Management following its sale to Liontrust PLC (Liontrust) on 30 March 2022.
Total administrative expenses and management fees were £1.2m compared to £0.8m for the six months to 31 March 2022. The increase is due to fees incurred in the change in Investment Management Arrangements, in particular fees payable to JP Morgan Cazenove, as corporate broker, and Dickson Minto LLP, as legal advisor. Marylebone has agreed to waive half of the investment management fees payable by the Company for a period of twelve months from their appointment as investment manager, this will be amortised over two and a half years as shown in note 3 in the full Half-Year Financial Report. The Company also paid performance fees to Liontrust of £0.7m which relate to its holding, now sold, in the Tortoise Fund.
Following the approval of the changes to the investment objective and policy the Company will pay quarterly dividends which are expected to comprise approximately 0.75% of the relevant quarter end NAV, leading to an aggregate annual dividend target of approximately 3%. Accordingly, in relation to the quarter ended 31 March 2023 a quarterly dividend of 1.8p was declared on 5 May 2023 which will be paid on 2 June 2023 to shareholders on the register on 19 May 2023.
As a consequence of the new arrangements the Company will no longer be self-managed and Marylebone will become the AIFM in due course. The Company will no longer have an office or any employees.
Performance
The overall performance for the Company was strong as equity markets recovered during the period. The large allocation that the Company had in the UK equity market was beneficial as was the continued strong performance of the Tortoise Fund. The UK Equity Segregated Portfolio was sold on 25 January 2023 and the Global Equity Fund, International Equity Fund and the Tortoise Fund were all sold on 22 February 2023 to enable the Company’s assets to remain invested during the transition.
The share price of Liontrust increased by 43% in the six months to 31 March 2023, though the price remains 50% below the level received as consideration by the Company as part of the sale of Majedie Asset Management (MAM). The performance targets (to be met by MAM by 31 March 2023) which would have triggered a deferred benefit from Liontrust to the Company were not achieved, therefore the deferred payment benefit has lapsed. The Company had attributed no value to this contingent payment in its NAV. The Company has continued to reduce its holding in Liontrust, selling 216,000 shares for a consideration of £2.3m over the six months to 31 March 2023.