Results for the year ended 30 April 2024
The Directors of Personal Assets Trust plc (“PAT” or “the Company”) are pleased to announce the Company’s results for the year ended 30 April 2024.
The key points are as follows:
· PAT’s investment policy is to protect and increase (in that order) the value of shareholders’ funds per share over the long term.
· Over the year to 30 April 2024 PAT’s net asset value per share (“NAV”) rose by 1.2%. This compares to a rise of 3.4% in the FTSE All-Share Index. PAT’s share price rose by 2.00p during the year and at 30 April 2024 was 483.00p.
· Percentage changes to 30 April 2024:
| Percentage Changes | |||||
| 1 Year | 3 years | 5 Years | 10 Years | Since 1990 (1) | |
| Share Price | 0.4 | 2.5 | 18.4 | 45.5 | 1,122.8 |
| NAV per Share (2) | 1.2 | 4.7 | 20.3 | 45.9 | 759.5 |
| FTSE All-Share Index | 3.4 | 11.2 | 8.9 | 22.4 | 324.7 |
| Share Price Relative to FTSE All-Share | (2.9) | (7.8) | 8.7 | 18.9 | 187.9 |
| Share Price Total Return(2) | 2.1 | 7.0 | 26.7 | 67.9 | 2,247.0 |
| NAV per Share Total Return(2) | 1.3 | 9.2 | 28.7 | 68.3 | 1,441.4 |
| Retail Price Index (RPI) | 3.3 | 27.9 | 33.6 | 50.6 | 207.8 |
| Consumer Price Index (CPI) | 2.4 | 21.3 | 24.1 | 33.4 | 142.1 |
| FTSE All-Share Total Return | 7.5 | 23.9 | 30.1 | 75.8 | 1,298.8 |
| Share Price Total Return relative to FTSE All-Share Total Return | (5.0) | (13.6) | (2.6) | (4.5) | 67.8 |
| Share Price Total Return relative to RPI | (1.2) | (16.3) | (5.2) | 11.5 | 662.5 |
| Share Price Total Return relative to CPI | (0.3) | (11.8) | 2.1 | 25.9 | 869.4 |
(1) The Company became self-managed in 1990.
(2) Alternative Performance Measure. Please see pages 64 and 65 of the Annual Report for a glossary of terms and definitions.
· During the year the Company’s shares continued to trade close to NAV. The Company did not issue any Ordinary shares and bought back 49,244,828 Ordinary shares during the year.
· During the year, PAT continued to maintain a high level of liquidity. At 30 April 2024, liquidity was 72.5%. This included 11.8% in UK Gilts, UK index-linked bonds, UK cash, overseas cash, and net current assets and 60.6% in various classes of non-equity risk assets: 36.5% in US TIPS, 11.6% in US Treasuries and 12.5% in Gold Bullion. This compared to holdings as at 30 April 2023 of 17.7% in UK Gilts, UK cash, overseas cash, and net current liabilities and 58.2% in various classes of non-equity risk assets: 33.9% in US TIPS, 14.8% in US Treasuries and 9.5% in Gold Bullion.
The Chairman, Iain Ferguson, said:
We continue to live in a world of great uncertainty and increasing volatility with little expectation for improvement in the immediate future. We still have a war raging in Europe, particularly poignant as we commemorate the 80th anniversary of ‘D-Day’, and we now have a very intractable conflict in the Middle East. There are obvious growing international tensions across the globe and the outcome of the election in the United States will have literally ‘world changing’ ramifications. In the UK we are now in the General Election process and by the time of our AGM in July we will know the outcome. Most pundits are predicting a change of government. This is the challenging context in which we seek to deliver our core investment proposition, which is to protect and increase (in that order) the value of shareholders’ funds per share (also known as net asset value (‘NAV’) per share) over the long term. The Directors and our Investment Managers at Troy Asset Management Limited (‘Troy’), Sebastian Lyon and Charlotte Yonge, are shareholders in the Company. As such, we are all strongly aligned and are advocates for this investment proposition. As Directors, we work closely with the Troy team, bringing our collective experience to complement, inform, challenge and support. This close but independent relationship is particularly important when we are seeking to navigate uncertain and turbulent markets together.
We track the performance of the Company from 1990. Since then, the NAV has grown at an annual compound rate of +6.5% compared to +3.4% for the UK Retail Price Index and +4.3% for the FTSE All-Share Index, our two main comparators. We also track the degree of risk experienced in achieving our financial performance. The results are tabulated in the Key Features section on page 2 of the Annual Report and the volatility experienced is indicated on the chart on page 11 of the Annual Report. This shows that over the last 24 years the Company has been less volatile than equities in general and also less volatile than the AIC Flexible Investment Sector. Whilst this combination of above comparator financial performance and below-sector volatility is the outcome of a focus on capital preservation, these metrics are by no means a target. The Investment Manager’s focus remains on the avoidance of permanent capital loss (our preferred definition of risk) and on growing the real value of the Company’s capital over the long run. In his report on pages 6 and 7 of the Annual Report, Sebastian Lyon, our Investment Manager, provides further details of our investment performance and describes the particular challenges of the last year.
The Company aims to pay as consistent and sustainable a dividend as is compatible with protecting and increasing the value of its shareholders’ funds and maintaining its investment flexibility. The Board remains committed to paying an annual dividend of 5.60p per share in line with this policy. High levels of inflation during the year, particularly in the United States, mean that the Company has again this year earned significantly more income on its holding of US TIPS than in previous years. Accordingly, in order to meet the investment trust distribution requirements, the Board has resolved to pay an additional special dividend for the year to 30 April 2024 of 1.60p per share. This dividend will be paid to shareholders in July 2024 alongside the first interim dividend of 1.40p per share for the year to 30 April 2025.
During the year we bought back 49,244,828 Ordinary shares into Treasury under the Company’s discount control policy, for a net outflow of £232 million. As at 30 April 2024 we had 342,325,372 Ordinary shares in issue, with 50,479,828 Ordinary shares in Treasury. It is the policy of the Company to aim to ensure that, in normal market conditions, its Ordinary shares always trade at or close to NAV and this policy is enshrined in the Articles of Association. It is reassuring to report that since November 1999, when investment trusts were empowered to use capital to buy back shares and hence control the discount to NAV at which their shares trade, the Company’s share price has closely tracked the NAV both through periods of significant issuance and as demonstrated in the last year through a period of sustained buy back. Given the persistence of discounts for investment trusts generally, buyback activity throughout the year has been pronounced across the industry more widely. For the Company, the year ending 30 April 2024 will be the first since 2007 when the number of shares in issue has declined year on year.
The Board membership has enjoyed a further year of stability and I am grateful for the continuing commitment and wise counsel of my colleagues. We appointed Jennifer Thomas to the Board with effect from 1 May 2024. She brings more than 25 years of experience in leading communications in several international companies and we look forward to her contribution to our work. During 2022 Board Level Partners conducted an independent review of the performance of the Board and its Committees. Whilst this did not highlight any material weaknesses or concerns, it did identify some areas for further focus. These include planning for Board member succession, development of shareholder communications and closer monitoring of our relationships with our key service providers, Troy and Juniper Partners Limited (‘Juniper’). During 2023 and 2024 we conducted internal reviews, and it is pleasing to record that we have made significant progress in each of the focus areas. Further detail can be found on page 29 of the Annual Report.
As part of our oversight of our key service providers, we introduced a more formal annual review process with Troy in 2023 and this has been repeated in 2024. The review process is led by Mandy Clements and includes open discussions with all the Directors and several members of the senior team at Troy. We have all found this to be a positive and helpful exercise. In summary, our relationship with Troy continues to be excellent and we are increasingly benefitting from access to the shared resources and focused support from the wider Troy team. We now hold two Board meetings each year in the Troy offices in London which is helping us to get to know more members of the Troy team and to deepen our relationship on a broader base. As our shareholder funds continue to be above £1.5 billion, we are benefitting from the revised fee structure agreed in 2021. Details of the fee structure are shown on page 15 of the Annual Report. We also pay particular attention to ensuring the competitiveness of our ongoing charges ratio, which was 0.65% for the year ended 30 April 2024, having reduced from 0.89% in 2013 and remains in line with last year’s figure.
We had adopted a similar annual review process with Juniper in 2022 and have now completed our third review cycle. As with Troy, this process is led by Mandy Clements. Our relationship with Juniper, which provides our administrative, company secretarial, AIFM and discount control services, continues to be excellent with a very open and supportive culture. Juniper provides a first-class service to the Company and works in close association with Troy to provide a seamless service to the PAT Board and shareholders.
We recognise the continuing evolution of the Company’s shareholder base and the increasing number of investors holding shares through retail platforms who may not have direct access to communications with the Company. This is a challenge which is often discussed by the Board as we seek to improve communication and interaction with investors. We hope that our website (www.patplc.co.uk), our Quarterlies, our Annual and Interim Reports and our monthly Factsheet are providing investors with easy and effective access to information about PAT and we will continue to seek innovative ways of improving our dialogue with shareholders and with potential shareholders.
We are looking forward to holding the AGM on Friday 19 July 2024 at The Kimpton Charlotte Square Hotel in Edinburgh. The Investment Manager’s presentation will also be made available on our website following the AGM for those who cannot attend in person. I would encourage all shareholders to submit any questions for the AGM to our Company Secretary by email in advance of the meeting at cosec@junipartners.com by Tuesday, 16 July 2024. In the meantime, I wish you all good health and thank you for entrusting your investment to PAT.
Iain Ferguson CBE
Chariman
18 June 2024