TIDMPCGH TIDMPGHZ
RNS Number : 8408K
Polar Capital Global Health Tst PLC
10 May 2022
POLAR CAPITAL GLOBAL HEALTHCARE TRUST PLC
(the "Company")
Unaudited Results Announcement for the Six Months to 31 March
2022
LEI: 549300YV7J2TWLE7PV84 10 May 2022
HIGHLIGHTS IN DETAIL
For the six For the year
months to to
31 March 30 September
Performance 2022 2021
Net asset value per Ordinary share (total return)
(note 1)* +5.05% 19.46%
Benchmark index
MSCI ACWI/Healthcare Index (total return in
GBP sterling with dividends reinvested) +5.03% 13.40%
Since restructuring on 20 June 2017
Net asset value per Ordinary share (total return)
(note 2)* +59.97% 52.28%
Benchmark index total return +61.15% 53.42%
Expenses*
Ongoing charges (note 3) 0.86% 0.83%
Financials (Audited)
(Unaudited) As at
As at 30 September Change
31 March 2022 2021
Total net assets (Group and Company) GBP403,902,000 GBP385,728,000 4.7%
Net asset value per Ordinary share 333.06p 318.07p 4.7%
Net asset value per ZDP share 115.19p 113.50p 1.5%
Price per Ordinary share 300.00p 288.00p 4.2%
Discount per Ordinary share* 9.9% 9.5%
Price per ZDP share 114.50p 113.50p 0.9%
Net gearing* 5.92% 6.04%
Ordinary shares in issue (excluding
those held in treasury) 121,270,000 121,270,000 -
Ordinary shares held in treasury 2,879,256 2,879,256 -
ZDP shares in issue 32,128,437 32,128,437 -
Amount
Dividends paid and declared per Ordinary Record Ex-Dividend Declared
in the period: Pay Date share Date Date date
The Company has paid the
following dividend relating
to the financial year 28 February 4 February 3 February 16 December
ended 30 September 2021: 2022 1.00p 2022 2022 2021
Dividends for the current financial year ending 30 September 2022,
if declared, will be paid in August 2022 and February 2023.
All data sourced from Polar Capital LLP/HSBC.
Note 1 NAV total return is calculated as the change in NAV from the start of the period, assuming
that dividends paid to shareholders are reinvested on the payment date in Ordinary shares
at their net asset value.
Note 2 The Company's portfolio was restructured on 20 June 2017. The total return NAV performance
since restructuring is calculated by reinvesting the dividends in the assets of the Group
and Company from the relevant payment date.
Note 3 Ongoing charges represents the total expenses of the Company, excluding finance costs, transaction
costs, tax and nonrecurring expenses expressed as a percentage of the average daily net asset
value, in accordance with AIC guidance issued in May 2012. The ongoing charges figure as at
31 March 2022 is for the six month period from 30 September 2021 and is annualised for comparison
with the full year's calculation as at 30 September 2021.
*See Alternative Performance Measures below.
For further information Tracey Lago FCG Tel: 020 7227 2700
please contact: Company Secretary
Polar Capital Global Healthcare
Trust Plc
INTERIM MANAGEMENT REPORT
CHAIR'S STATEMENT
On behalf of the Board, I am pleased to provide you with the
Company's Half Year Report for the six months to 31 March 2022.
Only two years ago I wrote my first Chair's Statement as
COVID-19 was sweeping the globe, a situation viewed by many as a
once in a generation event. I certainly did not anticipate writing
so soon against the backdrop of another major humanitarian crisis
unfolding, in the form of the invasion of the Ukraine by Russia at
the end of February. Our thoughts and good wishes go out to all
those affected by these terrible events.
Performance
Not surprisingly, the deteriorating geo-political situation
layered upon increasingly negative economic factors, proved to be
another challenging period for most managers, although equity
markets overall remained remarkably resilient.
The net asset value per Ordinary share (total return) rose 5.05%
over the period, broadly in line with the Benchmark index (+5.03%)
and comfortably ahead of our AIC sector peer group. Whilst we would
always aim to be further ahead of the benchmark, given the backdrop
combined with some of the extreme stock price moves within the
healthcare sector, this was arguably a good outcome.
The discount widened slightly through the period by 0.4% to
9.9%. We had seen a gradual narrowing of the discount earlier in
the period, but in common with many investment trusts, as the
Russia-Ukraine situation developed, discounts widened. The Board
continues to monitor the discount.
Outlook
Whilst the global geo-political situation and economic
conditions are likely to remain challenging for the foreseeable
future, the outlook for healthcare is very compelling. The
Company's managers believe that the macro-economic environment has
shifted to one that is supportive for the healthcare sector,
especially for those companies that sit higher up the
capitalisation and quality scale. More detail is provided in the
Investment Manager's Review below.
The Board
There have been no changes to the membership of the Board in the
six months to 31 March 2022. The Directors' biographical details
are available on the Company's website and are provided in the
Annual Report. In late April 2022, the FCA published the results
and revisions to the Listing Rules in relation to Diversity and
Inclusion on company boards. We will be reviewing the revisions to
the requirements and will advise in the next Annual Report if we
feel that it is necessary or appropriate to take any action.
Principal Risks and Uncertainties
A detailed explanation of the Company's principal risks and
uncertainties, and how they are managed through mitigation and
controls, can be found on pages 29 to 31 of the Annual Report for
the year ended 30 September 2021. The principal risks and
uncertainties are categorised into four main areas: Portfolio
Management, Operational Risk, Regulatory Risk and Economic/Market
Risk. The Directors consider that, overall, the principal risks and
uncertainties faced by the Company for the remaining six months of
the financial year have not changed from those outlined within the
Annual Report. The Board continues to carefully monitor the impact
of the Russian invasion of Ukraine and whilst this worsens the
macroeconomic outlook, there is no direct impact to the Company's
portfolio or the healthcare sector.
Further detail on the Company's performance and portfolio can be
found in the Investment Managers' Report.
Going Concern
As detailed in the notes to the financial statements, the Board
continually monitors the financial position of the Group and
Company and has undertaken additional stress-testing and analysis
in determining the appropriateness of preparing the Financial
Statements on a going concern basis. Having carried out the
additional testing, the Directors are satisfied that it is
appropriate to continue to adopt the going concern basis in
preparing the financial results of the Group and Company. In
reaching this conclusion, the Board also considered the Company's
performance and its assessment of any material uncertainties and
events that might cast significant doubt upon the Group and
Company's ability to continue as a going concern.
Related Party Transactions
In accordance with DTR 4.2.8R, there have been no new related
party transactions during the six month period to 31 March 2022.
There have been no changes in any related party transaction
described in the last Annual Report that could have a material
effect on the financial position or performance of the Group or
Company in the first six months of the current financial year or to
the date of this report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors of Polar Capital Global Healthcare Trust Plc
confirm to the best of their knowledge that:
-- The condensed set of financial statements has been prepared
in accordance with IAS 34, in conformity with the requirements of
the Companies Act 2006 and gives a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company as at 31 March 2022; and
-- The Interim Management Report includes a fair review of the
information required by the Disclosure Guidance and Transparency
Rules 4.2.7R and 4.2.8R.
The half year financial report for the six month period to 31
March 2022 has not been audited or reviewed by the Auditors. The
half year financial report was approved by the Board on 9 May
2022.
Lisa Arnold
Chair
INVESTMENT MANAGER'S REVIEW
Executive Summary
An unwelcome combination of economic and geo-political events
has made the first half of 2022 an extremely challenging period for
global equity markets. Despite being faced with a cocktail of
rising inflation, hawkish central banks and war in Ukraine, the
equity markets have been remarkably resilient and over the six
month period to the end of March 2022. The Company returned 5.05%
versus 5.03% for the benchmark (MSCI AC World Daily Total Return
Net Health Care Index in sterling). More importantly, the macro
environment has shifted to one that is very supportive for the
healthcare sector, especially for larger and generally higher
quality companies. The potential for slowing economic growth and
elevated inflation, i.e. stagflation, is one that should benefit
healthcare. The essential nature of its products and services
provides an offset to slowing economic growth. On the inflation
side, healthcare is populated with businesses that have pricing
power, are vertically integrated, or have high gross and operating
margins and thus can absorb the additional costs.
Reflecting on performance, strong stock selection across the
market capitalisation spectrum was offset by the allocation effect
of having a relative overweight position in small and
mid-capitalisation stocks. More importantly, we did start to see
some evidence that COVID-19 is becoming less disruptive, especially
in the US, as evidenced by a sharp reduction in COVID-19
infections, a material decline in patients needing ICU treatment
and some signs that staffing pressures have plateaued and could
eventually ease. There may well be further COVID-19 bumps in the
road, but if that general direction of travel continues, consumers
will start to re-engage with healthcare systems, which could put
upwards pressure on utilisation, consumption and ultimately company
revenues. With relative valuations attractive and absolute
valuations supportive, the outlook for the healthcare sector is
highly compelling.
Performance review
Over the six month period to the end of March 2022, the
healthcare sector outperformed the broader market indices as the
retreat into more defensive sectors accelerated in late February
following the Russian invasion of Ukraine. It is worth noting that
the Company has not had, and does not have, direct investments in
Russia or Ukraine but is invested in companies that either generate
sales or are running clinical trials in the region. We note that
the healthcare industry is also exposed to some of the supply
chains pressures that have been a direct result of the conflict,
with titanium and energy two good examples. The Company's
performance was in line with that of its benchmark index, with
further details provided below.
Performance - 30 September 2021 to 31 March 2022
From the 30(th) September 2021 to the end of March 2022, the
Company returned 5.05% versus 5.03% for the benchmark. Over the
period under review, market price moves across the healthcare
sector have been quite extreme. In the 4th quarter of calendar 2021
and the 1(st) quarter of calendar 2022, small capitalisation
healthcare, including biotech, which would be regarded as one of
the more speculative sub-sectors, was heavily sold off as investors
switched to more value and higher quality stocks at the expense of
higher growth and smaller stocks. This clearly impacted the
allocation effect for the Company given the higher exposure to
small and mid-capitalisation companies than its benchmark.
Average Weight (Fund) Average Weight (Bench)
>$10bn 79.20 96.46
>$5bn - $10bn 15.15 2.38
<$5bn 11.12 1.16
Cash and Others -5.47 0.00
Source: Polar Capital as at 31 March 2022, average calculated
over the reporting period
From a geographical perspective, the Asia Pacific region
(excluding Japan) was the biggest contributor, mainly due to our
underweight exposure to the region. The overweight in North America
and underweight in Japan were also positive, but negative stock
selection meant that the overall contribution from these regions
was only marginal. The other notable impact over the period was the
negative contribution from Europe with stock selection being a
detractor despite a good allocation effect. The impact of gearing
on performance was negligible over the six months. Although we
decreased the level of gearing in December 2021 and January 2022 on
the back of increased concerns about the Omicron COVID-19 variant,
the overall level was relatively stable during the period under
review. Net gearing at the end of September 2021 was 6.0% and this
was reduced slightly to 5.9% by the end of March 2022.
In terms of sub-sectors, outperformance was split between
allocation and stock selection. The most positive impact came from
strong stock selection in healthcare equipment and facilities,
whilst managed care was a positive contributor due to the
allocation effect. Negative contributors were as follows:
pharmaceuticals due to the underweight exposure, and biotechnology
and healthcare distributors through adverse stock selection.
Stocks that contributed positively to the relative performance
over the period included Moderna, Molina Healthcare, Steris, Wuxi
Biologics, and UnitedHealth Group. A lack of exposure to US
biotechnology company Moderna was a positive relative contributor
with the stock continuing to struggle, as the market re-assessed
not only the future opportunity for COVID-19 vaccines but the
broader utility of the company's mRNA platform. Managed care
organisations Molina Healthcare and UnitedHealth Group delivered
positive results and provided reassuring commentary around 2022
consensus earnings. Further, the stocks benefitted from the
sector's overall strong performance with rising interest rates
providing a tailwind. Wuxi Biologics, a Chinese-based contract
development and manufacturing company, was affected by the broader
growth-to-value rotation (from which Chinese companies were
particularly impacted) but also by the addition of two of its
subsidiaries to the US Commerce department's Unverified List, a
list of companies that the Bureau of Industry Security could not
verify as bona fide. Steris is a leading provider of infection
prevention and procedural products and services, focused primarily
on the critical markets of healthcare, pharmaceuticals and medical
devices. The company's strong performance over the period has been
driven by strong execution despite the challenging environment.
Indeed, Steris upgraded its outlook for the 2022 fiscal year on
stronger growth across the business coupled with higher synergies
from a recent acquisition, which triggered positive revenue and
earnings revisions, putting upwards pressure on the stock's share
price.
Stocks that impacted relative performance negatively over the
period were AbbVie, Bio-Rad Laboratories, Pfizer, Medley and Eli
Lilly. US biotechnology company AbbVie, which was not held during
the period, impacted relative performance, with management
executing well and producing solid sets of financial results that
were well received by the market. There was no significant news
flow for Bio-Rad Laboratories or Medley, but the stocks were caught
up in the derating experienced by highly valued, high-growth
sub-sectors such as life sciences tools and services (Bio-Rad
Laboratories) and healthcare technology (Medley). A lack of
exposure to Pfizer and Eli Lilly hurt performance as the stocks
performed well due to positive announcements (e.g. the FDA granting
an emergency use authorisation to Pfizer's Paxlovid, a COVID-19
oral anti-viral) combined with investors' increased appetite for
large-capitalisation, defensive stocks.
Relative Contributors (%) - 30 September 2021 - 31 March
2022
Average Stock Total Attribution
Stock Active Stock Return Effect
Top 10 Weight Weight Return vs BM
Moderna 0.00 -1.02 -54.14 -59.18 1.01
Molina Healthcare 2.24 2.01 25.97 20.93 0.48
Steris 3.01 2.71 21.25 16.22 0.46
Wuxi Biologics Cayman 0.00 -0.52 -47.63 -52.67 0.40
UnitedHealth Group 6.91 1.24 33.71 28.68 0.37
Centene Corp 1.23 0.65 38.43 33.39 0.33
Envista Holdings
Corp 2.34 2.34 19.36 14.32 0.32
Medtronic 0.00 -1.92 -9.32 -14.35 0.30
Essilor International
SA 0.69 0.69 -1.40 -6.44 0.29
Bristol Myers Squibb 3.38 1.58 26.45 21.41 0.26
Average Stock Total Attribution
Stock Active Stock Return Effect
Bottom 10 Weight Weight Return vs BM
AbbVie 0.00 -2.99 53.97 48.93 -1.24
Bio-Rad Laboratories 3.01 2.82 -22.64 -27.68 -0.89
Pfizer 0.00 -3.67 23.32 18.28 -0.61
Medley 0.78 0.78 -41.73 -46.76 -0.57
Eli Lilly & Co 0.00 -2.67 26.98 21.95 -0.55
Zealand Pharma A/S 0.74 0.74 -44.74 -49.78 -0.49
Avantor 2.41 2.16 -15.28 -20.32 -0.47
Genmab A/S 2.05 1.73 -13.91 -18.94 -0.40
Ship Healthcare 0.83 0.83 -33.95 -38.98 -0.39
Anthem 0.00 -1.38 34.99 29.96 -0.36
Source: Polar Capital as at 31 March 2022. Past performance is
not indicative or a guarantee of future results.
Near term considerations; Stagflation
The healthcare industry is composed of a broad and diversified
universe of businesses that range from pharmaceuticals and
biotechnology to medical equipment, medical insurance, healthcare
facilities and life sciences tools and services. This diversity,
with many different business models across the
market-capitalisation spectrum, is one of the reasons the sector
can offer investors protection against the prospect of global
stagflation. In fact, the correlation of both earnings and the
share prices of healthcare stocks to various economic indicators
(global GDP; the Current Activity Indicator; PMI) is one of the
lowest in the market.
There are also three more fundamental reasons why the healthcare
sector should be relatively attractive in a stagflationary
environment. Firstly, with high inflation and low economic growth,
consumers' purchasing power and confidence are greatly reduced,
adversely affecting consumer demand. However, given the essential
nature of many products and services provided by healthcare
companies, demand for these tends to be consistent. That
consistency should offer investors greater confidence in healthcare
companies' ability to generate steady revenues, earnings and cash
flow.
Secondly, certain pockets of healthcare offer some protection
from inflationary pressures given they can pass on costs to their
customers, are vertically integrated (thus offering greater control
of their supply chains) or have high gross and operating margins
that can absorb the additional costs. On the pricing side we would
highlight healthcare supplies and contract manufacturers and on the
margin side we would point to pharmaceuticals and large
capitalisation biotechnology companies.
Finally, during periods of prolonged stagflation, quality
companies with high cash flow generation, solid balance sheets and
high returns on equity and invested capital should perform better
than higher growth but less cash-generative businesses. This is
because future earnings and cash flows have a lower present value
when nominal interest rates are high, with investors tending to
prefer businesses that can generate earnings and cash flows in the
near term. We are therefore particularly constructive on larger
capitalisation healthcare stocks, many of which display these
characteristics. In summary, near-term macroeconomic uncertainty
and the rising spectre of stagflation lead us to believe the
healthcare sector is an attractive investment proposition,
especially on a relative basis.
Medium term drivers; Healthcare in a COVID-endemic world
In last year's Annual Report we outlined six key investment
themes, which we believe offer the potential for significant
returns in the years ahead. As a reminder the themes are; Delivery
disruption; Innovation; Emerging markets; Consolidation;
Outsourcing; Prevention. These themes remain relevant today, but we
are currently focused on two of the original investment themes plus
a new theme ("Tackling the backlog") that we believe have greater
near-term relevance. That view is based on the assumption that
COVID-19 becomes less disruptive over the next few months and years
because if so, there are positive implications for the healthcare
industry that should yield some exciting investment opportunities.
In order of immediacy, these are;
-- Tackling the backlog
-- Disrupting the delivery of healthcare
-- Prevention
Tackling the backlog
COVID-19 has been incredibly disruptive for millions of people,
for many different reasons, but the impact on global healthcare
systems has been particularly profound. The COVID-19 pandemic has
had significant repercussions for the delivery of elective care,
meaning that many patients are now waiting longer for treatment
than they were before the pandemic began. In order to address the
ever-growing backlog healthcare systems, and their staffing
policies, will need to learn to live with COVID-19, increase
capacity, prioritise diagnosis and treatment and look to utilise
alternative sites of delivery. If successfully delivered, then
utilisation and volumes should accelerate, which is a clear
positive for the top-lines of healthcare facilities, healthcare
providers and medical device companies.
To try and understand the magnitude of the problem, and indeed
the opportunity for the healthcare industry, a recent NHS report
pointed to 6 million people on waiting lists, up from 4.4 million
before the pandemic. The NHS is just one example of the challenge
that healthcare systems face, but it is perfectly reasonable to
assume that similar dynamics exist in other jurisdictions globally.
What that statistic does not capture, however, is the number of
people who have missed all-important diagnoses and could now be
faced with more advanced and more problematic health challenges.
Cancer is a case in point, with the NHS launching the Help Us Help
You campaign to encourage people with cancer symptoms to come
forward. Recent analysis by Macmillan Cancer Support has suggested
that around 50,000 patients have missed a cancer diagnosis during
the pandemic. Research has also shown that women being diagnosed
with stage four breast cancer has increased by 48% over the last
few months, which the charity say is down to COVID-19 disruption to
NHS care. Tackling the backlog is a clear and immediate
priority.
Disrupting the delivery of healthcare
The disruption of delivery is critical given there is an acute
need globally to generate greater efficiencies and deliver more
healthcare to more people for less money. Investment in products
and services that drive efficiencies has been evident for some
time, but the COVID-19 crisis has brought a greater level of focus
and has accelerated momentum in certain areas. The use of
out-patient facilities and Ambulatory Surgery Centres to perform
surgeries that might previously have been performed in a more
traditional hospital setting has really accelerated during the
tail-end of the COVID-19 pandemic. Cataract surgeries, endoscopies
and colonoscopies have been performed in out-patient settings/
Ambulatory Surgery Centres for some time, but there is a clear
drive to conduct more and more procedures, for example orthopaedic
surgery and cardiovascular intervention, in those facilities.
We would also highlight home health as an area that should see
considerable growth over the medium-term as healthcare systems look
to shift patient volumes to lower-cost and more convenient
settings. The Centers for Medicare & Medicaid Services, a
federal agency that administers the United States' major healthcare
programs, has projected that home health spending will grow in the
mid- to high-single-digits per annum through 2028 which should
translate into healthy organic growth for providers. It is
interesting to note that in March UnitedHealth Group announced its
intention to acquire home-health provider, LHC Group, helping to
underpin our view that home-health offers durable growth prospects.
Once part of the UnitedHealth Group, management will look to
improve care coordination, improve outcomes and patient experiences
as well as drive better value for the healthcare system.
Prevention: The cornerstone of public health systems
Effective prevention should be the cornerstone of public health
systems, not just vaccinations, but early and accurate diagnoses to
set patients on to optimal treatment pathways. The COVID-19 crisis
has offered a timely reminder not only of the value of safe and
effective vaccines, but also of the need for effective diagnostics
infrastructure. Early intervention coupled with effective disease
management should drive better outcomes for patients and,
ultimately, generate much-needed cost savings. Genetic testing to
help greater understanding of underlying disease biology will only
accelerate from here, as will the use of biomarkers to enhance
therapeutic accuracy and reduce waste.
Preventative medicine and preventative measures come in a very
wide range of guises, but we feel it appropriate to focus on
diagnostics and vaccines. In a post-COVID-19 world there is hope
that the much-needed investment in diagnostics infrastructure will
be put to good use as testing menus expand. As such, companies like
Abbott Laboratories, Hologic, Roche Holdings and Siemens
Healthineers should be well-positioned to capitalise. Definitive
diagnosis, coupled with guided therapies, are foundational to
precision medicine with the goal of driving better outcomes for
patients. Safe and effective vaccines will also continue to be a
critical part of the healthcare eco-system, with French
pharmaceuticals giant Sanofi one of the world's leading vaccine
manufacturers. Sanofi manufactures not just seasonal vaccines like
influenza, but also travel and paediatric vaccines.
Strategy and positioning
As a reminder, the objective of the Company is to achieve
long-term capital appreciation by investing in a portfolio of
global healthcare companies, to include, but not limited to,
pharmaceutical, biotechnology, medical device and healthcare
services companies. The aim is to identify companies where there is
a disconnect between valuations and intrinsic value. The Company is
a high conviction (81.5% active share as at 31st March 2022),
actively managed investment vehicle that gives investors exposure
to the global healthcare universe. Stock-picking remains critical
to the process, but it is worth noting there will be a continued
focus on the key investment themes some of which appear to be
accelerating in the near-term but also have medium-term
durability.
The Company attempts to combine a Growth at a Reasonable Price
(GARP) approach with the opportunity to invest in earlier-stage,
more disruptive companies. The Growth portfolio dominates the
portfolio with exposure to companies that sit further up the market
capitalisation scale. This part of the portfolio consists of
holdings where we see a disconnect between the current share price
and intrinsic value. The positions also reflect, in part but not
exclusively, the investment themes where we have the highest
conviction. This part of the portfolio drives the lower volatility
of the Company relative to other, more volatile areas of
healthcare. The innovation portfolio provides optionality through
investments in the most exciting small capitalisation stocks we can
find.
http://www.rns-pdf.londonstockexchange.com/rns/8408K_1-2022-5-9.pdf
Period end positioning; Diverse but with high conviction
From a sub-sector perspective, there were a few material changes
during the six month period under review to positioning in response
to both macro and stock-specific drivers. Although pharmaceuticals
remains the largest underweight relative to the benchmark, the
exposure to this sub-sector was increased over the last quarter of
the period (-11.1% as at 31 March 2022 from -13.5% at 30 September
2021) given the defensive characteristics of the sector. Starting
from a modest overweight at the start of the fiscal year,
biotechnology became the biggest overweight at the end of the
period (6.5% as at 31 March 2022) as the large sell-off in this
sector at the end of calendar 2021 offered an opportunity to buy
established, large-capitalisation companies with commercialised
assets and some smaller stocks with exciting pipeline potential. We
reduced our overweight to the managed healthcare and distributors
sub-sectors as they performed well over the period, leaving less
room for upside. Finally, in line with our thesis that healthcare
systems will need to step up their efforts to tackle an
ever-growing large backlog of patients, we remain optimistic on the
healthcare facilities, supplies and medical equipment
sub-sectors.
http://www.rns-pdf.londonstockexchange.com/rns/8408K_2-2022-5-9.pdf
As mentioned above, we continue to be underweight in
pharmaceuticals relative to the benchmark given the industry's
anaemic growth profile and mature operating margins, but at a less
extreme level than at the start of the financial year. The
sub-sector's valuations and dividend yields offer downside
protection, plus the defensive profiles of component companies
should provide some safety against a more cautious macroeconomic
backdrop. Further, the possibility of drug pricing pressures in the
US are likely to recede, especially if the mid-term elections in
November 2022 result in the Republicans gaining a majority in the
House of Representatives. However, our overall underweight is
predicated on our belief that we can find more opportunities in
other areas of the healthcare universe.
Share prices in the biotechnology sub-sector came under
significant pressure during the first four months of the reporting
period due to a less favourable macroeconomic environment, with
higher interest rates weighing down on stocks with high implied
terminal-values and low or negative free cashflow generation. This
broad correction presented some interesting opportunities,
especially with companies that have commercialised assets and/or
overly discounted, late-stage pipelines. More importantly, however,
we believe the biotechnology sector's fundamentals remain intact;
these include ever-improving understanding of human biology and the
ability to take that knowledge into the clinic, and ultimately onto
the market to help patients.
The managed healthcare sub-sector experienced a substantial
re-rating during the period under review, aided by a supportive
political environment but also rising interest rates, which allow
the companies to generate a higher return on their capital.
Similarly, distributors performed very well, mainly due to their
resilient and stable earnings algorithms.
Our thesis that there is increased desire to shift patient
volumes to low-cost settings like the home and Ambulatory Surgery
Centres is unchanged, therefore we have remained overweight in
healthcare facilities despite short-term challenges in the form of
staffing shortages and wage inflation. Tenet Healthcare, the
largest operator of Ambulatory Surgery Centres in the United
States, was added during the period as we believe its portfolio is
well geared to capitalise from this trend. Furthermore, hospitals
and providers are a direct beneficiary of the post-COVID-19
"opening up" trade as patients re-enter the system to access the
care that has been denied them during the height of the coronavirus
crisis.
Other beneficiaries of the "opening up" trade should be
healthcare equipment and supplies companies, to which we have
higher exposure relative to the benchmark. Unfortunately, both
sub-sectors have underperformed the benchmark during the period for
two main reasons. Firstly, the COVID-19 Omicron variant continues
to spread across the world, thus reducing the volumes of elective
procedures and consequently the sales of medical equipment used for
these operations. Secondly, a number of companies have flagged
inflationary pressures and staffing shortages as challenges they
will need to navigate in the coming months. Both transient in
nature, we remain constructive on the sub-sectors, given their
strong fundamentals and the opportunity that the patient backlog
presents.
Stock-selection is a key driver
The table below displays the Company's top 10 relative
overweight and underweights at the end of the reporting period,
highlighting the highest conviction ideas in the portfolio. Whilst
conviction is the appropriate term to use when discussing
positioning versus the benchmark, it is important to stress that
valuation inefficiencies can be relatively short-lived, especially
amongst well-covered large capitalisation stocks. With opportunity
cost also a key decision driver as we look to maximise returns, the
Company's top 10 relative overweights are subject to change.
Top 10 Overweights and Top 10 Underweights relative to
Benchmark
Active Active
(%) (%)
Steris 3.19% Roche -3.74%
Sanofi 2.98% Pfizer -3.70%
Bio-Rad Laboratories 2.92% AbbVie -3.65%
Bristol Myers Squibb 2.87% Eli Lilly & Co -2.97%
Horizon Pharma 2.84% Thermo Fisher Scientific -2.97%
Seattle Genetics 2.59% Abbott Laboratories -2.67%
Alcon 2.58% Merck & Co -2.64%
Boston Scientific Corp 2.58% Novartis -2.46%
SARTORIUS AG 2.55% Danaher -2.40%
Zimmer Biomet Holdings 2.52% Novo Nordisk A/S -2.40%
Source: Polar Capital, as at 31 March 2022
The majority of the Top 10 overweights relative to the benchmark
have been in the portfolio for some time, with the exception of
Sartorius, Seattle Genetics and Zimmer Biomet, all of which were
added during the reporting period. Sartorius is a life sciences
tools and services company that partners with the
biopharmaceuticals industry via the provision of products,
technologies and expertise to produce biopharmaceuticals reliably
and efficiently. The stock performed strongly in 2021, with
COVID-19 a material contributor, but has since de-rated alongside
similar highly rated, high-growth companies. That contraction in
the valuation presented an opportunity to re-engage with a
high-quality business that enjoys a strong position in buoyant
end-markets. Seattle Genetics is a US-based, commercial stage
biotechnology company that focusses on oncology with a particular
expertise in the field of antibody-drug conjugates (ADCs). ADCs are
highly targeted drugs that combine monoclonal antibodies specific
to surface antigens present on particular tumour cells, with highly
potent anti-cancer agents linked via a chemical linker. With a rich
pipeline of potential newsflow, coupled with a number of de-risked
assets, we believe Seattle Genetics carries a positive risk-reward
profile. Zimmer Biomet manufactures and distributes reconstructive
implants, with hips and knees the primary revenue drivers. The
addition of Zimmer Biomet gives the portfolio direct exposure to
the "tackling the backlog" theme, with hip and knee surgeries an
area that should see a near-term increase in demand.
There were few changes in the Innovation Portfolio during the
reporting period, as one would expect given the long-dated nature
of the investment's return profiles. We did, however, sell UK
diagnostics company Renalytix and add US-based Surgery Partners to
the portfolio. The decision to exit the position in Renalytix was
based on a combination of a rich valuation but also concerns over
the pace of the company's revenue generation. Surgery Partners is a
US-based healthcare services company that focusses on the
out-patient setting. The group operates more than 180 locations in
31 states, including Ambulatory Surgery Centres, surgical
hospitals, and multi-specialty physician practices. The addition of
Surgery Partners gives the portfolio direct exposure to the
"disrupting the delivery of healthcare" theme, as more and more
patient volumes switch from traditional in-patient hospital
settings to alternative sites of care.
Given their size, stocks held in the Innovation portfolio have
the potential to be more volatile than their larger peers held in
the Growth portfolio. It is also worth noting that companies
further down the market capitalisation scale tend to be less well
researched, increasing the chances of valuation inefficiencies. It
is that combination of volatility and valuation inefficiency that
we hope will yield some interesting ideas that could offer
significant potential over the long-term.
The outlook for healthcare is compelling, especially for high
quality large-cap stocks
The combination of a challenging macro-economic environment and
positive industry dynamics drives a compelling investment case for
healthcare. On the macro side, rising inflation, slowing economic
activity and dented consumer confidence all point to a scenario
that enhances the appeal of a defensive sector like healthcare.
Further, as we all learn to live with COVID-19, the consumption of
healthcare products and services should accelerate, putting upward
pressure on revenues and potentially earnings. One final
observation is that the greater the uncertainty, the more
attractive larger capitalisation companies become given their high
operating margins and enhanced ability to absorb inflationary
pressures. Importantly, many will continue to invest in future
growth opportunities in concert with delivering attractive
earnings.
James Douglas and Gareth Powell
Co-Managers
9 May 2022
PORTFOLIO AS AT 31 MARCH 2022
(Figures in brackets denote the comparative ranking as at 30
September 2021)
Ranking Stock Market Value % of total
Sector Country GBP'000 net assets
2022 2021 31 30 31 30
March September March September
2022 2021 2022 2021
Johnson &
1 (1) Johnson Pharmaceuticals United States 33,248 29,093 8.2% 7.5%
2 (2) UnitedHealth Managed Healthcare United States 30,020 24,053 7.4% 6.2%
Bristol Myers
3 (4) Squibb Pharmaceuticals United States 19,946 15,580 4.9% 4.0%
4 (5) Sanofi Pharmaceuticals France 18,046 13,629 4.5% 3.5%
Healthcare
5 (8) Steris Equipment United States 14,139 10,912 3.5% 2.8%
Healthcare
6 (10) Boston Scientific Equipment United States 13,657 10,810 3.4% 2.8%
7 (9) Horizon Pharma Biotechnology United States 12,655 10,910 3.1% 2.8%
Healthcare
8 (31) Alcon Supplies Switzerland 12,469 7,678 3.1% 2.0%
Life Sciences
9 (28) Bio-Rad Laboratories Tools & Services United States 12,437 8,439 3.1% 2.2%
Healthcare
10 (-) Zimmer Biomet Equipment United States 11,556 - 2.9% -
Top 10 investments 178,173 44.1%
11 (-) Seagen Biotechnology United States 11,488 - 2.9% -
Healthcare
12 (6) Baxter International Equipment United States 11,470 13,582 2.8% 3.5%
13 (3) AstraZeneca Pharmaceuticals United Kingdom 11,429 19,954 2.8% 5.2%
Healthcare
14 (-) Sartorius Equipment Germany 10,901 - 2.7% -
Life Sciences
15 (27) Avantor Tools & Services United States 10,655 8,637 2.6% 2.2%
Healthcare
16 (12) Siemens Healthineers Equipment Germany 10,067 10,450 2.5% 2.7%
17 (-) Astellas Pharma Pharmaceuticals Japan 9,800 - 2.5% -
Healthcare
18 (26) CooperCompanies Supplies United States 9,495 8,776 2.4% 2.3%
19 (22) Cytokinetics Biotechnology United States 9,462 8,974 2.3% 2.3%
Healthcare
20 (13) Hologic Equipment United States 9,394 10,401 2.3% 2.7%
Top 20 investments 282,334 69.9%
21 (-) Chugai Pharmaceutical Pharmaceuticals Japan 9,227 - 2.3% -
22 (17) ArgenX Biotechnology Netherlands 9,199 9,703 2.3% 2.5%
23 (25) UCB Pharmaceuticals Belgium 9,181 8,799 2.3% 2.3%
Healthcare
24 (18) Envista Equipment United States 9,067 9,619 2.2% 2.5%
25 (-) Incyte Biotechnology United States 8,988 - 2.2% -
Healthcare
26 (-) Tenet Healthcare Facilities United States 8,810 - 2.2% -
Healthcare
27 (19) Acadia Healthcare Facilities United States 8,509 9,595 2.1% 2.5%
28 (29) Biohaven Pharmaceutical Biotechnology United States 8,356 8,411 2.1% 2.2%
Metal & Glass
29 (24) AptarGroup Containers United States 8,305 8,852 2.1% 2.3%
Encompass Healthcare
30 (23) Health Facilities United States 8,279 8,893 2.0% 2.3%
Top 30 investments 370,255 91.7%
31 (-) Biovitrum Biotechnology Sweden 7,806 - 1.9% -
Healthcare
32 (32) Amedisys Services United States 6,085 6,856 1.5% 1.8%
33 (34) Genmab Biotechnology Denmark 5,642 5,712 1.4% 1.5%
34 (16) Molina Healthcare Managed Healthcare United States 5,194 9,961 1.3% 2.6%
Healthcare
35 (35) Uniphar Distributors Ireland 4,903 5,438 1.2% 1.4%
Healthcare
36 (39) LivaNova Equipment United Kingdom 4,029 3,810 1.0% 1.0%
37 (-) United Therapeutics Biotechnology United States 3,812 - 0.9% -
Intelligent Healthcare
38 (38) Ultrasound Technology United Kingdom 3,176 3,811 0.8% 1.0%
Healthcare
39 (36) Medley Technology Japan 3,039 4,404 0.8% 1.1%
Axonics Modulation Healthcare
40 (42) Technologies Equipment United States 3,025 2,180 0.7% 0.6%
Top 40 investments 416,966 103.2%
Healthcare
41 (-) Surgery Partners Facilities United States 2,650 - 0.7% -
Healthcare
42 (41) Ship Healthcare Distributors Japan 2,587 2,882 0.7% 0.7%
43 (40) Zealand Pharma Biotechnology Denmark 2,105 3,807 0.5% 1.0%
44 (44) Avadel Pharmaceuticals Pharmaceuticals Ireland 1,717 2,018 0.4% 0.5%
Healthcare
45 (43) Quotient Supplies Switzerland 1,115 2,123 0.3% 0.5%
Healthcare
46 (46) Verici DX Technology United Kingdom 99 230 - 0.1%
Total Equities 427,239 105.8%
Other Net Liabilities (23,337) (5.8%)
Net Assets 403,902 100.0%
Note - Sectors are from the GICS (Global Industry Classification
Standard).
PORTFOLIO REVIEW AS AT 31 MARCH 2022
30 September
Geographical Exposure at: 31 March 2022 2021
United States 71.8% 69.0%
Japan 6.3% 1.8%
Germany 5.2% 2.7%
United Kingdom 4.6% 7.3%
France 4.5% 6.2%
Switzerland 3.4% 2.5%
Netherlands 2.3% 5.2%
Belgium 2.3% 2.3%
Denmark 1.9% 4.6%
Sweden 1.9% -
Ireland 1.6% 1.9%
Australia - 2.4%
Other net liabilities (5.8%) (5.9%)
Total 100.0% 100.0%
30 September
Sector Exposure at: 31 March 2022 2021
Pharmaceuticals 27.9% 23.0%
Healthcare Equipment 24.0% 23.4%
Biotechnology 19.6% 14.8%
Managed Healthcare 8.7% 11.8%
Healthcare Facilities 7.0% 7.2%
Healthcare Supplies 5.8% 6.3%
Life Sciences Tools & Services 5.7% 5.4%
Metal & Glass Containers 2.1% 2.3%
Healthcare Distributors 1.9% 4.9%
Healthcare Technology 1.6% 2.3%
Healthcare Services 1.5% 1.8%
Apparel, Accessories & Luxury Goods - 2.7%
Other net liabilities (5.8%) (5.9%)
Total 100.0% 100.0%
Market Capitalisation breakdown 30 September
at: 31 March 2022 2021
Large (>US$10bn) 79.3% 78.9%
Medium (US$5bn - US$10bn) 17.1% 14.8%
Small (<US$5bn) 9.4% 12.2%
Other net liabilities (5.8%) (5.9%)
100.0% 100.0%
STATEMENT OF COMPREHENSIVE INCOME
For the half year ended 31 March 2022
Group Group Group
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
31 March 2022 31 March 2021 30 September 2021
Revenue Capital Total Revenue Capital Total Revenue Capital Total
return return return return return return return return return
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment income 2 1,973 - 1,973 1,595 - 1,595 3,685 - 3,685
Other operating
income 2 2 - 2 - - - - - -
Gains on investments
held at fair
value - 20,201 20,201 - 12,287 12,287 - 64,165 64,165
Other currency
losses - (214) (214) - (151) (151) - (144) (144)
Total income 1,975 19,987 21,962 1,595 12,136 13,731 3,685 64,021 67,706
Expenses
Investment management
fee (291) (1,162) (1,453) (245) (982) (1,227) (518) (2,070) (2,588)
Other administrative
expenses (317) (36) (353) (247) (15) (262) (553) (59) (612)
Total expenses (608) (1,198) (1,806) (492) (997) (1,489) (1,071) (2,129) (3,200)
Profit before
finance costs
and tax 1,367 18,789 20,156 1,103 11,139 12,242 2,614 61,892 64,506
Finance costs - (541) (541) - (526) (526) - (1,064) (1,064)
Profit before
tax 1,367 18,248 19,615 1,103 10,613 11,716 2,614 60,828 63,442
Tax (228) - (228) (170) - (170) (421) - (421)
Net profit for
the period and
total comprehensive
income 1,139 18,248 19,387 933 10,613 11,546 2,193 60,828 63,021
Earnings per
Ordinary share
(pence) 3 0.94 15.05 15.99 0.77 8.75 9.52 1.81 50.16 51.97
The total column of this statement represents the Group's
Statement of Comprehensive Income, prepared in accordance with
UK-adopted International Accounting Standards.
The revenue return and capital return columns are supplementary
to this and are prepared under guidance published by the
Association of Investment Companies.
The Group does not have any other income or expense that is not
included in net profit/(loss) for the period/year. The net
profit/(loss) for the period/year disclosed above represents the
Group's total comprehensive Income.
There are no dilutive securities and therefore the Earnings per
Share and the Diluted Earnings per Share are the same.
All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued
in the period/year.
BALANCE SHEETS
For the half year ended 31 March 2022
Group Company
(Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) (Audited)
31 March 31 March 30 September 31 March 31 March 30 September
2022 2021 2021 2022 2021 2021
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Investments held
at fair value 427,239 344,597 408,561 427,239 344,597 408,561
Investment in
subsidiary - - - 50 50 50
Current assets
Receivables 2,055 285 2,300 2,055 285 2,300
Overseas tax
recoverable 606 547 572 606 547 572
Cash and cash
equivalents 11,450 26,306 13,718 11,400 26,256 13,668
14,111 27,138 16,590 14,061 27,088 16,540
Total assets 441,350 371,735 425,151 441,350 371,735 425,151
Current liabilities
Payables (440) (339) (2,956) (440) (339) (2,956)
(440) (339) (2,956) (440) (339) (2,956)
Non-current liabilities
Zero dividend
preference
shares (37,008) (35,930) (36,467) - - -
Loan from subsidiary - - - (37,008) (35,930) (36,467)
Total liabilities (37,448) (36,269) (39,423) (37,448) (36,269) (39,423)
Net assets 403,902 335,466 385,728 403,902 335,466 385,728
Equity attributable
to equity shareholders
Called up share
capital 31,037 31,037 31,037 31,037 31,037 31,037
Share premium reserve 80,685 80,685 80,685 80,685 80,685 80,685
Capital redemption
reserve 6,575 6,575 6,575 6,575 6,575 6,575
Special distributable
reserve 3,672 3,672 3,672 3,672 3,672 3,672
Capital reserves 280,225 211,762 261,977 280,225 211,762 261,977
Revenue reserve 1,708 1,735 1,782 1,708 1,735 1,782
Total equity 403,902 335,466 385,728 403,902 335,466 385,728
Net asset value
per Ordinary share
(pence) 4 333.06 276.63 318.07 333.06 276.63 318.07
Net asset value
per ZDP share (pence) 4 115.19 111.83 113.50 - - -
The parent company has taken advantage of section 408 of the
Companies Act 2006 and has not included its own income statement in
the financial statements. The parent company's profit for the half
year was GBP19,387,000 (31 March 2021: profit of GBP11,546,000 and
30 September 2021: profit of GBP63,021,000).
STATEMENT OF CHANGES IN EQUITY
For the half year ended 31 March 2022
Group and Company
Half year ended 31 March 2022 (Unaudited)
Called Capital Share Special
up share redemption premium distributable Capital Revenue Total
capital reserve reserve reserve reserves reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total equity at 1 October
2021 31,037 6,575 80,685 3,672 261,977 1,782 385,728
Total comprehensive income:
Profit for the half
year ended 31 March
2022 - - - - 18,248 1,139 19,387
Transactions with owners, recorded
directly to equity:
Equity dividends
paid - - - - - (1,213) (1,213)
Total equity at 31
March 2022 31,037 6,575 80,685 3,672 280,225 1,708 403,902
Group and Company
Half year ended 31 March 2021 (Unaudited)
Called Capital Share Special
up share redemption premium distributable Capital Revenue Total
capital reserve reserve reserve reserves reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total equity at 1 October
2020 31,037 6,575 80,685 3,672 201,149 2,015 325,133
Total comprehensive income:
Profit for the half
year ended
31 March 2021 - - - - 10,613 933 11,546
Transactions with owners, recorded
directly to equity:
Equity dividends
paid - - - - - (1,213) (1,213)
Total equity at 31
March 2021 31,037 6,575 80,685 3,672 211,762 1,735 335,466
Group and Company
Year ended 30 September 2021 (Audited)
Called Capital Share Special
up share redemption premium distributable Capital Revenue Total
capital reserve reserve reserve reserves reserve Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total equity at 1 October
2020 31,037 6,575 80,685 3,672 201,149 2,015 325,133
Total comprehensive income:
Profit for the year
ended 30 September 2021 - - - - 60,828 2,193 63,021
Transactions with owners, recorded
directly to equity:
Equity dividends
paid - - - - - (2,426) (2,426)
Total equity at 30
September 2021 31,037 6,575 80,685 3,672 261,977 1,782 385,728
CASH FLOW STATEMENT
For the half year ended 31 March 2022
Group and Company
(Unaudited) (Unaudited) (Audited)
Half year Half year Year ended
ended ended 30 September
31 March 31 March 2021
2022 2021 GBP'000
GBP'000 GBP'000
Cash flows from operating activities
Profit before finance costs and tax 20,156 12,242 64,506
Adjustment for non-cash items:
Gains on investments held at fair value
through profit or loss (20,201) (12,287) (64,165)
Adjusted (loss)/profit before tax (45) (45) 341
Adjustments for:
Purchases of investments, including transaction
costs (245,517) (329,996) (626,164)
Sales of investments, including transaction
costs 244,829 340,486 625,115
Increase in receivables (130) (133) (108)
(Decrease)/increase in payables 71 (509) (479)
Overseas tax deducted at source (262) (128) (404)
Net cash (used in)/generated from operating
activities (1,054) 9,675 (1,699)
Cash flows from financing activities
Interest paid (1) (1) (2)
Equity dividends paid (1,213) (1,213) (2,426)
Net cash used in from financing activities (1,214) (1,214) (2,428)
Net (decrease)/increase in cash and cash
equivalents (2,268) 8,461 (4,127)
Cash and cash equivalents at the beginning
of the period 13,718 17,845 17,845
Cash and cash equivalents at the end of
the period 11,450 26,306 13,718
NOTES TO THE FINANCIAL STATEMENTS
For the half year ended 31 March 2022
1. General Information
The consolidated financial statements comprise the unaudited
results of the Company and its wholly-owned subsidiary PCGH ZDP plc
(together referred to as the Group) for the six month period to 31
March 2022.
The Group and Company unaudited financial statements to 31 March
2022 have been prepared using the accounting policies used in the
Group and Company's financial statements to 30 September 2021.
These accounting policies are based on UK-adopted International
Accounting Standards (IAS), International Financial Reporting
Standards ("IFRS"), which comprise standards and interpretations
approved by the International Accounting Standards Board
("IASB").
The financial information in this half year financial report
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006.
The financial information for the periods ended 31 March 2022
and 31 March 2021 have not been audited. The figures and financial
information for the year ended 30 September 2021 are an extract
from the latest published accounts and do not constitute statutory
accounts for that year. Full statutory accounts for the year ended
30 September 2021, prepared under IFRS, including the report of the
auditors which was unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under
section 498 of the Companies Act 2006, have been delivered to the
Registrar of Companies.
The Group and Company's accounting policies have not varied from
those described in the financial statements for the year ended 30
September 2021.
The Group and Company's financial statements are presented in
Pound Sterling and all values are rounded to the nearest thousand
pounds (GBP'000), except where otherwise stated.
The Directors believe it is appropriate to adopt the going
concern basis in preparing the financial statements. The Board
continually monitors the financial position of the Group and
Company. The Directors have considered a detailed assessment of the
Group and Company's ability to meets its liabilities as they fall
due. The assessment took account of the Company's current financial
position, its cash flows and its liquidity position. In light of
the results of these tests, the Group and Company's cash balances,
and the liquidity position, the Directors consider that the Group
and Company have adequate financial resources to enable them to
continue in operational existence. Accordingly, the Directors are
satisfied that it is appropriate to continue to adopt the going
concern basis in preparing the financial results of the Group and
Company.
There were no new IFRSs or amendments to IFRSs applicable to the
current year which had any significant impact on the Group and
Company's Financial Statements.
2. DIVIDS and OTHER Income (Unaudited) (Unaudited) (Audited)
For the half For the half For the
year ended year ended year ended
31 March 31 March 30 September
2022 2021 2021
GBP'000 GBP'000 GBP'000
Investment income
Revenue:
UK Dividend income 335 286 430
Overseas Dividend income 1,638 1,309 3,255
Total investment income allocated
to revenue 1,973 1,595 3,685
Other operating income
Bank interest 2 - -
Total other operating income 2 - -
There were no dividends allocated to capital as at 31 March
2022
3. EARNING per ORDINARY share (Unaudited) (Unaudited) (Audited)
For the half For the half For the
year ended year ended year ended
31 March 31 March 30 September
2022 2021 2021
GBP'000 GBP'000 GBP'000
Net profit for the period:
Revenue 1,139 933 2,193
Capital 18,248 10,613 60,828
Total 19,387 11,546 63,021
Weighted average number of shares
in issue during the period 121,270,000 121,270,000 121,270,000
Revenue 0.94p 0.77p 1.81p
Capital 15.05p 8.75p 50.16p
Total 15.99p 9.52p 51.97p
As at 31 March 2022 there were no potentially dilutive shares in
issue (31 March 2021 and 30 September 2021: nil).
4. Net asset value per share (Unaudited) (Unaudited)
For the half For the half (Audited)
year year For the year
ended ended ended
31 March 31 March 30 September
2022 2021 2021
(i) Ordinary shares
Net assets attributable to Ordinary
shareholders (GBP'000) 403,902 335,466 385,728
Ordinary shares in issue at
end of period (excluding those
held in treasury) 121,270,000 121,270,000 121,270,000
Net asset value per Ordinary
share (pence) 333.06 276.63 318.07
As at 31 March 2022 there were no potentially dilutive shares in
issue (31 March 2021 and 30 September 2021: nil).
(ii) ZDP shares
Calculated entitlement of ZDP
shareholders (GBP'000) 37,008 35,930 36,467
ZDP shares in issue at the
end of the year 32,128,437 32,128,437 32,128,437
Net asset value per ZDP share
(pence) 115.19 111.83 113.50
5. DIVIDS
Dividends for the current financial year ending 30 September
2022, if declared, will be paid in August 2022 and February
2023.
6. RELATED PARTY TRANSACTIONS
There have been no related party transactions that have
materially affected the financial position or the performance of
the Company during the six month period to 31 March 2022.
7. POST BALANCE SHEET EVENTS
There are no significant events that have occurred after the end
of the reporting period to the date of this report which require
disclosure.
ALTERNATIVE PERFORMANCE MEASURES (APMS)
In assessing the performance of the Company, the Investment
Manager and the Directors use the following APMs which are not
defined in accounting standards or law but are considered to be
known industry metrics:
Net Asset Value (NAV) and NAV per share
The NAV is the value attributed to the underlying assets of the
Company less the liabilities, presented either on a per share or
total basis.
The NAV is often expressed in pence per share after being
divided by the number of shares which have been issued. The NAV per
share is unlikely to be the same as the share price which is the
price at which the Company's shares can be bought or sold by an
investor. See Note 4 above for detailed calculations. The NAV per
Ordinary share is published daily.
NAV Total Return (APM)
The NAV total return shows how the net asset value has performed
over a period of time taking into account both capital returns and
dividends paid to shareholders. NAV total return is calculated as
the change in NAV from the start of the period, assuming that
dividends paid to shareholders are reinvested on the payment date
in Ordinary shares at their net asset value.
Year ended Year ended
31 March 30 September
2022 2021
Opening NAV per share a 318.07 268.11p
Closing NAV per share b 333.06p 318.07p
Dividend reinvestment factor c 1.003247 1.006997
Adjusted closing NAV per share d=b*c 334.14p 320.30p
NAV total return for the year (d/a)-1 5.05% 19.46%
NAV Total Return Since Restructuring (APM)
The NAV total return shows how the net asset value has performed
over a period of time taking into account both capital returns and
dividends paid to shareholders. NAV total return is calculated as
the change in NAV from the start of the period, assuming that
dividends paid to shareholders are reinvested on the payment date
in Ordinary shares at their net asset value.
Year ended Year ended
31 March 30 September
2022 2021
NAV per share at reconstruction a 215.85p 215.85p
Closing NAV per share b 333.06p 318.07p
Dividend reinvestment factor c 1.036736 1.033409
Adjusted closing NAV per share d=b*c 345.30p 328.70p
NAV total return since reconstruction (d/a)-1 59.97% 52.28%
(Discount)/Premium (APM)
A description of the difference between the share price and the
net asset value per share usually expressed as a percentage (%) of
the net asset value per share. If the share price is higher than
the NAV per share the result is a premium. If the share price is
lower than the NAV per share, the shares are trading at a
discount.
Year ended Year ended
31 March 30 September
2022 2021
Closing share price a 300.00p 288.00p
Closing NAV per share b 333.06p 318.07p
Discount per Ordinary share (a/b)-1 9.93% 9.45%
Ongoing Charges (APM)
Ongoing charges are calculated in accordance with AIC guidance
by taking the Company's annual ongoing charges, excluding
performance fees and exceptional items, if any, and expressing them
as a percentage of the average daily net asset value of the Company
over the year.
Ongoing charges include all regular operating expenses of the
Company. Transaction costs, interest payments, tax and nonrecurring
expenses are excluded from the calculation as are the costs
incurred in relation to share issues and share buybacks.
Where a performance fee is paid or is payable, a second ongoing
charge is provided, calculated on the same basis as the above but
incorporating the amount of performance fee due or paid.
The ongoing charges figure as at 31 March 2022 is for the six
month period from 30 September 2021 and is annualised for
comparison with the full year's calculation as at 30 September
2021.
Year ended Year ended
31 March 30 September
2022 2021
Investment Management fee GBP1,453,000 GBP2,588,000
Other Administrative Expenses GBP353,000 GBP612,000
a GBP1,806,000 GBP3,200,000
Average daily net assets value b GBP422,791,000 GBP384,905,000
Ongoing Charges excluding
performance fee (a/182*365)/b 0.86% 0.83%
Performance fee c - -
d=a+c GBP1,806,000 GBP3,200,000
Ongoing charges including
performance fee (d/182*365)/b 0.86% 0.83%
Net Gearing (APM)
Gearing is calculated in line with AIC guidelines and represents
net gearing, i.e. total assets less cash and cash equivalents
divided by net assets. The total assets are calculated by adding
back the structural gearing which is the ZDP value. Cash and cash
equivalents are cash and purchases and sales for future settlement
outstanding at the year end.
Year ended Year ended
31 March 30 September
2022 2021
Net assets a GBP403,902,000 GBP385,728,000
ZDP loan value b GBP37,008,000 GBP36,467,000
Total assets c=(a+b) GBP440,910,000 GBP422,195,000
Cash and cash equivalents
(including amounts awaiting
settlement) d GBP13,115,000 GBP13,171,000
Net gearing (c-d)/a 5.92% 6.04%
FORWARD LOOKING STATEMENTS
Certain statements included in this half-year financial report
incorporating the interim management report contain forward-looking
information concerning the Company's strategy, operations,
financial performance or condition, outlook, growth opportunities
or circumstances in the countries, sectors or markets in which the
Company operates. By their nature, forward-looking statements
involve uncertainty because they depend on future circumstances,
and relate to events, not all of which are within the Company's
control or can be predicted by the Company. Although the Company
believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Actual results could
differ materially from those set out in the forward-looking
statements. For a detailed analysis of the factors that may affect
our business, financial performance or results of operations, we
urge you to look at the principal risks and uncertainties included
in the Strategic Report section on pages 29 to 31 of the Annual
Report for the year ended 30 September 2021. No part of these
results constitutes, or shall be taken to constitute, an invitation
or inducement to invest in Polar Capital Global Healthcare Trust
plc or any other entity and must not be relied upon in any way in
connection with any investment decision. The Company undertakes no
obligation to update any forward-looking statements.
HALF YEAR REPORT
The Company has opted not to post half year reports to
shareholders. Copies of this announcement will be available from
the Company Secretary at the Registered Office, 16 Palace Street,
London, SW1E 5JD and from the Company's website at
www.polarcapitalglobalhealthcaretrust.co.uk
Neither the contents of the Company's website nor the contents
of any website accessible from the hyperlinks on the Company's
website (or any other website) is incorporated into or forms part
of this announcement .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BUGDULUGDGDC
(END) Dow Jones Newswires
May 10, 2022 03:40 ET (07:40 GMT)
Polar Capital Global Hea... (LSE:PCGH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Polar Capital Global Hea... (LSE:PCGH)
Historical Stock Chart
From Jul 2023 to Jul 2024
