Released : 13/03/2020 07:00
To: RNS
From: European Assets Trust PLC ('the Company')
Date: 13 March 2020
Statement of Results - 31 December 2019
· Total return* performance for the year ended 31 December 2019
Sterling | Euro | |
Share price | 25.7% | 33.3% |
Net asset value per share | 19.8% | 26.9% |
EMIX Smaller European Companies (ex UK) Index | 20.6% | 27.8% |
· The annual dividend for 2020 is 7.020p per share equivalent to 6% of the closing net asset value per share on 31 December 2019 and an increase of 17.2% over the prior year | ||
Sterling | ||
Annual dividend payable for 2020 | 7.020p | |
January 2020 interim dividend paid per share∞ | 1.755p | |
* Capital performance with dividends reinvested
∞The 2020 dividend will be paid in four equal instalments with further dividends payable in April, July and October.
Chairman's Statement
Fellow shareholders,
European Assets Trust PLC ('the Company') recorded a Sterling share price total return for the year ended 31 December 2019 of 25.7% (European Assets Trust NV 2018: -23.9%). The Sterling Net Asset Value ('NAV') total return for the year was 19.8% (European Assets Trust NV 2018: -15.4%). This compares to the total return of its benchmark the EMIX Smaller European Companies (ex UK) Index which rose 20.6% (European Assets Trust NV 2018: -12.7%) during the same period. The share price total return benefited from a narrowing of the discount from 9.5% as at 31 December 2018 to 5.2% at the year-end.
2019 was a good year for European Smaller Companies and your Company, allowing us to announce an attractive increase in dividend. Depressed sentiment leading into the year helped provide the platform for a strong first quarter as the markets yet again took their lead from Central Banks with both the US and European authorities signalling that monetary support would continue. While this market cycle has been driven by low interest rates more than economic growth, it was a threat to the latter that dampened optimism heading into the second and third quarter. Macroeconomic indicators deteriorated as the US and China continued their trade negotiations. However, the final months of the year were strong as a stage one deal between the two countries was announced and economic data began to look more promising. The outcome of the UK general election also provided further political relief, though the ensuing rally of Sterling did dampen our Euro denominated returns when translated back to our reporting currency.
The Investment Manager's Review, which follows, discusses the Company's performance in more detail.
Migration
As previously reported, on 16 March 2019, the Company migrated its legal seat and structure from the Netherlands to the United Kingdom by means of a cross border merger (the 'migration'). The migration resulted in the entire portfolio of investments of its predecessor, European Assets Trust NV ('EAT NV'), transferring to the Company, with shareholders entitled to receive one ordinary share in the Company in exchange for each share held in EAT NV. EAT NV then effectively dissolved without liquidation.
EAT NV was a Dutch company. The migration to the United Kingdom has resulted in an English registered, London market premium listed, UK investment trust, which the Board believes provides a long-term stable structure for the Company.
Following the migration to the United Kingdom, the Company has ensured that it will have continuity of investment management services, governance and regulatory oversight. The Board continues to monitor the potential impact of Brexit and believes that while the ultimate impact of Brexit on financial and currency markets both in the United Kingdom and the European Union cannot be assessed, any volatility would be managed as part of our normal investment processes.
Financial reporting
The Company was incorporated on 12 November 2018 and presents its first set of accounts for the period ended 31 December 2019.
As disclosed within the prospectus of the Company issued on 27 November 2018, the Company has accounted for the migration as if it had occurred on 1 January 2019 notwithstanding the effective date of 16 March 2019. This treatment is consistent with the Board's goal, throughout the merger process, of minimising the impact of the migration on the day to day operations and reporting to shareholders of the Company. The Board has also announced that with effect from the reporting period beginning on 1 January 2020, the reporting currency of the Company will change to Sterling from Euro and that all future financial statements will be presented in Sterling.
Dividend
The level of dividend paid each year is determined in accordance with the Company's distribution policy. The Company has stated that, barring unforeseen circumstances, it will pay an annual dividend equivalent to six per cent of its NAV at the end of the preceding year.
In January, the Company announced that dividends would be declared in Sterling, a change from the previous practice of declaring in Euros. This change will provide greater certainty of income for the overwhelming majority of the Company's shareholders who choose to receive their dividends in Sterling rather than Euros.
The 2020 dividend of £0.07020 per share, which represents an increase of 17.2% from the 2019 dividend of £0.0599* per share will be paid in four equal instalments of £0.01755 on 31 January, 30 April, 31 July and 30 October 2020. Following approval by the UK High Court, dividends will be funded by a combination of current year profits and the Distributable Reserve.
Directorate Change
As part of an orderly succession process, Professor Robert van der Meer will retire from the Board following the conclusion of the Company's forthcoming Annual General Meeting. Robert has served on the Board of this Company and its predecessor, EAT NV, since 27 April 2007. As Deputy Chairman and Chairman of the Audit and Risk Committee, Robert has played a key oversight role. His knowledge and understanding of Dutch corporate governance and accounting and his insight into investment management portfolio risk has been invaluable. On behalf of the Board and stakeholders of the Company, I thank Robert for his commitment and wise counsel throughout the last 13 years.
As reported in my statement for the report and accounts for the six-month period ended 30 June 2019, following a rigorous selection process which was facilitated by an external search company, Stuart Paterson was appointed to the Board with effect from 22 July 2019. Upon the retirement of Robert, and following a period of valuable overlap, I am pleased to confirm that Stuart will be appointed as Chairman of the Audit and Risk Committee.
Outlook
Given the unprecedented nature of the current Coronavirus epidemic, it is unwise to provide any specific outlook. What we know is that the longer the epidemic endures, the more damaging it will be on the global economy and on stock markets. This is likely to be met with responses by both central banks and governments, with the latter more likely to be constructive with expansionist fiscal policies. This may potentially lead us into a market cycle different from the liquidity driven cycle we have seen thus far.
In investment terms, we can take comfort that the portfolio entered this period without any leverage. Indeed, the manager has been clear that we needed financial capacity to take advantage of any opportunities to add some good quality assets were they to fall towards more attractive valuation levels. We would therefore expect to be deploying more capital over the coming months, taking advantage of any further volatility for the benefit of long-term returns.
Annual General Meeting
The Annual General Meeting will take place on 14 May 2020 at 3.00pm at the offices of BMO Global Asset Management (EMEA), Exchange House, Primrose Street, London EC2A 2NY and will include a presentation from the Lead Investment Manager, Sam Cosh, on the Company and its investment portfolio. This is a good opportunity for shareholders to meet the investment management team and the Board and we look forward to welcoming as many shareholders as are able to attend. In addition, to reach a wider audience of shareholders, the presentation will be recorded and will be available to view on the Company's website shortly thereafter.
Jack Perry CBE
Chairman
*The Sterling equivalent of the dividend paid to shareholders of €0.0684 net of Dutch withholding tax.
Investment Manager's Review
Market Backdrop
2019 was a strong year for equity markets helping us to deliver an attractive NAV and share price return, which, following a narrowing of our discount, outperformed the benchmark.
The year under review started strongly, with the markets rebounding from the weak final quarter of 2018 as Central Banks signalled that they would provide yet more monetary stimulus in response to lacklustre economic data. Following a decade long investment cycle that has principally been driven by monetary policy, this was all the fuel that investors needed to drive markets higher.
The second and third quarter saw the return of some volatility as the trade negotiations between the US and China continued and macroeconomic data deteriorated. This, however, preceded a rally in the final quarter that sealed a strong year for global equities.
Several factors helped to propel equities and bond yields higher towards the end of 2019. Economic data turned out to be more reassuring with the US and Eurozone manufacturing business surveys picking up slightly from September, although they did still point to a challenging environment. Employment data, however, pointed to more resilience, while service sector surveys also supported a more optimistic picture. Concerns over an imminent recession were therefore side-lined.
The year end rally also saw two significant political risks avoided. The trade negotiations between the US and China took a more optimistic turn as the scheduled tariff increases were delayed as the two parties agreed a phase one trade deal. Europe specifically was buoyed by the decision by the US not to impose tariffs on European Union auto exports. While the current truce may prove temporary, the fact that a severe trade war was averted was obviously welcomed.
The large majority for the Conservative Party in the UK election in December helped remove another significant political risk. While this boosted UK listed stocks, which are beyond our investment remit, it also provoked a rally in Sterling relative to the Euro which did dampen some of our returns when translated to our reporting currency.
Portfolio Performance
Our performance in 2019 was characterised by good stock picking which was partially offset by our sector allocation. Our top performer was ASM International, the Dutch listed semiconductor equipment supplier, which rose +168.5% in Sterling terms. Operationally the company's performance was outstanding with the release of consistently strong results, which were particularly impressive when set alongside a sector that struggled. The shares have also been supported by share buy backs as the company returned some of their strong balance sheet back to shareholders.
The other holding that delivered outstanding returns was the Italian asset manager, Azimut, that rose +130.3%. The shares had performed poorly last year precipitating a review of our investment thesis. Our decision to maintain the holding was vindicated as the company continued to demonstrate attractive inflows but also, more significantly, announced a change in their fee structure, reducing their reliance on performance fees. Another holding in the financial sector, Ringkjoebing Landbobank, also produced excellent returns. The Danish listed regional bank rose +45.9% as it upgraded its expected profits for the year due to strong loan growth.
CTS Eventim, another one of our largest positions, was also a significant contributor rising +64.2%. CTS is a German listed and European market leader in online ticketing. This is a high-quality company with a robust balance sheet, high margins, and is cash generative. Growth has been driven by the transition from paper ticketing to online, rising ticket prices and acquisitions. The company delivered strong results, but perhaps more importantly announced an acquisition of the leading French online ticketing provider, which appears to be significantly value accretive.
Other good performance came from the healthcare stocks operating in the invitro diagnostics space, Tecan and Diasorin, which rose +40.9% and +56.0% respectively, and the Eastern European low-cost airline, Wizz Air, which grew +39.0%.
Turning to our poorer performing stocks, our main disappointment was in our holdings of Consumer Staples where our positions underperformed a sector which also lagged the market. Sligro Food, the Dutch food service business, was the main detractor falling -33.1%, They struggled to integrate a large contract with Heineken, which led to extra costs and problems with delivery. While we believe the deal will ultimately leave them in a strong position, we think that the integration will continue to be challenging, so have sold the position. We have also sold one of our long-standing holdings, Viscofan, the Spanish listed synthetic sausage skin producer. The shares underperformed last year, though since purchase it has added a lot of value to the portfolio. The decision to sell was taken because we felt the growth outlook had deteriorated and therefore left the valuation looking vulnerable. The other significant negative contributor was Origin Enterprises, the Irish listed agronomist, which fell -36.6% following a profit warning blamed on the poor winter weather in the UK. We have some sympathy with this and believe that the valuation is at absurdly cheap levels, leading to our decision to retain the position.
In terms of sector allocation, the largest detractor was real estate where we currently have no exposure. While this may have been a mistake, we believe the fundamental reasons for being cautious towards the sector is understandable. We believe that European real estate companies, where leverage, or use of debt, is integral to their business models, have been the principal beneficiaries of the low interest rate environment. Ultimately, we have not been able to find stocks in this sector with a sufficient margin of safety which would produce a sufficient long-term return at an acceptable level of risk.
Portfolio Activity
While most of the year was quiet in terms of trading, the final quarter saw some increased activity, though overall portfolio turnover remains in satisfactory territory. In aggregate, our trades improved the quality characteristics of the portfolio and reduced the economic sensitivity. Below we highlight some of our new holdings purchased during the year:
Scout24
Scout24 is listed in Germany and, following the announced sale of its auto dealer online platform, has the dominant property portal which derives its revenues mainly from real estate agents. As we have seen in other geographies such as the UK and Australia, these portals demonstrate strong pricing power and have significant potential to grow. Scout24 has perhaps more attractive prospects as it is operating in a market where the transition from offline to online is not yet complete and where average revenues per user have significant potential, when benchmarked against international comparators. There are also plenty of other attractive revenue opportunities to harness.
Corticeira Amorim
Amorim is a family run business that is the clear global market leader in cork stoppers. While growth is not expected to be spectacular the consumption of premium wine is increasing whilst cork is establishing its market position again against aluminium and plastic due to environmental considerations and the quality characteristics that cork infers. We believe that margins and cash flow are set to improve after a tricky period, as the cork harvest improves, and their flooring division, which has been loss making, starts contributing positively.
SimCorp
SimCorp is a Danish software company that sells to the asset management industry. They are embedded with their clients, so have highly predictable revenue streams, are gaining new clients, and are capital light, so cash generation is superb. Their growth is driven by the replacement of archaic internal developed systems that can no longer cope with a rapidly changing market that is characterised by high levels of compliance and reporting requirements. All of which leads to rapidly compounding cash generation and value creation.
Karnov
Karnov is the dominant provider of case information to the legal profession in Sweden and Denmark. This information is integral to their clients' workflow yet is relatively low cost. This leads to high satisfaction and renewal rates amongst a customer group that is growing as the incidence of legislation increases. Earnings should grow disproportionally as they fully integrate their recent Swedish acquisition, which gives them a dominant position and therefore pricing power. This should lead to margin expansion as they begin to move prices up to those they achieve in their Danish market.
Outlook
2019 ended with optimism that cyclical indicators had stabilised and that 2020 was likely to be a year of economic recovery. The consensus also assumed that Central Banks would protect against any disappointment in growth through further action.
The outbreak of the Coronavirus has, however, superseded these expectations, driving severe volatility in our markets. The direction of equity markets from here will likely depend on whether the impact of the virus turns out to be a relatively short-lived event or more sustained. The longer the epidemic takes to contain, the more likely the global economy will suffer. Many Central Banks have already recognised this danger by cutting interest rates, yet it seems difficult to understand, absent of a short boost of liquidity and confidence, how this will cushion any economic impact. What this episode could, however, encourage is a more active approach of governments towards more constructive fiscal policies, not least because monetary policy is all but exhausted. We are seeing tentative signs of this already, with the UK government being more expansive, and the German government loosening their fiscal restrictions, albeit temporarily. This could herald the next phase of the market cycle which is likely to be very different from what we have seen since the great financial crisis.
Turning to the portfolio we are in the fortunate position not to be leveraged heading into this market volatility. This allows us to look at this period constructively. Whilst we will not do anything rash, we will use equity market falls to slowly add some quality companies to the portfolio. These are companies that we have looked at in detail previously but have not been sufficiently attractively priced for an investment. Over the long term, whilst unwelcome, this challenging period should therefore be an opportunity to build towards attractive long-term returns.
Sam Cosh
Lead Investment Manager
BMO Investment Business Limited
| STATEMENT OF COMPREHENSIVE INCOME | |||||
European Assets Trust PLC For the period from 12 November 2018 to 31 December 2019 | European Assets Trust NV For the year ended 31 December 2018†* | ||||||
Revenue Return | Capital Return | Total Return | Revenue Return | Capital Return | Total Return | ||
€000 | €000 | €000 | €000 | €000 | €000 | ||
Gains/(losses) on investments | - | 103,225 | 103,225 | - | (88,792) | (88,792) | |
Foreign exchange gains | - | 282 | 282 | - | - | - | |
Income | 11,515 | - | 11,515 | 15,252 | - | 15,252 | |
Management fees | (748) | (2,991) | (3,739) | (808) | (3,234) | (4,042) | |
Other expenses | (1,379) | (335) | (1,714) | (1,403) | (1,700) | (3,103) | |
Net return before finance costs and taxation | 9,388 | 100,181 | 109,569 | 13,041 | (93,726) | (80,685) | |
Finance costs | (40) | (160) | (200) | (31) | (123) | (154) | |
Net return before taxation | 9,348 | 100,021 | 109,369 | 13,010 | (93,849) | (80,839) | |
Taxation | (1,798) | - | (1,798) | (319) | - | (319) | |
Net return attributable to Shareholders | 7,550 | 100,021 | 107,571 | 12,691 | (93,849) | (81,158) | |
Return per share | €0.021 | €0.278 | €0.299 | €0.035 | €(0.262) | €(0.227) | |
The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.
During the period from 12 November 2018 until migration the only activity of the Company was the issuance of share capital to be held by its parent Company, EAT NV.
All revenue and capital items in the above statement derive from continuing operations.
*Pro forma based on European Assets Trust NV ('EAT NV') financial statements.
† EAT NV prior to migration on 16 March 2019.
STATEMENT OF CHANGES IN EQUITY
European Assets Trust PLC | Share Capital | Share Premium account | Other reserves | Distributable reserve | Capital reserve | Revenue reserve | Total shareholders' funds |
Period from 12 November 2018 to 31 December 2019 | €'000s | €'000s | €'000s | €'000s | €'000s | €'000s | €'000s |
Balance at 12 November 2018 | - | - | - | - | - | - | - |
Transferred from European Assets Trust NV on 1 January 2019 - accounting effective date of migration | 35,976 | 271,344 | 104,274 | - | - | - | 411,594 |
Total comprehensive income for the period from 1 January 2019 to 16 March 2019 - date of migration | - | - | 62,153 | - | - | - | 62,153 |
Interim dividends distributed for the period from 1 January 2019 to 16 March 2019 - date of migration | 7 | (7) | (13,344) | - | - | - | (13,344) |
Cancelled on 16 March 2019 - date of migration | (35,983) | (271,337) | (153,083) | - | - | - | (460,403) |
Issued on 16 March 2019 - date of migration | 42,178 | 418,225 | - | - | - | - | 460,403 |
Cancelled by court process | - | (418,225) | - | - | - | - | (418,225) |
Arising from cancellation of share premium | - | - | - | 418,225 | - | - | 418,225 |
Total comprehensive income for the period from 16 March 2019 to 31 December 2019 | - | - | - | - | 35,896 | 9,522 | 45,418 |
Interim dividends distributed for the period from 16 March 2019 to 31 December 2019 | 12 | - | - | - | (2,797) | (9,522) | (12,307) |
Issuance cost of scrip dividend shares | - | - | - | - | (31) | - | (31) |
Foreign exchange movement on Sterling denominated share capital | 282 | - | - | - | (282) | - | - |
Balance at 31 December 2019 | 42,472 | - | - | 418,225 | 32,786 | - | 493,483 |
The net asset value of EAT NV on 15 March 2019 was €460.4 million. This was composed of share capital of €36.0 million, share premium of €271.3 million and other reserves of €153.1 million. Upon migration the opening net asset value of European Assets Trust PLC was unchanged and was composed of share capital of €42.2 million and share premium of €418.2 million.
European Assets Trust NV | |||||||
Year ended 31 December 2018†* | Share Capital | Share Premium account | Other reserves | Distributable reserve | Capital reserve | Revenue reserve | Total shareholders' funds |
€'000s | €'000s | €'000s | €'000s | €'000s | €'000s | €'000s | |
Balance at 31 December 2017 | 15,982 | 273,936 | 218,233 | - | - | - | 508,151 |
Total comprehensive income for the year | - | - | (81,158) | - | - | - | (81,158) |
Interim dividends distributed | 20 | (20) | (32,801) | - | - | - | (32,801) |
Issue of shares | 628 | 16,774 | - | - | - | - | 17,402 |
Redenomination of shares | 19,346 | (19,346) | - | - | - | - | - |
Balance at 31 December 2018 | 35,976 | 271,344 | 104,274 | - | - | - | 411,594 |
*Pro forma based on EAT NV financial statements.
† EAT NV prior to the migration on 16 March 2019.
STATEMENT OF FINANCIAL POSITION
European Assets Trust PLC | European Assets Trust NV | ||
As at 31 December 2019 | As at 31 December 2018†* | ||
€'000s | €'000s | ||
Non-current assets | |||
Investments at fair value through profit or loss | 477,489 | 414,714 | |
Current assets | |||
Other receivables | 2,491 | 1,111 | |
Investment in subsidiary | - | 57 | |
Cash and cash equivalents | 13,591 | - | |
Total current assets | 16,082 | 1,168 | |
Current liabilities | |||
Other payables | (88) | (641) | |
Bank overdraft | - | (3,647) | |
Total current liabilities | (88) | (4,288) | |
Net current assets / (liabilities) | 15,994 | (3,120) | |
Net assets | 493,483 | 411,594 | |
Equity | |||
Share capital | 42,472 | 35,976 | |
Share premium account | - | 271,344 | |
Distributable reserve | 418,225 | - | |
Capital reserve | 32,786 | - | |
Revenue reserve | - | - | |
Other reserves | - | 104,274 | |
Total equity | 493,483 | 411,594 | |
Net Asset Value per ordinary share | €1.37 | €1.14 | |
*Pro forma based on EAT NV financial statements.
† EAT NV prior to migration on 16 March 2019.
STATEMENT OF CASHFLOW
European Assets Trust PLC | European Assets Trust NV | |
For the period from 12 November 2018 to 31 December 2019 | For the year ended 31 December 2018†* | |
€'000s | €'000s | |
| Cashflows from operating activities | ||
| Sale of investments | 136,028 | 159,027 |
| Purchase of investments | (95,579) | (152,655) |
| Dividends received | 8,384 | 15,073 |
| Investment management fees paid | (3,738) | (4,042) |
| Restructuring costs paid | (706) | (1,329) |
| Other operating expenses | (1,531) | (1,433) |
| Interest expenses paid | (220) | (75) |
| Cashflows from operating activities | 42,638 | 14,566 |
| Financing activities | ||
| Net proceeds from issuance of new shares | - | 17,336 |
| Equity dividends paid | (25,682) | (32,801) |
| Cashflow from financing activities | (25,682) | (15,465) |
| Net movement in cash and cash equivalents | 16,956 | (899) |
| Cash and cash equivalents at beginning of period/year | - | (2,748) |
| Cash and cash equivalents transferred on 1 January 2019 - accounting effective date for migration | (3,647) | - |
| Effect of movement on foreign exchange | 282 | - |
| Cash and cash equivalents at end of the period/ year | 13,591 | (3,647) |
| Represented by | ||
| Cash at bank | 13,591 | - |
| Bank overdraft | - | (3,647) |
13,591 | (3,647) |
*Pro forma based on EAT NV financial statements.
† EAT NV prior to the migration on 16 March 2019.
MIGRATION
During the period ended 31 December 2019 the Company migrated its investment enterprise from the Netherlands to the United Kingdom. This migration was achieved by the absorption of the assets and liabilities of EAT NV by the Company, which was, at that time, a wholly owned subsidiary of EAT NV.
The merger was approved by the shareholders of EAT NV during an extraordinary shareholders' general meeting held on 9 January 2019. On 12 February 2019, the Dutch notary issued the merger compliance certificate confirming compliance with the Dutch Cross-Border Merger Regulations and, at a hearing held on 20 February 2019, the UK High Court approved the completion of the migration.
The migration was effective on 16 March 2019 by means of a cross-border merger under the European Cross-Border Merger Regulations of the Company with EAT NV. Following the merger, the Company continued the investment activities of EAT NV and EAT NV was dissolved and ceased to exist without going into liquidation. Upon merger, shareholders received one share in the Company for each share held in EAT NV.
EAT NV shares delisted from Euronext Amsterdam on 14 March 2019. The Board of EAT NV applied to the Financial Conduct Authority for the cancellation of the standard listing of EAT NV on the Official List, and to the London Stock Exchange to cancel the admission to trading of its shares on the Main Market, effective on 18 March 2019. Application was made for the Company's shares to be admitted to the premium segment of the Official List and trading on the premium segment of the Main Market of the London Stock Exchange, began at 8.00 a.m. on 18 March 2019.
The Company was incorporated in England and Wales on 12 November 2018 and has prepared its first set of financial statements for the period ended 31 December 2019. Following the merger, the Company became a publicly traded investment trust with a premium listing on the London Stock Exchange.
In accordance with the prospectus of the Company issued on 27 November 2018, pursuant to the Cross-Border Merger Regulations, the accounting effective date of the migration was 1 January 2019. During the period from 12 November 2018 until migration the only activity of the Company was the issuance of share capital to be held by its parent, EAT NV. The comparative information is pro forma accounts based on the financial statements of EAT NV.
ACCOUNTING POLICIES
The financial statements of the Company have been prepared on a going concern basis under the historical cost convention modified to include fixed asset investments and derivatives at fair value, and in accordance with the Companies Act 2006, International Financial Reporting Standards ('IFRS'), which comprise standards and interpretations approved by the International Accounting Standards Board (the 'IASB'), and International Accounting Standards and Standing Interpretations Committee interpretations approved by the International Accounting Standards Committee ('IASC') that remain in effect, and to the extent that they have been adopted by the European Union.
Where presentational guidance set out in the 2018 amended Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'('SORP') for investment trusts issued by the Association of Investment Companies ('AIC') is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
1. Dividend declaration
A dividend of 1.755 pence per share was announced on 7 January 2020 and paid on 31 January 2020. During 2020, a total distribution of 7.020 pence per share, is payable in four instalments in January, April, July and October.
2. Shares in issue
As at 31 December 2019 the Company had 359,934,706 shares in issue (31 December 2018 EAT NV: 359,755,323). During the year and prior to the migration on 16th March 2019, EAT NV issued 72,984 shares followed by an issue of 106,399 by the Company post migration through the scrip dividend option.
3. Financial risk factors
As an investment trust the Company invests in equities in order to achieve its investment objective, which is to achieve growth of capital through investment in quoted small and medium-sized companies in Europe, excluding the United Kingdom. In pursuing its investment objective, the Company is exposed to a variety of financial risks that could result in either a reduction in the Company's net assets or a reduction in the Company's profits. These financial risks are market risk (including price risk, currency risk and interest rate risk), credit risk and liquidity risk.
The full details of financial risks are contained in note 20 of the Report and Accounts.
4. Restructuring costs
Restructuring costs arising from the migration during the period ended 31 December 2019 amounted to €335,000 (2018 EAT NV: €1,700,000). Of this amount €237,000 related to a provision against Irish transaction costs which the Company is seeking to recover from the Irish revenue and €30,000 chargeable by PricewaterhouseCoopers for the audit of the Company's initial accounts prepared to provide support for the payment of the Company's July 2020 dividend.
5. Report and accounts
The report and accounts for the period ended 31 December 2019 will be posted to Shareholders and made available on the websitewww.europeanassets.co.ukshortly. Copies may also be obtained from the Company's registered office, Exchange House, Primrose Street, London EC2A 2NY.
6. Annual general meeting
The Annual General Meeting will be held at the registered office of the Company, Exchange House, Primrose Street, London EC2A 2NYon Thursday 14th May 2020 at 3:00 p.m.
By order of the Board
BMO Investment Business Limited, Secretary
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European Assets Trust plc published this content on 13 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 March 2020 07:17:20 UTC
