Chelverton UK Dividend Trust plc (SDVP) 
Chelverton UK Dividend Trust plc: Half-Yearly Financial ReportFor the six months ended 31 October 2020 
 
30-Nov-2020 / 14:35 GMT/BST 
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The issuer is solely responsible for the content of this announcement. 
 
CHEVERTON UK DIVIDEND TRUST PLC 
 
Half-Yearly Financial Report 
 
For the six months ended 31 October 2020 
 
Investment Objective and Policy 
 
The investment objective of Chelverton UK Dividend Trust PLC ('the Company') is to provide Ordinary shareholders with a 
high income and opportunity for capital growth, having provided a capital return sufficient to repay the full final 
capital entitlement of the Zero Dividend Preference shares issued by the wholly owned subsidiary company, SDV 2025 ZDP 
PLC ('SDVP'). 
 
Chelverton UK Dividend Trust PLC ('the Company'), and its subsidiary SDV 2025 ZDP PLC ('SDVP') ('the Subsidiary'), 
together form the Group ('the Group'). The Group's funds are invested principally in mid and smaller capitalised UK 
companies. The portfolio comprises companies listed on the Official List and companies admitted to trading on AIM. The 
Group does not invest in other investment trusts or in unquoted companies. No investment is made in preference shares, 
loan stock or notes, convertible securities or fixed interest securities. 
 
Financial Highlights 
 
Capital                        31 October      30 April        % 
 
                                     2020          2020   change 
Total gross assets (GBP'000)         41,602        42,040   (1.04) 
Total net assets (GBP'000)           25,205        26,034   (3.18) 
Net asset value per               120.89p       124.86p   (3.18) 
Ordinary share 
Mid-market price per              111.00p       127.50p  (12.94) 
Ordinary share 
(Discount)/premium                (8.18%)         2.11% 
Net asset value per Zero          111.84p       109.67p     1.98 
Dividend Preference share 
Mid-market price per Zero         108.00p       102.00p     5.88 
Dividend Preference share 
Discount                          (3.43%)       (6.99%) 
 
Revenue                     Six months to Six months to        % 
                               31 October 
 
                                             31 October   change 
                                     2020 
 
                                                   2019 
Return per Ordinary share           2.80p         6.71p  (58.27) 
Dividends declared per              5.00p         4.80p     4.17 
Ordinary share* 
Special dividends declared              -         2.50p (100.00) 
per Ordinary share 
 
Total Return 
Total return on Group net           0.74%       (4.94%) 
assets** 
 
* Dividend per Ordinary share includes the first interim paid and second interim declared for the period to 31 October 
2020 and 2019 and will differ from the amounts disclosed within the statement of changes in net equity, owing to the 
timings of payments. 
 
** Adding back dividends distributed in the period. 
 
Interim Management Report 
 
Overview 
 
Given the extraordinary events of the past few months the Board felt it appropriate to update shareholders on the 
positioning of the Company with a more detailed view of the current state of the portfolio and the market. 
 
In the period since the depths of the market collapse in March, a time we have called "The Great Panic", matters have 
become progressively clearer as more is now known medically about the Covid-19 virus and over this period companies have 
developed processes and systems to manage their businesses within the constraints of keeping employees and customers safe 
and operating within Government regulations. 
 
Initially, after the significant market collapse of share prices in the Small and Mid-Cap sector, share values 
"flatlined". Whilst the portfolio companies, universally, started reporting that trading had been better than expected, 
there was no marked improvement in their share prices. Since that period share prices have in general modestly recovered, 
although the sectors most affected by Covid-19 driven restrictions - travel and hospitality - have continued to be 
depressed. 
 
However, after a little while companies began to work out new ways of operating and were innovative in what they did and 
how they did it. Whilst some of our companies are dependent on people interacting and coming together, others have very 
definitely benefited from the restrictions of the lockdown. 
 
Across the companies invested in by the funds managed by Chelverton Asset Management it is fair to say that all of them 
felt they were in a better position after four to six months of lockdown than they had at first anticipated in March. 
Clearly companies involved in the hospitality industry have, through the recent tightening of regulations, gone backwards 
of late. 
 
Another very clear feature that has become evident over the past six months is that this period has been used by our 
companies to adopt new business practices and to drive through efficiency improvements that will make a difference now 
but particularly in the future as demand picks up. The furlough scheme, and the subsequent gradual unwinding of the 
furlough scheme, has highlighted the productivity, or indeed lack of productivity, of the marginal employee. It might 
well be that the spike in unemployment that we all expect in the next few months could be partially from a reduction in 
demand but also from a reduction in workforces resulting in improvement in their productivity. It looks like the absolute 
level of expected unemployment might be reduced by the news that some 800,000 visitors from the European Community have 
already returned to their home countries. 
 
Hopefully, if and when, we finally see a Free Trade Agreement in the next few weeks or months then the country and the 
companies we are invested in can get on with managing with what will then be "known-knowns". The energy, time and 
resources spent on the Brexit process will be applied much more productively. There is a feeling that once the 
relationship with the European Union is resolved, either with a Free Trade Agreement or indeed No Agreement, then there 
will be a release of pent-up demand that has been held up while waiting several years for this to be resolved. 
 
The portfolio is invested in small listed and AIM-traded companies whose business is largely conducted in the UK and 
therefore the strength and growth of the UK economy is by far and away the most important determinant of our underlying 
companies' success. 
 
It is a well-documented fact that UK and overseas investors remain very underweight in UK equities, as it has been all 
too easy to sit on the side-lines waiting for a resolution of the Brexit Debate and then the Free Trade Agreement 
impasse. The trend we highlighted last year of the large differential in the relative ratings between "Growth" companies 
and "Value" companies has continued to widen in the year. An example of this is the extraordinary rise in the past year 
in the value of Apple, the American technology company, which on its own became worth more than the aggregate value of 
the components of FTSE 100. Those of us who have been working in and observing markets for some time know that these 
extremes of valuation difference do not last forever. 
 
As is often the case after a market sell-off, the share prices of smaller companies take much longer to recover as 
compared to members of the FTSE100. This period, after a market collapse and then a stabilisation period, generally 
throws up a large number of deeply undervalued companies and this is particularly true as one moves down the market 
capitalisation scale, especially in under researched smaller companies which is this fund's area of focus. 
 
Results 
 
This half-yearly report covers the six months to 31 October 2020. The net asset value per Ordinary share at 31 October 
2020 was 120.89p, down from 124.86p at 30th April 2020, a decrease of 3.18% in the past six months compared to an 
increase of 2.03% in the MSCI Small Cap Index. 
 
Since the beginning of the Company's financial year, the Ordinary share price has decreased from 127.5p to 111.0p at 31th 
October 2020, a decrease of 12.9%. Since the period end the net asset value per share has increased to 156.34p, a 
percentage increase of 29.3% as at 26 November 2020 and the shares at a price of 151.0p now trade on a discount of some 
3.41%. 
 
Dividend 
 
In respect of the year ended 30 April 2021, a first interim dividend of 2.50p (2019: 2.40p) per Ordinary share was paid 
on 1 October 2020. The Board has declared a second interim dividend of 2.50p per Ordinary share (2019: 2.40p) payable on 
4 January 2021 to shareholders on the register on 11 December 2020, making a total for the half year of 5.00p per 
Ordinary share (2019: 4.80p) an increase of 4.2%. At present the Company intends to at least maintain this level of 
dividend for the third and fourth interim dividends making a total core dividend of 10.00p for the year (2019: 9.6p) an 
increase of 4.2%. 
 
The Board will review the dividend flow from the company's portfolio over the next six months and consider the forecast 
dividend flow for 2021/2022 before deciding on the absolute amount of the fourth interim dividend. A number of the 
Company's investee companies initially adopted a very cautious approach in respect of the uncertainties that lay ahead 
and reduced or passed their dividends. Some of these companies have restored their dividends and others have already 
indicated that they will resume paying dividends next year. 
 
Shareholders will also be aware that your Company has built up significant revenue reserves over the past ten years and 
has one of the highest levels of reserves relative to its annual core dividend. It is therefore in a strong position to 
continue increasing the dividend paid even in this period where others are having to cut or maintain their dividend. 
 
Portfolio

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