TIDMMNTN TIDMMNTC
RNS Number : 7017K
Schiehallion Fund Limited (The)
03 September 2021
RNS Announcement
The Schiehallion Fund Limited
Legal Entity Identifier: 213800NQOLJA1JCWXQ56
Regulated Information Classification: Half Yearly Financial
Report
The following is the unaudited Interim Financial Report for the
six months to 31 July 2021 which was approved by the Board on 2
September 2021.
Summary of Unaudited Results*
31 January
2021
31 July (audited) %
Ordinary shares 2021 change
=================================== ============ ============= ========
Shareholders' funds US$810.66m US$706.08m
Net asset value per ordinary share 164.19c 146.99c 11.7
Share price 203.00c 180.00c 12.8
Premium 23.6% 22.5%
Number of shares in issue 493,730,002 480,350,002
Market capitalisation US$1,002.27m US$864.63m
Six months Six months
to 31 July to 31 July
2021 2020
=========================== =========== ===========
Revenue earnings per share (0.75c) 0.13c
For the period from 26 April 2021, launch and first day of
trading, to 31 July 2021
31 July 26 April %
C shares 2021 2021 (#) change
=================================== =========== ============= =======
Shareholders' funds US$698.31m US$694.788m
Net asset value per ordinary share 99.76c 99.25c 0.5
Share price 125.00c 124.00c 0.8
Premium 25.3% 24.9%
Number of shares in issue 700,000,000 700,000,000
Market capitalisation US$875.00m US$868.00m
Period from 26 April
2021 (#)
to 31 July 2021
=========================== ====================
Revenue earnings per share (0.04c)
Notes
* For a definition of terms see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Alternative performance measure, see Glossary of Terms and
Alternative Performance Measures at the end of this announcement
.
(#) 26 April 2021, the date the Company's C shares were admitted
to trading on the Specialist Fund Segment of the Main
Market of the London Stock Exchange.
All investment strategies have the potential of profit and
loss.
Past performance is not a guide to future performance.
Summary of Unaudited Results*(Ctd)
Period's High and Low
Six months to 31 July Year to 31 January
2021 2021
Ordinary shares High Low High Low
=================================== =========== ========== ========= =========
Net asset value per ordinary share 164.19c 146.57c 146.99c 102.01c
Share price 203.00c 180.00c 180.00c 121.50c
Premium 25.7% 17.4% 31.8% 2.5%
Period from 26 April
2021(#)
to 31 July 2021
C shares High Low
=================================== ========== ==========
Net asset value per ordinary share 99.76c 99.23c
Share price 125.00c 124.00c
Premium 26.0% 24.9%
Performance Since Inception
31 July 27 March %
Ordinary shares 2021 2019 (++) change
=================================== ========== =========== =======
Net asset value per ordinary share 164.19c 99.66c 64.8
Share price 203.00c 100.00c 103.0
31 July 26 April %
C shares 2021 2021 (#) change
============================ ========== ========== =======
Net asset value per C share 99.76c 99.25c 0.5
Share price 125.00c 124.00c 0.8
Notes
* For a definition of terms see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Alternative performance measure, see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
(++) 27 March 2019, the date the Company's Ordinary shares were
admitted to trading on the Specialist Fund Segment
of the Main Market of the London Stock Exchange.
(#) 26 April 2021, the date the Company's C shares were admitted
to trading on the Specialist Fund Segment of the Main
Market of the London Stock Exchange.
All investment strategies have the potential of profit and
loss.
Past performance is not a guide to future performance.
Investment Objective and Policy
Investment Objective
The Schiehallion Fund Limited seeks to generate capital growth
for investors through making long-term minority investments in
later stage private businesses that the Company considers to have
transformational growth potential and to have the potential to
become publicly traded.
Principle and Emerging Risks and Uncertainties
The principal and emerging risks facing the Company are:
- Investment and Strategic Risks - Liquidity of investments;
Market, Economic, Political and Environmental Risks; Valuation
Risk; Investment Strategy Risk; and Discount Risk.
- External Risks - Political and Associated Economic Risk; Legal
and Regulatory Risk; and Covid-19.
- Operational Risks - Performance and Reliance on Third Party
Service Providers; Cyber Security Threats; and Key
Professionals.
- Emerging Risks - Cyber risk and coronavirus; and Environmental
Social and Governance issues (ESG).
An explanation of these risks and how they are managed is set
out on pages 5 to 8 of the Company's Annual Report and Financial
Statements for the year to 31 January 2021 which is available on
the Company's website: schiehallionfund.com. The principal risks
and uncertainties have not changed since the date of the Annual
Report and Financial Statements.
Responsibility Statement
The Directors of The Schiehallion Fund Limited confirm that to
the best of their knowledge:
a) the Interim Financial Report has been prepared in accordance
with IAS 34 Interim Financial Reporting and the Directors have
elected to prepare financial statements that comply with
International Financial Reporting Standards as issued by the
International Accounting Standards Board;
b) the Interim Management Report includes a fair review of the information required by:
i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
ii) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or the performance of
the enterprise during that period.
By Order of the Board
Linda Yueh
Chairperson
2 September 2021
Interim Management Report
In April this year, Schiehallion raised US$700m in capital via a
conversion or C share issuance. We want to say a deep 'thank you'
to everyone who supported and participated in this process, and to
welcome our new C shareholders. At the time of the raise, the
capital in the Schiehallion ordinary share class was 95%
invested.
This raise represents an important bridge. In our long-term
portfolio management task, we make no distinction between our
ordinary and C shareholders. Whilst in the short term both have
exposure to different parts of the Schiehallion portfolio, over the
medium to long term, everyone will be a shareholder in the combined
portfolio. The capital raised therefore enables Schiehallion
ordinary shareholders to benefit from the continued flow of
investment opportunities over the medium term until the recycling
of capital within the portfolio, from maturing investments to new
investments, starts occurring naturally. Given our investment time
horizon is five to ten years, and beyond, this is not a process
that we expect to start overnight.
Indeed, it remains our thesis that it is possible to gain access
to some of the best opportunities in private markets via being a
truly long-term and aligned investor. Sadly, many early-stage
private investors are constrained to become forced sellers after
private companies pass into the listed markets. This necessarily
drives an increased investor focus on avoiding short-term tactical
missteps that is often frustrating to founders and management teams
who remain intent on the seizing the long-term strategic
opportunity. The Schiehallion offering, of being a long-term
investor for whom listing events are just another step in the
journey, is designed to stand out in this context.
We continue to see encouraging signs of this thesis playing out.
Our pipeline remains as healthy as ever, with the team continuing
to broaden our contacts across industries in North America, as well
as engaging more deeply with companies in international geographies
that are after many years approaching our investment sweet-spot
such as India and Brazil, and working closely with our Shanghai
team to engage with a new generation of Chinese local champions. We
are also continuing to monitor the evolving regulatory environment
in China, with these factors being incorporated into our investment
analysis under the 'social license to operate' component of our
research framework.
Drawing on this work, the last six months has seen us deploy
capital into seven new investee companies: Brex, Faire, Loft, Daily
Hunt, Rappi, Masterclass and PsiQuantum. Within their respective
spheres - small business finance, wholesale, real estate, social
media, delivery, entertainment and computer hardware - each has the
clear potential to build a profoundly distinctive and valuable
operation.
A couple of these businesses are particularly worth
highlighting. Loft, Daily Hunt and Rappi are all companies based in
geographies that we've been deepening our understanding of and
sourcing work in for many years. In the case of two of them, Daily
Hunt and Rappi, our conversations with the businesses have spanned
much of that time. However, it's only now that we're finding that
the operations and opportunities in these geographies are hitting
the sweet spot for us to start deploying capital. We're excited to
see great bottom-up investment cases emerging in these and other
geographies as their innovation ecosystems ripen. In the case of
Daily Hunt, it's perhaps also worth noting that the investment was
made entirely from ordinary share capital as it is not possible for
the C share pool to access the Indian market.
PsiQuantum also deserves a mention. The vast majority of our
investee companies have robust revenue lines and clear unit
economics, with the main debate focused on business model advantage
and the scope for scale. This is very much our sweet spot. That
said, we believe that there is room in the portfolio for a minority
of companies with different characteristics. These businesses are
typically in industries where value is created less by refinements
in product-market fit or distribution, and more via technological
innovations. Here we seek to clearly understand the technical
abilities of the core team and their track record in reaching key
milestones. PsiQuantum, whose work in photonic quantum computing
leads the field, is an operation that we have followed over many
years; however, we now believe that it has turned a corner in
de-risking its approach, and so has become a highly attractive
investment opportunity in its own right. As with any holding, there
can be no certainty of success.
We have also seen Oscar Health, Wise and Zymergen enter the
publicly listed section of the portfolio. Per our philosophy, we
are continuing to be patient and long-term supporters of these
businesses. Short-term volatility in share prices in the months and
quarters immediately following a listing matters less to us than
tracking whether fundamental business performance continues to
support the long-term investment opportunity. We're lucky to be
able to work within the broader Baillie Gifford investment floor,
with our public market colleagues adding an extra layer of analysis
to our own as these businesses become more widely appreciated
within public markets.
Across the portfolio, many of our holdings have continued to
perform extremely strongly, the difficulties of the Covid-19 era
notwithstanding. In the last six months, we have taken advantage of
opportunities to put more capital to work in existing holdings,
including Workrise, Tanium, Stripe, SpaceX, Northvolt and Epic
Games - all cases where our conviction in the upside has deepened
faster than their valuations have risen. Other holdings have had a
tougher time of it, with the focus remaining on keeping their
organisations and balance sheets stable through the pandemic. Here,
as before, our conversations with management teams have focused on
the importance of retaining key employees and customer
relationships, preserving their ability to grow profitably as
economic conditions improve.
The principal risks and uncertainties facing the Company are set
out above.
Peter Singlehurst
Robert Natzler
Baillie Gifford Statement on Stewardship
Reclaiming Activism for Long-Term Investors
Baillie Gifford's over-arching ethos is that we are 'actual'
investors. We have a responsibility to behave as supportive and
constructively engaged long-term investors. We invest in companies
at different stages in their evolution, across vastly different
industries and geographies and we celebrate their uniqueness.
Consequently, we are wary of prescriptive policies and rules,
believing that these often run counter to thoughtful and beneficial
corporate stewardship. Our approach favours a small number of
simple principles which help shape our interactions with
companies.
Our Stewardship Principles
Prioritisation of long-term value creation
We encourage company management and their boards to be ambitious
and focus their investments on long-term value creation. We
understand that it is easy for businesses to be influenced by
short-sighted demands for profit maximisation but believe these
often lead to sub-optimal long-term outcomes. We regard it as our
responsibility to steer businesses away from destructive financial
engineering towards activities that create genuine economic value
over the long run. We are happy that our value will often be in
supporting management when others do not.
A constructive and purposeful board
We believe that boards play a key role in supporting corporate
success and representing the interests of minority shareholders.
There is no fixed formula, but it is our expectation that boards
have the resources, cognitive diversity and information they need
to fulfil these responsibilities. We believe that a board works
best when there is strong independent representation able to
assist, advise and constructively test the thinking of
management.
Long-term focused remuneration with stretching targets
We look for remuneration policies that are simple, transparent
and reward superior strategic and operational endeavour. We believe
incentive schemes can be important in driving behaviour, and we
encourage policies which create alignment with genuine long-term
shareholders. We are accepting of significant pay-outs to
executives if these are commensurate with outstanding long-run
value creation, but plans should not reward mediocre outcomes. We
think that performance hurdles should be skewed towards long-term
results and that remuneration plans should be subject to
shareholder approval.
Fair treatment of stakeholders
We believe it is in the long-term interests of companies to
maintain strong relationships with all stakeholders, treating
employees, customers, suppliers, governments and regulators in a
fair and transparent manner. We do not believe in one-size-fits-all
governance and we recognise that different shareholder structures
are appropriate for different businesses. However, regardless of
structure, companies must always respect the rights of all equity
owners.
Sustainable business practices
We look for companies to act as responsible corporate citizens,
working within the spirit and not just the letter of the laws and
regulations that govern them. We believe that corporate success
will only be sustained if a business's long-run impact on society
and the environment is taken into account. Management and boards
should therefore understand and regularly review this aspect of
their activities, disclosing such information publicly alongside
plans for ongoing improvement.
List of Investments as at 31 July 2021 (unaudited)
==================================================
2021
Ordinary
Shares
Value 2021 2021 2021
US$'000 C Shares Total % of
Value Value net
US$'000 assets*
Name Business Country US$'000
=================== =================== ========= ============================ ================================ ============================ ================================
Online
international
money transfer United
Wise PLC - Listed service Kingdom 61,551 20,459 82,010 5.4
Social media and
news
aggregation
ByteDance Limited company China 59,920 - 59,920 4.0
Online payment United
Stripe Inc platform States 51,035 - 51,035 3.4
Online platform
which
Affirm Holdings Inc provides point
- of sale consumer United
Listed finance States 50,181 - 50,181 3.3
Designs,
manufactures
and launches
Space Exploration advanced rockets
Technologies and United
Corp spacecraft States 42,322 - 42,322 2.8
Online and physical
Warby Parker (JAND corrective United
Inc) eyewear retailer States 41,844 - 41,844 2.8
Online gaming United
Scopely Inc company States 40,024 - 40,024 2.7
Video game United
Epic Games Inc developer States 32,837 - 32,837 2.2
Oncological records
aggregator
and
diagnostic testing United
Tempus Labs Inc provider States 30,356 - 30,356 2.0
Telephone voice,
data,
Daily Hunt (Ver Se text messaging
Innovation and roaming
Limited) services India 30,058 - 30,058 2.0
Provider of an on
demand
delivery
platform designed
to
connect
consumers with
local United
Rappi Inc stores States - 30,000 30,000 2.0
Online security United
Tanium Inc management States 28,573 - 28,573 1.9
Lithium ion battery
Northvolt AB manufacturer Sweden 24,177 3,431 27,608 1.8
European mobility
FlixMobility GmbH provider Germany 13,363 13,411 26,774 1.8
Workrise Jobs marketplace
Technologies for United
Inc the energy sector States 26,238 - 26,238 1.7
Sustainable
direct-to-customer United
Allbirds Inc footwear brand States 23,211 - 23,211 1.5
Zymergen Inc - United
Listed Synthetic biology States 21,193 - 21,193 1.4
Online property
Loft Holdings Ltd platform Brazil - 20,000 20,000 1.3
Microbial seed
treatments
to increase
crop yields and
Indigo Agriculture grain United
Inc marketplace States 19,579 - 19,579 1.3
United
Grail Inc Oncology testing States 17,874 - 17,874 1.2
Computer chip United
Graphcore Limited developer Kingdom 15,622 - 15,622 1.0
Digital current
account United
Chime Financial Inc provider States 15,442 - 15,442 1.0
Silicon photonic
quantum United
PsiQuantum Corp computing States - 15,000 15,000 1.0
United
Cohesity Inc Data storage States 14,940 - 14,940 1.0
Healthcare
Oscar Health Inc - insurance United
Listed provider States 13,909 - 13,909 0.9
List of Investments as at 31 July 2021 (unaudited)
2021
Ordinary
Shares
Value 2021 2021 2021
Name Business Country US$'000 C Shares Total % of
Value Value net
US$'000 assets*
US$'000
============= =============== ========= ======================== ================================ ============================ ================================
Marketplace for
truckers United
Convoy Inc and shippers States 13,700 - 13,700 0.9
Online
Faire wholesale
Wholesale market United
Inc place States - 13,333 13,333 0.9
Manufactures
and develops United
Carbon Inc 3D printers States 12,642 - 12,642 0.8
Travel and
Away (JRSK lifestyle United
Inc) brand States 12,153 - 12,153 0.8
Develops
software for
cardiovascular
disease
diagnosis and United
HeartFlow Inc treatment States 11,314 - 11,314 0.8
Jiangxiaobai Producer of
Holdings alcoholic
Ltd beverages China 11,273 - 11,273 0.7
Online market
place for
Airbnb Inc - travel United
Listed accommodation States 11,069 - 11,069 0.7
Corporate
credit cards United
Brex Inc for startups States 10,210 - 10,210 0.7
Developer of
autonomous
delivery United
Nuro Inc vehicles States 10,000 - 10,000 0.7
Yanka Online
Industries education United
Inc platform States 10,000 - 10,000 0.7
Honor Provider of
Technology home-care United
Inc services States 5,565 - 5,565 0.4
============= =============== ========= ======================== ================================ ============================ ================================
Total investments 782,175 115,634 897,809 59.5
US Treasury Bill 12/08/2021 - 96,299 96,299 6.4
US Treasury Bill 07/10/2021 - 96,296 96,296 6.4
US Treasury Bill 04/11/2021 - 96,296 96,296 6.4
US Treasury Bill 24/03/2022 - 96,222 96,222 6.3
US Treasury Bill 16/06/2022 - 96,240 96,240 6.4
US Treasury Bill 27/01/2022 - 96,237 96,237 6.4
============================== ========= ======================== ================================ ============================ ================================
Total US Treasury Bills - 577,590 577,590 38.3
Cash 29,751 5,363 35,114 2.3
Other current assets and
liabilities (1,264) (275) (1,539) (0.1)
============================== ========= ======================== ================================ ============================ ================================
Net current assets 28,487 582,678 611,165 2.2
============================== ========= ======================== ================================ ============================ ================================
Net assets 810,662 698,312 1,508,974 100.0
============================== ========= ======================== ================================ ============================ ================================
* See Glossary of Terms and Alternative Performance Measures at the end of this announcement
Listed security, in line with the conditions of the IPO,
investors with holdings prior to the listing are subject to a lock
in
period preventing trading of the holding. This expires on 19
October 2021.
(#) Subsequent to the period end Illumina announced its acquisition of Grail.
Listed security, in line with the conditions of the IPO,
investors with holdings prior to the listing are subject to a lock
in
period preventing trading of the holding. This expired on 30
August 2021.
The Company may hold various classes of shares in investee
companies, some of which may have a preference on winding up.
Allocation of Net Assets (Unaudited)
2021
Ordinary
Shares
Value 2021 2021 2021
Name US$'000 C Shares Total % of
Value Value net
US$'000 assets*
US$'000
============================ ========= ========== ========== ==========
Listed investments 157,903 20,459 178,362 11.8
Private company investments 624,272 95,175 719,447 47.7
US Treasury Bills - 577,590 577,590 38.3
Cash and cash equivalents 29,751 5,363 35,114 2.3
Net current assets (1,264) (275) (1,539) (0.1)
==================================== ========= ========== ========== ==========
Total 810,662 698,312 1,508,974 100.0
==================================== ========= ========== ========== ==========
* See Glossary of Terms and Alternative Performance Measures at
the end of this announcement
Includes holdings in preference shares, ordinary shares and
convertible promissory notes.
Distribution of Total Investments (unaudited)
Geographical
As at As at
31 July 2021 31 January
2021
% %
================ =================== =================
United States 69.6 82.4
United Kingdom 10.9 6.5
China 7.9 7.7
India 3.3 -
Sweden 3.1 1.7
Germany 3.0 1.7
Brazil 2.2 -
Total 100.0 100.0
================ =================== =================
Sectoral
As at As at
31 July 2021 31 January
2021
% %
======================== =================== =================
Communication Services 11.1 6.1
Consumer Discretionary 14.4 15.0
Consumer Staples 3.4 4.6
Financials 24.8 30.1
Healthcare 7.3 10.2
Industrials 13.3 13.7
Information Technology 21.1 18.7
Materials 2.4 1.6
Real Estate 2.2 -
Total 100.0 100.0
======================== =================== =================
The above sectoral distribution is not derived from any
index.
Income Statement (unaudited)
For the six months For the six months For the year to
to 31 July 2021 to 31 July 2020 31 January 2021
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
========================== ======== ======== ======== ======== ======== ======== ======== ======== ========
Gains on investments - 86,674 86,674 - 20,809 20,809 - 209,901 209,901
Currency gains/(losses) - 338 338 - 24 24 - (1) (1)
Income 2 148 - 148 2,191 - 2,191 2,764 - 2,764
Investment management
fee 3 (3,534) - (3,534) (1,252) - (1,252) (3,603) - (3,603)
Other administrative
expenses 4 (509) - (509) (331) - (331) (759) - (759)
========================= ======== ======== ======== ======== ======== ======== ======== ======== ========
Operating profit before
taxation (3,895) 87,012 83,117 608 20,833 21,441 (1,598) 209,900 208,302
========================== ======== ======== ======== ======== ======== ======== ======== ======== ========
Tax on ordinary activities - - - - - - - - -
========================== ======== ======== ======== ======== ======== ======== ======== ======== ========
Profit and total
comprehensive
income for the period (3,895) 87,012 83,117 608 20,833 21,441 (1,598) 209,900 208,302
========================== ======== ======== ======== ======== ======== ======== ======== ======== ========
For the six months For the six months For the year to
to 31 July 2021 to 31 July 2020 31 January 2021
Revenue Capital Total Revenue Capital Total Revenue Capital Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
============================ ======== ======== ======== ======== ======== ======== ======== ======== ========
Profit and total
comprehensive
income for the period
analysed as follows:
Attributable to Ordinary
shareholders (3,645) 83,252 79,607 608 20,833 21,441 (1,598) 209,900 208,302
Attributable to C
shareholders (250) 3,760 3,510 - - - - - -
============================ ======== ======== ======== ======== ======== ======== ======== ======== ========
Profit and total
comprehensive
income for the period (3,895) 87,012 83,117 608 20,833 21,441 (1,598) 209,900 208,302
============================ ======== ======== ======== ======== ======== ======== ======== ======== ========
(Loss)/earnings per 16.40 0.13 4.37 4.50 (0.33 43.94 43.61
Ordinary share (0.75c) 17.15c c c c c c ) c c
(Loss)/earnings per 0.50
C share (0.04c) 0.54c c - - - - - -
============================ ======== ======== ======== ======== ======== ======== ======== ======== ========
The total column of this Statement represents the Statement of
Comprehensive Income of the Company. The supplementary revenue and
capital columns are prepared under guidance published by the
Association of Investment Companies.
All revenue and capital items in this statement derive from
continuing operations.
Statement of Financial Position (unaudited)
At 31 July At 31 July At 31 January At 31 January
Notes 2021 2021 2021 2021
US$'000 US$'000 US$'000 US$'000
================================ ========== ========== ============= =============
Fixed assets
Investments held at fair value
through profit or loss 7 897,809 614,179
=============================== ========== ========== ============= =============
Current assets
US Treasury Bills 577,590 77,000
Cash and cash equivalents 35,114 16,113
Debtors 611 426
=============================== ========== ========== ============= =============
613,315 93,539
================================ ========== ========== ============= =============
Current liabilities
Amounts falling due within one
year (2,150) (1,638)
================================ ========== ========== ============= =============
Net current assets 611,165 91,901
================================ ========== ========== ============= =============
Net assets 1,508,974 706,080
================================ ========== ========== ============= =============
Capital and reserves
Share capital 8 1,200,117 480,340
Capital reserve 307,990 220,978
Revenue reserve 867 4,762
=============================== ========== ========== ============= =============
Shareholders ' funds 1,508,974 706,080
================================ ========== ========== ============= =============
At 31 July At 31 January
2021 2021
=================================== =========== =============
Shareholders ' funds per Ordinary US$810,662 US$706,080
share (US$ ' 000)
Net asset value per Ordinary
share 164.19 c 146.99 c
Number of Ordinary shares in
issue 493,730,002 480,350,002
Shareholders' funds per C share US$698,312 -
(US$'000)
Net asset value per C share 99.76c -
Number of C shares in issue 700,000,000 -
==================================== =========== =============
Statement of Changes in Equity (unaudited)
Six months to 31 July 2021
Share Capital Revenue Shareholders'
capital reserve* reserve funds
Notes US$'000 US$'000 US$'000 US$'000
========================================== ========= ========= ======== =============
Shareholders' funds at 31 January 2021 480,340 220,978 4,762 706,080
Ordinary shares issued 8 24,975 - - 24,975
C shares issued 8 694,802 - - 694,802
Total comprehensive income for the period
- Ordinary shares - 83,252 (3,645) 79,607
Total comprehensive income for the period
- C shares - 3,760 (250) 3,510
========================================== ========= ========= ======== =============
Shareholders ' funds at 31 July 2021 1,200,117 307,990 867 1,508,974
========================================== ========= ========= ======== =============
Six months to 31 July 2020
Share Capital Revenue Shareholders'
capital reserve reserve funds
US$'000 US$'000* US$'000 US$'000
========================================== ======== ========= ======== =============
Shareholders' funds at 31 January 2020 475,642 11,078 6,360 493,080
Ordinary shares issued 131 - - 131
Total comprehensive income for the period - 20,833 608 21,441
========================================== ======== ========= ======== =============
Shareholders ' funds at 31 July 2020 475,773 31,911 6,968 514,652
========================================== ======== ========= ======== =============
* Includes investment holdings gains of US$307,643,000 (31 July 2020 - US$8,250,000)
Statement of Cash Flows (unaudited)
Six months to Six months to
31 July 2021 31 July 2020
Notes US$'000 US$'000 US$'000 US$'000
========================================== ================ =============== ================== ================
Cash flows from operating activities
Operating profit before taxation 83,117 21,441
US Treasury Bills interest (78) (2,394)
Net gains on investments (86,674) (20,809)
Currency gains (338) (24)
Changes in debtors and creditors 481 552
========================================== ================ =============== ================== ================
Net cash used in operating activities* (3,492) (1,234)
========================================== ================ =============== ================== ================
Cash flows from investing activities
Acquisitions of US Treasury Bills (752,036) (120,028)
Disposals of US Treasury Bills 251,524 250,943
Acquisitions of investments (196,956) (124,999)
Disposals of investments - -
========================================== ================ =============== ================== ================
Net cash (used in)/from investing
activities (697,468) 5,916
========================================== ================ =============== ================== ================
Cash flows from financing activities
Ordinary shares issued 24,821 131
C shares issued 694,802 -
========================================== ================ =============== ================== ================
Net cash from financing activities 719,623 131
========================================== ================ =============== ================== ================
Net increase in cash and cash equivalents 18,663 4,813
Effect of exchange rate fluctuations
on cash and cash
equivalents 338 24
Cash and cash equivalents at start
of period 16,113 10,133
========================================== ================ =============== ================== ================
Cash and cash equivalents at 31
July 35,114 14,970
========================================== ================ =============== ================== ================
* Cash from operations includes interest received of US$1,000 (2020 - US$17,000)
Notes to the Financial Statements (unaudited)
=============================================
1. Basis of Accounting
The condensed Financial Statements for the six months to 31 July 2021 comprises the statements
set out on the previous pages together with the related notes below. They have been prepared
in accordance with International Financial Reporting Standards (IFRS). The Financial Statements
for the six months to 31 July 2021 have been prepared on the basis of the same accounting
policies as set out in the Company's Annual Report and Financial Statements at 31 January
2021.
Equity instruments
The Ordinary shares and C shares of the Company are classified as equity in accordance with
the definition of equity instruments under IAS 32 Financial Instruments: presentation (IAS
32). The proceeds from the issue of shares are recognized in the Statement of Changes in Equity
net of incremental issuance costs.
Going Concern
In accordance with The Financial Reporting Council's guidance on going concern and liquidity
risk, including its Covid-19 guidance, the Directors have undertaken a rigorous review of
the Company's ability to continue as a going concern and specifically in the context of the
coronavirus pandemic.
Having considered the Company's principal risks and uncertainties, as set out at the beginning
of this announcement, together with its current position, investment objective and policy,
its assets and liabilities, and projected income and expenditure, it is the Directors' opinion
that the Company has adequate resources to continue in operational existence for the foreseeable
future. The Directors have considered the Company's principal and emerging risks as detailed
on pages 5 to 8 of the Company's Annual Report and Financial Statements for the year to 31
January 2021 and the Investment Manager ensures that the Company holds at all times a proportion
of assets that is sufficiently liquid to enable it to discharge its payment obligations. Accordingly,
the Directors consider it appropriate to adopt the going concern basis of accounting in preparing
these Financial Statements and confirm that they are not aware of any material uncertainties
which may affect the Company's ability to continue to do so over a period of at least twelve
months from the date of approval of the Financial Statements.
=============================================================================================================
2. Income
6 months to 6 months to Year to
31 July 2021 31 July 2020 31 January 2021
US$'000 US$'000 US$'000
=========================================== =================== =================== ======================
US Treasury Bills interest 148 2,394 2,899
Overseas interest - (220) (153)
Deposit interest - 17 18
================================================ =================== =================== ======================
Total income 148 2,191 2,764
================================================ =================== =================== ======================
3. Investment Management Fee
6 months to 6 months to Year to
31 July 2021 31 July 2020 31 January 2021
US$'000 US$'000 US$'000
=========================================== =================== =================== ======================
Investment Management Fee 3,534 1,252 3,603
================================================ =================== =================== ======================
The Company has appointed Baillie Gifford & Co Limited as its Investment Manager (the 'Investment
Manager'). As the entity appointed to be responsible for risk management and portfolio management,
the Investment Manager has also been appointed as the Company's Alternative Investment Fund
Manager ('AIFM'). Baillie Gifford & Co Limited has delegated portfolio management services
to Baillie Gifford Overseas Limited. The Investment Management Agreement is terminable on
not less than six months' notice.
Under the terms of the Investment Management Agreement, the Investment Manager will be entitled
to an annual fee (exclusive of VAT, which shall be added where applicable) of: 0.9% on the
net asset value excluding cash or cash equivalent assets up to and including US$650 million;
0.8% on the net asset value excluding cash or cash equivalent assets exceeding US$650 million
up to and including US$1.3 billion; and 0.7% on the net asset value excluding cash or cash
equivalent assets exceeding US$1.3 billion. Management fees are calculated and payable quarterly.
Notes to the Financial Statements (unaudited) (Ctd)
===================================================
4. Other Administrative Expenses
6 months to 6 months to Year to
31 July 2021 31 July 2020 31 January 2021
US$'000 US$'000 US$'000
============================= ============================== ================== ============================
General administrative expenses 239 168 323
Administrator's fee 55 47 83
Auditor's remuneration for audit
services 113 46 206
Directors' Fees 102 70 147
=================================== ============================== ================== ============================
509 331 759
=================================== ============================== ================== ============================
5. Expenses relating directly to a share class are charged to that share class. Expenses pertaining
to both Ordinary and C share classes are split equally between these share classes.
Each Director received a one-off fee of GBP5,000 (US$6,953 equivalent) which covered services
relating to the initial listing of the Company's C shares.
Earnings per Share
===============================================================================================================
6 months to 6 months to
31 July 2021 31 July 2020 Year to
Ordinary shares US$'000 c US$'000 c 31 January 2021 US$'000 c
============================= ============================== ================== ============================
Revenue return on ordinary
activities after taxation (3,645) (0.75) 608 0.13 (1,598) (0.33)
Capital return on ordinary
activities after taxation 83,252 17.15 20,833 4.37 209,900 43.94
=================================== ============== ============== ========== ====== =============== ===========
Profit and total comprehensive
income for the period 79,607 16.40 21,441 4.50 208,302 43.61
Weighted average number of Ordinary
shares in issue 485,476,079 477,267,310 477,670,487
=================================== ============================== ================== ============================
Period from 26 April 2021 to
31 July 2021
C shares US$'000 c
============================= ============== ==============
Revenue return on ordinary
activities after taxation (250) (0.04)
Capital return on ordinary
activities after taxation 3,760 0.54
=================================== ============== ==============
Profit and total comprehensive
income for the period 3,510 0.50
=================================== ============== ==============
Weighted average number of C shares
in issue 700,000,000
=================================== ==============================
Net return per Ordinary share is based on the above totals of revenue and capital and the
weighted average number of Ordinary shares in issue during each period. There are no dilutive
or potentially dilutive shares in issue.
6. Ordinary Dividends
There were no dividends paid or proposed in respect of the six months for either the Ordinary
shares or for the C shares (2020 - none).
Notes to the Financial Statements (unaudited) (Ctd)
==========================================================================
7. Financial Instruments
Fair Value Hierarchy
The fair value hierarchy used to analyse the fair values of financial assets is described
below. The levels are determined by the lowest (that is the least reliable or least independently
observable) level of input that is significant to the fair value measurement for the individual
investment in its entirety as follows:
Level 1 - using unadjusted quoted prices for identical instruments in an active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that are directly
or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is unavailable).
===========================================================================================================
Level 1 Level 2 Level 3 Total
As at 31 July 2021 US$'000 US$'000 US$'000 US$'000
===================================================== ============= =========== =========== ===========
Listed equities 178,362 - - 178,362
Unlisted ordinary shares - - 124,541 124,541
Unlisted preference shares * - - 589,735 589,735
Unlisted convertible promissory notes - - 5,171 5,171
========================================================== ============= =========== =========== ===========
Total financial asset investments 178,362 - 719,447 897,809
========================================================== ============= =========== =========== ===========
Level 1 Level 2 Level 3 Total
As at 31 January 2021 US$'000 US$'000 US$'000 US$'000
===================================================== ============= =========== =========== ===========
Listed equities 102,442 - - 102,442
Unlisted ordinary shares - - 79,352 79,352
Unlisted preference shares * - - 429,710 429,710
Unlisted convertible promissory notes - - 2,675 2,675
========================================================== ============= =========== =========== ===========
Total financial asset investments 102,442 - 511,737 614,719
========================================================== ============= =========== =========== ===========
* The investments in preference shares are not classified as equity holdings as they include
liquidation preference rights that determine the repayment (or multiple thereof) of the original
investment in the event of a liquidation event such as a take-over.
During the six months to 31 July 2021, investments with a fair value (IPO price) of US$85,165,000
were transferred from Level 3 to Level 1 on becoming listed. During the year ended 31 January
2021, investments with a fair value (IPO price) of US$47,656,000 were transferred from Level
3 to Level 1 on becoming listed.
The valuation techniques used by the Company are explained in the accounting policies on page
42 of the Company's Annual Report and Financial Statements for the year to 31 January 2021.
Listed investments are categorised as Level 1 if they are valued using unadjusted quoted prices
for identical instruments in an active market and as Level 2 if they do not meet all these
criteria but are, nonetheless, valued using market data. The Company's holdings in unlisted
investments are categorised as Level 3 as unobservable data is a significant input to their
fair value measurements.
Notes to the Financial Statements (unaudited) (Ctd)
===================================================
8. Share Capital
31 July 31 July 31 January 31 January
2021 2021 2021 2021
Number US$'000 Number US$'000
============================================================== =========== ======== =========== ==========
Allotted, called up and fully paid Ordinary shares of US$1 each 493,730,002 505,315 480,350,002 480,340
=================================================================== =========== ======== =========== ==========
Allotted, called up and fully paid C shares of US$1 each 700,000,000 694,802 - -
=================================================================== =========== ======== =========== ==========
By way of a special resolution passed on 15 March 2019 the Directors have a general authority
to allot up to 720,000,000 Ordinary shares or C shares, such figure to include the Ordinary
shares issued at the initial placing. 477,250,000 Ordinary shares were issued at the Company's
initial placing hence the Company has the ability to issue a further 242,750,000 shares under
this existing authority which expires at the end of the period concluding immediately prior
to the Annual General Meeting of the Company to be held in 2024 (or, if earlier, five years
from the date of the resolution). During the six months to 31 July 2021 the Company issued
13,380,000 Ordinary shares raising net proceeds of US$24,974,000. As at 31 July 2021 the Company
has the authority to issue 229,370,000 Ordinary shares. In the period from 1 August 2021 to
1 September 2021 the Company issued a further 1,660,000 shares raising net proceeds of US$3,436,000.
By way of a special resolution passed on 18 March 2021, the Directors have a general authority
to allot up to 700,000,000 C shares. On 26 April 2021, the Company issued 700,000,000 C shares
of US$1 and raised gross proceeds of US$700,000,000. The issue costs in respect of the C share
issue were US$5,198,000. These costs consisted of mainly broker commission (US$4,066,000),
legal fees (US$601,000) and listing fees (US$396,000).
By way of an ordinary resolution passed on 6 May 2021 the Directors of the Company have general
authority to make market purchases of up to 72,176,850 Ordinary shares, being 14.99% of the
Ordinary shares in issue as at 17 March 2021, being the latest practicable date prior to the
publication of the Company's Annual report and Financial Statements for the year ended 31
January 2021. This authority will expire at the conclusion of the Annual General Meeting of
the Company to be held in respect of the year ending 31 January 2022. No shares have been
bought back during the six months ended 31 July 2021 (31 January 2021 - nil) hence the authority
remains at 72,176,850 Ordinary shares.
Holders of Ordinary shares have the right to receive income and capital from assets attributable
to such share class, Ordinary shareholders have the right to receive notice of general meetings
of the Company and have the right to attend and vote at all general meetings.
Holders of C shares have the right to receive income and capital from assets attributable
to such share class, C shareholders have the right to receive notice of general meetings of
the Company and have the right to attend and vote at all general meetings.
9. Transaction Costs
During the period the Company incurred transaction costs on purchases of investments of US$99,000
(31 July 2020 - US$nil; year to 31 January 2021 - US$31,000) and transaction costs on sales
of US$nil (31 July 2020 - US$nil; year to 31 January 2021 - US$nil).
10. Transactions with Related Parties and the Investment Manager and Administrator
There have been no transactions with related parties during the first six months of the current
financial year that have materially affected the financial position or the performance of
the Company during that period and there have been no changes in the related party transactions
described in the last Annual Report and Financial Statements that could have such an effect
on the Company during that period.
None of the views expressed in this document should be construed as advice to buy or sell
a particular investment.
Glossary of Terms and Alternative Performance Measures ('APM')
Total Assets
The total value of all assets held less all liabilities (other than liabilities in the form
of borrowings).
Shareholders' Funds and Net Asset Value
Shareholders' Funds is the value of all assets held less all liabilities, with borrowings
deducted at book cost. Net Asset Value (NAV) is the value of all assets held less all liabilities,
with borrowings deducted at either fair value or par value. Per share amounts are calculated
by dividing the relevant figure by the number of Ordinary shares in issue.
Net Liquid Assets
Net liquid assets comprise current assets less current liabilities (excluding borrowings).
Premium/(Discount) (APM)
As stock markets and share prices vary, an investment trust's share price is rarely the same
as its NAV. When the share price is lower than the NAV per share it is said to be trading
at a discount. The size of the discount is calculated by subtracting the share price from
the NAV per share and is usually expressed as a percentage of the NAV per share. If the share
price is higher than the NAV per share, it is said to be trading at a premium.
Ordinary shares 31 July 2021 31 January 2021
============================================== =================== ================ ====================
Closing NAV per share (a) 164.19c 146.99c
Closing share price (b) 203.00c 180.00c
============================================== =================== ================ ====================
Premium expressed as a percentage (b-a) ÷ a 23.6% 22.5%
============================================== =================== ================ ====================
C shares 31 July 2021 26 April 2021
============================================== =================== ================ ====================
Closing NAV per share (a) 99.76c 99.25c
Closing share price (b) 125.00c 124.00c
============================================== =================== ================ ====================
Premium expressed as a percentage (b-a) ÷ a 25.3% 24.9%
============================================== =================== ================ ====================
Ongoing Charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a percentage of
the average net asset value (with debt at fair value).
Other Shareholder Information
=============================
Directors
Mr David Chiswell and Mr Richard Holmes were appointed Directors
of the Company on 2 September 2021.
Automatic Exchange of Information
In order to fulfil its legal obligations under the Guernsey
Common Reporting Standard Legislation relating to the Automatic
Exchange of Information, the Company is required to collect and
report certain information about certain shareholders. The
legislation will require investment companies to provide personal
information to the Guernsey authorities on certain investors who
purchase shares in investment funds. As an affected company, The
Schiehallion Fund Limited will have to provide information annually
to the local authority on the tax residencies of non-UK based
certificated shareholders and corporate entities.
Other Shareholder Information (Ctd)
Foreign Account Tax Compliance Act
Pursuant to the reciprocal information sharing
inter-governmental agreement entered into by the States of Guernsey
and the US Treasury, and for the purposes of the US Foreign Account
Tax Compliance Act ('FATCA') of the Company registered with the
Internal Revenue Service ('IRS') as a Foreign Financial Institution
('FFI') and received a Global Intermediary Identification Number
(R2NXXB.9999.SL.831). The Company can be located on the IRS FFI
list.
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
You can find up to date performance information about The
Schiehallion Fund on the Schiehallion Fund page of the Managers'
website at schiehallionfund.com (++)
The Schiehallion Fund Limited is managed by Baillie Gifford, the
Edinburgh based fund management group with around GBP 356 billion
under management and advice in active equity and bond portfolios
for clients in the UK and throughout the world (as at 1 September
2021). The Administrator, Secretary and Designated Manager is Alter
Domus (Guernsey) Limited.
++ Neither the contents of the Managers' website nor the
contents of any website accessible from hyperlinks on the Managers'
website (or any other website) is incorporated into, or forms part
of, this announcement.
Past performance is not a guide to future performance. The value
of an investment and any income from it is not guaranteed and may
go down as well as up and investors may not get back the amount
invested. This is because the share price is determined by the
changing conditions in the relevant stock markets in which the
Company invests and by the supply and demand for the Company's
shares.
2 September 2021
For further information please contact:
Alex Blake, Baillie Gifford & Co
Tel: 0131 275 2859 or 07773 246035
Mark Knight, Four Communications
Tel: 0203 697 4200 or 07803 758810
- ends -
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END
IR MZGGLGFGGMZM
(END) Dow Jones Newswires
September 03, 2021 06:43 ET (10:43 GMT)
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