ANNUAL REPORT
FOR THE YEAR ENDED 31 MARCH 2024
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2024
Worldwide Healthcare Trust PLC
(the “Company”) is a specialist
investment trust which invests in
the global healthcare sector with
the objective of achieving a high
level of capital growth.
In order to achieve its investment objective, the Company invests
worldwide in a diversified portfolio of shares in pharmaceutical and
biotechnology companies and related securities in the healthcare
sector. It may use gearing, and derivative transactions to enhance
returns and mitigate risk. Performance is measured against the MSCI
World Health Care Index on a net total return, sterling adjusted basis
(“Benchmark”). Further details of the Company’s investment policy,
including how it can use gearing and employ derivatives, are set out in
the Strategic Report on pages 8 and 9.
ACCESSING THE GLOBAL MARKET
The healthcare sector is global and accessing this market as a UK
investor can be difficult. The Company offers an opportunity to gain
exposure to pharmaceutical, biotechnology and related companies in
the healthcare sector on a global scale. The Company invests in large
companies with market capitalisations of over U.S.$10bn, smaller
companies below that size, as well as in unquoted companies. The
portfolio ranges from large multi-national pharmaceutical companies
with multiple products to unquoted emerging biotechnology companies.
Worldwide Healthcare Trust PLC is able to participate in all aspects
of healthcare, anywhere in the world because of its broad investment,
mandate. These may include patented speciality medicines for small
patient populations and unpatented generic drugs, in both developed
countries and emerging markets.
In addition, the Company invests in medical device technologies, life
science tools and healthcare services. The overall geographic spread
of Worldwide Healthcare Trust PLC is also extensive with investments
in the U.S., Europe, Japan, China and India (see page 12 for further
information).
HOW TO INVEST
The Company’s shares are traded openly on the London Stock
Exchange and can be purchased through a stockbroker or other
financial intermediary. The shares are also available through savings
plans (including investment dealing accounts, ISAs, Junior ISAs and
SIPPs) which enable both regular monthly investments and lump
sum investments in the Company’s shares. There are a number of
investment platforms that offer these facilities. Further details can be
found on page 102.
Strategic Report
Financial Summary 1
Key Information 2
Company Performance 3
Statement from the Chair 4
Investment Objective and Policy 8
Portfolio 10
OrbiMed Capital LLC (‘OrbiMed’) 13
Portfolio Manager’s Review 14
Environmental, Social and
Governance and Climate Change 29
Business Review 31
Governance
Board of Directors 45
Report of the Directors 47
Statement of Directors’ 51
Responsibilities
Corporate Governance 52
Audit & Risk Committee Report 60
Directors’ Remuneration Report 65
Independent Auditors’ Report 68
Financial Statements
Income Statement 77
Statement of Changes in Equity 78
Statement of Financial Position 79
Statement of Cash Flows 80
Notes to the Financial Statements 81
Further Information
Shareholder Information 98
Glossary of Terms and Alternative 99
Performance Measures (‘APMs’)
How to Invest 102
Notice of the Annual General
Meeting 103
Explanatory Notes to the 108
Resolutions
Regulatory Disclosures 110
Company Information 112
The Strategic Report, Governance and
Further Information Sections are unaudited
unless specifically stated otherwise.
For more information about Worldwide
Healthcare Trust PLC visit the website at
www.worldwidewh.com
Follow us on X @worldwidewh
Contents
1
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
New graph to be
provided
Rebased to 100 as at 31 Mar
ch 2023
Sour
ce: Morningstar
WWH Share Price (total return) (8.6%)
Benchmark (total return) (+10.9%)
Mar
2023
Apr
2023
May
2023
Jun
2023
Jul
2023
Aug
2023
Sep
2023
Oct
2023
Nov
2023
Dec
2023
Jan
2024
Feb
2024
Mar
2024
WWH NAV (total return) (12.0%)
%
80
85
90
95
100
105
110
115
for the year to 31 March 2024
Total Return Performance
*Source: Morningstar
† MSCI World Health Care Index on a net total
return, sterling adjusted basis. (See Glossary
beginning on page 99).
^ Alternative Performance Measure (see
Glossary beginning on page 99).
1
Comparative period restated for the sub-
division of each share of 25p into 10new shares
of 2.5p each during the year.
12.0%
Net asset value per share
(total return)*^
2023: (0.1)%
(12.1)%
Discount of share price to
net asset value per share*
2023: (9.3)%
8.6%
Share price (total return)*^
2023: (4.1)%
2.8p
Dividends per share
2023: 3.1p
1
10.9%
Benchmark*†
2023: 2.5%
0.9%
Ongoing Charges^
2023: 0.8%
Financial Summary
Year ended 31 March 2024
“I am pleased to report that,
following two difficult years, the
Company performed well in the
year under review”
Chair of the Board
2
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Rebased to 100 as at 31 March 2019. Source: Morningstar.
Mar 19 Mar 20 Mar 21 Mar 22 Mar 23 Mar 24
WWH NAV (total return) (+45.8%)
WWH Share Price (total return) (+27.9%)
Benchmark (total return) (+68.3%)
%
80
100
120
140
160
180
Key Information
Rebased to 100 as at 28 April 1995. Source: Morningstar, Thomson Reuters & Bloomberg
* With effect from 1 October 2010, the performance of the Company is measured against the MSCI World Health Care Index on a net total return, sterling
adjusted basis. Prior to this date, performance was measured against the Datastream World Pharmaceutical & Biotechnology Index (total return, sterling adjusted)
Apr
95
Mar
96
Mar
97
Mar
98
Mar
99
Mar
00
Mar
01
Mar
02
Mar
03
Mar
04
Mar
05
Mar
06
Mar
07
Mar
08
Mar
09
Mar
10
Mar
11
Mar
12
Mar
13
Mar
14
Mar
15
Mar
16
Mar
17
Mar
18
Mar
19
Mar
20
Mar
21
Mar
22
Mar
23
Mar
24
WWH NAV (total return) (+4,731.8%) WWH Share Price (total return) (+4,032.6%) Benchmark (total return) (+2,438.0%)*
%
0
1000
2000
3000
4000
5000
6000
Total Return Performance
Since Launch to 31 March 2024
Five year total return performance
to 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
3
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 Jan 2024 Feb 2024 Mar 2024
%
-12.0
-10.0
-6.0
-8.0
-4.0
-2.0
0.0
(9.3)%
(12.1)%
-14.0
-16.0
2019 2020 2021
2022 2023
2024
Net asset value per share (total return)*^ 13.7% 6.5% 30.0% (5.8)% (0.1)% 12.0%
Benchmark (total return)* 21.1% 5.7% 16.0% 20.4%
2.5% 10.9%
Net asset value per share 272.3p 286.9p 370.3p 346.5p 343.5p 381.1p
Share price 273.0p 292.0p 369.5p 327.5p 311.5p 335.0p
Premium/(discount) of share price to
net asset value per share 0.3% 1.8% (0.2)% (5.5)% (9.3)% (12.1)%
Dividends per share 2.65p 2.5p 2.2p 2.7p 3.1p 2.8p
Leverage 4.9% 12.0% 7.6% 10.9% 10.5% 10.8%
Ongoing charges^ 0.9% 0.9% 0.9% 0.9% 0.8% 0.9%
Ongoing charges (including performance
fees paid or crystallised during the year)^ 1.1% 0.9% 0.9% 1.4% 0.8% 0.9%
Comparative periods have been restated for the sub-division of each share of 25p each into 10 new shares of 2.5p each, approved at
the AGM held on 18 July 2023 and effective on 27 July 2023.
*Source: Morningstar
^ Alternative Performance Measure (see Glossary beginning on page 99).
Company Performance
*Source: Morningstar
Historic performance
for the years ended 31 March
Discount of the Company’s Share Price to the Net Asset Value per Share
year to 31 March 2024
4
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
INVESTMENT PERFORMANCE
I am pleased to present your Company’s Annual Report and
Financial Statements for the year ended 31 March 2024.
Stock market volatility continued in the year under review,
with company and healthcare industry fundamentals
often taking a back seat to macroeconomic forces and
geopolitical events. The first half of the year was dominated
by investor uncertainty and concerns regarding lingering
inflation and continued high interest rates. The second
half of the year saw these concerns abate, which helped
markets to rise, in some cases, back to all-time highs.
Against this backdrop, I am pleased to report that the
Company performed well, with a net asset value per share
total return of +12.0% (2023: -0.1%), outperforming the
Company’s Benchmark, the MSCI World Health Care Index
measured on a net total return, sterling adjusted basis,
which returned +10.9% (2023: +2.5%).
The Company’s share price total return during the year
was +8.6% (2023: -4.1%). The disparity between the
performance of the Company’s net asset value per share
and its share price was reflected in the widening of our
share price discount to our net asset value per share from
9.3% at 31 March 2023 to 12.1% at 31 March 2024.
Principal contributors to our outperformance were Big
Pharma, Medtech and Emerging Biotech stocks. A key part
of our Portfolio Manager’s strategy is to be overweight
the Emerging Biotech sector. This reflects both the high
levels of innovation and growth found in these companies
as well as their potential to be acquisition targets by larger
pharmaceutical companies seeking growth opportunities.
While the Company has underperformed the Benchmark on
a five-year view (+45.8% compared to +68.3%), our long-term
performance continues to be strong. From the Company’s
inception in 1995 to 31 March 2024, the total return of our
net asset value per share has been +4,733%, equivalent to
a compound annual return of +14.4%. This compares to a
cumulative blended Benchmark return of +2,438% and a
compound annual return of 11.9% over the same period.
Further information on the healthcare sector, the
Company’s investments and performance during the year
can be found in the Portfolio Manager’s Review.
CAPITAL
Since the beginning of 2022, and for a variety of reasons,
share price discounts across the investment company
sector in the UK have widened. The average level of
discount in the broader sector currently stands at c.14.0%*.
This compares to the Company’s share price discount of
9.4% as at 5 June 2024.
It is the Board’s policy to buy back our shares if the
Company’s share price discount to the net asset value
per share exceeds 6% on an ongoing basis. Shareholders
should note, however, that it remains possible for the
discount to be greater than 6% for extended periods of
time, particularly when sentiment towards the Company,
the sector and to investment trusts generally remains poor.
In such an environment, buybacks may prove unable to
prevent the discount from widening. However, they enhance
the net asset value per share for remaining shareholders
and go some way to dampening discount volatility, which
can adversely affect investors’ risk adjusted returns.
Over the year, the Company remained committed to its
share buyback and issuance policy, regularly repurchasing
shares. This commitment was demonstrated by the fact
that a total of 80,265,298 shares were repurchased for
treasury at a cost of £253m and at an average discount of
10.5%. In addition to increasing the Company’s net asset
value per share, during the period under review this activity
made the Company the most active acquirer of its own
shares both in its sector and across the investment trust
sector as a whole.
Statement from the Chair
“Net asset value per share total
return during the year was +12.0%,
and has been +14.4% pa since the
Company’s inception”
* Source: Winterflood Investment Trusts
5
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
The shares repurchased during the year under review
equated to 12.8% of the Company’s share capital at the
beginning of the year. The total number of shares shown to
have been repurchased during the year has been adjusted
to reflect the share split of each of the Company’s shares
of 25p each into 10 shares of 2.5p each which took effect
from 27 July 2023.
On 31 March 2024, there were 545,942,332 shares in issue
(excluding the 55,722,868 shares held in treasury). From the
beginning of the new financial year to 5 June 2024, a further
10,677,869 shares have been bought back for treasury, at a
cost of £36.5m and at an average discount of 10.1%.
In a change to the Company’s stated policy, I confirm that all
shares held in treasury at the date of the Company’s Annual
General Meeting to be held on 10 July 2024, will not be
cancelled and will continue to be held in treasury for re-issue
at a premium to the net asset value per share.
REVENUE AND DIVIDEND
Shareholders will be aware that it remains the Company’s
investment policy to pursue capital growth for shareholders
and to pay dividends at least to the extent required to
maintain investment trust status. Therefore, the level
of dividends declared can go down as well as up. An
unchanged interim dividend of 0.7p per share for the year
ended 31 March 2024, was paid on 11 January 2024 to
shareholders on the register on 24 November 2023.
The Company’s net revenue for the year as a whole decreased
to £16.1m from £19.7m. This was due largely to a decrease
in exposure to higher yielding stocks in the portfolio as well as
a reduction in the size of the portfolio due to shares bought
back by the Company during the year. As a result, the revenue
return per share was 2.7p (2023: 3.0p per share).
Accordingly, the Board is proposing a slightly reduced
final dividend for the year of 2.1p per share (2023:2.4p per
share). Together with the interim dividend already paid,
this makes a total dividend for the year of 2.8p per share
(2023:3.1p per share).
The effect of share buybacks means that the reported
dividend per share, which is based on the number of shares
in issue at the end of the financial year, is higher than the
reported revenue return per share, which is based on the
average number of shares in issue over the year.
Based on the closing mid-market share price of 353.5p
on 5 June 2024, the total dividend payment for the year
represents a current yield of 0.8%.
The final dividend will be payable, subject to shareholder
approval, on 24 July 2024, to shareholders on the register
of members on 14 June 2024. The associated ex-dividend
date will be 13 June 2024.
The Company’s dividend policy will be proposed for
approval at the forthcoming Annual General Meeting.
BOARD OF DIRECTORS
Humphrey van der Klugt will retire at the conclusion of
theCompany’s Annual General Meeting on Wednesday,
10July 2024.
Humphrey has served on the Board since 2016 and was
the Chair of the Audit & Risk Committee from 2016 to 2023.
Humphrey’s accounting, general finance and portfolio
management experience, including his deep knowledge
of the investment trust sector, have been invaluable to
the Board. His friendship and wise counsel will be greatly
missed. The Board is in the process of recruiting a new
Director to join the Board later in the year and we will keep
shareholders informed of developments.
For further details on the Board composition and
succession, please see pages 55 and 56 of these accounts.
6
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
(“ESG”) MATTERS
ESG matters continue to be an important priority for the
Board. Our objective is to have full, transparent disclosure
on the topic. Our Senior Independent Director, Bina Rawal,
works closely with our Portfolio Manager on this matter.
Our Portfolio Manager remains committed to taking
a leading role in the development of meaningful ESG
engagement practices in the healthcare sector. As part of
this, they facilitate dialogue and an exchange of leading
practices among investors, companies and other relevant
experts on ESG, in particular, the large capitalisation
pharmaceutical sector. They also engage with a broad
range of companies on a regular basis where areas of
improvement can be identified. Further information on
both ESG matters and climate change can be found in the
Portfolio Manager’s ESG report.
CONTINUATION VOTE
The Board has committed to undertaking a continuation
vote every five years, with a resolution tabled at the Annual
General Meeting falling in the fifth year. Accordingly, such
a resolution is included in the notice of Annual General
Meeting contained within this report.
In the light of the Company’s long-term track record of
outperformance, the positive outlook for the healthcare
sector globally and the Company’s unique ability to
provide shareholders with access to a broad range of
healthcare investment opportunities worldwide, the Board
unanimously recommends that shareholders vote in favour
of the resolution allowing the Company to continue as an
investment trust for a further five years.
ANNUAL GENERAL MEETING (“AGM”)
The Company’s AGM will again be held at Saddlers’ Hall,
40Gutter Lane, London EC2V 6BR on Wednesday, 10 July
2024 at 1.00pm. As well as the formal proceedings, there
will be an opportunity to meet the Board and the Portfolio
Manager and to receive an update on the Company’s
strategy. We look forward to seeing as many of you as
possible there.
For those investors who are not able to attend the meeting
in person, a video recording of the Portfolio Manager’s
presentation will be uploaded to the website after the
meeting. Shareholders can submit questions in advance by
sending them to wwh@frostrow.com.
I encourage all shareholders to exercise their right to vote at
the AGM and to register your votes online in advance of the
meeting. Registering your vote in advance will not restrict
you from attending and voting at the meeting in person
should you wish to do so. The votes on the resolutions to
be proposed at the AGM will again be conducted on a poll.
The results of the proxy votes will be published following
the conclusion of the AGM by way of a stock exchange
announcement and will also be able to be viewed on the
Company’s website at www.worldwidewh.com.
OUTLOOK
While stock market volatility is to be expected, and in the
coming year may be influenced by elections in the US and
UK, our Portfolio Manager, OrbiMed, continues to remain
positive on the outlook for the healthcare sector and our
Company’s strategy for maximizing shareholder value over
time. They believe that the overall future of the healthcare
industry remains strong due to increasing demand globally,
driven by a combination of the world’s aging population
and improving access to healthcare products and services
worldwide. At the same time, the rapid pace of innovation
continues unabated, leading to the availability of new
products and treatments.
OrbiMed further believes that the challenging investment
backdrop for healthcare stocks that had existed since the
easing of the COVID pandemic appears to be changing and
that the recent upturn in share prices across the industry is
more representative of its positive fundamentals.
Lastly, OrbiMed expects the currently high level of merger
and acquisition activity in the healthcare sector to continue,
supported by attractive valuations, healthy balance sheets
and, within the pharmaceutical sector, a need to address
future patent expirations.
Your Board shares OrbiMed’s optimism. We believe the
prospects for the global healthcare sector are strong and
that your Company is uniquely placed to take advantage
of opportunities in a wide variety of companies around the
world. Accordingly, we believe that long-term investors in
the Company will continue to be rewarded.
Doug McCutcheon
Chair
6 June 2024
STATEMENT FROM THE CHAIR CONTINUED
7
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
8
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
INVESTMENT OBJECTIVE
The Company invests in the
global healthcare sector with
the objective of achieving a
high level of capital growth.
In order to achieve its investment objective, the Company
invests worldwide in a diversified portfolio of shares in
pharmaceutical and biotechnology companies and related
securities in the healthcare sector. It uses gearing, and
derivative transactions to enhance returns and mitigate
risk. Performance is measured against the MSCI World
Health Care Index on a net total return, sterling adjusted
basis (“Benchmark”).
INVESTMENT STRATEGY
The implementation of the Company’s Investment
Objective has been delegated to OrbiMed by Frostrow
(asAIFM) under the Board’s and Frostrow’s supervision
and guidance.
Details of OrbiMed’s investment strategy and approach
are set out in the Portfolio Manager’s Review on
pages14to28.
While the Board’s strategy is to allow flexibility in
managing the investments, in order to manage investment
risk it has imposed various investment, gearing and
derivative guidelines and limits, within which Frostrow and
OrbiMed are required to manage the investments, as set
out below.
Any material changes to the Investment Objective, Policy
and Benchmark or the investment, gearing and derivative
guidelines and limits require approval from shareholders.
INVESTMENT POLICY
INVESTMENT LIMITS AND GUIDELINES
• The Company will not invest more than 15% of the
portfolio in any one individual stock at the time of
acquisition;
• At least 50% of the portfolio will normally be invested
in larger companies (i.e. with a market capitalisation of
at least U.S.$10bn);
• At least 20% of the portfolio will normally be invested
in smaller companies (i.e. with a market capitalisation
of less than U.S.$10bn);
• Investment in unquoted securities will not exceed 10%
of the portfolio at the time of acquisition;
• A maximum of 5% of the portfolio, at the time
of acquisition, may be invested in each of debt
instruments, convertibles and royalty bonds issued by
pharmaceutical and biotechnology companies;
• A maximum of 30% of the portfolio, at the time of
acquisition, may be invested in companies in each of
the following sectors:
– healthcare equipment and supplies;
– healthcare providers and services;
• The Company will not invest more than 10% of its
gross assets in other closed ended investment
companies (including investment trusts) listed on the
London Stock Exchange, except where the investment
companies themselves have stated investment
policies to invest no more than 15% of their gross
assets in other closed ended investment companies
(including investment trusts) listed on the London
Stock Exchange, where such investments shall be
limited to 15% of the Company’s gross assets at the
time of acquisition.
Investment objective and policy
9
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
DERIVATIVE STRATEGY AND LIMITS
In line with the Investment Objective, derivatives are
employed, when appropriate, in an effort to enhance
returns and to improve the risk-return profile of the
Company’s portfolio. Only Equity Swaps were employed
within the portfolio during the year.
The Board has set the following limits within which
derivative exposures are managed:
• Derivative transactions (excluding equity swaps) can
be used to mitigate risk and/or enhance capital returns
and will be restricted to a net exposure of 5% of the
portfolio; and
• Equity Swaps may be used in order to meet the
Company’s investment objective of achieving a high
level of capital growth, and counterparty exposure
through these is restricted to 12% of the gross assets
of the Company at the time of acquisition.
The Company does not currently hedge against foreign
currency exposure.
GEARING LIMIT
The Board has set a maximum gearing level, through
borrowing, of 20% of the net assets.
LEVERAGE LIMITS
Under the AIFMD the Company is required to set
maximum leverage limits. Leverage under the AIFMD is
defined as any method by which the total exposure of an
AIF is increased.
The Company has two current sources of leverage: the
overdraft facility, which is subject to the gearing limit; and,
derivatives, which are subject to the separate derivative
limits. The Board and Frostrow have set a maximum
leverage limit of 140% on both the commitment and
grossbasis.
Further details on the gearing and leverage calculations,
and how total exposure through derivatives is calculated,
are included in the Glossary beginning on page 99. Further
details on how derivatives are employed can be found in
note 16 beginning on page 91.
INVESTMENT OBJECTIVE AND POLICY CONTINUED
10
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Portfolio
INVESTMENTS HELD AS AT 31 MARCH 2024
Investments Sector Country
Market value
£’000
% of
investments
Eli Lilly Pharmaceuticals United States 192,261 9.2%
Boston Scientific Healthcare Equipment & Supplies United States 139,752 6.7%
Novo Nordisk Pharmaceuticals Denmark 130,534 6.2%
AstraZeneca Pharmaceuticals United Kingdom 129,973 6.2%
Intuitive Surgical Healthcare Equipment & Supplies United States 123,124 5.9%
Merck Pharmaceuticals United States 117,578 5.6%
Biogen Biotechnology United States 92,990 4.4%
Tenet Healthcare Healthcare Providers & Services United States 80,031 3.8%
Daiichi Sankyo Pharmaceuticals Japan 77,991 3.7%
Stryker Healthcare Equipment & Supplies United States 63,107 3.0%
Top 10 investments 1,147,341 54.7%
BioMarin Pharmaceutical Biotechnology United States 56,867 2.7%
Elevance Health Healthcare Providers & Services United States 52,559 2.5%
Eisai Pharmaceuticals Japan 52,016 2.5%
Thermo Fisher Scientific Life Sciences Tools & Services United States 51,937 2.5%
Evolent Health Healthcare Providers & Services United States 51,662 2.5%
GSK Pharmaceuticals United Kingdom 50,940 2.4%
Natera Life Sciences Tools & Services United States 46,733 2.2%
Ionis Pharmaceuticals Biotechnology United States 42,969 2.0%
Caris Life Sciences * Life Sciences Tools & Services United States 40,531 1.9%
Sarepta Therapeutics Biotechnology United States 38,152 1.8%
Top 20 investments 1,631,707 77.7%
ICON Life Sciences Tools & Services Ireland 37,515 1.8%
Apellis Pharmaceuticals Biotechnology United States 37,187 1.8%
Argenx Biotechnology Netherlands 32,035 1.5%
Neurocrine Biosciences Biotechnology United States 29,086 1.4%
SI-BONE Healthcare Equipment & Supplies United States 29,033 1.4%
Vertex Pharmaceuticals Biotechnology United States 28,781 1.4%
UnitedHealth Healthcare Providers & Services United States 27,397 1.3%
Vaxcyte Biotechnology United States 26,716 1.3%
Cytokinetics Biotechnology United States 26,621 1.3%
Shanghai INT Medical Instruments Healthcare Equipment & Supplies China 20,244 1.0%
Top 30 investments 1,926,322 91.9%
Janux Therapeutics Biotechnology United States 19,806 0.9%
Crossover Health * Healthcare Providers & Services United States 18,018 0.9%
EDDA Healthcare & Technology * Healthcare Equipment & Supplies China 15,129 0.7%
VISEN Pharmaceuticals * Biotechnology China 13,714 0.7%
Beijing Yuanxin Technology * Healthcare Providers & Services China 13,407 0.6%
Sino Biopharmaceutical Pharmaceuticals Hong Kong 12,723 0.6%
Dexcom Healthcare Equipment & Supplies United States 12,012 0.6%
Galderma Group Pharmaceuticals Switzerland 11,652 0.6%
New Horizon Health Life Sciences Tools & Services China 11,186 0.5%
Innovent Biologics Biotechnology China 11,053 0.5%
Top 40 investments 2,065,022 98.5%
* Unquoted holding
11
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
PORTFOLIO CONTINUED
Investments Sector Country
Market value
£’000
% of
investments
Ruipeng Pet Group * Healthcare Providers & Services China 10,844 0.5%
Jiangxi RiMAG Group * Healthcare Providers & Services China 10,503 0.5%
MabPlex * Healthcare Providers & Services China 5,395 0.3%
API Holdings * Healthcare Providers & Services India 5,072 0.2%
Shandong Weigao Group Medical Polymer Healthcare Equipment & Supplies China 2,961 0.1%
Shanghai Bio-heart Biological Technology Healthcare Equipment & Supplies China 2,381 0.1%
Passage Bio Biotechnology United States 2,218 0.1%
Ikena Oncology Biotechnology United States 1,815 0.1%
Dingdang Health Technology Healthcare Providers & Services China 1,510 0.1%
Peloton Therapeutics - Milestone * Biotechnology United States 514 0.0%
Total equities 2,108,235 100.5%
Biotech M&A Target Swap Basket Swaps United States 176,869 8.4%
Apollo Hospitals Healthcare Providers & Services India 16,416 0.8%
GLP-1 Dislocation;/MedTech Recovery
Swap
Basket Swaps China 4,797 0.2%
Less: Gross exposure on financed swaps (209,556) (10.0)%
Total Equity Swaps (11,474) (0.5)%
Total investments including OTC Swaps 2,096,761 100.0%
* Unquoted holding
SUMMARY
Investments
Market value
£’000
% of
investments
Quoted Equities 1,975,108 94.2%
Unquoted equities 133,127 6.3%
Equity Swaps (11,474) (0.5)%
Total of all investments 2,096,761 100.0%
12
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
PORTFOLIO CONTINUED
* Figures expressed as a % of the total economic exposure. This includes all derivatives as an economically equivalent position in the underlying holding
and allocated to the underlying holdings respective Sectors and Regions. Within the Region diagrams unquoted investments have been allocated into their
respectivecountries.
SECTOR* REGION*
Portfolio distribution
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Healthcare Equipment & Supplies 16.1%
Healthcare Providers & Services 9.2%
Life Sciences Tools & Services 5.9%
Unquoted 5.8%
Japan 5.7%
Emerging Market 3.3%
North America 70.7%
Europe 17.0%
China 5.7%
Japan 5.7%
India 0.9%
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Biotechnology 21.8%
Healthcare Equipment & Supplies 17.5%
Healthcare Providers & Services 13.9%
Emerging Market 7.2%
Unquoted 6.2%
Japan 5.7%
Life Sciences Tools & Services 3.4%
North America 65.3%
Europe 18.3%
China 8.8%
Japan 5.7%
India 1.9%
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13
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
OrbiMed was founded
in 1989 and has evolved
over time to be one of the
largest dedicated healthcare
investment firms in the world.
OrbiMed has managed the
Company’s portfolio since its
launch in 1995.
OrbiMed had approximately U.S.$17 billion in assets under
management as of 31 March 2024, across a range of
funds, including investment trusts, hedge funds, and private
equityfunds.
INVESTMENT STRATEGY AND PROCESS
Within the guidelines set by the Board, the OrbiMed team
works to identify sources of outperformance, or alpha, with
a focus on fundamental research. In healthcare, there are
many primary sources of alpha generation, especially in
therapeutics. Clinical events such as the publication of new
clinical trial data is a prominent example and historically
has been the largest source of share price volatility.
Regulatory events, such as new drug approvals by U.S.,
European, or Japanese regulatory authorities are also
stock moving events. Subsequent new product launches
are carefully tracked and forecasted. Other sources include
legal events and, of course, merger and acquisition activity.
The team has a global focus with a universe of coverage
that covers the entire spectrum of companies, from early
stage companies with pre-clinical assets to fully integrated
biopharmaceutical companies. The universe of actively
covered companies is approaching 1,000.
OrbiMed emphasises investments in companies with
under-appreciated products in the pipeline, high quality
management teams, and adequate financial resources.
A disciplined portfolio construction process is utilised
to ensure the portfolio is focused on high conviction
positions. Finally, the portfolio is subject to a rigorous risk
management process.
THE TEAM
The wider OrbiMed Investment Team continues to expand
and now has over 130 professionals that cover all aspects
of research, trading, finance, and compliance. This includes
over 30 degree holders with MD and/or PhD credentials,
healthcare industry veterans, and finance professionals
with over 20 years of experience.
The firm has a global investment horizon and the OrbiMed
footprint now spans three continents with offices in New
York, San Francisco, Herzliya (Israel), Hong Kong, Shanghai,
Mumbai and London.
The lead managers with responsibility for the Company’s
portfolio are as follows:
Sven H. Borho, CFA,
Sven H. Borho, CFA, is a founder and
Managing Partner of OrbiMed. Sven
heads the public equity team and he
is the portfolio manager for OrbiMed’s
public equity and hedge funds. He has
been a portfolio manager for the firm’s
funds since 1993 and has played an
integral role in the growth of OrbiMed’s
asset management activities.
He started his career in 1991 when he joined OrbiMed’s
predecessor firm as a Senior Analyst covering European
pharmaceutical firms and biotechnology companies
worldwide. Sven studied business administration at
Bayreuth University in Germany and received a M.Sc.
(Econs.), Accounting and Finance, from The London School
of Economics.
Trevor M. Polischuk, Ph.D.
Trevor M. Polischuk, Ph.D., is a Partner
at OrbiMed focused on the global
pharmaceutical industry. Trevor joined
OrbiMed in 2003 and became a Partner
in 2011. Previously, he worked at
Lehman Brothers as a Senior Research
Analyst covering the U.S. pharmaceutical
industry. Trevor began his career at
Warner Lambert as a member of the Global Marketing
Planning team within Parke-Davis. Trevor holds a Doctorate
in Neuropharmacology & Gross Human Anatomy and an
M.B.A. from Queen’s University, Canada.
ORBIMED CAPITAL LLC
Portfolio Manager’s Review
MARKETS
Global equity markets continued their rollercoaster ways
in the financial year, with a volatile first half followed by
a steep climb higher in the second half. One constant
throughout the year has been the macroeconomic
and political factors driving returns, trumping industry
specificfundamentals.
The first half of the year was characterised mostly by
investor fear and uncertainty, with rising interest rates,
geopolitical conflicts, and persistent inflation providing the
backdrop for the debate around a recession. Broad market
returns during this period were flat to down, exacerbated
by a precipitous market sell-off in October where
“higher for longer” was the rally cry for investors to sell.
Healthcare stocks eschewed their traditional defensive
characteristics and lagged the market by over 5% (source:
MSCI) during this period.
But the second half of the year saw a dramatic reversal of
market performance as investors expressed enthusiasm
over easing inflation data and the U.S. Federal Reserve’s
indication of a potential end to its two-year interest rate
hiking cycle. That momentum continued unabated into
the financial year end where the MSCI World Index and
the S&P 500 closed on all-time highs whilst the FTSE
All-Share Index closed on a 52-week high. Healthcare
stocks also rose, but again trailed the broad market by 6%.
The net of it was a difficult year for healthcare stocks. The
MSCI World Index bucked the early tumult of the year to
post an impressive total return of +22.4% (sterling). Whilst
the MSCI World Healthcare Index also rebounded during
the year, the total return of +10.9% (sterling) was the worst
relative performance versus the broad market in over
20years.
Despite the difficult backdrop for healthcare, the Company
was able to produce a strong double-digit return that
exceeded the Benchmark by over 1%, driven primarily by
stock picking across Big Pharma, Emerging Biotech, and
Medtech.
Healthcare Underperformance
(MSCI World Index vs. MSCI World Healthcare Index)
Source: Bloomberg
Mar 23 Jun 23 Sep 23 Dec 23 Mar 24
MSCI World Healthcare IndexMSCI World
+10.9%
+22.4%
20%
15%
5%
0%
10%
-5%
-10%
25%
14
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
PORTFOLIO MANAGER’S REVIEW CONTINUED
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
ALLOCATION
We actively manage the Company’s allocation across
healthcare sub-sectors with reference to the Benchmark.
In the reported financial year, we have continued our
strategic overweight positioning in Biotechnology stocks, in
particular Emerging Biotech. As innovation has become the
real hallmark of the Company, the real cradle of innovation
has been in Emerging Biotech stocks, companies that are
typically without revenues but have been the technology
engine behind both the majority of the industry’s pipeline and
ultimately new product approvals. We ended the financial
year with total Biotechnology exposure of 29.0%, 20.7%
above the Benchmark, representing an increase year-over-
year on both an absolute and relative basis. Within Emerging
Biotech, there was a modest increase year-over-year (+1.7%)
on an absolute basis and a large increase relative to the
Benchmark (+3.9%) as valuations compressed in the period.
Overall, the exposure is very much consistent with our long-
held positioning that has typically ranged from high 20’s to
low 30’s percentage on an absolute basis, which we expect
to continue.
Similarly, we have continued our strategic underweight
positioning in Pharmaceutical stocks in the reported financial
year. There are two main rationales for this. First is a nod to the
Benchmark where Pharmaceuticals (global large capitalisation
stocks, generics, and specialty) comprise approximately
45% of the weighting, the largest segment of MSCI World
Healthcare Index. This fact creates the most likely candidate
for funding other segments of our investment. Second, and
more importantly, the underweight positioning is primarily
due to our fundamental outlook for the sector. Big Pharma
companies, in our view, are a collection of companies that are
easily divided into the classic “Have or Have Not” designation
from a variety of metrics including but certainly not limited to
valuation, growth profile, management credibility, pipelines,
new product launches, strength of balance sheet, capital
allocation priorities, and forward-looking catalysts. Our focus
on the “Haves” has enabled us to capture performance in
the financial year both in absolute terms and relative to the
Benchmark, despite the underweight positioning. Year-over-
year, our exposure in Big Pharma companies did increase by
3.3% (absolute) and 1.3% (relative) given high conviction ideas
in companies that are significant weightings in the Benchmark
including Eli Lilly, Novo Nordisk, and AstraZeneca.
15
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
ALLOCATION BY SUB-SECTOR
(WWH vs. MSCI World Healthcare Index)
As of 31 March 2024 As of 31 March 2023
Subsector WWH % NAV
^
MSCI HC
Over/Under
vs.BM
WWH % NAV
^
MSCI HC
Over/Under
vs.BM
Pharmaceuticals 31.0 44.8 (13.8) 26.8 43.0 (16.2)
 Big Pharma 29.9 41.7 (11.8) 26.6 39.7 (13.1)
 Spec Pharma 1.1 2.9 (1.8) 0.2 3.2 (3.0)
 Generics – 0.2 (0.2) – 0.1 (0.1)
Biotechnology 29.0 8.3 20.7 24.1 9.4 14.7
 Big Biotech 6.1 6.2 (0.1) 2.9 5.1 (2.2)
 Emerging Biotech 22.9 2.1 20.8 21.2 4.3 16.9
Life Science Tools & Services 6.5 11.1 (4.6) 3.8 12.3 (8.5)
Health Care Equipment & Supplies 17.8 16.9 0.9 19.3 16.2 3.1
Healthcare Services & Supplies 10.2 15.1 (4.9) 15.4 14.9 0.5
Japan 6.3 3.8 2.5 6.3 4.2 2.1
Emerging Market 3.7 – 3.7 8.0 – 8.0
Privates 6.4 – 6.4 6.8 – 6.8
Total 110.9 100.0 10.9 110.5 100.0 10.5
^ Figures expressed as a % of total Net Asset Value. This includes all derivatives as an economically equivalent position in the underlying holding and
allocated to the underlying holding respective Sectors and Regions.
PORTFOLIO MANAGER’S REVIEW CONTINUED
16
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
In the Life Sciences Tools & Services (“Tools”) sector, we
increased our exposure over the course of the year but
remained underweight versus the Benchmark, reflecting the
difficult macro environment for tools companies across
many markets, including bioprocessing, instruments, China,
and general biopharma weakness. We added one new
significant position, Icon Life Sciences, a contract research
organisation where market trends and opportunities have
improved for the company. We await opportunities to add
exposure as the Tools sector returns to more normal growth
towards the end of calendar 2024.
The portfolio allocation in Health Care Equipment & Supplies
(“Medtech”) varied through the financial year given a variety
of shifting tailwinds and headwinds. Whilst this is unlike our
strategic positioning in Biotechnology and Pharmaceuticals, it
is a typical trading pattern for us, historically, in Medtech. We
started the financial year overweight given high conviction,
single stock ideas and a sub-sector valuation that appeared
reasonable against a backdrop of improving procedural
utilisation rates. Exposure was reduced mid-year due to profit
taking, ahead of a seasonally slower second quarter, and the
negative fall-out from GLP-1 data sets, such as the SELECT
trial, which created significant tumult in the sector during the
year. Our exposure to the group increased in November 2023 to
take advantage of what we saw to be a rebound in the hardest
hit parts of the sub-sector. Into the year-end, the portfolio was
back to a slight overweight position, albeit slightly down year-
over-year (approximately 1.5% absolute and 2.2% relative).
Looking ahead, subsector fundamentals are highly bifurcated
between a select group of large capitalisation companies such
as Boston Scientific, Intuitive Surgical, and Stryker which
are benefiting from sizable new product cycles, while most of
the other large cap companies should remain at much lower
growth rates and out of favour with investors.
In Healthcare Providers & Services (“Services”), we reduced
our managed care exposure meaningfully over the course
of the year. Our current underweight positioning reflects the
significant challenges that this sector has faced, especially
for companies exposed to Medicare Advantage – including
an unprecedented spike in utilisation and insufficient
reimbursement updates from a more negative government
stance on the industry. We are watching carefully for
opportunities to increase our exposure again as utilisation
appears to be stabilising.
Historically, our exposure to Japanese pharmaceuticals has
been idea based. That is, our long history in both due diligence
and investing in companies from Japan has shown episodic
opportunities of novel innovation and outsized returns from
concentrated investments there, regardless of the Benchmark.
As of the year end, our overweight positioning here was stable,
as two investment opportunities have carried through the
start and end of the period, specifically Daiichi-Sankyo, the
worldwide leaders in antibody drug conjugate technology
for the treatment of multiple cancers, and Eisai, the longtime
pioneers in Alzheimer’s disease, now presiding over a historic
global launch of Leqembi (lecanemab).
Another sector in which we have historically been
overweight is Emerging Markets, in particular China
healthcare. Fundamentally, there are a multitude of reasons
for this, including a sizable and growing market, patient
demographics, local consumer demand, and ultimately
government support in building healthcare infrastructure
and reforms to improve access to healthcare services for
its citizens. More recently, we have also discovered the
incredible innovation that is also coming out of China in
the healthcare space, drug discovery and development
which is rivalling, and sometimes surpassing, their Western
counterparts. That said, we have also acknowledged
(and capitulated) to the plethora of headline risk that has
been coming out of China, primarily the given geopolitical
tensions between U.S. and China. As a result, we have
lowered our exposure to Emerging Markets significantly over
the past four years, ending the year at 3.7% and down over
4.3% year-over-year. Nevertheless, the secular tailwinds
remain strong and we expect to continue to look for and
invest in meaningful opportunities in China and India.
PERFORMANCE
For the year ended 31 March 2024, we are pleased to
report that the Company generated a net asset value total
return of +12.0% whilst the share price total return was
+8.6%. The net asset value performance surpassed the
Benchmark return of +10.9%. Drivers of both absolute and
relative performance were similar to the most recent years,
namely the fluctuations between fundamental industry
drivers and macroeconomic factors heavily influenced the
returns during the year. With interest rates being the most
significant corollary to performance, the only sustained
returns were achieved in the second half of the financial
year when investors and the market began to expect – and
price in – interest rate cuts in 2024.
As detailed below, key upside drivers for performance
included stock picking in Big Pharma, allocation and stock
picking in Biotechnology, and stock picking in Medtech. This
was partially offset by allocation in China, stock picking in
Japan, and exposure to unquoteds.
17
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
PORTFOLIO MANAGER’S REVIEW CONTINUED
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
SUBSECTOR PERFORMANCE
On a sub-sector level, the largest contributor to absolute
performance was from Big Pharma, contributing 7% (of
the +12% net asset value return). Obesity drugs and the
landmark data from the newest GLP-1 medications was the
true hallmark for healthcare stocks in 2023 and was a key
contributor to the Company’s absolute performance. Stock
picking here was key as relative contribution from Big Pharma
was also positive, despite the sizable underweight positioning
versus the Benchmark throughout the financial year (average
portfolio weight 28% compared to Benchmark weight 41%).
An outsized contribution also came from Medtech at
just over 4% of the 12.0% NAV return. The space was
particularly volatile in 2023 as small capitalisation stocks
underperformed and obesity-laterals disrupted the share
prices of many stocks. Additionally, stock picking here was
particularly astute and combined with allocation effect
(average year-long overweight of approximately 1.6%),
investments in Medtech yielded nearly 2% of excessreturn.
Fiscal Year Performance Comparison
(Worldwide Healthcare Trust vs. MSCI World Healthcare Index)
Source: Bloomberg, OrbiMed; Data updated through 31 March 2024. Note: WWH performance figures are net of fees
WWH NAV (total return) (+4,731.8%) WWH Share Price (total return) (+4,032.6%) Benchmark (total return) (+2,438.0%)*
15%
5%
0%
10%
-5%
-10%
Apr 23 May 23 Jun 23 Jul 23 Aug 23 Sep 23 Oct 23 Nov 23 Dec 23 Jan 24 Feb 24 Mar 24
+10.9%
+12.0%
WWH MSCI World Healthcare Index
Attribution By Subsector – Absolute
WWH
+12.0%
MSCI
+10.9%
Pharma
Medtech
Biotech
Services
Tools
India
Unquoted
Japan
China
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
18
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
PORTFOLIO MANAGER’S REVIEW CONTINUED
A contribution of import was also generated within
Biotechnology, more specifically Emerging Biotech stocks
which generated nearly 3% of absolute return. Moreover, this
return also represented nearly 3% of relative return, primarily
due to stock picking. The majority of this contribution
came from OrbiMed’s custom and proprietary mergers
and acquisitions (“M&A”) swap basket, first constructed in
April 2022, which consists of handpicked biotechnology
companies (by OrbiMed) that we believe are likely M&A
targets as an efficient way to gain exposure to a plethora
of single stocks. The strategy proved very successful,
with the basket returning over 65% (USD) since inception,
outperforming broad small and mid-capitalisation stocks
(+28% per the XBI) and large capitalisation (+17% per
the NBI) Biotechnology stocks, contributing over 2% or
nearly £35 million alone. The total net contribution for
Biotechnology was partially offset by our investments in Big
Biotech names, which werenegative.
ORBIMED’S M&A Swap Basket
(vs. XBI SPDR S&P Biotech ETF and vs. NBI NASDAQ Biotech Index)
orbiMed M&A Basket XBI NBI
+66.5%
+28.0%
+17.4%
100%
80%
60%
40%
20%
0%
-20%
Apr
23
May
23
Jun
23
Jul
23
Aug
23
Sep
23
Oct
23
Nov
23
Dec
23
Jan
24
Feb
24
Mar
24
Apr
22
May
22
Jun
22
Jul
22
Aug
22
Sep
22
Oct
22
Nov
22
Dec
22
Jan
23
Feb
23
Mar
23
Detractors of note on a sub-sector level (China, Japan,
Unquoted) were modest. The equity markets in China
remained difficult as investor concerns over the economy
were exacerbated by ongoing geopolitical tensions with
the U.S. and proposed legislation that could limit China’s
role in the U.S. biopharmaceutical industry. Overall, the
Hang Seng Healthcare Index dropped 35% in the financial
year under review.
Thus, allocation effect primarily led to more than a 2%
negative impact from China-basedinvestments.
Attribution By Subsector – Relative
(Worldwide Healthcare Trust vs. MSCI World Healthcare Index)
WWH
+12.0%
MSCI
+10.9%
Pharma
Medtech
Biotech
Services
Tools
India
Unquoted
Japan
China
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
19
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
PORTFOLIO MANAGER’S REVIEW CONTINUED
In Japan, the TOPIX Pharm Index total return was negative
at -6% (sterling) despite the Nikkei-225 Index advancing
more than 25% (sterling) and reaching all-times highs in
March 2024. Thus, the allocation effect, and stock picking,
combined for more than a 1% impact to performance in
the financial year.
UNQUOTEDS
During the financial year, the Company strategically
refrained from making new investments in unquoted
companies, as we continued to cautiously navigate
the challenging public offering market for small and
mid-capitalisation healthcare firms. While the capital
market funding landscape has been improving, most of
our unquoted companies are well capitalised and are
being selective with regards to pursuing listings. We are
optimistic about the ability of some of our unquoted
investments to achieve listings within the next year as
we anticipate the capital market funding environment will
continue to improve.
As of the end of the financial year, unquoted investments
made up 6.3% of the Company’s portfolio, a slight
decrease from 6.7% as at 31 March 2023. The existing
unquoted portfolio demonstrates a diverse and forward-
looking approach. Geographically, exposure is evenly
distributed among Emerging Markets and North American
companies. On a sub-sector basis, the exposure is
concentrated in Services and Tools, with small exposures
to Biotechnology and Medtech.
We participated in one additional investment (£3.3 million)
in API Holdings (better known as PharmEasy) which
was also the only material write-down in valuation. The
company was compelled to accept a capital infusion at a
distressed valuation after a planned initial public offering
(“IPO”) was delayed due to adverse market conditions,
leading to a funding shortfall, including a potential breach
of a debt covenant.
During the year under review, the unquoted investments
made a loss of £14.7 million, from an opening market
value of £145.2 million across 10 companies. The
unquoted strategy as a whole had an implied return
of -9.9% which detracted -0.7% from performance.
API Holdings was the main detractor in the unquoted
strategy while other emerging markets names had minor
downward valuation revisions largely due to a historically
ABSOLUTE CONTRIBUTION BY INVESTMENT FOR THE YEAR ENDED 31 MARCH 2024
Principal contributors to and detractors from net asset value performance
Top five contributors
Sector Country
Contribution
£’000
Contribution
per share
p
Eli Lilly Pharmaceuticals United States 77,301 13.2
Novo Nordisk Pharmaceuticals Denmark 59,568 10.2
Intuitive Surgical Healthcare Equipment & Supplies United States 49,032 8.4
Boston Scientific Healthcare Equipment & Supplies United States 36,022 6.2
Tenet Healthcare Healthcare Providers & Services United States 32,586 5.6
Top five detractors
Sector Country
Contribution
£’000
Contribution
per share
p
Bristol-Myers Squibb* Pharmaceuticals United States (12,246) (2.1)
uniQure* Biotechnology Netherlands (15,647) (2.7)
Eisai Pharmaceuticals Japan (16,628) (2.8)
Madrigal Pharmaceuticals* Biotechnology United States (16,642) (2.8)
Biogen Biotechnology United States (21,702) (3.7)
* Not held at 31 March 2024
20
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
PORTFOLIO MANAGER’S REVIEW CONTINUED
challenging public market environment in China and Hong
Kong. On the contrary, North American unquoted holdings
had a positive return during the financial year.
MAJOR CONTRIBUTORS TO PERFORMANCE
The pursuit of innovation is the longtime hallmark of
the Company. Nowhere has this been better exemplified
than in the study and development of the incretin class
of medicines, better known as the GLP-1 agonists or the
now famous “obesity drugs” Wegovy (semaglutide) and
Zepbound (tirzepatide). The journey of these medicines
began in 1996 when the target was first isolated from
the venom of a Gila monster and is now culminating in
unprecedented benefit for patients with diabetes and
obesity and a plethora of other indications, including
cardiovascular disease, heart failure, chronic kidney
disease, liver disease, just to name a few.
Eli Lilly can call themselves one of the true pioneers in
this class of drugs and currently markets the undisputed
“best-in-class” agents in the space. The company’s most
recent offering is Mounjaro (tirzepatide), a dual GLP-1
and “GIP” agonist. Whilst approved for diabetes in 2022,
the company presented additional data in obesity in 2023,
showing weight loss eclipsing 20% and even approaching
25% in some cases. This dual-agonist therapy has
pushed weight loss to new levels and the company
benefited materially from the SELECT trial, with investors
(and the company) assuming that “more is better”: the
cardiovascular benefits shown by Wegovy should extend
to Mounjaro, if not more so, given the superior weight
loss profile. Sales of Mounjaro were annualising at almost
$10 billion per annum at the end of 2023. The year end
approval of Zepbound in obesity was the company’s first
and only approval so far in obesity and the launch has
thus been explosive to start 2024. The combination of
data disclosures, approvals, launches, and anticipation of
next generation agents throughout the fiscal year caused
the share price to more than double in the period. Eli Lilly
was the top contributor to performance for the Company
at 3.8%.
The other true pioneer of the GLP-1 class is the
global sales leader in this space, Novo Nordisk. 2023
contained a landmark moment for the company with the
announcement and presentation of the SELECT trial, a
global study that followed nearly 18,000 patients over
five years to measure the benefits of taking Wegovy
(semaglutide) on cardiovascular disease in obese patients.
The full results were presented at the American Heart
Association congress and simultaneously published in
the New England Journal of Medicine in November 2023.
The data was stunning and unequivocally showed a 20%
drop in the risk of a patient suffering a “MACE” event (heart
attack, stroke, or cardiovascular related death) by taking
a once-weekly injection of Wegovy. This data surpassed
all investor expectations and moved this drug from a
lifestyle intervention into a chronic care medicine that can
prolong a patient’s life. Sales growth has been explosive
and the company’s total GLP-1 franchise was annualising
close to U.S.$25 billion by the end of 2023, despite supply
limitations, given insatiable demand. With additional
manufacturing coming online in 2024, we expect this
exciting growth to continue. With a share price rise of
nearly 60% (sterling) in the period, Novo Nordisk was the
second largest contributor to the Company’s performance.
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PORTFOLIO MANAGER’S REVIEW CONTINUED
The Select Trial
(Key Highlights from AHA and NEJM)
(Key Highlights from AHA and NEJM)
Source: Novo Nordski, NEJM.org
With a seasoned management team, multi-decade head start and superior robotic technology, we
view Intuitive Surgical as the best positioned company in the fast-growing and vastly
underpenetrated surgical robotics space. The company operates as a monopoly with its da Vinci
suite of robotic systems, and we see upcoming competitor system launches as market expansive
as opposed to driving material share gains against Intuitive. Over the past year, building investor
excitement over a potential new system that should further insulate the company from competition,
as well as accelerating top and bottom-line growth, has driven strong share performance. Intuitive’s
procedure volumes benefited from rebounding U.S. surgeries and deeper penetration into new
procedure categories and international markets. As procedures improved, customers required
further robotics capacity resulting in strong system placements as well. The company’s latest
system, the da Vinci 5, was U.S. Food & Drug Administration (“FDA”) approved in March 2024
and the roll-out as already begun. While there are still several unanswered questions about the pace
of new system purchases going forward, it is clear that consensus estimates have yet to fully reflect
the new system launch, and we see significant further share price appreciation in the coming years.
Boston Scientific is an industry leading medical technology company that develops, manufactures,
and markets minimally invasive medical devices in several high growth end markets including
interventional cardiology, cardiac rhythm management, peripheral interventions,
electrophysiology, neurovascular intervention, endoscopy, urology, gynecology, and
neuromodulation. Over the past year, the company has successfully driven accelerating organic
sales growth ahead of company guidance and investor expectations on the back of several new
product launches, improving labor issues at U.S. hospitals and stabilising inflation headwinds.
Moreover, investor optimism for improving future year growth has increased in recent months on
the back of positive trial results and subsequent FDA approval for the company’s next generation
device for the treatment of atrial fibrillation, known as the FARAPULSE Pulsed Field Ablation
System. While the company has several other new products launching over the next three years,
Source: Novo Nordski, NEJM.org
With a seasoned management team, multi-decade
head start and superior robotic technology, we view
Intuitive Surgical as the best positioned company in the
fast-growing and vastly under-penetrated surgical robotics
space. The company operates as a monopoly with its
da Vinci suite of robotic systems, and we see upcoming
competitor system launches as market expansive as
opposed to driving material share gains against Intuitive.
Over the past year, building investor excitement over a
potential new system that should further insulate the
company from competition, as well as accelerating
top and bottom-line growth, has driven strong share
performance. Intuitive’s procedure volumes benefited from
rebounding U.S. surgeries and deeper penetration into
new procedure categories and international markets. As
procedures improved, customers required further robotics
capacity resulting in strong system placements as well.
The company’s latest system, the da Vinci 5, was U.S.
Food & Drug Administration (“FDA”) approved in March
2024 and the roll-out has already begun. While there are
still several unanswered questions about the pace of new
system purchases going forward, it is clear that consensus
estimates have yet to fully reflect the new system launch,
and we see significant further share price appreciation in
the coming years.
Boston Scientific is an industry leading medical technology
company that develops, manufactures, and markets
minimally invasive medical devices in several high
growth end markets including interventional cardiology,
cardiac rhythm management, peripheral interventions,
electrophysiology, neurovascular intervention, endoscopy,
urology, gynecology, and neuromodulation. Over the past
year, the company has successfully driven accelerating
organic sales growth ahead of company guidance and
investor expectations on the back of several new product
launches, improving labour issues at U.S. hospitals and
stabilising inflation headwinds. Moreover, investor optimism
for improving future growth has increased in recent months
on the back of positive trial results and subsequent FDA
approval for the company’s next generation device for the
treatment of atrial fibrillation, known as the FARAPULSE
Pulsed Field Ablation System. While the company has
several other new products launching over the next three
years, investors are particularly focused on the pulsed field
ablation device as the multi-billion dollar atrial fibrillation
market could rapidly shift toward this new technology. We
believe the ongoing company algorithm of best-in-class
organic sales growth, differentiated margin expansion
potential and ongoing M&A should result in continued
strong and durable EPS growth for the foreseeable future.
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
PORTFOLIO MANAGER’S REVIEW CONTINUED
The Texas-based hospital operator, Tenet Healthcare,
had an excellent year, as the most outsized beneficiary
of favourable hospital market trends during the fiscal
year. Hospitals spent most of 2022 managing spikes in
labour costs for temporary nurse staffing, but were set
up favourably for 2023 with continued strong utilisation
trends exiting COVID, receding labour costs, and higher-
than-average reimbursement trends in delayed recognition
of higher labour costs. This combination of strong
volume, price, and lower cost drove stellar results for
hospitals throughout 2023, including Tenet Healthcare.
Share price gains were also realised by the company due
to the company’s (1) business mix toward higher-value
ambulatory surgery centres, (2) impressive free cash
flow, and (3) reduced leverage. Finally, we would note the
company executed three significant hospital divestitures
in early 2024 at valuations far beyond their own, which
unlocked further value to shareholders.
MAJOR DETRACTORS FROM PERFORMANCE
In 2023, one of the most notable new drug approvals was
Leqembi (lecanemab), the first monoclonal antibody to show
unequivocal disease modifying effects in the treatment of
mild to moderate Alzheimer’s disease. This landmark full
approval was achieved by Eisai and their partner Biogen in
July 2023 after receiving accelerated approval in January
2023. However, the launch has proven to be much more
of a challenge than originally expected. Many factors
contributed to the guarded uptake of Leqembi for prospective
patients, including a cognitive test and physical exam,
biomarker-confirmed diagnosis using cerebral spinal fluid
(via lumbar puncture) or positron emission tomography test,
confirmation of ApoE status (for safety considerations), and
enrolment in a federal patient registry.
Furthermore, the dosing regimen for Leqembi requires a
patient to receive a long duration intra-venous infusion
once every two weeks at an appropriate infusion centre.
Much of the infrastructure for this was limited or even
absent in the first year of the launch, curbing access to
“chair time” for patients to get this novel medication. As a
result, uptake has been modest through the second half of
2023, although it has inflected in early 2024. This situation
has weighed on the share prices of both Eisai and Biogen.
Share price declines were exacerbated when delays
arose to the companies’ sub-cutaneous formulation of
Leqembi, a drug regimen that would circumvent the need
for infusion centres and perhaps require less frequent
administration and almost assuredly allow for greater
uptake and utilisation of Leqembi in afflicted patients.
Ultimately, Eisai and Biogen failed to dose 10,000 patients
in the U.S. – their stated goal at launch – in the financial
year ended 31 March 2024. Overall, the sub-optimal
launch of Leqembi resulted in Eisai and Biogen being
the largest detractors to performance in the period.
However, key opinion leader feedback on Leqembi remains
supportive; the drug remains an important and beneficial
clinical intervention for patients with Alzheimer’s disease.
We believe sales can and will inflect going forward and
our ongoing investment in these companies remains a
lucrative opportunity.
Madrigal Pharmaceuticals is a clinical-stage
biopharmaceutical company based in Pennsylvania,
pursuing novel therapeutics for the treatment of NASH
(nonalcoholic steatohepatitis), or the emerging acronym of
MASH (metabolic dysfunction-associated steatohepatitis).
MASH is a severe form of fatty liver disease, a condition
in which the liver builds up excessive fat deposits. Over
time, inflammation, fibrosis, and cirrhosis can occur,
leading to liver failure. With few options to treat this deadly
condition and a huge prevalence globally, the commercial
opportunity is large. Their primary pipeline asset,
resmetirom, is a thyroid hormone β-receptor agonist
which is believed to play a role in liver health. It has shown
promising data in late stage, pivotal trials for this disease.
However, the emergence of data for the GLP-1 class of
drugs (for the treatment of diabetes and obesity from Eli
Lilly and Novo Nordisk) have shown significant ability to
reduce liver fat accumulation, decrease inflammation,
and prevent the progression of fibrosis in patients with
NASH. This finding dramatically hurt investor sentiment
for all NASH players, including Madrigal. Share price
declines were exacerbated by a change in the CEO and
a subsequent financing, which removed the takeout
premium in the stock. Ultimately, with the commercial
opportunity for resmetirom blunted, we exited the stock.
The Netherlands-based gene therapy player, uniQure, is
a clinical-stage company that focuses on neurological
disorders. Gene therapy, whilst still somewhat nascent,
represents an incredible leap in innovation that has
curative properties. The company’s lead asset is a novel
gene therapy, AMT-130, for Huntington’s disease, an
inherited disorder that causes cells in parts of the brain
to gradually degenerate and die, progressively impacting
a person’s functional abilities and results in movement,
cognitive, and psychiatric disorders. However, in June
2023 the company provided a mixed interim update from
its Phase I/II trial for AMT-130, which raised investor
concern over target engagement of the gene therapy. The
stock fell on the news and continued to sell-off. That said,
23
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
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PORTFOLIO MANAGER’S REVIEW CONTINUED
we were encouraged by the totality of the data, including
the early indication of function benefit across multiple
measures. Ultimately, however, we concluded that the
data was not approvable as is and an additional large,
multi-year trial would be required to satisfy FDA and other
regulatory authorities. As a result, we exited the stock.
The global pharmaceutical company, Bristol-Myers
Squibb is well known for its leadership in oncology, with
major cancer franchises in both immuno-oncology and
multiple myeloma. However, both franchises are aged
and have reached or are nearing expiration of exclusivity.
With a declining topline, the company’s price-to-earnings
multiple has compressed to below 10x, creating the most
heavily discounted stock in the large cap pharmaceutical
space. However, this “value play” turned into a “value trap”
in 2023. The company has had one of the most productive
pipelines in the industry over the past three years, with
new approvals in immunology, haematology, oncology, and
cardiovascular disease. However, commercial execution
of the many new product launches has underwhelmed,
and a top line renaissance has so far failed to materialise.
The share price has subsequently fallen further as has
the multiple. We exited the stock during the first half of
the financial year as our conviction level for a turnaround
deteriorated. The share price continued to move lower in
the second half of the year.
DERIVATIVE STRATEGY
The Company has the ability to utilise equity swaps and
options as part of its financial strategy. Equity swaps are a
financial tool, a derivative contract, that allow for synthetic
exposure to a basket of single stocks in an efficient manner
and within a well-defined theme. For example, having 15 to
50+ additional positions at smaller weights in the portfolio
(i.e., non-core) is suboptimal. An equity swap basket
facilitates management of the investment theme and
tracking of performance. The swaps contain multiple single
stock long positions and the basket swap counterparty is
Goldman Sachs, allowing for confidence in forward trading
and rebalancing strategies.
The Company strategically invested in three customised
tactical basket swaps, targeting growth opportunities
in undervalued small and mid-capitalisation biotech,
therapeutic and medical device companies.
These baskets were constructed to capitalise on three
prevailing themes: 1) investment opportunities possessing
considerable potential as attractive acquisition targets for
larger corporations (M&A swap basket), 2) those exhibiting
a favourable risk/reward profile in light of upcoming
clinical catalysts and 3) substantial valuation dislocations
in small and mid-capitalisation medical device companies
brought about by the GLP-1 weight loss craze.
During the period under review, the basket swaps gained
£32.7 million, which added 1.6% to performance. The
gains were primarily due to the returns generated by the
propriety Biotech M&A Target Swap.
Throughout the year, the Company also used single stock
equity swaps to access Chinese and Indian investments,
which would otherwise be inaccessible through more
traditional investment methods. During the period under
review, single stock equity swaps contributed £5.0 million
to performance, and we remain confident in the long-term
prospects of emerging market securities, particularly
those trading locally in mainland China.
LEVERAGE STRATEGY
Historically, the typical leverage level employed by the
Company has been in the mid-to-high teens range.
Considering the market volatility during the past three plus
financial years, we have, more recently, used leverage in
a more tactical fashion. In 2023, we have flexed leverage
modestly in response to the economic climate, including in
consideration of a putative recession earlier in the period
and interest rate fluctuations and speculation.
Most recently, leverage has converged to the low-double
digit range, a reflection of our overall bullishness on the
portfolio and a hopeful turn in biotechnology stocks. Some
factors that keep us from extending leverage even further
is the continued uncertainty with the macro backdrop,
further geopolitical risk, the looming U.S. Presidential
election, and relatively higher borrowing costs at present.
SECTOR DEVELOPMENTS
Innovation is one of the major value drivers across the
healthcare space. One of the most objective measures
of said innovation is novel product approvals and 2023
was record setting with 67 approvals across a wide range
of therapeutic categories. More impressive has been the
nearly 400 new drugs approved over the past 7 years.
This marks one of the most productive periods in the
bio-pharmaceutical industry. With standards for new
product approvals ever increasing, this industry-wide
accomplishment stands as one of the most consequential
achievements in the modern era of medicine. Additionally,
the recent return of FDA inspectors to China and other Asian
venues for the first time in two of years is an encouraging
sign for the industry (source:WashingtonAnalysis).
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PORTFOLIO MANAGER’S REVIEW CONTINUED
There were many notable new drugs among the more than
five dozen approvals in 2023. As mentioned previously in this
report was the landmark approval of Leqembi (lecanemab),
the first monoclonal antibody to show unequivocal disease
modifying effects in the treatment of mild to moderate
Alzheimer’s disease, ushering in a new paradigm in helping
patients and families with this devastating disease. GSK
presided over the best (non-COVID) vaccine launch in
history after the approval of Arexvy, indicated for seniors for
active immunisation for the prevention of lower respiratory
tract disease in patients exposed to Respiratory Syncytial
Virus (RSV). Another medicine approved for RSV was
Beyfortus (nirsevimab), a monoclonal antibody designed
to prevent infections in newborns babies. Multiple novel
gene therapies were also approved, including Elevidys
for Duchenne Muscular Dystrophy (a genetic problem in
producing dystrophin, a protein that protects muscle fibers
from breaking down, a disease found in young boys which
results in the inability to crawl or walk and early death) and
Roctavian for Haemophilia A (a genetic disorder resulting
from a deficit of factor VIII, a vital blood-clotting protein,
that manifests as protracted and excessive bleeding either
spontaneously or secondary to trauma).
NOTABLE APPROVALS IN 2023
(Selected Novel Drug Approvals by the U.S. FDA in 2023)
Source: FDA.gov
A significant investment theme in 2023 – a theme we expect to continue into 2024 – is the
accelerated pace of mergers and acquisitions in the therapeutics space, fueled by a variety of
factors. First, the industry is facing another “patent cliff” with approximately U.S.$250 billion in
branded sales at risk to generic alternatives commencing in 2025. Second, the looming drug price
headwinds in the U.S. in 2026 (from the Inflation Reduction Act) is pressuring management teams
to bolster top lines via M&A. Third, historically low biotechnology valuations have created
bargains with many small and mid-capitsalistion biotechnology companies being taken out at or
below their all-time high price. Finally, and most importantly, innovation in biotechnology is at
all-time highs where 65% of the industry pipeline and 50% of approved drugs originated from
small and mid-capitalisation biotechnology companies.
MMEERRGGEERRSS AANNDD AACCQQUUIISSTTIIOONNSS PPAASSTT 33 YYEEAARRSS
(Number of Deals and Total Deal Value by Fiscal Year)
Source: FactSet; Data as of 31 March 2024; *excludes PFE acquisition of SGEN
This has created a very positive environment for deal making as high interest rates and a quiet
initial public offering market created some barriers to access for capital for these companies. The
financial year saw a total of 40 bio-pharmaceutical takeovers valued at U.S.$115 billion. The first
14 weeks of calendar 2024 saw14 deals, accelerating the trend into the new year.
1144 DDEEAALLSS 1144 WWEEEEKKSS TTOO SSTTAARRTT 22002244
(Acquired + Acquiree Companies and Deal Terms)
Source: FDA.gov
A significant investment theme in 2023 – a theme we expect
to continue into 2024 – is the accelerated pace of mergers
and acquisitions in the therapeutics space, fuelled by a
variety of factors. First, the industry is facing another “patent
cliff” with approximately U.S.$250 billion in branded sales at
risk to generic alternatives commencing in 2025. Second,
the looming drug price headwinds in the U.S. in 2026 (from
the Inflation Reduction Act) is pressuring management
teams to bolster top lines via M&A. Third, historically low
biotechnology valuations have created bargains with many
small and mid-capitalisation biotechnology companies
being taken out at or below their all-time high price. Finally,
and most importantly, innovation in biotechnology is at
all-time highs where 65% of the industry pipeline and 50% of
approved drugs originated from small and mid-capitalisation
biotechnology companies.
U.S. FDA New Drug Approvals
(Annual Approvals since 2016)
0
10
20
30
40
50
60
70
CDER CBER
2016 2017 2018 2019 2020 2021 2022 2023
22 46 59 48 53
5
7
1
51
7
37
8
55
12
22
53
59 49
58 58
45
67
CDER – Center for Drug Evaluation and Research. CBER – Center for Biologics Evaluation and Research
Source: FDA.gov
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
PORTFOLIO MANAGER’S REVIEW CONTINUED
MERGERS AND ACQUISITIONS PAST 3 YEARS
(Number of Deals and Total Deal Value by Fiscal Year)
0
10
20
30
40
50
FY 2021
17
$31bn
FY 2022
29
$70bn*
FY 2023
40
$115bn
Source: FactSet; Data as of 31 March 2024; *excludes PFE acquisition of SGEN
This has created a very positive environment for deal
making as high interest rates and a quiet initial public
offering market created some barriers to access for
capital for these companies. The financial year saw a total
of 40 bio-pharmaceutical takeovers valued at U.S.$115
billion. The first 14 weeks of calendar 2024 saw14 deals,
accelerating the trend into the new year.
14 DEALS 14 WEEKS TO START 2024
(Acquired + Acquiree Companies and Deal Terms)
Source: FactSet; Transactions shown to 6 April 2024
INNOVATION
The largest sector development continues to be the incredible era of innovation that the bio-
pharmaceutical industry is presiding over. The global phenomenon of obesity drugs that gripped
the market in 2023 actually represents a class of drugs that is nearly 20 years old, but the continued
innovation by the pioneers – Eli Lilly. and Novo Nordisk – pushed the efficacy benefits beyond
expectations. And these companies are not stopping here despite the recent launches of Wegovy
and Zepound, rather, next-generation incretins are already in late-stage development. Over the next
6-12 months, data for “CagriSema” (from Novo Nordisk) and “retatrutide” (from Eli Lilly & Co.)
will most likely improve the standard-of-care beyond what we are seeing today, pushing the life
cycle of GLP-1 drugs (and the various combinations) well into the next decade and beyond.
Capital expenditure exceeding U.S.$10 billion per company is being spent on expanded global
manufacturing capacity in attempt to satisfy the incredible demand for these drugs. Additionally,
both companies are in hot pursuit of oral incretins as well, to further increase the size and reach of
this market.
Another key tailwind for this class of drugs is also usage outside of “diabesity” with impressive
clinical data for cardiovascular disease, heart failure, osteoarthritis, kidney disease, liver, and sleep
apnea already published. Over the coming year we should see data in other indications as well,
such as peripheral arterial disease and even Alzheimer’s disease. An independent study out of
France even showed proof-of-concept for a GLP-1 molecule benefitting patients with Parkinson’s
disease. Of course, there are many companies, both small and large, trying to enter this market and
we should see plenty of rival data in 2024.
As 2023 came to a close, the latest generation GLP-1’s were annualising at U.S.$40 billion per
annum – despite neither company having fully rolled out Wegovy and Zepbound globally by year
end. Previously, we speculated if this market could reach U.S.$100 billion in annual sales by 2030.
No more. Now we are contemplating a market size of potentially U.S.$200 billion by the decade.
TTHHEE BBAATTTTLLEE OOFF TTHHEE BBUULLGGEE
(Multiple catalysts for the GLP-1 class of drugs in 2024 and beyond)
Source: FactSet; Transactions shown to 6 April 2024
INNOVATION
The largest sector development continues to be the
incredible era of innovation that the bio-pharmaceutical
industry is presiding over. The global phenomenon of obesity
drugs that gripped the market in 2023 actually represents a
class of drugs that is nearly 20 years old, but the continued
innovation by the pioneers – Eli Lilly and Novo Nordisk –
pushed the efficacy benefits beyond expectations. And
these companies are not stopping here despite the recent
launches of Wegovy and Zepound, rather, next-generation
incretins are already in late-stage development. Over the
next 6-12 months, data for “CagriSema” (from Novo Nordisk)
and “retatrutide” (from Eli Lilly) will most likely improve the
standard-of-care beyond what we are seeing today, pushing
the life cycle of GLP-1 drugs (and the various combinations)
well into the next decade and beyond.
Capital expenditure exceeding U.S.$10 billion per company
is being spent on expanded global manufacturing capacity
in attempt to satisfy the incredible demand for these
drugs. Additionally, both companies are in hot pursuit of
oral incretins as well, to further increase the size and reach
of this market.
Another key tailwind for this class of drugs is also usage
outside of “diabesity” with impressive clinical data for
cardiovascular disease, heart failure, osteoarthritis, kidney
disease, liver, and sleep apnea already published. Over the
coming year we should see data in other indications as well,
such as peripheral arterial disease and even Alzheimer’s
disease. An independent study out of France even showed
proof-of-concept for a GLP-1 molecule benefiting patients
with Parkinson’s disease. Of course, there are many
companies, both small and large, trying to enter this market
and we should see plenty of rival data in2024.
As 2023 came to a close, the latest generation GLP-1’s
were annualising at U.S.$40 billion per annum – despite
neither company having fully rolled out Wegovy and
Zepbound globally by year end. Previously, we speculated
if this market could reach U.S.$100 billion in annual sales
by 2030. No more. Now we are contemplating a market
size of potentially U.S.$200 billion by the decade end.
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PORTFOLIO MANAGER’S REVIEW CONTINUED
THE BATTLE OF THE BULGE
(Multiple catalysts for the GLP-1 class of drugs in 2024 and beyond)
A therapeutic class that has been a hot bed of innovation over the past decade has been oncology.
The launch of the first “immuno-oncology” agent ushered in a revolution in the treatment of cancer
never before seen and despite the bar constantly resetting higher, the industry continues to deliver
as “IO” agents eclipsed U.S.$45 billion in sales in 2023. This year, data for next generation IO
agents (such as TIGIT, LAG3, and newer CTLA-4) may prove critical in the continued growth of
this class. Also, novel bi-specific formulations could be game changing.
Not to be outdone, but the largest inflection of interest in the oncology space over the past year
has been in the antibody-drug-conjugate (ADC) class of drugs. ADCs are a form of targeted
medicines that deliver chemotherapy agents directly to cancer cells, destroying them whilst mostly
sparing normal, healthy cells. The pursuit of ADCs was behind the largest business development
deals in 2023, specifically the U.S.$43 billion acquisition of Seagen (by Pfizer) and the U.S.$22
billion development deal between Daiichi Sankyo and Merck.
HHOOTT SSPPAACCEESS IINN OONNCCOOLLOOGGYY
(Clinical data read-outs can drive significant value creation in 2024)
A therapeutic class that has been a hot bed of innovation
over the past decade has been oncology. The launch of
the first “immuno-oncology” agent ushered in a revolution
in the treatment of cancer never before seen and despite
the bar constantly resetting higher, the industry continues
to deliver as “IO” agents eclipsed U.S.$45 billion in sales in
2023. This year, data for next generation IO agents (such
as TIGIT, LAG3, and newer CTLA-4) may prove critical in
the continued growth of this class. Also, novel bi-specific
formulations could be game changing.
Not to be outdone, but the largest inflection of interest
in the oncology space over the past year has been in the
antibody-drug-conjugate (ADC) class of drugs. ADCs are
a form of targeted medicines that deliver chemotherapy
agents directly to cancer cells, destroying them whilst
mostly sparing normal, healthy cells. The pursuit of ADCs
was behind the largest business development deals in
2023, specifically the U.S.$43 billion acquisition of Seagen
(by Pfizer) and the U.S.$22 billion development deal
between Daiichi Sankyo and Merck.
HOT SPACES IN ONCOLOGY
(Clinical data read-outs can drive significant value creation in 2024)
A therapeutic class that has been a hot bed of innovation over the past decade has been oncology.
The launch of the first “immuno-oncology” agent ushered in a revolution in the treatment of cancer
never before seen and despite the bar constantly resetting higher, the industry continues to deliver
as “IO” agents eclipsed U.S.$45 billion in sales in 2023. This year, data for next generation IO
agents (such as TIGIT, LAG3, and newer CTLA-4) may prove critical in the continued growth of
this class. Also, novel bi-specific formulations could be game changing.
Not to be outdone, but the largest inflection of interest in the oncology space over the past year
has been in the antibody-drug-conjugate (ADC) class of drugs. ADCs are a form of targeted
medicines that deliver chemotherapy agents directly to cancer cells, destroying them whilst mostly
sparing normal, healthy cells. The pursuit of ADCs was behind the largest business development
deals in 2023, specifically the U.S.$43 billion acquisition of Seagen (by Pfizer) and the U.S.$22
billion development deal between Daiichi Sankyo and Merck.
HHOOTT SSPPAACCEESS IINN OONNCCOOLLOOGGYY
(Clinical data read-outs can drive significant value creation in 2024)
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PORTFOLIO MANAGER’S REVIEW CONTINUED
Radiopharmaceuticals – the using of localised radiation
in the form of injectable isotopes – was another area of
oncology which saw outsized M&A activity with Eli Lilly,
AstraZeneca, and Bristol-Myers Squibb all buying their
way in to compete with the industry leader, Novartis.
With record new drug approvals and clinical pipelines
as full as they have ever been, this impressive wave of
innovation will be bountiful in 2024 and for years to come.
Whilst our focus here has been on metabolic disease
and oncology, by no means are new achievements in
innovation limited to these therapeutic classes. 2023 saw
the approval of the very first disease modifying agent
for Alzheimer’s disease (Eisai’s Leqembi). 2023 saw the
approval of the very first vaccine for respiratory syncytial
virus (GSK’s Arexvy). 2023 saw the first approval for a
gene therapy treatment for Duchenne muscular dystrophy
(Sarepta Therapeutic’s Elevidys). Early 2024 saw the
approval of the most sophisticated surgical robotic suite
ever produced (Intuitive Surgical’s da Vinci 5). Early 2024
saw the approval of the most efficacious agent to treat
pulmonary arterial hypertension (Merck’s Winrevair). This
list goes on and on – across immunology, inflammation,
women’s health, haematology, endocrinology, respiratory,
dermatology, gastrointestinal, neurology, infectious
disease, and vaccines. The next 12-18 months will bring
new and novel data sets across numerous disease states,
advancing the standard of care in medicine, and driving
the value of the sector higher.
Now in our 29th year, the performance from inception
remains strong. As we closed the financial year, the NAV was
near all-time highs and our bullishness into the new financial
year remained steadfast. Overall, the Company’s net asset
value performance since inception (from 28 April 1995), has
posted a 4,733% return, or an average of 14.4% per annum
through 31 March 2024. This compares to a Benchmark
return of 2,438% and 11.9% over the same investment
horizon and the FTSE All-Share Index return of +636% and
+7.1%. As we enter our 30th year of managing the Company,
the multiple since inception of 48x represents both the
strength of the healthcare industry and the unyielding global
demand for healthcare related goods and services. It also
shows what an active manager or specialist investor can do
in healthcare, especially in the face of a highly idiosyncratic,
global sector that possesses many barriers to understanding
the scientific, clinical, regulatory, technological, and political
environment that envelops all of healthcare.
Performance Since Inception
(Worldwide Healthcare Trust vs. Blended Benchmark*)
*With effect from 1 October 2010, the performance of the Company is measured against the MSCI World Health Care Index on a net
total return, sterling adjusted basis. Prior to this date, performance was measured against the Datastream World Pharmaceutical &
Biotechnology Index (total return, sterling adjusted). Source: Frostrow, Bloomberg
WWH NAV Rreturn WWH Share Price Blended DS / MSCI World Healthcare Index
FTSE
1995 1996 1997 1998 1999 2000 2001 2002 20042003 2005 2006 2007 2008 2009 2010 2011 20132012 2014 20162015 2017 2018 2019 2020 2021 2022 2023 2024
+4733%
+4033%
+2438%
+636%
£0
£1,000
£2,000
£3,000
£4,000
£5,000
28
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
PORTFOLIO MANAGER’S REVIEW CONTINUED
OUTLOOK
The state of the healthcare industry remains strong,
supported by significant global demand and new product
flow, underpinned by an era of incredible innovation that
has not been seen before. Moreover, the challenging
investment backdrop for healthcare stocks that has
been in place since the easing of the COVID pandemic
appears to be in the past as the recent inflection of share
prices across the industry is much more indicative of
the positive fundamentals of the space. The long-term
growth potential of healthcare also remains strong:
global demographics, aging populations, and constant,
persistent demand. Innovation, however, continues to
advance in unparalleled fashion and is the primary driver
of value creation. Innovation is not just in the domain
of biotechnology, but across therapeutics, medical
technology, patient services, analytics, and platform
technologies. Together, they are improving patient
care, advancing medical knowledge, and creating new
medicines, with many that now can offer a cure. The
productivity in the therapeutics space continues to be
exceptional, with pipelines the fullest they have ever been,
and the number of new drug approvals at all-time highs.
The inflection in M&A in the space is just one testimony to
this productivity, one that has already continued in 2024.
Overall, we remain committed to our long-term investment
strategy that has underpinned our impressive track record
since inception. There is no change to our investment
philosophy and we eschew change for its own sake. We
look forward to what the year ahead brings, across the
entirety of the healthcare spectrum, as the growth of
this industry continues to create a multitude of exciting
investment opportunities.
Sven H. Borho and Trevor M. Polischuk
OrbiMed Capital LLC
Portfolio Manager
6 June 2024
Environmental, Social and Governance
and Climate Change
ORBIMED’S APPROACH TO ESG
The Company’s Portfolio Manager, OrbiMed, is guided
by its Responsible Investing Policy in its approach to
environmental, social, and governance (“ESG”). They seek to
invest in innovative healthcare companies that are working
towards addressing significant unmet medical needs, across
biopharmaceuticals, medical devices, diagnostics, and
healthcare services sectors, globally.
OrbiMed believes that there is a high congruence between
companies that seek to act responsibly and those that
succeed in building long-term shareholder value. The
Portfolio Manager seeks to integrate ESG into the overall
investment process, with the objective of maximising
investment returns. Investment decisions are based on
a variety of financial and non-financial company factors,
including ESG information. The Portfolio Manager has
appointed a full-time member of staff to the role of
Director– ESG to oversee the integration of ESG analysis.
As a responsible investor, OrbiMed negatively screens
potential investments and business sectors that may
objectively lead to negative impacts on public health or
well-being. They consider healthcare sector-specific
guidance from the Sustainability Accounting Standards
Board (“SASB”) to determine material ESG factors as
part of their investment research. Social factors such as
affordability, pricing, access, and safety dominate the
financially material ESG issues for the pharmaceutical,
biotechnology, and medical devices sub-sectors, followed
by governance factors. For companies which do not have
manufacturing and are focused on drug discovery and
development, environmental factors such as greenhouse
gas (“GHG”) emissions are seldom material. Energy
and waste management appear as material factors for
healthcare delivery, and drug retailer sub-sectors, where
the physical footprint of the companies is large. Healthcare
and life sciences sectors are highly regulated, globally.
Environmental regulation, along with quality-related
regulation is well-established across developed markets
and emerging markets for the sector. To that end, OrbiMed
considers compliance with local laws and regulations as
one of the factors in its investment evaluation. Depending
on the investment, all or a subset of the ESG factors that
are financially material and relevant are considered in
OrbiMed’s research.
MONITORING AND ENGAGEMENT
OrbiMed utilises ESG scores for public equity holdings
from third-party service providers. To supplement the
information from the third-party service providers, OrbiMed
also conducts proprietary analysis on ESG performance. The
scores from the third-party service providers are integrated
with OrbiMed’s analysis onto a business intelligence platform
via programming interface, for regular monitoring.
The Portfolio Manager also engages on a regular basis
with its portfolio companies through meetings with
management, proxy voting, and in some cases, through
board representation.
OrbiMed’s analysts regularly track ESG information on
safety of clinical trials, drug safety, product safety, ethical
marketing, call-backs and other materially relevant factors.
As part of these efforts, OrbiMed engages with companies
directly or through brokers, and facilitates dialogues and
exchange of leading practices among investors, companies,
and other relevant experts on ESG in the healthcare sector.
Between 1 April 2023 and 31 March 2024, a total of 626
proposals came to vote within the Company’s portfolio.
Of these, 607 were management proposals and 19 were
shareholder proposals.
Proposed by
Total number
of proposals Voted for Voted against Votes abstained
Number of
votes against
management’s
proposed response
Management 607 562 45 0 45
Shareholder 19 2 17 0 2
29
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
There were no management proposals referring to ESG
that came to vote. Of the 19 shareholder proposals, there
was one proposal regarding diversity, equity and inclusion
report and another proposal regarding impact of extension
of patents on access. ‘Access to medicine’ is one of the
material ESG topics listed in the Sustainability Accounting
Standards Board guidance for the Biotechnology and
Pharmaceuticals sub-sector.
The Portfolio Manager provides a quarterly update on ESG
to the Board of the Company.
CLIMATE CHANGE
As per the guidance from SASB, climate change in relation
to the Company’s own operations is not a material ESG
consideration for biotechnology and pharmaceutical,
medical equipment and supplies, and managed care sectors.
However, Energy management is noted as a material ESG
concern for the healthcare delivery sector. To that end,
OrbiMed includes the scores on energy management for the
relevant sectors in its overall ESG monitoring.
REGULATORY UPDATE ON ESG
During the year, regulators around the world remained
active on defining and classifying ESG investing and
curbing greenwashing. The UK Financial Conduct Authority
(“FCA”) released its final Policy Statement on Sustainability
Disclosure Requirements (“SDR”) and investment labels
on28 November 2023. The UK SDR, which applies to all
UK-domiciled funds, introduces a set of sustainability-related
product labels, product and entity-level disclosures, and
anti-greenwashing rules for sustainable investing in the
UK. The product- and entity-level disclosure requirements
outlined in the UK SDR build on the recommendations of
the Task Force for Climate-related Financial Disclosures
(“TCFD”). The anti-greenwashing rules apply to firms and
products from 31 May 2024, while the first annual report
for funds with sustainability labels are due 31 July 2025,
and those for non-labelled funds are due 2 December
2025. Entity-level disclosures for entities with greater than
GBP50billion AUM are due 2 December 2025, and for
those funds with greater than GBP 5 billion AUM are due
2December 2026, and annually thereafter.
While the Portfolio Manager considers ESG issues to be
important when selecting investments, the Company
does not have explicit sustainability objectives in its
investment policy and the Company will not seek to apply a
sustainability label under SDR.
Sven H. Borho and Trevor M. Polischuk
OrbiMed Capital LLC
Portfolio Manager
6 June 2024
ENVIRONMENTAL, SOCIAL AND GOVERNANCE AND CLIMATE CHANGE CONTINUED
30
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Business review
The Strategic Report, on pages1 to 44, contains a review
of the Company’s business model and strategy, an analysis
of its performance during the financial year and its future
developments and details of the principal risks and
challenges it faces. Its purpose is to inform shareholders
in the Company and help them to assess how the Directors
have performed their duty to promote the success of the
Company.
The Strategic Report contains certain forward-looking
statements. These statements are made by the Directors in
good faith based on the information available to them up to
the date of this report. Such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying such forward-
looking information.
BUSINESS MODEL
Worldwide Healthcare Trust PLC is an externally managed
investment trust and its shares are listed on the premium
segment of the Official List and traded on the main market
of the London Stock Exchange. Its investment objective and
policy are set out on pages 8 and 9.
The purpose of the Company is to achieve a high level of
capital growth for its shareholders by providing a vehicle for
investors to gain, through a single investment, exposure to
the global healthcare sector through a diversified portfolio
of shares in pharmaceutical and biotechnology companies
and related securities.
The Company’s strategy is to create value for shareholders
by addressing its investment objective.
As an externally managed investment trust, all of the
Company’s day-to-day managements and administrative
functions are outsourced to service providers. As a result,
the Company has no executive directors, employees or
internal operations. The Company employs Frostrow
Capital LLP (“Frostrow”) as its Alternative Investment Fund
Manager (“AIFM”), OrbiMed Capital LLC (“OrbiMed”) as
its Portfolio Manager, J.P. Morgan Europe Limited as its
Depositary and J.P. Morgan Securities LLC as its Custodian
and Prime Broker. Further details about their appointments
can be found in the Business Review on pages 32 and 33.
The Company is an investment company within the meaning
of Section 833 of the Companies Act 2006 and has been
approved by HM Revenue & Customs as an investment trust
(for the purposes of Section 1158 of the Corporation Tax Act
2010). As a result the Company is not liable for taxation on
capital gains. The Directors have no reason to believe that
approval will not continue to be retained. The Company is not
a close company for taxation purposes.
The Board is responsible for all aspects of the Company’s
affairs, including the setting of parameters for and the
monitoring of the investment strategy a s well as the
review of investment performance and policy. It also has
responsibility for all strategic issues, the dividend policy,
the share issuance and buy-back policy, gearing, share
price and discount/premium monitoring and corporate
governance matters.
CONTINUATION OF THE COMPANY
A resolution was passed at the Annual General Meeting
(“AGM”) held in 2019 that the Company continues as an
investment trust for a further five year period. In accordance
with the Company’s Articles of Association, shareholders
will have an opportunity to vote on the continuation of the
Company at this year’s AGM and every five years thereafter.
THE BOARD
The Board of the Company comprises Doug McCutcheon
(Chair), Sven Borho, Dr Bina Rawal, Humphrey van der Klugt,
Tim Livett and Jo Parfrey. All of these Directors served
throughout the year. All are independent non-executive
Directors with the exception of Sven Borho who is not
considered to be independent by the Board.
Further information on the Directors can be found on
pages45 and 46.
All Directors, with the exception of Humphrey van derKlugt,
are seeking re-election by shareholders at this year’s
Annual General Meeting.
DIVIDEND POLICY
It is the Company’s policy to pay out dividends to
shareholders at least to the extent required to maintain
investment trust status for each financial year. Such
dividends will typically be paid twice a year by means of an
interim dividend and a final dividend.
31
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
KEY PERFORMANCE INDICATORS (“KPIs”)
The Board assesses the Company’s performance in
meeting its objectives against KPI’s as follows. The KPI’s
have not changed from the previous year:
• Net asset value (“NAV”) per share total return
against the Benchmark;*
• Discount/premium of share price to NAV per
share;and
• Ongoing charges ratio.*
* Alternative Performance Measure
(See Glossary beginning on page 99)
Information on the Company’s performance is provided in
the Statement from the Chair and the Portfolio Manager’s
Review and a record of these measures is shown on
pages1, 2 and 3. Further information can be found in the
Glossary beginning on page 99.
NAV per share total return against the Benchmark
The Directors regard the Company’s NAV per share total
return as being the overall measure of value delivered to
shareholders over the long term. This reflects both net
asset value growth of the Company and dividends paid to
shareholders.
The Board considers the most important comparator,
against which to assess the NAV per share total return
performance, to be the MSCI World Health Care Index
measured on a net total return, sterling adjusted basis
(the‘Benchmark’). As noted on pages 8 and 9, OrbiMed has
flexibility in managing the investments and are not limited
by the make up of the Benchmark. As a result, investment
decisions are made that differentiate the Company from the
Benchmark and therefore the Company’s performance may
also be different from that of theBenchmark.
A full description of performance during the year under
review is contained in the Portfolio Manager’s Review
beginning on page 14.
Share price discount/premium to NAV per share
The share price discount/premium to the NAV per share
is considered a key indicator of performance as it impacts
the share price total return of shareholders and can
provide an indication of how investors view the Company’s
performance and its Investment Objective.
Ongoing charges*
The Board continues to be conscious of expenses and
works hard to maintain a balance between good quality
service and costs.
As at 31 March 2024 the ongoing charges figure was 0.9%
(2023: 0.8%).
* Alternative Performance Measure (See Glossary beginning on page 99).
PRINCIPAL SERVICE PROVIDERS
The principal service providers to the Company are the
AIFM, Frostrow, the Portfolio Manager, OrbiMed, the
Custodian and Prime Broker J.P. Morgan Securities LLC,
and the Depositary, J.P. Morgan Europe Limited. Details
of their key responsibilities follow and further information
on their contractual arrangements with the Company
are included in the Report of the Directors beginning on
page47.
Alternative investment fund manager (“AIFM”)
Frostrow under the terms of its AIFM agreement with
theCompany provides, inter alia, the following services:
• oversight of the portfolio management function
delegated to OrbiMed Capital LLC;
• portfolio administration and valuation;
• risk management services;
• marketing and shareholder services;
• share price discount and premium management;
• administrative and secretarial services;
• advice and guidance in respect of corporate
governance requirements;
• maintenance of the Company’s accounting records;
• maintenance of the Company’s website;
• preparation and dispatch of annual and half-year
reports (as applicable) and monthly fact sheets; and
• ensuring compliance with applicable legal and
regulatory requirements.
During the year, under the terms of the AIFM Agreement,
Frostrow received a fee as follows:
On market capitalisation up to £150 million: 0.3%; in the
range £150 million to £500 million: 0.2%; in the range
£500 million to £1 billion: 0.15%; in the range £1 billion to
£1.5 billion: 0.125%; over £1.5 billion: 0.075%. In addition,
Frostrow receives a fixed fee per annum of £57,500.
BUSINESS REVIEW CONTINUED
32
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
BUSINESS REVIEW CONTINUED
Portfolio manager
OrbiMed under the terms of its portfolio management
agreement with the AIFM and the Company provides,
interalia, the following services:
• the seeking out and evaluating of investment
opportunities;
• recommending the manner by which monies should
be invested, disinvested, retained or realised;
• advising on how rights conferred by the investments
should be exercised;
• analysing the performance of investments made; and
• advising the Company in relation to trends, market
movements and other matters which may affect the
investment objective and policy of the Company.
OrbiMed receives a base fee of 0.65% of NAV and a
performance fee of 15% of outperformance against the
Benchmark as detailed on page 46.
Depositary, custodian and prime broker
J.P. Morgan Europe Limited acts as the Company’s
Depositary and J.P. Morgan Securities LLC as its Custodian
and Prime Broker.
J.P. Morgan Europe Limited, as Depositary, must take
reasonable care to ensure that the Company is managed in
accordance with the Financial Conduct Authority’s Investment
Funds Sourcebook, the AIFMD and the Company’s Articles of
Association. The Depositary must in the context of this role
act honestly, fairly, professionally, independently and in the
interests of the Company and its shareholders.
The Depositary receives a variable fee based on the size of
the Company as set out on pages 46 and 47.
J.P. Morgan Europe Limited has discharged certain of its
liabilities as Depositary to J.P. Morgan Securities LLC. Further
details of this arrangement are set out on page 47. J.P. Morgan
Securities LLC, as Custodian and Prime Broker, provides the
following services under its agreement with the Company:
• safekeeping and custody of the Company’s
investments and cash;
• processing of transactions;
• provision of an overdraft facility. Assets up to 140% of
the value of the outstanding overdraft can be taken as
collateral. See page 94 for further details; and
• foreign exchange services.
AIFM AND PORTFOLIO MANAGER EVALUATION
AND RE-APPOINTMENT
The performance of the AIFM and the Portfolio Manager is
reviewed continuously by the Board and the Management
Engagement & Remuneration Committee (the “Committee”)
with a formal evaluation being undertaken each year.As
part of this process, the Committee monitors theservices
provided by the AIFM and the Portfolio Managerand receives
regular reports and views from them. TheCommittee also
receives comprehensive performance measurement reports
to enable it to determine whether or not the performance
objectives set by the Board have been met. The Committee
reviewed the appropriateness of the appointment of the AIFM
and the Portfolio Manager in March 2024 with a positive
recommendation being made to the Board.
The Board believes the continuing appointment of the AIFM
and the Portfolio Manager, under the terms described on
pages 32 and 33, is in the interests of shareholders as a
whole. In coming to this decision, it took into consideration,
interalia, the following:
• the quality of the service provided and the depth of
experience of the company management, company
secretarial, administrative and marketing team
that the AIFM allocates to the management of the
Company; and
• the quality of the service provided and the quality
and depth of experience allocated by the Portfolio
Manager to the management of the portfolio and
the long-term performance of the portfolio in
absolute terms and by reference to the Benchmark.
RISK MANAGEMENT
The Board is responsible for the management of risks
faced by the Company. Through delegation to the Audit
& Risk Committee, the Board has established procedures
to manage risk, to review the Company’s internal control
framework and establish the level and nature of the
principal risks the Company is prepared to accept in order
to achieve its long-term strategic objective. At least twice
a year the Audit & Risk Committee carries out a robust
assessment of the principal risks and uncertainties with the
assistance of Frostrow (the Company’s AIFM) identifying
the principal risks faced by the Company. These principal
risks and the ways they are managed or mitigated are
detailed on the following pages.
33
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
Principal risks and uncertainties Mitigation
Market risks
By the nature of its activities and Investment
Objective, the Company’s portfolio is exposed to
fluctuations in market prices (from both individual
security prices and foreign exchange rates) and
due to exposure to the global healthcare sector, it
is expected to have higher volatility than the wider
market. As such investors should be aware that
by investing in the Company they are exposing
themselves to market risks and those additional
risks specific to the sectors in which the Company
invests, such as political interference in drug pricing.
In addition, OrbiMed’s approach is expected to
lead to performance that will deviate from that
of comparators, including both market indices
and other investment companies investing in
healthcare.
The Company also uses leverage (both through
derivatives and gearing) the effect of which is
to amplify the gains or losses the Company
experiences.
To manage these risks the Board and the AIFM have appointed OrbiMed to
manage the portfolio within the remit of the investment objective and policy,
and imposed various limits and guidelines, set out on pages 8 and 9. These
limits ensure that the portfolio is diversified, reducing the risks associated with
individual stocks, and that the maximum exposure (through derivatives and an
overdraft facility) is limited. The compliance with those limits and guidelines is
monitored daily by Frostrow and OrbiMed and reported to the Board monthly.
In addition, OrbiMed reports at each Board meeting on the performance of the
Company’s portfolio, which encompasses the rationale for stock selection
decisions, the make-up of the portfolio, potential new holdings and, derivative
activity and strategy (further details on derivatives can be found in note 16
beginning on page 91).
The Company does not currently hedge its currency exposure.
Geopolitical/regulatory and macro economic risk
Macro events may have an adverse impact on the
Company’s performance by causing exchange
rate volatility, changes in tax or regulatory
environments, and/or a fall in market prices.
Emerging markets, which a portion of the portfolio
is exposed to, can be subject to greater political
uncertainty and price volatility than developed
markets.
While such events are outside the control of the Company the Board reviews
regularly, and discusses with the Portfolio Manager, the wider economic and
political environment, along with the portfolio exposure and the execution of
the investment policy against the long-term objectives of the Company. The
ongoing tensions in the Asia Pacific Region and also the instability caused
by the war in the Ukraine have featured in these discussions. The Portfolio
Manager’s risk team perform systematic risk analysis, including country and
industry specific risk monitoring.
The Board monitors regulatory developments but relies on the services of its
external advisers to ensure compliance with applicable law and regulations.
The Board has appointed a specialist investment trust AIFM and Company
Secretary who provides industry and regulatory updates at each Board meeting.
Unquoted investment risk
The Company’s risk could be increased by its
investment in unquoted companies. These
investments may be more difficult to buy, sell or
value, so changes in their valuations may be greater
than for listed assets. The valuation of unquoted
investments requires considerable judgement as
explained in Note1(a) beginning on page 80 and
as such realisations may be materially lower than
the value as estimated by the Company. Particular
events, outside the control of the Company, may
also have a significant impact on the valuation
and considerable uncertainty may exist around the
potential future outcomes for each investment.
To mitigate this risk the Board and AIFM have set a limit of 10% of the portfolio,
calculated at the time of investment, that can be held in unquoted investments
and have established a robust and consistent valuation policy and process as
set out in Note 1(b) on page 82, which is in line with UK GAAP requirements
and the International Private Equity and Venture Capital (“IPEV”) Guidelines.
TheBoard also monitors the performance of these investments compared to
the additional risks involved.
BUSINESS REVIEW CONTINUED
34
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Principal risks and uncertainties Mitigation
Investment management key person risk
There is a risk that the individuals responsible
for managing the Company’s portfolio may leave
their employment or may be prevented from
undertaking their duties.
The Board manage this risk by:
• appointing OrbiMed, who operate a team environment such that the loss of
any individual should not impact on service levels;
• receiving reports from OrbiMed at each Board meeting, such report
includes any significant changes in the make-up of the team supporting the
Company;
• meeting the wider team, outside the designated lead managers, at
OrbiMed’s offices and encouraging the participation of the wider OrbiMed
team in investor updates; and
• delegating to the Management Engagement & Remuneration Committee
responsibility to perform an annual review of the service received from
OrbiMed, including, interalia, the team supporting the lead managers and
succession planning.
Counterparty risk
In addition to market and foreign currency risks,
discussed above, the Company is exposed to
risk arising from the use of counterparties. If a
counterparty were to fail, the Company could
be adversely affected through either delay in
settlement or loss of assets.
The most significant counterparty the Company is
exposed to is J.P. Morgan Securities LLC which is
responsible for the safekeeping of the Company’s
assets and provides the overdraft facility to the
Company. As part of the arrangements with J.P.
Morgan Securities LLC they may take assets, up
to 140% of the value of the drawn overdraft, as
collateral and have first priority security interest
or lien over all of the Company’s assets. Such
assets taken as collateral may be used, loaned,
sold, rehypothecated or transferred by J.P. Morgan
Securities LLC. Although the Company maintains
the economic benefit from the ownership of those
assets it does not hold any of the rights associated
with those assets. Any of the Company’s assets
taken as collateral are not covered by the custody
arrangements provided by J.P. Morgan Securities
LLC. The Company is, however, afforded protection
in accordance with SEC rules and U.S. legislation
equal to the value of the assets that have been
rehypothecated.
This risk is managed by the Board through:
• reviews of the arrangements with, and services provided by, the Depositary
and the Custodian and Prime Broker to ensure that the security of the
Company’s assets is being maintained. Legal opinions are sought, where
appropriate, as part of this review. Also, the Board regularly monitors the
credit rating of the Company’s Custodian and Prime Broker;
• monitoring of the assets taken as collateral (further details can be found in
note 16 beginning on page 90);
• reviews of OrbiMed’s approved list of counterparties, the Company’s use of
those counterparties and OrbiMed’s process for monitoring, and adding to,
the approved counterparty list;
• monitoring of counterparties, including reviews of internal control reports
and credit ratings, as appropriate;
• by primarily investing in markets that operate DVP (Delivery Versus
Payment) settlement. The process of DVP mitigates the risk of losing the
principal of a trade during the settlement process; and
• J.P. Morgan Securities LLC is subject to regular monitoring by J.P.Morgan
Europe Limited, the Company’s Depositary, and the Board receives regular
reports from J.P. Morgan Europe Limited.
BUSINESS REVIEW CONTINUED
35
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
Principal risks and uncertainties Mitigation
Service provider risk
The Company is reliant on the systems of its
service providers and as such disruption to, or a
failure of, those systems (including, for example,
as a result of cyber-crime or a ‘black swan’ event)
could lead to a failure to comply with law and
regulations leading to reputational damage and/ or
financial loss.
To manage these risks the Board:
• receives a monthly compliance report from Frostrow, which includes,
interalia, details of compliance with applicable laws and regulations;
• reviews internal control reports, key policies, including measures taken to
combat cyber security issues, and also the disaster recovery procedures of
its service providers;
• maintains a risk matrix with details of risks the Company is exposed to, the
controls relied on to manage those risks and the frequency of the controls
operation;
• receives updates on pending changes to the regulatory and legal environment
and progress towards the Company’s compliance with these; and
• has considered the increased risk of cyber-attacks and received reports
and assurance at meetings with its service providers where the information
security controls in place were reviewed.
ESG related risks
Both the Board and the Portfolio Manager
recognise the importance of having a coherent ESG
policy. There is a risk that investing in companies
that disregard ESG factors will have a negative
impact on investment returns and also that the
Company itself may become unattractive to
investors if ESG is not appropriately considered in
the Portfolio Manager’s decision making process.
The Portfolio Manager provides ESG reports at each Board meeting, highlighting
examples where ESG issues influenced investment decisions and/or led to
engagement with an investee company. The Portfolio Manager also produces a
quarterly ESG update.
The Board ensures that the Portfolio Manager’s ESG approach is in line with
standards elsewhere and the Board’s expectations. A summary of the Portfolio
Manager’s approach to Responsible Investing can be found on pages 29 and 30.
Shareholder relations and share price performance risk
The Company is also exposed to the risk,
particularly if the investment strategy and
approach are unsuccessful, that the Company may
underperform resulting in the Company becoming
unattractive to investors and a widening of the
share price discount to NAV per share. Also, falls
in stock markets and the risk of a global recession,
are likely to adversely affect the performance of the
Company’s shares.
In managing this risk the Board:
• reviews the Company’s Investment Objective in relation to market, and
economic, conditions and the operation of the Company’s peers;
• discusses at each Board meeting the Company’s future development and
strategy;
• reviews the shareholder register at each Board meeting;
• actively seeks to promote the Company to current and potential investors; and
• has implemented a discount/premium control mechanism.
The Board undertakes a regular review of the Company’s share price compared
to the NAV per share. Further information can be found on page 34. Company
promotional activities have been delegated to Frostrow, whoreport to the Board
at each Board meeting on these activities.
BUSINESS REVIEW CONTINUED
36
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Emerging risks
The Company has carried out a robust assessment of
the Company’s emerging and principal risks and the
procedures in place to identify emerging risks are described
below. The International Risk Governance Council definition
of an ‘emerging’ risk is one that is new, or is a familiar
risk in a new or unfamiliar context or under new context
conditions (re-emerging). Failure to identify emerging risks
may cause reactive actions rather than being proactive
and, in worst case, could cause the Company to become
unviable or otherwise fail or force the Company to change
its structure, objective or strategy.
The Audit & Risk Committee reviews a risk schedule at
its half-yearly meetings. Emerging risks are discussed in
detail as part of this process and also throughout the year
to try to ensure that emerging (as well as known) risks are
identified and, sofar as practicable, mitigated.
During the year the Audit & Risk Committee discussed
how artificial intelligence (AI) might impact the Company
itself and also its portfolio companies in the future. It was
agreed that these developments should be regarded as an
opportunity as well as a possible threat.
COMPANY PROMOTION
The Company has appointed Frostrow to provide marketing
and investor relations services, in the belief that a
well-marketed investment company is more likely to grow
over time, have a more diverse and stable shareholder
register and will trade at a superior rating to its peers.
Frostrow actively promotes the Company in the following
ways:
Engaging regularly with institutional investors, discretionary
wealth managers and a range of execution-only platforms:
Frostrow regularly talks and meets with institutional
investors, discretionary wealth managers and execution-
only platform providers to discuss the Company’s strategy
and to understand any issues and concerns, covering both
investment and corporate governance matters;
Making Company information more accessible: Frostrow
works to raise the profile of the Company by targeting key
groups within the investment community, holding annual
investment seminars, overseeing PR output and managing
the Company’s website and wider digital offering, including
Portfolio Manager videos and social media;
Disseminating key Company information: Frostrow
performs the Investor Relations function on behalf of the
Company and manages the investor database. Frostrow
produces all key corporate documents, distributes monthly
Fact Sheets, Annual Reports and updates from OrbiMed on
portfolio and market developments; and
Monitoring market activity, acting as a link between the
Company, shareholders and other stakeholders: Frostrow
maintains regular contact with sector broker analysts and
other research and data providers, and conducts periodic
investor perception surveys, liaising with the Board to
provide up-to-date and accurate information on the latest
shareholder and market developments.
DISCOUNT/PREMIUM CONTROL
The Board undertakes a regular review of the level of
discount/premium and consideration is given to ways in
which share price performance may be enhanced, including
the effectiveness of marketing, share issuance and share
buybacks, where appropriate.
It is the Board’s policy to buy back the Company’s shares
if the share price discount to the net asset value per share
exceeds 6% on an ongoing basis. Shares repurchased
are held as treasury shares. Treasury shares can be sold
back to the market at a later date at a premium to the
cum-income net asset value per share (See Glossary
beginning on page 99). Shareholders should note, however,
that it remains very possible for the discount to be greater
than 6% for extended periods of time particularly when
sentiment towards the Company, the sector and to
investment trusts generally remains poor.
While buybacks may prove unable to prevent the discount
from widening, they also enhance the net asset value per
share for remaining shareholders and go some way to
dampening discount volatility which can adversely affect
investors’ risk adjusted returns.
At times when there are unsatisfied buying orders for the
Company’s shares in the market, the Company has the
ability to issue new shares or to re-issue treasury shares
at a small premium to the cum income net asset value
per share. This acts as an effective share price premium
management tool.
Details of share issuance and share buybacks are set out
on page 49.
BUSINESS REVIEW CONTINUED
37
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
SOCIAL, HUMAN RIGHTS AND
ENVIRONMENTAL MATTERS
The Directors, through the Company’s Portfolio Manager,
encourage companies in which investments are made
to adhere to best practice with regard to corporate
governance. In light of the nature of the Company’s
business there are no relevant human rights issues and the
Company does not have a human rights policy.
The Company recognises that social and environmental
issues can have an effect on some of its investee companies.
The Company is an investment trust and so its
own direct environmental impact is minimal. As an
externally- managed investment trust, the Company does
not have any employees or maintain any premises, nor does
it undertake any manufacturing or other physical operations
itself. All its operational functions are outsourced to third
party service providers. Therefore, the Company has no
material, direct impact on the environment or any particular
community and the Company itself has no environmental,
human rights, social or community policies. The Board
of Directors consists of six Directors, four of whom are
resident in the UK, one in Canada and one in theU.S.
TheBoard holds the majority of its regular meetings in the
UK, with usually one meeting held each year in NewYork,
and has a policy that travel, as far as possible, is minimal,
thereby minimising the Company’s greenhouse gas
emissions. Further details concerning greenhouse gas
emissions can be found within the Report of the Directors
on page 50. Video conferencing has proved to be a very
effective way of holding meetings, and this medium
continues to be used alongside in person meetings.
The Portfolio Manager engages with the Company’s
underlying investee companies in relation to their corporate
governance practices and the development of their policies
on social, community and environmental matters.
INTEGRITY AND BUSINESS ETHICS
The Company is committed to carrying out business in an
honest and fair manner with a zero-tolerance approach to
bribery, tax evasion and corruption. As such, policies and
procedures are in place to prevent this. In carrying out its
activities, the Company aims to conduct itself responsibly,
ethically and fairly, including in relation to social and human
rights issues.
The Company believes that high standards of ESG make
good business sense and have the potential to protect
and enhance investment returns. The Portfolio Manager’s
investment criteria provide that ESG and ethical issues are
taken into account and best practice is encouraged by the
Board. The Board’s expectations are that its principal service
providers have appropriate governance policies in place.
TASKFORCE FOR CLIMATE-RELATED
FINANCIAL DISCLOSURES (“TCFD”)
The Company notes the TCFD recommendations on
climate-related financial disclosures. The Company is an
investment trust with no employees, internal operations or
property and, as such, it is exempt from the Listing Rules
requirement to report against the TCFD framework.
GOING CONCERN
The financial statements have been prepared on a going
concern basis. The Directors consider this is the appropriate
basis as the Company has adequate resources to continue in
operational existence for the foreseeable future, being taken
as 12 months after approval of the financial statements.
The Company’s shareholders are asked every five years to
vote for the continuation of the Company, this will next be
put to shareholders at this year’s Annual General Meeting.
The content of the Company’s portfolio, trading activity,
the Company’s cash balances and revenue forecasts,
and the trends and factors likely to affect the Company’s
performance are reviewed and discussed at each Board
meeting. The Board has considered a detailed assessment
of the Company’s ability to meet its liabilities as they fall
due, including stress and liquidity tests which modelled
the effects of substantial falls in markets and significant
reductions in market liquidity, on the Company’s net asset
value, its cash flows and its expenses. Further information is
provided in the Audit & Risk Committee Report beginning on
page 60.
Based on the information available to the Directors at the
date of this report, including the results of these stress
tests, the conclusions drawn in the Viability Statement on
page40, the Company’s cash balances, and the liquidity of
the Company’s listed investments, the Directors are satisfied
that the Company has adequate financial resources to
continue in operation for at least the next 12 months and
that, accordingly, it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
BUSINESS REVIEW CONTINUED
38
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
VIABILITY STATEMENT
The Directors have assessed the Company’s position and
prospects, including consideration of the Company’s principal
risks, and have formed a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due over the next five financial years.
The Board has chosen a five-year horizon in view of both the
long-term outlook adopted by the Portfolio Manager when
making investment decisions and also the investment horizon
adopted by investors.
To make this assessment, the Audit & Risk Committee has
considered the Company’s financial position, its ability to
liquidate the portfolio and to meet its liabilities as they fall due.
The following points were noted:
• The portfolio is comprised principally of investments
traded on major international stock exchanges. Based on
recent market volumes 96.0% of the current portfolio could
be liquidated within 5 trading days. There is no current
expectation that the nature of the investments held within
the portfolio will be significantly different in future.
• The Board has considered the viability of the Company
under various scenarios, including periods of stock market
and economic volatility, and concluded that it would
expect to be able to ensure the financial stability of the
Company due, in large part, to having a diversified portfolio
comprising principally of listed and readily realisable
assets. As illustrated in note 16 to the financial statements,
the Board has considered the following risks with
appropriate sensitivity analysis having been undertaken:
market risk (including foreign currency risk, interest rate
risk and other price risk), liquidity risk and credit risk.
With an ongoing charges ratio of 0.9%, the expenses of the
Company are predictable and modest in comparison with the
assets and there are no known capital commitments which
would alter that position.
• The Company has an overdraft facility which can be used
to meet its liabilities. Details of the Company’s current
liabilities as at 31 March 2024 are set out in notes 10 and
12 to the financial statements.
• The Company has no employees. Therefore, it does not
have redundancy or other employment related liabilities or
responsibilities.
The Audit & Risk Committee, in addition to considering
the potential impact of the Company’s principal risks
and various plausible downside scenarios, has made the
following assumptions in considering the Company’s
longer-term viability:
• There will continue to be demand for investment trusts;
• The Portfolio Manager will continue to adopt a long-term
view when making investments;
• The Company invests principally in the securities of listed
companies traded on international stock exchanges to
which investors will wish to continue to have exposure;
• Shareholders will vote for the continuation of the Company
at this year’s Annual General Meeting and at five-year
intervals thereafter. Following a programme of extensive
engagement with the Company’s principal shareholders,
there is an expectation that the resolution will be passed.
• Due to the closed-ended nature of the Company, unlike
open-ended funds, it does not have to sell investments
when shareholders wish to sell their shares;
• The Company will continue to be able to fund share
buybacks when required. The Company bought back
80,265,298 shares in the year under review at a total cost
of £252.7 million. It had shareholders’ funds in excess of
£2,081.2 million at the year end; and
• The long-term performance of the Company will continue
to be satisfactory.
STAKEHOLDER INTERESTS AND BOARD
DECISION-MAKING (SECTION 172 OF THE
COMPANIES ACT 2006)
The Directors are required to explain more fully how they have
discharged their duty under s172 of the Companies Act 2006
in promoting the success of the Company for the benefit of the
members as a whole. This includes the likely consequences
of the Directors’ decisions in the long term and how they have
taken wider stakeholders’ needs into account.
The Directors aim to act fairly between the Company’s
stakeholders. The Board’s approach to shareholder relations
is summarised in the Corporate Governance Report beginning
on page 52. The Statement from the Chair beginning on
page4 provides an explanation of actions taken by the
Directors during the year to achieve the Board’s long-term aim
of ensuring that the Company’s shares trade at a price close to
the NAV per share.
BUSINESS REVIEW CONTINUED
39
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
BUSINESS REVIEW CONTINUED
As an externally managed investment trust, the Company has
no employees, customers, operations or premises. Therefore,
the Company’s key stakeholders (other than its shareholders)
are considered to be its service providers. The need to foster
business relationships with the service providers and maintain
a reputation for high standards of business conduct are
central to the Directors’ decision-making as the Board of an
externally managed investment trust. The Directors believe that
fostering constructive and collaborative relationships with the
Company’s service providers will assist in their promotion of
the success of the Company for the benefit of all shareholders.
The Board engages with representatives from its service
providers throughout the year. Representatives from OrbiMed
and Frostrow are in attendance at each Board meeting. As the
Portfolio Manager and the AIFM respectively, the services they
provide are fundamental to the long-term success and smooth
running of the Company. The Statement from the Chair and the
Business Review on pages 4 to 7 and also on page 33, describe
relevant decisions taken during the year relating to OrbiMed and
Frostrow. Further details about the matters discussed in Board
meetings and the relationship between OrbiMed and the Board
are set out in the Corporate Governance Report beginning on
page 52.
Representatives from other service providers are asked to
attend Board meetings when deemed appropriate.
Further details are set out overleaf.
40
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Stakeholder group
The benefits of engagement with the
Company's stakeholders
How the board, the portfolio manager and the AIFM
have engaged with the Company’s stakeholders
Investors
Clear communication of the Company’s strategy
and the performance against the Company’s
objective can help the share price trade at a
narrower discount or a premium to its net asset
value per share which benefits shareholders.
New shares can be issued to meet demand
without net asset value per share dilution to
existing shareholders. Increasing the size of the
Company can benefit liquidity as well as spread
costs.
Share buybacks are undertaken at the discretion of
the Directors.
The Portfolio Manager and Frostrow, on behalf
of the Board, complete a programme of investor
relations throughout the year.
In advance of this year’s continuation vote, the
Chair of the Board, the Portfolio Manager and
Frostrow undertook a series of meetings with the
Company’s principal shareholders. The purpose
of these meetings was two fold: to give holders
the opportunity to raise issues of a corporate
governance nature and to discuss any portfolio
related matters.
An analysis of the Company’s shareholder register
is provided to the Directors at each Board meeting
along with marketing reports from Frostrow. The
Board reviews and considers the marketing plans
on a regular basis. Reports from the Company’s
broker are submitted to the Board on investor
sentiment and industry issues.
Key mechanisms of engagement include:
• The Annual General Meeting, where the
Portfolio Manager provides an update on the
Company’s performance and strategy. This is
followed by a question and answer section.
• The Company’s website which hosts reports,
articles and insights, and monthly fact sheets.
• One-on-one and group investor meetings.
• Should any significant votes be cast
against a resolution proposed at the Annual
General Meeting the Board will engage with
shareholders.
• The Board will explain in its announcement
of the results of the Annual General Meeting
any actions it intends to take to consult
shareholders in order to understand the
reasons behind significant votes against.
• Following any consultation, an update would
be published no later than six months after the
Annual General Meeting and the Annual Report
will detail the impact shareholder feedback has
had on any decisions the Board has taken and
any actions or resolutions proposed.
BUSINESS REVIEW CONTINUED
41
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
What were the key areas of engagement?
What actions were taken, including main decisions?
Key areas of engagement with investors
• Ongoing dialogue with shareholders concerning the strategy
of the Company, performance and the portfolio.
• The Portfolio Manager and Frostrow meet regularly
with shareholders and potential investors to discuss the
Company’s strategy, performance and portfolio. TheChair
of the Board also met with key shareholders during the
year to discuss corporate governance matters and also the
Company’s investment strategy.
Frostrow and the Portfolio Manager engage with retail investors
through a number of different channels:
(i) The Company’s website, which is maintained by Frostrow,
contains articles, webinars and quarterly updates;
(ii) A distribution list of shareholders (retail and professional)
which is maintained by Frostrow and is used to communicate
with investors on a regular basis;
(iii) The Portfolio Manager provides annual presentations online
– (webcasts) and offline (Annual General Meeting), which
shareholders are able to attend and participate in; and
(iv) Frostrow ensures that the Company is available through a
wide range of leading execution only platforms.
BUSINESS REVIEW CONTINUED
42
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Stakeholder group
The benefits of engagement with the
Company's stakeholders
How the board, the portfolio manager and the AIFM
have engaged with the Company’s stakeholders
Portfolio Manager
Engagement with the Company’s Portfolio
Manager is necessary to evaluate their
performance against the Company’s stated
strategy and to understand any risks or
opportunities this may present. The Board ensures
that the Portfolio Manager’s environmental, social
and governance (“ESG”) approach is in line with
standards elsewhere and the Board’s expectations.
Engagement also helps ensure that the Portfolio
Manager’s fees are closely monitored and remain
competitive.
Gaining a deeper understanding of the portfolio
companies and their strategies as well as
incorporating consideration of ESG factors into
the investment process assists in understanding
and mitigating risks of an investment as well as
identifying future potential opportunities.
The Board met regularly with the Company’s
Portfolio Manager throughout the year. The Board
also receives monthly performance and compliance
reporting.
The Portfolio Manager’s attendance at each Board
meeting provides the opportunity for the Portfolio
Manager and Board to further reinforce their mutual
understanding of what is expected from both
parties.
The Board encourages the Company’s Portfolio
Manager to engage with companies and in
doing so expects ESG issues to be an important
consideration.
The Board receives an update on Frostrow’s
engagement activities by way of a dedicated report
at Board meetings and at other times during the
year as required.
Service Providers
The Company contracts with third parties for other
services including: custody, company secretarial,
accounting & administration and registrar. The
Company ensures that the third parties to whom
the services have been outsourced complete their
roles in line with their service level agreements
thereby supporting the Company in its success
and ensuring compliance with its obligations.
The Board and Frostrow, acting in its capacity as
AIFM, engage regularly with other service providers
both in one-to-one meetings and via regular written
reporting. This regular interaction provides an
environment where topics, issues and business
development needs can be dealt with efficiently and
collegiately.
The Board together with Frostrow also carried out a
review of the service providers’ business continuity
plans and additional cyber security provisions.
The review of the performance of the Portfolio
Manager and Frostrow is a continuous process
carried out by the Board and the Management
Engagement & Remuneration Committee with a
formal evaluation being undertaken annually.
BUSINESS REVIEW CONTINUED
43
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
What were the key areas of engagement?
What actions were taken, including main decisions?
Key areas of engagement with the Portfolio Manager on an ongoing basis are portfolio composition, performance, outlook
and business updates.
• Regular review of the performance and make up of the
investment portfolio.
• The integration of ESG factors into the Portfolio Manager’s
investment processes.
• The Board engaged with the Portfolio Management team
to discuss the Company’s overall performance as well as
developments in individual portfolio companies and wider
macroeconomic developments.
• The Portfolio Manager reports on ESG issues at each Board
meeting.
Key areas of engagement with Service Providers
• The Directors have frequent engagement with the Company’s
other service providers through the annual cycle of reporting. This
engagement is completed with the aim of maintaining an effective
working relationship and oversight of the services provided.
• No specific action required as the reviews of the Company’s
service providers, have been positive and the Directors believe
their continued appointment is in the best interests of the
Company.
Key areas of engagement with the broker
• The Board is cognisant that the trading of the Company‘s
shares at a persistent and significant discount or premium
to the prevailing NAV per share is not in the interests of
shareholders.
• Throughout the year the Board closely monitored the Company’s
discount/premium to NAV per share and received regular
updates from the broker. 80,265,298 shares were bought back
during the year, and a further 10,677,869 shares were bought
back since the year end to 5 June 2024. Nonew shares were
issued during the year, nor following the year end to 5 June
2024. (Please see the Statement from the Chair on pages 4 and
5 for further information.)
PERFORMANCE AND FUTURE
DEVELOPMENTS
A review of the Company’s year, its performance and
the outlook for the Company can be found in the Chair’s
Statement on pages 4 to 6 and in the Portfolio Manager’s
Review on pages 14 to 28.
The Company’s overall strategy remains unchanged.
LOOKING TO THE FUTURE
The Board concentrates its attention on the Company’s
investment performance and OrbiMed’s investment approach
and on factors that may have an effect on this approach.
Marketing reports are given to the Board at each board
meeting by the AIFM which include how the Company will
be promoted and details of planned communications with
existing and potential shareholders. The Board is regularly
updated by the AIFM on wider investment trust industry issues
and discussions are held at each Board meeting concerning
the Company’s future development and strategy.
A review of the Company’s year, its performance since the
year end and the outlook for the Company can be found in
the Chair’s Statement on pages 4 to 6 and in the Portfolio
Manager’s Review on pages 14 to 28. It is expected that
theCompany’s Strategy will remain unchanged in the
coming year.
ALTERNATIVE PERFORMANCE MEASURES
The Financial Statements (on pages 77 to 97) set out the
required statutory reporting measures of the Company’s
financial performance. In addition, the Board assesses the
Company’s performance against a range of criteria which
are viewed as particularly relevant for investment trusts,
which are explained in greater detail in the Strategic Report,
under the heading ‘Key Performance Indicators’ on page 32.
By order of the Board
Frostrow Capital LLP
Company Secretary
6 June 2024
BUSINESS REVIEW CONTINUED
44
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Board of Directors
Non-Executive Director
Joined the Board in 2018
Annual Remuneration Year Ended
2024: Nil
Committee Membership
Sven is not a member of any of the
Company’s Committees.
Shareholding in the Company
200,000
Skills and Experience
Sven H. Borho, CFA, is a founder and
Managing Partner of OrbiMed. Sven
heads the public equity team and he
is the portfolio manager for OrbiMed’s
public equity and hedge funds. He has
been a portfolio manager for the firm’s
funds since 1993 and has played an
integral role in the growth of OrbiMed’s
asset management activities.
He started his career in 1991 when
he joined OrbiMed’s predecessor
firm as a Senior Analyst covering
European pharmaceutical firms and
biotechnology companies worldwide.
Sven studied business administration
at Bayreuth University in Germany and
received a M.Sc. (Econs.), Accounting
and Finance, from The London School
of Economics.
Other Appointments
Sven is a Managing Partner of
OrbiMed and does not have any other
appointments.
Standing for re-election: Yes
Independent Non-Executive
Director
Joined the Board in 2016
Annual Remuneration Year Ended
2024: £34,244
Committee Membership
Humphrey is a member of the Audit &
Risk, the Management Engagement &
Remuneration and the Nominations
Committees.
Shareholding in the Company
30,000
Skills and Experience
Humphrey was formerly Chairman
of Fidelity European Values PLC and
a Director of Murray Income Trust
PLC, BlackRock Commodities Income
Investment Trust plc, J P Morgan
Claverhouse Investment Trust plc
and Allianz Technology Trust PLC.
Prior to this Humphrey was a fund
manager and Director of Schroder
Investment Management Limited and
in a 22 year career was a member
of their Group Investment and Asset
Allocation Committees. Prior to joining
Schroders, he was with Peat Marwick
Mitchell & Co (now KPMG) where he
qualified as a Chartered Accountant
in 1979.
Other Appointments
–
Standing for re-election: No
Independent Non-Executive Chair
Joined the Board in 2012 and became
Chair on 6 July 2022
Annual Remuneration Year Ended
2024: £54,213
Committee Membership
Doug attends the Audit & Risk
Committee by invitation and is
a member of the Nominations
and Management Engagement &
Remuneration Committees.
Shareholding in the Company
250,000
Skills and Experience
Doug is the President of Longview
Asset Management Ltd., an
independent investment firm that
manages the capital of families,
charities and endowments. Prior
to this, Doug was an investment
banker for 25 years at UBS and its
predecessor firm, S.G. Warburg, where,
most recently, he was the head of
Healthcare Investment Banking for
Europe, the Middle East, Africa and
Asia- Pacific. Doug is involved in
philanthropic organisations with a
focus on healthcare and education. He
attended Queen’s University, Canada.
Other Appointments
Doug is a non-executive Director of
Labrador Iron Ore Royalty Corporation
listed on the Toronto Stock Exchange.
Standing for re-election: Yes
DOUG MCCUTCHEON SVEN BORHO
HUMPHREY VAN DER
KLUGT, FCA
45
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
STRATEGIC REPORT
GOVERNANCE FINANCIAL STATEMENTS FURTHER INFORMATION
Independent Non-Executive
Director
Joined the Board in 2022
Annual Remuneration Year Ended
2024: £34,244
Committee Membership
Jo is Chair of the Management
Engagement & Remuneration
Committee and is a member of
the Audit & Risk and Nominations
Committees.
Shareholding in the Company
20,000
Skills and Experience
Jo was formerly a non-executive
Director of Guy’s and St Thomas’
Enterprises Limited and of LGV
Capital Partners Limited. A Chartered
Accountant, Jo has extensive
experience of both global investment
trusts and healthcare, including life
sciences. Jo studied chemistry at
OxfordUniversity.
Other Appointments
Jo is non-executive Director and Chair
of the Audit Committee of Henderson
International Income Trust plc, and
a non-executive Director of Octopus
AIM VCT. She is also a non-executive
Director and Chair of the Audit
Committee of Start Codon Limited
and IESO Digital Health Limited and
the non-executive Chair of Babraham
Research Campus Limited.
Standing for re-election: Yes
Independent Non-Executive
Director
Joined the Board in 2022
Annual Remuneration Year Ended
2024: £41,956
Committee Membership
A qualified accountant, Tim is Chair
of the Audit & Risk Committee and
is a member of the Management
Engagement & Remuneration and
Nominations Committees.
Shareholding in the Company
21,957
Skills and Experience
Tim was formerly the Chief Financial
Officer at Caledonia Investments
PLC. Prior to this role he was Chief
Financial Officer at Wellcome Trust,
the global charitable trust focused
on health research, and at Virgin
Atlantic Limited. He has an extensive
and broad financial background. Tim
studied Chemistry at Oxford University.
Other Appointments
Tim is a non-executive Director of
British Standards Institution and
of Oxford University Endowment
Management, plus a Trustee of
Babraham Institute; he chairs the
respective Audit and Risk Committees
of these institutions. He is also a
non-executive Director of Premier
MarinasGroup.
Standing for re-election: Yes
Independent Non-Executive
Director
Joined the Board in 2019
Annual Remuneration Year Ended
2024: £36,727
Committee Membership
Bina is the Senior Independent Director
and is Chair of the Nominations
Committee. She is also a member of
the Audit & Risk and the Management
Engagement & Remuneration
Committees.
Shareholding in the Company
26,060
Skills and Experience
A physician scientist with 25
years’ experience in Research and
Development, Bina has held senior
executive roles in drug development
and scientific evaluation in four
global pharmaceutical companies.
She has also worked in senior roles
with two medical research funding
organisations: Wellcome Trust and
Cancer Research UK.
Other Appointments
Bina is a non-executive Director
of PHP Plc. She is also a Trustee
on the Board of the Social Mobility
Foundation.
Standing for re-election: Yes
JO PARFREY, ACATIM LIVETT, ACMA DR BINA RAWAL
BOARD OF DIRECTORS CONTINUED
46
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Report of the Directors
The Directors present their Annual
Report on the affairs of the Company
together with the audited financial
statements and the Independent
Auditors’ Report for the year ended
31 March 2024.
SIGNIFICANT AGREEMENTS
Details of the services provided under these agreements are
included in the Strategic Report on pages 28 and 29.
Alternative investment fund management
agreement
Frostrow is the designated AIFM for the Company on
the terms and subject to the conditions of the alternative
investment fund management agreement between the
Company and Frostrow (the “AIFM Agreement”).
The notice period on the AIFM Agreement with Frostrow is
12 months, termination can be initiated by either party.
Details of the fee payable to Frostrow can be found on
page32.
Portfolio management agreement
Under the AIFM Agreement Frostrow has delegated the
portfolio management function to OrbiMed, under a
portfolio management agreement between it, the Company
and Frostrow (the “Portfolio Management Agreement”).
OrbiMed receives a periodic fee equal to 0.65% p.a. of the
Company’s NAV and a performance fee as set out in the
Performance Fee section below. Its agreement with the
Company may be terminated by either party giving notice of
not less than 12 months.
Performance fee
Dependent on the level of long-term outperformance of
the Company, OrbiMed is entitled to a performance fee.
The performance fee is calculated by reference to the
amount by which the Company’s NAV performance has
outperformed the Benchmark (see inside front cover for
details of the Benchmark).
The fee is calculated quarterly by comparing the cumulative
performance of the Company’s NAV with the cumulative
performance of the Benchmark since the launch of the
Company in 1995. The performance fee amounts to 15.0% of
any outperformance over the Benchmark. Provision is made
within the daily NAV per share calculation as required and in
accordance with generally accepted accounting standards.
In order to ensure that only sustained outperformance
is rewarded, at each quarterly calculation date any
performance fee payable is based on the lower of:
(i) The cumulative outperformance of the portfolio over the
Benchmark as at the quarter end date; and
(ii) The cumulative outperformance of the portfolio over the
Benchmark as at the corresponding quarter end date in
the previous year
less any cumulative outperformance on which a
performance fee has already been paid.
The effect of this is that outperformance has to be
maintained for a twelve month period before it is paid.
As at 31 March 2024 no performance fees were accrued or
payable (31 March 2023: £nil).
Depositary agreement
The Company appointed J.P. Morgan Europe Limited
(the“Depositary”) as its Depositary in accordance with the
AIFMD on the terms and subject to the conditions of the
Depositary agreement between the Company, Frostrow and
the Depositary (the “Depositary Agreement”).
Under the terms of the Depositary Agreement the Company
has agreed to pay the Depositary a fee calculated at 1.75bp
on net assets up to £150 million, 1.50 bps on net assets
between £150 million and £300 million, 1.00bps on net
assets between £300 million and £500 million and 0.50bps
on net assets above £500 million.
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
47
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
REPORT OF THE DIRECTORS CONTINUED
The Depositary has delegated the custody and safekeeping
of the Company’s assets to J.P. Morgan Securities LLC (the
“Custodian and Prime Broker”) pursuant to a delegation
agreement between the Company, Frostrow, the Depositary and
the Custodian and Prime Broker (the “Delegation Agreement”).
The Delegation Agreement transfers the Depositary’s
liability for the loss of the Company’s financial instruments
held in custody by the Custodian and Prime Broker to the
Custodian and Prime Broker as permitted by the AIFMD.
The Company has consented to the transfer and reuse
of its assets by the Custodian and Prime Broker (known
as “rehypothecation”) in accordance with the terms of an
institutional account agreement between the Company, the
Custodian and Prime Broker and certain other J.P. Morgan
entities (as defined therein). See page 33 for further details.
Prime brokerage agreement
The Company appointed J.P. Morgan Securities LLC on
the terms and subject to the conditions of the prime
brokerage agreement between the Company, Frostrow
and the Depositary (the “Prime Brokerage Agreement”).
TheCustodian and Prime Broker receives interest on the
drawn overdraft as detailed in note 12 on page 90.
The Custodian and Prime Broker is a registered
broker-dealer and is regulated by the United States
Securities and Exchange Commission.
RESULTS AND DIVIDENDS
The results attributable to shareholders for the year and the
transfer to reserves are shown on pages 77 and 78. Details
of the Company’s dividend record can be found on page 3.
Substantial interests in share capital
The Company was aware of the following substantial interests in the voting rights of the Company:
30 April 2024
31 March 2024
Shareholder
Number of
shares
% of issued
share
capital
Number of
shares
% of issued
share
capital
Rathbone Brothers plc
48,038,882 8.88 48,436,836 8.85
Investec Wealth & Investment Limited
41,413,773 7.66 42,232,373 7.72
Interactive Investor
37,594,401 6.95 37,766,720 6.90
Hargreaves Lansdown plc
31,735,426 5.87 32,444,732 5.93
Charles Stanley & Co Limited
27,085,383 5.01 27,284,055 4.99
Forsyth Barr
20,859,186 3.86 21,376,017 3.91
Craigs Investment Partners
19,540,173 3.61
19,672,830 3.60
Evelyn Partners
19,239,555 3.56 19,450,805 3.56
Quilter Cheviot Investment Management
18,204,177 3.37 18,651,596 3.41
RBC Brewin Dolphin
18,758,151 3.47 18,495,921 3.38
As at 31 March 2024 the Company had 545,942,332 shares in issue (excluding 55,722,868 shares held in treasury).
As at 30April 2024 there were 540,098,103 shares in issue (excluding 61,567,097 shares held in treasury).
48
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
REPORT OF THE DIRECTORS CONTINUED
CAPITAL STRUCTURE
The Company’s capital structure comprises solely ordinary
shares.
Share split
The price of the Company’s shares has increased substantially
over the last 10 years. To assist monthly savers, those who
reinvest their dividends or are looking to invest smaller
amounts the Directors proposed a sub-division of each
share of 25p each into 10 new shares of 2.5p each during
the year. This was approved by shareholders at the AGM
on 18 July 2023 and became effective on 27 July 2023. All
comparative per share amounts within this Annual Report
have been restated to reflect this share split.
During the year, and to 5 June 2024, no new shares were
issued. A total of 2,507,439 shares of 25p were repurchased
prior to the share split on 27 July 2023. Post 27 July 2023
55,190,908 shares of 5p were repurchased. The total cost of
the shares repurchased during the year was £252,759,000
and the average discount to the NAV per share was 10.5%.
Shares bought back are held in treasury and were previously
cancelled annually after the Company’s AGM. In a change
to the Company’s stated policy, all shares held in treasury at
the date of the Company’s AGM will now not be cancelled
and will continue to be held in treasury for re-issue at a
premium to the net asset value per share. Following the
year end, to 5 June 2024, the latest practicable date prior to
the publication of this Annual Report, a further 10,677,869
shares were repurchased at an average discount of 10.1%
to the cum income NAV per share. As at 5 June 2024 there
were 535,264,463shares in issue excluding 66,400,737
shares held in treasury.
Voting rights in the Company’s shares
Details of the voting rights in the Company’s shares at the
date of this Annual Report are given in note 9 to the Notice
of Annual General Meeting on page 106. Each shareholder
is entitled to one vote on a show of hands and, on a poll,
onevote for every share held.
DIRECTORS’ & OFFICERS’ LIABILITY
INSURANCE COVER
Directors’ & officers’ liability insurance cover was
maintained by the Company during the year ended
31March 2024 and to the date of this report. It is intended
that this policy will continue for the year ending 31 March
2025 and subsequent years.
DIRECTORS’ INDEMNITIES
During the year under review and to the date of this report,
indemnities were in force between the Company and each
of its Directors under which the Company has agreed to
indemnify each Director, to the extent permitted by law, in
respect of certain liabilities incurred as a result of carrying
out his or her role as a Director of the Company. The
Directors are also indemnified against the costs of defending
any criminal or civil proceedings or any claim by the
Company or a regulator as they are incurred provided that
where the defence is unsuccessful the Director must repay
those defence costs to the Company. The indemnities are
qualifying third party indemnity provisions for the purposes
of the Companies Act 2006.
A copy of each deed of indemnity is available for inspection
at the Company’s registered office during normal business
hours and will be available for inspection at the Annual
General Meeting. Please refer to the Statement from the
Chair on pages 4 to 6 for details of this year’s Annual General
Meeting arrangements.
POLITICAL AND CHARITABLE DONATIONS
The Company has not in the past and does not intend in the
future to make political or charitable donations.
MODERN SLAVERY ACT 2015
The Company does not provide goods or services in the
normal course of business, and as a financial investment
vehicle does not have customers. The Directors do not
therefore consider that the Company is required to make a
statement under the Modern Slavery Act 2015 in relation to
slavery or human trafficking.
ANTI-BRIBERY AND CORRUPTION POLICY
The Board has adopted a zero tolerance approach to
instances of bribery and corruption. Accordingly it expressly
prohibits any Director or associated persons when acting
on behalf of the Company, from accepting, soliciting, paying,
offering or promising to pay or authorise any payment, public
or private in the UK or abroad to secure any improper benefit
for themselves or for the Company.
The Board ensures that its service providers apply the same
standards in their activities for the Company.
A copy of the Company’s Anti Bribery and Corruption Policy
can be found on its website at www.worldwidewh.com. The
policy is reviewed regularly by the Audit & Risk Committee.
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
49
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
CRIMINAL FINANCES ACT 2017
The Company has a commitment to zero tolerance towards
the criminal facilitation of tax evasion.
A copy of the Company’s Prevention of the Facilitation
of Tax Evasion Policy can be found on its website at
www.worldwidewh.com. The policy is reviewed regularly by
the Audit & Risk Committee.
GLOBAL GREENHOUSE GAS EMISSIONS
The Company has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any
other emissions producing sources under the Companies
Act 2006 (Strategic Reports and Directors’ Reports)
Regulations 2013 or the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018, including those within the Company’s
underlying investment portfolio. Consequently, the Company
consumed less than 40,000 kWh of energy during the year in
respect of which the Report of the Directors is prepared and
therefore is exempt from the disclosures required under the
Streamlined Energy and Carbon Reporting criteria.
COMMON REPORTING STANDARD (“CRS”)
CRS is a global standard for the automatic exchange of
information commissioned by the Organisation for Economic
Cooperation and Development and incorporated into UK law
by the International Tax Compliance Regulations 2015. CRS
requires the Company to provide certain additional details
to HMRC in relation to certain shareholders. The reporting
obligation began in 2016 and is an annual requirement. The
Registrars, Link Group, have been engaged to collate such
information and file the reports with HMRC on behalf of the
Company.
CORPORATE GOVERNANCE
The Corporate Governance Report is set out on pages52
to59.
ARTICLES OF ASSOCIATION
Amendments of the Company’s Articles of Association
require a special resolution to be passed by shareholders.
REQUIREMENTS OF THE LISTING RULES
Listing Rule 9.8.4 requires the Company to include certain
information in a single identifiable section of the Annual
Report or a cross reference table indicating where the
information is set out. The Directors confirm that there are
no disclosures to be made under Listing Rule 9.8.4.
UK SANCTIONS
The Board has made due diligence enquiries of the service
providers that process the Company’s shareholder data, to
ensure the Company’s compliance with the UK sanctions
regime. The relevant service providers have confirmed that
they check the Company’s shareholder data against the UK
sanctions list on a daily basis. At the date of this report, no
sanctioned individuals had been identified on the Company’s
shareholder register. The Board notes that stockbrokers
and execution-only platforms also carry out their own
duediligence.
By order of the Board
Frostrow Capital LLP
Company Secretary
6 June 2024
REPORT OF THE DIRECTORS CONTINUED
50
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable law and regulations. In preparing these financial
statements, the Directors are required to:
• select suitable accounting policies and apply them
consistently;
• make judgements and estimates that are reasonable
and prudent;
• follow applicable UK accounting standards comprising
FRS 102;
• prepare the financial statements on a going concern
basis unless it is inappropriate to presume that the
Company will continue in business; and
• prepare a director’s report, a strategic report and a
directors’ remuneration report which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
and the Directors’ Remuneration Report comply with
the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for ensuring that the Report
of the Directors and other information included in the
Annual Report is prepared in accordance with company
law in the United Kingdom. They are also responsible for
ensuring that the Annual Report includes information
required by the Listing Rules of the FCA.
The Directors are also responsible for ensuring that the
Annual Report and the Financial Statements are made
available on a website. The Annual Report and the Financial
Statements are published on the Company’s website at
www.worldwidewh.com and via Frostrow’s website at
www.frostrow.com. The maintenance and integrity of
these websites, so far as it relates to the Company, is the
responsibility of Frostrow. The work carried out by the
Auditors does not involve consideration of the maintenance
and integrity of these websites and, accordingly, the
Auditors accept no responsibility for any changes that
have occurred to the financial statements since they
were initially presented on these websites. Visitors to the
websites need to be aware that legislation in the United
Kingdom governing the preparation and dissemination of
the financial statements may differ from legislation in their
jurisdiction.
DISCLOSURE OF INFORMATION TO THE
AUDITORS
So far as the Directors are aware, there is no relevant
information of which the Auditors are unaware. The
Directors have taken all steps they ought to have taken to
make themselves aware of any relevant audit information
and to establish that the Auditors are aware of such
information.
RESPONSIBILITY STATEMENT OF THE
DIRECTORS IN RESPECT OF THE ANNUAL
FINANCIAL REPORT
The Directors confirm to the best of their knowledge that:
• the Annual Report and the Financial Statements
have been prepared in accordance with applicable
accounting standards, give a true and fair view of the
assets, liabilities, financial position and the return for the
year ended 31 March 2024;
• the Chairman’s Statement, Strategic Report and the
Report of the Directors include a fair review of the
information required by 4.1.8R to 4.1.11R of the FCA’s
Disclosure Guidance and Transparency Rules; and
• the Annual Report and the Financial Statements,
includes a fair review of the development and
performance of the Company and of its financial
position, together with a description of the principal
risks and uncertainties it faces. Also, that taken as
a whole they are fair, balanced and understandable
and provide the information necessary to assess the
Company’s performance, business model and strategy.
On behalf of the Board
Doug McCutcheon
Chair
6 June 2024
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
51
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
THE BOARD AND COMMITTEES
Responsibility for effective governance lies with the Board. The governance framework of the Company reflects the fact that
as an investment company it has no employees and outsources portfolio management to OrbiMed and risk management,
company management, company secretarial, administrative and marketing services to Frostrow.
Corporate Governance
Management Engagement &
Remuneration Committee
Chair
Jo Parfrey
All Independent Directors
Key responsibilities:
• to review regularly the
contracts, the performance and
remuneration of the Company’s
principal service providers;
• to set the Directors’ Remuneration
Policy; and
• to review the terms and conditions
of the Directors’ appointments.
THE BOARD
Chair – Doug McCutcheon
Senior Independent Director – Dr. Bina Rawal
Five additional non-executive Directors, all considered independent, except for Sven Borho (see page 45 for further information).
Key responsibilities:
• to provide leadership and set strategy, values and standards within a framework of prudent effective controls which enable risk to
be assessed and managed;
• to ensure that a robust corporate governance framework is implemented; and
• to challenge constructively and scrutinise performance of all outsourced activities.
Audit & Risk Committee
Chair
Tim Livett*
All Independent Directors
(excluding the Chair,
Doug McCutcheon)
Key responsibilities:
• to review the Company’s financial
reports;
• to oversee the risk and control
environment and financial
reporting; and
• to have primary responsibility
for the relationship with the
Company’s external Auditors, to
review their independence and
performance, and to determine
their remuneration.
Nominations Committee
Chair
Dr. Bina Rawal
All Independent Directors
Key responsibilities:
• to review regularly the Board’s
structure and composition; and
• to make recommendations for any
changes or new appointments.
* The Board believes that Tim Livett has the necessary recent and relevant financial experience to Chair the Company’s Audit & Risk Committee.
Copies of the full terms of reference, which clearly define the responsibilities of each Committee, can be obtained from the
Company Secretary and can be found at the Company’s website at www.worldwidewh.com. Copies will also be available for
inspection on the day of the Annual General Meeting.
52
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
CORPORATE GOVERNANCE STATEMENT
The Board is committed to maintaining and demonstrating
high standards of corporate governance. The Board has
considered the principles and recommendations of the AIC
Code of Corporate Governance published in February 2019
(‘AIC Code’). The AIC Code addresses all the principles set
out in the UK Corporate Governance Code (the ‘UK Code’),
as well as setting out additional provisions on issues that
are of specific relevance to the Company.
The Financial Reporting Council has confirmed that by
following the AIC Code boards of investment companies
will meet their obligations in relation to the UK Code and
paragraph 9.8.6 of the UK Listing Rules.
The Board considers that reporting in accordance with
the principles and recommendations of the AIC Code
(whichhas been endorsed by the Financial Reporting Council)
provides more relevant and comprehensive information to
shareholders. By reporting against the AIC Code, the Company
meets its obligations under the UK Code (and associated
disclosure requirements under paragraph 9.8.6 of the Listing
Rules) and as such does not need to report further on issues
contained in the UK Code which are irrelevant to the Company
as an externally managed investment company, including the
provisions relating to the role of the chief executive, executive
directors’ remuneration and the internal audit function.
The Company has complied with the principles and
recommendations of the AIC Code.
The AIC Code can be viewed at www.theaic.co.uk and the
UK Code can be viewed on the Financial Reporting Council
website at www.frc.org.uk. The Corporate Governance
Report on pages 52 to 59, forms part of the Report of the
Directors on pages 47 to 50.
BOARD LEADERSHIP AND PURPOSE
Purpose and strategy
The purpose and strategy of the Company are described in
the Strategic Report.
THE BOARD
The Board is responsible for the effective Stewardship of
the Company’s affairs. Strategy issues and all operational
matters of a material nature are considered at its meetings.
The Board consists of six non-executive Directors, each of
whom, with the exception of Sven Borho, is independent
of OrbiMed and the Company’s other service providers. No
member of the Board is a Director of another investment
company managed by OrbiMed, nor has any Board
member (with the exception of Sven Borho) been an
employee of OrbiMed or any of the Company’s service
providers. Further details regarding the Directors can be
found on pages 45 and 46.
The Board carefully considers the various guidelines for
determining the independence of non-executive Directors,
placing particular weight on the view that independence
is evidenced by an individual being independent of mind,
character and judgement. All Directors retire at the AGM each
year and, if appropriate, seek election or re-election. Each
Director has signed a letter of appointment to formalise the
terms of their engagement as a non-executive Director, copies
of which are available on request at Frostrow’s offices.
BOARD CULTURE
The Board aims to consider and discuss differences
of opinion, unique vantage points and to exploit fully
areas of expertise. The Chair encourages open debate
to foster a supportive and co-operative approach for all
participants. Strategic decisions are discussed openly and
constructively. The Board aims to be open and transparent
with shareholders and other stakeholders and for the
Company to conduct itself responsibly, ethically and fairly
in its relationships with service providers.
The Board has gained assurance on whistleblowing
procedures at the Company’s principal service providers
to ensure employees at those companies are supported in
speaking up and raising concerns. No concerns relating to
the Company were raised during the year.
Shareholder relations
The Company has appointed Frostrow to provide marketing
and investor relations services, in the belief that a well
marketed investment company is more likely to grow over
time, have a more diverse, stable list of shareholders and
its shares will trade at close to net asset value per share
over the long run. Frostrow actively promotes the Company
as set out on page 37.
Shareholder communications
The Board, the AIFM and the Portfolio Manager consider
maintaining good communications with shareholders
and engaging with larger shareholders through meetings
and presentations a key priority. Shareholders are kept
informed by the publication of annual and half-year
reports which include financial statements. These reports
are supplemented by the daily release of the net asset
value per share to the London Stock Exchange and the
publication of monthly fact sheets. All this information,
CORPORATE GOVERNANCE CONTINUED
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
53
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
including interviews with the Portfolio Manager, is available
on the Company’s website at www.worldwidewh.com.
The Board monitors the share register of the Company;
it also reviews correspondence from shareholders at
each meeting and maintains regular contact with major
shareholders. Shareholders who wish to raise matters with
a Director may do so by writing to them at the registered
office of the Company.
The Board supports the principle that the Annual General
Meeting be used to communicate with private investors, in
particular. Shareholders are encouraged to attend the AGM,
where they are given the opportunity to question the Chair,
the Board and representatives of the Portfolio Manager.
Inaddition, the Portfolio Manager makes a presentation
to shareholders covering the investment performance and
strategy of the Company at the AGM. Voting at the AGM is
conducted on a poll and details of the proxy votes received
in respect of each resolution will be made available on the
Company’s website.
Significant holdings and voting rights
Details of the shareholders with substantial interests in the
Company’s shares, the Directors’ authorities to issue and
repurchase the Company’s shares, and the voting rights of
the shares are set out in the Directors’ Report.
BOARD MEETINGS
The Board meets formally at least four times each
year. A representative of OrbiMed attends all meetings;
representatives from Frostrow are also in attendance at
each Board meeting. The Independent Directors also meet
before each formal Board meeting without representatives
from Frostrow and OrbiMed being present. The Chair
encourages open debate to foster a supportive and
co-operative approach for all participants.
The Board has agreed a schedule of matters specifically
reserved for decision by the Board. This includes
establishing the investment objectives, strategy and
the Benchmark, the permitted types or categories of
investments, the markets in which transactions may
be undertaken, the amount or proportion of the assets
that may be invested in any geography or category of
investment or in any one investment, and the Company’s
share issuance and share buyback policies.
The Board, at its regular meetings, undertakes reviews of
key investment and financial data, revenue projections and
expenses, analyses of asset allocation, transactions and
performance comparisons, share price and net asset value
performance, marketing and shareholder communication
strategies, the risks associated with pursuing the investment
strategy, peer group information and industry issues.
The Chair is responsible for ensuring that the Board receives
accurate, timely and clear information. Representatives of
OrbiMed and Frostrow Capital LLP report regularly to the
Board on issues affecting the Company.
The Board is responsible for strategy and has established
an annual programme of agenda items under which it
reviews the objectives and strategy for the Company at
each meeting.
CONFLICTS OF INTEREST
Company Directors have a statutory obligation to avoid a
situation in which they (and connected persons) have, or
can have, a direct or indirect interest that conflicts, or may
possibly conflict, with the interests of the Company. The
Board has in place procedures for managing any actual or
potential conflicts of interest. No conflicts of interest arose
during the year under review.
BOARD FOCUS AND RESPONSIBILITIES
With the day to day management of the Company
outsourced to service providers the Board’s primary
focus at each Board meeting is reviewing the investment
performance and associated matters, such as, inter alia,
future outlook and strategy, gearing, asset allocation,
investor relations, marketing, and industry issues.
In line with its primary focus, the Board retains
responsibility for all the key elements of the Company’s
strategy and business model, including:
• the Investment Objective, Policy and Benchmark,
incorporating the investment and derivative guidelines
and limits, and changes to these;
• the maximum level of gearing and leverage the
Company may employ;
• a review of performance against the Company’s KPIs;
• a review of the performance and continuing
appointment of service providers; and
• the maintenance of an effective system of oversight,
risk management and corporate governance.
The Investment Objective, Policy, and Benchmark, including
the related limits and guidelines, are set out on pages 8 and 9,
along with details of the gearing and leverage levels allowed.
CORPORATE GOVERNANCE CONTINUED
54
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Details of the principal KPIs and further information on the
principal service providers, their performance and continuing
appointment, along with details of the principal risks, and
how they are managed, are set out in the Strategic Report.
The Corporate Governance Report, on pages 52 to 59, includes
a statement of compliance with corporate governance codes
and best practice, and the Business Review (pages 31 to 44)
includes details of the internal control and risk management
framework within which the Board operates.
BOARD COMPOSITION AND SUCCESSION
Succession planning
During the year, the Nominations Committee considered the
structure of the Board, recognising the need for progressive
refreshment. A plan for recruiting a Director to succeed
Humphrey van der Klugt, following his retirement at the
forthcoming AGM, was also agreed. (Please see the Statement
from the Chair on pages 5 and 6 for further information).
The Board has an approved succession planning policy to
ensure that (i) there is a formal, rigorous and transparent
procedure for the appointment of new Directors; and (ii) the
Board is comprised of members who collectively display
the necessary balance of professional skills, experience,
length of service and industry/Company knowledge.
Policy on the tenure of the Board Chair and
otherDirectors
All Directors seek election or re-election every year. The
Board subscribes to the view that long-serving Directors
should not necessarily be prevented from forming part
of an independent majority. The Board considers that a
Director’s tenure does not necessarily reduce his or her
ability to act independently and will continue to assess
each Director’s independence annually through a formal
performance evaluation.
The tenure of each Director is not ordinarily expected to
exceed nine years. However, the Board has agreed that
the tenure of the Board Chair may be extended in order
to facilitate the Board’s overall orderly succession. The
Board believes that this more flexible approach to the
tenure of the Chair is appropriate in the context of the
regulatory rules that apply to investment companies, which
ensure that the Board Chair remains independent after
appointment, while being consistent with the need for
regular refreshment and diversity.
The Board asked Doug McCutcheon to take on the role
of Board Chair from July 2022 for a period of three to five
years. This was in order to oversee the renewal of the Board,
including the retirement and replacement of all but one of
the then Directors as well as changing the composition and
leadership of all of the Board’s Committees.
Since then, good progress has been made toward the
end goal of having a Board structure that will facilitate
Director renewal on a more regular basis than has occurred
historically. And the process continues – as stated on
page5 of these accounts, Humphrey van der Klugt will be
retiring as a Director at this year’s Annual General Meeting
and the Board expects to recruit a new Director to join the
Board later this year. In the light of this progress, the Board
now expects Doug McCutcheon’s term as Board Chair to
not exceed four years.
Portfolio Manager Representative on the Board
The Company was founded in 1995 by our Portfolio
Manager, OrbiMed. Since that time, the Company has
performed strongly, producing a compound net asset
value per share annual return of +14.4%, well above our
Benchmark and making us the third best performing
trust in the UK across all sectors over the period
(Source:Winterflood Investment Trusts).
Since our inception, a representative of OrbiMed has served
as a Director of the Company. While less common in the
investment trust sector today than when the Company was
founded, the Board believes that the Company’s long-term
performance and its shareholders have and will continue
to benefit from this arrangement. The Board has also taken
steps to avoid any potential conflicts of interest – the current
OrbiMed representative, Sven Borho, does not sit on any of
the Board’s Committees and he does not receive a salary for
serving as a Director.
Appointments to the Board
The Nominations Committee considers annually the skills
possessed by the Board and identifies any skill shortages
to be filled by new Directors.
The rules governing the appointment and replacement of
Directors are set out in the Company’s articles of association
and the aforementioned succession planning policy.
Where the Board appoints a new Director during the year,
that Director will stand for election by shareholders at the
next AGM. Subject to there being no conflict of interest,
all Directors are entitled to vote on candidates for the
appointment of new Directors and on the recommendation for
shareholders’ approval for the Directors seeking re-election
at the AGM. When considering new appointments, the Board
endeavours to ensure that it has the capabilities required to
be effective and oversee the Company’s strategic priorities.
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
This will include an appropriate range, balance and diversity of
skills, experience and knowledge. The Company is committed
to ensuring that any vacancies arising are filled by the most
qualified candidates.
Diversity policy
The Board supports the principle of Boardroom diversity,
of which gender and ethnicity are two important aspects.
The Company’s policy is that the Board and its committees
should be comprised of directors with a diverse range of
skills, knowledge and experience and that appointments
should be made on merit against objective criteria,
including diversity in its broadest sense.
The objective of the policy is to have a broad range of
approaches, backgrounds, skills, knowledge and experience
represented on the Board. To this end, achieving a diversity
of perspectives and backgrounds on the Board will be a key
consideration in any director search process. The Board
encourages any recruitment agencies it engages to find a
diverse range of candidates that meet the criteria agreed for
each appointment and, from the shortlist, aims to ensure that
a diverse range of candidates is brought forward for interview.
The Board will continue to give due regard to the new diversity
targets in the Listing Rules set out below. The Board will not
discriminate unfairly on the grounds of gender, ethnicity, age,
sexual orientation, disability or socio-economic background
when considering the appointment of a new Director.
Candidates’ educational and professional backgrounds, their
cognitive and personal strengths, are considered against the
specification prepared for each appointment.
The Board has noted the FCA’s new Listing Rules which require
companies to report against the following diversity targets:
a) At least 40% of individuals on the board are women;
b) At least one of the senior board positions is held by a
woman; and
c) At least one individual on the board is from a minority
ethnic background.
As an externally managed investment company, the
Company does not have the positions of CEO or CFO and
therefore, as permitted by the Listing Rules, it has not
reported formally against the second target as it is not
applicable. As shown in the tables below, the Company has
met the third target but has not yet met the first target. The
Board notes that the statistics will change when Humphrey
van der Klugt retires from the Board at the conclusion of the
forthcoming AGM and will have due regard to these targets
in future Director recruitment processes.
In accordance with the Listing Rules, the Board has
provided the following information in relation to its diversity
as at the year end.
Number of
Board
Members
Percentage of
the Board
Number of
senior
positions on
the Board*
Men
4 67% 2
Women
2 33% 1
Not specified/prefer not to say
– – –
Number of
Board
Members
Percentage of
the Board
Number of
senior
positions on
the Board*
White British or other White (including minority-white groups)
5 83% 2
Mixed/Multiple Ethnic Groups
– – –
Asian/Asian British
1 17% 1
Black/African/Caribbean/Black British – – –
Other ethnic group, including Arab – – –
Not specified/ prefer not to say – – –
*The format of the above tables is prescribed in the Listing Rules which define ‘senior positions on the Board’ as ‘CEO, CFO, SID and Chair’. However, as an externally
managed investment trust, the Company has no executive management functions, including the roles of CEO and CFO, and the Company has therefore excluded
columns relating to executive management. In the absence of the aforementioned roles, the Board considers the Chair of the Audit & Risk Committee to be a senior
position and therefore the Company has defined the ‘senior positions on the Board’ as Chair, Senior Independent Director and Chair of the Audit & Risk Committee.
The information above was obtained by asking the Directors to indicate on an anonymous form, how they should be
categorised for the purposes of the Listing Rules disclosures.
CORPORATE GOVERNANCE CONTINUED
56
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
MEETING ATTENDANCE
The number of meetings held during the year of the Board and its Committees, and each Director’s attendance level,
isshown below:
Type and number of meetings held in 2023/24
Board
(5)
Audit & Risk
Committee
(3)
Nominations
Committee
(2)
Management
Engagement &
Remuneration
Committee
(1)
Sarah Bates*
2 1 1 1
Sven Borho^
5 – – –
Tim Livett
5 3 2 1
Humphrey van der Klugt
5 3 2 1
Doug McCutcheon~
5 – 2 1
Jo Parfrey
5 3 2 1
Dr Bina Rawal
5 3 2 1
* Retired from the Board on 18 July 2023.
^ Sven Borho does not sit on any of the Company’s Committees.
~ Not a member of the Audit & Risk Committee.
All of the serving Directors attended the Annual General Meeting held on 18July 2023.
BOARD EVALUATION
During the year, an externally facilitated review of the Board
its committees and individual Directors (including each
Director’s independence) was carried out by Stephenson
Executive Search Ltd. The evaluation took the form of a series
of one-to-one meetings with the Directors. Areas covered in
the evaluation included Board and Board Committee structure,
succession planning, recruitment and the Board’s compliance
with AIC corporate governance guidelines, paying particular
attention to diversity and Board tenure.
The evaluation concluded that the Board works in a
collegiate, efficient and effective manner, and there were no
material weaknesses or concerns identified. The Board is
satisfied that the structure, mix of skills and operation of the
Board, its committees, and individual Directors continue to
be effective.
The Board pays close attention to the capacity of individual
Directors to carry out their work on behalf of the Company.
In recommending individual Directors to shareholders for
re-election, it considered their other Board positions and
their time commitments and is satisfied that each Director
has the capacity to be fully engaged with the Company’s
business. The Board has considered the position of all of the
Directors as part of the evaluation process, and believes that
it would be in the Company’s best interests to propose them
for re-election (with the exception of Humphrey van der Klugt
who will be retiring from the Board on the date of this year’s
AGM), for the following reasons:
Doug McCutcheon joined the Board in November 2012
and became Chair in July 2022. Doug was an investment
banker at S.G. Warburg and then UBS for 25 years, most
recently as the head of Healthcare Investment Banking for
Europe, the Middle East, Africa and Asia-Pacific. It is noted
that Doug has been a Director of the Company for more
than nine years. The Board has agreed to this period of
longer service to ensure an orderly succession. The Senior
Independent Director conducted a preliminary evaluation of
the Chair shortly after his appointment with no issues being
raised. The Board continues to believe that Doug remains
independent in thought and judgement.
Sven Borho joined the Board in June 2018. Sven is a
founder and Managing Partner of OrbiMed and heads
their public Equity team and is the portfolio manager for
OrbiMed’s public equity and hedge funds.
Having a senior OrbiMed representative on the Board
dates back to the Company’s inception in 1995. The
Board believes that there is great value in the current
representative, Sven Borho, being a Director of the
Company as a result of his considerable knowledge
and experience. Sven does not receive a fee for being a
Director, neither is he a member of any of the Company’s
Committees.
Tim Livett joined the Board in September 2022. A qualified
accountant, Tim is Chair of the Audit & Risk Committee.
Tim was formerly the Chief Financial Officer at Caledonia
Investments PLC. Prior to this role he was Chief Financial
Officer at Wellcome Trust, the global charitable foundation
focused on health research and at Virgin Atlantic Limited. Tim
is a non-executive Director of British Standards Institution and
of Oxford University Endowment Management, plus a Trustee
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
of Babraham Institute; he chairs the respective Audit and Risk
Committees of these institutions. He has an extensive and
broad financial background.
Jo Parfrey joined the Board in September 2022. Jo is
Chair of the Management Engagement & Remuneration
Committee. She is a non-executive Director and Chair of
the Audit Committee of Henderson International Income
Trust plc, and a non-executive Director of Octopus AIM VCT.
She is also a non-executive Director and Chair of the Audit
Committee of Start Codon Limited and IESO Digital Health
Limited and the non-executive Chair of Babraham Research
Campus Limited. A Chartered Accountant, Jo has extensive
experience of both global investment trusts and healthcare,
including life sciences.
Dr Bina Rawal joined the Board on November 2019.
Aphysician with 25 years’ experience in life sciences
research and development, she has held senior executive
roles in drug development and scientific evaluation in
four global pharmaceutical companies. She has also
worked in senior roles with two medical research funding
organisations.
The Chair is pleased to report that following a formal
performance evaluation, the Directors’ performance
continues to be effective and they continue to demonstrate
commitment to the role.
TRAINING AND ADVICE
New appointees to the Board are provided with a full
induction programme. The programme covers the
Company’s investment strategy, policies and practices. The
Directors are also given key information on the Company’s
regulatory and statutory requirements as they arise including
information on the role of the Board, matters reserved for its
decision, the terms of reference of the Board Committees, the
Company’s corporate governance practices and procedures
and the latest financial information. It is the Chair’s
responsibility to ensure that the Directors have sufficient
knowledge to fulfil their role and Directors are encouraged to
participate in training courses where appropriate.
The Directors have access to the advice and services of a
Company Secretary through its appointed representative
which is responsible to the Board for ensuring that Board
procedures are followed and that applicable rules and
regulations are complied with. The Company Secretary
is also responsible for ensuring good information flows
between all parties.
There is an agreed procedure for Directors, in the
furtherance of their duties, to take independent professional
advice if necessary at the Company’s expense.
RISK MANAGEMENT AND INTERNAL
CONTROLS
The Board has overall responsibility for the Company’s
risk management and internal control systems and for
reviewing their effectiveness. The Company applies the
guidance published by the Financial Reporting Council on
internal controls. Internal control systems are designed to
manage, rather than eliminate, the risk of failure to achieve
the business objective and can provide only reasonable
and not absolute assurance against material misstatement
or loss. These controls aim to ensure that the assets of
the Company are safeguarded, that proper accounting
records are maintained and that the Company’s financial
information is reliable. The Directors have a robust process
for identifying, evaluating and managing the significant
risks faced by the Company, which are recorded in a risk
matrix. The Audit & Risk Committee, on behalf of the Board,
considers each risk as well as reviewing the mitigating
controls in place. Each risk is rated for its “likelihood” and
“impact” and the resultant numerical rating determines its
ranking into ‘Principal/Key’, ‘Significant’ or ’Minor’. This
process was in operation during the year and continues in
place up to the date of this report. The process also involves
the Audit & Risk Committee receiving and examining regular
reports from the Company’s principal service providers. The
Board then receives a detailed report from the Audit & Risk
Committee on its findings. The Directors have not identified
any significant failures or weaknesses in respect of the
Company’s internal control systems.
BENEFICIAL OWNERS OF SHARES –
INFORMATION RIGHTS
Beneficial owners of shares who have been nominated by
the registered holder of those shares to receive information
rights under section 146 of the Companies Act 2006 are
required to direct all communications to the registered
holder of their shares rather than to the Company’s
registrar, Link Group, or to the Company directly.
The Company has adopted a nominee share code which is
set out on the following page.
The annual and half-year financial reports, and a monthly
fact sheet are available to all shareholders. The Board, with
the advice of Frostrow, reviews the format of the annual
and half-year financial reports so as to ensure they are
useful to all shareholders and others taking an interest in the
Company. In accordance with best practice, the annual report,
including the Notice of the Annual General Meeting, is sent
to shareholders at least 20 working days before the meeting.
Separate resolutions are proposed for substantive issues.
CORPORATE GOVERNANCE CONTINUED
58
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
ANNUAL GENERAL MEETING
The following information to be considered at the
forthcoming annual general meeting is important
and requires your immediate attention.
If you are in any doubt about the action you should take,
you should seek advice from your stock broker, bank
manager, solicitor, accountant or other financial adviser
authorised under the Financial Services and Markets
Act2000 (as amended). If you have sold or transferred all
of your ordinary shares in the Company, you should pass
this document, together with any other accompanying
documents, including the form of proxy, at once to the
purchaser or transferee, or to the stock broker, bank or other
agent through whom the sale or transfer was effected, for
onward transmission to the purchaser or transferee
The Company’s Annual General Meeting will be held at
Saddlers’ Hall, 40 Gutter Lane, London EC2V 6BR on
Wednesday, 10 July 2024 from 1.00 p.m. Please refer to the
Chair’s Statement beginning on page 4 for details of this
year’s arrangements.
In particular, resolutions relating to the following items will
be proposed at the forthcoming Annual General Meeting.
Resolution 11 Authority to allot shares
Resolution 12 Authority to disapply pre-emption rights
Resolution 13 Authority to sell shares held in treasury
on a non pre-emptive basis
Resolution 14 Authority to buy-back shares
Resolution 15 Authority to hold General Meetings (other
than the Annual General Meeting) on at
least 14 clear days’ notice
Resolution 16 The continuance of the Company as an
investment trust for a further period of
five years
Resolutions 11 and 16 will be proposed as Ordinary
Resolutions and resolutions 12 to 15 will be proposed as
Special Resolutions.
The full text of the resolutions can be found in the Notice of
Annual General Meeting on pages 103 to 107. Explanatory
notes regarding the resolutions can be found on pages 108
and 109.
EXERCISE OF VOTING POWERS
The Board and the AIFM have delegated authority to
OrbiMed to vote the shares owned by the Company. The
Board has instructed that OrbiMed submit votes for such
shares wherever possible. This accords with current best
practice whilst maintaining a primary focus on financial
returns. OrbiMed may refer to the Board on any matters of
a contentious nature. The Board has reviewed OrbiMed’s
Voting Guidelines and is satisfied with their approach.
The Company does not retain voting rights on any shares
that are held as collateral in connection with the overdraft
facility provided by J.P. Morgan Securities LLC.
NOMINEE SHARE CODE
Where shares are held in a nominee company name, the
Company undertakes:
• to provide the nominee company with multiple copies of
shareholder communications, so long as an indication
of quantities has been provided in advance; and
• to allow investors holding shares through a nominee
company to attend general meetings, provided the
correct authority from the nominee company is
available.
Nominee companies are encouraged to provide the
necessary authority to underlying shareholders to attend
the Company’s general meetings.
By order of the Board
Frostrow Capital LLP
Company Secretary
6 June 2024
CORPORATE GOVERNANCE CONTINUED
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STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
59
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Audit & Risk Committee Report
INTRODUCTION FROM THE CHAIRMAN
I am pleased to present this report to shareholders as Chair
of the Audit & Risk Committee (the “Committee”), for the
year ended 31 March 2024.
COMPOSITION AND MEETINGS
The Committee comprises those Directors considered to
be independent by the Board. The Chair of the Company is
not a member of the Committee but attends meetings by
invitation. The Committee met three times during the year
and attendance by each Director is shown in the table on
page 57.
The Board has taken note of the requirements that the
Committee as a whole should have competence relevant to
the sector in which the Company operates and that at least
one member of the Committee should have recent and
relevant financial experience. I am a qualified accountant
and Chair a number of Audit& Risk Committees for other
organisations. The other Committee members have a
combination of financial, investment and other relevant
experience gained throughout their careers. The Committee
is satisfied that it is properly constituted in both respects.
The experience of the Committee members can be
assessed from the Directors’ biographies set out on
pages45 and 46.
RESPONSIBILITIES
The Committee’s main responsibilities during the year were:
1. To review the Company’s Half-Year and Annual Report.
2. To review the risk management and internal control
processes of the Company and its key service
providers. Further details of the Committee’s review
are included in the Principal Risks section beginning
on page 33.
3. To develop and implement a policy for the engagement
of the external Auditors and agreeing the scope of its
work and its remuneration. Also, to be responsible
for the selection process of the external Auditors
(including the leadership of an audit tender process)
and to have primary responsibility for the Company’s
relationship with the external Auditors.
4. To review the quality and effectiveness of the external
audit and the process.
5. To review the independence and objectivity of the
external Auditors.
6. To consider any non-audit work to be carried out by
the Auditors. The Committee reviews the need for
non-audit services to be provided by the Auditors
and authorises such on a case by case basis, having
consideration to the cost effectiveness of the services
and the independence and objectivity of the Auditors.
7. To consider the need for an internal audit function.
8. To assess the going concern and viability of the
Company, including the assumptions used.
9. ToreportitsfindingstotheBoard.
A comprehensive description of the Committee’s role, its
duties and responsibilities, can be found in its terms of
reference which are available for review on the Company’s
website at www.worldwidewh.com.
SIGNIFICANT ISSUES CONSIDERED BY THE
COMMITTEE DURING THE YEAR
Annual Report and Financial Statements
The production of the Company’s Annual Report (including
the external audit) is a thorough process involving input
from a number of different areas.
In order to be able to confirm that the Annual Report is fair,
balanced and understandable, the Board has requested that
the Committee advise on whether it considers these criteria
have been satisfied. As part of this process the Committee
has considered the following:
• the procedures followed in the production of the Annual
Report, including the processes in place to assure the
accuracy of the factual content;
• the extensive levels of review that were undertaken in
the production process, by the Company’s AIFM and the
Committee; and
• the internal control environment as operated by the
Portfolio Manager, AIFM and other service providers.
As a result of the work undertaken by the Committee, it
has confirmed to the Board that the Annual Report and the
Financial Statements for the year ended 31 March 2024,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders
to assess the Company’s financial position, performance,
business model and strategy.
60
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
AUDIT & RISK COMMITTEE REPORT CONTINUED
The Committee addressed the overall accuracy of
the annual report by considering the draft Annual
Report, a letter from Frostrow in support of the letter of
representation made by the Board to the Auditors and the
Auditors’ Report to the Committee.
Valuation and Ownership of the Company’s
Investments and Derivatives, including
unquotedinvestments
The Committee dealt with this matter by:
• ensuring that all investment holdings and cash/
deposit balances had been agreed to an independent
confirmation from the Custodian and Prime Broker
or relevant counterparty. In addition, receiving and
reviewing details of the internal control procedures
in place at the Portfolio Manager, the AIFM and the
Custodian and Prime Broker and also regular reports
from both the Custodian and Prime Broker and also
the Depositary (whose role it is to ensure that the
Company’s assets are safeguarded and to verify their
valuation);
• reconfirming its understanding of the processes in place
to record investment transactions and income, and to
value the portfolio;
• reviewing and amending, where necessary, the
Company’s register of key risks in light of changes to the
portfolio and the investment environment;
• gaining an overall understanding of the performance of
the portfolio both in capital and revenue terms through
comparison to the Benchmark; and
• conducting a review of how the Company’s derivative
positions were monitored.
In addition, the Committee considered the valuation of
unquoted investments. The Company has the ability to make
unquoted investments within its investment portfolio, up
to a limit of 10% of the portfolio at the time of acquisition.
Both the Company’s Directors and the AIFM need to ensure
that an appropriate value is placed on such investments
within the Company’s net asset value. The Committee has
worked with the Company’s Portfolio Manager and the AIFM
to establish clear guidelines for the valuation of unquoted
investments, including the use of valuations produced by
independent external valuers, where appropriate.
Valuations are reviewed formally on a six-monthly
basis and, if necessary, on an ad hoc basis in response
to material events such as a significant change in
fundamentals, a takeover approach or an initial public
offering (IPO). Any ad hoc changes made to valuations are
reflected in the next day’s published NAV per share, which is
announced to the London Stock Exchange.
Calculation of AIFM, Portfolio Management and
Performance Fees
The AIFM, Portfolio Management and Performance fees
are calculated in accordance with the AIFM and Portfolio
Management Agreements. The Auditors perform agreed
upon procedures over any performance fee payable to
the Portfolio Manager prior to payment. The Auditors also
recalculate the AIFM and Portfolio Management fee as part
of the audit.
Recognition of Revenue from Investments
The Committee sought to gain an understanding of the
processes in place to record investment income and
transactions. The Committee requested and received
confirmation from the AIFM that all dividends both received and
receivable had been accounted for correctly. The Committee
noted and acknowledged the segregation of duties in place
between the AIFM and the Custodian and Prime Broker.
Investment Trust Status
The Committee approached and dealt with ensuring
compliance with Section 1158 of the Corporation Tax Act
2010, by seeking confirmation from Frostrow that the
Company continues to meet the eligibility conditions on a
monthly basis.
OTHER REPORTING MATTERS
Withholding Tax
The Committee monitored the reclamation of withholding
tax, receiving regular updates from Frostrow on the process
and the appointment of specialist local agents.
Investment Performance
The Committee gained an overall understanding of the
performance of the investment portfolio both in capital and
revenue terms through ongoing discussions and analysis with
the Company’s Portfolio Manager and also with comparison
to suitable key performance indicators (see page 32).
Accounting Policies
During the year the Committee ensured that the accounting
policies, as set out on pages 81 to 85, were applied
consistently throughout the year. In light of there being
no unusual transactions during the year or other possible
reasons, the Committee agreed that there was no reason to
change the policies.
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
61
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Half Year Report and Financial Statements
The Committee reviewed the Half Year Report and Financial
Statements, which are not audited or reviewed by the
external Auditors, to ensure that the accounting policies
used in the Annual Financial Statements were also used at
the half-year stage and that they portrayed a fair balanced
and understandable picture of the period in question.
Going Concern and Viability Statement
Having reviewed the Company’s financial position and
liabilities, the Committee is satisfied that it is appropriate for
the Board to prepare the financial statements on the going
concern basis. Further detail is provided on page 38. The
Committee’s review of the Company’s financial position
included consideration of the cash and cash equivalent
position of the Company; the diversification of the portfolio;
and the analysis of portfolio liquidity, which estimated over
68% of the portfolio could be liquidated within one trading
days (based on current market volumes).
The Committee also considered the longer-term viability of
the Company in connection with the Board’s statement in
the Strategic Report on page 39. The Committee reviewed
the Company’s financial position (including its cash flows
and liquidity position), the principal risks and uncertainties
and the results of stress tests. The stress tests included a
number of scenarios which considered the impact of severe
adverse stock market volatility in the form of substantial
market falls and significantly reduced market liquidity.
The scenarios assumed that there would be no recovery in
asset prices and that listed portfolio companies would not
reinstate dividends. The results demonstrated the impact
on the Company’s NAV, its expenses, its cash flows and
its ability to meet its liabilities. In even the most stressed
scenario, the Company was shown to have sufficient cash,
or to be able to liquidate a sufficient portion of its listed
holdings, in order to be able to meet its liabilities as they
fall due. Based on the information available to the Directors
at the time, the Committee therefore concluded it was
reasonable for the Board to expect that the Company will
be able to continue in operation and meet its liabilities
as they fall due over the next five financial years. The
Committee expects that the Company will continue to exist
for the foreseeable future and at least for the period of
theassessment.
The Committee also gave consideration to the Company’s
continuation resolution which will be considered
by shareholders at the Company’s Annual General
Meeting(“AGM”) to be held on 10 July 2024. Following a
programme of extensive engagement with the Company’s
principal shareholders, there is an expectation that the
resolution will be passed.
Internal Controls and Risk Management
As set out on page 33 the Board is responsible for the risk
assessment and review of internal controls of the Company,
undertaken in the context of the overall investment
objective.
The review covers the key business, operational, compliance
and financial risks facing the Company. In arriving at its
judgement of what risks the Company faces, the Board has
considered the Company’s operations in the light of the
following factors:
• the nature of the Company, with all management
functions outsourced to third party service providers;
• the nature and extent of risks which it regards as
acceptable for the Company to bear within its overall
investment objective;
• the threat of such risks becoming a reality; and
• the Company’s ability to reduce the incidence and
impact of risk on its performance.
Against this background, a risk matrix has been developed
which covers key risks the Company faces, the likelihood of
their occurrence and their potential impact, how these risks
are monitored and mitigating controls in place. The Board
has delegated to the Committee the responsibility for the
review and maintenance of the risk matrix and it reviews,
in detail, the risk matrix each time it meets, bearing in mind
any changes to the Company, its environment or service
providers since the last review. Any significant changes to
the risk matrix are discussed with the whole Board.
Principal Service Providers
In addition to reviewing the systems of internal control
in place at the Company’s principal service providers, the
Committee also reviewed the cyber security strategies
adopted by them.
Depositary
During the year, the Committee reviewed reports from the
Depositary on their regulatory oversight and due diligence
duties. Nothing material was brought to the attention of the
Committee.
AUDIT & RISK COMMITTEE REPORT CONTINUED
62
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Internal Audit
The Committee considered whether there was a need
for the Company to have an internal audit function. As
the Company delegates its day-to-day operations to third
parties and has no employees, the Committee concluded
that there was no such need.
EXTERNAL AUDIT
Audit Tender
Following the completion of last year’s audit,
PricewaterhouseCoopers (“PwC”) had completed nine
audits of the Company (this year’s audit was their tenth).
They were appointed on 14July 2014 following a formal
tender process and this appointment has been renewed at
each subsequent AGM.
As notified in last year’s Annual Report, a competitive audit
tender process, led by the Committee, was undertaken in
the autumn of 2023. A range of audit firms were considered
not just those who are part of the “Big Four” group of
audit firms. A selection of audit firms was then invited to
participate, and three firms submitted proposals and were
interviewed by the Committee.
In line with the requirements of the EU Audit Regulation,
the Committee submitted two audit firm candidates for
the engagement to the Board, together with a justified
preference for one of them. Following due consideration,
the Board resolved to re-appoint the Committee’s preferred
candidate, PwC.
Allan McGrath was the audit partner for the financial year
under review and he has confirmed PwC’s willingness
to continue to act as Auditors to the Company for the
forthcoming financial year. The Company’s Auditors
are required to rotate the audit partner every five years.
Following completion of this year’s audit, Allan has now
completed five audits and will therefore be required
to rotate off. The Committee has already met Allan’s
successor as engagement lead for the Company’s affairs.
As a public company listed on the London Stock Exchange,
the Company is subject to mandatory auditor rotation
requirements. Based on these requirements, another
tender process will be conducted no later than 2034. PwC
will not be eligible to take part in this tender (if they are
still in post) as they will have completed 20 years as the
Company’sAuditors.
Appointment and tenure
As a public company listed on the London Stock Exchange,
the Company is subject to mandatory auditor rotation
requirements. The Company will put the external audit out
to tender at least every 10 years, and change auditor at
least every 20 years. In addition, the Committee continues
to consider annually the need to go to tender for audit
quality, remuneration or independence reasons.
The Committee will be mindful of any potential conflicts of
interest. Any firms providing services to the Company within
a two-year period of the date of the audit tender will be
unable to participate.
The Committee has adopted formal audit tender guidelines
to govern the audit tender process.
Auditors’ Reappointment
Following the tender process, PwC will act as Auditors to
the Company for the forthcoming year and a resolution for
their re-appointment will be proposed at theAGM.
The Committee reviews the scope and effectiveness of the
audit process, including agreeing the Auditors’ assessment
of materiality and monitors the Auditors’ independence and
objectivity. It conducted a review of the performance of the
Auditors during the year and concluded that performance
was satisfactory and there were no grounds for change.
Meetings
This year the nature and scope of the audit together with
PwC’s audit plan were considered by the Committee on
1 November 2023. I, as Chair of the Committee, had a
separate meeting with them specifically to discuss the audit
and any issues that arose. The Committee then met PwC
on 29 May 2024 to review the outcome of the audit and to
discuss the limited issues that arose. The Committee also
discussed the presentation of the Annual Report with the
Auditors and sought their perspective.
Independence and Effectiveness
In order to fulfil the Committee’s responsibility regarding the
independence of the Auditors, the Committee reviewed:
• the senior audit personnel in the audit plan for the year;
• the Auditors’ arrangements concerning any conflicts of
interest;
• the extent of any non-audit services; and
• the statement by the Auditors that they remain
independent within the meaning of the regulations and
their professional standards.
AUDIT & RISK COMMITTEE REPORT CONTINUED
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
63
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
AUDIT & RISK COMMITTEE REPORT CONTINUED
Quality and Effectiveness
The Committee reviews the key areas of risk and judgement
as proposed by the external auditors. One of the key areas
of judgement, as noted earlier in this report, is the valuation
of unquoted investments. The Committee encouraged input
and challenge on this matter to provide additional rigour to
the process.
The Committee reviews the quality and effectiveness
of the external audit by seeking feedback from the key
participants in the process. This year feedback was
obtained from key service providers alongside the portfolio
manager, Frostrow and PwC. This was reviewed and
collated with the Committee’s own views of the process to
provide a full assessment.
The Committee also reviews the outcomes of the FRC’s
annual Audit Quality Reviews and discusses the findings
with the Auditors.
Remuneration
The Committee approved a fee of £56,070 for the audit
for the year ended 31 March 2024 (2023: £53,900). While
this represents an increase on the previous year’s fee, the
Committee believes that the fee is in line with general audit
fees payable for the investment trust sector and is reflective
of the level of work required to audit a listed company.
Non-Audit Services Policy
The Company operates on the basis whereby the provision
of all non-audit services by the Auditors has to be pre-
approved by the Committee. Such services are only
permissible where no conflicts of interest arise, the service
is not expressly prohibited by audit legislation, where the
independence of the Auditors is not likely to be impinged
by undertaking the work and the quality and the objectivity
of both the non-audit work and audit work will not be
compromised. The Committee will monitor the need for
non-audit work to be performed by the Auditors, if any, in
accordance with the Company’s non-audit services policy.
A copy of the Company’s non-audit services policy can be
found on the Company’s website at www.worldwidewh.com.
No non-audit fees were paid to the Auditors during the year
(2023: £nil).
The Committee has considered the extent and nature of
non-audit work performed by the Auditors and is satisfied
that this did not impinge on their independence and is a
cost effective way for the Company to operate.
PERFORMANCE EVALUATION
The Committee’s performance over the past year was
reviewed and discussed as part of this year’s external Board
evaluation. The evaluation considered the composition of
the Committee and the efficacy of Committee meetings,
as well as assessing the Committee’s role in monitoring
and overseeing the Company’s financial reporting and
accounting, risk management and internal controls,
compliance with corporate governance regulations and also
the assessment of the external audit.
I am pleased to confirm that the evaluation result was
positive and no matters of concern or requirements for
change were highlighted.
AUDIT & RISK COMMITTEE CONFIRMATION
The Audit & Risk Committee confirms that it has carried
out a review of the effectiveness of the system of internal
financial control and risk management during the year, as
set out above and that:
(a) An ongoing procedure for identifying, evaluating and
managing significant risks faced by the Company was in
place for the year under review and up to 6 June 2023.
This procedure is regularly reviewed by the Board; and
(b) It is responsible (on behalf of the Board) for the
Company’s system of internal controls and for reviewing
its effectiveness and that it is designed to manage the
risk of failure to achieve business objectives. This can
only provide reasonable not absolute assurance against
material misstatement or loss.
Tim Livett
Chair of the Audit & Risk Committee
6 June 2024
64
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Directors’ Remuneration Report
INTRODUCTION FROM THE CHAIR
This report has been prepared in accordance with Schedule
8 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulation 2013, the
requirements of Section 421 of the Companies Act 2006
and the Enterprise and Regulatory Reform Act 2013. The
Directors’ Remuneration Report is subject to an annual
advisory vote and therefore an Ordinary Resolution for the
approval of this report will be put to shareholders at the
Company’s forthcoming AGM.
The law requires the Company’s Auditors to audit
certain of the disclosures provided in this report. Where
disclosures have been audited, they are indicated as such
and the Auditors’ audit opinion is included in its report to
shareholders on pages 69 to 77.
The Management Engagement & Remuneration Committee
(the “Committee”) considers the framework for the
remuneration of the Directors on an annual basis. It reviews
the ongoing appropriateness of the Directors’ Remuneration
Policy and the individual remuneration of Directors by
reference to the activities and particular complexities of
the Company and comparison with other companies of a
similar structure and size. This is in-line with the AIC Code.
An Ordinary Resolution proposing the adoption of the
Directors’ Remuneration Report was put to shareholders
at the Annual General Meeting of the Company held on
18July 2023, and was passed with 99.8%of the votes cast
by shareholders voting in favour of the Resolution.
As noted in the Strategic Report, all of the Directors are
non-executive and therefore there is no Chief Executive
Officer. The Company does not have any employees.
There is therefore no Chief Executive Officer or employee
information to disclose.
Directors’ remuneration policy
The Directors’ Remuneration Policy provides that fees
payable to the Directors should reflect the time spent by
the Board on the Company’s affairs and the responsibilities
borne by the Directors and should be sufficient to enable
candidates of high calibre to be recruited. Directors are
remunerated in the form of fees payable monthly in arrears,
paid to the Director personally or to a specified third
party. There are no long-term incentive schemes, share
option schemes, pension arrangements, bonuses, or other
benefits in place and fees are not specifically related to the
Directors’ performance, either individually or collectively.
The remuneration for the non-executive Directors is
determined within the limits set out in the Company’s
Articles of Association. The present limit is £350,000 in
aggregate per annum. The amount paid in aggregate
to the Directors in 2024 is set out in the table on the
followingpage.
A binding resolution to approve the Directors’
Remuneration Policy was put to shareholders at the Annual
General Meeting held in 2023, and was passed with 99.8%
of shareholders voting in favour of the Resolution. The
aforementioned Directors’ Remuneration Policy provisions
apply until the next time that they are put to shareholders
for the renewal of that approval, which must be at
intervals of not more than three years, or if the Directors’
Remuneration Policy is varied. As approval of this policy
was last granted by shareholders at the Annual General
Meeting held in July 2023, shareholder approval will again
be sought at the Annual General Meeting to be held in
2026.
Directors’ appointment
None of the Directors has a service contract. The terms of
their appointment provide that Directors shall retire and be
subject to election at the first Annual General Meeting after
their appointment and to re-election annually thereafter. The
terms also provide that a Director may be removed without
notice and that compensation will not be due on leaving office.
Directors’ fees
Following a review by the Committee it was agreed that the
Directors’ fees would be increased by 5%, with effect from
1 April 2024.
The Committee considered the current year increase
is appropriate given the level of inflation and the need
to retain and attract Directors with the relevant skills to
support your Company.
The table overleaf shows the level of fees paid to Directors
and the percentage increase from the prior year.
All of the Directors, as at the date of this report, served
throughout the year. The table overleaf excludes any
employer’s national insurance contributions, if applicable.
The Directors are entitled to be reimbursed for reasonable
expenses incurred by them in connection with the
performance of their duties and attendance at Directors’
and shareholder meetings.
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
65
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Year Ended
31 March 2024
Year Ended
31 March 2023
Year Ended
31 March 2022
Director
Fee Level
(per annum)
%
Change
Fee Level
(per annum)
%
Change
Fee Level
(per annum)
%
Change
Fee Level
(per annum)
%
Change
Chair
£56,924 5.0 £54,213
2.0
£53,150 – £53,150 4.0
Audit & Risk Committee Chair
£44,054 5.0 £41,956
2.0
£41,133 – £41,133 4.0
Senior Independent Director
£38,563 5.0 £36,727
2.0
£36,007 – £36,007 4.0
Director
£35,956 5.0 £34,244
2.0
£33,573 – £33,573 4.0
Sums paid to third parties
None of the fees referred to in the below table were paid to any third party in respect of the services provided by any of the Directors.
Directors’ emoluments for the year (audited)
Date of
Appointment
totheBoard
Fixed fees
(£)
2024
Taxable
Expenses
(£)†
2024
Total (£)
2024
Fixed fees
(£)
2023
Taxable
Expenses
(£)†
2023
Total (£)
2023
Sir Martin Smith* 8 November 2007 – – – 14,105 – 14,105
Humphrey van der Klugt 15 February 2016 34,244 – 34,244 40,503 – 40,503
Sarah Bates* 22 May 2013 10,877 – 10,877 36,007 – 36,007
Tim Livett^ 1 September 2022 41,956 – 41,956 20,124 – 20,124
Doug McCutcheon 7 November 2012 54,213 – 54,213 47,894 – 47,894
Jo Parfrey 1 September 2022 34,244 – 34,244 19,584 – 19,584
Sven Borho+ 7 June 2018 – – – – – –
Dr Bina Rawal# 1 November 2019 35,907 – 35,907 33,573 – 33,573
Total 211,441 – 211,441 211,790 – 211,790
† Taxable expenses primarily comprise travel and associated expenses incurred by the Directors in attending Board and Committee meetings in London. These are
reimbursed by the Company and, under HMRC Rules, are subject to tax and National Insurance and therefore are treated as a benefit in kind within this table.
* Sir Martin Smith retired from the Board on 6 July 2022 and Sarah Bates retired from the Board on 18 July 2023.
# Dr Bina Rawal was appointed as the Senior Independent Director with effect from 18 July 2023.
+ Sven Borho has waived his Director’s fee.
^
Tim Livett was appointed as Chair of the Audit & Risk Committee with effect from 1 March 2023.
No communications have been received from shareholders regarding Directors’ remuneration.
Directors’ interests in the Company’s shares (audited)
Ordinary
Shares of 2.5p each*
31 March
2024
31 March
2023
Sarah Bates
N/A 72,000
Sven Borho 200,000 100,000
Humphrey van der Klugt 30,000 30,000
Tim Livett 21,957 21,750
Doug McCutcheon 250,000 200,000
Jo Parfrey 20,000 20,000
Dr Bina Rawal 26,060 26,060
548,017 469,810
* The comparative period has been adjusted for the sub-division of each share of 25p into 10 new shares of 2.5p each which became effective on 27 July 2023.
DIRECTORS’ REMUNERATION REPORT CONTINUED
Year Ending
31 March 2025
66
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Share price total return
The chart below illustrates the total shareholder return
for a holding in the Company’s shares as compared to
the Benchmark, which the Board has adopted as the key
measure of the Company’s performance.
TOTAL SHAREHOLDER RETURN FOR THE TEN YEARS
TO 31 MARCH 2024
Mar
14
Mar
15
Mar
16
Mar
17
Mar
18
Mar
19
Mar
20
Mar
21
Mar
22
Mar
23
Mar
24
Benchmark (Total Return) (+218.3%)
Rebased to 100 as at 31 March 2014
Source: Morningstar
WWH Share Price (Total Return) (+179.7%)
%
0
100
200
300
400
500
Relative cost of directors’ remuneration
The bar chart below shows the comparative cost of
Directors’ fees compared with the level of dividend
distribution and ongoing charges for 2023 and 2024.
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Annual statement
On behalf of the Board, I confirm that the Directors’
Remuneration Policy, set out on page 65 of this Annual
Report, and the Directors’ Remuneration Report set out
on page 65 to 67 summarise, as applicable, for the year to
31March2024:
(a) the major decisions on Directors’ remuneration;
(b) any substantial changes relating to Directors’
remuneration made during the year; and
(c) the context in which the changes occurred and
decisions have been taken.
Jo Parfrey
Chair of the Management Engagement & Remuneration
Committee
6 June 2024
DIRECTORS’ REMUNERATION REPORT CONTINUED
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
67
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Independent Auditors’ report to the members
of Worldwide Healthcare Trust PLC
REPORT ON THE AUDIT OF THE FINANCIAL
STATEMENTS
Opinion
In our opinion, Worldwide Healthcare Trust PLC’s financial
statements:
• give a true and fair view of the state of the Company’s
affairs as at 31 March 2024 and of its return and cash
flows for the year then ended;
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS
102 “The Financial Reporting Standard applicable in the
UK and Republic of Ireland”, and applicable law); and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements, included within
the Annual Report, which comprise: Statement of Financial
Position as at 31 March 2024; the Income Statement, the
Statement of Changes in Equity and the Statement of Cash
Flows for the year then ended; and the notes to the financial
statements, which include a description of the significant
accounting policies.
Our opinion is consistent with our reporting to the Audit &
Risk Committee.
Basisforopinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Company in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes
the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
We have provided no non-audit services to the Company in
the period under audit.
Our audit approach
Context
The Company is a standalone Investment Trust Company
and engages Frostrow Capital LLP (the “AIFM”) to manage
its assets.
Overview
Audit scope
• We conducted our audit of the financial statements
using information from the AIFM and J.P. Morgan
Europe Limited with whom the AIFM have engaged to
provide certain administrative functions.
• We tailored the scope of our audit taking into account
the types of investments within the Company, the
involvement of the third parties referred to above, the
accounting processes and controls, and the industry in
which the Company operates.
• We obtained an understanding of the control
environment in place at the AIFM and adopted a fully
substantive testing approach using reports obtained
from the AIFM and service providers.
68
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Key audit matters
• Income from investments
• Valuation and existence of investments
• Ability to continue as a going concern (Continuation
Vote)
Materiality
• Overall materiality: £20,804,000 (2023: £21,500,000)
based on approximately 1% of net assets.
• Performance materiality: £15,603,000 (2023:
£16,125,000).
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the
audit of the financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by
the auditors, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources
in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the
context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Ability to continue as a going concern (Continuation Vote)
is a new key audit matter this year. Otherwise, the key audit
matters below are consistent with last year.
.
INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFWORLDWIDEHEALTHCARETRUSTPLC
CONTINUED
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
69
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Key audit matter How our audit addressed the key audit matter
Income from investments
Refer to the Audit & Risk Committee Report,
Accounting Policies and Notes to the Financial
Statements (Note 2).
ISAs (UK) presume there is a risk of fraud in income
recognition because of the pressure management
may feel to achieve a certain objective. In this
instance, we consider that ‘income’ refers to all the
Company’s income streams, both revenue and capital
(including gains and losses on investments).
As the Company has a capital objective, there might
be an incentive to overstate income in that category
if capital is particularly underperforming. As such,
we focussed this risk on the existence/occurrence of
gains/losses on investments and completeness of
dividend income recognition and its presentation in
the Income Statement as set out in the requirements
of The Association of Investment Companies’
Statement of Recommended Practice (the “AIC
SORP”).
We assessed the accounting policy for income recognition for
compliance with accounting standards and the AIC SORP and
performed testing to confirm that income had been accounted for
in accordance with this stated accounting policy.
We found that the accounting policies implemented were in
accordance with accounting standards and the AIC SORP, and
that income has been accounted for in accordance with the stated
accounting policy.
We understood and assessed the design and implementation of
key controls surrounding income recognition.
The gains/losses on investments held at fair value comprise
realised and unrealised gains/losses. For unrealised gains/losses,
we sample tested the valuation of the portfolio at the year end
(see below), together with testing the reconciliation of opening and
closing investments.
For realised gains/losses, we tested a sample of disposal proceeds
by agreeing the proceeds to bank statements and we re-performed
the calculation of a sample of realised gains/losses.
For all the dividends recorded by the Company, we tested the
accuracy of dividend income by agreeing the dividend rates from
investments to independent market data.
We tested occurrence by examining for each investment holding,
that all dividends recorded in the year had been declared in the
market.
To test for completeness, we tested that the appropriate dividends
had been received in the year by reference to independent data of
dividends declared for all listed investments during the year. Our
testing did not identify any unrecorded dividends.
We tested the allocation and presentation of dividend income
between the revenue and capital return columns of the Income
Statement in line with the requirements set out in the AIC SORP.
No material misstatements were identified from this testing.
INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFWORLDWIDEHEALTHCARETRUSTPLC
CONTINUED
70
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Key audit matter How our audit addressed the key audit matter
Valuation and existence of investments
Refer to the Audit & Risk Committee Report,
Accounting Policies and Notes to the Financial
Statements (Note 9).
The investment portfolio at 31 March 2024 principally
comprised of listed equity investments and unquoted
equity investments and totalled £2,108,325,000. We
focused on the valuation and existence of investments
because investments represent the principal element
of the net asset value as disclosed in the Statement of
Financial Position in the financial statements.
We tested the valuation of all listed investments by agreeing the
prices used in the valuation to independent third party sources.
We tested the existence of all listed investments by agreeing the
holdings of each investment to an independent confirmation
from the Custodian and Prime Broker, J.P. Morgan Securities
LLC, as at 31 March 2024.
For unquoted investments we understood and evaluated the
valuation methodology applied, by reference to the International
Private Equity and Venture Capital Valuation guidelines
(IPEV),and tested the techniques used by the Directors in
determining the fair value of unquoted investments. Our testing,
performed on a sample basis, included:
– assessing the appropriateness of the valuation models
used;
– testing the inputs either through validation to appropriate
third party sources, or where relevant, assessing the
reasonableness of significant estimates and judgements
used;
– assessing the potential impact of climate change on the
valuation of the unquoted investments; and
– assessing the ongoing impact of geopolitical events on the
valuation of investments.
We found that the Directors’ valuations of unquoted
investments were materially consistent with the IPEV guidelines
and that the assumptions used to derive the valuations
within the financial statements were reasonable based on the
investee’s circumstances or consistent with appropriate third
party sources. No material misstatements were identified from
this testing.
We tested the existence of the unquoted investment portfolio
by agreeing a sample of the holdings to independently obtained
third party confirmations as at 31 March 2024. No variances
were identified from this testing.
Ability to continue as a going concern (Continuation Vote)
Refer to Going concern and viability statement in the
Audit & Risk Committee Report .
A continuation vote is due to take place at the 2024
AGM, which, if passed, will allow the Company to
continue as an investment trust for a further five
years. The Directors have considered and assessed
the potential impact of the continuation vote on the
ability of the Company to continue as a going concern.
The procedures we performed and our conclusions on going
concern are included in the Conclusions relating to going
concern section below.
INDEPENDENTAUDITORS’REPORTTOTHEMEMBERSOFWORLDWIDEHEALTHCARETRUSTPLC
CONTINUED
GOVERNANCE
STRATEGIC REPORT FINANCIAL STATEMENTS FURTHER INFORMATION
71
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the
industry in which it operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process management adopted to assess the
extent of the potential impact of climate risk on the Company’s financial statements and support the disclosures made
within the Company’s financial statements. The Directors and the AIFM concluded that there was no material impact on
the financial statements. Our evaluation of this included assessing how the Directors had incorporated climate risk factors
into the key area of judgement and estimation in the financial statements, being in relation to the process of valuation of
unquoted investments. We also considered the consistency of the climate change disclosures included in the Strategic
Report with the financial statements and our knowledge from our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Company materiality
£20,804,000 (2023: £21,500,000).
How we determined it Approximately 1% of net assets.
Rationale for benchmark applied
We believe that net assets is the primary measure used by the shareholders in
assessing the performance of the entity, and is a generally accepted auditing
benchmark for investment trust Company audits. This benchmark provides an
appropriate and consistent year on year basis for our audit.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to
£15,603,000 (2023: £16,125,000) for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our
normal range was appropriate.
We agreed with the Audit & Risk Committee that we would report to them misstatements identified during our audit
above £1,040,000 (2023: 1,075,000) as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
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Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the
Company’s ability to continue to adopt the going concern
basis of accounting included:
• evaluating the Directors’ updated risk assessment
and considering whether it addressed relevant threats,
including rise of inflation and the wider macro economic
uncertainty;
• evaluating the Directors’ assessment of potential
operational impacts, considering their consistency with
other available information and our understanding of
the business and assessed the potential impact on the
financial statements;
• reviewing the Directors’ assessment of the Company’s
financial position in the context of its ability to
meet future expected operating expenses and debt
repayments, their assessment of liquidity as well as their
review of the operational resilience of the Company and
oversight of key third-party service providers;
• assessing the implication of significant reductions in NAV
as a result of market performance on the ongoing ability
of the Company to operate; and
• reviewing the Directors’ assessment of going concern
in relation to the passing of the continuation vote,
including assessing the stability of the shareholder
register, engagement with key shareholders, the
financial performance of the Company compared to its
benchmark and the result of previous continuation votes.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Company’s ability to continue as a
going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate.
However, because not all future events or conditions can
be predicted, this conclusion is not a guarantee as to the
Company’s ability to continue as a going concern.
In relation to the Directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in
the Annual Report other than the financial statements and
our auditors’ report thereon. The Directors are responsible
for the other information. Our opinion on the financial
statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except
to the extent otherwise explicitly stated in this report, any
form of assurance thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a
material misstatement of the financial statements or a
material misstatement of the other information. If, based
on the work we have performed, we conclude that there is
a material misstatement of this other information, we are
required to report that fact. We have nothing to report based
on these responsibilities.
With respect to the Strategic report and the Report of the
Directors, we also considered whether the disclosures
required by the UK Companies Act 2006 have been
included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and the Report of the Directors
In our opinion, based on the work undertaken in the course
of the audit, the information given in the Strategic report
and the Report of the Directors for the year ended 31
March 2024 is consistent with the financial statements
and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the
Company and its environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic report and the Report of the Directors.
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the Directors’
statements in relation to going concern, longer-term
viability and that part of the corporate governance
statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified
for our review. Our additional responsibilities with respect to
the corporate governance statement as other information
are described in the Reporting on other information section
of this report.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
corporate governance statement is materially consistent
with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or
draw attention to in relation to:
• The Directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe
those principal risks, what procedures are in place to
identify emerging risks and an explanation of how these
are being managed or mitigated;
• The Directors’ statement in the financial statements
about whether they considered it appropriate to
adopt the going concern basis of accounting in
preparing them, and their identification of any material
uncertainties to 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;
• The Directors’ explanation as to their assessment of
the Company’s prospects, the period this assessment
covers and why the period is appropriate; and
• The Directors’ statement as to whether they have a
reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they
fall due over the period of its assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-
term viability of the Company was substantially less in
scope than an audit and only consisted of making inquiries
and considering the Directors’ process supporting their
statement; checking that the statement is in alignment with
the relevant provisions of the UK Corporate Governance
Code; and considering whether the statement is consistent
with the financial statements and our knowledge and
understanding of the Company and its environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of
our audit, we have concluded that each of the following
elements of the corporate governance statement is
materially consistent with the financial statements and our
knowledge obtained during the audit:
• The Directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary
for the members to assess the Company’s position,
performance, business model and strategy;
• The section of the Annual Report that describes the
review of effectiveness of risk management and internal
control systems; and
• The section of the Annual Report describing the work of
the Audit & Risk Committee.
We have nothing to report in respect of our responsibility
to report when the Directors’ statement relating to the
Company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Responsibilitiesforthefinancialstatementsand
the audit
Responsibilities of the Directors for the financial
statements
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the
preparation of the financial statements in accordance with
the applicable framework and for being satisfied that they
give a true and fair view. The Directors are also responsible
for such internal control as they determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate
the Company or to cease operations, or have no realistic
alternative but to do so.
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Auditors’ responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the Company and industry,
we identified that the principal risks of non-compliance with
laws and regulations related to breaches of section 1158 of
the Corporation Tax Act 2010, and we considered the extent
to which non-compliance might have a material effect on
the financial statements. We also considered those laws
and regulations that have a direct impact on the financial
statements such as the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk
of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries
to increase revenue (investment income and capital gains)
or to increase net asset value, and management bias in
accounting estimates. Audit procedures performed by the
engagement team included:
• discussions with the AIFM and the Audit & Risk
Committee, including consideration of known or
suspected instances of non-compliance with laws and
regulation and fraud;
• reviewing relevant meeting minutes, including those of
the Audit & Risk Committee;
• assessment of the Company’s compliance with the
requirements of section 1158 of the Corporation Tax Act
2010, including recalculation of numerical aspects of
the eligibility conditions;
• challenging assumptions and judgements made by
management in their significant accounting estimates,
in particular in relation to the valuation of unquoted
investments (see related key audit matter above);
• identifying and testing journal entries, in particular
any material or revenue-impacting manual journal
entries posted as part of the Annual Report preparation
process; and
• designing audit procedures to incorporate
unpredictability around the nature, timing or extent of
our testing.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting
a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
Our audit testing might include testing complete
populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically
involves selecting a limited number of items for testing,
rather than testing complete populations. We will often
seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the
population from which the sample is selected.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report
is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
• we have not obtained all the information and
explanations we require for our audit; or
• adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• certain disclosures of Directors’ remuneration specified
by law are not made; or
• the financial statements and the part of the Directors’
Remuneration Report to be audited are not in
agreement with the accounting records and returns.
We have no exceptions to report arising from this
responsibility.
Appointment
Following the recommendation of the Audit & Risk
Committee, we were appointed by the members on 14 July
2014 to audit the financial statements for the year ended 31
March 2015 and subsequent financial periods. The period
of total uninterrupted engagement is 10 years, covering the
years ended 31 March 2015 to 31 March 2024.
Allan McGrath (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
6 June 2024
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
2024
2023
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains on investments
9
– 213,794 213,794 – 10,388 10,388
Exchange losses on currency
balances
– (5,492) (5,492) – (18,302) (18,302)
Income from investments 2
21,398 – 21,398 23,945 – 23,945
AIFM, portfolio management and
performance fees
3 (813) (15,454) (16,267) (877) (16,657) (17,534)
Other expenses
4
(1,294) – (1,294) (1,142) (22) (1,164)
Net return/(loss) before finance
charges and taxation
19,291 192,848 212,139 21,926 (24,593) (2,667)
Finance costs
5
(406) (7,718) (8,124) (193) (3,658) (3,851)
Net return/(loss) before taxation
18,885 185,130 204,015 21,733 (28,251) (6,518)
Taxation
6
(2,853) – (2,853) (2,021) (248) (2,269)
Net return/(loss) after taxation
16,032 185,130 201,162 19,712 (28,499) (8,787)
Return/(loss) per share*
7
2.7p 31.7p 34.4p 3.0p (4.4)p (1.4)p
* Comparative period restated for the sub-division of each ordinary share into 10 new ordinary shares during the year.
The “Total” column of this statement is the Income Statement of the Company. The “Revenue” and “Capital” columns are supplementary to
this and are prepared under guidance published by The Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The Company has no recognised gains and losses other than those shown above and therefore no separate Statement of Total
Comprehensive Income has been presented.
The accompanying notes are an integral part of these statements.
Income Statement
FOR THE YEAR ENDED 31 MARCH 2024
78
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Share
capital
£’000
Capital
redemption
reserve
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
At 31 March 2023
16,265 8,341 841,599 1,261,025 23,491 2,150,721
Net return after taxation
– – – 185,130 16,032 201,162
Final dividend paid in respect of year ended
31 March 2023
– – – – (14,709) (14,709)
Interim dividend paid in respect of year
ended 31 March 2024
– – – – (3,998) (3,998)
Shares purchased for treasury
– – – (252,759) – (252,759)
Shares cancelled from treasury
(1,223) 1,223 – – – –
At 31 March 2024
15,042 9,564 841,599 1,193,396 20,816 2,080,417
FOR THE YEAR ENDED 31 MARCH 2023
Share
capital
£’000
Capital
redemption
reserve
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
At 1 April 2022
16,385 8,221 841,599 1,381,038 20,990 2,268,233
Net (loss)/return after taxation
– – – (28,499) 19,712 (8,787)
Final dividend paid in respect of year ended
31 March 2022
– – – – (12,721) (12,721)
Interim dividend paid in respect of year ended
31 March 2023
– – – – (4,490) (4,490)
Shares purchased for treasury
– – – (91,514) – (91,514)
Shares cancelled from treasury
(120) 120 – – – –
At 31 March 2023
16,265 8,341 841,599 1,261,025 23,491 2,150,721
Statement of Changes in Equity
For the year ended 31 March 2024
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
Notes
2024
£’000
2023
£’000
Fixed assets
Investments 9
2,108,235 2,186,417
Derivative – OTC swaps
9 & 10
944 209
2,109,179 2,186,626
Current assets
Debtors
11 10,232 4,376
Cash
73,797 58,925
84,029 63,301
Current liabilities
Creditors: amounts falling due within one year
12
(100,373) (72,105)
Derivative – OTC swaps
9 & 10
(12,418) (27,101)
(112,791) (99,206)
Net current liabilities
(28,762) (35,905)
Total net assets
2,080,417 2,150,721
Capital and reserves
Share capital
13
15,042 16,265
Capital redemption reserve
9,564 8,341
Share premium account
841,599 841,599
Capital reserve
17
1,193,396 1,261,025
Revenue reserve
20,816 23,491
Total shareholders' funds
2,080,417 2,150,721
Net asset value per share*
14
381.1p 343.5p
* Comparative period restated for the sub-division of each ordinary share into 10 new ordinary shares during the year.
The financial statements on pages 77 to 97 were approved by the Board of Directors and authorised for issue on 6 June 2024 and were
signed on its behalf by:
Doug McCutcheon
Chair
The accompanying notes are an integral part of this statement.
Worldwide Healthcare Trust PLC – Company Registration Number 3023689 (Registered in England)
Statement of Financial Position
As at 31 March 2024
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Notes
2024
£’000
2023
£’000
Net cash inflow from operating activities
18
2,262 5,394
Purchases of investments and derivatives
(975,783) (1,189,133)
Sales of investments and derivatives
1,260,461 1,404,617
Realised loss on foreign exchange transactions
(5,535) (18,240)
Net cash inflow from investing activities
279,143 197,244
Shares repurchased
13
(252,760) (91,514)
Equity dividends paid
(18,707) (17,211)
Interest paid
(8,124) (3,851)
Net cash outflow from financing activities
(279,591) (112,576)
Increase in net cash
1,814 90,062
Cash flows from operating activities include interest received of £3,219,000 (2023: £2,302,000) and dividends received of £17,463,000
(2023:£20,507,000).
RECONCILIATION OF NET CASH FLOW MOVEMENT TO MOVEMENT IN NET CASH/(DEBT)
2024
£’000
2023
£’000
Increase in net cash/debt resulting from cashflows
1,814 90,062
Gains/(Losses) on foreign currency cash and cash equivalents
44 (62)
Movement in net cash/debt in the year
1,858 90,000
Net cash/(debt) at 1 April
2,997 (87,003)
Net cash at 31 March
4,855 2,997
Net cash includes the bank overdraft of £68,942,000 (2023: £55,928,000) (see note 12) and cash as per the balance sheet of £73,797,000
(2023: £58,925,000).
The accompanying notes are an integral part of this statement.
Statement of Cash Flows
For the year ended 31 March 2024
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
Notes to the Financial Statements
1. ACCOUNTING POLICIES
The principal accounting policies, all of which have been applied consistently throughout the year in the preparation of these financial
statements, are set out below:
(A) Basis of preparation
These financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 ‘The Financial Reporting
Standard applicable in the UK and Ireland’ (‘UK GAAP’) and the guidelines set out in the Statement of Recommended Practice (‘SORP’),
published in February 2021, for Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment
Companies (‘AIC’), the historical cost convention, as modified by the valuation of investments and derivatives at fair value. The Board
has considered a detailed assessment of the Company’s ability to meet its liabilities as they fall due, including stress and liquidity tests
which modelled the effects of substantial falls in markets and significant reductions in market liquidity (including further stressing the
current economic conditions) on the Company’s financial position and cash flows. Theresults of the tests showed that the Company
would have sufficient cash, or the ability to liquidate a sufficient proportion of its listed holdings, to meet its liabilities as they fall due.
Based on the information available to the Directors at the time of this report, including the results of the stress tests, the Company’s
cash balances, and the liquidity of the Company’s listed investments, the Directors are satisfied that the Company has adequate
financial resources to continue in operation for at least the next 12 months from the date of approval of these financial statements and
that, accordingly, it is appropriate to adopt the going concern basis in preparing these financial statements.
The Company’s financial statements are presented in sterling, being the functional and presentational currency of the Company.
Allvalues are rounded to the nearest thousand pounds (£’000) except where otherwise indicated.
In addition, investments and derivatives held at fair value are categorised into a fair value hierarchy based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
• Level 1 – Quoted prices in active markets.
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data), either
directly or indirectly.
• Level 3 – Inputs are unobservable (i.e. for which market data is unavailable).
Presentation of the Income Statement
In order to reflect better the activities of an investment trust company and in accordance with the SORP, supplementary information
which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income
Statement. The net revenue return is the measure the Directors believe appropriate in assessing the Company’s compliance with
certain requirements set out in Sections 1158 and 1159 of the Corporation Tax Act 2010.
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
Critical accounting judgements and key sources of estimation uncertainty used in preparing the financial information are continually
evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be
reasonable. The resulting estimates will, by definition, seldom equal the related actual results.
82
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
1. ACCOUNTING POLICIES continued
In the course of preparing the financial statements, the only key source of estimation uncertainty in the process of applying the
Company’s accounting policies, is in relation to the valuation of the unquoted (Level 3) investments. The nature of estimation means
that the actual outcomes could differ from those estimates, possibly significantly. The estimates relate to the investments where there
is no appropriate market price i.e. the private investments. Whilst the board considers the methodologies and assumptions adopted
in the valuation are supportable, reasonable and robust, because of the inherent uncertainty of valuation, those estimated values may
differ significantly from the values that would have been used had a ready market for the investment existed. As at 31 March 2024,
there is no single key assumption used in the valuation of the unquoted investments, or other key source of estimation uncertainty,
that, in the Directors’ opinion has a significant risk of causing a material adjustment to the carrying values of assets and liabilities
within the next financial year.
Unquoted investments are all valued in line with the accounting policy set out below.
(B) Investments
Investments are measured under FRS 102 and are measured initially, and at subsequent reporting dates, at fair value. Investments
are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the
time frame established by the market concerned. Changes in fair value and gains or losses on disposal are included in the Income
Statement as a capital item.
For quoted securities fair value is either bid price or last traded price, depending on the convention of the exchange on which the
investment is listed.
Fair value is the price for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
In estimating the fair value of unquoted investments, the AIFM and Board apply valuation techniques which are appropriate in light of
the nature, facts and circumstances of the investment, and use reasonable current market data and inputs combined with judgement
and assumptions and apply these consistently. The following principles used in determining the valuation of unquoted investments,
are consistent with the International Private Equity and Venture Capital Valuation (“IPEV”) Guidelines. The assumptions and estimates
made in determining the fair value of each unquoted investment are considered at least each six months or sooner if there is a
triggering event. An example of where a valuation would be considered out of the six-month cycle is the success or failure of a drug
under development to meet an anticipated outcome of its trial, announcement of the company undergoing an initial public offering, or
other performance against tangible development milestones.
The primary valuation method applied in the valuation of the unquoted investments is the probability-weighted expected return
method (“PWERM”), which considers on a probability weighted basis the future outcomes for the investment. When using the PWERM
method significant judgements are made in estimating the various inputs into the model and recognising the sensitivity of such
estimates. Examples of the factors where significant judgement is made include, but are not limited to, the probability assigned to
potential future outcomes; discount rates; and, the likely exit scenarios for the investor company, for example, IPO or trade sale.
Where the investment being valued was itself made recently, or there has been a third party transaction in the investment, the price
of the transaction may provide a good indication of fair value. Using the Price of Recent Investment technique is not a default and at
each reporting date the fair value of recent investments is estimated to assess whether changes or events subsequent to the relevant
transaction would imply a material change in the investment’s fair value.
When using the price of a recent transaction in the valuations the Company looks to ‘re-calibrate’ this price at each valuation point by
reviewing progress within the investment, comparing against the initial investment thesis, assessing if there are any significant events
or milestones that would indicate the value of the investment value has changed materially and considering whether an alternative
methodology would be more appropriate.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
83
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
1. ACCOUNTING POLICIES continued
(C) Derivative financial instruments
The Company uses derivative financial instruments (namely put and call options and equity swaps).
All derivative instruments are valued initially, and at subsequent reporting dates, at fair value in the Statement of Financial Position.
The equity swaps are accounted for as Fixed Assets or Current Liabilities.
All gains and losses on over-the-counter (OTC) equity swaps are accounted for as gains or losses on investments. Where there has
been a re-positioning of the swap, gains and losses are accounted for on a realised basis. All such gains and losses have been debited
or credited to the capital column of the Income Statement.
Cash collateral held by counterparties is included within cash, except where there is a right of offset against the overdraft facility.
(D) Investment income
Dividends receivable are recognised on the ex-dividend date. Where no ex-dividend date is quoted, dividends are recognised when the
Company’s right to receive payment is established. Foreign dividends are grossed up at the appropriate rate of withholding tax, with the
withholding tax recognised in the taxation charge.
Income from fixed interest securities is recognised on a time apportionment basis so as to reflect the effective interest rate. Deposit
interest is accounted for on an accruals basis.
(E) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the Income Statement
except as follows:
• expenses which are incidental to the acquisition or disposal of an investment are charged to the capital column of the Income
Statement; and
• expenses are charged to the capital column of the Income Statement where a connection with the maintenance or enhancement
of the value of the investments can be demonstrated. In this respect the portfolio management and AIFM fees have been charged
to the Income Statement in line with the Board’s expected long-term split of returns, in the form of capital gains and income, from
the Company’s portfolio. As a result 5% of the portfolio management and AIFM fees are charged to the revenue column of the
Income Statement and 95% are charged to the capital column of the Income Statement.
Any performance fee is charged in full to the capital column of the Income Statement.
(F) Finance costs
Finance costs are accounted for on an accruals basis. Finance costs are charged to the Income Statement in line with the Board’s
expected long-term split of returns, in the form of capital gains and income, from the Company’s portfolio. As a result 5% of the
finance costs are charged to the revenue column of the Income Statement and 95% are charged to the capital column of the Income
Statement. Finance charges are accounted for on an accruals basis in the Income Statement using the effective interest rate method
and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
84
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
1. ACCOUNTING POLICIES continued
(G) Taxation
The tax effect of different items of expenditure is allocated between capital and revenue using the marginal basis.
Deferred taxation is provided on all timing differences that have originated but not been reversed by the Statement of Financial Position
date other than those differences regarded as permanent. This is subject to deferred tax assets only being recognised when it is
probable that there will be suitable profits from which the reversal of timing differences can be deducted. Any liability to deferred tax is
provided for at the rate of tax enacted or substantially enacted.
(H) Foreign currency
Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily exchange rates.
Assets and liabilities denominated in overseas currencies at the Statement of Financial Position date are translated into sterling at the
exchange rates ruling at that date.
Exchange gains/losses on foreign currency balances
Any gains or losses on the translation of foreign currency balances, including the foreign currency overdraft, whether realised or
unrealised, are taken to the capital or the revenue column of the Income Statement, depending on whether the gain or loss is of a
capital or revenue nature.
(I) Capital redemption reserve
This reserve arose when ordinary shares were redeemed by the Company and subsequently cancelled. When ordinary shares are
redeemed by the Company and subsequently cancelled, an amount equal to the par value of the ordinary share capital is transferred
from the ordinary share capital to the capital redemption reserve.
(J) Capital reserve
The following are transferred to this reserve:
• gains and losses on the disposal of investments;
• exchange differences of a capital nature, including the effects of changes in exchange rates on foreign currency borrowings;
• expenses, together with the related taxation effect, in accordance with the above policies; and
• changes in the fair value of investments and derivatives.
This reserve can be used to distribute realised capital profits by way of dividend or share buybacks. Any gains in the fair value of
investments that are not readily convertible to cash are treated as unrealised gains in the capital reserve. Distributions are only payable
out of the capital reserve if capital reserves are greater than the proposed distribution and positive on the date of distribution.
(K) Revenue reserve
The revenue reserve is distributable by way of dividend. Dividends are only payable out of the revenue reserve if revenue reserves are
greater than the proposed dividend and positive on the date of distribution.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
85
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
1. ACCOUNTING POLICIES continued
(L) Dividend payments
Dividends paid by the Company on its shares are recognised in the financial statements in the year in which they become payable and
are shown in the Statement of Changes in Equity.
(M) Cash and cash equivalents
Cash comprises cash at bank and cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash and are subject to an insignificant risk of changes in value.
Bank overdrafts are considered as a component of cash and cash equivalents as they are repayable on demand and form an integral
part of the Company’s cash management.
2. INCOME FROM INVESTMENTS
2024
£’000
2023
£’000
Income from investments
Overseas dividends
14,699 18,431
Fixed interest income
– 184
UK dividends
3,480 3,212
18,179 21,827
Other income
Derivatives
27 79
Deposit interest
3,192 2,039
Total income from investments
21,398 23,945
Total income comprises:
Dividends
18,179 21,643
Interest
3,219 2,302
21,398 23,945
3. AIFM, PORTFOLIO MANAGEMENT AND PERFORMANCE FEES
2024
2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
AIFM fee
141 2,689 2,830 151 2,862 3,013
Portfolio management fee
672 12,765 13,437 726 13,795 14,521
813 15,454 16,267 877 16,657 17,534
See page 47 for further information on the performance fee.
Further details on the above fees are set out in the Strategic Report on pages 32 and 33 and in the Report of the Directors on
page 47.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
86
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
4. OTHER EXPENSES
2024
£’000
2023
£’000
Directors’ remuneration
211 212
Employer’s NIC on Directors’ remuneration
17 18
Auditors’ remuneration for the audit of the Company’s financial statements
56 54
Depositary and custody fees
227 208
Listing fees
101 85
Registrar fees
58 45
Legal and professional costs
267 181
Broker fees
– (15)
Other costs
357 354
1,294 1,142
Professional fees (Capital)^
– 22
1,294 1,164
Details of the amounts paid to Directors are included in the Directors’ Remuneration Report on page 66.
^ Professional fees in respect of acquisition of unquoted investments. These fees do not form part of the ongoing charge ratio.
5. FINANCE COSTS
2024
2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Finance costs
406 7,718 8,124 193 3,658 3,851
6. TAXATION
(A) Analysis of charge in year
2024
2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Corporation tax at 25% (2023: 19%)
– – – – – –
Overseas taxation
2,853 – 2,853 2,021 248 2,269
2,853 – 2,853 2,021 248 2,269
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
87
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
6. TAXATION continued
(B) Factors affecting the tax charge for the year
Approved investment trusts are exempt from tax on capital gains made within the Company.
The tax charged for the year is lower (2023: higher) than the standard rate of corporation tax of 25% (2023: 19%).
Thedifference is explained below.
2024
2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Net return/(loss) before taxation
18,885 185,130 204,015 21,733 (28,251) (6,518)
Corporation tax at 25% (2023: 19%)
4,721 46,283 51,004 4,129 (5,415) (1,286)
Non-taxable (gains)/losses on investments
– (52,076) (52,076) – 1,551 1,551
Overseas withholding taxation
2,853 – 2,853 2,021 – 2,021
Overseas capital gains tax
– – – – 248 248
Non taxable dividends
(4,545) – (4,545) (4,112) – (4,112)
Unutilised management expenses
(176) 5,056 4,880 (17) 3,864 3,847
Corporate interest restriction
- 737 737 - - -
Total tax charge
2,853 – 2,853 2,021 248 2,269
(C) Provision for deferred tax
No provision for deferred taxation has been made in the current or prior year. The Company has not provided for deferred tax
on capital profits and losses arising on the revaluation or disposal of investments, as it is exempt from tax on these items
because of its status as an investment trust company.
The Company has not recognised a deferred tax asset of £54,349,000 (25% tax rate) (2023: £49,985,000 (25% tax rate)) as
a result of excess management expenses and overdraft expenses. It is not anticipated that these excess expenses will be
utilised in the foreseeable future.
7. RETURN/(LOSS) PER SHARE
2024
£’000
2023
£’000
The return/(loss) per share is based on the following figures:
Revenue return
16,032 19,712
Capital return/(loss)
185,130 (28,499)
201,162 (8,787)
Weighted average number of ordinary shares in issue during the year
585,308,530 644,744,220
Revenue return per ordinary share
2.7p 3.0p
Capital return/(loss) per ordinary share
31.7p (4.4)p
34.4p (1.4)p
2023 return per share figures restated for the sub-division of each ordinary share into 10 new ordinary shares during the year.
The calculation of the total, revenue and capital (loss)/return per ordinary share is carried out in accordance with IAS 33,
“Earnings per Share”, in accordance with the requirements of FRS 102.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
88
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
8. DIVIDENDS
Under UK Company Law, final dividends are not recognised until they are approved by shareholders and interim dividends are
not recognised until they are paid. They are also debited directly from reserves. Amounts recognised as distributable in these
financial statements were as follows:
2024
£’000
2023
£’000
Final dividend in respect of the year ended 31 March 2022
– 12,721
Interim dividend in respect of the year ended 31 March 2023
– 4,490
Final dividend in respect of the year ended 31 March 2023
14,709 –
Interim dividend in respect of the year ended 31 March 2024
3,998 –
18,707 17,211
In respect of the year ended 31 March 2024, an interim dividend of 0.7p per share was paid on 11 January 2024. A final
dividend of 2.1p will be payable, subject to shareholder approval, on 26 July 2024, the associated ex-dividend date
will be 13
June 2024. The total dividends payable in respect of the year ended 31 March 2024 amount to 2.8p per share
(2023:31.0pper share, prior to 10 for 1 share split). The aggregate cost of the final dividend, based on the number of shares
in issue (excluding shares held in treasury) at 5 June 2024, will be £11,241,000. In accordance with FRS 102 dividends
will be reflected in the financial statements for the year in which they become payable. Total dividends in respect of the
financial year, which is the basis on which the requirements of s1158 of the Corporation Tax Act 2010 are considered, are set
outbelow.
2024
£’000
2023
£’000
Revenue available for distribution by way of dividend for the year
16,032 19,712
Interim dividend in respect of the year ended 31 March 2024
(3,998) –
Final dividend in respect of the year ended 31 March 2024*
(11,241) –
Interim dividend in respect of the year ended 31 March 2023
– (4,490)
Final dividend in respect of the year ended 31 March 2023
– (14,717)
Net retained revenue
793 505
* based on 535,264,463 shares in issue (excluding shares held in treasury) as at 5 June 2024.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
89
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
9. INVESTMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS
Quoted
Investments
£’000
Unquoted
Investments
£’000
Total
£’000
Derivative
Financial
Instruments -
Net
£’000
Total
Investments
£’000
Cost at 1 April 2023
1,829,033 121,703 1,950,736 – 1,950,736
Investment holdings gains/(losses) at 1 April 2023
212,214 23,467 235,681 (26,892) 208,789
Valuation at 1 April 2023
2,041,247 145,170 2,186,417 (26,892) 2,159,525
Movement in the year:
 Purchases at cost
987,042 3,278 990,320 – 990,320
 Sales - proceeds
(1,244,565) – (1,244,565) (22,313) (1,266,878)
Net movement in investment holding gains/(losses)
191,384 (15,321) 176,063 37,731 213,794
Valuation at 31 March 2024
1,975,108 133,127 2,108,235 (11,474) 2,096,761
Cost at 31 March 2024
1,549,252 124,985 1,674,237 – 1,674,237
Investment holding gains/(losses) at 31 March 2024
425,856 8,142 433,998 (11,474) 422,524
Valuation at 31 March 2024
1,975,108 133,127 2,108,235 (11,474) 2,096,761
* See Note 16.
The Company received £1,266,878,000 (2023: £1,393,875,000) from investments and derivatives sold in the year. The book
cost of these was £1,266,824,000 (2023: £1,307,159,000). These investments and derivatives have been revalued over time
and until they were sold any unrealised gains/losses were included in the fair value of the investments.
2024
£’000
2023
£’000
Net movement in investment holding gains in the year
176,063 33,331
Net movement in derivative holding gains/(losses) in the year
37,731 (22,835)
Effective interest rate amortisation
– (108)
Gains on investments
213,794 10,388
Purchase transaction costs were £992,000 (2023: £1,660,000). Sales transaction costs were £1,299,000 (2023: £1,266,000).
These comprise mainly commission and stamp duty.
10. DERIVATIVES
2024
£’000
2023
£’000
Fair value of OTC equity swaps (asset)
944 209
Fair value of OTC equity swaps (liability)
(12,418) (27,101)
(11,474) (26,892)
See note 9 above for movements during the year.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
90
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
11. DEBTORS
2024
£’000
2023
£’000
Amounts due from brokers
6,508 88
Withholding taxation recoverable
1,665 2,882
Prepayments and accrued income
2,059 1,406
10,232 4,376
12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024
£’000
2023
£’000
Amounts due to brokers
23,973 9,432
Overdraft drawn*
68,942 55,928
Other creditors and accruals
7,458 6,745
100,373 72,105
* The Company’s borrowing requirements are met through the utilisation of an overdraft facility provided by J.P. Morgan Securities LLC. The overdraft is drawn down
in U.S. dollars. Interest on the drawn overdraft is charged at the United States Overnight Bank Funding Rate plus 45 basis points.
As described on page 95, J.P. Morgan Securities LLC may take investments up to 140% of the value of the overdrawn balance as collateral and has been granted a
first priority security interest or lien over the Company’s assets.
13. SHARE CAPITAL
2024
Number
2023
Number
As at 1 April
62,620,763 65,457,246
Purchase of shares into treasury pre-share split
(2,507,439) (2,836,483)
Issue of shares following 10 for 1 share split
541,019,916 –
Purchase of shares into treasury post-share split (55,190,908) –
As at year end:
In circulation 545,942,332 62,620,763
In Treasury 55,722,868 2,438,015
Listed 601,665,200 65,058,778
Nominal Value of 2.5p (2023: 25p) ordinary shares (£000) 15,042 16,265
During the year, the Company bought back ordinary shares at a cost of £252,759,000 (Year ended 31 March 2023:
£91,514,000).
Following the AGM held in July 2023 4,892,258 shares were cancelled from treasury. At the AGM shareholders approved a
resolution for a ten for one share split such that each shareholder would receive ten shares with a nominal value of 2.5 pence
each for every one share held. 541,498,680 additional shares (541,019,916 to shareholders and 478,764 in relation to shares
held in treasury) were issued on 27 July 2023 following this approval.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
91
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
14. NET ASSET VALUE PER SHARE
2024
2023
Net asset value per share
381.1p 343.5p
The net asset value per share is based on the assets attributable to equity shareholders of £2,080,417,000 (2023:
£2,150,721,000) and on the number of shares in issue at the year end (excluding those shares held in treasury) of 545,942,332
(2023: 62,620,763) in issue. Comparative NAV per share adjusted to reflect ten for one share issue during the year).
15. RELATED PARTIES AND TRANSACTIONS WITH THE AIFM
The following are considered to be related parties:
• Frostrow Capital LLP (the Company’s AIFM, a related party under the Listing Rules only)
• OrbiMed Capital LLC (the Company’s Portfolio Manager)
• The Directors of the Company
Sven Borho is a Managing Partner at OrbiMed and has waived his Director’s fee of £34,244 (2023: £33,573). Details of
fees paid to OrbiMed by the Company can be found in note 3 on page 85. All material related party transactions have been
disclosed in notes 3 and 4 on pages 85 and 86.
Details of the remuneration of all Directors can be found on page 66. Details of the Directors’ interests in the capital of the
Company can also be found on page 66.
Three current and two former partners at OrbiMed have a minority financial interest totalling 19.4% in Frostrow, the
Company’s AIFM. Details of the fees paid to Frostrow by the Company can be found in note 3 onpage 85.
16. FINANCIAL INSTRUMENTS
Risk management policies and procedures
The Company’s financial instruments comprise securities and other investments, derivative instruments, cash balances,
overdrafts and debtors and creditors that arise directly from its operations.
As an investment trust, the Company invests in equities and other investments for the long term so as to secure its
investment objective. In pursuing its investment objective, the Company is exposed to a variety of risks that could result in a
reduction in the Company’s net assets.
The main risks that the Company faces arising from its financial instruments are:
(i) market risk (including foreign currency risk, interest rate risk and other price risk)
(ii) liquidity risk
(iii) credit risk
These risks, with the exception of liquidity risk, and the Directors’ approach to the management of them have not changed
from the previous accounting year. The AIFM, in close co-operation with the Board and the Portfolio Manager, co-ordinates
the Company’s risk management.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
92
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
16. FINANCIAL INSTRUMENTS continued
Use of derivatives
Equity swaps are used within the Company’s portfolio.
OTC equity swaps
The Company uses OTC equity swap positions to gain access to the Indian and Chinese markets when it is more cost
effective to gain access via swaps or to gain exposure to thematic baskets of stocks.
Offsetting disclosure
Swap trades and OTC derivatives are traded under ISDA† Master Agreements. The Company currently has such agreements
in place with Goldman Sachs and JP Morgan.
These agreements create a right of set-off that becomes enforceable only following a specified event of default, or in other
circumstances not expected to arise in the normal course of business. As the right of set-off is not unconditional, for financial
reporting purposes, the Company does not offset derivative assets and derivative liabilities.
†International Swap Dealers Association Inc.
(i) Other price risk
In pursuance of the Company’s Investment Objective the Company’s portfolio, including its derivatives, is exposed to the risk
of fluctuations in market prices and foreign exchange rates.
The Board manage these risks through the use of limits and guidelines, monthly compliance reports from Frostrow and
reports from Frostrow and OrbiMed presented at each Board meeting.
Other price risk exposure
The Company’s gross exposure to other price risk is represented by the fair value of the investments and the underlying
exposure through the derivative investments held at the year end as shown in the table below.
2024
2023
Assets
£’000
Liabilities
£’000
Notional*
exposure
£’000
Assets
£’000
Liabilities
£’000
Notional*
exposure
£’000
Investments
2,108,235 – 2,108,235 2,186,417 – 2,186,417
OTC equity swaps
944 (12,418) 198,082 209 (27,101) 190,704
2,109,179 (12,418) 2,306,318 2,186,626 (27,101) 2,377,121
* The notional exposure is calculated in accordance with the AIFMD requirements for calculating exposure via derivatives. See glossary beginning on page 99.
Other price risk sensitivity
If market prices of all of the Company’s financial instruments including the derivatives at the Statement of Financial Position
date had been 25% higher or lower (2023: 25% higher or lower) while all other variables remained constant: the revenue return
would have decreased/increased by £0.2 million (2023: £0.2 million); the capital return would have increased/decreased
by £572.5million (2023: £596.6 million); and, the return on equity would have increased/decreased by £572.3million
(2023:£594.6million). The calculations are based on the portfolio as at the respective Statement of Financial Position dates
and are not representative of the year as a whole.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
93
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
16. FINANCIAL INSTRUMENTS continued
(ii) Foreign currency risk
A significant proportion of the Company’s portfolio and derivative positions are denominated in currencies other than sterling
(the Company’s functional currency, and the currency in which it reports its results). As a result, movements in exchange
rates can significantly affect the sterling value of those items.
Foreign currency exposure
The fair values of the Company’s monetary assets and liabilities that are denominated in foreign currencies are shown below.
2024
2023
Current
assets
£’000
Current
liabilities
£’000
Investments
£’000
Current
assets
£’000
Current
liabilities
£’000
Investments
£’000
U.S. dollar
140,646 (166,711) 1,579,696 115,823 (124,286) 1,488,321
Swiss franc
11,102 – 11,652 2,466 – 84,999
Japanese yen
1,041 – 130,007 793 – 135,398
Hong Kong dollar
– – 62,058 – – 109,170
Other
993 – 132,435 194 – 201,798
153,782 (166,711) 1,915,848 119,276 (124,286) 2,019,686
Foreign currency sensitivity
The following table details the sensitivity of the Company’s net return for the year and shareholders’ funds to a 10% increase
and decrease in sterling against the relevant currency (2023: 10% increase and decrease).
These percentages have been determined based on market volatility in exchange rates over the previous 12 months. The
sensitivity analysis is based on the Company’s significant foreign currency exposures at each Statement of Financial Position
date.
2024
2023
USD
£’000
YEN
£’000
CHF
£’000
HKD
£’000
USD
£’000
YEN
£’000
CHF
£’000
HKD
£’000
Sterling depreciates
195,910 14,561 2,528 6,895 188,606 15,132 9,718 12,130
Sterling appreciates
(160,290) (11,913) (2,069) (5,642) (154,314) (12,381) (7,951) (9,925)
(iii) Interest rate risk
Interest rate changes may affect:
– the interest payable on the Company’s variable rate borrowings;
– the level of income receivable from floating and fixed rate securities and cash at bank and on deposit;
– the fair value of investments in fixed interest securities.
Interest rate exposure
The Company’s main exposure to interest rate risks is through its overdraft facility with J.P. Morgan Securities LLC, which is
repayable on demand, and its holding in fixed interest securities. The exposure of financial assets and liabilities to fixed and
floating interest rates, is shown below.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
94
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
16. FINANCIAL INSTRUMENTS continued
The interest rate exposure is shown in the table below.
2024
2023
Floating
rate
£’000
Floating
rate
£’000
Cash
78,721 100,366
Overdraft facility
(12,412) (97,369)
Financed swap positions
(209,556) (217,596)
(143,247) (214,599)
All interest rate exposures are held in U.S. dollars.
Cash of £78.7 million (2023: £100.4 million) was held as collateral against the financed swap positions, of which £4.9million
(2023: £41.4 million) was offset against the overdraft position.
Interest rate sensitivity
If interest rates had been 1% higher or lower and all other variables were held constant, the Company’s net return for the year
ended 31 March 2024 and the net assets would increase/decrease by £1.4 million (2023: increase/decrease by £2.1 million).
(iv) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Management of the risk
Liquidity risk is not considered significant as the majority of the Company’s assets are investments in quoted securities that
are readily realisable within one week, in normal market conditions. There may be circumstances where market liquidity is
lower than normal. Stress tests have been performed to understand how long the portfolio would take to realise in such
situations. The Board is comfortable that in such a situation the Company would be able to meet its liabilities as they fall due.
Liquidity exposure and maturity
Contractual maturities of the financial liability exposures as at 31 March 2024, based on the earliest date on which payment
can be required, are as follows:
2024
2023
3 to 12
months
£’000
3 months
or less
£’000
3 to 12
months
£’000
3 months
or less
£’000
Overdraft facility
– 12,412 – 97,369
Amounts due to brokers and accruals
– 31,461 – 16,177
OTC equity swaps
12,418 – 27,101 –
12,418 43,873 27,101 113,546
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
95
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
16. FINANCIAL INSTRUMENTS continued
£4.9 million of cash held as collateral is offset against the overdraft facility in the Statement of Financial Position, as set out
in Note 16(iii) above.
(v) Credit risk
Credit risk is the risk of failure of a counterparty to discharge its obligations resulting in the Company suffering a financial loss.
The carrying amounts of financial assets best represent the maximum credit risk at the Statement of Financial Position date.
The Company’s quoted securities are held on its behalf by J.P. Morgan Securities LLC acting as the Company’s Custodian and
Prime Broker.
As noted on page 35, certain of the Company’s assets can be held by J.P. Morgan Securities LLC as collateral against
the overdraft provided by them to the Company. As at 31 March 2024 such assets held by J.P. Morgan Securities LLC
are available for rehypothecation (see Glossary on page 101). As at 31 March 2024, assets with a total market value of
£104.1million (2023: £134.7 million) were available to J.P. Morgan Securities LLC to be used as collateral against the
overdraft facility which equates to 140% of the overdrawn position (calculated on a settled basis).
CREDIT RISK EXPOSURE
2024
£’000
2023
£’000
Derivative – OTC equity swaps
944 209
Current assets:
Other receivables (amounts due from brokers, dividends and interest receivable)
10,232 4,376
Cash
73,797 58,925
(vi) Fair value of financial assets and financial liabilities
Financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value (investments
and derivatives) or the Statement of Financial Position amount is a reasonable approximation of fair value (due from brokers,
dividends and interest receivable, due to brokers, accrual, cash at bank, and the overdraft).
(vii) Hierarchy of investments
The Company has classified its financial assets designated at fair value through profit or loss and the fair value of derivative
financial instruments using a fair value hierarchy that reflects the significance of the inputs used in making the fair value
measurements. The hierarchy has the following levels:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 – inputs other than quoted prices included with Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
96
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
16. FINANCIAL INSTRUMENTS continued
As of 31 March 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments held at fair value through profit or loss
1,975,108 – 133, 127 2,108,235
Derivatives: OTC swaps (assets)
– 944 – 944
Derivatives: OTC swaps (liabilities)
– (12,418) – (12,418)
Financial instruments measured at fair value
1,975,108 (11,474) 133,127 2,096,761
As at 31 March 2024 & 2023, ten equity investments and a deferred consideration investment have been classified as level 3.
All level 3 positions have been valued in accordance with the accounting policy set out in Note 1(b).
During 2023 one unquoted investment was transferred to Level 1 following its initial public offering.
As of 31 March 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments held at fair value through profit or loss
2,041,247 – 145,170 2,186,417
Derivatives: OTC swaps (assets)
– 209 – 209
Derivatives: OTC swaps (liabilities)
– (27,101) – (27,101)
Financial instruments measured at fair value
2,041,247 (26,892) 145,170 2,159,525
(viii) Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern and to
maximise the income and capital return to its equity shareholders through an appropriate level of gearing or leverage.
The Board’s policy on gearing and leverage is set out on page 9.
As at 31 March 2024 the Company had a net leverage percentage of 10.8% (2023: 10.5%).
The capital structure of the Company consists of the equity share capital, retained earnings and other reserves as shown in
the Statement of Financial Position on page 79.
The Board, with the assistance of the AIFM and the Portfolio Manager, monitors and reviews the broad structure of the
Company’s capital on an ongoing basis. This includes a review of:
– the planned level of gearing, which takes into account the Portfolio Manager’s view of the market;
– the need to buy back equity shares, either for cancellation or to hold in treasury, in light of any share price discount to net
asset value per share in accordance with the Company’s share buy-back policy;
– the need for new issues of equity shares, including issues from treasury; and
– the extent to which revenue in excess of that which is required to be distributed should be retained.
The Company’s objectives, policies and processes for managing capital are unchanged from the preceding accounting year.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
97
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FINANCIAL STATEMENTS
STRATEGIC REPORT GOVERNANCE FURTHER INFORMATION
17. CAPITAL RESERVE
Capital Reserves
Other
£’000
Investment
Holding
Gains*
£’000
Total
£’000
At 1 April 2023
888,953 372,072 1,261,025
Net gains/(losses) on investments
60 213,734 213,794
Expenses and taxation charged to capital
(23,172) – (23,172)
Exchange loss on currency balances
(5,492) – (5,492)
Shares repurchased for Treasury
(252,759) – (252,759)
At 31 March 2024
607,590 585,806 1,193,396
* Investment holding gains relate to the revaluation of investments and derivatives held at the reporting date. (See note 9 beginning on page 89 for further details).
Under the Company’s Articles of Association, sums within “capital reserves – other” are also available for distribution.
18. RECONCILIATION OF OPERATING RETURN/(LOSS) TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
2024
£’000
2023
£’000
Gain/(loss) before finance charges and taxation
212,139 (2,667)
Add: capital (gain)/loss before finance charges and taxation
(192,848) 24,593
Revenue return before finance charges and taxation
19,291 21,926
Expenses charged to capital
(15,454) (16,679)
(Increase)/decrease in other debtors
(653) 150
Increase in other creditors
714 2,669
Net taxation suffered on investment income
(1,636) (2,564)
Amortisation
– (108)
Net cash inflow from operating activities
2,262 5,394
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
98
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
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Shareholder Information
FINANCIAL CALENDAR
31 March Financial Year End
June Final Results Announced
July Annual General Meeting
30 September Half Year End
November Half Year Results Announced
January/July Dividends Payable
Annual general meeting
The Annual General Meeting of Worldwide Healthcare Trust
PLC will be held at Saddlers’ Hall, 40 Gutter Lane, London
EC2V 6BR on Wednesday, 10 July 2024 from 1.00 p.m.
Please refer to the Statement from the Chair on pages 4 to 6
for details of this year’s arrangements.
Dividends
The Company pays an interim and a final dividend in
January and July each year. Shareholders who wish to
have dividends paid directly into a bank account, rather
than by cheque to their registered address, can complete a
mandate form for the purpose. Mandates may be obtained
from the Company’s Registrars, Link Group, on request.
Seepage 112 for their contact details.
Share prices
The Company’s shares are listed on the London Stock
Exchange under ‘Investment Companies’. The price is given
daily in the Financial Times and other newspapers.
Change of address
Communications with shareholders are mailed to the
address held on the share register. In the event of a change
of address or other amendment this should be notified to
the Company’s Registrars, Link Group, under the signature
of the registered holder.
Daily net asset value
The daily net asset value of the Company’s shares can be
obtained on the Company’s website at www.worldwidewh.com
and is published daily via the London Stock Exchange.
Profile of the company’s ownership
% of Ordinary Shares held at 31 March.
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99
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FURTHER INFORMATION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Glossary of Terms and Alternative
Performance Measures (“APMS”)
ALTERNATIVE INVESTMENT FUND MANAGERS
DIRECTIVE (“AIFMD”)
Agreed by the European Parliament and the Council of the
European Union and transported into UK legislation, the
AIFMD classifies certain investment vehicles, including
investment companies, as Alternative Investment Funds
(AIFs) and requires them to appoint an Alternative
Investment Fund Manager (AIFM) and a depositary to
manage and oversee the operations of the investment
vehicle. The Board of the Company retains responsibility
for strategy, operations and compliance and the Directors
retain a fiduciary duty to shareholders.
Alternative performance measure (“APM”)
An APM is a numerical measure of the Company’s current,
historical or future financial performance, financial position
or cash flows, other than a financial measure defined or
specified in the applicable financial framework. In selecting
these Alternative Performance Measures, the Directors
considered the key objectives and expectations of typical
investors in an investment trust such as the Company.
Discount or premium
A description of the difference between the share price and
the net asset value per share. The size of the discount or
premium is calculated by subtracting the share price from
the net asset value per share and is usually expressed as a
percentage (%) of the net asset value per share. If the share
price is higher than the net asset value per share the result
is a premium. If the share price is lower than the net asset
value per share, the shares are trading at a discount.
Equity swaps
An equity swap is an agreement where one party
(counterparty) transfers the total return of an underlying
equity position to the other party (swap holder) in exchange
for a payment of the principal, and interest for financed
swaps, at a set date. Total return includes dividend income
and gains or losses from market movements. The exposure
of the holder is the market value of the underlying equity
position.
The Company currently only uses financed equity swaps,
where payment is made on maturity. Financed swaps
increase exposure by the value of the underlying equity
position, with no initial outlay and no increase in the
investment portfolio’s value – there is therefore embedded
leverage within a financed swap due to the deferral of
payment to maturity.
The Company employs swaps for two purposes:
• To gain access to individual stocks in the Indian,
Chinese and other emerging markets, where the
Company is not locally registered to trade or is able to
gain in a more cost efficient manner than holding the
stocks directly; and,
• To gain exposure to thematic baskets of stocks
(aBasket Swap). Basket Swaps are used to build
exposure to themes, or ideas, that the Portfolio
Manager believes the Company will benefit from and
where holding a Basket Swap is more cost effective
and operationally efficient than holding the underlying
stocks or individual swaps.
Gearing
Gearing is calculated as the overdraft drawn, less net
current assets (excluding dividends), divided by Net Assets,
expressed as a percentage. For years prior to 2013, the
calculation was based on borrowings as a percentage of
Net Assets.
* Alternative Performance Measure
100
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES (‘APMS’) CONTINUED
International swaps and derivatives association (“ISDA”)
ISDA has created a standardised contract (the ISDA Master Agreement) which sets out the basic trading terms between the
counterparties to derivative contracts.
Leverage
Leverage is defined in the AIFMD as any method by which the AIFM increases the exposure of an AIF. In addition to the
gearing limit the Company also has to comply with the AIFMD leverage requirements. For these purposes the Board has set
a maximum leverage limit of 140% for both methods. This limit is expressed as a % with 100% representing no leverage or
gearing in the Company. There are two methods of calculating leverage as follows:
The Gross Method is calculated as total exposure divided by Shareholders’ Funds. Total exposure is calculated as net assets,
less cash and cash equivalents, adding back cash borrowing plus derivatives converted into the equivalent position in their
underlying assets.
The Commitment Method is calculated as total exposure divided by Shareholders Funds. In this instance total exposure is
calculated as net assets, less cash and cash equivalents, adding back cash borrowing plus derivatives converted into the
equivalent position in their underlying assets, adjusted for netting and hedging arrangements.
See the definition of Equity Swaps for more details on how exposure through these instruments is calculated.
2024
£’000
2023
£’000
Fair Value Exposure* Fair Value Exposure*
Investments 2,108,235 2,108,235 2,186,417 2,186,417
OTC equity swaps (11,474) 198,082 (26,092) 190,704
2,096,761 2,306,317 2,159,525 2,377,121
Shareholders’ funds 2,081,180 2,150,721
Leverage % 10.8% 10.5%
* Calculated in accordance with AIFMD requirements using the Commitment Method
MSCI World Health Care Index (the Company’s Benchmark)
The MSCI World Health Care Index is designed to capture the large and mid capitalisation segments across 23 developed
markets countries: All securities in the index are classified as healthcare as per the Global Industry Classification Standard
(GICS). Developed Markets countries include: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland
the UK and the U.S. The net total return of the Index is used which assumes the reinvestment of any dividends paid by its
constituents after the deduction of relevant withholding taxes. The performance of the Index is calculated in U.S.$ terms.
Because the Company’s reporting currency is £ the prevailing U.S.$/£ exchange rate is applied to obtain a £ based return.
NAV per share (pence)
The value of the Company’s assets, principally investments made in other companies and cash being held, minus any
liabilities. The NAV is also described as ‘shareholders’ funds’ per share. The NAV is often expressed in pence per share after
being divided by the number of shares which have been issued. The NAV per share is unlikely to be the same as the share
price which is the price at which the Company’s shares can be bought or sold by an investor. The share price is determined
by the relationship between the demand and supply of the shares.
* Alternative Performance Measure
101
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FURTHER INFORMATION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES (‘APMS’) CONTINUED
Net asset value (NAV) per share total return*
The theoretical total return on shareholders’ funds per share, reflecting the change in NAV assuming that dividends paid
to shareholders were reinvested at NAV at the time the shares were quoted ex-dividend. A way of measuring investment
management performance of investment trusts which is not affected by movements in discounts/premiums.
NAV Total Return
2024
p
2023
p
Opening NAV 343.5 346.5
Increase/(decrease) in NAV 37.6 (3.1)
Closing NAV 381.1 343.5
% increase/(decrease) in NAV 10.9% (0.9%)
Impact of reinvested dividends 1.1% 0.8%
NAV Total Return 12.0% (0.1%)
Ongoing Charges*
Ongoing charges are calculated by taking the Company’s annualised ongoing charges, excluding finance costs, taxation,
performance fees and exceptional items, and expressing them as a percentage of the average daily net asset value of the
Company over the year.
2024
£’000
2023
£’000
AIFM & Portfolio Management fees (Note 3) 16,267 17,534
Other Expenses – Revenue (Note 4) 1,294 1,142
Total Ongoing Charges 17,561 18,676
Performance fees paid/crystallised – –
Total 17,561 18,676
Average net assets 2,036,653 2,247,296
Ongoing Charges 0.9% 0.8%
Ongoing Charges (including performance fees paid or crystallised during the year) 0.9% 0.8%
Rehypothecation
Rehypothecation is the practice by banks and brokers of using, for their own purposes, assets that have been posted as
collateral by clients.
Share Price Total Return*
Return to the investor on mid-market prices assuming that all dividends paid were reinvested.
Share Price Total Return
2024
p
2023
p
Opening share price 311.5 327.5
Increase in share price 23.5 16.0
Closing share price 335.0 311.5
% increase in share price 7.5% (4.9%)
Impact of reinvested dividends 1.1% 0.8%
Share Price Total Return 8.6% (4.1%)
* Alternative Performance Measure
102
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
RETAIL INVESTORS ADVISED BY IFAS
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers
(‘IFAs’) inthe UK to ordinary retail investors in accordance with the Financial Conduct Authority (‘FCA’) rules in relationship
to non-mainstream investment procedures and intends to continue to do so. The shares are excluded from the FCA’s
restrictions which apply to non-mainstream investment products because they are shares in an investment trust.
INVESTMENT PLATFORMS
The Company’s shares are traded openly on the London Stock Exchange and can be purchased through a stock broker
or other financial intermediary. The shares are available through savings plans (including Investment Dealing Accounts,
ISAs, Junior ISAs and SIPPs) which facilitate both regular monthly investments and lump sum investments in the
Company’s shares. There are a number of investment platforms that offer these facilities. A list of some of them, that is not
comprehensive nor constitutes any form of recommendation, can be found below:
AJ Bell Youinvest http://www.youinvest.co.uk/
Barclays Smart Investor https://www.smartinvestor.barclays.co.uk/
Bestinvest http://www.bestinvest.co.uk/
Charles Stanley Direct https://www.charles-stanley-direct.co.uk/
Halifax Share Dealing https://www.halifaxsharedealing-online.co.uk/
Hargreaves Lansdown http://www.hl.co.uk/
HSBC https://www.hsbc.co.uk/investments/
iDealing http://www.idealing.com/
Interactive Investor http://www.iii.co.uk/
IWEB http://www.iweb-sharedealing.co.uk/share-dealing-home.asp
How to invest
103
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FURTHER INFORMATION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Notice of the Annual General Meeting
Notice is hereby given that the Annual General Meeting of Worldwide Healthcare Trust PLC will be held at Saddlers' Hall,
40Gutter Lane, London EC2V 6BR on Wednesday, 10 July 2024 from 1.00 p.m. for the following purposes:
Ordinary Resolutions
To consider and, if thought fit, pass the following resolutions which will be proposed as ordinary resolutions:
1. That the Report of the Directors and the audited Accounts for the year ended 31March 2024 together with the Report of
the Auditors thereon be received and adopted.
2. To approve the payment of a final dividend of 2.1p per ordinary share for the year ended 31 March 2024.
3. To approve the Company’s dividend policy, as set out on page 31 of the Annual Report for the year ended 31 March 2024.
4. To re-elect Mr Doug McCutcheon as a Director of the Company.
5. To re-elect Mr Sven Borho as a Director of the Company.
6. To re-elect Dr Bina Rawal as a Director of the Company.
7. To re-elect Mr Tim Livett as a Director of the Company.
8. To re-elect Ms Jo Parfrey as a Director of the Company.
9. To re-appoint PricewaterhouseCoopers LLP as the Company’s Auditors and to authorise the Audit & Risk Committee to
determine their remuneration.
10. To approve the Directors’ Remuneration Report for the year ended 31 March 2024.
Authority to Allot Shares
11. THAT in substitution for all existing authorities the Directors be and are hereby generally and unconditionally authorised
in accordance with section 551 of the Companies Act 2006 (the “Act”) to exercise all powers of the Company to allot
relevant securities (within the meaning of section 551 of the Act) up to a maximum aggregate nominal amount equal
to 10% of the issued share capital of the Company at 5 June 2024 (or,if changed, the number representing 10% of the
issued share capital of the Company at the date at which this resolution is passed), provided that this authority shall
expire at the conclusion of the Annual General Meeting of the Company to be held in 2025 or 15 months from the date
of passing this resolution, whichever is the earlier, unless previously revoked, varied or renewed, by the Company in
General Meeting and provided that the Company shall be entitled to make, prior to the expiry of such authority, an offer
or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot
relevant securities pursuant to such offer or agreement as if the authority conferred hereby had not expired.
Special Resolutions
To consider and, if thought fit, pass the following resolutions which will be proposed as special resolutions:
Disapplication of Pre-Emption Rights
12. THAT in substitution for all existing powers (and in addition to any power conferred on them by resolution 13 set out
in the notice convening the Annual General Meeting at which this resolution is proposed (“Notice of Annual General
Meeting”)) the Directors be and are hereby generally empowered pursuant to Section 570 of the Companies Act 2006
(the“Act”) to allot equity securities (within the meaning of Section 560 of the Act) for cash pursuant to the authority
conferred on them by resolution 11 set out in the Notice of Annual General Meeting or otherwise as if Section 561(1) of
the Act did not apply to any such allotment:
(a) pursuant to an offer of equity securities open for acceptance for a period fixed by the Directors where the equity securities
respectively attributable to the interests of holders of shares in the capital of the Company (“Shares”) are proportionate
(asnearly as may be) to the respective numbers of Shares held by them but subject to such exclusions or other
104
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
arrangements in connection with the issue as the Directors may consider necessary, appropriate or expedient to deal with
equity securities representing fractional entitlements or to deal with legal or practical problems arising in any overseas
territory, the requirements of any regulatory body or stock exchange, or any other matter whatsoever;
(b) provided that (otherwise than pursuant to sub-paragraph (a) above) this power shall be limited to the allotment of equity
securities up to an aggregate nominal value equal to 10% of the issued share capital of the Company at 5 June 2024
(or, if changed, the number representing 10% of the issued share capital of the Company at the date at which this
resolution is passed) and provided further that (i) the number of equity securities to which this power applies shall be
reduced from time to time by the number of treasury shares which are sold pursuant to any power conferred on the
Directors by resolution 13 set out in the Notice of Annual General Meeting and (ii) no allotment of equity securities shall
be made under this power which would result in Shares being issued at a price which is less than the net asset value per
Share as at the latest practicable date before such allotment of equity securities as determined by the Directors in their
reasonable discretion; and
such power shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this
resolution or 15 months from the date of passing this resolution, whichever is earlier, unless previously revoked, varied or
renewed by the Company in General Meeting and provided that the Company shall be entitled to make, prior to the expiry
of such authority, an offer or agreement which would or might otherwise require equity securities to be allotted after such
expiry and the Directors may allot equity securities pursuant to such offer or agreement as if the power conferred hereby
had not expired.
13. THAT in substitution for all existing powers (and in addition to any power conferred on them by resolution 12 set out in
the Notice of Annual General Meeting) the Directors be and are hereby generally empowered pursuant to Section 570 of
the Companies Act 2006 (the “Act”) to sell relevant shares (within the meaning of Section 560 of the Act) if, immediately
before the sale, such shares are held by the Company as treasury shares (as defined in Section 724 of the Act (“treasury
shares”)), for cash as if Section 561(1) of the Act did not apply to any such sale provided that:
(a) this power shall be limited to the sale of relevant shares having an aggregate nominal value equal to 10% of the
issued share capital of the Company at 5 June 2024 (or, if changed, the number representing 10% of the issued share
capital of the Company at the date at which this resolution is passed) and provided further that the number of relevant
shares to which power applies shall be reduced from time to time by the number of Shares which are allotted for cash
as if Section 561(1) of the Act did not apply pursuant to the power conferred on the Directors by resolution 15 set out
in the Notice of Annual General Meeting,
and such power shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of
this resolution or 15 months from the date of passing this resolution, whichever is earlier, unless previously revoked,
varied or renewed by the Company in General Meeting and provided that the Company shall be entitled to make, prior
to the expiry of such authority, an offer or agreement which would or might otherwise require treasury shares to be
sold after such expiry and the Directors may sell treasury shares pursuant to such offer or agreement as if the power
conferred hereby had not expired.
Authority to Repurchase Ordinary Shares
14. THAT the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of the
Companies Act 2006 (the “Act”) to make one or more market purchases (within the meaning of section 693 of the Act) of
ordinary shares in the capital of the Company (“Shares”) (either for retention as treasury shares for future reissue, resale,
transfer or cancellation), provided that:
(a) the maximum aggregate number of Shares authorised to be purchased shall be that number of shares which is equal
to 14.99% of the issued share capital of the Company as of the value of the date of the passing of this resolution;
(b) the minimum price (exclusive of expenses) which may be paid for a Share is 2.5 pence;
105
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FURTHER INFORMATION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
(c) the maximum price (exclusive of expenses) which may be paid for a Share is an amount equal to the greater of
(i)105% of the average of the middle market quotations for a Share as derived from the Daily Official List of the
London Stock Exchange for the five business days immediately preceding the day on which that Share is purchased
and (ii) the higher of the price of the last independent trade and the highest then current independent bid on the
London Stock Exchange as stipulated in the technical standards referred to in Article 5(6) of the Market Abuse
Regulation (EU) No. 596/2014 (which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018);
(d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held
in 2025 or, if earlier, on the expiry of 15 months from the date of the passing of this resolution unless such authority is
renewed prior to such time; and
(e) the Company may make a contract to purchase Shares under this authority before the expiry of such authority which
will or may be executed wholly or partly after the expiration of such authority, and may make a purchase of Shares in
pursuance of any such contract.
General Meetings
15. THAT the Directors be authorised to call general meetings (other than the Annual General Meeting of the Company) on
not less than 14 clear days’ notice, such authority to expire on the conclusion of the next Annual General Meeting of the
Company, or, if earlier, on the expiry 15 months from the date of the passing of the resolution.
Ordinary Resolution
To consider and, if thought fit, pass the following resolution which will be proposed as an ordinary resolution:
Continuance of the Company
16. To approve the continuance of the Company as an investment trust for a further period of five years.
By order of the Board Registered Office:
One Wood Street
London EC2V 7WS
Frostrow Capital LLP
Company Secretary
6 June 2024
106
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
NOTES
1. Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A shareholder may
appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held
by that shareholder. A proxy need not be a shareholder of the Company.
2. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolutions. If no voting indication
is given, a proxy may vote or abstain from voting at his/her discretion. A proxy may vote (or abstain from voting) as he or she thinks fit in relation to any other
matter which is put before the meeting.
3. This year, hard copy forms of proxy have not been included with this notice. Members can vote by: logging onto www.signalshares.com and following
instructions; requesting a hard copy form of proxy directly from the registrars, Link Group at shareholderenquiries@linkgroup.co.uk or in the case of CREST
members, utilising the CREST electronic proxy appointment service in accordance with the procedures set out below. To be valid any proxy form or other
instrument appointing a proxy must be completed and signed and received by post or (during normal business hours only) by hand at Link Group, PXS1,
CentralSquare, 29 Wellington Street, Leeds LS1 4DL no later than 1.00 p.m. on Monday, 8 July 2024. Alternatively if you are an institutional shareholder you may
also be able to appoint a proxy electronically via the proxymity platform (see note 14 below).
4. In the case of a member which is a company, the instrument appointing a proxy must be executed under its seal or signed on its behalf by a duly authorised
officer or attorney or other person authorised to sign. Any power of attorney or other authority under which the instrument is signed (or a certified copy of it)
must be included with the instrument.
5. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described below) will not prevent a shareholder attending the
meeting and voting in person if he/she wishes to do so.
6. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a “Nominated
Person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or have someone else
appointed) as a proxy for the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such
agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
7. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 3 above does not apply to Nominated Persons. The
rights described in these paragraphs can only be exercised by shareholders of the Company.
8. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, only shareholders registered on the register of members of the Company (the
“Register of Members”) at the close of business on Monday, 8 July 2024 (or, in the event of any adjournment, on the date which is two days before the
time of the adjourned meeting) will be entitled to attend and vote or be represented at the meeting in respect of shares registered in their name at that time.
Changes to the Register of Members after that time will be disregarded in determining the rights of any person to attend and vote at the meeting.
9. As at 5 June 2024 (being the last business day prior to the publication of this notice) the Company’s issued share capital consists of 601,665,200 ordinary
shares, carrying one vote each. The Company holds 66,400,737 shares in treasury. Therefore, the total voting rights in the Company as at 5 June 2024 are
535,264,463.
10. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described
in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
11. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must
be properly authenticated in accordance with the specifications of Euroclear UK and International (“CRESTCo”), and must contain the information required for
such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA10) no later than
48 hours before the time appointed for holding the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp
applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other
means.
12. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that CRESTCo does not make available special
procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member,
orhas appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST
sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system
and timings.
13. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
14. If you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the
Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 1.00pm on
8 July 2024 in order to be considered valid or, in the event of any adjournment, close of business on the date which is two working days before the time of the
adjourned meeting. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important
that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. An electronic proxy appointment via
the Proxymity platform may be revoked completely by sending an authenticated message via the platform instructing the removal of your proxy vote.
15. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will
be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Register of Members in respect of the joint holding (the
first named being the most senior).
16. Members who wish to change their proxy instructions should submit a new proxy appointment using the methods set out above. Note that the cut-off time for
receipt of proxy appointments (see above) also applies in relation to amended instructions; any amended proxy appointment received after the relevant cut-off
time will be disregarded.
17. Members who have appointed a proxy using the hard-copy proxy form and who wish to change the instructions using another hard-copy form, should contact
Link Group on 0371 664 0300 or +44 371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United
Kingdom are charged at the applicable international rate. Lines are open 09.00 to 17.30 Monday to Friday excluding public holidays in England and Wales.
18. If a member submits more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
19. In order to revoke a proxy instruction, members will need to inform the Company. Members should send a signed hard copy notice clearly stating their intention
to revoke a proxy appointment to Link Group, PXS1, 29 Wellington Street, Central Square, Leeds LS1 4DL.
In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the
company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of
such power of attorney) must be included with the revocation notice. If a member attempts to revoke their proxy appointment but the revocation is received
after the time for receipt of proxy appointments (see above) then, subject to paragraph 4 on page 105, the proxy appointment will remain valid.
107
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FURTHER INFORMATION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
Location of the Annual General Meeting
Saddlers’ Hall, 40Gutter Lane, London EC2V 6BR
How To Vote
If you hold your shares directly you can:
• Log on to https://www.signalshares.com and follow the instructions; or
• Request a hard copy form of proxy from the Company’s registrars, Link Group, by emailing
shareholderenquiries@linkgroup.co.uk or by calling +44 (0)371 664 0300 and returning the completed form to Link Group,
PXS1, Central Square, 29Wellington Street, Leeds LS1 4DL, no later than 1.00 pm on Monday, 8 July 2024.
If you hold your shares via an investment platform (e.g. Hargreaves Lansdown) or a nominee, you should contact them to
enquire about arrangements to vote.
108
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Explanatory notes to the resolutions
Resolution 1 – To receive and adopt the Annual
Report and Accounts
The Annual Report and Accounts for the year ended
31 March 2024 will be presented to the Annual General
Meeting (“AGM”). These accounts accompany this Notice
ofMeeting.
Resolution 2 – To approve a Final Dividend
The rationale for the payment of a final dividend is set out in
the Statement from the Chair beginning on page 4 and the
Report of the Directors on page 49.
Resolution 3 – Approval of the Company’s Dividend
Policy
Resolution 3 seeks shareholder approval of the Company’s
dividend policy, which is set out on page 31.
Resolutions 4 to 8 – Re-election of Directors
Resolutions 4 to 8 deal with the re-election of each Director.
Biographies of each of the Directors can be found on
pages45 and 46 of the annual report.
The Board has confirmed, following a performance review,
that the Directors standing for re-election and election
continue to perform effectively.
Resolution 9 – Re-appointment of Auditors and the
determination of their remuneration
Resolution 9 relates to the re-appointment of
PricewaterhouseCoopers LLP as the Company’s
independent Auditors to hold office until the next AGM
of the Company and also authorises the Audit & Risk
Committee to set their remuneration.
Resolution 10 – Directors’ Remuneration Report
The Directors’ Remuneration Report is set out in full in the
annual report on pages 65 to 67.
Resolutions 11, 12 and 13 – Issue of Shares
Ordinary Resolution 11 in the Notice of AGM will renew
the authority to allot the unissued share capital up to an
aggregate nominal amount equal to 10% of the aggregate
nominal amount of the Company’s issued share capital
on 5 June 2024, being the nearest practicable date prior
to the signing of this Report (or if changed, the number
representing 10% of the issued share capital of the
Company at the date at which the resolution is passed).
Such authority will expire on the date of the next AGM or
after a period of 15 months from the date of the passing
of the resolution, whichever is earlier. This means that the
authority will have to be renewed at the next AGM.
When shares are to be allotted for cash, Section 551 of
the Companies Act 2006 (the “Act”) provides that existing
shareholders have pre-emption rights and that the new
shares must be offered first to such shareholders in
proportion to their existing holding of shares. However,
shareholders can, by special resolution, authorise the
Directors to allot shares otherwise than by a pro rata
issue to existing shareholders. Special Resolution 12 will,
if passed, give the Directors power to allot for cash equity
securities up to an aggregate nominal amount equal to
10% of the Company’s share capital on 5 June 2024 (or if
changed, the number representing 10% of the issued share
capital of the Company at the date at which the resolution
is passed), as if Section 551 of the Act does not apply.
This is the same nominal amount of share capital which
the Directors are seeking the authority to allot pursuant to
Resolution 13. This authority will also expire on the date
of the next Annual General Meeting or after a period of
15months, whichever is earlier. This authority will not be
used in connection with a rights issue by the Company.
Under the Companies (Acquisition of Own Shares)
(Treasury Shares) Regulations 2003 (as amended) (the
“Treasury Share Regulations”) the Company is permitted
to buyback and hold shares in treasury and then sell them
at a later date for cash, rather than cancelling them. The
Treasury Share Regulations require such sale to be on a
pre-emptive, pro rata, basis to existing shareholders unless
shareholders agree by special resolution to disapply such
pre-emption rights. Accordingly, in addition to giving the
Directors power to allot unissued share capital on a non
pre-emptive basis pursuant to Resolution 12, Resolution13,
if passed, will give the Directors authority to sell shares held
in treasury on a non pre-emptive basis. No dividends may
be paid on any shares held in treasury and no voting rights
will attach to such shares. The benefit of the ability to hold
treasury shares is that such shares may be resold. This
should give the Company greater flexibility in managing its
share capital, and improve liquidity in its shares. It is the
intention of the Board that any re-sale of treasury shares
would only take place at a premium to the cum income net
asset value per share. It is also the intention of the Board
that sales from treasury would only take place when the
Board believes that to do so would assist in the provision
of liquidity to the market. The number of treasury shares
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Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FURTHER INFORMATION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
which may be sold pursuant to this authority is limited
to an aggregate nominal amount equal to 10% of the
Company’s share capital on 5 June 2024 (or if changed,
the number representing 10% of the issued share capital of
the Company at the date at which the resolution is passed)
(reduced by any equity securities allotted for cash on a
non-pro rata basis pursuant to Resolution 12, as described
above). This authority will also expire on the date of the
next Annual General Meeting or after a period of 15months,
whichever is earlier.
The Directors intend to use the authority given by
Resolutions 11, 12 and 13 to allot shares and disapply
pre-emption rights only in circumstances where this will
be clearly beneficial to shareholders as a whole. The issue
proceeds would be available for investment in line with
the Company’s investment policy. No issue of shares will
be made which would effectively alter the control of the
Company without the prior approval of shareholders in
general meeting.
New Shares will only be issued at a premium to the
Company’s cum income net asset value per share at the
time of issue.
Resolution 14 – Share Repurchases
The Directors wish to renew the authority given by
shareholders at the previous AGM. The principal aim of a
share buyback facility is to enhance shareholder value by
acquiring shares at a discount to net asset value, as and
when the Directors consider this to be appropriate. The
purchase of Shares, when they are trading at a discount to
net asset value per share should result in an increase in the
net asset value per share for the remaining shareholders.
This authority, if conferred, will only be exercised if to do
so would result in an increase in the net asset value per
share for the remaining shareholders and if it is in the best
interests of shareholders generally. Any purchase of shares
will be made within guidelines established from time to time
by the Board. It is proposed to seek shareholder authority to
renew this facility for another year at the AGM.
Under the current Listing Rules, the maximum price that
may be paid on the exercise of this authority must not
exceed the higher of (i) 105% of the average of the middle
market quotations for the shares over the five business
days immediately preceding the date of purchase and
(ii)the higher of the last independent trade and the highest
current independent bid on the trading venue where the
purchase is carried out. The minimum price which may be
paid is 2.5p per Share. Existing shares which are purchased
under this authority will either be cancelled or held as
Treasury Shares.
Special Resolution 14 in the Notice of AGM will renew the
authority to purchase in the market a maximum of 14.99%
of the issued share capital of the Company as at the date
of the passing of the resolution, 14.99% of the issued share
capital of the Company as changed by that resolution.
Such authority will expire on the date of the next AGM or
after a period of 15 months from the date of passing of the
resolution, whichever is earlier. This means in effect that the
authority will have to be renewed at the next AGM or earlier
if the authority has been exhausted.
Resolution 15 – General Meetings
Special Resolution 15 seeks shareholder approval for the
Company to hold General Meetings (other than the AGM) at
14 clear days’ notice. The Board confirms that the shorter
notice period would only be used where it was merited by
the purpose of the meeting.
Resolution 16 –
Continuance of the Company as an
investment trust. Ordinary Resolution 16 seeks shareholder
approval for the Company to continue as an investment
trust for a further period of five years.
Recommendation
The Board considers that the resolutions relating to the
above items are in the best interests of shareholders as a
whole. Accordingly, the Board unanimously recommends
to the shareholders that they vote in favour of the above
resolutions to be proposed at the forthcoming AGM as the
Directors intend to do in respect of their own beneficial
holdings totalling 548,017 shares.
EXPLANATORY NOTES TO THE RESOLUTIONS CONTINUED
110
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Regulatory Disclosures
ALTERNATIVE INVESTMENT FUND MANAGERS
DIRECTIVE (“AIFMD”) DISCLOSURES
Investment objective and leverage
A description of the investment strategy and objectives of
the Company, the types of assets in which the Company
may invest, the techniques it may employ, any applicable
investment restrictions, the circumstances in which it may
use leverage, the types and sources of leverage permitted
and the associated risks, any restrictions on the use of
leverage and the maximum level of leverage which the AIFM
and Portfolio Manager are entitled to employ on behalf of
the Company and the procedures by which the Company
may change its investment strategy and/or the investment
policy can be found on pages 8 and 9 under the heading
“Investment Strategy”.
The table below sets out the current maximum permitted
limit and actual level of leverage for the Company as a
percentage of net assets.
Gross
Method
Commitment
Method
Maximum level of leverage 140.0% 140.0%
Actual level at 31 March 2024 114.4% 110.8%
REMUNERATION OF AIFM STAFF
Following completion of an assessment of the application
of the proportionality principle to the FCA’s AIFM
Remuneration Code, the AIFM has disapplied the pay-out
process rules with respect to it and any of its delegates.
This is because the AIFM considers that it carries out
non- complex activities and is operating on a small scale.
Further disclosures required under the AIFM Rules can
be found within the Investor Disclosure Document on the
Company’s website: www.worldwidewh.com.
SECURITY FINANCING TRANSACTIONS
DISCLOSURES
As defined in Article 3 of Regulation (EU) 2015/2365,
securities financing transactions (SFT) include repurchase
transactions, securities or commodities lending and
securities or commodities borrowing, buy-sellback
transactions or sell-buyback transactions and margin
lending transactions. Whilst the Company does not engage
in such SFT’s, it does engage in Total Return Swaps (TRS)
therefore, in accordance with Article 13 of the Regulation,
the Company’s involvement in and exposure to Total Return
Swaps for the accounting year ended 31 March 2024 are
detailed below.
Global data
Amount of assets engaged in TRS
The following table represents the total value of assets
engaged in TRS:
£’000 % of AUM
TRS (11,474) (0.5)
Concentration Data
Counterparties
The following table provides details of the counterparties
and their country of incorporation (based on gross volume
of outstanding transactions with exposure on a gross
basis) in respect of TRS as at the balance sheet date:
Country of
Incorporation £’000
Goldman Sachs U.S.A. 181,166
JPMorgan U.S.A. 16,416
Aggregate transaction data
Type, quality, maturity, tenor and currency of collateral
No collateral was received by the Company in respect
of TRS during the year to 31 March 2024. The collateral
provided by the Company to the above counterparties is set
out below.
Type Currency Maturity Quality £’000
Cash USD less than 1 day n/a 78,749
Maturity tenor of TRS
The following table provides an analysis of the maturity
tenor of open TRS positions (with exposure on a gross
basis) as at the balance sheet date:
Maturity
TRS
Value
£’000
1 to 3 months –
3 to 12 months 198,082
Settlement and clearing
OTC derivative transactions (including TRS) are entered
into by the Company under an International Swaps
and Derivatives Associations, Inc. Master Agreement
(“ISDA Master Agreement”). An ISDA Master Agreement
is a bilateral agreement between the Company and a
111
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
FURTHER INFORMATION
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
counterparty that governs OTC derivative transactions
(including TRS) entered into by the parties. All OTC
derivative transactions entered under an ISDA Master
Agreement are netted together for collateral purposes,
therefore any collateral disclosures provided are in respect
of all OTC derivative transactions entered into by the
Company under the ISDA Master agreement, not just total
return swaps.
Safekeeping of collateral
There was no non-cash collateral provided by the Company
in respect of OTC derivatives (including TRS) with the
counterparties noted above as at the statement of financial
position date.
Return and cost
All returns from TRS transactions will accrue to the
Company and are not subject to any returns sharing
arrangements with the Company’s AIFM, Portfolio Manager
or any other third parties. Returns from those instruments
are disclosed in Note 9 to the Company’s financial
statements.
REGULATORY DISCLOSURES CONTINUED
112
Worldwide Healthcare Trust PLC Annual Report for the year ended 31 March 2024
Company Information
Directors
Doug McCutcheon (Chair of the Board)
Dr Bandhana (Bina) Rawal (Senior
Independent Director and Chair of
the Nominations Committee)
Sven Borho
Humphrey van der Klugt, FCA
Tim Livett, ACMA (Chair of the
Audit & RiskCommittee)
Jo Parfrey, ACA (Chair of the
Management Engagement &
Remuneration Committee)
Company Registration Number
3023689 (Registered in England)
The Company is an investment
company as defined under Section 833
of the Companies Act 2006
Website
Website: www.worldwidewh.com
Registered Office
One Wood Street
London EC2V 7WS
Alternative Investment Fund
Manager, Company Secretary and
Administrator
Frostrow Capital LLP
25 Southampton Buildings, London
WC2A 1AL
Telephone: 0203 008 4910
E-mail: info@frostrow.com
Website: www.frostrow.com
Authorised and regulated by the Financial Conduct
Authority
If you have an enquiry about the
Company or if you would like to receive
a copy of the Company’s monthly
fact sheet by e-mail, please contact
Frostrow Capital using the above
e-mail address.
Portfolio Manager
OrbiMed Capital LLC
601 Lexington Avenue, 54th Floor
New York NY 10022
Website: www.orbimed.com
Registered under the U.S. Securities & Exchange
Commission
Depositary
J.P. Morgan Europe Limited
25 Bank Street London
E14 5JP
Independent Auditors
PricewaterhouseCoopers LLP
Atria One
144 Morrison Street
Edinburgh
EH3 8EX
Custodian and Prime Broker
J.P. Morgan Securities LLC
Suite 1, Metro Tech Roadway
Brooklyn, NY 11201
USA
Stockbroker
Winterflood Securities Limited
Riverbank House
2 Swan Lane
London EC4R 3GA
Registrars
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
E-mail: shareholderenquiries@
linkgroup.co.uk Telephone (in UK): 0371
664 0300† Telephone (from overseas):
+ 44 371 664 0300†
Shareholder Portal:
www.signalshares.com
Website: www.linkgroup.eu
Please contact the Registrars if you
have a query about a certificated
holding in the Company’s shares.
† Calls are charged at the standard geographic rate
and will vary by provider. Calls outside the UK are
charged at the applicable international rate. Lines
are open between 09.00 and 17.30 Monday to Friday
excluding public holidays in England and Wales.
Shareholder Portal
You can register online to view your
holdings using the Share Portal,
aservice offered by Link Group at
www.signalshares.com.
The Share Portal is an online service
enabling you to quickly and easily
access and maintain your shareholding
online – reducing the need for
paperwork and providing 24 hour
access to your shareholding details.
Through the Share Portal you may:
• Cast your proxy vote online;
• View your holding balance and get
an indicative valuation;
• View movements on your holding;
• Update your address;
• Register and change bank mandate
instructions so that dividends
can be paid directly to your bank
account;
• Elect to receive shareholder
communications electronically; and
• Access a wide range of shareholder
information including the ability to
download shareholder forms.
Share Price Listings
The price of your shares can be found
in various publications including the
Financial Times, The Daily Telegraph,
The Times and The Scotsman.
The Company’s net asset value per
share is announced daily and is available,
together with the share price, on the
TrustNet website at www.trustnet.com.
Identification Codes
Shares: SEDOL : 0338530
ISIN : GB0003385308
BLOOMBERG : WWH LN
EPIC : WWH
Foreign Account Tax
Compliance Act (“FATCA”)
Global Intermediary Identification
Number (GIIN) :  FIZWRN.99999.SL.826
Legal Entity Identifier (LEI) :
5493003YBCY4W1IMJU04
Disability Act
Copies of this annual report and other documents issued by the Company are available from the
Company Secretary. If needed, copies can be made available in a variety of formats, including
Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Group, which has installed telephones to allow speech and hearing impaired people who have
their own telephone to contact them directly, without the need for an intermediate operator, for this
service please call 0800 731 1888. Specially trained operators are available during normal business
hours to answer queries via this service. Alternatively, if you prefer to go through a ‘typetalk’
operator (provided by the RNID) you should dial 18001 followed by the number you wish to dial.
This report is printed on Revive 100% White Silk a totally recycled paper
produced using 100% recycled waste at a mill that has been awarded the
ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
This report has been produced using vegetable based inks.
Worldwide Healthcare Trust PLC
25 Southampton Buildings
London
WC2A 1AL
www.worldwidewh.com
A member of the Association of Investment Companies
CBP008251
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2024