Interim Management Statement


 
TIDMGMF 
 
GARTMORE FLEDGLING TRUST plc 
 
Interim Management Statement 
 
for the 3 months ended 30 November 2010 (Unaudited) 
 
This interim management statement has been produced to provide information to 
shareholders as a body in accordance with the relevant requirements of the UK 
Listing Authority's Disclosure and Transparency Rules. It should not be relied 
upon by any other party or parties for any other purposes. The views, 
information and data in this publication should not be deemed a financial 
promotion or recommendation. 
 
Gartmore Fledgling Trust plc is an investment trust company that seeks to 
provide shareholders with long-term growth in capital and dividends from 
investment predominantly in the constituents of the FTSE Fledgling (ex. 
Investment Companies) Index (the Fledgling Index). The Company is managed using 
a hybrid investment style. At least 65% of the portfolio passively replicates 
the Fledgling Index. An active overlay is then applied to up to 35% (normally 
likely to be 30% or less) of the Company's portfolio value, of which no more 
than 20% (normally likely to be 15% or less) may be invested in AIM-traded 
companies which were formerly admitted to trading on the Official List and 
which meet the Fledgling Index market capitalisation criteria. The active 
overlay takes the form of higher weightings in those Fledgling and AIM 
companies that are strongly favoured by the Manager's investment process, and/ 
or where directors have recently purchased their own shares. Conversely, 
constituents of the Fledgling Index which are not highly-rated by the Manager 
or which are considered unlikely to remain solvent on a one-year view are 
excluded from the portfolio. 
 
The three-month period under review was dominated by macroeconomic issues, as 
the highly anticipated details of the coalition government's public spending 
cuts were revealed, financial markets absorbed news of further quantitative 
easing in the US, and Asia faced renewed inflationary concerns. On a more 
positive note, full year UK economic growth is likely to be above most 
expectations - despite a slight downward revision of third quarter GDP figures. 
UK equities strengthened over the period, with a rally in September continuing 
into October. However the gains did not extend into November as European 
sovereign debt concerns resurfaced when Ireland was pressured into accepting a 
bail-out from the European Union and the International Monetary Fund. 
 
After underperforming against other major UK equity indices since the beginning 
of 2010, the performance of the Fledgling Index was relatively strong over the 
three months to 30 November 2010, the first quarter of the Company's current 
financial year. During this period, the Company achieved a net asset value 
total return of 8.5%, which was broadly in line with the performance of the 
Fledgling Index. The discount at which the Company's Ordinary shares trade 
relative to their net asset value (including current year revenue) narrowed to 
11.7%, from 16.6% at 31 August 2010, with the middle market price of the 
Company's Ordinary shares rising by 13.4%, from 381.0 pence to 432.0 pence. The 
Company's Ordinary shares delivered a total return of 14.4% over the 
three-month period. 
 
The Company continues to provide investors with a unique opportunity to access 
a portfolio of companies offering compelling value and substantial recovery 
potential. The constituent companies of the Fledgling Index are valued 
significantly more cheaply than those of the FTSE All-Share Index using the 
price-to-book value and price-to-sales measures. Fledgling companies also carry 
much lower levels of debt than their larger counterparts and provide a higher 
dividend yield. The annual and quarterly rebalancing process continues to 
refresh the Fledgling Index and more recently there has been a noticeable 
increase in institutional buying of Fledgling companies. The pace of takeover 
activity in the Fledgling sector is also expected to increase from the recent 
low levels, as large companies seek to grow their businesses in a weak economic 
environment. A rise in the proportion of Fledgling company sales originating 
from overseas markets over the past 18 months, from 21% to 40%, makes the 
Fledgling sector particularly attractive to large companies, as increased sales 
to overseas markets will offset potentially depressed domestic demand. 
 
Total Return Performance         At 30              Total Return 
                              November 
 
                                  2010       3  1 year 3 years 5 years      10 
                                        months                           years 
 
Net Asset Value per            489.5p*   +8.5%  +12.6%  +23.1%  +32.5% +183.5% 
Ordinary share 
 
Middle Market Price per         432.0p  +14.4%  +20.9%  +32.9%  +31.6% +187.1% 
Ordinary share 
 
Benchmark **                    5166.4   +8.8%  +13.2%  +20.7%  +34.1% +199.4% 
 
FTSE All-Share Index            2861.6   +6.8%  +11.7%   -2.3%  +24.5%  +35.7% 
 
Discount                         11.7% 
 
Source: The Association of Investment Companies and Thomson Reuters Datastream. 
From 31 December 2005 (inclusive), Net Asset Value reflects the portfolio 
stated at bid prices. Performance has been calculated using unadjusted 
historical published Net Asset Values which were based on mid valuations prior 
to 31 December 2005. 
 
*Inclusive of current year revenue. ** FTSE Fledgling (ex. Investment 
Companies) Index. 
 
Ten Principal              Market     % of     Major Sector                % of 
Investments at              Value              Weightings at 30 
                                     Total     November 2010         Investment 
30 November 2010            GBP'000   Assets 
                                                                      Portfolio 
 
Nestor Healthcare           5,058      5.8     Industrials                 26.6 
 
Renold                      3,069      3.5     Consumer Services           20.1 
 
Sinclair Pharma             2,586      3.0     Health Care                 18.5 
 
AEA Technology              2,585      3.0     Financials                  10.8 
 
Acal                        2,464      2.8     Consumer Goods               8.3 
 
Future                      2,405      2.8     Basic Materials              6.8 
 
Real Estate Credit          2,109      2.4     Technology                   4.2 
Investment 
 
Norcros                     1,982      2.3     Utilities                    3.3 
 
Carr's Milling              1,947      2.3     Oil & Gas                    1.4 
Industries 
 
Blacks Leisure              1,918      2.2 
 
At 30 November 2010, the Company's portfolio comprised 99 investments. 
 
Financial Position                      (Unaudited)     (Audited) 
 
(including undistributed revenue)                At            At 
 
                                        30 November     31 August 
 
                                               2010          2010 
 
                                              GBP'000         GBP'000 
 
Investments                                  88,202        88,702 
 
Net current liabilities                     (4,151)       (3,706) 
 
                                            _______       _______ 
 
Net Assets attributable to Ordinary          84,051        84,996 
shares 
 
                                              =====         ===== 
 
Material Events and Transactions 
 
At the Company's Annual General Meeting on 1 December 2010, all resolutions 
were passed on a show of hands, including a vote for continuation of the 
Company. A final dividend of 4.0p per Ordinary share was paid on 8 December 
2010 to shareholders on the register on 12 November 2010. 
 
Over the three-month period to 30 November 2010, the Company repurchased 
1,425,500 Ordinary shares for cancellation. This represented 7.7% of the issued 
share capital at the beginning of the period and reduced the number of Ordinary 
shares in issue to 17,169,080. The aggregate consideration was GBP5,839,000. 
 
Price and Performance Information 
 
The Company's Ordinary shares are listed on the Official List of the UK Listing 
Authority and are traded on the main market of the London Stock Exchange and 
the closing mid-market price of these shares is published in the Financial 
Times and The Daily Telegraph under `Investment Companies'. Real-time share 
price information is available on 09058 171 690. Calls to this number are 
charged at 75p per minute from a BT landline. The Company's Net Asset Value is 
calculated daily and can be viewed on the London Stock Exchange website: 
www.londonstockexchange.com and via a link from the Gartmore web site at 
www.gartmore.co.uk. 
 
Further information can be obtained from Gartmore as follows: 
 
Investor helpline: 0800 289 336 (calls are free from a BT landline) 
 
Internet address: www.gartmore.co.uk 
 
E-mail address: helpline@gartmore.com 
 
Other than as disclosed above, the Directors are not aware of any significant 
events or transactions which have occurred between 30 November 2010 and the 
date of publication of this statement, which have had a material impact on the 
financial position of the Company. For latest performance information, please 
refer to the Gartmore website, www.gartmore.co.uk. The Company's discrete area 
on the site can be accessed via the "Fund range" menu or directly at 
www.gartmorefledglingtrust.co.uk or www.gartmorefledglingtrust.com . 
 
Gartmore Investment Limited 
 
Secretary 
 
5 January 2011 
 
 
 
END
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