Half-year Report

BlackRock Income & Growth Investment Trust plc
LEI:  5493003YBY59H9EJLJ16

Half Yearly Financial Report to 30 April 2018
(Article 5 Transparency Directive, DTR 4.2)
 

PERFORMANCE RECORD

FINANCIAL HIGHLIGHTS

Attributable to ordinary shareholders	As at  30 April  2018	As at  31 October  2017	Change  %
Assets
Net asset value per ordinary share	208.70p	209.96p	-0.6
– with dividend reinvested*			+1.4
Ordinary share price (mid-market)	196.00p	205.50p	-4.6
– with dividend reinvested*			-2.7
FTSE All-Share Index (Total Return)**	7,201.06	7,051.23	+2.1
Net assets (£’000)***	50,765	51,680	-1.8
Discount to net asset value	6.1%	2.1%
	========	========	========

	For the  six months  ended  30 April  2018	For the  six months  ended  30 April  2017	Change  %
Revenue
Net profit after taxation (£’000)	788	752	+4.8
Revenue profit per ordinary share	3.23p	2.97p	+8.8
Dividend per ordinary share
Interim	2.50p	2.50p	-
	--------	--------	--------

*              Net asset value and share price performance include the dividend reinvestment.
**             The benchmark index.
***           The change in net assets reflects the market movements during the period and the purchase of the Company’s own shares.

CHAIRMAN’S STATEMENT
for the six months to 30 April 2018

Dear Shareholder

I am pleased to present the Company’s half-yearly financial report for the six months to 30 April 2018.

PERFORMANCE
During the period, the Company’s net asset value per share (NAV) returned 1.4%, compared with the Company’s benchmark, the FTSE All-Share Index (Total Return), which returned 2.1%. The Company’s share price fell by 2.7%. Since the period end and up to the close of business on 22 June 2018, the Company’s NAV per share has risen by 3.5% compared with a rise in the benchmark of 3.2% (all percentages are with dividends reinvested). Further information on the significant components of overall performance and the changes to portfolio composition are set out in the Investment Manager’s Report.

OVERVIEW
Global equity markets saw positive returns overall for the six month period under review. The first quarter of 2018 saw a significant sell-off and market volatility increased in February and March as geo-political tensions and the implementation of trade tariffs and protectionists rhetoric from the US administration unsettled global markets. On the domestic front, the UK economy is now growing at a slower pace than those of the Eurozone and the US, predominately as a result of the uncertainty created by the ongoing Brexit process. In March 2018, the UK Government announced that an extended transition period had been agreed with the EU and confirmed that existing trade agreements would remain in force until December 2020. This news was well received by the market and aided sterling’s rally against the US dollar. However, domestic currency strength in this period eroded some of the returns generated by the portfolio’s holdings exposed to the US dollar.

REVENUE PROFIT AND DIVIDENDS
Revenue profit for the period was 3.23 pence per share (six months to 30 April 2017: 2.97 pence per share). Total revenue has increased when compared to the same period last year as a result of an increase in the levels of dividends received during the period. The Board is pleased to declare an interim dividend of 2.50 pence per share (2017: 2.50 pence per share). This dividend will be paid on 3 September 2018 to shareholders on the Company’s register at the close of business on 27 July 2018 (the ex-dividend date is 26 July 2018).

SHARE CAPITAL
The Directors recognise the importance to investors that the Company’s share price should not trade at a significant discount to NAV and therefore, in normal market conditions, may use the Company’s share buy back, sale of shares from treasury and share issue powers to ensure that the share price does not trade at a significant discount. The discount management policy is effected through the use of share buy backs at a discount and the issue of new shares or issue of shares from treasury at or above the estimated NAV per share. During the period, the Company’s shares traded at an average discount of 2.4% (cum income). As at the close of business on 22 June 2018 the discount stood at 3.2%.

A total of 290,000 ordinary shares were bought back during the period at an average price of 202.76 pence and for a total consideration of £583,940. No shares were issued or sold from treasury during the period under review. Since the year end and up to the date of this report, a further 61,000 ordinary shares have been bought back at an average price of 200.49 pence and for a total consideration of £122,300. As at 22 June 2018, 26.3% of the Company’s issued ordinary share capital is held in treasury and may be issued to satisfy any demand for the Company’s shares that may arise.

The Board believes that an ongoing commitment to its discount management policy will continue to enhance the attractiveness of the Company to existing and potential new shareholders.

GEARING
The Company operates a flexible gearing policy which depends on prevailing conditions and the outlook for the market. Gearing is subject to a maximum level of 20% of net assets at the time of investment. The Company has been geared during the period under review and at 30 April 2018 the Company had net gearing of 4.0%. Gearing levels and sources of funding are reviewed regularly to ensure that the Company has access to the most competitive borrowing rates available. The Company currently has a two year unsecured sterling revolving credit facility of £4,000,000 with ING Bank (Luxembourg) S.A., with a maturity date of 31 October 2018. At the date of this report the facility was fully drawn down.

OUTLOOK
The UK government continues its Brexit negotiations with the EU. There has been an acceleration in UK wage growth in recent months, which is now outpacing inflation, and the labour market has strengthened with levels of employment hitting a record high. The Bank of England’s (BOE) Monetary Policy Committee also resolved to raise the UK base rate of interest from 0.25% to 0.50% last November, the first rate rise in over a decade. Inflation appears to have peaked in late 2017 with CPI at 2.4% as at 30 April 2018 and the BOE has indicated that it expects inflation to continue to fall towards its 2% target. The combination of low inflation, low unemployment and increasing earnings should contribute to continuing UK economic growth.

As you will read in their report which follows, your investment managers’ approach has not changed and they continue to seek companies that can generate cashflow from strong business models and have favourable industry characteristics or scope for management driven self-help. They view recent increased market volatility as an opportunity, identifying high quality companies at attractive valuations. The focus remains on bottom-up stock selection, assembling a portfolio of individual companies which, taken as a whole, should prove capable of delivering attractive returns and supporting dividend growth into the future. Your Board remains fully supportive of this approach.

Jonathan Cartwright
Chairman
25 June 2018

INTERIM MANAGEMENT REPORT AND RESPONSIBILITY STATEMENT

The Chairman’s Statement and the Investment Manager’s Report give details of the important events which have occurred during the period and their impact on the financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks faced by the Company can be divided into various areas as follows:

• Investment performance;
• Income/dividend;
• Gearing;
• Legal & regulatory compliance;
• Operational;
• Market; and
• Financial.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 31 October 2017. A detailed explanation can be found in the Strategic Report on pages 8 to 10 and in note 16 on pages 56 to 62 of the Annual Report and Financial Statements which are available on the website maintained by BlackRock at blackrock.co.uk/brig.

In the view of the Board, there have not been any changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were to the six months under review.

GOING CONCERN
The Directors, having considered the nature and liquidity of the portfolio, the Company’s investment objective and the Company’s projected income and expenditure are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and is financially sound. For this reason, they continue to adopt the going concern basis in preparing the financial statements. The Company has a portfolio of investments which are considered to be readily realisable and is able to meet all of its liabilities from its assets and income generated from these assets. Ongoing charges (excluding interest costs and taxation) for the year ended 31 October 2017 were approximately 1.08% of net assets.

RELATED PARTY DISCLOSURE AND TRANSACTIONS WITH THE INVESTMENT MANAGER
BlackRock Fund Managers Limited (BFM) was appointed as the Company’s Alternative Investment Fund Manager (AIFM) with effect from 2 July 2014. BFM has, with the Company’s consent, delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Both BFM and BIM (UK) are regarded as related parties under the Listing Rules. Details of the management fee payable are set out in note 3 and note 10.

The related party transactions with the Directors are set out in note 9.

DIRECTORS’ RESPONSIBILITY STATEMENT
The Disclosure and Transparency Rules of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge that:

• the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with the applicable UK Accounting Standard FRS 104 ‘Interim Financial Reporting’; and
• the Interim Management Report, together with the Chairman’s Statement and Investment Manager’s Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA’s Disclosure and Transparency Rules.

The half yearly financial report has not been audited or reviewed by the Company’s Auditors.

The half yearly financial report was approved by the Board on 25 June 2018 and the above responsibility statement was signed on its behalf by the Chairman.

Jonathan Cartwright
For and on behalf of the Board
25 June 2018

INVESTMENT MANAGER’S REPORT
Half Yearly Financial Report to 30 April 2018

PERFORMANCE
BlackRock Income and Growth Investment Trust plc (‘the Company’) returned 1.4% in the 6 months to 30 April 2018, compared with the FTSE All-Share Index which returned 2.1% for the period.

INVESTMENT APPROACH AND PROCESS
In assembling the Company’s portfolio we adopt a relatively concentrated approach to investment to ensure that our best ideas contribute significantly to returns. We believe that it is the role of the portfolio overall to achieve a premium level of yield alongside capital growth rather than every individual company within the portfolio. This gives the Company increased flexibility to invest where returns are most attractive. This approach results in a portfolio which differs substantially from the index and in any individual year the returns will vary, sometimes significantly from those of the index. Over longer periods our objective is to achieve returns greater than the index, but with lower volatility.

The foundation of the portfolio, approximately 70%, is in high free cash flow companies that can sustain cash generation and pay a growing dividend whilst aiming to deliver a double digit total return. Additionally, we look to identify and invest 20% of the portfolio in ‘growth’ companies that have significant barriers to entry and scalable business models that enable them to grow consistently. We also look for turnaround companies, at around 10% of portfolio value, which represent those companies that are out of favour with the market, facing temporary challenges with high yields or very low valuations, but with attractive recovery potential. The return from this segment is expected to contribute meaningfully to overall returns over time.

MARKET REVIEW
The last 6 months has been a tale of two halves with UK equities finishing 2017 on a strong note, whilst the start of 2018 brought significant declines and volatility in equity markets. Global economic data has remained positive, notably in the US with more to come from fiscal easing, albeit with some softening from recent highs in Europe and China. The geopolitical landscape is volatile with tensions around North Korea changing on a daily basis while President Trump’s protectionist agenda has significant implications for global trade. In the UK, the domestic economy continues to prove more resilient than expected, helped by the modest progress made in Brexit negotiations. More recently, the increase in bond yields weighed on defensive stocks given their perceived higher sensitivity to the rise in discount rates, whilst cyclicals outperformed.

CONTRIBUTORS TO PERFORMANCE
Defensive shares, such as RELX, Royal Dutch Shell and British American Tobacco underperformed the market reflecting three issues. First, rising bond yields have increased the discount rate for such long duration stocks. Second, the continued strength of sterling, or weakness of the dollar, has led to earnings downgrades from currency translation. Third, the routes to market for many consumer companies are being challenged by the growth of private label and e-commerce. RELX has faced a particular challenge in its academic journals business from a consortium of German universities but the impact of this, we believe, has been greatly overstated. British American Tobacco is delivering operationally and generating revenue growth. However, the company remains quite highly geared and has announced downgrades to earnings per share of 2%. Although the tobacco industry is undergoing structural change which has put pressure on the British American Tobacco share price, the company continues to deliver operationally and its investment in next generation products means that it is well placed to benefit as the industry evolves.

Tesco was the largest contributor to performance for the period as its share price responded favourably to results which came in ahead of market estimates. The company demonstrated improved cash flow and a reduction in debt levels. Additionally, we believe the Booker acquisition is additive to the investment case both financially and strategically.

Premier Asset Management Group performed strongly as the company has been a beneficiary of strong market returns, whilst also seeing inflows into its multi-asset products where it has first quartile performance. Infrastructure investor, John Laing Group, saw its share price rise following full year results and an announcement of a rights issue to raise £210m for future investment. In addition, management has identified opportunities to develop partnerships in new markets, particularly in the US and Australasia.

TRANSACTIONS
During the period we added new positions which include insurer Prudential and paper and packaging company Mondi. Additionally, we added to a number of our defensive positions on share price weakness, including Royal Dutch Shell and British American Tobacco, as well as to CRH, AstraZeneca and Standard Chartered. With competition for capital remaining high, these trades were funded through reductions to Diageo, Direct Line Insurance, Shire and Carnival as well as sales which included Intercontinental Hotel Group, Vodafone, BAE Systems and RPC. Overall, the portfolio remains positioned towards companies with dependable cashflow generation, balance sheet strength and trusted management teams in what we expect to be a more demanding and volatile investment environment.

OUTLOOK
The outlook for the UK economy is more uncertain given ongoing Brexit negotiations in contrast to the growth seen elsewhere. However, we believe these Brexit fears have provided us with the opportunity to own high quality franchises at attractive valuations. The UK is a hugely international market that is supported by very strong corporate governance, shareholder interaction, regulation, tax and accounting laws and transparency. This makes the UK market attractive for investing in high quality companies with both domestic and international exposure.

We continue to like cash generative consumer staple companies, especially those exposed to the emerging market consumer given the improvement in the trading backdrop in key markets. These companies often generate substantial cash flow which allows them to invest in innovation, marketing and distribution to ensure the longevity of their brands while also paying attractive and growing dividends to shareholders. We have also sought exposure to infrastructure and construction spend, both in the UK and overseas. US and European construction and infrastructure spend remains well below long-term averages and initiatives to boost this spend features prominently in politicians’ manifestos. However, as the last few months have demonstrated, it is crucial to be selective when investing in these industries and to focus on the strong operators that provide a differentiated service and that boast a strong balance sheet.

Adam Avigdori and David Goldman
BlackRock Investment Management (UK) Limited
25 June 2018

TEN LARGEST INVESTMENTS
30 April 2018

Royal Dutch Shell ‘B’: 6.1% (2017: 4.2%) is an oil and gas company based in the UK. The company operates in both Upstream and Downstream industries. Upstream is engaged in searching for and recovering crude oil and natural gas, the liquefaction and transportation of gas. Downstream is engaged in manufacturing, distribution and marketing activities for oil products and chemicals.

British American Tobacco: 5.5% (2017: 6.3%) is one of the world’s leading tobacco groups, with more than 200 brands in the portfolio selling in approximately 180 markets worldwide.

Unilever: 4.6% (2017: 4.1%) is a global supplier of food, home and personal care products with more than 400 brands focused on health and wellbeing.

Lloyds Banking Group: 4.0% (2017: 4.5%) is a UK-based financial services group, providing a wide range of banking and financial services, focused on personal and commercial customers. Its main business activities are retail, commercial and corporate banking, general insurance and life insurance, pensions and investment provision.

RELX: 3.9% (2017: 4.3%) is a global provider of professional information solutions that includes publication of scientific, medical, technical and legal journals. It also has one of the world’s leading exhibitions, conference and events business.

John Laing Group: 3.5% (2017: 3.1%) is an international originator, active investor and manager of infrastructure projects. Its business is focused on major transport, social and environmental infrastructure projects awarded under governmental public-private partnership programmes and renewable energy projects, across a range of international markets including the UK, Europe, Asia Pacific and North America.

Rentokil Initial: 3.5% (2017: 3.7%) is a business services company that operates in over 60 countries globally, providing pest control and hygiene services.

BP Group: 3.3% (2017: 2.8%) is a multi-national integrated oil and gas company that is vertically integrated and operates in all areas of the industry including exploration, production, refining, distribution, trading and renewable energy.

Ferguson: 3.2% (2017: 3.3%) is a multi-national building materials distribution company who supply heating and plumbing supplies to professional contractors and consumers across the USA, UK, Canada and Europe.

HSBC Holdings: 3.1% (2017: 3.0%) is a multi-national banking and financial services company operating across 70 countries. The company operates within four business groups: Commercial Banking, Global Banking and Markets, Retail Banking and Wealth Management and Global Private Banking.

All percentages reflect the value of the holding as a percentage of total investments as at 30 April 2018 (the percentages in brackets represent the position as at 31 October 2017). Together, the ten largest investments represent 40.7% of total investments (ten largest investments as at 31 October 2017: 39.3%).

DISTRIBUTION OF INVESTMENTS
as at 30 April 2018

ANALYSIS OF PORTFOLIO BY SECTOR

	% of Investments by value	Benchmark
1 Banks	10.2	11.0
2 Oil & Gas Producers	9.4	13.4
3 Pharmaceuticals & Biotechnology	7.9	7.6
4 Support Services	6.7	4.6
5 Financial Services	6.7	3.1
6 Media	6.5	3.5
7 Tobacco	6.4	4.8
8 Non-life Insurance	5.7	1.1
9 Food Producers	4.6	0.7
10 Industrial Engineering	4.6	0.9
11 Construction & Materials	4.4	1.7
12 Life Insurance	4.3	4.5
13 General Retailers	3.9	1.8
14 Travel & Leisure	3.3	4.7
15 Food & Drug Retailers	2.8	1.5
16 General Industrials	2.5	1.0
17 Forestry & Paper	1.9	0.3
18 Fixed Line Telecommunications	1.7	1.0
19 Chemicals	1.6	0.8
20 Household Goods & Home Construction	1.5	3.0
21 Gas, Water & Multiutilities	1.5	2.1
22 Beverages	1.0	2.9
23 Software & Computer Services	0.9	0.9

Sources: BlackRock and Datastream.

INVESTMENT SIZE

	Number of investments	% of Investments
< £1m	20	25.8
£1m to £2m	19	50.1
£2m to £3m	4	18.0
£3m to £4m	1	6.1

Source: BlackRock.

INVESTMENTS
as at 30 April 2018

	Market  value  £’000	% of  investments
Banks
Lloyds Banking Group	2,121	4.0
HSBC Holdings	1,632	3.1
Standard Chartered	1,164	2.2
Barclays	481	0.9
	--------	--------
	5,398	10.2
	--------	--------
Oil & Gas Producers
Royal Dutch Shell ‘B’	3,229	6.1
BP Group	1,721	3.3
	--------	--------
	4,950	9.4
	--------	--------
Pharmaceuticals & Biotechnology
AstraZeneca	1,586	3.1
GlaxoSmithKline	1,473	2.8
Shire	1,071	2.0
	--------	--------
	4,130	7.9
	--------	--------
Support Services
Rentokil Initial	1,846	3.5
Ferguson	1,709	3.2
	--------	--------
	3,555	6.7
	--------	--------
Financial Services
John Laing Group	1,862	3.5
Premier Asset Management Group	988	1.9
TP ICAP	658	1.3
	--------	--------
	3,508	6.7
	--------	--------
Media
RELX	2,064	3.9
ITV	783	1.4
Ascential	613	1.2
	--------	--------
	3,460	6.5
	--------	--------
Tobacco
British American Tobacco	2,900	5.5
Imperial Brands	488	0.9
	--------	--------
	3,388	6.4
	--------	--------
Non-life Insurance
Admiral Group	1,273	2.5
Hiscox	1,036	2.0
Direct Line Insurance	642	1.2
	--------	--------
	2,951	5.7
	--------	--------
Food Producers
Unilever	2,428	4.6
	--------	--------
	2,428	4.6
	--------	--------
Industrial Engineering
Bodycote	1,049	2.0
Weir Group	928	1.8
RHI Magnesita	447	0.8
	--------	--------
	2,424	4.6
	--------	--------
Construction & Materials
CRH	1,496	2.8
Kier Group	460	0.9
Forterra	384	0.7
	--------	--------
	2,340	4.4
	--------	--------
Life Insurance
Prudential	1,368	2.6
Aviva	872	1.7
	--------	--------
	2,240	4.3
	--------	--------
General Retailers
Inchcape	1,245	2.4
Next	793	1.5
	--------	--------
	2,038	3.9
	--------	--------
Travel & Leisure
Carnival	1,017	1.9
Patisserie Holdings	724	1.4
	--------	--------
	1,741	3.3
	--------	--------
Food & Drug Retailers
Tesco	1,496	2.8
	--------	--------
	1,496	2.8
	--------	--------
General Industrials
DS Smith	1,344	2.5
	--------	--------
	1,344	2.5
	--------	--------
Forestry & Paper
Mondi	1,017	1.9
	--------	--------
	1,017	1.9
	--------	--------
Fixed Line Telecommunications
BT Group	924	1.7
	--------	--------
	924	1.7
	--------	--------
Chemicals
Elementis	864	1.6
	--------	--------
	864	1.6
	--------	--------
Household Goods & Home Construction
Reckitt Benckiser	845	1.5
	--------	--------
	845	1.5
	--------	--------
Gas, Water & Multiutilities
United Utilities Group	776	1.5
	--------	--------
	776	1.5
	--------	--------
Beverages
Diageo	512	1.0
	--------	--------
	512	1.0
	--------	--------
Software & Computer Services
Accesso Technology	487	0.9
	--------	--------
	487	0.9
	--------	--------
Total investments	52,816	100.0
	========	========

All investments are in ordinary shares unless otherwise stated.

The total number of holdings as at 30 April 2018 was 44 (31 October 2017: 46).

INCOME STATEMENT
for the six months ended 30 April 2018

		Revenue £’000			Capital £’000			Total £’000
		Six months ended		Year  ended	Six months ended		Year  ended	Six months ended		Year  ended
	Notes	30.04.18  (unaudited)	30.04.17  (unaudited)	31.10.17  (audited)	30.04.18  (unaudited)	30.04.17  (unaudited)	31.10.17  (audited)	30.04.18  (unaudited)	30.04.17  (unaudited)	31.10.17  (audited)
Gains on investments held at fair value through profit or loss		–	–	–	10	3,619	5,050	10	3,619	5,050
Income from investments held at fair value through profit or loss	2	966	904	1,991	–	–	–	966	904	1,991
Other income	2	–	5	9	–	–	–	–	5	9
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Total income		966	909	2,000	10	3,619	5,050	976	4,528	7,050
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Expenses
Investment management fees	3	(36)	(36)	(74)	(109)	(109)	(223)	(145)	(145)	(297)
Other operating expenses	4	(137)	(118)	(252)	(3)	(2)	(5)	(140)	(120)	(257)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Total operating expenses		(173)	(154)	(326)	(112)	(111)	(228)	(285)	(265)	(554)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit/(loss) on ordinary activities before finance costs and taxation		793	755	1,674	(102)	3,508	4,822	691	4,263	6,496
Finance costs		(5)	(3)	(6)	(14)	(9)	(16)	(19)	(12)	(22)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit/(loss) on ordinary activities before taxation		788	752	1,668	(116)	3,499	4,806	672	4,251	6,474
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Taxation		–	–	–	–	–	–	–	–	–
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit/(loss) on ordinary activities after taxation		788	752	1,668	(116)	3,499	4,806	672	4,251	6,474
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Earnings/(loss) per ordinary share (pence)	6	3.23	2.97	6.63	(0.48)	13.80	19.09	2.75	16.77	25.72
		========	========	========	========	========	========	========	========	========

The total column of this statement represents the Company’s profit and loss account. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations and no operations were acquired or discontinued during the period. All income is attributable to the equity holders of the Company.

The net profit/(loss) on ordinary activities for the period disclosed above represents the Company’s total comprehensive income.

STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 April 2018

	Called  up  share  capital  £’000	Share  premium  account  £’000	Capital  redemption  reserve  £’000	Capital  reserves  £’000	Special  reserve  £’000	Revenue  reserve  £’000	Total  £’000
For the six months ended 30 April 2018 (unaudited)
At 31 October 2017	329	14,819	220	13,907	19,784	2,621	51,680
Total comprehensive income:
(Loss)/profit for the period	–	–	–	(116)	–	788	672
Transactions with owners, recorded directly to equity:
Ordinary shares purchased into treasury	–	–	–	–	(585)	–	(585)
Share purchase costs	–	–	–	–	(3)	–	(3)
Dividends paid(a)	–	–	–	–	–	(999)	(999)
	--------	--------	--------	--------	--------	--------	--------
At 30 April 2018	329	14,819	220	13,791	19,196	2,410	50,765
	--------	--------	--------	--------	--------	--------	--------
For the six months ended 30 April 2017 (unaudited)
At 31 October 2016	329	14,819	220	9,101	21,272	2,566	48,307
Total comprehensive income:
Profit for the period	–	–	–	3,499	–	752	4,251
Transactions with owners, recorded directly to equity:
Dividends paid(b)	–	–	–	–	–	(989)	(989)
	--------	--------	--------	--------	--------	--------	--------
At 30 April 2017	329	14,819	220	12,600	21,272	2,329	51,569
	--------	--------	--------	--------	--------	--------	--------
For the year ended 31 October 2017 (audited)
At 31 October 2016	329	14,819	220	9,101	21,272	2,566	48,307
Total comprehensive income:
Profit for the year	–	–	–	4,806	–	1,668	6,474
Transactions with owners, recorded directly to equity:
Ordinary shares purchased into treasury	–	–	–	–	(1,480)	–	(1,480)
Share purchase costs	–	–	–	–	(8)	–	(8)
Dividends paid(c)	–	–	–	–	–	(1,613)	(1,613)
	--------	--------	--------	--------	--------	--------	--------
At 31 October 2017	329	14,819	220	13,907	19,784	2,621	51,680
	========	========	========	========	========	========	========

(a)           Final dividend of 4.10p per share for the year ended 31 October 2017, declared on 20 December 2017 and paid on 9 March 2018.
(b)           Final dividend of 3.90p per share for the year ended 31 October 2016, declared on 21 December 2016 and paid on 10 March 2017.
(c)           Final dividend of 3.90p per share for the year ended 31 October 2016, declared on 21 December 2016 and paid on 10 March 2017, and the interim dividend of 2.50p per share for the six months ended 30 April 2017, declared on 26 June 2017 and paid on 1 September 2017.

The transaction costs incurred on the acquisition and disposal of investments are included within the capital reserve. Purchase and sale costs amounted to £56,000 and £8,000 respectively for the six months ended 30 April 2018 (six months ended 30 April 2017: £28,000 and £4,000; year ended 31 October 2017: £71,000 and £10,000).

BALANCE SHEET
as at 30 April 2018

	Notes	30 April  2018  £’000  (unaudited)	30 April  2017  £’000  (unaudited)	31 October  2017  £’000  (audited)
Fixed assets
Investments held at fair value through profit or loss		52,816	52,420	53,177
		--------	--------	--------
Current assets
Debtors		592	587	487
Cash and cash equivalents		1,890	811	1,192
		--------	--------	--------
		2,482	1,398	1,679
		--------	--------	--------
Creditors – amounts falling due within one year
Bank loan		(4,000)	(2,000)	(2,000)
Other creditors		(533)	(249)	(1,176)
		--------	--------	--------
		(4,533)	(2,249)	(3,176)
		--------	--------	--------
Net current liabilities		(2,051)	(851)	(1,497)
		--------	--------	--------
Net assets		50,765	51,569	51,680
		========	========	========
Capital and reserves
Called up share capital	7	329	329	329
Share premium account		14,819	14,819	14,819
Capital redemption reserve		220	220	220
Capital reserves		13,791	12,600	13,907
Special reserve		19,196	21,272	19,784
Revenue reserve		2,410	2,329	2,621
		--------	--------	--------
Total shareholders’ funds	6	50,765	51,569	51,680
		========	========	========
Net asset value per ordinary share (pence)	6	208.70	203.39	209.96
		========	========	========

STATEMENT OF CASH FLOWS
for the six months ended 30 April 2018

	Six months  ended  30 April  2018  £’000  (unaudited)	Six months  ended  30 April  2017  £’000  (unaudited)	Year ended  31 October  2017  £’000  (audited)
Operating activities
Net profit before taxation	672	4,251	6,474
Add back finance costs	19	12	22
Gains on investments held at fair value through profit or loss	(10)	(3,623)	(5,050)
Sales of investments	11,483	6,563	15,700
Purchase of investments	(11,673)	(6,613)	(14,427)
(Increase)/decrease in debtors	(320)	(267)	14
Increase/(decrease) in other creditors	96	(92)	(3)
	--------	--------	--------
Net cash generated from operating activities	267	231	2,730
	--------	--------	--------
Financing activities
Ordinary shares purchased into treasury	(556)	–	(1,480)
Share purchase costs	(3)	–	(9)
Increase in bank loan	2,000	–	–
Interest paid	(11)	(12)	(17)
Dividends paid	(999)	(989)	(1,613)
	--------	--------	--------
Net cash generated/(used) in financing activities	431	(1,001)	(3,119)
	--------	--------	--------
Increase/(decrease) in cash and cash equivalents	698	(770)	(389)
	--------	--------	--------
Cash and cash equivalents at beginning of period/year	1,192	1,581	1,581
	--------	--------	--------
Cash and cash equivalents at end of period/year	1,890	811	1,192
	--------	--------	--------
Comprised of:
Cash at bank	128	139	130
BlackRock's Institutional Cash Series plc – Sterling Liquidity Fund	1,762	672	1,062
	--------	--------	--------
	1,890	811	1,192
	========	========	========

NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 30 April 2018

1. PRINCIPAL ACTIVITY AND BASIS OF PREPARATION
The principal activity of the Company is that of an investment trust company within the meaning of section 1158 of the Corporation Tax Act 2010.

The Company presents its results and positions under FRS 102, ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102), which forms part of revised Generally Accepted Accounting Practice (New UK GAAP) issued by the Financial Reporting Council (FRC) in 2013.

The condensed set of financial statements have been prepared on a going concern basis in accordance with FRS 102 and FRS 104, ‘Interim Financial Reporting’ issued by the FRC in March 2015 and the revised Statement of Recommended Practice - ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (SORP) issued by the Association of Investment Companies (AIC) in November 2014 and updated in January 2017.

The accounting policies applied for the condensed set of financial statements are as set out in the Company’s Annual Report and Financial Statements for the year ended 31 October 2017.

2. INCOME

	Six months  ended  30 April  2018  £’000  (unaudited)	Six months  ended  30 April  2017  £’000  (unaudited)	Year ended  31 October  2017  £’000  (audited)
Investment income:
UK dividends	933	877	1,953
UK REITs	–	–	9
UK scrip dividends	5	25	25
Overseas dividends	28	2	4
	--------	--------	--------
	966	904	1,991
Other income:
Deposit interest	–	1	1
Underwriting commission	–	4	8
	--------	--------	--------
Total income	966	909	2,000
	========	========	========

Dividends and interest received in cash during the period amounted to £643,000 and £nil (six months ended 30 April 2017: £638,000 and £1,000; year ended 31 October 2017: £2,004,000 and £1,000) respectively.

There were no special dividends recognised in capital (six months ended 30 April 2017: £nil; year ended 31 October 2017: £nil).

3. INVESTMENT MANAGEMENT FEES

	Six months ended 30 April 2018 (unaudited)			Six months ended 30 April 2017 (unaudited)			Year ended 31 October 2017 (audited)
	Revenue  £’000	Capital  £’000	Total  £’000	Revenue  £’000	Capital  £’000	Total  £’000	Revenue  £’000	Capital  £’000	Total  £’000
Investment management fees	36	109	145	36	109	145	74	223	297
	========	========	========	========	========	========	========	========	========

Under the terms of the investment management agreement with BFM, BFM are entitled to a base fee of 0.6% per annum of the Company’s market capitalisation. There was no additional fee for company secretarial and administration services. The fee is allocated 25% to the revenue profit and 75% to the capital profit.

4. OTHER OPERATING EXPENSES

	Six months  ended  30 April  2018  £’000  (unaudited)	Six months  ended  30 April  2017  £’000  (unaudited)	Year ended  31 October  2017  £’000  (audited)
Taken to revenue:
Custody fees	1	–	1
Audit fees	13	13	24
Registrars’ fees	12	12	23
Depositary fees	3	3	7
Directors’ emoluments	46	46	89
Marketing fees	29	11	24
Marketing fees written back	–	(2)	(2)
Other administration costs	33	35	86
	--------	--------	--------
	137	118	252
	--------	--------	--------
Taken to capital:
Transaction costs	3	2	5
	--------	--------	--------
	140	120	257
	--------	--------	--------

5. DIVIDEND
The Board has declared an interim dividend of 2.50p per share for the period ending 31 October 2018 payable on 3 September 2018 to shareholders on the register on 27 July 2018. The total cost of the dividend based on 24,263,268 ordinary shares in issue at 22 June 2018 is £607,000 (30 April 2017: £634,000).

In accordance with FRS 102, Section 32, ‘Events After the End of the Reporting Period’, the interim dividend payable on the ordinary shares has not been included as a liability in the financial statements, as interim dividends are only recognised when they have been paid.

6. EARNINGS AND NET ASSET VALUE PER ORDINARY SHARE
Revenue and capital returns per share and net asset value per share are shown below and have been calculated using the following:

	Six months  ended  30 April  2018  £’000  (unaudited)	Six months  ended  30 April  2017  £’000  (unaudited)	Year ended  31 October  2017  £’000  (audited)
Net revenue profit (£’000)	788	752	1,668
Net capital (loss)/profit (£’000)	(116)	3,499	4,806
	--------	--------	--------
Total profit (£’000)	672	4,251	6,474
	--------	--------	--------
Equity shareholders’ funds (£’000)	50,765	51,569	51,680
	--------	--------	--------
Earnings per share
The weighted average number of ordinary shares in issue at the end of each period, on which the earnings per ordinary share was calculated, was:	24,394,906	25,354,268	25,166,474
	--------	--------	--------
The actual number of ordinary shares in issue at the end of each period, on which the net asset value per ordinary share was calculated, was:	24,324,268	25,354,268	24,614,268
	--------	--------	--------
Calculated on weighted average number of ordinary shares:
Revenue profit (pence)	3.23	2.97	6.63
	--------	--------	--------
Capital (loss)/profit (pence)	(0.48)	13.80	19.09
	--------	--------	--------
Total (pence)	2.75	16.77	25.72
	========	========	========

	As at  30 April  2018  (unaudited)	As at  30 April  2017  (unaudited)	As at  31 October  2017  (audited)
Net asset value (pence)	208.70	203.39	209.96
	--------	--------	--------
Ordinary share price (pence)	196.00	197.50	205.50
	========	========	========

7. CALLED UP SHARE CAPITAL AND SHARES HELD IN TREASURY

	Ordinary  shares  number	Treasury  shares  number	Total  shares  number	Nominal  value  £'000
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 1p each
At 31 October 2017	24,614,268	8,319,664	32,933,932	329
	--------	--------	--------	--------
Shares purchased and held in treasury	(290,000)	290,000	–	–
	--------	--------	--------	--------
At 30 April 2018	24,324,268	8,609,664	32,933,932	329
	========	========	========	========

During the period to 30 April 2018, 290,000 ordinary shares were purchased and transferred to treasury at a cost of £588,000 (six months ended 30 April 2017: nil ordinary shares at a total cost of £nil; year ended 31 October 2017: 740,000 ordinary shares at a total cost of £1,488,000).

No treasury shares were cancelled during the period (six months ended 30 April 2017: nil; year ended 31 October 2017: nil).

Since 30 April 2018 and up to the close of business on 22 June 2018, 61,000 ordinary shares have been repurchased at an average price of 200.49p per share and placed in treasury.

8. VALUATION OF FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are either carried in the Balance Sheet at their fair value (investments) or at an amount which is a reasonable approximation of fair value (due from brokers, dividends and interest receivable, due to brokers, accruals, cash and cash equivalents and overdrafts). Section 11 of FRS 102 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Company are explained in the accounting policies note on page 50 of the Annual Report and Financial Statements for the year ended 31 October 2017.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset.

The fair value hierarchy has the following levels:

Level 1 – Quoted prices for identical instruments in active markets

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The Company does not adjust the quoted price for these instruments.

Level 2 – Valuation techniques using observable inputs

This category includes instruments valued using quoted prices for similar instruments in markets that are considered less than active, or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3 – Valuation techniques using significant unobservable inputs

This category includes all instruments where the valuation technique includes inputs not based on observable market data and the unobservable inputs could have a significant impact on the instrument’s valuation.

This category also includes instruments that are valued based on quoted prices for similar instruments where significant entity determined adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The Investment Manager considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes ‘observable’ inputs requires significant judgement by the Investment Manager.

The table below is the analysis of the Company’s financial instruments measured at fair value at the balance sheet date.

Financial assets at fair value through  profit or loss	Level 1  £’000	Level 2  £’000	Level 3  £’000	Total  £’000
Equity investments at 30 April 2018	52,816	–	–	52,816
	--------	--------	--------	--------
Equity investments at 30 April 2017	52,420	–	–	52,420
	--------	--------	--------	--------
Equity investments at 31 October 2017	53,177	–	–	53,177
	========	========	========	========

There were no transfers between levels for financial assets and financial liabilities during the period recorded at fair value as at 30 April 2018, 30 April 2017 and 31 October 2017. The Company did not hold any Level 3 securities through the six month period or as at 30 April 2018 (30 April 2017: none; 31 October 2017: none).

9. RELATED PARTY DISCLOSURE
The Board consists of four non-executive Directors, all of whom are considered to be independent by the Board. None of the Directors has a service contract with the Company. The Chairman receives an annual fee of £28,750, the Chairman of the Audit Committee receives an annual fee of £23,250, and Mr Worsley receives an annual fee of £19,750. Mr Luckraft’s fee of £19,750, (excluding VAT of £3,950), is paid to AXA Investment Management (UK) Limited for the provision of his services as a non-executive Director of the Company. As at 30 April 2018, an amount of £7,000 (30 April 2017: £7,000; 31 October 2017: £7,000) was outstanding in respect of Directors’ fees.

At the period end and as at 22 June 2018 members of the Board held ordinary shares in the Company as set out below:

	Ordinary  shares  22 June  2018	Ordinary  shares  30 April  2018	Ordinary  shares  31 October  2017
Jonathan Cartwright	20,000	20,000	20,000
Nicholas Gold	20,000	20,000	20,000
George Luckraft	–	–	–
Charles Worsley	987,5391	987,5391	987,5391
	--------	--------	--------

1. Including a non-beneficial interest in 655,500 ordinary shares

Since the period end and up to the date of this report there have been no further changes in Directors’ holdings.

10. TRANSACTIONS WITH THE AIFM AND THE INVESTMENT MANAGER
BFM provides management and administration services to the Company under a contract which is terminable on six months’ notice. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of the investment management contract are disclosed in the Directors’ Report in the Annual Report and Financial Statements for the year ended 31 October 2017 on pages 21 and 22.

The investment management fee payable for the six months ended 30 April 2018 amounted to £145,000 (six months ended 30 April 2017: £145,000; year ended 31 October 2017: £297,000). At the period end, £297,000 was outstanding in respect of investment management fees (30 April 2017: £145,000; 31 October 2017: £225,000).

In addition to the above services, BIM (UK) has provided the Company with marketing services. The total fees paid or payable for these services for the six months ended 30 April 2018 amounted to £29,000 including VAT (six months ended 30 April 2017: £9,000; 31 October 2017: £22,000). Marketing fees of £51,000 were outstanding at 30 April 2018 (30 April 2017: £21,000; 31 October 2017: £22,000).

The Company has an investment in BlackRock’s Institutional Cash Series plc - Sterling Liquidity Fund of £1,762,000 at the period end (30 April 2017: £672,000; 31 October 2017: £1,062,000).

11. CONTINGENT LIABILITIES
There were no contingent liabilities at 30 April 2018 (30 April 2017: nil; 31 October 2017: nil).

12. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information contained in this half yearly financial report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 30 April 2018 and 30 April 2017 has not been reviewed or audited by the Company’s Auditor.

The information for the year ended 31 October 2017 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the Auditor on those accounts contained no qualification or statement under sections 498 (2) or (3) of the Companies Act 2006.

13. ANNUAL RESULTS
The Board expects to announce the annual results for the year ended 31 October 2018, in December 2018. Copies of the results announcement can be obtained from the Company Secretary on 020 7743 3000 or by email at [e-mail]. The Annual Report and Financial Statements should be available in December 2018, with the Annual General Meeting being held in March 2019.

25 June 2018

ENDS

The half yearly financial report will also be available on the BlackRock website at http://www.blackrock.co.uk/brig.  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

For further information please contact:

Simon White, Managing Director Investment Trusts - 020 7743 3000

Press enquires:

Lucy Horne, Lansons Communications - 020 7294 3689
E-mail:  [e-mail]

BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
London
EC2N 2DL