Portfolio Update

BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC
All information is at 31 March 2016 and unaudited.
Performance at month end with net income reinvested

   

One
Month
Three
Months
One
Year
Three
Years
Since
1 April
2012
Five
Years
Sterling
Share price                      3.4%   -3.0% -0.8% 26.8% 55.5% 47.4%
Net asset value                   0.6%  -3.0% -0.6% 26.0% 43.9% 43.0%
FTSE All-Share Total Return      1.9% -0.4% -3.9% 11.4% 30.1% 31.9%
Source: BlackRock

BlackRock took over the investment management of the Company with effect from 1 April 2012.

At month end
Sterling:
Net asset value - capital only:                177.89p
Net asset value - cum income*:                 179.96p
Share price:                                   177.63p
Total assets (including income):               £49.2m
Discount to cum-income NAV:                       1.3%
Net Cash:                                       3.4%
Net yield**:                                       3.4%
Ordinary shares in issue***:                26,229,268
Gearing range (as a % of net assets)             0-20%
Ongoing charges****:                              1.2%

   

* includes net revenue of 2.07 pence per share
** based on an interim dividend of 2.40p per share and a final dividend of 3.60p per share in respect of the year ended 31 October 2015.
*** excludes 6,704,664 shares held in treasury
**** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 October 2015.

   

Benchmark
Sector Analysis   Total assets (%)
Pharmaceuticals & Biotechnology 9.8
Travel & Leisure 9.7
Banks 9.6
Support Services 9.3
Tobacco 7.9
Financial Services 7.2
Media 6.5
Life Insurance 6.0
Oil & Gas Producers 5.5
Food Producers 4.6
Fixed Line Telecommunication 4.0
General Retailers 2.9
General Industrials                2.6
Non-Life Insurance 2.2
Technology & Hardware Equipment 2.1
Real Estate Investment Trusts 1.9
Software & Computer Services 0.9
Net Current Assets  7.3
Total 100.0

   

Ten Largest Equity Investments
Company  Total assets (%)
British American Tobacco 5.5
Lloyds Banking Group 5.3
AstraZeneca 4.8
Unilever 4.6
BT Group 4.0
RELX 3.5
Royal Dutch Shell ‘B’ 3.4
Aviva 3.3
Wolseley 3.0
Sky                       3.0

   

Commenting on the markets, Adam Avigdori and Mark Wharrier representing the Investment Manager noted:
Equity markets experienced a turbulent start to the year, buffeted by economic and political concerns before rallying strongly into the quarter end.  The negative trend in commodity prices, which dominated markets in 2015, reversed abruptly as oil bounced back from a low in February of below $30.  Expectations for further US interest rate rises were tempered as global growth expectations slowed and as other central ban            ks, notably the ECB, continued a policy of loosening.  Confirmation of the date for the Brexit referendum put pressure on sterling and domestically orientated equities.
In the first quarter of 2016, the Company’s NAV fell by 3.0%, whilst the FTSE All Share Index fell by 0.4%. The IA Income Sector returned -1.5% over the same period. As well as being affected by a reversal of momentum, the Company’s performance was impacted negatively by our underweight position in basic materials as it rebounded strongly following its significant fall last year.
Over the quarter, the largest detractor from relative performance was not owning Glencore as the company rallied from its lows.  Next, reacted negatively to a reduction in sales forecasts for 2016 driven by a mix of short-term factors and a weaker outlook for UK consumers. Next is a strong business with a leading position in the UK market. Other holdings which detracted from performance included AstraZeneca, Hays, Barclays and Stagecoach.
The portfolio’s top performer over the quarter was car insurance specialist Admiral Group, which reported record profits and produced a dividend increase of 16%. John Laing Group, the infrastructure developer and investor, reported a strong set of full year 2015 results which included a significant increase in their net asset value, continuing the strong growth track record seen prior to its IPO. Intercontinental Hotels Group also reported robust results with a significant special dividend and our turnaround holding in Rentokil Initial reported strong momentum in its business with excellent cash generation.
During the quarter we took advantage of the volatility in markets and purchased new positions in Shire and RPC. We added to our holding in Lloyds Banking Group, prior to the bank reporting strong results which included a special dividend, further reinforcing the prospect of an improving capital position and a rising dividend payout. We sold our remaining position in Rio Tinto reflecting our structural concerns regarding the long-term demand for iron ore.
We continue to focus on the specific drivers of individual companies and the ability to determine their future rather than relying on a specific macro outcome. We seek those companies that can drive returns through self-help and have a clear strategy to deploy the cashflow they generate. The portfolio is primarily invested in high free cash flow companies that can sustain cash generation and pay a growing dividend yield, but also has exposure to companies with sustainable growth franchises and turnaround situations.
21 April 2016
UK 100

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