Interim Management Statement

RNS Number : 5023W

City Natural Res High Yield Tst PLC

19 November 2010

 



To: RNS

Date: 19 November 2010

From: City Natural Resources High Yield Trust plc

Interim Management Statement

For the Three Month Period from 1 July 2010 to 30 September 2010

Investment Objective

City Natural Resources High Yield Trust plc aims to provide shareholders with capital growth and income from a portfolio of mining and resource equities, resources and industrial fixed interest securities.

Performance Summary

Total Return	For the three month period ended 30 September 2010
Net asset value per share	+30.3%
Ordinary share price	+33.9%
Composite Index	+13.2%
HSBC Global Mining Index (sterling adjusted)	+16.1%
Credit Suisse High Yield Bond Index (sterling adjusted)	+0.5%

Capital Values - 3 months	As at 30 September 2010	As at 30 June 2010	% Change
Net assets (£000s)	£195,362	£151,109	29.3%
Net asset value per share	292.2p	226.0p	29.3%
Share price	250.0p	188.5p	32.6%
Discount	14.4%	16.6%
Gearing (100 = nil geared position) *	107.5%	109.7%

* Gearing = Total assets ÷ Equity Shareholders' Funds

Review for the Period

Quarterly Review:

A very strong quarter for the Company, with its net asset value up 29.3 per cent and its share price up 32.6 per cent as the discount narrowed a little to end the quarter at 14.4 per cent.

There may be few signs of a sustained recovery in the developed world, but the emerging economies go from strength to strength and their appetite for resources has driven a widespread commodity boom which extends from soft commodities (the Company's investments in palm oil and rubber have stood it in good stead) to energy (both coal and oil have been strong, but it is uranium, where the Company has close to 10 per cent of its assets, that has caught the eye), rare earths and beyond.  US dollar weakness played its part and the uncertain effects of vast tranches of quantitative easing also contributed, with gold, by far the Company's single biggest exposure, hitting new highs during the period.

There seems little reason to look for any retreat in commodity prices in the near term, and merger and acquisition activity can be expected to intensify as the majors reap the benefits of the prevailing high prices.

Dividend:

A final dividend for the year to 30 June 2010 of 1.85p per share was paid on 27 August 2010 to shareholders on the register on 6 August 2010.  This took the dividend for the year to 30 June 2010 to 3.71p, an increase of 20.8 per cent on the prior year.

Top Ten Holdings as at 30 September 2010

Company	Sector	Country Listing	Percentage of total investments
Polar Star Mining	Copper	Canada	6.0
Extract Resources	Uranium	Australia	3.5
Kalahari Minerals (Note 1)	Uranium	UK	3.4
REA Holdings (Note 2)	Palm Oil	UK	2.9
New Britain Palm Oil	Palm Oil	UK and Papua New Guinea	2.5
Perseus Mining	Gold	Australia and Canada	2.4
Kinross Gold	Gold	Canada	1.9
First Quantum	Copper	Canada	1.7
Silver Wheaton	Silver	Canada	1.6
Silver Lake Resources	Gold	Australia	1.5
Total			27.4

Note 1 - Includes Kalahari Minerals 10% Cv 31/08/11 *

Note 2 - Includes REA Holdings Cum Pref shares and REA Finance 9.5% 31/12/17

Note 3 - Includes warrants

* Denotes an unquoted investment

Classification of investments by stockmarket quotation as at 30 September 2010

Country	Percentage of total investments
Australia	40.7
Canada	29.8
UK	20.3
US	5.7
Europe	3.2
Hong Kong	0.1
Papua New Guinea	0.1
South Africa	0.1
Total	100.0

Analysis of net assets as at 30 September 2010

Sector	Percentage of net assets
Gold	29.6
Copper	11.1
Uranium	9.2
Oil & gas	8.3
Rare earth	5.9
Palm oil	5.4
Silver	5.2
Iron ore	3.1
Platinum	1.3
Nickel	0.9
Rubber	0.9
Other investments	4.7
Corporate bonds	10.3
Convertibles	8.8
Preference shares	2.1
Net current assets	(6.8)
Total	100.0

Analysis of investments by quotation as at 30 September 2010

	Percentage of net assets
Listed/Quoted on a recognised investment exchange	99.5
Unquoted - convertible into a security quoted on a recognised exchange	3.5
Unquoted - other	3.8
Net current assets	(6.8)
Total	100.0

Significant Events or Transactions

A first interim dividend for the year to 30 June 2011 of 0.69p per share was declared on 21 October 2010. This dividend is payable to shareholders on the register on 29 October 2010 and will be paid on 26 November 2010.

The Board is not aware of any other significant events or transactions which have occurred since 30 September 2010 and the date of publication of this statement which would have a material impact on the financial position of the Company.

This interim management statement has been prepared solely to provide information to meet

the requirements of the UK Listing Authority's Disclosure and Transparency Rules.

Daily and Key Information

Further information regarding the Company including the recent share price and the recent monthly fact sheet, can be found at the Manager's website www.ncim.co.uk

For further information please contact:

Merfyn Roberts / Will Smith                                            Martin Cassels

New City Investment Managers Ltd                                  F&C Asset Management plc

0207 201 5371/5387                                                       0208 628 8000

 

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