Interim Management Statement

RNS Number : 4038S

City Natural Res High Yield Tst PLC

18 November 2011

 



To: RNS

Date:  18 November 2011

From: City Natural Resources High Yield Trust plc

Interim Management Statement

For the Three Month Period from 1 July 2011 to 30 September 2011

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, resource and industrial fixed interest securities.

Performance Summary

Total Return	For the three month period ended 30 September 2011
Net asset value per share	-15.4%
Ordinary share price	-18.8%
Composite Index	-19.3%
HSBC Global Mining Index (sterling adjusted)	-22.6%
Credit Suisse High Yield Bond Index (sterling adjusted)	-1.2%

Capital Values - 3 months	As at 30 September 2011	As at 30 June 2011	% Change
Net assets (£000s)	£199,174	£236,788	-15.9%
Net asset value per share	297.9p	354.2p	-15.9%
Share price	245.9p	305.0p	-19.4%
Discount	17.5%	13.9%
Gearing (100 = nil geared position) *	117.5%	107.9%

* Gearing = Total assets ÷ Equity Shareholders' Funds

Review for the Period

Quarterly Review:

A quarter characterised by more than usually high levels of volatility.  The Company's net asset value closed at 297.9 pence, down 15.4% and a little ahead of the composite benchmark index which closed down 19.3%.  The more revealing statistic is the performance of the two elements that make up the composite index, with the HSBC Global Mining Index (sterling adjusted) down 22.6%, while the Credit Suisse High Yield Bond Index (sterling adjusted) fell only 1.2%.

Against this backdrop the Company's successful issue of £40 million nominal 3.5% Cumulative Unsecured Loan Stock on 26 September was especially pleasing.  It replaces the Company's existing bank facility at a historically low level of interest and at a time when valuations are not extended.

Squabbling over the euro, with consequent dollar strength, continues to loom over the markets.  The Company takes comfort from the fact that commodities such as coal, iron ore and mineral sands which are priced by actual supply and demand, and not materially influenced by futures and options markets, continued to trade relatively well.  The value of the equities of the underling producers have, however, not been protected by this, and patience and a steady nerve will be necessary over the coming months.

Dividend:

A fourth interim dividend for the year to 30 June 2011 of 2.15p per share was paid on 26 August 2011 to shareholders on the register on 5 August 2011.  This took the dividend for the year to 30 June 2011 to 4.22p, an increase of 13.7 per cent on the prior year.

Top Ten Holdings as at 30 September 2011

Company	Sector	Country Listing	Percentage of total investments
Kalahari Minerals (Note 1)	Uranium	UK	4.2
Extract Resources	Uranium	Australia	4.0
Ausgold (Note 2)	Gold	Australia	3.4
REA Holdings (Note 3)	Palm oil	UK	3.3
New Britain Palm Oil	Palm oil	UK and Papua New Guinea	3.2
Neo Material Technologies (Note 4)	Rare earth	Canada	2.0
Great Western Minerals (Note 5)	Rare earth	Canada	1.7
Rockgate Capital (Note 6)	Uranium	Canada	1.6
Silver Wheaton	Silver	Canada	1.6
Polar Star Mining	Copper	Canada	1.5
Total			26.5

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

Note 2 - Includes warrants

Note 3 - Includes REA Holdings Cum Pref shares and REA Finance 9.5% 31/12/17

Note 4 - Includes New Material Technologies 5% Cv 31/12/17

Note 5 - Includes warrants

Note 6 - Includes warrants

* Denotes an unquoted investment

Classification of investments by stockmarket quotation as at 30 September 2011

Country	Percentage of total investments
Australia	36.8
Canada	27.9
UK	22.4
US	9.2
Europe	3.3
South Africa	0.3
Papua New Guinea	0.1
Total	100.0

Analysis of net assets as at 30 September 2011

Sector	Percentage of net assets
Gold	29.2
Uranium	12.8
Oil & gas	8.3
Palm oil	5.9
Silver	5.8
Rare earth	5.5
Copper	4.6
Other mining investments	4.4
Iron ore	3.2
Alternative energy / other	2.4
Rubber	0.7
Platinum	0.3
Corporate bonds	11.6
Convertibles	7.4
Preference shares	5.1
Net current assets	(7.2)
Total	100.0

Analysis of investments by quotation as at 30 September 2011

	Percentage of net assets
Listed/Quoted on a recognised investment exchange	101.1
Unquoted - other	5.0
Unquoted - convertible into a security quoted on a recognised exchange	1.1
Net current assets	(7.2)
Total	100.0

Significant Events or Transactions

A first interim dividend for the year to 30 June 2011 of 0.77p per share was declared on 20 October 2011. This dividend is payable to shareholders on the register on 28 October 2011 and will be paid on 25 November 2011.

The Board is not aware of any other significant events or transactions which have occurred since 30 September 2011 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:

Will Smith/Ian Francis                                                    Martin Cassels

New City Investment Managers                                       F&C Asset Management plc

0207 201 5387                                                               0208 628 8000

 

END

 

 

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