Interim Management Statement

RNS Number : 4114T

City Natural Res High Yield Tst PLC

19 November 2013

 



To: RNS

Date:  19 November 2013

From: City Natural Resources High Yield Trust plc

Interim Management Statement

For the Three Month Period from 1 July 2013 to 30 September 2013

Investment Objective

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

Performance Summary

Total Return	For the three month period ended 30 September 2013
Net asset value per share	+1.13%
Ordinary share price	+10.25%
Composite Index	+5.21%
HSBC Global Mining Index (sterling adjusted)	+8.68%
Credit Suisse High Yield Bond Index (sterling adjusted)	-3.29%

Capital Values - 3 months	As at 30 September 2013	As at 30 June 2013	% Change
Net assets (£000s)	£108,473	£109,094	-0.1%
Net asset value per share	162.2p	163.1p	-0.1%
Ordinary share price +	146.0p	135.0p	+8.1%
3.5% Convertible Unsecured Loan Stock 2018 ("CULS") +	92.8p	93.5p	-0.8%
Discount	10.0%	17.2%
Gearing *	22.4%	22.7%

* The calculation and presentation of gearing is in accordance with the guidance published by the AIC on 1 October 2012

+ Mid market

Review for the Period

Quarterly Review:

The most pronounced feature of the quarter was a narrowing of the discount at which the Company's ordinary shares trade from 17.2 % to 10.0%, resulting in a share price total return for the period of 10.3%.  The Company's net asset value total return for the quarter was 1.1%, somewhat behind that of a composite benchmark index which returned 5.2%.  The two components of the latter fared very differently, with the HSBC Global Mining Index (sterling adjusted) up by 8.7%, while the Credit Suisse High Yield Bond Index (sterling adjusted) fell by 3.3%.

The severe downward pressure on resource prices that we saw during the second quarter climaxed in June, and abated during the quarter under review.  Gold and copper, for example, recovered some, though very far from all, of the ground lost, while a decline in the oil price as the quarter wore on allowed some future optimism as to production costs.  At the macro level global economic indicators remain supportive of growth, without looking robust, and the jury remains out on the tapering of quantitative easing.

Dividend:

A fourth interim dividend for the year to 30 June 2013 of 2.92p per share was paid on 30 August 2013 to shareholders on the register on 9 August 2013.  This took the dividend for the year to 30 June 2013 to 5.50p, an increase of 13.9 per cent on the prior year.

Top Ten Holdings as at 30 September 2013

Company		Sector	Country Listing	% of total investments
REA Holdings (Note 1)		Palm oil	UK	5.5
Vermillion Energy		Oil & gas	Canada	3.3
New Britain Palm Oil		Palm oil	UK and Papua New Guinea	3.2
Norwegian Energy (Note 2)		Oil & gas	Norway	2.4
Sirius Resources		Nickel	Australia	2.3
First Quantum Minerals		Copper	Canada	2.2
Pacific Rubiales Energy		Oil & gas	Canada	1.8
ARC Resources		Oil & gas	Canada	1.8
Skipton Building Society (Note 3)		Finance	UK	1.7
Great Western Minerals (Note 4)		Rare earth	Canada	1.7
Total				25.9
	Note 1 - Includes REA Holdings 9% Cumulative Preference Shares and REA Finance 9.5% 31/12/2017
	Note 2 - Includes Norwegian Energy Norno 12.9% 20/11/2014, Norwegian Energy 10.41% 06/12/2013 and Norwegian Energy 10.5% 25/02/2016. Note 3 - Includes Skipton 10% 12/12/2018 and Skipton 6.75% 30/05/2022.
	Note 4 - Includes warrants and Great Western Minerals 8% Cv 06/04/2017

Classification of investments by stockmarket quotation as at 30 September 2013

Country	% of total investments
Canada	38.5
UK	24.5
Australia	16.6
Europe	13.6
US	0.8
Other	0.2
Unquoted	5.8
Total	100.0

Analysis of net assets as at 30 September 2013

Sector	% of net assets
Oil & gas	28.2
Gold	15.9
Palm oil	7.1
Copper	6.5
Uranium	5.6
Nickel Other mining investments Diamonds Silver Agriculture Iron ore Rare earth Coal Rubber Alternative energy Platinum Other investments Preference shares	2.9 2.4 2.1 2.0 1.9 1.2 0.9 0.9 0.7 0.6 0.2 0.1 10.2
Fixed interest	31.8
Net current assets	11.8
3.5% Convertible Unsecured Loan Stock 2018	(33.0)
Total	100.0

Analysis of investments by quotation as at 30 September 2013

	% of total investments
Listed/quoted on a recognised investment exchange	94.2
Unquoted equities (including placings)	3.9
Unquoted convertible securities that are convertible into listed securities	1.1
Unquoted bonds	0.8
Total	100.0

Significant Events or Transactions

A first interim dividend for the year to 30 June 2014 of 0.86p per share was declared on 21 October 2013.  This was in line with the dividend paid in respect of the same period last year, is payable to shareholders on the register on 1 November 2013 and will be paid on 30 October 2013.

The Company issued 1,416 ordinary shares of 25p each in connection with the exercise of conversion rights by holders of a £5,351 nominal of the Company's 3.5 per cent. Convertible Unsecured Loan Stock 2018 with effect from 30 September 2013.  Trading on the Main Market of the London Stock Exchange became effective and dealings in the new shares commenced at 8.00 a.m. on 11 October 2013. 

The Board is not aware of any other significant events or transactions which have occurred since 30 September 2013 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                                       R&H Fund Services Limited

0207 201 5387                                                               0131 524 6140

 

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