Annual Financial Report and Dividend Announcement

RNS Number : 1504I

CT UK Capital and Income Investment

01 December 2022

 

CT UK CAPITAL AND INCOME INVESTMENT TRUST PLC

Audited Statement of Results for the year ended 30 September 2022

LEI: 21380052ETTRKV2A6Y19

1 December 2022

CT UK Capital and Income Investment Trust PLC ("CTUK" / "the Company") today announces its results for the year ended 30 September 2022.

· Net Asset Value ("NAV") per share total return of -13.1%, compared to the FTSE All-Share Index (our "Benchmark") total return of -4.0%. Share price total return of -10.5%

· The Board is pleased to declare a fourth quarterly dividend of 3.85p per share*. Together with the three dividends already paid for this financial year, this takes the total dividend for the year to 11.80p per share, an increase of 1.7% compared to last year. This is the 29^th consecutive year of increased payments, maintaining the Company's status as an AIC Dividend Hero. 

· Despite this short-term underperformance the Company continues to outperform long-term.  For ten years NAV per share and share price total returns were 81.5% and 80.1% compared to 79.5% for the FTSE All-Share Index.  Furthermore, since March 1997, when Julian Cane was appointed Fund Manager, the Company's NAV per share and share price total returns were 284.7% and 387.7% respectively.  These compare to the total return from the FTSE All-Share Index of 252.1% for that period.

*The fourth interim dividend will be paid on 19 December 2022 to Shareholders on the register on 9 December 2022.  The ex-dividend date is 8 December 2022.

The Chairman, Jonathan Cartwright, said:

" This year the UK has witnessed probably one of its greatest periods of political instability. This, inevitably, is feeding through into turmoil on the financial markets, contributing to both volatility and a weakness in the value of sterling denominated assets. The most recent events come after, and in some way were partly caused by, an already difficult macroeconomic and geopolitical background.

"Notwithstanding continuing global and domestic economic and political pressures and uncertainties, the Board considers that the Company remains well placed to take advantage of opportunities to deliver attractive returns over the medium and longer- term."

Chairman's Statement

This year the UK has witnessed probably one of its greatest periods of political instability, having had, at the time of writing, three Prime Ministers and four Chancellors. This, inevitably, is feeding through into turmoil on the financial markets, contributing to both volatility and a weakness in the value of sterling denominated assets. The most recent events come after, and in some way were partly caused by, an already difficult macroeconomic and geopolitical background.

It has been a very difficult environment for all UK domestic investors and our Shareholders have not been immune, with inflation eating into all asset returns and both equities and bonds being under considerable pressure. During our financial year, from 30 September 2021 to 30 September 2022, the FTSE All-Share Index recorded a negative total return of -4.0%. Whilst the economic situation has not been strong over the last year it was arguably politics that was the major driver of market movement, and your Company's disappointing performance, especially Russia's invasion of Ukraine and the initial acts of the now ex-, senior leadership of the UK's Government. This was in addition to a COVID-19 "hangover" as companies sought to adapt to continuing supply chain issues, changes in work practices and a tight employment market. As if that were not enough, post Brexit problems associated with the smooth transfer of goods and services remained unresolved.

The Fund Manager's Review in the annual report comments in more detail about events of the last year and how they affected your Company directly, but in contrast to the previous year when performance was very strong in absolute terms and relative to the Index, the impact was negative. Over the year to September 2022, the Net Asset Value (NAV) per share total return (including all income) fell by 13.1% and the share price total return (including the dividends paid) fell by 10.5%.

In our last annual report, I commented that our performance was ahead of our Benchmark over the short, medium and long-term, but the scale of this year's reversal clearly rolls through to our medium and longer-term performance. Whilst this setback has put a dent in our track record, under Julian Cane, your investment manager since March 1997, we continue to show outperformance compared to our Benchmark, with the performance figures showing over ten years our NAV per share and share price total returns are 81.5% and 80.1% compared to 79.5% for the FTSE All-Share Index. Furthermore, over 25 years to September 2022, the Company's NAV per share and share price total returns totalled 284.7% and 387.7% respectively. These compare directly to the total return from the FTSE All-Share Index of 252.1%.

Revenue, Earnings and Dividends

There is some better news on our revenue and earnings for the year. These have continued to experience strong rates of growth

with earnings per share having recovered to 12.0p, an increase of 13.9% over one year and 44.2% over two years. This exceptional rate of growth over two years is from the low point of portfolio dividend receipts during the COVID-19 pandemic when a number of companies ceased dividend payments altogether. All of our investments are now paying dividends again.

Notwithstanding the political chaos and the UK's lacklustre economic performance, companies in general have been increasing their dividends, at least partly in response to a gain in confidence postpandemic. The Fund Manager's Review in the annual report comments more about the rate of dividend growth from some of our key investments.

In the previous two financial years, your Board chose to pay dividends to Shareholders that were not fully covered by our annual earnings. This decision was reached as your Company had accrued reserves over a number of years and we know our Shareholders appreciate a steadily rising dividend. Importantly, a key feature of the structure of investment trusts is that it allows companies such as ours to accumulate a Revenue Reserve from undistributed income in good years and then to draw down from this Reserve when circumstances are more challenging. It is encouraging to report this year's dividend is fully covered by annual earnings.

With these results, we are announcing the intention to pay a fourth quarterly dividend of 3.85 pence per share. Together with the three dividends already paid for this financial year, this takes the total dividend for the year to 11.80 pence per share, an increase of 1.7% compared to last year.

We are proud to be an AIC Dividend Hero as we have increased our dividend every year since launch in 1992. It is very much our intention to continue to extend this record and the strength of our Revenue Reserve of £11.1m or 10.4p per share adds greatly to our confidence that this will be achievable.

Share Rating

The Company's shares have traded on average at a discount to their underlying NAV per share of a little less than 2% over the last year. This is very similar to the average level at which the shares traded in the previous financial year.

The Board believes it is in Shareholders' interests that the shares of the Company should not trade at prices that are too detached from the underlying NAV per share. In order to facilitate this, the Company has the ability to buy back its own shares if the price stands at a discount compared to the underlying NAV per share and to issue its own shares if the price is at a premium of more than 1.5%. In total there were ten share buy backs and one share issue during the year. For further details please refer to notes 15 and 16 to the financial statements. It is important to note that the effect of these activities is also to increase marginally the underlying NAV per share for continuing Shareholders.

At the forthcoming Annual General Meeting, the Board will again be asking Shareholders to renew its authority to issue shares at a premium and buy back at a discount. This will assist the Company in keeping its share price closely linked to the NAV per share. The ability to buy back and issue shares also helps to provide liquidity to Shareholders and potential Shareholders, beyond what may be available through the market.

Costs

We aim to run your Company efficiently and believe we are amongst the most competitive within our peer group. I am pleased to report that the cost of running the Company for the year ended 30 September 2022 remained unchanged from the prior year at 0.59%. This further extends a period of stability in the costs of running the Company.

It is worth highlighting again that all our performance figures are quoted after these costs.

Balance Sheet and Gearing

The amount we have borrowed during the course of the year has not varied much, ranging from £23.5m to £27.0m. As market movements and our Net Asset Value have declined during the year, the use of gearing has not been beneficial to our investment returns overall.

The main question when considering whether to borrow to finance investment in the portfolio, is whether the returns from any additional investments are likely to be greater than the interest cost of our borrowing. Even with interest rates having increased, the Board and the Manager believe that the return from the investment portfolio is likely to have a much greater impact on the net investment return than the cost of debt.

Our gearing (averaging 7.2% through the year) is at a relatively modest level and the amount borrowed can be increased up to £40m if a more positive view of markets is taken.

Responsible Investment

As longstanding Shareholders will know, consideration of Environmental, Social and Governance (ESG) issues have long been an important part of the investment process as your Manager has one of the largest and longest established teams dedicated to ESG.

There is a detailed report on pages 26 to 29 of the annual report which explains Columbia Threadneedle's ESG policies, how these are implemented in the management of the portfolio and its engagement with our investee companies.

Your Board engages with the Columbia Threadneedle ESG team to ensure that their policies are aligned with the fundamental objectives of your Company and carefully monitors the decisions taken by Columbia Threadneedle in its application of those ESG policies.

Directorate Change

As a part of the Board's succession plan, on 21 July 2022, it was announced that Sharon Brown will retire on 31 December 2022, having served on the Board for nine years. Sharon is Chair of the Company's Audit and Risk Committee and her retirement date coincides with the planned completion of the Company's financial reporting process for the year ended 30 September 2022. The Company has benefited immensely from Sharon's wide ranging financial and commercial experience. On behalf of the Board and Shareholders of the Company I thank Sharon for her diligence and wise counsel throughout her period of appointment.

As a further part of this plan a search company was commissioned to find a new Director for the Board. Following a thorough selection process, on 21 July 2022, Patrick Firth was appointed to the Board and its committees.

Patrick is a qualified Chartered Accountant and a member of the Chartered Institute for Securities and Investment. He has worked in the fund industry in Guernsey since 1992 and has been, and continues to be, a director of a number of management companies, general partners and investment companies. He is currently Chair of the Audit and Risk Committees of Riverstone Energy Limited, NextEnergy Solar Fund Limited and India Capital Growth Fund Limited.

Following Sharon's retirement, Patrick will be appointed Chair of the Company's Audit and Risk Committee.

I was appointed to the Board in November 2019 and became Chair with effect from 1 April 2020. Due to a change in my own personal circumstances, I now intend to retire from the Board on 1 July 2023.

Although relatively short, my tenure has witnessed some major events. As mentioned earlier, the Company has experienced the COVID-19 pandemic, Russian military action in the Ukraine, rising inflation and increasing interest rates in many economies including the United Kingdom. Throughout the period, our investment strategy has remained unchanged, with an emphasis on identifying companies with clear business models and the potential for significant medium and longer-term prosperity. The dividend has also been increased annually.

I wish to express my sincere thanks to my fellow Directors, the Columbia Threadneedle investment management team and the Company's advisers for their support in navigating these challenges.

Upon my retirement, Jane Lewis, who was appointed to the Board in April 2015 will be appointed Chair. Jane has extensive sector experience through her career in investment company corporate broking at Winterflood and business development at leading investment trust houses. Jane holds a number of investment trust directorships including as Chair. I know that she will continue to serve the Company well.

The Board will also recruit a new Director, taking account of diversity as part of this process.

AGM

The Annual General Meeting ("AGM") will be held at 11.30am on 9 March 2023 at the offices of Columbia Threadneedle Investments, Exchange House, Primrose Street, London EC2A 2NY. This will be followed by a presentation by Julian on the Company and its investment portfolio.

For Shareholders who are unable to attend, any questions they may have regarding the resolutions proposed at the AGM or the performance of the Company can be directed to a dedicated email account, [e-mail], by Thursday 2 March 2023. We will endeavour, in so far as reasonably practicable, to address all such questions at the meeting. In addition, the meeting will be recorded and will be available to view on the Company's website, www.ctukcapitalandincome.com shortly thereafter.

To ensure that your votes will count, I would encourage all Shareholders that cannot attend in person to complete and submit their Form of Proxy or Form of Direction in advance of the AGM.

Continuation Vote

In accordance with the Company's articles of association, every five years the Board seeks Shareholder approval for the continuation of the Company. As the last vote occurred in 2018, an ordinary resolution for the continuation of the Company will be proposed at the forthcoming AGM. The Board believes that it is in the best interests of Shareholders for the Company to continue and therefore encourages Shareholders to vote in favour of the Company's continuation.

During the year the Board surveyed investors who hold the Company's shares within the CT Savings Plans. The purpose of the survey was to gain a deeper understanding of investors' views and sentiment towards the Company in advance of the continuation vote. Common themes amongst responses included the importance of performance, dividend growth, low fees and the reputation of the Manager. The Board has noted that most respondents invest for the longer-term with retirement and income being key reasons for investment.

I would like to thank on behalf of the Board the many investors who took the time to complete the survey and provide comments and questions. The Board has considered these results and comments and is taking steps to address the issues raised.

Your stated priorities are fully aligned with your Board's and we shall continue to pursue them on behalf of Shareholders.

Ownership of the Manager

On 8 November 2021, BMO sold its asset management business in Europe, the Middle East and Africa, ("BMO GAM EMEA") to Columbia Threadneedle Investments. Since November 2021, Columbia Threadneedle Investments has been working to integrate both organisations. The combined business has more than 2,500 staff, including over 650 investment professionals based in North America, Europe and Asia. At 30 September 2022 it managed £490 billion of client assets.

On 4 July 2022, the entire BMO GAM EMEA business was rebranded as Columbia Threadneedle Investments. As part of this process, the Company's Manager, BMO Investment Business Limited, was renamed Columbia Threadneedle Investment Business Limited.

As many of the Company's Shareholders invest through the CT Savings Plans the Board resolved that aligning with the brand of the Manager would ensure that the Company maximises the benefits of the broader Columbia Threadneedle Investments brand.

On 1 July 2022 the Company therefore announced that it had changed its name from BMO Capital and Income Investment Trust PLC to CT UK Capital and Income Investment Trust PLC. The Company's website address was also amended from 4 July 2022 to become ctukcapitalandincome.com and its trading instrument display mnemonic ("TIDM" or "ticker") changed to CTUK.

Throughout the change of ownership of the Manager, the Board has emphasised and received assurances from senior management at Columbia Threadneedle Investments regarding the stability and continuity of the teams which support the Company. The Board welcomes these assurances and will ensure that Shareholders are kept informed of developments.

Outlook

The immediate economic, domestic political and geopolitical backgrounds look at least as challenging as anything experienced in the last several decades. In this context, investment markets are necessarily forward looking, worried less by the past, but focusing on how the future will develop. Domestic political stability had largely been taken for granted in the UK and it will be necessary in future to avoid further losses in confidence in the UK as a country in which to carry out business.

Inflation, which is driving the cost-of-living crisis, has arisen from a variety of sources, with each of these perhaps starting to be addressed. Some inflation stemmed from the disruption to supply chains caused by the pandemic and this has been easing. Central Banks have been increasing interest rates and the Bank of England has started to implement some Quantitative Tightening as loose monetary policy is unwound. This will help to reduce some inflationary pressure. Additionally, some indices of energy prices are now lower than in the first half of this year; if this trend continues it will be positive for consumers' disposable income and also reduce inflation.

Valuation is a further indicator of expectations for future investment returns. The UK equity market has not been popular with international investors for a while, leading to the UK market standing at an undemanding valuation, both in absolute terms and when compared with many international markets. On the plus side the relatively low valuation and attractive dividend yield should give some good protection from current and future uncertainties.

Notwithstanding continuing global and domestic economic and political pressures and uncertainties, the Board considers that your Company remains well placed to take advantage of opportunities to deliver attractive returns over the medium and longer-term. I would like to take this opportunity to thank Shareholders for your continuing support.

Jonathan Cartwright

Chairman

30 November 2022

Principal Risks and Future Prospects

The principal risks together with their mitigations are set out below. The Board's processes for monitoring them and identifying emerging risks are set out on page 53 and in note 21 of the Annual Report & Accounts.

The global economy continues to suffer considerable disruption due to the effects of the COVID-19 pandemic, inflationary concerns and the war in Ukraine.

The Directors continue to review the key risk register for the Company which identifies the risks that the Company is exposed to, the controls in place and the actions being taken to mitigate them.

The principal risks identified as most relevant to the assessment of the Company's future prospects and viability are detailed below.

· Risk description:   Macroeconomic and geopolitical risk including the possibility of prolonged recession in the United Kingdom and the impact of the war in Ukraine.

Increase in overall risk during the year.

Mitigation:  The Company has a clearly defined and approved strategy which is reviewed and approved on an annual basis. The Board can hold additional board meetings at short notice to discuss the impact of significant changes in the macroeconomic and geo-political environment. The Company maintains a portfolio of diversified stocks. Forward looking stress tests ranging from moderate to extreme scenarios are provided by the Manager to the Board to support the Five-Year Horizon Statement.

· Risk description : Unfavourable markets or asset allocation, sector and stock selection and use of gearing and derivatives are inappropriate giving rise to investment underperformance as well as impacting capacity to pay dividends.

No change in overall risk during the year.

Mitigation : The portfolio of quoted securities is diversified and the Company's structure enables it to take a long-term view notwithstanding the current market volatility. Investment policy, performance, revenue and gearing are reviewed at each Board meeting. The Manager's Performance and Risk Oversight team provides independent oversight on investment risk management. The Board regularly considers operating costs along with underlying dividend income and the implications for the dividend payment capacity of the Company taking into account revenue reserves.

· Risk description : Errors, fraud or control failures at service providers or loss of data through increasing cyber threats or business continuity failure could damage reputation or investors' interests or result in losses.

No change in overall risk during the year.

Mitigation : The Board receives regular control reports from the Manager covering risk and compliance including oversight of third party service providers. The Board has access to the Manager's Risk Manager and requires any significant issues directly relevant to the Company to be reported immediately. The Depositary is specifically liable for loss of any of the Company's securities and cash held in custody.

· Risk description:   Inappropriate business or marketing strategy particularly in relation to investor needs or sentiment giving rise to a share price discount to NAV per share.

No change in overall risk during the year.

Mitigation:   To gauge investor sentiment, the Board holds an investor satisfaction survey which is conducted every five years ahead of a vote on whether the Company should continue. The Board holds a separate annual meeting to consider the Company's strategy and performance together with opportunities and threats to its business. The appointment of the Manager is also reviewed annually in terms of sustainable long-term growth in capital and income, which includes the growing recognition of the importance of the application of high standards of ESG practice. Share buybacks can be employed to help moderate discount volatility, while share issues can be made when the shares are trading at a premium. At each Board meeting the Directors receive an update on the marketing activities undertaken by the Manager. This includes details of the level of maturing Child Trust Funds and the decisions, if any, taken by their holders. The Company's Broker provides periodic updates to the Board relating to the Company's trading in the wider market.

Five Year Horizon

Through a series of connected stress tests ranging from moderate to extreme scenarios and based on historical information, but forward looking over the five years commencing 1 October 2022, the Board assessed the risks of:

· potential illiquidity of the Company's portfolio;

· the effects of any substantial future falls in investment values and income receipts on the ability to repay and re-negotiate borrowings;

· potential breaches of loan covenants, the maintenance of dividend payments and retention of investors; and

· the potential need for extensive share buybacks in the event of share price volatility and a move to a wide discount.

In accordance with the UK Code, the Directors have assessed the future prospects of the Company over the coming five years. Based on this assessment, and in the context of the Company's business model, strategy and operational arrangements, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period ending November 2027. For this reason, the Board also considers it appropriate to continue adopting the going concern basis in preparing these financial statements.

Statement of Directors' Responsibilities 

In accordance with Chapter 4 of the Disclosure Guidance and Transparency Rules the Directors confirm, that to the best of their knowledge:

· the financial statements, prepared in accordance with applicable accounting standards give a true and fair view of the assets, liabilities, financial position and profit of the Company;

· the Strategic report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face; and

· the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's position and performance, business model and strategy.

On behalf of the Board

Jonathan Cartwright

Chairman

30 November 2022

Income Statement

for the year ended 30 September	2022			2021
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
(Losses)/gains on investments	-	(57,259)	(57,259)	-	89,657	89,657
Foreign exchange (losses)/gains	(1)	-	(1)	(4)	13	9
Income	14,495	-	14,495	12,697	58	12,755
Management fee	(714)	(714)	(1,428)	(721)	(721)	(1,442)
Other expenses	(680)	(1)	(681)	(535)	(2)	(537)
Net return before finance costs and taxation	13,100	(57,974)	(44,874)	11,437	89,005	100,442
Finance costs	(192)	(192)	(384)	(114)	(114)	(228)
Net return before taxation	12,908	(58,166)	(45,258)	11,323	88,891	100,214
Taxation	(18)	-	(18)	(13)	-	(13)
Net return attributable to Shareholders	12,890	(58,166)	(45,276)	11,310	88,891	100,201
Return per share - basic and diluted	12.03p	(54.29p)	(42.26p)	10.56p	82.95p	93.51p

The total column of this statement is the profit and loss account of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

A statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement.

Statement of Changes in Equity

for the year ended 30 September 2022
		Share	Capital				Total
	Share	premium	redemption	Special	Capital	Revenue	Shareholders'
	capital	account	reserve	reserve	reserve	reserve	funds
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 September 2021	26,822	141,374	4,146	4,432	168,366	10,735	355,875
Movements during the year    ended 30 September 2022:
Dividends paid	-	-	-	-	-	(12,532)	(12,532)
Ordinary shares issued from   treasury	-	21	-	568	-	-	589
Ordinary shares bought back   and held in treasury	-	-	-	(2,358)	-	-	(2,358)
Costs relating to broker	-	(15)	-	-	-	-	(15)
Net return attributable to   Shareholders	-	-	-	-	(58,166)	12,890	(45,276)
Balance at 30 September 2022	26,822	141,380	4,146	2,642	110,200	11,093	296,283

for the year ended 30 September 2021
		Share	Capital				Total
	Share	Premium	redemption	Special	Capital	Revenue	Shareholders'
	capital	Account	reserve	reserve	reserve	reserve	Funds
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 September 2020	26,677	139,814	4,146	4,434	79,475	11,849	266,395
Movements during the year    ended 30 September 2021:
Dividends paid	-	-	-	-	-	(12,424)	(12,424)
Ordinary shares issued	145	1,549	-	-	-	-	1,694
Ordinary shares issued from   treasury	-	29	-	443	-	-	472
Ordinary shares bought back   and held in treasury	-	-	-	(445)	-	-	(445)
Costs relating to broker	-	(18)	-	-	-	-	(18)
Net return attributable to   Shareholders	-	-	-	-	88,891	11,310	100,201
Balance at 30 September 2021	26,822	141,374	4,146	4,432	168,366	10,735	355,875

Balance Sheet

at 30 September	2022	2021
	£'000s	£'000s
Fixed assets
Investments	318,796	378,420
Current assets
Debtors	5,106	1,087
Cash and cash equivalents	906	1,813
Total current assets	6,012	2,900
Current liabilities
Creditors: amounts falling due within one year	(4,525)	(445)
Bank Loan	(24,000)	(25,000)
Total current liabilities	(28,525)	(25,445)
Net current liabilities	(22,513)	(22,545)
Total assets less current liabilities	296,283	355,875
Capital and reserves
Share capital	26,822	26,822
Share premium account	141,380	141,374
Capital redemption reserve	4,146	4,146
Special reserve	2,642	4,432
Capital reserve	110,200	168,366
Revenue reserve	11,093	10,735
Total Shareholders' funds	296,283	355,875
Net asset value per ordinary share - pence	277.66	331.70

Statement of Cash Flows

for the year ended 30 September	2022	2021
	£'000s	£'000s
Cash flows from operating activities before dividends received and interest	(2,241)	(2,038)
Dividends received	14,133	12,279
Interest received	9	15
Interest paid	(376)	(227)
Cash flows from operating activities	11,525	10,029
Investing activities
Purchase of investments	(22,303)	(42,713)
Sale of investments	25,189	39,028
Other capital charges	(1)	(2)
Cash flows from investing activities	2,885	(3,687)
Cash flows before financing activities	14,410	6,342
Financing activities
Equity dividends paid	(12,532)	(12,424)
Net proceeds from issuance of new shares	-	1,694
Net proceeds from issuance of shares held in treasury	589	472
Broker costs associated with share issues and buybacks	(15)	(18)
Cost of shares bought back and held in treasury	(2,358)	(445)
(Repayment)/drawdown of bank loan	(1,000)	5,000
Cash flows from financing activities	(15,316)	(5,721)
Net movement in cash and cash equivalents	(906)	621
Cash and cash equivalents at the beginning of the year	1,813	1,183
Effect of movement in foreign exchange	(1)	9
Cash and cash equivalents at the end of the year	906	1,813
Represented by:
Cash at bank	36	3
Short-term deposits	870	1,810
	906	1,813

Notes

1  Return per ordinary share

Revenue return

The revenue return per share of 12.03p (2021: 10.56p) is based on the revenue return attributable to Shareholders of £12,890,000 profit (2021: £11,310,000 profit).

Capital return

The capital return per share of -54.29p (2021: 82.95p) is based on the capital return attributable to Shareholders of £58,166,000 loss (2021: £88,891,000 profit).

Total return

The total return per share of -42.26p (2021: 93.51p) is based on the total return attributable to Shareholders of £45,276,000 loss (2021: £100,201,000 profit).

Weighted average ordinary shares in issue

The returns per share are based on a weighted average of 107,131,967 (2021: 107,151,511) ordinary shares in issue during the year.

2  Dividends

The Directors have declared a fourth interim dividend in respect of the year ended 30 September 2022 of 3.85 pence per share, payable on 19 December 2022 to all Shareholders on the register at close of business on 9 December 2022, ex-dividend 8 December 2022.

3  Financial risk management

The Company is an investment company, listed on the London Stock Exchange, and conducts its affairs so as to qualify in the United Kingdom ("UK") as an investment trust under the provisions of section 1158 of the Corporation Tax Act. In so qualifying, the Company is exempted in the UK from corporation tax on capital gains on its portfolio of investments.

The Company's investment objective is to secure long-term capital and income growth from a portfolio consisting mainly of FTSE All-Share companies. The Company can also have exposure to overseas companies, with the value of the non-UK portfolio not exceeding 10% of the Company's gross assets. In pursuing this objective, the Company is exposed to financial risks which could result in a reduction of either or both of the value of the net assets and the profits available for distribution by way of dividend. These financial risks are principally related to the market (currency movements, interest rate changes and security price movements), liquidity and credit. The Board, together with the Manager, is responsible for the Company's risk management.

The full details of financial risks are contained in note 21 of the Report and Accounts.

4  Annual general meeting

The 2023 Annual General Meeting ("AGM") of the Company will be held at 11.30am on Thursday 9 March 2023 at Exchange House, Primrose Street, London EC2A 2NY.

For Shareholders who are unable to attend, any questions they may have regarding the resolutions proposed at the AGM or the

performance of the Company can be directed to a dedicated email account, [e-mail], by Thursday 2 March 2023. We will endeavour, in so far as reasonably practicable, to address all such questions at the meeting. In addition, the meeting will be recorded and will be available to view on the Company's website, www.ctukcapitalandincome.com shortly thereafter.

To ensure that your votes will count we would encourage all Shareholders that cannot attend in person to complete and submit their Form of Proxy or Form of Direction in advance of the AGM.

5  Report and accounts

The report and accounts for the year ended 30 September 2022 will be posted to Shareholders and made available on the website www.ctukcapitalandincome.com shortly. Copies may also be obtained by mailing the Company's registered office, Exchange House, Primrose Street, London EC2A 2NY.

By order of the Board

Columbia Threadneedle Investment Business Limited, Secretary

30 November 2022

 

END

 

 

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