Interim Management Statement

RNS Number : 7221L

F&C Capital & Income Inv Tst PLC

15 January 2009

 



F&C Capital and Income Investment Trust PLC 

Interim Management Statement 

For the three month period to 31 December 2008

Objective

To secure long-term capital and income growth from a portfolio consisting mainly of FTSE All-Share companies. 

Performance summary

	At 31 December 2008	At 30 September 2008	% change
Net assets *	£139.62m	£158.20m	- 11.7
Net asset value ("NAV") per share *	174.54p	200.45p	- 12.9
FTSE All-Share Index - 3 month     return	-	-	-11.1
Share price	169.75p	196.50p	-13.6
Discount to NAV per share	2.7%	2.0%	-
NAV per share    total return - 3 month return	-	-	-11.3
Effective gearing/(liquidity)	5.6%	(0.2)%	-

* Includes undistributed income

Key portfolio changes

The last quarter saw total net investment of £8.6m as new purchases outweighed sales.

Weightings were adjusted and increased slightly in the Bank sector through the reduction in the Barclays and HSBC holdings which were reinvested in Lloyds and The Royal Bank of Scotland. The two largest additions in the portfolio were to Aviva and Vodafone, both being existing holdings. Other significant additions were to Man Group and BP, both companies that earn most of their revenues and set their dividends in US$. Although most of the additions were financed by increasing the loan (or by switching within the Bank sector), the remaining holding in Diageo was sold following strong performance, as was Fresenius in Europe.

Three convertible bonds have also been purchased. There is no real expectation that these will convert, but all have been bought at a large discount to par with very attractive redemption yields.

Three month review

Over the three months to 31 December, the Company's NAV per share fell 12.9%, a greater decline than the decrease in the FTSE All-Share Index of 11.1 %, while the share price fell 13.6% as the discount to NAV per share  widened from  2.0% to  2.7%. 

Economic news over the quarter was grim as the effects of the financial crisis spread and the Credit Crunch continued to claim more victims. As well as individual banks suffering, an entire country was brought to the brink as the Icelandic banking system collapsed. Across the world, the real economy has faltered with the UK, US and Eurozone all showing negative growth. There has been further monetary and fiscal stimulus across many countries as governments and monetary authorities struggled to respond to the crisis. In the UK, interest rates were cut down to 2%, while the US has embarked on the world of ZIRP (Zero Interest Rate Policy). Against this background, the price of oil fell further, reaching $36 / barrel despite production cuts from OPEC and sterling fell heavily against both the euro and the US dollar.

Those sectors most exposed to the slowing economy, such as Banks and Mining, performed very poorly, while more stable industries, such as Pharmaceuticals, Tobacco and Utilities performed better.

The Company's level of borrowing within its £20m committed facility increased during the quarter from nil to  £8m.

The Company did not purchase any of its own shares in the three months to 31 December 2008.  1,070,000 ordinary shares were issued from the Company's general blocklisting authority during this period.  

The Board is not aware of any significant events or transactions which have occurred between 31 December 2008 and the date of publication of this statement which would have a material impact on the financial position of the Company.

First interim dividend for 2009

The Directors have today declared a first interim dividend for 2009 of 1.9 pence per share and a special dividend of 0.4 pence per share, both of which will be paid on 31 March 2009 to shareholders registered on 6 March 2009.  The special dividend has been declared in order to distribute amounts received since the year end in relation to VAT recoveries.

Ten largest holdings

At 31 December 2008	At 30 September 2008	Company	Percentage of total investments at   31 December 2008
1	1	BP	11.1
2	5	Vodafone	7.5
3	3	Royal Dutch Shell	7.4
4	4	GlaxoSmithKline	7.0
5	2	HSBC	5.3
6	7	British American Tobacco	4.9
7	6	Scottish & Southern Energy	4.3
8	11	AstraZeneca	4.2
9	9	National Grid	3.6
10	10	Tesco	3.4
		Total	58.7

Investment portfolio by sector

	Percentage of total investments at 31 December 2008	Percentage of total  investments at 30 September 2008
Financials	17.9	22.6
Oil & gas	20.3	16.3
Consumer goods	8.7	12.5
Basic materials	3.4	7.1
Utilities	11.3	10.8
Telecommunications	10.8	8.5
Health care	11.2	9.6
Consumer services	5.0	2.8
Industrials	3.7	3.1
Europe	7.7	6.7

Annual general meeting

The Directors announce that all resolutions proposed at the annual general meeting held earlier today were duly passed. A copy of the resolutions concerning special business passed has been submitted to the UK Listing Authority and will be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at: Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS, telephone [phone].

Daily and key information

Further information regarding the Company, including monthly factsheets and daily NAVs published since the end of the period, can be found on the internet at www.fandccit.com 

By order of the Board

F&C Management Limited, Secretary

15 January 2009

 

END

 

 

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