Interim Management Statement

RNS Number : 3336Z

Investors Capital Trust PLC

17 July 2008

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 April 2008 to 30 June 2008

Investment objective

To provide an attractive return to shareholders each year in the form of dividends and/or capital returns, together with prospects for capital growth. 

The Company's portfolio is managed in two parts. The first part comprises investments in UK equities and equity-related securities of large and mid-sized companies (the Equities Portfolio) and the second part comprises investments in fixed interest and other higher yielding stocks and securities (the Higher Yield Portfolio).

Performance summary

Capital return	As at  30 June  2008	As at   31 March   2008	Movement
Total assets	£144.7 million	£149.5 million	(3.2)%
Net asset value:    A share and B share    Unit*	87.9p 351.6p	89.6p 358.5p	(1.9)% (1.9)%
Share price:   A share   B share   Unit	84.5p 84.0p 332.5p	83.0p 83.0p 327.0p	1.8% 1.2% 1.7%
Discount:   A share   B share   Unit	(3.9)% (4.4)% (5.4)%	(7.4)% (7.4)% (8.8)%
Gearing**:   Maximum potential ratio   Actual ratio	129.3 75.5	129.7 75.1
Total return	For the three month period ended 30 June 2008	For the 13 month period ended 31 March 2008
Net asset value:   A and B share and Unit	(0.4)%	(3.1)%
FTSE All-Share Capped 5% Index	(2.1)%	(4.7)%

Sources: F&C Investment Business Limited and Datastream.

* A unit consists of three A shares and one B share

**The gearing ratio indicates the extra amount by which shareholders' funds would rise or fall if total assets were to rise or fall. A figure of 100 means that the Company has a nil geared position.

Maximum potential ratio = the ratio of total assets (including fixed interest and cash assets) to assets attributable to shareholders.

If securities held in the Company's Higher Yield Portfolio are included as fixed interest assets then the actual ratio will be as shown below.

Actual ratio = the ratio of total assets (less fixed interest and cash assets) to assets attributable to shareholders.

  Review

The UK equity market decreased 2.1% during the quarter to 30 June 2008, as measured by the FTSE All-Share Capped 5% Index on a total return basis. This relatively modest decline in the Index fails to reflect the significant fall from the high achieved during May, from where the Index has declined by 12%.

Inflationary pressures increasingly act as a constraint on the ability of the Monetary Policy Committee (MPC) to cut interest rates in an effort to stimulate economic activity. The market now forecasts UK interest rates will increase in the second half of the year as the MPC emphasise the importance of anchoring inflation expectations. Recent mortgage rate increases from a number of key mortgage providers coupled with the change in the outlook for domestic interest rates reinforce the view that the feel good factor from rising house prices is firmly in reverse. The inflationary impact of oil rising to new nominal highs of over $140 per barrel is compounded by the linkage to the cost of wholesale gas. The rise in the cost of gas will ensure utility companies pass on further price increases for gas and electricity to households that are already under pressure. The decline in equity valuations better reflects the more challenging economic outlook although we caution that the downturn may prove protracted. 

The Company has maintained a significant holding in cash, 19% of total assets, which was built up in the last quarter of 2007 in combination with a defensive investment stance in both the Company's Equities and Higher Yield portfolios. This has helped the Company outperform the Index over the quarter with its net asset value decreasing 0.4% on a total return basis.

Dividends and Capital Distributions

A fourth quarter dividend in respect of the period ended 31 March 2008, of 1.375 pence per share, was paid on the A shares of the Company on 9 May 2008 to A shareholders on the register on 4 April 2008. 

A fourth quarter capital return of 1.375 pence per share was paid on the B shares of the Company on 9 May 2008 to B shareholders on the register on 4 April 2008. Capital returns on B shares are paid at the same time as, and in an amount equal to, each dividend paid on an A share.

Share Buy Backs

During the quarter, the Company bought back 930,000 A Shares to be held in treasury for a total consideration of £0.8 million and 310,000 B Shares for cancellation for a total consideration of £0.3 million.

  Top ten Equities Portfolio holdings and top ten Higher Yield Portfolio holdings

Equities Portfolio

Company			Percentage of total assets  as at  30 June 2008
BP			4.2%
Royal Dutch Shell			4.1%
Vodafone Group			3.7%
GlaxoSmithKline			3.1%
HSBC			3.0%
BG Group			2.1%
Rio Tinto			2.0%
Imperial Tobacco			2.0%
Tesco			1.9%
Scottish & Southern Energy			1.7%
Total			27.8%

Higher Yield Portfolio

Security			Percentage of total assets  as at  30 June 2008
Iron Mountain 7.25% 15/04/14			0.6%
Credit Suisse 8.25% 10/07/09 Perpetual			0.6%
Segro 7.125% 17/02/10			0.5%
Canandaigua Brand 8.5% 15/11/09			0.5%
Land Securities 4.625% 03/02/13			0.4%
ANZ 6.54% 15/06/12 Perpetual			0.4%
NTL Cable 8.75% 15/04/14			0.4%
M&DB FRN 15/07/20			0.4%
Xerox 9.75% 15/01/09			0.4%
Finance for Danish Industries 6% 06/02/12			0.4%
Total			4.6%

Portfolio Summary

		Market Value at  30 June 2008 £'000	% of  Total Assets at  30 June  2008	% of  Total Assets at   31 March 2008
Equities Portfolio		84,001	58.1	57.7
Higher Yield Portfolio		32,906	22.7	22.1
Net Current Assets		27,818	19.2	20.2
Total Assets (less Current Liabilities)		144,725	100.0	100.0
Bank Term Loan & Interest Rate Swap		(32,780)	(22.6)	(22.9)
Net Assets Attributable to Shareholders		111,945	77.4	77.1

The Board is not aware of any significant events or transactions which have occurred since 30 June 2008 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and key information

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.investorscapital.co.uk, or at www.fandc.com.

Year end:                                                                   31 March

Dividends and Capital Distributions paid:                 August, November, February and May 

Shares in issue with voting rights at quarter end:    97,033,144 A shares and 30,331,703 B shares.

For further information please contact:

Rodger McNair, Investment Manager            Tel: [phone]

Michael Campbell, Company Secretary        Tel: [phone]

 

END

 

 

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