Interim Management Statement

RNS Number : 6048G

Investors Capital Trust PLC

03 February 2010

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 October 2009 to 31 December 2009

Investment objective

To provide an attractive return to shareholders each year in the form of dividends and/or capital distributions, 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 31 December 2009	As at   30 Sept 2009	Movement
Total assets	£138.6 million	£134.0 million	3.4%
Net asset value:    A share and B share    Unit*	80.2p 320.8p	76.4p 305.6p	5.0% 5.0%
Share price:    A share    B share    Unit	78.0p 82.0p 306.0p	77.3p 79.8p 305.0p	0.9% 2.8% 0.3%
Premium/(discount):   A share   B share   Unit	(2.7)% 2.3% (4.6)%	1.2% 4.5% (0.2)%
Gearing**:   Maximum potential ratio   Actual ratio (Investment gearing)     Actual ratio (Equity gearing)	135.4 124.6 86.7	137.4 125.5 84.8
Total return	For the three month period ended 31 December 2009	For the nine month period ended 31 December 2009
Net asset value:   A and B share and Unit	6.8%	40.5%
FTSE All-Share Capped 5% Index	5.6%	43.9%

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 net 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 (investment gearing) = the ratio of total assets (less cash assets) to assets attributable to shareholders.

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

Review

The UK equity market increased 5.6% during the quarter resulting in a gain of 31.9% for the calendar year for the FTSE All-Share Capped 5% Index, as measured on a total return basis.

A strong finish to the year saw the UK equity market recover to levels last reached pre-Lehman's collapse in September 2008.  The increase in government debt as a result of support given to the financial sector following Lehman's bankruptcy will be an important focus for investors in the months ahead.  The remedy to the UK fiscal position requires tough political decisions which will only become apparent post the general election, creating a less certain back-drop for the stock market.  The UK banking system, despite government led assistance, is still reluctant to lend to individual and corporate customers instead preferring to increase the proportion of lending to the government through the purchase of gilts.  The short term profit outlook for banks has improved as a result of the low level of interest rates but a lack of credit availability to individuals and the corporate sector is likely to hinder any broader economic recovery.

The level of cash held by Investors Capital Trust remained broadly unchanged during the quarter at 8% of total assets resulting in an investment gearing position of 125%.  The opportunity to invest internationally through UK listed companies has allowed us to reduce our exposure to what we believe will be a prolonged period of sub-trend economic growth in the UK.  Despite equity valuations recovering from the lows reached in March 2009 we are encouraged by the prospect of attractive dividend yields that can grow in real terms, especially in the context of historically low interest rates.

Dividends and Capital Distributions

A second quarter dividend in respect of the year ended 31 March 2010, of 1.325 pence per share, was paid on the A shares of the Company on 6 November 2009 to A shareholders on the register on 9 October 2009.

A second quarter capital return of 1.325 pence per share was paid on the B shares of the Company on 6 November 2009 to B shareholders on the register on 9 October 2009.  Capital distributions on B shares are paid at the same time as, and in an amount equal to, each dividend paid on an A share.

The Company has announced a third quarter dividend in respect of the year ending 31 March 2010 of 1.325 pence per A share and a third quarter capital distribution of 1.325 pence per B share, both payable on 5 February 2010.

Share Buy Backs

The Company did not buy back, issue or re-sell any shares during the quarter. At 31 December 2009 the Company held 6,489,000 A Shares and 25,000 B Shares in treasury.

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

Equities Portfolio

Company			Percentage of total assets as at 31 December 2009
HSBC			4.0%
GlaxoSmithKline			4.0%
BP			3.6%
British American Tobacco			3.2%
Royal Dutch Shell			3.1%
Vodafone			3.1%
AstraZeneca			2.8%
Rio Tinto			2.7%
Diageo			2.1%
BHP Billiton			2.1%
Total			30.7%

Higher Yield Portfolio

Security			Percentage of total assets as at 31 December 2009
Skipton Building Society 2% 04/05/12			0.8%
Iron Mountain 7.25% 15/04/14			0.6%
Land Securities 4.625% 03/02/13			0.5%
RWE Finance 6.375% 03/06/13			0.4%
Segro 7.125% 17/02/10			0.4%
GlaxoSmithKline 4.85% 15/05/13			0.3%
Merrill Lynch FRN 08/02/10			0.3%
Society of Lloyds 5.625% 17/11/14			0.3%
Kraft Foods 5.75% 20/03/12			0.3%
Paragon Group 7% 20/04/17			0.3%
Total			4.2%

Portfolio Summary

		Market Value at 31 Dec 2009 £'000	% of Total Assets at 31 Dec 2009	% of Total Assets at  30 Sept 2009
Equities Portfolio		88,698	64.0	61.7
Higher Yield Portfolio		38,818	28.0	29.6
Net Current Assets		11,110	8.0	8.7
Total Assets (less Current Liabilities)		138,626	100.0	100.0
Bank Term Loan & Interest Rate Swap		(36,275)	(26.2)	(27.2)
Net Assets Attributable to Shareholders		102,351	73.8	72.8

The Board is not aware of any significant events or transactions which have occurred since 31 December 2009 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:      95,578,144 A shares and 32,051,703 B shares.

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.

For further information please contact:

Rodger McNair, Investment Manager             Tel: [phone]

Michael Campbell, Company Secretary         Tel: [phone]

 

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