Interim Management Statement

RNS Number : 0879J

Investors Capital Trust PLC

01 August 2012

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 April 2012 to 30 June 2012

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

Total return	For the three month period ended 30 June 2012
Net asset value:   A and B share and Unit	(0.6)%
FTSE All-Share Capped 5% Index	(2.8)%
Capital return	As at 30 June 2012	As at   31 March 2012	Movement
Total assets	£139.4 million	£143.2 million	(2.7)%
Net asset value:    A share and B share    Unit*	84.3p 337.2p	85.9p 343.8p	(1.9)% (1.9)%
Share price:    A share    B share    Unit	77.0p 81.5p 309.0p	82.0p 86.5p 322.5p	(6.1)% (5.8)% (4.2)%
Premium/(discount):   A share   B share   Unit	(8.7)% (3.3)% (8.4)%	(4.6)% 0.7% (6.2)%
Gearing**:   Maximum potential ratio   Actual ratio (Investment gearing)     Actual ratio (Equity gearing)	132.1 122.9 102.3	131.4 120.1 99.7

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 (investment gearing) = the ratio of investments held to assets attributable to shareholders.

Actual ratio (equity gearing) = the ratio of the Equities Portfolio to assets attributable to shareholders.

Review

The UK equity market decreased 2.8% during the quarter ended 30 June 2012, as measured by the FTSE All-Share Capped 5% Index on a total return basis.

The release of weaker than expected economic data in the US and China added weight to market concerns that problems facing the Eurozone will negatively impact on global economic activity.  Policy decisions in the Eurozone region continue to evolve in response to the latest crisis.  During the period the inability of the Spanish government to support its under-capitalised banking system took centre stage.  The initial bailout proposal to support the Spanish banking system only served to heighten the perceived risk of Spanish sovereign debt.  The rapid deterioration in the market's view of Spanish sovereign creditworthiness precipitated a welcome softening of German opposition to several bailout measures.  A more accommodating stance by Germany was evident in a number of the key agreements reached at the latest EU summit, notably the more flexible uses of bailout funds.  In contrast to the sovereign debt issues faced by several Continental European countries the UK government continues to benefit from historically low yields when issuing gilts. 

The protracted process of addressing the debt problems facing Europe has deterred many investors from investing in equities.  The reduced investor appetite for equities has resulted in attractive valuations for many well managed, geographically diverse businesses with strong balance sheets.  Recognising this valuation support we have continued to reduce the level of the Company's assets invested in corporate bonds in favour of equities.  Equities currently represent 77% and corporate bonds 16% of total assets with the balance of 7% held in cash.  The current gearing position of the Company is an equity gearing ratio of 102% and an investment gearing ratio of 123%.  We anticipate that economic issues, particularly in Continental Europe, will result in continued volatility in the UK equity market but are encouraged by the valuation support to this asset class.

Dividends and Capital Distributions

A fourth quarter dividend in respect of the year ended 31 March 2012, of 1.1 pence per share, was paid on the A shares of the Company on 4 May 2012 to A shareholders on the register on 10 April 2012. A fourth quarter capital return of 1.1 pence per share was paid on the B shares of the Company on 4 May 2012 to B shareholders on the register on 10 April 2012.  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.

Share Buy Backs

During the quarter the Company bought back 1,150,000 A shares to hold in treasury at a cost of £934,000 and 400,000 B shares to hold in treasury at a cost of £312,000. The Company did not buy back any shares for cancellation nor resell any shares from treasury during the quarter.

At 30 June 2012 the Company held 8,539,000 A Shares and 425,000 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 30 June 2012
GlaxoSmithKline			4.6%
British American Tobacco			4.2%
Vodafone			4.2%
HSBC			4.0%
Royal Dutch Shell			3.8%
BP			3.7%
Rio Tinto			2.8%
BG Group			2.6%
AstraZeneca			2.3%
BHP Billiton			2.2%
Total			34.4%

Higher Yield Portfolio

Security			Percentage of total assets as at 30 June 2012
Paragon Group 7% 20/04/17			0.4%
UBS 6.375% 20/07/16			0.3%
Permanent Master ABS 15/07/42			0.3%
National Australia Bank FRN 27/01/15			0.3%
Altria Group 8.5% 10/11/13			0.3%
Nationwide Building Society FRN 23/01/15			0.3%
Barclays Bank FRN 20/01/15			0.3%
GE Capital 6% 11/04/13			0.3%
Abbey National Treasury Services FRN 16/02/15			0.3%
Ineos 7.875% 15/02/16			0.3%
Total			3.1%

Portfolio Summary

		Market Value at 30 June 2012 £'000	% of Total Assets at 30 June 2012	% of Total Assets at  31 March 2012
Equities Portfolio		107,949	77.4	75.9
Higher Yield Portfolio		21,777	15.6	15.5
Net Current Assets		9,704	7.0	8.6
Total Assets (less Current Liabilities)		139,430	100.0	100.0
Bank Term Loan & Interest Rate Swap		(33,878)	(24.3)	(23.9)
Net Assets Attributable to Shareholders		105,552	75.7	76.1

The Board is not aware of any significant events or transactions which have occurred since 30 June 2012 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:      93,528,144 A shares and 31,651,703 B shares.

For further information please contact:

Rodger McNair, F&C Investment Business Limited, Investment Manager               

Tel: [phone]

Michael Campbell, F&C Investment Business Limited, Company Secretary           

Tel: [phone]

 

END

 

 

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