Interim Management Statement

RNS Number : 3550K

Investors Capital Trust PLC

29 July 2013

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 April 2013 to 30 June 2013

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 2013
Net asset value (debt at fair value):   A and B share and Unit*	(0.8)%
FTSE All-Share Capped 5% Index	(1.7)%
Capital return	As at 30 June 2013	As at   31 March 2013	Movement
Total assets	£136.4 million	£139.5 million	(2.2)%
Net asset value (debt at fair value):    A share and B share    Unit*	96.0p 384.1p	97.9p 391.5p	(1.9)% (1.9)%
Share price:    A share    B share    Unit*	90.5p 90.5p 358.0p	93.5p 94.5p 369.0p	(3.2)% (4.2)% (3.0)%
Discount:   A share   B share   Unit*	(5.7)% (5.7)% (6.8)%	(4.5)% (3.4)% (5.7)%
Gearing**:   Net gearing	11.2%	10.1%

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 zero per cent means that the Company has a nil geared position. A negative number means that the Company holds net cash after offsetting borrowings.

Net gearing = the percentage figure of investments held divided by assets attributable to shareholders.

Review

The UK equity market decreased 1.7% during the quarter, as measured by the FTSE All-Share Capped 5% Index on a total return basis.

Improving investor optimism contributed to a broad-based rally in equity markets through April and May. However during the latter weeks of the quarter uncertainty over the future path of US monetary policy, and whether the pace of asset purchases would slow as the US economy strengthens, has put downward pressure on equity markets and triggered a rise in global bond yields. The commitment of the Federal Reserve to maintain a highly accommodative monetary stance even after the asset purchase program has ended, together with the expectation that the improvement in the global economic outlook is likely to remain gradual, suggests that an early increase in official policy rates is unlikely.

Trading results from investee companies have remained generally encouraging. In particular businesses with US exposure have benefitted from both solid underlying trading conditions together with the weakness in sterling against the US dollar since the beginning of the year. Growth in US economic activity has recovered more strongly than in most of the other major developed economies since the trough in 2009. In the UK, indicators have suggested a modest pick-up in the pace of economic activity in recent months. In particular, following a long period of weakness, the housing market has shown some early signs of recovery.

Equities currently represent 83% and corporate bonds 13% of the Company's total assets with the balance of 4% held in cash.  The Company currently has investment gearing of 11%. Investors Capital Trust remains invested in geographically diversified businesses with a focus on companies that can deliver dividend growth that can match or exceed the rate of inflation.

Dividends and Capital Distributions

A fourth quarter dividend in respect of the year ended 31 March 2013, of 1.1 pence per share, was paid on the A shares of the Company on 3 May 2013 to A shareholders on the register on 5 April 2013. A fourth quarter capital repayment of 1.1 pence per share was paid on the B shares of the Company on 3 May 2013 to B shareholders on the register on 5 April 2013.  Capital repayments on B shares are paid at the same time as, and in an amount equal to, each dividend paid on an A share.

On 26 June 2013, the Board of Investors Capital Trust plc announced a first quarter dividend in respect of the year ended 31 March 2014 of 1.0825 pence per share on the A shares of the Company.  This dividend will be paid on 2 August 2013 to A shareholders on the register on 5 July 2013.   A first quarter capital repayment of 1.0825 pence per share will be paid on the B shares of the Company on 2 August 2013 to B shareholders on the register on 5 July 2013.  This represents an increase of 2.1 per cent over the first quarter dividend/ capital repayment paid in the prior year.  In the absence of unforeseen circumstances, the Company intends to increase each of the remaining three quarterly dividends for the year ended 31 March 2014 by a similar amount.

Share Buy Backs

During the quarter the Company bought back 750,000 A shares to hold in treasury at a cost of £697,000 and re-sold 200,000 B shares from treasury receiving net proceeds of £196,000. The Company did not buy back any shares for cancellation during the quarter.

At 30 June 2013 the Company held 10,289,000 A Shares and 455,000 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 2013
GlaxoSmithKline			5.1%
HSBC			4.8%
British American Tobacco			4.4%
Vodafone			4.1%
BP			4.1%
Royal Dutch Shell			3.8%
AstraZeneca			2.8%
BT Group			2.2%
BHP Billiton			2.1%
Rio Tinto			2.1%
Total			35.5%

Higher Yield Portfolio

Security			Percentage of total assets as at 30 June 2013
Paragon Group 7% 20/04/17			0.4%
UBS 6.375% 20/07/16			0.3%
Permanent Master ABS 15/07/42			0.3%
Marstons FRN 15/07/20			0.3%
Nationwide Building Society FRN 23/01/15			0.3%
Barclays Bank FRN 20/01/15			0.3%
National Australia Bank FRN 27/01/15			0.3%
Abbey National Treasury Services FRN 16/02/15			0.3%
Bupa Finance 7.5% 04/07/16			0.3%
Southern Gas FRN 21/10/15			0.2%
Total			3.0%

Portfolio Summary

		Market Value at 30 June 2013 £'000	% of Total Assets at 30 June 2013	% of Total Assets at  31 March 2013
Equities Portfolio		113,755	83.4	83.4
Higher Yield Portfolio		18,031	13.2	12.4
Net Current Assets		4,576	3.4	4.2
Total Assets (less Current Liabilities)		136,362	100.0	100.0
Bank Term Loan (debt at fair value)		(17,879)	(13.1)	(13.0)
Net Assets Attributable to Shareholders		118,483	86.9	87.0

The Board is not aware of any significant events or transactions which have occurred since 30 June 2013 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 Repayments paid:                  August, November, February and May

Shares in issue with voting rights at quarter end:      91,778,144 A shares and 31,621,703 B shares.

For further information please contact:

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

Tel: [phone]

 

END

 

 

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