Interim Management Statement

RNS Number : 6810Z

Investors Capital Trust PLC

10 February 2014

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 October 2013 to 31 December 2013

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 31 December 2013	As at 30 September 2013	Movement
Total assets	£145.1 million	£140.4 million	3.3%
Net asset value (debt at fair value):    A share and B share    Unit*	103.50p 414.00p	99.30p 397.20p	4.2% 4.2%
Share price:    A share    B share    Unit	97.0p 99.5p 374.5p	95.0p 101.0p 369.0p	2.1% (1.5)% 1.5%
(Discount)/premium:   A share   B share   Unit	(6.3)% (3.9)% (9.5)%	(4.3)% 1.7% (7.1)%
Net Gearing**	9.3%	9.1%
Total return	For the three month period ended 31 December 2013	For the nine month period ended 31 December 2013	For the five year period ended 31 December 2013
Net asset value:   A and B share and Unit	5.3%	9.2%	99.0%
FTSE All-Share Capped 5% Index	5.5%	9.8%	102.2%

Sources: F&C Investment Business Limited and Datastream.

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

** The gearing figure 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 the Company holds net cash after offsetting gearing.

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

Review

The UK equity market increased 5.5% during the quarter, as measured by the FTSE All-Share Capped 5% Index on a total return basis.

Rising economic optimism, together with a pick-up in investor sentiment, has been good for risk assets, including Equities which continued to make further gains during the three months to 31 December 2013.

The corporate sector remains in reasonably good health with profitability strong and dividends growing. However, over the past year or so, UK corporate earnings have made little progress and as a consequence the pace of dividend growth for the market has continued to slow. Recent stock market gains have arisen as a result of a re-rating of shares rather than through growth in underlying earnings. While the valuation of UK equities still appears reasonable when compared with competing asset classes such as cash and bonds, it is more demanding when viewed in isolation. However, the improving economic outlook together with rising business confidence and more stable capital markets suggests we may see an increase in the level of merger and acquisition activity in the year ahead.

Equities currently represent 83.5% and corporate bonds 12.5% of the Company's total assets with the balance of 4.0% held in cash. The Company currently has investment gearing of 9.3%, Investors Capital Trust continues to favour businesses which have the ability to grow earnings and dividends over the longer term, have strong balance sheets, generate surplus cash beyond the needs of the business and have a proven management team with a commitment to dividend growth.

Dividends and Capital Distributions

A second quarter dividend in respect of the year ending 31 March 2014, of 1.0825 pence per share, was paid on the A shares of the Company on 1 November 2013 to A shareholders on the register on 4 October 2013.

A second quarter capital repayment of 1.0825 pence per share was paid on the B shares of the Company on 1 November 2013 to B shareholders on the register on 4 October 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.

The Company has announced a third quarter dividend in respect of the year ending 31 March 2014 of 1.0825 pence per A share and a third quarter capital repayment of 1.0825 pence per B share, both were paid on 7 February 2014 to shareholders on the register on 10 January 2014.

Share Buy Backs

During the three months ended 31 December 2013, the Company bought back 500,000 A Shares and nil B Shares to hold in treasury at a cost of £483,000. The Company resold 200,000 B shares from treasury during the quarter, receiving proceeds of £205,000. At 31 December 2013 the Company held 10,789,000 A Shares and 130,000 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 2013
Vodafone			5.0%
GlaxoSmithKline			4.7%
HSBC Holdings			4.4%
BP			4.1%
British American Tobacco			3.9%
Royal Dutch Shell			3.8%
Rio Tinto			2.5%
BT Group			2.5%
BHP Billiton			2.2%
AstraZeneca			2.0%
Total			35.1%

Higher Yield Portfolio

Security			Percentage of total assets as at 31 December 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%
Nationwide Building Society FRN 23/01/15			0.3%
Abbey National Treasury Service FRN 16/02/15			0.2%
Marstons FRN 15/07/20			0.2%
Bupa Finance 7.5% 04/07/16			0.2%
Southern Gas FRN 21/10/15			0.2%
Yorkshire Building Society FRN 23/03/16			0.2%
Mitchells & Butler 1.05438% 15/12/28			0.2%
Total			2.5%

Portfolio Summary

		Market Value at 31 Dec 2013 £'000	% of Total Assets at 31 Dec 2013	% of Total Assets at  30 Sept 2013
Equities Portfolio		121,284	83.5	82.3
Higher Yield Portfolio		18,089	12.5	13.0
Net Current Assets		5,767	4.0	4.7
Total Assets (less Current Liabilities)		145,140	100.0	100.0
Bank Term Loan at fair value		(17,603)	(12.1)	(12.7)
Net Assets Attributable to Shareholders		127,537	87.9	87.3

The fair value of the £18 million term loan, on a marked to market basis, was £17,603,000 at 31 December 2013 (30 September 2013: £17,792,000).

The Board is not aware of any significant events or transactions which have occurred since 31 December 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 Distributions paid:                   August, November, February and May

Shares in issue with voting rights at quarter end:      91,278,144 A shares and 31,946,703 B shares.

For further information please contact:

Rodger McNair, Investment Manager                         Tel: [phone]

Donald Cameron, Company Secretary                      Tel: [phone]

 

END

 

 

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