Interim Management Statement

RNS Number : 7394A

Investment Company PLC

04 February 2011

 



The Investment Company plc

Interim Management Statement

4^th February 2011

In his Statement with the Interim Accounts on the 17^th November 2010 the Chairman advised shareholders that the net asset value per 50p ordinary share at the 30^th September 2010 was 298.81p.  We can advise shareholders today that the net asset value of each ordinary share at 31^st December 2010 was 298.42p per share.

As pointed out in November the largest investments, those in the prior charges of Lloyds Banking Group and Royal Bank of Scotland Group, had performed well in the second quarter of the Company's year, July/August/September 2010.  These securities had in aggregate declined by about 10% in the first quarter of our year  April/May/June 2010 but had risen in line with the ordinary shares of those banks in the second quarter July/August/September 2010.  However in the third quarter of our year October/November/December the ordinary shares of both Lloyds and the Royal Bank declined quite sharply and not surprisingly the prior charge securities followed suit.  The fundamental difference between the securities which we hold and the ordinary shares however is that our holdings yield on average at market prices between 9% and 10% while the ordinary shares yield nothing and are prevented from receiving dividends on the orders of the European Commission until at least May 2012. 

Counterbalancing the decline in the value of these holdings between September and December 31^st 2010 however we enjoyed appreciation in the value of our large shareholding in Delta plc 4.5% preference shares and Dunlop Plantations 6% preference shares both of which have now been repaid at 100p (plus accrued dividends) per share.  In total therefore we have enjoyed a cash inflow of almost £2 million which has enabled us to repay all our loans from Barclays Bank (although we retain a facility to borrow up to £1.5 million,) and to have readily available cash to meet the next instalment of the redemption of the outstanding 5% loan notes which will cost £365,700 in March.

We regard the present state of the portfolio as satisfactory and remain confident that our present policies should enable the company to prosper in the months ahead.

Contact:

Stephen J. Cockburn - Managing Director - 020 7448 4715

 

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