Half-year Report

BlackRock Income and Growth Investment Trust plc

Performance record

Financial highlights

Attributable to ordinary shareholders	As at  30 April  2016	As at  31 October  2015	Change  %
Assets
Net asset value per ordinary share	178.56p	187.69p	-4.9
– with income reinvested			-2.8
Ordinary share price (mid-market)	176.00p	184.25p	-4.5
– with income reinvested			-2.3
FTSE All-Share Index (total return)	5,542.10	5,541.71	+0.0
Net assets (£'000)*	46,835	49,231	-4.9
Discount to net asset value	1.4%	1.8%

	For the six  months  ended  30 April  2016	For the six  months  ended  30 April  2015	Change  %
Revenue
Net revenue after taxation (£’000)	865	953	-9.2
Return per ordinary share*	3.30p	3.61p	-8.6
Dividend per ordinary share
Interim	2.40p	2.40p	-

* The change in net assets reflects the market movements during the period.

Chairman’s statement

for the six months to 30 April 2016

PERFORMANCE

For the six month period ended 30 April 2016, the Company’s net asset value per share (“NAV”) returned -2.8% and the share price returned -2.3%. By comparison, the FTSE All-Share Index was unchanged over the period. Since the period end and up to 27 June 2016, the Company’s NAV per share has fallen by 6.8% compared with a fall in the benchmark of 4.7% (all percentages with income reinvested).

Further information on the Company’s performance is set out in the Investment Manager’s Report.

REVENUE RETURN AND DIVIDENDS

Revenue return for the period was 3.30 pence per share (six months to 30 April 2015: 3.61 pence per share) and the Board has declared an interim dividend of 2.40 pence per share (2015: 2.40 pence per share). The dividend will be paid on 2 September 2016 to shareholders on the Company’s register at the close of business on 15 July 2016 (ex-dividend date is 14 July 2016).

SHARE CAPITAL

The Directors recognise the importance to investors that the Company’s share price should not trade at a significant discount to NAV and therefore, in normal market conditions, may use the Company’s share buy back, sale of shares from treasury and share issue powers to ensure that the share price is broadly in line with the underlying NAV. The discount management policy is effected through the use of share buy backs at a narrow discount to NAV and the issue of new shares at or above the estimated NAV per share.

The Board believes that an ongoing commitment to that discount management policy will continue to enhance the attractiveness of the Company to existing and potential new shareholders and thus its ability to grow over time by increasing the liquidity of the shares and spreading fixed costs over a larger asset base.

No shares were issued or sold from treasury during the period under review and 350,000 shares have been purchased since the period end. At the date of this report, 21.4% of the Company’s issued ordinary share capital is held in treasury.

During the period, the Company’s shares traded at an average discount of 1.5% (cum income), and as at the close of business on 27 June 2016 stood at a discount of 3.1%.

GEARING

The Company operates a flexible gearing policy which depends on prevailing conditions and the outlook for the market. Gearing is subject to a maximum level of 20% of net assets at the time of investment. The Company has not been geared during the period under review and at 30 April 2016 the Company had net cash of 2.0%. Gearing levels and sources of funding are reviewed regularly.

The Company currently has a two year unsecured sterling revolving credit facility of £4 million with Scotiabank (Ireland) Limited, with a maturity date of 30 October 2016.

OUTLOOK

At the time of writing, the UK, the European Union and global markets generally are absorbing the historic decision by UK voters to leave the EU. As predicted by many, we have seen substantial volatility in the equity and financial markets since the result of the vote was announced. Following such a momentous decision, it is not yet possible accurately to predict the long term impact on the UK economy. However, the underlying economy is strong and, as I wrote in January of this year, your fund manager continues to focus on assembling a portfolio of individual companies which, taken as a whole, should prove capable of growing the Company's revenue and supporting dividend growth into the future.

Companies listed on the UK stock exchange derive around two thirds of their overall earnings overseas. Thus, shorter term shocks experienced domestically as a result of the referendum vote are mitigated for such companies by their overseas exposure. Looking to the longer term, it is reasonable to expect that the UK will be able to negotiate satisfactory trading arrangements with its European neighbours - and more widely.

Whilst the immediate outlook therefore remains volatile, the fundamentals of your Company's portfolio are positioned to provide attractive returns on both capital and income account over the longer term.

Jonathan Cartwright
Chairman
29 June 2016

Interim management report and responsibility statement

The Chairman’s Statement and the Investment Manager’s Report give details of the important events which have occurred during the period and their impact on the financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks faced by the Company can be divided into various areas as follows:

• Performance;
• Income/dividend;
• Gearing;
• Regulatory;
• Operational;
• Market; and
• Financial.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 31 October 2015. A detailed explanation can be found in the Strategic Report on pages 8 to 10 and in note 17 on pages 49 to 54 of the Annual Report and Financial Statements which are available on the website maintained by BlackRock at blackrock.co.uk/brig.

In the Board’s opinion, an additional uncertainty to those outlined in the Annual Report now exists. In a referendum held on 23 June 2016, the United Kingdom resolved to leave the European Union. The referendum result may affect the Company’s risk profile through introducing potentially significant new uncertainties and instability in financial markets as the UK negotiates its exit from the European Union. These uncertainties could have a material adverse effect on the Company's business, financial condition and operations. The process of a major country leaving the EU has no precedent, so we expect an ongoing period of market uncertainty as implications are digested.

In the view of the Board, there have not been any other changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties are equally applicable to the remaining six months of the financial year as they were to the six months under review.

GOING CONCERN

The Directors, having considered the nature and liquidity of the portfolio, the Company’s investment objective and the Company’s projected income and expenditure are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and is financially sound. For this reason, they continue to adopt the going concern basis in preparing the financial statements. The Company has a portfolio of investments which are considered to be readily realisable and is able to meet all of its liabilities from its assets and income generated from these assets. Ongoing charges (excluding interest costs and taxation) for the year ended 31 October 2015 were approximately 1.0% of net assets.

RELATED PARTY DISCLOSURE AND TRANSACTIONS WITH THE INVESTMENT MANAGER

BlackRock Fund Managers Limited (BFM) was appointed as the Company’s Alternative Investment Fund Manager (AIFM) with effect from 2 July 2014. BFM has, with the Company’s consent, delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Both BFM and BIM (UK) are regarded as related parties under the Listing Rules. Details of the management fee payable are set out in note 3 and note 10. The related party transactions with the Directors are set out in note 9.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Disclosure and Transparency Rules (DTR) of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge that:

• the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with applicable UK Accounting Standard FRS 104 ‘Interim Financial Reporting’; and
• the Interim Management Report, together with the Chairman’s Statement and Investment Manager’s Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA’s Disclosure and Transparency Rules.

The half yearly financial report has not been audited or reviewed by the Company’s Auditors.

The half yearly financial report was approved by the Board on 29 June 2016 and the above responsibility statement was signed on its behalf by the Chairman.

Jonathan Cartwright
For and on behalf of the Board
29 June 2016

Investment manager’s report

Half yearly report to 30 April 2016

Performance

Over the six month period ended 30 April 2016 the Company’s NAV fell by 2.8% and the share price by 2.3%. Over the same period, the FTSE All Share Index was flat (0.0%). (All percentages are in sterling with income reinvested.)

Investment Approach & Process

In assembling the Company’s portfolio we adopt a relatively concentrated approach to investment to ensure that our best ideas contribute significantly to returns. We believe that it is the role of the portfolio overall to achieve a premium level of yield alongside capital growth rather than every individual company within the portfolio. This gives the Company increased flexibility to invest where returns are most attractive. This approach results in a portfolio which differs substantially from the index and in any individual year the returns will vary, sometimes significantly from those of the index. Over longer periods our objective is to achieve returns greater than the index, but with lower volatility.

The foundation of the portfolio, approximately 70%, is in high free cash flow companies that can sustain cash generation and pay a growing dividend whilst aiming to deliver a double digit total return. Additionally, we look to identify and invest 20% of the portfolio in ‘growth’ companies that have significant barriers to entry and scalable business models that enable them to grow consistently. We also look for turnaround companies, at around 10% of portfolio value, which represent those companies that are out of favour with the market, facing temporary challenges with high yields or very low valuations, but with attractive recovery potential. The return from this segment is expected to contribute meaningfully to overall returns over time.

Market Review

Equity markets experienced a turbulent start to the calendar year, buffeted by economic and political concerns before rallying strongly into the first quarter end. The negative trend in commodity prices, which dominated markets in 2015, reversed abruptly as oil bounced from a low in February of below US$30 per barrel. Expectations for further US interest rate rises were tempered as global growth expectations slowed and as other central banks, notably the ECB, continued a policy of monetary loosening. Confirmation of the date for the Brexit referendum put pressure on sterling and domestically-orientated equities.

Contributors to Performance

The main driver of the portfolio’s relative performance over the six months to 30 April 2016 was strongly performing shares in the index which we did not hold. The mining sector demonstrated significant volatility, initially falling in the fourth quarter of 2015, to rebound strongly in the first quarter of 2016. As the portfolio is positioned away from companies that rely on a continuing high commodity price environment, this acted as a material drag on relative performance. Carnival saw a higher oil price impact its shares, whilst the company continues to point to improving revenue and a confident earnings outlook. Next also reacted negatively to a reduction in sales forecasts for 2016, driven by a mix of short-term factors and a weaker outlook for the UK consumer. However, we believe that Next is a well-managed business with an exemplary record of capital allocation.

The portfolio’s strongest performer was our position in Shire which recovered strongly following robust results. Earlier this year the shares had been weak on its proposed acquisition of Baxalta and we used that as an opportunity to re-purchase shares in the company. Other strong performers included car insurance specialist Admiral Group and John Laing Group, the infrastructure developer and investor. Both companies reported a strong set of full year 2015 results and continued dividend growth. Intercontinental Hotels Group also reported robust results with a significant special dividend and our holding in Rentokil Initial reported strong momentum in its business with excellent cash generation.

Transactions

During the period we purchased new positions in Shire, Foxtons Group, RPC Group and ITV whilst adding to our holdings in Unilever, Provident Financial, Lloyds, Intercontinental Hotels Group and John Laing Group. We reduced our holdings in HSBC Holdings, RELX, Wolseley, Aviva and Shell and sold our holdings in Rio Tinto, BHP Billiton, Bodycote and Ashmore Group.

Outlook

The wider macro backdrop continues to be challenging with sluggish economic growth combined with political uncertainty and heightened currency volatility resulting from diverging monetary policies among the G7 nations. The outcome of the EU membership referendum throws an additional unknown into this mix. Our approach continues to focus on the underlying merits of company investments. Despite the uncertainties, companies which have strong market positions and the ability to generate cash and deploy this to their advantage are likely to produce attractive investment returns over time whichever macro scenario unfolds. We continue to find companies with these characteristics and are alert to new price opportunities the market presents to us through market volatility.

Adam Avigdori and Mark Wharrier
BlackRock Investment Management (UK) Limited
29 June 2016

Ten largest investments

30 April 2016

British American Tobacco: 6.0% (2015: 5.7%) is one of the world’s leading tobacco groups, with more than 200 brands in the portfolio selling in approximately 180 markets worldwide.

Lloyds Banking Group: 5.6% (2015: 4.8%) is a UK-based financial services group, providing a wide range of banking and financial services, focused on personal and commercial customers. Its main business activities are retail, commercial and corporate banking, general and life insurance, pensions and investment provision.

AstraZeneca: 4.9% (2015: 5.0%) is a global pharmaceutical company, operating in the research, development, manufacture and marketing of pharmaceutical products, including the areas of cardiovascular and metabolic disease, oncology, respiratory, inflammation and autoimmunity.

Unilever: 4.7% (2015: 2.9%) is a global supplier of food, home and personal care products with more than 400 brands focused on health and wellbeing.

BT Group: 4.5% (2015: 4.2%) is a communications services company, involved in the  provisions of fixed line services, broadband, mobile and television products and services in the United Kingdom and globally. The company operates in five segments: BT Global Services, BT Business, BT Consumer, BT Wholesale and Openreach.

Royal Dutch Shell ‘B’: 3.8% (2015: 3.6%) is an oil and gas company based in the UK. The company operates in both Upstream and Downstream industries. Upstream is engaged in searching for and recovering crude oil and natural gas, the liquefaction and transportation of gas. Downstream is engaged in manufacturing, distribution and marketing activities for oil products and chemicals.

RELX (formerly Reed Elsevier): 3.5% (2015: 4.3%) is a global provider of professional information solutions that includes publication of scientific, medical, technical and legal journals. It also has the world’s leading exhibitions, conference and events business.

GlaxoSmithKline: 3.2% (2015: 2.5%) is a global health care group operating in the research, development, manufacture and marketing of pharmaceutical products, including vaccines, over-the-counter medicines and health related consumer products.

Wolseley: 3.1% (2015: 4.0%) is a specialist trade distributor of plumbing and heating products and building materials in North America, the UK and Continental Europe. The company has a network of distribution centres which serve branches for its plumbing and heating businesses.

Sky: 2.9% (2015: 2.7%), is an entertainment company providing on-demand internet streaming media, broadband and telephone services to approximately 21 million customers across 5 countries (Italy, Germany, Austria, UK and Ireland).

All percentages reflect the value of the holding as a percentage of total investments. The percentages in brackets represent the value of the holding as at 31 October 2015. Together, the ten largest investments represent 42.2% of total investments (ten largest investments as at 31 October 2015: 43.3%).

Distribution of Investments

as at 30 April 2016

ANALYSIS OF PORTFOLIO BY SECTOR

	% of Investments	Benchmark
Industrial Goods & Services	11.7	9.3
Banks	10.6	9.2
Health Care	10.5	8.6
Travel & Leisure	10.0	4.6
Insurance	8.8	5.4
Personal & Household Goods	8.6	11.5
Media	8.1	3.9
Financial Services	6.4	6.6
Oil & Gas	6.2	11.2
Food & Beverages	4.7	5.5
Telecommunications	4.5	5.2
Retail	3.2	3.8
Real Estate	3.1	2.9
Technology	2.7	1.5
Construction & Materials	0.9	1.1
Basic Resources	0.0	4.9
Utilities	0.0	4.0
Chemicals	0.0	0.6
Automobiles & Parts	0.0	0.2

Sources: BlackRock and Datastream.

INVESTMENT SIZE

	Number of Investments	% of Investments
<£1m	20	27.6
£1m to £2m	17	55.9
£2m to £3m	5	16.5

Source: BlackRock.

Investments

as at 30 April 2016

	Market  value	% of  investments
	£’000
Banks
Lloyds Banking Group	2,586	5.6
Barclays	1,155	2.5
HSBC Holdings	1,145	2.5
	--------	--------
	4,886	10.6
	--------	--------
Pharmaceuticals & Biotechnology
AstraZeneca	2,235	4.9
GlaxoSmithKline	1,470	3.2
Shire	1,108	2.4
	--------  4,813	--------------- 10.5
	------------	--------------
Travel & Leisure
Carnival	1,233	2.7
Intercontinental Hotels Group	1,119	2.5
Stagecoach Group	912	2.0
Cineworld Group	651	1.4
Patisserie Holdings	631	1.4
	------------ 4,546	------------- 10.0
	--------	--------
Support Services
Wolseley	1,429	3.1
Rentokil Initial	1,177	2.6
Hays	847	1.8
Intertek	684	1.5
	--------	--------
	4,137  --------------	9.0  ------------
Tobacco
British American Tobacco	2,737	6.0
Imperial Brands	1,179	2.6
	--------	--------
	3,916  ------------	8.6  ------------
Media
RELX	1,605	3.5
Sky	1,340	2.9
Ascential	429	0.9
ITV	387	0.8
	------------- 3,761	------------- 8.1
Financial Services	--------	--------
John Laing Group	1,173	2.6
Provident Financial	932	2.0
Hargreaves Lansdown	847  ------------	1.8  --------------
	2,952  -----------	6.4  ------------
Oil & Gas Producers
Royal Dutch Shell ‘B’ BP Group	1,760	3.8
	1,074  -----------	2.4              ------------
	2,834  -----------	6.2                                    ------------
Life Insurance
Legal & General Group	1,261	2.7
Aviva	1,088	2.4
	--------	--------
	2,349	5.1
	--------	--------
Food Producers
Unilever	2,172	4.7
	--------	--------
	2,172	4.7
	--------	--------
Fixed Line Telecommunications
BT Group	2,062	4.5
	--------  2,062	--------  4.5
Non-life Insurance	------------	------------
Admiral Group	1,036	2.3
Direct Line Insurance	635	1.4
	---------------	----------------
	1,671	3.7
	--------------	---------------
General Retailers
Dixons Carphone	738	1.6
Next	713	1.6
	---------------	---------------
	1,451	3.2
	---------------	---------------
General Industrials
DS Smith	650	1.4
RPC Group	607	1.3
	-----------------	----------------
	1,257  ----------------	2.7 --------------
Technology Hardware & Equipment
ARM Holdings	954	2.1
	----------------	------------------
	954	2.1
	----------------	-----------------
Real Estate Investment Trusts
Hansteen Holdings	560	1.2
Land Securities	374	0.8
	---------------	---------------
	934	2.0
	--------------	--------------
Real Estate Investment & Services
Foxtons Group	495 --------------	1.1  ---------------
	495	1.1
	--------------	---------------
Construction & Materials
Forterra	425	0.9
	----------------	--------------
	425	0.9
	----------------	-------------
Software & Computer Services
Softcat	303	0.6
	---------------	---------------
	303	0.6
	---------------	---------------
Total Value of Securities	45,918	100.0
	=========	=========

All investments are in ordinary shares unless otherwise stated.

The total number of holdings as at 30 April 2016 was 42 (31 October 2015: 41).

Income statement

for the six months ended 30 April 2016

		Revenue £’000			Capital £’000			Total £’000
		Six  months  ended	Six  months  ended	Year ended	Six  months  ended	Six  months  ended	Year   ended	Six  months  ended	Six  months  ended	Year ended
	Notes	30.04.16  (unaudited)	30.04.15  (unaudited)	31.10.15  (audited)	30.04.16  (unaudited)	30.04.15  (unaudited)	31.10.15  (audited)	30.04.16  (unaudited)	30.04.15  (unaudited)	31.10.15  (audited)
(Losses)/gains on investments held at fair value through profit or loss		–	–	–	(2,198)	5,046	4,534	(2,198)	5,046	4,534
Income from investments held at fair value through profit or loss	2	1,021	1,091	2,047	–	–	–	1,021	1,091	2,047
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Total income		1,021	1,091	2,047	(2,198)	5,046	4,534	(1,177)	6,137	6,581
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Expenses
Investment management fee	3	(35)	(35)	(72)	(105)	(106)	(216)	(140)	(141)	(288)
Operating expenses	4	(117)	(97)	(207)	(2)	(2)	(4)	(119)	(99)	(211)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Total operating expenses		(152)	(132)	(279)	(107)	(108)	(220)	(259)	(240)	(499)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit/(loss) on ordinary activities before finance costs and taxation		869	959	1,768	(2,305)	4,938	4,314	(1,436)	5,897	6,082
Finance costs		(4)	(6)	(10)	(12)	(18)	(30)	(16)	(24)	(40)
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit/(loss) on ordinary activities before taxation		865	953	1,758	(2,317)	4,920	4,284	(1,452)	5,873	6,042
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Taxation		–	–	–	–	–	–	–	–	–
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Net profit/(loss) on ordinary activities after taxation		865	953	1,758	(2,317)	4,920	4,284	(1,452)	5,873	6,042
		--------	--------	--------	--------	--------	--------	--------	--------	--------
Earnings/(loss) per ordinary share –basic and diluted	6	3.30p	3.61p	6.68p	(8.84p)	18.66p	16.29p	(5.54p)	22.27p	22.97p
		========	========	========	========	========	========	========	========	========

The total column of this statement represents the Company’s Profit and Loss Account. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations and no operations were acquired or discontinued during the period. All income is attributable to the equity holders of BlackRock Income and Growth Investment Trust plc.

The Company does not have any other recognised gains or losses. The net profit/(loss) for the period disclosed above represents the Company’s total comprehensive income.

Statement of changes in equity

for the six months ended 30 April 2016

	Called up  share  capital	Share  premium  account	Capital  redemption  reserve	Special  reserve	Capital  reserves	Revenue  reserve	Total
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Six months ended 30 April 2016 (unaudited)
At 31 October 2015	329	14,819	220	22,857	8,682	2,324	49,231
Total comprehensive income:
(Loss)/profit for the period	–	–	–	–	(2,317)	865	(1,452)
Dividend paid*	–	–	–	–	–	(944)	(944)
	--------	--------	--------	--------	--------	--------	--------
At 30 April 2016	329	14,819	220	22,857	6,365	2,245	46,835
	--------	--------	--------	--------	--------	--------	--------
Six months ended 30 April 2015 (unaudited)
At 31 October 2014	329	14,819	220	23,306	4,398	2,122	45,194
Total comprehensive income:
Profit for the period	–	–	–	–	4,920	953	5,873
Shares purchased to be held in treasury	–	–	–	(448)	–	–	(448)
Dividend paid**	–	–	–	–	–	(927)	(927)
	--------	--------	--------	--------	--------	--------	--------
At 30 April 2015	329	14,819	220	22,858	9,318	2,148	49,692
	--------	--------	--------	--------	--------	--------	--------
Year ended 31 October 2015 (audited)
At 31 October 2014	329	14,819	220	23,306	4,398	2,122	45,194
Total comprehensive income:
Profit for the year	–	–	–	–	4,284	1,758	6,042
Shares purchased to be held in treasury	–	–	–	(449)	–	–	(449)
Dividends paid***	–	–	–	–	–	(1,556)	(1,556)
	--------	--------	--------	--------	--------	--------	--------
At 31 October 2015	329	14,819	220	22,857	8,682	2,324	49,231
	========	========	========	========	========	========	========

* Final dividend of 3.60p per share for the year ended 31 October 2015, declared on 15 January 2016 and paid on 4 March 2016.

** Final dividend of 3.50p per share for the year ended 31 October 2014, declared on 8 January 2015 and paid on 6 March 2015.

*** Final dividend of 3.50p per share for the year ended 31 October 2014, declared on 8 January 2015 and paid on 6 March 2015, and the interim dividend of 2.40p per share for the six months ended 30 Apri 2015, declared on 23 June 2015 and paid on 4 September 2015.

The transaction costs incurred on the acquisition and disposal of investments are included within the capital reserve. Purchase and sale costs amounted to £36,000 and £7,000 respectively for the six months ended 30 April 2016 (six months ended 30 April 2015: £87,000 and £17,000; year ended 31 October 2015: £167,000 and £29,000).

Balance sheet

as at 30 April 2016

	Notes	30 April  2016	30 April  2015	31 October  2015
		£’000  (unaudited)	£’000  (unaudited)	£’000  (audited)
Fixed assets
Investments held at fair value through profit or loss		45,918	49,081	50,388
		--------	--------	--------
Current assets
Debtors		563	1,188	195
Cash and cash equivalents		2,735	2,315	991
		--------	--------	--------
		3,298	3,503	1,186
		--------	--------	--------
Creditors – amounts falling due within one year
Bank loan		(2,000)	(2,000)	(2,000)
Other creditors		(381)	(892)	(343)
		--------	--------	--------
		(2,381)	(2,892)	(2,343)
		--------	--------	--------
Net current assets/(liabilities)		917	611	(1,157)
		---------	---------	---------
Net assets		46,835	49,692	49,231
		========	========	========
Capital and reserves
Called up share capital	7	329	329	329
Share premium account		14,819	14,819	14,819
Capital redemption reserve		220	220	220
Special reserve		22,857	22,858	22,857
Capital reserves		6,365	9,318	8,682
Revenue reserve		2,245	2,148	2,324
		---------	---------	---------
Total shareholders’ funds	6	46,835	49,692	49,231
		========	========	========
Net asset value per ordinary share	6	178.56p	189.45p	187.69p
		========	========	========

Statement of cash flows

for the six months ended 30 April 2016

	Six months  ended  30 April  2016	Six months  ended  30 April  2015	Year ended  31 October  2015
	£’000  (unaudited)	£’000  (unaudited)	£’000  (audited)
Operating activities
(Loss)/profit before taxation	(1,452)	5,873	6,042
Finance costs	16	24	40
Losses/(gains) on investments	2,198	(5,046)	(4,534)
Special dividends credited to capital	19	–	113
Sales of investments	10,352	15,376	29,253
Purchases of investments	(8,117)	(15,396)	(30,754)
Increase in debtors	(304)	(201)	(92)
(Decrease)/increase in other creditors	(8)	21	(95)
	--------	--------	--------
Net cash generated from/(used in) operating activities	2,704	651	(27)
	--------	--------	--------
Financing activities
Purchase of ordinary shares	–	(448)	(449)
Interest paid	(16)	(24)	(40)
Dividends paid	(944)	(927)	(1,556)
	--------	--------	--------
Net cash used in financing activities	(960)	(1,399)	(2,045)
	--------	--------	--------
Increase/(decrease) in cash	1,744	(748)	(2,072)
	--------	--------	--------
Cash and cash equivalents at beginning of period/year	991	3,063	3,063
	--------	--------	--------
Cash and cash equivalents at end of period/year	2,735	2,315	991
	--------	--------	--------
Comprised of:
Cash at bank	134	661	122
BlackRock’s Institutional Cash Series plc – Sterling Liquidity Fund	2,601	1,654	869
	----------	----------	----------
	2,735	2,315	991
	========	========	========

Notes to the financial statements

for the six months ended 30 April 2016

1. Principal activity and basis of preparation

The principal activity of the Company is that of an investment trust company within the meaning of section 1158 of the Corporation Tax Act 2010.

The Company is applying for the first time, for the year ending 31 October 2016, FRS102, ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’, which forms part of revised Generally Accepted Accounting Practice (New UK GAAP) issued by the Financial Reporting Council (FRC) in 2012 and 2013 and which came into effect for accounting periods beginning on or after 1 January 2015. The last financial statements prepared under the previous UK GAAP were for the year ended 31 October 2015.

The condensed set of financial statements has been prepared on a going concern basis in accordance with FRS 102 and FRS 104, ‘Interim Financial Reporting’ issued by the FRC in March 2015 and the revised Statement of Recommended Practice - ‘Financial Statements of Investments Trusts Companies and Venture Capital Trusts’ (SORP) issued by the Association of Investment Companies (AIC) in November 2014.

As a result of the first time adoption of New UK GAAP and the revised SORP, comparative amounts and presentation formats have been amended where required. The changes to accounting policies relate to the composition of cash and cash equivalents, changes in the presentation of cash flows (see below) and the fair value hierarchy of financial instruments (see note 8). There were no adjustments to the Company’s income statement for the financial year ended 31 October 2015 and the total equity as at 1 November 2014 and 31 October 2015 between UK GAAP, as previously reported, and FRS 102 as a result of changes to accounting policies.

The Company’s statement of cash flows reflects the presentation requirements of FRS 102, which is different to that prepared under FRS 1. In addition, the statement of cash flows reconciles to cash and cash equivalents whereas under previous UK GAAP, it reconciled to cash. Cash and cash equivalents are defined in FRS 102 as ‘cash in hand and demand deposits, short term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value’. Cash is defined in FRS 1 as ‘cash in hand and deposits repayable on demand with any qualifying institution, less overdrafts from any qualifying institution repayable on demand’. Accordingly, the Company’s investment in BlackRock Institutional Cash Series plc – Sterling Liquidity Fund of £2,601,000 (30 April 2015: £1,654,000; 31 October 2015: £869,000) which is held as part of the Company’s cash management policy has been classified in the balance sheet and the statement of cash flows as cash and cash equivalents.

The accounting policies applied for the financial statements with regard to measurement and classification are as set out in the Company’s Annual Report and Financial Statements for the year ended 31 October 2015. This reflects the Company’s application of Sections 11 and 12 of FRS 102 in relation to financial instruments in full.

References to prior, individual Financial Reporting Statements (FRS) should now be taken as references to FRS 102 and FRS 104.

2. Income

	Six months  ended  30 April  2016	Six months  ended  30 April  2015	Year ended  31 October  2015
	(unaudited)  £’000	(unaudited)  £’000	(audited)  £’000
Investment income:
UK listed dividends	1,012	1,085	2,035
Overseas listed dividends	9	6	12
	--------	--------	--------
Total income	1,021	1,091	2,047
	========	========	========

Dividends and interest received during the period amounted to £711,000 and £nil (six months ended 30 April 2015: £865,000 and £nil; year ended 31 October 2015: £1,944,000 and £nil) respectively.

Special dividends of £19,000 have been recognised in capital (six months ended 30 April 2015: £nil; year ended 31 October 2015: £113,000).

3. Investment management fee

	Revenue £’000			Capital £’000			Total £’000
	Six  months  ended	Six  months  ended	Year   ended	Six  months  ended	Six  months  ended	Year   ended	Six  months  ended	Six  months  ended	Year   ended
	30.04.16  (unaudited)	30.04.15  (unaudited)	31.10.15  (audited)	30.04.16  (unaudited)	30.04.15  (unaudited)	31.10.15  (audited)	30.04.16  (unaudited)	30.04.15  (unaudited)	31.10.15  (audited)
Investment management fee	35	35	72	105	106	216	140	141	288
	========	========	========	========	========	========	========	========	========

Under the terms of the investment management agreement with BFM, BFM are entitled to a base fee of 0.6% per annum of the Company’s market capitalisation. There was no additional fee for company secretarial and administration services. The fee is allocated 25% to the revenue column and 75% to the capital column of the Income Statement.

4. Operating expenses

	Six months  ended  30 April  2016	Six months  ended  30 April  2015	Year ended  31 October  2015
	(unaudited)  £’000	(unaudited)  £’000	(audited)  £’000
Custody fees	1	1	1
Depositary fees	3	3	7
Audit fees	11	11	22
Directors’ emoluments	46	49	95
Marketing fees	12	19	3
Other administration costs charged to income	44	14	79
	--------	--------	--------
	117	97	207
	--------	--------	--------
Transaction costs to capital	2	2	4
	--------	--------	--------
	119	99	211
	--------	--------	--------

5. Dividend

The Board has declared an interim dividend of 2.40p per share for the period ended 31 October 2016 payable on 2 September 2016 to shareholders on the register on 15 July 2016. The total cost of the dividend based on 25,879,268 ordinary shares in issue at 29 June 2016 is £621,000 (30 April 2015: £629,000).

6. return and net asset value per ordinary share

Revenue and capital returns per share are shown below and have been calculated using the following:

	Six months  ended  30 April  2016	Six months  ended  30 April  2015	Year ended  31 October  2015
	(unaudited)	(unaudited)	(audited)
Net revenue profit attributable to ordinary shareholders (£’000)	865	953	1,758
Net capital (loss)/profit attributable to ordinary shareholders (£’000)	(2,317)	4,920	4,284
	-----------	-----------	-----------
Total (loss)/profit (£’000)	(1,452)	5,873	6,042
Equity shareholders’ funds (£’000)	46,835	49,692	49,231
	-----------	-----------	-----------
The weighted average number of ordinary shares in issue at the end of each period, on which the return per ordinary share was calculated was:	26,229,268	26,372,914	26,300,501
The actual number of ordinary shares in issue at the end of each period, on which the net asset value per ordinary share was calculated was:	26,229,268	26,229,268	26,229,268
	------------	-------------	------------
Revenue earnings per ordinary share	3.30p	3.61p	6.68p
	==========	==========	=========
Capital (loss)/earnings per ordinary share	(8.84p)	18.66p	16.29p
	==========	=========	=========
Total (loss)/earnings per ordinary share	(5.54p)	22.27p	22.97p
	==========	=========	=========
	As at  30 April  2016	As at  30 April  2015	As at  31 October  2015
	(unaudited)	(unaudited)	(audited)
Net asset value per ordinary share	178.56p	189.45p	187.69p
	==========	==========	==========
Ordinary share price	176.00p	188.00p	184.25p
	==========	==========	==========

7. Called up share capital and shares held in treasury

	Ordinary  shares	Treasury  shares	Total  shares	Nominal  value
	number	number	number	£’000
Allotted, called-up and fully paid share capital comprised:
Ordinary shares of 1p each
At 31 October 2015	26,229,268	6,704,664	32,933,932	329
	----------------	---------------	---------------	----------
At 30 April 2016	26,229,268	6,704,664	32,933,932	329
	==========	=========	=========	========

During the period to 30 April 2016, no ordinary shares were purchased by the Company and placed in treasury for re-issue into the market or for cancellation at a future date. No ordinary shares were cancelled from treasury.

Since the period end and up until 29 June 2016 a further 350,000 ordinary shares have been repurchased by the Company. As at 29 June 2016 there are 25,879,268 ordinary shares in issue, excluding 7,054,664 ordinary shares held in treasury.

8. VALUATION OF FINANCIAL INSTRUMENTS

The Company has early adopted the amendments to FRS 102 ‘Fair value hierarchy disclosure’ effective for annual periods beginning on or after 1 January 2017. These amendments improve the consistency of fair value disclosure for financial instruments compared with those required by EU adopted IFRS.

The Company classifies financial instruments measured at fair value using a fair value hierarchy. The fair value hierarchy has the following categories:

Level 1 – Quoted prices for identical instruments in active markets

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The Company does not adjust the quoted price for these instruments.

Level 2 – Valuation techniques using observable inputs

This category includes instruments valued using: quoted prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3 – Valuation techniques using significant unobservable inputs

This category includes all instruments where the valuation techniques used include inputs not based on market data and these inputs could have a significant impact on the instrument’s valuation. This category also includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.

For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ inputs requires significant judgement by the Investment Manager. The Investment Manager considers observable inputs to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The table below is an analysis of the Company’s financial instruments measured at fair value at the balance sheet date.

Financial assets at fair value through profit  or loss	Level  1	Level  2	Level  3	Total
	£’000	£’000	£’000	£’000
Equity investments at 30 April 2016	45,918	–	–	45,918
	--------	--------	--------	--------
Equity investments at 30 April 2015	49,081	–	–	49,081
	--------	--------	--------	--------
Equity investments at 30 October 2015	50,388	–	–	50,388
	--------	--------	--------	--------

There were no transfers between levels for financial assets and financial liabilities during the period recorded at fair value as at 30 April 2016, 30 April 2015 and 31 October 2015.

As stated in Note 1, the Company’s investment in BlackRock’s Institutional Cash Series plc – Sterling Liquidity Fund of £2,601,000 (30 April 2015: £1,654,000; 31 October 2015: £869,000) which is managed as part of the Company’s cash management policy was previously classified as investments but is now classified in the balance sheet and the statement of cash flows as cash and cash equivalents.

The Company did not hold any level 3 securities through the six month period or as at 30 April 2016 (30 April 2015: nil; 31 October 2015: nil).

9. Related party disclosure

The Board consists of four non-executive Directors, all of whom are considered to be independent by the Board. None of the Directors has a service contract with the Company. The Chairman receives an annual fee of £28,000, the Chairman of the Audit Committee receives an annual fee of £22,500 and Mr Worsley receives an annual fee of £19,000 . Mr Luckraft’s fee of £19,000 (excluding VAT of £3,800), is paid to AXA Investment Management (UK) Limited for the provision of his services as a non-executive Director of the Company. As at 30 April 2016, an amount of £8,000 (30 April 2015: £7,000; 31 October 2015: £7,000) was outstanding in respect of Directors’ fees.

At the period end and as at 29 June 2016 members of the Board held ordinary shares in the Company as set out below:

	Ordinary share  29 June  2016		Ordinary shares  30 April  2015	Ordinary shares  31 October  2015
Jonathan Cartwright	20,000		20,000	20,000
Nicholas Gold	20,000		20,000	20,000
George Luckraft	-		-	-
Charles Worsley	987,3592		487,3591	487,3591
1. Include a non-beneficial interest in 155,500 ordinary shares.
2. Including a non-beneficial interest in 655,500 ordinary shares.

A further 3,000,000 shares were held by Mr Worsley’s connected persons up until 9 June 2016 and 1,500,000 thereafter. Since the period end and up to the date pf this report there have been no fiurther changes in Directors holdings.

10. Transactions with the AIFM and the Investment Manager

BlackRock Fund Managers Limited (BFM) was appointed as the Company’s AIFM with effect from 2 July 2014. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of the investment management contract are disclosed in the Directors’ Report in the Annual Report and Financial Statements on page 18.

The investment management fee due to BFM for the six months ended 30 April 2016 amounted to £140,000 (six months ended 30 April 2015: £141,000; year ended 31 October 2015: £288,000). At the period end, £140,000 was outstanding in respect of investment management fees (30 April 2015: £209,000; 31 October 2015: £146,000).

In addition to the above services, BIM (UK) has provided the Company with marketing services. The total fees paid or payable for these services for the six months ended 30 April 2016 amounted to £12,000 including VAT (six months ended 30 April 2015: £19,000; 31 October 2015: £3,000). Marketing fees of £45,000 were outstanding at 30 April 2016 (30 April 2015: £58,000; 31 October 2015: £49,000).

The Company has an investment in BlackRock’s Institutional Cash Series plc – Sterling Liquidity Fund of £2,601,000 at the period end (30 April 2015: £1,654,000; 31 October 2015: £869,000).

11. Contingent liabilities

There were no contingent liabilities at 30 April 2016 (30 April 2015: nil; 31 October 2015: nil).

12. Publication of non statutory accounts

The financial information contained in this half yearly financial report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 30 April 2016 and 30 April 2015 has not been reviewed or audited by the Company’s Auditor.

The information for the year ended 31 October 2015 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the Auditor on those accounts contained no qualification or statement under sections 498 (2) or (3) of the Companies Act 2006.

13. Annual results

The Board expects to announce the annual results for the year ended 31 October 2016, as prepared under the New UK GAAP, in December 2016. Copies of the results announcement can be obtained from the Secretary on 020 7743 3000. The Annual Report and Financial Statements should be available in December 2016, with the Annual General Meeting being held in March 2017.

ENDS

The half yearly financial report will also be available on the BlackRock website at http://www.blackrock.co.uk/brig.  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

For further information please contact:

Simon White, Managing Director Investment Trusts - 020 7743 3000

Adam Avigdori/Mark Wharrier, Fund Managers - 020 7743 3000

Press enquires:

Lucy Horne, Lansons Communications - 020 7294 3689
E-mail:  [e-mail]

BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
London
EC2N 2DL