Half-year Report

Legal Entity Identifier:  213800NN42KX2LG1GQ40

16 May 2022

LONDON STOCK EXCHANGE ANNOUNCEMENT

Finsbury Growth & Income Trust PLC

Unaudited Half Year Results For The Six Months Ended

31 March 2022

This Announcement is not the Company’s Half Year Report & Accounts. It is an abridged version of the Company’s full Half Year Report & Accounts for the six months ended 31 March 2022. The full Half Year Report & Accounts, together with a copy of this announcement, will shortly be available on the Company’s website at www.finsburygt.com where up to date information on the Company, including daily NAV, share prices and fact sheets, can also be found.

The Company's Half Year Report & Accounts for the six months ended 31 March 2022 has been submitted to the UK Listing Authority, and will shortly be available for inspection on the National Storage Mechanism (NSM): https://data.fca.org.uk/#/nsm/nationalstoragemechanism

COMPANY SUMMARY

The Company is an investment trust. Its shares are listed on the premium segment of the Official List and traded on the main market of the London Stock Exchange. The Company is a member of the Association of Investment Companies (“AIC”).

INVESTMENT OBJECTIVE AND PERFORMANCE MEASUREMENT

The Company aims to achieve capital and income growth and to provide shareholders with a total return in excess of that of the FTSE All-Share Index (the Company’s benchmark).

INVESTMENT POLICY

The Company’s investment policy is to invest principally in the securities of companies either listed in the UK or otherwise incorporated, domiciled or having significant business operations within the UK. Up to a maximum of 20% of the Company’s portfolio, at the time of acquisition, can be invested in companies not meeting these criteria.

The portfolio will normally comprise up to 30 investments. This level of concentration is likely to lead to an investment return which is materially different from the Company’s benchmark index and may be considered to carry above average risk*.

Unless driven by market movements, securities in FTSE 100 companies and comparable companies listed on an overseas stock exchange will normally represent between 50% and 100% of the portfolio; securities in FTSE 350 companies and comparable companies listed on overseas stock exchanges will normally represent at least 70% of the portfolio.

The Company will not invest more than 15% of the Company’s net assets, at the time of acquisition, in the securities of any single issuer. For the purposes of this limit only, net assets shall exclude the value of the Company’s investment in Frostrow Capital LLP.

The Company does not and will not invest more than 15%, in aggregate, of the value of the gross assets of the Company in other listed closed ended investment companies. Further, the Company does not and will not invest more than 10%, in aggregate, of the value of its gross assets in other listed closed ended investment companies except where the investment companies themselves have stated investment policies to invest no more than 15% of their gross assets in other listed closed ended investment companies.

The Company has the ability to invest up to 25% of its gross assets in preference shares, bonds and other debt instruments, although no more than 10% of any one issue may be held.

In addition, a maximum of 10% of the Company’s gross assets can be held in cash, where the Portfolio Manager believes market or economic conditions make equity investment unattractive or while seeking appropriate investment opportunities or to maintain liquidity.

The Company’s gearing policy is that gearing will not exceed 25% of the Company’s net assets.

No investment will be made in any company or fund managed by the Portfolio Manager without the prior approval of the Board.

In accordance with the Listing Rules of the Financial Conduct Authority (“FCA”), the Company can only make a material change to its investment policy with the approval of its shareholders.

* The Company publishes its Active Share scores in its monthly fact sheet for investors and in both the annual and half-yearly reports to highlight how different the portfolio is from the Company's benchmark index.

PERFORMANCE

Whilst performance is measured against the FTSE All-Share Index, the Company's portfolio is constructed and managed without reference to a stock market index with the Portfolio Manager selecting investments based on their assessment of their long term value.

MANAGEMENT

Frostrow Capital LLP (“Frostrow”) is the appointed Alternative Investment Fund Manager (“AIFM”) and provides company management, company secretarial, administrative and marketing services. Lindsell Train Limited (“Lindsell Train”) is the appointed Portfolio Manager.

DIVIDENDS

An interim dividend of 8.3p per share (2021: 8.0p) was paid on 13 May 2022 to shareholders who were registered at the close of business on 1 April 2022. The associated ex-dividend date was 31 March 2022.

In accordance with FRS 102 dividends are included in the Financial Statements in the period in which they are paid or approved by shareholders.

It is expected that a second interim dividend will be declared and paid in the Autumn.

CAPITAL STRUCTURE

At 31 March 2022 the Company had 223,330,882 shares of 25p each in issue (excluding 1,660,421 held in treasury) (30 September 2021: 224,991,303; there were no shares held in treasury). During the six months under review 1,660,421 shares were bought back to be held in treasury. Since the end of the half-year, to 12 May 2022, being the latest practicable date, a further 700,459 shares were bought back and held in treasury.

GEARING

As at the half-year end the Company was in the final year of its three-year secured fixed term revolving credit facility (the “facility”) of £50 million with Scotiabank Europe PLC (“Scotiabank”) and there is an additional £50 million facility available if required. As at 31 March 2022 a total of £36.7 million has been drawn down from this facility. The Company has commenced negotiations with Scotiabank and it is intended that this facility will be renewed with effect from early October 2022.

COMPANY PERFORMANCE

KEY FACTS
888.0p	-2.2%	-3.0%
Net Asset Value Per Share† 30 September 2021: 917.7p (change -3.2%)	Net Asset value per share total return*^ 30 September 2021: +10.6%	Share price total return*^ 30 September 2021: +6.3%
833.0p	£1.983bn	223,330,882
Share price 30 September 2021: 876.0p (change -4.9%)	Shareholders’ funds† 30 September 2021: £2.065bn (change -4.0%)	Number of shares in issue 30 September 2021: 224,991,303 (change -0.7%)
6.2%	0.58%	1.0%
Discount of share price to net asset value per share^ 30 September 2021: 4.5%	Ongoing charges^ 30 September 2021: 0.62%	Gearing^ 30 September 2021: 0.3%
-20.8p	86.7%	8.3p
Total return per share† 30 September 2021: +88.0p	Active Share^* 30 September 2021: 86.0%	First interim dividend per share 2021: 8.0p (change 3.8%)

^{^} Alternative Performance Measure (see glossary)

^† UK GAAP Measure

* Source – Morningstar

** Source – FTSE International Limited (“FTSE”) © FTSE 2022* (See glossary)

REVIEWS

Chairman’s Statement

PERFORMANCE

The Company’s net asset value per share total return^ over the period was -2.2% and the share price total return^ was -3.0%. It is disappointing to have to report that the Company has continued to underperform its benchmark (the FTSE All-Share Index) which, on a total return basis, rose by 4.7% over the same period.

Markets have remained focused on a number of macroeconomic and geopolitical factors, including the continued effects of the Covid-19 pandemic, the implications of unwinding government support for the economy and, more recently, Russia’s invasion of Ukraine. All of these factors have contributed to the current negative outlook for consumption, inflation and investors’ risk appetite. As a result, the returns earned on our concentrated portfolio of high quality stocks have failed to reflect the underlying strength and performance of the companies we own. The Portfolio Manager’s report provides more detail on the performance of the portfolio.

SHARE CAPITAL

During the period the Company bought back its own shares as its discount widened, in accordance with its policy. While share buy-backs will not necessarily prevent the discount from widening further, particularly in times of market volatility, the Board believes that buy-backs enhance the net asset value per share for remaining shareholders, provide some additional liquidity and help to mitigate discount volatility which can damage shareholder returns.

During the six months under review the Company has bought back a total of 1,660,421 shares into treasury at a cost of £14.4m. As at 31 March 2022 the discount was 6.2% and at the time of writing (at the close of the UK market on 12 May 2022), the discount was 8.0%. Since 1 April 2022 to the date of this report, a further 700,459 shares were bought back into treasury at a cost of £5.8 million.  As at 12 May 2022, the Company had 222,630,423 shares in issue (excluding 2,360,880 shares held in treasury).

DIVIDEND

The Board declared a first interim dividend of 8.3p per share (2021: 8.0p) with respect to the year ending 30 September 2022. That dividend was paid on Friday, 13 May 2022 to shareholders who were on the register on Friday, 1 April 2022. The associated ex-dividend date was Thursday, 31 March 2022.

The Board expects to declare the second interim dividend for the year ending 30 September 2022 in the Autumn.

OUTLOOK

Our Portfolio Manager continues to believe in the Company’s investment strategy which has delivered attractive returns to investors over many years. Your Board supports this view and, notwithstanding current economic and geopolitical headwinds, continues to believe that shareholders with a long term outlook will be well rewarded.

Simon Hayes

Chairman

13 May 2022

^{^} Alternative Performance Measure (see glossary).

PORTFOLIO MANAGER'S REVIEW

This is the third consecutive six-month period I have had to report disappointing returns to shareholders. I am sorry that the longstanding Lindsell Train investment approach and the longstanding major holdings in the portfolio have failed to deliver acceptable performance for your Company over what is now no trivial period.

Despite this I have not and do not propose to change the investment approach, nor has there been any substantive change to the portfolio constituents since my last report (with the exception of the takeover of the DMGT). There has been no change for two reasons. First, as a significant shareholder myself, I remain convinced that our investment philosophy – of running a concentrated, low turnover portfolio, comprising shares in outstanding companies held for the very long term – remains the best way for me to deliver the returns we all hope for.

The second reason I propose no change to the investment approach is because to do so would be a disservice to shareholders, in my opinion. It would dilute or even take away the opportunity for them to invest into a distinctive and disciplined investment strategy. Of course, shareholders may decide that this strategy is not for them and they prefer another style. That is fine, but I hope our consistency of approach and the clear articulation of the approach is valuable for shareholders when they make their, preferably, infrequent decisions about where to entrust their precious savings.

I wrote at some length about our expectations for each holding in the portfolio in the last Annual Report and will not repeat in this interim update, if only because our expectations for portfolio companies have not changed. But it is well worth reporting that many key business franchises or brands that make up the portfolio have indeed done well over the last six months. In particular, I highlight the exceptional performance of Diageo’s brands in its biggest market, the United States, the clear acceleration of usage of RELX’s data and analytics services, the growing recognition of the strategic acumen of the London Stock Exchange Group's merger with Refinitiv, Fever-Tree’s remarkable achievement of becoming the number one tonic brand in the United States, Burberry’s better than expected full-price luxury sales and Schroders’ record profits and assets under management. Yet, as is sometimes the way in stock markets, while some of the achievements I list above were applauded by investors, others were ignored or even taken as an opportunity to sell.

Instead of a stock-by-stock review, what I propose to do in the rest of this report is to discuss another, more formal, yardstick of what constitutes an “outstanding company”. This is Return on Capital ("RoC"). RoC is the measure of a company’s annual net income, expressed as a percentage of all the capital it deploys to run its business, both equity and debt. Outstanding companies tend to sustain RoCs of at least low double digits for long periods, in the past and, ideally, well into the future. It is too simplistic, but nonetheless a useful rule of thumb to say that if a company earns a RoC of 10% every year for, say, the next thirty years, probably the average return earned by its shareholders over the three decades will work out at close to 10% per annum too. That would be an excellent outcome, by the way, because few businesses sustain high returns decade after decade. Of course, shorter-term stock market returns are lumpy, but over time there has been an observable relationship between high, sustained RoCs and satisfactory long-term investment returns.

Currently, the weighted average RoC of all holdings in the Company's portfolio above 1% of NAV, amounting to 99% of gross assets, is above 15%. I will review the range of RoCs that make up that average in a moment, but let me say, in the context of the preceding paragraph, it is reassuring to me that the underlying profitability of the portfolio is strong and this makes me hopeful that long-term returns from the Company's portfolio will also be strong.

The highest RoC in the Company's portfolio is Hargreaves Lansdown (“HL”), standing at 50%. This reflects the exceptional profitability of the company and, as a technology-platform business, its low requirement for physical capital. Now, HL is a prime example of the often poor short-term correlation between RoCs and share price returns, because despite the high RoC its shares have been weak, notably over the last six months, falling 30% over that period. It must be that other investors believe that HL’s RoC is about to decline, probably precipitately. I have to say, we disagree and expect HL to continue to earn high returns. If we are right, at some stage the HL share price will do well again.

The next tier of RoCs in the portfolio is a quartet of companies earning 17% per annum returns. These are Burberry, Fever-Tree, London Stock Exchange Group and RELX. These attractive rates are generated by the rare and aspirational brands of the first two and the highly profitable data and software services of the latter pair. There are another four delivering 15% per annum RoCs – Diageo, Experian, Schroders and Unilever. All of these have long histories of stable, high returns – driven by beloved, globally ubiquitous brands, trusted data and the favourable economics of successful Fund Management companies. Unilever’s returns will be under pressure, at least temporarily, in 2022 from rising input costs, but there have been other similar episodes in the company’s history and in the past Unilever has been able to mitigate rising costs by price increases, cost savings, and most important, building on the success of its secular growth brands and markets, such as, currently, Dove, ice-cream (Ben & Jerry’s, Magnum) and India.

Lower, but still solid RoCs are delivered by Sage, 13.5%, A.G. Barr, Heineken, Rathbones and Remy Cointreau at around 11%. Mondelez, one of the better performers in the Company’s portfolio over the period, has a RoC of just under 10%, which we expect to increase over time.

To complete the portfolio, I must acknowledge there was one company that reported a loss last year and therefore has a negative RoC. This is Manchester United, whose business in 2021 was still hit by Covid-19. The recent and very keen interest shown in acquiring Chelsea FC demonstrates that sports franchises of this calibre and scarcity remain attractive to strategic investors (purportedly it is the highest price ever paid for a sports franchise) and we wonder what the implications will be for Manchester United, where the stock market value is notably below the confirmed levels of the offers for the London club.

The Company's portfolio offers, I submit, an attractive overall RoC, delivered by companies with long histories of stable, high returns and critically with good reason to think those returns will be maintained over time. The weighted average Price/Earnings ratio for the portfolio stands at an historic 25 times. We hope this will fall quickly in coming years, because of the strong profits growth we expect from portfolio companies. Nonetheless, even this backward-looking Price/Earnings ratio of 25 times represents an earnings yield of 4%. To us, compared to the returns on cash or fixed interest, that is still highly appealing, given the combination of inflation protection and real growth offered by so many of the portfolio constituents.

The state of the world and of global stock markets, as I write this report, is apprehensive. The duration and effects of war are uncertain. There may be a speculative bubble deflating in technology company shares. It is possible inflation and interest rates will go higher. We have no particular perspective on any of these issues that would give us an edge in timing the markets. In such circumstances, I always remind myself of this, paraphrased, advice from the late, great investor Sir John Templeton. “The best time to buy sound common stocks is when events look most uncertain.” This is indeed great advice. Often events don’t work out as badly as people fear; but even if they do, owning shares in solid companies is a good strategy to see you through to the better days to come. The Company's strategy will continue to prize long-term ownership of “sound common stocks”.

Nick Train

Director

Lindsell Train Limited

Portfolio Manager

13 May 2022

INVESTMENTS AS AT 31 MARCH 2022

INVESTMENTS	SECTOR	FAIR VALUE £'000	% OF INVESTMENTS
RELX	Consumer Discretionary	253,850	12.7
Diageo	Consumer Staples	252,248	12.6
London Stock Exchange Group	Financials	205,073	10.2
Mondelez International1	Consumer Staples	185,427	9.3
Schroders+	Financials	150,018	7.5
Unilever	Consumer Staples	149,342	7.5
Burberry Group	Consumer Discretionary	136,054	6.8
Sage Group	Technology	115,593	5.8
Remy Cointreau2	Consumer Staples	113,142	5.6
Experian Group	Industrials	106,516	5.3
Top 10 Investments		1,667,263	83.3
Heineken3	Consumer Staples	93,727	4.7
Hargreaves Lansdown	Financials	78,221	3.9
Fever-Tree Drinks	Consumer Staples	49,489	2.5
Rathbone Brothers	Financials	27,789	1.4
Manchester United1	Consumer Discretionary	24,984	1.2
A.G. Barr	Consumer Staples	23,510	1.2
The Lindsell Train Investment Trust plc	Financials	10,850	0.5
Cazoo1	Consumer Discretionary	7,628	0.4
Young & Co Brewery (non voting)	Consumer Discretionary	6,817	0.3
Frostrow Capital LLP4**	Financials	5,500	0.2
Top 20 Investments		1,995,778	99.6
Fuller Smith & Turner	Consumer Discretionary	3,454	0.2
Celtic*	Consumer Discretionary	3,311	0.2
Total Investments		2,002,543	100.0

All of the above investments are equities listed in the UK, unless otherwise stated.

⁺ includes Schroders (non-voting) shares, fair value £8,549,000

* Includes Celtic 6% cumulative convertible preference shares, fair value £222,000

** Includes Frostrow Capital LLP AIFM Investment, fair value £900,000

¹ Listed in the United States

² Listed in France

³ Listed in the Netherlands

⁴ Unquoted

FINANCIAL STATEMENTS

Income Statement
for the six months ended 31 March 2022

	(UNAUDITED) SIX MONTHS ENDED 31 MARCH 2022			(UNAUDITED) SIX MONTHS ENDED 31 MARCH 2021
	REVENUE	CAPITAL	TOTAL	REVENUE	CAPITAL	TOTAL
	£000	£000	£000	£000	£000	£000
(Losses)/gains on investments at fair value through profit or loss	–	(56,974)	(56,974)	–	31,000	31,000
Currency translations	–	(13)	(13)	–	(20)	(20)
Income (note 2)	17,061	–	17,061	15,873	–	15,873
AIFM and Portfolio Management fees (note 3)	(1,391)	(4,174)	(5,565)	(1,794)	(3,643)	(5,437)
Other expenses	(561)	–	(561)	(482)	–	(482)
Return/(loss) on ordinary activities before finance charges and taxation	15,109	(61,161)	(46,052)	13,597	27,337	40,934
Finance charges	(63)	(190)	(253)	(67)	(135)	(202)
Return/(loss) on ordinary activities before taxation	15,046	(61,351)	(46,305)	13,530	27,202	40,732
Taxation on ordinary activities	(303)	–	(303)	(265)	–	(265)
Return/(loss) on ordinary activities after taxation	14,743	(61,351)	(46,608)	13,265	27,202	40,467
Return/(loss) per share – basic and diluted (note 4)	6.6p	(27.4)p	(20.8)p	6.0p	12.2p	18.2p

The “Total” column of this statement represents the Company’s Income Statement.

The “Revenue” and “Capital” columns are supplementary to this and are prepared under guidance published by The Association of Investment Companies (“AIC”).

All items in the above statement derive from continuing operations. The Company had no recognised gains or losses other than those declared in the Income Statement.

There is no material difference between the net (loss)/return on ordinary activities before taxation and the net (loss)/return on ordinary activities after taxation stated above and their historical cost equivalents.

Statement of Changes in Equity
for the six months ended 31 March 2022

(Unaudited) Six months ended 31 March 2022	CALLED UP SHARE CAPITAL £000	SHARE PREMIUM ACCOUNT £000	CAPITAL REDEMPTION RESERVE £000	CAPITAL RESERVE £000	REVENUE RESERVE £000	TOTAL SHAREHOLDERS FUNDS £000
At 1 October 2021	56,248	1,099,847	3,453	855,886	49,224	2,064,658
Net (loss)/return from ordinary activities	–	–	–	(61,351)	14,743	(46,608)
Second interim dividend (9.1p per share) for the year ended 30 September 2021	–	–	–	–	(20,474)	(20,474)
Repurchase of shares in Treasury	–	–	–	(14,358)	–	(14,358)
At 31 March 2022	56,248	1,099,847	3,453	(780,177)	43,493	1,983,218

(Unaudited) Six months ended 31 March 2021	CALLED UP SHARE CAPITAL £000	SHARE PREMIUM ACCOUNT £000	CAPITAL REDEMPTION RESERVE £000	CAPITAL RESERVE £000	REVENUE RESERVE £000	TOTAL SHAREHOLDERS FUNDS £000
At 1 October 2020	54,438	1,039,510	3,453	699,693	45,436	1,842,530
Net return from ordinary activities	–	–	–	27,202	13,265	40,467
Second interim dividend (8.6p per share) for the year ended 30 September 2020	–	–	–	–	(18,727)	(18,727)
Issue of shares	1,517	50,067	–	–	–	51,584
At 31 March 2021	55,955	1,089,577	3,453	726,895	39,974	1,915,854

Statement of Financial Position
as at 31 March 2022

	(UNAUDITED)	(AUDITED)
	31 MARCH	30 SEPTEMBER
	2022	2021
	£000	£000
Fixed assets
Investments designated at fair value through profit or loss (note 1)	2,002,543	2,071,266
Current assets
Debtors	8,484	9,428
Cash and cash equivalents	10,742	22,531
	19,226	31,959
Current liabilities
Creditors: amounts falling due within one year	(1,851)	(1,867)
Bank loan	(36,700)	–
	(38,551)	(1,867)
Net current (liabilities)/assets	(19,325)	30,092
Total assets less current liabilities	1,983,218	2,101,358
Creditors: amounts falling due after one year
Bank loan	–	(36,700)
Net assets	1,983,218	2,064,658
Capital and reserves
Called up share capital	56,248	56,248
Share premium account	1,099,847	1,099,847
Capital redemption reserve	3,453	3,453
Capital reserve	780,177	855,886
Revenue reserve	43,493	49,224
Total shareholders’ funds	1,983,218	2,064,658
Net asset value per share (note 5)	888.0p	917.7p

Statement of Cash Flows
for the six months ended 31 March 2022

	(UNAUDITED)	(UNAUDITED)
	31 MARCH	31 MARCH
	2022	2021
	£000	£000
Net cash inflow from operating activities before interest (note 7)	11,451	10,319
Interest paid	(253)	(151)
Net cash inflow from operating activities	11,198	10,168
Investing activities
Purchase of investments	(56,978)	(55,894)
Sale of investments	68,003	4,656
Net cash inflow/(outflow) from investing activities	11,025	(51,238)
Financing activities
Equity dividends paid	(20,474)	(18,727)
Shares issued	–	51,584
Repurchase of Shares into Treasury	(13,525)	–
Net cash (outfow)/inflow from financing activities	(33,999)	32,857
Decrease in cash and cash equivalents	(11,776)	(8,213)
Currency translations	(13)	(20)
Cash and cash equivalents at 1 October	22,531	20,440
Cash and cash equivalents at 31 March	10,742	12,207

Notes to the Financial Statements

1. Basis of preparation

The condensed Financial Statements for the six months to 31 March 2022 have been prepared under the historical cost convention, modified to include the revaluation of investments and in accordance with FRS 104 ‘Interim Financial Reporting’ and with the AIC’s Statement of Recommended Practice (“the SORP”) for Investment Trust Companies and Venture Capital Trusts dated April 2021 and the Companies Act 2006.

The accounting policies used for the year ended 30 September 2021 have been applied.

Fair Value

Under FRS 102 and FRS 104 investments have been classified using the following fair value hierarchy:

Level 1 – quoted prices in active markets

Level 2 – prices of recent transactions for identical instruments

Level 3 – valuation techniques using observable and unobservable market data.

The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:

	(UNAUDITED) AS AT 31 MARCH 2022
AS AT 31 MARCH 2022	LEVEL 1 £'000	LEVEL 2 £'000	LEVEL 3 £'000	TOTAL £'000
Equity investments	1,996,821	–	–	1,996,821
Limited liability partnership interest (Frostrow)	–	–	4,600	4,600
AIFM Capital contribution (Frostrow)	–	–	900	900
Preference share investments	222	–	–	222
	1,997,043	–	5,500	2,002,543

	(AUDITED) AS AT 30 SEPTEMBER 2021
AS AT 30 SEPTEMBER 2021	LEVEL 1 £'000	LEVEL 2 £'000	LEVEL 3 £'000	TOTAL £'000
Equity investments	2,065,830	–	–	2,065,830
Limited liability partnership interest (Frostrow)	–	–	4,300	4,300
AIFM Capital contribution (Frostrow)	–	–	900	900
Preference share investments	236	–	–	236
	2,066,066	–	5,200	2,071,266

2. Income

	(UNAUDITED) SIX MONTHS ENDED 31 MARCH 2022 £'000	(UNAUDITED) SIX MONTHS ENDED 31 MARCH 2021 £'000
Income from investments
UK listed dividends	14,853	13,915
Overseas dividends	2,168	1,924
Limited liability partnership – priority profit-share on AIFM capital contribution	40	34
Total income	17,061	15,873

3. AIFM and Portfolio Management fees

	(UNAUDITED) SIX MONTHS TO 31 MARCH 2022			(UNAUDITED) SIX MONTHS TO 31 MARCH 2021
	REVENUE	CAPITAL	TOTAL	REVENUE	CAPITAL	TOTAL
	£'000	£'000	£'000	£'000	£'000	£'000
AIFM fee	348	1,043	1,391	448	911	1,359
Portfolio management fee	1,043	3,131	4,174	1,346	2,732	4,078
Total fees	1,391	4,174	5,565	1,794	3,643	5,437

4. Return/(Loss) per share – basic and diluted

	(UNAUDITED) SIX MONTHS TO 31 MARCH 2022 £'000	(UNAUDITED) SIX MONTHS TO 31 MARCH 2021 £'000
The return/(loss) per share is based on the following figures:
Revenue return	14,743	13,265
Capital (loss)/return	(61,351)	27,202
Total (loss)/return	(46,608)	40,467
Weighted average number of shares in issue for the period	224,203,451	221,896,250
Revenue return per share	6.6p	6.0p
Capital (loss)/return per share	(27.4)p	12.2p
Total (loss)/return per share	(20.8)p	18.2p

The calculation of the total, revenue and capital returns/(loss) per ordinary share is carried out in accordance with IAS 33, “Earnings per Share (as adopted in the EU)”.

During the period there were no dilutive instruments held, therefore the basic and diluted return/(loss) per share are the same.

5. Net asset value per share

	(UNAUDITED) AS AT 31 MARCH 2022	(AUDITED) AS AT 30 SEPTEMBER 2021
Net Assets (£'000)	1,983,218	1,915,854
Number of shares in issue	223,330,882	223,821,303
Net asset value per share	888.0p	856.0p

6. Transaction costs

Purchase transaction costs for the six months ended 31 March 2022 were £142,000 (six months ended 31 March 2021: £160,000). These comprise stamp duty costs of £102,000 (31 March 2021: £136,000) and commission of £40,000 (31 March 2021: £24,000).

Sales transaction costs for the six months ended 31 March 2022 were £24,000 (six months ended 31 March 2021: £1,000). These comprise solely commission.

These transaction costs are included within the gains and losses on investments within the Income Statement.

7. Reconciliation of total return/(loss) before finance costs and taxation to net cash inflow from operating activities

	(UNAUDITED) SIX MONTHS ENDED 31 MARCH 2022 £'000	(UNAUDITED) SIX MONTHS ENDED 31 MARCH 2021 £'000
Total (loss)/return before finance charges and taxation	(46,052)	40,934
Add/(deduct): capital loss/(return) before finance charges and taxation	61,161	(27,337)
Net revenue before finance costs and taxation	15,109	13,597
Decrease in accrued income and prepayments	1,210	745
(Decrease)/increase in creditors	(125)	38
Taxation – irrecoverable overseas tax paid	(569)	(418)
AIFM and Portfolio management fees charged to capital	(4,174)	(3,643)
Net cash inflow from operating activities	11,451	10,319

8. Going concern

The Directors believe, having considered the Company’s investment objective, risk management policies, capital management policies and procedures, as well as the nature of the portfolio and the expenditure projections, that the Company has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence for the foreseeable future. In addition, there are no material uncertainties relating to the Company that would prevent its ability to continue in such operational existence for at least twelve months from the date of the approval of this half year financial report. For these reasons, the Directors consider there is reasonable evidence to continue to adopt the going concern basis in preparing the Financial Statements. In reviewing the position as at the date of this report, the Board has considered the guidance on this matter issued by the Financial Reporting Council.

As part of their assessment, the Directors have given careful consideration to the consequences for the Company of continuing uncertainty in the global economy. The Russian invasion of Ukraine and the ongoing Covid-19 pandemic including further lockdowns in China, have created significant supply chain disruption exacerbating inflationary pressures worldwide. As previously reported, stress testing was also carried out in November 2021 to establish the impact of a significant and prolonged decline in the Company’s performance and prospects. This included a range of plausible downside scenarios such as reviewing the effects of substantial falls in investment values and the impact on the Company’s ongoing charges ratio.

9. 2021 accounts

The figures and financial information for the year to 30 September 2021 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for the year.

Those accounts have been delivered to the Registrar of Companies and included the Report of the Auditor which was unqualified and did not contain a reference to any matters to which the Auditor drew attention by way of emphasis without qualifying the report, and did not contain a statement under section 498 of the Companies Act 2006.

GOVERNANCE/INTERIM MANAGEMENT REPORT

INTERIM MANAGEMENT REPORT

The Directors are required to provide an Interim Management Report in accordance with the UK Listing Authority’s Disclosure and Transparency Rules. They consider that the Chairman’s Statement and the Portfolio Manager’s Review, the following statements and the Directors’ Responsibility Statement together constitute the Interim Management Report for the Company for the six months ended 31 March 2022.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors continue to review the key risk register for the Company which identifies the risks that the Company is exposed to, the controls in place and the actions being taken to mitigate them. This is set against the backdrop of increased risk levels within the global economy since the beginning of 2020 as a result of the disruptive impact and continuing uncertainty created by the Covid-19 pandemic, the recent level of inflation and potential rising interest rates, together with the consequences of the Russian invasion of Ukraine and the subsequent long-term effects on economies and international relations.

The Directors have considered the impact of the continued uncertainty on the Company’s financial position and, based on the information available to them at the date of this report, have concluded that no adjustments are required to the accounts as at 31 March 2022.

A review of the performance and the outlook for the Company can be found in the Chairman’s Statement and in the Portfolio Manager’s Review. The principal risks and uncertainties faced by the Company include the following:

• The Company’s share price total return may differ materially from the NAV per share total return.
• The investment strategy adopted by the Portfolio Manager including the high degree of concentration of the investment portfolio, may lead to an investment return that is materially lower than the Company’s benchmark index, thereby failing to achieve the Company’s investment objective.
• The departure of a key individual at the Portfolio Manager may affect the Company’s performance.
• Global events such as the ongoing Covid-19 pandemic including further lockdowns in China, Russia's invasion of Ukraine and ongoing supply chain issues and/or labour shortages may adversely impact the operational activities of the portfolio companies so that they are no longer appropriate to achieve the Company’s investment objective.
• The investment approach is not aligned with shareholder expectations in relation to Environmental, Social and Governance ("ESG") matters.
• The Company's investment mandate no longer appeals to investors leading to long-term selling pressure which threatens the stability of the Company.
• Errors or irregularities in published information could lead to censure and/or result in reputational damage to the Company.
• Adverse reputational impact of one or more of the Company's key service providers which, by association, causes the Company reputational damage.
• Fraud (including unauthorised payments and cyber fraud) occurs leading to a loss.
• The Company is exposed to market price risk.
• The regulatory environment in which the Company operates changes materially, affecting the Company’s modus operandi.
• The Company and/or the Directors fail(s) to comply with legal requirements in relation to FCA dealing rules/ handbook procedures, the AIFMD, the Listing Rules, the Companies Act 2006, relevant accounting standards, the Bribery Act 2010, the Criminal Finances Act 2017, GDPR, tax regulations or any other applicable regulations.
• Poor adherence to corporate governance best practice or errors or irregularities in published information could lead to censure and/or result in reputational damage to the Company.
• The adverse impact of climate change on the portfolio companies’ operational performance.

Information on each of these risks is given in the Annual Report for the year ended 30 September 2021.

The Board believes that the Company’s principal risks and uncertainties have not changed materially since the date of that report and are not expected to change materially for the remaining six months of the Company’s financial year.

RELATED PARTY TRANSACTIONS

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company.

DIRECTORS’ RESPONSIBILITIES

The Board of Directors confirms that, to the best of its knowledge:

1. the condensed set of financial statements contained within the Half Year Report have been prepared in accordance with applicable United Kingdom Generally Accepted Accounting Practice standards; and
2. the interim management report includes a true and fair review of the information required by:
   1. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year;
   2. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and
   3. any changes in the related party transactions described in the last annual report that could do so.

The Half Year Report has not been audited by the Company’s auditors.

This Half Year Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the date of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

For and on behalf of the Board

Simon Hayes
Chairman

13 May 2022

FURTHER INFORMATION

Glossary of Terms and Alternative Performance Measures (“APM”)

ACTIVE SHARE

Active Share is expressed as a percentage and shows the extent to which a fund’s holdings and their weightings differ from those of the fund’s benchmark index. A fund that closely tracks its index might have a low Active Share of less than 20% and be considered passive, while a fund with an Active Share of 60% or higher is generally considered to be actively managed.

AIC

The Association of Investment Companies.

ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE (“AIFMD”)

Agreed by the European Parliament and the Council of the European Union and transposed into UK legislation, the AIFMD classifies certain investment vehicles, including investment companies, as Alternative Investment Funds (“AIFs”) and requires them to appoint an Alternative Investment Fund Manager (“AIFM”) and depositary to manage and oversee the operations of the investment vehicle. The Board of the Company retains responsibility for strategy, operations and compliance and the Directors retain a fiduciary duty to shareholders.

ALTERNATIVE PERFORMANCE MEASURE (“APM”)

An Alternative Performance Measure (“APM”) is a numerical measure of the Company’s current, historical or future financial performance, financial position or cash flows other than a financial measure defined or specified in the applicable financial framework. In selecting these Alternative Performance Measures, the Directors considered the key objectives and expectations of typical investors and believe that each APM gives the reader useful and relevant information in judging the Company's performance and in comparing other Investment Companies.

BENCHMARK RETURN

Total return on the benchmark, assuming that all dividends received were re-invested, without transaction costs, into the shares of the underlying companies at the time the shares were quoted ex-dividend.

DISCOUNT OR PREMIUM (APM)

A description of the difference between the share price and the net asset value per share. The size of the discount or premium is calculated by subtracting the share price from the net asset value per share and is usually expressed as a percentage (%) of the net asset value per share. If the share price is higher than the net asset value per share the result is a premium. If the share price is lower than the net asset value per share, the shares are trading at a discount.

DISCOUNT OR PREMIUM (APM)		31 MARCH 2022	30 SEPTEMBER 2021
Share Price (p)		833.0	876.0
Net Asset value per share (p)		888.0	917.7
Discount share price to net asset value per share		6.2%	4.5%

FTSE DISCLAIMER

“FTSE© is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distributions of FTSE data is permitted without FTSE’s express written consent.

GEARING (APM)

Gearing represents prior charges, adjusted for net current assets expressed as a percentage of net assets (AIC methodology). Prior charges includes all loans and bank overdrafts for investment purposes.

		31 MARCH	30 SEPTEMBER
		2022	2021
Bank loan (prior charges)		(36,700)	(36,700)
Net Current Assets (excluding bank loan)		17,375	30,092
Net Debt		(19,325)	(6,608)
Net Assets		1,983,218	2,064,658
Gearing		1.0%	0.3%

LEVERAGE

For the purpose of the Alternative Investment Fund Managers (”AIFM”) Directive, leverage is a method which increases the Company’s exposure, including the borrowing of cash and the use of derivatives.

Leverage is calculated slightly differently to the AIC method of calculating gearing in that it is expressed as a ratio between the Company’s exposure and its net asset value. It is calculated under gross and commitment methods. Under the gross method, exposure represents the Company’s investment positions excluding sterling cash balances. Under the commitment method, exposure represents the Company’s investment positions including sterling cash balances and after certain hedging and netting positions are offset (where applicable). For these purposes the Board has set a maximum leverage of 125% for both methods.

	31 MARCH 2022	30 SEPTEMBER 2021
Gross method	101.9%	100.3%
Commitment method	102.5%	101.4%

NET ASSET VALUE (”NAV”)

The value of the Company’s assets, principally investments made in other companies and cash being held, less any liabilities. The NAV is also described as ‘shareholders’ funds’ per share. The NAV is often expressed in pence per share after being divided by the number of shares which have been issued. The NAV per share is unlikely to be the same as the share price which is the price at which the Company’s shares can be bought or sold by an investor. The share price is determined by the relationship between the demand and supply of the shares.

NET ASSET VALUE TOTAL RETURN PER SHARE (APM)

The theoretical total return on an investment over a specified period assuming dividends paid to shareholders were reinvested at net asset value per share at the time the shares were quoted ex-dividend. This is a way of measuring investment management performance of investment trusts which is not affected by movements in discounts or premiums.

NAV TOTAL RETURN		31 MARCH 2022	30 SEPTEMBER 2021
Opening NAV per share (p)		917.7	846.2
(Decrease)/increase in NAV per share (p)		(29.7)	71.5
Closing NAV per share (p)		888.0	917.7
Less first interim dividend (p)*		(8.3)	–
Adjusted closing NAV per share (p)		879.7	917.7
(Decrease)/increase in the adjusted closing NAV		(4.1)%	+8.4%
Impact of dividends re-invested*		+1.9%	+2.2%
NAV per share total return		(2.2)%	+10.6%

* Total dividends declared during the period of 17.4p (2021: 16.6p declared during the 2021 financial year) were re-invested at the cum income NAV per share at the ex-dividend date.

In accordance with FRS 102 dividends are included in the Financial Statements in the period in which they are paid or approved by shareholders.

The source is Morningstar which has calculated the return on an industry comparative basis.

ONGOING CHARGES (APM)

Ongoing charges are calculated by taking the Company’s annualised operating expenses expressed as a proportion of the average daily net asset value of the Company over the year. The costs of buying and selling investments are excluded, as are interest costs, taxation, cost of buying back or issuing ordinary shares and other non-recurring costs.

				31 MARCH 2022 £000	30 SEPTEMBER 2021 £000
AIFM and Portfolio management fees				10,767	11,240
Operating Expenses				1,091	1,007
Total Expenses				11,858*	12,247
Average Net Assets during the period/year				2,045,353	1,988,069
Ongoing Charges				0.58%	0.62%

* Estimated expenses for the year ending 30 September 2022,.

PEER GROUP

Finsbury Growth & Income Trust PLC is part of the AIC’s UK Equity Income Investment Trust Sector. The trusts in this universe are defined as trusts whose investment objective is to achieve a total return for shareholders through both capital and dividend growth. The members will normally have at least 80% of their assets in UK securities return.

SHARE PRICE TOTAL RETURN (APM)

The change in capital value of a company’s shares over a given period, plus dividends paid to shareholders, expressed as a percentage of the opening value. The assumption is that dividends paid to shareholders are re-invested in the shares at the time the shares are quoted ex dividend.

SHARE PRICE TOTAL RETURN		31 MARCH 2022	30 SEPTEMBER 2021
Opening share price (p)		876.0	840.0
(Decrease)/increase in share price (p)		(43.0)	36.0
Closing share price (p)		833.0	876.0
% (Decrease)/increase in share price		(4.9)%	+4.3%
% Impact of dividends re-invested*		1.9%	+2.0%
Share price total return		(3.0)%	+6.3%

* Total dividends declared during the period of 17.4p (2021: 16.6p declared during the 2021 financial year) were re-invested at the share price at the ex-dividend date.

The source is Morningstar which has calculated the return on an industry comparative basis.

STRESS TESTING

Is a forward-looking analysis technique that considers the impact of a variety of extreme but plausible economic scenarios on the financial position of the Company.

TREASURY SHARES

Shares previously issued by a company that have been bought back from shareholders to be held by the Company for potential sale or cancellation at a later date. Such shares are not capable of being voted and carry no rights to dividends.

- END-

Victoria Hale

Frostrow Capital LLP

Company Secretary – 0203 170 8732

16 May 2022