Interim Management Statement

RNS Number : 4681A

Investors Capital Trust PLC

01 February 2011

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 October 2010 to 31 December 2010

Investment objective

To provide an attractive return to shareholders each year in the form of dividends and/or capital distributions, together with prospects for capital growth.

The Company's portfolio is managed in two parts.  The first part comprises investments in UK equities and equity-related securities of large and mid-sized companies (the Equities Portfolio) and the second part comprises investments in fixed interest and other higher yielding stocks and securities (the Higher Yield Portfolio).

Performance summary

Capital return	As at 31 December 2010	As at 30 Sept 2010	Movement
Total assets	£145.0 million	£140.6 million	3.1%
Net asset value:    A share and B share   Unit*	85.4p 341.6p	81.6p 326.4p	4.7% 4.7%
Share price:    A share    B share    Unit	84.5p 90.0p 328.0p	81.5p 81.5p 323.0p	3.7% 10.4% 1.5%
Premium/(discount):  A share  B share  Unit	(1.1)% 5.4% (4.0)%	(0.1)% (0.1)% (1.0)%
Gearing**:  Maximum potential ratio  Actual ratio (Investment gearing)    Actual ratio (Equity gearing)	133.0 124.8 95.4	135.0 129.2 91.9
Total return	For the three Month period ended 31 December 2010	For the nine Month period ended 31 December 2010
Net asset value:  A and B share and Unit	6.0%	7.3%
FTSE All-Share Capped 5% Index	7.3%	8.6%

bSources: F&C Investment Business Limited and Datastream.

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

**The gearing ratio indicates the extra amount by which shareholders' funds would rise or fall if total assets were to rise or fall. A figure of 100 means that the Company has a nil geared position.

Maximum potential ratio = the ratio of total assets (including fixed interest and net cash assets) to assets attributable to shareholders.

If securities held in the Company's Higher Yield Portfolio are included as fixed interest assets then the actual ratio will be as shown below.

Actual ratio (investment gearing) = the ratio of total assets (less cash assets) to assets attributable to shareholders.

Actual ratio (equity gearing) = the ratio of total assets (less fixed interest and cash assets) to assets attributable to shareholders.

Review

The UK equity market increased 7.3% during the quarter resulting in a gain of 16.1% for the calendar year for the FTSE All-Share Capped 5% Index, as measured on a total return basis.

The positive UK equity return for the quarter was largely a result of a 7.1% gain in December.  European sovereign debt concerns faded as investors reacted to the extension of US tax cuts and a continuation of strong economic data in Asia.  The increased purchasing power the tax cuts create led several economists to upgrade forecasts for US GDP in 2011.  We welcome policy decisions that enhance economic growth but are mindful of the impact the decision has on an already stretched US fiscal position.  The coalition government in the UK remains resolute in its commitment to reduce the fiscal deficit ensuring 2011 will be a tough year for many households.  We believe an enduring solution for European sovereign debt issues will remain a significant challenge.  Remedies that provide countries access to liquidity do not address the source problem of high absolute levels of public debt. 

During the quarter the corporate bond portfolio was reduced to a value broadly commensurate with the nominal value of the Company's debt.  The reduction in corporate bond holdings was completed into a strong fixed interest market.  Generally fixed interest markets reacted positively to the US Federal Reserve decision to implement a second round of quantitative easing.  A significant proportion of the money raised from the corporate bond portfolio was invested into equities during October and November.  The UK equity market has recovered meaningfully from the lows reached in March 2009.  We believe equity valuations remain appealing, particularly those of companies paying attractive dividends that can grow in real terms.

Dividends and Capital Distributions

A second quarter dividend in respect of the year ended 31 March 2011, of 1.06 pence per share, was paid on the A shares of the Company on 5 November 2010 to A shareholders on the register on 15 October 2010.

A second quarter capital return of 1.06 pence per share was paid on the B shares of the Company on 5 November 2010 to B shareholders on the register on 15 October 2010.  Capital distributions on B shares are paid at the same time as, and in an amount equal to, each dividend paid on an A share.

The Company has announced a third quarter dividend in respect of the year ending 31 March 2011 of 1.06 pence per A share and a third quarter capital distribution of 1.06 pence per B share, both payable on 4 February 2011.

Share Buy Backs

The Company did not buy back, issue or re-sell any shares during the quarter. At 31 December 2010 the Company held 6,489,000 A Shares and 25,000 B Shares in treasury.

Top ten Equities Portfolio holdings and top ten Higher Yield Portfolio holdings

Equities Portfolio

Company			Percentage of total assets as at 31 December 2010
GlaxoSmithKline			4.0%
Vodafone			3.9%
Royal Dutch Shell			3.7%
Rio Tinto			3.6%
HSBC Holdings			3.5%
British American Tobacco			3.4%
BHP Billiton			3.0%
BP			2.9%
Diageo			2.4%
AstraZeneca			2.2%
Total			32.6%

Higher Yield Portfolio

Security			Percentage of total assets as at 31 December 2010
Iron Mountain 7.25% 15/04/14			0.5%
Land Securities 4.625% 03/02/13			0.4%
Paragon Group 7% 20/04/17			0.4%
Ineos 7.875% 15/02/16			0.4%
Marstons FRN 15/07/20			0.3%
Kraft Foods 5.75% 20/03/12			0.3%
France Telecom 6% 29/03/12			0.3%
Old Mutual 5% 21/01/16			0.3%
Yorkshire Water 6.5876% 21/02/23			0.3%
Sutton Bridge 8.625% 30/06/22			0.3%
Total			3.5%

Portfolio Summary

		Market Value at 31 Dec 2010 £'000	% of Total Assets at 31 Dec 2010	% of Total Assets at  30 Sept 2010
Equities Portfolio		104,003	71.7	68.0
Higher Yield Portfolio		31,985	22.1	27.7
Net Current Assets		9,003	6.2	4.3
Total Assets (less Current Liabilities)		144,991	100.0	100.0
Bank Term Loan & Interest Rate Swap		(35,988)	(24.8)	(25.9)
Net Assets Attributable to Shareholders		109,003	75.2	74.1

Director Changes

Martin Haldane retired as Chairman and a Director of the Company on 31 December 2010.  Iain McLaren has been appointed by the Board as Chairman of the Company with effect from 1 January 2011.  Julia Le Blan has been appointed as a Director of the Company with effect from 1 January 2011 and Chairman of the Audit Committee from that date.

The Board is not aware of any significant events or transactions which have occurred since 31 December 2010 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and key information

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.investorscapital.co.uk, or at www.fandc.com.

Year end:                                                                     31 March

Dividends and Capital Distributions paid:                   August, November, February and May

Shares in issue with voting rights at quarter end:      95,578,144 A shares and 32,051,703 B shares.

This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.

For further information please contact:

Rodger McNair, Investment Manager             Tel: [phone]

Michael Campbell, Company Secretary                     Tel: [phone]

 

END

 

 

IMSKMGGZMMLGMZM