Half-year Report
BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC
LEI: 5493003YBY59H9EJLJ16 - Article 5 Transparency Directive, DTR 4.2
HALF YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 APRIL 2019
Performance record
FINANCIAL HIGHLIGHTS
| As at 30 April 2019 |
As at 31 October 2018 |
Change % |
|
| Assets | |||
| Net asset value per ordinary share (pence) | 203.70 | 194.26 | +4.9 |
| – with dividends reinvested* | – | – | +7.3 |
| Ordinary share price (mid-market) (pence) | 197.50 | 183.00 | +7.9 |
| – with dividends reinvested* | – | – | +10.5 |
| FTSE All-Share Index (Total Return)** | 7,389.39 | 6,947.84 | +6.4 |
| Net assets (£’000)*** | 47,338 | 46,738 | +1.3 |
| Discount to net asset value | 3.0% | 5.8% |
| For the six months ended 30 April 2019 |
For the six months ended 30 April 2018 |
Change % |
|
| Revenue | |||
| Net profit after taxation (£’000) | 827 | 788 | +4.9 |
| Revenue profit per ordinary share (pence) | 3.45 | 3.23 | +6.8 |
| Dividend per ordinary share | |||
| Interim | 2.60p | 2.50p | +4.0 |
* Alternative Performance Measures,
** The benchmark index.
*** The change in net assets reflects the market movements during the year and the purchase of the Company’s own shares.
CHAIRMAN’S STATEMENT FOR THE SIX MONTHS TO 30 APRIL 2019
Dear Shareholder
I am pleased to present the Company’s half-yearly financial report for the six months to 30 April 2019.
PERFORMANCE
During the period, the Company’s net asset value per share (NAV) returned +7.3%, compared with the Company’s benchmark, the FTSE All-Share Index (Total Return), which returned +6.4%. The Company’s share price rose by 10.5%. Since the period end and up to the close of business on 24 June 2019, the Company’s NAV per share has risen by 0.3% compared with a rise in the benchmark of 0.3% (all percentages are with dividends reinvested). Further information on the significant components of overall performance and the changes to portfolio composition are set out in the Investment Manager’s Report which follows.
OVERVIEW
Global equity markets saw positive returns overall for the six month period under review. However this encompassed a significant sell-off in the fourth quarter of 2018 around concerns over US/China trade tensions, slowing global growth and an interest rate increase by the US Federal Reserve in December. On the domestic front, the FTSE All-Share Index followed suit in the fourth quarter of 2018 and declined as concern around Brexit related risk rose after the UK Government’s failure to garner support for the withdrawal agreement between the UK and the EU. The first quarter of 2019 saw a sharp rebound with all major markets performing well, particularly in the US, where a more dovish stance from the Federal Reserve was indicated.
REVENUE PROFIT AND DIVIDENDS
Revenue profit for the period was 3.45 pence per share (six months to 30 April 2018: 3.23 pence per share). Total revenue has increased when compared to the same period last year as a result of an increase in the levels of dividends received during the period. The Board is pleased to declare an interim dividend of 2.60 pence per share (2018: 2.50 pence per share). This dividend will be paid on 2 September 2019 to shareholders on the Company’s register at the close of business on 26 July 2019 (the ex dividend date is 25 July 2019).
SHARE CAPITAL
The Directors recognise the importance to investors that the Company’s share price should not deviate significantly from the underlying NAV per share 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 does not trade at a significant discount. The discount management policy is effected through the use of share buy backs at a discount and the issue of new shares or issue of shares from treasury at or above the estimated NAV per share. During the period, the Company’s shares traded at an average discount of 4.1% to cum income NAV per share. At the close of business on 24 June 2019 the discount stood at 3.3%.
A total of 820,147 ordinary shares were bought back during the period at an average price of 191.41 pence and for a total consideration of £1,576,000. No shares were issued or sold from treasury during the period under review. Since the year end and up to the date of this report, a further 172,045 ordinary shares have been bought back at an average price of 191.63 pence and for a total consideration of £330,000. As at 24 June 2019, 30.0% of the Company’s issued ordinary share capital is held in treasury and may be issued to satisfy any demand for the Company’s shares that may arise.
The Board believes that an ongoing commitment to its discount management policy will continue to enhance the attractiveness of the Company to existing and potential new shareholders.
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 been geared during the period under review and at 30 April 2019 the Company had net gearing of 1.6%. Gearing levels and sources of funding are reviewed regularly to ensure that the Company has access to the most competitive borrowing rates available to it. The Company currently has a two year unsecured sterling revolving credit facility of £4,000,000 with ING Bank (Luxembourg) S.A., with a maturity date of October 2020. At the date of this report the facility was fully drawn down.
BOARD SUCCESSION
As previously announced, after 9 years’ service with the Company, I have informed the Board that I will not be seeking re-election at the Company’s next AGM, which is scheduled to be held on 12 March 2020, and that I will therefore cease to be a Director of the Company at the AGM’s conclusion. As part of the Company’s succession planning arrangements the search to identify a suitable successor has commenced. Further information will be announced in due course.
OUTLOOK
Market volatility is expected to continue throughout 2019 and there remain a number of downside risks; not least a further deterioration in the economic outlook, but also various geopolitical risks, including the outcome of the Brexit process, political instability in the UK and a further escalation of US/China trade tensions. The UK has recently seen some robust employment figures and positive wage growth. However, the economic climate remains volatile.
As you will read in their report which follows, your investment managers continue to seek companies that can generate cash flow from strong business models and have favourable industry characteristics or scope for management driven self-help. They believe that market volatility is likely to continue during the remainder of the financial year, although this should provide the opportunity to identify high quality companies at attractive valuations and to increase their holdings where they have the greatest conviction. The focus remains on bottom-up stock selection, assembling a portfolio of individual companies which, taken as a whole, should prove capable of delivering attractive returns and supporting dividend growth into the future. Your Board remains fully supportive of this approach.
JONATHAN CARTWRIGHT
Chairman
25 June 2019
INVESTMENT MANAGER’S REPORT FOR THE SIX MONTHS TO 30 APRIL 2019
PERFORMANCE
The Company’s NAV returned 7.3% in the six months to 30 April 2019, outperforming the FTSE All-Share Index which returned 6.4% for the period (all figures in sterling terms with dividends reinvested).
INVESTMENT APPROACH AND PROCESS
In assembling the Company’s portfolio we adopt a 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 benchmark index and in any individual year the returns will vary, sometimes significantly, from those of the benchmark index. Over longer periods our objective is to achieve returns greater than the benchmark 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
Sharp declines in equity markets in the fourth quarter of 2018 have been erased by a strong rally through the start of 2019. Markets shrugged off a host of weak economic data, corporate earnings downgrades and political confusion in the UK. The US Federal Open Market Committee’s tone became notably more dovish which drove bond yields back to levels last seen at the beginning of 2018. The European Central Bank’s monetary stance also remained accommodative and Chinese policy was eased on both fiscal and monetary fronts. Brexit has continued to dominate the UK political landscape but markets were relatively unmoved by the ongoing uncertainty; sterling strengthened over the period in the belief that the probability of a “no deal†Brexit had waned, shrugging off concerns that the chances of a general election may have increased. However, post the period end sterling has weakened following the UK Prime Minister’s announcement of her resignation date and the resulting UK political leadership contest, which has once again elevated uncertainty.
The Mining sector has performed well as the iron ore price strengthened while domestically exposed sectors, such as General Retail and Food Retail, rose as the probability of “no deal†faded, yet smaller cap indices, with higher domestic exposure, underperformed. Elsewhere, returns were primarily driven by company specific news flow.
CONTRIBUTORS TO AND DETRACTORS FROM PERFORMANCE
John Laing Group has reiterated continued investment in Australia and North America, where they have a large, varied and exciting pipeline of opportunities, and also new investment opportunities in Latin America. We continue to have conviction in this business which is well exposed to global infrastructure investment trends. Rentokil Initial experienced a strong share price rise over the period, boosted more recently by an announcement from the company that they are preparing for a buy-out of their pension fund, which is currently in surplus, and which will result in a cash payment to the company. Phoenix Group reported strong growth in profits with the business beating expectations for both cash flow and capital generation. This life assurance company is delivering on its strategic priorities, having completed the acquisition of the Standard Life Assurance business.
Superdry announced a profit downgrade, blaming the unseasonably warm weather at the start of the winter season which had a substantial impact on sales volumes. The investment has also been impacted by the strategic disagreement between the board and the group’s co-founder and largest shareholder. The lack of holdings in Diageo and Rio Tinto detracted from relative performance.
TRANSACTIONS
During the period we purchased new positions in Easyjet, Homeserve, Moneysupermarket Group and Pheonix Group. We have added to holdings in Tesco and have reduced exposure to Weir Group, British American Tobacco and RELX. We have sold Accesso Technology, Inchcape and Shire; the latter left the benchmark following the takeover by Japanese pharmaceutical firm, Takeda.
OUTLOOK
We expect UK growth to remain modest as we see structural pressures from demographics, corporate underinvestment and new technology continuing to act as a drag on inflation while the dovish tilt from central banks has been supportive for markets. This is a fragile equilibrium such that we expect markets to oscillate between periodic concern about a deterioration in growth and a shift to a more hawkish stance from central banks. With heightened political uncertainty and investor nervousness, we expect market volatility to continue. As active managers of a concentrated fund, we believe that this market environment continues to provide us with the opportunity to find high quality, cash generative businesses, with robust balance sheets, that can deliver long term capital and income growth for our clients.
We continue to like cash generative consumer staple companies, especially those exposed to the emerging market consumer, given the prevalent demographic trends in certain markets. These companies often generate substantial cash flow which allows them to invest in research and development, marketing and distribution to ensure the longevity of their brands while also paying attractive and growing dividends to shareholders. We have also sought exposure to infrastructure spend whilst at the same time we are watching for signs of overheating in the US and monitoring economic growth in China. We also note that inflationary pressures could start to build and therefore we seek those companies with sufficient pricing power and efficiency potential to withstand rising costs. As the recent past has demonstrated, it is crucial to be selective and to focus on those companies that are strong operators that provide a differentiated service or product and that boast a robust balance sheet.
ADAM AVIGDORI and DAVID GOLDMAN
BlackRock Investment Management (UK) Limited
25 June 2019
TEN LARGEST INVESTMENTS AS AT 30 APRIL 2019
Royal Dutch Shell ‘B’: 7.0% (2018: 6.8%) is an oil and gas company based in the UK. The company operates in both upstream and downstream industries. Upstream industries are engaged in searching for and recovering crude oil and natural gas, the liquefaction and transportation of gas. Downstream industries are engaged in manufacturing, distribution and marketing activities for oil products and chemicals.
RELX: 4.8% (2018: 4.9%) is a global provider of professional information solutions that includes publication of scientific, medical, technical and legal journals. It also has one of the world’s leading exhibitions, conference and events businesses.
Prudential: 4.5% (2018: 3.4%) is a multinational life insurance and financial services company which aims to meet the long-term savings and protection needs of a growing middle class and ageing population across Asia, the US, Europe and the UK.
Tesco: 4.5% (2018: 3.1%) Tesco is a multinational groceries and general merchandise retailer and wholesaler, headquartered in the UK and operating across Europe and Asia. Through Tesco Bank the company offers a range of personal banking services.
Reckitt Benckiser: 4.3% (2018: 2.5%) Reckitt Benckiser is a multinational consumer goods company headquartered in the UK with operations in over 60 countries. Through its consumer health and hygiene & home businesses, the business has a portfolio of leading brands.
GlaxoSmithKline: 4.2% (2018: 4.0%) is a science-led global healthcare company focused on researching, developing and manufacturing innovative pharmaceutical medicines, vaccines and consumer healthcare products.
British American Tobacco: 4.1% (2018: 5.5%) is one of the world’s leading tobacco groups, with more than 200 brands in the portfolio selling in approximately 180 markets worldwide.
BP Group: 4.0% (2018: 4.1%) is a multinational integrated oil and gas company that is vertically integrated and operates in all areas of the industry including exploration, production, refining, distribution, trading and renewable energy.
AstraZeneca: 3.9% (2018: 3.9%) is an Anglo-Swedish multinational pharmaceutical company with its headquarters in the UK. It is a science-led biopharmaceutical business with a portfolio of products for major disease areas including cancer, cardiovascular, infection, neuroscience and respiratory.
Lloyds Banking Group: 3.6% (2018: 3.9%) 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 insurance and life insurance, pensions and investment provision.
All percentages reflect the value of the holding as a percentage of total investments as at 30 April 2019 (the percentages in brackets represent the position as at 31 October 2018). Together, the ten largest investments represent 44.9% of total investments (ten largest investments as at 31 October 2018: 44.8%).
DISTRIBUTION OF INVESTMENTS AS AT 30 APRIL 2019
ANALYSIS OF PORTFOLIO BY SECTOR
| % of investments by value | Benchmark | |
| 1 Oil & Gas Producers | 12.1 | 12.8 |
| 2 Life Insurance | 8.4 | 3.6 |
| 3 Pharmaceuticals & Biotechnology | 8.1 | 6.6 |
| 4 Banks | 7.5 | 10.6 |
| 5 Household Goods & Home Construction | 7.3 | 3.2 |
| 6 Media | 7.3 | 3.5 |
| 7 Financial Services | 7.0 | 3.6 |
| 8 Food Producers | 6.2 | 1.2 |
| 9 Support Services | 6.0 | 4.7 |
| 10 Tobacco | 5.1 | 3.7 |
| 11 Food & Drug Retailers | 4.5 | 1.8 |
| 12 Travel & Leisure | 3.5 | 4.6 |
| 13 Mining | 3.5 | 7.5 |
| 14 Industrial Engineering | 3.0 | 0.9 |
| 15 Non-life Insurance | 2.7 | 1.1 |
| 16 Gas, Water & Multiutilities | 2.6 | 1.9 |
| 17 Mobile Telecommunications | 1.7 | 1.6 |
| 18 Electronic & Electrical Equipment | 1.1 | 0.6 |
| 19 Construction & Materials | 1.1 | 1.6 |
| 20 Chemicals | 0.8 | 0.8 |
| 21 Personal Goods | 0.5 | 2.6 |
Sources: BlackRock and Datastream.
INVESTMENT SIZE
| Number of Investments | % of Investments by value |
|
| < £1m | 24 | 28.2 |
| £1m to £2m | 15 | 46.7 |
| £2m to £3m | 4 | 18.1 |
| £3m to £4m | 1 | 7.0 |
Source: BlackRock.
INVESTMENTS AS AT 30 APRIL 2019
| Market value £’000 |
% of investments |
|
| Oil & Gas Producers | ||
| Royal Dutch Shell ‘B’ | 3,380 | 7.0 |
| BP Group | 1,924 | 4.0 |
| Diversified Gas & Oil | 531 | 1.1 |
| ------------------ | ------------------ | |
| 5,835 | 12.1 | |
| ------------------ | ------------------ | |
| Life Insurance | ||
| Prudential | 2,168 | 4.5 |
| Phoenix Group | 1,087 | 2.2 |
| St James’s Place | 802 | 1.7 |
| ------------------ | ------------------ | |
| 4,057 | 8.4 | |
| ------------------ | ------------------ | |
| Pharmaceuticals & Biotechnology | ||
| GlaxoSmithKline | 1,999 | 4.2 |
| AstraZeneca | 1,885 | 3.9 |
| ------------------ | ------------------ | |
| 3,884 | 8.1 | |
| ------------------ | ------------------ | |
| Banks | ||
| Lloyds Banking Group | 1,709 | 3.6 |
| Standard Chartered | 839 | 1.7 |
| HSBC Holdings | 675 | 1.4 |
| Barclays | 372 | 0.8 |
| ------------------ | ------------------ | |
| 3,595 | 7.5 | |
| ------------------ | ------------------ | |
| Household Goods & Home Construction | ||
| Reckitt Benckiser | 2,090 | 4.3 |
| Taylor Wimpey | 976 | 2.0 |
| Bellway | 489 | 1.0 |
| ------------------ | ------------------ | |
| 3,555 | 7.3 | |
| ------------------ | ------------------ | |
| Media | ||
| RELX | 2,301 | 4.8 |
| Moneysupermarket Group | 611 | 1.3 |
| Ascential | 603 | 1.2 |
| ------------------ | ------------------ | |
| 3,515 | 7.3 | |
| ------------------ | ------------------ | |
| Financial Services | ||
| John Laing Group | 1,534 | 3.2 |
| London Stock Exchange Group | 1,007 | 2.1 |
| Premier Asset Management Group | 817 | 1.7 |
| ------------------ | ------------------ | |
| 3,358 | 7.0 | |
| ------------------ | ------------------ | |
| Food Producers | ||
| Unilever | 1,536 | 3.2 |
| Associated British Foods | 1,468 | 3.0 |
| ------------------ | ------------------ | |
| 3,004 | 6.2 | |
| ------------------ | ------------------ | |
| Support Services | ||
| Rentokil Initial | 1,083 | 2.2 |
| Ferguson | 991 | 2.1 |
| HomeServe | 561 | 1.2 |
| De La Rue | 233 | 0.5 |
| ------------------ | ------------------ | |
| 2,868 | 6.0 | |
| ------------------ | ------------------ | |
| Tobacco | ||
| British American Tobacco | 1,982 | 4.1 |
| Imperial Brands | 457 | 1.0 |
| ------------------ | ------------------ | |
| 2,439 | 5.1 | |
| ------------------ | ------------------ | |
| Food & Drug Retailers | ||
| Tesco | 2,142 | 4.5 |
| ------------------ | ------------------ | |
| 2,142 | 4.5 | |
| ------------------ | ------------------ | |
| Travel & Leisure | ||
| Whitbread | 1,052 | 2.2 |
| EasyJet | 639 | 1.3 |
| Patisserie Holdings* | – | – |
| ------------------ | ------------------ | |
| 1,691 | 3.5 | |
| ------------------ | ------------------ | |
| Mining | ||
| BHP | 1,688 | 3.5 |
| ------------------ | ------------------ | |
| 1,688 | 3.5 | |
| ------------------ | ------------------ | |
| Industrial Engineering | ||
| Bodycote | 858 | 1.8 |
| Weir Group | 574 | 1.2 |
| ------------------ | ------------------ | |
| 1,432 | 3.0 | |
| ------------------ | ------------------ | |
| Non-life Insurance | ||
| Hiscox | 1,304 | 2.7 |
| ------------------ | ------------------ | |
| 1,304 | 2.7 | |
| ------------------ | ------------------ | |
| Gas, Water & Multiutilities | ||
| United Utilities Group | 1,249 | 2.6 |
| ------------------ | ------------------ | |
| 1,249 | 2.6 | |
| ------------------ | ------------------ | |
| Mobile Telecommunications | ||
| Vodafone | 805 | 1.7 |
| ------------------ | ------------------ | |
| 805 | 1.7 | |
| ------------------ | ------------------ | |
| Electronic & Electrical Equipment | ||
| Oxford Instruments | 539 | 1.1 |
| ------------------ | ------------------ | |
| 539 | 1.1 | |
| ------------------ | ------------------ | |
| Construction & Materials | ||
| Forterra | 523 | 1.1 |
| ------------------ | ------------------ | |
| 523 | 1.1 | |
| ------------------ | ------------------ | |
| Chemicals | ||
| Elementis | 367 | 0.8 |
| ------------------ | ------------------ | |
| 367 | 0.8 | |
| ------------------ | ------------------ | |
| Personal Goods | ||
| Superdry | 232 | 0.5 |
| ------------------ | ------------------ | |
| 232 | 0.5 | |
| ------------------ | ------------------ | |
| Beverages | ||
| Fevertree Drinks | 3 | – |
| ------------------ | ------------------ | |
| 3 | – | |
| ------------------ | ------------------ | |
| Total investments | 48,085 | 100.0 |
| ========== | ========== |
* Suspended investment held at fair value (please see note 8 of the financial statements for further information).
All investments are in ordinary shares unless otherwise stated. The total number of investments held at 30 April 2019 was 44 (31 October 2018: 42).
As at 30 April 2019, the Company did not hold any equity interests comprising more than 3% of any company’s share capital.
Interim management report and responsibility statement
The Chairman’s Statement and the Investment Manager’s Report above 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:
· Investment performance;
· Income/dividend;
· Gearing;
· Legal & regulatory compliance;
· 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 2018. A detailed explanation can be found in the Strategic Report on pages 8 to 10 and in note 15 on pages 57 to 63 of the Annual Report and Financial Statements which are available on the website maintained by BlackRock at blackrock.co.uk/brig
In the view of the Board, there have not been any changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties are as 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 transaction costs, finance costs and taxation) for the year ended 31 October 2018 were approximately 1.10% 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 Guidance and Transparency Rules 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 the 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 Guidance 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 25 June 2019 and the above responsibility statement was signed on its behalf by the Chairman.
JONATHAN CARTWRIGHT
For and on behalf of the Board
25 June 2019
Income statement for the six months ended 30 April 2019
Notes |
Revenue £’000 | Capital £’000 | Total £’000 | |||||||
| Six months ended | Six months ended | Six months ended | ||||||||
| 30.04.19 (unaudited) |
30.04.18 (unaudited) |
Year ended 31.10.18 (audited) |
30.04.19 (unaudited) |
30.04.18 (unaudited) |
Year ended 31.10.18 (audited) |
30.04.19 (unaudited) |
30.04.18 (unaudited) |
Year ended 31.10.18 (audited) |
||
| Gains/(losses) on investments held at fair value through profit or loss | – | – | – | 2,531 | 10 | (3,682) | 2,531 | 10 | (3,682) | |
| Gains/(losses) on foreign exchange | – | – | – | 2 | – | (1) | 2 | – | (1) | |
| Income from investments held at fair value through profit or loss | 2 | 973 | 963 | 2,053 | – | – | – | 973 | 963 | 2,053 |
| Other income | 2 | 19 | 3 | 21 | – | – | – | 19 | 3 | 21 |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ||
| Total income | 992 | 966 | 2,074 | 2,533 | 10 | (3,683) | 3,525 | 976 | (1,609) | |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ||
| Expenses | ||||||||||
| Investment management fees | 3 | (33) | (36) | (73) | (99) | (109) | (218) | (132) | (145) | (291) |
| Other operating expenses | 4 | (123) | (137) | (265) | (5) | (3) | (7) | (128) | (140) | (272) |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ||
| Total operating expenses | (156) | (173) | (338) | (104) | (112) | (225) | (260) | (285) | (563) | |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ||
| Net profit/(loss) on ordinary activities before finance costs and taxation | 836 | 793 | 1,736 | 2,429 | (102) | (3,908) | 3,265 | 691 | (2,172) | |
| Finance costs | (8) | (5) | (12) | (24) | (14) | (36) | (32) | (19) | (48) | |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ||
| Net profit/(loss) on ordinary activities before taxation | 828 | 788 | 1,724 | 2,405 | (116) | (3,944) | 3,233 | 672 | (2,220) | |
| Taxation | (1) | – | – | – | – | – | (1) | – | – | |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ||
| Net profit/(loss) on ordinary activities after taxation | 827 | 788 | 1,724 | 2,405 | (116) | (3,944) | 3,232 | 672 | (2,220) | |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ||
| Earnings/(loss) per ordinary share (pence) | 6 | 3.45 | 3.23 | 7.09 | 10.03 | (0.48) | (16.22) | 13.48 | 2.75 | (9.13) |
| ========= | ========= | ========= | ========= | ========= | ========= | ========= | ========= | ========= | ||
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 the Company.
The net profit/(loss) on ordinary activities for the period disclosed above represents the Company’s total comprehensive income/(loss). The Company does not have any other comprehensive income.
Statement of changes in equity for the six months ended 30 April 2019
Called up share capital £’000 |
Share premium account £’000 |
Capital redemption reserve £’000 |
Capital reserve £’000 |
Special reserve £’000 |
Revenue reserve £’000 |
Total £’000 |
|
| For the six months ended 30 April 2019 (unaudited) | |||||||
| At 31 October 2018 | 329 | 14,819 | 220 | 9,963 | 18,667 | 2,740 | 46,738 |
| Total comprehensive income: | |||||||
| Net profit for the period | – | – | – | 2,405 | – | 827 | 3,232 |
| Transactions with owners, recorded directly to equity: | |||||||
| Ordinary shares purchased into treasury | – | – | – | – | (1,570) | – | (1,570) |
| Share purchase costs | – | – | – | – | (6) | – | (6) |
| Dividends paid(a) | – | – | – | – | – | (1,056) | (1,056) |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | |
| At 30 April 2019 | 329 | 14,819 | 220 | 12,368 | 17,091 | 2,511 | 47,338 |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | |
| For the six months ended 30 April 2018 (unaudited) | |||||||
| At 31 October 2017 | 329 | 14,819 | 220 | 13,907 | 19,784 | 2,621 | 51,680 |
| Total comprehensive income: | |||||||
| Net (loss)/profit for the period | – | – | – | (116) | – | 788 | 672 |
| Transactions with owners, recorded directly to equity: | |||||||
| Ordinary shares purchased into treasury | – | – | – | – | (585) | – | (585) |
| Share purchase costs | – | – | – | – | (3) | – | (3) |
| Dividends paid(b) | – | – | – | – | – | (999) | (999) |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | |
| At 30 April 2018 | 329 | 14,819 | 220 | 13,791 | 19,196 | 2,410 | 50,765 |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | |
| For the year ended 31 October 2018 (audited) | |||||||
| At 31 October 2017 | 329 | 14,819 | 220 | 13,907 | 19,784 | 2,621 | 51,680 |
| Total comprehensive income: | |||||||
| Net (loss)/profit for the year | – | – | – | (3,944) | – | 1,724 | (2,220) |
| Transactions with owners, recorded directly to equity: | |||||||
| Ordinary shares purchased into treasury | – | – | – | – | (1,109) | – | (1,109) |
| Share purchase costs | – | – | – | – | (8) | – | (8) |
| Dividends paid(c) | – | – | – | – | – | (1,605) | (1,605) |
| ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | |
| At 31 October 2018 | 329 | 14,819 | 220 | 9,963 | 18,667 | 2,740 | 46,738 |
| ========= | ========= | ========= | ========= | ========= | ========= | ========= |
(a) Final dividend paid in respect of the year ended 31 October 2018 of 4.40p per share, declared on 20 December 2018 and paid on 19 March 2019.
(b) Final dividend paid in respect of the year ended 31 October 2017 of 4.10p per share, declared on 20 December 2017 and paid on 9 March 2018.
(c) Interim dividend paid in respect of the year ended 31 October 2018 of 2.50p per share, declared on 25 June 2018 and paid on 3 September 2018. Final dividend paid in respect of the year ended 31 October 2017 of 4.10p per share, declared on 20 December 2017 and paid on 9 March 2018.
The transaction costs incurred on the acquisition of investments amounted to £50,000 for the six months ended 30 April 2019 (six months ended 30 April 2018: £56,000; year ended 31 October 2018: £121,000). Costs relating to the disposal of investments amounted to £7,000 for the six months ended 30 April 2019 (six months ended 30 April 2018: £8,000; year ended 31 October 2018: £16,000). All transaction costs have been included within capital reserves.
The share premium account and capital redemption reserve are not distributable profits under the Companies Act 2006. The special reserve may be used as distributable profits for all purposes and, in particular, for the repurchase by the Company of its ordinary shares and for payment as dividends. In accordance with the Company’s articles, net capital reserves may be distributed by way of the repurchase by the Company of its ordinary shares and for payment as dividends.
Balance sheet as at 30 April 2019
Notes |
30 April 2019 £’000 (unaudited) |
30 April 2018 £’000 (unaudited) |
31 October 2018 £’000 (audited) |
|
| Fixed assets | ||||
| Investments held at fair value through profit or loss | 48,085 | 52,816 | 47,830 | |
| ---------------- | ---------------- | ---------------- | ||
| Current assets | ||||
| Debtors | 413 | 592 | 167 | |
| Cash and cash equivalents | 3,243 | 1,890 | 3,442 | |
| ---------------- | ---------------- | ---------------- | ||
| 3,656 | 2,482 | 3,609 | ||
| ---------------- | ---------------- | ---------------- | ||
| Creditors – amounts falling due within one year | ||||
| Bank loan | (4,000) | (4,000) | (4,000) | |
| Other creditors | (403) | (533) | (701) | |
| ---------------- | ---------------- | ---------------- | ||
| (4,403) | (4,533) | (4,701) | ||
| ---------------- | ---------------- | ---------------- | ||
| Net current liabilities | (747) | (2,051) | (1,092) | |
| ---------------- | ---------------- | ---------------- | ||
| Net assets | 47,338 | 50,765 | 46,738 | |
| ========= | ========= | ========= | ||
| 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 | |
| Capital reserve | 12,368 | 13,791 | 9,963 | |
| Special reserve | 17,091 | 19,196 | 18,667 | |
| Revenue reserve | 2,511 | 2,410 | 2,740 | |
| ---------------- | ---------------- | ---------------- | ||
| Total shareholders’ funds | 6 | 47,338 | 50,765 | 46,738 |
| ========= | ========= | ========= | ||
| Net asset value per ordinary share (pence) | 6 | 203.70 | 208.70 | 194.26 |
| ========= | ========= | ========= |
Statement of cash flows for the six months ended 30 April 2019
| Six months ended 30 April 2019 £’000 (unaudited) |
Six months ended 30 April 2018 £’000 (unaudited) |
Year ended 31 October 2018 £’000 (audited) |
|
| Operating activities | |||
| Net profit/(loss) before taxation | 3,233 | 672 | (2,220) |
| Add back: Finance costs expense | 32 | 19 | 48 |
| (Gains)/losses on investments held at fair value through profit or loss | (2,531) | (10) | 3,682 |
| (Gains)/losses on foreign exchange | (2) | – | 1 |
| Special dividends allocated to capital | 69 | – | 92 |
| Sales of investments | 11,679 | 11,483 | 25,978 |
| Purchases of investments | (9,896) | (11,673) | (24,517) |
| (Increase)/decrease in other debtors | (239) | (320) | 15 |
| Increase/(decrease) in other creditors | 118 | 96 | (53) |
| ---------------- | ---------------- | ---------------- | |
| Net cash generated from operating activities | 2,463 | 267 | 3,026 |
| ---------------- | ---------------- | ---------------- | |
| Financing activities | |||
| Ordinary shares purchased into treasury | (1,570) | (556) | (1,109) |
| Share purchase costs paid | (6) | (3) | (8) |
| Drawdown of bank loan | – | 2,000 | 2,000 |
| Interest paid | (32) | (11) | (53) |
| Dividends paid | (1,056) | (999) | (1,605) |
| ---------------- | ---------------- | ---------------- | |
| Net cash (used in)/generated from financing activities | (2,664) | 431 | (775) |
| ---------------- | ---------------- | ---------------- | |
| (Decrease)/increase in cash and cash equivalents | (201) | 698 | 2,251 |
| ---------------- | ---------------- | ---------------- | |
| Cash and cash equivalents at beginning of period/year | 3,442 | 1,192 | 1,192 |
| Effect of foreign exchange rate changes | 2 | – | (1) |
| ---------------- | ---------------- | ---------------- | |
| Cash and cash equivalents at end of period/year | 3,243 | 1,890 | 3,442 |
| ---------------- | ---------------- | ---------------- | |
| Comprised of: | |||
| Cash at bank | 101 | 128 | 42 |
| Cash Fund* | 3,142 | 1,762 | 3,400 |
| ---------------- | ---------------- | ---------------- | |
| 3,243 | 1,890 | 3,442 | |
| ========= | ========= | ========= |
* Cash Fund represents funds held on deposit with the BlackRock Institutional Cash Series plc – Sterling Liquidity Fund.
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 APRIL 2019
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 presents its results and positions under FRS 102, ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102), which forms part of the revised Generally Accepted Accounting Practice (New UK GAAP) issued by the Financial Reporting Council (FRC) in 2013.
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 Investment Trust Companies and Venture Capital Trusts’ (SORP) issued by the Association of Investment Companies (AIC) in November 2014 and updated in January 2017 and February 2018.
The accounting policies applied for the condensed set of financial statements are as set out in the Company’s Annual Report and Financial Statements for the year ended 31 October 2018.
2. INCOME
| Six months ended 30 April 2019 £’000 (unaudited) |
Six months ended 30 April 2018 £’000 (unaudited) |
Year ended 31 October 2018 £’000 (audited) |
|
| Investment income: | |||
| UK dividends | 937 | 933 | 1,768 |
| UK scrip dividends | – | 5 | 22 |
| UK special dividends | 36 | – | 221 |
| Overseas dividends | – | 25 | 42 |
| --------------- | --------------- | --------------- | |
| 973 | 963 | 2,053 | |
| --------------- | --------------- | --------------- | |
| Other income: | |||
| Interest from Cash Fund | 13 | 3 | 12 |
| Underwriting commission | 6 | – | 9 |
| --------------- | --------------- | --------------- | |
| 19 | 3 | 21 | |
| --------------- | --------------- | --------------- | |
| Total income | 992 | 966 | 2,074 |
| ========= | ========= | ========= |
Dividends and interest received in cash during the period amounted to £745,000 and £13,000 (six months ended 30 April 2018: £641,000 and £2,000; year ended 31 October 2018: £2,052,000 and £10,000) respectively.
Special dividends of £69,000 have been recognised in capital (six months ended 30 April 2018: £nil; year ended 31 October 2018: £92,000).
Comparative Figures
Interest of £3,000 for the six months ended 30 April 2018 has been reclassified from “Income from investments held at fair value through profit or loss†to “Other Income†in the Income Statement. This reclassification had no impact on the revenue return for the period or the net assets as at 30 April 2018.
3. INVESTMENT MANAGEMENT FEES
| Six months ended 30 April 2019 (unaudited) |
Six months ended 30 April 2018 (unaudited) |
Year ended 31 October 2018 (audited) |
|||||||
| Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
Revenue £’000 |
Capital £’000 |
Total £’000 |
|
| Investment management fees | 33 | 99 | 132 | 36 | 109 | 145 | 73 | 218 | 291 |
| ========= | ========= | ========= | ========= | ========= | ========= | ========= | ========= | ========= | |
Under the terms of the investment management agreement, BFM is 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 reserve and 75% to the capital reserve.
4. OTHER OPERATING EXPENSES
| Six months ended 30 April 2019 £’000 (unaudited) |
Six months ended 30 April 2018 £’000 (unaudited) |
Year ended 31 October 2018 £’000 (audited) |
|
| Taken to revenue: | |||
| Custody fees | 1 | 1 | 2 |
| Audit fees | 13 | 13 | 24 |
| Registrars’ fees | 11 | 12 | 23 |
| Depositary fees | 3 | 3 | 7 |
| Directors’ emoluments | 46 | 46 | 92 |
| Marketing fees | 11 | 29 | 49 |
| Printing fees | 9 | 10 | 21 |
| Legal and professional fees | 7 | 3 | 7 |
| Other administration costs | 22 | 20 | 40 |
| --------------- | --------------- | --------------- | |
| 123 | 137 | 265 | |
| Taken to capital: | |||
| Custody transaction charges | 5 | 3 | 7 |
| --------------- | --------------- | --------------- | |
| 128 | 140 | 272 | |
| ========= | ========= | ========= |
5. DIVIDEND
The Board has declared an interim dividend of 2.60p per share for the year ending 31 October 2019 payable on 2 September 2019 to shareholders on the register on 26 July 2019. The total cost of the dividend based on 23,067,476 ordinary shares in issue (excluding shares held in Treasury) at 24 June 2019 is £599,755 (30 April 2018: £607,000).
In accordance with FRS 102, Section 32, ‘Events After the End of the Reporting Period’, the interim dividend payable on the ordinary shares has not been included as a liability in the financial statements, as interim dividends are only recognised when they have been paid.
6. EARNINGS AND NET ASSET VALUE PER ORDINARY SHARE
Revenue and capital returns per share and net asset value per share are shown below and have been calculated using the following:
| Six months ended 30 April 2019 (unaudited) |
Six months ended 30 April 2018 (unaudited) |
Year ended 31 October 2018 (audited) |
|
| Net revenue profit attributable to ordinary shareholders (£’000) | 827 | 788 | 1,724 |
| Net capital profit/(loss) attributable to ordinary shareholders (£’000) | 2,405 | (116) | (3,944) |
| -------------------- | -------------------- | -------------------- | |
| Total profit/(loss) attributable to ordinary shareholders (£’000) | 3,232 | 672 | (2,220) |
| -------------------- | -------------------- | -------------------- | |
| Total shareholders’ funds (£’000) | 47,338 | 50,765 | 46,738 |
| -------------------- | -------------------- | -------------------- | |
| Earnings per share | |||
| The weighted average number of ordinary shares in issue at the end of each period, on which the earnings per ordinary share was calculated, was: | 23,972,832 | 24,394,906 | 24,306,961 |
| -------------------- | -------------------- | -------------------- | |
| 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: | 23,239,521 | 24,324,268 | 24,059,668 |
| -------------------- | -------------------- | -------------------- | |
| Calculated on weighted average number of ordinary shares: | |||
| Revenue earnings (pence) | 3.45 | 3.23 | 7.09 |
| Capital earnings/(loss) (pence) | 10.03 | (0.48) | (16.22) |
| -------------------- | -------------------- | -------------------- | |
| Total earnings/(loss) (pence) | 13.48 | 2.75 | (9.13) |
| ============ | ============ | ============ |
| As at 30 April 2019 (unaudited) |
As at 30 April 2018 (unaudited) |
As at 31 October 2018 (audited) |
|
| Net asset value per ordinary share (pence) | 203.70 | 208.70 | 194.26 |
| --------------- | --------------- | --------------- | |
| Ordinary share price (mid-market) (pence) | 197.50 | 196.00 | 183.00 |
| ========= | ========= | ========= |
7. CALLED UP SHARE CAPITAL AND SHARES HELD IN TREASURY
| Ordinary shares number |
Treasury shares number |
Total shares number |
Nominal value £’000 |
|
| Allotted, called up and fully paid share capital comprised: | ||||
| Ordinary shares of 1p each | ||||
| At 31 October 2018 | 24,059,668 | 8,874,264 | 32,933,932 | 329 |
| Shares purchased and held in treasury | (820,147) | 820,147 | – | – |
| -------------------- | -------------------- | -------------------- | -------------------- | |
| At 30 April 2019 | 23,239,521 | 9,694,411 | 32,933,932 | 329 |
| ============ | ============ | ============ | ============ |
During the period to 30 April 2019, 820,147 ordinary shares were purchased and transferred to treasury at a cost of £1,576,000 (six months ended 30 April 2018: 290,000 ordinary shares at a total cost of £588,000; year ended 31 October 2018: 554,600 ordinary shares at a total cost of £1,117,000).
No treasury shares were cancelled during the period (six months ended 30 April 2018: nil; year ended 31 October 2018: nil).
Since 30 April 2019 and up to the close of business on 24 June 2019, 172,045 ordinary shares have been repurchased at an average price of 191.63p per share and placed in treasury.
8. VALUATION OF FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are either carried in the Balance Sheet at their fair value (investments) or at an amount which is a reasonable approximation of fair value (due from brokers, dividends and interest receivable, due to brokers, accruals, cash and cash equivalents and overdrafts). Section 11 of FRS 102 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Company are explained in the accounting policies note on page 51 of the Annual Report and Financial Statements for the year ended 31 October 2018.
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset.
The fair value hierarchy has the following levels:
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 from an exchange, dealer, broker, industry group, pricing service or regulatory agency 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 for similar instruments in markets that are considered less active, or other valuation techniques where 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 technique includes inputs not based on observable market data and the unobservable 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 entity determined adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The Investment Manager considers observable data 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 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. 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 judgement, considering factors specific to the asset or liability.
The table below is the 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 £’000 |
Level 2 £’000 |
Level 3 £’000 |
Total £’000 |
| Equity investments at 30 April 2019 | 48,085 | – | – | 48,085 |
| Equity investments at 30 April 2018 | 52,816 | – | – | 52,816 |
| Equity investments at 31 October 2018 | 47,758 | – | 72 | 47,830 |
| ========= | ========= | ========= | ========= |
There were no transfers between levels for financial assets and financial liabilities during the period to 30 April 2019 or period to 30 April 2018 and one transfer between levels 1 and 3 in the year to 31 October 2018. The Company held one level 3 security during the period to 30 April 2019 (period to 30 April 2018: none; year to 31 October 2018: one).
The investment in Patisserie Holdings was classified as a level 3 investment as of 31 October 2018 as the trading of shares in this company was suspended. At 31 October 2018, the value was based on the transaction price of shares placed by the company in a placing programme. During the period 23 January 2019 to 30 April 2019 the Directors valued the holding at nil. On 19 June 2019 the Directors resolved to write off the investment in Patisserie Holdings.
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 £28,750, the Chairman of the Audit Committee receives an annual fee of £23,250, and Mr Worsley receives an annual fee of £19,750. Mr Luckraft’s fee of £19,750, (excluding VAT of £3,950), is paid to AXA Investment Managers Limited for the provision of his services as a non-executive Director of the Company. As at 30 April 2019, an amount of £7,000 (30 April 2018: £7,000; 31 October 2018: £7,000) was outstanding in respect of Directors’ fees.
At the period end and as at 24 June 2019 members of the Board held ordinary shares in the Company as set out below:
| Ordinary shares 24 June 2019 |
Ordinary shares 30 April 2019 |
Ordinary shares 31 October 2018 |
|
| Jonathan Cartwright | 20,000 | 20,000 | 20,000 |
| Nicholas Gold | 20,000 | 20,000 | 20,000 |
| George Luckraft | – | – | – |
| Charles Worsley | 987,5391 | 987,5391 | 987,5391 |
1 Including a non-beneficial interest in 655,500 ordinary shares.
10. TRANSACTIONS WITH THE AIFM AND THE INVESTMENT MANAGER
BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a contract which is terminable on six months’ notice. 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 on pages 21 and 22 in the Annual Report and Financial Statements for the year ended 31 October 2018.
The investment management fee payable for the six months ended 30 April 2019 amounted to £132,000 (six months ended 30 April 2018: £145,000; year ended 31 October 2018: £291,000). At the period end, £203,000 was outstanding in respect of investment management fees (30 April 2018: £297,000; 31 October 2018: £146,000).
In addition to the above services, BlackRock provided the Company with marketing services. The total fees paid or payable for these services for the six months ended 30 April 2019 amounted to £11,000 including VAT (six months ended 30 April 2018: £29,000; year ended 31 October 2018: £49,000). Marketing fees of £44,000 were outstanding at 30 April 2019 (30 April 2018: £51,000; 31 October 2018: £33,000).
The Company has an investment in BlackRock’s Institutional Cash Series plc – Sterling Liquidity Fund of £3,142,000 at the period end (30 April 2018: £1,762,000; 31 October 2018: £3,400,000), which has been presented in the financial statements as a cash equivalent.
11. CONTINGENT LIABILITIES
There were no contingent liabilities at 30 April 2019 (30 April 2018: nil; 31 October 2018: 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 2019 and 30 April 2018 has not been reviewed or audited by the Company’s Auditor.
The information for the year ended 31 October 2018 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 2019, in December 2019. Copies of the results announcement can be obtained from the Secretary on 020 7743 3000 or by email at cosec@blackrock.com. The Annual Report and Financial Statements should be available in December 2019, with the Annual General Meeting being held in March 2020.
25 June 2019
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
Press enquires:
Lucy Horne, Lansons Communications - 020 7294 3689
E-mail: lucyh@lansons.com
BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
London
EC2N 2DL
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