Interim Management Statement

RNS Number : 9903M

Investors Capital Trust PLC

09 February 2009

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 October 2008 to 31 December 2008

Date: 9 February 2009 

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 2008	As at   30 September   2008	Movement
Total assets	£123.5 million	£133.0 million	(7.1)%
Net asset value:    A share and B share   Unit*	69.0p 276.2p	78.1p 312.3p	(11.6)% (11.6)%
Share price:    A share    B share    Unit	67.0p 67.0p 254.0p	77.5p 77.5p 309.0p	(13.5)% (13.5)% (17.8)%
Discount:  A share  B share  Unit	(3.0)% (3.0)% (8.0)%	(0.8)% (0.8)% (1.1)%
Gearing**:  Potential ratio   Actual ratio (Equity gearing)	142.2 72.6	134.3 75.0
Total return	For the three month period ended 31 December 2008	For the nine month period ended 31 December 2008
Net asset value:  A and B share and Unit	(9.9)%	(19.0)%
FTSE All-Share Capped 5% Index	(10.7)%	(23.2)%

Sources: 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 shareholders' funds.

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 = the ratio of total assets (less fixed interest, net cash assets and interest rate swap) to shareholders' funds.

  Review

A continued period of volatility resulted in a decline of 10.7% for the fourth quarter and 30.6% for the calendar year as a whole for the FTSE All-Share Capped 5% Index, measured on a total return basis.

The recent confirmation that the UK economy has entered into a recession was widely expected with only the depth and duration of the downturn now under debate. The well established collapse in demand in the housing market is now being followed by consumers cutting back on discretionary spending. The result of the sharp reduction in consumer spending is evidenced by the succession of national retail chains failing, a trend that accelerated through the important Christmas trading period. We remain cautious on the length of the downturn in consumer spending as increased job losses are likely to be, unfortunately, a consistent theme for 2009. Despite the gloom created by the deteriorating economic and corporate news we are encouraged by the co-ordinated policy response by Central Banks and Governments in rapidly reducing interest rates and committing to substantial stimulus packages.  

Two particularly sharp sell-offs in equities occurred during October and November creating the opportunity to reinvest some of the cash balance raised during the final quarter of 2007. Subsequently we have once again raised the cash balance as the market rallied sharply from the November low through to the year end.  The Trust is well positioned as a result of the significant cash holding of circa 21% of total assets, to take advantage of investment opportunities that continued high levels of volatility in equities present.

Dividends and Capital Distributions

A second quarter dividend in respect of the year ending 31 March 2009, of 1.325 pence per share, was paid on the A shares of the Company on 7 November 2008 to A shareholders on the register on 3 October 2008. 

A second quarter capital return of 1.325 pence per share was paid on the B shares of the Company on 7 November 2008 to B shareholders on the register on 3 October 2008. 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 of 1.325 pence per A share and a third quarter capital distribution of 1.325 pence per B share, both payable on 6 February 2009.

Share Buy Backs

During the quarter, the Company bought back 840,000 A Shares to be held in treasury for a total consideration of £0.5 million and 280,000 B Shares for cancellation for a total consideration of £0.2 million.

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

Equities Portfolio

Company			Percentage of total assets as at 31 December 2008
GlaxoSmithKline			3.7%
Vodafone Group			3.3%
BP			2.6%
Royal Dutch Shell			2.6%
HSBC Holdings			2.2%
Tesco			2.2%
Imperial Tobacco			2.0%
AstraZeneca			1.9%
Scottish & Southern Energy			1.5%
British American Tobacco			1.4%
Total			23.4%

Higher Yield Portfolio

Security			Percentage of total assets as at 31 December 2008
Anglo Irish FRN 16/03/09			0.6%
Irish Nationwide Building Society FRN 16/11/09			0.6%
Credit Suisse 8.25% 10/07/09 Perpetual			0.6%
Xerox 9.75% 15/01/09			0.6%
Iron Mountain 7.25% 15/04/14			0.5%
Canandaigua Brand 8.5% 15/11/09			0.5%
Land Securities 4.625% 03/02/13			0.5%
Finance for Danish Industries 6% 06/02/12			0.5%
Segro 7.125% 17/02/10			0.5%
GlaxoSmithKline 4.85% 15/05/13			0.4%
Total			5.3%

Portfolio Summary

		Market Value at 31 December 2008 £’000	% of Total Assets at 31 December 2008	% of Total Assets at  30 September 2008
Equities Portfolio		63,069	51.1	55.9
Higher Yield Portfolio		33,714	27.3	23.6
Net Current Assets		26,707	21.6	20.5
Total Assets (less Current Liabilities)		123,490	100.0	100.0
Bank Term Loan & Interest Rate Swap		(36,670)	(29.7)	(25.5)
Net Assets Attributable to Shareholders		86,820	70.3	74.5

The Board is not aware of any significant events or transactions which have occurred since 31 December 2008 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:     95,818,144 A shares and 29,926,703 B shares.

For further information please contact:

Rodger McNair, Investment Manager                        Tel: [phone]

Michael Campbell, Company Secretary                    Tel: [phone]

 

END

 

 

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