Interim Management Statement

RNS Number : 7850L

Investors Capital Trust PLC

04 August 2011

 



Investors Capital Trust plc

Interim Management Statement

For the three month period from 1 April 2011 to 30 June 2011

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 30 June 2011	As at   31 March 2011	Movement
Total assets	£146.7 million	£144.4 million	1.6%
Net asset value:    A share and B share    Unit*	87.5p 350.0p	85.6p 342.2p	2.2% 2.3%
Share price:    A share    B share    Unit	80.5p 88.0p 328.0p	82.0p 91.5p 328.0p	(1.8)% (3.8)% 0.0%
Premium/(discount):   A share   B share   Unit	(8.0)% 0.6% (6.3)%	(4.2)% 6.9% (4.2)%
Gearing**:   Maximum potential ratio   Actual ratio (Investment gearing)     Actual ratio (Equity gearing)	131.8 125.1 96.1	132.6 125.4 96.1
Total return	For the three month period ended 30 June 2011	Period from launch on 1 March 2007 to 30 June 2011
Net asset value:   A and B share and Unit	3.6%	17.1%
FTSE All-Share Capped 5% Index	2.1%	15.4%

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 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 2.1% during the quarter, as measured by the FTSE All-Share Capped 5% Index on a total return basis. The Company's net asset value total return for the quarter was 3.6%.

An end of quarter rally resulted in a modest gain for the UK equity market during the period.  After a tense build-up markets reacted positively to Greek politicians voting through additional austerity measures in order to receive the latest tranche of bailout funding.  A durable solution to the problems facing several over-indebted Eurozone countries will test politicians and regulators to a greater extent than that of the recent successful Greek vote.  The UK economy is just starting to absorb the impact of its own austerity measures.  Economic activity in the UK remains subdued although the resolve of the Monetary Policy Committee (MPC) to maintain the historically low level of interest rates is being tested by a stubbornly above target level of inflation.  Aside from any evidence of upward pressure in wage settlements we see little reason for the MPC to increase interest rates any time soon. 

The level of cash held by Investors Capital Trust remained broadly constant, ending the quarter at 5% of total assets.  There was no significant shift in assets between the Equities Portfolio and the Higher Yield Portfolio; as a result the Company had equity gearing of 96% and investment gearing of 125% at the end of June.  We remain concerned about the impact of a protracted process of de-leveraging within a number of highly indebted Western countries will have on economic activity.  Despite this caution we are encouraged by the absolute and relative value of the UK equity market.  We continue to invest in geographically diversified companies that offer an attractive dividend yield which can grow in real terms.

Dividends and Capital Distributions

A fourth quarter dividend in respect of the year ended 31 March 2011, of 1.1 pence per share, was paid on the A shares of the Company on 6 May 2011 to A shareholders on the register on 8 April 2011. A fourth quarter capital return of 1.1 pence per share was paid on the B shares of the Company on 6 May 2011 to B shareholders on the register on 8 April 2011.  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.

Share Buy Backs

The Company did not buy back, issue or re-sell any shares during the quarter.

At 30 June 2011 the Company held 6,889,000 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 30 June 2011
GlaxoSmithKline			4.3%
Royal Dutch Shell			4.0%
Vodafone			3.9%
Rio Tinto			3.7%
British American Tobacco			3.6%
HSBC			3.3%
BHP Billiton			2.9%
BP			2.8%
BG Group			2.3%
AstraZeneca			2.3%
Total			33.1%

Higher Yield Portfolio

Security			Percentage of total assets as at 30 June 2011
Iron Mountain 7.25% 15/04/14			0.5%
Ineos 7.875% 15/02/16			0.4%
Paragon Group 7% 20/04/17			0.4%
Marstons FRN 15/07/20			0.3%
Kraft Food 5.75% 20/03/12			0.3%
Yorkshire Water 6.5876% 21/02/23			0.3%
UBS 6.375% 20/07/16			0.3%
France Telecom 6% 29/03/12			0.3%
Macquarie Bank FRN 06/12/16			0.3%
Permanent Master 15/07/42			0.3%
Total			3.4%

Portfolio Summary

		Market Value at 30 June 2011 £'000	% of Total Assets at 30 June 2011	% of Total Assets at  31 March 2011
Equities Portfolio		106,931	72.9	72.5
Higher Yield Portfolio		32,333	22.0	22.1
Net Current Assets		7,417	5.1	5.4
Total Assets (less Current Liabilities)		146,681	100.0	100.0
Bank Term Loan & Interest Rate Swap		(35,360)	(24.1)	(24.6)
Net Assets Attributable to Shareholders		111,321	75.9	75.4

The Board is not aware of any significant events or transactions which have occurred since 30 June 2011 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:      95,178,144 A shares and 32,051,703 B shares.

For further information please contact:

Rodger McNair, F&C Investment Business Limited, Investment Manager               

Tel: [phone]

Michael Campbell, F&C Investment Business Limited, Company Secretary           

Tel: [phone]

 

END

 

 

IMSDMGGRDDMGMZM