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Invesco Inc Grth Tst (IVI)

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Friday 11 November, 2011

Invesco Inc Grth Tst

Half-yearly Report

Invesco Income Growth Trust plc

Half-Yearly Financial Report for the Six Months to 30 September 2011


Invesco Income Growth Trust plc is an investment trust company listed on the
London Stock Exchange. The Company is managed by Invesco Asset Management

Investment Objective

The Company's investment objective is to provide shareholders with long-term
capital growth and real long-term growth in dividends from a portfolio yielding
more than the FTSE All-Share Index.

The Company will invest principally in UK equities and equity-related
securities of UK companies selected from any market sector. In managing the
Company's investment portfolio, the Manager will seek to achieve a total return
over the long term in excess of the total return on the FTSE All-Share Index.

Full details of the Company's Investment Policy (incorporating the Company's
investment objective) can be found on page 11 of the Company's 2011 annual
financial report.

Performance Statistics

                                                 AT             AT           
                                       30 SEPTEMBER       31 MARCH          %
                                               2011           2011     CHANGE
Net asset value per ordinary share                                           
- per Balance Sheet                          197.4p         208.0p       -5.1
- after deducting proposed dividends         195.5p         204.7p       -4.5
Mid-market price per ordinary share          187.8p         191.3p       -1.8
Discount per ordinary share                    4.9%           8.0%           
Gross gearing - excluding effect of           10.0%          10.3%           
Net gearing - including effect of              7.4%           7.9%           
cash and bond holdings                                                       
                                         SIX MONTHS     SIX MONTHS           
                                              ENDED          ENDED           
                                       30 SEPTEMBER   30 SEPTEMBER          %
                                               2011           2010     CHANGE
Total Return                                                                 
(includes net dividends reinvested)                                          
Change in net asset value per                 -3.6%          +2.0%           
ordinary share                                                               
Change in FTSE All-Share Index               -11.8%          +0.2%           
Source: Invesco/Thomson Reuters                                              
Revenue and Dividends per ordinary                                           
Net revenue after tax (£'000)                 3,176          2,690       18.1
Revenue return - basic                         5.4p           4.6p       17.4
Dividends - first interim                     1.95p          1.90p        2.6
- second interim                              1.95p          1.90p           




During the six months to 30 September 2011, the total return (comprising the
movement in the net asset value `NAV' plus dividends) of the Company was
negative at -3.6%, which compared to a negative return of -11.8% by the FTSE
All-Share Index. The period was marked by much higher than usual levels of
share price volatility, and the Company's long term investments in some of the
more defensive sectors of the stock market enabled it to perform highly
creditably through such turbulent conditions.

The outperformance by the Company's net assets relative to the FTSE All-Share
index was enhanced for shareholders by a narrowing of the discount: during the
period the mid-market price per share fell by 1.8% to 187.75p and the discount
to NAV decreased from 8% to 4.9%.

The Investment Manager's Report that follows gives a more detailed account of
the period under review, together with a commentary on the investment and
portfolio strategy.


The Board continues to monitor the Company's level of gearing which, when
prudently used, should enhance the returns to shareholders. As at 30 September
2011, the Company had gross gearing of 10.0%, provided by a bank overdraft of £
11.5m. This approximately matched the percentage gearing level at 31 March
2011; the level of gearing moved higher at times during the period.

Revenue and Dividends

Dividend income has been stronger than in the first half of the previous
financial year, producing net revenue of £3,176,000 in the six months to 30
September 2011 compared with £2,690,000 for the six months to 30 September
2010. The main contributors to this enhanced result were dividend growth from
many companies in the portfolio, use of a higher level of gearing and taking
occasional tactical opportunities to benefit from some large dividend payments.

The Board is pleased to declare a second interim dividend of 1.95p per share in
respect of the year ended 31 March 2012. This dividend will be paid on 30
December 2011 to shareholders registered on 9 December 2011. Together with the
first interim dividend this makes a total of 3.9p for the first half of the
current financial year compared with 3.8p last year. This is consistent with
the Board's objective of achieving a better balance between the three interim
and the final dividend payments and should not be taken as an indication of the
level of the full year's total distribution. As I highlighted in my last annual
statement, it is likely that a small proportion of reserves will again be used
to contribute to the dividend payment to shareholders.


We remain confident that the portfolio is well paced to meet the challenges of
the current environment of low economic growth and volatile markets.

John McLachlan


11 November 2011


Market Review & Portfolio Strategy

Over a volatile six months, where the FTSE All-Share Index recorded a negative
total return of -11.8%, the Company's net asset value return was -3.6%.

The period saw a rapid unwinding of the buoyant mood seen at the start of 2011.
Global economic news, particularly the European sovereign debt and banking
crisis, increasingly dominated investor sentiment. Concerns over the
possibility of an uncontrolled Greek default, combined with forward looking
economic indicators from around the world showing a likely slowing in global
growth, led to the FTSE All-Share Index registering, over the quarter to 30
September 2011, its worst quarterly performance since 2002.

In such an environment, defensive sectors outperformed the more cyclical ones,
and the portfolio's long held positions in the tobacco and pharmaceutical
sectors particularly benefited its performance. Imperial Tobacco generated
strongly positive returns, helped both by confirmation that the cigarette price
war in Spain was over and by rumours of a bid. Such speculation further
confirms my view that the shares remain undervalued at current levels. Shares
in British American Tobacco also registered positive returns over the period.

The pharmaceutical sector has seen a return to favour in 2011 and the
portfolio's holding in GlaxoSmithKline was another to register positive returns
over the six months. Concerns over the impact of patent expiries are still
weighing heavily on share prices in the sector, but the news flow here is
improving while investors are beginning to appreciate the growth prospects for
these companies in the developing world.

Amidst all the doom and gloom on the economic front, corporate news was in
general more positive. Perhaps surprisingly, this included upbeat news from the
general retailers - the recent investment in Next rose on results which were
accompanied by the comment that "retail headwinds are likely to ease as we move
into 2012". This is a company with a strong business model and which has built
itself a robust market position.

Performance also benefited from the absence of exposure to the miners - a
sector which fell very sharply over the six months - and comparatively small
investments in the oil & gas sector.

The main detractors to performance came from the portfolio's holdings in the
bank sector, HSBC and Barclays, whose shares fell with the whole sector on
concerns over the possible impact of a Greek default.

There were relatively few transactions in the portfolio over the period. I
disposed of the holding in Aviva, mindful of its significant exposure to Europe
and particularly to Italy and Italian bonds. The proceeds were reinvested in
existing holdings across the insurance sector - specifically Resolution and
Legal & General - where there is no European exposure.

There was a new investment in Experian. This global credit checking and reports
business is strongly profitable and possesses significant barriers to entry.
Its US and UK businesses are strongly cash generative, funding expansion in new
markets including Brazil, while the shares stand on a modest valuation for the
high quality of the business.


I am positive about the longer term outlook for the UK stock market.
Principally this is because company share valuation levels are very low. While
I do not expect a major global recession, and Asia remains resilient, there is
still a risk of policy mistakes in Europe and stock market volatility is likely
to stay high. With companies and now governments continuing to deleverage, we
are unlikely to see anything other than modest global growth.

My aim remains to seek to invest in companies with strong balance sheets and
high quality management and business models. The equity market volatility has
left many of these strongly placed companies looking even more attractive, and
I am confident about the outlook for long-term returns from the Company's

Ciaran Mallon

Investment Manager

11 November 2011

Related Party

Invesco Asset Management Limited (`IAML'), a wholly owned subsidiary of Invesco
Limited, acts as Manager and Company Secretary to the Company. Details of
IAML's services and fee arrangements are given in the latest annual financial
report, which is available on the Manager's website at

Principal Risks and Uncertainties

The principal risk factors relating to the Company can be summarised as:

• Investment policy and process - the adopted policy and process may not
achieve the Company's published objective;

• Market movements and portfolio performance - a fall in the stock market as a
whole will affect the performance of the portfolio and individual investments;

• Shares - share price is affected by market sentiment, supply and demand for
the shares, and dividends declared as well as portfolio performance;

• Gearing - borrowing will amplify the effect on shareholders' funds of
portfolio gains and losses;

• Regulatory - whilst compliance with rules and regulations is closely
monitored, breaches could affect returns to shareholders; and

• Reliance on Third Party Service Providers - The Company has no employees,
other than the Board, so is reliant upon the performance of third party service
providers, particularly the Manager, for it to function.

A detailed explanation of these principal risks and uncertainties can be found
on pages 14 and 15 of the 2011 annual financial report, which is available on
the Manager's website.

In the view of the Board these principal risks and uncertainties are equally
applicable to the remaining six months of the financial year as they were to
the six months under review.

Going Concern

The half-yearly financial report has been prepared on a going concern basis.
The Directors consider this is the appropriate basis as the Company has
adequate resources to continue in operational existence for the foreseeable
future. In reaching this conclusion, the Directors took into account the
Company's investment objective, its risk management policies, the diversified
portfolio of readily realisable securities which can be used to meet funding
commitments, the overdraft which can be used for both long-term and short-term
funding requirements, the liquidity of the investments which could be used to
repay the overdraft in the event that the facility could not be renewed or
replaced, and the ability of the Company to meet all of its liabilities and
ongoing expenses.



The Directors are responsible for preparing the half-yearly financial report
using accounting policies consistent with applicable law and UK Accounting

The Directors confirm that to the best of their knowledge:

- the condensed set of financial statements contained within the half-yearly
financial report have been prepared in accordance with the Accounting Standards
Board's Statement `Half-Yearly Financial Report';

- the interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R of the FSA's Disclosure and Transparency
rules; and

- the interim management report includes a fair review of the information
required on related party transactions.

The half-yearly financial report has not been audited or reviewed by the
Company's auditors.

Signed on behalf of the Board of Directors.

John McLachlan


11 November 2011


Ordinary shares unless stated otherwise

                                                              VALUE        % OF
COMPANY                 ACTIVITY BY SECTOR                    £'000   PORTFOLIO
British American        Tobacco                               6,776         5.3
Imperial Tobacco        Tobacco                               5,996         4.7
GlaxoSmithKline         Pharmaceuticals &                     5,874         4.6
AstraZeneca             Pharmaceuticals &                     5,618         4.4
Royal Dutch Shell `B'   Oil & Gas Producers                   5,593         4.4
Vodafone                Mobile Telecommunications             5,194         4.1
HSBC                    Banks                                 4,753         3.7
Scottish & Southern     Electricity                           3,848         3.0
Tesco                   Food & Drug Retailers                 3,263         2.6
Young & Co.'s Brewery   Travel & Leisure                      3,197         2.5
Centrica                Gas, Water & Multiutilities           2,963         2.3
Barclays - Ords and     Banks                                 2,780         2.2
Fltg Perpetual Bond                                                            
BT                      Fixed Line Telecommunications         2,723         2.1
Next                    General Retailers                     2,659         2.1
Resolution              Life Insurance                        2,496         2.0
National Grid           Gas, Water & Multiutilities           2,446         1.9
Legal & General         Life Insurance                        2,342         1.8
Morrison (W)            Food & Drug Retailers                 2,173         1.8
Croda International     Chemicals                             2,153         1.7
Pennon                  Gas, Water & Multiutilities           2,128         1.7
Land Securities         Real Estate Investment Trusts         2,108         1.7
BP                      Oil & Gas                             2,078         1.6
Whitbread               Travel & Leisure                      2,004         1.6
Severn Trent            Gas, Water & Multiutilities           1,936         1.6
BAE Systems             Aerospace & Defence                   1,918         1.6
                                                             85,019        67.0
Other investments                                            41,782        33.0
Total investments                                           126,801       100.0



                                                                        Year to
                 SIX MONTHS TO               SIX MONTHS TO             31 March
                 30 SEPTEMBER 2011           30 SEPTEMBER 2010             2011
                      £'000    £'000   £'000     £'000   £'000    £'000   £'000
(Losses)/gains            -  (7,189) (7,189)         -    (81)     (81)   5,968
on investments                                                                 
held at fair                                                                   
value through                                                                  
profit or loss                                                                 
. UK dividends        3,396        -   3,396     2,789       -    2,789   5,142
. UK unfranked          208        -     208       220       -      220     420
. Overseas               15        -      15         5       -        5       5
. Deposit                 -        -       -         -       -        -       2
. Underwriting            -        -       -        65       -       65      68
Investment            (231)    (231)   (462)     (209)   (209)    (418)   (858)
management fee -                                                               
note 2                                                                         
Other expenses        (161)        -   (161)     (135)       -    (135)   (299)
Net return            3,227  (7,420) (4,193)     2,735   (290)    2,445  10,448
before finance                                                                 
costs and                                                                      
Finance costs          (51)     (51)   (102)      (45)    (45)     (90)   (162)
Return on             3,176  (7,471) (4,295)     2,690   (335)    2,355  10,286
before and after                                                               
Return per             5.4p  (12.8)p  (7.4)p      4.6p  (0.6)p     4.0p   17.6p
ordinary share                                                                 
Basic - note 4                                                                 

The total column of this statement represents the Company's profit and loss
account. The supplementary revenue and capital columns are presented for
information purposes in accordance with the Statement of Recommended Practice
issued by the Association of Investment Companies. All items in the above
statement derive from continuing operations and the Company has no other gains
or losses and therefore no statement of total recognised gains or losses is
presented. No operations were acquired or discontinued in the period.


Registered number 3141073

                                             AT              AT              AT
                                   30 SEPTEMBER    30 SEPTEMBER        31 MARCH
                                           2011            2010            2011
                                          £'000           £'000           £'000
Fixed assets                                                                   
Investments at fair value               126,801         126,271         133,238
Current assets                                                                 
. Amounts due from brokers                  285             140             435
. Prepayments and accrued                   730             701             817
                                          1,015             841           1,252
Creditors: amounts falling due                                                 
one year                                                                       
. Bank overdraft                       (11,542)         (9,677)        (12,578)
. Amounts due to brokers                  (557)               -               -
. Accruals and deferred income            (142)           (263)           (145)
                                       (12,241)         (9,940)        (12,723)
Net current liabilities                (11,226)         (9,099)        (11,471)
Total assets less current               115,575         117,172         121,767
Capital and reserves                                                           
Called up share capital                  14,638          14,638          14,638
Share premium                            40,021          40,021          40,021
Capital redemption reserve                2,310           2,310           2,310
Capital reserve                          52,925          54,313          60,396
Revenue reserve                           5,681           5,890           4,402
Shareholders' funds                     115,575         117,172         121,767
Net asset value per                                                            
ordinary share - note 5                                                        
Basic                                    197.4p          200.1p          208.0p



                                  SIX MONTHS TO   SIX MONTHS TO         YEAR TO
                                   30 SEPTEMBER    30 SEPTEMBER        31 MARCH
                                           2011            2010            2011
                                          £'000           £'000           £'000
Net return before finance costs         (4,193)           2,445          10,448
and taxation                                                                   
Adjustment for losses/(gains)             7,189              81         (5,968)
on investments                                                                 
Decrease in debtors                          87             132              16
(Decrease)/increase in                      (3)             104             (2)
Net cash flow from operating              3,080           2,762           4,494
Servicing of finance                      (102)            (78)           (162)
Net financial investment                                                       
. Purchase of investments              (12,125)        (12,659)        (20,303)
. Sale of investments                    12,080          14,598          21,029
Net equity dividends paid               (1,897)               -         (3,336)
Movement in cash in the period            1,036           4,623           1,722
Net debt at beginning of period        (12,578)        (14,300)        (14,300)
Net debt at end of period              (11,542)         (9,677)        (12,578)

Analysis of changes in net debt                                                
Brought forward:                                                               
Bank overdraft                         (12,578)        (14,300)        (14,300)
Net debt brought forward               (12,578)        (14,300)        (14,300)
Movements in period:                                                           
Cash inflow from bank                     1,036           4,623           1,722
Net debt at end of period              (11,542)         (9,677)        (12,578)



                      SHARE      SHARE REDEMPTION    CAPITAL   REVENUE          
                    CAPITAL    PREMIUM    RESERVE    RESERVE   RESERVE     TOTAL
                      £'000      £'000      £'000       £'00     £'000     £'000
For the six months ended 30                                                     
September 2011                                                                  
At 1 April 2011      14,638     40,021      2,310     60,396     4,402   121,767
Net return on             -          -          -    (7,471)     3,176   (4,295)
Dividends paid -          -          -          -          -   (1,933)   (1,933)
final 2011                                                                      
Unclaimed                 -          -          -          -        36        36
At 30 September      14,638     40,021      2,310     52,925     5,681   115,575

For the six months ended 30                                                    
September 2010                                                                 
At 1 April 2010      14,638     40,021     2,310     54,648     3,200   114,817
Net return on             -          -         -      (335)     2,690     2,355
At 30 September      14,638     40,021     2,310     54,313     5,890   117,172

For the year ended 31 March                                                    
At 1 April 2010      14,638    40,021      2,310     54,648     3,200   114,817
Net return on             -         -          -      5,748     4,538    10,286
Dividends paid -          -         -          -          -   (3,336)   (3,336)
interims 2011                                                                  
At 31 March 2011     14,638    40,021      2,310     60,396     4,402   121,767

Notes to the Condensed Financial Statements

1. Basis of Preparation

The condensed financial statements have been prepared using the same accounting
policies as those adopted in the 2011 annual financial report, have been
prepared under the historical cost convention and are consistent with
applicable UK Accounting Standards and with the Statement of Recommended
Practice `Financial Statements of Investment Trust Companies and Venture
Capital Trusts'.

2. Management Fee

The investment management fee is calculated and payable monthly in arrears
based on the value of the funds under management before deducting borrowings,
of 0.7% up to £100 million, 0.6% on the next £50 million, 0.55% on the next £50
million and if in excess of £200 million the fee will be reviewed. This fee is
allocated 50% to capital and 50% to revenue.

3. Tax

The tax effect of expenditure is allocated between capital and revenue on the
same basis as the particular item to which it relates, using the Company's
effective rate of tax for the accounting period.

4. Basis of Returns

                           SIX MONTHS TO     SIX MONTHS TO          YEAR TO
                            30 SEPTEMBER      30 SEPTEMBER         31 MARCH
                                    2011              2010             2011
                                   £'000             £'000            £'000
Returns after tax:                                                         
Revenue                            3,176             2,690            4,538
Capital                          (7,471)             (335)            5,748
Total                            (4,295)             2,355           10,286
Weighted average              58,551,530        58,551,530       58,551,530
number of shares in                                                        
issue during the                                                           

5. Basis of Net Asset Value Per Ordinary Share

                                      AT                AT                AT
                            30 SEPTEMBER      30 SEPTEMBER          31 MARCH
                                    2011              2010              2011
Shareholders' funds         £115,575,000      £117,172,000      £121,767,000
Ordinary shares in            58,551,530        58,551,530        58,551,530
issue at period end                                                         

6. Movements in Share Capital

                          SIX MONTHS TO     SIX MONTHS TO           YEAR TO
                           30 SEPTEMBER      30 SEPTEMBER          31 MARCH
                                   2011              2010              2011
Number of ordinary                                                         
Brought forward              58,551,530        58,551,530        58,551,530
Shares bought back                    -                 -                 -
and cancelled                                                              
In issue at period           58,551,530        58,551,530        58,551,530

7. Dividends

The first interim dividend of 1.95p for the quarter ended 30 June 2011 was paid
to shareholders on 31 October 2011. The second interim dividend of 1.95p for
the quarter ending 30 September 2011 will be paid on 30 December 2011.

8. Investment Trust Status

It is the intention of the Directors to conduct the affairs of the Company so
that it satisfies the conditions for approval as an investment trust company
set out in section 1159 of the Corporation Tax Act 2010.

9. Status of Half-Yearly Financial Report

The financial information contained in this half-yearly financial report does
not constitute statutory accounts within the meaning of section 434 of the
Companies Act 2006. The financial information for the half years ended 30
September 2011 and 30 September 2010 has not been audited. The figures and
financial information for the year ended 31 March 2011 are extracted and
abridged from the latest published accounts and do not constitute the statutory
accounts for that year. Those accounts have been delivered to the Registrar of
Companies and include the Report of the Independent Auditors, which was
unqualified and did not include a statement under section 498 of the Companies
Act 2006.

By order of the Board

Invesco Asset Management Limited

Company Secretary

11 November 2011

a d v e r t i s e m e n t