Last checked at 17 Jul 2019 11:25
BlackRock Income and Growth Investment Trust Plc - Portfolio UpdateBlackRock Income and Growth Investment Trust Plc - Portfolio Update
PR Newswire
London, July 17
| BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) |
| All information is at 30 June 2019 and unaudited. |
| Performance at month end with net income reinvested |
| One Month | Three Months | One Year | Three Years | Five Years | Since 1 April 2012 | |
| Sterling | ||||||
| Share price | 4.5% | 6.2% | -2.1% | 27.2% | 38.9% | 90.3% |
| Net asset value | 3.1% | 3.6% | -1.3% | 26.0% | 41.0% | 80.9% |
| FTSE All-Share Total Return | 3.7% | 3.3% | 0.6% | 29.5% | 35.8% | 76.4% |
| Source: BlackRock |
| BlackRock took over the investment management of the Company with effect from 1 April 2012. |
| At month end | |
| Sterling: | |
| Net asset value - capital only: | 199.50p |
| Net asset value - cum income*: | 204.79p |
| Share price: | 196.50p |
| Total assets (including income): | £51.2m |
| Discount to cum-income NAV: | 4.0% |
| Gearing: | 0.6% |
| Net yield**: | 3.6% |
| Ordinary shares in issue***: | 23,067,476 |
| Gearing range (as a % of net assets) | 0-20% |
| Ongoing charges****: | 1.1% |
| * includes net revenue of 5.29 pence per share |
| ** The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.6% and includes the 2018 final dividend of 4.40p per share declared on 20 December 2018 and paid to shareholders on 19 March 2019 and the 2019 interim dividend of 2.60p per share declared on 25 June 2019 and due to be paid to shareholders on 2 September 2019. |
| *** excludes 9,866,456 shares held in treasury |
| **** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 October 2018. |
| Sector Analysis | Total assets (%) |
| Oil & Gas Producers | 10.6 |
| Pharmaceuticals & Biotechnology | 8.3 |
| Media | 8.1 |
| Life Insurance | 7.4 |
| Financial Services | 6.7 |
| Banks | 6.4 |
| Support Services | 6.4 |
| Food Producers | 5.9 |
| Household Goods & Home Construction | 5.6 |
| Tobacco | 4.2 |
| Mining | 3.7 |
| Food & Drug Retailers | 3.4 |
| Travel & Leisure | 3.2 |
| Industrial Engineering | 2.7 |
| Nonlife Insurance | 2.3 |
| Health Care Equipment & Services | 1.9 |
| Mobile Telecommunications | 1.4 |
| Gas, Water & Multiutilities | 1.3 |
| Electronic & Electrical Equipment | 1.2 |
| Construction & Materials | 1.0 |
| Chemicals | 0.7 |
| General Retailers | 0.3 |
| Net Current Assets | 7.3 |
| ------ | |
| Total | 100.0 |
| ====== | |
| Ten Largest Equity Investments | |
| Company | Total assets (%) |
| Royal Dutch Shell 'B' | 6.9 |
| RELX | 4.9 |
| AstraZeneca | 4.4 |
| Prudential | 4.2 |
| GlaxoSmithKline | 3.9 |
| BP Group | 3.7 |
| BHP | 3.7 |
| British American Tobacco | 3.6 |
| Tesco | 3.4 |
| Unilever | 3.2 |
| Commenting on the markets, Adam Avigdori and David Goldman representing the Investment Manager noted: |
| The UK equity market continued to rally over the second quarter as weaker economic data led to increasing expectations of monetary easing, particularly in the US. The UK’s political environment remained turbulent as Theresa May failed to secure a Brexit deal in Parliament and stepped down as Prime Minister; uncertainty is likely to persist for the remainder of the year with the EU27 leaders having agreed an extension until 31st October 2019. The trade dispute between the US and China continued to roil markets and mounting tensions in the Middle East involving Iran added further uncertainty. Large-cap companies modestly outperformed mid-caps and small-caps; in terms of style factors, the underperformance of Value continued at the expense of ‘Quality’ companies, particularly those with strong balance sheets which were delivering sustainable sales and earnings growth. Sector trends were more mixed: after a first quarter rally, Tobacco weakened again on volume concerns and General Retail suffered on tough year-on-year trading comparisons; the Telecoms sector underperformed as revenues came under further pressure. Notable positive contributors included Media and Oil & Gas. Over the quarter the BlackRock Income and Growth Investment Trust delivered a return of 3.6%, outperforming the FTSE All-Share which delivered a return of 3.3%. The largest contributor came from core holding RELX. Uncertainties around the academic publishing market in the first quarter were dispelled as RELX continued to report consistent sales, profits and earnings growth from its broad portfolio of well-invested professional information businesses. London Stock Exchange Group continues to benefit from the regulatory tailwinds to its clearing businesses, notably LCH, and from higher market levels which boost FTSE Russell, its index information division. Shares in Oxford Instruments continued to perform well and also contributed to performance. Turning to the portfolio’s detractors, Whitbread saw its share price decrease after painting a rather negative outlook in their latest trading update. UK total accommodation sales declined 1.5% in the quarter due to weak trading conditions and maintained their previous guidance regarding the caution on the UK business environment given macro uncertainty. British American Tobacco has previously reported strong results in the second quarter and maintained guidance, but the market remains concerned about weaker volumes in US cigarettes, even though reported industry data remains fallible. This has caused shares to be weak in the quarter. Finally, demand for air travel across Europe has been weaker than expected, exacerbated by Brexit concerns in the UK, with an adverse impact on all carriers, including easyJet which we hold. During the quarter we initiated a position in Trainline, added to positions in Euromoney, easyJet and Elementis. We have reduced exposure to Phoenix, Hiscox and Homeserve. We continue to see a period of sustained growth. Importantly, we expect nominal growth to remain modest as we see structural pressures from demographics, corporate underinvestment and new technology continuing to act as a drag on inflation. The dovish tilt from central banks is clearly supportive for markets, however from time-to-time we expect markets to worry about a shift to a more hawkish stance. With heightened political uncertainty and investor nervousness, we expect volatility to return to markets. This provides us, as active managers of a concentrated portfolio, with a great opportunity to identify high-quality cash generative businesses, with robust balance sheets, that can weather various market cycles and help to 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 innovation, 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 are starting 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 strong balance sheet. |
| 17 July 2019 |