Last checked at 12 Aug 2016 15:37
BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC - Portfolio UpdateBLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC - Portfolio Update
PR Newswire
London, August 10
| BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC All information is at 31 July 2016 and unaudited. | |||||||
| Performance at month end with net income reinvested | |||||||
| One Month | Three Months | One Year | Three Years | Since 1 April 2012 | Five Years | ||
| Sterling | |||||||
| Share price | 7.3% | 4.2% | 1.7% | 24.5% | 60.6% | 59.7% | |
| Net asset value | 4.6% | 5.1% | 1.0% | 26.2% | 50.1% | 51.0% | |
| FTSE All-Share Total Return | 4.0% | 7.7% | 3.8% | 15.5% | 41.7% | 44.1% | |
| 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: | 183.22p | ||||||
| Net asset value - cum income*: | 185.25p | ||||||
| Share price: | 181.00p | ||||||
| Total assets (including income): | £49.6m | ||||||
| Discount to cum-income NAV: | 2.3% | ||||||
| Net gearing: | 1.9% | ||||||
| Net yield**: | 3.3% | ||||||
| Ordinary shares in issue***: | 25,679,268 | ||||||
| Gearing range (as a % of net assets) | 0-20% | ||||||
| Ongoing charges****: | 1.2% | ||||||
| * includes net revenue of 2.03 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 3.3% and includes the 2015 final dividend of 3.60p per share declared on 15 January 2016, paid to shareholders on 4 March 2016 and the 2016 interim dividend of 2.40p per share announced on 29 June 2016 and payable to shareholders on 2 September 2016. *** excludes 7,254,664 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 2015. | |||||||
| Sector Analysis | Total assets (%) | ||||||
| Pharmaceuticals & Biotechnology | 10.9 | ||||||
| Media | 9.0 | ||||||
| Tobacco | 8.9 | ||||||
| Travel & Leisure | 8.8 | ||||||
| Support Services | 7.2 | ||||||
| Financial Services | 5.9 | ||||||
| Oil & Gas Producers | 5.9 | ||||||
| Banks | 5.8 | ||||||
| Food Producers | 5.3 | ||||||
| General Retailers | 4.8 | ||||||
| Fixed Line Telecommunication | 4.5 | ||||||
| Non-Life Insurance | 4.4 | ||||||
| General Industrials | 4.1 | ||||||
| Wireless Telecommunication Services | 3.8 | ||||||
| Technology Hardware & Equipment | 2.7 | ||||||
| Real Estate Investment & Services | 2.0 | ||||||
| Food & Drug Retailers | 1.9 | ||||||
| Real Estate Investment Trusts | 1.2 | ||||||
| Construction & Materials | 0.7 | ||||||
| Net Current Assets | 2.2 | ||||||
| ----- | |||||||
| Total | 100.0 | ||||||
| ----- | |||||||
| Ten Largest Equity Investments | |||||||
| Company | Total assets (%) | ||||||
| British American Tobacco | 6.4 | ||||||
| AstraZeneca | 5.5 | ||||||
| Unilever | 5.3 | ||||||
| BT Group | 4.5 | ||||||
| RELX | 3.8 | ||||||
| Vodafone | 3.8 | ||||||
| Sky | 3.6 | ||||||
| GlaxoSmithKline | 3.4 | ||||||
| Royal Dutch Shell ‘B’ | 3.4 | ||||||
| Lloyds Banking Group | 3.3 | ||||||
Commenting on the markets, Adam Avigdori and Mark Wharrier representing the Investment Manager noted:The UK market strengthened in July, but was again volatile given continued macro uncertainties and the aftermath of the EU referendum. The swift appointment of Theresa May as the new Prime Minister helped limit the immediate political uncertainty, although there are clearly many unanswered questions concerning the economic consequences of the UK leaving the European Union. While the Bank of England did not cut interest rates at its monthly meeting as many expected, there was a clear indication of further stimulus should it be required. It is also likely the reformed UK government will adopt a less hawkish fiscal policy. Monetary policy conditions around the world however continue to be extremely benign. At a sector level there was modest recovery in more cyclical sectors such as financials and consumer shares following sharp falls in June and conversely some profit taking in the oil sector.
During the month the Company’s NAV* increased by 4.6% whilst the FTSE All-Share Index rose by 4.0%. The IA Income Sector also increased by 5.9% over the same period.
Unlike June, there were no dominant sector trends driving the Company’s performance during July, although the modest holdings in the oil sector and large positions in healthcare added to relative performance. Stock specifics were much more important, with the agreed £24bn bid for ARM from the Japanese company Softbank being the largest contributor to performance, we held a 2% position in ARM ahead of the bid. Despite having a low dividend yield, we have held ARM given its attractive cash flow characteristics, the long duration qualities of customer licenses and secular growth. Softbank have also been attracted to these qualities.
During the month we added to positions in more domestic companies where share prices have been impacted by recent market volatility including Sky, Tesco and Hays and sold the positon in Intertek. Like ARM, Intertek has served our Company well and we feel the current valuation now reflects longer term growth prospects. There were no new positions during the month.
Macroeconomic volatility has been an important driver of equities so far this year which has tended to overwhelm the stock specific factors at the heart of our process. However, over the longer term earnings and cash flow growth tend to be the dominant driver of share prices. If equity markets fail to recognise that, corporates buyers have the potential to; the bid for ARM during the month was a good reminder of that dynamic. Markets are likely to remain skittish given macro headwinds, likely volatility in bond markets and an increasing level of political risks. However, we continue to find opportunities in those companies that can generate cash flow from strong business models and have favourable industry characteristics or scope for management self-help. While sometimes unnerving, we will continue to use market volatility to provide buying opportunities in these types of companies.
* NAV - Inc. performance.
12 August 2016
ENDS
Latest information is available by typing www.blackrock.co.uk/brig on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). 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.