Last checked at 19 Sep 2018 16:27
BlackRock Income and Growth Investment Trust Plc - Portfolio UpdateBlackRock Income and Growth Investment Trust Plc - Portfolio Update
PR Newswire
London, September 19
| BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) All information is at 31 August 2018 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 | -0.5% | 1.2% | 6.3% | 27.1% | 55.8% | 93.1% |
| Net asset value | -1.8% | -1.3% | 6.0% | 27.4% | 58.5% | 81.6% |
| FTSE All-Share Total Return | -2.8% | -1.7% | 4.7% | 33.7% | 44.1% | 72.8% |
| 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: | 206.81p |
| Net asset value - cum income*: | 210.44p |
| Share price: | 204.00p |
| Total assets (including income): | £55.0m |
| Discount to cum-income NAV: | 3.1% |
| Gearing: | 2.4% |
| Net yield**: | 3.2% |
| Ordinary shares in issue***: | 24,223,268 |
| Gearing range (as a % of net assets) | 0-20% |
| Ongoing charges****: | 1.1% |
| * includes net revenue of 3.63 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 3.2% and includes the 2017 final dividend of 4.10p per share declared on 20 December 2017 and paid to shareholders on 9 March 2018 and the 2018 interim dividend of 2.50p per share declared on 25 June 2018 and paid to shareholders on 3 September 2018. |
| *** excludes 8,710,664 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 2017. |
| Sector Analysis | Total assets (%) |
| Oil & Gas Producers | 10.0 |
| Pharmaceuticals & Biotechnology | 9.1 |
| Banks | 9.1 |
| Support Services | 6.6 |
| Tobacco | 5.8 |
| Food Producers | 5.6 |
| Financial Services | 5.5 |
| Life Insurance | 5.4 |
| Media | 5.3 |
| Industrial Engineering | 4.4 |
| Nonlife Insurance | 4.1 |
| Construction & Materials | 3.3 |
| Household Goods & Home Construction | 3.3 |
| Food & Drug Retailers | 2.8 |
| General Retailers | 2.6 |
| Travel & Leisure | 2.5 |
| Gas, Water & Multiutilities | 2.2 |
| Forestry & Paper | 2.0 |
| Chemicals | 1.4 |
| General Industrials | 1.4 |
| Software & Computer Services | 0.9 |
| Electronic & Electrical Equipment | 0.9 |
| Personal Goods | 0.8 |
| Net Current Assets | 5.0 |
| ------ | |
| Total | 100.0 |
| ====== |
| Ten Largest Equity Investments | |
| Company | Total assets (%) |
| Royal Dutch Shell B | 5.7 |
| British American Tobacco | 4.9 |
| RELX | 4.1 |
| Unilever | 3.9 |
| John Laing Group | 3.7 |
| Lloyds Banking Group | 3.6 |
| GlaxoSmithKline | 3.5 |
| BP Group | 3.4 |
| AstraZeneca | 3.3 |
| Ferguson | 3.3 |
| Commenting on the markets, Adam Avigdori and David Goldman representing the Investment Manager noted: |
| UK equities recorded a negative month during August, with the FTSE All-Share falling -2.8% as Brexit related uncertainty once again dominated headlines and drove investor sentiment away from the UK market. The Monetary Policy Committee voted 9-0 in favour of the anticipated 25bps interest rate hike, the second rise since 2007, taking the UK base rate to 0.75%. The message remains that future increases will be gradual and limited. Economic growth in the UK rebounded in Q2, after a poor Q1 which was heavily impacted by adverse weather and is now in-line with the Bank of England’s expectations, however the Bank noted the dangers of protectionist policies and increased Brexit risk. Escalating trade conflicts and disorder in emerging markets, most notably in Turkey, clouded the global growth outlook. US Dollar strength, with the economy continuing to benefit from fiscal stimulus, was unhelpful for commodity prices, while sterling weakened in response to negative Brexit related newsflow. UK small & mid-caps outperformed large caps during the month. The earnings boost from the weak pound to many international FTSE 100 companies was not enough to offset the broader fears for global growth which impacted miners, while other mega-cap sectors including tobacco were hit with industry specific factors. Over the month the Company delivered a return of -1.8%, outperforming the FTSE All-Share which delivered a return of -2.8%. John Laing shares rose as the company provided a strong update with an increase to net asset value after a large gain on the disposal of one of their assets. The pipeline for new investments continues to look encouraging for the remainder of the year. RELX shares continue to rise as the company has stated it expects underlying growth in revenue and operating profit. Reassuringly, disputes with German and Swedish universities haven’t impacted revenues. During the month RELX received court approval for the simplification of their business from a dual to a single parent company, listed in the UK. Hiscox has recently reported strong results with an improving outlook for the London market business as prices gently rise in a sustainable way. The opportunity in the retail business remains the largest driver of growth and returns for the group. Over the past year, British American Tobacco has been impacted by wider industry issues as investors assess the likely impact on companies of the move from combustible cigarettes to Next Generation Products (NGPs). More immediately, the company will be impacted by tax hikes on its products and is considering raising prices to help offset the profit effect. Whilst Standard Chartered has delivered accelerating revenue growth, it is below the pace that we would have expected. Balance sheet and liability driven areas of the business (cash management, retail and wealth) are making good progress, but the financial markets part of the business is not yet performing to expectations. Bodycote’s management team remain confident in the growth potential for the business, but the shares trade on a high valuation at 19x Price-to-Earnings and there are some temporary concerns around capacity issues in the aerospace market and around how potential automotive tariffs in the US may impact Bodycote’s end customers. During the month we purchased a new position in Superdry which is trading on a depressed valuation given a number of issues, both self-inflicted and otherwise. The business is cash generative with a healthy balance sheet and we expect to see growth in the underlying business. Additionally, we have added to positions in Weir Group, Reckitt Benckiser and Phoenix Group Holdings. We have reduced exposure to DS Smith, Next, Admiral and John Laing and sold our holding in TP ICAP. We are broadly constructive on global markets and expect a continuation of the global growth that we have seen over the last few years, albeit in a less synchronised fashion across the G7 nations as this year brings more political and economic uncertainty. The trend of steady growth has provided a solid backdrop for equity market returns, which have also been helped by loose financial conditions from supportive governments and central banks. However, political uncertainty is rising, which combined with tightening financial conditions means that 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 and construction spend, which remains well below long-term averages and initiatives to boost this spend features prominently in politicians’ manifestos, particularly in the US and Europe. 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 last few months have 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. |
| 18 September 2018 |
| 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 BlackRock’s website (or any other website) is incorporated into, or forms part of, this announcement. |