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21 Feb 2025 07:00
LEGAL ENTITY IDENTIFIER: 213800F3NOTF47H6AO55
THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Results for the Half-Year Ended 31 December 2024
This announcement contains regulated information
INVESTMENT OBJECTIVE
The Company's objective is to provide long-term growth in income and capital, principally by investment in equities listed on the London Stock Exchange. The Board fully recognises the importance of dividend income to shareholders.
PERFORMANCE
| As at31 December 2024 | As at30 June 2024 |
Net asset value ("NAV") per ordinary share | 425.1p | 424.3p |
Premium/(discount) | 1.4% | (1.0)% |
Net asset value per ordinary share (debt at fair value) | 430.8p | 429.6p |
Premium/(discount) (debt at fair value) | 0.0% | (2.2)% |
Ordinary share price | 431.0p | 420.0p |
Gearing (debt at par value) | 7.6% | 7.1% |
| ||
Six months to31 December 2024 | Six months to31 December 2023 | |
Dividends per share | 10.5p | 10.1p |
Dividend yields | As at31 December 2024 | As at30 June 2024 | |||
The City of London Investment Trust plc | 4.9% | 4.9% | |||
FTSE All-Share Index (Benchmark) | 3.8% | 3.7% | |||
AIC UK Equity Income sector | 4.8% | 4.2% | |||
IA UK Equity Income OEIC sector | 4.2% | 4.3% | |||
Sources: Morningstar Direct, LSEG Datastream
| |||||
Total return performance to 31 December 2024 | 6 months % | 1 year % | 3 years% | 5 years% | 10 years% |
NAV1 | 2.8 | 11.5 | 24.8 | 29.2 | 83.8 |
Share price2 | 5.1 | 10.6 | 26.8 | 25.1 | 80.1 |
FTSE All-Share Index (Benchmark) | 1.9 | 9.5 | 18.5 | 26.5 | 81.9 |
AIC UK Equity Income sector3 | 2.7 | 10.1 | 16.6 | 26.9 | 88.2 |
IA UK Equity Income OEIC sector4 | 1.4 | 8.7 | 13.8 | 20.0 | 66.2 |
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
1 Net asset value per ordinary share total return with debt at fair value (including dividends reinvested)
2 Share price total return using mid-market closing price
3 AIC UK Equity Income sector size weighted average NAV total return (shareholders' funds)
4 The Investment Association ("IA") peer group average is based on mid-day NAV whereas the returns of the investment trust are calculated using close of business NAV
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Introduction
City of London achieved a 2.8% net asset value total return during the six months to 31 December 2024 against a backdrop of political change in the UK and USA, uncertain economic prospects globally and cuts in interest rates.
The Markets
Following July's general election, the new Labour government introduced a Budget in October which raised public spending, increased the employer's national insurance tax rate and signalled the removal of the Inheritance Tax exemption for personal pension funds. Growth in the UK economy slowed from the pace of the first half of the year, whilst the Bank of England lowered the base rate to 4.75% through two cuts of 25 basis points. The UK 10-year gilt yield rose from 4.2% to 4.6% during the six months, reflecting concerns about the stickiness of inflation and the prudent sustainability of government finances. Growth in Europe was also weak, with the European Central Bank reducing its deposit rate to 3.0%. Economic growth in the US, in contrast, remained relatively robust, with the US Federal Reserve making three cuts in interest rates to 4.5%.
The UK equity market returned 1.9%, as measured by the FTSE All-Share Index, with medium-sized and small companies slightly outperforming larger peers. The banking sector was a notable outperformer, with banks benefitting through rolling over structural hedges of funds on better terms than had prevailed during the period of ultra-low interest rates. The oil sector, however, was weak with the Brent oil price falling by 7% to $75 per barrel during the six months, reflecting reduced global demand.
Net Asset Value Total Return
City of London's net asset value total return was 2.8%, exceeding the FTSE All-Share Index (1.9%), the AIC UK Equity Income sector average (2.7%) and the IA UK Equity Income OEIC sector average (1.4%). Stock and sector selection contributed to relative outperformance against the Index by 93 basis points. The biggest sector contributor was tobacco, where corporate earnings and dividends were resilient. Imperial Brands was the second biggest stock contributor. The biggest stock contributor was our underweight position in AstraZeneca. The third biggest contributor was NatWest, whose share price rose by 29% during the six months. The biggest detracting sector was aerospace and defence, where Rolls Royce, which we do not hold, continued to perform well despite not paying a dividend, and was our biggest stock detractor. In addition, our holding in BAE Systems gave back some gains, having been a very strong performer over the previous three years.
Earnings and Dividends
Earnings per share declined from 8.8p to 8.4p, compared with the same six-month period last year, mainly due to the change in timing of dividend payments from some investee companies. Another factor was the absence of any special dividends compared with £0.9 million received during the same period last year. This reflected an increasing trend by UK listed companies to substitute dividend distributions with share buy backs to fund shareholder returns, particularly in relation to exceptional profits.
The Board continues to control expenses tightly. City of London's ongoing charge, which represents the investment management fee and other administrative non-interest expenses as a percentage of shareholder funds, is expected to remain around 0.37% during this financial year. This is low compared with almost all other investment trusts and (non-tracker) managed equity investment products.
City of London has declared two interim dividends to date of 5.25p each in respect of this financial year. The Company's diverse portfolio, strong cash flow and revenue reserve give the Board confidence that in line with its objective to provide long-term income and capital growth, it will be able to increase the total annual dividend for the 59th consecutive year. The quarterly dividend rate will be reviewed by the Board before the third interim dividend is declared in April 2025.
Material Events and Transactions during the Period
The Board continued with its stated policy, subject to prevailing conditions, of issuing and buying back shares within a narrow band relative to net asset value. During the six-month period, the Company's shares traded close to net asset value and ended the period with the share price equal to net asset value (valuing debt at fair value) and at a 1.4% premium to net asset value (valuing debt at par value). 28,278 shares were bought back, costing £119,000, at a small discount and no shares were issued.
A new holding was bought in TP ICAP, a leading intermediary in global financial markets. Notable additions were made to Shell, the oil and gas company, and to the diversified Real Estate Investment Trusts, British Land and Land Securities. DS Smith, the paper and packaging company in the process of being taken over by the US company, International Paper, was sold. Pennon, the water utility, was sold ahead of the final determination of the regulatory review of UK water companies. In a tough backdrop for consumer spending, Burberry and DFS Furniture omitted their dividends and were sold. A significant profit was realised with the sale of half the holding in 3i following a very strong share price performance. Some profits were also taken in BAE Systems.
Outlook for the Six Months to 30 June 2025
The UK economy is struggling to grow, with business confidence adversely affected by a combination of the rise in employer's national insurance, the prospect of tighter labour regulations and the well-above inflation increase in the National Minimum Wage from April 2025. Although it seems likely that there will be further interest rate cuts from the current level of 4.5%, the Bank of England's decision is made harder by the ripple effect of government induced cost pressures on inflation. Cuts in interest rates could be well received by investors, who will anticipate an improvement in corporate profits and consumer spending. The outlook for growth in Europe is also weak, with considerable political uncertainty in both France and Germany. The European Central Bank is expected to make further cuts in interest rates which may improve sentiment. Prospects for economic growth are stronger in the US, with its technology sector continuing to generate impressive returns. The policies of the Trump administration, such as in relation to tariffs, currently remain uncertain and the judgement of the potential impact of such policies will feature materially in the Federal Reserve's determination of future interest rates.
Many domestic UK stocks remain on relatively depressed valuations, both absolutely and relatively when compared with their peers in overseas markets. The diversified Real Estate Investment Trusts exemplify this valuation discrepancy, trading on discounts to net asset value of 30% and dividend yields of 6%. It is important to recognise, however, that City of London's portfolio is biased towards companies with overseas sales. At 31 December 2024, some 63% of the underlying sales of investee companies were made overseas. They are therefore well placed to benefit from global growth trends. It is also worth noting the possible signs of a lessening of geo-political tensions, such as the ceasefire in Gaza, and President Trump's proactive engagement in efforts to end the war in Ukraine.
Given the relative attraction of UK equities to their equivalents in overseas markets, especially with regard to dividend yield, it remains the case that investors in UK equities "are paid to hold on". It is encouraging to see many companies taking advantage of their low valuations to buy back their shares "on the cheap". Imperial Brands, City of London's seventh largest holding, has demonstrated the benefits of this approach with its share buy backs over the last two years having been significantly accretive to earnings per share.
More takeovers can be expected from overseas companies and private equity firms while this low relative value of UK equities persists. The dividend yield of UK equities will also become increasingly attractive relative to bank deposit rates as interest rates decline.
Sir Laurie Magnus CBE
Chairman
20 February 2025
FORTY LARGEST INVESTMENTS
Company | Market value 31 December 2024 £'000 | Company | Market value 31 December 2024 £'000 | |
HSBC | 105,230 | Aviva | 40,777 | |
Shell | 97,802 | GSK | 40,380 | |
RELX | 92,175 | IG | 39,620 | |
Unilever | 85,256 | 3i | 35,640 | |
British American Tobacco | 76,293 | British Land | 30,797 | |
BAE Systems | 73,759 | Munich Re | 28,985 | |
Imperial Brands | 73,399 | Severn Trent | 28,842 | |
Tesco | 72,923 | Reckitt Benckiser | 26,576 | |
NatWest | 71,373 | SSE | 26,466 | |
AstraZeneca | 64,354 | TotalEnergies | 26,465 | |
National Grid | 53,701 | Schroders | 23,872 | |
Barclays | 52,021 | Sage | 21,760 | |
Lloyds Banking | 51,493 | Swire Pacific | 21,725 | |
Rio Tinto | 51,481 | Glencore | 21,204 | |
M&G | 51,389 | Beazley | 20,413 | |
Diageo | 49,725 | Anglo American | 20,094 | |
BP | 49,512 | Deutsche Telekom | 19,651 | |
Phoenix | 44,028 | Britvic | 19,620 | |
Legal & General | 43,662 | St. James's Place | 19,519 | |
Land Securities | 40,880 | Novartis | 18,752 | |
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These investments total £1,831,614,000 or 81.0% of the portfolio. | ||||
Convertibles and all classes of equity in any one company are treated as one investment.
| ||||
SECTOR EXPOSURE
As a percentage of the investment portfolio excluding cash
% | |
Financials | 32.3 |
Consumer Staples | 20.2 |
Industrials | 9.8 |
Energy | 8.1 |
Health Care | 7.3 |
Consumer Discretionary | 6.3 |
Utilities | 5.3 |
Basic Materials | 4.7 |
Telecommunications | 2.6 |
Real Estate | 2.4 |
Technology | 1.0 |
Total | 100.0 |
Source: Janus Henderson
SECTOR BREAKDOWN OF INVESTMENTS
| Valuation 31 December 2024 £'000 |
|
| Valuation 31 December 2024 £'000 | |
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|
| |
ENERGY |
|
| Industrial Support Services | ||
Oil, Gas and Coal |
|
| PayPoint | 15,600 | |
BP | 97,802 | Hays | 10,285 | ||
Shell | 49,512 | Inchcape | 9,619 | ||
TotalEnergies1 | 26,465 | 35,504 | |||
ENI1 | 9,673 | Total Industrials | 222,419 | ||
| 183,452 |
|
| ||
Total Energy | 183,452 |
| CONSUMER STAPLES |
| |
|
|
| Beverages | ||
BASIC MATERIALS |
|
| Diageo | 49,725 | |
Chemicals |
|
| Britvic | 19,620 | |
Victrex | 8,308 |
| Coca-Cola1 | 10,940 | |
Johnson Matthey | 6,014 |
|
| 80,285 | |
14,322 |
|
|
| ||
|
| Food Producers |
| ||
Industrial Metals and Mining | Nestlé1 | 17,803 | |||
Rio Tinto | 51,481 | Hilton Food | 9,050 | ||
Glencore | 21,204 | Tate & Lyle | 8,638 | ||
Anglo American | 20,094 | 35,491 | |||
92,779 |
| ||||
Total Basic Materials | 107,101 | Personal Care, Drug and Grocery Stores | |||
Unilever | 85,256 | ||||
INDUSTRIALS | Tesco | 72,923 | |||
Aerospace and Defence | Reckitt Benckiser | 26,576 | |||
BAE Systems | 73,759 |
|
| 184,755 | |
| 73,759 |
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| |
| Automobiles and Parts |
| |||
Construction and Materials |
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| Dowlais | 6,740 | |
Ibstock | 14,432 |
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| 6,740 | |
Marshalls | 7,338 |
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| 21,770 |
| Tobacco |
| |
|
| British American Tobacco | 76,293 | ||
Electronic and Electrical Equipment |
| Imperial Brands | 73,399 | ||
IMI | 13,202 |
| 149,692 | ||
Morgan | 11,288 |
| Total Consumer Staples | 456,963 | |
Rotork | 5,962 |
| |||
XP Power | 2,974 |
| HEALTH CARE | ||
33,426 |
| Medical Equipment and Services | |||
| Smith & Nephew | 12,586 | |||
General Industrials |
| 12,586 | |||
Swire Pacific1 | 21,725 |
|
| ||
Smiths | 13,720 |
| Pharmaceuticals and Biotechnology | ||
Mondi | 11,319 |
| AstraZeneca | 64,354 | |
46,764 |
| GSK | 40,380 | ||
| Novartis1 | 18,752 | |||
Industrial Engineering |
| Merck1 | 16,285 | ||
Vesuvius | 11,196 | Johnson & Johnson1 | 12,010 | ||
| 11,196 | 151,781 | |||
| Total Health Care | 164,367 | |||
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| Valuation 31 December 2024 £'000 |
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| Valuation 31 December 2024 £'000 | ||||
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CONSUMER DISCRETIONARY | Investment Banking and Brokerage Services | |||||||
Retailers | M&G | 51,389 | ||||||
Kingfisher | 11,311 | IG | 39,620 | |||||
Halfords | 3,930 | 3i | 35,640 | |||||
15,241 | Schroders | 23,872 | ||||||
St. James's Place | 19,519 | |||||||
Media | Rathbones | 14,940 | ||||||
RELX | 92,175 | TP ICAP | 11,610 | |||||
92,175 |
|
| 196,590 | |||||
Household Goods and Home Construction |
| Life Insurance | ||||||
Persimmon | 17,103 | Phoenix | 44,028 | |||||
Taylor Wimpey | 15,690 | Legal & General | 43,662 | |||||
32,793 | Aviva | 40,777 | ||||||
Prudential | 7,642 | |||||||
Travel and Leisure | 136,109 | |||||||
Young | 2,475 | |||||||
2,475 | Non-life Insurance | |||||||
Total Consumer Discretionary | 142,684 | Munich Re1 | 28,985 | |||||
Beazley | 20,413 | |||||||
TELECOMMUNICATIONS | Direct Line Insurance | 12,118 | ||||||
Telecommunications Service Providers | Hiscox | 9,189 | ||||||
Deutsche Telekom1 | 19,651 | Sabre Insurance | 6,555 | |||||
BT | 14,045 | 77,260 | ||||||
Vodafone | 12,973 | Total Financials | 698,559 | |||||
Verizon Communications1 | 12,782 | |||||||
59,451 | REAL ESTATE | |||||||
Total Telecommunications | 59,451 | Real Estate Investment Trusts | ||||||
|
| Land Securities | 40,880 | |||||
UTILITIES |
| British Land | 30,797 | |||||
Electricity |
| Segro | 12,614 | |||||
SSE | 26,466 | 84,291 | ||||||
26,466 | Total Real Estate | 84,291 | ||||||
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Gas, Water and Multi-utilities | TECHNOLOGY |
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National Grid | 53,701 | Software and Computer Services | ||||||
Severn Trent | 28,842 | Sage | 21,760 | |||||
United Utilities | 10,515 |
| 21,760 | |||||
| 93,058 | Total Technology | 21,760 | |||||
Total Utilities | 119,524 |
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TOTAL INVESTMENTS | 2,260,571 | |||||||
FINANCIALS |
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Banks |
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HSBC | 105,230 | UK investments | 2,065,500 | |||||
NatWest | 71,373 | Overseas investments | 195,071 | |||||
Barclays | 52,021 | TOTAL INVESTMENTS | 2,260,571 | |||||
Lloyds Banking | 51,493 | |||||||
Nationwide Building Society 10.25% Var Perp CCDS | 8,483 | |||||||
| 288,600 | |||||||
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1 Overseas listed
All classes of equity in any one company are treated as one investment.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties associated with the Company's business can be divided into the following main areas:
· Portfolio and market price
· Dividend income
· Investment activity, gearing and performance
· Tax and regulatory
· Operational
Information on these risks and how they are managed is given in the Annual Report for the year ended 30 June 2024. In the view of the Board, these principal risks and uncertainties at the year end remain and are as applicable to the remaining six months of the financial year as they were to the six months under review.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge:
• | the condensed set of financial statements has been prepared in accordance with FRS 104 "Interim Financial Reporting".
|
• | the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of the principal risks and uncertainties for the remaining six months of the year); and
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• | the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
|
On behalf of the Board
Sir Laurie Magnus CBE
Chairman
20 February 2025
INCOME STATEMENT
(Unaudited) Half-year ended 31 December 2024 | (Unaudited) Half-year ended 31 December 2023 | (Audited) Year ended 30 June 2024 | |||||||
Revenue return £'000 | Capital return £'000 |
Total £'000 | Revenue return £'000 | Capital return £'000 |
Total £'000 | Revenue return £'000 | Capital return £'000 |
Total £'000 | |
|
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Gains on investments held at fair value through profit or loss | - | 18,690 | 18,690 | - | 92,532 | 92,532 | - | 200,864 | 200,864 |
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Income from investments held at fair value through profit or loss | 44,017 | - | 44,017 | 46,388 | - | 46,388 | 109,335 | - | 109,335 |
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Other interest receivable and similar income | 111 | - | 111 | 185 | - | 185 | 371 | - | 371 |
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Gross revenue and capital gains | 44,128 | 18,690 | 62,818 | 46,573 | 92,532 | 139,105 | 109,706 | 200,864 | 310,570 |
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Management fee | (969) | (2,261) | (3,230) | (961) | (2,242) | (3,203) | (1,927) | (4,497) | (6,424) |
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| |||||||
Other administrative expenses | (591) | - | (591) | (468) | - | (468) | (1,009) | - | (1,009) |
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Net return before finance costs and taxation | 42,568 | 16,429 | 58,997 | 45,144 | 90,290 | 135,434 | 106,770 | 196,367 | 303,137 |
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Finance costs | (925) | (1,976) | (2,901) | (737) | (1,535) | (2,272) | (1,666) | (3,520) | (5,186) |
| |||||||||
Net return before taxation | 41,643 | 14,453 | 56,096 | 44,407 | 88,755 | 133,162 | 105,104 | 192,847 | 297,951 |
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Taxation on net return | (161) | - | (161) | (201) | - | (201) | (533) | - | (533) |
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Net return after taxation | 41,482 | 14,453 | 55,935 | 44,206 | 88,755 | 132,961 | 104,571 | 192,847 | 297,418 |
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Return per ordinary share (note 2) | 8.39p | 2.93p | 11.32p | 8.80p | 17.67p | 26.47p | 20.87p | 38.48p | 59.35p |
The total columns of this statement represent the Company's Income Statement, prepared in accordance with FRS 104. The revenue and capital columns are supplementary to this and are published under guidance from the Association of Investment Companies.
The Company has no recognised gains or losses other than those disclosed in the Income Statement and Statement of Changes in Equity. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
Half-year ended 31 December 2024 (unaudited) | Called-up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
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|
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At 1 July 2024 | 125,666 | 1,072,624 | 2,707 | 849,910 | 46,621 | 2,097,528 |
Net return on ordinary activities after taxation | - | - | - | 14,453 | 41,482 | 55,935 |
Buyback of 28,278 ordinary shares for treasury | - | - | - | (119) | - | (119) |
Dividends paid | - | - | - | - | (51,905) | (51,905) |
| ||||||
At 31 December 2024 | 125,666 | 1,072,624 | 2,707 | 864,244 | 36,198 | 2,101,439 |
Half-year ended 31 December 2023 (unaudited) | Called-up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
At 1 July 2023 | 124,339 | 1,053,061 | 2,707 | 691,463 | 44,322 | 1,915,892 |
Net return on ordinary activities after taxation | - | - | - | 88,755 | 44,206 | 132,961 |
Issue of 5,310,000 of new ordinary shares | 1,328 | 19,563 | - | - | - | 20,891 |
Dividends paid | - | - | - | - | (50,759) | (50,759) |
At 31 December 2023 | 125,667 | 1,072,624 | 2,707 | 780,218 | 37,769 | 2,018,985 |
Year ended 30 June 2024 (audited) | Called-up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
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|
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|
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At 1 July 2023 | 124,339 | 1,053,061 | 2,707 | 691,463 | 44,322 | 1,915,892 |
Net return after taxation | - | - | - | 192,847 | 104,571 | 297,418 |
Buyback of 8,301,867 ordinary shares for treasury | - | - | - | (34,400) | - | (34,400) |
Issue of 5,310,000 new ordinary shares | 1,327 | 19,563 | - | - | - | 20,890 |
Dividends paid | - | - | - | - | (102,272) | (102,272) |
At 30 June 2024 | 125,666 | 1,072,624 | 2,707 | 849,910 | 46,621 | 2,097,528 |
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The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
| (Unaudited) 31 December 2024 £'000 | (Unaudited) 31 December 2023 £'000 | (Audited) 30 June 2024 £'000 |
|
| ||
Investments held at fair value through profit or loss (note 3) |
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| |
Listed at market value | 2,260,571 | 2,126,376 | 2,246,245 |
Investment in subsidiary undertakings | 347 | 347 | 347 |
| |||
| 2,260,918 | 2,126,723 | 2,246,592 |
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Current assets |
| ||
Debtors | 8,892 | 9,541 | 12,911 |
Cash at bank | - | 1,753 | - |
8,892 | 11,294 | 12,911 | |
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Creditors: amounts falling due within one year | (52,670) | (3,387) | (46,307) |
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Net current (liabilities)/assets | (43,778) | 7,907 | (33,396) |
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Total assets less current liabilities | 2,217,140 | 2,134,630 | 2,213,196 |
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Creditors: amounts falling due after more than one year | (115,701) | (115,645) | (115,668) |
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Net assets | 2,101,439 | 2,018,985 | 2,097,528 |
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Capital and reserves |
| ||
Called-up share capital (note 4) | 125,666 | 125,667 | 125,666 |
Share premium account | 1,072,624 | 1,072,624 | 1,072,624 |
Capital redemption reserve | 2,707 | 2,707 | 2,707 |
Other capital reserves (note 5) | 864,244 | 780,218 | 849,910 |
Revenue reserve | 36,198 | 37,769 | 46,621 |
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Equity shareholders' funds | 2,101,439 | 2,018,985 | 2,097,528 |
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Net asset value per ordinary share (note 6) | 425.10p | 401.66p | 424.29p |
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The accompanying notes are an integral part of these financial statements.
NOTES
1. | Accounting Policy - Basis of Preparation | |||||||||
The condensed set of financial statements has been prepared in accordance with FRS 104, Interim Financial Reporting, FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland and the Statement of Recommended Practice for "Financial Statements of Investment Trust Companies and Venture Capital Trusts", issued in July 2022.
For the period under review, the Company's accounting policies have not varied from those described in the Annual Report for the year ended 30 June 2024. These financial statements have been neither audited nor reviewed by the Company's auditors.
As an investment fund, the Company has the option, which it has taken, not to present a cash flow statement. A cash flow statement is not required when an investment fund meets all the following conditions: substantially all of the entity's investments are highly liquid and are carried at market value; and where a statement of changes in equity is provided.
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2. | Return per Ordinary Share |
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(Unaudited) Half-year ended 31 December 2024 £'000 | (Unaudited) Half-year ended 31 December 2023 £'000 | (Audited) Year ended 30 June 2024 £'000 | ||||||||
The return per ordinary share is based on the following figures: | ||||||||||
Revenue return | 41,482 | 44,206 | 104,571 | |||||||
Capital return | 14,453 | 88,755 | 192,847 | |||||||
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Total | 55,935 | 132,961 | 297,418 | |||||||
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Weighted average number of ordinary shares in issue for each period | 494,334,723 | 502,285,221 | 501,134,608 | |||||||
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Revenue return per ordinary share | 8.39p | 8.80p | 20.87p | |||||||
Capital return per ordinary share | 2.93p | 17.67p | 38.48p | |||||||
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Total return per ordinary share | 11.32p | 26.47p | 59.35p | |||||||
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The Company does not have any dilutive securities, therefore, the basic and diluted returns per share are the same.
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3. | Financial Instruments | |||||||||
The financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value or the Statement of Financial Position amount is a reasonable approximation of fair value (debtors and creditors falling due within one year).
The table below sets out fair value measurements of the investments using the FRS 102 fair value hierarchy.
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Financial assets at fair value through profit or loss at 31 December 2024 | ||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||
£'000 | £'000 | £'000 | £'000 | |||||||
Equity investments | 2,136,162 | - | 347 | 2,136,509 | ||||||
Total | 2,136,162 | - | 347 | 2,136,509 | ||||||
Financial assets at fair value through profit or loss at 31 December 2023 | ||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||
£'000 | £'000 | £'000 | £'000 | |||||||
Equity investments | 2,126,376 | - | 347 | 2,126,723 | ||||||
Total | 2,126,376 | - | 347 | 2,126,723 | ||||||
Financial assets at fair value through profit or loss at 30 June 2024 | ||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||
£'000 | £'000 | £'000 | £'000 | |||||||
Equity investments | 2,246,245 | - | 347 | 2,246,592 | ||||||
Total | 2,246,245 | - | 347 | 2,246,592 | ||||||
Financial liabilities The secured notes, preference stocks and preferred ordinary stock are carried in the Statement of Financial Position at par.
At 31 December 2024, the aggregate fair value of the preferred and preference stock was £2,635,000 (31 December 2023: £2,276,000; 30 June 2024: £2,469,000).
At 31 December 2024, the fair value of the secured notes was estimated to be £84,840,000 (31 December 2023: £91,658,000; 30 June 2024: £87,069,000).
The fair value of the secured notes is calculated using a discount rate which reflects the yield on a UK gilt of similar maturity plus a suitable credit spread.
The preference stocks and preferred ordinary stock are categorised as Level 1 in the fair value hierarchy. The secured notes are categorised as Level 3 in the fair value hierarchy.
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Fair value hierarchy categories Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:
Level 1: The unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e., developed using market data) for the asset or liability, either directly or indirectly; and
Level 3: Inputs are unobservable (i.e., for which market data is unavailable) for the asset or liability. | ||||||||||
The valuation techniques used by the Company are explained in the accounting policies in note 1 in the Company's Annual Report for the year ended 30 June 2024.
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4. | Share Capital | |||||||||
| During the half-year ended 31 December 2024, 28,278 ordinary shares were bought back into treasury for a net payment of £119,000 (half-year ended 31 December 2023: 5,310,000 new ordinary shares issued for total proceeds of £20,890,000; year ended 30 June 2024: 5,310,000 new ordinary shares issued for total proceeds of £20,890,000 and 8,301,867 ordinary shares bought back into treasury for a net payment of £34,400,000).
The number of ordinary shares in issue (excluding shares held in treasury) at 31 December 2024 was 494,334,723 (31 December 2023: 502,664,868; 30 June 2024: 494,363,001). There were 8,330,145 shares in treasury at 31 December 2024 (31 December 2023: nil and 30 June 2024: 8,301,867).
Since 31 December 2024 to 19 February 2025, a further 10,191,050 shares have been bought back for treasury.
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5. | Other Capital Reserves | |||||||||
| At 31 December 2024, the other capital reserves are made up of the capital reserve arising on investments sold which was £378,509,000 (31 December 2023: £362,881,000; 30 June 2024: £346,288,000) and is distributable and the capital reserve arising on revaluation of investments held which was £485,735,000 (31 December 2023: £417,337,000; 30 June 2024: £503,622,000) and which is not distributable.
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6. | Net Asset Value per Ordinary Share | |||||||||
| The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £2,101,439,000 (31 December 2023: £2,018,985,000; 30 June 2024: £2,097,528,000) and on 494,334,723 ordinary shares (excluding shares held in treasury) (31 December 2023: 502,664,868; 30 June 2024: 494,363,001) being the number of ordinary shares at the period end.
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7. | Transaction Costs | |||||||||
| Purchase transaction costs for the half-year ended 31 December 2024 were £508,000 (half-year ended 31 December 2023: £390,000; year ended 30 June 2024: £1,141,000). These comprise mainly stamp duty and commissions. Sale transaction costs for the half-year ended 31 December 2024 were £42,000 (half-year ended 31 December 2023: £23,000; year ended 30 June 2024: £71,000).
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8. | Dividends | |||||||||
| A first interim dividend of 5.25p per ordinary share was paid on 29 November 2024. The second interim dividend of 5.25p per ordinary share (declared on 5 December 2024) will be paid on 28 February 2025 to shareholders on the register on 24 January 2025. The Company's shares went ex-dividend on 23 January 2025.
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9. | Related Party Transactions | |||||||||
| Other than the relationship between the Company and its Directors, the provision of services by Janus Henderson is the only related party arrangement currently in place. Other than fees payable by the Company in the ordinary course of business and the provision of marketing services, there have been no material transactions with this related party affecting the financial position of the Company during the period under review.
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10. | Going Concern | |||||||||
| The assets of the Company consist of securities that are readily realisable. The Directors have also considered the current geo-political and macroeconomic uncertainties and the potential for sudden catastrophic events such as pandemics, conflict and climate events, including cash flow forecasting, a review of covenant compliance, including the headroom above the most restrictive covenants, and an assessment of the liquidity of the portfolio. They have concluded that the Company has adequate resources to meet its financial obligations, including the repayment of the bank overdraft, as they fall due for a period of at least twelve months from the date of approval of the financial statements. Having assessed these factors and the principal risks, the Board has determined that it is appropriate for the financial statements to be prepared on a going concern basis.
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11. | Comparative Information | |||||||||
| The financial information contained in this half-year report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The figures and financial information for the year ended 30 June 2024 are extracted 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 included the Report of the Independent Auditors, which was unqualified and did not include a statement under either Section 498(2) or 498(3) of the Companies Act 2006.
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12. | Half-Year Report An abbreviated version of the half-year report, the 'Update', will be posted to shareholders in early March 2025. The Update will also be available on the Company's website www.cityinvestmenttrust.com or in hard copy from the Company's registered office.
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13. | General Information Company Status | |||||||||
| The City of London Investment Trust plc is a UK domiciled investment trust company.
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| ISIN number / SEDOL: ordinary shares: GB0001990497 / 0199049
London Stock Exchange (TIDM) Code: CTY
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| Global Intermediary Identification Number (GIIN): S55HF7.99999.SL.826
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| Legal Entity Identifier (LEI): 213800F3NOTF47H6AO55
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| Company Registration Number | |||||||||
| 34871
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| Registered Office | |||||||||
| 201 Bishopsgate, London EC2M 3AE
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| Directors and Secretary | |||||||||
| The Directors of the Company are Sir Laurie Magnus CBE (Chairman), Sally Lake (Chair of the Audit and Risk Committee), Clare Wardle (Senior Independent Director), Robert Edward (Ted) Holmes and Ominder Dhillon.
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| The Corporate Secretary is Janus Henderson Secretarial Services UK Limited, represented by Sally Porter, ACG.
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| Website | |||||||||
| Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at www.cityinvestmenttrust.com.
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For further information please contact:
Job Curtis Fund Manager The City of London Investment Trust plc Telephone: 020 7818 4367
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Dan Howe Head of Investment Trusts Janus Henderson Investors Telephone: 020 7818 1818
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Harriet Hall PR Director, Investment Trusts Janus Henderson Investors Telephone: 020 7818 2919
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Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
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