7 Aug 2009 16:16
Investors Capital Trust plc
Interim Management Statement
For the three month period from 1 April 2009 to 30 June 2009
Investment objective
To provide an attractive return to shareholders each year in the form of dividends and/or capital distributions, together with prospects for capital growth.
The Company's portfolio is managed in two parts. The first part comprises investments in UK equities and equity-related securities of large and mid-sized companies (the Equities Portfolio) and the second part comprises investments in fixed interest and other higher yielding stocks and securities (the Higher Yield Portfolio).
Performance summary
| Capital return | As at 30 June 2009 | As at 31 March 2009 | Movement |
| Total assets | £119.2 million | £113.0 million | 5.5% |
| Net asset value: A share and B share Unit* | 66.0p 263.8p | 60.5p 241.8p | 9.1% 9.1% |
| Share price: A share B share Unit | 66.0p 66.5p 267.0p | 59.5p 59.5p 237.0p | 10.9% 11.8% 12.7% |
| Premium/(discount): A share B share Unit | 0.0% 0.8% 1.2% | (1.6)% (1.6)% (2.0)% | |
| Gearing**: Maximum potential ratio Actual ratio (Investment gearing) Actual ratio (Equity gearing) | 143.4 123.5 81.4 | 148.5 115.2 74.5 | |
| Total return | For the three month period ended 30 June 2009 | For the year ended 31 March 2009 | |
| Net asset value: A and B share and Unit | 11.4% | (27.6)% | |
| FTSE All-Share Capped 5% Index | 11.6% | (29.7)% | |
Sources: F&C Investment Business Limited and Datastream.
* A unit consists of three A shares and one B share
**The gearing ratio indicates the extra amount by which shareholders' funds would rise or fall if total assets were to rise or fall. A figure of 100 means that the Company has a nil geared position.
Maximum potential ratio = the ratio of total assets (including fixed interest and net cash assets) to assets attributable to shareholders.
If securities held in the Company's Higher Yield Portfolio are included as fixed interest assets then the actual ratio will be as shown below.
Actual ratio (investment gearing) = the ratio of total assets (less cash assets) to assets attributable to shareholders.
Actual ratio (equity gearing) = the ratio of total assets (less fixed interest and cash assets) to assets attributable to shareholders.
Review
The UK equity market returned 11.6 per cent during the quarter, as measured by the FTSE All-Share Capped 5% Index on a total return basis, extending the recovery from the recent low reached in early March
The depth and duration of the UK recession remains unclear although we note the stock market has reacted positively to the release of economic statistics that indicate the rate of decline in the economy is moderating. The aggressive de-stocking which occurred in the fourth quarter of 2008 provided the conditions for an element of inventory rebuild leading to a modest improvement in economic activity. The inventory investment is more a function of re-ordering from a very low level as opposed to greater confidence in the outlook for consumer demand. The de-leveraging process that is required at both an individual and corporate level is still far from complete which creates a headwind for the medium term outlook for consumer demand. The policy response via interest rate reductions, fiscal stimulus and support to the financial system will cushion the impact of the de-leveraging process but we believe it will still require some time to fully unwind.
Notwithstanding our relatively cautious assessment of the economic outlook we continue to look to invest the Company's cash balance to take advantage of supportive equity valuations. We have invested a proportion of the cash balance into the equity portfolio so that cash now represents 13.8 per cent of total assets at the end of June, down from 22.4 per cent at the end of March. We recognise the pressure placed on businesses by the economic environment but are encouraged by the valuation of many strong businesses that can continue to invest to create long term shareholder value.
Dividends and Capital Distributions
A fourth quarter dividend in respect of the year ended 31 March 2009, of 1.375 pence per share, was paid on the A shares of the Company on 8 May 2009 to A shareholders on the register on 3 April 2009.
A fourth quarter capital return of 1.375 pence per share was paid on the B shares of the Company on 8 May 2009 to B shareholders on the register on 8 May 2009. Capital distributions on B shares are paid at the same time as, and in an amount equal to, each dividend paid on an A share.
The Company has announced a first quarter dividend in respect of the year ending 31 March 2010 of 1.325 pence per A share and a first quarter capital distribution of 1.325 pence per B share, both payable on 7 August 2009.
Share Buy Backs
During the quarter, the Company bought back 240,000 A Shares to be held in treasury for a total consideration of £145,000 and 80,000 B Shares for treasury for a total consideration of £48,000. The Company re-sold 500,000 B Shares from treasury, receiving net proceeds of £332,000.
At 30 June 2009 the Company held 6,489,000 A Shares and 1,630,000 B Shares in treasury.
Since the end of the quarter, the Company has re-sold a further 800,000 B Shares from treasury, receiving net proceeds of £526,000.
Top ten Equities Portfolio holdings and top ten Higher Yield Portfolio holdings
Equities Portfolio
| Company | Percentage of total assets as at 30 June 2009 | ||
| Vodafone | 3.6% | ||
| GlaxoSmithKline | 3.5% | ||
| BP | 3.3% | ||
| HSBC | 3.3% | ||
| British American Tobacco | 3.1% | ||
| Royal Dutch Shell | 2.8% | ||
| AstraZeneca | 2.6% | ||
| Scottish & Southern Energy | 1.9% | ||
| National Grid | 1.9% | ||
| BG Group | 1.7% | ||
| Total | 27.7% | ||
Higher Yield Portfolio
| Security | Percentage of total assets as at 30 June 2009 | ||
| Credit Suisse 8.25% 10/07/09 Perpetual | 0.6% | ||
| Irish Nationwide Building Society FRN 16/11/09 | 0.6% | ||
| Iron Mountain 7.25% 15/04/14 | 0.6% | ||
| Canandaigua Brand 8.5% 15/11/09 | 0.6% | ||
| Land Securities 4.625% 03/02/13 | 0.5% | ||
| RWE Finance 6.375% 03/06/13 | 0.5% | ||
| Segro 7.125% 17/02/10 | 0.5% | ||
| Virgin Media 8.75% 15/04/14 | 0.5% | ||
| Johnsondiversey 9.625% 15/05/12 | 0.4% | ||
| Sutton Bridge 8.625% 30/06/22 | 0.4% | ||
| Total | 5.2% | ||
Portfolio Summary
| Market Value at 30 June 2009 £'000 | % of Total Assets at 30 June 2009 | % of Total Assets at 31 March 2009 | ||
| Equities Portfolio | 67,660 | 56.8 | 50.2 | |
| Higher Yield Portfolio | 35,017 | 29.4 | 27.4 | |
| Net Current Assets | 16,495 | 13.8 | 22.4 | |
| Total Assets (less Current Liabilities) | 119,172 | 100.0 | 100.0 | |
| Bank Term Loan & Interest Rate Swap | (36,044) | (30.2) | (32.7) | |
| Net Assets Attributable to Shareholders | 83,128 | 69.8 | 67.3 | |
The Board is not aware of any significant events or transactions which have occurred since 30 June 2009 and the date of publication of this statement which would have a material impact on the financial position of the Company.
Daily and key information
Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.investorscapital.co.uk, or at www.fandc.com.
Year end: 31 MarchDividends and Capital Distributions paid: August, November, February and May Shares in issue with voting rights at quarter end: 95,578,144 A shares and 30,446,703 B shares.
This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.
For further information please contact:
Rodger McNair, Investment Manager Tel: 0131 718 1000
Michael Campbell, Company Secretary Tel: 0131 718 1000