TIDMIIT
RNS Number : 9441Z
Independent Investment Trust PLC
16 January 2020
RNS Announcement: Preliminary Results
-------------------------------------
The Independent Investment Trust PLC
------------------------------------
The following is the unaudited preliminary statement of annual
results for the year to 30 November 2019 which was approved by the
board on 15 January 2020.
Chairman's Statement
--------------------
Over the year to 30 November 2019, our Company produced a net
asset value (NAV) total return of 8.5%. Over the same period,
theoretical investments in the FTSE All-Share Index and the FTSE
World Index would have produced total returns of 11% and 13.1%
respectively. It is particularly disappointing that, after an
encouraging first half, we failed to match the return on either
index. Poor stock selection, notably since the EU referendum, is
largely to blame, with the Eddie Stobart debacle a particularly
painful example.
A further erosion of the rating of our shares saw the discount
move out from 1.2% at 30 November 2018 to 9.4% at 30 November 2019,
producing a share price total return of -0.5%. By 14 January 2020
the NAV had risen to 612p and the share price to 589p, reducing the
discount to 3.8%.
Economic activity over the last year has tended to disappoint
with the result that the nascent tightening of monetary policy
highlighted in our report a year ago has given way to renewed
stimulus. Markets, in the tradition of Pavlov's dog, have responded
well to this. The UK market underperformed the world market over
the period as many investors chose to stay out of the market owing
to the various uncertainties attending Brexit and the political
situation.
We made very few changes to the portfolio over the year: the
only significant adjustment to our sector weightings deriving from
transactions was in technology, where the sale of Kainos and a
reduction in Blue Prism led to a fall in our exposure. Elsewhere,
good share price performances boosted our exposure to housebuilding
and to travel and leisure, while poor share price performances
caused a substantial reduction in our business services exposure.
In keeping with our prediction in last year's report, our cash
balances were higher than usual and ended at 13.6% on 30 November
2019 as against 8.6% on 30 November 2018. Further comments on the
portfolio can be found in the Managing Director's Report below.
At risk of basking in the glow of past glories, we once again
draw attention to our longer term record: for the period from
inception in October 2000 to 30 November 2019, we produced an NAV
total return of 748%, equivalent to a rate of roughly 11.9% per
annum, of which 2.8% per annum can be offset by RPI inflation. By
comparison, the notional return available from the FTSE All-Share
Index over the period amounted to 169%, or 5.3% per annum
Earnings per share for the year were 13.48p (10.53p in 2018). As
foreshadowed in our interim report, we are recommending a final
dividend of 5p (5p in 2018), making a total regular dividend of 8p
(7p in 2018). In addition, we are proposing a special dividend of
5p (3p in 2018). Both will be paid on 6 April with an ex dividend
date of 20 February.
Our ongoing charges ratio rose from 0.21% to 0.24%. The only
reason for this is that the average daily value of our assets in
the year under review was materially lower than in the previous
year; our costs actually fell marginally. The ratio remains one of
the lowest - if not the lowest - in the industry.
During the year we were able to buy in rather over 650,000
shares at an average discount of 5.9%. We remain keen to buy back
shares when this can be done on terms that benefit both leaving and
continuing shareholders. Such terms are very much a function of
market conditions prevailing at the time.
One of our major concerns throughout the financial year was the
risk of adverse political developments. The prospect of continuing
stalemate or, worse still, the election of a left wing Labour
government tended to overshadow our enthusiasm for the companies in
which we are invested. The election of a Conservative government
with a substantial majority shortly after our year end has
dispelled this concern. There are, of course, plenty of other
things to worry about - not least the terms on which we exit the EU
- but we believe that the removal of a major worry justifies a less
cautious stance. Since 30 November, we have reduced our cash
balances to GBP33m (9.8% of our assets at 14 January), largely
through investment in domestic UK equities.
Once again, we should like to encourage you to come to the AGM,
which is to be held in the Baillie Gifford offices at Calton Square
at 4.30pm on 26 March 2020. It will help our planning if we know
how many shareholders are likely to attend, and I shall be grateful
if you will mark the proxy form accordingly and return it to the
Company's registrars. I look forward to seeing as many of you as
possible there.
Douglas McDougall
15 January 2020
Past performance is not a guide to future performance.
For a definition of terms see Glossary of Terms and Alternative
Performance Measures (APM).
Total return information is sourced from Baillie Gifford
/Refinitiv and relevant underlying index providers. See disclaimer
at the end of this announcement.
Managing Director's Report
--------------------------
Our performance over the year has been covered in the Chairman's
Statement.
A poor second half performance from our once large holding in
Blue Prism restrained the overall performance of our technology and
telecommunications stake: worth GBP72.7m at 30 November 2018, it
had fallen in value to GBP64.9m at 30 November 2019 after net sales
of GBP12.5m. Blue Prism's share price was hurt by poor interim
results but staged a partial recovery when a year end trading
statement provided reassurance that the company continues to grow
strongly. It still appears to have great potential, but we have
learnt that perceptions of the strength of its market position can
change significantly over short periods of time. Other
disappointments included Zoo Digital, whose legacy subtitling
business came under pressure, and Alfa Financial Software, which
continues to experience weak conditions in its markets. We sold out
of Kainos at a good price and participated in the Seeing Machines
equity issue, since which the share price has staged a worthwhile
recovery. Holdings in Herald, Gamma and FDM all performed well in
response to generally pleasing results.
Growing investor enthusiasm for our three computer games
companies, Team 17, Codemasters and Frontier Developments, was the
main factor behind the strong performance of our large stake in the
travel and leisure sector: worth GBP50.3m at 30 November 2018, it
had grown in value to GBP60.6m at 30 November 2019 after net sales
of GBP0.5m. The advent of cloud computing has transformed the
economics of the computer games industry and our holdings all
appear to be benefiting in much the way we had hoped. Elsewhere in
the sector, mildly disappointing share price performances from The
Gym Group (on the back of competition concerns) and our new holding
Loungers (largely attributable to a subdued consumer spending
environment) were outweighed by good recoveries in the prices of On
the Beach and Hollywood Bowl. We took advantage in each case to
reduce the holdings - Hollywood Bowl on grounds of valuation and On
the Beach in anticipation of more difficult trading conditions.
The year under review was a happier one for our housebuilders.
Although there were signs of continued weakness at the high end of
the housing market, demand for reasonably priced houses, the
principal market for most quoted builders, remained strong. Margins
have come back from abnormally high levels, but profitability has
remained at attractive levels and the land market, a vital
component of future profits, has remained benign. Despite the
recovery in share prices, these stocks are still pricing in a
subdued trading outlook. Following the Conservative election
victory, we think there is a good chance that trading conditions
will improve rather than deteriorate. Meanwhile our confidence in
the long term outlook remains as high as ever. Our only activity
during the year comprised a small purchase of Redrow (GBP1.0m),
made to counteract the effect of the company's share consolidation,
and a brief investment in Galliford Try which yielded a profit of
GBP0.2m. The valuation of our position in the sector rose from
GBP41.3m at 30 November 2018 to GBP53.6m at 30 November 2019. We
have made significant additions to our stake since the General
Election.
Our business services stake performed terribly during the year.
A disastrous investment in the conference call company, LoopUp, was
sold at a big loss and we wrote down our holding in Eddie Stobart
to a nominal valuation to reflect the company's untenable financial
position; the shares remain suspended pending the long overdue
publication of the company's interim figures. On a happier note
Midwich, the distributor of audiovisual equipment, continued to
trade satisfactorily and saw this reflected in its share price; we
reduced the holding to take account of the illiquidity in the
market for its shares. Overall, our business service holdings fell
in value from GBP29.1m at 30 November 2018 to GBP14.8m at 30
November 2019 after sales of GBP4.4m.
Our retail holdings also had a difficult year. We sold our
holding in the clothing retailer, Quiz, at a big loss and the share
price of The Works fell sharply as trading deteriorated.
Fortunately, our big holding in the second hand car retailer,
Motorpoint, performed well as the company continued to trade
resiliently in a tough second hand car market; as with Midwich, we
reduced the holding on grounds of illiquidity. Overall, a retail
stake worth GBP16.8m at 30 November 2018 had fallen in value to
GBP14.0m by 30 November 2019 after sales of GBP2.0m.
Elsewhere in the portfolio, the Ashtead share price staged a
strong recovery as the company continued to trade well, but the
Fever-Tree share price fell as the company delivered disappointing
sales in the important UK market; sales elsewhere were ahead of
expectations. The Medica share price was unchanged in reaction to
results that met reduced expectations, while Polar Capital
continued to make satisfactory progress and NAHL staged a muted
recovery as signs emerged that trading was bottoming out. Our
energy holdings performed very poorly in reaction to disappointing
results caused principally by difficult operating conditions in the
Permian Basin. A short lived investment in NewRiver REIT was sold
at a significant loss and, finally, our new holding in the
biotechnology company Oxford Biomedica made a promising debut.
Max Ward
15 January 2020
Past performance is not a guide to future performance.
List of Investments as at 30 November 2019 (unaudited)
2018 Gains/ 2019
Value Net transactions (losses) Value
Sector Name GBP'000 GBP'000 GBP'000 GBP'000 %
---------------------- ------------------------- --------- ----------------- ---------- --------- ------
Housing Bellway 5,082 - 1,596 6,678 2.1
Crest Nicholson 13,688 - 1,688 15,376 4.9
Galliford Try - (214) 214 - -
Persimmon 3,800 - 1,316 5,116 1.6
Redrow 18,728 1,044 6,668 26,440 8.5
41,298 830 11,482 53,610 17.1
--------- ----------------- ---------- --------- ------
Industrials Ashtead Group 17,590 - 5,900 23,490 7.5
Retailing Joules Group 3,510 - (60) 3,450 1.1
Motorpoint 9,450 (1,496) 2,030 9,984 3.2
Quiz 1,461 (496) (965) - -
TheWorks.co.uk 2,345 - (1,826) 519 0.2
--------- ----------------- ---------- --------- ------
16,766 (1,992) (821) 13,953 4.5
--------- ----------------- ---------- --------- ------
Consumer Services NAHL Group 2,575 - 425 3,000 1.0
Codemasters Group
Travel and Leisure Holdings 5,950 1,012 2,156 9,118 2.9
Frontier Developments 5,590 - 2,327 7,917 2.6
Hollywood Bowl Group 7,800 (2,342) 1,682 7,140 2.3
Loungers - 3,245 (125) 3,120 1.0
On the Beach Group 19,228 (2,367) 1,011 17,872 5.7
Team 17 Group 6,150 - 3,900 10,050 3.2
The Gym Group 5,580 - (200) 5,380 1.7
--------- ----------------- ---------- --------- ------
50,298 (452) 10,751 60,597 19.4
--------- ----------------- ---------- --------- ------
Business Services Eddie Stobart Logistics* 7,910 - (7,840) 70 -
Loop Up 5,003 (1,808) (3,195) - -
Midwich 16,200 (2,631) 1,181 14,750 4.7
29,113 (4,439) (9,854) 14,820 4.7
--------- ----------------- ---------- --------- ------
Technology and
Telecommunications Alfa Financial Software 3,300 - (665) 2,635 0.8
Blue Prism 23,596 (9,235) (1,942) 12,419 4.0
FDM Group 12,735 - 1,830 14,565 4.7
Gamma Communications 4,020 - 2,230 6,250 2.0
Herald Investment Trust 17,325 - 3,735 21,060 6.7
Kainos Group 4,240 (4,395) 155 - -
Seeing Machines 4,800 1,082 461 6,343 2.0
Zoo Digital Group 2,660 - (1,040) 1,620 0.5
72,676 (12,548) 4,764 64,892 20.7
--------- ----------------- ---------- --------- ------
Beverages Fever-Tree Drinks 23,920 (6,109) (307) 17,504 5.6
--------- ----------------- ---------- --------- ------
Property NewRiver REIT - 2,317 (2,317) - -
Healthcare Medica Group 5,640 - - 5,640 1.8
Oxford Biomedica - 3,171 357 3,528 1.1
--------- ----------------- ---------- --------- ------
5,640 3,171 357 9,168 2.9
--------- ----------------- ---------- --------- ------
Polar Capital Global
Insurance Fund -
Financials Ireland 5,051 - 715 5,766 1.9
--------- ----------------- ---------- --------- ------
Energy/Oilfield
Services Concho Resources - USA 5,107 - (2,300) 2,807 0.9
RPC - USA 2,050 - (1,455) 595 0.2
7,157 - (3,755) 3,402 1.1
Total Investments 272,084 (19,222) 17,340 270,202 86.4
Net Liquid Assets 25,489 17,178 - 42,667 13.6
------------------------------------------------- --------- ----------------- ---------- --------- ------
Shareholders'
Funds 297,573 (2,044) 17,340 312,869 100.0
------------------------------------------------- --------- ----------------- ---------- --------- ------
All holdings are in equities domiciled in the UK unless
otherwise stated.
* The shares were suspended from trading on 23 August 2019
Income statement
----------------
For the year ended For the year ended
30 November 2019 (unaudited) 30 November 2018 (audited)
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Gains/(losses) on investments - 17,338 17,338 - (41,752) (41,752)
Currency losses - (4) (4) - (2) (2)
Income (note 2) 8,178 - 8,178 6,601 - 6,601
Administrative expenses (740) - (740) (751) - (751)
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Net return on ordinary activities before taxation 7,438 17,334 24,772 5,850 (41,754) (35,904)
Tax on ordinary activities (7) - (7) (11) - (11)
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Net return on ordinary activities after taxation 7,431 17,334 24,765 5,839 (41,754) (35,915)
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Net return per ordinary share (note 3) 13.48p 31.45p 44.93p 10.53p (75.27p) (64.74p)
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Note:
Dividends per share paid and payable in respect
of the year (note 4) 13.00p 10.00p
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
The total column of this statement is the profit and loss
account of the Company. The supplementary revenue and capital
columns are prepared under guidance published by the Association of
Investment Companies.
All revenue and capital items in this statement derive from
continuing operations.
A Statement of Comprehensive Income is not required as the
Company does not have any other comprehensive income and the net
return on ordinary activities after taxation is both the profit and
comprehensive income for the year.
Balance sheet
-------------
At 30 November 2019 (unaudited) At 30 November 2018 (audited)
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------- ---------------- --------------- --------------- --------------
Fixed assets
Investments held at fair value through profit or
loss 270,202 272,084
Current assets
Debtors 266 266
Cash and cash equivalents 43,446 25,794
-------------------------------------------------- ---------------- --------------- --------------- --------------
43,712 26,060
-------------------------------------------------- ---------------- --------------- --------------- --------------
Creditors
Amounts falling due within one year (1,045) (571)
-------------------------------------------------- ---------------- --------------- --------------- --------------
Net current assets 42,667 25,489
-------------------------------------------------- ---------------- --------------- --------------- --------------
Total net assets 312,869 297,573
-------------------------------------------------- ---------------- --------------- --------------- --------------
Capital and reserves
Share capital 13,679 13,842
Share premium account 15,242 15,242
Special distributable reserve 12,465 15,861
Capital redemption reserve 2,853 2,690
Capital reserve 258,771 241,437
Revenue reserve 9,859 8,501
-------------------------------------------------- ---------------- --------------- --------------- --------------
Shareholders' funds 312,869 297,573
-------------------------------------------------- ---------------- --------------- --------------- --------------
Net asset value per ordinary share (note 5) 571.8p 537.4p
-------------------------------------------------- ---------------- --------------- --------------- --------------
Statement of changes in equity
------------------------------
For the year ended 30 November 2019 (unaudited)
Special Capital
Share premium distributable redemption Capital Revenue Shareholders'
Share capital account reserve reserve reserve* reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 1
December 2018 13,842 15,242 15,861 2,690 241,437 8,501 297,573
Net return on
ordinary
activities
after
taxation - - - - 17,334 7,431 24,765
Shares bought
back for
cancellation
(note 5) (163) - (3,396) 163 - - (3,396)
Dividends paid
during the
year
(note 4) - - - - - (6,073) (6,073)
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 30
November 2019 13,679 15,242 12,465 2,853 258,771 9,859 312,869
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
For the year ended 30 November 2018 (audited)
Special Capital
Share premium distributable redemption Capital Revenue Shareholders'
Share capital account reserve reserve reserve* reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------------- ------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 1
December 2017 13,867 15,242 16,387 2,665 283,191 7,099 338,451
Net return on
ordinary
activities
after
taxation - - - - (41,754) 5,839 (35,915)
Shares bought
back for
cancellation
(note 5) (25) - (526) 25 - - (526)
Dividends paid
during the
year
(note 4) - - - - - (4,437) (4,437)
-------------- -------------- ------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 30
November 2018 13,842 15,242 15,861 2,690 241,437 8,501 297,573
-------------- -------------- ------------- ------------- ------------- --------- -------------- --------------
* The Capital Reserve balance at 30 November 2019 included an
investment holding gain on fixed asset investments of GBP96,327,000
(2018 - gain of GBP88,310,000).
Notes to Financial Statements (unaudited)
------------------------------------------
1. The unaudited financial statements for the year to 30 November 2019 have been prepared in
accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic
of Ireland' on the basis of the accounting policies set out in the Annual Report and Financial
Statements are unchanged from the prior year and have been applied consistently. All of the
Company's operations are of a continuing nature and the financial statements are expected
to be prepared on a going concern basis. The Company has elected not to present a Statement
of Cash Flows for the current year as a Statement of Changes in Equity has been provided and
substantially all of the Company's investments are highly liquid and are carried at market
value.
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2. Income Year to Year to
30 November 2019 30 November 2018
GBP'000 GBP'000
------------------------------------------ ----------------- ----------------- -------------------
Income from investments and interest
receivable 8,159 6,582
Other income 19 19
---------------------------------------------- ----------------- ----------------- -------------------
8,178 6,601
---------------------------------------------- ----------------- ----------------- -------------------
3. Net return per ordinary Year to Year to
share 30 November 2019 30 November 2018
Revenue Capital Total Revenue Capital Total
----------------------- ----------------- ----------------- ------- -------- -------- ---------
Net return on ordinary
activities after taxation
(GBP'000) 7,431 17,334 24,765 5,839 (41,754) (35,915)
Weighted average number of
ordinary shares in issue
during the year 55,114,893 55,469,725
Net return per ordinary
share 13.48p 31.45p 44.93p 10.53p (75.27p) (64.74p)
--------------------------- ----------------- ----------------- ------- -------- -------- ---------
Returns per ordinary share are based on the return for the financial year and on the weighted
average number of ordinary shares in issue during the year as shown above. There are no dilutive
or potentially dilutive shares in issue.
-----------------------------------------------------------------------------------------------------
4. Ordinary dividends Year to Year to
30 November 2019 30 November 2018
Pence GBP'000 Pence GBP'000
------------------------------------------ ----------------- ----------------- -------- ---------
Amounts recognized as distributions in the
year
Previous year's final dividend paid 8 April
2019 5.00 2,766 4.00 2,219
Previous year's special dividend paid 8 April
2019 3.00 1,660 2.00 1,109
Interim dividend paid 23 August 2019 3.00 1,647 2.00 1,109
---------------------------------------------- ----------------- ----------------- -------- ---------
11.00 6,073 8.00 4,437
---------------------------------------------- ----------------- ----------------- -------- ---------
Set out below are the total dividends paid and proposed in respect of the financial year,
which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010
are considered. The revenue available for distribution by way of dividend for the year is
GBP7,431,000 (2018 - GBP5,839,000).
Ordinary dividends Year to Year to
30 November 2019 30 November 2018
Pence GBP'000 Pence GBP'000
------------------------------------------ ----------------- ----------------- -------- ---------
Amounts paid and payable in respect of the
year
Interim dividend paid 23 August 2019 3.00 1,647 2.00 1,109
Final dividend payable 6 April 2020 5.00 2,736 5.00 2,766
Special dividend payable 6 April 2020 5.00 2,736 3.00 1,660
---------------------------------------------- ----------------- ----------------- -------- ---------
13.00 7,119 10.00 5,535
---------------------------------------------- ----------------- ----------------- -------- ---------
If approved, the recommended final and special dividends will be paid on 6 April 2020 to all
shareholders on the register at the close of business on 21 February 2020. The ex-dividend
date is 20 February 2020.
---------------------------------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (Ctd)
------------------------------------------------------------------
5. Net asset value per ordinary At 30 November 2019 At 30 November 2019 At 30 November 2018 At 30 November 2018
share Pence GBP'000 Pence GBP'000
----------------------------- ------------------- ------------------- ------------------- -------------------
Net asset value attributable to
ordinary shares 571.8 312,869 537.4 297,573
The net asset value per share is based on net assets as shown above and on 54,717,378 shares
(2018 - 55,370,000), being the number of shares in issue at the year end. There are no dilutive
or potentially dilutive shares in issue.
During the year the Company bought back and cancelled 652,622 (2018 - 100,000) ordinary shares
with a nominal value of GBP163,000 (2018 - GBP25,000) at a cost of GBP3,396,000 (2018 - GBP526,000).
No shares were allotted during the year. At 30 November 2019 the Company had authority remaining
to buy back a further 7,639,846 ordinary shares and to allot new shares up to an aggregate
nominal value amount of GBP4,774,939.
---------------------------------------------------------------------------------------------------------------------
6. Transaction costs incurred on the purchase and sale of the investments are added to the purchase
cost or deducted from the sale proceeds, as appropriate. During the year, transaction costs
on purchases amounted to GBP120,000 (2018 - GBP95,000) and transaction costs on sales amounted
to GBP96,000 (2018 - GBP131,000).
7. The financial information set out above does not constitute the Company's statutory accounts
for the year ended 30 November 2019. The financial information for 2018 is derived from the
financial statements for 2018 which have been delivered to the Registrar of Companies. The
auditors have reported on the 2018 accounts; their report was unqualified, did not include
a reference to any matters to which the auditors drew attention by way of emphasis without
qualifying the report and did not contain a statement under sections 498 (2) or 498(3) of
the Companies Act 2006. The statutory accounts for 2019 will be finalised on the basis of
the financial information presented in this preliminary announcement and will be delivered
to the Registrar of Companies following the Company's Annual General Meeting. The Auditors
have advised the Company that they do not expect their report on the 2019 statutory accounts
to include any modification or emphasis of matter statements.
8. The Report and Accounts will be available on the Company's website www.independentinvestmenttrust.co.uk
on or around 21 February 2020.
-----------------------------------------------------------------------------------------------------------------
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.
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
Glossary of Terms and Alternative Performance Measures (APM)
Total Assets
The total value of all assets held less all liabilities (other
than liabilities in the form of borrowings).
Net Asset Value
Net Asset Value (NAV) is the value of all assets held less all
liabilities (including liabilities in the form of borrowings). The
NAV per share is calculated by dividing this amount by the number
of ordinary shares in issue.
Discount/Premium (APM)
As stockmarkets and share prices vary, an investment trust's
share price is rarely the same as its NAV. When the share price is
lower than the NAV per share it is said to be trading at a
discount. The size of the discount is calculated by subtracting the
share price from the NAV per share and is usually expressed as a
percentage of the NAV per share. If the share price is higher than
the NAV per share, this situation is called a premium.
Net Liquid Assets
Net liquid assets comprise current assets less current
liabilities (excluding borrowings).
Total Return (APM)
The total return is the return to shareholders after reinvesting
the net dividend on the date that the share price goes
ex-dividend.
Net Asset Value
2019 2018
--------------------------------------------------------------------------- ---- ------- -------
Opening NAV per share at 1 December 2018 (2017) (a) 537.43p 610.20p
Closing NAV per share at 30 November (b) 571.79p 537.43p
Total dividend adjustment factor* (c) 1.02019 1.01278
Adjusted closing NAV per share (d = b x c) (d) 583.33p 544.30p
Total return on net asset value (d - a) ÷ a expressed as a percentage 8.5% (10.8%)
--------------------------------------------------------------------------------- ------- -------
* The dividend adjustment factor is calculated on the assumption
that the final dividends paid out by the Company are reinvested
into shares of the Company at the cum income NAV at the ex-dividend
date.
Share Price
2019 2018
--------------------------------------------------------------------------- ---- ------- -------
Opening share price at 1 December 2018 (2017) (a) 531.00p 654.00p
Closing share price at 30 November (b) 518.00p 531.00p
Total dividend adjustment factor* (c) 1.02046 1.01151
Adjusted closing share price (d = b x c) (d) 528.60p 537.11p
Total return on net share price (d - a) ÷ a expressed as a percentage (0.5%) (17.9%)
--------------------------------------------------------------------------------- ------- -------
* The dividend adjustment factor is calculated on the assumption
that the dividends paid out by the Company are reinvested into
shares of the Company at the last traded price quoted at the
ex-dividend date.
Glossary of Terms and Alternative Performance Measures (APM)
(Ctd)
Ongoing Charges (APM)
The total administrative expenses incurred by the Company as a
percentage of the average shareholders' funds, calculated on a
daily basis.
2019 2018
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Total administrative expenses (a) 740 751
Average net asset value (b) 303,015 350,330
Ongoing charges (a) ÷ (b) expressed as a percentage 0.24% 0.21%
--------------------------------------------------------- -------- --------
Available cash
Cash and cash equivalents as adjusted for investment and share
buy-back transactions awaiting settlement.
Gearing
At its simplest, gearing is borrowing. Just like any other
public company, an investment trust can borrow money to invest in
additional investments for its portfolio. The effect of the
borrowing on the shareholders' assets is called 'gearing'. If the
Company's assets grow, the shareholders' assets grow
proportionately more because the debt remains the same. But if the
value of the Company's assets falls, the situation is reversed.
Gearing can therefore enhance performance in rising markets but can
adversely impact performance in falling markets. The level of
gearing can be adjusted through the use of derivatives which affect
the sensitivity of the value of the portfolio to changes in the
level of markets.
Net gearing/(cash) is borrowings less available cash (as defined
above) and fixed interest securities (ex convertibles) divided by
shareholders' funds.
Compound Annual Return
The compound annual return converts the return over a period of
longer than one year to a constant annual rate of return applied to
the compounded value at the start of each year.
Third Party Data Provider Disclaimer
No third party data provider ('Provider') makes any warranty,
express or implied, as to the accuracy, completeness or timeliness
of the data contained herewith nor as to the results to be obtained
by recipients of the data. No Provider shall in any way be liable
to any recipient of the data for any inaccuracies, errors or
omissions in the index data included in this document, regardless
of cause, or for any damages (whether direct or indirect) resulting
therefrom. No Provider has any obligation to update, modify or
amend the data or to otherwise notify a recipient thereof in the
event that any matter stated herein changes or subsequently becomes
inaccurate. Without limiting the foregoing, no Provider shall have
any liability whatsoever to you, whether in contract (including
under an indemnity), in tort (including negligence), under a
warranty, under statute or otherwise, in respect of any loss or
damage suffered by you as a result of or in connection with any
opinions, recommendations, forecasts, judgements, or any other
conclusions, or any course of action determined, by you or any
third party, whether or not based on the content, information or
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FR KKPBKOBKDQDD
(END) Dow Jones Newswires
January 16, 2020 02:00 ET (07:00 GMT)
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