TIDMCTY
RNS Number : 8313Z
City of London Investment Trust PLC
19 September 2022
Legal Entity Identifier: 213800F3NOTF47H6AO55
THE CITY OF LONDON INVESTMENT TRUST PLC
Annual financial results for the year ended 30 June 2022
This announcement contains regulated information
CHAIRMAN'S COMMENT
" City of London's NAV total return of 7.5% was 5.9 percentage
points ahead of the FTSE All-Share Index. The dividend was
increased for the 56(th) consecutive year and covered by earnings
per share, leaving GBP6.0 million to be added to our revenue
account. "
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 AT 30 JUNE
2022 2021
--------------------------------------------- ------- -------
Total Return Performance:
Net asset value ("NAV") per ordinary share
(1) 7.5% 20.0%
Share price(2) 7.7% 21.3%
FTSE All-Share Index (Benchmark) 1.6% 21.5%
AIC UK Equity Income sector(3) -1.5% 26.4%
IA UK Equity Income OEIC sector -0.5% 25.4%
2022 2021
--------------------------------------------- ------- -------
NAV per ordinary share 390.9p 387.6p
NAV per ordinary share (debt at fair value) 393.5p 384.1p
Share price 400.5p 390.0p
Premium 2.5% 0.6%
Premium (debt at fair value) 1.8% 1.5%
Gearing at year end 7.1% 6.9%
Revenue earnings per share 20.7p 17.1p
Dividends per share 19.6p 19.1p
Ongoing charge for the year(4) 0.37% 0.38%
Revenue reserve per share 9.5p 8.4p
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 Calculated using the methodology prescribed by the Association
of Investment Companies ("AIC")
Sources: Morningstar Direct, Janus Henderson, Refinitiv
Datastream
CHAIRMAN'S STATEMENT
I am pleased to report a net asset value ("NAV") total return of
7.5%, which compares with a total return of 1.6% for the FTSE
All-Share Index. The dividend was increased for the 56(th)
consecutive year and covered by earnings per share, leaving GBP6.0
million to be added to our revenue reserve.
The Markets
The key economic concern over the 12 months was the significant
rise in inflation, partly caused by higher oil and gas prices
triggered in response to the war in Ukraine. UK CPI inflation
reached 9.4% in June, the highest level for 30 years. The Bank of
England increased the base rate, in four moves, from 0.1% to
1.25%.
The FTSE 100 Index (comprising the largest UK listed companies)
produced a total return of 5.8% during the year. The best
performing sector was oil and gas, benefiting from the rise in
energy prices. Banks also performed well, with rising interest
rates providing a helpful tailwind for their net interest margins.
Pharmaceutical companies, which are typically defensive in a
downturn, outperformed. In contrast, the indices for UK
medium-sized and small companies, which have much less exposure to
banks, oil and pharmaceutical companies, underperformed. The FTSE
250 Mid Cap Index produced a negative total return of 14.6% and the
FTSE SmallCap Index a negative total return of 12.6%.
Performance
Earnings and Dividends
City of London's revenue earnings per share increased by 21.2%
to 20.72p, reflecting dividend growth from across the portfolio,
with particular highlights from our stakes in the mining companies,
Rio Tinto, Anglo American and BHP. Special dividends accounted as
income increased by GBP3.9 million to GBP6.3 million. A further
GBP5.4 million of special dividends were deemed to be capital by
nature (largely resulting from business disposals) and were
therefore accounted as capital rather than revenue.
City of London increased its dividend for the 56th consecutive
year by 2.6% to 19.6p. Although the increase was lower than
inflation over the 12 months, City of London has increased its
dividend by 41.2% over the last 10 years compared with a cumulative
increase in UK CPI inflation of 26.5%. The Board understands the
importance of growing the dividend in real terms through the
economic cycle.
Expenses remained under tight control, with our ongoing charge
of 0.37% very competitive compared with other actively managed
funds. Our revenue reserve increased by GBP6.0 million to GBP43.6
million. In addition, the capital reserve arising from capital
gains on investments sold, which could also help fund dividend
payments, rose by GBP30.0 million to GBP326.6 million.
NAV Total Return
City of London's NAV total return of 7.5% was 5.9 percentage
points ahead of the FTSE All-Share Index. Gearing contributed 1.5
percentage points to the outperformance due to the decline in fair
value of our secured debt. The GBP30 million 2.67% maturing 2046
and the GBP50 million 2.94% maturing 2049 secured notes, which the
Company has issued over the last five years, will provide low-cost
debt financing over the next quarter of a century for investment in
equities.
Stock selection contributed 4.7 percentage points, helped by the
portfolio's tilt towards large companies and dividend yield and
away from highly valued, growth stocks and medium-sized and small
companies. The biggest stock contributor was BAE Systems, the
defence equipment manufacturer, followed by Imperial Brands, the
tobacco company. Brewin Dolphin, the private client wealth
management group, which received a takeover bid from Royal Bank of
Canada, was the sixth biggest stock contributor. The underweight
position in Shell was the biggest stock detractor, somewhat offset
by the holding in TotalEnergies, the French international oil
company, which was the eighth biggest stock contributor. The second
biggest stock detractor was being underweight in AstraZeneca,
although partly balanced by the holding in US pharmaceutical
company, Merck, which was the ninth biggest contributor.
City of London's NAV total return was ahead of the FTSE
All-Share Index over 1, 3, 5 and 10 years. City of London was also
ahead of the averages of the AIC UK Equity Income Investment Trust
and IA UK Equity Income OEIC sectors over 1, 3, 5 and 10 years.
Share Issues
During the year City of London's ordinary shares have again been
in strong demand and continued to trade at a premium. 14 million
ordinary shares were issued at a premium to NAV for proceeds of
GBP57.1 million. Issuing shares at a premium enhances NAV and
spreads costs across a larger asset base. Over the past ten years,
City of London has issued 220.8 million shares, at a premium to
NAV, increasing our share capital by 192.4%.
Environmental, Social and Governance
The Fund Manager takes environmental, social and governance
("ESG") related risks and opportunities into careful consideration
when selecting stocks for the portfolio. An analysis by
Sustainalytics, a Morningstar-owned company widely used for ESG
analytics, shows that City of London's portfolio continues to rate
slightly better for ESG risks compared with the FTSE All-Share
Index. The Fund Manager reports on ESG matters at each Board
meeting, including how it has voted on resolutions at investee
company shareholder meetings. Please see the Annual Report for more
detail of the analysis by Sustainalytics and a description of how
ESG considerations feature in the Fund Manager's investment
process.
Annual General Meeting
The 2022 Annual General Meeting ("AGM") will be held at the
offices of Janus Henderson, 201 Bishopsgate, London EC2M 3AE on
Thursday, 27 October 2022 at 2.30pm. The meeting will include a
presentation by our Fund Manager, Job Curtis, and Deputy Fund
Manager, David Smith. Any shareholder who is unable to travel is
encouraged to join virtually by Zoom, the conference software
provider. There will, as usual, be live voting for those physically
present at the AGM but we cannot offer live voting via Zoom because
of technical restrictions. We therefore request all shareholders,
and particularly those who cannot attend physically, to submit
their votes by proxy to ensure their vote counts at the AGM.
Communication with Shareholders
The Board believes that many shareholders will welcome its
proposal to reduce the Company's increasing postage and printing
costs by sending Annual and Half Year reports and other
communications to them electronically. This proposal will also have
a positive environmental impact. The Board fully appreciates that
some shareholders will wish to continue to receive communications
in printed form and there will be an option for them to request
this. Further details of this proposal, which is expected to save
significant costs annually for the Company, can be found in the AGM
Notice and the letter enclosed with the Annual Report.
Outlook
The macro economic outlook has darkened since the year end, with
inflation expectations increasing to levels last seen in the 1980s.
The Bank of England which, this time last year, predicted that
elevated inflation would be "transitory", is now forecasting that
it could reach 13.3%. It has reacted by increasing its base rate to
1.75%, whilst simultaneously warning of an impending recession.
These forecasts are inevitably damaging for consumer and business
confidence, with a growing risk that inflationary expectations
become embedded as pay settlements "catch up."
The outlook for the UK is particularly unclear as the new Prime
Minister steers a course towards increased public borrowing and tax
cuts. This uncertainty, which appears already to be unsettling
confidence about sterling in the currency markets, is compounded by
the prospect of higher interest rates across all major economies as
central banks respond to inflation and start to reverse their
programmes of quantitative easing. Most worrying, however, are the
rising geopolitical risks stemming from Russia's invasion of
Ukraine and the tensions with China over Taiwan, with consequences
which are already apparent for the sourcing of energy supplies and
important manufacturing components.
It remains the case, despite these concerns, that UK equities
still offer a better dividend yield than can be obtained from bank
deposits or ten-year gilts. Many of our shareholdings are in high
quality businesses, with significant foreign revenues, which are
well placed to withstand economic turbulence. Furthermore,
UK-listed companies continue to attract takeover bids in
recognition of their relative value compared with peers traded in
other stock markets (the latest in our portfolio being for Brewin
Dolphin). During the recent corporate results season, a number of
our investee companies have demonstrated their ability to cope with
inflationary pressures with positive dividend declarations. These
considerations, together with the advantages of our investment
trust status, underpin the Board's confidence of building on City
of London's unique 56-year record of annual dividend increases and
of continuing to provide reliable returns.
Sir Laurie Magnus CBE
Chairman
16 September 2022
FUND MANAGER'S REPORT
Investment Background
The UK stock market made solid gains during the first half of
the period under review as companies continued to benefit from the
reopening of the economy after the restrictions caused by the
pandemic. In addition, monetary policy was stimulatory with the UK
base rate at 0.1%. The rise in inflation that took place was higher
than the Bank of England expected and longer lasting. The base rate
was raised to 0.25% in December 2021 and there were four further
increases to reach 1.25% by the end of June 2022. In the US,
inflation was also higher than anticipated and the Federal Reserve
increased interest rates. The move from the previous era of
quantitative easing (ultra-low interest rates and bond purchases by
central banks) to quantitative tightening (rising interest rates
and no bond purchases/bond sales by central banks) led to more
subdued stock markets in the first six months of 2022. The rise in
interest rates and bond yields was a factor behind the derating of
some shares that had started 2022 on a high valuation, based on
future profits. The highest inflation for several decades led to
uncertainty on the impact on the consumer and corporate profit
margins. Finally, the invasion by Russia of Ukraine significantly
increased geopolitical risks.
A key factor causing inflation was the oil price, which rose by
53% over the 12 months. The oil price had slumped in the first part
of the pandemic given the collapse in economic activity. As demand
subsequently recovered, the oil market tightened, partly because of
the lack of spare oil production capacity as a result of under
investment in recent years given scepticism about long-term returns
due to decarbonisation. In addition, the war in Ukraine was an
adverse shock to oil and gas supply.
Although the UK base rate of 1.25% in June 2022 was its highest
for over 10 years, it was still significantly below the dividend
yield of the UK equity market, as it had been throughout the 12
months. The 10-year Gilt yield, which also remained below the
equity market dividend yield, rose from 0.8% to 2.2% over the 12
months in response to the rise in inflation and the UK base rate.
Overall, the additional yield available in UK equities was
supportive of gearing. City of London's gearing started the period
at 6.9%, rose to 8.3% at 31 December 2021 and finished the 12
months at 7.1% at 30 June 2022.
Over the 12 months, sterling weakened against the US dollar by
12% but was steady against the euro. The strength of the US dollar
reflected the more aggressive stance towards fighting inflation and
raising interest rates by the US's Federal Reserve compared with
the Bank of England and the European Central Bank. In addition, the
US dollar has a "safe haven" status and attracted funds given the
uncertainty caused by the war in Ukraine.
Performance Review
Estimated performance attribution (relative to FTSE All-Share
Index total return)
2022 2021
% %
======================== ====== ======
Stock selection +4.69 -3.80
Gearing +1.53 +2.49
Expenses -0.37 -0.38
Share issues/buy backs +0.04 +0.27
------------------------ ------ ------
Total +5.89 -1.42
------------------------ ------ ------
Source: Janus Henderson
City of London outperformed the FTSE All-Share Index by 5.89
percentage points in the year to 30 June 2022. Stock selection
contributed by 4.69 percentage points and gearing by 1.53
percentage points. The fall in the fair value of City of London's
secured notes caused the positive contribution of gearing.
The biggest stock contributor was BAE Systems, which is the UK's
biggest defence contractor but has its largest operations in the
US. The war in Ukraine led to a rerating of BAE's shares. Tobacco
shares, which were lowly valued and had resilient profits,
performed well and Imperial Brands and British American Tobacco
were among the top six contributors. The takeover bid for Brewin
Dolphin by Royal Bank of Canada led to it being the fifth biggest
contributor. Not holding Scottish Mortgage or Ashtead were also
among the top six contributors.
The biggest detractor was the underweight position in Shell,
although this was somewhat offset by the holding in TotalEnergies,
which was the eighth largest contributor. The underweight position
in AstraZeneca was the second biggest detractor (partly offset by
the position in Merck which was the ninth largest contributor). The
biggest detracting stock where City of London was overweight was
St. James's Place, which had performed very well the previous
12-month period.
It was a relatively good year for large companies, with the FTSE
100 Index of the largest companies returning 5.8% compared with
negative 14.6% for the FTSE 250 Index of medium-sized companies and
negative 12.6% for the FTSE SmallCap Index. The FTSE 100 Index was
helped by the outperformance of oil company shares, banks and
utilities.
Higher yielding shares also had a good year, as the chart in the
Annual Report shows. It compares the performance of the FTSE 350
Higher Yield Index (the higher dividend yielding half of the
largest 350 shares listed in the UK) with the FTSE 350 Lower Yield
Index (the lower dividend yielding half of the largest 350 shares
listed in the UK). Oil and tobacco shares were significant
contributors to the outperformance of the FTSE 350 Higher Yield
Index.
Distribution of the portfolio as at 30 June 2022
% of the portfolio
-------------------------------------------- -------------------
Large UK-listed companies (constituents of
the FTSE 100 Index) 71%
Medium-sized and small UK-listed companies 12%
Overseas-listed companies 17%
Source: Janus Henderson, 30 June 2022
During the year, the proportion of the portfolio invested in
companies with their prime listing overseas rose from 15% to 17%.
The proportion invested in large UK-listed companies fell by one
percentage point, as did the proportion invested in medium-sized
and small UK-listed companies. This increase in the overseas listed
share reflected the move by BHP away from being partly listed in
London to a full listing in Australia and also the move by Ferguson
to a US listing. The overseas listed stocks provide the portfolio
with additional diversification and in some cases exposure to types
of business not listed on the London Stock Exchange, such as
Microsoft.
Portfolio Changes
Takeover activity led to two holdings leaving the portfolio.
First, the bidding war from two private equity groups for Wm
Morrison, the supermarket group, which had started in the previous
financial year, completed at a significant premium to the share
price which had prevailed before. Secondly, Daily Mail &
General was taken private by Lord Rothermere and his family.
In addition, Brewin Dolphin, the private wealth manager, agreed
to be taken over by Royal Bank of Canada. Half City of London's
holding was sold at a very small discount to the offer price, with
the deal expected to complete by the end of the third quarter of
2022. A new holding was initiated in Rathbones, another leading UK
wealth manager, at a considerable discount to the valuation at
which Brewin Dolphin was taken over. Private client wealth
management is enjoying secular growth as people choose to take more
control of their pension assets.
A significant reduction was made to the holding in BHP, which
became fully listed in Australia. BHP has been a very successful
holding in terms of both share price appreciation and dividends
paid. The most important commodity that BHP mines is iron ore,
which is very dependent on demand from China. After the strong
performance of the iron price in recent years, there were grounds
for some caution and therefore a reduction was made in BHP.
A small reduction was also made in Anglo American, while Rio
Tinto was left unchanged, leaving the mining sector as 5.2% of the
total portfolio at 30 June 2022.
A new holding in Woodside Energy came into the portfolio as a
result of the merger of BHP's oil and gas interests with those of
Woodside, which is also listed in Australia. Woodside's assets are
predominantly in Australia and the Gulf of Mexico. Some 50% of its
total oil and gas production is Liquified Natural Gas ("LNG"),
which is seen as a "transition" energy source because it emits less
carbon than coal or oil but is more efficient than renewables.
Demand for LNG has been growing steadily in recent years and is
expected to strengthen further as Europe weans itself off Russian
gas. Given the favourable backdrop for oil companies, an increase
was made to the stake in TotalEnergies, the international oil
company headquartered in France, which has a good dividend track
record.
Two other new overseas listed companies were bought. Sanofi is
the France-headquartered, international pharmaceutical company with
key franchises in immunology, oncology and rare diseases. Its
growth is expected to be driven by the success of Dupixent, its
medicine for dermatitis (eczema).
Holcim is a Switzerland-listed, international building materials
company. It is the global leader in cement as well as having
significant operations in ready-mix concrete, aggregates and
roofing products. It should benefit from growing demand for the
building materials and the products it makes in both developed and
developing markets. The other two building materials companies in
the portfolio, Ibstock (the brick maker) and Marshalls (paving
stones and roofing products), are both focused on the UK
market.
In addition to Rathbones, mentioned above, two other new
medium-sized (outside the FTSE 100 Index), UK-listed companies were
bought. Hays is a specialist recruitment agency for permanent and
temporary staff split into three main divisions: UK and Ireland,
Australia and New Zealand, and Germany. Hays has been trading well,
supported by rising wages, increased fees for temps and higher
demand across its network. Wincanton is a leading supply solutions
company with a long history, operating from some 200 warehouses
across the UK. Its digital and e-fulfilment division is growing
rapidly.
A new holding was also bought in 3i, the investment company
focused on private equity. Slightly over half of 3i's net assets
are accounted for by its investment in Action, a successful and
fast-growing discount retailer in Continental Europe. In addition,
3i has investments in private companies benefiting from certain
growth trends: demographics, value for money, low carbon and
digitisation.
Against a background of rising interest rates, vulnerable
sectors were reviewed. An underweight position was maintained in
consumer discretionary sectors, such as retail and travel and
leisure. In real estate investment trusts ("REITs"), Hammerson, the
owner of shopping centres, was sold given the continuing over
capacity in that part of the property market. Holdings were
retained in Land Securities and British Land, which are mainly
invested in offices, and Segro, which owns industrial property and
warehouses. In housebuilding, Berkeley, the specialist in London
flats, was sold but Persimmon and Taylor Wimpey, the nationwide
builders of family homes, were retained.
Finally, a complete sale was made of Go-Ahead, the transport
group, which had over-accounted for profits under a government
contract in its rail division. It received a fine and a temporary
suspension of its London Stock Exchange listing.
Portfolio Outlook
Consumer staples companies, which make and sell everyday
products, constitute 20.5% of the portfolio. They tend to have a
degree of pricing power to cope with inflationary cost pressures.
Three of the ten largest stocks in the portfolio are consumer
staples companies. British American Tobacco (largest holding) and
Imperial Brands (ninth largest) have strong cash flow to support
their dividends. British American Tobacco has also made significant
progress in the transition to less harmful products and is the
leader in vaping, with Vuse, in the United States. Diageo (third
largest holding) is the world's largest spirits company (outside
China) as well as owning Guinness. Leading spirits brands it owns
include Johnnie Walker (Scotch whisky), Tanqueray (gin) and
Smirnoff (vodka). It has also grown to become the leader by value
of total sales in tequila, which is the fastest growing spirits
category in the United States, with brands such as Don Julio and
Casamigos. Tesco (11th largest holding) and Unilever (12th largest)
are also consumer staples companies. Tesco has market leadership
and competitive pricing in UK food retailing. Unilever has
significant sales from its beauty and personal care, food and
homecare divisions in both developed and emerging markets.
The oil sector is represented in the top ten by Shell (second
largest holding) and BP (tenth largest). Both companies benefit
from the elevated price of oil, which is likely to persist given
the imbalance between demand and supply in the global market. Long
term, a key determinant of their performance will be how well they
execute on ambitious plans to achieve "Net Zero", which means
completely negating the amount of greenhouse gases they produce.
They aim to achieve this by reducing fossil fuel exposure,
investing in renewable energy (wind and solar) and developing
carbon capture technology. National Grid (13th largest holding) and
SSE (17th largest) are both well placed to benefit from
electrification of the economy and growth in renewable energy.
It is likely that governments will increase defence spending
given the rising threat from hostile countries. The products made
by BAE Systems (fourth largest holding) are of crucial important in
this context. RELX (fifth largest), which provides essential
information and analytics for businesses, professionals and
scientists, is expected to continue its outstanding record of
steady growth.
The pharmaceutical sector constitutes 8.9% of the portfolio. The
two largest holdings are UK listed, AstraZeneca (sixth largest
holding) and GlaxoSmithKline (eighth largest). In addition, four
overseas-listed pharmaceutical companies are held: Merck, Novartis,
Johnson & Johnson and Sanofi. These companies have a strong
record of bringing to the market medicines and vaccines that
improve health, prolong and save lives. Given its importance and
the large-scale funding from governments, healthcare spending is
fairly resilient in a period of slowing economic growth.
HSBC is the seventh largest holding and there are also smaller
positions in Lloyds Banking and Barclays in the portfolio. Banks
should benefit from the rise in interest rates as they are able to
improve rates for deposit accounts and the margin between deposits
and loans. Banks are vulnerable to loan losses and impairments if
the rise in interest rates leads to a recession. Life assurers
Phoenix (16th largest holding) and Legal & General (19th
largest) offer anomalously high dividend yields, as does M&G
(15th largest), which is a mixture of fund manager and life
assurer.
Revenue exposure
% of the portfolio
---------------------------------- -------------------
United Kingdom 33
North America 24
Europe ex UK 15
Emerging Markets (Other) 12
Emerging Markets (Asia) 10
Developed Markets (Asia/Pacific) 3
Japan 3
Source: FactSet, 30 June 2022
The portfolio is well diversified with a bias towards large,
international companies and shares with above average dividend
yield. Some 67% of investee companies' revenues comes from
overseas. The aim is to be invested in those companies that can
support their dividends through profits and cash generation and
invest enough for growth. While dividends from mining companies
have probably peaked, given lower prices for their key commodities,
dividend recovery from other parts of the market, such as banks and
energy, should continue to drive the aggregate level of market
dividends in the UK higher. Overall, there are currently serious
macroeconomic and political challenges but the quality of the
companies in the portfolio gives confidence for the future.
Job Curtis
Fund Manager
David Smith
Deputy Fund Manager
16 September 2022
FORTY LARGEST INVESTMENTS as at 30 June 2022
The 40 largest investments, representing 77.96% of the portfolio, are
listed below
Market
value Portfolio
Position Company Sector GBP'000 %
--------- ----------------------- -------------------------------------- -------- ----------
British American
1 Tobacco Tobacco 91,507 4.76
2 Shell Oil, Gas and Coal 71,723 3.73
3 Diageo Beverages 68,463 3.56
4 BAE Systems Aerospace and Defence 64,340 3.35
5 RELX Media 56,679 2.95
6 AstraZeneca Pharmaceuticals and Biotechnology 56,160 2.92
7 HSBC Banks 53,014 2.76
8 GlaxoSmithKline Pharmaceuticals and Biotechnology 50,579 2.63
9 Imperial Brands Tobacco 48,641 2.53
10 BP Oil, Gas and Coal 48,343 2.51
--------- ----------------------- -------------------------------------- -------- ----------
Top 10 609,449 31.70
------------------------------------ -------------------------------------------------- ----------
Personal Care, Drug and Grocery
11 Tesco Stores 45,972 2.39
Personal Care, Drug and Grocery
12 Unilever Stores 45,954 2.39
13 National Grid Gas, Water and Multi-utilities 44,794 2.33
14 Rio Tinto Industrial Metals and Mining 44,740 2.33
Investment Banking and Brokerage
15 M&G Services 44,174 2.30
16 Phoenix Life Insurance 42,308 2.20
17 SSE Electricity 39,107 2.03
18 Anglo American Industrial Metals and Mining 31,866 1.66
19 Legal & General Life Insurance 31,374 1.63
Personal Care, Drug and Grocery
20 Reckitt Benckiser Stores 30,790 1.60
--------- ----------------------- -------------------------------------- -------- ----------
Top 20 1,010,528 52.56
------------------------------------ -------------------------------------------------- ----------
Investment Banking and Brokerage
21 St. James's Place Services 30,636 1.59
22 TotalEnergies Oil, Gas and Coal 29,479 1.53
Investment Banking and Brokerage
23 Schroders Services 28,990 1.51
24 Nestlé Food Producers 28,750 1.49
25 Direct Line Insurance Non-life Insurance 28,694 1.49
Telecommunications Service
26 Vodafone Providers 27,861 1.45
27 Severn Trent Gas, Water and Multi-utilities 27,859 1.45
28 Lloyds Banking Banks 27,501 1.43
29 Persimmon Household Goods and Home Construction 26,641 1.39
Investment Banking and Brokerage
30 IG Services 25,548 1.33
--------- ----------------------- -------------------------------------- -------- ----------
Top 30 1,292,487 67.22
------------------------------------ -------------------------------------------------- ----------
Telecommunications Service
31 Verizon Communications Providers 23,824 1.24
32 BHP Industrial Metals and Mining 22,970 1.19
33 Barclays Banks 22,968 1.19
Investment Banking and Brokerage
34 3i Services 22,915 1.19
35 Merck Pharmaceuticals and Biotechnology 21,064 1.09
36 Land Securities Real Estate Investment Trusts 19,920 1.04
37 Munich Re Non-life Insurance 19,248 1.00
38 Novartis Pharmaceuticals and Biotechnology 18,287 0.96
39 Microsoft Software and Computer Services 17,978 0.93
40 Segro Real Estate Investment Trusts 17,579 0.91
--------- ----------------------- -------------------------------------- -------- ----------
Top 40 1,499,240 77.96
------------------------------------ -------------------------------------------------- ----------
Convertibles and all classes of equity in any one company are treated
as one investment.
PRINCIPAL RISKS
The Board, with the assistance of the Manager, has carried out a
robust assessment of the principal risks and uncertainties facing
the Company, including those that would threaten its business
model, future performance, solvency or liquidity and
reputation.
The Board regularly considers the principal risks facing the
Company and has drawn up a register of these risks. The Board has
also put in place a schedule of investment limits and restrictions,
appropriate to the Company's investment objective and policy, in
order to mitigate these risks as far as practicable. The principal
risks which have been identified and the steps taken by the Board
to mitigate these are set out in the table below. The principal
financial risks are detailed in note 16 to the financial statements
in the Annual Report. Details of how the Board monitors the
services provided by Janus Henderson and its other suppliers, and
the key elements designed to provide effective internal control,
are explained further in the internal controls section of the
Corporate Governance Report in the Annual Report.
Geopolitical risks had been identified as an emerging risk in
the 2021 Annual Report. Given the events in Ukraine and the
resulting potential global impact, including increased market
volatility and cyber security risks, this was moved from emerging
to principal risks during the year.
Principal risks Trend Mitigating measure
Geopolitical The Fund Manager keeps the global
Heightened political tensions political and economic picture under
in and among a number of countries review as part of the investment
around the world have potential process.
impacts, including increasing
market volatility, risks to
cyber security and on the supply
of commodities, including oil
and gas, and manufacturing components.
------ ---------------------------------------------
Global pandemic The Fund Manager maintains close
The impact that the coronavirus oversight of the Company's portfolio,
pandemic or some future manjor and in particular the dividend strategies
health crisis could have on of investee companies. Regular stress
the Company's investments and testing of the revenue account under
its direct and indirect effects, different scenarios for dividends
including the effect on the is carried out.
global economy.
The Board also maintains close oversight
of the third-party service providers
which assist in the administration
of the Company.
------ ---------------------------------------------
Portfolio and market price The Board reviews the portfolio at
Although the Company invests the seven Board meetings held each
almost entirely in securities year and receives regular reports
that are listed on recognised from the Company's brokers. A detailed
markets, share prices may move liquidity report is considered on
rapidly. The companies in which a regular basis.
investments are made may operate
unsuccessfully, or fail entirely. The Fund Manager closely monitors
A fall in the market value of the portfolio between meetings and
the Company's portfolio would mitigates this risk through diversification
have an adverse effect on equity of investments. The Fund Manager
shareholders' funds. periodically presents the Company's
investment strategy in respect of
The wider consequences of Brexit current market conditions. Performance
on employment and regulation relative to the FTSE All-Share Index,
together with resultant, adverse other UK equity income trusts and
trade negotiations may impact IA UK Equity Income OEICs is also
the Company's investments. monitored.
The majority of the Company's investments
are multi-national companies with
operations in local markets.
------ ---------------------------------------------
Dividend income The Board reviews income forecasts
A reduction in dividend income at each meeting. The Company has
could adversely affect the Company's revenue reserves of GBP43.6 million
dividend record. (before payment of the fourth interim
dividend) and distributable capital
reserves of GBP326.6 million.
------ ---------------------------------------------
Investment activity, gearing At each meeting, the Board reviews
and performance investment performance, the level
An inappropriate investment of gearing, the level of premium/discount,
strategy (for example, in terms income forecasts and a schedule of
of asset allocation or the level expenses. It also has an annual meeting
of gearing) may result in underperformance focused on strategy at which these
against the Company's benchmark. matters are considered in more depth.
------ ---------------------------------------------
Tax and regulatory The Manager provides its services,
Changes in the tax and regulatory inter alia, through suitably qualified
environment could adversely professionals and the Board receives
affect the Company's financial internal control reports produced
performance, including the return by the Manager on a quarterly basis,
on equity. which confirm legal and regulatory
compliance. The Fund Manager also
A breach of Section 1158/9 of considers tax and regulatory change
the Corporation Tax Act 2010 in his monitoring of the Company's
as amended could lead to a loss underlying investments.
of investment trust status,
resulting in capital gains realised
within the portfolio being subject
to corporation tax. A breach
of the Listing Rules could result
in suspension of the Company's
shares, while a breach of the
Companies Act 2006 could lead
to criminal proceedings, or
financial or reputational damage.
The Company must also ensure
compliance with the Listing
Rules of the New Zealand Stock
Exchange.
------ ---------------------------------------------
Operational The Board monitors the services provided
Disruption to, or failure of, by the Manager and its other suppliers
the Manager's or its Administrator's and receives reports on the key elements
(BNP Paribas Securities Services) in place to provide effective internal
accounting, dealing or payment control.
systems or the Depositary's
records could prevent the accurate Cyber security is closely monitored
reporting and monitoring of and the Audit Committee receives
the Company's financial position. regular presentations from Janus
Cyber crime could lead to loss Henderson's Chief Information Security
of confidential data. The Company Officer.
is also exposed to the operational
risk that one or more of its The Board considers the loss of the
suppliers may not provide the Fund Manager as a risk but this is
required level of service. mitigated by the experience of the
team at Janus Henderson as detailed
in the Annual Report.
------ ---------------------------------------------
Emerging risks
In addition to the principal risks facing the Company, the Board
also regularly considers emerging risks, which are defined as
potential trends, sudden events or changing risks which are
characterised by a high degree of uncertainty in terms of the
probability of them happening and the possible effects on the
Company. Should an emerging risk become sufficiently clear, it may
be moved to a significant risk.
BORROWINGS
The Company has a borrowing facility of GBP120.0 million (2021:
GBP120.0 million) with HSBC Bank plc, of which GBP16.3 million was
drawn at the year end (2021: GBP10.0 million).
The Company has GBP114.2 million (2021: GBP114.1 million) (par
value) of secured notes in issue (fair value of the loan notes:
GBP101.1 million (2021: GBP128.5 million)).
The level of gearing at 30 June 2022 was 7.1% of net asset value
(2021: 6.9%).
VIABILITY STATEMENT
The AIC Code of Corporate Governance includes a requirement for
the Board to assess the future prospects for the Company, and to
report on the assessment within the Annual Report.
The Board considers that certain characteristics of the
Company's business model and strategy are relevant to this
assessment:
-- The Board seeks to deliver long-term performance by the Company.
-- The Company's investment objective, strategy and policy, which are
subject to regular Board monitoring, mean that the Company is invested
mainly in readily realisable, UK-listed securities and that the level
of borrowings is restricted.
-- The Company is a closed end investment company and therefore does
not suffer from the liquidity issues arising from unexpected redemptions.
-- The Company has an ongoing charge of 0.37%, which is lower than other
comparable investment trusts.
Also relevant were a number of aspects of the Company's
operational agreements:
-- The Company retains title to all assets held by the Custodian under
the terms of formal agreements with the Custodian and Depositary.
-- Long-term borrowing is in place, being 4.53% secured notes 2029,
2.94% secured notes 2049 and 2.67% secured notes 2046 which are subject
to formal agreements, including financial covenants with which the
Company complied in full during the year. The value of long-term
borrowing is relatively small in comparison to the value of net assets,
being 6.4 %.
-- Revenue and expenditure forecasts are reviewed by the Directors at
each Board meeting. This includes stress testing of the forecast
under different scenarios.
-- Cash is held with approved banks.
In addition, the Directors carried out a robust assessment of
the principal risks and uncertainties which could threaten the
Company's business model, including future performance, liquidity
and solvency and considered emerging risks that could have a future
impact on the Company.
The principal risks identified as relevant to the viability
assessment were those relating to investment portfolio performance
and its effect on the net asset value, share price and dividends,
and threats to security over the Company's assets. The Board took
into account the liquidity of the Company's portfolio, the
existence of the long-term fixed rate borrowings, the effects of
any significant future falls in investment values and income
receipts on the ability to repay and renegotiate borrowings, grow
dividend payments and retain investors and the potential need for
share buybacks to maintain a narrow share price discount.
The Directors assess viability over five-year rolling periods,
taking account of foreseeable severe but plausible scenarios. In
coming to this conclusion, the Directors have considered the
aftermath of the Covid-19 pandemic and heightened macroeconomic
uncertainty following Russia's invasion of Ukraine, in particular
the impact on income and the Company's ability to meet its
investment objective. The Directors do not believe that they will
have a long-term impact on the viability of the Company and its
ability to continue in operation, notwithstanding the short-term
uncertainty these events have caused in the markets and specific
short-term issues such as energy, supply chain disruption,
inflation and labour shortages.
The Directors believe that a rolling five-year period best
balances the Company's long-term objective, its financial
flexibility and scope with the difficulty in forecasting economic
conditions affecting the Company and its shareholders.
Based on their assessment, and in the context of the Company's
business model, strategy and operational arrangements set out
above, the Directors have a reasonable expectation that the Company
will be able to continue in operation and meet its liabilities as
they fall due over the five-year period to June 2027.
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were
with the Directors and the Manager. There were no material
transactions between the Company and its Directors during the year
and the only amounts paid to them were in respect of expenses and
remuneration for which there were no outstanding amounts payable at
the year end. Directors' shareholdings are disclosed in the Annual
Report.
In relation to the provision of services by the Manager, other
than fees payable by the Company in the ordinary course of business
and the provision of marketing services, there were no material
transactions with the Manager affecting the financial position of
the Company during the year under review. More details on
transactions with the Manager, including amounts outstanding at the
year end, are given in the Annual Report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Each of the Directors, who are listed below, confirms that, to
the best of his or her knowledge:
-- the Company's financial statements, which have been prepared in accordance
with UK Accounting Standards on a going concern basis, give a true
and fair view of the assets, liabilities, financial position and
return of the Company; and
-- the Strategic Report and financial statements include a fair review
of the development and performance of the business and the position
of the Company, together with a description of the principal risks
and uncertainties that it faces.
On behalf of the Board
Sir Laurie Magnus CBE
Chairman
16 September 2022
INCOME STATEMENT
Year ended 30 June 2022 Year ended 30 June 2021
Revenue Capital Total Revenue Capital Total
return return return return return return
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----- ---------------------- --------------- ---------------- --------------- -------- -------- ---------------
Gains on investments
held at fair value
through profit or
loss - 13,394 13,394 - 200,267 200,267
Income from
investments
held at fair value
through profit or
2 loss 98,028 - 98,028 77,626 - 77,626
Other interest
receivable
3 and similar income 190 - 190 263 - 263
--------------- ---------------- --------------- -------- -------- ---------------
Gross revenue and
capital gains 98,218 13,394 111,612 77,889 200,267 278,156
Management fee (1,746) (4,073) (5,819) (1,493) (3,484) (4,977)
Other administrative
expenses (774) - (774) (726) (7) (733)
--------------- ---------------- --------------- -------- -------- ---------------
Net return before
finance costs and
taxation 95,698 9,321 105,019 75,670 196,776 272,446
Finance costs (1,474) (3,075) (4,549) (1,696) (3,589) (5,285)
--------------- ---------------- --------------- -------- -------- ---------------
Net return before
taxation 94,224 6,246 100,470 73,974 193,187 267,161
Taxation (1,236) - (1,236) (1,165) - (1,165)
--------------- ---------------- --------------- -------- -------- ---------------
Net return after
taxation 92,988 6,246 99,234 72,809 193,187 265,996
--------------- ---------------- --------------- -------- -------- ---------------
Return per ordinary
share basic and
5 diluted 20.72p 1.39p 22.11p 17.09p 45.36p 62.45p
--------------- ---------------- --------------- -------- -------- ---------------
The total columns of this statement represent the Company's
Income Statement. The revenue return and capital return columns are
supplementary to this and are prepared under guidance published by
the Association of Investment Companies. All revenue and capital
items in the above statement derive from continuing operations. The
Company has no recognised gains or losses other than those
recognised in the Income Statement.
STATEMENT OF CHANGES IN EQUITY
Called Share Capital Other
up share premium redemption capital Revenue
Year ended capital account reserve reserves reserve Total
Notes 30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2021 111,406 855,597 2,707 720,048 37,567 1,727,325
Net return
after taxation - - - 6,246 92,988 99,234
Issue of 14,015,000
new ordinary
8 shares 3,504 53,546 - - - 57,050
7 Dividends paid - - - - (86,952) (86,952)
---------- --------- ------------ ---------- --------- ----------
At 30 June
2022 114,910 909,143 2,707 726,294 43,603 1,796,657
---------- --------- ------------ ---------- --------- ----------
Called Share Capital Other
up share premium redemption capital Revenue
Year ended capital account reserve reserves reserve Total
Notes 30 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2020 104,101 752,967 2,707 526,861 45,623 1,432,259
Net return
after taxation - - - 193,187 72,809 265,996
Buyback of
1,175,000 ordinary
shares for
treasury - - - (3,736) - (3,736)
Issue of 1,175,000
ordinary shares
from treasury - 124 - 3,736 - 3,860
Issue of 29,220,000
new ordinary
8 shares 7,305 102,506 - - - 109,811
7 Dividends paid - - - - (80,865) (80,865)
---------- --------- ------------ ---------- --------- ----------
At 30 June
2021 111,406 855,597 2,707 720,048 37,567 1,727,325
---------- --------- ------------ ---------- --------- ----------
STATEMENT OF FINANCIAL POSITION
30 June
2022 30 June 2021
Notes GBP'000 GBP'000
-------- --------------------------------------- ---------- ---------------
Fixed assets
Investments held at fair value through
profit or loss
Listed at market value in the United
Kingdom 1,642,199 1,618,973
Listed at market value overseas 281,071 227,701
Investment in subsidiary undertakings 347 347
---------- ---------------
1,923,617 1,847,021
---------- ---------------
Current assets
Debtors 11,451 10,157
11,451 10,157
Creditors: amounts falling due within
one year (22,835) (14,323)
---------- ---------------
Net current liabilities (11,384) (4,166)
---------- ---------------
Total assets less current liabilities 1,912,233 1,842,855
Creditors: amounts falling due after
more than one year (115,576) (115,530)
---------- ---------------
Net assets 1,796,657 1,727,325
---------- ---------------
Capital and reserves
8 Called up share capital 114,910 111,406
Share premium account 909,143 855,597
Capital redemption reserve 2,707 2,707
Other capital reserves 726,294 720,048
Revenue reserve 43,603 37,567
---------- ---------------
6 Total shareholders' funds 1,796,657 1,727,325
---------- ---------------
Net asset value per ordinary share
6 - basic and diluted 390.88p 387.62p
---------- ---------------
NOTES TO THE FINANCIAL STATEMENTS
Accounting policies
1.
Basis of accounting
The Company is a registered investment company as defined in Section
833 of the Companies Act 2006 and is incorporated in the UK. It operates
in the UK and is registered at the address below.
The financial statements have been prepared in accordance with the
Companies Act 2006, FRS 102, the Financial Reporting Standard applicable
in the UK and Republic of Ireland, and with the Statement of Recommended
Practice: Financial Statements of Investment Trust Companies and Venture
Capital Trusts ("the SORP") issued in April 2021 by the Association
of Investment Companies.
The principal accounting policies applied in the presentation of these
financial statements are set out in the Annual Report. These policies
have been consistently applied to all the years presented.
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, substantially
all of the entity's investments are carried at market value, and the
entity provides a Statement of Changes in Equity. The Directors have
assessed that the Company meets all of these conditions.
The financial statements have been prepared under the historical cost
basis except for the measurement at fair value of investments. In
applying FRS 102, financial instruments have been accounted for in
accordance with Sections 11 and 12 of the standard. All of the Company's
operations are of a continuing nature.
The financial statements of the Company's three subsidiaries have
not been consolidated on the basis of immateriality and dormancy.
Consequently, the financial statements present information about the
Company as an individual entity. The Directors consider that the values
of the subsidiary undertakings are not less than the amounts at which
they are included in the financial statements.
The preparation of the Company's financial statements on occasion
requires the Directors to make judgements, estimates and assumptions
that affect the reported amounts in the primary financial statements
and the accompanying disclosures. These assumptions and estimates
could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in the current and
future periods, depending on circumstance.
The decision to allocate special dividends as income or capital is
a judgement but not deemed to be material. The allocation of expenses
to income or capital is a judgement as well, but also is not deemed
to be material. The Directors do not believe that any accounting judgements
or estimates have been applied to this set of financial statements
that have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities within the next financial
year.
Going concern
The assets of the Company consist of securities that are readily realisable
and, accordingly, the Directors believe that the Company has adequate
resources to continue in operational existence for at least twelve
months from the date of approval of the financial statements. The
Directors have also considered the aftermath of the Covid-19 pandemic
and the risks arising from the wider ramifications of the conflict
between Russia and Ukraine, 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 is able 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, the principal
risks and other matters discussed in connection with the viability
statement, the Board has determined that it is appropriate for the
financial statements to be prepared on a going concern basis.
Income from investments held at fair value through profit or loss
2.
2022 2021
GBP'000 GBP'000
-------------------------- -------------------------
UK dividends:
Listed - ordinary dividends 79,682 64,806
Listed - special dividends 5,702 2,413
-------------------------- -------------------------
85,384 67,219
-------------------------- -------------------------
Other dividends:
Dividend income - overseas investments 10,041 8,856
Dividend income - overseas special dividends 586 -
Dividend income - UK REIT 2,017 1,497
Scrip dividends - 54
-------------------------- -------------------------
12,644 10,407
-------------------------- -------------------------
Total 98,028 77,626
-------------------------- -------------------------
3. Other interest receivable and similar income
2022 2021
GBP'000 GBP'000
-------------------------- -------------------------
Stock lending revenue 190 263
-------------------------- -------------------------
190 263
-------------------------- -------------------------
At 30 June 2022, the total value of securities on loan by the Company
for stock lending purposes was GBP177,048,000 (2021: GBP211,020,000).
The maximum aggregate value of securities on loan at any one time
during the year ended 30 June 2022 was GBP288,549,000 (2021: GBP285,200,000).
The Company's agent holds collateral at 30 June 2022, with a value
of GBP192,321,000 (2021: GBP223,341,000) in respect of securities
on loan, the value of which is reviewed on a daily basis and comprises
CREST Delivery By Value ("DBVs") and Government Bonds with a market
value of 109% (2021: 106%) of the market value of any securities on
loan.
Management fee
4.
2022 2021
Revenue Capital Total Revenue Capital Total
return return return return return return
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- ---------- ---------- ---------------- -------- ------------
Management fee 1,746 4,073 5,819 1,493 3,484 4,977
-------- ---------- ---------- ---------------- -------- ------------
A summary of the terms of the Management Agreement is given in the
Annual Report. Details of apportionment between revenue and capital
can be found in the Annual Report.
Return per ordinary share - basic and diluted
5.
The return per ordinary share is based on the net return attributable
to the ordinary shares of GBP99,234,000 (2021: return of GBP265,996,000)
and on 448,747,183 ordinary shares (2021: 425,921,991), being the
weighted average number of ordinary shares in issue during the year.
The return per ordinary share is analysed between revenue and capital
as below:
2022 2021
GBP'000 GBP'000
------------------------------- --------------------------------------------
Net revenue return 92,988 72,809
Net capital return 6,246 193,187
------------------------------- --------------------------------------------
Net total return 99,234 265,996
------------------------------- --------------------------------------------
Weighted average number of
ordinary shares in issue during
the year 448,747,183 425,921,991
------------------------------- --------------------------------------------
2022 2021
Pence Pence
------------------------------- --------------------------------------------
Revenue return per ordinary
share 20.72 17.09
Capital return per ordinary
share 1.39 45.36
------------------------------- --------------------------------------------
Total return per ordinary
share 22.11 62.45
------------------------------- --------------------------------------------
The Company does not have any dilutive securities, therefore the basic
and diluted returns per share are the same.
6. Net asset value per ordinary share - basic and diluted
The net asset value per ordinary share is based on the net assets
attributable to the ordinary shares of GBP1,796,657,000 (2021: GBP1,727,325,000)
and on 459,639,868 (2021: 445,624,868) shares in issue on 30 June
2022.
An alternative net asset value per ordinary share can be calculated
by deducting from the total assets less current liabilities of the
Company the preference and preferred ordinary stocks and secured notes
at their market (or fair) values rather than at their par (or book)
values. The net asset value per ordinary share at 30 June 2022 calculated
on this basis was 393.45p (2021: 384.12p). See the Annual Report for
further details of the Alternative Performance measure and how it
is calculated.
The movements during the year of the assets attributable to the ordinary
shares were as follows:
GBP'000
-------------------------
Total net assets attributable to the ordinary shares at
1 July 2021 1,727,325
Total net return after taxation 99,234
Dividends paid on ordinary shares in the year (86,952)
Issue of shares 57,050
-------------------------
Total net assets attributable to the ordinary shares
at 30 June 2022 1,796,657
-------------------------
The Company does not have any dilutive securities.
7. Dividends paid on ordinary shares
2022 2021
Record date Payment date GBP'000 GBP'000
----------------- --------------- --------- -----------
Fourth interim dividend (4.75p)
for the year ended 30 June
2020 31 July 2020 28 August 2020 - 19,779
First interim dividend (4.75p)
for the year ended 30 June 30 October 30 November
2021 2020 2020 - 19,723
Second interim dividend (4.75p)
for the year ended 30 June 29 January 26 February
2021 2021 2021 - 20,205
Third interim dividend (4.80p)
for the year ended 30 June
2021 30 April 2021 28 May 2021 - 21,218
Fourth interim dividend (4.80p)
for the year ended 30 June 06 August
2021 2021 31 August 2021 21,434 -
First interim dividend (4.80p)
for the year ended 30 June 29 October 30 November
2022 2021 2021 21,434 -
Second interim dividend (4.80p)
for the year ended 30 June 28 January 28 February
2022 2022 2022 21,434 -
Third interim dividend (5.00p)
for the year ended 30 June
2022 28 April 2022 31 May 2022 22,684 -
Unclaimed dividends over 12
years old (34) (60)
--------- -----------
86,952 80,865
--------- -----------
In accordance with FRS 102, interim dividends payable to equity shareholders
are recognised in the Statement of Changes in Equity when they have
been paid to shareholders. All dividends have been paid out of revenue
reserves or current year revenue profits and at no point during the
year did the revenue reserve move to a negative position.
The total dividends payable in respect of the financial year which
form the basis of the test under Section 1158 of the Corporation Tax
Act 2010 are set out below.
2022 2021
GBP'000 GBP'000
--------------- ----------------------
Revenue available for distribution by
way of dividend for the year 92,988 72,809
First interim dividend of 4.80p (2021:
4.75p) (21,434) (19,723)
Second interim dividend of 4.80p (2021:
4.75p) (21,434) (20,205)
Third interim dividend of 5.00p (2021:
4.80p) (22,684) (21,218)
Fourth interim dividend of 5.00p (2021:
4.80p) paid on 31 August 2022(1) (23,139) (21,434)
--------------- ----------------------
Transfer to/(from) revenue reserve (2) 4,297 (9,771)
--------------- ----------------------
1 Based on 462,789,868 ordinary shares in issue at 4 August 2022 (the
ex-dividend date) (2021: 446,549,868)
2 The surplus of GBP4,297,000 (2021: deficit of GBP9,771,000) has
been taken to/(from) the revenue reserve
Since the year end, the Board has announced a first interim dividend
of 5.00 p per ordinary share, in respect of the year ending 30 June
2023. This will be paid on 30 November 2022 to holders registered
at the close of business on 28 October 2022. The Company's shares
will go ex-dividend on 27 October 2022.
8. Called up share capital
Nominal value
of total shares
in issue
Shares in issue GBP'000
---------------------- ----------------------
Allotted and issued ordinary shares
of 25p each:
At 1 July 2021 445,624,868 111,406
Issue of new ordinary shares 14,015,000 3,504
---------------------- ----------------------
At 30 June 2022 459,639,868 114,910
---------------------- ----------------------
Nominal value
of total shares
in issue
Shares in issue GBP'000
---------------------- ----------------------
Allotted and issued ordinary shares
of 25p each:
At 1 July 2020 416,404,868 104,101
Buyback of ordinary shares for treasury (1,175,000) -
Issue of ordinary shares from treasury 1,175,000 -
Issue of new ordinary shares 29,220,000 7,305
At 30 June 2021 445,624,868 111,406
---------------------- ----------------------
The Company issued 14,015,000 (2021: 29,220,000) ordinary shares with
total proceeds of GBP57,050,000 (2021: GBP109,811,000) after deduction
of issue costs of GBP291,000 (2021: GBP170,000). The average price of
the ordinary shares that were issued was 408.6p (2021: 375.8p). During
the year there were no shares re-purchased by the Company (2021: 1,175,000
shares were bought back at a total cost of GBP3,736,000 all of which
were placed into treasury. These shares were then re-issued for total
proceeds of GBP3,860,000 after deduction of issue costs of GBP6,000).
9. 2022 financial information
The figures and financial information for the year ended 30 June 2022
are extracted from the Company's annual financial statements for that
period and do not constitute statutory accounts. The Company's annual
financial statements for the year to 30 June 2022 have been audited but
have not yet been delivered to the Registrar of Companies. The Independent
Auditors' Report on the 2022 annual financial statements was unqualified,
did not include a reference to any matter to which the auditors drew
attention without qualifying the report, and did not contain any statements
under Sections 498(2) or 498(3) of the Companies Act 2006.
10. 2021 financial information
The figures and financial information for the year ended 30 June 2021
are compiled from an extract of the published financial statements for
that year and do not constitute statutory accounts. Those financial statements
have been delivered to the Registrar of Companies and included the report
of the auditors which was unqualified, did not include a reference to
any matter to which the auditors drew attention without qualifying the
report, and did not contain any statements under Sections 498(2) or 498(3)
of the Companies Act 2006.
11. Annual Report
The Annual Report will be posted to shareholders in late September 2022
and will be available on the Company's website www.cityinvestmenttrust.com
. Copies will be available thereafter in hard copy format from the Company's
registered office, 201 Bishopsgate, London, EC2M 3AE.
12. Annual General Meeting
The Annual General Meeting will be held on Thursday, 27 October 2022
at 2.30pm. The Notice of Meeting will be sent to shareholders with the
Annual Report.
13. General Information
Company Status
The City of London Investment Trust plc is a UK domiciled investment
trust company.
ISIN number / SEDOL: ordinary shares: GB0001990497 / 0199049
London Stock Exchange (TIDM) Code: CTY
New Zealand Stock Exchange Code: TCL
Global Intermediary Identification Number (GIIN): S55HF7.99999.SL.826
Legal Entity Identifier (LEI): 213800F3NOTF47H6AO55
Company Registration Number
UK : 00034871
New Zealand : 1215729
Registered Office
201 Bishopsgate, London EC2M 3AE
Directors and Secretary
The Directors of the Company are Sir Laurie Magnus (Chairman), Samantha
Wren (Audit Committee Chair), Clare Wardle (Senior Independent Director),
Ominder Dhillon and Robert (Ted) Holmes.
The Corporate Secretary is Janus Henderson Secretarial Services UK Limited,
represented by Sally Porter, ACG.
For further information please contact:
Job Curtis
Fund Manager
The City of London Investment Trust plc
Telephone: 020 7818 4367
Dan Howe
Head of Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 4458
Harriet Hall
Investment Trust PR Manager
Janus Henderson Investors
Telephone: 020 7818 2919
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) are incorporated into, or forms part of,
this announcement.
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END
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(END) Dow Jones Newswires
September 19, 2022 02:00 ET (06:00 GMT)
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