LEGAL ENTITY IDENTIFIER:
213800F3NOTF47H6AO55
THE CITY OF LONDON INVESTMENT
TRUST PLC
Unaudited Results for the
Half-Year Ended 31 December 2023
This announcement contains regulated
information
INVESTMENT OBJECTIVE
The Company's objective is to
provide long-term growth in income and capital, principally by
investment in equities listed on the London Stock Exchange. The
Board fully recognises the importance of dividend income to
shareholders.
PERFORMANCE
|
As at
31 December 2023
|
As at
30 June 2023
|
Net asset
value ("NAV") per ordinary share
|
401.7p
|
385.2p
|
Premium
|
2.0%
|
3.1%
|
Net asset
value per ordinary share (debt at fair value)
|
406.0p
|
391.2p
|
Premium
(debt at fair value)
|
0.9%
|
1.5%
|
Ordinary
share price
|
409.5p
|
397.0p
|
Gearing
(debt at par value)
|
5.3%
|
6.2%
|
|
|
|
|
Six months to
31 December 2023
|
Six months
to
31 December 2022
|
Dividends
per share
|
10.1p
|
10.0p
|
Dividend yields
|
As at
31 December 2023
|
As at
30 June 2023
|
The City of
London Investment Trust plc
|
4.9%
|
5.1%
|
FTSE
All-Share Index (Benchmark)
|
3.8%
|
3.7%
|
AIC UK
Equity Income sector
|
4.7%
|
4.3%
|
IA UK
Equity Income OEIC sector
|
4.5%
|
4.8%
|
Sources: Morningstar Direct, LSEG
Datastream
|
Total return performance to 31 December 2023
|
6 months %
|
1 year %
|
3 years
%
|
5 years
%
|
10 years
%
|
NAV1
|
6.5
|
6.5
|
34.4
|
40.3
|
73.2
|
Share
price2
|
5.8
|
4.8
|
28.1
|
36.3
|
70.0
|
FTSE
All-Share Index (Benchmark)
|
5.2
|
7.9
|
28.1
|
37.7
|
68.2
|
AIC UK Equity Income
sector3
|
5.0
|
7.8
|
25.8
|
39.4
|
74.7
|
IA UK
Equity Income OEIC sector4
|
6.9
|
7.1
|
24.0
|
32.7
|
57.8
|
Sources: Morningstar Direct, Janus
Henderson, LSEG Datastream
1 Net asset value per ordinary share
total return with debt at fair value (including dividends
reinvested)
2 Share price total return using
mid-market closing price
3 AIC UK Equity Income sector size
weighted average NAV total return (shareholders' funds)
4 The Investment Association ("IA")
peer group average is based on mid-day NAV whereas the returns of
the investment trust are calculated using close of business
NAV
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Introduction
City of London achieved a 6.5% net
asset value total return during the six months to 31 December 2023
against a backdrop of falling inflation and market expectations
that interest rates have peaked.
The
Markets
Although economic growth slowed, the
main developed countries appear to have avoided a significant
downturn, with employment remaining at high levels. Inflation fell
by more than expected, especially towards the end of the period,
with investors anticipating cuts to interest rates by central banks
globally during 2024. The 10-year gilt yield, which was 4.4% at the
beginning of July, ended 2023 at 3.5%.
The UK equity market returned 5.2%,
as measured by the FTSE All-Share Index, with medium-sized and
small companies slightly outperforming larger peers. The best
performing sector was real estate investment trusts, reflecting the
downward move in gilt yields, followed by technology, in line with
trends overseas. Some more defensive sectors, such as food &
beverage and health care, were notable underperformers.
Net
Asset Value Total Return
City of London's net asset value
total return was 6.5% - higher than the FTSE All-Share Index (5.2%)
and the AIC UK Equity Income sector average (5.0%), but behind the
IA UK Equity Income OEIC sector average (6.9%). The negative impact
of the fall in gilt yields on the fair value of the Company's fixed
interest debt detracted performance by 34 basis points. It should
be noted, however, that the £30 million 2.67% 2046 and £50 million
2.94% 2049 secured notes, both issued in recent years, provide
borrowings at fixed low interest rates for investment in equities
by City of London over the next quarter of a century.
Stock and sector selection
contributed by 171 bps. The underweight positions in
pharmaceuticals and AstraZeneca were respectively the biggest
sector and stock contributors. The second biggest sector impact
arose from being overweight in real estate investment trusts, with
Land Securities a notable stock contributor. The biggest detracting
sector was food producers, with Nestlé a detractor over the six
months. The second biggest detracting sector was aerospace and
defence, where the Company missed out on the rise in Rolls Royce
(which was not held) but benefited from its position in BAE
Systems. Other notable stock contributors were 3i, whose main asset
is its shareholding in Action, a fast-growing discount retailer in
Europe, and Round Hill Music Royalties Fund, which was taken over.
The biggest detracting stock was St James's Place, which announced
changes in the structure of its customer fees.
Earnings and Dividends
Earnings per share rose marginally
compared with the same six-month period last year, from 8.79p to
8.80p. Special dividends, received and accounted as income, were
down from £2.4 million to £0.9 million. The trend in ordinary
dividends received was similar to City of London's last financial
year, with cuts from mining companies being offset by increases
from banks and oil companies.
City of London has declared two
interim dividends to date of 5.05p each in respect of this
financial year. The Company's diverse portfolio, strong cash flow
and revenue reserve give the Board confidence that, in line with
its objective to provide long-term income and capital growth, it
will be able to increase the total annual dividend for the 58th
consecutive year. The quarterly dividend rate will be reviewed by
the Board before the third interim dividend is declared in April
2024.
Management Fee and Expenses
The investment management fee rate
was last reviewed in 2019. Since then, the Company has grown its
net assets under management by 48%, from £1,360 million to £2,019
million, partly due to the issue of 143 million shares. The Board
has agreed with the Company's investment manager, Janus Henderson,
to reduce the investment management fee rate from 0.325% to 0.300%
with effect from 1 January 2024. The consequence of this change is
that the ongoing charge, which represents the investment management
fee and other administrative non-interest related expenses as a
percentage of shareholder funds, is expected to be lower for this
financial year than last year, when it was 0.37%. The Board
continues rigorously to review costs to ensure that City of
London's ongoing charge remains low compared with other investment
trusts and discretionary (non-tracker) managed equity investment
products. Furthermore, in the event that net assets under
management exceed £3,000 million, the management fee on any such
excess will be reduced to 0.275%.
Material Events and Transactions during the
Period
A total of 5.3 million new shares,
raising £21 million were issued during the six months to 31
December 2023. The proceeds were invested across the portfolio. The
Board is continuing its stated policy, subject to prevailing
circumstances, of considering issuance of new shares within a
narrow band relative to net asset value. As at 29 December
2023 (the last dealing day during the six months), the Company's
share price was trading at a premium of 0.9% to NAV (with debt at
fair value). As at 13 February 2024 (the last practicable date
before printing this report), the Company's share price was trading
at a discount of 0.6% to NAV (with debt at fair value).
Three new holdings were bought
during the six months. Burberry is a luxury British fashion company
with around half of its stores in the Asia Pacific region. Hilton
Foods is a packer and distributor of meat products, with operations
in the UK, Europe and Australasia. The purchase of ENI, the
international oil and gas company, was financed by the sale of
Woodside, the Australian company with a focus on liquified natural
gas. Complete sales were also made in Cisco, the information
technology and networking services company; Ferguson, the US
building products distributor; Sanofi, the pharmaceutical company;
and Round Hill Music Royalties Fund, which was taken
over.
Delisting from New Zealand Stock Exchange
The Company's ordinary shares have a
primary listing on the London Stock Exchange and a secondary
listing on the New Zealand Stock Exchange (NZX Main Board).
Shareholdings on the New Zealand register now only represent 1.2%
of the Company's total shares in issue and the costs of maintaining
the listing have been steadily increasing. The Board considers that
these costs, together with the administrative and compliance
burdens of maintaining the secondary listing in New Zealand, have
become disproportionate to the benefits of maintaining that listing
and relative to the percentage of shares involved. After careful
consideration, the Board has therefore resolved to delist the
shares from the NZX Main Board from 21 March 2024. Shares on the
New Zealand register will be automatically transferred to the UK
register, which already has a number of shareholders with addresses
in New Zealand.
The
Board
The Board is delighted to announce
that Sally Lake will be joining the Board on 1 August 2024. Sally
is currently Group Finance Director of Beazley plc, the FTSE 100
specialist insurance company, but will be stepping down from that
role later in 2024. She has wide ranging experience of financial
markets, risk management and the operational challenges facing
listed companies. She will succeed Samantha Wren as Audit Committee
Chair following the Company's Annual General Meeting in October,
when Samantha will retire after serving nine years on the
Board.
Outlook for the Six Months to 30 June 2024
The tightening of monetary policy in
2022 and 2023 by the world's leading central banks is expected to
lead to a further reduction in the rate of inflation. A significant
slowdown in economic activity, however, appears unlikely as
consumers continue to draw down excess savings from the Covid
lockdowns and employment statistics remain relatively buoyant.
Although it is generally accepted that interest rates have now
peaked, market expectations for cuts may be exaggerated given
continuing wage increases and "quantitative tightening" by central
banks. There are also considerable risks resulting from the current
war in the Middle East, with a widening conflict, such as the
recent hostilities in the Red Sea area, raising the prospect of
further political and economic turbulence including the disruption
of supply chains and destabilisation of energy markets, as observed
already in the Ukraine conflict.
UK equities remain attractively
valued relative to overseas equivalents. This has encouraged
further takeovers of UK companies by private equity firms and
foreign businesses, including the acquisition of Round Hill Music
Royalties Fund from the Company's portfolio. There has subsequently
been a bid in January 2024 for Wincanton, another of City of
London's investee companies, from a large French private company.
More takeovers can be expected while the discounted value of UK
equities relative to global peers persists. Although the prospect
of political change in the UK may weigh on equity valuations until
after the general election, the compelling dividend yields from
many companies effectively "pay investors to hold on" and should
help to mitigate the downside risks of current
uncertainties.
Sir Laurie Magnus
CBE
Chairman
16 February
2024
FORTY LARGEST INVESTMENTS
Company
|
Market
value
31 December
2023
£'000
|
|
Company
|
Market
value
31 December
2023
£'000
|
Shell
|
86,360
|
|
Glencore
|
37,768
|
BAE Systems
|
84,398
|
|
IG
|
32,917
|
RELX
|
79,016
|
|
Land Securities
|
32,597
|
HSBC
|
76,883
|
|
TotalEnergies
|
32,026
|
Unilever
|
71,241
|
|
Schroders
|
31,813
|
AstraZeneca
|
65,178
|
|
Nestlé
|
27,261
|
3i
|
61,710
|
|
Reckitt Benckiser
|
27,100
|
British American Tobacco
|
60,804
|
|
Severn Trent
|
25,760
|
BP
|
58,735
|
|
Barclays
|
25,758
|
Tesco
|
57,499
|
|
St. James's Place
|
24,552
|
Rio Tinto
|
56,667
|
|
Munich Re
|
23,471
|
Diageo
|
55,978
|
|
NatWest
|
23,465
|
M&G
|
53,376
|
|
Holcim
|
22,452
|
Imperial Brands
|
51,937
|
|
Merck
|
20,952
|
SSE
|
48,256
|
|
Novartis
|
20,793
|
National Grid
|
46,340
|
|
Sage
|
20,050
|
Phoenix
|
46,191
|
|
Swire Pacific
|
19,876
|
Legal & General
|
42,687
|
|
Persimmon
|
19,841
|
Lloyds Banking
|
40,072
|
|
Taylor Wimpey
|
18,896
|
GlaxoSmithKline
|
39,518
|
|
Anglo American
|
18,228
|
|
|
|
These investments total
£1,688,422,000 or 79.4% of the portfolio.
|
|
Convertibles and all classes of
equity in any one company are treated as one investment.
|
SECTOR EXPOSURE
As a percentage of the investment
portfolio excluding cash
|
%
|
Financials
|
26.0
|
Consumer Staples
|
18.8
|
Industrials
|
12.5
|
Energy
|
9.0
|
Health Care
|
8.1
|
Consumer Discretionary
|
7.0
|
Utilities
|
6.5
|
Basic Materials
|
5.8
|
Real Estate
|
3.0
|
Telecommunications
|
2.4
|
Technology
|
0.9
|
Total
|
100.0
|
Source: Janus Henderson
SECTOR BREAKDOWN OF INVESTMENTS
|
Valuation
31 December
2023
£'000
|
|
|
Valuation
31 December
2023
£'000
|
|
|
|
|
|
|
|
ENERGY
|
|
|
Industrial Support Services
|
|
Oil,
Gas and Coal
|
|
|
Hays
|
13,978
|
|
Shell
|
86,360
|
|
PayPoint
|
10,380
|
|
BP
|
58,735
|
|
|
24,358
|
|
TotalEnergies1
|
32,026
|
|
Total Industrials
|
266,301
|
|
ENI1
|
13,258
|
|
|
|
|
|
190,379
|
|
CONSUMER STAPLES
|
|
|
Total Energy
|
190,379
|
|
Beverages
|
|
|
|
|
|
Diageo
|
55,978
|
|
BASIC MATERIALS
|
|
|
Britvic
|
12,607
|
|
Chemicals
|
|
|
Coca-Cola1
|
10,167
|
|
Victrex
|
5,327
|
|
|
78,752
|
|
Johnson Matthey
|
5,093
|
|
|
|
|
|
10,420
|
|
Food
Producers
|
|
|
|
|
|
Nestlé1
|
27,261
|
|
Industrial Metals and Mining
|
|
Tate & Lyle
|
10,167
|
|
Rio Tinto
|
56,667
|
|
Hilton
|
8,000
|
|
Glencore
|
37,768
|
|
|
45,428
|
|
Anglo American
|
18,228
|
|
|
|
|
|
112,663
|
|
Personal Goods
|
|
|
Total Basic Materials
|
123,083
|
|
Burberry
|
6,372
|
|
|
|
|
|
6,372
|
|
INDUSTRIALS
|
|
|
|
|
|
Aerospace and Defence
|
|
|
Personal Care, Drug and Grocery Stores
|
|
BAE Systems
|
84,398
|
|
Unilever
|
71,241
|
|
|
84,398
|
|
Tesco
|
57,499
|
|
|
|
|
Reckitt Benckiser
|
27,100
|
|
Construction and Materials
|
|
|
|
155,840
|
|
Holcim1
|
22,452
|
|
|
|
|
Ibstock
|
12,423
|
|
Tobacco
|
|
|
Marshalls
|
6,985
|
|
British American Tobacco
|
60,804
|
|
|
41,860
|
|
Imperial Brands
|
51,937
|
|
|
|
|
|
112,741
|
|
Industrial Engineering
|
|
|
Total Consumer Staples
|
399,133
|
|
Vesuvius
|
12,030
|
|
|
|
|
|
12,030
|
|
HEALTH CARE
|
|
|
|
|
Medical Equipment and Services
|
Electronic and Electrical Equipment
|
|
Smith & Nephew
|
11,847
|
|
IMI
|
12,209
|
|
|
11,847
|
|
Morgan Advanced Materials
|
11,320
|
|
|
|
Rotork
|
5,663
|
|
Pharmaceuticals and Biotechnology
|
XP Power
|
3,126
|
|
AstraZeneca
|
65,178
|
|
|
32,318
|
|
GlaxoSmithKline
|
39,518
|
|
|
|
|
Merck1
|
20,952
|
|
General Industrials
|
|
|
Novartis1
|
20,793
|
|
Swire Pacific1
|
19,876
|
|
Johnson &
Johnson1
|
12,787
|
|
Siemens1
|
14,694
|
|
|
159,228
|
|
Smiths Group
|
10,575
|
|
Total Health Care
|
171,075
|
|
DS Smith
|
9,526
|
|
|
|
|
Mondi
|
8,451
|
|
|
|
|
|
63,122
|
|
|
|
|
|
|
|
|
|
|
Industrial Transportation
|
|
|
|
|
|
Wincanton
|
8,215
|
|
|
|
|
|
8,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Valuation
31 December
2023
£'000
|
|
|
Valuation
31 December
2023
£'000
|
|
|
|
|
|
CONSUMER DISCRETIONARY
|
|
|
FINANCIALS
|
|
Retailers
|
|
|
Banks
|
|
Kingfisher
|
11,070
|
|
HSBC
|
76,883
|
Halfords
|
5,979
|
|
Lloyds Banking
|
40,072
|
DFS
|
3,045
|
|
Barclays
|
25,758
|
|
20,094
|
|
NatWest
|
23,465
|
|
|
|
Nationwide Building Society 10.25%
Var Perp CCDS
|
8,385
|
Media
|
|
RELX
|
79,016
|
|
|
174,563
|
|
79,016
|
|
|
|
|
|
|
Investment Banking and Brokerage Services
|
Household Goods and Home Construction
|
|
3i
|
61,710
|
Persimmon
|
19,841
|
|
M&G
|
53,376
|
Taylor Wimpey
|
18,896
|
|
IG
|
32,917
|
|
38,737
|
|
Schroders
|
31,813
|
|
|
|
St. James's Place
|
24,552
|
Travel and Leisure
|
|
|
Rathbones
|
15,570
|
La Française des
Jeux1
|
8,527
|
|
|
219,938
|
Young
|
3,080
|
|
|
|
|
11,607
|
|
Life
Insurance
|
|
Total Consumer Discretionary
|
149,454
|
|
Phoenix
|
46,191
|
|
|
|
Legal & General
|
42,687
|
TELECOMMUNICATIONS
|
|
|
Prudential
|
10,644
|
Telecommunications Service Providers
|
|
|
99,522
|
Deutsche
Telekom1
|
15,502
|
|
|
|
Vodafone
|
13,024
|
|
Non-life Insurance
|
|
Orange1
|
12,944
|
|
Munich Re1
|
23,471
|
Verizon
Communications1
|
10,348
|
|
Beazley
|
11,473
|
|
51,818
|
|
Hiscox
|
8,959
|
Total Telecommunications
|
51,818
|
|
Direct Line Insurance
|
8,646
|
|
|
Sabre Insurance
|
7,182
|
UTILITIES
|
|
|
|
59,731
|
Electricity
|
|
|
Total Financials
|
553,754
|
SSE
|
48,256
|
|
|
|
|
48,256
|
|
REAL
ESTATE
|
|
|
|
|
Real
Estate Investment Trusts
|
Gas,
Water and Multi-utilities
|
|
|
Land Securities
|
32,597
|
National Grid
|
46,340
|
|
Segro
|
15,955
|
Severn Trent
|
25,760
|
|
British Land
|
15,580
|
United Utilities
|
12,708
|
|
|
64,132
|
Pennon
|
4,133
|
|
Total Real Estate
|
64,132
|
|
88,941
|
|
|
|
Total Utilities
|
137,197
|
|
TECHNOLOGY
|
|
|
|
|
Software and Computer Services
|
|
|
|
Sage
|
20,050
|
|
|
|
|
20,050
|
|
|
|
Total Technology
|
20,050
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS
|
2,126,376
|
|
|
|
|
|
1 Overseas listed
All classes of equity in any one
company are treated as one investment.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and
uncertainties associated with the Company's business can be divided
into the following main areas:
·
Geopolitical
·
Global pandemics
·
Portfolio and market
price
·
Dividend income
·
Investment activity, gearing and
performance
·
Tax and regulatory
·
Operational
Information on these risks and how
they are managed is given in the Annual Report for the year ended 30 June 2023. In the view
of the Board, these principal risks and uncertainties at the year
end remain and are as applicable to the remaining six months of the
financial year as they were to the six months under
review.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the
best of their knowledge:
•
|
the condensed set of financial
statements has been prepared in accordance with FRS 104 "Interim
Financial Reporting".
|
•
|
the Interim Management Report
includes a fair review of the information required by Disclosure
Guidance and Transparency Rule 4.2.7R (indication of important
events during the first six months and description of the principal
risks and uncertainties for the remaining six months of the year);
and
|
•
|
the Interim Management Report
includes a fair review of the information required by Disclosure
Guidance and Transparency Rule 4.2.8R (disclosure of related party
transactions and changes therein).
|
On
behalf of the Board
Sir
Laurie Magnus CBE
Chairman
16 February 2024
INCOME STATEMENT
|
(Unaudited)
Half-year
ended
31 December
2023
|
(Unaudited)
Half-year
ended
31
December 2022
|
(Audited)
Year
ended
30 June
2023
|
|
Revenue
return
£'000
|
Capital
return
£'000
|
Total
£'000
|
Revenue
return
£'000
|
Capital
return
£'000
|
Total
£'000
|
Revenue
return
£'000
|
Capital
return
£'000
|
Total
£'000
|
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on investments held at
fair value through profit or loss
|
-
|
92,532
|
92,532
|
-
|
29,737
|
29,737
|
-
|
(27,111)
|
(27,111)
|
|
|
|
|
|
|
|
|
|
|
Income from investments held at fair
value through profit or loss
|
46,388
|
-
|
46,388
|
43,544
|
-
|
43,544
|
101,747
|
-
|
101,747
|
|
|
|
|
|
|
|
|
|
|
Other interest receivable and similar
income
|
185
|
-
|
185
|
129
|
-
|
129
|
224
|
-
|
224
|
|
|
|
|
|
|
|
|
|
|
Gross revenue and capital gains/(losses)
|
46,573
|
92,532
|
139,105
|
43,673
|
29,737
|
73,410
|
101,971
|
(27,111)
|
74,860
|
|
|
|
|
|
|
|
|
|
|
Management fee
|
(961)
|
(2,242)
|
(3,203)
|
(886)
|
(2,068)
|
(2,954)
|
(1,844)
|
(4,304)
|
(6,148)
|
|
|
|
|
|
|
|
|
|
|
Other administrative
expenses
|
(468)
|
-
|
(468)
|
(459)
|
-
|
(459)
|
(860)
|
-
|
(860)
|
|
|
|
|
|
|
|
|
|
|
Net
return/(loss) before finance costs and taxation
|
45,144
|
90,290
|
135,434
|
42,328
|
27,669
|
69,997
|
99,267
|
(31,415)
|
67,852
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
(737)
|
(1,535)
|
(2,272)
|
(766)
|
(1,604)
|
(2,370)
|
(1,621)
|
(3,416)
|
(5,037)
|
|
|
|
|
|
|
|
|
|
|
Net
return/(loss) before taxation
|
44,407
|
88,755
|
133,162
|
41,562
|
26,065
|
67,627
|
97,646
|
(34,831)
|
62,815
|
|
|
|
|
|
|
|
|
|
|
Taxation on net
return/(loss)
|
(201)
|
-
|
(201)
|
(427)
|
-
|
(427)
|
(1,406)
|
-
|
(1,406)
|
|
|
|
|
|
|
|
|
|
|
Net
return/(loss) after taxation
|
44,206
|
88,755
|
132,961
|
41,135
|
26,065
|
67,200
|
96,240
|
(34,831)
|
61,409
|
|
|
|
|
|
|
|
|
|
|
Return/(loss) per ordinary share (note 2)
|
8.80p
|
17.67p
|
26.47p
|
8.79p
|
5.57p
|
14.36p
|
20.14p
|
(7.29p)
|
12.85p
|
The total columns of this statement
represent the Company's Income Statement, prepared in accordance
with FRS 104. The revenue and capital columns are supplementary to
this and are published under guidance from the Association of
Investment Companies.
The Company has no recognised gains
or losses other than those disclosed in the Income Statement and
Statement of Changes in Equity. All items in the above statement
derive from continuing operations. No operations were acquired or
discontinued during the period.
The accompanying notes are an
integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
Half-year ended 31 December 2023 (unaudited)
|
Called-up share
capital
£'000
|
Share premium
account
£'000
|
Capital redemption
reserve
£'000
|
Other
capital
reserves
£'000
|
Revenue
reserve
£'000
|
Total
£'000
|
|
|
|
|
|
|
|
At 1 July 2023
|
124,339
|
1,053,061
|
2,707
|
691,463
|
44,322
|
1,915,892
|
Net return on ordinary activities
after taxation
|
-
|
-
|
-
|
88,755
|
44,206
|
132,961
|
Issue of 5,310,000 new ordinary
shares
|
1,328
|
19,563
|
-
|
-
|
-
|
20,891
|
Dividends paid
|
-
|
-
|
-
|
-
|
(50,759)
|
(50,759)
|
|
|
|
|
|
|
|
At
31 December 2023
|
125,667
|
1,072,624
|
2,707
|
780,218
|
37,769
|
2,018,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-year ended 31 December 2022
(unaudited)
|
Called-up
share capital
£'000
|
Share
premium account
£'000
|
Capital
redemption reserve
£'000
|
Other
capital
reserves
£'000
|
Revenue
reserve
£'000
|
Total
£'000
|
|
|
|
|
|
|
|
At 1 July 2022
|
114,910
|
909,143
|
2,707
|
726,294
|
43,603
|
1,796,657
|
Net return on ordinary activities
after taxation
|
-
|
-
|
-
|
26,065
|
41,135
|
67,200
|
Issue of 16,560,000 new ordinary
shares
|
4,140
|
61,342
|
-
|
-
|
-
|
65,482
|
Dividends paid
|
-
|
-
|
-
|
-
|
(46,657)
|
(46,657)
|
|
|
|
|
|
|
|
At 31 December 2022
|
119,050
|
970,485
|
2,707
|
752,359
|
38,081
|
1,882,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 30 June 2023
(audited)
|
Called-up
share capital
£'000
|
Share
premium account
£'000
|
Capital
redemption reserve
£'000
|
Other
capital
reserves
£'000
|
Revenue
reserve
£'000
|
Total
£'000
|
|
|
|
|
|
|
|
At 1 July 2022
|
114,910
|
909,143
|
2,707
|
726,294
|
43,603
|
1,796,657
|
Net (loss)/return after
taxation
|
-
|
-
|
-
|
(34,831)
|
96,240
|
61,409
|
Issue of 37,715,000 new ordinary
shares
|
9,429
|
143,918
|
-
|
-
|
-
|
153,347
|
Dividends paid
|
-
|
-
|
-
|
-
|
(95,521)
|
(95,521)
|
|
|
|
|
|
|
|
At 30 June 2023
|
124,339
|
1,053,061
|
2,707
|
691,463
|
44,322
|
1,915,892
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
|
(Unaudited)
31
December
2023
£'000
|
(Unaudited)
31
December
2022
£'000
|
(Audited)
30
June
2023
£'000
|
|
|
|
|
Investments held at fair value through
profit or loss (note
6)
|
|
|
|
Listed at market value in the United
Kingdom
|
1,861,318
|
1,717,798
|
1,734,695
|
Listed at market value
overseas
|
265,058
|
300,628
|
299,605
|
Investment in subsidiary
undertakings
|
347
|
347
|
347
|
|
|
|
|
|
2,126,723
|
2,018,773
|
2,034,647
|
|
|
|
|
Current assets
|
|
|
|
Debtors
|
9,541
|
8,664
|
10,823
|
Cash at bank
|
1,753
|
-
|
-
|
|
11,294
|
8,664
|
10,823
|
|
|
|
|
Creditors: amounts falling due
within one year
|
(3,387)
|
(29,172)
|
(13,956)
|
|
|
|
|
Net
current assets/(liabilities)
|
7,907
|
(20,508)
|
(3,133)
|
|
|
|
|
Total assets less current liabilities
|
2,134,630
|
1,998,265
|
2,031,514
|
|
|
|
|
Creditors: amounts falling due
after more than one year
|
(115,645)
|
(115,583)
|
(115,622)
|
|
|
|
|
Net
assets
|
2,018,985
|
1,882,682
|
1,915,892
|
|
|
|
|
Capital and reserves
|
|
|
|
Called-up share capital (note
3)
|
125,667
|
119,050
|
124,339
|
Share premium account
|
1,072,624
|
970,485
|
1,053,061
|
Capital redemption reserve
|
2,707
|
2,707
|
2,707
|
Other capital reserves (note
4)
|
780,218
|
752,359
|
691,463
|
Revenue reserve
|
37,769
|
38,081
|
44,322
|
|
|
|
|
Equity shareholders' funds
|
2,018,985
|
1,882,682
|
1,915,892
|
|
|
|
|
Net
asset value per ordinary share - basic and diluted
(note 5)
|
401.66p
|
395.36p
|
385.22p
|
|
|
|
|
The accompanying notes are an
integral part of these financial statements.
NOTES
1.
|
Accounting Policy - Basis of Preparation
|
|
The condensed set of financial
statements has been prepared in accordance with FRS 104, Interim
Financial Reporting, FRS 102, the Financial Reporting Standard
applicable in the UK and Republic of Ireland and the Statement of
Recommended Practice for "Financial Statements of Investment Trust
Companies and Venture Capital Trusts", issued in July
2022.
For the period under review, the
Company's accounting policies have not varied from those described
in the Annual Report for the year ended 30 June 2023. These
financial statements have been neither audited nor reviewed by the
Company's auditors.
As an investment fund, the Company
has the option, which it has taken, not to present a cash flow
statement. A cash flow statement is not required when an investment
fund meets all the following conditions: substantially all of the
entity's investments are highly liquid and are carried at market
value; and where a statement of changes in equity is
provided.
|
2.
|
Return per Ordinary Share
|
|
|
|
|
|
|
|
(Unaudited)
Half-year
ended
31 December
2023
£'000
|
|
(Unaudited)
Half-year
ended
31
December
2022
£'000
|
|
(Audited)
Year
ended
30
June
2023
£'000
|
|
The return per ordinary share is
based on the following figures:
|
|
|
|
|
|
|
Revenue return
|
44,206
|
|
41,135
|
|
96,240
|
|
Capital return/(loss)
|
88,755
|
|
26,065
|
|
(34,831)
|
|
|
|
|
|
|
|
|
Total
|
132,961
|
|
67,200
|
|
61,409
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary
shares in issue for each period
|
502,285,221
|
|
467,917,477
|
|
477,932,402
|
|
|
|
|
|
|
|
|
Revenue return per ordinary
share
|
8.80p
|
|
8.79p
|
|
20.14p
|
|
Capital return/(loss) per ordinary
share
|
17.67p
|
|
5.57p
|
|
(7.29p)
|
|
|
|
|
|
|
|
|
Total return per ordinary share
|
26.47p
|
|
14.36p
|
|
12.85p
|
|
|
|
|
|
|
|
|
The Company does not have any
dilutive securities, therefore, the basic and diluted returns per
share are the same.
|
3.
|
Share Capital
|
|
During the half-year ended 31
December 2023, 5,310,000 new ordinary shares were issued for total
proceeds of £20,891,000 (half-year ended 31 December 2022:
16,560,000 new ordinary shares issued for total proceeds of
£65,482,000; year ended 30 June 2023: 37,715,000 new ordinary
shares issued for total proceeds of £153,347,000). The number of
ordinary shares in issue at 31 December 2023 was 502,664,868
(31 December 2022: 476,199,868; 30 June 2023: 497,354,868).
There were no shares in treasury at 31 December 2023 (31
December 2022 and 30 June 2023: nil).
|
4.
|
Other Capital Reserves
|
|
At 31 December 2023, the other
capital reserves are made up of the capital reserve arising on
investments sold which was £362,881,000 (31 December 2022:
£316,480,000; 30 June 2023: £344,587,000) and is distributable and
the capital reserve arising on revaluation of investments held
which was £417,337,000 (31 December 2022: £435,879,000; 30
June 2023: £346,876,000) which is not distributable.
|
5.
|
Net
Asset Value per Ordinary Share
|
|
The net asset value per ordinary
share is based on the net assets attributable to the ordinary
shares of £2,018,985,000 (31 December 2022: £1,882,682,000; 30 June
2023: £1,915,892,000) and on 502,664,868 ordinary shares (31
December 2022: 476,199,868; 30 June 2023: 497,354,868) being the
number of ordinary shares at the period end.
|
6.
|
Financial Instruments
|
|
The financial assets and financial
liabilities are either carried in the Statement of Financial
Position at their fair value or the Statement of Financial Position
amount is a reasonable approximation of fair value (debtors and
creditors falling due within one year).
The table below sets out fair value
measurements of the investments using the FRS 102 fair value
hierarchy.
|
|
Financial assets at fair value through profit or loss at 31
December 2023
|
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Equity investments
|
2,126,376
|
-
|
347
|
2,126,723
|
|
Total
|
2,126,376
|
-
|
347
|
2,126,723
|
|
|
|
|
|
|
|
Financial assets at fair value
through profit or loss at 31 December 2022
|
|
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Equity investments
|
2,018,426
|
-
|
347
|
2,018,773
|
|
Total
|
2,018,426
|
-
|
347
|
2,018,773
|
|
|
|
|
|
|
|
Financial assets at fair value
through profit or loss at 30 June 2023
|
|
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Equity investments
|
2,034,300
|
-
|
347
|
2,034,647
|
|
Total
|
2,034,300
|
-
|
347
|
2,034,647
|
|
|
|
|
|
|
|
Financial liabilities
The secured notes, preference stocks
and preferred ordinary stock are carried in the Statement of
Financial Position at par.
At 31 December 2023, the aggregate
fair value of the preferred and preference stock was £2,276,000
(31 December 2022: £2,635,000; 30 June 2023:
£2,635,000).
At 31 December 2023, the fair value
of the secured notes was estimated to be £91,658,000 (31 December
2022: £86,591,000; 30 June 2023: £83,313,000).
The fair value of the secured notes
is calculated using a discount rate which reflects the yield on a
UK gilt of similar maturity plus a suitable credit
spread.
The preference stocks and preferred
ordinary stock are categorised as Level 1 in the fair value
hierarchy. The secured notes are categorised as Level 3 in the fair
value hierarchy.
|
|
Fair value hierarchy categories
Categorisation within the hierarchy
has been determined on the basis of the lowest level input that is
significant to the fair value measurement of the relevant asset as
follows:
Level 1: The unadjusted quoted
prices in an active market for identical assets or liabilities that
the entity can access at the measurement date;
Level 2: Inputs other than quoted
prices included within Level 1 that are observable (i.e., developed
using market data) for the asset or liability, either directly or
indirectly; and
Level 3: Inputs are unobservable
(i.e., for which market data is unavailable) for the asset or
liability.
|
|
The valuation techniques used by the
Company are explained in the accounting policies in note 1 in the
Company's Annual Report for the year ended 30 June 2023.
|
7.
|
Transaction Costs
|
|
Purchase transaction costs for the
half-year ended 31 December 2023 were £390,000 (half-year ended
31 December 2022: £538,000; year ended 30 June 2023:
£1,105,000). These comprise mainly stamp duty and commissions. Sale
transaction costs for the half-year ended 31 December 2023 were
£23,000 (half-year ended 31 December 2022: £17,000; year ended 30
June 2023: £34,000).
|
8.
|
Dividends
|
|
A first interim dividend of 5.05p
per ordinary share was paid on 30 November 2023. The second interim
dividend of 5.05p per ordinary share (declared on 7 December 2023)
will be paid on 29 February 2024 to shareholders on the register on
26 January 2024. The Company's shares went ex-dividend on 25
January 2024.
|
9.
|
Related Party Transactions
|
|
Other than the relationship between
the Company and its Directors, the provision of services by Janus
Henderson is the only related party arrangement currently in place.
Other than fees payable by the Company in the ordinary course of
business and the provision of marketing services, there have been
no material transactions with this related party affecting the
financial position of the Company during the period under
review.
|
10.
|
Going Concern
|
|
The assets of the Company consist of
securities that are readily realisable. The Directors have also
considered the aftermath of the Covid-19 pandemic and the risks
arising from the current geo-political conflicts, including cash
flow forecasting, a review of covenant compliance including the
headroom above the most restrictive covenants and an assessment of
the liquidity of the portfolio. They have concluded that the
Company has adequate resources to meet its financial obligations,
including the repayment of the bank overdraft, as they fall due for
a period of at least twelve months from the date of approval of the
financial statements. Having assessed these factors and the
principal risks, the Board has determined that it is appropriate
for the financial statements to be prepared on a going concern
basis.
|
11.
|
Comparative Information
|
|
The financial information contained
in this half-year report does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006. The figures and
financial information for the year ended 30 June 2023 are extracted
from the latest published accounts and do not constitute the
statutory accounts for that year. Those accounts have been
delivered to the Registrar of Companies and included the Report of
the Independent Auditors, which was unqualified and did not include
a statement under either Section 498(2) or 498(3) of the Companies
Act 2006.
|
12.
|
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: 34871
New
Zealand: 1215729
|
|
Registered Office
|
|
201 Bishopsgate, London EC2M
3AE
|
|
Directors and Secretary
|
|
The Directors of the Company are Sir
Laurie Magnus CBE (Chairman), Samantha Wren (Audit Committee
Chair), Clare Wardle (Senior Independent Director), Robert Edward
(Ted) Holmes and Ominder Dhillon.
|
|
The Corporate Secretary is Janus
Henderson Secretarial Services UK Limited, represented by Sally
Porter, ACG.
|
|
Website
|
|
Details of the Company's share price
and net asset value, together with general information about the
Company, monthly factsheets and data, copies of announcements,
reports and details of general meetings can be found at
www.cityinvestmenttrust.com.
|
13.
|
Half-Year Report
An abbreviated version of the
half-year report, the 'Update', will be posted to shareholders in
late February 2024. The Update will also be available on the
Company's website www.cityinvestmenttrust.com
or in hard copy from the Company's registered
office.
|
|
|
|
|
|
|
|
|
|
| |
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
PR Director, Investment
Trusts
Janus Henderson Investors
Telephone: 020 7818 2919
|
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of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.