TIDMRMII TIDMTTM
RNS Number : 7023J
RM Infrastructure Income PLC
18 August 2023
RM INFRASTRUCTURE INCOME PLC
HALF-YEARLY REPORT ANNOUNCEMENT
FOR THE SIX MONTHSED 30 JUNE 2023
LEI: 213800RBRIYICC2QC958
ABOUT US
How we invest
RM Infrastructure Income plc (the "Company") aims to generate
attractive and regular dividends through investment in secured debt
instruments of UK Small and Medium sized Enterprises ('SMEs'), and
mid-market corporates and/or individuals including any loan,
promissory notes, lease, bond, or preference share (such debt
instruments, as further described in the prospectus, being 'Loans')
sourced or originated by RM Capital Markets Limited (the
"Investment Manager") with a degree of inflation protection through
index-linked returns where appropriate.
Where we invest
Having had a general sectoral lending approach since inception,
the Company narrowed the sector focus since 2021 to investments
within the social and environmental infrastructure sectors.
Our ethos
The Company aims to make a difference with the deployment of its
capital and as such has adopted an impact framework allowing the
measurement and reporting of impact from investments made. In
addition to this the firm seeks to target investments directly
linked to achieving outcomes linked to six Sustainable Development
Goals ("SDGs").
PORTFOLIO AT A GLANCE
Financial information
As at As at
30 June 2023 30 June 2022
------------------------------------------ -------------- --------------
Gross asset value (GBP'000) (1) GBP121,792 GBP128,630
------------------------------------------ -------------- --------------
Net Asset Value ("NAV") (GBP'000) GBP107,805 GBP110,389
------------------------------------------ -------------- --------------
NAV per Ordinary Share (pence) 91.68p 93.68p
------------------------------------------ -------------- --------------
Ordinary Share price (pence) 69.00p 90.75p
------------------------------------------ -------------- --------------
Ordinary Share price discount to NAV (1) (24.74%) (3.1%)
------------------------------------------ -------------- --------------
Dividend (pence) paid in respect of the
Period 3.250p 3.250p
------------------------------------------ -------------- --------------
Performance summary
% change(2,4) % change(3,4)
----------------------------------------- -------------- --------------
Total return - Ordinary Share NAV and
dividends (1) +2.7% +2.7%
----------------------------------------- -------------- --------------
Total return - Ordinary Share price and
dividends (1) -15.4% -1.1%
----------------------------------------- -------------- --------------
1. These are Alternative Performance Measures ("APMs").
2. Total returns for the period to 30 June 2023, including dividend reinvestment.
3. Total returns for the period to 30 June 2022, including dividend reinvestment.
4. Source: The Company's Factsheet.
Alternative Performance Measures ("APMs")
The financial information and performance summary data
highlighted in the footnote to the above tables represent are
considered to represent the APMs of the Company. Definitions of
these APMs together with how these measures have been calculated
can be found within the Report.
Company highlights (as at 30 June 2023)
3.250p 28% of GAV GBP121.8m
------------------------- ----------------------- ----------------------------
Dividend pence per share CBILS* and RLS** loans Gross assets
------------------------- ----------------------- ----------------------------
+2.66% 37 1.91 years
------------------------- ----------------------- ----------------------------
NAV Total return Number of investments Average life of investments
------------------------- ----------------------- ----------------------------
*Coronavirus Business Interruption Loan Scheme
** Recovery Loan Scheme
Portfolio Summary (as at 30 June 2023)
Largest 10 loans by drawn amounts across the entire
portfolio
Investment type Valuation Percentage of
Business activity (Private/Public/Bond) GBP'000 gross asset
(%)
-------------------------------- ------------------------ ---------- --------------
Care home Private Loans 12,728 10.50
-------------------------------- ------------------------ ---------- --------------
Automotive parts manufacturing Private Loans 9,594 7.90
-------------------------------- ------------------------ ---------- --------------
Hotel Private Loans 8,410 6.90
-------------------------------- ------------------------ ---------- --------------
Health and Well-being Private Loans 8,184 6.70
-------------------------------- ------------------------ ---------- --------------
Asset backed lending Private Loans 6,694 5.50
-------------------------------- ------------------------ ---------- --------------
Hotel Private Loans 5,479 4.50
-------------------------------- ------------------------ ---------- --------------
Care home Private Loans 4,955 4.10
-------------------------------- ------------------------ ---------- --------------
Hotel Private Loans 4,943 4.10
-------------------------------- ------------------------ ---------- --------------
Student accommodation Private Loans 4,430 3.60
-------------------------------- ------------------------ ---------- --------------
Hotel Private Loans 4,085 3.40
-------------------------------- ------------------------ ---------- --------------
Ten largest holdings 69,502 57.20
---------------------------------------------------------- ---------- --------------
Other private loan investments 43,564 35.70
---------------------------------------------------------- ---------- --------------
Wholly owned asset 3,119 2.60
---------------------------------------------------------- ---------- --------------
Total holdings 116,185 95.50
---------------------------------------------------------- ---------- --------------
Other net current assets 5,607 4.50
---------------------------------------------------------- ---------- --------------
Gross assets* 121,792 100.00
---------------------------------------------------------- ---------- --------------
Valuation conducted by external Valuation Agent.
* The Company's gross assets comprise the net asset value of the
Company's Ordinary Shares and the Bank loan (the calculation can be
found in the Interim Report).
CHAIR'S STATEMENT
Introduction
Dear Shareholders,
On behalf of the Board, I am pleased to present RM
Infrastructure Income plc's ("RMII" or "the Company") Interim
Report and Accounts for the first half of 2023 (the "Period"). The
first six months of the year have been challenging for fixed income
markets as we have seen a further material increase in UK
government bond yields, especially at the front end of the United
Kingdom yield curve, with two-year government bond yields rising
circa 200bps over the Period. Despite this, it is pleasing that the
Net Asset Value ( " NAV " ) % Total Return has remained positive,
albeit slightly behind target. The share price % total return has
been -15.4 % and whilst it is disappointing to report an absolute
negative return there has been outperformance versus more
traditional corporate bond funds and leveraged loan indices as well
as the other listed peers.
Overall, the short-dated nature of the portfolio has provided a
certain measure of protection from rising interest rates, and this
was strategically planned by the Board and Investment Manager who
have been saying for several years that absolute levels of interest
rates were too low and likely to rise.
Credit spreads as measured by the Markit iTraxx Europe Crossover
index have tightened from 475 to 400bps at the Period end. Given
the shape of the UK yield curve, which is inverted, the tightest
point for credit spreads in the near to medium term may have
passed, with credit conditions set to deteriorate as financing
becomes more expensive.
As the shares were trading above an average discount of zero
during the six-month period to 31 March 2023, the Company undertook
a consultation with Shareholders to determine how they wished for
the Company to continue. This consultation was undertaken in the
later part of the Period, and it was pleasing to speak and hear
from so many Shareholders. Whilst the feedback was overwhelmingly
positive and supportive of our investment strategy, there is a
common theme of Shareholder focus which is not just on investment
performance but on other areas in particular liquidity, size and
cost for Shareholders.
Robust NAV performance
The NAV % Total Return for the Period was 2.66% which is
slightly behind our target, however, when set against the weaker
backdrop for credit as described above, is not unexpected.
Delivering stable income
Since inception there have been 25 quarterly distributions at or
above target to Shareholders totalling 38.85 pence per Ordinary
Share.
The Company paid the dividend for the first quarter of 2023 of
1.625 pence per Ordinary Share on 30 June 2023 and in addition the
Board has declared a second interim dividend of 1.625 pence per
Ordinary Share for Q2 2023, which will be payable on 29 September
2023 to Shareholders on the register at the close of business on 8
September 2023. Therefore, the aggregate dividend in respect of the
Period is 3.25 pence per Ordinary Share.
As of 30 June 2023, the issued share capital of the Company
consisted of 117,586,359 Ordinary Shares with voting rights and
4,638,222 Ordinary Shares held in Treasury and the closing
mid-price was 69.00 pence per Ordinary Share. The NAV per Ordinary
Share was 91.68 pence, correspondingly the share price to NAV was a
circa 24.74% discount. The Board has been hampered in its option to
address this discount due to the approaches made by third parties
but we expect any solution will help to narrow the discount from
its current extreme levels.
Portfolio
The portfolio size reduced as the Revolving Credit Facility
("RCF") was largely paid back during the Period. The number of
loans remained roughly stable during the Period, from 38 at year
end to 37 at Period end. Invested assets totalled GBP123m (GBP126m
at year end). Overall private debt investments represent circa 96%
of the portfolio holdings and 4% within equity (unlevered ownership
of investment reference 68, student accommodation asset
Coventry.)
Compared to the position on 31 December 2022 ("year-end") the
average yield on investments at 10.02% is 87 basis points higher
and the expected average life of the portfolio is 1.91 years.
Outlook
As Shareholders will be aware, the Board, the Investment Manager
and Singer Capital Markets, our corporate broker, have been
evaluating the future strategy of the Company. Having consulted
widely with Shareholders and received various approaches from third
parties, as an alternative to a managed wind-down, the Board is
currently assessing a proposal from GCP Infrastructure Income
Limited regarding a potential partial combination with RMII in
conjunction with its proposed merger with GCP Asset Backed Income
Fund. Once the proposal has been assessed in full, including
further consultation with our Shareholders, the Board will make an
announcement on the future course of the Company.
Since this process started Shareholders have been very generous
in giving their time and in showing patience in what has turned out
to be a much more complex process than first imagined. In every
complex situation where those involved have very differing views,
it will be impossible to "please all of the people, all of the
time" but we expect that whatever decision is made on the future of
the Company will be in the best interests of our Shareholders as a
whole and any proposals tabled will be put to a shareholder
vote.
The Board is grateful for the support of Shareholders from such
a broad investor base. Please do not hesitate to contact me through
Singer Capital Markets if any additional information is
required.
Norman Crighton
Chair
17 August 2023
INVESTMENT MANAGER'S REPORT
Overview
Income Performance & NAV % Total Return
RM Funds ("RM" or the "Investment Manager") is satisfied with
the Company's continued positive performance in the Period, in
which the portfolio delivered a steady net interest income with two
further dividends declared for the Period totalling 3.25 pence per
Ordinary Share. Overall, since inception there have been 25
distributions totalling 38.85 pence per Ordinary Share to
Shareholders.
The NAV % Total Return for the Period was 2.66%. Whilst slightly
behind the Company's target, the portfolio's performance versus the
observable credit peer group is favourable, as outlined below:
% Total Return
----------------------
6 month
period
ending Inception
30 June to 30
2023 June 2023
--------- -----------
RM Infrastructure Income NAV 2.66 40.87
RM Infrastructure Income Share
Price TR -15.20 5.77
S&P European Leveraged Loan
Index 3.37 -4.18
MarkIT iBoxx EUR Liquid High
Yield TRI -1.99 -3.62
Share Price
The share price has been disappointing with the Company's shares
opening the Period at 85.00 pence and closing the period at 69.00
pence, delivering a negative total return of 15.20%. This has
entirely been driven by the share price discount to NAV increasing
from 8.10% to 24.74%. There were some share buybacks which occurred
at the beginning of the Period, however discounts have opened up
not just across investment trusts focused on private debt
strategies but across the whole closed ended Investment Trust and
REIT market. Sadly, RMII is not immune from this and in the view of
RM Funds, caused largely as a function of the shape of the UK yield
curve which has one year Sterling Overnight Interest Average
("SONIA") at over 6% at the Period end. The target remains to
continue to reduce this discount and the steps that the Investment
Manager and Board are undertaking at the moment with regards to
consulting with Shareholders seek to address this discount.
Investment Manager aligned with Shareholder interest
RM Funds purchased 12,500 Ordinary Shares in the Company during
the Period. This takes the direct investment in the Company to
1,329,125 Ordinary Shares. The Investment Manager continues to
believe this is the best way of demonstrating its alignment with
the interests of Shareholders.
Market environment
Fixed income markets continue to be dominated by the inflation
story and in the UK, we have seen the yield curve not only move
higher but start to invert as well. Front end UK-Government bonds
have increased materially over the Period with 2-year gilt yields
at 5.25% at the Period end versus 1.75% on 30 June 2022 - 350bp
higher. Over the same period 40-year gilts have moved from 2.3% to
4% which is roughly half of the widening seen in the 2-year part of
the curve.
Overall, the inverted shape of the curve is the key takeaway. It
shows credit conditions are tightening, the market environment for
credit is deteriorating and it is probably signalling a recession
in the UK is due within the next twelve months.
Portfolio Update
As at the Period end, the capital available for investment was
fully deployed with a small drawing under the RCF. The average
yield on investments of 10.02% was slightly higher by 87bps than at
year end and reflects the yield widening during the Period. The
portfolio remains well diversified with 37 investments across 12
sectors. RM Funds continues to believe that the CBILS and the
Recovery Loan Scheme ("RLS") investment loans, which benefit from a
UK Government partial guarantee, also offer a material credit
enhancement for the portfolio.
Overall, income generation of GBP5.52m was similar to the first
half of 2022 (GBP5.3m H1 2021), split between cash and Payment in
Kind ("PIK") 85%/15%, which is down from 86%/14% during the same
period last year. For the Period, there were five drawdowns to
existing facilities, one new investment, 11 partial repayments and
two full repayments, which again further demonstrate the successful
execution of the business strategy as the Company makes loans,
receive interest from borrowers and continues to get repaid.
As at 31 December 2022, there was one loan which was under
enhanced monitoring by the investment team and at the end of the
Period there were three additional loans added to the enhanced
monitoring list. The key developments during the Period for each of
these loans is detailed below:
1. Hotel development & contractor, Glasgow (Loan References 58, 79, 80 & 92)
Overview: This hotel was scheduled to open in June 2022 and will
be operated by Virgin Hotels under a 35-years Hotel Management
Agreement. The total market value exposure that is correlated to
the outcome of this asset is currently cGBP12.2m representing 11.3%
of Company net assets.
Update: The Clyde Street Virgin Hotel, Glasgow, received its
temporary occupational certificate post Period end. This
essentially means that the hotel is now ready to start trading,
with the first paying guests expected to be welcomed before the end
of August 2023.
As a reminder, most of the exposure has been funded by CBILS and
/ or RLS loans and to date the loans have been marked near their
guaranteed level of c.80p. This was to reflect the uncertain
opening date as well as the increased risk due to cost overruns.
Consequently, we believe the risks are appropriately reflected in
the marks, with limited downside given the partial government
guarantee provided by such CBILS and / or RLS facilities.
2. Accommodation, Student Accommodation (Loan Reference 84)
Overview: GBP4m senior secured CBILS loan to a UK-based
Purpose-Built Student Accommodation ("PBSA") developer and
operator.
Update: The Borrower was scheduled to received c.GBP3.5m of
proceeds derived from the sale of two operational PBSA assets in a
JV structure which were to be used in repayment of RM's outstanding
debt. Significant disagreements have arisen between the JV partners
which have led to the above-mentioned proceeds not yet being
transferred to the Borrowing entity. In H1 2023, a total of
c.GBP3.25m of fresh subordinated capital was injected in the
borrowing company by the borrower. This is a CBILS loan and
benefits from a UK government guarantee covering up to 80% of
capital outstanding.
3. Accommodation, Student Accommodation (Loan References 74 & 89)
Overview: RM has two investment loans; GBP930k junior secured -
Loan Reference 74 and GBP5m CBILS junior secured - Loan Reference
89, secured against a portfolio of 5 operational & performing
PBSA properties in the UK.
Update: In April 2023, the lending group moved to a recovery
process. Accordingly, the principal outstanding for Loan Reference
89, which is RM's most junior position in the capital structure,
was written down to its CBILS guarantee level of 80p. We expect the
receivership process to be concluded during the course of Q3
2023.
4. Healthcare - Aged care (Loan References 88, 82 & 83)
Overview: RM has three investment loans: GBP12.8m/GBP5m CBILS
/GBP2.8m secured over two separate purpose-built aged care homes.
During Q1 2023 a valuation report was received that triggered a
Loan To Value covenant breach. Since then, a second valuation
report providing a second opinion has satisfied the loan
covenant.
Update : By the period end there was an accrued balance on
interest which was paid post period end in cash. These loans have
now been removed from the watchlist .
Outlook
Overall, we see interest rates are now at or near their peaks.
The curve inversion within the UK gilt market is creating a
compelling story for valuations across the front end of the fixed
income curve. There will probably be no better time to be investing
into short-dated credit and closed-ended real asset funds than now,
as the high levels of short-dated SONIA have driven down valuations
and increased share price discounts to NAV, which in our view are
unlikely to be maintained. The market is behind the curve as the
inflation story is now moving into the background and the outlook
will be driven by systemic risks that have arisen by the velocity
and extent of the interest rate rises within the United
Kingdom.
RM Capital markets Limited
17 August 2023
INTERIM MANAGEMENT REPORT
The Directors are required to provide an Interim Management
Report in accordance with the Financial Conduct Authority ("FCA")
Disclosure Guidance and Transparency Rules ("DTR"). The Chair's
Statement and the Investment Manager's Report in this half-yearly
report provide details of the important events which have occurred
during the Period and their impact on the financial statements. The
following statements on principal and emerging risks and
uncertainties, related party transactions, going concern and the
statement of Directors' responsibilities, together, constitute the
Interim Management Report for the Company for the six months ended
30 June 2023. The outlook for the Company for the remaining six
months of the year ending 31 December 2023 is discussed in the
Chair's Statement and the Investment Manager's Report.
Principal and emerging risks and uncertainties
The Board has a dynamic risk management register in place to
help identify principal and emerging risks in the business and
oversee the effectiveness of internal controls and processes. The
principal and emerging risks and uncertainties facing the Company
are as follows:
-- Market risk - rates of inflation (counterparty affordability), rates of interest
-- Liquidity risk - liquidity opportunity and discount control
-- Leverage and borrowing risk - the Company's investment policy
involves the use of leverage, which exposes the company to risks
associated with borrowings
-- Credit / counterparty risk - counterparty default, borrower
default, loan non-performance and collateral risk
Emerging risks are considered by the Board at its quarterly
meetings and by the Audit and Management Engagement Committee as
part of its risk management and internal control review. Failure to
identify emerging risks may cause reactive actions rather than
being proactive and the Company could be forced to change its
structure, objective or strategy and, in worst case, could cause
the Company to become unviable.
A detailed explanation of the principal and emerging risks and
uncertainties to the Company are detailed in the Company's most
recent Annual Report for the year ended 31 December 2022, published
on 26 April 2023, which can be found on the Company's website at
https://rm-funds.co.uk/rm-infrastructure-income/investor-relations/
. The Board is of the opinion that these principal and emerging
risks are equally applicable to the remaining six months of the
financial year as they were to the six months being reported
on.
Since the publication of the 2022 Annual Report and Accounts,
there continues to be increased risk levels within the global
economy. The Investment Manager believes the key risk factors that
have increased during the period are:
Interest rate risk - due to a material increase in the Sterling
Overnight Interest Average ("SONIA") which could make the
refinancing of loans due for repayment over the next two years more
challenging for borrowers given the increased cost of the "risk
free" rate. These SONIA rates are predicted to remain high given
the shape of the SONIA curve which currently rises over the next 12
months. This causes specific risk in two areas: portfolio borrowers
seeking refinancing, as the materially higher funding cost could
affect the interest cover on the loan thus making new funding
difficult to obtain. On portfolio exposures where a borrower is
seeking to refinance a third-party debt ranking senior to RMII,
this could also increase the likelihood of any RMII Mezzanine loan
covenants being breached.
Collateral risk : real estate values as evidenced by price
performance within the Real Estate Investment Trust ("REIT")
segment have reduced over the period. Whilst these price falls have
not been reflected fully by these REITS or other real estate
indices the Investment Managers believe that the probability has
increased that the realisable market valuations are lower at the
end of the period than the beginning of the period. Given that the
RMII portfolio has extensive security over real estate this could
negatively affect recoveries in any enforcement scenarios.
Availability of credit : the Investment Manager believes that
credit is less available at the end of the period than the start of
the period and this will potentially negatively affect borrowers
who are seeking refinance. Given the RMII portfolio is exposed to
loans with a final maturity date this will increase the refinancing
risk.
The Board closely monitors and assesses these continued
uncertainties as to how they could impact and affect the Company's
trading position with regards our investment objective, portfolio
and thus our Shareholders and where appropriate endeavour to
mitigate the risk.
The Investment Manager and other key service providers provide
periodic reports to the Board on operational resilience. The Board
is satisfied that the key service providers have the ability to
continue their operations efficiently in a hybrid working
environment.
Related party transactions
The Company's Investment Manager, RM Capital Markets Limited is
considered a related party under the Listing Rules. Details of the
amounts paid to the Company's Investment Manager and the Directors
during the Period are detailed in the Notes to the Financial
Statement.
Going concern
The Directors have adopted the going concern basis in preparing
the financial statements. The following is a summary of the
Directors' assessment of the going concern status of the
Company.
The Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for at
least twelve months from the date of this document. In reaching
this conclusion, the Directors have considered the Company's
portfolio of loan investments of GBP 116.2 million (30 June 2022:
GBP126.5 million; 31 December 2022: GBP120.0 million) as well as
its income and expense flows and the cash position of GBP 0.9
million (30 June 2022: GBP0.7 million; 31 December 2022: GBP3.0
million). The Company's net assets at 30 June 2023 were GBP 107.8
million (30 June 2022: GBP110.4 million; 31 December 2022: GBP108.8
million). The total expenses (excluding finance costs and taxation)
for the period ended 30 June 2023 were GBP 1.1 million (30 June
2022: GBP1.1 million; 31 December 2022: GBP2.2 million). At the
date of approval of this document, based on the aggregate of
investments and cash held, the Company has substantial operating
expenses cover.
As part of their assessment, the Directors have fully considered
each of the Company's loans, giving careful consideration to the
consequences for the Company of continuing uncertainties in the
global economy.
Income obligations have been met by borrowers and there is a
diverse portfolio of Loan investments; Directors see an increase in
the risk to the income from the Company loans within the portfolio
as the outlook is uncertain. However, these loans have a number of
specific lender protections (such as loan to value covenants and
cashflow or earnings covenants) which are being monitored.
Given the level of market volatility experienced, the Investment
Manager has performed stress tests on the Company's income and
expenses and the Directors remain comfortable with the liquidity of
the Company. As part of their assessment, the Board have fully
considered and assessed the Company's portfolio of investments,
giving careful consideration to the consequences for the Company of
continuing uncertainties in the global economy. The Russian
invasion of Ukraine has created significant supply chain disruption
and the subsequent rise in global energy prices, inflation and
rising interest rates worldwide have led to a more uncertain
investment environment. The Directors continue to review the
processes in place to mitigate geopolitical and market risk; and to
ensure that these are appropriate and proportionate in the current
market environment.
STATEMENT OF DIRECTORS' RESPONSIBILITY
for the Half-yearly Report
The Directors confirm to the best of their knowledge that:
> The condensed set of financial statements contained within
the Half-yearly report has been prepared in accordance with IAS 34
Interim Financial Reporting.
> The Interim Management Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FCA's Disclosure
Guidance and Transparency Rules.
Norman Crighton
Chair
17 August 2023
FINANCIAL STATEMENTS
Condensed unaudited statement of comprehensive income
For the six months ended 30 June 2023
Six months ended 30 Six months ended 30 Year ended 31 December
June 2023 June 2022 2022*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(Losses) on
investments - (936) (936) - (929) (929) - (2,072) (2,072)
Income 4 5,524 - 5,524 5,446 - 5,446 10,768 - 10,768
Investment
management
fee 5 (476) - (476) (490) - (490) (971) - (971)
Other expenses 5 (649) - (649) (612) - (612) (1,230) - (1,230)
-------------------- --------- -------- -------- ----------- ---------- ---------- ----------- -------- -------- --------
Return before
finance
costs and taxation 4,399 (936) (3,463 4,344 (929) 3,415 8,567 (2,072) 6,495
Finance costs (597) - (597) (431) - (431) (1,102) - (1,102)
-------------------- --------- -------- -------- ----------- ---------- ---------- ----------- -------- -------- --------
Return on ordinary activities
before taxation 3,802 (936) 2,866 3,913 (929) 2,984 7,465 (2,072) 5,393
Taxation 6 - - - (15) - (15) (3) - (3)
-------------------- --------- -------- -------- ----------- ---------- ---------- ----------- -------- -------- --------
Return on ordinary
activities after
taxation 3,802 (936) 2,866 3,898 (929) 2,969 7,465 (2,072) 5,390
-------------------- --------- -------- -------- ----------- ---------- ---------- ----------- -------- -------- --------
Return per ordinary
share (pence) 8 3.23p (0.80p) 2.43p 3.31p (0.79p) 2.52p 6.33p (1.76p) 4.57p
-------------------- --------- -------- -------- ----------- ---------- ---------- ----------- -------- -------- --------
The Total column of this statement is the profit and loss account of the Company.
All the Revenue and Capital items in the above statement derive from continuing operations.
'Return on ordinary activities after taxation' is also the Total comprehensive income for
the period.
The notes form an integral part of these financial statements.
Condensed unaudited statement of financial position
As at 30 As at 30 As at 31
June 2023 June 2022 December 2022*
Notes GBP'000 GBP'000 GBP'000
--------------------------------------- ------ ----------- ----------- ----------------
Fixed assets
Investments at fair value through
profit or loss 3 116,186 126,460 119,970
Current assets
Cash and cash equivalents 880 690 2,993
Receivables 7,293 3,187 5,421
--------------------------------------- ------ ----------- ----------- ----------------
8,173 3,877 8,414
Payables: amounts falling due
within one year
Payables (2,567) (1,707) (2,308)
Bank loan - Credit facility (13,987) (18,241) (17,271)
(16,554) (19,948) (19,579)
--------------------------------------- ------ ----------- ----------- ----------------
Net current liabilities (8,381) (16,071) (11,165)
--------------------------------------- ------ ----------- ----------- ----------------
Total assets less current liabilities 107,805 110,389 108,805
--------------------------------------- ------ ----------- ----------- ----------------
Net assets 107,805 110,389 108,805
--------------------------------------- ------ ----------- ----------- ----------------
Capital and reserves: equity
Share capital 7 1,175 1,178 1,176
Share premium 70,168 70,168 70,168
Special reserve 44,597 44,813 44,640
Capital reserve (11,157) (9,078) (10,221)
Revenue reserve 3,022 3,308 3,042
Total shareholders' funds 107,805 110,389 108,805
--------------------------------------- ------ ----------- ----------- ----------------
NAV per share - Ordinary Shares
(pence) 9 91.68p 93.68p 92.49p
--------------------------------------- ------ ----------- ----------- ----------------
*Audited
The financial statements of the Company were approved and
authorised for issue by the Board of Directors on 17 August 2023
and signed on their behalf by:
Norman Crighton
Chair
RM Infrastructure Income plc incorporated in England and Wales
with registered number 10449530.
The notes form an integral part of these financial
statements.
Condensed unaudited statement of changes in equity
For the six months ended
30 June 2023
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------ --------- --------- --------- --------- --------- -----------
Balance as at beginning
of the period 1,176 70,168 44,640 (10,221) 3,042 108,805
Return on ordinary activities - - - (936) 3,802 2,866
Buy back of shares 7 (1) - (42) - - (43)
Shares buy back costs - - (1) - - (1)
Dividend paid 10 - - - - (3,822) (3,822)
Balance as at 30 June
2023 1,175 70,168 44,597 (11,157) 3,022 107,805
------------------------------- ------ --------- --------- --------- --------- --------- -----------
For the six months ended 30 June 2022
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------ --------- --------- --------- --------- --------- -----------
Balance as at beginning
of the period 1,178 70,168 44,813 (8,149) 3,240 111,250
Return on ordinary activities - - - (929) 3,898 2,969
Buyback of shares 7 - - - - - -
Share buyback costs - - - - - -
Dividend paid 10 - - - - (3,830) (3,830)
Balance as at 30 June
2022 1,178 70,168 44,813 (9,078) 3,308 110,389
------------------------------- ------ --------- --------- --------- --------- --------- -----------
For the year ended 31 December 2022*
Share Share Special Capital Revenue
capital premium reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------ --------- --------- --------- --------- --------- -----------
Balance as at beginning
of the year 1,178 70,168 44,813 (8,149) 3,240 111,250
Return on ordinary activities - - - (2,072) 7,462 5,390
Buy back of shares 7 (2) 2 (173) - - (173)
Shares buy back costs - (2) - - - (2)
Dividend paid 10 - - - - (7,660) (7,660)
------------------------------- ------ --------- --------- --------- --------- --------- -----------
Balance as at 31 December
2022 1,176 70,168 44,640 (10,221) 3,042 108,805
------------------------------- ------ --------- --------- --------- --------- --------- -----------
*Audited
Distributable reserves comprise: the revenue reserve; capital
reserve attributable to realised profits; and the special
reserve.
Share capital represents the nominal value of shares that have
been issued. The share premium includes any premiums received on
the issue of share capital. Any transaction costs associated with
the issuing of shares are deducted from share premium.
The notes form an integral part of these financial
statements.
Condensed unaudited statement of cash flows
For the six months ended 30 June 2023
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2023 2022 2022*
GBP'000 GBP'000 GBP'000
-------------------------------------- --- --------------- --------------- -------------
Operating activities
Return on ordinary activities
before finance costs and taxation** 3,463 3,415 6,495
Adjustments for movements
not generating an operating
cash flow:
Adjustment for losses on investments 845 720 1,802
PIK adjustments to the operating
cash flow (1,256) (1,310) (2,466)
Adjustments for balance sheet
movements:
Increase in receivables (1,872) (503) (2,737)
Increase/(decrease) in payables 259 (155) 458
Net cash flow from operating
activities 1,439 2,167 3,552
-------------------------------------- --- --------------- --------------- -------------
Investing activities
Private loan repayments/ bonds
sales proceeds 9,426 13,455 25,784
Private loans issued/ bonds
purchases (5,231) (12,651) (18,416)
Net cash flow from investing
activities 4,195 804 7,368
-------------------------------------- --- --------------- --------------- -------------
Financing activities
Finance costs (597) (431) (1,102)
Ordinary Share bought back 7 (43) - (173)
Ordinary Share buyback costs (1) - (2)
Oaknorth loan facility drawdown 4,266 5,670 12,550
Oaknorth loan facility repaid (7,550) (7,000) (14,850)
Equity dividends paid 10 (3,822) (3,830) (7,660)
Net cash flow used in financing
activities (7,747) (5,591) (11,237)
-------------------------------------- --- --------------- --------------- -------------
Decrease in cash (2,113) (2,620) (317)
Opening balance at beginning
of the period/year 2,993 3,310 3,310
-------------------------------------- --- --------------- --------------- -------------
Balance as at the period/year
end 880 690 2,993
-------------------------------------- --- --------------- --------------- -------------
* Audited
** Cash inflow from interest on investment holdings was
GBP2,429,000 (30 June 2022: GBP3,650,000; 31 December 2022:
GBP8,396,000).
The notes form an integral part of these financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
1. General information
RM Infrastructure Income plc (the "Company") was incorporated in
England and Wales on 27 October 2016 with registered number
10449530, as a closed-ended investment company. The Company
commenced its operations on 15 December 2016. The Company intends
to carry on business as an investment trust within the meaning of
Chapter 4 of Part 24 of the Corporation Tax Act 2010.
The Company's investment objective is to generate attractive and
regular dividends through investment in secured debt instruments of
UK SMEs and mid-market corporates including any loan, promissory
notes, lease, bond or preference share sourced or originated by the
Investment Manager with a degree of inflation protection through
index-linked returns where appropriate.
The registered office is 6(th) Floor, 125 London Wall, Barbican,
London EC2Y 5AS.
2. Basis of preparation and accounting policies
Statement of compliance
The interim unaudited financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and the
Disclosure Guidance and Transparency Rules ("DTRs") of the UK's
Financial Conduct Authority. They do not include all of the
information required for full annual financial statements and
should be read in conjunction with the financial statements of the
Company as at and for the year ended 31 December 2022. The
financial statements for the year ended 31 December 2022 have been
prepared in accordance with the UK adopted international accounting
standards. The financial information for the year ended 31 December
2022 in the interim unaudited financial statements has been
extracted from the audited Annual Report and Accounts.
When presentational guidance set out in the Statement of
Recommended Practice ("SORP") for Investment Companies issued by
the Association of Investment Companies ('the AIC') in July 2022 is
consistent with the requirements of UK adopted international
accounting standards, the Directors have sought to prepare the
financial statements on a basis compliant with the recommendations
of the SORP.
Going concern
The Directors have adopted the going concern basis in preparing
the financial statements. Details of the Directors' assessment of
the going concern status of the Company, which considered the
adequacy of the Company's resources and the level of market
volatility are given in the Interim Report.
Accounting policies
The accounting policies used by the Company in preparing these
interim unaudited financial statements are the same as those
applied by the Company in its financial statements as at and for
the year ended 31 December 2022.
3. INVESTMENT AT FAIR VALUE THROUGH PROFIT
OR LOSS
Six months Year ended
Six months ended 30 ended 30 June 31 December
June 2023 2022 2022
GBP'000 GBP'000 GBP'000
-------------------------- -------------------- --------------- -------------
Financial assets held:
Equity investments 3,119 3,593 3,593
Bond investments 4,020 6,891 4,208
Private loan investments 109,047 115,976 112,169
116,186 126,460 119,970
-------------------------- -------------------- --------------- -------------
4. INCOME
Six months ended Six months ended Year ended 31
30 June 2023 30 June 2022 December 2022
GBP'000 GBP'000 GBP'000
---------------------------- ----------------- ----------------- ---------------
Income from investments
Bond and loan interest 3,950 3,913 7,895
Bond and loan PIK interest 1,403 1,494 2,767
Arrangement fees 17 22 43
Delayed Compensation fees
received - - 2
Other income 154 17 60
----------------- ----------------- ---------------
Total 5,524 5,446 10,768
---------------------------- ----------------- ----------------- ---------------
5. INVESTMENT MANAGEMENT FEE AND OTHER EXPENSES
Six months ended Six months ended Year ended 31
30 June 2023 30 June 2022 December 2022
GBP'000 GBP'000 GBP'000
------------------------ ------------------------ --------------------------------- ----------------------
Expenses charged
to revenue:
Investment management
fees 476 490 971
Other administration
charges 649 612 1,230
Total revenue expenses 1,125 1,102 2,201
------------------------ ------------------------ --------------------------------- ----------------------
The Company's Investment Manager is RM Capital Markets Limited. Under the
amended Investment Management Agreement, effective 1 April 2020, the Investment
Manager is entitled to receive a management fee payable monthly in arrears
or as soon as practicable after the end of each calendar month an amount
one-twelfth of:
(a) 0.875 per cent. of the prevailing NAV in the event that the prevailing
NAV is up to or equal to GBP250 million; or
(b) 0.800 per cent. of the prevailing NAV in the event that the prevailing
NAV is above GBP250 million but less than GBP500 million; or
(c) 0.750 per cent. of the prevailing NAV in the event that the prevailing
NAV is above GBP500 million.
The management fee shall be payable in sterling on a pro-rata basis in respect
of any period which is less than a complete calendar month.
There is no performance fee payable to the Investment Manager.
6. TAXATION
Six months ended Six months ended Year ended 31 December
30 June 2023 30 June 2022 2022
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ----------- -------- -------- -------- -------- -------- ---------- -------- ------------
Analysis of tax charge
/ (credit)
for the period/year:
Corporation tax - - - 15 - 15 3 - 3
----------------- ----------- -------- -------- -------- -------- -------- ---------- -------- ------------
Total tax charge - - - 15 - 15 3 - 3
----------------- ----------- -------- -------- -------- -------- -------- ---------- -------- ------------
7. SHARE CAPITAL
As at 31 December
As at 30 June 2023 As at 30 June 2022 2022
---------------------- ---------------------- ----------------------
No. of No. of No. of
Shares GBP'000 Shares GBP'000 Shares GBP'000
------------------ ------------ -------- ------------ -------- ------------ --------
Allotted, issued
& fully paid:
Ordinary shares
of 1p 117,586,359 1,175 117,840,988 1,178 117,636,359 1,176
------------------ ------------ -------- ------------ -------- ------------ --------
At the period end, the Company has 117,586,359 (30 June 2022:
117,840,988; 31 December 2022: 117,636,359) Ordinary Shares in
issue with voting rights and 4,638,222 (30 June 2022: 4,383,593; 31
December 2022: 4,588,222) Ordinary Shares held in Treasury.
Share movement
The table below sets out the share movement for the six months
ended 30 June 2023.
------------------------------------------------------------------------
Shares
in issue
Shares at
Opening Shares bought 30 June
balance issued back 2023
----------------------- ----------------- ----------- ------------- -------------
Ordinary Shares 117,636,359 - (50,000) 117,586,359
------------------------- ----------------- ----------- ------------- -------------
The table below sets out the share movement for the six months
ended 30 June 2022.
------------------------------------------------------------------------
Shares
in issue
Shares at
Opening Shares bought 30 June
balance issued back 2022
----------------------- ----------------- ----------- ------------- -------------
Ordinary Shares 117,840,988 - - 117,840,988
------------------------- ----------------- ----------- ------------- -------------
The table below sets out the share movement for the year ended
31 December 2022.
------------------------------------------------------------------------
Shares
in issue
Shares at
Opening Shares bought 31 December
balance issued back 2022
----------------------- ----------------- ----------- ------------- -------------
Ordinary Shares 117,840,988 - (204,629) 117,636,359
------------------------- ----------------- ----------- ------------- -------------
8. RETURN PER ORDINARY
SHARE
Total return per Ordinary Share is based on the gain on ordinary activities
after taxation of GBP2,866,000 (30 June 2022: gain of GBP2,969,000;
31 December 2022: gain of GBP5,390,000).
Based on the weighted average of number of 117,589,381 (30 June 2022:
117,840,988; 31 December 2022: 117,839,605) Ordinary Shares in issue
for the six months ended 30 June 2022, the returns per share were as
follows:
Six months ended 30 June Six months ended 30 June
2023 2022
Revenue Capital Total Revenue Capital Total
---------------------------- ---------- --------- ------ ---------- --------- ------
Return per ordinary
share 3.23p (0.80p) 2.43p 3.31p (0.79p) 2.52p
---------------------------- ---------- --------- ------ ---------- --------- ------
Year ended 31 December
2022
Revenue Capital Total
---------------------------- ---------- --------- ------ ---------- --------- ------
Return per ordinary
share 6.33p (1.76p) 4.57p
---------------------------- ---------- --------- ------ ---------- --------- ------
9. NET ASSET VALUE PER SHARE
The net asset value per share is based on Company's total shareholders'
funds of GBP107,805,000 (30 June 2022: GBP110,389,000; 31 December 2022:
GBP108,805,000), and on 117,586,359 (30 June 2022: 117,840,988; 31 December
2022: 117,839,605) Ordinary Shares in issue at the period/year end.
10. DIVID
On the 1 March 2023, the Directors approved the payment of a final interim
dividend for year ended 31 December 2022 to Ordinary Shareholders at the
rate of 1.625 pence per Ordinary Share. The dividend had a record date
of 10 March 2023 and was paid on 31 March 2023. The dividend was funded
from the Company's revenue reserve.
On 23 May 2023, the Directors approved the payment of an interim dividend
at the rate of 1.625 pence per Ordinary Share. The dividend had a record
date of 2 June 2023 and was paid on 30 June 2023. The dividend was funded
from the Company's revenue reserve.
On 14 August 2023, the Directors approved the payment of an interim dividend
at the rate of 1.625 pence per Ordinary Share. The dividend will have a
record date of 8 September 2023 and will be payable on 29 September 2023.
The dividend will be funded from the Company's revenue reserve.
11. RELATED PARTY TRANSACTION
Fees payable to the Investment Manager are shown in the Statement of
Comprehensive Income. As at 30 June 2023 the fee outstanding to the Investment
Manager was GBP79,000 (30 June 2022: GBP80,000; 31 December 2022: GBP80,000).
Fees are payable at an annual rate of GBP36,000 to the Chair, GBP33,000
to the Chair of the Audit and Management Engagement Committee and GBP30,000
to the other Director.
The Board has been involved with various strategic issues during the
Period and therefore it was agreed that an additional one-off payment
for the six months ended 30 June 2023 would be in order for work conducted
in the first half of the financial year. Additional fees were payable
of GBP10,000 to the Chair, GBP7,500 to the Audit and Management Engagement
Chair and GBP7,500 to the other Director.
The Directors had the following shareholdings in the Company, all of
which are beneficially owned.
As at 30 June As at 30 June As at 31 December
2023 2022 2022
Ordinary shares Ordinary shares Ordinary shares
Norman Crighton 29,982 29,982 29,928
Guy Heald 20,000 20,000 20,000
Marlene Wood 20,000 20,000 20,000
12. CLASSIFICATION OF FINANCIAL INSTRUMENTS
IFRS 13 requires the Company to classify its investments in a fair value
hierarchy that reflects the significance of the inputs used in making the
measurements. IFRS 13 establishes a fair value hierarchy that prioritises
the inputs to valuation techniques used to measure fair value. The three
levels of fair value hierarchy under IFRS 13 are as follows:
Level 1
Inputs are quoted prices in active markets for identical assets or liabilities
that the entity can access at the measurement date.
Level 2
Inputs other than quoted market prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3
Inputs are unobservable for the asset or liability.
The classification of the Company's investments held at fair value through
profit or loss is detailed in the table below:
30 June 2023 30 June 2022
Level Level Level Level Level Level
1 2 3 Total 1 2 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- -------- -------- --------- ---------- -------- -------- --------------
Financial assets:
Financial assets -
Private
loans and bonds - 4,020 - 4,020 - 6,891 - 6,891
Financial assets -
Private
loans - - 109,047 109,047 - - 115,976 115,976
Financial assets -
Equity
investment - - 3,119 3,119 - - 3,593 3,539
Forward contract
unrealised
gain/(loss)* - 197 - 197 - (66) - (66)
Net financial assets - 4,217 112,166 116,383 - 6,825 119,569 126,394
--------------------- ---------- -------- -------- --------- ---------- -------- -------- --------------
*The net unrealised gain of GBP197,000 (30 June 2022: loss of GBP66,000)
on forwards is recognised within other debtors/(creditors) in the Statement
of Financial Position.
-------------------------------------------------------------------------------------------------------------
31 December 2022
Level Level Level
1 2 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- -------- -------- --------- ---------- -------- -------- --------------
Financial assets:
Financial assets - Private
loans and bonds - 4,208 - 4,208
Financial assets - Private
loans - - 112,169 112,169
Financial assets - Equity
Investments - - 3,593 3,593
Forward contract unrealised
loss* - (162) - (162)
Net financial assets - 4,046 115,762 119,808
--------------------------------- -------- -------- --------- ---------- -------- -------- --------------
*The net unrealised loss of GBP162,000 on forwards is recognised within
other creditors in the Statement of Financial Position.
As at 30 June 2023, the fair value of the Company's loans is materially
equal to the carrying value.
Investments that trade in markets that are not considered to be active
but are valued based on quoted market prices, dealer quotations or alternative
pricing sources supported by observable inputs are classified within Level
2.
Level 3 holdings are valued using a discounted cash flow analysis and benchmarked
discount/interest rates appropriate to the nature of the underlying loan
and the date of valuation.
Interest rates are a significant input into the Level 3 valuation methodology.
There have been no movements between levels during the reporting period.
The Company considers factors that may necessitate the transfers between
levels using the definition of the levels 1, 2 and 3 above.
13. POST BALANCE SHEET EVENTS
On 11 August 2023, the Board published a strategic review update (
https://rm-funds.co.uk/rm-infrastructure-income/regulatory-news/
) and will continue to update Shareholders as appropriate.
There are no other post period end events other than those disclosed
in this report.
14. STATUS OF THIS REPORT
These financial statements are not the Company's statutory
accounts for the purposes of section 434 of the Companies Act 2006.
They are unaudited. The Half-yearly financial report will be made
available to the public at the registered office of the Company.
The report will be available in electronic format on the Manager's
website ( https://rm-funds.co.uk/ ).
The Half-yearly report was approved by the Board on 17 August
2023.
OTHER INFORMATION
Alternative Performance Measures ("APMs")
Gross asset
The Company's gross assets comprise the net asset values of the
Company's Ordinary Shares and the bank loan-credit facility, with
the breakdown as follows:
As at 30 June 2023 GBP'000 Per Share (Pence)
--------------------------- ----- -------- ------------------
Ordinary Shares - NAV a 107,805 91.68
--------------------------- ------ -------- ------------------
Bank Loan-Credit facility b 13,987 -
--------------------------- ------ -------- ------------------
Gross asset value a+b 121,792 n/a
--------------------------- ------ -------- ------------------
Discount
The amount, expressed as a percentage, by which the share price
is less than the Net Asset Value per share.
As at 30 June 2023 Per Share (Pence)
-------------------------------- --------- ------------------
NAV per Ordinary Share (pence) a 91.68
-------------------------------- ----------- ------------------
Share price (pence) b 69.00
-------------------------------- ----------- ------------------
Discount (b/a)-1 -24.7%
-------------------------------- ----------- ------------------
Total return
A measure of performance that includes both income and capital
returns. This takes into account capital gains and reinvestment of
dividends paid out by the Company into its Ordinary Shares on the
ex-dividend date.
As at 30 June 2023 NAV Per Share (Pence)
----------------------------------- --------- ------- ------------------
Opening at 1 January 2023 (pence) a 92.49 85.00
----------------------------------- ---------- ------- ------------------
Closing at 30 June 2023 (pence) b 91.68 69.00
----------------------------------- ---------- ------- ------------------
Dividend adjustment factor c 1.0361 1.0422
----------------------------------- ---------- ------- ------------------
Adjusted closing (d = b x c) d 94.99 71.91
----------------------------------- ---------- ------- ------------------
Total return (d/a)-1 +2.70% -15.40%
----------------------------------- ---------- ------- ------------------
GLOSSARY
Admission Admission of the Ordinary Shares to the premium
listing segment of the Official List of the UKLA
and admission of the Shares to trading on the main
market for listed securities of the London Stock
Exchange
---------------------------- -----------------------------------------------------------
AIC Association of Investment Companies
---------------------------- -----------------------------------------------------------
Alternative Investment An investment vehicle under AIFMD. Under AIFMD (see
Fund or "AIF" below) the Company is classified as an AIF
---------------------------- -----------------------------------------------------------
Alternative Investment A European Union directive which came into force
Fund Managers Directive on 22 July 2013 and has been implemented Managers
of "AIFMD" Directive or "AIFMD" in the UK.
---------------------------- -----------------------------------------------------------
Annual General Meeting A meeting held once a year which Shareholders can
or "AGM" attend and where they can vote on resolutions to
be put forward at the meeting and ask directors
questions about the Company in which they are invested.
---------------------------- -----------------------------------------------------------
C Shares C Shares of 10 pence each in the capital of the
Company.
---------------------------- -----------------------------------------------------------
CTA 2010 Corporation Tax Act 2010.
---------------------------- -----------------------------------------------------------
Custodian An entity that is appointed to safeguard a company's
assets.
---------------------------- -----------------------------------------------------------
Discount The amount, expressed as a percentage, by which
the share price is less than the net asset value
per share.
---------------------------- -----------------------------------------------------------
Dividend Income receivable from an investment in shares.
---------------------------- -----------------------------------------------------------
Ex-dividend date The date from which you are not entitled to receive
a dividend which has been declared and is due to
be paid to Shareholders.
---------------------------- -----------------------------------------------------------
Financial Conduct Authority The independent body that regulates the financial
or "FCA" services industry in the UK.
---------------------------- -----------------------------------------------------------
Gearing A way to magnify income and capital returns, but
which can also magnify losses. A bank loan is a
common method of gearing.
---------------------------- -----------------------------------------------------------
Index A basket of stocks which is considered to replicate
a particular stock market or sector.
---------------------------- -----------------------------------------------------------
Investment company A company formed to invest in a diversified portfolio
of assets.
---------------------------- -----------------------------------------------------------
Investment Trust An investment company which is based in the UK and
which meets certain tax conditions which enables
it to be exempt from UK corporation tax on its capital
gains. The Company is an investment trust.
---------------------------- -----------------------------------------------------------
Leverage An alternative word for "Gearing".
Under AIFMD, leverage is any method by which the
exposure of an AIF is increased through borrowing
of cash or securities or leverage embedded in derivative
positions.
Under AIFMD, leverage is broadly similar to gearing,
but is expressed as a ratio between the assets (excluding
borrowings) and the net assets (after taking account
of borrowing). Under the gross method, exposure
represents the sum of the Company's positions after
deduction of cash balances, without taking account
of any hedging or netting arrangements. Under the
commitment method, exposure is calculated without
the deduction of cash balances and after certain
hedging and netting positions are offset against
each other.
---------------------------- -----------------------------------------------------------
Liquidity The extent to which investments can be sold at short
notice.
---------------------------- -----------------------------------------------------------
Loans or Secured Debt Secured debt instruments of UK SMEs and mid-market
Instruments corporates and/or individuals including any loan,
promissory notes, lease, bond, or preference share
such debt instruments.
---------------------------- -----------------------------------------------------------
Net Assets An investment company's assets less its liabilities.
---------------------------- -----------------------------------------------------------
Net asset value (NAV) Net assets divided by the number of Ordinary Shares
per Ordinary Share in issue (excluding any shares held in treasury).
---------------------------- -----------------------------------------------------------
Ordinary Shares The Company's Ordinary Shares of 1 pence each in
the capital of the Company.
---------------------------- -----------------------------------------------------------
Portfolio A collection of different investments held in order
to deliver returns to Shareholders and to spread
risk.
---------------------------- -----------------------------------------------------------
Share buyback A purchase of a company's own shares. Shares can
either be bought back for cancellation or held in
treasury.
---------------------------- -----------------------------------------------------------
Share price The price of a share as determined by a relevant
stock market.
---------------------------- -----------------------------------------------------------
Treasury shares A company's own shares which are available to be
sold by a company to raise funds.
---------------------------- -----------------------------------------------------------
Volatility A measure of how much a share moves up and down
in price over a period of time.
---------------------------- -----------------------------------------------------------
ZDP Share Zero dividend preference Share.
---------------------------- -----------------------------------------------------------
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END
IR SFEESWEDSESA
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