TIDMPLI 
 
Perpetual Income and Growth Investment Trust plc 
 
Half-Yearly Financial Report for the Six Months to 30 September 2019 
 
Key Facts 
 
Perpetual Income and Growth Investment Trust plc (the 'Company') is an 
investment trust company listed on The London Stock Exchange. 
 
Investment Objective of the Company 
 
The Company's investment objective is to provide shareholders with capital 
growth and real growth in dividends over the medium to long term from a 
portfolio of securities listed mainly in the UK equity market. 
 
Performance Statistics 
 
                                                        SIX MONTHSED 
                                                      30 SEPTEMBER 
                                                              2019 
 
Total Return(1)(2)(3) (all dividends reinvested): 
 
Net asset value (NAV) - debt at market value                (1.2)% 
 
Share price                                                 (1.0)% 
 
FTSE All-Share Index(4)                                       4.6% 
 
                                                                 SIX MONTHSED 
 
                                                      30 SEPTEMBER   30 SEPTEMBER           % 
                                                              2019           2018      CHANGE 
 
Revenue 
 
Basic revenue return per ordinary share 
 
    - including special dividends                            9.65p          8.28p       +16.5 
 
    - excluding special dividends                            9.39p          8.28p       +13.4 
 
Dividends - first interim                                    3.40p          3.25p 
 
Dividends - second interim                                   3.40p          3.25p 
 
Dividends - total                                            6.80p          6.50p        +4.6 
 
                                                                AT             AT 
                                                      30 SEPTEMBER       31 MARCH           % 
                                                              2019           2019      CHANGE 
 
Shareholders' funds 
 
Net assets (GBP'000)(5)                                      805,430        881,546       (8.6) 
 
NAV per share - debt at market value                        351.9p         363.2p       (3.1) 
 
Share price and discount 
 
Share price(1)                                              312.0p         323.5p       (3.6) 
 
Discount to NAV(6) - debt at market value                  (11.3)%        (10.9)% 
 
Gearing (debt at market value): 
 
  - gross gearing(7)                                         18.7%          17.3% 
 
  - net gearing(8)                                           18.7%          17.3% 
 
(1) Source: Refinitiv. 
 
(2) See Glossary of Terms and Alternative Performance Measures (APM) on pages 
66 to 68 of the 2019 annual financial report for the explanation and 
calculation of APMs. 
 
(3) The combined effect of any dividends paid, together with the rise or fall 
in the share price or NAV. Any dividends received by a shareholder are assumed 
to have been reinvested in either additional shares (i.e. share price total 
return) or in the Company's assets (i.e. NAV total return). 
 
(4) The Benchmark index of the Company. 
 
(5) Includes 14,741,342 shares bought back at an average price of 304.9p. 
 
(6) Discount to NAV - debt at market value: (share price less NAV per share 
with debt at market value) ÷ NAV per share with debt at market value. 
 
(7) Gross gearing: borrowings ÷ shareholders' funds. 
 
(8) Net gearing: borrowing less cash ÷ shareholders' funds. 
 
. 
 
Chairman's Statement 
 
Performance 
 
I am disappointed to report that the net asset value (NAV) total return 
performance in the six months to 30 September 2019, with dividends reinvested, 
was -1.2%, compared with +4.6% for our benchmark FTSE All-Share Index. The 
share price total return was -1.0% for the period. In contrast to the NAV and 
share price performance, revenue has remained strong. 
 
The portfolio experienced mixed results. The pall over UK focused stocks from 
the uncertainty around Brexit continued, and the period also saw other setbacks 
including a short seller attack on Burford Capital and negative market 
sentiment towards tobacco stocks. In contrast, a number of other holdings, 
including in particular some focused around UK domestic opportunities, did 
well. Further details can be found in the Manager's Report. 
 
The Board is very sensitive to shareholder concerns about the continued weak 
results. We engage regularly with the portfolio manager, Mark Barnett, who 
continues to apply his consistent valuation based investment approach. We have 
also had a number of discussions with Invesco management about the continuing 
poor performance and about processes around individual portfolio managers. We 
note the recent appointment of a new Chief Investment Officer, Stephanie 
Butcher, and have met with her to discuss new initiatives to be put in place 
with the aim to improve portfolio performance. We will be closely monitoring 
progress. 
 
Share price discount 
 
The share price discount to NAV ranged between 10.5% and 15.0% during the 
period. We have ramped up the programme of share buybacks, instituted last 
year. Through these we are seeking to stabilise the discount, to provide 
liquidity to take out overhangs in the market and to accrue value to remaining 
shareholders through realising the discount on the shares bought back. During 
the period the Company bought back 14.7 million shares at an average discount 
to NAV of 12.5%. However, reiterating my previous statements, improved 
portfolio performance and consequent demand for the shares will be the main 
driver to reduce the discount level. 
 
Dividend 
 
The Directors are pleased to have declared a second interim dividend of 3.4p 
per ordinary share in respect of the three months to 30 September 2019. This 
dividend will be paid on 30 December 2019 to shareholders on the register on 29 
November 2019. The shares will be marked ex-dividend on 28 November 2019. 
 
Richard Laing 
 
Chairman 
20 November 2019 
 
. 
 
Portfolio Manager's Report 
 
Market Review 
 
The UK equity market posted a positive return over the six-month period to 
30 September 2019. However, as has tended to be the case in recent reporting 
periods, this headline return masks periods of underlying volatility. Global 
markets were driven by persistent concerns of a slowdown in economic growth and 
the fluctuation of US-Sino trade tensions. Meanwhile a trend noted in previous 
periods continued; internationally orientated sectors within the FTSE 100 
continued to lead market performance. 
 
Political uncertainty surrounding negotiations for the exit from the European 
Union (EU) dominated the domestic agenda. During the period sterling served as 
the bellwether for the perceived likelihood of a "no-deal" exit. The value of 
sterling versus international currencies remained weak, with the prorogation of 
Parliament in August pushing the pound to just US$1.20. 
 
Amid this persistent domestic uncertainty, the Bank of England's Monetary 
Policy Committee voted unanimously on four occasions to hold the UK base 
interest rate at 0.75%. Latterly, officials signalled the potential for a 
future interest rate cut following the UK's exit from the EU. Economic data 
released during the period, showed a slowdown in economic growth during the 
first half of 2019, a result of weaker business investment and slowing global 
economic growth. The UK economy expanded in the third quarter, avoiding 
recession. Employment data remained robust, with the unemployment rate below 4% 
and more than 800,000 labour market vacancies. 
 
Portfolio Review 
 
The Company's investments have continued to generate meaningful growth in 
income that has supported the growth in dividends. However, the capital returns 
have been disappointing as a consequence of the challenging backdrop facing UK 
domestically orientated companies, some particular stock specific challenges, 
and also the consequences of a large forced seller in the UK equity market. The 
Company's net asset value, including reinvested dividends, provided a total 
return of -1.2% over the period under review, compared with a total return of 
+4.6% by the FTSE All-Share Index. 
 
The portfolio's core themes of UK domestic value, international growth 
opportunities, tobacco and non-correlated financials have remained consistent 
over the past six months. The tilt towards UK domestic companies has been 
maintained, as persistent negativity towards domestic sectors continues to 
present compelling opportunities. Exposure to selective global industries, 
namely oil and tobacco, remains prominent whilst a significant proportion of 
the portfolio is also invested in non-correlated financials. The low 
correlation of investments held by the Company with the FTSE All-Share Index 
affords two important benefits to the portfolio; business risk diversification 
and income diversification. This is especially important given the 
concentration of dividend income in the UK stock market. 
 
The portfolio's UK domestic opportunities theme continued to provide some 
positive returns over the period. BCA Marketplace, KCOM and Next were the 
standout contributors within this theme. Both KCOM and BCA Marketplace received 
private equity bids during the period. KCOM's Board of Directors recommended a 
bid in April, but later abandoned it in favour of an enhanced all cash offer 
from a European infrastructure fund. Meanwhile, BCA Marketplace confirmed in 
June that it was in advanced discussions with a private equity firm, following 
an all cash offer for the company. Elsewhere within the portfolio's domestic 
theme, Next released a strong trading statement in July, which confirmed 
better-than-expected full price sales for the second quarter. Half-year results 
released in September confirmed double-digit growth in online sales, whilst 
management reaffirmed its full year guidance. 
 
The portfolio's absolute performance was also supported by its exposure to 
international growth opportunities. Stock selection within this theme proved 
decisive, as holdings in BAE Systems and HomeServe were amongst the portfolio's 
best performing stocks over the period. HomeServe released full year results in 
May, which were ahead of market expectations. The company delivered another 
year of strong organic revenue growth and confirmed a double digit increase in 
the annual dividend. Meanwhile, BAE Systems traded well over much of the 
period. The company released supportive half-year results in July that showed 
double digit profit growth, fuelled by an increase in US defence spending. 
 
Relative performance also benefitted from the portfolio's zero weighting in the 
metals & mining sector, which proved highly volatile amid geopolitical 
tensions. Conversely, the non-inclusion of several highly rated, 
internationally focussed FTSE 100 stocks proved to be a drag on relative 
performance. 
 
Tobacco remains a prominent theme, with investments in Altria, British American 
Tobacco and Imperial Brands. These holdings have previously delivered 
exceptional returns for shareholders, however more recent performance has 
continued to prove challenging. Investor sentiment towards the tobacco sector 
was affected by revived fears around regulation, whilst the release of 
underwhelming sales data for Imperial Brands' next generation technology 
reignited concerns around the outlook for future revenues. The portfolio's 
significant weighting in the sector adversely affected relative performance, 
with negative returns from non-UK index stock Altria being a significant 
detractor. Despite these persistent concerns, the outlook for the sector 
remains positive, particularly as the headwinds outlined are reflected in 
depressed valuations across the sector. 
 
The portfolio's final theme proved the most substantial driver of weakness 
during the period. Having been a strong contributor to fund performance over 
many years, Burford Capital provided the portfolio's largest negative return 
over the period. In August 2019, the litigation financer was the subject of a 
highly critical report from a US firm that specialises in publishing research 
for short-sellers. This caused a very material fall in the company's share 
price. Burford Capital robustly defended itself against the accusations and 
later announced a series of corporate governance enhancements. Whilst the share 
price recovered some losses during September, the value of this holding still 
remained significantly lower at period end. 
 
Elsewhere within the non-correlated financials holdings, Amigo also provided a 
negative contribution to returns, as concerns grew around the regulatory focus 
for the guarantor backed loan sector. The share price fell sharply at the end 
of August on the release of results for the first quarter, when the company cut 
its full year guidance and announced a change in lending strategy, to 
prioritise new customer lending over repeat customer lending. Despite these 
specific challenges, there were a number of holdings in this area that 
performed well over the period. Most notable was AJ Bell, which has traded very 
well following the initial public offering (IPO) in December 2018. In April, 
the company released a strong trading update for the second quarter, which 
supported positive momentum in the shares. AJ Bell has been a very successful 
holding for the Company. Initially held as a private, unquoted company, we were 
extremely supportive of the IPO, which saw significant gains realised for the 
portfolio. 
 
Other notable contributors within the wider portfolio included PureTech Health. 
The company's share price performed very well over the period, supported by 
positive developments from a number of the firm's underlying companies. News 
that PureTech Health is exploring a listing on the US Nasdaq exchange was also 
well received by the market. 
 
A final comment on performance drivers is that a small number of portfolio 
holdings experienced notably weak price performance due to challenges facing 
other shareholders rather than issues with the businesses themselves. While 
this short-term share price disruption was not isolated to this portfolio, it 
has been a source of some frustration. We maintain the view that the long-term 
outlook and inherent value of those companies impacted are unchanged. 
 
Portfolio Manager Outlook 
 
The performance of the UK stock market is likely to be determined by the same 
macroeconomic and political forces that have dominated sentiment for the past 
few years. The political uncertainty in many regions has been especially 
difficult to navigate recently and has been a major headwind to portfolio 
performance given the extreme polarisation of company valuations that has 
emerged. I have commented previously that this differential between highly 
rated global non-cyclical stocks and depressed domestic economically sensitive 
shares is substantial. This differential sits at a multi-year high and offers 
the most glaring opportunities within the UK stock market. The portfolio is 
positioned to take advantage of this perceived mispricing and retains large 
portfolio weightings in insurance, real estate, retail and support services. 
 
The extent of this mispricing is perhaps most clearly highlighted by the spread 
between dividend yields and corporate bond yields over the past ten years. Over 
this period, dividend yields have remained broadly flat, whilst corporate bond 
yields have declined markedly. A 650bp (6.5%) shift in the yield differential 
over the period is notable and represents another strong endorsement of the 
attraction of equities to an asset neutral investor at the moment. It is also 
very likely a significant factor behind the strong re-emergence of merger and 
acquisition activity in recent months. The range and breadth of deals witnessed 
from industrial and especially financial buyers is clear evidence that there is 
value available in UK listed companies that can be exploited with finance from 
accessing the debt markets at very attractive yields. The portfolio has been a 
beneficiary of two such deals (BCA Marketplace and KCOM) that have been 
announced since the year end. 
 
In recent weeks sentiment within the market has been extremely volatile as 
perceptions around a political deal have shifted. This has resulted in a marked 
change in the composition of the stock and sector leadership, which has 
favoured the current positioning within the portfolio. Clarity regarding the 
outcome of the negotiations with Brussels would clearly benefit the performance 
of the UK stock market and especially this portfolio. The level of pessimism 
which is discounted in the valuations of many holdings is anticipated to result 
in material revaluation opportunities from current levels as and when the 
political fog clears. 
 
Mark Barnett 
 
Portfolio Manager 
20 November 2019 
 
. 
 
Related Parties Transactions 
 
Under UK Generally Accepted Accounting Practice (UK Accounting Standards and 
applicable law), the Company has identified the Directors as related parties. 
No other related parties have been identified. No transactions with related 
parties have taken place which have materially affected the financial position 
or the performance of the Company. 
 
. 
 
Principal Risks and Uncertainties 
 
The Board carries out a regular review of the risk environment in which the 
Company operates, including consideration of emerging risks. The principal 
risks and uncertainties identified in this review are summarised below: 
 
*        Economic Risk - Economic risk arises from uncertainty about the future 
prices of the Company's investments. Market fluctuations, both upward and 
downward, may arise from external factors which are outside the control of the 
Board and the Manager. 
 
*        Investment Risk - This is the stock specific risk that the stock 
selection process may not achieve the Company's published objectives. Poor 
performance of individual portfolio investments is mitigated by diversification 
and ongoing monitoring of investment guidelines. 
 
*        Financial Risk - The financial risks faced by the Company include 
market price risk (including currency risk, interest rate risk and other price 
risk), liquidity risk and credit risk, which includes counterparty and 
custodial risk. 
 
*        Gearing Risk - The use of borrowings will amplify the effect on 
shareholders' funds of portfolio gains and losses. 
 
*        Share Discount Risk - The Company's shares may, at times, trade at a 
wide discount. The Board has put in place a share repurchase programme to help 
the management of this risk. 
 
*        Operational Risk - A failure of the systems of financial and 
non-financial internal controls operated by the Company, the Manager and other 
external service providers could result in loss of assets and reputational 
damage as a result of fraud or material misstatement. 
 
*        Regulatory Risk - Loss of investment trust status for tax purposes 
could lead to the Company being subject to tax on the realised capital profits 
on the sale of its investments. A serious breach of regulatory rules could lead 
to suspension from the Official List, a fine or qualified audit report and 
reputational problems. 
 
*        Other Risks - The risk that the portfolio manager, Mark Barnett, may 
become incapacitated or otherwise be unavailable is mitigated by support 
available from his designated deputy for this portfolio, Martin Walker, and the 
wider Invesco UK Equities team. 
 
A detailed explanation of these principal risks and uncertainties can be found 
on pages 14 to 15 of the 2019 annual financial report, which is available on 
the Company's section of the Manager's website at: www.invesco.co.uk/pigit. In 
the view of the Board these principal risks and uncertainties are equally 
applicable to the remaining six months of the financial year as they were to 
the six months under review. 
 
. 
 
Going Concern 
 
The condensed financial statements have been prepared on a going concern basis. 
The Directors consider this is the appropriate basis as they have a reasonable 
expectation that the Company has adequate resources to continue in operational 
existence for the foreseeable future, being at least 12 months after the 
approval of this half-yearly financial report. In considering this, the 
Directors took into account the diversified portfolio of readily realisable 
securities which can be used to meet funding commitments, and the ability of 
the Company to meet all of its liabilities and ongoing expenses from its 
assets. The Directors also considered the revenue forecasts for the year and 
future dividend payments. 
 
. 
 
INVESTMENT PORTFOLIO STATEMENT AT 30 SEPTEMBER 2019 
 
Ordinary shares listed in the UK unless otherwise stated 
 
                                                                          MARKET 
                                                                           VALUE        % OF 
ISSUER                                 SECTOR                              GBP'000   PORTFOLIO 
 
British American Tobacco               Tobacco                            52,246         5.6 
 
BP                                     Oil & Gas Producers                50,267         5.3 
 
Next                                   General Retailers                  34,269         3.6 
 
Legal & General                        Life Insurance                     30,935         3.3 
 
Royal Dutch Shell - A shares           Oil & Gas Producers                29,251         3.1 
 
Tesco                                  Food & Drug Retailers              28,639         3.0 
 
Derwent London                         Real Estate Investment Trusts      27,217         2.9 
 
Roche - Swiss Listed                   Pharmaceuticals & Biotechnology    25,891         2.8 
 
BAE Systems                            Aerospace & Defence                25,351         2.7 
 
Novartis - Swiss Listed                Pharmaceuticals & Biotechnology    24,096         2.6 
 
Top Ten Investments                                                      328,162        34.9 
 
HomeServe                              Support Services                   23,236         2.5 
 
Aviva                                  Life Insurance                     20,386         2.2 
 
Randall & QuilterAIM                   Non-life Insurance                 19,514         2.1 
 
British Land                           Real Estate Investment Trusts      19,319         2.0 
 
Capita                                 Support Services                   19,168         2.0 
 
Imperial Brands                        Tobacco                            18,685         2.0 
 
Altria - US Listed                     Tobacco                            18,621         2.0 
 
AJ Bell                                Financial Services                 17,808         1.9 
 
NewRiver REIT                          Real Estate Investment Trusts      17,766         1.9 
 
BT                                     Fixed Line Telecommunications      16,656         1.8 
 
Top Twenty Investments                                                   519,321        55.3 
 
easyJet                                Travel & Leisure                   16,620         1.8 
 
Total - French Listed                  Oil & Gas Producers                15,985         1.7 
 
PureTech Health                        Pharmaceuticals & Biotechnology    15,670         1.7 
 
Beazley                                Non-life Insurance                 15,654         1.6 
 
Hiscox                                 Non-life Insurance                 15,055         1.6 
 
G4S                                    Support Services                   14,820         1.6 
 
Babcock International                  Aerospace & Defence                14,492         1.5 
 
Lancashire                             Non-life Insurance                 14,110         1.5 
 
IAG                                    Travel & Leisure                   14,094         1.5 
 
Harworth                               Real Estate Investment &           14,071         1.5 
                                       Services 
 
Top Thirty Investments                                                   669,892        71.3 
 
Provident Financial                    Financial Services                 13,996         1.5 
 
Oxford Sciences InnovationUQ           Financial Services                 13,875         1.5 
 
Cranswick                              Food Producers                     13,587         1.5 
 
Royal Bank of Scotland                 Banks                              13,346         1.4 
 
Drax                                   Electricity                        12,031         1.3 
 
Burford CapitalAIM                     Financial Services                 11,841         1.3 
 
CLS                                    Real Estate Investment &           11,569         1.2 
                                       Services 
 
Urban ExposureAIM                      Financial Services                 10,679         1.1 
 
Pollen Street Secured Lending          Equity Investment Instruments      10,669         1.1 
(formerly P2P Global Investments) 
 
Novo-Nordisk - B Shares                Pharmaceuticals & Biotechnology    10,399        1.1 
 
Top Forty Investments                                                    791,884       84.3 
 
Whitbread                              Travel & Leisure                   10,347         1.1 
 
Secure Income REITAIM                  Real Estate Investment Trusts       9,938         1.1 
 
Secure Trust Bank                      Banks                               9,891         1.1 
 
Real Estate Investors                  Real Estate Investment Trusts       9,693         1.0 
 
IP Group                               Financial Services                  9,514         1.0 
 
Draper EspritAIM                       Financial Services                  9,461         1.0 
 
Chesnara                               Life Insurance                      9,269         1.0 
 
Aquis ExchangeAIM                      Financial Services                  8,720         0.9 
 
Plus500                                Financial Services                  8,538         0.9 
 
Hadrian's Wall Secured Investments     Equity Investment Instruments       8,343         0.9 
 
Top Fifty Investments                                                    885,598       94.3 
 
Vectura                                Pharmaceuticals & Biotechnology     7,584         0.8 
 
Eddie Stobart LogisticsAIM - suspended Industrial Transportation           6,355         0.7 
(see note 7) 
 
TalkTalk Telecom                       Fixed Line Telecommunications       6,087         0.6 
 
Marwyn Value Investors                 Equity Investment Instruments       5,768         0.6 
 
Horizon DiscoveryAIM                   Pharmaceuticals & Biotechnology     4,240         0.4 
 
Doric Nimrod Air Three - preference    Equity Investment Instruments       4,036         0.4 
shares 
 
VPC Specialty Lending Investments      Financial Services                  3,925         0.4 
 
Doric Nimrod Air Two   - preference    Equity Investment Instruments       3,848         0.4 
shares 
 
SME Credit Realisation (formerly       Equity Investment Instruments       3,364         0.4 
Funding Circle SME) 
 
McBride                                Household Goods & Home              3,318         0.4 
                                       Construction 
 
Top Sixty Investments                                                    934,123       99.4 
 
Amigo                                  Financial Services                  3,284         0.4 
 
Circassia PharmaceuticalsAIM           Pharmaceuticals & Biotechnology       723         0.1 
 
infirst HealthcareUQ                   Pharmaceuticals & Biotechnology 
 
  - Mar - preferred                                                          273 
 
  - D shares                                                                 257         0.1 
 
  - Jan - preferred                                                           63 
 
Motif Bio 
 
  - ADR                                Pharmaceuticals & Biotechnology       149 
 
  - AIM listed shares                                                        105           - 
 
  - ADR - Warrants 9 Nov 2021                                                 20 
 
SciFluor Life SciencesUQ - US Series A Pharmaceuticals & Biotechnology       239           - 
convertible preferred 
 
Countryside                            Household Goods & Home                144           - 
                                       Construction 
 
EurovestechUQ                          Financial Services                    121           - 
 
XTL Biopharmaceuticals - ADR           Pharmaceuticals & Biotechnology        23           - 
 
Lombard Medical - US Listed            Health Care Equipment &                 6           - 
                                       Services 
 
MiradaAIM                              Media                                   1           - 
 
Top Seventy Investments                                                  939,531      100.0 
 
Jaguar HealthUQ - US indemnity shares  Pharmaceuticals & Biotechnology         1           - 
 
Total Investments 71 (2018: 75)        939,532                             100.0 
 
AIM: Investments quoted on AIM (8.7%) 
 
UQ: Unquoted (1.6%) 
 
ADR: American Depositary Receipts (0.0%) 
 
. 
 
CONDENSED INCOME STATEMENT 
 
                                          SIX MONTHS TO                   SIX MONTHS TO 
                                        30 SEPTEMBER 2019               30 SEPTEMBER 2018 
 
                                 REVENUE      CAPITAL       TOTAL   REVENUE  CAPITAL       TOTAL 
                                   GBP'000        GBP'000       GBP'000     GBP'000    GBP'000       GBP'000 
 
(Losses)/gains on investments          -     (31,464)    (31,464)         -   52,497      52,497 
held at fair value 
 
Gains/(losses) on foreign              -            1           1         -      (7)         (7) 
exchange 
 
Income - note 2                   24,699          354      25,053    21,881      577      22,458 
 
                                  24,699     (31,109)     (6,410)    21,881   53,067      74,948 
 
Investment management fee -        (849)      (1,982)     (2,831)     (938)  (2,190)     (3,128) 
note 3 
 
Other expenses                     (296)            -       (296)     (333)        -       (333) 
 
Net return before finance costs   23,554     (33,091)     (9,537)    20,610   50,877      71,487 
and taxation 
 
Finance costs - note 3             (572)      (1,334)     (1,906)     (538)  (1,255)     (1,793) 
 
Return on ordinary activities     22,982     (34,425)    (11,443)    20,072   49,622      69,694 
before taxation 
 
Tax on ordinary activities -       (352)            -       (352)     (178)        -       (178) 
note 4 
 
Return on ordinary activities     22,630     (34,425)    (11,795)    19,894   49,622      69,516 
after taxation for the 
financial period 
 
Return per ordinary share -        9.65p     (14.68)p     (5.03)p     8.28p   20.65p      28.93p 
Basic 
 
Weighted average number of                            234,593,254                    240,326,771 
ordinary shares in issue 
 
The total column of this statement represents the Company's profit and loss 
account, prepared in accordance with UK Accounting Standards. The return on 
ordinary activities after taxation is the total comprehensive income and 
therefore no additional statement of other comprehensive income is presented. 
The supplementary revenue and capital columns are presented for information 
purposes in accordance with the Statement of Recommended Practice issued by the 
Association of Investment Companies. All items in the above statement derive 
from continuing operations of the Company. No operations were acquired or 
discontinued in the period. 
 
. 
 
CONDENSED BALANCE SHEET 
 
Registered number 3156676 
 
                                                                               AT          AT 
                                                                     30 SEPTEMBER    31 MARCH 
                                                                             2019        2019 
                                                              NOTES         GBP'000       GBP'000 
 
Fixed assets 
 
  Investments held at fair value through profit or loss           7       939,532   1,017,184 
 
Current assets 
 
  Amounts due from brokers                                                      -       1,174 
 
  Tax recoverable                                                           1,700       1,550 
 
  Prepayments and accrued income                                            2,261       2,572 
 
                                                                            3,961       5,296 
 
Creditors: amounts falling due within one year 
 
  Bank loan                                                              (40,000)    (45,000) 
 
  Amounts due to brokers                                                  (2,050)           - 
 
  Bank overdraft                                                         (33,094)    (33,704) 
 
  Share buybacks awaiting settlement                                        (727)           - 
 
  Accruals                                                                (2,602)     (2,661) 
 
                                                                         (78,473)    (81,365) 
 
Net current liabilities                                                  (74,512)    (76,069) 
 
Total assets less current liabilities                                     865,020     941,115 
 
Creditors: amounts falling due after more than one year 
 
  4.37% Senior Secured Notes due 8 May 2029                              (59,590)    (59,569) 
 
Net assets                                                                805,430    881,546 
 
Capital and reserves 
 
Share capital                                                     6        24,043     24,043 
 
Share premium                                                             265,233     265,233 
 
Capital reserve                                                           481,706     561,395 
 
Revenue reserve                                                            34,448      30,875 
 
Shareholders' funds                                                       805,430     881,546 
 
Net asset value per ordinary share                                8 
 
  Basic 
 
  - debt at par value                                                      358.5p      368.2p 
 
  - debt at market value                                                   351.9p      363.2p 
 
Number of 10p ordinary shares in issue at the period end          6   224,671,008 239,412,350 
 
. 
 
CONDENSED STATEMENT OF CHANGES IN EQUITY 
 
                                                 SHARE    SHARE    CAPITAL   REVENUE 
                                               CAPITAL  PREMIUM    RESERVE   RESERVE    TOTAL 
                                                 GBP'000    GBP'000      GBP'000     GBP'000    GBP'000 
 
FOR THE SIX MONTHSED 30 SEPTEMBER 2019 
 
At 31 March 2019                                24,043  265,233    561,395    30,875  881,546 
 
Return on ordinary activities                        -        -   (34,425)    22,630 (11,795) 
 
Dividends paid - note 5                              -        -          -  (19,057) (19,057) 
 
Shares bought back and held in treasury              -        -   (45,264)         - (45,264) 
 
At 30 September 2019                            24,043  265,233    481,706    34,448  805,430 
 
FOR THE SIX MONTHSED 30 SEPTEMBER 2018 
 
At 31 March 2018                                24,043  265,233    602,836    31,817  923,929 
 
Return on ordinary activities                        -        -     49,622    19,894   69,516 
 
Dividends paid - note 5                              -        -          -  (20,403) (20,403) 
 
Shares bought back and held in treasury              -        -    (2,230)         -  (2,230) 
 
At 30 September 2018                            24,043  265,233    650,228    31,308  970,812 
 
. 
 
NOTES TO THE CONDENSED FINANCIAL STATEMENTS 
 
1.  Accounting Policies 
 
The condensed financial statements have been prepared in accordance withapplicable United Kingdom Accounting Standards and applicable law (UK Generally 
Accepted Accounting Practice), including FRS 102 The Financial Reporting 
Standard applicable in the UK and Republic of Ireland, FRS 104 Interim 
Financial Reporting and the Statement of Recommended Practice Financial 
Statements of Investment Trust Companies and Venture Capital Trusts, issued by 
the Association of Investment Companies in November 2014, as updated in 
February 2018. The financial statements are issued on a going concern basis. 
 
The accounting policies applied to these condensed financial statements are 
consistent with those applied in the financial statements for the year ended 31 
March 2019. 
 
2.  Income 
 
                                                        SIX MONTHS TO  SIX MONTHS TO 
                                                         30 SEPT 2019   30 SEPT 2018 
                                                                GBP'000          GBP'000 
 
Income from investments 
 
UK dividends - ordinary                                        18,879         18,146 
 
                   - special                                      320              - 
 
Overseas dividends - ordinary                                   4,519          3,094 
 
                   - special                                      284              - 
 
Unfranked investment income                                       528            516 
 
Scrip dividends                                                    96             95 
 
                                                               24,626         21,851 
 
Other income 
 
Other                                                              73             30 
 
Total income                                                  24,699          21,881 
 
 
Special dividends of GBP354,000 have been recognised in capital (30 September 
2018: GBP577,000). 
 
3.  Investment Management Fees and Finance Costs 
 
The base management fee and finance costs are allocated 70% to capital and 30% 
to revenue. The base management fee is 0.6% on the first GBP900 million of assets 
under management and 0.4% thereafter. 
 
4.  Investment Trust Status and Tax 
 
It is the intention of the Directors to conduct the affairs of the Company so 
that it satisfies the conditions for approval as an investment trust company. 
As such, no tax liability arises on capital gains. The tax charge represents 
withholding tax suffered on overseas income. 
 
5.  Dividends paid on Ordinary Shares 
 
                                                     30 SEPT 2019        30 SEPT 2018 
 
SIX MONTHSED                                     PENCE      GBP'000     PENCE     GBP'000 
 
Fourth (prior year)                                   4.75     11,305      4.45    10,699 
 
First (current year)                                  3.40      7,752      3.25     7,804 
 
Total (excluding special dividends)                   8.15     19,057      7.70    18,503 
 
Special dividend (prior year)                            -          -       0.8     1,923 
 
Total (including special dividends)                   8.15     19,057      8.50    20,426 
 
Return of unclaimed dividends from previous              -          -         -      (23) 
years 
 
Total paid                                            8.15     19,057      8.50    20,403 
 
          The first interim dividend of 3.40p was paid on 30 September 2019 to 
shareholders registered on 6 September 2019. The Directors have declared a 
second interim dividend of 3.40p payable on 30 December 2019 to shareholders 
registered on 29 November 2019. 
 
6.  Share Capital, including Movements 
 
          Share capital represents the total number of shares in issue, 
including treasury shares. 
 
                                                         AT 30 SEPT 2019  AT 31 MAR 2019 
 
Share capital: 
 
Ordinary shares of 10p each (GBP'000)                               22,467          23,941 
 
Treasury shares of 10p each (GBP'000)                                1,576             102 
 
                                                                  24,043          24,043 
 
Brought forward                                              239,412,350     240,432,350 
 
Shares bought back into treasury                            (14,741,342)     (1,020,000) 
 
Carried forward                                              224,671,008     239,412,350 
 
Subsequent to the period end 4,776,670 ordinary shares were bought back into 
treasury at an average price of 312.66p. 
 
7.  Fair Value Hierarchy Disclosures 
 
FRS 102 sets out three fair value levels. These are: 
 
Level 1 -  The unadjusted quoted price in an active market for identical assets 
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. 
 
Level 3 -  Inputs are unobservable (i.e. for which market data is unavailable) 
for the asset or liability. 
 
The fair value hierarchy analysis for investments and related forward currency 
contracts held at fair value at the period end is as follows: 
 
                                                          AT 30 SEPT 2019     AT 31 MAR 
                                                                    GBP'000          2019 
                                                                                  GBP'000 
 
Financial assets designated at fair value through profit 
or loss: 
 
Level 1                                                           918,348     1,000,337 
 
Level 3                                                            21,184        16,847 
 
Total for financial assets                                        939,532     1,017,184 
 
The unquoted investment holdings of the portfolio make up the whole of Level 3 
with the exception of Eddie Stobart Logistics which was suspended from AIM and 
therefore categorised as Level 3. The holding was valued at the period end at GBP 
6,355,000 (31 March 2019: GBP7,409,000 and shown in Level 1) and its value has 
fallen further since the period end. 
 
8.  Net Asset Value 
 
The following shows a reconciliation of NAV with debt at par to NAV with debt 
at market value. The difference in the NAVs arises solely from the valuation of 
the 4.37% senior secured notes 2029. The number of shares at the period end was 
224,671,008 (31 March 2019: 239,412,350). 
 
                                                         AT 30 SEPT 2019  AT 31 MAR 2019 
                                                                     NAV             NAV 
                                                               PER SHARE       PER SHARE 
                                                                   PENCE           PENCE 
 
NAV - debt at par                                                  358.5           368.2 
 
Notes 
 
  - debt at par, after amortised costs                              26.5            24.9 
 
  - debt at market value                                          (33.1)          (29.9) 
 
NAV - debt at market value                                         351.9           363.2 
 
          The market value of the Notes used in the above reconciliation, which 
is based on a comparable quoted debt security, is: 
 
                                                         AT 30 SEPT 2019  AT 31 MAR 2019 
                                                                   GBP'000           GBP'000 
 
Notes - debt at market value                                      74,454          71,472 
 
9.  Status of Half-Yearly Financial Report 
 
The financial information contained within the financial statements in this 
half-yearly financial report, does not constitute statutory accounts within the 
meaning of section 434 of the Companies Act 2006. The financial information for 
the half years ended 30 September 2019 and 30 September 2018 has not been 
audited. The figures and financial information for the year ended 31 March 2019 
are extracted and abridged from the latest audited accounts and do not 
constitute the statutory accounts for that year. Those accounts have been 
delivered to the Registrar of Companies and included the Independent Auditor's 
report, which was unqualified and did not include a statement under section 498 
of the Companies Act 2006. 
 
By order of the Board 
 
Invesco Asset Management Limited 
 
Company Secretary 
20 November 2019 
 
. 
 
DIRECTORS' RESPONSIBILITY STATEMENT 
 
in respect of the preparation of the half-yearly financial report 
 
The Directors are responsible for preparing the half-yearly financial report 
using accounting policies consistent with applicable law and UK Accounting 
Standards. 
 
The Directors confirm that to the best of their knowledge: 
 
-        the condensed set of financial statements contained within the 
half-yearly financial report has been prepared in accordance with the FRC's FRS 
104 Interim Financial Reporting; 
 
-        the interim management report includes a fair review of the 
information required by DTR 4.2.7R and DTR 4.2.8R of the FCA's Disclosure 
Guidance and Transparency Rules; and 
 
-        the interim management report includes a fair review of the 
information required on related party transactions. 
 
The half-yearly financial report has not been audited or reviewed by the 
Company's auditor. 
 
Signed on behalf of the Board of Directors. 
 
Richard Laing 
 
Chairman 
20 November 2019 
 
 
 
END 
 

(END) Dow Jones Newswires

November 20, 2019 08:01 ET (13:01 GMT)

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