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Montag, 17.10.2016 17:10 von PR Newswire

PR Newswire

All information is at 30 September 2016 and unaudited.
Performance at month end with net income reinvested


1 April
Share price                      1.1% 11.4% 11.2% 31.8% 66.8% 79.2%
Net asset value                   0.9%  8.5% 11.6% 34.8% 55.7% 79.0%
FTSE All-Share Total Return      1.7%  7.8% 16.8% 21.1% 46.8% 68.9%
Source: BlackRock


BlackRock took over the investment management of the Company with effect from 1 April 2012.


At month end
Net asset value - capital only:                188.24p
Net asset value - cum income*:                 192.20p
Share price:                                   188.00p
Total assets (including income):               £51.4m
Discount to cum-income NAV:                       2.2%
Net gearing:                                       2.6%
Net yield**:                                       3.2%
Ordinary shares in issue***:                25,679,268
Gearing range (as a % of net assets)             0-20%
Ongoing charges****:                              1.2%


* includes net revenue of 3.96 pence per share
** The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.2% and includes the 2015 final dividend of 3.60p per share declared on 15 January 2016, paid to shareholders on 4 March 2016 and the 2016 interim dividend of 2.40p per share announced on 29 June 2016 and paid to shareholders on 2 September 2016.
*** excludes 7,254,664 shares held in treasury
**** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 October 2015.


Sector Analysis   Total assets (%)
Pharmaceuticals & Biotechnology 10.4
Travel and Leisure 9.4
Tobacco 8.8
Media 8.6
Support Services  7.3
Financial Services 6.4
Banks 6.1
Oil & Gas Producers 5.8
Food Producers 5.3
General Retailers 4.7
General Industrials 4.2
Fixed Line Telecommunication 4.1
Wireless Telecommunication Services 3.5
Non-Life Insurance 3.2
Food & Drug Retailers 2.4
Construction & Materials 2.3
Aerospace & Defence 2.2
Real Estate Investment & Services 2.0
Real Estate Investment Trusts 1.2
Chemicals 0.7
Net Current Assets  1.4
Total 100.0


Ten Largest Equity Investments
Company  Total assets (%)
British American Tobacco 6.3
Unilever 5.3
AstraZeneca 5.2
BT Group 4.1
RELX 3.8
Vodafone 3.6
John Laing Group 3.4
Sky 3.4
Royal Dutch Shell ‘B’ 3.3
Lloyds Banking Group 3.2


Commenting on the markets, Adam Avigdori and Mark Wharrier representing the Investment Manager noted:
The rally in the UK equity market post the referendum result has surprised a number of commentators.  After the initial market setback on the vote, the market strengthened throughout the summer and generated a return of 7.8% during the quarter.  Whilst the process of extracting Britain from the European Union has only just begun, it remains important to emphasise the global nature of the UK stock market which continues to provide opportunities to invest in companies which demonstrate sustainable competitive advantages.
During the quarter the Company returned +8.5%, whilst the FTSE All Share Index returned +7.8%.
While the Company essentially kept pace with the strong market rise during the quarter, performance was highly stock specific. The position in ARM Holdings was the largest contributor to performance following the agreed £24bn bid for the company from Japanese company, Softbank. The Company held a 2% position in ARM Holdings ahead of the bid.  Despite having a low dividend yield, we have continued to hold ARM Holdings given its attractive cash flow characteristics, the long duration qualities of customer licenses and secular growth. Softbank have also been attracted to these qualities. John Laing Group was also a strong contributor and is a good example of a company that continues to drive growth through active management, even if the wider macro environment has challenges.  This investor and manager of infrastructure assets produced encouraging interim results during the month, demonstrating net asset value growth of its portfolio of 8% which is struck using a conservative discount rate of over 9%. The pipeline of potential infrastructure investments is healthy and management continues to recycle the portfolio to enhance longer term returns for shareholders. 
The mining sector, where we do not have any positions, continued to be a headwind to performance during the quarter.  Whilst the outlook for Emerging Markets and commodity demand has improved, we prefer exposure through less capital intensive companies such as Inchcape and British American Tobacco.
During the period we added to positions in more domestic companies where share prices have been impacted by recent market volatility including Sky, Tesco and Hays and sold the positon in Intertek.  Like Arm Holdings, Intertek has served the Company well and we feel the current valuation now reflects longer term growth prospects.  We also established new positions in BAE Systems and Kier Group.  After many years of depressed defence spending, budgets across the developed world, particularly in the US, are slowly recovering. Kier Group is a contractor focussing on roads and social housing, both areas with potential upside should the government seek to stimulate the economy through fiscal measures.
Macroeconomic volatility has been an important driver of equities so far this year which has tended to overwhelm the stock specific factors at the heart of our process.  However, over the longer term, earnings and cash flow growth tend to be the dominant driver of share prices.  If equity markets fail to recognise that, corporates buyers have the potential to; the bid for ARM Holdings during the quarter was a good reminder of that dynamic.  Markets are likely to remain skittish given macro headwinds, likely volatility in bond markets and an increasing level of political risks.  However, we continue to find opportunities in those companies that can generate cash flow from strong business models, have favourable industry characteristics or scope for management driven self-help.  While sometimes unnerving, we will continue to use market volatility to provide buying opportunities in those types of companies.
* NAV - Inc. performance.
17 October 2016