|Delayed - 08/02 08:00:55 am|
Rights and Issues Investment Trust PLC: Results -3-
|02/16/2021 | 11:12am|
Due to the COVID-19 pandemic it has been a year involving multiple forms of international and national restrictions and 'lock downs' which have adversely affected global trading. During the first wave supply chains were disrupted, export and import transportation slowed, and the movement of people was severely restricted. April was the nadir for market sentiment but subsequently there has been a slow but reasonably constant recovery as companies have adapted to the 'new normal'. Restrictions of various types are likely to continue well into 2021, however, I believe the pandemic has perversely presented business and commerce throughout the world with a new range of opportunities to think and act in more imaginative ways than they have before. Increased use of IT in communications, remote management of supply chains and significant changes to office/home working will significantly and probably permanently alter the industrial and commercial landscape.
The FTSE All-Share Index fell by 12.5% during the year (down 18.7% in the first six months) but the Company's portfolio held firm with net asset value only slightly down from 2275.2p to 2258.9 per share (0.7%). This reflects a strong recovery in the second half after a 20.9% reduction in net assets in the first six months.
The share buy-back programme remains paused for the foreseeable future, subject to operation of the discount management policy when necessary.
A final dividend of 21.5p is proposed, making 32.25p for the year, reflecting the Directors' awareness of the importance of dividend income to the Company's investors and its robust underlying financial position. The directors are closely monitoring the implications of the continuing market volatility and global response to the pandemic for the Company's net asset position and future income streams, and will make changes to the Company's dividend policy when deemed appropriate to do so.
Environmental, Social and Governance risks continue to be recognised as significant matters of global concern and the Board is committed to ensuring that the Company, through the Investment Director, appropriately manages and mitigates these risks through the investment strategy.
I am pleased to confirm that the composition of your Board continues to remain stable and I and my board colleagues look forward to overseeing implementation of the Company's investment strategy and improving returns for shareholders in the future.
In the medium term, the economic outlook is still uncertain but, with the imminent international roll-out of COVID-19 immunisation programmes, 2021 should prove to be a better year than the one everyone has had to endure in 2020.
Dr D. M. BRAMWELL
16th February 2021
Details of the investments held within the portfolio as at 31st December 2020 are given below by market value:
Holdings Market Value UK Investments 2020 2019 2020 2019 GBP'000 GBP'000 Treatt 3,500,000 4,250,000 28,490 19,125 Hill & Smith 1,434,230 1,434,230 20,194 21,126 Scapa 8,000,000 8,000,000 14,880 19,520 Macfarlane 17,250,000 17,250,000 14,869 18,199 Spirax-Sarco Engineering 120,714 120,714 13,635 10,731 Vp 1,800,000 1,800,000 13,500 16,920 Electrocomponents 1,300,000 1,300,000 11,317 8,757 Colefax 2,365,000 2,100,000 9,696 8,820 Vitec 400,000 400,000 3,656 4,280 Renold 30,000,000 30,000,000 3,600 5,100 Eleco 4,520,781 4,520,781 3,526 3,526 IMI 275,000 - 3,204 - Morgan Advanced Materials 1,000,000 750,000 3,110 2,377 Bellway 80,000 80,000 2,364 3,046 Menzies (John) 882,142 882,142 2,276 4,173 Carr's 1,750,000 350,000 2,223 532 Castings 400,000 400,000 1,448 1,640 National Grid 137,500 137,500 1,189 1,298 Titon 1,265,000 1,265,000 1,139 1,518 GlaxoSmithKline 70,000 70,000 939 1,245 Discretionary Unit Fund Managers 93,600 93,600 758 758 Santander UK 10.375% Non Cumulative Preferred 400,000 400,000 640 668 Dialight 238,095 238,095 600 555 LPA 650,000 650,000 520 572 Coral Products 2,000,000 2,000,000 170 190 Chamberlin 1,000,000 1,000,000 60 300 Dyson 1,000,000 1,000,000 2 2 Low & Bonar - 6,000,000 - 723 Costain 41 41 - - Total Porfolio 158,005 155,701
Unless otherwise specified, the actual holdings are, in each case, of ordinary shares or stock units and of the nominal value for which listing has been granted.
The Strategic Report is designed to provide information primarily about the Company's business and results for the year ended 31st December 2020 and should be read in conjunction with the Chairman's Statement on page 7.
PERFORMANCE STATISTICS 31-Dec-20 31-Dec-19 % change NAV per Ordinary Share 2,258.9p 2,275.2p -0.7% Discount to NAV 6.8% 2.2% 4.6% Closing mid-market price per Ordinary Share 2,105.0p 2,225.0p -5.4% Dividends per Ordinary Share 32.25p 32.25p Dividend yield* 1.4% 1.4% Ongoing Charges* 0.5% 0.5% Earnings per Ordinary Share - basic Revenue 11.4p 30.2p Capital 4.6p 143.3p NAV return* -0.7% 7.4% FTSE All-Share Index -12.5% 14.2%
*These are Alternative Performance Measures.
EXPLANATION OF ALTERNATIVE PERFORMANCE MEASURES (APMS)
An alternative performance measure is a financial measure of historical or future financial performance, financial position or cash flow that is not prescribed by the relevant accounting standards. The APMs are the dividend yield, ongoing charges and NAV return as defined below.
The dividend yield is a financial ratio which indicates how much the Company pays out in dividends each year relative to its share price. The figure is calculated by dividing the aggregate value of dividends per share in a given year by the closing share price and is represented as a percentage.
The dividend yield was calculated as follows: 2020 2019 Total dividends per ordinary share (a) 32.25p 32.25p NAV per Ordinary Share (b) 2,258.9p 2,275.2p Dividend Yield (a) / (b)*100 1.4% 1.4%
Ongoing charges are expenses charged to revenue or capital that relate to the operation of the Company as an investment trust and are deemed likely to recur in the foreseeable future. They do not include the costs of acquisition or disposal of investments, financing costs and gains or losses arising on investments. Ongoing charges are calculated on the basis of the annualised ongoing charge as a percentage of the average net asset value in the period.
The calculation methodology for ongoing charges is set out by the Association of Investment Companies ("AIC") and was calculated as follows:
2020 2019 (GBP000) (GBP000) Total Expenses (a) 749 803 Average NAV (b) 145,673 170,273 Ongoing Charge (a) / (b)*100 0.5% 0.5%
NAV return is the percentage change in closing NAV per share compared with opening NAV per share.
NAV return was calculated as follows: NAV per Ordinary Share 31st December 2020 (a) 2,258.9p NAV per Ordinary Share 31st December 2019 (b) 2,275.2p Return [a/b-1]*100 -0.7%
The Company is a self-managed investment trust. The Company is registered as an investment company as defined in section 833 of the Companies Act 2006 and operates as such. The Company is not a close company within the meaning of the provisions of the Corporation Tax Act 2010.
The Company has been approved by the Financial Conduct Authority to be a Small Registered Alternative Investment Fund Manager ("AIFM").
In the opinion of the Directors, the Company has conducted its affairs during the year under review, so as to qualify as an investment trust for the purposes of Chapter 4 of Part 24 of the Corporation Tax Act 2010 and continues to meet the eligibility conditions set out in section 1158 of the Corporation Tax Act 2010.
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