TIDMIIT
RNS Number : 1821C
Independent Investment Trust PLC
18 January 2018
RNS Announcement: Preliminary Results
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The Independent Investment Trust PLC
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The following is the unaudited preliminary statement for the
year to 30 November 2017 which was approved by the board on 17
January 2018.
Chairman's Statement
--------------------
Over the year to 30 November 2017, our company produced a net
asset value (NAV) total return of 54.8%. However one measures
performance this was, by some margin, the best annual result in the
history of the Independent: theoretical investments in the FTSE
All-Share Index and the FTSE World Index would have produced total
returns of 13.4% and 15.4% respectively. For the period from
inception in October 2000 to 30 November 2017, we produced an NAV
total return of 788%, equivalent to a rate of roughly 13.7% per
annum, of which 2.8% per annum can be offset by RPI inflation. By
comparison, the notional return available from the FTSE All-Share
Index over the period amounted to 146%, or 5.4% per annum. Our
performance is to the great credit of Max Ward, who has managed the
portfolio from inception.
The results rekindled enthusiasm for our shares, which moved
from a discount of 11.2% at 30 November 2016 to a premium of 7.2%
at 30 November 2017, producing a share price total return of
87.0%.
Two factors were particularly helpful to us in the year under
review. First, it was a market environment in which investors were
happy to re-rate companies with a good story and results to match.
This was particularly true of UK domestic companies, such as the
housebuilders, whose valuations were artificially depressed in the
wake of the vote to leave the European Union. Secondly, an
unusually high proportion of our companies produced operating
results during the period that exceeded expectations. Either or
both of these factors could reverse at any time.
Once again, there has been little change in the global economic
background. Growth has been unexciting; inflation has been
generally modest; and consumer spirits have been subdued by limited
real wage gains (indeed, real wages have declined in the UK).
Interest rates have started to rise in some parts of the world, but
at a slower pace than some would have liked. The overwhelming
impression is of policymakers trying to direct events that have a
mind of their own. Markets have once again benefited from a
combination of loose monetary policy and high levels of corporate
profitability.
The main changes in our sectoral distribution have been a
reduction in the importance of our housebuilding stake as we sold
out of Berkeley Group and a significant increase in our exposure to
the technology and telecommunications sector (despite modest net
sales). The emergence of the latter as our largest sector marks a
major change in our thinking in recent years. Up until 2014 we did
not trust ourselves to invest in individual small technology
companies, fearing that we lacked the relevant specialist
expertise. Instead, we delegated the task, very successfully, to
Katie Potts and her team at Herald Investment Trust. Since 2014 we
have been able to persuade ourselves in the case of a growing
number of small technology companies that we understand enough
about their businesses to justify investing directly. Our results
to date have exceeded our wildest hopes, but have not blinded us to
the risks of investing in highly rated companies operating in fast
changing markets. Our greater willingness to invest directly in
this area has led to a less obvious role for Herald in our
portfolio and we have reduced the holding accordingly.
We ended our year with cash balances of just over 7% of
shareholders' funds (5% at 30 November 2016). Further comments on
the portfolio can be found in the Managing Director's Report
below.
Earnings per share for the year were 9.2p (7.93p in 2016). Given
the buoyancy of our revenue account and an encouraging outlook, we
have decided to recommend a final dividend of 4p (nil in 2016),
making a total regular dividend of 6p (5p in 2016). In addition, we
are proposing a special dividend of 2p (2.5p in 2016). If approved,
both will be paid on 6 April with an ex-dividend date of 22
February.
The growth in our assets had a beneficial effect on our ongoing
charges ratio, which fell from 0.34% to 0.25%. Not only is this one
of the lowest ratios in the industry - if not the lowest - but the
level of 0.25% is also a record low for us.
In the early part of our year, our shares traded at a discount
to NAV and we were able to buy back 60,000 at a discount of 7.3%.
In normal market conditions we are happy to buy back shares when
this can be done on terms that are not detrimental to the interests
of continuing shareholders.
It is now nine years since the FTSE All Share Index last
delivered a negative total return over a year ending on 30
November. Over that nine year period total returns for the index
have averaged comfortably over 10% per annum, which is far in
excess of UK - or global - economic growth for the period. Common
sense would suggest that we are overdue a significant market
correction, but in the absence of any clear indication of the
timing of such a correction we see little point in trying to
anticipate it. Our companies are in good fettle and we are
confident about their long term prospects. This is the foundation
on which our future strategy is based.
Once again, we should like to encourage you to come to the AGM,
which is to be held in the Baillie Gifford offices at Calton Square
at 4.30pm on 22 March 2018. It will help our planning if we know
how many shareholders are likely to attend, and I shall be grateful
if you will mark the proxy form accordingly and return it to the
Company's registrars. I look forward to seeing as many of you as
possible there.
Douglas McDougall
17 January 2018
Past performance is not a guide to future performance.
For a definition of terms see Glossary of Terms.
Total return information is sourced from Baillie Gifford
/Thomson Reuters DataStream. See disclaimer at the end of this
announcement.
Managing Director's Report
--------------------------
Our performance over the year has been covered in the Chairman's
Statement.
It has been a remarkable year for our large technology and
telecommunications stake: worth GBP44.6m at 30 November 2016, it
had risen in value to GBP87.4m by 30 November 2017 after net sales
of GBP1.1m. Strong share price performances led us to make
reductions in our holdings of FDM, Gamma Communications and Kainos.
In each case this was a mistake as all three companies produced
strong results. We also made a reduction in our holding in Herald
Investment Trust to address the issue of overlap between our two
portfolios. This, too, was a mistake as the Herald discount fell
after we sold in recognition of strong investment results.
Fortunately, we were less trigger happy in the case of our Blue
Prism holding, which went from strength to strength throughout the
year as demand for its software robots grew at quite extraordinary
rates. We do not pretend to know what the "right" valuation for the
company is, but we continue to believe that it could grow to many
times its current size in a relatively short space of time if it
maintains its position of leadership in the embryonic market for
robotic process automation. Our two new technology holdings, Alfa
Financial Software and Frontier Developments, both made encouraging
debuts. Alfa, one of the leading providers of software to the asset
finance industry, is renowned for the quality of its products and
for its ability to deliver complex implementations on time and on
budget. Frontier is a long established designer of computer games
which is benefiting from the transformational effect of the cloud
on the design and marketing of computer games. It is also notable
for having attracted the attention of the giant Chinese internet
company, Tencent, which has taken a 9% stake in it.
It has been a much better year for our large position in the
housebuilding industry. Conditions in the housing market have been
about as favourable as they could be for builders. A plentiful
supply of land at very attractive prices combined with robust
demand, albeit helped at the lower end of the market by the
government's Help to Buy scheme, to provide strong sales at good
margins. The one exception to this happy picture is the retirement
homes builder, McCarthy and Stone, which has again been held back
by a sluggish market for second hand houses. There are now,
however, clear signs of improvement even in its business. Strong
profits and dividends have been rewarded with good share price
performances, but in the case of most of our holdings we think the
market continues to undervalue their long-term prospects. Berkeley
Group, which we held until October, is the one exception to this:
its dependence on the London market and its policy of selling well
ahead have left it with very high profits in the current year, but
a more subdued outlook thereafter. Despite the undoubted quality of
the business, we decided to sell our holding at a very good profit.
Overall, despite sales of GBP7.7m, the value of our housebuilding
stake rose from GBP51.0m at 30 November 2016 to GBP59.4m at 30
November 2017.
It has been another good year for our travel and leisure
holdings: their value grew from GBP24.7m at 30 November 2016 to
GBP34.8m at 30 November 2017 despite net sales of GBP1.8m. The main
contributor to this performance, as was the case in 2016, was the
online package holiday company, On the Beach, which has once again
delivered strong earnings growth against a difficult market
background. The strength of its customer proposition - low prices
and flexible booking arrangements - is becoming increasingly
apparent. Gym Group delivered another year of good growth and was
rewarded with a strong recovery in its share price. The performance
of the Hollywood Bowl share price was more subdued, but there was
nothing wrong with its operating results.
Given our disappointing record as investors in the retail
sector, it may seem perverse that we have significantly increased
our exposure to it at a time when there are widespread concerns
about the outlook for consumer spending. It is our hope that our
new purchases, Footasylum and Quiz, will turn out to be resilient
in a tough consumer environment and we believe that our addition to
our old favourite, Dunelm, was made at an attractive valuation even
given the uncertainties surrounding its immediate outlook. Both
Footasylum and Quiz are clothing retailers. They serve totally
different markets, but share the common characteristic (also shared
with Joules, which we bought in 2016) of having developed a
successful multichannel approach, in which the website and the
physical estate feed off each other's strengths. The net result is
rapid growth in internet sales combined with very fast paybacks on
new store openings. All three are highly cash generative
businesses. Motorpoint, our other retail holding, has seen a strong
rebound in its share price as results have recovered from the
disappointing spell of trading in the wake of the referendum.
Overall, the value of our retail holdings rose from GBP15.2m at 30
November 2016 to GBP31.7m at 30 November 2017 after net purchases
of GBP11.0m.
Once again we consider it appropriate to devote an entire
paragraph to the soft drinks company, Fever-Tree. Fever-Tree's
international business (probably 40% of total sales) is growing at
over 40% per annum and in each of its geographical areas it
dominates the premium segment of the mixer market. We think premium
mixers will continue to gain market share for years to come because
they are starting from a low base and we expect Fever-Tree to be at
the forefront of this trend. Rather reluctantly, we took some
profits towards the end of the year on grounds of valuation, but
despite this it retained its position as our largest holding.
It has been a year of considerable change for our holdings in
the business services sector: we sold out of SThree and Gama
Aviation, added to Midwich and bought a new holding in Eddie
Stobart Logistics. SThree has struggled in recent years to reprise
the growth rates it achieved when we originally bought it, while
Gama was sold largely on grounds of illiquidity. Our addition to
Midwich was well timed and it is pleasing to see the attributes
that attracted us to this exceptionally well-run business are now
beginning to achieve wider recognition. Eddie Stobart, however, has
failed to attract a following in the wake of its initial public
offering despite reporting good results. Overall, our business
services stake grew in value from GBP11.4m to GBP25.9m after net
purchases of GBP3.8m.
Elsewhere in the portfolio, good results were reflected in the
share prices of Ashtead and Luceco (although the latter issued a
profits warning after our year end). Our new holding in RPC, the
oil service company, enjoyed a good share price performance. The
same was true of teleradiology company, Medica, but in its case
much of the share price strength has reversed since our year end in
the wake of a disappointing trading statement. The Polar Capital
Global Insurance Fund had a quiet year, while NAHL, to which we
started to add towards the end of our year, saw its share price
affected by uncertainty (which we consider largely resolved now)
about the future of personal injury litigation. We sold Telecom
Plus and Bluefield Solar on grounds of valuation, and disposed of
The AA and UP Global in the wake of disappointing trading news.
Max Ward
17 January 2018
List of Investments as at 30 November 2017 (unaudited)
Value Gains/ Value
2016 Net transactions (losses) 2017
Sector Name GBP'000 GBP'000 GBP'000 GBP'000 %
---------------------- ------------------------- --------- ----------------- ---------- --------- ------
Housing Bellway 4,882 - 2,036 6,918 2.0
Berkeley Group 4,952 (7,733) 2,781 - -
Crest Nicholson 13,113 - 1,992 15,105 4.5
McCarthy and Stone 8,315 - (95) 8,220 2.4
Persimmon 3,398 - 1,676 5,074 1.5
Redrow 16,344 - 7,696 24,040 7.1
51,004 (7,733) 16,086 59,357 17.5
--------- ----------------- ---------- --------- ------
Industrials Ashtead Group 15,640 - 3,350 18,990 5.6
Retailing Dunelm Group 5,908 4,182 432 10,522 3.1
Footasylum - 3,409 691 4,100 1.2
Joules Group 3,660 (1,327) 1,717 4,050 1.2
Motorpoint 5,670 - 2,655 8,325 2.5
Quiz - 4,782 (42) 4,740 1.4
--------- ----------------- ---------- --------- ------
15,238 11,046 5,453 31,737 9.4
--------- ----------------- ---------- --------- ------
Consumer Services AA 5,308 (5,194) (114) - -
NAHL Group 3,056 183 (625) 2,614 0.8
--------- ----------------- ---------- --------- ------
8,364 (5,011) (739) 2,614 0.8
--------- ----------------- ---------- --------- ------
Consumer Goods Luceco 5,744 (1,469) 2,976 7,251 2.1
Up Global Sourcing - 664 (664) - -
5,744 (805) 2,312 7,251 2.1
Travel and Leisure Hollywood Bowl Group 6,680 - 440 7,120 2.1
On the Beach Group 13,260 (1,814) 9,818 21,264 6.3
The Gym Group 4,770 - 1,680 6,450 1.9
--------- ----------------- ---------- --------- ------
24,710 (1,814) 11,938 34,834 10.3
--------- ----------------- ---------- --------- ------
Business Services Eddie Stobart Logistics - 11,176 (256) 10,920 3.2
Gama Aviation 2,360 (4,591) 2,231 - -
Midwich 4,945 2,069 7,986 15,000 4.5
SThree 4,125 (4,851) 726 - -
--------- ----------------- ---------- --------- ------
11,430 3,803 10,687 25,920 7.7
--------- ----------------- ---------- --------- ------
Technology and Alfa Financial Software - 9,372 2,751 12,123 3.6
Telecommunications Blue Prism 5,780 (838) 22,320 27,262 8.1
FDM Group 13,125 (7,198) 8,286 14,213 4.2
Frontier Developments - 5,977 2,473 8,450 2.5
Gamma Communications 4,735 (2,645) 925 3,015 0.9
Herald Investment Trust 16,500 (4,638) 5,778 17,640 5.2
Kainos Group 4,455 (1,148) 1,418 4,725 1.4
--------- ----------------- ---------- --------- ------
44,595 (1,118) 43,951 87,428 25.9
--------- ----------------- ---------- --------- ------
Beverages Fever-Tree Drinks 19,242 (8,157) 18,075 29,160 8.6
--------- ----------------- ---------- --------- ------
Utilities Telecom Plus 5,000 (4,813) (187) - -
--------- ----------------- ---------- --------- ------
Healthcare Medica Group - 5,779 2,701 8,480 2.5
--------- ----------------- ---------- --------- ------
Polar Capital Global
Insurance Fund -
Insurance Ireland 4,408 - 381 4,789 1.4
--------- ----------------- ---------- --------- ------
Energy/Oilfield
Services RPC - USA - 2,823 729 3,552 1.0
Renewable Energy Bluefield Solar Income
Funds - Channel Islands 5,187 (5,691) 504 - -
--------- ----------------- ---------- --------- ------
Total Investments 210,562 (11,691) 115,241 314,112 92.8
Net Liquid Assets 10,308 14,063 (32) 24,339 7.2
------------------------------------------------- --------- ----------------- ---------- --------- ------
Shareholders'
Funds 220,870 2,372 115,209 338,451 100.0
------------------------------------------------- --------- ----------------- ---------- --------- ------
The above table excludes holdings valued at nil. All holdings
are in equities domiciled in the UK unless otherwise stated.
Income statement
----------------
For the year ended For the year ended
30 November 2017 (unaudited) 30 November 2016 (audited)
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Gains on investments - 115,241 115,241 - 5,720 5,720
Currency (losses)/gains - (32) (32) - 139 139
Income (note 2) 5,830 - 5,830 5,139 - 5,139
Administrative expenses (721) - (721) (719) - (719)
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Net return on ordinary activities before taxation 5,109 115,209 120,318 4,420 5,859 10,279
Tax on ordinary activities (3) - (3) - - -
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Net return on ordinary activities after taxation 5,106 115,209 120,315 4,420 5,859 10,279
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Net return per ordinary share: basic (note 3) 9.20p 207.67p 216.87p 7.93p 10.51p 18.44p
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
Note:
Dividends per share paid and payable in respect
of the year (note 4) 8.00p 7.50p
-------------------------------------------------- ---------- ---------- --------- --------- --------- ---------
The total column of this statement is the profit and loss
account of the Company. The supplementary revenue and capital
columns are prepared under guidance published by the Association of
Investment Companies.
All revenue and capital items in this statement derive from
continuing operations.
A Statement of Comprehensive Income is not required as all gains
and losses of the Company have been reflected in the above
statement.
Balance sheet
-------------
At 30 November 2017 (unaudited) At 30 November 2016 (audited)
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------- ---------------- --------------- --------------- --------------
Fixed assets
Investments held at fair value through profit or
loss 314,112 210,562
Current assets
Debtors 798 115
Cash and cash equivalents 23,704 10,247
-------------------------------------------------- ---------------- --------------- --------------- --------------
24,502 10,362
-------------------------------------------------- ---------------- --------------- --------------- --------------
Creditors
Amounts falling due within one year (163) (54)
-------------------------------------------------- ---------------- --------------- --------------- --------------
Net current assets 24,339 10,308
-------------------------------------------------- ---------------- --------------- --------------- --------------
Total net assets 338,451 220,870
-------------------------------------------------- ---------------- --------------- --------------- --------------
Capital and reserves
Share capital 13,867 13,882
Share premium account 15,242 15,242
Special distributable reserve 16,387 16,625
Capital redemption reserve 2,665 2,650
Capital reserve 283,191 167,982
Revenue reserve 7,099 4,489
-------------------------------------------------- ---------------- --------------- --------------- --------------
Shareholders' funds 338,451 220,870
-------------------------------------------------- ---------------- --------------- --------------- --------------
Net asset value per ordinary share (note 5) 610.2p 397.7p
-------------------------------------------------- ---------------- --------------- --------------- --------------
Statement of changes in equity
------------------------------
For the year ended 30 November 2017 (unaudited)
Special Capital
Share premium distributable redemption Capital Revenue Shareholders'
Share capital account reserve reserve reserve* reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 1
December 2016 13,882 15,242 16,625 2,650 167,982 4,489 220,870
Net return on
ordinary
activities
after
taxation - - - - 115,209 5,106 120,315
Shares bought
back for
cancellation
(note 5) (15) - (238) 15 - - (238)
Dividends paid
during the
year
(note 4) - - - - - (2,496) (2,496)
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 30
November 2017 13,867 15,242 16,387 2,665 283,191 7,099 338,451
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
For the year ended 30 November 2016 (audited)
Special Capital
Share premium distributable redemption Capital Revenue Shareholders'
Share capital account reserve reserve reserve* reserve funds
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------------- ------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 1
December 2015 14,032 15,242 18,831 2,500 162,123 6,243 218,971
Net return on
ordinary
activities
after
taxation - - - - 5,859 4,420 10,279
Shares bought
back for
cancellation
(note 5) (150) - (2,206) 150 - - (2,206)
Dividends paid
during the
year
(note 4) - - - - - (6,174) (6,174)
-------------- -------------- ------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 30
November 2016 13,882 15,242 16,625 2,650 167,982 4,489 220,870
-------------- -------------- ------------- ------------- ------------- --------- -------------- --------------
* The Capital Reserve balance at 30 November 2017 included an
investment holding gain on fixed asset investments of
GBP145,636,000 (2016 - gain of GBP57,240,000).
Notes (unaudited)
-----------------
1. The unaudited financial statements for the year to 30 November 2017 have been prepared in
accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic
of Ireland'. The accounting policies adopted are consistent with those of the previous financial
year. The Company has elected not to present a Statement of Cash Flows for the current year
as a Statement of Changes in Equity has been provided and substantially all of the Company's
investments are highly liquid and are carried at market value.
-----------------------------------------------------------------------------------------------------------
2. Income Year to Year to
30 November 2017 30 November 2016
GBP'000 GBP'000
------------------------------------------------- -------------------------- ----------------------------
Income from investments and interest receivable 5,808 5,120
Other income 22 19
----------------------------------------------------- -------------------------- ----------------------------
5,830 5,139
----------------------------------------------------- -------------------------- ----------------------------
3. Net return per ordinary Year to 30 November 2017 Year to 30 November 2016
share
Revenue Capital Total Revenue Capital Total
------------------------ ----------------------- ----------------- ------- -------- --------- -------
Net return on ordinary
activities after taxation
(GBP'000) 5,106 115,209 120,315 4,420 5,859 10,279
Weighted average number of
ordinary shares in issue
during the year 55,477,890 55,738,196
---------------------------- --------------------------------------------------- ----------------------------
Net return per ordinary
share: Basic 9.20p 207.67p 216.87p 7.93p 10.51p 18.44p
---------------------------- ----------------------- ----------------- ------- -------- --------- -------
Returns per ordinary share are based on the return for the financial year and on the weighted
average number of ordinary shares in issue during the year as shown above. There are no dilutive
or potentially dilutive shares in issue.
-----------------------------------------------------------------------------------------------------------
4. Ordinary dividends Year to Year to
30 November 2017 30 November 2016
Pence GBP'000 Pence GBP'000
------------------------------------------------- ----------------- ------- ------------------- -------
Amounts recognized as distributions in the year:
Previous year's second interim dividend - - 3.00 1,684
Previous year's special dividend paid 6 April 2017 2.50 1,387 3.00 1,684
Interim dividend paid 25 August 2017 2.00 1,109 5.00 2,806
----------------------------------------------------- ----------------- ------- ------------------- -------
4.50 2,496 11.00 6,174
----------------------------------------------------- ----------------- ------- ------------------- -------
Set out below are the total dividends paid and proposed in respect of the financial year,
which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010
are considered. The revenue available for distribution by way of dividend for the year is
GBP5,106,000 (2016 - GBP4,420,000).
Ordinary dividends Year to Year to
30 November 2017 30 November 2016
Pence GBP'000 Pence GBP'000
------------------------------------------------- ----------------- ------- ------------------- -------
Amounts paid and payable in respect of the year:
Interim dividend paid 25 August 2017 2.00 1,109 5.00 2,806
Final dividend payable 6 April 2018 4.00 2,219 - -
Special dividend payable 6 April 2018 2.00 1,109 2.50 1,388
----------------------------------------------------- ----------------- ------- ------------------- -------
8.00 4,437 7.50 4,194
----------------------------------------------------- ----------------- ------- ------------------- -------
If approved, the recommended final and special dividends will be paid on 6 April 2018 to all
shareholders on the register at the close of business on 23 February 2018. The ex-dividend
date is 22 February 2018.
---------------------------------------------------------------------------------------------------------------
5. Net asset value per ordinary share At 30 November At 30 November
2017 2016
GBP000 GBP'000
------------------------------------------------------------------ ------------------- -------------------
Net asset value attributable to ordinary shares 338,451 220,870
---------------------------------------------------------------------- ------------------- -------------------
Net asset value per share is based on net assets (as shown above) and on 55,470,000 shares
(2016 - 55,530,000), being the number of shares in issue at the year end. There are no dilutive
or potentially dilutive shares in issue.
During the year the Company bought back and cancelled 60,000 (2016 - 600,000) ordinary shares
with a nominal value of GBP15,000 (2016 - GBP150,000) at a cost of GBP238,000 (2016 - GBP2,206,000).
No shares were allotted during the year. At 30 November 2017 the Company had authority remaining
to buy back a further 8,314,953 ordinary shares and to allot new shares up to an aggregate
nominal value amount of GBP4,774,939.
6. Transaction costs incurred on the purchase and sale of the investments are added to the purchase
cost or deducted from the sale proceeds, as appropriate. During the year, transaction costs
on purchases amounted to GBP153,000 (2016 - GBP64,000) and transaction costs on sales amounted
to GBP155,000 (2016 - GBP99,000).
7. The financial information set out above does not constitute the Company's statutory accounts
for the year ended 30 November 2017. The financial information for 2016 is derived from the
financial statements for 2016 which have been delivered to the Registrar of Companies. The
auditors have reported on the 2016 accounts; their report was unqualified, did not include
a reference to any matters to which the auditors drew attention by way of emphasis without
qualifying the report and did not contain a statement under sections 498 (2) or 498(3) of
the Companies Act 2006. The statutory accounts for 2017 will be finalised on the basis of
the financial information presented in this preliminary announcement and will be delivered
to the Registrar of Companies following the Company's Annual General Meeting. The Auditors
have advised the Company that they do not expect their report on the 2017 statutory accounts
to include any modification or emphasis of matter statements.
8. The Report and Accounts will be available on the Company's website www.independentinvestmenttrust.co.uk
on or around 12 February 2018.
------------------------------------------------------------------------------------------------------------
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
None of the views expressed in this document should be construed
as advice to buy or sell a particular investment.
Glossary of Terms
Total Assets
The total value of all assets held less all liabilities (other than liabilities in the form
of borrowings).
Net Asset Value
Net Asset Value (NAV) is the value of total assets held less all liabilities (including liabilities
in the form of borrowings). The NAV per share is calculated by dividing this amount by the
number of ordinary shares in issue.
Discount/Premium
As stock markets and share prices vary, an investment trust's share price is rarely the same
as its NAV. When the share price is lower than the NAV per share it is said to be trading
at a discount. The size of the discount is calculated by subtracting the share price from
the NAV per share and is usually expressed as a percentage of the NAV per share. If the share
price is higher than the NAV per share, this situation is called a premium.
Net Liquid Assets
Net liquid assets comprise current assets less current liabilities, excluding borrowings.
Total Return
The total return is the return to shareholders after reinvesting the net dividend on the date
that the share price goes ex-dividend.
Ongoing Charges
The total administrative expenses incurred by the Company as a percentage of the average shareholders'
funds.
Gearing
At its simplest, gearing is borrowing. Just like any other
public company, an investment trust can borrow money to invest in
additional investments for its portfolio. The effect of the
borrowing on the shareholders' assets is called 'gearing'. If the
Company's assets grow, the shareholders' assets grow
proportionately more because the debt remains the same. But if the
value of the Company's assets falls, the situation is reversed.
Gearing can therefore enhance performance in rising markets but can
adversely impact performance in falling markets.
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FTSE Index data
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(END) Dow Jones Newswires
January 18, 2018 02:00 ET (07:00 GMT)
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