TIDMIIT
RNS Number : 9994S
Independent Investment Trust PLC
14 July 2020
The Independent Investment Trust PLC
------------------------------------
Interim Financial Report for the six months ended 31 May 2020
-------------------------------------------------------------
Legal Entity Identifier: 213800IYHGJTZJ3MO642
Regulated Information Classification: Half Yearly Financial
Report.
The following information is disclosed in accordance with DTR
4.2 of the UKLA Listing Rules (half-yearly financial reports).
Objective and Policy
--------------------
The Company's objective is to provide good absolute returns over
long periods by investing the great majority of its assets in UK
and international quoted securities and, if appropriate, index
futures. The portfolio is constructed without reference to the
composition of any stockmarket index. Although its investment
policy allows gearing, including the use of derivatives, the
Company is not permitted to employ gearing whilst it continues to
be a small registered UK Alternative Investment Fund Manager
(AIFM). When appropriate, the directors will sanction a relatively
concentrated portfolio structure and, depending on its AIFM status,
relatively high levels of gearing.
Principal Risk and Uncertainties
--------------------------------
The principal risks facing the Company, which have not changed
since the date of the Company's Annual Report and financial
statements for the year to 30 November 2019, are financial risk,
investment strategy risk, regulatory risk, custody risk,
operational risk, discount risk, political risk and resource risk.
An explanation of these risks and how they are being managed or
mitigated is set out on pages 10 to 12 of that report, which is
available on the Company's website:
www.independentinvestmenttrust.co.uk. The principal risks and
uncertainties have not changed since the date of the annual report
with the exception of the current unprecedented situation resulting
from the covid-19 pandemic. The board and manager are working
closely to monitor the situation as it develops and will continue
to do so. The Company's policy is designed to allow the Company an
unusually high degree of freedom to exploit the directors'
judgement. To the extent that the directors' judgement is flawed,
future results could be unusually poor.
Responsibility Statement
------------------------
We confirm that to the best of our knowledge:
a) the condensed set of financial statements has been prepared
in accordance with FRS 104 'Interim Financial Reporting';
b) the Chairman's Statement includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.7R
(being an indication of important events that have occurred during
the first six months of the financial year, their impact on the
condensed set of financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the year); and
c) the Interim Financial Report includes a fair review of the
information required by Disclosure and Transparency Rule 4.2.8R
(disclosure of related party transactions and changes therein).
On behalf of the board
Douglas McDougall
Chairman
14 July 2020
Financial Highlights (*)
------------------------
31 May 2020 30 November 2019 % change
---------------------- --------------------- -------------------- ---------
Net asset value per
share 467.0p 571.8p (18.3)
Share price 414.0p 518.0p (20.1)
FTSE All-Share Index 3,363.7 4,066.7 (17.3)
FTSE World Index 718.7 737.5 (2.5)
Discount(#) 11.3% 9.4%
Six months to 31 May Year to 30 November
2020 2019
---------------------- --------------------- -------------------- ---------
Total returns
Net asset value per
share(#) (17.0%) 8.5%
Share price(#) (18.7%) (0.5%)
FTSE All-Share Index (16.1%) 11.0%
FTSE World Index (1.4%) 13.1%
Six months to 31 May Six months to 31 % change
2020 May 2019
---------------------- --------------------- -------------------- ---------
Revenue earnings
per share 0.85p 8.08p (89.5)
Dividend per share 3.00p 3.00p 0.0
* For a definition of terms see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Source: Baillie Gifford/Refinitive and relevant underlying data
providers. See disclaimer at the end of this announcement.
# Alternative performance measure, see Glossary of Terms and
Alternative Performance Measures at the end of this
announcement.
Past performance is not a guide to future performance.
Chairman's Statement
--------------------
The six month period ending 31 May 2020 saw our company produce
a net asset value total return of -17%. The total returns
notionally attributable to the FTSE All-Share Index and the FTSE
World Index were -16.1% and -1.4% respectively. Our net asset value
per share fell from 571.8p to 467p over the period, and the share
price from 518p to 414p, causing the discount to net asset value to
rise from 9.4% to 11.3%. The share price total return for the
period was -18.7%.
This is a most disappointing outcome and we are conscious that
it would have been materially less so but for a fateful decision to
increase our cash balances substantially towards the end of March.
This decision was driven by the fear that many otherwise strong
businesses would get into financial difficulties as a result of
initial government responses to the Covid-19 pandemic. It is
already clear that in most instances - notably that of Ashtead -
this fear was misplaced, not least because it failed to take into
account the scale of the measures governments and central banks
would subsequently take to counter the damaging effects of
lockdowns.
Earnings for the half year amounted to 0.85p (8.08p). It has
been a difficult period for the revenue account as many of our
biggest dividend payers have decided to defer dividends that would
have been recognized during it. These are strong companies and most
of them will return to the dividend list once the outlook clears.
We have therefore decided to declare an unchanged interim dividend
of 3p. This will be paid on 21 August with an ex-dividend date of
30 July. We hope to have a clearer picture of the underlying
potential of the revenue account towards the end of the year, at
which point we shall take a decision on whether or not to recommend
a final dividend.
During the period we were able to buy back 39,609 shares at a
discount of 11.1%. These purchases were made in February when
market conditions were orderly. We have always made it a paramount
consideration in buying back shares that such activity should be in
the interests of continuing shareholders. From the end of February,
the volatility of markets became such that we were unable to
convince ourselves that this criterion would be met. More recently
there have been some signs of stability returning to markets and we
have tentatively re-entered the market for our own shares.
The early part of the period was marked by an unexpectedly
decisive Conservative victory in the General Election, which was
beneficial to our portfolio with its domestic bias. January and
February saw further encouraging trends, within both the economy
and our portfolio, but the sudden realization in early March that
drastic measures would need to be taken to control the spread of
Covid-19 created conditions of panic in stockmarkets round the
world. The fall in the UK stockmarket had a particularly severe
impact on companies in the housebuilding and leisure industries, to
which we were heavily exposed. Our decision to reduce our exposure
to these areas and to make sales of other companies whose
businesses appeared particularly vulnerable to the sudden
interruption of economic activity was poorly timed. Soon after it,
markets staged a dramatic recovery as governments introduced huge
programmes of fiscal stimulus and central banks flooded the markets
with liquidity. Many of the stocks we had sold featured prominently
in this recovery.
The biggest changes in the composition of our portfolio have
been the reduction in our housebuilding stake (largely driven by
market movements) and the sale of our one industrial holding,
Ashtead. Our cash balances rose from 13.6% at 30 November 2019 to
26.4% at 31 May 2020. Market movements and net purchases (including
share repurchases) have reduced this to 20.5% at 14 July 2020.
Our technology holdings demonstrated commendable resilience over
the period: a stake worth GBP64.9m at 30 November 2019 had fallen
in value to GBP57.2m by 31 May 2020 after net sales of GBP5.1m. The
star of the show was our old favourite, Herald - the only member of
our current portfolio to have been held continuously since October
2000. Over the period, Herald's portfolio of small technology
companies once again outperformed the market by a significant
margin, allowing its share price to rise despite an increase in the
discount. Herald is now our biggest holding and stands at almost
four times its book cost. Gamma Communications, to which we added
in April, also saw its share price rise over the period as strong
trading and the evident resilience of its business model attracted
investors. Blue Prism was another positive contributor despite a
poorly timed sale of part of the holding. Seeing Machines, FDM and
Alfa Financial Software were all affected by Covid-19 while Zoo
Digital continues to wrestle with upheavals in its marketplace.
Our traditional holdings in the travel and leisure sector had a
very difficult time during the period owing to the impact of
lockdown on their businesses. We sold completely out of The Gym
Group and Hollywood Bowl, and reduced On The Beach - all at
depressingly low prices - but added modestly to Loungers at a
comparably depressed price. In total, our traditional holdings in
the sector cost us GBP16.9m over the six months, but fortunately
this was mostly offset by the gains we made in our three computer
games companies: Codemasters, Frontier Developments and Team 17.
All three have benefited significantly from increased game playing
during lockdowns round the world and there is some uncertainty as
to how much, if any, of this benefit will survive a return to
normal life, but their longer term prospects will be determined by
their success in creating new games of enduring appeal. On this
count, the track records of all three give grounds for
encouragement. Overall, our travel and leisure stake fell in value
from GBP60.6m at 30 November 2019 to GBP52.4m at 31 May 2020 after
net sales of GBP6.0m.
Following their good recovery last year, we had high hopes of
our housebuilding holdings for 2020. Valuations were attractive,
trading was good and the uncertainty dispelled by the General
Election outcome seemed likely to generate a strong spring selling
season. With this in mind, we made significant additions to our
stake in mid- December. Everything seemed to be unfolding much as
we had hoped when the prospect of lockdown hove into view.
Suddenly, what had appeared a clear and bright outlook had become a
dense and unwelcoming fog. We concluded that it was no longer
appropriate to have such a large exposure to an industry that could
easily suffer a lengthy period of hostile trading conditions,
whatever its long term attractions. Unfortunately, the timing of
the reduction in our stake was poor, as is often the case when a
sudden and dramatic change of view is required. Over the period,
our holdings declined in value from GBP53.6m at 30 November 2019 to
GBP24.2m at 31 May 2020 after net sales of GBP5.5m.
The traditional retail sector has been particularly badly
affected by Covid-19, but our disposals of Joules and The Works
took place before the outbreak, which saved us a little money. This
leaves us with just one retail holding: the second hand car
retailer, Motorpoint. Its share price held up better than one might
have expected, allowing us to make a further reduction in the
holding.
The energy sector suffered from the spectacular fall in the oil
price. Early in the period we bought a holding in Shell, believing
that the dividend was safe. This belief was quickly shown to be
misplaced and we sold the holding at a substantial loss. We hold
out greater hopes for our American holdings, Concho and RPC, both
of which look certain to survive and would benefit
disproportionately from a recovery in the oil price.
We made a further reduction in our hugely successful holding in
Fever-Tree on grounds of valuation following a change in its US
strategy and we made a poorly timed disposal of our holding in
Ashtead - also a successful holding for us. The Midwich share price
performed disappointingly over the period as the company's business
was affected by Covid-19, but we retain our enthusiasm for the long
term prospects of the business.
A new holding in the personal lines insurer, Direct Line, made a
subdued start, while our longstanding holding in Polar Capital
Global Insurance performed uncharacteristically poorly. The Medica
share price reflected the disruption to its business caused by
Covid-19, but the lentiviral specialist Oxford Biomedica performed
strongly as it expanded its range of collaborations with large
pharmaceutical companies. Finally, we disposed of small holdings in
NAHL and Eddie Stobart Logistics at a substantial loss.
The reaction of governments and central banks to the Covid-19
pandemic has been to pursue fiscal and monetary policies of
unprecedented laxity. These have had the short term effect of
restoring confidence in stockmarkets, but their longer term
implications for the health of economies is difficult to assess.
The job of valuing equities in these circumstances is very
difficult and we are struggling to find businesses where we can be
confident that their stockmarket valuations are a sensible
reflection of their risk-adjusted prospects. For as long as this
remains the case, we expect to operate with larger cash balances
than normal.
The principal risks facing the Company are set out on the inside
front cover of this report. We draw your attention, in particular,
to the unusually important role of the directors' judgement in the
success or failure of the Company's policy. We should also like to
remind shareholders, despite the decision by the Association of
Investment Companies to classify us as a UK trust, that we are free
to invest in quoted equities wherever they are listed.
Douglas McDougall
14 July 2020
List of Investments as at 31 May 2020 (unaudited)
-------------------------------------------------
Value Value
30 Nov Gains/ 31 May
2019 Net transactions (losses) 2020
Sector Name GBP'000 GBP'000 GBP'000 GBP'000 %
-------------------- ----------------------- --------- ----------------- ---------- --------- ------
Housing Bellway 6,678 7,592 (3,990) 10,280 4.0
Crest Nicholson 15,376 (10,620) (4,756) - -
Persimmon 5,116 - (530) 4,586 1.8
Redrow 26,440 (6,219) (10,857) 9,364 3.7
Taylor Woodrow* - 3,795 (3,795) - -
53,610 (5,452) (23,928) 24,230 9.5
--------- ----------------- ---------- --------- ------
Industrials Ashtead Group 23,490 (14,256) (9,234) - -
--------- ----------------- ---------- --------- ------
Retailing Joules Group 3,450 (2,629) (821) - -
Motorpoint 9,984 (2,494) (530) 6,960 2.7
TheWorks.co.uk 519 (752) 233 - -
13,953 (5,875) (1,118) 6,960 2.7
--------- ----------------- ---------- --------- ------
Consumer Services NAHL Group 3,000 (1,250) (1,750) - -
========= ================= ========== ========= ======
Codemasters Group
Travel and Leisure Holdings 9,118 - 2,716 11,834 4.6
Frontier Developments 7,917 - 5,473 13,390 5.2
Hollywood Bowl
Group 7,140 (2,994) (4,146) - -
Loungers 3,120 162 (969) 2,313 0.9
On the Beach Group 17,872 (1,558) (7,974) 8,340 3.3
Team 17 Group 10,050 - 6,450 16,500 6.5
The Gym Group 5,380 (1,588) (3,792) - -
--------- ----------------- ---------- --------- ------
60,597 (5,978) (2,242) 52,377 20.5
--------- ----------------- ---------- --------- ------
Direct Line Insurance
Business Services Group - 9,359 295 9,654 3.8
Eddie Stobart
Logistics 70 (473) 403 - -
Midwich 14,750 1,250 (3,762) 12,238 4.8
--------- ----------------- ---------- --------- ------
14,820 10,136 (3,064) 21,892 8.6
--------- ----------------- ---------- --------- ------
Alfa Financial
Technology and Software 2,635 - (682) 1,953 0.8
Telecommunications Blue Prism 12,419 (6,611) 632 6,440 2.5
FDM Group 14,565 - (1,080) 13,485 5.3
Gamma Communications 6,250 1,993 367 8,610 3.4
Herald Investment
Trust 21,060 - 960 22,020 8.6
Seeing Machines 6,343 (487) (2,414) 3,442 1.3
Zoo Digital Group 1,620 - (380) 1,240 0.5
64,892 (5,105) (2,597) 57,190 22.4
--------- ----------------- ---------- --------- ------
Beverages Fever-Tree Drinks 17,504 (6,161) (3,135) 8,208 3.2
--------- ----------------- ---------- --------- ------
Healthcare Medica Group 5,640 - (640) 5,000 2.0
Oxford Biomedica 3,528 - 867 4,395 1.7
9,168 - 227 9,395 3.7
Polar Capital
Global
Insurance Fund
Financials - Ireland 5,766 - (850) 4,916 1.9
--------- ----------------- ---------- --------- ------
Energy/Oilfield Concho Resources
Services - USA 2,807 - (604) 2,203 0.9
Royal Dutch Shell
B* - 3,927 (3,927) - -
RPC - USA 595 - (81) 514 0.2
--------- ----------------- ---------- --------- ------
3,402 3,927 (4,612) 2,717 1.1
--------- ----------------- ---------- --------- ------
Total Investments 270,202 (30,014) (52,303) 187,885 73.6
Net Liquid Assets 42,667 24,784 - 67,451 26.4
--------------------------------------------- --------- ----------------- ---------- --------- ------
Shareholders'
Funds 312,869 (5,230) (52,303) 255,336 100.0
--------------------------------------------- --------- ----------------- ---------- --------- ------
All holdings are in equities domiciled in the UK unless
otherwise stated.
* These shares were bought and sold within the period.
Income statement (unaudited)
----------------------------
For the six months ended For the six months ended (Audited)
31 May 2020 31 May 2019 For the year ended
30 November 2019
-------------------------- ----------------------------- ----------------------------- ----------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- -------- -------- --------- -------- -------- -------- -------- --------
(Losses)/gains on
investments (note 3) - (52,303) (52,303) - 19,249 19,249 - 17,338 17,338
Currency gains/(losses) - 4 4 - (1) (1) - (4) (4)
Income from investments
and interest receivable 782 - 782 4,826 - 4,826 7,969 - 7,969
Other income 59 - 59 9 - 9 209 - 209
Administrative expenses (373) - (373) (361) - (361) (740) - (740)
-------------------------- --------- -------- -------- --------- -------- -------- -------- -------- --------
Net return on ordinary
activities before
taxation 468 (52,299) (51,831) 4,474 19,248 23,722 7,438 17,334 24,772
Tax on ordinary activities (2) - (2) (5) - (5) (7) - (7)
-------------------------- --------- -------- -------- --------- -------- -------- -------- -------- --------
Net return on ordinary
activities after taxation 466 (52,299) (51,833) 4,469 19,248 23,717 7,431 17,334 24,765
-------------------------- --------- -------- -------- --------- -------- -------- -------- -------- --------
Net return per ordinary
share (note 4) 0.85p (95.62p) (94.77p) 8.08p 34.79p 42.87p 13.48p 31.45p 44.93p
-------------------------- --------- -------- -------- --------- -------- -------- -------- -------- --------
Note:
Dividends per share paid
and payable in respect of
the period (note 5) 3.00p 3.00p 13.00p
-------------------------- --------- -------- -------- --------- -------- -------- -------- -------- --------
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 the
Company does not have any other comprehensive income and the net
return on ordinary activities after taxation is both the profit and
comprehensive income for the period.
Balance sheet (unaudited)
-------------------------
At 31 May (Audited)
2020 At 30 November
2019
GBP'000 GBP'000
------------------------------------------------------ ---------- ---------------
Fixed assets
Investments held at fair value through profit or loss 187,885 270,202
------------------------------------------------------ ---------- ---------------
Current assets
Debtors 129 266
Cash and cash equivalents 67,346 43,446
------------------------------------------------------ ---------- ---------------
67,475 43,712
Creditors
Amounts falling due within one year (24) (1,045)
------------------------------------------------------ ---------- ---------------
Net current assets 67,451 42,667
------------------------------------------------------ ---------- ---------------
Total net assets 255,336 312,869
------------------------------------------------------ ---------- ---------------
Capital and reserves
Share capital 13,669 13,679
Share premium account 15,242 15,242
Special distributable reserve 12,233 12,465
Capital redemption reserve 2,863 2,853
Capital reserve 206,472 258,771
Revenue reserve 4,857 9,859
------------------------------------------------------ ---------- ---------------
Shareholders' funds 255,336 312,869
------------------------------------------------------ ---------- ---------------
Net asset value per ordinary share (note 6) 467.0p 571.8p
------------------------------------------------------ ---------- ---------------
Ordinary shares in issue (note 7) 54,677,769 54,717,378
------------------------------------------------------ ---------- ---------------
Statement of changes in equity (unaudited)
==========================================
For the six months ended 31 May 2020
Special Capital Shareholders'
Share premium distributable redemption Capital Revenue funds
Share capital account reserve reserve reserve* reserve GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------- ------------- ------------- -------------- --------- -------------- --------------
Shareholders'
funds at 1
December 2019 13,679 15,242 12,465 2,853 258,771 9,859 312,869
Net return on
ordinary
activities
after
taxation - - - - (52,299) 466 (51,833)
Shares bought
back for
cancellation (10) - (232) 10 - - (232)
Dividends paid
(note 5) - - - - - (5,468) (5,468)
-------------- ------------- ------------- ------------- -------------- --------- -------------- --------------
Shareholders'
funds at 31
May 2020 13,669 15,242 12,233 2,863 206,472 4,857 255,336
-------------- ------------- ------------- ------------- -------------- --------- -------------- --------------
For the six months ended 31 May 2019
Special Capital Shareholders'
Share premium distributable redemption Capital Revenue funds
Share capital account reserve reserve reserve* reserve GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 1
December 2018 13,842 15,242 15,861 2,690 241,437 8,501 297,573
Net return on
ordinary
activities
after
taxation - - - - 19,248 4,469 23,717
Shares bought
back for
cancellation (12) - (248) 12 - - (248)
Dividends paid
(note 5) - - - - - (4,425) (4,425)
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
Shareholders'
funds at 31
May 2019 13,830 15,242 15,613 2,702 260,685 8,545 316,617
-------------- ------------- -------------- ------------- ------------- --------- -------------- --------------
* The Capital reserve balance at 31 May 2020 includes investment
holding gains on fixed asset investments of GBP62,440,000 (31 May
2019 - gains of GBP92,498,000).
Notes to the condensed financial statements (unaudited)
=======================================================
1. The condensed financial statements for the six months to 31 May 2020 comprise the statements
set out above and the related notes below. They have been prepared in accordance with FRS
104 'Interim Financial Reporting' and the AIC's Statement of Recommended Practice issued in
November 2014 and updated in October 2019 with consequential amendments. They have not been
audited or reviewed by the Auditor pursuant to the Auditing Practices Board Guidance on 'Review
of Interim Financial Information'. The financial statements for the six months to 31 May 2020
have been prepared on the basis of the same accounting policies as set out in the Company's
Annual Report and financial statements at 30 November 2019. The Company has elected not to
present a Statement of Cash Flows for the current period 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.
Fair Value Hierarchy
The fair value hierarchy used to analyse the basis on which the fair values of financial instruments
held at fair value through the profit or loss account are measured is described below. Fair
value measurements are categorised on the basis of the lowest level input that is significant
to the fair value measurement.
Level 1 - using unadjusted quoted prices for identical instruments in an active market;
Level 2 - using inputs, other than quoted prices included within Level 1, that are directly
or indirectly observable (based on market data); and
Level 3 - using inputs that are unobservable (for which market data is unavailable).
The Company's investments are financial instruments held at fair value through the profit
or loss accounts. At 31 May 2020, all of the investments were categorized as Level 1 within
the fair value hierarchy described above. At 30 November 2019 GBP270,132,000 of the Company's
investments were classified as Level 1 and GBP70,000 were classified as level 3. For all other
financial assets and liabilities, carrying value approximates to fair value. There have been
no transfers between levels of the fair value hierarchy during the period. The fair value
of listed investments is either the bid price or last traded price, depending on the convention
of the stock exchange on which the investment is listed. Listed investments are categorised
as Level 1 if they are valued using unadjusted quoted prices for identical instruments in
an active market and as Level 2 if they do not meet all these criteria but are, nonetheless,
valued using market data and as Level 3 where market data is unavailable.
Going Concern
Having considered the Company's current position, self-managed status, the nature of its assets,
liabilities, projected income and expenditure together with the Company's investment objective
and policy, dividend policy and principal risks and uncertainties, as set out above, it is
the directors' opinion that the Company has adequate resources to continue in operational
existence for the foreseeable future. The Company's assets, the majority of which are investments
in quoted securities which are readily realizable, exceed its liabilities significantly. The
Company has no loans. Accordingly, the directors consider it appropriate to adopt the going
concern basis of accounting in preparing these financial statements and confirm that they
are not aware of any material uncertainties which may affect its ability to continue to do
so over a period of at least twelve months from the date of approval of these financial statements.
=====================================================================================================
2. The financial information contained within this Interim Financial Report does not constitute
statutory accounts as defined in sections 434 to 436 of the Companies Act 2006. The financial
information for the year ended 30 November 2019 has been extracted from the statutory accounts
which have been filed with the Registrar of Companies. The Auditor's Report on those accounts
was not qualified, did not include a reference to any matters to which the Auditor drew attention
by way of emphasis without qualifying its report, and did not contain statements under sections
498(2) or (3) of the Companies Act 2006.
=====================================================================================================
3. Gains on investments Six months to Six months to (Audited)
31 May 2020 31 May 2019 Year to
GBP'000 GBP'000 30 November 2019
GBP'000
------------------------------------------------- ================ ================= ======================
Realized (losses)/gains on sales (18,416) 15,062 9,321
Movement on investment holding gains and losses (33,887) 4,187 8,017
====================================================== ================ ================= ======================
(52,303) 19,249 17,338
====================================================== ================ ================= ======================
4. Net return per ordinary share Six months to Six months to (Audited)
31 May 2020 31 May 2019 Year to
GBP'000 GBP'000 30 November 2019
GBP'000
================================================= ================ ================= ======================
Revenue return on ordinary activities after taxation 466 4,469 7,431
Capital return on ordinary activities after taxation (52,299) 19,248 17,334
------------------------------------------------------ ---------------- ----------------- ----------------------
Total net return (51,833) 23,717 24,765
------------------------------------------------------ ---------------- ----------------- ----------------------
The returns per share are based on the above returns and on 54,695,049 (31 May 2019 - 55,321,507;
30 November 2019 - 55,114,893) shares being the weighted average number of shares in issue
during each period.
There was no dilution of returns during any of the financial periods under review.
--------------------------------------------------------------------------------------------------------------
5. Dividends Six months to Six months to (Audited)
31 May 2020 31 May 2019 Year to
GBP'000 GBP'000 30 November 2019
GBP'000
------------------------------------------------- ---------------- ----------------- ----------------------
Amounts recognized as distributions in the
period:
Previous year's second interim of 5.00p paid 6 April
2020 (2019 - 5.00p) 2,734 2,766 2,766
Previous year's special of 5.00p paid 6 April 2020
(2019 - 3.00p) 2,734 1,659 1,660
Interim (2019 - 3.00p) - - 1,647
------------------------------------------------------ ---------------- ----------------- ----------------------
5,468 4,425 6,073
------------------------------------------------------ ---------------- ----------------- ----------------------
Amounts paid and payable in respect of the
period:
Interim of 3.00p payable 21 August 2020 (2019 - 3.00p) 1,636 1,660 1,647
Final (2019 - 5.00p) - - 2,736
Special (2019 - 5.00p) - - 2,736
------------------------------------------------------ ---------------- ----------------- ----------------------
1,636 1,660 5,539
------------------------------------------------------ ---------------- ----------------- ----------------------
The Interim dividend in respect of the six months to 31 May 2020 was declared after the period
end and has therefore not been included as a liability in the balance sheet. It is payable
on 21 August 2020 to shareholders on the register at the close of business on 31July 2020.
The ex-dividend date is 30 July 2020.
6. Net asset value per ordinary share
The net asset value per ordinary share and the net asset value attributable to the ordinary
shareholders at the period end calculated in accordance with the articles of association and
UK GAAP were as follows:
As at 31 May 2020 As at 30 November 2019
Pence GBP'000 Pence GBP'000
------------------------------------------------------- ---------- ------------- ------------- ===========
Ordinary shares 467.0 255,336 571.8 312,869
============================================================ ========== ============= ============= ===========
The net asset value per share is based on net assets as shown above and on 54,677,769 shares
(30 November 2019 - 54,717,378), being the number of shares in issue at the period end.
There are no dilutive or potentially dilutive shares in issue.
===================================================================================================================
7. During the period the Company bought back for cancellation 39,609 ordinary shares of 25p each
at a cost of GBP232,000. At 31 May 2020, the Company had authority to buy back 8,162,525 ordinary
shares and to allot new shares up to an aggregate nominal amount of GBP4,559,325. In the period
from 1 June 2020 to 14 July 2020 the Company has bought back 145,020 ordinary shares of 25p
each at a cost of GBP605,000.
==============================================================================================================
8. 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 period, transaction costs
on purchases amounted to GBP274,000 (31 May 2019 - GBP6,000; 30 November 2019 - GBP120,000)
and transaction costs on sales amounted to GBP152,000 (31 May 2019 - GBP63,000; 30 November
2019 - GBP96,000).
==============================================================================================================
9. Related party transactions
There have been no transactions with related parties during the first six months of the current
financial year that have materially affected the financial position or the performance of
the Company during that period and there have been no changes in the related party transactions
described in the last Annual Report and Financial Statements that could have had such an effect
on the Company during that period.
==============================================================================================================
Third party data provider disclaimer
No third party data provider ('Provider') makes any warranty,
express or implied, as to the accuracy, completeness or timeliness
of the data contained herewith nor as to the results to be obtained
by recipients of the data.
No Provider shall in any way be liable to any recipient of the
data for any inaccuracies, errors or omissions in the index data
included in this document, regardless of cause, or for any damages
(whether direct or indirect) resulting therefrom. No Provider has
any obligation to update, modify or amend the data or to otherwise
notify a recipient thereof in the event that any matter stated
herein changes or subsequently becomes inaccurate.
Without limiting the foregoing, no Provider shall have any
liability whatsoever to you, whether in contract (including under
an indemnity), in tort (including negligence), under a warranty,
under statute or otherwise, in respect of any loss or damage
suffered by you as a result of or in connection with any opinions,
recommendations, forecasts, judgements, or any other conclusions,
or any course of action determined, by you or any third party,
whether or not based on the content, information or materials
contained herein.
FTSE Index data
FTSE International Limited ('FTSE')(c) FTSE 2020. 'FTSE(R)' is a
trade mark of the London Stock Exchange Group companies and is used
by FTSE International Limited under licence. All rights in the FTSE
indices and/or FTSE ratings vest in FTSE and/or its licensors.
Neither FTSE nor its licensors accept any liability for any errors
or omissions in the FTSE indices and/or FTSE ratings or underlying
data and no party may rely on any FTSE indices, ratings and/or
underlying data contained in this communication. No further
distribution of FTSE Data is permitted without FTSE's express
written consent. FTSE does not promote, sponsor or endorse the
content of this communication.
Automatic Exchange of Information
In order to fulfil its obligations under UK Tax Legislation
relating to the automatic exchange of information, the Company is
required to collect and report certain information about certain
shareholders.
The legislation will require investment trust companies to
provide personal information to HMRC on certain investors who
purchase shares in investment trusts. Accordingly, the Company must
provide information annually to the local tax authority on the tax
residencies of a number of non-UK based certificated shareholders
and corporate entities.
Shareholders, excluding those whose shares are held in CREST,
who come on to the share register will be sent a certification form
for the purposes of collecting this information.
For further information, please see HMRC's Quick Guide:
Automatic Exchange of Information - information for account holders
https://www.gov.uk/government/publications/exchange-of-information-account-holders
Glossary of Terms and Alternative Performance Measures (APM)
Total Assets
The total value of all assets held less all liabilities (other than liabilities in the form
of borrowings).
Net Asset Value
Also described as shareholder's funds. Net Asset Value (NAV) is the value of all assets held
less all liabilities. The NAV per share is calculated by dividing this amount by the number
of ordinary shares in issue.
Discount/Premium (APM)
As stockmarkets 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, it is said to be trading at a premium.
Net Liquid Assets
Net liquid assets comprise current assets less current liabilities.
Total Return (APM)
The total return is the return to shareholders after reinvesting the dividend on the date
that the share price goes
ex-dividend.
31 May 31 May 30 November 30 November
2020 2020 2019 2019
NAV Share Price NAV Share Price
Closing NAV per share /
share price (a) 467.0p 414.0p 571.8p 518.0p
Dividend adjustment factor* (b) 1.01602 1.01689 1.02019 1.02046
Adjusted closing NAV per (c = a
share / share price x b) 474.5p 421.0p 583.3p 528.6p
Opening NAV per share /
share price (d) 571.8p 518.0p 537.4p 531.0p
Total Return expressed as (c ÷
a percentage d) - 1 (17.0) (18.7) 8.5 (0.5)
* The dividend adjustment factor is calculated on the assumption
that the dividends of 10.00p paid by the Company in the six months
to 31 May 2020 (year to 30 November 2019 - 11.00p) were reinvested
into shares of the Company at the cum income NAV per share/share
price, as appropriate, at the ex-dividend date.
Gearing (APM)
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. The level of
gearing can be adjusted through the use of derivatives which affect
the sensitivity of the value of the portfolio to changes in the
level of markets.
Available Cash
Cash and cash equivalents as adjusted for investment and share
buy-back transactions awaiting settlement.
The printed version of the Interim Financial Report will be sent
to shareholders and will be available on
www.independentinvestmenttrust.co.uk on or around 28 July 2020.
None of the views expressed in this document should be construed as
advice to buy or sell a particular investment.
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.
- ends -
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EZLFFBDLEBBQ
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July 14, 2020 12:00 ET (16:00 GMT)
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