BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC - Portfolio Update
18 October 2016 - 2:08AM
PR Newswire (US)
BLACKROCK INCOME AND GROWTH
INVESTMENT TRUST PLC |
All information is at 30
September 2016 and unaudited. |
|
Performance at month end with net
income reinvested |
|
One
Month |
Three
Months |
One
Year |
Three
Years |
Since
1 April
2012 |
Five
Years |
Sterling |
|
|
|
|
|
|
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 |
|
Sterling: |
|
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 |
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