BlackRock Income and Growth Investment Trust Plc - Portfolio Update
20 April 2017 - 9:05PM
PR Newswire (US)
BLACKROCK INCOME AND GROWTH
INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) |
All information is at 31 March
2017 and unaudited. |
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Performance at month end with net
income reinvested |
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|
|
One
Month |
Three
Months |
One
Year |
Three
Years |
Since
1 April 2012 |
Five
Years |
|
Sterling |
|
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|
|
|
|
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Share price |
1.5% |
6.7% |
15.3% |
32.1% |
79.2% |
79.2% |
|
Net asset value |
1.1% |
4.2% |
15.7% |
32.8% |
66.5% |
66.5% |
|
FTSE All-Share Total Return |
1.2% |
4.0% |
22.0% |
24.9% |
58.7% |
58.7% |
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Source: BlackRock |
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BlackRock took over the
investment management of the Company with effect from 1 April
2012. |
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At month end |
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Sterling: |
|
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Net asset value -
capital only: |
199.82p |
|
Net asset value - cum
income*: |
201.53p |
|
Share price: |
198.00p |
|
Total assets (including
income): |
£53.1m |
|
Discount to cum-income
NAV: |
1.8% |
|
Net gearing: |
2.7% |
|
Net yield**: |
3.2% |
|
Ordinary shares in
issue***: |
25,354,268 |
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Gearing range (as a % of
net assets): |
0-20% |
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Ongoing
charges****: |
1.0% |
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* includes net revenue
of 1.71 pence per share. |
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** 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 2016
final dividend of 3.90p per share declared on 21 December 2016 and
paid to shareholders on 10 March 2017 and the 2016 interim dividend
of 2.40p per share announced on 29 June 2016 and paid to
shareholders on 2 September 2016. |
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*** excludes 7,579,664
shares held in treasury. |
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**** calculated as a
percentage of average net assets and using expenses, excluding
finance costs and taxation for the year ended
31 October 2016. |
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Sector
Analysis |
Total
assets (%) |
|
Media |
9.7 |
|
Support Services |
8.1 |
|
Tobacco |
8.0 |
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Banks |
7.9 |
|
Travel &
Leisure |
7.5 |
|
Pharmaceuticals &
Biotechnology |
7.4 |
|
Financial Services |
6.0 |
|
Oil & Gas
Producers |
6.0 |
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Food Producers |
5.5 |
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Non-Life Insurance |
4.6 |
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General Retailers |
4.3 |
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General Industrials |
3.6 |
|
Mobile
Telecommunications |
3.2 |
|
Fixed Line
Telecommunications |
3.2 |
|
Construction &
Materials |
2.7 |
|
Aerospace &
Defence |
2.6 |
|
Food & Drug
Retailers |
2.3 |
|
Real Estate Investment
& Services |
1.8 |
|
Chemicals |
1.6 |
|
Household Goods &
Home Construction |
1.6 |
|
Real Estate Investment
Trusts |
0.7 |
|
Industrial
Engineering |
0.5 |
|
Net current assets |
1.2 |
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------ |
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Total |
100.0 |
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====== |
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Ten
Largest Equity Investments |
|
|
Company |
Total
assets (%) |
|
British American
Tobacco |
6.9 |
|
Unilever |
5.5 |
|
Lloyds Banking
Group |
4.8 |
|
RELX |
3.9 |
|
Sky |
3.6 |
|
Royal Dutch Shell
‘B’ |
3.5 |
|
AstraZeneca |
3.4 |
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Vodafone |
3.2 |
|
BT Group |
3.2 |
|
GlaxoSmithKline |
3.2 |
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Commenting on the
markets, Adam Avigdori and Mark Wharrier representing the
Investment Manager noted: |
The UK stock market made a positive start to the year. US economic
and employment data remained supportive as rising inflation and
growth expectations lead the US Federal Reserve to increase rates
by 0.25, as widely expected. The combined effect of import-led
inflation following sterling weakness and stronger oil prices
compared to a year ago led to an acceleration in UK prices with
inflation expectations rising in the UK and Europe.
The market exuberance which greeted the new US administration did
fade towards the end of the period as President Trump’s initial
attempts to implement travel restrictions and change Obamacare
faced obstacles. Sectors that were relatively strong included
personal goods, tobacco and household goods where corporate
activity was a major driver of outperformance, whilst the
telecommunications, oil & gas and utilities sectors
underperformed.
The Company has started the year with strong performance, returning
4.2% for the quarter and outperforming the FTSE All-Share which
returned 4.0% during the quarter (figures with income
reinvested).
Unilever is one of the largest active positions in the portfolio
and was the most significant contributor to performance during the
quarter after receiving a surprise £112bn takeover proposal from
Kraft, which Unilever rejected. The Kraft proposal has prompted
Unilever to conduct a strategic review which should accelerate
shareholder returns from a business which has much potential,
particularly in the scope to improve margins and cashflow.
Inchcape performed strongly over the quarter driven largely by
strong results from their Australasia business with the Subaru
brand gaining market share. In the UK, progress on aftermarket
sales has been encouraging, despite the impact of Brexit. Europe is
also showing pockets of strength.
Another positive contributor was British American Tobacco which
agreed terms to buy the remainder of the Reynolds American business
it does not own. This company continues to generate strong
revenue growth and make excellent progress on developing new
revenue streams from next generation products.
BT Group was the largest detractor from performance. The share
price fell after the company quantified the impact of a known fraud
issue in Italy as substantially worse than forecast. In addition,
the company highlighted a weaker revenue performance in some of its
UK business and consequently impacted cash flow prospects. Given
the recent underperformance the shares look attractively valued
assuming some alleviation of the regulatory pressures and a 5%
dividend yield.
Over the quarter we have sold our positions in Cineworld Group and
Dixons Carphone whilst making new purchases in Reckitt Benckiser, a
multinational consumer goods company and Bodycote, a leading
provider in heat treatment services that looks to be in a good
place to benefit from a cyclical recovery in industrial
activity.
As ever, we remain believers that over the longer-term earnings and
cashflow growth tend to be the dominant driver of share prices and
where equity markets fail to recognise that, corporate buyers have
the potential to exploit the opportunity; the bid for Unilever this
quarter was a good reminder of that dynamic as was the bid for both
Sky and for ARM Holdings last year. With a combination of continued
sterling weakness and a low interest rate environment fuelling
cheap debt, we believe that M&A activity will remain a theme
throughout the year. 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 cashflow
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.
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20 April 2017 |
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