BlackRock New Engy Portfolio Update
19 November 2013 - 1:35AM
UK Regulatory
TIDMBRNE TIDMBRNS
BLACKROCK NEW ENERGY INVESTMENT TRUST plc
All information is at 31 October 2013 and unaudited.
Performance at month end with net income reinvested
One Three Six One Five Since launch
Month Months Months Year Years (23 Oct 00)
Net asset value
(Undiluted) 3.5% 2.5% 9.7% 29.8% 19.0% -51.4%
Share price 10.5% 10.1% 18.5% 43.3% 42.2% -54.9%
Source: BlackRock
At month end
Net asset value - capital only (undiluted): 45.80p
Net asset value - cum income (undiluted): 46.15p
Share price: 44.75p
Discount to cum income NAV*: 3.03%
Subscription share price: 0.250p
Net yield***: 0.34%
Total assets including current year revenue: GBP108.45m
Gearing: Nil
Ordinary shares in issue**: 234,985,619
Subscription shares in issue: 45,614,192
* Discount to NAV based on cum income undiluted NAV.
** 11,900,000 treasury shares cancelled.
*** Based on a final dividend of 0.15p per share in respect of the year ended
31 October 2012.
Benchmark
Sector Analysis Total Assets (%) Country Analysis Total Assets (%)
Enabling Energy & Infrastructure 27.6 USA 32.6
Energy Efficiency 24.8 Denmark 8.7
Renewable Energy Developers 20.8 United Kingdom 8.0
Alternative Fuels 12.2 China 7.7
Renewable Energy Technology 10.2 France 6.7
Net current assets 4.4 Germany 5.1
----- Canada 5.0
100.0 Portugal 3.9
===== Switzerland 3.7
South Africa 2.3
Finland 2.2
Italy 2.2
Ireland 2.2
Belgium 1.7
Australia 1.6
Brazil 1.2
Japan 0.8
Net current assets 4.4
-----
100.0
=====
Ten Largest Investments (in alphabetical order)
Company Country of Risk
ABB Reg Switzerland
EDP Renovaveis Portugal
ITC Holdings USA
Johnson Controls USA
Johnson Matthey United Kingdom
NextEra Energy USA
Novozymes Denmark
Regal Beliot USA
Schneider Electric France
Vestas Wind Systems Denmark
Robin Batchelor and Poppy Allonby, representing the Investment Manager, noted:
The NAV of the Company increased by 3.5% in October.
For reference, the MSCI World Index returned 4.7% and the WilderHill New Energy
Global Innovations, an index that is representative of the sector, added 6.0%
(Datastream, in sterling terms).
In October markets focused on the US Government shutdown, its resolution and
the impact it may have on the timeline for the tapering of the US Federal
Reserve's Quantitative Easing programme. Chinese data continued to show
improvements with notably better than expected PMI readings although some
concerns on liquidity crept up mid-month. China's third plenum at which the
government will announce its new reform objectives will take place in early
November. These reforms aim to transform the Chinese economy by 2020.
Over the month, we saw continued uncertainty in the UK energy market on the
back of the politicisation of issues which weighed on British utility stocks.
Performance
Veeco, an LED equipment manufacturer was among the top detractors over the
month reflecting continued concerns about the lack of visibility over future
orders.
A position in waste-to-energy group Covanta also had negative absolute returns.
The company reported disappointing quarterly results and weak guidance on
higher than expected maintenance costs
On the positive side, shares of ABB added significantly to returns. This
reporting season has seen very weak numbers from European industrial companies;
ABB however was one of the few firms to post good results on the back of strong
internal cost controls.
Johnson Controls was also among top performers as the company is going through
a strategic review and is looking at divesting some of its non-core assets,
which was well received by investors.
Portfolio Activity
Over the month, we exited a position in an Alternative Fuels company. We also
sold out of an Enabling Energy and Infrastructure name and rotated the
Company's industrial exposure.
Outlook
The Company has been positioned to benefit from areas of the New Energy sector
that are experiencing strong near-term growth.
The pain that the Renewable Energy Technology sub-sector has suffered is
showing little sign of imminent relief despite some recent positive newsflow.
The price of a solar module has fallen by approximately 70% from the start of
2009 rendering many producers loss making, and, despite demand growth, the
industry remains over-supplied. We continue to believe that consolidation is
required to create a sustainable industry. We remain cautious on investment in
the space and continue to prefer opportunities among the Renewable Energy
developers.
At the other end of the spectrum, and with some positive momentum due to a more
optimistic industrial outlook, lie the Enabling Energy and Infrastructure
companies and certain Energy Efficiency players who are enjoying bumper growth.
The natural gas revolution and power grid expansion in the US has sparked an
investment up-cycle in energy infrastructure spending which continues to gather
momentum. Energy Efficiency has also benefitted from corporate and government
cost saving - legislation to incentivize the adoption of energy efficiency
technology is a more appealing option to a cash strapped government than
renewable energy subsidy.
We believe that sector valuations are generally attractive, both relative to
history and to broader equity markets, and there is scope for the positive
sector fundamentals to be supported by continued M&A.
At a General Meeting of the Company held on 25 July 2012 shareholders approved
the removal of the requirement for an annual continuation vote and replaced it
with the obligation for the Board to put forward proposals that shareholders be
given the opportunity to elect to receive an amount per share in cash of NAV
less applicable costs, shortly after the AGM in 2014.
18 November 2013
ENDS
Latest information is available by typing www.brneplc.co.uk on the internet,
"BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal). Neither the contents of the Manager's website nor the contents of
any website accessible from hyperlinks on the Manager's website (or any other
website) is incorporated into, or forms part of, this announcement.
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