TIDMFCIT
RNS Number : 1758G
F&C Investment Trust PLC
16 March 2020
F&C INVESTMENT TRUST PLC
Audited Statement of Results for the year ended 31 December
2019.
LEI: 213800W6B18ZHTNG7371
16 March 2020
F&C Investment Trust PLC ('FCIT'/'Company') today announces
its results for the year ended
31 December 2019.
-- FCIT's share price was 765.0 pence representing a total
return of 22.9%, ahead its benchmark, the FTSE All-World Index, of
22.3%.
-- FCIT's Net Asset Value ("NAV") total return gained 19.1%,
with debt at market value. Private Equity performance and some
underperformance from some listed portfolio strategies, held the
NAV returns below benchmark.
-- Exposure to listed equity markets delivered strong gains,
whereas the Private Equity holdings produced marginally positive
returns due to declines in value of the residual mature funds of
funds holdings and Syncona.
-- The newer commitments to Private Equity produced satisfactory
returns. Private Equity has a strong record of delivering higher
returns than listed equities in FCIT's portfolio and this is
expected to continue.
-- The final dividend will be 2.9 pence per share, subject to
shareholder approval, will bring the total dividend for the year to
11.6 pence per share. This will be a 5.5% increase, the 49(th)
consecutive annual increase, and well ahead of the Consumer Price
Index of 1.3%.
-- The shares ended the year at a premium of 1.5% having opened
the year at a discount of 1.5% and averaging a 2.2% discount
overall.
Commenting on the markets, Paul Niven, Fund Manager of FCIT,
said:
"The global economy had been in reasonable shape entering 2020,
but this benign backdrop has been threatened by the rise and spread
of COVID-19, coronavirus. If the situation deteriorates further
then we would expect substantial monetary and fiscal easing in
response and, at the present time, foresee a sharp but relatively
brief economic downturn."
T he Chairman, Beatrice Hollond, said:
"Global equity markets have fallen sharply in recent days, in
sharp contrast to 2019. There will be risks and there will be
opportunities. Shareholders can be assured that, at all times, we
will be focused on delivering growth in both capital and income
over the longer term."
The full results statement is attached.
Past performance should not be seen as an indication of future
performance. The value of investments and income derived from them
can go down as well as up as a result of market or currency
movements and investors may not get back the original amount
invested.
Contacts
Paul Niven - Fund Manager
0207 011 4385
Campbell Hood
campbell.hood@bmogam.com
Tel: +44 (0)20 7011 4243
FTI Consulting
bmo@fticonsulting.com
Tel: +44 (0) 20 3727 1888
About FCIT:
-- Founded in 1868 - the oldest collective investment trust
-- A diversified portfolio provides exposure to most of the
world's stock markets, with exposure to over 500 individual
companies across the globe
-- Its aim is to generate long-term growth in capital and income
by investing primarily in an international portfolio of listed
equities
The Chairman's Statement
Dear Shareholder,
In this, the first Report and Accounts for which I report to you
as Chairman, we explain more about our purpose, values and culture.
Much can be traced back to our foundation as the first investment
trust in 1868 when FCIT was established to provide access to the
capital markets for people wishing to invest, not least those with
relatively modest means. Your Board recognises and values the
contribution and benefits of that vision to this day, not only for
shareholders but also for society at large.
Global equity markets have fallen sharply in recent days, in
stark contrast to 2019 when they delivered annual returns which
ranked among the strongest in decades. Our share price total return
was 22.9%, ahead of the 22.3% from the FTSE All-World Index against
which we benchmark our performance. Our Net Asset Value ("NAV")
with debt at market value gained 19.1%. There was further
improvement in the rating of your Company (the level at which the
share price trades relative to NAV), with the shares ending the
year at a premium of 1.5%.
Our NAV per share with debt at market value rose from 642.9
pence per share to 753.9 pence per share and our share price rose
from 633.0 pence to 765.0 pence. In common with major equity market
indices, our share price ended the year close to record highs.
Our exposure to listed equity markets delivered strong gains but
our Private Equity holdings, which by their nature as unlisted
investments will always lag valuation changes reflected in listed
markets, produced only marginally positive returns. Our newer
commitments to unlisted exposure produced satisfactory returns but
our holdings in Syncona and residual mature funds of funds declined
in value. Underperformance of the Private Equity exposure as a
whole was driven by the valuation declines of these particular
funds. Private Equity and underperformance from some of our listed
strategies, notably North America and Emerging Markets, left our
NAV total return below benchmark. Private Equity has a strong
record of delivering higher returns than listed equities in FCIT's
portfolio and we expect this to continue to be the case over the
longer term.
We have historically referenced the total return of the FTSE
All-World Index inclusive of withholding tax when reporting our
performance and have done so again for 2019. In future we will
report against the FTSE All-World Index net of withholding tax as
this is a more realistic representation for comparing our
performance given the negative effect of these taxes on returns as
an investor in overseas equities. It is also consistent with most
of our peers. The total return of the FTSE All- World Index net of
withholding tax for 2019 was 21.6%. On page 11 we are showing the
comparisons of the total returns on a gross and net basis as part
of our Key Performance Indicators.
The benefits of our long-term focus
Our overriding objective is to provide sustainable long-term
growth in capital and income and, in this regard, it is instructive
to consider our historic performance as we begin a new decade. Ten
years ago, the global economy was emerging from the Global
Financial Crisis and the consequent severe bear market across the
world. The ten-year period to the end of 2019 saw your Company
deliver a total return of 248.7%, equivalent to an annual return of
13.3% per annum. Over the past twenty years, the total return was
367.3%, equivalent to 8.0% per annum. Thus, this past decade
produced extraordinary returns for investors in equities. It also
demonstrates the importance of income to investor returns and the
power of compounding over time. Our capital returns over the past
twenty years amounted to 209% which, with reinvested dividends,
brought the total return up to the 367.3% figure that I have
mentioned. Dividends paid to shareholders have risen by 5.7% per
annum over the past ten years and by 7.2% over the past twenty
years.
Earnings and Dividends
Earnings posted gains over the year, rising to GBP70.9m,
including the positive benefits of exchange rate movements
estimated to be GBP2.3m (2018: negative GBP1.1m) and special
dividends of GBP3.7m (2018: GBP3.9m). Our Net Revenue Return per
share rose to 13.1 pence per share from 12.8 pence per share in
2018, boosted by an increase in dividends received and a slight
reduction in expenses. Subject to shareholder approval at the
Annual General Meeting ("AGM"), shareholders will receive a final
dividend of 2.9 pence per share on 13 May 2020 bringing the total
dividend for the year to 11.6 pence. This is a rise of 5.5%, which
compares with the 1.3% rise in the Consumer Price Index. It adds to
our long record of increases in real terms and is our forty ninth
consecutive annual dividend increase and our one hundred and fifty
second annual dividend.
The total dividend proposed for the year is, once again, fully
covered by earnings and we remain confident that the Company will
continue to deliver sustainable rises in dividend payments for the
foreseeable future. After payment of the final dividend our revenue
reserve will continue to exceed one year's worth of dividends.
Company rating
After making our first issuance of shares for decades in 2018,
we continued to make progress in our rating with modest net share
issuance of 0.34m in 2019. The shares had started the year at a
discount of 1.5% and continued to trade at or around NAV for much
of the first half before it widened, temporarily, due to Brexit
concerns which reduced demand from retail investors. As part of our
commitment towards a sustainably low deviation between the share
price and NAV, we bought back shares during this period. The
discount averaged 2.2% over the year but had moved to a premium of
1.5% by its end, with a total of 1.65m shares reissued from
treasury.
Contributors to total return %
in 2019
Portfolio return 18.4
------------------------------ ------
Management fees (0.4)
------------------------------ ------
Interest and other Expenses (0.3)
------------------------------ ------
Buy-backs 0.0
------------------------------ ------
Change of value of debt (0.5)
------------------------------ ------
Gearing/other 1.9
------------------------------ ------
NAV total return 19.1
------------------------------ ------
Change from discount to
premium 3.8
------------------------------ ------
Share price total return 22.9
------------------------------ ------
FTSE All-World total return 22.3
------------------------------ ------
Source: BMO GAM
Cost efficiency
The returns that we are reporting are net of the costs that we
incur and we are pleased to report a further reduction in our
Ongoing Charges figure, which fell slightly to 0.63% (2018: 0.65%).
This reduction follows several years in which this measure of cost
efficiency has improved considerably. The tiered management fee
structure that took effect at the beginning of 2019 helped to
contain costs. This is designed to bring down our cost ratios as
the Company grows, with the benefits of scale being passed on to
shareholders. Delivering value for money for shareholders remains
one of our key performance objectives.
Borrowings
In recent years we have taken advantage of low interest rates to
undertake new long-term borrowings. In 2019, we borrowed a further
GBP150m equivalent for terms ranging from seven to forty years.
Rates on these loans ranged from 0.93% to 2.72%. These borrowings,
combined with our other short-term and long-term loans, led to a
blended overall rate on our borrowings of around 2.2%, which is
extremely low by historic standards. Provided that our assets can
deliver returns above this rate over the term of the borrowings
then our gearing will be accretive for NAV returns.
Fulfilling our purpose
Companies that are subject to the UK Code of Corporate
Governance (the "UK Code") now have to explain their purpose. Our
purpose is essentially unchanged since inception as The Foreign
& Colonial Government Trust back in 1868. The purpose then was
to provide the investor of relatively moderate means access to the
same opportunities and advantages as the very largest investors and
diminish risk by investing across a wide area; then, for the very
first time, the investor with GBP100 had the same pro rata
investment benefits and costs as other investors with as much as
GBP100,000. For the same fundamental purpose we now invest in
global equities, both public and private, and continue to provide a
diversified, convenient and cost-effective global investment choice
that meets the longer term investment needs of investors large or
small.
This purpose, coupled with the long track record of investing
well, should help our shareholders to plan for the future even in
more uncertain times. We believe that with innovation, adaptation
and diversification inherent in our long-term strategy we can
continue to deliver sustainable returns and rises in dividends. In
addition to strong investment performance from our Manager, we
expect them to adhere to the very highest standards of
environmental, social and governance practice given their diverse,
collaborative and forward thinking organisational culture. In
alignment with this culture and the values that we share with BMO
Global Asset Management, we aim to pursue our strategy and
objective through the consistent application of the very highest
standards of transparency, corporate governance and business
ethics.
Financial education - a social need
The Foreign & Colonial Government Trust was founded on
strong values that centred around the democratisation of capital
markets with contemporary newspaper commentary attesting to FCIT as
being "universally recognised as meeting a public want." Those
social values exist today as we develop, albeit in a small way, our
financial education programme. This is designed to help people
understand better the opportunities and significance of not just
saving, but how their savings can work much harder through
investment over the longer term. We are therefore focused on
helping students to become financially aware and in 2019 partnered
with four universities and colleges to run the "F&C Investment
Trust Prize", a competition designed to inspire financial thinking
among students and showcase their financial knowledge. At a more
junior level and by working with a small but growing number of
primary schools, we have been introducing basic savings concepts to
much younger children. We plan to continue to build on these
activities in coming years.
Board composition
My predecessor, Simon Fraser, retired from the Board on 31
December 2019. On behalf of the Board, I would like to register my
sincere thanks to Simon for the outstanding role which he played as
Chairman from May 2010. Simon demonstrated vision and leadership
while holding true to the Company's great heritage and values and
helped to steer FCIT through a number of challenges, including
dealing with the aftermath of the 2008 financial crisis and
ownership changes affecting the management company. The achievement
of a premium rating and resultant share issuance is testament to
the progress made and marked a fitting end to Simon's tenure.
One of my responsibilities as Chairman is to lead the Nomination
Committee and maintain a strong Board by replacing longer serving
members with those of equally high calibre. Shareholders can
therefore expect to see some new Directors over the next year or
so. In this regard, I am pleased to report the appointment of
Quintin Price on 10 March 2020 as a first step in a sequence of
these planned changes. Quintin brings us senior level experience in
both investment management and investment banking and we look
forward to working with him.
Outlook
The rise and spread of COVID-19, coronavirus, has seen increased
risks of widespread economic disruption with simultaneous demand
and supply side shocks for global and corporate earnings. This is
being reflected in substantial falls in equity markets worldwide.
We expect that policymakers will attempt to contain both the
economic and financial market impact through concerted monetary and
fiscal easing. As at 12 March 2020, FCIT's NAV per share was 586.6
pence per share, a fall of 22.2% since 31 December 2019. The share
price fell by 24.6% to 577.0 pence per share. FCIT has weathered
many a crisis throughout its long history and even though there are
likely to be economic and equity market challenges in the
near-term, your Company has a diversified portfolio that is well
placed to cope with market shocks and short-term volatility. There
are risks and there will be opportunities. Shareholders can be
assured that, at all times, we will retain our focus on delivering
growth in both capital and income over the longer term.
Beatrice Hollond
Chairman
13 March 2020
Forward-looking statements
This document may contain forward-looking statements with
respect to the financial condition, results of operations and
business of the Company. Such statements involve risk and
uncertainty because they relate to future events and circumstances
that could cause actual results to differ materially from those
expressed or implied by forward-looking statements. The forward
looking statements are based on the Directors' current view and on
information known to them at the date of this document. Nothing
should be construed as a profit forecast.
Weighting, stock selection and performance over one year in each
investment portfolio strategy and underlying geographic exposure
versus Index at 31 December 2019
Investment Our portfolio Underlying Benchmark Our strategy Gross index
Portfolio strategy geographic weighting performance performance
Strategy weighting exposure* % in Sterling in Sterling
% % % %
-------------- ------------ ------------ ------------- -------------
North America 43.9 54.3 57.2 22.8 26.5
-------------- ------------ ------------ ------------- -------------
Europe inc
UK 15.0 24.2 19.0 24.0 20.0
-------------- ------------ ------------ ------------- -------------
Japan 7.4 8.7 7.7 11.3 14.8
-------------- ------------ ------------ ------------- -------------
Emerging
Markets 9.5 11.1 12.3 9.3 14.3
-------------- ------------ ------------ ------------- -------------
Developed
Pacific - 1.7 3.8 - -
-------------- ------------ ------------ ------------- -------------
Global Strategies** 16.5 20.5 22.3
-------------- ------------ ------------ ------------- -------------
Private Equity 7.7 0.2
-------------- ------------ ------------ ------------- -------------
Source: BMO GAM
* Represents the geographic exposure of the portfolio, including
underlying exposures in private equity and fund holdings.
**The Global Strategies allocation consisted of Global Income
and Global Smaller Companies as at 31 December but performance also
includes the historic allocation to Global Multi-Manager.
Principal Risks and Future Prospects
The Board's processes for monitoring the principal risks and
identifying emerging risks are set out in note 26 to the Report and
Accounts. The principal risks are largely unchanged from those
reported in the prior year. Those identified as most relevant to
the assessment of FCIT's future prospects and viability were those
relating to potential investment portfolio under-performance and
its effect on share price discount and dividends, as well as
threats to security over FCIT's assets. Our risk evaluation forms
an inherent part of our strategy determination described in the
Strategic Report in the Report and Accounts.
Risk description: Investment proposition and its promotion -
Failure to access the targeted market or meet investor needs or
expectations, including ESG and climate change in particular,
leading to significant pressure on the share price. Unchanged
throughout the year.
Mitigation by strategy: Our investment and business strategies
aim to position us as a clear and core investment choice through
all available channels.
The Company's discount is a KPI measured by the Board on a
continual basis and is reported on page 11 of the Report and
Accounts.
Risk description: Investment performance - Unfavourable markets
or inappropriate asset allocation, sector and stock selection,
currency exposure and use of gearing and derivatives may give rise
to investment under-performance as well as impacting capacity to
pay dividends to investors. Political risk factors could also
impact performance as could near term market shocks such as those
experienced in relation to coronavirus (COVID-19).
Increased during the year.
Mitigation by strategy: Under our Business Model, a manager is
appointed with the capability and resource to manage FCIT's assets,
asset allocation, gearing, stock and sector selection and risk. To
provide a breadth of sources of return, the individual global and
regional investment portfolios are managed as a whole to provide
diversification, lower volatility and risk. The Manager has the
flexibility to delegate the management of investment portfolios
externally.
The performance of FCIT relative to its market benchmark, its
peers and inflation is a KPI measured by the Board on a continual
basis and is reported on page 11 of the Report and Accounts.
Risk description: Chosen Manager - Failure of BMO GAM to
continue to operate effectively through loss of key staff,
inadequate investment and support capability, systems or
resource.
Reduced throughout the year.
Mitigation by strategy: The Business Model is based on the
premise of an effective and strong working relationship with the
appointed Manager while an important responsibility of the Board is
the robust annual evaluation of its performance, capabilities and
resource, leading to the decision on whether to reappoint.
Internal performance KPIs and Manager errors are monitored by
the Board for indications of continuity or other Manager
issues.
Risk description: Service providers and systems security -
Errors, fraud or control failures at service providers or loss of
data through business continuity failure or cyber-attacks could
damage reputation or investors' interests or result in loss. Cyber
risks remain heightened.
Unchanged throughout the year.
Mitigation by strategy: The ancillary functions of
administration, secretarial, accounting and marketing services are
all carried out by the Manager.
The Board monitors efficiency of service providers' processes
through internal efficiency KPIs.
Ten Year Horizon
Through a series of connected stress tests ranging from moderate
to extreme scenarios including the impact of market shocks and
based on historical information, but forward-looking over the ten
years commencing 1 January 2020, the Board assessed the effects
of:
-- Potential illiquidity of the Company's portfolio during
substantial market falls when needing to fund Private Equity
commitments.
-- Substantial falls in investment values on the ability to
maintain loan covenants and to repay and re-negotiate funding.
-- Significant falls in income on the ability to continue paying
steadily-rising dividends and maintaining adequate revenue
reserves.
-- The impact of substantial fluctuations in exchange rates on
asset values and dividend income.
In concluding that ten years is a reasonable period over which
to assess future prospects of the Company, the Board considers that
this approximates the periods relating to:
-- its Private Equity commitments;
-- its borrowings, repayable beyond ten years; and
-- the corporate governance principles relating to the
Directors' tenure.
The Board also took into consideration the perceived viability
of its principal service providers, potential effects of
anticipated regulatory changes and the potential threat from
competition.
Based on its assessment and evaluation of FCIT's future
prospects, the Board has a reasonable expectation that FCIT will be
able to continue in operation and meet its liabilities as they fall
due over the coming ten years; FCIT's business model, strategy and
the embedded characteristics have helped define and maintain the
stability of FCIT over many decades. The Board expects this to
continue over many more years to come.
Statement of Directors' Responsibilities in Respect of the
Financial Statements
In accordance with Chapter 4.1.12 of the Disclosure Guidance and
Transparency Rules the Directors confirm, that to the best of their
knowledge:
-- the financial statements, prepared in accordance with
applicable accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit of the
Company;
-- the Strategic Report includes a fair review of the
development and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that it faces; and
-- in the opinion of the Directors the annual report and
financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for
shareholders to assess the Company's position and performance,
business model and strategy.
.
On behalf of the Board
Beatrice Hollond
Chairman
13 March 2020
Income Statement
For the year ended 31 December 2019 2018
Revenue Capital Total Revenue Capital Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------------------ --------- --------- --------- --------- ----------- -----------
Gains/(losses) on investments - 622,989 622,989 - (162,535) (162,535)
Exchange movements on foreign currency loans
and cash balances 50 2,817 2,867 199 (5,557) (5,358)
Income 89,376 - 89,376 87,898 - 87,898
Management fees (4,294) (12,882) (17,176) (4,277) (12,830) (17,107)
Other expenses (3,926) (49) (3,975) (4,146) (44) (4,190)
------------------------------------------------ --------- --------- --------- --------- ----------- -----------
Net return before finance costs and taxation 81,206 612,875 694,081 79,674 (180,966) (101,292)
Finance costs (2,245) (6,736) (8,981) (2,221) (6,664) (8,885)
------------------------------------------------ --------- --------- --------- --------- ----------- -----------
Net return on ordinary activities before
taxation 78,961 606,139 685,100 77,453 (187,630) (110,177)
Taxation on ordinary activities (8,024) - (8,024) (8,015) (29) (8,044)
------------------------------------------------ --------- --------- --------- --------- ----------- -----------
Net return attributable to shareholders 70,937 606,139 677,076 69,438 (187,659) (118,221)
------------------------------------------------ --------- --------- --------- --------- ----------- -----------
Net return per share - basic (pence) 13.06 111.61 124.67 12.81 (34.61) (21.80)
------------------------------------------------ --------- --------- --------- --------- ----------- -----------
The total column of this statement is the profit and loss
account of the Company.
All revenue and capital items in the above statement derive from
continuing operations.
The net return attributable to Shareholders is also the total
comprehensive income.
Statement of Changes in Equity
Share Capital Capital Revenue Total
Capital Redemption Reserves Reserve Shareholders'
Reserve Funds
For the year ended 31 December 2019 GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------------------------- --------- ----------- ---------- --------- --------------
Balance brought forward 31 December 2018 140,455 122,307 3,126,949 102,202 3,491,913
Dividends paid - - - (61,915) (61,915)
Shares issued by the Company from treasury - - 11,251 - 11,251
Shares repurchased by the Company and held in treasury - - (9,276) - (9,276)
Net return attributable to shareholders - - 606,139 70,937 677,076
------------------------------------------------------- --------- ----------- ---------- --------- --------------
Balance carried forward 31 December 2019 140,455 122,307 3,735,063 111,224 4,109,049
------------------------------------------------------- --------- ----------- ---------- --------- --------------
Share Capital Capital Revenue Total
Capital Redemption Reserves Reserve Shareholders'
Reserve Funds
For the year ended 31 December 2018 GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------------------------- --------- ----------- ---------- --------- --------------
Balance brought forward 31 December 2017 140,455 122,307 3,313,941 91,320 3,668,023
Dividends paid - - - (58,556) (58,556)
Shares issued by the Company from treasury - - 667 - 667
Net return attributable to shareholders - - (187,659) 69,438 (118,221)
-------------------------------------------- --------- ----------- ---------- --------- --------------
Balance carried forward 31 December 2018 140,455 122,307 3,126,949 102,202 3,491,913
-------------------------------------------- --------- ----------- ---------- --------- --------------
Balance Sheet
At 31 December 2019 2018
GBP'000s GBP'000s GBP'000s GBP'000s
--------------------------------------------------------- ---------- ---------- ---------- ----------
Fixed assets
Investments 4,512,321 3,717,610
Current assets
Debtors 20,563 38,698
Cash at Bank and short-term deposits 28,196 96,439
--------------------------------------------------------- ---------- ---------- ---------- ----------
48,759 135,137
Creditors: amounts falling due within one year
Loans (75,000) (110,047)
Other (15,861) (35,587)
--------------------------------------------------------- ---------- ---------- ---------- ----------
(90,861) (145,634)
Net current liabilities (42,102) (10,497)
--------------------------------------------------------- ---------- ---------- ---------- ----------
Total assets less current liabilities 4,470,219 3,707,113
Creditors: amounts falling due after more than one year
Loans (360,595) (214,625)
Debenture (575) (575)
--------------------------------------------------------- ---------- ---------- ---------- ----------
(361,170) (215,200)
--------------------------------------------------------- ---------- ---------- ---------- ----------
Net assets 4,109,049 3,491,913
--------------------------------------------------------- ---------- ---------- ---------- ----------
Capital and Reserves
Share capital 140,455 140,455
Capital redemption reserve 122,307 122,307
Capital reserves 3,735,063 3,126,949
Revenue reserve 111,224 102,202
--------------------------------------------------------- ---------- ---------- ---------- ----------
Total shareholders' funds 4,109,049 3,491,913
--------------------------------------------------------- ---------- ---------- ---------- ----------
Net asset value per share - prior charges at
nominal value (pence) 757.26 643.93
--------------------------------------------------------- ---------- ---------- ---------- ----------
Statement of Cash Flows
for the year ended 31 December 2019 2018
GBP'000s GBP'000s
---------------------------------------------------------------------------------- ---- ---- ------------ ------------
Cash flows from operating activities before dividends received and interest paid (28,991) (27,695)
Dividends received 90,240 84,873
Interest paid (9,585) (8,521)
---------------------------------------------------------------------------------------------- ------------ ------------
Cash flows from operating activities 51,664 48,657
Investing activities
Purchases of investments (1,609,187) (1,840,994)
Sales of investments and derivatives 1,437,402 1,886,950
Other capital charges and credits (42) (57)
---------------------------------------------------------------------------------------------- ------------ ------------
Cash flows from investing activities (171,827) 45,899
---------------------------------------------------------------------------------------------- ------------ ------------
Cash flows before financing activities (120,163) 94,556
---------------------------------------------------------------------------------------------- ------------ ------------
Financing activities
Equity dividends paid (61,915) (58,556)
Repayment of loans (208,884) (50,000)
Drawdown of loans 325,090 75,000
Cash flows from share issues 9,321 667
Cash flows from share buybacks for treasury shares (9,276) (194)
Cash flows from financing activities 54,336 (33,083)
---------------------------------------------------------------------------------------------- ------------ ------------
Net (decrease)/increase in cash and cash equivalents (65,827) 61,473
Cash and cash equivalents at the beginning of the year 96,439 31,136
Effect of movement in foreign exchange (2,416) 3,830
---------------------------------------------------------------------------------------------- ------------ ------------
Cash and cash equivalents at the end of the year 28,196 96,439
---------------------------------------------------------------------------------------------- ------------ ------------
Represented by:
Cash at bank 14,727 27,875
Short-term deposits 13,469 68,564
---------------------------------------------------------------------------------------------- ------------ ------------
Cash and cash equivalents at the end of the year 28,196 96,439
---------------------------------------------------------------------------------------------- ------------ ------------
Notes
1 NET RETURN PER SHARE
2019 2019 2018 2018
pence GBP'000s pence GBP'000s
---------------------------------------------- ------- ------------- -------- -------------
Total return 124.67 677,076 (21.80) (118,221)
Revenue return 13.06 70,937 12.81 69,438
Capital return 111.61 606,139 (34.61) (187,659)
---------------------------------------------- ------- ------------- -------- -------------
Weighted average ordinary shares in issue,
excluding shares held in treasury - number 543,106,069 542,191,397
---------------------------------------------- ------- ------------- -------- -------------
2 DIVIDS
The Directors have proposed a final dividend in respect of the
year ended 31 December 2019 of 2.90p per share payable on 13 May
2020 to all shareholders on the register at close of business on 17
April 2020.
3 FINANCIAL RISK MANAGEMENT
The Company is an investment company, listed on the London Stock
Exchange, and conducts its affairs so as to qualify in the United
Kingdom (UK) as an investment trust under the provisions of Section
1158 of the Corporation Tax Act 2010. In so qualifying, the Company
is exempted in the UK from corporation tax on capital gains on its
portfolio of investments.
The Company's investment objective is to secure long-term growth
in capital and income through a policy of investing primarily in an
internationally diversified portfolio of public listed equities, as
well as unlisted securities and private equity, with the use of
gearing. In pursuing the objective, the Company is exposed to
financial risks which could result in a reduction of either or both
of the value of the net assets and the profits available for
distribution by way of dividend. These financial risks are
principally related to the market (currency movements, interest
rate changes and security price movements), liquidity and credit.
The Board of Directors, together with the Manager, is responsible
for the Company's risk management.
The full details of financial risks are contained in note 26 of
the Report and Accounts.
4 GOING CONCERN
The Company's investment objective, strategy and policy are
subject to a process of regular Board monitoring and are designed
to ensure that the Company is invested mainly in readily
realisable, listed securities and that the level of borrowings is
restricted. The Company retains title to all assets held by the
Custodian and agreements cover its borrowing facilities. Cash is
held with banks approved and regularly reviewed by the Manager and
the Board.
The Directors believe that: the Company's objective and policy
continue to be relevant to investors; the Company operates within a
robust regulatory environment; and the Company has sufficient
resources to continue operating within its stated policy for the 12
month period commencing from the date of this report. Accordingly,
the financial statements have been drawn up on the basis that the
Company is a going concern.
5 ANNUAL GENERAL MEETING
The annual general meeting will be held at Merchant Taylors'
Hall, 30 Threadneedle Street, London EC2 on 7 May 2020 at 12
noon.
6 REPORT AND ACCOUNTS
This statement was approved by the Board on 13 March 2020. It is
not the Company's statutory accounts. The statutory accounts for
the financial year ended 31 December 2019 have been approved and
audited, and received an audit report which was unqualified and did
not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying the report. The
statutory accounts for the financial year ended 31 December 2018
received an audit report which was unqualified and did not include
a reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report.
The Report and Accounts will be posted to shareholders on or
around 30 March 2020 and copies may be obtained thereafter during
normal business hours from the Company's Registered Office,
Exchange House, Primrose Street, London EC2A 2NY. Copies are
available on the internet at fandcit.com from 16 March 2020.
Legal Entity Identifier: 213800W6B18ZHTNG7371
Information disclosed in accordance with Disclosure Guidance and
Transparency Rule 4.1
By order of the Board
BMO Investment Business Limited, Secretary,
Exchange House,
Primrose Street,
London
EC2A 2NY
13 March 2020
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
FR FLFFDVVIVLII
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March 16, 2020 03:00 ET (07:00 GMT)
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