Interim Management Statement
15 January 2009 - 3:05AM
UK Regulatory
TIDMICH
Investec High Income Trust Plc
Interim Management Statement
for the quarter ended 31 December 2008
Objective
Investec High Income Trust plc is an investment company as defined in section
266 of the Companies Act 1985 and carries on the business of an investment
trust. The objective of the Company is to achieve both a high and growing level
of income with the potential for capital growth from a portfolio principally
invested directly or indirectly in equities.
Material Events and Transactions
As highlighted in the half-year report for the six months to 30 September 2008,
the board believes that given the substantial reduction in assets following the
maturing of the bank debt and the repayment of the zero dividend preference
shares in March 2009, the most sensible strategy to adopt is to wind up the
Company. Accordingly, a resolution will be put to shareholders on 20 March 2009
proposing to wind up the Company; a circular will be sent to shareholders
outlining the proposals relating to the liquidation towards the end of
February. On this basis, the portfolio has been structured with this outcome in
mind.
The bespoke put option became an increasingly large part of the overall
portfolio as the equity market fell in October; therefore, 50% of it was sold
together with the commensurate amount of equities against which it was hedged.
During the quarter we sold some holdings which had held up remarkably well in
2008 such as Home Retail, Kingfisher and Standard Life as well as the holding
in Games Workshop. We also made some fairly modest purchases of Invensys,
Travis Perkins, GlaxoSmithKline and BT.
Investec High Income Trust plc repaid the entire remaining GBP14.6m balance of
its term loan facility with Bank of Scotland during the quarter in a number of
instalments, the final payment being made on 6 November 2008. The corresponding
amount was also unwound on the associated swap agreement.
At the end of December, 7.2% of the portfolio was invested in cash and gilts,
78.5% was invested in equities and 14.3% was invested in a put option. The put
option expires towards the end of January and at this time some equities will
be sold to maintain the level of gearing for ordinary shareholders.
During the quarter to 31 December 2008, Investec High Income Securities plc
bought back 1,109,160 zero dividend preference shares for cancellation. As at
31 December 2008, the share capital of Investec High Income Trust plc consisted
of 28,000,000 ordinary shares. The share capital of Investec High Income
Securities plc consisted of 200,008 ordinary shares and 7,140,840 zero dividend
preference shares.
A second interim dividend of 1.45p per share was paid on 20 November 2008 to
shareholders on the register as at 31 October 2008. A third and final dividend
will be paid in March prior to the Company's liquidation.
Top Ten Holdings as at 31 December 2008
Holding % of Total
Assets
ML FTSE ex top 20 put option 14.40
Royal Dutch Shell `B' Shares 10.17
GlaxoSmithKline 9.81
BP 9.53
Vodafone Group 7.82
UK Treasury 2.50 16 August 2013 Index-Linked 6.29
HSBC Holdings 5.75
Unilever 5.31
AstraZeneca 5.03
BT Group 3.17
77.28
Financial Performance
Quarter to 6 months to
31 December 30 September
2008 2008
Total assets less current liabilities GBP11.605m GBP10.947m
NAV total return1 6.99% -2.12%
Ordinary shares
NAV per share 41.01p 39.10p
Price per share 33.00p 33.50p
Discount 19.5% 14.3%
Zero dividend preference shares
NAV per share 192.02p 188.00p
Price per share 193.00p 186.50p
Benchmark NAV total return
FTSE All-Share Index -10.19% -13.45%
FTSE 350 Higher Yield Index -7.16% -9.46%
� Adjusted for dividend distributions, bank loan interest paid, bank loan
repaid and ZDP share buy backs during the period.
Note: The directors are not aware of any significant events or transactions
which have occurred between the date of the financial information and the date
of publication, which would have a material impact on the financial position of
the Company.
The net asset value is published on a weekly basis and other useful background
information on the Company including downloads of published documentation such
as previous Annual Reports and Monthly Fact Sheets can be found at
www.investecassetmanagement.com.
Company Information
Launch date 28 February 2001
Year end 31 March
Contact
Martin Slade
Investec Investment Management Limited
2 Gresham Street
London EC2V 7QP
Tel: +44 (0)20 7597 1942
END
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