Source - PRN
All information is at 31 August 2016 and unaudited.
Performance at month end with net income reinvested


1 April
Share price                      2.8%  4.7% 8.6% 33.1% 65.0% 77.3%
Net asset value                   2.9%  5.4% 8.3% 34.8% 54.4% 68.7%
FTSE All-Share Total Return      1.9%  9.0% 11.7% 20.4% 44.4% 57.7%
Source: BlackRock


BlackRock took over the investment management of the Company with effect from 1 April 2012.


At month end
Net asset value - capital only:                187.13p
Net asset value - cum income*:                 190.55p
Share price:                                   186.00p
Total assets (including income):               £50.9m
Discount to cum-income NAV:                       2.4%
Net gearing:                                       3.2%
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 3.42 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                                      10.3
Travel & Leisure 9.2
Tobacco 8.6
Media 8.5
Support Services                                        7.3
Banks 6.4
Financial Services 6.3
Oil & Gas Producers 5.6
Food Producers 5.1
General Retailers 5.1
General Industrials 4.1
Fixed Line Telecommunications 4.1
Wireless Telecommunication Services 3.7
Non-Life Insurance 3.3
Technology Hardware & Equipment 2.7
Food & Drug Retailers 2.2
Real Estate Investment & Services 2.1
Aerospace & Defence 1.8
Construction & Materials 1.5
Real Estate Investment Trusts 1.2
Net Current Assets                                        0.9            
Total                                    100.0


Ten Largest Equity Investments
Company  Total assets (%)
British American Tobacco 6.1
AstraZeneca 5.2
Unilever 5.1
BT Group 4.1
RELX 3.8
Vodafone Group 3.7
Lloyds Banking Group 3.5
GlaxoSmithKline 3.2
John Laing Group 3.2
Royal Dutch Shell ‘B’ 3.2


Commenting on the markets, Adam Avigdori and Mark Wharrier representing the Investment Manager noted:
The UK equity market made progress during August, sustaining the recovery in share prices from the initial shock the EU referendum vote triggered earlier in the summer. The Bank of England responded to counter the near term risks to the economy with an interest rate cut of 0.25% and a renewed package of QE.  Judging by recent economic data and feedback from companies the initial economic impact from the Brexit vote appears to be limited, although it’s still early days. The focus should now move back to government policy and any fiscal stimulus that may be announced by Chancellor Hammond in the Autumn Statement.
During the month the Trust returned +2.9% whilst the FTSE All Share Index returned +1.9%. The IA Income Sector returned +2.6% over the same period.
Relative performance was largely stock specific during the month with positive contributions from John Laing Group, Lloyds Banking Group and Stagecoach. John Laing Group 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.
During the month we established two new positions; 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 cashflow growth tend to be the dominant driver of share prices. 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 self-help.  While sometimes unnerving, we will continue to use market volatility to provide buying opportunities in these types of companies.
* NAV - Inc. performance.
16 September 2016