LEGAL ENTITY IDENTIFIER: 213800F3NOTF47H6AO55
THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Results for the Half-Year Ended 31 December 2020
This announcement contains regulated information
INVESTMENT OBJECTIVE
The Company's objective is to provide long-term growth in income and capital, principally by investment in equities listed on the London Stock Exchange. The Board continues to recognise the importance of dividend income to shareholders.
PERFORMANCE
|
| As at | As at |
| Net asset value ("NAV") per ordinary share | 357.4p | 344.0p |
| Premium/(discount) | 3.7% | (1.2%) |
| Net asset value per ordinary share (debt at fair value) | 351.2p | 338.7p |
| Premium (debt at fair value) | 5.5% | 0.4% |
| Ordinary share price | 370.5p | 340.0p |
| Gearing (at par value) | 8.6% | 9.7% |
|
Dividend yields | As at | As at | |||
| The City of London Investment Trust plc | 5.4% | 5.6% | |||
| FTSE All-Share Index (Benchmark) | 3.0% | 4.2% | |||
| AIC UK Equity Income sector | 5.1% | 4.9% | |||
| IA UK Equity Income OEIC sector | 3.9% | 5.5% | |||
|
Sources: Morningstar for the AIC, Bloomberg
| |||||
| Total return performance to 31 December 2020 (including dividends reinvested and excluding transaction costs) | 6 months % | 1 year % | 3 years | 5 years | 10 years |
| Net asset value per ordinary share1 | 6.9 | -13.8 | -6.1 | 16.0 | 95.0 |
| Ordinary share price2 | 12.3 | -11.8 | -2.7 | 19.8 | 96.0 |
| FTSE All-Share Index (Benchmark) | 9.3 | -9.8 | -2.7 | 28.5 | 71.9 |
| AIC UK Equity Income sector3 | 12.0 | -9.7 | -1.1 | 24.7 | 100.9 |
| IA UK Equity Income OEIC sector4 | 11.9 | -10.9 | -4.3 | 16.2 | 76.9 |
Sources: Morningstar for the AIC, Janus Henderson, Refinitiv Datastream
1 Net asset value per ordinary share total return with debt at fair value
2 Share price total return using mid-market closing price
3 AIC UK Equity Income sector size weighted average NAV total return (shareholders' funds)
4 The Investment Association ("IA") peer group average is based on mid-day NAV whereas the returns of the investment trust are calculated using close of business NAV
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
Net asset value total return
The UK equity market fell slightly over the first four months of the period under review, with the outlook uncertain for many companies due to the Covid-19 virus. A strong rally took place in the final two months of the period after newly developed vaccines were revealed to be effective against the virus. The FTSE All-Share Index recovered all of its losses from the first four months to produce a total return of 9.3% for the six months to 31 December 2020.
City of London's net asset value total return of 6.9% lagged the FTSE All-Share Index over the six month period. While gearing contributed positively by 0.7%, stock selection was negative by 3.0%. The biggest detracting sector was not holding equity investment instruments, especially Scottish Mortgage, followed by being underweight in travel & leisure, including not holding Flutter Entertainment. The third biggest detracting sector was our above average exposure to gas, water & multi-utilities. In general, some of the portfolio's more defensive holdings were underperformers, such as Nestlé (food manufacturer), Verizon Communications (US telecommunications operator) and RELX (information provider).
On a more positive note, the underweight positions in pharmaceuticals and oil & gas were the two biggest sector contributors followed by our holdings in real estate investment trusts, which recovered well in the last two months of the year. It was also pleasing to note strong stock contributions from M&G (life insurer and asset manager), Croda (chemicals) and La Française des Jeux (French National Lottery operator).
UK medium-sized and small companies, which are in general more domestic and cyclical, significantly outperformed UK large companies over the six months to 31 December 2020. The FTSE 250 Index of medium-sized companies produced a total return of 21.0% and the FTSE Small Cap Index 25.7%, while the FTSE 100 Index was 6.4%. This outperformance occurred despite dividend cuts being even more severe among medium-sized and small companies compared with FTSE 100 companies. City of London's relatively high FTSE 100 weighting and the defensive bias of its portfolio led to a total return underperformance over the six months compared with the averages of other UK equity income investment trusts and OEICs.
Earnings and dividends
Against the background of a significantly lower dividend base across the UK market compared with the same period last year, City of London's revenue earnings per share fell by 15.6%. Compared to our experience during the first half of 2020, when our earnings fell by 38.2% compared with the same period the previous year, there was a significant improvement with a number of investee companies returning to the dividend list, such as BAE Systems (aerospace and defence), Persimmon (housebuilder) and Direct Line Insurance. So far this financial year, City of London has declared two interim dividends of 4.75p each. City of London's diverse portfolio, strong cash flow and revenue reserve give the Board confidence that it will be able to increase the dividend for the fifty-fifth consecutive year. The quarterly rate will be reviewed by the Board before the third interim dividend is declared in March 2021.
Expenses
Expenses remain under tight control. The ongoing charge ratio is expected to remain around 0.36% for the year to 30 June 2021. There will, however, be a drop in interest costs following the redemption of our last debenture of £30 million, with a fixed interest rate of 8.5%, on 31 January 2021.
Material events and transactions during the period
During September 2020, 1,175,000 shares were bought back into treasury, at a discount to net asset value, for a total cost of £3,736,000. These were then reissued, at a premium to net asset value, for total proceeds of £3,860,000. A further 5,445,000 ordinary shares were issued at a premium to net asset value for total proceeds of £19,622,000.
The proceeds were predominantly invested in existing holdings in the portfolio considered to offer a realistic share price valuation relative to prospects and above average dividend yields. Areas of notable additions were: aerospace & defence (BAE Systems), financials (Direct Line Insurance, Legal & General, M&G and IG Group), tobacco (British American Tobacco and Imperial Brands) and utilities (SSE). One new holding was purchased, which was Cisco, the leading maker of network equipment for the internet.
Complete sales were made of Halma (health and safety equipment), Renishaw (precision measuring instruments) and Spirax-Sarco Engineering. All three stocks have performed exceptionally well over the period they have been in the portfolio, but their prospects were considered to be more than fully reflected in their share price valuations. Complete sales were also made of Greggs and National Express (bus and coach operator) given what was considered to be slow recovery prospects due to the pandemic. A complete sale was also made of TP ICAP (wholesale financial intermediary) following its change in corporate strategy. Overall, the number of holdings in the portfolio fell from 90 (at 30 June 2020) to 85 (at 31 December 2020).
The Board
Philip Remnant retired as Chairman at the conclusion of the Annual General Meeting on 27 October 2020 after nine years on the Board. It was unfortunate that the lockdown rules prevented shareholders from attending the Annual General Meeting in person, as I am sure that they would have wished to join the Board in thanking Philip for his outstanding leadership of the Company.
Martin Morgan will be retiring as a Director at the Annual General Meeting later this year, having served for nine years, and the Board will be starting a process to appoint a new Director shortly.
Outlook for the six months to 30 June 2021
The roll-out of three vaccines against the Covid-19 virus is very encouraging and provides "light at the end of the tunnel". It is unlikely, however, that there will be a smooth path to herd immunity for the UK or globally given current limitations to the supply of the vaccines and the apparent scope for the virus to mutate.
Governments and central banks have responded to the enforced lockdowns of economies as a result of Covid-19 with unprecedented fiscal and monetary easing. It is likely that, after a contraction in the first quarter of 2021, the UK and global economy will recover sharply over the rest of the year, with consumer demand bolstered by running down the high savings ratios accumulated while economic activity was restricted. The scale of the lockdowns could still leave deep scarring in some sectors, such as travel and hospitality, with the resumption of dividends some way off. City of London's portfolio remains biased towards large companies with defensive and cash generative qualities.
The UK's trade deal with the EU at the end of 2020 removed an uncertainty and may improve sentiment towards UK equities from global investors. While interest rates remain at a rock bottom level, UK equities offer a much more attractive yield and have scope to build on recent capital appreciation if expectations for profits and dividends are met.
Sir Laurie Magnus
Chairman
18 February 2021
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties associated with the Company's business can be divided into the following main areas:
· Global pandemic
· Portfolio and market price
· Dividend income
· Investment activity, gearing and performance
· Tax and regulatory
· Operational
Information on these risks and how they are managed are given in the Annual Report for the year ended 30 June 2020. In the view of the Board, the principal risks and uncertainties at the year end remain and are as applicable to the remaining six months of the financial year as they were to the six months under review.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge:
| • | the condensed set of financial statements has been prepared in accordance with FRS 104 "Interim Financial Reporting";
|
| • | the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of the principal risks and uncertainties for the remaining six months of the year); and
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| • | the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
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On behalf of the Board
Sir Laurie Magnus
Chairman
18 February 2021
For further information please contact:
| Job Curtis Fund Manager The City of London Investment Trust plc Telephone: 020 7818 4367
|
| James de Sausmarez Director and Head of Investment Trusts Janus Henderson Investors Telephone: 020 7818 3349
|
| Laura Thomas Investment Trust PR Manager Janus Henderson Investors Tel: 020 7818 2636
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INCOME STATEMENT
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| (Unaudited) Half-year ended 31 December 2020 | (Unaudited) Half-year ended 31 December 2019 | (Audited) Year ended 30 June 2020 | ||||||
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| Revenue return £'000 | Capital return £'000 |
Total £'000 | Revenue return £'000 | Capital return £'000 |
Total £'000 | Revenue return £'000 | Capital return £'000 |
Total £'000 |
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| Gains/(losses) on investments held at fair value through profit or loss | - | 68,598 | 68,598 | - | 65,349 | 65,349 | - | (291,388) | (291,388) |
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| Income from investments held at fair value through profit or loss | 32,496 | - | 32,496 | 35,645 | - | 35,645 | 67,779 | - | 67,779 |
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| Other interest receivable and similar income | 154 | - | 154 | 116 | - | 116 | 176 | - | 176 |
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| Gross revenue and capital gains/(losses) | 32,650 | 68,598 | 101,248 | 35,761 | 65,349 | 101,110 | 67,955 | (291,388) | (223,433) |
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| Management fee | (685) | (1,599) | (2,284) | (802) | (1,872) | (2,674) | (1,457) | (3,400) | (4,857) |
| Other administrative expenses | (389) | - | (389) | (354) | - | (354) | (696) | (7) | (703) |
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| Net return/(loss) before finance costs and taxation | 31,576 | 66,999 | 98,575 | 34,605 | 63,477 | 98,082 | 65,802 | (294,795) | (228,993) |
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| Finance costs | (984) | (2,112) | (3,096) | (1,112) | (2,411) | (3,523) | (2,163) | (4,681) | (6,844) |
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| Net return/(loss) before taxation | 30,592 | 64,887 | 95,479 | 33,493 | 61,066 | 94,559 | 63,639 | (299,476) | (235,837) |
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| Taxation on net return/(loss) | (341) | - | (341) | (420) | - | (420) | (1,176) | - | (1,176) |
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| Net return/(loss) after taxation | 30,251 | 64,887 | 95,138 | 33,073 | 61,066 | 94,139 | 62,463 | (299,476) | (237,013) |
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| Return/(loss) per ordinary share (note 2) | 7.25p | 15.56p | 22.81p | 8.59p | 15.86p | 24.45p | 15.73p | (75.42p) | (59.69p) |
The total columns of this statement represent the Company's Income Statement, prepared in accordance with FRS 104. The revenue and capital columns are supplementary to this and are published under guidance from the Association of Investment Companies.
The Company has no recognised gains or losses other than those disclosed in the Income Statement and Statement of Changes in Equity. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
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Half-year ended 31 December 2020 (unaudited) | Called-up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
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| At 1 July 2020 | 104,101 | 752,967 | 2,707 | 526,861 | 45,623 | 1,432,259 |
| Net return on ordinary activities after taxation | - | - | - | 64,887 | 30,251 | 95,138 |
| Buyback of 1,175,000 ordinary shares for treasury | - | - | - | (3,736) | - | (3,736) |
| Issue of 1,175,000 ordinary shares from treasury | - | 124 | - | 3,736 | - | 3,860 |
| Issue of 5,445,000 new ordinary shares | 1,361 | 18,261 | - | - | - | 19,622 |
| Fourth interim dividend (4.75p per share) for year ended 30 June 2020 paid 28 August 2020 | - | - | - | - | (19,779) | (19,779) |
| First interim dividend (4.75p per share) for year ending 30 June 2021 paid 30 November 2020 | - | - | - | - | (19,724) | (19,724) |
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| At 31 December 2020 | 105,462 | 771,352 | 2,707 | 591,748 | 36,371 | 1,507,640 |
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Half-year ended 31 December 2019 (unaudited) | Called-up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
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| At 1 July 2019 | 94,709 | 613,711 | 2,707 | 826,337 | 58,259 | 1,595,723 |
| Net return on ordinary activities after taxation | - | - | - | 61,066 | 33,073 | 94,139 |
| Issue of 18,185,000 new ordinary shares | 4,546 | 71,779 | - | - | - | 76,325 |
| Fourth interim dividend (4.75p per share) for year ended 30 June 2019 paid 31 August 2019 | - | - | - | - | (18,012) | (18,012) |
| First interim dividend (4.75p per share) for year ended 30 June 2020 paid 29 November 2019 | - | - | - | - | (18,341) | (18,341) |
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| At 31 December 2019 | 99,255 | 685,490 | 2,707 | 887,403 | 54,979 | 1,729,834 |
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Year ended 30 June 2020 (audited) | Called-up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
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| At 1 July 2019 | 94,709 | 613,711 | 2,707 | 826,337 | 58,259 | 1,595,723 |
| Net (loss)/return on ordinary activities after taxation | - | - | - | (299,476) | 62,463 | (237,013) |
| Issue of 37,570,000 new ordinary shares | 9,392 | 139,256 | - | - | - | 148,648 |
| Fourth interim dividend (4.75p per share) for year ended 30 June 2019 paid 30 August 2019 | - | - | - | - | (18,012) | (18,012) |
| First interim dividend (4.75p per share) for year ended 30 June 2020 paid 29 November 2019 | - | - | - | - | (18,341) | (18,341) |
| Second interim dividend (4.75p per share) for year ended 30 June 2020 paid 28 February 2020 | - | - | - | - | (19,041) | (19,041) |
| Third interim dividend (4.75p per share) for year ended 30 June 2020 paid 29 May 2020 | - | - | - | - | (19,705) | (19,705) |
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| At 30 June 2020 | 104,101 | 752,967 | 2,707 | 526,861 | 45,623 | 1,432,259 |
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The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
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| (Unaudited) 31 December 2020 £'000 | (Unaudited) 31 December 2019 £'000 | (Audited) 30 June 2020 £'000 |
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| Investments held at fair value through profit or loss (note 6) |
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| Listed at market value in the United Kingdom | 1,414,556 | 1,684,974 | 1,359,435 |
| Listed at market value overseas | 223,058 | 177,648 | 211,589 |
| Investment in subsidiary undertakings | 347 | 347 | 347 |
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| 1,637,961 | 1,862,969 | 1,571,371 |
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| Current assets |
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| Debtors | 8,253 | 7,288 | 5,962 |
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| 8,253 | 7,288 | 5,962 |
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| Creditors: amounts falling due within one year | (52,809) | (24,695) | (59,327) |
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| Net current liabilities | (44,556) | (17,407) | (53,365) |
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| Total assets less current liabilities | 1,593,405 | 1,845,562 | 1,518,006 |
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| Creditors: amounts falling due after more than one year | (85,765) | (115,728) | (85,747) |
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| Net assets | 1,507,640 | 1,729,834 | 1,432,259 |
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| Capital and reserves |
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| Called-up share capital (note 3) | 105,462 | 99,255 | 104,101 |
| Share premium account | 771,352 | 685,490 | 752,967 |
| Capital redemption reserve | 2,707 | 2,707 | 2,707 |
| Other capital reserves (note 4) | 591,748 | 887,403 | 526,861 |
| Revenue reserve | 36,371 | 54,979 | 45,623 |
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| Equity shareholders' funds | 1,507,640 | 1,729,834 | 1,432,259 |
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| Net asset value per ordinary share - basic and diluted (note 5) | 357.4p | 435.7p | 344.0p |
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The accompanying notes are an integral part of these financial statements.
NOTES
| 1. | Accounting Policy - Basis of Preparation | |||||||||
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| The condensed set of financial statements has been prepared in accordance with FRS 104, Interim Financial Reporting, FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland and the Statement of Recommended Practice for "Financial Statements of Investment Trust Companies and Venture Capital Trusts", issued in October 2019.
For the period under review, the Company's accounting policies have not varied from those described in the Annual Report for the year ended 30 June 2020. These financial statements have been neither audited nor reviewed by the Company's auditors.
As an investment fund, the Company has the option, which it has taken, not to present a cash flow statement. A cash flow statement is not required when an investment fund meets all the following conditions: substantially all of the entity's investments are highly liquid and are carried at market value; and where a statement of changes in equity is provided.
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| 2. | Return per Ordinary Share |
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| (Unaudited) Half-year ended 31 December 2020 £'000 |
| (Unaudited) Half-year ended 31 December 2019 £'000 |
| (Audited) Year ended 30 June 2020 £'000 | ||||
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| The return per ordinary share is based on the following figures: |
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| ||||
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| Revenue return | 30,251 |
| 33,073 |
| 62,463 | ||||
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| Capital return/(loss) | 64,887 |
| 61,066 |
| (299,476) | ||||
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| Total | 95,138 |
| 94,139 |
| (237,013) | ||||
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| Weighted average number of ordinary shares in issue for each period | 417,014,243 |
| 384,976,853 |
| 397,078,092 | ||||
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| Revenue return per ordinary share | 7.25p |
| 8.59p |
| 15.73p | ||||
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| Capital return/(loss) per ordinary share | 15.56p |
| 15.86p |
| (75.42p) | ||||
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| Total return/(loss) per ordinary share | 22.81p |
| 24.45p |
| (59.69p) | ||||
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| The Company does not have any dilutive securities, therefore, the basic and diluted returns per share are the same.
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| 3. | Share Capital | |||||||||
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| During the half-year ended 31 December 2020, 1,175,000 ordinary shares were bought back into treasury for a total cost of £3,736,000. These shares were then re-issued for total proceeds of £3,860,000 and a further 5,445,000 new ordinary shares were issued for total proceeds of £19,622,000 (half-year ended 31 December 2019: 18,185,000 ordinary shares issued for total proceeds of £76,325,000; year ended 30 June 2020: 37,570,000 ordinary shares issued for total proceeds of £148,648,000). The number of ordinary shares in issue at 31 December 2020 was 421,849,868. There are no shares in treasury.
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| 4. | Other Capital Reserves | |||||||||
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| At 31 December 2020, the other capital reserves are made up of the capital reserve arising on investments sold which was £300,424,000 (31 December 2019: £341,539,000; 30 June 2020: £271,839,000) and is distributable and the capital reserve arising on revaluation of investments held which was £291,324,000 (31 December 2019: £545,864,000; 30 June 2020: £255,022,000), which is not distributable.
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| 5. | Net Asset Value per Ordinary Share | |||||||||
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| The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £1,507,640,000 (31 December 2019: £1,729,834,000; 30 June 2020: £1,432,259,000) and on 421,849,868 ordinary shares (31 December 2019: 397,019,868; 30 June 2020: 416,404,868), being the number of ordinary shares in issue at the period end.
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| 6. | Financial Instruments | |||||||||
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| The financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value or the Statement of Financial Position amount is a reasonable approximation of fair value (debtors and creditors falling due within one year). The debenture stock, secured notes, preference stocks and preferred ordinary stock are carried in the Statement of Financial Position at par.
At 31 December 2020, the fair value of the debenture stock was £30,150,000 (31 December 2019: £42,225,000; 30 June 2020: £31,191,000) and the aggregate fair value of the preferred and preference stocks was £2,635,000 (31 December 2019: £2,634,000; 30 June 2020: £2,634,000).
The valuations of the debenture stock are obtained from brokers based on market prices. The valuations of the preferred and preference stock are from the Daily Official List quotations.
As at 31 December 2020, the fair value of the secured notes was estimated to be £109,196,000 (31 December 2019: £99,715,000; 30 June 2020: £103,950,000).
The valuation of the secured loan notes is calculated using a discount rate which reflects the yield on a UK gilt of similar maturity plus a suitable credit spread.
The debenture stock, preference stocks and preferred ordinary stock are categorised as Level 1 in the fair value hierarchy. The secured notes are categorised as Level 3 in the fair value hierarchy.
The table below sets out fair value measurements of the investments using the FRS 102 fair value hierarchy.
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| Financial assets at fair value through profit or loss at 31 December 2020 |
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| Level 1 | Level 2 | Level 3 | Total | |||||
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| £'000 | £'000 | £'000 | £'000 | |||||
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| Equity investments | 1,637,614 | - | 347 | 1,637,961 | |||||
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| Total | 1,637,614 | - | 347 | 1,637,961 | |||||
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| Financial assets at fair value through profit or loss at 31 December 2019 | |||||||||
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| Level 1 | Level 2 | Level 3 | Total | |||||
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| £'000 | £'000 | £'000 | £'000 | |||||
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| Equity investments | 1,862,622 | - | 347 | 1,862,969 | |||||
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| Total | 1,862,622 | - | 347 | 1,862,969 | |||||
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| Financial assets at fair value through profit or loss at 30 June 2020 | |||||||||
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| Level 1 | Level 2 | Level 3 | Total | |||||
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| £'000 | £'000 | £'000 | £'000 | |||||
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| Equity investments | 1,571,024 | - | 347 | 1,571,371 | |||||
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| Total | 1,571,024 | - | 347 | 1,571,371 | |||||
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| Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:
Level 1: The unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable (i.e., developed using market data) for the asset or liability, either directly or indirectly; and
Level 3: Inputs are unobservable (i.e., for which market data is unavailable) for the asset or liability. | |||||||||
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|
The valuation techniques used by the Company are explained in the accounting policies note 1 in the Company's Annual Report for the year ended 30 June 2020.
| |||||||||
| 7. | Transaction Costs | |||||||||
|
| Purchase transaction costs for the half-year ended 31 December 2020 were £359,000 (half-year ended 31 December 2019: £598,000; year ended 30 June 2020: £1,627,000). These comprise mainly stamp duty and commissions. Sale transaction costs for the half-year ended 31 December 2020 were £34,000 (half-year ended 31 December 2019: £21,000; year ended 30 June 2020: £72,000).
| |||||||||
| 8. | Dividends | |||||||||
|
| A first interim dividend of 4.75p per ordinary share was paid on 30 November 2020. The second interim dividend of 4.75p per ordinary share (declared on 15 December 2020) will be paid on 26 February 2021 to shareholders on the register on 29 January 2021. The Company's shares went ex-dividend on 28 January 2021.
| |||||||||
| 9. | Related Party Transactions | |||||||||
|
| Other than the relationship between the Company and its Directors, the provision of services by Janus Henderson is the only related party arrangement currently in place. Other than fees payable by the Company in the ordinary course of business and the provision of marketing services, there have been no material transactions with this related party affecting the financial position of the Company during the period under review.
| |||||||||
| 10. | Going Concern | |||||||||
|
| The assets of the Company consist of securities that are readily realisable. The Directors have also considered the impact of Covid-19, including cash flow forecasting, a review of covenant compliance including the headroom above the most restrictive covenants and an assessment of the liquidity of the portfolio and have concluded that the Company has adequate resources to meet its financial obligations, including the repayment of the debenture stock and the bank overdraft, as they fall due for a period of at least twelve months from the date of approval of the financial statements. Having assessed these factors and the principal risks, the Board has determined that it is appropriate for the financial statements to be prepared on a going concern basis.
| |||||||||
| 11. | Comparative Information | |||||||||
|
| The financial information contained in this half-year report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The figures and financial information for the year ended 30 June 2020 are extracted from the latest published accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the Report of the Independent Auditors, which was unqualified and did not include a statement under either section 498(2) or 498(3) of the Companies Act 2006.
| |||||||||
| 12. | General Information Company Status | |||||||||
|
| The City of London Investment Trust plc is a UK domiciled investment trust company.
| |||||||||
|
| ISIN number / SEDOL: ordinary shares: GB0001990497 / 0199049
London Stock Exchange (TIDM) Code: CTY
| |||||||||
|
| Global Intermediary Identification Number (GIIN): S55HF7.99999.SL.826
| |||||||||
|
| Legal Entity Identifier number (LEI): 213800F3NOTF47H6AO55
| |||||||||
|
| Company Registration Number | |||||||||
|
| UK: 00034871 New Zealand: 1215729
| |||||||||
|
| Registered Office | |||||||||
|
| 201 Bishopsgate, London EC2M 3AE
| |||||||||
|
| Directors and Secretary | |||||||||
|
| The Directors of the Company are Sir Laurie Magnus (Chairman), Samantha Wren (Audit Committee Chair), Martin Morgan (Senior Independent Director), Robert Edward (Ted) Holmes and Clare Wardle.
Philip Remnant CBE (former Chairman) retired from the Board on 27 October 2020.
| |||||||||
|
| The Corporate Secretary is Henderson Secretarial Services Limited, represented by Sally Porter, ACG.
| |||||||||
|
| Website | |||||||||
|
| Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at www.cityinvestmenttrust.com
| |||||||||
| 13. | Half-Year Report An abbreviated version of the half-year report, the 'Update', will be posted to shareholders in early March 2021. The Update will also be available on the Company's website www.cityinvestmenttrust.com or in hard copy from the Company's registered office. | |||||||||
FORTY LARGEST INVESTMENTS
| Company | Market value 31 December 2020 £'000 |
| Company | Market value 31 December 2020 £'000 |
| British American Tobacco | 69,325 |
| Anglo American | 28,618 |
| Diageo | 56,979 |
| St. James's Place | 28,054 |
| Unilever | 54,241 |
| Tesco | 26,842 |
| Rio Tinto | 49,777 |
| Vodafone | 26,607 |
| Royal Dutch Shell | 47,942 |
| Schroders | 26,277 |
| RELX | 45,695 |
| Nestlé | 25,886 |
| GlaxoSmithKline | 42,944 |
| Persimmon | 23,519 |
| M&G | 38,600 |
| Barclays | 22,002 |
| HSBC | 37,506 |
| Direct Line Insurance | 21,851 |
| Imperial Brands | 36,852 |
| Taylor Wimpey | 21,305 |
| BHP | 35,280 |
| IG | 20,688 |
| SSE | 34,500 |
| Lloyds Banking | 20,406 |
| National Grid | 34,168 |
| Land Securities | 20,214 |
| Phoenix | 33,979 |
| Ferguson | 19,545 |
| Reckitt Benckiser | 32,710 |
| Legal & General | 18,634 |
| BAE Systems | 32,261 |
| Novartis | 18,205 |
| BP | 31,723 |
| Wm Morrison | 17,735 |
| Prudential | 31,655 |
| Severn Trent | 17,167 |
| Verizon Communications | 30,060 |
| Segro | 17,057 |
| AstraZeneca | 29,296 |
| Munich Re | 16,817 |
|
|
| |||
| These investments total £1,242,922,000 or 75.9% of the portfolio. |
| |||
|
Convertibles and all classes of equity in any one company are treated as one investment.
| ||||
SECTOR EXPOSURE
As a percentage of the investment portfolio excluding cash
|
| % |
| Financials | 25.4 |
| Consumer Goods | 22.6 |
| Basic Materials | 9.9 |
| Consumer Services | 8.7 |
| Health Care | 8.0 |
| Industrials | 6.6 |
| Utilities | 6.4 |
| Oil & Gas | 5.5 |
| Telecommunications | 4.9 |
| Technology | 2.0 |
| Total | 100.0 |
SECTOR BREAKDOWN OF INVESTMENTS
|
| Market value 31 December 2020 £'000 |
|
| Market value 31 December 2020 £'000 | |
| OIL & GAS |
|
| Support Services |
| |
| Oil & Gas Producers |
|
| Ferguson | 19,545 | |
| Royal Dutch Shell | 47,942 |
| Paypoint | 5,559 | |
| BP | 31,723 |
|
| 25,104 | |
| Total1 | 11,059 |
| Total Industrials | 107,313 | |
|
| 90,724 |
|
|
| |
| Total Oil & Gas | 90,724 |
| CONSUMER GOODS |
| |
|
|
|
| Beverages |
| |
| BASIC MATERIALS |
|
| Diageo | 56,979 | |
| Chemicals |
|
| Coca-Cola1 | 15,251 | |
| Croda International | 7,585 |
| Britvic | 8,120 | |
| Victrex | 6,100 |
|
| 80,350 | |
| Johnson Matthey | 4,365 |
|
|
| |
|
| 18,050 |
| Food Producers |
| |
|
|
|
| Nestlé1 | 25,886 | |
| Construction & Materials |
|
| Tate & Lyle | 15,174 | |
| Ibstock | 11,473 |
|
| 41,060 | |
| Marshalls | 6,952 |
|
|
| |
|
| 18,425 |
| Household Goods & Home Construction | ||
|
|
|
| Reckitt Benckiser | 32,710 | |
| Forestry & Paper |
|
| Persimmon | 23,519 | |
| Mondi | 11,177 |
| Taylor Wimpey | 21,305 | |
|
| 11,177 |
| Berkeley | 11,144 | |
|
|
|
|
| 88,678 | |
| Mining |
|
|
|
| |
| Rio Tinto | 49,777 | Personal Goods |
| ||
| BHP | 35,280 |
| Unilever | 54,241 | |
| Anglo American | 28,618 |
|
| 54,241 | |
|
| 113,675 |
|
|
| |
| Total Basic Materials | 161,327 |
| Tobacco |
| |
|
|
|
| British American Tobacco | 69,325 | |
| INDUSTRIALS |
|
| Imperial Brands | 36,852 | |
| Aerospace & Defence |
|
|
| 106,177 | |
| BAE Systems | 32,261 |
| Total Consumer Goods | 370,506 | |
| Meggitt | 2,426 |
|
|
| |
|
| 34,687 |
| HEALTH CARE |
| |
|
|
|
| Health Care Equipment & Services | ||
| Electronic & Electrical Equipment |
| Smith & Nephew | 11,203 | ||
| XP Power | 9,380 |
|
| 11,203 | |
|
| 9,380 |
|
|
| |
|
|
|
| Pharmaceuticals & Biotechnology | ||
| General Industrials |
|
| GlaxoSmithKline | 42,944 | |
| Siemens1 | 9,993 |
| AstraZeneca | 29,296 | |
| Smiths | 7,603 |
| Novartis1 | 18,205 | |
| Swire Pacific1 | 4,100 |
| Merck1 | 16,749 | |
|
| 21,696 |
| Johnson & Johnson1 | 11,962 | |
|
|
|
| 119,156 | ||
| Industrial Engineering |
|
| Total Health Care | 130,359 | |
| IMI | 10,881 |
|
|
| |
| Rotork | 5,565 |
|
| ||
|
| 16,446 |
|
|
| |
|
|
| ||||
|
| Market value 31 December 2020 £'000 |
|
| Market value 31 December 2020 £'000 | ||
| CONSUMER SERVICES |
|
| FINANCIALS |
| ||
| Food & Drug Retailers |
|
| Banks |
| ||
| Tesco | 26,842 |
| HSBC | 37,506 | ||
| Wm Morrison | 17,735 |
| Barclays | 22,002 | ||
|
| 44,577 |
| Lloyds Banking | 20,406 | ||
|
|
|
| Nationwide Building Society 10.25% Var Perp CCDS | 11,552 | ||
| General Retailers |
| |||||
| Kingfisher | 7,842 |
|
| 91,466 | ||
| Halfords | 5,874 |
|
|
| ||
| DFS | 3,520 |
| Financial Services |
| ||
|
| 17,236 |
| M&G | 38,600 | ||
|
|
|
| Schroders | 26,277 | ||
| Media |
|
| IG | 20,688 | ||
| RELX | 45,695 |
| Brewin Dolphin | 13,115 | ||
| Daily Mail & General | 3,725 |
| 98,680 | |||
| ITV | 2,884 |
|
|
| ||
|
| 52,304 | Life Insurance |
| |||
|
|
| Phoenix | 33,979 | |||
| Travel & Leisure |
|
| Prudential | 31,655 | ||
| La Française des Jeux1 | 15,068 |
| St. James's Place | 28,054 | ||
| Ten Entertainment | 6,255 |
| Legal & General | 18,634 | ||
| Young | 3,026 |
|
| 112,322 | ||
| Go-Ahead | 2,363 |
|
|
| ||
| Carnival | 2,119 |
| Non-life Insurance |
| ||
|
| 28,831 |
| Direct Line Insurance | 21,851 | ||
| Total Consumer Services | 142,948 |
| Munich Re1 | 16,817 | ||
|
|
|
| Hiscox | 11,247 | ||
| TELECOMMUNICATIONS |
|
| Sabre Insurance | 9,213 | ||
| Fixed Line Telecommunications |
|
| 59,128 | |||
| Verizon Communications1 | 30,060 |
|
|
| ||
|
| 30,060 |
| Real Estate Investment Trusts | |||
|
|
|
| Land Securities | 20,214 | ||
| Mobile Telecommunications |
| Segro | 17,057 | |||
| Vodafone | 26,607 |
| British Land | 13,447 | ||
| Orange1 | 11,760 |
| Hammerson | 3,512 | ||
| Deutsche Telekom1 | 11,713 |
|
| 54,230 | ||
|
| 50,080 |
| Total Financials | 415,826 | ||
| Total Telecommunications | 80,140 |
|
|
| ||
|
|
|
| TECHNOLOGY |
| ||
| UTILITIES |
| Software & Computer Services | ||||
| Electricity |
| |||||
| SSE | 34,500 |
| Microsoft1 | 16,254 | ||
|
| 34,500 |
| Sage | 9,114 | ||
|
|
|
|
| 25,368 | ||
| Gas, Water & Multi-utilities |
|
|
|
| ||
| National Grid | 34,168 |
| Technology Hardware & Equipment | |||
| Severn Trent | 17,167 |
| Cisco Systems1 | 8,181 | ||
| United Utilities | 9,666 |
|
| 8,181 | ||
| Pennon | 9,421 |
| Total Technology | 33,549 | ||
|
| 70,422 |
|
|
| ||
| Total Utilities | 104,922 |
| TOTAL INVESTMENTS | 1,637,614 | ||
|
|
|
|
|
| ||
1 Overseas listed
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