BLACKROCK INCOME AND GROWTH INVESTMENT
TRUST PLC (LEI:5493003YBY59H9EJLJ16)
All information is at 28 February 2019 and unaudited.
Performance at month end with net income reinvested:
|
One
Month |
Three
Months |
One
Year |
Three
Years |
Five
Years |
Since
1 April
2012^ |
Sterling |
|
|
|
|
|
|
Share price |
1.5% |
3.7% |
-0.9% |
20.2% |
32.6% |
80.7% |
Net asset value |
3.4% |
3.2% |
1.3% |
19.1% |
32.6% |
70.4% |
FTSE All-Share Total Return |
2.3% |
2.6% |
1.7% |
30.4% |
27.6% |
66.4% |
Source: BlackRock
^BlackRock took over the investment management of the Company with
effect from 1 April 2012.
At month end |
|
Sterling: |
|
Net asset value - capital only: |
191.16p |
Net asset value - cum
income1: |
192.95p |
Share price: |
186.50p |
Total assets (including
income): |
£50.3m |
Discount to cum-income NAV: |
3.3% |
Gearing: |
4.7% |
Net yield2: |
3.7% |
Ordinary shares in
issue3: |
24,004,668 |
Gearing range (as a % of net
assets) |
0-20% |
Ongoing charges4: |
1.1% |
1 Includes net revenue of 1.79
pence per share.
2 The Company’s yield based on dividends announced in
the last 12 months as at the date of the release of this
announcement is 3.7% and includes the 2018 final dividend of 4.40p
per share declared on 20 December
2018 and to be paid to shareholders on 19 March 2019 and the 2018 interim dividend of
2.50p per share declared on 25 June
2018 and paid to shareholders on 3
September 2018.
3 excludes 8,929,264 shares held in
treasury.
4 Calculated as a percentage of average net assets
and using expenses, excluding performance fees and interest costs
for the year ended 31 October
2018.
Sector Analysis |
Total assets
(%) |
|
|
Oil & Gas Producers |
11.1 |
Banks |
8.0 |
Pharmaceuticals &
Biotechnology |
7.8 |
Media |
7.5 |
Financial Services |
6.6 |
Life Insurance |
6.5 |
Food Producers |
6.4 |
Support Services |
6.3 |
Household Goods & Home
Construction |
5.9 |
Travel & Leisure |
5.1 |
Tobacco |
4.1 |
Industrial Engineering |
4.0 |
Food & Drug Retailers |
3.9 |
Mining |
3.2 |
Gas, Water &
Multi-utilities |
2.6 |
Nonlife Insurance |
2.5 |
Mobile Telecommunications |
1.5 |
Electronic & Electrical
Equipment |
1.1 |
Construction & Materials |
0.9 |
Personal Goods |
0.7 |
Chemicals |
0.6 |
General Retailers |
0.1 |
Net Current Assets |
3.6 |
|
------ |
Total |
100.0 |
|
====== |
Ten Largest Equity
Investments |
|
|
|
Company |
Total assets
(%) |
|
|
Royal Dutch Shell 'B' |
6.5 |
RELX |
5.1 |
AstraZeneca |
4.0 |
Unilever |
4.0 |
Prudential |
4.0 |
Lloyds Banking Group |
3.9 |
Reckitt Benckiser |
3.9 |
Tesco |
3.9 |
GlaxoSmithKline |
3.8 |
BP Group |
3.7 |
Commenting on the markets, Adam
Avigdori and David Goldman
representing the Investment Manager noted:
The UK market rose for a second consecutive month in February,
with the FTSE All-Share Index returning 2.3%1.
Year-to-date the UK market has returned 6.6%, recovering a large
proportion of the losses from the turbulent fourth quarter of 2018.
Equity markets globally continued to rise during February,
shrugging off the ongoing geopolitical uncertainty, softening
global economic data and largely underwhelming corporate earnings
newsflow. European economic data continued to disappoint and UK
services PMI (Purchasing Managers Index), fell to its lowest level
since July 2016. Optimistic messaging
around US/China trade discussions
continued. In the US, the Federal Reserve continued with a more
dovish stance indicating a willingness to keep rates stable for
some time. The Bank of England
also left the base rate unchanged as expected, however it lowered
its growth forecast for this year to 1.2%. UK politics weren’t far
from the headlines during the month, however February’s
developments took a more positive turn with MPs voting in favour of
the Cooper amendment, giving Parliament the ability to force
Theresa May to request an extension
to article 50 and therefore diminishing the risk of a ‘no-deal’
Brexit. Sterling strengthened as a result, causing a headwind for
more international large-cap businesses towards the end of the
month.
Over the month the Company’s net asset value rose by 3.4%,
outperforming the FTSE All-Share Index, which delivered a return of
2.3%.
Hiscox reported strong profit for the year with the London market leading the way as it returns to
growth. Regulatory action is leading to more capital and pricing
discipline in the market, meaning prices are rising. Having
substantially changed the portfolio over the last few years,
management feel now is the right time to capitalise on the better
environment. John Laing has
demonstrated a continued ability to grow net asset value through a
diversified portfolio of infrastructure projects. The company has a
strong pipeline of opportunities to invest in both existing and new
markets. Phoenix Group recently reported strong growth in profit
with the business beating expectations for both cash flow and
capital generation. The life assurance company is delivering on
their strategic priorities, having completed the acquisition of the
Standard Life Assurance business and their preparations for
Brexit.
Associated British Foods performed poorly after like-for-like
growth within Primark was lower than the market expected. The
expansion of Primark across the US offers large growth potential
and rising sugar prices should benefit their sugar business.
Reckitt Benckiser delivered better than expected sales growth
despite a weak flu season and some manufacturing issues. The Mead
Johnson business was a standout success for last year. From here,
the market will be watching the progress of the search for a new
CEO as Rakesh Kapoor has announced
his decision to retire at the end of the year. Whilst trading was
broadly in line with expectations at Accesso Technology, the
uncertainty caused by the announcement of a strategic review
combined with the departure of the Executive Chairman had a
negative impact on the shares in the month.
During the month we purchased a new position in easyJet, which
we believe has an opportunity to benefit from both yield management
and a changing short-haul competitor environment. We have added to
positions including London Stock Exchange, MoneySupermarket and
Associated British Foods and we have reduced exposure to Inchcape,
John Laing and HSBC and have sold
our holding in Accesso Technology.
We are broadly constructive on global markets and expect
continued global growth, albeit in a less synchronised fashion
across the G7 nations and at a lower level than in recent past. The
trend of steady growth has provided a solid backdrop for equity
market returns, which have also been helped by loose financial
conditions from supportive governments and central banks. However
political uncertainty is rising, which combined with tightening
financial conditions (led by the Federal Reserve) means that we
expect volatility to return to markets. This provides us, as active
managers of a concentrated portfolio, with a great opportunity to
identify high-quality cash generative businesses, with robust
balance sheets, that can weather various market cycles and help to
deliver long-term capital and income growth for our clients.
We continue to like cash generative consumer staple companies,
especially those exposed to the Emerging Market consumer given the
prevalent demographic trends in certain markets. These companies
often generate substantial cash flow which allows them to invest in
innovation, marketing and distribution to ensure the longevity of
their brands while also paying attractive and growing dividends to
shareholders. We have also sought exposure to infrastructure and
construction spend whilst at the same time we are watching for
signs of overheating in the US and monitoring the natural slowdown
in China. US construction spend
remains well below long-term averages and initiatives to boost this
spend feature prominently on the political agenda. We also note
that inflationary pressures are starting to build and therefore we
seek those companies with sufficient pricing power and efficiency
potential to withstand rising costs. As the last few months have
demonstrated, it is crucial to be selective and to focus on those
companies that are strong operators and that provide a
differentiated service or product and boast a strong balance
sheet.
19 March 2019
1Source: BlackRock as at 28
February 2018
ENDS
Latest information is available by typing
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"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.