To:
RNS
From:
CT UK High Income Trust PLC
Date:
29 November 2024
LEI:
213800B7D5D7RVZZPV45
Unaudited Half-Year Results
The Board of CT UK High Income Trust
PLC (the 'Company') announces the unaudited half-year results of
the Company for the six month period to 30 September
2024.
Financial Highlights for the six
months
·
Net asset value total return(1) per
share for the six months was +6.8%, compared to the total return of
the Benchmark(2) of +6.1%.
·
Ordinary share price total return for the six
months was +9.4% compared to the total return of the Benchmark of
+6.1%.
·
B share price total return for the six months was
+6.7% compared to the total return of the Benchmark of
+6.1%.
·
Distribution yield(1) of 6.3% on
Ordinary shares and 6.5% on B shares at 30 September 2024, compared
to the yield on the FTSE All-Share Index of 3.6%.
Notes:
1. Yield and total
return - see Alternative Performance Measures.
2. Benchmark - FTSE
All-Share Index.
Chairman's Statement
Investment performance
For the six months to 30 September
2024 the net asset value ("NAV") total return for both the Ordinary
shares and B shares was +6.8%, which outperformed the +6.1% total
return for the FTSE All-Share Index, the Company's benchmark
index.
Equity markets globally have been
positive in 2024 and the UK has joined in, albeit at a slower pace
than other major markets, producing a total return of just over 6%
in the six months to 30 September 2024. As is now the norm, market
sectors have been volatile within this as they reacted to newsflow
whether geo-political, macro-economic and on occasion even stock
specific. Perhaps surprisingly, the continuing war in Ukraine, the
conflict in the Middle East and the potential for this to expand
into a wider regional war have had, in the main, limited impact on
equity markets. The bigger focus once again has been on inflation
and interest rates. When I wrote this statement a year ago, I noted
that inflation had been stubborn but had begun to fall. This
continued, possibly faster than many had anticipated, and stands
now at around 2%. At last, the Bank has now begun to cut interest
rates, rather belatedly in my view. They are still higher than most
other major country, but the path is clear and equity markets
responded positively.
The other major event in the last
six months was of course the UK election and the resounding victory
of the Labour party was at first seen very positively. Whatever the
politics, investors were relieved at least, by the certainty that
the UK would be led by the same party and probably the same
individuals for the next five years which, after the chaos of
recent times, is indeed a big positive. Unfortunately, the
positivity and enthusiasm ebbed away over the following months as
the new government seemed to go out of its way to be increasingly
negative on the inherited fiscal situation.
Despite all of this, David Moss, our
portfolio manager, does remain positive on the future of investing
in UK equities. We will have a period of stable government - rather
unusual in the context of our European trading partners - which, of
itself, should encourage vital foreign direct investment to help
our economy to grow. The anticipated cuts in interest rates will
help reduce the cost of borrowing for all but particularly the cost
of borrowing on mortgages. As I said a year ago, though, our
portfolio manager continues to believe that while the cost of
borrowing will continue to fall, we are in a regime more in common
with the 1990s than the period post-financial crisis and interest
rates, wherever they settle, will remain positive in real terms,
likely in the 3-4% range. He remains of the view this is a positive
backdrop for borrowers and savers and the efficient allocation of
capital.
Trading activity by the portfolio
manager has been much less in the last six months to 30 September
2024, driven primarily by increasing the quality of the portfolio
or the ability to generate sustainable and growing income.
Performance has been good during this period with
the NAV total return out-performance of the benchmark coming from
stock selection. Irish housebuilder Cairn Homes was one of the top
contributors as the shares performed very strongly on the back of
strong results and cash generation enabling them to continue
returning cash to shareholders through an ongoing share buyback and
growing dividend. Likewise, NatWest has delivered much better than
expected results, despite the weak UK economic backdrop, which has
enabled them to increase the dividend and continue to buy back
shares from the government. In contrast, UK brickmaker Ibstock has
delivered fairly weak results hurt by levels of UK housebuilding
below 2009. They have continued to invest through this period
leaving them very well positioned for the recovery which the
Investment Manager is highly confident will come, as the UK
continues to have a clear shortage of housing and increasing this
is a very clear policy of the new Labour government.
Share price performance
Over the six month period, the
discount to NAV at which the Company's Ordinary shares traded,
narrowed from -10.6% to -8.8% at 30 September 2024 and
consequently, the Ordinary share price total return for the period
was +9.4%. The discount of the B shares to NAV widened slightly
from -11.6% to -12.2% at the period end, thus generating a B share
price total return of +6.7% for the period under review.
During the period, 250,000 B shares
were bought back for treasury at an average discount of
approximately 12% to the prevailing NAV. No Ordinary shares were
bought back in the period under review. It continues to be the
Board's strategy to buy back shares in line with the Company's
stated policy, which helps to enhance the NAV per share for
continuing shareholders, especially if a mismatch of demand and
supply causes the discount to widen.
Earnings, dividends and capital repayments
In the period under review, your
Company's revenue earnings per share has risen by 14.7% from 2.31p
per share to 2.65p per share in comparison to the six months to 30
September 2023.
As I have previously stated, it is a
key objective of the Board and Investment Manager to return to a
covered dividend and rebuild the revenue reserve. Now that the
changes made by the portfolio manager over the last year are coming
to fruition, we believe the Company's revenue position at the
half-year stage is in a much-improved position.
In the absence of unforeseen
circumstances, it is the Board's current intention that the
aggregate dividend and capital repayment for the current financial
year to 31 March 2025 will be at least 5.62p per Ordinary share and
B share respectively. Three quarterly interim dividends and capital
repayments have so far been declared, each of 1.35p per
share.
At 30 September 2024, this aggregate
distribution represented a yield of 6.3% and 6.5% on the Ordinary
share price and B share price respectively, as compared with the
yield on the FTSE All-Share Index of 3.6%.
Borrowing
At 30 September 2024, the Company
had fully drawn down its £15 million revolving credit facility
("RCF") with The Royal Bank of Scotland International Limited. This
facility provides flexibility for the Board and Investment Manager
to utilise borrowing when investment opportunities arise or,
conversely, reduce borrowing dependent on market conditions and
outlook.
Outlook
I talked earlier about the portfolio
manager's positive view on investing in UK equities and in the
context of this and looking forward, I must mention the UK budget.
There had been a lot of leaks and even more speculation on its
content but we have finally now seen the first budget from Rachel
Reeves, the Chancellor of this new Labour government. The initial
judgement from investors was positive with bond yields falling and
domestic UK shares rising. Unfortunately, this lasted only until we
saw the detailed numbers as the Office for Budget Responsibility
revised up borrowing numbers and revised down growth. As investors
digested this information and the sheer amount of debt the
government intends to issue, sentiment turned more negative with
bond yields rising sharply and shares falling. Even if this looks
like a classic left-wing tactic of tax and spend, investment in UK
infrastructure and housing is desperately needed. Businesses at
least now know the rules under which they have to operate and the
ultimate impact remains to be seen.
We probably all have a view on the
pros and cons of borrowing more to invest and raising taxes but I
think arguments will persist for some time as to whether
pre-election promises have been broken and the right taxes have
been raised. Whilst I think this debate will rumble on, the fact
that we will have a period of stable government intending to invest
more has to be beneficial for the long-term future of the country,
helpful for economic growth and positive for those businesses that
are exposed to infrastructure and housing in particular.
Without acknowledging it, this new
Labour Government has actually inherited one of the fastest growing
European economies and with fiscal clarity now here and interest
rates still likely to fall further, our portfolio manager remains
constructive on the UK and positive on UK domestic companies where
dividends and valuations remain very attractive.
The landslide election victory by
President-elect Trump in America defied prediction but is being
taken particularly well by equity markets. His pre-election
rhetoric is yet to be tested but, as the UK's largest
single-country trading partner, we should take the early signs as
encouraging. We shall see.
As ever, your support of this
Company is very much appreciated.
Andrew Watkins
Chairman
28
November 2024
Condensed Unaudited Statement of
Comprehensive Income
For
the six month period to 30 September 2024
|
|
Six months to 30 September
2024
|
|
|
|
|
|
|
Notes
|
Revenue
|
Capital
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
Gains on investments held at fair
value
|
-
|
4,831
|
4,831
|
|
Exchange losses
|
-
|
(4)
|
(4)
|
|
Income
2
|
3,529
|
-
|
3,529
|
|
Investment management
fee
3
|
(100)
|
(233)
|
(333)
|
|
Other expenses
|
(222)
|
-
|
(222)
|
|
Profit before finance costs and taxation
|
3,207
|
4,594
|
7,801
|
|
|
|
|
|
|
Net
finance costs
|
|
|
|
|
Interest on bank loans
|
(144)
|
(336)
|
(480)
|
|
Total finance costs
|
(144)
|
(336)
|
(480)
|
|
|
|
|
|
|
Profit before tax
|
3,063
|
4,258
|
7,321
|
|
Tax on ordinary
activities
4
|
(46)
|
-
|
(46)
|
|
Profit for the period
|
3,017
|
4,258
|
7,275
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
3,017
|
4,258
|
7,275
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
5
|
2.65p
|
3.73p
|
6.38p
|
The total column of this statement
represents the Company's Profit and Loss Account. The supplementary
revenue return and capital return columns are both prepared under
guidance published by the Association of Investment
Companies.
All revenue and capital items in the
above statement derive from continuing operations.
All of the profit and comprehensive
income for the period is attributable to the owners of the
Company.
Condensed Unaudited Cash Flow Statement
|
|
Six months
to
30 September
2024
|
Six months
to
30 September
2023
|
Year to
31 March
2024*
|
|
|
£'000
|
£'000
|
£'000
|
|
Cash
flows from operating activities
|
|
|
|
|
Profit/(loss) before tax
|
7,321
|
(1,470)
|
11,252
|
|
Adjustments for:
|
|
|
|
|
(Gains)/losses on investments held at
fair value through profit or loss
|
(4,831)
|
3,694
|
(7,674)
|
|
Exchange losses/(gains)
|
4
|
(15)
|
(10)
|
|
Interest income
|
(34)
|
(36)
|
(84)
|
|
Interest received
|
34
|
36
|
84
|
|
Dividend income
|
(3,495)
|
(3,105)
|
(5,519)
|
|
Dividend income received
|
4,140
|
3,576
|
5,727
|
|
Decrease/(increase) in
receivables
|
9
|
(2)
|
1
|
|
(Decrease)/increase in
payables
|
(37)
|
(22)
|
45
|
|
Finance costs
|
480
|
406
|
896
|
|
Overseas tax suffered
|
(20)
|
(97)
|
(69)
|
|
Cash
flows from operating activities
|
3,571
|
2,965
|
4,649
|
|
Cash
flows from investing activities
|
|
|
|
|
Purchases of investments
|
(30,519)
|
(37,247)
|
(62,065)
|
|
Sales of investments
|
30,782
|
34,270
|
61,699
|
|
Cash
flows from investing activities
|
263
|
(2,977)
|
(366)
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
Dividends paid on Ordinary
shares
|
(2,508)
|
(2,442)
|
(4,642)
|
|
Capital returns paid on B
shares
|
(925)
|
(881)
|
(1,692)
|
|
Interest on bank loans
|
(480)
|
(393)
|
(1,293)
|
|
Shares purchased for
treasury
|
(216)
|
(1,293)
|
(868)
|
|
Drawdown of bank loans
|
-
|
3,000
|
3,000
|
|
Cash
flows from financing activities
|
(4,129)
|
(2,009)
|
(5,495)
|
|
|
|
|
|
|
Net
decrease in cash and cash
equivalents
|
(295)
|
(2,021)
|
(1,212)
|
|
Effect of movement in foreign
exchange
|
(4)
|
15
|
2,288
|
|
Opening net cash and cash
equivalents
|
1,086
|
2,288
|
10
|
|
Closing cash and cash equivalents
|
787
|
282
|
1,086
|
|
|
|
|
|
|
Represented by:
|
|
|
|
|
Cash at bank
|
47
|
73
|
176
|
|
Short term deposits
|
740
|
209
|
910
|
|
|
787
|
282
|
1,086
|
*audited
figures
Notes to the Condensed
Financial Statements (unaudited)
1. Accounting
Policies
The condensed unaudited financial
statements have been prepared on a going concern basis and in
accordance with UK-adopted International Accounting Standard 34
"Interim Financial Reporting" and the accounting policies set out
in the statutory financial statements of the Company for the year
ended 31 March 2024. Where presentational guidance set out in
the Statement of Recommended Practice ("SORP") for investment
trusts issued by the Association of Investment Companies is
consistent with the requirements of UK-adopted International
Accounting Standards, the Directors have sought to prepare the
condensed financial statements on a basis compliant with the
recommendations of the SORP. The condensed financial statements do
not include all of the information required for full annual
financial statements and should be read in conjunction with the
financial statements of the Company for the year ended
31 March 2024, which were prepared under UK-adopted
International Accounting Standards.
2. Income
|
|
30 September
2024
|
30 September
2023
|
31
March 2024
|
|
Income comprises:
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
UK dividend income
|
2,773
|
2,575
|
4,653
|
|
UK dividend income - special
dividends
|
-
|
-
|
46
|
|
Overseas dividend income
|
552
|
464
|
632
|
|
Overseas
dividend income - special dividends
|
-
|
25
|
25
|
|
Property income
distributions
|
170
|
41
|
163
|
|
|
3,495
|
3,105
|
5,519
|
|
Other income
|
|
|
|
|
Interest on cash and cash
equivalents
|
34
|
36
|
84
|
|
|
3,529
|
3,141
|
5,603
|
3.
The Company's investment manager Columbia
Threadneedle Investment Business Limited receives an investment
management fee of 0.60 per cent per annum of the net asset value of
the Company payable quarterly in arrears.
4.
The taxation charge for the period represents
withholding tax suffered on overseas dividend income.
5. The earnings per
share are based on the net profit/(loss) for the period and on
114,005,447 shares (period to 30 September 2023 - 115,437,141; year
to 31 March 2024 - 114,734,272), being the weighted average number
of shares in issue during the period.
6.
Earnings for the six months to 30 September 2024
should not be taken as a guide to the results of the full
year.
7.
The Board has considered the requirements of IFRS
8 'Operating Segments'. The Board is of the view that the Company
is engaged in a single segment of business, of investing in equity,
and that therefore the Company has only a single operating segment.
The Board of Directors, as a whole, has been identified as
constituting the chief operating decision maker of the Company. The
key measure of performance used by the Board to assess the
Company's performance is the total return on the Company's net
asset value as calculated under UK-adopted
International Accounting Standards and
therefore no reconciliation is required between the measure of
profit or loss used by the Board and that contained in the
condensed financial statements.
8.
Dividends and capital repayments
|
Dividends
|
Payment
Date
|
Six months
to
30 Sept
2024
|
Six months
to
30 Sept
2023
|
Year
to
31 March
2024
|
|
|
|
£'000
|
£'000
|
£'000
|
|
In
respect of the previous period:
|
|
|
|
|
|
Fourth
interim dividend at 1.66p (2023: 1.55p) per Ordinary
share
|
3 May
2024
|
1,383
|
1,319
|
1,319
|
|
|
|
|
|
|
|
In respect of the period
under review:
|
|
|
|
|
|
First
interim dividend at 1.35p (2024: 1.32p) per Ordinary
share
|
2 Aug
2024
|
1,125
|
1,123
|
1,123
|
|
Second
interim dividend (2024: 1.32p) per Ordinary share
|
|
-
|
-
|
1,100
|
|
Third
interim dividend (2024: 1.32p) per Ordinary share
|
|
-
|
-
|
1,100
|
|
|
|
2,508
|
2,442
|
4,642
|
|
|
|
|
|
| |
A second interim dividend for the
year to 31 March 2025, of 1.35p per Ordinary share, was paid on 1
November 2024 to Ordinary shareholders on the register on 4 October
2024.
|
Capital repayments
|
Payment
Date
|
Six months
to
30 Sept
2024
|
Six months
to
30 Sept
2023
|
Year
to
31 March
2024
|
|
|
|
£'000
|
£'000
|
£'000
|
|
In
respect of the previous period:
|
|
|
|
|
|
Fourth
capital repayment at 1.66p (2023: 1.55p) per B share
|
3 May
2024
|
510
|
476
|
476
|
|
|
|
|
|
|
|
In respect of the period
under review:
|
|
|
|
|
|
First
capital repayment at 1.35p (2024: 1.32p) per B share
|
2 Aug
2024
|
415
|
405
|
405
|
|
Second
capital repayment (2024: 1.32p) per B share
|
|
-
|
-
|
406
|
|
Third
capital repayment (2024: 1.32p) per B
share
|
|
-
|
-
|
405
|
|
|
|
925
|
881
|
1,692
|
A second capital repayment for the
year to 31 March 2025, of 1.35p per B share, was paid on 1 November
2024 to B shareholders on the register on 4 October
2024.
Although the above referenced
payments on 1 November 2024 relate to the period ended 30 September
2024, under UK-adopted International Accounting Standards they will
be accounted for in the six months to 31 March 2025, being the
period during which they are paid.
9.
Investments held at fair value through profit or
loss
|
|
Listed/
Quoted
(Level 1)
£'000
|
Subsidiary/
Unlisted
(Level 3)
£'000
|
Total
£'000
|
|
Cost brought forward
|
105,822
|
250
|
106,072
|
|
Gains brought forward
|
15,195
|
-
|
15,195
|
|
Fair value of investments at 31 March
2024
|
121,017
|
250
|
121,267
|
|
Movement in the period:
|
|
|
|
|
Purchases at cost
|
30,310
|
-
|
30,310
|
|
Sales proceeds
|
(30,782)
|
-
|
(30,782)
|
|
Gains on investments sold in the
period
|
5,227
|
-
|
5,227
|
|
Losses on investments held at 30
September 2024
|
(396)
|
-
|
(396)
|
|
Fair
value of investments at 30 September 2024
|
125,376
|
250
|
125,626
|
|
Cost at 30 September 2024
|
110,577
|
250
|
110,827
|
|
Gains at 30 September 2024
|
14,799
|
-
|
14,799
|
|
Fair
value of investments at 30 September 2024
|
125,376
|
250
|
125,626
|
Accounting standards recognise a
hierarchy of fair value measurements for financial instruments
which gives the highest priority to unadjusted quoted prices in
active markets for identical assets or liabilities (Level 1) and
the lowest priority to unobservable inputs (Level 3). The
classification of financial instruments depends on the lowest
significant applicable input, as follows:
·
Level
1 - quoted (unadjusted) prices in
active markets for identical assets or liabilities.
·
Level
2 - other techniques for which all
inputs that have a significant effect on the recorded fair value
are observable, either directly or indirectly. The Company held no
such instruments during the period under review.
·
Level
3 - techniques that use inputs that
have a significant effect on the recorded fair value that are not
based on observable market data. The Company's investment in its
subsidiary undertaking, Investors Securities Company Limited, is
included in Level 3 and is valued at its net asset
value.
There were no transfers between
levels of the fair value hierarchy during the six months ended 30
September 2024.
10. Receivables
|
|
30 Sept
|
30 Sept
|
31 March
|
|
|
2024
|
2023
|
2024
|
|
|
£'000
|
£'000
|
£'000
|
|
Income receivable from shares and
securities
|
322
|
704
|
967
|
|
Withholding tax
recoverable
|
153
|
199
|
179
|
|
Sundry debtors and
prepayments
|
38
|
67
|
57
|
|
|
513
|
970
|
1,203
|
11. Payables
|
|
30 Sept
|
30 Sept
|
31 March
|
|
|
2024
|
2023
|
2024
|
|
|
£'000
|
£'000
|
£'000
|
|
Loan from
subsidiary undertaking repayable on
demand
|
250
|
250
|
250
|
|
Investment
management fee payable to the
investment manager
|
168
|
148
|
161
|
|
Amounts due
to brokers in settlement of purchase of investments
|
-
|
-
|
209
|
|
Loan Interest
|
-
|
2
|
10
|
|
Accrued expenses
|
116
|
106
|
160
|
|
|
534
|
506
|
790
|
12. Bank Loans
The Company has an unsecured
revolving credit facility ('RCF') with The Royal Bank of Scotland
International Limited for £15 million which is available until 28
September 2025. At 30 September 2024, £15 million was drawn down
(30 September 2023: £15 million; 31 March 2024: £15
million).
The loan agreement contains certain
financial covenants with which the Company must comply. These
include a financial covenant with respect to the ratio of the
Adjusted Portfolio Value (as defined in the loan agreement) to the
level of debt and also that the Adjusted Portfolio Value does not
fall below £50 million. The Company complied with the required
financial covenants throughout the period since
drawdown.
13. Share Capital
Allotted, issued and fully paid
|
|
Listed
|
Held in
Treasury
|
In Issue
|
|
|
Number
|
£
|
Number
|
£
|
Number
|
£
|
|
Ordinary Shares of 0.1p each
|
|
|
|
|
|
|
|
Balance at 1 April 2024
|
102,067,144
|
102,067
|
(18,744,491)
|
(18,744)
|
83,322,653
|
83,323
|
|
Balance at 30 September
2024
|
102,067,144
|
102,067
|
(18,744,491)
|
(18,744)
|
83,322,653
|
83,323
|
|
B
Shares of 0.1p each
|
|
|
|
|
|
|
|
Balance at 1 April 2024
|
32,076,703
|
32,077
|
(1,367,953)
|
(1,368)
|
30,708,750
|
30,709
|
|
Repurchased to be held in
treasury
|
-
|
-
|
(250,000)
|
(250)
|
(250,000)
|
(250)
|
|
Balance at 30 September
2024
|
32,076,703
|
32,077
|
(1,617,953)
|
(1,618)
|
30,458,750
|
30,459
|
|
Total at 30 September 2024
|
134,143,847
|
134,144
|
(20,362,444)
|
(20,362)
|
113,781,403
|
113,782
|
During the period the Company bought
back nil Ordinary shares and bought back 250,000 B shares at a cost
of £216,000 to hold in treasury (period to 30 September 2023 -
1,750,000 Ordinary shares and nil B shares; year to 31 March 2024 -
1,750,000 Ordinary shares and nil B shares).
At 30 September 2024 the Company
held 18,744,491 Ordinary shares and 1,617,953 B shares in treasury
(30 September 2023 - 18,744,491 Ordinary shares and 1,367,953 B
shares; 31 March 2024 - 18,744,491 Ordinary shares and 1,367,953 B
shares).
14. The net asset value per share is based on shareholders' funds
at the period end and on 83,322,653 Ordinary shares and 30,458,750
B shares, being the number of shares in issue at the period end (30
September 2023 - 83,322,653 Ordinary shares and 30,708,750 B
shares; 31 March 2024 - 83,322,653 Ordinary shares and 30,708,750 B
shares).
15. The fair values of the Company's financial assets and
liabilities are not materially different from their carrying values
in the financial statements.
The Company's financial risk
management objectives and policies are consistent with those
disclosed in the Company's financial statements for the year ended
31 March 2024.
16. Changes in liabilities arising from financing
activities
|
|
Six months
to
30
September
2024
|
Six months to 30
September
2023
|
Year to
31 March
2024
|
|
|
£'000
|
£'000
|
£'000
|
|
Opening net debt at beginning
of
period/year
|
15,000
|
12,000
|
12,000
|
|
Cash flows:
|
|
|
|
|
Drawdown of revolving credit
facility
|
-
|
3,000
|
3,000
|
|
Closing net debt at end of
period/year
|
15,000
|
15,000
|
15,000
|
17. Going concern
In assessing the going concern basis
of accounting, the Directors have had regard to the guidance issued
by the Financial Reporting Council and have undertaken a
rigorous review of the Company's ability to continue as a going
concern. The Board has, in particular, considered the outlook for
inflation and ongoing macroeconomic and geopolitical
concerns.
The Company's investment objective
and policy, which is subject to regular Board monitoring processes,
is designed to ensure that the Company is invested mainly in
liquid, listed securities. The value of these investments
exceeds the Company's liabilities by a significant margin. The
Company retains title to all assets held by its custodian, and has
an agreement relating to its borrowing facility with which it has
complied. Cash is held only with banks approved and regularly
reviewed by the Investment Manager.
As part of the going concern review,
the Directors noted that a borrowing facility of a £15 million
revolving credit facility is committed to the Company until 28
September 2025 and loan covenants are reviewed by the Board on a
regular basis. It is expected that a new borrowing facility could
be entered into when the current arrangement expires, but, if not,
or should the Board decide not to renew it, any outstanding
borrowings would be repaid through the use of cash and, if
required, from the proceeds of the sale of the Company's
investments.
The Directors believe, having
assessed the principal risks and other matters, in light of the
controls and review processes noted and bearing in mind the nature
of the Company's business and assets and revenue and expenditure
projections, that the Company has adequate resources to continue in
operational existence for a period of at least twelve months from
the date of approval of the financial statements. Accordingly, they
continue to adopt the going concern basis in preparing the
financial statements.
The Company does not have a fixed
life. However, in the event that the net asset value total return
performance of the Company is less than that of the FTSE All-Share
Index over the relevant three year period, in accordance with the
Company's articles of association, shareholders will be given the
opportunity to vote on whether the Company should continue in
existence, by ordinary resolution at the Company's Annual General
Meeting. The current three year period for this purpose will run
from 1 April 2022 to 31 March 2025.
18. Related party transactions
The Directors of the Company are
considered a related party. Under the FCA UK Listing Rules, the
Manager is also defined as a related party. However, the existence
of an independent Board of Directors demonstrates that the Company
is free to pursue its own financial and operating policies and
therefore under the AIC SORP, the Manager is not considered a
related party for accounting purposes.
The Directors receive aggregated
remuneration for services as Directors and for which there were no
outstanding balances at the period end. There have been no
transactions with related parties during the first six months of
the current financial year that have materially affected the
financial position or performance of the Company during the period
and there have been no changes in the related party transactions
described in the last Annual Report and Financial Statements that
could do so.
19. The Company's auditor, Deloitte LLP, has not audited or
reviewed the Half-Year Report and the results for the six months to
30 September 2024 and 30 September 2023 pursuant to the
Auditing Practices Board guidance on 'Review of Interim Financial
Information'. These are not full statutory financial statements in
terms of Section 434 of the Companies Act 2006 and are
unaudited. Statutory financial statements for the year ended
31 March 2024, which received an unqualified audit report and
which did not contain a statement under Section 498 of the
Companies Act 2006, have been lodged with the Registrar of
Companies. The condensed financial statements shown for the year
ended 31 March 2024 are an extract from those financial statements.
No full statutory financial statements in respect of any period
after 31 March 2024 have been reported on by the Company's auditor
or delivered to the Registrar of Companies.
The Half-Year Report to 30 September
2024 is available on the website maintained on behalf of the
Company at ctukhighincome.co.uk
Statement of Principal Risks and
Uncertainties
As an investment company, investing
primarily in listed securities, most of the Company's principal
risks and uncertainties that could threaten the achievement of its
objective, strategy, future performance, liquidity and solvency are
market related.
These risks, and the way in which
they are managed, are described under the heading 'Principal Risks
and Uncertainties and Viability Statement' within the Strategic
Report in the Company's Annual Report and Financial Statements for
the year ended 31 March 2024.
The principal risks identified in
the Annual Report were:
•
Investment performance risk;
•
Legal and regulatory risk; and
•
Third party service delivery and Cyber risks.
The Board continues to review the
key risk summary for the Company which identifies the risks that
the Company is exposed to, the controls in place and the actions
being taken to mitigate them. The Board has also considered the
outlook for inflation and ongoing macroeconomic and geopolitical
concerns.
The Board considers that the
Company's principal risks and uncertainties have not changed
materially since 30 May 2024, the date that the Company's Annual
Report and Financial Statements was approved, and are not expected
to change materially for the remainder of the Company's
financial year. The Board has also considered these principal
risks in relation to going concern, as set out in
note 17.
Statement of Directors' Responsibilities in Respect of the
Half-Year Report
We confirm that to the best of our
knowledge:
·
the condensed set of financial statements has been
prepared in accordance with UK-adopted International Accounting
Standard 34 "Interim Financial Reporting" and give a true and
fair view of the assets, liabilities, financial position and profit
or loss of the Company;
·
the Chairman's Statement and the Statement of
Principal Risks and Uncertainties (together constituting the
Interim Management Report) include a fair review of the information
required by the Disclosure Guidance and Transparency Rule ('DTR')
4.2.7R, being an indication of important events that have occurred
during the first six months of the financial year and
their impact on the condensed set of financial
statements;
·
the Statement of Principal Risks and Uncertainties
is a fair review of the principal risks and uncertainties for the
remainder of the financial year; and
·
the Half-Year Report includes a fair review of the
information required by DTR 4.2.8R, being related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the Company during that
period, and any changes in the related party transactions described
in the last Annual Report that could do so.
On behalf of the Board
Andrew Watkins
Chairman
28 November 2024
Alternative Performance Measures ('APMs')
The Company uses the following
APMs:
Discount/premium - the share
price of an investment company is derived from buyers and sellers
trading their shares on the stock market. This price is not
identical to the net asset value (NAV) per share of the underlying
assets less liabilities of the Company. If the share price is lower
than the NAV per share, the shares are trading at a discount. This
usually indicates that there are more sellers of shares than
buyers. Shares trading at a price above NAV per share are deemed to
be at a premium usually indicating there are more buyers of shares
than sellers.
|
|
|
30 September
2024
|
31 March
2024
|
|
|
|
Ordinary
Shares
|
B
Shares
|
Ordinary
Shares
|
B Shares
|
|
Net asset value per share
|
(a)
|
97.90p
|
97.90p
|
94.51p
|
94.51p
|
|
Share price
|
(b)
|
89.25p
|
86.00p
|
84.50p
|
83.50p
|
|
Discount (c=(b-a)/(a))
|
(c)
|
-8.8%
|
-12.2%
|
-10.6%
|
-11.6%
|
|
|
|
|
|
|
| |
Gearing - represents the excess
amount above shareholders' funds of total investments, expressed as
a percentage of the shareholders' funds. If the amount
calculated is negative, this is a 'net cash' position and no
gearing.
|
|
|
30 September
2024
£'000
|
31 March
2024
£'000
|
|
Investments held at fair value
through profit or loss
|
(a)
|
125,626
|
121,267
|
|
Net assets
|
(b)
|
111,392
|
107,766
|
|
(Net cash)/gearing
(c=(a/b)-1)%
|
(c)
|
12.8%
|
12.5%
|
Total Return - the theoretical
return to shareholders calculated on a per share basis by adding
dividends/capital repayments paid in the period to the increase or
decrease in the share price or NAV in the period. The
dividends/capital repayments are assumed to have been re-invested
in the form of shares or net assets, respectively, on the date on
which the shares were quoted ex-dividend.
The effect of reinvesting these
dividends/capital repayments on the respective ex-dividend dates
and the NAV total returns and Share price total returns are shown
below.
|
|
30 September
2024
|
31 March
2024
|
|
|
|
Ordinary shares/B
shares
|
Ordinary shares/B
shares
|
|
NAV per share at start of
period/year
|
94.51p
|
89.97p
|
|
NAV per share at end of
period/year
|
97.90p
|
94.51p
|
|
Change in the period/year
|
+3.6%
|
+5.0%
|
|
Impact of
dividend/capital repayment reinvestmentâ€
|
+3.2%
|
+6.8%
|
|
NAV total return
|
+6.8%
|
+11.8%
|
|
|
|
|
| |
†During the six months to 30 September 2024 dividends/capital
repayments totalling 3.01p (Ordinary shares/B shares) went
ex-dividend. During the year to 31 March 2024 the equivalent
figures were 5.51p (Ordinary shares/B shares).
|
|
30 September
2024
|
31 March
2024
|
|
|
|
Ordinary
Shares
|
B
Shares
|
Ordinary
Shares
|
B Shares
|
|
Share price per share at start of
period/year
|
84.50p
|
83.50p
|
82.00p
|
84.50p
|
|
Share price per share at end of
period/year
|
89.25p
|
86.00p
|
84.50p
|
83.50p
|
|
Change in the period/year
|
+5.6%
|
+3.0%
|
+3.0%
|
-1.2%
|
|
Impact of dividend/capital repayment
reinvestmentâ€
|
+3.8%
|
+3.7%
|
+7.2%
|
+6.7%
|
|
Share price total return for the
period/year
|
+9.4%
|
+6.7%
|
+10.2%
|
+5.5%
|
|
|
|
|
|
|
| |
†During the six months to 30 September 2024 dividends/capital
repayments totalling 3.01p (Ordinary shares/B shares) went
ex-dividend. During the year to 31 March 2024 the equivalent
figures were 5.51p (Ordinary shares/B shares).
Yield - The total annual
dividend/capital repayment expressed as a percentage of the period
end share price.
|
|
|
30 September
2024*
|
31 March
2024
|
|
|
|
|
Ordinary
Shares
|
B
Shares
|
Ordinary
Shares
|
B Shares
|
|
Annual dividend/capital
repayment
|
(a)
|
5.62p
|
5.62p
|
5.62p
|
5.62p
|
|
Share price
|
(b)
|
89.25p
|
86.00p
|
84.50p
|
83.50p
|
|
Yield (c=a/b)
|
(c)
|
6.3%
|
6.5%
|
6.7%
|
6.7%
|
|
|
|
|
|
|
|
| |
*Based on expected minimum annual
dividend/capital repayment of 5.62 pence per share in respect of
the year ending 31 March 2025.
For further information, please
contact:
David Moss, Columbia Threadneedle
Investment Business Limited 0131 573 8300
Ian Ridge, Columbia Threadneedle
Investment Business
Limited
0131 573 8300
