BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC
BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC
All information is at 31 December 2016 and unaudited.
Performance at month end with net income reinvested
One Three One Three Since Five
Month Months Year Years 1 April Years
2012
Sterling
Share 3.1% 0.7% 4.8% 26.1% 67.9% 75.5%
price
Net asset 5.5% 2.6% 7.7% 27.9% 59.8% 72.5%
value
FTSE All-Share Total 5.0% 3.9% 16.8% 19.3% 52.5% 61.8%
Return
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: 192.82p
Net asset value - cum income*: 197.20p
Share price: 189.25p
Total assets (including income): £52.0m
Discount to cum-income NAV: 4.0%
Net gearing: 2.2%
Net yield**: 3.3%
Ordinary shares in issue***: 25,354,268
Gearing range (as a % of net assets) 0-20%
Ongoing charges****: 1.0%
* includes net revenue of 4.38 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 3.3% and includes the 2016
final dividend of 3.90p per share declared on 21 December 2016, payable to
shareholders on 10 March 2017 and the 2016 interim dividend of 2.40p per
share announced on 29 June 2016 and paid to shareholders on 2 September 2016.
*** excludes 7,579,664 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
2016.
Sector Analysis Total assets (%)
Media 9.5
Travel & Leisure 9.1
Support Services 8.5
Pharmaceuticals & Biotechnology 8.1
Banks 7.9
Tobacco 7.2
Oil & Gas Producers 6.6
Financial Services 5.8
Food Producers 4.7
General Industrials 4.3
Non-Life Insurance 4.0
General Retailers 4.0
Fixed Line Telecommunications 3.8
Mobile Telecommunications 3.2
Food & Drug Retailers 2.6
Construction & Materials 2.4
Aerospace & Defence 2.4
Real Estate Investment & Services 1.9
Chemicals 1.5
Real Estate Investment Trusts 0.7
Net Current Assets 1.8
Total 100.0
Ten Largest Equity Investments
Company Total assets (%)
British American Tobacco 6.1
Unilever 4.7
Lloyds Banking Group 4.6
AstraZeneca 4.2
Royal Dutch Shell 'B' 3.8
BT Group 3.8
RELX 3.7
Sky 3.7
HSBC Holdings 3.2
Vodafone 3.2
Commenting on the markets, Adam Avigdori and Mark Wharrier representing the
Investment Manager noted:
During the quarter the Company returned +2.6% whilst the FTSE All Share Index
returned +3.9%.
UK equities made further progress in the fourth quarter driven by the
anticipation of a change in policy direction in the US leading to higher
economic growth, inflation and interest rate expectations. The US Federal
Reserve suggested it would permit above target inflation levels and the US
presidential election result added to expectations for government spending to
increase. OPEC surprised many commentators, leading to a rally in oil
prices, by organising production cuts amongst not only the cartel but also
other notable producers, including Russia.
Relative underperformance during the quarter was predominantly driven by
market moves rather than stock specifics. The outperformance of the resources
and banking sectors, areas that we remain underweight, detracted whilst
consumer staples and cash compounders underperformed as bond yields rose, in
theory reducing the value of their long-duration cash flows.
On the positive side, stock fundamentals were once again an important driver
of performance. Sky was the largest contributor during the quarter after
receiving a bid from 21st Century Fox at a significant premium to the share
price. Despite offering a lower dividend yield than the market, we were
attracted to Sky's cash generative business and vast customer base, giving
the benefits of scale to invest in new content and services, attributes that
were clearly undervalued by the market. RPC Group reported H1 results showing
strong revenue growth helped by recent acquisitions as they lead the way in
the consolidation of the European packaging industry. Building and plumbing
distributor Wolseley performed well following the US presidential election
result in anticipation of an increase in government spending on
infrastructure.
During the quarter we added new positions in Aggrekko and Babcock whilst
adding to our recent purchase in Elementis. Aggreko shares have fallen c.70%
since their peak and we feel that with the removal of the final profitable
contracts from expectations, the risk/reward trade-off is now favourable and
the company offers attractive revenue growth potential from contract wins
within emerging markets. Babcock, an outsourcing group with a bias towards
defence markets is company with strong revenue visibility and high barriers
to entry, which having de-rated after a difficult two years, we feel offers
potential upside to the current valuation.
Macroeconomic volatility has been an important driver of equities throughout
2016 and 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. If equity markets fail to
recognise that, corporates buyers have the potential to; the bid for ARM
Holdings during the summer was a good reminder of that dynamic as was the bid
for Sky from 21st Century Fox more recently. 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 driven self-help.
While sometimes unnerving, we will continue to use market volatility to
provide buying opportunities in those types of companies.
17 January 2017
Blackrock Income & Growth Invt Trust : AND GROWTH INVESTMENT TRUST PLC - Portfolio Update
January 17, 2017 at 05:09 pm
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© PRNewswire - 2017
