BlackRock Income and Growth Investment Trust Plc - Portfolio Update
All information is at
Performance at month end with net income reinvested
Since
One Three One Three Five
1 April
Month Months Year Years Years
2012
Sterling
Share price 2.4% 8.2% 12.3% 14.6% 21.3% 136.8%
Net asset value 4.7% 6.3% 13.6% 27.1% 32.8% 144.5%
FTSE All-Share Total Return 3.1% 4.4% 13.5% 27.1% 32.4% 138.2%
Source: BlackRock
BlackRock took over the investment management of the Company with effect from
At month end
Sterling:
Net asset value - capital only: 226.04p Net asset value - cum income*: 228.71p Share price: 199.00p Total assets (including income): £49.5m Discount to cum-income NAV: 13.0% Gearing: 6.5% Net yield**: 3.8% Ordinary shares in issue***: 19,897,822 Gearing range (as a % of net assets): 0-20% Ongoing charges****: 1.28% * Includes net revenue of2.67 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 3.8% and includes the 2023 final dividend of 4.80p per share declared on21 December 2023 with pay date15 March 2024 , and the Interim Dividend of 2.70p per share declared on20 June 2024 with pay date03 September 2024 . *** excludes 10,081,532 shares held in treasury. **** The Company's ongoing charges are calculated as a percentage of average daily net assets and using management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for the year ended31 October 2023 . In addition, the Company's Manager has also agreed to cap ongoing charges by rebating a portion of the management fee to the extent that the Company's ongoing charges exceed 1.15% of average net assets.
Sector Analysis Total assets (%) Support Services 11.0 Banks 8.7 Pharmaceuticals & Biotechnology 8.2 Financial Services 7.6 Media 7.0 Real Estate Investment Trusts 7.0 Oil & Gas Producers 6.7Household Goods & Home Construction 6.1 General Retailers 6.0 Mining 4.8 Travel & Leisure 3.5 Personal Goods 3.4 Industrial Engineering 3.4Nonlife Insurance 3.0 Gas, Water & Multiutilities 3.0 Life Insurance 2.5 Electronic & Electrical Equipment 1.7 Food Producers 1.7 Tobacco 1.5 General Industrials 1.1 Net Current Assets 2.1 ----- Total 100.0 ===== Country Analysis PercentageUnited Kingdom 94.4United States 1.9Switzerland 1.6 Net Current Assets 2.1 ----- 100.0 ===== Top 10 holdings Fund % AstraZeneca 7.2 RELX 5.5 Shell 4.8 3i Group 4.4 HSBC Holdings 3.8 Rio Tinto 3.7 Unilever 3.4 National Grid 3.0 Segro 2.8 London Stock Exchange Group 2.7
Commenting on the markets, representing the Investment Manager noted:
Performance Overview
The Company returned +4.7% during the month net of fees, outperforming the FTSE All-Share which returned +3.1%.
Market Summary
In July, the
The service sector experienced a slight increase, while the production and construction sectors saw minor contractions. Retail activity across the
GDP estimates remained flat 3 , and the labour market continued to soften, with job adverts down 20% compared to the previous year 4 .
Over the month,
Stock comments
During the month the portfolio performed strongly with several contributors. Amongst these was SGS, the Swiss testing business reported strong results as new management continues to establish a strong platform for growth. This is a recent purchase this year and we expect to see both an acceleration of organic and inorganic growth with margin progression. Another strong contributor was WH Smith which has recovered from a weak start to the year with an improved delivery in its North American business. This was reflected in a strong price rise during the month.
A recent purchase, Rosebank, contributed to performance on its initial public offering (IPO). This is a small cash shell launched by a strong management team we know well. We would anticipate as the year progresses that targets will be established for the management team to execute on their buy, build and sell strategy.
In terms of detractors, Rio Tinto was weak amongst a broad retrenchment from mining companies. An underweight in Unilever detracted from performance following a strong set of interim results. The new management team are successfully implementing change by improving resource allocation with further scope for mix and productivity gains to be reflected in profits. This comes from a low base which was reflected in the valuation. Hays fell during the month as the continued lack on recruitment momentum weighed on the shares.
Changes
During the month, we started a new position in Rosebank. This is the old Melrose management team gearing up for a new round of buy, improve, sell business model in the industrial space. We lean on the high regard and success of this team in this niche and following meetings we have had on the strategy.
We also sold the remainder of the Company's position in Games Workshop. The shares have done well, especially following a recent robust trading update, however, the company now faces tough comparatives and the premium valuation is demanding in the context of other consumer exposed names where momentum should be improving from here.
Outlook
Equity markets entered 2024 in a buoyant mood following a strong and broad rally in the latter part of 2023. The outlook, and optimism, is a far cry from 12 months ago, when supply chains were hugely disrupted, and inflation was double digit and well ahead of central banks' targets prompting rapid and substantial interest rates hikes despite an uncertain demand environment.
Markets have shifted to `goldilocks' territory whereby slowing inflation has signalled the peak for interest rates while broad macroeconomic indicators that have been weak are not expected to deteriorate further. This is also helpful for the cost and availability of credit which has recently improved having been deteriorating through most of 2023. Despite expectations for rate cuts moderating significantly, stock markets have continued to make progress in the developed world.
With the
The
We continue to focus the portfolio on cash generative businesses that we believe offer durable, competitive advantages as we believe these companies are best placed to drive returns over the long-term. Whilst we anticipate economic and market volatility will persist throughout the year, we are excited by the opportunities this will likely create; by seeking to identify the companies that strengthen their long-term prospects as well as attractive turnarounds situations.
Sources:
[1] ONS
[2] ONS
[3] ONS
https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/may2024
[4] ONS
Release
