Invesco Bond Income Plus Ltd - Half-year Report
HALF-YEARLY FINANCIAL REPORT FOR THE
SIX MONTHS ENDED
Unless otherwise stated, all page numbers below refer to the Half-Yearly Financial Report on the Company's website.
Investment Objective
The Company's investment objective is to seek to obtain capital growth and high income from investment, predominantly in
high-yielding fixed-interest securities.
Investment Policy
The Company seeks to provide a high level of dividend income relative to prevailing interest rates mainly through investment in bonds and other fixed-interest securities. The Company also invests in equities and other equity-like instruments consistent with the overall objective.
Financial Information and Performance Statistics
Total Return Statistics (1)(2)
with dividends reinvested
For Six For Year
Months to Ended
30 June 31 December
2024 2023
Net asset value - total return with dividends reinvested +3.6 +11.7
Share price - total return with dividends reinvested +3.9 +10.5
Capital Statistics
At At
30 June 31 December
2024 2023
Net assets (£'000) 329,745 304,629
Net asset value per ordinary share(2) 168.86p 168.58p
Share price(1) 171.75p 171.00p
Premium(2) 1.7% 1.4%
Gearing(2)
Gross gearing 13.0% 15.8%
Net gearing 11.1% 12.4%
Performance Statistics
For Six For Six
Months to Months to
30 June 30 June
2024 2023
Revenue return per share 5.66p 6.16p
Capital return per share 0.28p (2.77)p
Total return 5.94p 3.39p
Dividend per ordinary share for the period 5.75p 5.75p
(1) Source: LSEG Data & Analytics.
(2) Alternative Performance Measures (APM). See Glossary of Terms and Alternative Performance Measures on pages 15 and 16 of the financial report for details of the explanation and reconciliations of APMs.
Chairman's Statement
Highlights
· Positive Net Asset Value total return of 3.6%.
· Share price continued to trade at an average premium of 1.5% during the period.
· Successful Placing and Retail Offer resulting in the issuance of 7.9 million shares raising gross proceeds of £13.35 million and a further 6.7 million shares were issued during the period.
· Interim dividends totalling 5.75p per share declared during the period.
A succession of economic and geopolitical shocks including the global pandemic, war in
Economic growth in the
The Company's Net Asset Value (NAV) total return was 3.6% in the first half of the year, modestly below the 3.9% total return of our reference index, the ICE BofA European Currency High Yield Index. The share price total return was 3.9%, reflecting the small increase in our premium to NAV during the six months. The Portfolio Manager's Report which follows my comments explains the main drivers of portfolio returns.
It was pleasing to see shares of the Company trading at a consistent premium during the six months, particularly as the vast majority of investment trusts remained on stubbornly wide discounts. We were able to issue a total of 14,576,727 shares during the first six months of the year to meet demand, including a successful share placing in February of 7,926,727 shares. We have issued a further 1,450,000 shares since 30 June. An increase in the number of our shares in issue benefits shareholders by improving liquidity and ensuring that the fixed costs of running the Company are spread over a larger base.
During the period under review, we continued to build on the Company's long record of providing consistent and attractive income to shareholders. We declared first and second interim dividends of
It is estimated that over half the world's population will vote in elections during the year and so it is not surprising that 2024 had been dubbed `the election year'. In the
I will conclude my comments by returning to the inflation theme which, politics aside, seems set to remain a major determinant of market direction for the foreseeable future. On balance the inflation outlook is encouraging and there are good reasons for expecting the next six months to see further interest rate reductions here in the
Chairman
Portfolio Managers' Report
Portfolio Manager
Rhys Davies, CFA, Fund Manager
Rhys is a fund manager for the Invesco Fixed Interest Europe team, based in our Henley office.
He began his investment career with Invesco in 2002, moving to the Henley Fixed Interest team in 2003. He became a fund manager in 2014. He manages high yield credit portfolios.
He holds a BSc (Honours) in Management Science from the
Deputy Portfolio Manager
Edward is a fund manager for the Invesco Fixed Interest Europe team, based in our Henley office.
He began his career with
He holds a Master's degree in Physics from the
Q How have the bond markets performed in the first half of 2024?
A After a strong rally to end 2023, bonds, broadly defined, delivered near-zero returns in the first half of this year. Credit markets performed relatively well (delivering income and a modest degree of capital return), while government bonds struggled (with income more than offset by price falls).
Looking first at the parts of the market most represented in our portfolio, high yield corporate bonds (ICE BofA European Currency High Yield Index, GBP-hedged) returned 3.9% and subordinated bank capital instruments (ICE
BofA Contingent Capital Index) returned 5.3%. Investment grade corporate bonds (ICE
BofA Sterling Corporate Index) returned -0.1% and gilts (ICE BofA
Market yields for high yield and subordinated banks did not change much but spreads over government bonds tightened (from 411bps to 363bps and from 378bps to 327bps respectively).
The better performance for credit-risk assets reflected changing investor perceptions of the key macroeconomic drivers - growth and inflation. Data on economic activity has generally been a bit stronger than predicted, increasing confidence in corporate earnings and the consequent ability of companies to repay. Inflation data was less encouraging, particularly in the US in the first quarter. Along with a more hawkish tone from the major central banks, this meant that expectations for interest rate cuts have been significantly pared back, notwithstanding some better data in Q2 and actual rate cuts from the
As credit markets have rallied, supply has been stronger. High yield corporate issuance (for European currencies) was a gross €65 billion in the first half of 2024, already above the €58 billion and €32 billion totals for 2023 and 2022. On the whole, there have been plenty of buyers to absorb these new bonds. In many cases, deal terms have tightened to take advantage of the strength of demand.
Q How did the Company perform?
A
Over the six months to
Q What drove portfolio returns?
A Most of the portfolio is invested in credit assets. Given the relatively strong performance of this part of the market, it is no surprise that credit risk was the dominant factor in returns. Within this broad category, the contribution from subordinated financials was the main positive, followed by corporate high yield bonds. Relative to the high yield market, the portfolio's investments in higher quality assets like investment grade corporate bonds and senior bank paper, dragged on performance. Interest rate risk was a negative factor, but a smaller one.
The contribution from subordinated financials was boosted by some individual issuer-related events. Two of the portfolio's top contributors were bonds issued by
The most prominent name in the negative contributors was
Q How have you managed the portfolio?
A Credit spreads, the additional reward paid on top of the government yields in return for holding credit risk bonds, have been getting tighter for several quarters now and are in the lower end of their long-term range. In this environment we are tending to take less credit risk overall.
The credit quality of the portfolio has risen. The portion invested in investment grade bonds rose from 25.4% to 27.4%. Within high yield bonds, exposure to bonds with the higher rating of BB has risen while lower-rated B has fallen. The weight in the lowest credit ratings (CCC and below) is now just 1.9%, down from 4.9%.
In line with our view that the market's reward for credit risk has decreased, we have also trimmed the level of gearing, from 15.8% to 13.0%.
However, we are always keen to add individual bonds to the portfolio that offer an attractive income or yield relative to the risk. Over recent months, we have bought a number of such bonds, including Eutelsat
Because the investment company is a closed-ended structure, we sometimes invest in less liquid assets, which we would find difficult to hold in our open-ended products. Over this period, we added positions in two small bond issues from
Among the bonds we have sold are some that we believe either carry an uncomfortable level of credit risk for the current environment or are no longer offering sufficient yield. These include Boparan
Away from credit risk, we are choosing to hold more interest rate risk than the wider high yield market. The modified duration of the portfolio rose in the period from 3.7 to 4.1.
Q What are your expectations from here?
A Total levels of yield in the corporate bond markets remain quite attractive and we think there are still good opportunities to buy bonds which will provide good levels of income. However, we are conscious that yields have come down and that much of the yield is coming from interest rates, not credit spread.
Partly because of the importance of interest rates in yields, the markets have been very sensitive to inflation and growth data. We expect this to continue.
Inflation data has been bumpy, but we think it is on a downward path to levels consistent with the targets of the central banks. There have already been some rate cuts and we think there will be room for more over the rest of the year. We are comfortable holding more interest rate risk. Current yields are satisfactory and there is potential for capital return as interest rate expectations evolve.
Although interest rates should fall from here, we do not expect that they will reach the low levels seen before 2022. At the same time, there is potential for economic activity to weaken. This poses a challenge to corporates, who could face a difficult re-financing environment along with weaker earnings. The balance sheets of more leveraged or weaker businesses may come under strain in these conditions.
We have reduced our exposure to credit risk in this environment while also maintaining liquidity so that we can take advantage of opportunities that may arise in such weaker market conditions.
Rhys Davies
Portfolio Managers
Principal and Emerging Risks and Uncertainties
The Board has carried out a robust assessment of the risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. As part of this process, the Board conducted a full review of the Company's risk control summary and considered new and emerging risks. These are not necessarily principal risks for the Company at present but may have the potential to be in the future. In carrying out this assessment, the Board considered the emerging risks facing the Company including geopolitical risks such as the invasion of
______________________________________________________________________________________________ |Category and | | |Principal Risk |Mitigating Procedures and Controls | |Description | | |_______________|______________________________________________________________________________| |Strategic Risks | |______________________________________________________________________________________________| |Market and | | |Political Risk | | | | | |The Company | | |invests | | |primarily in | | |fixed interest | | |securities, the| | |majority of | | |which are | | |traded on | | |global security| | |markets. The | | |principal risk | | |for investors | | |in the Company | | |is a | | |significant | | |fall and/or a | | |prolonged | | |period of | | |decline in | | |these markets. | | |This could be | | |triggered by | | |unfavourable |An explanation of market risk and how this is addressed is given in note 19.1 | |developments |to the financial statements within the 2023 annual financial report. The | |globally and/or|Portfolio Managers' Report summarises particular macro economic factors | |in one or more |affecting performance during the period and the portfolio managers' views on | |regions, such |those most relevant to the outlook for the portfolio. | |as the current | | |conflict in | | |Ukraine and the| | |Middle East, | | |and other | | |geopolitical | | |tensions and | | |uncertainties | | |and their | | |impact on the | | |global economy.| | |The Board | | |cannot control | | |the effect of | | |such external | | |influences on | | |the portfolio. | | |Market risk | | |also arises | | |from movements | | |in foreign | | |currency | | |exchange rates | | |and interest | | |rates. | | |_______________|______________________________________________________________________________| |Regulatory or | | |Fiscal Changes | | | | | |The Company is | | |incorporated in| | |Jersey which is|The Board receives regular reports from the Manager and Company Secretary | |a low tax |which highlight any proposed changes to the regulatory/fiscal regimes which | |jurisdiction |might impact the Company. Jersey has recently received a positive report from | |subject to |MoneyVal, the Council of Europe's permanent monitoring body. MoneyVal | |global |concludes that Jersey's effectiveness in preventing financial crime is among | |scrutiny. Any |the highest level found in jurisdictions evaluated around the world. More | |adverse global |information can be found here: | |regulatory or | | |fiscal measures|https://www.gov.je/News/2024/Pages/Jersey%E2%80%99sStrengthInCombattingFinanci| |taken against |lCrimeIsRecognised.aspx | |such low tax | | |jurisdictions, | | |could | | |negatively | | |impact the | | |Company. | | |_______________|______________________________________________________________________________| |Wide Discount | | |leading to | | |Shareholder | | |Dissatisfaction| | | | | |The Company's | | |shares are | | |subject to | | |market | | |movements and | | |can trade at a | | |premium or | | |discount to | | |NAV. Should the|The Board receives regular reports from both the Manager and the Company's | |Company's |broker on the Company's share price performance and level of discount (or | |shares trade at|premium), together with regular reports on marketing and meetings with | |a significant |shareholders and prospective investors. The Board recognises the importance of| |discount |the Company's scale in terms of the aggregate value of its shares in the | |compared to its|market (`market cap') in creating liquidity and the benefit of a wide | |peers, then |shareholder base, and has the ability to both issue and buy back shares to | |shareholder |assist with market volatility. The foundation to this lies in solid investment| |dissatisfaction|performance and an attractive level of dividend. | |may result if | | |shareholders | | |cannot realise | | |the value of | | |their | | |investment | | |close to NAV, | | |with the | | |ultimate risk | | |that | | |arbitragers | | |join the share | | |register. | | |_______________|______________________________________________________________________________| |Third Party Service Providers Risks | |______________________________________________________________________________________________| |Lack of Control| | |over, or | | |Unsatisfactory | | |Performance of | | |Third Party | | |Service | | |Providers | | |(`TPPs') | | | | | |Failure by any | | |service | | |provider to | | |carry out its | | |obligations to | | |the Company in | | |accordance with| | |the terms of | | |its appointment| | |could have a | | |materially | | |detrimental |Details of how the Board monitors the services provided by the Manager and the| |impact on the |other TPPs, and the key elements designed to provide effective internal | |operations of |control, are included in the internal control and risk management section on | |the Company and|page 14 of the 2023 annual financial report. | |affect its | | |ability to | | |pursue | | |successfully | | |its investment | | |policy and | | |expose it to | | |reputational | | |risk. | | |Disruption to | | |the accounting,| | |payment systems| | |or custody | | |records could | | |prevent the | | |accurate | | |reporting and | | |monitoring of | | |the Company's | | |financial | | |position. | | |_______________|______________________________________________________________________________| |Cyber Risk | | | | | |The Company's | | |operational | | |structure means| | |that cyber risk| | |(information |The Audit & Risk Committee on behalf of the Board periodically reviews TPPs' | |technology and |service organisation control reports and meets with representatives of the | |physical |Manager's Investment Management, Compliance, Internal Audit and Investment | |security) |Trust teams as well as the Company Secretary's senior staff and Compliance | |predominantly |team. The Board receives periodic updates on the Manager's and the Company | |arises at its |Secretary's information security arrangements. The Board monitors TPPs' | |TPPs. This |business continuity plans and testing - including their regular `live' testing| |cyber risk |of workplace recovery arrangements. | |includes fraud,| | |sabotage or | | |crime | | |perpetrated | | |against the | | |Company or any | | |of its TPPs. | | |_______________|______________________________________________________________________________| |Business | | |Continuity Risk|The Manager's business continuity plans are reviewed on a regular basis and | | |the Directors are satisfied that the Manager has in place robust plans and | |Impact of a |infrastructure to minimise the impact on its operations so that the Company | |major event, |can continue to trade, meet regulatory obligations, report and meet | |such as |shareholder requirements. | |Covid-19, on | | |the operations |The Board receives periodic reports from the Manager and TPPs on business | |of the service |continuity processes and has been provided with assurance from them all | |providers, |insofar as possible that measures are in place for them to continue to provide| |including any |contracted services to the Company. | |prolonged | | |disruption. | | |_______________|______________________________________________________________________________|
In the view of the Board, these principal and emerging risks and uncertainties are as applicable to the remaining six months of the financial year as they were to the period under review.
Thirty Largest Investment Issuers
AT
Market
Country of Value % of
Issuer Industry Incorporation £'000 Portfolio
Lloyds Banking Group Financials UK 11,582 3.2
Barclays Financials UK 11,002 3.0
UK Treasury Bill Government Bonds UK 10,447 2.9
Co-Operative Bank Financials UK 8,244 2.3
Virgin Money Financials UK 7,924 2.2
Aviva Financials UK 6,850 1.9
Thames Water Finance Utilities UK 6,815 1.9
Albion Finance Consumer Services Luxembourg 5,868 1.6
BNP Paribas Financials UK 5,754 1.6
Saffron Building Society Financials UK 5,555 1.5
Virgin Media O2 Telecommunications UK 5,367 1.5
Vodafone Group Basic Materials UK 5,350 1.5
Teva Pharmaceutical Finance Health Care Netherlands 5,155 1.4
Eléctricité De France Utilities France 5,134 1.4
Intesa Financials Italy 5,041 1.4
OSB Financials UK 4,715 1.3
Jupiter Fund Management Financials UK 4,703 1.3
Deutsche Bank Financials Germany 4,537 1.3
Clarios Basic Materials USA 4,454 1.2
Newcastle Building Society Financials UK 4,437 1.2
CPUK Finance Financials Jersey 4,432 1.2
Ziggo Bond Finance Telecommunications Netherlands 4,343 1.2
Sainsbury's Bank Financials UK 4,134 1.2
Ford Motor Credit Consumer Goods USA 4,118 1.2
Telecom Italia Telecommunications Italy 4,087 1.1
Legal & General Financials UK 4,037 1.1
Codere New Topco Consumer Services Luxembourg 3,721 1.0
Haleon Health Care UK 3,675 1.0
ING Financials Netherlands 3,522 1.0
Jerrold Finco Financials UK 3,460 1.0
Top 30 investments 168,463 46.6
Other investments 193,291 53.4
Total investments 361,754 100.0
Governance
Related Parties
Note 23 to the financial statements within the Company's 2023 annual financial report gives details of related party transactions. The basis of these has not changed for the six months being reported. The 2023 annual financial report is available on the Company's section of the Manager's website at: www.invesco.co.uk/bips.
Going Concern
The financial statements have been prepared on a going concern basis. When considering this, the Directors took into account the annual shareholders' continuation vote and the following: the Company's investment objective and risk management policies, the nature of the portfolio and expenditure and cash flow projections. As a result, they determined that the Company has adequate resources, an appropriate financial structure, readily realisable fixed assets to repay current liabilities and suitable management arrangements in place to continue in operational existence for the foreseeable future.
Bond Rating Analysis
The table below reflects Standard and Poor's (`S&P') ratings. Where an S&P rating is not available, an equivalent average rating has been used. Investment grade is BBB- and above.
For the definitions of these ratings see the Glossary of Terms and Alternative Performance Measures on page 79 of the Company's 2023 annual financial report.
30 June 2024 31 December 2023
Cumulative Cumulative
Rating Portfolio % Total % Portfolio % Total %
Investment Grade:
AA+ 0.2 0.2 0.2 0.2
AA 2.8 3.0 1.8 2.0
A+ 0.6 3.6 0.7 2.7
A- 0.1 3.7 0.8 3.5
BBB+ 1.1 4.8 1.8 5.3
BBB 16.4 21.2 14.7 20.0
BBB- 6.2 27.4 5.4 25.4
Non-investment Grade:
BB+ 7.3 34.7 8.1 33.5
BB 14.0 48.7 13.1 46.6
BB- 16.3 65.0 17.0 63.6
B+ 9.4 74.4 8.5 72.1
B 9.9 84.3 12.1 84.2
B- 6.2 90.5 6.7 90.9
CCC+ 0.8 91.3 2.1 93.0
CCC 0.4 91.7 1.7 94.7
D 0.7 92.4 1.1 95.8
NR* (including equity) 7.6 100.0 4.2 100.0
100.0 100.0
Summary of Analysis
Investment Grade 27.4 25.4
Non-investment Grade 65.0 70.4
NR (including equity) 7.6 4.2
100.0 100.0
* NR: not rated.
Directors' Responsibility Statement
in respect of the preparation of the Half-Yearly Financial Report
The Directors are responsible for preparing the financial report, using accounting policies consistent with applicable law and International Financial Reporting Standards.
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements contained within the Half-Yearly Financial Report have been prepared in accordance with International Accounting Standards 34 `Interim Financial Reporting';
-
the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the
- the interim management report includes a fair review of the information required on related party transactions.
The Half-Yearly Financial Report has not been audited or reviewed by the Company's auditor.
Signed on behalf of the Board of Directors.
Audit & Risk Committee Chair
Condensed Statement of Comprehensive Income
FOR THE SIX MONTHS ENDED
30 June 2024 30 June 2023
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Profit/(loss) on
investments held at fair - 2 2 - (9,688) (9,688)
value
Profit on derivative
instruments - currency 891 891 - 4,130 4,130
hedges and CDS
Exchange differences - 666 666 - 1,575 1,575
Income - note 2 12,140 - 12,140 12,113 - 12,113
Investment management (532) (532) (1,064) (461) (461) (922)
fees - note 3
Other expenses (411) (68) (479) (386) (2) (388)
Profit/(loss) before
finance costs and 11,197 959 12,156 11,266 (4,446) 6,820
taxation
Finance costs - note 3 (430) (430) (860) (420) (420) (840)
Profit/(loss) before 10,767 529 11,296 10,846 (4,866) 5,980
taxation
Taxation - note 4 (14) - (14) - - -
Profit/(loss) after 10,753 529 11,282 10,846 (4,866) 5,980
taxation
Return per ordinary 5.66p 0.28p 5.94p 6.16p (2.77)p 3.39p
share
Weighted average number
of ordinary shares in 189,998,186 176,159,363
issue during the period
The total columns of this statement represent the Company's statement of comprehensive income, prepared in accordance with International Financial Reporting Standards as adopted by the
Condensed Statement of Changes in Equity
Stated Capital Revenue
Capital Reserve Reserve Total
£'000 £'000 £'000 £'000
For the six months ended 30 June 2024
At 31 December 2023 316,793 (22,018) 9,854 304,629
Profit after taxation - 529 10,753 11,282
Dividends paid - note 5 (336) - (10,430) (10,766)
Net proceeds from issue of new shares - note 24,600 - - 24,600
6
At 30 June 2024 341,057 (21,489) 10,177 329,745
For the six months ended 30 June 2023
At 31 December 2022 305,062 (32,141) 8,168 281,089
(Loss)/profit after taxation - (4,866) 10,846 5,980
Dividends paid - note 5 (279) - (9,817) (10,096)
Net proceeds from issue of new shares 7,172 - - 7,172
At 30 June 2023 311,955 (37,007) 9,197 284,145
Condensed Balance Sheet
At At
30 June 31 December
2024 2023
£'000 £'000
Non-current assets
Investments held at fair value through profit or loss 361,754 335,533
Current assets
Derivative financial instruments - receivable 867 1,589
Amounts due from brokers 1,055 38
Margin held at brokers 794 2,129
Proceeds due from issue of new shares 172 171
Income tax recoverable 2 3
Prepayments and accrued income 6,156 6,211
Cash and cash equivalents 5,403 8,138
14,449 18,279
Current liabilities
Amounts due to brokers (2,539) -
Amounts payable relating to issue of new shares (1) (1)
Accruals (943) (915)
Derivative financial instruments - payable (271) (199)
Securities sold under agreements to repurchase (42,704) (48,068)
(46,458) (49,183)
Net current liabilities (32,009) (30,904)
Net assets 329,745 304,629
Capital and reserves
Stated capital 341,057 316,793
Capital reserve (21,489) (22,018)
Revenue reserve 10,177 9,854
Total shareholders' funds 329,745 304,629
Net asset value per ordinary share 168.86p 168.58p
Number of ordinary shares in issue at the period end - 195,279,323 180,702,596
note 6
Condensed Statement of Cash Flows
Six months to Six months to
30 June 30 June
2024 2023
£'000 £'000
Cash flow from operating activities
Profit before finance costs and taxation 12,156 6,820
Tax on overseas income (14) -
Adjustment for:
Purchases of investments (82,738) (83,043)
Sales of investments 58,041 65,881
(24,697) (17,162)
(Decrease)/increase from securities sold under (5,364) 4,410
agreements to repurchase
(Profit)/loss on investments held at fair value (2) 9,688
Net movement from derivative instruments - currency 794 (328)
hedges
Decrease/(increase) in receivables 1,390 (506)
Increase/(decrease) in payables 63 (3)
Net cash (outflow)/inflow from operating activities (15,674) 2,919
Cash flow from financing activities
Finance cost paid (894) (736)
Net proceeds from issue of new shares 24,723 7,377
Dividends paid - note 5 (10,766) (10,096)
Cost of shares issued (124) -
Net cash inflow/(outflow) from financing activities 12,939 (3,455)
Net decrease in cash and cash equivalents (2,735) (536)
Cash and cash equivalents at the start of the period 8,138 9,082
Cash and cash equivalents at the end of the period 5,403 8,546
Reconciliation of cash and cash equivalents to the
Balance Sheet is as follows:
Cash held at custodian 4,913 4,826
Invesco Liquidity Funds plc - Sterling 490 3,720
Cash and cash equivalents 5,403 8,546
Cash flow from operating activities includes:
Dividends received 151 191
Interest received 12,017 12,535
At At
1 January Cash 30 June
2024 flows 2024
Reconciliation of net debt £'000 £'000 £'000
Cash and cash equivalents 8,138 (2,735) 5,403
Securities sold under agreements to repurchase (48,068) 5,364 (42,704)
Total (39,930) 2,629 (37,301)
Notes to the Condensed Financial Statements
1. Basis of Preparation
The condensed financial statements have been prepared using the same accounting policies as those adopted in the Company's 2023 annual financial report. They have been prepared on an historical cost basis, in accordance with the applicable International Financial Reporting Standards (IFRS), as adopted by the
2. Income
Six months to Six months to
30 June 30 June
2024 2023
£'000 £'000
Income from investments:
UK dividends 94 95
UK investment income - interest 5,685 4,280
Overseas dividends 57 53
Overseas investment income - interest 6,147 7,609
11,983 12,037
Other income:
Deposit interest 114 50
Other income 43 26
157 76
Total income 12,140 12,113
3. Management Fee and Finance costs
Investment management fees and finance costs are allocated 50% to capital and 50% to revenue (2023: 50% to capital and 50% to revenue).
Finance costs relate to interest payable on borrowings from securities sold under agreements to repurchase (repo) or bank overdrafts. In some instances, interest on repo is negative i.e. receivable and has been netted against interest payable, shown within finance costs, as they relate to borrowings utilised by the Company.
4. Taxation
The Company is subject to Jersey income tax at the rate of 0% (2023: 0%). The overseas tax charge consists of irrecoverable withholding tax.
5. Dividends paid on Ordinary Shares
Six months Six months
to to
30 June 2024 30 June 2023
pence £'000 pence £'000
Interim dividends in respect of previous period 2.875 5,212 2.875 5,008
First interim dividend 2.875 5,554 2.875 5,088
Total 5.750 10,766 5.750 10,096
Dividends paid in the period have been charged to revenue except for £336,000 which was charged to stated capital (six months to 30
A second interim dividend of 2.875p (2023: 2.875p) has been declared and will be paid on
6.
Allotted ordinary shares of no par value.
Six months to Year to
30 June 31 December
2024 2023
Stated capital:
Brought forward £316,793,000 £305,062,000
Net proceeds from shares issued £24,600,000 £12,072,000
Dividends paid from stated capital £(336,000) £(341,000)
Carried forward £341,057,000 £316,793,000
Number of ordinary shares:
Brought forward 180,702,596 173,302,596
Issued in the period 14,576,727 7,400,000
Carried forward 195,279,323 180,702,596
Per share:
- average issue price 169.61p 165.21p
7. Classification Under Fair Value Hierarchy
Note 20 of the 2023 annual financial report sets out the basis of classification.
There were no Level 3 holdings at
At 30 June 2024 At 31 December 2023
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000 £'000 £'000
Financial assets designated at
fair value through profit
or loss:
- Fixed interest securities(1) - 285,607 - - 281,481 -
- Convertibles - 58,330 - - 44,200
- Government - 11,213 - - 6,941 -
- Preference 6,477 - - 2,769 - -
- Equities 81 46 - 142 - -
Derivative financial
instruments:
- Forward currency contract - 596 - - 1,390 -
Total for financial assets 6,558 355,792 - 2,911 334,012 -
(1) Fixed interest securities include both fixed and floating rate securities.
8. Status of Half-Yearly Financial Report
The financial information contained in this Half-Yearly Financial Report, which has not been audited by the Company's auditor, does not constitute statutory accounts as defined in Article 104 of Companies (Jersey) Law 1991. The financial information for the half year ended
By order of the Board
Company Secretary
Glossary of Terms and Alternative Performance Measures
Alternative Performance Measure (`APM')
An APM is a measure of performance or financial position that is not defined in applicable accounting standards and cannot be directly derived from the financial statements. The calculations shown in the corresponding tables are for the six months ended
Premium/(discount) (`APM')
Premium is a measure of the amount by which the mid-market price of an investment company share is higher than the underlying net asset value of that share. Discount is a measure of the amount by which the mid-market price of an investment company share is lower than the underlying net asset value (`NAV') of that share. If the shares are trading at a premium the result of the below calculation will be positive and if they are trading at a discount it will be negative. In this Half-Yearly Financial Report the premium/(discount) is expressed as a percentage of the net asset value per share and is calculated according to the formula set out below.
30 June 31 December
2024 2023
Share price a 171.75p 171.00p
Net asset value per share b 168.86p 168.58p
Premium c = (a-b)/b 1.7% 1.4%
Modified Duration
Modified Duration is regarded as a measure of the volatility of a portfolio, as, with all other risk factors being equal, bonds with higher durations have greater price volatility than bonds with lower durations. Modified duration measures the change in the value of a bond (or portfolio) in response to a change in 100 basis-point (1%) change in interest rates. For example, in general this would mean that a 1% rise in interest rates leads to a 1% fall in the value of the bond or portfolio.
Gearing
The gearing percentage reflects the amount of borrowings that a company has invested. This figure indicates the extra amount by which net assets, or shareholders' funds, would move if the value of a company's investments were to rise or fall. A positive percentage indicates the extent to which net assets are geared; a nil gearing percentage, or `nil', shows a company is ungeared. A negative percentage indicates that a company is not fully invested and is holding net cash as described below.
There are several methods of calculating gearing and the following has been used in this report:
Gross Gearing (`APM')
This reflects the amount of gross borrowings in use by a company and takes no account of any cash balances. It is based on gross borrowings as a percentage of net assets.
30 June 31 December
2024 2023
£'000 £'000
Securities sold under agreements to repurchase 42,704 48,068
(repo financing)
Gross borrowings a 42,704 48,068
Net asset value b 329,745 304,629
Gross gearing c = a/b 13.0% 15.8%
Net gearing reflects the amount of net borrowings invested, i.e. borrowings less cash and cash equivalents (incl. investments in money market funds). It is based on net borrowings as a percentage of net assets. Net cash reflects the net exposure to cash and cash equivalents, as a percentage of net assets, after any offset against total borrowings.
30 June 31 December
2024 2023
£'000 £'000
Securities sold under agreement to repurchase (repo 42,704 48,068
financing)
Less: cash and cash equivalents including margin (6,197) (10,267)
Net borrowings a 36,507 37,801
Net asset value b 329,745 304,629
Net gearing c = a/b 11.1% 12.4%
Net Asset Value (`NAV')
Also described as shareholders' funds, the NAV is the value of total assets less liabilities. Liabilities for this purpose include current and long-term liabilities. The NAV per ordinary share is calculated by dividing the net assets by the number of ordinary shares in issue. For accounting purposes assets are valued at fair (usually market) value and liabilities are valued at par (their repayment - often nominal - value).
Return
The return generated in a period from the investments including the increase and decrease in the value of investments over time and the income received.
Total Return
Total return is the theoretical return to shareholders that measures the combined effect of any dividends paid together with the rise or fall in the share price or NAV. In this Half-Yearly Financial Report these return figures have been sourced from LSEG Data & Analytics who calculate returns on an industry comparative basis, taking the Net Asset Values and Share Prices for the opening and closing periods and adding the impact of dividend reinvestments for the relevant periods.
Net Asset Value Total Return (`APM')
Total return on net asset value per share, with debt at market value, assuming dividends paid by the Company were reinvested into the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend.
Share Price Total Return (`APM')
Total return to shareholders, on a mid-market price basis, assuming all dividends received were reinvested, without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend.
Net Asset Share
Six Months Ended 30 June 2024 Value Price
As at 30 June 2024 168.86p 171.75p
As at 31 December 2023 168.58p 171.00p
Change in period a 0.2% 0.4%
Impact of dividend reinvestments(1) b 3.4% 3.5%
Total return for the period c = a+b 3.6% 3.9%
Net Asset Share
Year Ended 31 December 2023 Value Price
As at 31 December 2023 168.58p 171.00p
As at 31 December 2022 162.20p 166.00p
Change in year a 3.9% 3.0%
Impact of dividend reinvestments(1) b 7.8% 7.5%
Total return for the year c = a+b 11.7% 10.5%
(1)
Total dividends paid during the period of 5.75p (
Directors, Investment Manager and Administration
Directors
01491 417 000
www.invesco.co.uk/investmenttrusts
Manager's Website
Information relating to the Company can be found on the Manager's website, at https://www.invesco.com/uk/en/investment-trusts/invesco-bond-income-plus-limited.html
The contents of websites referred to in this document, or accessible from links within those websites, are not incorporated into, nor do they form part of, this interim report.
Company Secretary, Administrator and Registered Office
PO Box 1075
28 Esplanade
Jersey JE4 2QP
Company Secretarial Contact:
01534 700000
General Data Protection Regulation
The Company's privacy notice can be found at:
Corporate Broker
Winterflood Investment Trusts
Riverbank House
EC4R 3GA
Independent Auditor
37 Esplanade
Jersey JE1 4XA
Depositary, Custodian & Banker
Invesco Client Services
Invesco has a Client Services Team available from
0800 085 8677
www.invesco.co.uk/investmenttrusts
Registrar
Jersey JE1 1ES
+44 (0370) 707 4040
Shareholders who hold shares directly and not through a Savings Scheme or ISA and have queries relating to their shareholding should contact the Registrar's call centre on the above number.
Calls are charged at the standard geographic rate and will vary by provider.
Calls from outside the
Shareholders holding shares directly can also access their holding details via Computershare's website:
http://www.investorcentre.co.uk/je
The Registrar provides an on-line share dealing service to existing shareholders who are not seeking advice on buying or selling via Computershare's website http://www.investorcentre.co.uk/je
For queries relating to shareholder dealing contact
+44 (0) 370 703 0084
Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the
Dividend Re-Investment Plan
The Registrar also manages a Dividend Re-Investment Plan for the Company. Shareholders wishing to re-invest their dividends should contact the Registrar.
NATIONAL STORAGE MECHANISM
A copy of the Half-Yearly
Financial Report will be
submitted shortly to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
.
Hard copies of the Half-Yearly Financial Report will be posted to shareholders. Copies may be obtained during normal business hours from the Company's Registered Office,
Company Secretary
Telephone: 01534 700000
LEI: 549300JLX6ELWUZXCX14
