RIGHTS AND ISSUES INVESTMENT TRUST PLC

For the six months ended 30th June 2019

 

A copy of the Company's Half Yearly Financial Report for the six months ended 30th June 2019 will shortly be available to view and download from www.maitlandgroup.com/investments-trusts/rights-and-issues-investment-trust-plc/.  Neither the contents of this website nor the contents of any website accessible from hyperlinks on this website (or any other website) is incorporated into or forms part of this announcement.

 

Printed copies of the Report will be sent to shareholders shortly. Additional copies may be obtained from the Corporate Secretary - Maitland Administration services Limited, Hamilton Centre, Rodney Way, Chelmsford, Essex CM1 3BY.

 

INTERIM DIVIDEND

An interim dividend of 10.75p per share has been approved by the Board and is payable on 27th September 2019 to shareholders on the register as at 30th August 2019 (ex-dividend 29th August 2019).

 

The following text is copied from the Half Yearly Financial Report.

 

HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2019

 

CHAIRMAN'S STATEMENT

Markets have recovered with a 10.4% increase in the FTSE All-Share Index in the six months to 30 June 2019.

 

The UK smaller company market underperformed with the FTSE Small Cap Index rising by 8.5% and the FTSE Fledgling Index falling by 4.3%.

 

The Trust made modest progress with the net asset value increasing by 3.3% to 2188.7p.

 

The share buy-back programme has continued in the half year with a further £3.1m of purchases and the issued equity has now been reduced by 13% since December 2016.

 

The interim dividend is being raised by 2.4% to 10.75p.

 

The change of Prime Minister now means the Brexit process is at its most uncertain and this is likely to dominate for the remaining months of 2019.

 

Dr D. M. BRAMWELL

Chairman

1st August 2019

 

You can view or download copies of the Half Yearly and the Annual Reports from our website at www.maitlandgroup.com/investment-trusts/rights-and-issues-investment-trust-plc/

 

The Half Yearly Report will be posted to shareholders and copies are available at the registered office of the Company.

 

Risks and uncertainties 
Cautionary statement

 

This Half Yearly Report contains forward-looking statements that involve risk and uncertainty. These have been made by the Directors in good faith based on the information available to them at the time of their approval of this Report. Due to the inherent uncertainties, including stock market risk factor, actual results may differ materially from those expressed or implied by these forward-looking statements.

 

There are a number of potential risks and uncertainties which could have a material impact on the Company's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Company's results continue to be exposed to market price risk. Further information on the principal long-term risks and uncertainties of the Company is included in the latest Annual Report.

 

STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30th June 2019

			Six months ended 30th June 2019			Six months ended 30th June 2018
	Notes	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment income	2	1,911	-	1,911	1,814	-	1,814
Other operating income	2	8	-	8	8	-	8
Total income		1,919	-	1,919	1,822	-	1,822
Gains on fair value through profit or loss assets		-	5,518	5,518	-	8,873	8,873
Gains on subsidiary holding		-	52	52	-	-	-
		1,919	5,570	7,489	1,822	8,873	10,695
Expenses
Investment management fee		-	-	-	-	-	-
Other expenses		400	16	416	395	44	439
		400	16	416	395	44	439
Profit before tax		1,519	5,554	7,073	1,427	8,829	10,256
Tax-			-	-	-	-	-
Profit for the period		1,519	5,554	7,073	1,427	8,829	10,256
Earnings per share
Return per Ordinary Share		19.1p	69.8p	88.9p	17.3p	107.3p	124.6p

 

Return per share is calculated using the weighted average number of Ordinary shares in issue during the period ended 30th June 2019 of 7,958,152 (2018: 8,228,933).

 

The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards as adopted by the EU. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement are those of the single entity and derive from continuing operations.

 

The profit for the period disclosed above represents the Company's total Comprehensive Income. The Company does not have any other Comprehensive Income.

 

An interim dividend of 10.75p (2018: 10.50p) per share and amounting to £833,213 (calculated as at 29th July 2019) (2018: £845,870) is payable on 27th September 2019 to shareholders on the register as at 30th August 2019 (ex-dividend 29th August 2019).

 

			Year ended 31st December 2018
	Notes	Revenue £'000	Capital £'000	Total £'000
Investment income	2	3,599	-	3,599
Other operating income	2	20	-	20
Total income		3,619	-	3,619
(Losses)/gains on fair value through profit or loss assets		-	(21,459)	(21,459)
Gains on subsidiary holding		-	-	-
		3,619	(21,459)	(17,840)
Expenses
Investment management fee		-	-	-
Other expenses		813	59	872
		813	59	872
Loss before tax		2,806	(21,518)	(18,712)
Tax		-	-	-
Loss for the period		2,806	(21,518)	(18,712)
Earnings per share
Return per Ordinary Share		34.5p	(264.8)p	(230.3)p

 

Return per share is calculated using the weighted average number of Ordinary shares in issue during the year ended 31st December 2018 of 8,125,931.

 

The financial information contained in this Half Yearly Financial Report does not constitute statutory accounts as defined in Sections 434 - 436 of the Companies Act 2006. The information for the six months to 30th June 2019 and 30th June 2018 has not been audited.

 

The information for the year ended 31st December 2018 has been extracted from the latest published audited accounts which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 498 (2) or (4) of the Companies Act 2006.

 

The auditors have reviewed the financial information for the six months ended 30th June 2019 pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information and their report is on page 12.

 

BALANCE SHEET

as at 30th June 2019

 

STATEMENT OF CHANGES IN EQUITY

for the six months ended 30th June 2019

 

 

 

For the six months ended 30th June 2019 Balance at	Share capital £'000	Capital Redemption reserve £'000	Capital reserve £'000	Revaluation reserve £'000	Revenue reserve £'000	Total £'000
31st December 2018	2,002	253	61,984	102,217	3,119	169,575
Profit for the period	-	-	601	4,953	1,519	7,073
Total recognised income and expense	2,002	253	62,585	107,170	4,638	176,648
Ordinary shares bought back and cancelled	(39)	39	(3,104)	-	-	(3,104)
Dividends (Note 3)	-	-	-	-	(1,676)	(1,676)
Balance at 30th June 2019	1,963	292	59,481	107,170	2,962	171,868

 

STATEMENT OF CASH FLOWS

for the six months ended 30th June 2019

Cashflows from operating activities	30th June 2019 £'000	30th June 2018 £'000	31st December 2018 £'000
Profit/(loss) before tax	7,073	10,256	(18,712)
Adjustments for:
(Gains)/losses on investments	(5,518)	(8,873)	21,460
(Gains) on revaluation of subsidiary	(52)	-	-
Purchases of investments	(2,815)	(4,018)	(4,018)
Proceeds on disposal of investments	825	3,862	6,055
Operating cash flows before movements in working capital	(487)	1,227	4,785
Increase in receivables	(474)	(358)	(42)
Increase/(decrease) in payables	(35)	(33)	(17)
Net cash from operating activities	(996)	836	4,726
Cashflows from financing activities
Ordinary shares bought back and cancelled	(2,996)	(5,909)	(7,948)
Dividends paid	(1,676)	(1,694)	(2,537)
Net cash used in financing activities	(4,672)	(7,603)	(10,485)
Net decrease in cash and cash equivalents	(5,668)	(6,767)	(5,759)
Cash and cash equivalents at beginning of period	13,310	19,069	19,069
Cash and cash equivalents at end of period	7,642	12,302	13,310

 

NOTES TO THE HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2019

 

1.  Accounting Standards

 

The condensed interim financial report has been prepared in accordance with International Financial Reporting Standards (IFRSs), including IAS 34 "Interim financial reporting" as adopted by the European Union. The same accounting policies and methods of computation are followed in the interim financial report as those used in the Company's latest published annual financial statements.

 

2.  Income	30th June	30th June	31st December
	2019	2018	2018
	£'000	£'000	£'000
Total income comprises:
Dividends	1,911	1,814	3,599
Interest	8	8	20
Total income	1,919	1,822	3,619

 

3.  Dividends

	30th June 2019 £'000	30th June 2018 £'000	31st December 2018 £'000
Amounts recognised as distributions to equity holders in the year:
Interim dividend for the year ended 31st December 2018 of 10.50p per share	-	-	843
Final dividend for the year ended 31st December 2018 of 21.00p per share (year ended 31st December 2017: 20.50p)	1,676	1,694	1,694
	1,676	1,694	2,537

 

	30th June 2019 £'000
Proposed interim dividend of 10.75p per share	833
	833

 

This proposed interim dividend was approved by the Board on 1st August 2019, has been calculated based on shares in issue at 29th July 2019, and has not been included as a liability at 30th June 2019.

 

4.  Valuation of financial instruments

 

IFRS 13 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The valuation techniques used by the Company are explained in the accounting policies note 1 Investments, as set out in the Company's Annual Report and Financial Statements for the year ended 31st December 2018.

 

The fair value hierarchy has the following levels:

Level 1 - Unadjusted prices quoted in active markets for identical assets and liabilities.

Level 2 - Having inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices).

Level 3 - Having inputs for the asset or liability that are not based on observable data.

 

30th June 2019 Financial assets at fair value through profit or loss	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
UK Equity Listed	121,300	-	-	121,300
AIM traded stocks	41,147	-	-	41,147
Delisted stock	-	2	-	2
Investment in subsidiary undertaking	-	-	758	758
Net fair value	162,447	2	758	163,207
30th June 2018	Level 1	Level 2	Level 3	Total
	£000	£000	£000	£000
Financial assets at fair value through profit or loss
UK Equity Listed	143,791	-	-	143,791
AIM traded stocks	43,655	-	-	43,655
Delisted stock	-	21	-	21
Investment in subsidiary undertaking	-	-	706	706
Net fair value	187,446	21	706	188,173

 

31st December 2018 Financial assets at fair value through profit or loss	Level 1 £000	Level 2 £000	Level 3 £000	Total £000
UK Equity Listed	116,544	-	-	116,544
AIM traded stocks	38,395	-	-	38,395
Delisted stock	-	2	-	2
Investment in subsidiary	-	-	706	706
Net fair value	154,939	2	706	155,647

 

There were no transfers between Level 1 and Level 2 during the period.

A reconciliation of fair value measurements in Level 3 is set out in the following table.

 

	30th June 2019 £'000	30th June 2018 £'000	31st December 2018 £'000
Opening Balance	706	706	706
Purchases	-	-	-
Sales	-	-	-
Total gains or losses included in gains on investments in the Income Statement:
- on assets sold	-	-	-
- on assets held at period end	52	-	-
Closing Balance	758	706	706

 

The Level 3 investment relates to the Company's subsidiary, Discretionary Unit Fund Managers Limited, which has been valued based on the most recent estimated NAV.

 

5.  Related Party Transactions

 

Under IFRS, the Directors have been identified as related parties. Their fees and interests for the year ended 31st December 2018 have been disclosed in the Directors' Annual Remuneration Report within the 2018 Annual Report and Financial Statements.

 

During the period the Company had the following transactions with Discretionary Unit Fund Managers Limited, its subsidiary undertaking:

 

	30th June 2019 £'000	30th June 2018 £'000	31st December 2018 £'000
Dividends received	-	-	-
	-	-	-
Amounts owed by subsidiary undertaking	78	78	78

 

6.  Going Concern

 

The Company's assets comprise mainly realisable equity securities and cash and the value of its assets is greater than its liabilities. Additionally, after reviewing the Company's budget including the current financial resources and projected expenses for the next twelve months and its medium-term plans, the Directors believe that the Company's resources are adequate for continuing in business for the foreseeable future. Accordingly it is appropriate to continue to prepare accounts on a going concern basis.

 

DIRECTORS' STATEMENT OF RESPONSIBILITY FOR THE HALF YEARLY FINANCIAL REPORT

 

The Directors are responsible for preparing the Half Yearly financial report in accordance with applicable law and regulations.

 

The Directors confirm that to the best of their knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim financial reporting"; and
• the Half Yearly management report includes a fair review of the information required by DTR 4.2.7R and 4.2.8R.

This report was approved on 1st August 2019.

 

Dr D. M. BRAMWELL Chairman

 

PORTFOLIO STATEMENT

Details of the twenty largest investments as at 30th June 2019 are given below by market value:

 

UK Investments		Holdings		Market Value
	30th June 2019	31st December 2018	30th June 2019 £'000	31st December 2018 £'000
Treatt	4,250,000	4,250,000	19,550	17,680
RPC Group	2,400,000	2,400,000	19,018	15,634
Hill & Smith Holdings	1,434,230	1,434,230	16,795	17,196
Macfarlane Group	17,250,000	17,250,000	16,526	12,248
Vp	1,800,000	1,800,000	15,480	16,920
Scapa Group	8,000,000	6,250,000	14,832	19,150
Spirax-Sarco Engineering	120,714	120,714	11,088	7,514
Colefax Group	2,100,000	2,250,000	11,025	12,375
Renold	27,000,000	27,000,000	8,775	7,560
Electrocomponents	1,300,000	1,300,000	8,226	6,586
Vitec Group	400,000	400,000	4,560	4,740
Menzies (John)	882,142	882,142	4,005	4,499
Elecosoft	4,520,781	4,520,781	3,481	3,029
Titon Holdings	1,265,000	1,265,000	1,923	2,277
Castings	400,000	400,000	1,640	1,500
Dialight	238,095	238,095	1,169	952
National Grid	137,500	137,500	1,149	1,051
GlaxoSmithKline	70,000	70,000	1,104	1,044
Discretionary Unit Fund
Managers Limited	93,600	93,600	758	706
Santander UK 10.375%
Non Cumulative Preferred	400,000	400,000	631	604
			161,735	153,265
Balance held in other investments			1,472	2,382
			163,207	155,647

 

Unless otherwise specified, the actual holdings are, in each case, of ordinary shares or stock units and of the nominal value for which listing has been granted.

 

INDEPENDENT REVIEW REPORT TO RIGHTS AND ISSUES INVESTMENT TRUST PLC

 

INTRODUCTION

We have been engaged by the Company to review the financial statements in the Half Yearly Financial Report for the six months ended 30th June 2019 which comprises the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and the related explanatory notes 1 to 6. We have read the other information contained in the Half Yearly Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

The report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

 

DIRECTORS' RESPONSIBILITIES

The Half Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1, the Annual Financial Statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The financial statements included in this Half Yearly Financial Report have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

 

OUR RESPONSIBILITY

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half Yearly Financial Report based on our review.

 

SCOPE OF REVIEW

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than in an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.

 

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the financial statements in the Half Yearly Financial Report for the six months ended 30th June 2019 are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

JEREMY STAINES

For and on behalf of Begbies, 9 Bonhill Street, London EC2A 4DJ

Chartered Accountants

1st August 2019

 

DIRECTORS AND ADVISERS

 

DIRECTORS

Dr D. M. BRAMWELL (Chairman)

D. M. BEST

Dr A. J. HOSTY

S. J. B. KNOTT

J. B. ROPER

 

REGISTERED OFFICE

Hamilton Centre

Rodney Way

Chelmsford CM1 3BY

 

WEBSITE

www.maitlandgroup.com/investment-trusts/rights-and-issues-investment-trust-plc/

 

ADMINISTRATOR/SECRETARY

MAITLAND ADMINISTRATION SERVICES LTD

Hamilton Centre Rodney Way

Chelmsford CM1 3BY

 

SOLICITORS

EVERSHEDS SUTHERLAND

One Wood Street

London EC2V 7WS

 

AUDITOR

BEGBIES

9 Bonhill Street

London EC2A 4DJ

 

REGISTRARS

LINK MARKET SERVICES LTD

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

 

BROKERS

SHORE CAPITAL LTD

Cassini House

57-58 St James's Street

London SW1A 1LD

 

BANKERS/CUSTODIAN

NORTHERN TRUST

50 Bank Street

Canary Wharf

London E14 5NT

 

REGISTRATION DETAILS

 

Company Registration Number:	00736898 (Registered in England)
SEDOL number:	0739207
ISIN number:	GB0007392078
London Stock Exchange (EPIC) Code:	RIII
Global Intermediary Identification Number (GIIN):	I2ZVNY.99999.SL.826
Legal Entity Identifier (LEI):	2138002AWAM93Z6BP574

 

END