The Directors of the Edinburgh Investment Trust plc (LON:EDIN) have today announced the interim results for the period ended 30 September 2022.
· Total Return Net Asset Value (with debt at fair value) fell by 8.2% compared with a fall of 8.3% for the FTSE All-Share Index
· The refinancing of the Company’s debenture at end September 2022, and the resulting debt-driven boost of c.4% to NAV, has offset underperformance at the portfolio level over the six-month period
· First interim dividend, declared on 26 October, up 6.7% from 2021 at 6.4p per share
· Net gearing at 30 September 2022 of 4.4%
· Share price discount to NAV widened from 7.7% to 10.6% in the six months to September 2022 but has tightened to mid-single digits since the end of the period
· Since management of the trust moved in March 2020, the cumulative NAV return of +41.2% and the share price return of +44.1% have outperformed the FTSE All-Share return of +31.3% (all in total return terms)
Elisabeth Stheeman, Chair, said: “This has been an active six months for the Company. In addition to the normal day-to-day business of managing the portfolio, there have been changes to the debt structure, a first interim dividend announced and the welcome return of our in-person events for shareholders.
Since the current Portfolio Manager began day-to-day management of the Company’s portfolio at the end of March 2020, the cumulative NAV return has been +41.2% and the share price return +44.1%, compared with the FTSE All-Share return of +31.3%. Delivering returns above that of the index over all longer-term periods remains a key priority.
There are many reasons to be positive and the Company is in a strong position to take advantage of the attractive opportunities that are now arising, as well as to continue with the important business of working with existing holdings that underpin the income and capital value of the portfolio. Things are in good health and this should support attractive returns to shareholders in the years ahead.”
James de Uphaugh, Manager, said: “Equity markets gave up some ground over this six-month period. Part of that is the general weakness of global equity markets, part was self-made problems in the UK owing to the political uncertainty. However, hopefully the worst of it is behind us.
The good news is that inflationary pressures are easing as commodity prices come off their highs. Supply problems are also easing. The UK economy is slowing, but a deep recession is not a certainty, especially if the job market can remain robust. In recent years many consumers and businesses have become accustomed to operating with an element of macroeconomic and political uncertainty. As such, we think the most important thing is to produce a diversified equity portfolio that has the ability to thrive, as well as withstand any unanticipated shocks. On this basis we believe the portfolio is well placed to underpin the delivery of the Company’s dual objectives in the years ahead.”
The Edinburgh Investment Trust plc
HALF-YEARLY FINANCIAL REPORT
SIX MONTHS TO 30 SEPTEMBER 2022
£1,003m Net assets
553.00p Share price
4.4% Gearing (net)*
* Alternative Performance Measures
The Edinburgh Investment Trust plc (‘the Company’) is an investment trust whose investment objective is to invest primarily in UK securities with the long-term objective of achieving:
1. an increase of the Net Asset Value per share in excess of the growth in the FTSE All-Share Index; and
2. growth in dividends per share in excess of the rate of UK inflation
The Company will generally invest in companies quoted on a recognised stock exchange in the UK. The Company may also invest up to 20% of the portfolio in securities listed on stock exchanges outside the UK. The portfolio is selected on the basis of assessment of fundamental value of individual securities and is not structured on the basis of industry weightings.
Nature of the Company
The Company is a publicly listed Investment Company whose shares are traded on the London Stock Exchange. The business of the Company consists of investing the pooled funds of its shareholders, according to a specified investment objective and policy (set out on page 14 of the Company’s 2022 Annual Financial Report), with the aim of spreading investment risk and generating a return for shareholders.
The Company uses borrowing to enhance returns to shareholders. This increases the risk to shareholders should the value of investments fall.
In April 2022 Liontrust Fund Partners LLP became the Company’s AIFM (the Manager) following the acquisition of Majedie Asset Management Limited (the Company’s AIFM since its appointment in March 2022) by Liontrust Asset Management PLC. The responsibility for the day-to-day investment management activities of the Company has been delegated to Liontrust Investment Partners LLP. The Company’s portfolio management team, with James de Uphaugh as the portfolio manager and Chris Field as the deputy manager, has remained unchanged. Other administrative functions are contracted to other external service providers. The Company has a Board of non-executive Directors who oversee and monitor the activities of the Manager and other third party service providers on behalf of shareholders and ensure that the investment objective and policy is adhered to. The Company has no employees.
The Company’s ordinary shares qualify to be considered as mainstream investment products suitable for promotion to retail investors. The Company’s ordinary shares are eligible for investment in an ISA.