BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC
BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC
(LEI:5493003YBY59H9EJLJ16)
All information is at 30 April 2019 and unaudited.
Performance at month end with net income reinvested:
One Month % | Three Months % | One Year % | Three Years % | Five Years % | Since 1 April 2012 % | |
| Sterling | ||||||
| Share price | 6.8% | 7.5% | 4.4% | 24.2% | 41.5% | 91.3% |
| Net asset value | 3.1% | 9.2% | 1.0% | 26.0% | 42.1% | 79.9% |
| FTSE All-Share Total Return | 2.7% | 7.8% | 2.6% | 33.3% | 35.2% | 75.4% |
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: | 200.13p |
| Net asset value - cum income1: | 203.70p |
| Share price: | 197.50p |
| Total assets (including income): | £51.3m |
| Discount to cum-income NAV: | 3.0% |
| Gearing: | 1.6% |
| Net yield2: | 3.5% |
| Ordinary shares in issue3: | 23,239,521 |
| Gearing range (as a % of net assets) | 0-20% |
| Ongoing charges4: | 1.1% |
1 includes net revenue of 3.57 pence per share
2 the Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.5% and includes the 2018 final dividend of 4.40p per share declared on 20 December 2018 and paid to shareholders on 19 March 2019 and the 2018 interim dividend of 2.50p per share declared on 25 June 2018 and paid to shareholders on 3 September 2018
3 excludes 9,694,411 shares held in treasury
4 calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 October 2018
| Sector Analysis | Total assets (%) |
| Oil & Gas Producers | 11.4 |
| Life Insurance | 7.9 |
| Pharmaceuticals & Biotechnology | 7.6 |
| Banks | 7.0 |
| Household Goods & Home Construction | 6.9 |
| Media | 6.8 |
| Financial Services | 6.5 |
| Food Producers | 5.9 |
| Support Services | 5.6 |
| Tobacco | 4.8 |
| Food & Drug Retailers | 4.2 |
| Travel & Leisure | 3.3 |
| Mining | 3.3 |
| Industrial Engineering | 2.8 |
| Nonlife Insurance | 2.5 |
| Gas, Water & Multi-utilities | 2.4 |
| Mobile Telecommunications | 1.6 |
| Electronic & Electrical Equipment | 1.0 |
| Construction & Materials | 1.0 |
| Chemicals | 0.7 |
| Personal Goods | 0.5 |
| Net Current Assets | 6.3 |
| ------ | |
| Total | 100.0 |
| ====== |
| Ten Largest Equity Investments | |
| Company | Total assets (%) |
| Royal Dutch Shell 'B' | 6.6 |
| RELX | 4.5 |
| Prudential | 4.2 |
| Tesco | 4.2 |
| Reckitt Benckiser | 4.1 |
| GlaxoSmithKline | 3.9 |
| British American Tobacco | 3.9 |
| BP Group | 3.8 |
| AstraZeneca | 3.7 |
| Lloyds Banking Group | 3.3 |
Commenting on the markets, Adam Avigdori and David Goldman representing the Investment Manager noted:
The UK equity market continued on its upward trend during April, rising for a fourth consecutive month. However the UK underperformed global equities. Year to date the FTSE All-Share Index has returned 12.3%. Equity markets globally received support from a number of positive surprises in economic data released during the month, as fears of a global slowdown appeared to have been overdone. The US economy grew more than expected during the first quarter, easing fears of a potential US recession, although this masked some weakness in domestic indicators, with growth being driven by inventory build and government spending. Chinese data confirmed a pickup in economic activity, with the March PMI (Purchasing Manager Index) coming out better than expected, showing signs that stimulus has started to feed through to the economy. European data continued to show signs of weakness. However the UK appears to be remaining resilient, although some of this has been attributed to pre-Brexit stock building. The political scene in the UK remains uncertain; with none of the Brexit deal options securing a majority vote in Parliament, and the EU granted a second extension for the UK to leave until 31 October. Defensive areas of the market such as Tobacco, Pharmaceuticals and Utilities, underperformed while Industrials and Financials led the market higher. As a result, smaller companies outperformed large cap companies.
Over the month the Company’s NAV delivered a return of 3.1%1, outperforming the FTSE All-Share which delivered a return of 2.7%1.
Prudential experienced share price strength as the company reported encouraging trading trends highlighting the group’s future growth potential. The company is progressing with the planned separation of its UK and European business, M&G Prudential and its Asian and US business, Prudential plc. Rentokil reported strong revenue growth of around 9%, of which 4% was organic. Both Pest and Hygiene divisions are performing well, and the investment thesis remains on track. Tesco results were well ahead of consensus expectations with the company on track to meet their 2020 targets. The dividend pay-out has been raised and customer satisfaction, volumes and cash are all showing positive progress.
Whitbread revenues missed expectations as the company experienced a decline in room demand across their Premier Inn business, coinciding with a period of acute political and economic uncertainty in the UK. An underweight position in HSBC was a relative performance detractor for the month as the shares have rallied in the run up to their first quarter earnings announcement. Premier Asset Management marginally underperformed despite seeing another period of net inflows.
During the month we added to our position in St James’s Place and made reductions to holdings including Unilever, Rentokil and Whitbread.
We expect nominal growth to remain modest as we see structural pressures from demographics, corporate underinvestment and new technology continuing to act as a drag on inflation while the dovish tilt from central banks has been supportive for markets. This is a fragile equilibrium such that we expect markets to oscillate between periodically worrying about a deterioration in growth and a shift to a more hawkish stance from central banks. With heightened political uncertainty and investor nervousness, we expect volatility to return to markets. As active managers of a concentrated portfolio, we believe that this market environment continues to provide us with the opportunity to find high quality, cash generative businesses, with robust balance sheets that can deliver long term capital and income growth for our clients.
We continue to like cash generative consumer staple companies, especially those exposed to the emerging market consumer given the prevalent demographic trends in certain markets. These companies often generate substantial cash flow which allows them to invest in innovation, marketing and distribution to ensure the longevity of their brands while also paying attractive and growing dividends to shareholders. We have also sought exposure to infrastructure spend whilst at the same time we are watching for signs of overheating in the US and monitoring economic growth in China. We also note that inflationary pressures are starting to build and therefore we seek those companies with sufficient pricing power and efficiency potential to withstand rising costs. As the recent past has demonstrated, it is crucial to be selective and to focus on those companies that are strong operators, that provide a differentiated service or product and that boast a strong balance sheet.
1Source: BlackRock as at 30 April 2019
21 May 2019
ENDS
Latest information is available by typing www.blackrock.co.uk/brig on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.
