DJ Rights and Issues Investment Trust PLC: Annual Report
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Rights and Issues Investment Trust PLC (RIII)
Rights and Issues Investment Trust PLC: Annual Report
26-Feb-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
RIGHTS AND ISSUES INVESTMENT TRUST PLC
Annual Report & Accounts for the full year to 31 December 2018
Printed copies of the Annual 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.
The Annual General Meeting of the Company will be held at The Gridiron
Building, 8th Floor, Number One Pancras Square, Pancras Road, King's Cross,
London N1C 4AG on Tuesday 2nd April 2019 at 12 noon.
The Directors have proposed the payment of a final dividend of 21.0p per
Income share which, if approved by shareholders at the forthcoming Annual
General Meeting, will be payable on 4th April 2019 to shareholders whose names
appear on the register at the close of business on 15th March 2019
(ex-dividend 14th March 2019).
The following text is copied from the Annual Report & Accounts.
INVESTMENT OBJECTIVE & POLICY
The Board's objective is to exceed the benchmark index over the long term
whilst managing risk.
The Company invests in equities with an emphasis on smaller companies. UK
smaller companies will normally constitute at least 80% of the investment
portfolio. UK smaller companies include both listed securities and those
quoted on the Alternative Investment Market ("AIM").
The investment portfolio will normally lie in the range of 80% to 100% of
shareholders' funds and therefore gearing will normally be between -20% and
0%. As a result of the Alternative Investment Fund Managers Regulations 2013
it has been decided that the Company will not use gearing.
CAPITAL STRUCTURE
ISSUED SHARE CAPITAL (at 31st December 2018)
8,006,179 Income shares of 25p each.
INCOME ENTITLEMENT
Equal entitlement to dividends and other distributions.
CAPITAL ENTITLEMENT
Equal entitlement to the surplus assets.
VOTING
One vote per share.
PRICE (mid-market) (at 31st December 2018) 1970.00p.
DIVIDEND YIELD 1.60%.
DISCOUNT MANAGEMENT POLICY
On 7th December 2016, the Company implemented share buy-back arrangements to
encourage the level of discount to be not more than 10%.
SHARE BUY BACKS
During the year, the Company has bought back for cancellation a total of
369,079 Income shares for a total consideration of GBP7.9m, representing 4.1% of
the share capital of the Company at 7th December 2016.
DISCOUNT (at 31st December 2018) 6.99%.
RIGHTS AND ISSUES INVESTMENT TRUST PLC ('THE TRUST" or 'THE COMPANY") MAY BE
LIQUIDATED AT ANY TIME, BUT THE BOARD OF DIRECTORS HAS INDICATED THAT IT IS
NOT ITS PRESENT INTENTION TO DO SO PRIOR TO 25TH JULY 2021.
Note: The above is a summary of rights. For full information shareholders
should refer to the Articles of Association.
HISTORIC RECORD
Year to Net asset Net asset Net FTSE All FTSE All
value per value per Share Share
share share Index
(Rebased
31st dividend
December per Income Index
(Index share
1984 = 1984 =
100) 100)
1984 29.0p 100 3.80p 592.94 100
1990 75.4p 260 7.50p 1032.60 174
1995 175.0p 602 10.50p 1802.56 304
2000 473.9p 1631 25.50p 2983.81 503
2005 732.0p 2520 40.50p 2847.00 480
2010 776.4p 2673 25.50p 3094.41 522
2011 751.2p 2586 25.50p 2857.88 482
2012 962.0p 3312 26.75p 3093.41 522
2013 1382.5p 4759 40.00p* 3609.63 609
2014 1297.1p 4465 36.00p 3532.74 596
2015t 1595.6p 5492 36.00p 3444.26 581
2016 2002.2p 6892 52.50p* 3873.22 653
2017 2372.3p 8166 30.75p 4221.82 712
2018 2118.1p 7291 31.50p 3675.27 620
* Includes Special Dividend
From 2015 onwards the historic record is for the Company only and not the
Group.
Note: Until 2016 net asset value per share is based on the Capital shares
adjusted for the reconstruction (four Income shares for each Capital share).
Thereafter, performance is based on the Income shares (the only remaining
share class).
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
STOCKDALE SECURITIES LTD
100 Wood Street
London EC2V 7AN
BANKERS/CUSTODIAN
HSBC BANK PLC
London EC2P 2BX
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
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the fifty-sixth Annual General Meeting of the
members of Rights and Issues Investment Trust Public Limited Company will be
held in the Gridiron Building, 8th Floor, Number One Pancras Square, Pancras
Road, King's Cross, London N1C 4AG, on 2nd April 2019, at 12 noon, for the
following purposes:
ORDINARY BUSINESS
1. To receive the audited financial statements and Reports of the Directors
and Auditor for the year ended 31st December 2018.
2. To approve the Annual Report on Directors' Remuneration, set out on pages
21 to 26 (excluding the restated Remuneration Policy on pages 24 and 25), for
the financial year ended 31st December 2018.
3. To approve the payment of a final dividend of 21.0 pence per Income share
for the financial year ended 31st December 2018.
4. To re-elect Dr D. M. Bramwell as a Director.
5. To re-elect D. M. Best as a Director.
6. To re-elect Dr A. J. Hosty as a Director.
7. To re-elect S. J. B. Knott as a Director.
8. To re-elect J. B. Roper as a Director.
9. To reappoint Begbies as Auditor and authorise the Directors to determine
the Auditor's remuneration.
SPECIAL BUSINESS
To consider and, if thought fit, pass resolutions 10 and 11 as Special
Resolutions:
10. THAT the Company be and is hereby generally and unconditionally authorised
in accordance with section 701 of the Companies Act 2006 to make market
purchases (within the meaning of section 693 of the Companies Act 2006) of
Income shares, provided that:
10.1 the maximum aggregate number of Income shares hereby authorised to be
purchased shall be 1,196,769 (representing approximately 14.99% of the Income
shares in issue on 21st February 2019);
10.2 the minimum price (exclusive of expenses) which may be paid for an Income
share is 25 pence;
10.3 the maximum price (exclusive of expenses) which may be paid for an Income
share is not more than the higher of (i) an amount equal to 105% of the
average market value of the Income shares for the five business days
immediately preceding the day on which the Income share is purchased; and (ii)
the higher of the last independent bid and the highest current independent bid
on the London Stock Exchange when the purchase is carried out, or such other
amount as may be specified by the FCA from time to time;
10.4 the authority hereby conferred will expire at the conclusion of the
Annual General Meeting of the Company in 2020 unless such authority is renewed
prior to such time; and
10.5 the Company may make a contract to purchase Income shares under the
authority hereby conferred prior to the expiry of such authority which will or
may be executed wholly or partly after the expiration of such authority and
may make a purchase of Income shares pursuant to any such contract; provided
that all Income shares purchased pursuant to this authority shall be cancelled
or transferred into treasury immediately upon completion of the purchases.
11. THAT the Company's Income shares be renamed Ordinary shares and the draft
new articles of association produced to the meeting and initialled for
identification by the Chairman be adopted in substitution for and to the
exclusion of all previous articles of association.
By Order of the Board,
MAITLAND ADMINISTRATION SERVICES LTD Secretary, 25th February 2019
Notes:
1. Any shareholder entitled to attend and vote at the above meeting is
entitled to appoint one or more proxies (who need not be a shareholder of the
Company) to attend and to vote instead of the shareholder. To appoint more
than one proxy, additional proxy forms may be obtained by contacting the
Company's registrars. Please also indicate by ticking the box provided if the
proxy instructions are one of multiple instructions being given. All forms
must be signed and should be returned together in the same envelope.
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Completion and return of a form of proxy will not preclude a shareholder from
attending and voting at the meeting in person, should he subsequently decide
to do so.
2. The right to appoint a proxy does not apply to persons whose Income shares
in the Company (the "Shares") are held on their behalf by another person and
who have been nominated to receive communications from the Company in
accordance with section 146 of the Companies Act 2006 ("nominated persons").
Nominated persons may have a right under an agreement with the registered
shareholder who holds the Shares on their behalf to be appointed (or to have
someone else appointed) as a proxy. Alternatively, if nominated persons do not
have such a right, or do not wish to exercise it, they may have a right under
such an agreement to give instructions to the person holding the Shares as to
the exercise of voting rights.
3. In order to be valid, a form of proxy, which is provided with this notice,
and a power of attorney or other authority under which it is signed, or
certified by a notary or office copy of such power or authority, must reach
the Company's registrars, Link Asset Services, PXS, 34 Beckenham Road,
Beckenham BR3 4TU not less than 48 hours (excluding any part of a day which is
a non-working day) before the time of the meeting or of any adjournment of the
meeting. A form of proxy is enclosed with this notice.
4. CREST members who wish to appoint a proxy or proxies by utilising the CREST
electronic proxy appointment service may do so by utilising the procedures
described in the CREST manual. CREST personal members or other CREST sponsored
members, and those CREST members who have appointed a voting service
provider(s), should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate action on their behalf.
5. In order for a proxy appointment made by means of CREST to be valid, the
appropriate CREST message must be transmitted so as to be received by the
Company's agent, Link Market Services (whose CREST ID is RA10) by the
specified latest time(s) for receipt of proxy appointments. For this purpose,
the time of receipt will be taken to be the time (as determined by the
timestamp applied to the message by the CREST applications host) from which
the Company's agent is able to retrieve the message by enquiry to CREST in the
manner prescribed.
6. The Company may treat as invalid a CREST proxy instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001. A register showing the interests of each Director and their
connected persons, so far as they are aware, in the Income shares will be
available for inspection at the offices of the Company Secretary, Maitland
Administration Services Limited, Hamilton Centre, Rodney Way, Chelmsford,
Essex CM1 3BY, during normal business hours every weekday except Saturdays,
from the above date to the day preceding that of the general meeting. It will
also be available for inspection at the place of the meeting for 15 minutes
prior to the general meeting and during the meeting. Apart from the Investment
Director, there are no contracts of service existing between the Company and
any of the Directors.
7. Any shareholder attending the general meeting is entitled, pursuant to
section 319A of the Companies Act 2006, to ask any question relating to the
business being dealt with at the meeting. The Company will answer any such
questions unless:
i. to do so would interfere unduly with the preparation for the meeting or
involve the disclosure of confidential information;
ii. the answer has already been given on a website in the form of an answer to
a question; or
iii. it is undesirable in the interests of the Company or the good order of
the meeting that the question be answered.
From the date of this notice and for the following two years the following
information will be available on the Company's website and can be accessed at
www.maitlandgroup.com/investment-trust/rights-and-issues-investment-trust-plc:
[1]
i. the matters set out in this notice of general meeting;
ii. the total numbers of Shares in respect of which shareholders are entitled
to exercise voting rights at the meeting; and
iii. the totals of the voting rights that shareholders are entitled to
exercise at the meeting in respect of the Shares.
8. Any shareholders' statements, shareholders' resolutions and shareholders'
matters of business received by the Company after the date of this notice will
be added to the information already available on the website as soon as
reasonably practicable and will also be made available for the following two
years.
9. Where a poll is taken at the general meeting, from the date of this notice
and for the following two years the following information will be available on
the Company's website and can be accessed at
www.maitlandgroup.com/investment-trust/rights-and-issues-investment-trust-plc:
[2]:
i. the date of the general meeting;
ii. the text of the resolution or, as the case may be, a description of the
subject matter of the poll;
iii. the number of votes validly cast;
iv. the proportion of the Company's issued share capital represented by those
votes;
v. the number of votes cast in favour;
vi. the number of votes cast against; and
vii. the number of abstentions (if counted).
10. In order to attend and vote at this meeting you must comply with the
procedures set out in notes 1 to 3 by the time specified in note 3.
11. The right of shareholders to vote at the meeting is determined by
reference to the register of shareholders. As permitted by section 360B(3) of
the Companies Act 2006 and Regulation 41 of the Uncertificated Securities
Regulations 2001, shareholders (including those who hold Shares in
uncertificated form) must be entered on the Company's share register at close
of business on 29th March 2019 in order to be entitled to attend and vote at
the meeting. Such shareholders may only cast votes in respect of Shares held
at such time. Changes to entries on the relevant register after that time
shall be disregarded in determining the rights of any person to attend or vote
at the meeting.
12. The total number of Income shares of 25p in issue as at 21st February
2019, the last practicable day before printing this document, was 7,983,785
Shares and the total level of voting rights was 7,983,785.
CHAIRMAN'S STATEMENT
Weakness in US tech stocks have led to a very sharp correction in equity
markets since September and the FTSE All-Share Index declined by 12.9% in
2018.
The UK smaller company market was impacted with the FTSE Small Cap Index
falling by 13.2%.
Your Company's portfolio was also affected with the net asset value of the
Income shares down by 10.7% to 2118.1p.
The final income dividend proposed is 21.0p making 31.5p for the year, a 2.4%
increase.
The share buy-back programme amounted to GBP7.9m in 2018. During the year, the
average discount of Income shares to net asset value was 8.8% and therefore,
in accordance with the Articles, no tender offer is required. The programme is
again being extended for a further twelve months to February 2020.
With only weeks now left, Brexit remains uncertain and there is no clarity on
the nature of the future relationship. This is now having discernible impacts
on the UK economy.
Dr D. M. BRAMWELL
Chairman
25th February 2019
STRATEGIC REPORT
The Strategic Report is designed to provide information primarily about the
Company's business and results for the year ended 31st December 2018 and
should be read in conjunction with the Chairman's Statement on page 7.
STATUS
The Company is a self-managed investment trust. The Company is registered as
an investment company as defined in section 833 of the Companies Act 2006 and
operates as such. The Company is not a close company within the meaning of the
provisions of the Corporation Tax Act 2010.
The Board has been approved by the Financial Conduct Authority to be a Small
Registered Alternative Investment Fund Manager ("AIFM").
In the opinion of the Directors, the Company has conducted its affairs during
the year under review, so as to qualify as an investment trust for the
purposes of Chapter 4 of Part 24 of the Corporation Tax Act 2010 and continues
to meet the eligibility conditions set out in section 1158 of the Corporation
Tax Act 2010.
The Financial Conduct Authority rules in relation to non-mainstream pooled
investments do not apply to the Company.
STRATEGY FOR MEETING THE OBJECTIVES
The Board's objective is to exceed the benchmark index over the long term
whilst managing risk.
To achieve this objective, the Board continues with its long-term strategy of
seeking out undervalued investments that have characteristics consistent with
a matrix of criteria developed by the Investment Director. This is supported
by the five-yearly review that addresses the above objective. The latest
review was conducted in November 2015, which concluded that the continuation
of the Company for the period until July 2021 was in the best interests of
shareholders.
In pursuing its strategy, close attention is paid to the control of costs.
Further information on this is contained in the Key Performance Indicators on
page 9.
BUSINESS MODEL
There is a rigorous process of risk analysis at the level of the individual
investment, based on the characteristics of the investee company. This
controls the overall risk profile of the investment portfolio, allowing a
higher level of concentration in the investment portfolio.
The investment portfolio is then managed on a medium-term basis with a low
level of investment turnover. This minimises transaction costs and ensures
medium-term consistency of the investment approach.
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