DJ Rights and Issues Investment Trust PLC: Half-yearly Results
Rights and Issues Investment Trust PLC (RIII)
Rights and Issues Investment Trust PLC: Half-yearly Results
02-Aug-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
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-pl
c/. 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
GBP3.1m 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
/ [1]
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 Six months
ended 30th ended 30th
June 2019 June 2018
Notes Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment 2 1,911 - 1,911 1,814 - 1,814
income
Other 2 8 - 8 8 - 8
operating
income
Total 1,919 - 1,919 1,822 - 1,822
income
Gains on - 5,518 5,518 - 8,873 8,873
fair value
through
profit or
loss
assets
Gains on - 52 52 - - -
subsidiary
holding
1,919 5,570 7,489 1,822 8,873 10,695
Expenses
Investment - - - - - -
management
fee
Other 400 16 416 395 44 439
expenses
400 16 416 395 44 439
Profit 1,519 5,554 7,073 1,427 8,829 10,256
before tax
Tax- - - - - -
Profit for 1,519 5,554 7,073 1,427 8,829 10,256
the period
Earnings
per share
Return per 19.1p 69.8p 88.9p 17.3p 107.3p 124.6p
Ordinary
Share
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
GBP833,213 (calculated as at 29th July 2019) (2018: GBP845,870) 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 Capital Total
GBP'000 GBP'000 GBP'000
Investment 2 3,599 - 3,599
income
Other operating 2 20 - 20
income
Total income 3,619 - 3,619
(Losses)/gains - (21,459) (21,459)
on fair value
through profit
or loss assets
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 2,806 (21,518) (18,712)
period
Earnings per
share
Return per 34.5p (264.8)p (230.3)p
Ordinary Share
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
Non-current assets 30th June 30th June 31st December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Investments - fair value 163,207 188,173 155,647
through profit or loss
163,207 188,173 155,647
Current assets
Trade and other receivables 1,095 937 621
Amounts due from Group 78 78 78
undertakings
Cash and cash equivalents 7,642 12,302 13,310
8,815 13,317 14,009
Total assets 172,022 201,490 169,656
Current liabilities
Trade and other payables 154 65 81
154 65 81
Total assets less current 171,868 201,425 169,575
liabilities
Net assets 171,868 201,425 169,575
Equity
Called up share capital 1,963 2,025 2,002
Capital redemption reserve 292 230 253
Retained reserves:
Capital reserve 59,481 62,096 61,984
Revaluation reserve 107,170 134,491 102,217
Revenue reserve 2,962 2,583 3,119
Total equity 171,868 201,425 169,575
Net asset value per share
Ordinary shares 2,188.7p 2,487.9p 2,118.1p
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30th June 2019
For the six Share Capital Capital Revaluation Revenue Total
months capita redemptio reserve reserve reserve
ended 30th l n reserve
June 2018
GBP'000
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GBP'000 GBP'000 GBP'000
GBP'000 GBP'000
Balance at
31st 2,094 161 65,434 128,151 2,850 198,690
December
2017
Profit for - - 2,489 6,340 1,427 10,256
the period
Total 2,094 161 67,923 134,491 4,277 208,946
recognised
income and
expense
Ordinary (69) 69 (5,827) - - (5,827)
shares
bought back
and
cancelled
Dividends - - - - (1,694) (1,694)
(Note 3)
Balance at 2,025 230 62,096 134,491 2,583 201,425
30th June
2018
For the Share Capital Capital Revaluation Revenue Total
year ended capita Redempti reserve reserve reserve
31st l on
December reserve
2018 GBP'000
GBP'000 GBP'000 GBP'000
GBP'000
GBP'000
Balance at
31st 2,094 161 65,434 128,151 2,850 198,690
December
2017
Changes in
equity for
2018
Loss for - - 4,416 (25,934) 2,806 (18,712)
the year
Total 2,094 161 69,850 102,217 5,656 179,978
recognised
income and
expense
Ordinary (92) 92 (7,866) - - (7,866)
shares
bought
back and
cancelled
Dividends - - - - (2,537) (2,537)
(Note 3)
Balance at 2,002 253 61,984 102,217 3,119 169,575
31st
December
2018
For the Share Capital Capital Revaluation Revenue Total
six months Redempti reserve reserve reserve
ended 30th on
June 2019 reserve
capital GBP'000
GBP'000 GBP'000 GBP'000
Balance at GBP'000
GBP'000
31st 2,002 253 61,984 102,217 3,119 169,575
December
2018
Profit for - - 601 4,953 1,519 7,073
the period
Total 2,002 253 62,585 107,170 4,638 176,648
recognised
income and
expense
Ordinary (39) 39 (3,104) - - (3,104)
shares
bought
back and
cancelled
Dividends - - - - (1,676) (1,676)
(Note 3)
Balance at 1,963 292 59,481 107,170 2,962 171,868
30th June
2019
STATEMENT OF CASH FLOWS
for the six months ended 30th June 2019
Cashflows from operating 30th June 30th June 31st December
activities
2019 2018 2018
GBP'000 GBP'000 GBP'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 (52) - -
subsidiary
Purchases of investments (2,815) (4,018) (4,018)
Proceeds on disposal of 825 3,862 6,055
investments
Operating cash flows before (487) 1,227 4,785
movements in working capital
Increase in receivables (474) (358) (42)
Increase/(decrease) in (35) (33) (17)
payables
Net cash from operating (996) 836 4,726
activities
Cashflows from financing
activities
Ordinary shares bought back (2,996) (5,909) (7,948)
and cancelled
Dividends paid (1,676) (1,694) (2,537)
Net cash used in financing (4,672) (7,603) (10,485)
activities
Net decrease in cash and cash (5,668) (6,767) (5,759)
equivalents
Cash and cash equivalents at 13,310 19,069 19,069
beginning of period
Cash and cash equivalents at 7,642 12,302 13,310
end of period
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
GBP'000 GBP'000 GBP'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 30th June 31st December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Amounts recognised as
distributions to equity
holders in the year:
Interim dividend for the year - - 843
ended 31st December 2018 of
10.50p per share
Final dividend for the year 1,676 1,694 1,694
ended 31st December 2018 of
21.00p per share (year ended
31st December 2017: 20.50p)
1,676 1,694 2,537
30th June
2019
GBP'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 Level 1 Level 2 Level 3 Total
Financial assets at fair value GBP000 GBP000 GBP000 GBP000
through profit or loss
UK Equity Listed 121,300 - - 121,300
AIM traded stocks 41,147 - - 41,147
Delisted stock - 2 - 2
Investment in subsidiary - - 758 758
undertaking
Net fair value 162,447 2 758 163,207
30th June 2018 Level 1 Level 2 Level 3 Total
GBP000 GBP000 GBP000 GBP000
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 - - 706 706
undertaking
Net fair value 187,446 21 706 188,173
31st December 2018 Level 1 Level 2 Level 3 Total
Financial assets at fair value GBP000 GBP000 GBP000 GBP000
through profit or loss
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 30th June 31st December
2019 2018 2018
GBP'000 GBP'000 GBP'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 30th June 31st December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Dividends received - - -
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- - -
Amounts owed by subsidiary 78 78 78
undertaking
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 31st 30th June 31st
June December 2019 December
2019 2018 2018
GBP'000
GBP'000
Treatt 4,250,00 4,250,000 19,550 17,680
0
RPC Group 2,400,00 2,400,000 19,018 15,634
0
Hill & Smith Holdings 1,434,23 1,434,230 16,795 17,196
0
Macfarlane Group 17,250,0 17,250,000 16,526 12,248
00
Vp 1,800,00 1,800,000 15,480 16,920
0
Scapa Group 8,000,00 6,250,000 14,832 19,150
0
Spirax-Sarco 120,714 120,714 11,088 7,514
Engineering
Colefax Group 2,100,00 2,250,000 11,025 12,375
0
Renold 27,000,0 27,000,000 8,775 7,560
00
Electrocomponents 1,300,00 1,300,000 8,226 6,586
0
Vitec Group 400,000 400,000 4,560 4,740
Menzies (John) 882,142 882,142 4,005 4,499
Elecosoft 4,520,78 4,520,781 3,481 3,029
1
Titon Holdings 1,265,00 1,265,000 1,923 2,277
0
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 400,000 400,000 631 604
Preferred
161,735 153,265
Balance held in other 1,472 2,382
investments
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) RIII
Code:
Global Intermediary I2ZVNY.99999.SL.826
Identification Number (GIIN):
Legal Entity Identifier (LEI): 2138002AWAM93Z6BP574
END
ISIN: GB0007392078
Category Code: IR
TIDM: RIII
LEI Code: 2138002AWAM93Z6BP574
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited
reviews
Sequence No.: 15451
EQS News ID: 850273
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