DJ Rights and Issues Investment Trust PLC: Results for the year ending 31 December 2020
Rights and Issues Investment Trust PLC (RIII)
Rights and Issues Investment Trust PLC: Results for the year ending 31 December 2020
16-Feb-2021 / 16:10 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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RIGHTS AND ISSUES INVESTMENT TRUST PLC
Annual Report & Accounts for the full year to 31st December 2020
A copy of the Company's Annual Report for the year ended 31st December 2020 will shortly be available to view and
download from the Company's website https://www.maitlandgroup.com/investment-trusts/
rights-and-issues-investment-trust-plc/.
Printed copies of the Annual Report will be sent to those shareholders electing to receive hard copies shortly.
Additional copies may be obtained from the Company Secretary - Maitland Administration Services Limited, Hamilton
Centre, Rodney Way, Chelmsford, Essex CM1 3BY.
The Annual General Meeting of the Company will be held electronically on 24th March 2021 at 11am GMT and unfortunately,
due to ongoing COVID-19 restrictions, the meeting will be closed to shareholders. A presentation from the Company's
Investment Director will be made available via the Company's website from 10th March 2021 and shareholders are also
invited to submit any questions in advance of the meeting, by 17th March 2021 at the latest.
The Directors have proposed the payment of a final dividend of 21.5p per Ordinary share which, if approved by
shareholders at the forthcoming Annual General Meeting, will be payable on 1st April 2021 to shareholders whose names
appear on the register at the close of business on 5th March 2021 (ex-dividend 4th March 2021).
The following text is copied from the Annual Report & Accounts for the year ended 31st December 2020.
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.
In January 2021 the Board reviewed the performance of the Company in the context of the investment objective, the
investment policy and the continuation of the Company. The Directors unanimously supported the continuation for a
minimum period of five years to 2026.
CAPITAL STRUCTURE
ISSUED SHARE CAPITAL
(at 31st December 2020)
7,540,321 Ordinary 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 2020)
2,105.0p.
DIVIDEND YIELD
1.4%.
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 to 31st December 2020, the Company did not buy back any shares for cancellation and therefore paid nil
consideration. The Directors have paused the buyback programme as a reflection of both the discount being in the target
range required under the discount management policy and also market uncertainty caused by the COVID-19 pandemic.
DISCOUNT
(at 31st December 2020)
6.8%.
RIGHTS AND ISSUES INVESTMENT TRUST PLC ("THE TRUST" or "THE COMPANY") MAY BE
LIQUIDATED AT ANY TIME, BUT THE BOARD OF DIRECTORS HAS CONCLUDED THAT IT IS NOT ITS
PRESENT INTENTION TO DO SO PRIOR TO 25TH JULY 2026.
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 value per share Net FTSE All Share FTSE All Share
Net asset value per share Index (Rebased
31st December (Index 1984 = 100) dividend Index
per share 1984 = 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
2015? 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
2019 2275.2p 7832 32.25p 4196.47 709
2020 2258.9p 7776 32.25p 3673.63 619
* 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 Ordinary shares for each Capital share). Thereafter, performance is based on the Ordinary shares, formerly named 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 SHORE CAPITAL
Cassini House
57 St James's Street London SW1A 1LD
BANKERS/CUSTODIAN NORTHERN TRUST COMPANY
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
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the fifty-eighth Annual General Meeting of the members of Rights and Issues Investment Trust Public Limited Company will be held electronically on Wednesday 24th March 2021, at 11:00am, 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 2020. 2. To approve the Annual Report on Directors' Remuneration, set out on pages 27 to 32 in the Annual Report and
Financial Statements 2020 (excluding the Remuneration Policy on pages 30 to 32), for the financial year ended 31st
December 2020. 3. To approve the payment of a final dividend of 21.5 pence per ordinary share for the financial year ended 31st
December 2020. 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 to the Company, to hold office until the end of the next general meeting at which
accounts are laid before the Company. 10. To authorise the Directors of the Company to determine the Auditor's remuneration.
SPECIAL BUSINESS
To consider and, if thought fit, pass resolutions 11 and 12 as Special Resolutions as follows: 11. 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
Ordinary shares, provided that:
11.1 the maximum aggregate number of Ordinary shares hereby authorised to be purchased shall be 1,130,294 (representing approximately 14.99% of the Ordinary shares in issue on 15th February 2021);
11.2 the minimum price (exclusive of expenses) which may be paid for an Ordinary share is 25 pence;
11.3 the maximum price (exclusive of expenses) which may be paid for an Ordinary share is not more than the higher of (i) an amount equal to 105% of the average market value of the Ordinary shares for the five business days immediately preceding the day on which the Ordinary 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;
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11.4 the authority hereby conferred will expire at the conclusion of the next Annual General Meeting of the Company unless such authority is renewed prior to such time; and
11.5 the Company may make a contract to purchase Ordinary 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 Ordinary shares pursuant to any such contract; provided that all Ordinary shares purchased pursuant to this authority shall be cancelled or transferred into treasury immediately upon completion of the purchases.
12. THAT the Articles of Association of the Company produced to the meeting and initialled by the Chairman for the purposes of identification be approved and adopted as the Articles of Association of the Company in substitution for, and to the exclusion of, the existing Articles of Association with effect from conclusion of the meeting.
By Order of the Board,
MAITLAND ADMINISTRATION SERVICES LIMITED
Secretary, 16th February 2021
Notes: 1. In accordance with the travel restrictions implemented by the UK government in response to the COVID-19 epidemic,
members will be prohibited from attending the meeting in person. Any member entitled to vote at the meeting is
entitled to appoint one or more proxies (who need not be a shareholder of the Company) to vote on behalf of that
member. Shareholders are therefore encouraged by the Board to appoint the Chairman of the meeting as their proxy to
vote on their behalf and to send any questions that they might like answered by the Board to the Company Secretary,
Maitland Administration Services Limited at cosec@maitlandgroup.com by 17th March 2021. A presentation by the
Company's Investment Director will also be made available on the Company's website from 10th March 2021. 2. The right to appoint a proxy does not apply to persons whose Ordinary 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 Market Services, PXS, 34 Beckenham Road, Beckenham BR3 4TU not less than 48 hours
(excluding any part of a day which is a nonworking day) before the time of the meeting or of any adjournment of
the meeting. As previously communicated to all shareholders paper proxy forms will not be sent to shareholders.
Shareholders may instead lodge their proxy via the registers website www.signalshares.com. If not already
registered, shareholders will need their investor code (IVC) which can be located on their share certificate. If a
paper proxy is required please contact Link Group by calling them on 0371 664 0300 or, if calling from overseas, on
+44 (0) 371 664 0391. Calls are charged at the standard geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable international rate. We are open between 09:00 - 17:30, Monday
to Friday excluding public holidays in England and Wales. 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 Ordinary 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. The Annual General Meeting will comprise formal resolutions only. This year, the Company will not be taking any
questions at the Annual General Meeting. Instead, shareholders who wish to ask a question are requested to do so
prior to the meeting either by email to cosec@maitlandgroup.com or by post, by writing to the Company Secretary at
Maitland Administration Services Limited, Hamilton Centre, Rodney Way, Chelmsford, Essex CM1 3BY. To the extent
that it is appropriate to do so, responses to the questions will be posted to the Company's website as soon as is
practicable following the Annual General Meeting. Please note that all questions should be submitted by 11.00 am on
17th March 2021.
8. 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: 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.
9. 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.
10. 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: 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).
11. In order to vote at this meeting you must comply with the procedures set out in notes 1 to 3 by the time specified in note 3.
12. A copy of the proposed new Articles of Association of the Company, together with a copy showing all of the proposed changes to the existing articles of association, will be available for inspection on the Company's website at https://www.maitlandgroup.com/ investment-data/rights-and-issues-investment-trust-plc/.
13. The right of shareholders to vote at the meeting by appointing the Chairman as their proxy 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 22nd March 2021 in order to be entitled to vote at the meeting by appointing the Chairman as their proxy. 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.
14. The total number of Ordinary shares of 25p in issue as at 15th February 2021, the last practicable day before printing this document, was 7,540,321 Shares and the total level of voting rights was therefore also 7,540,321.
CHAIRMAN'S STATEMENT
At long last the EU and the UK government have signed a BREXIT agreement, although the operational details will take some time to impact on industry throughout the new trading block. Nevertheless, the effect on market sentiment has been positive if for no other reason than it has brought to an end several years of uncertainty. The Board will continue to closely monitor related developments to inform decision making on behalf of the Company.
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Due to the COVID-19 pandemic it has been a year involving multiple forms of international and national restrictions and 'lock downs' which have adversely affected global trading. During the first wave supply chains were disrupted, export and import transportation slowed, and the movement of people was severely restricted. April was the nadir for market sentiment but subsequently there has been a slow but reasonably constant recovery as companies have adapted to the 'new normal'. Restrictions of various types are likely to continue well into 2021, however, I believe the pandemic has perversely presented business and commerce throughout the world with a new range of opportunities to think and act in more imaginative ways than they have before. Increased use of IT in communications, remote management of supply chains and significant changes to office/home working will significantly and probably permanently alter the industrial and commercial landscape.
The FTSE All-Share Index fell by 12.5% during the year (down 18.7% in the first six months) but the Company's portfolio held firm with net asset value only slightly down from 2275.2p to 2258.9 per share (0.7%). This reflects a strong recovery in the second half after a 20.9% reduction in net assets in the first six months.
The share buy-back programme remains paused for the foreseeable future, subject to operation of the discount management policy when necessary.
A final dividend of 21.5p is proposed, making 32.25p for the year, reflecting the Directors' awareness of the importance of dividend income to the Company's investors and its robust underlying financial position. The directors are closely monitoring the implications of the continuing market volatility and global response to the pandemic for the Company's net asset position and future income streams, and will make changes to the Company's dividend policy when deemed appropriate to do so.
Environmental, Social and Governance risks continue to be recognised as significant matters of global concern and the Board is committed to ensuring that the Company, through the Investment Director, appropriately manages and mitigates these risks through the investment strategy.
I am pleased to confirm that the composition of your Board continues to remain stable and I and my board colleagues look forward to overseeing implementation of the Company's investment strategy and improving returns for shareholders in the future.
In the medium term, the economic outlook is still uncertain but, with the imminent international roll-out of COVID-19 immunisation programmes, 2021 should prove to be a better year than the one everyone has had to endure in 2020.
Dr D. M. BRAMWELL
Chairman
16th February 2021
PORTFOLIO STATEMENT
Details of the investments held within the portfolio as at 31st December 2020 are given below by market value:
Holdings Market Value
UK Investments 2020 2019
2020 2019
GBP'000 GBP'000
Treatt 3,500,000 4,250,000 28,490 19,125
Hill & Smith 1,434,230 1,434,230 20,194 21,126
Scapa 8,000,000 8,000,000 14,880 19,520
Macfarlane 17,250,000 17,250,000 14,869 18,199
Spirax-Sarco Engineering 120,714 120,714 13,635 10,731
Vp 1,800,000 1,800,000 13,500 16,920
Electrocomponents 1,300,000 1,300,000 11,317 8,757
Colefax 2,365,000 2,100,000 9,696 8,820
Vitec 400,000 400,000 3,656 4,280
Renold 30,000,000 30,000,000 3,600 5,100
Eleco 4,520,781 4,520,781 3,526 3,526
IMI 275,000 - 3,204 -
Morgan Advanced Materials 1,000,000 750,000 3,110 2,377
Bellway 80,000 80,000 2,364 3,046
Menzies (John) 882,142 882,142 2,276 4,173
Carr's 1,750,000 350,000 2,223 532
Castings 400,000 400,000 1,448 1,640
National Grid 137,500 137,500 1,189 1,298
Titon 1,265,000 1,265,000 1,139 1,518
GlaxoSmithKline 70,000 70,000 939 1,245
Discretionary Unit Fund Managers 93,600 93,600 758 758
Santander UK 10.375% Non Cumulative Preferred 400,000 400,000 640 668
Dialight 238,095 238,095 600 555
LPA 650,000 650,000 520 572
Coral Products 2,000,000 2,000,000 170 190
Chamberlin 1,000,000 1,000,000 60 300
Dyson 1,000,000 1,000,000 2 2
Low & Bonar - 6,000,000 - 723
Costain 41 41 - -
Total Porfolio 158,005 155,701
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.
STRATEGIC REPORT
The Strategic Report is designed to provide information primarily about the Company's business and results for the year ended 31st December 2020 and should be read in conjunction with the Chairman's Statement on page 7.
PERFORMANCE STATISTICS 31-Dec-20 31-Dec-19 % change NAV per Ordinary Share 2,258.9p 2,275.2p -0.7% Discount to NAV 6.8% 2.2% 4.6% Closing mid-market price per Ordinary Share 2,105.0p 2,225.0p -5.4% Dividends per Ordinary Share 32.25p 32.25p Dividend yield* 1.4% 1.4% Ongoing Charges* 0.5% 0.5% Earnings per Ordinary Share - basic Revenue 11.4p 30.2p Capital 4.6p 143.3p NAV return* -0.7% 7.4% FTSE All-Share Index -12.5% 14.2%
*These are Alternative Performance Measures.
EXPLANATION OF ALTERNATIVE PERFORMANCE MEASURES (APMS)
An alternative performance measure is a financial measure of historical or future financial performance, financial position or cash flow that is not prescribed by the relevant accounting standards. The APMs are the dividend yield, ongoing charges and NAV return as defined below.
Dividend Yield
The dividend yield is a financial ratio which indicates how much the Company pays out in dividends each year relative to its share price. The figure is calculated by dividing the aggregate value of dividends per share in a given year by the closing share price and is represented as a percentage.
The dividend yield was calculated as follows:
2020 2019
Total dividends per ordinary share (a) 32.25p 32.25p
NAV per Ordinary Share (b) 2,258.9p 2,275.2p
Dividend Yield (a) / (b)*100 1.4% 1.4%
Ongoing Charges
Ongoing charges are expenses charged to revenue or capital that relate to the operation of the Company as an investment trust and are deemed likely to recur in the foreseeable future. They do not include the costs of acquisition or disposal of investments, financing costs and gains or losses arising on investments. Ongoing charges are calculated on the basis of the annualised ongoing charge as a percentage of the average net asset value in the period.
The calculation methodology for ongoing charges is set out by the Association of Investment Companies ("AIC") and was calculated as follows:
2020 2019
(GBP000) (GBP000)
Total Expenses (a) 749 803
Average NAV (b) 145,673 170,273
Ongoing Charge (a) / (b)*100 0.5% 0.5%
NAV Return
NAV return is the percentage change in closing NAV per share compared with opening NAV per share.
NAV return was calculated as follows: NAV per Ordinary Share 31st December 2020 (a) 2,258.9p NAV per Ordinary Share 31st December 2019 (b) 2,275.2p Return [a/b-1]*100 -0.7%
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 Company 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.
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