BlackRock Income Portfolio Update

 
TIDMBRIG 
 
BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) 
 
All information is at 30 November 2017 and unaudited. 
 
Performance at month end with net income reinvested 
 
 
 
                                   One    Three     One   Three      Five     Since 
                                 Month   Months    Year   Years     Years   1 April 
                                                                               2012 
 
Sterling 
 
Share price                      -2.4%     1.1%   12.9%   27.4%     74.0%     83.8% 
 
Net asset value                  -1.8%     0.6%   13.9%   26.9%     61.1%     72.4% 
 
FTSE All-Share Total Return      -1.7%    -0.2%   13.4%   25.2%     57.1%     64.6% 
 
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:                                       201.48p 
 
Net asset value - cum income*:                                        206.17p 
 
Share price:                                                          200.50p 
 
Total assets (including income):                                       GBP52.4m 
 
Discount to cum-income NAV:                                              2.8% 
 
Gearing:                                                                 2.5% 
 
Net yield**:                                                             3.2% 
 
Ordinary shares in issue***:                                       24,424,268 
 
Gearing range (as a % of net assets)                                    0-20% 
 
Ongoing charges****:                                                     1.0% 
 
 
 
* includes net revenue of 4.69 pence per share 
 
** The Company's yield based on dividends announced in the last 12 months as 
at the date of the release of this announcement is 3.2% and includes the 2016 
final dividend of 3.90p per share declared on 21 December 2016 and paid to 
shareholders on 10 March 2017 and the 2017 interim dividend of 2.50p per 
share declared on 26 June 2017 and paid to shareholders on 1 September 2017. 
 
*** excludes 8,509,664 shares held in treasury 
 
**** Calculated as a percentage of average net assets and using expenses, 
excluding performance fees and interest costs for the year ended 
31 October 2016. 
 
 
 
Sector Analysis                                              Total assets (%) 
 
Banks                                                                     9.1 
 
Oil & Gas Producers                                                       7.9 
 
Pharmaceuticals & Biotechnology                                           7.2 
 
Tobacco                                                                   7.1 
 
Support Services                                                          7.0 
 
Media                                                                     6.9 
 
Financial Services                                                        5.9 
 
Non-Life Insurance                                                        5.9 
 
Travel & Leisure                                                          5.4 
 
Construction & Materials                                                  4.4 
 
Food Producers                                                            4.0 
 
General Retailers                                                         3.9 
 
Industrial Engineering                                                    3.3 
 
Fixed Line Telecommunications                                             2.7 
 
General Industrials                                                       2.6 
 
Beverages                                                                 2.6 
 
Food & Drug Retailers                                                     2.5 
 
Mobile Telecommunications                                                 2.0 
 
Household Goods & Home Construction                                       2.0 
 
Aerospace & Defence                                                       1.6 
 
Chemicals                                                                 1.5 
 
Gas, Water & Multiutilities                                               1.4 
 
Real Estate Investment Trusts                                             0.9 
 
Software & Computer Services                                              0.8 
 
Net Current Assets                                                        1.4 
 
                                                                       ------ 
 
Total                                                                   100.0 
 
                                                                       ====== 
 
 
 
Ten Largest Equity Investments 
 
Company                                                      Total assets (%) 
 
British American Tobacco                                                  6.2 
 
Royal Dutch Shell 'B'                                                     5.2 
 
RELX                                                                      4.4 
 
Unilever                                                                  4.0 
 
Lloyds Banking Group                                                      3.9 
 
Rentokil Initial                                                          3.5 
 
Ferguson                                                                  3.4 
 
John Laing Group                                                          3.2 
 
HSBC Holdings                                                             3.1 
 
Shire                                                                     2.8 
 
 
 
Commenting on the markets, Adam Avigdori and David Goldman representing the 
Investment Manager noted: 
 
 
A sharp rotation in equity market leadership from momentum to value saw the 
UK stock market fall during November, recording its first negative month 
since June. Financials, led by banks were the strongest performing sector, 
while the industrials and pharmaceuticals sectors underperformed.  As 
expected the Bank of England raised the UK base rate for the first time in 
over 10 years from the record low of 0.25% to 0.5%, reversing the cut from 
August 2016 in the aftermath of the surprise result of the EU referendum. UK 
retail sales for October saw the first year on year decline since March 2013, 
and Sterling surged to a two-month high versus the dollar. US third quarter 
GDP growth was revised up to a seasonally adjusted annual rate of 3.3% and US 
consumer confidence climbed to 17 year high. Organization of Petroleum 
Exporting Countries (OPEC) agreed to extend the production cuts, providing 
support for the oil price. 
 
Over the month the Company delivered a return of -1.8%, marginally 
underperforming the FTSE All-Share which also delivered a negative return of 
-1.7%. 
 
CRH, an internationally diversified leader in building materials, has seen 
its US business impacted by hurricanes and continued weakness in the 
Philippines whilst its European operations continue to recover. Profit 
guidance was marginally below consensus leading to small downgrades. Rentokil 
is supported by strong structural drivers and continues to deliver organic 
growth. Despite this the shares have recently been impacted by severe weather 
in the US over the summer months and by a recent strengthening of Sterling. 
An underweight position in Royal Dutch Shell was a performance drag relative 
to the benchmark over the month as profits announcements were slightly ahead 
of expectations. There has been nervousness around the dividend but we do not 
see this being under pressure and think Shell will continue with their 
current plan, including with regards to the dividend. 
 
Tesco, the largest contributor for the month, saw its shares rally after the 
company received provisional approval from the Competition and Markets 
Authority for the merger with Booker. The booker deal will bring financial 
synergies and the ability to better utilise Tesco's space and networks. 
Patisserie Holdings has performed strongly after it appears the pressures of 
rising costs are easing. The company is not seeing any obvious slow-down from 
the UK consumer and is using its cash heavy balance sheet to expand through 
new store openings as well as looking to potential accretive acquisitions. DS 
Smith has continued to deliver strong organic progress and has seen volume 
growth from its Pan-European and e-commerce customers. The company has made 
accretive acquisitions in Europe and the US driven by customer demand. 
 
We are positioning the portfolio more defensively and have made a number of 
recent transactions along these lines. The political deterioration post the 
election has made us more cautious of some of the traditional defensive names 
and in this regard we have sold our position in Babcock. We are being 
increasingly selective in our domestic UK holdings and have sold Foxtons and 
reduced our holding in Forterra and Lloyds. We have added to turnaround 
position Standard Chartered as well as increasing allocations to Royal Dutch 
Shell and CRH. 
 
We see increasing pressure in the UK consumer space as rock bottom household 
savings is coupled with rising household debt levels. Whilst we remain 
cautious in this area, we certainly don't treat all companies equally. By 
focussing on those companies that can generate cashflow from strong business 
models, have strong balance sheets or scope for management driven self-help, 
we are able to access some of the fantastic domestic opportunities starting 
to emerge. 
 
As ever, we remain believers that over the longer-term earnings and cashflow 
growth tend to be the dominant driver of share prices and where equity 
markets fail to recognise that, corporates buyers have the potential to 
exploit the opportunity. With a combination of continued sterling weakness 
and a low rate environment fuelling cheap debt, we believe that M&A activity 
will remain a theme throughout coming months. 
 
 
13 December 2017 
 
 
 
END 
 

(END) Dow Jones Newswires

December 13, 2017 05:36 ET (10:36 GMT)