BlackRock Income Portfolio Update

 
TIDMBRIG 
 
BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) 
 
All information is at 28 February 2019 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                       1.5%     3.7%      -0.9%    20.2%      32.6%     80.7% 
 
Net asset value                   3.4%     3.2%       1.3%    19.1%      32.6%     70.4% 
 
FTSE All-Share Total Return       2.3%     2.6%       1.7%    30.4%      27.6%     66.4% 
 
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:                                       191.16p 
 
Net asset value - cum income1:                                        192.95p 
 
Share price:                                                          186.50p 
 
Total assets (including income):                                       GBP50.3m 
 
Discount to cum-income NAV:                                              3.3% 
 
Gearing:                                                                 4.7% 
 
Net yield2:                                                              3.7% 
 
Ordinary shares in issue3:                                         24,004,668 
 
Gearing range (as a % of net assets)                                    0-20% 
 
Ongoing charges4:                                                        1.1% 
 
1 Includes net revenue of 1.79 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 3.7% and includes the 2018 
final dividend of 4.40p per share declared on 20 December 2018 and to be 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 8,929,264 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                                                      11.1 
 
Banks                                                                     8.0 
 
Pharmaceuticals & Biotechnology                                           7.8 
 
Media                                                                     7.5 
 
Financial Services                                                        6.6 
 
Life Insurance                                                            6.5 
 
Food Producers                                                            6.4 
 
Support Services                                                          6.3 
 
Household Goods & Home Construction                                       5.9 
 
Travel & Leisure                                                          5.1 
 
Tobacco                                                                   4.1 
 
Industrial Engineering                                                    4.0 
 
Food & Drug Retailers                                                     3.9 
 
Mining                                                                    3.2 
 
Gas, Water & Multi-utilities                                              2.6 
 
Nonlife Insurance                                                         2.5 
 
Mobile Telecommunications                                                 1.5 
 
Electronic & Electrical Equipment                                         1.1 
 
Construction & Materials                                                  0.9 
 
Personal Goods                                                            0.7 
 
Chemicals                                                                 0.6 
 
General Retailers                                                         0.1 
 
Net Current Assets                                                        3.6 
 
                                                                       ------ 
 
Total                                                                   100.0 
 
                                                                       ====== 
 
 
 
Ten Largest Equity Investments 
 
Company                                                      Total assets (%) 
 
Royal Dutch Shell 'B'                                                     6.5 
 
RELX                                                                      5.1 
 
AstraZeneca                                                               4.0 
 
Unilever                                                                  4.0 
 
Prudential                                                                4.0 
 
Lloyds Banking Group                                                      3.9 
 
Reckitt Benckiser                                                         3.9 
 
Tesco                                                                     3.9 
 
GlaxoSmithKline                                                           3.8 
 
BP Group                                                                  3.7 
 
Commenting on the markets, Adam Avigdori and David Goldman representing the 
Investment Manager noted: 
 
The UK market rose for a second consecutive month in February, with the FTSE 
All-Share Index returning 2.3%1. Year-to-date the UK market has returned 6.6%, 
recovering a large proportion of the losses from the turbulent fourth quarter 
of 2018. Equity markets globally continued to rise during February, shrugging 
off the ongoing geopolitical uncertainty, softening global economic data and 
largely underwhelming corporate earnings newsflow. European economic data 
continued to disappoint and UK services PMI (Purchasing Managers Index), fell 
to its lowest level since July 2016. Optimistic messaging around US/China trade 
discussions continued. In the US, the Federal Reserve continued with a more 
dovish stance indicating a willingness to keep rates stable for some time. The 
Bank of England also left the base rate unchanged as expected, however it 
lowered its growth forecast for this year to 1.2%. UK politics weren't far from 
the headlines during the month, however February's developments took a more 
positive turn with MPs voting in favour of the Cooper amendment, giving 
Parliament the ability to force Theresa May to request an extension to article 
50 and therefore diminishing the risk of a 'no-deal' Brexit. Sterling 
strengthened as a result, causing a headwind for more international large-cap 
businesses towards the end of the month. 
 
Over the month the Company's net asset value rose by 3.4%, outperforming the 
FTSE All-Share Index, which delivered a return of 2.3%. 
 
Hiscox reported strong profit for the year with the London market leading the 
way as it returns to growth. Regulatory action is leading to more capital and 
pricing discipline in the market, meaning prices are rising. Having 
substantially changed the portfolio over the last few years, management feel 
now is the right time to capitalise on the better environment. John Laing has 
demonstrated a continued ability to grow net asset value through a diversified 
portfolio of infrastructure projects. The company has a strong pipeline of 
opportunities to invest in both existing and new markets. Phoenix Group 
recently reported strong growth in profit with the business beating 
expectations for both cash flow and capital generation. The life assurance 
company is delivering on their strategic priorities, having completed the 
acquisition of the Standard Life Assurance business and their preparations for 
Brexit. 
 
Associated British Foods performed poorly after like-for-like growth within 
Primark was lower than the market expected. The expansion of Primark across the 
US offers large growth potential and rising sugar prices should benefit their 
sugar business. Reckitt Benckiser delivered better than expected sales growth 
despite a weak flu season and some manufacturing issues. The Mead Johnson 
business was a standout success for last year. From here, the market will be 
watching the progress of the search for a new CEO as Rakesh Kapoor has 
announced his decision to retire at the end of the year. Whilst trading was 
broadly in line with expectations at Accesso Technology, the uncertainty caused 
by the announcement of a strategic review combined with the departure of the 
Executive Chairman had a negative impact on the shares in the month. 
 
During the month we purchased a new position in easyJet, which we believe has 
an opportunity to benefit from both yield management and a changing short-haul 
competitor environment. We have added to positions including London Stock 
Exchange, MoneySupermarket and Associated British Foods and we have reduced 
exposure to Inchcape, John Laing and HSBC and have sold our holding in Accesso 
Technology. 
 
We are broadly constructive on global markets and expect continued global 
growth, albeit in a less synchronised fashion across the G7 nations and at a 
lower level than in recent past. The trend of steady growth has provided a 
solid backdrop for equity market returns, which have also been helped by loose 
financial conditions from supportive governments and central banks. However 
political uncertainty is rising, which combined with tightening financial 
conditions (led by the Federal Reserve) means that we expect volatility to 
return to markets. This provides us, as active managers of a concentrated 
portfolio, with a great opportunity to identify high-quality cash generative 
businesses, with robust balance sheets, that can weather various market cycles 
and help to 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 and construction 
spend whilst at the same time we are watching for signs of overheating in the 
US and monitoring the natural slowdown in China. US construction spend remains 
well below long-term averages and initiatives to boost this spend feature 
prominently on the political agenda. 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 last 
few months have demonstrated, it is crucial to be selective and to focus on 
those companies that are strong operators and that provide a differentiated 
service or product and boast a strong balance sheet. 
 
19 March 2019 
 
1Source: BlackRock as at 28 February 2018 
 
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. 
 
 
 
END 
 

(END) Dow Jones Newswires

March 20, 2019 09:52 ET (13:52 GMT)