BMO Capital & Income Inv Tst PLC Annual Results & Quarterly Dividend announcement (5385G)

TIDMBCI

RNS Number : 5385G

BMO Capital & Income Inv Tst PLC

26 November 2020

BMO CAPITAL AND INCOME INVESTMENT TRUST PLC

Audited Statement of Results for the year ended 30 September 2020

LEI: 21380052ETTRKV2A6Y19

26 November 2020

BMO Capital and Income Investment Trust PLC ("BCI" / "the Company") today announces its results for the year ended 30 September 2020.

-- BCI will pay a fourth interim dividend of 3.75 pence per share to bring the total for the year to 11.50 pence per share, an increase of 0.9%. This is ahead of CPI inflation of 0.5% and will be the 27th consecutive year of increased payments.

-- BCI's Net Asset Value ("NAV") total return for the year was -21.0%. This compares to the FTSE All-Share Index (the "Benchmark") which returned -16.6% for the same period. Over five years BCI's NAV total return was 19.8% in comparison to 18.6% from the Benchmark.

-- BCI's NAV total return from the financial year end to 23 November 2020 (the latest practicable date) was 16.4%, compared to 9.6% return from the FTSE All-Share Index.

-- The Ongoing Charges figure was 0.58%, the same as 2018 and 2019 representing a fall of nearly a third since 2010.

The Chairman, Jonathan Cartwright, said:

"Events over the last several months have been truly tumultuous. The impact of COVID-19 has been substantial on both absolute and relative performance. The Company's longer term NAV returns measured over five years remain positive in both absolute and relative terms.

Notwithstanding the challenges, there are opportunities for many companies to restructure and grow, and the Company will seek to identify and invest in those businesses. The Company's strong performance since the year end indicates that the portfolio is well placed to exploit these opportunities and achieve its objective of securing long-term capital and income growth for Shareholders.

With these results the Board announces the payment of a fourth interim dividend of 3.75 pence per share. This takes the total dividend for the year to 11.50 pence per share an increase of 0.9% from last year. We are proud to be an AIC Dividend Hero, having increased our dividend every year since launch in 1992 and this is a record we will strive to maintain."

Chairman's Statement

As we all know, events over the last several months have been truly tumultuous. This is my first annual statement to you since my appointment as Chairman in succession to Steve Bates, but there has been no honeymoon period. The Fund Manager's Review in the Annual Report and Accounts gives details about the performance of the stock market and the Company's own performance over the financial year and unsurprisingly, the impact of the COVID-19 pandemic has been substantial both on absolute performance and performance relative to our benchmark, the FTSE All-Share Index ("the Index").

Over the year to 30 September 2020, the total returns (including dividends) for the Company's Net Asset Value ("NAV") and share price were -21.0% and -20.3% respectively and these compare directly to the total return of -16.6% for the Index. The period between 21 February when the stock market started to fall sharply in response to the developing crisis and 23 March at the trough was when the performance of your Company was hit hardest. Indeed, up to that point we had been making good progress and, since the nadir in March, performance has been ahead of the Index.

Longer term performance has been impacted by the turmoil of this year, but nevertheless NAV total returns measured over the last five years remain positive in both absolute and relative terms. Over five years to 30 September 2020, the Company's NAV and share price total returns were +19.8% and +16.8% while the comparable figure for the Index was +18.6%.

Revenue and Dividends

The lockdowns mandated by most governments worldwide to halt the spread of the virus clearly affected many businesses severely as did the general uncertainty as to how the situation would develop. This fed through immediately into lower or no dividend payments from companies to their shareholders, thus reducing our income.

One of the objectives of this Company is to pay a rising dividend to Shareholders. Even though our own income has been significantly reduced this year because of the crisis, the Company has a very significant Revenue Reserve, which was accumulated in previous years. A key purpose of the Revenue Reserve is to be able to support dividend payments when conditions are more challenging, such as during this crisis, and therefore the Board is willing to use the Reserve to support the payment of an increased dividend this year.

With these results, the Board announces the payment of a fourth quarterly dividend of 3.75 pence per share. Together with the three dividends already paid, this takes the total dividend for the year to 11.5 pence per share, an increase of 0.9% compared to last year. By comparison, the Consumer Prices Index rate of inflation for the year to September was 0.5%.

We are proud to be an AIC Dividend Hero, having increased our dividend every year since launch in 1992 and this is a record we will strive to maintain.

Share Rating

For the majority of last year, our shares traded at a premium to the underlying NAV. This reflects good demand from Shareholders old and new and relatively few sales in the market as most Shareholders have a long-term view.

In response to the demand for our shares and as the share price stood at a premium to the NAV, we have again issued new shares; 3,925,000 in total. This increased our share count by 3.8% compared to the start of the financial year. There are a number of benefits to issuing new shares at a premium to NAV. First, by increasing the size of the Company it provides a larger capital base over which to allocate costs, secondly it ensures anyone buying shares only pays, at most, a relatively small premium to NAV, thirdly existing Shareholders are not diluted and finally it helps to reduce some volatility in the share price by linking the share price more closely to the NAV.

The incidence of the Company's shares trading at a premium or discount to NAV is dependent upon supply and demand for the shares, and most of our peer group of companies trade at a discount. If a persistent discount were to emerge, the Board has the flexibility to buy back shares in accordance with the authority given by Shareholders. Through our policy of issuing shares at a small premium to NAV and offering to buy back at a discount, the Company in effect becomes a market maker if required and it is able to provide greater liquidity to Shareholders than may be available from traditional sources. We do not think it is in Shareholders' interest that the share price of this Company should become too detached from the underlying NAV.

It is worth noting a number of our shares are held in Child Trust Funds; these will increasingly mature as the children for whom they were initially established turn 18 years of age and your Manager is working actively to encourage these young investors to remain as long-term Shareholders.

Operations

I am glad to report that at an operational level, the Board and your Manager have been able to continue to work without any disruption from the crisis. The Manager moved to most staff working from home early in March and as a result of good information technology, planning and infrastructure this has been successfully achieved. Our Board meetings have necessarily been held remotely, but these too have been without disruption and have been as thorough and diligent as ever. In recognition of the COVID crisis, we have held two additional meetings in order to keep in closer contact with the Investment Manager and the fast-moving events.

The Manager has also increased its efforts to communicate in greater detail with Shareholders and potential investors and we hope the written articles, videos and podcasts have helped to explain the Fund Manager's thoughts and responses to the events of the year.

Costs

Your Company's most significant cost is the fee paid to the Manager for its services. This is linked directly to the size of the assets of your Company and so has reduced as markets and performance have fallen. However, I am pleased to report that despite many other costs being fixed and not flexed in response to the crisis, the cost of running the Company as a percentage of average net assets has remained at 0.58% in line with 2018 and 2019 and represents a fall of over a third since 2010. Your Board looks to manage the affairs of the Company as efficiently as possible and believes the overall cost level is competitive with alternative actively managed products. It is also worth repeating all our performance figures are quoted after these costs.

Responsible Investment

The Board and the Manager have long recognised and been committed to the importance of high standards of Environmental, Social and Governance (ESG) practice in assessing investments for inclusion in our portfolio. These standards also establish a framework for dialogue with those companies. We believe higher standards can help to deliver better and more sustainable long-term growth in capital and income, in addition to their own intrinsic merits. The Manager has one of the largest and longest established teams in the City dedicated to ESG and pages 24 to 27 of the Annual Report and Accounts explain in detail its ESG policies and the engagement the Manager has had with companies in our portfolio. The Board fully supports the Manager's engagement in this increasingly important area.

Board

As part of an orderly succession plan, Clare Dobie will retire from the Board during 2021. Clare, who is the Company's Senior Independent Director has served on the Board for more than eight years. With a background in financial journalism and investment marketing her insight into improving communication with the Company's Shareholders has been invaluable. Following Clare's retirement I am very pleased to report Tim Scholefield will become Senior Independent Director. On behalf of the Board and Shareholders of the Company I thank Clare for her commitment and wise counsel throughout her period of appointment.

As a further part of this plan a search company was commissioned to find a new Director for the Board. Following a thorough selection process, the Company is pleased to announce that Nicky McCabe will be appointed to the Board with effect from 1 January 2021.

Nicky McCabe was formerly Head of Product and Investment Trusts at Fidelity International, as well as a director and Chief Operating Officer of a number of Fidelity companies. Nicky is currently a non-executive director of Aberdeen Asian Income Fund Ltd, Artemis Investment Management Limited, Vitality Life Insurance and the charity, Tomorrow's People.

The Board looks forward to working with Nicky and to the valuable insights she will bring to the Board's deliberations.

Annual General Meeting

The Annual General Meeting ("AGM") of the Company will be held at 11.30am on 16 February 2021 at Quartermile 4, 7a Nightingale Way, Edinburgh EH3 9EG. Mindful of the potential for travel and gathering restrictions arising from the COVID-19 pandemic the Board has taken the difficult decision to amend the format of this year's AGM.

Shareholders will not be permitted to attend this year's AGM physically but will be able to view proceedings at the meeting electronically. Voting will occur in advance with Shareholders encouraged to utilise their Form of Proxy or Form of Direction, appointing the Chairman of the AGM as your proxy. The formal meeting will then be followed by a presentation by the Company's Fund Manager. Shareholders are requested to direct any questions they may have with regard to the resolutions proposed at the AGM or the performance of the Company, in advance of the meeting to [e-mail].

The Fund Manager's presentation will also be available on the Company's website www.bmocapitalandincome.com accompanied with a regularly updated Questions and Answers Schedule. Access details for the AGM will be included on the Form of Proxy or Form of Direction.

The Board has always valued the opportunity that the AGM provided to meet the Company's Shareholders. The Board looks forward to a resumption of our normal practices in 2022 and if possible, with the additional facility of online attendance for those Shareholders unable to travel.

Outlook

Earlier this year, there was some hope that the impact of the COVID-19 pandemic would lessen by now and that everyone's way of life could revert closer to pre-COVID-19 conditions with full social interactions, businesses reopened and economies showing sustained recovery. In Europe, including the UK, recovery has proved patchy and the new lockdown decreed for England, and the ongoing restrictions elsewhere, demonstrate that the extent and direction of the pandemic still cannot be predicted accurately. Even economies such as that of China, where very stringent measures were taken to control the virus, cannot yet fully relax their vigilance. The effect on all our lives has been substantial, and the UK Government's economic response to defend jobs and livelihoods, whilst welcome, will result in a level of Government borrowing which will need to be brought down in future to rebalance the country's books.

Notwithstanding the challenges, many companies have been able to respond vigorously to the necessary changes in their structures and operations. Those able to exploit and develop new techniques have proven resilient and many have actually prospered as more traditionally structured companies, particularly in the "bricks and mortar" retail space have suffered. There are opportunities for many companies to restructure and grow, and the Company will seek to identify and invest in those businesses. The Company's strong performance since the year end indicates that the portfolio is well placed to exploit these opportunities and achieve its objective of securing long-term capital and income growth for Shareholders.

Finally, I would like to thank you for your continuing support. Stay safe, and I wish you all well as together we meet the challenges and opportunities ahead.

Jonathan Cartwright

Chairman

25 November 2020

Principal Risks and Future Prospects

The principal risks together with their mitigations are set out below. The Board's processes for monitoring them and identifying emerging risks are set out on pages 28 to 29 and in note 21 of the Report & Accounts.

Since the beginning of 2020 the global economy has suffered considerable disruption due to the effects of the COVID-19 pandemic. The Directors have reviewed the key risk register for the Company which identifies the risks that the Company is exposed to, the controls in place and the actions being taken to mitigate them.

The principal risks identified as most relevant to the assessment of the Company's future prospects and viability are detailed below. The Board considers that with the spread of the pandemic the threat from some principal risks has increased and have considered this in relation to going concern.

-- Risk description : Unfavourable markets or asset allocation, sector and stock selection and use of gearing and derivatives are inappropriate giving rise to investment underperformance as well as impacting capacity to pay dividends.

Increase in overall risk due to COVID-19.

Mitigation: The portfolio of quoted securities is diversified and the Company's structure enables it to take a long-term view. Investment policy, performance, revenue and gearing are reviewed at each Board meeting. The Manager's Performance and Risk Oversight team provides independent oversight on investment risk management. The Board regularly considers operating costs along with underlying dividend income and the implications for the dividend payment capacity of the Company taking into account revenue reserves.

-- Risk description : Errors, fraud or control failures at service providers or loss of data through increasing cyber threats or business continuity failure could damage reputation or investors' interests or result in losses. Increase in overall risk due to COVID-19 .

Mitigation : The Board receives regular control reports from the Manager covering risk and compliance including oversight of third party service providers. The Board has access to the Manager's Head of Business Risk and requires any significant issues directly relevant to the Company to be reported immediately. The Depositary is specifically liable for loss of any of the Company's securities and cash held in custody.

-- Risk description: Inappropriate business or marketing strategy particularly in relation to investor needs or sentiment giving rise to a share price discount to NAV per share.

Unchanged throughout the year under review.

Mitigation: At each regular Board meeting the Directors receive an update on marketing activities and from the broker. To gauge investor sentiment, the Board holds a Shareholder satisfaction survey which is conducted every five years ahead of a vote on whether the Company should continue. The Board holds a separate meeting to consider strategy and associated opportunities and threats and the performance. The appointment of the Manager is also reviewed annually in terms of its delivery of sustainable long-term growth in capital and income. This includes the growing recognition of the importance of further development and application of high standards of ESG practice by the Manager. Share buybacks can be employed to help moderate extensive discount volatility, while share issues can be made when the shares are trading at a premium.

Five Year Horizon

Through a series of connected stress tests ranging from moderate to extreme scenarios and based on historical information, but forward looking over the five years commencing 1 October 2020, the Board assessed the risks of:

   --      potential illiquidity of the Company's portfolio; 

-- the effects of any substantial future falls in investment values and income receipts on the ability to repay and re-negotiate borrowings;

-- potential breaches of loan covenants, the maintenance of dividend payments and retention of investors; and

-- the potential need for extensive share buybacks in the event of share price volatility and a move to a wide discount.

In accordance with the UK Code, the Directors have assessed the future prospects of the Company over the coming five years. Based on this assessment, and in the context of the Company's business model, strategy and operational arrangements, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period ending November 2025. For this reason, the Board also considers it appropriate to continue adopting the going concern basis in preparing these financial statements.

Statement of Directors' Responsibilities

In accordance with Chapter 4 of the Disclosure Guidance and Transparency Rules the Directors confirm, that to the best of their knowledge:

-- the financial statements, prepared in accordance with applicable accounting standards give a true and fair view of the assets, liabilities, financial position and profit of the Company;

-- the Strategic report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face; and

-- the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's position and performance, business model and strategy.

On behalf of the Board

Jonathan Cartwright

Chairman

25 November 2020

Income Statement

 
 for the year ended 30 September                                           2020                             2019 
                                                  Revenue    Capital      Total    Revenue    Capital      Total 
                                                 GBP'000s   GBP'000s   GBP'000s   GBP'000s   GBP'000s   GBP'000s 
----------------------------------------------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 (Losses)/gains on investments                          -   (79,247)   (79,247)          -      3,878      3,878 
 Foreign exchange gains/(losses)                        2       (25)       (23)          1          5          6 
 Income                                            10,097        938     11,035     14,810        459     15,269 
 Management fee                                     (609)      (609)    (1,218)      (667)      (667)    (1,334) 
 Other expenses                                     (583)        (2)      (585)      (547)        (3)      (550) 
----------------------------------------------  ---------  ---------  ---------  ---------  ---------  --------- 
 Net return before finance costs and taxation       8,907   (78,945)   (70,038)     13,597      3,672     17,269 
 Finance costs                                      (141)      (141)      (282)      (164)      (164)      (328) 
----------------------------------------------  ---------  ---------  ---------  ---------  ---------  --------- 
 Net return before taxation                         8,766   (79,086)   (70,320)     13,433      3,508     16,941 
 Taxation                                             (8)          -        (8)        (7)          -        (7) 
----------------------------------------------  ---------  ---------  ---------  ---------  ---------  --------- 
 Net return attributable to Shareholders            8,758   (79,086)   (70,328)     13,426      3,508     16,934 
----------------------------------------------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Return per share - basic and diluted               8.34p   (75.33p)   (66.99p)     13.12p      3.43p     16.55p 
----------------------------------------------  ---------  ---------  ---------  ---------  ---------  --------- 
 

The total column of this statement is the profit and loss account of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

A statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement.

Statement of Changes in Equity

 
 for the year ended 
  30 September 2020 
                                            Share      Capital                                              Total 
                                 Share    premium   redemption    Special    Capital      Revenue   Shareholders' 
                              capital     account      reserve    reserve    reserve      reserve           funds 
                              GBP'000s   GBP'000s     GBP'000s   GBP'000s   GBP'000s     GBP'000s        GBP'000s 
---------------------------  ---------  ---------  -----------  ---------  ---------  -----------  -------------- 
 
 Balance at 30 September 
  2019                          25,696    130,197        4,146      4,434    158,561       15,115         338,149 
 Movements during the 
  year 
  ended 30 September 
  2020 
 
   Dividends paid                    -          -            -          -          -     (12,024)        (12,024) 
 
   Ordinary shares issued          981      9,617            -          -          -            -          10,598 
 
   Net return attributable 
   to 
   Shareholders                      -          -            -          -   (79,086)        8,758        (70,328) 
---------------------------  ---------  ---------  -----------  ---------  ---------  -----------  -------------- 
 
   Balance at 30 September 
   2020                         26,677    139,814        4,146      4,434     79,475       11,849         266,395 
---------------------------  ---------  ---------  -----------  ---------  ---------  -----------  -------------- 
 
 
 for the year ended 
  30 September 2019 
                                            Share      Capital                                              Total 
                                 Share    premium   redemption    Special    Capital      Revenue   Shareholders' 
                              capital     account      reserve    reserve    reserve      reserve           Funds 
                              GBP'000s   GBP'000s     GBP'000s   GBP'000s   GBP'000s     GBP'000s        GBP'000s 
---------------------------  ---------  ---------  -----------  ---------  ---------  -----------  -------------- 
 
 Balance at 30 September 
  2018                          25,265    125,380        4,146      4,434    155,053       13,194         327,472 
 Movements during the 
  year 
  ended 30 September 
  2019 
 
   Dividends paid                    -          -            -          -          -     (11,505)        (11,505) 
 
   Ordinary shares issued          431      4,817            -          -          -            -           5,248 
 
   Net return attributable 
   to 
   Shareholders                      -          -            -          -      3,508       13,426          16,934 
---------------------------  ---------  ---------  -----------  ---------  ---------  -----------  -------------- 
 
   Balance at 30 September 
   2019                         25,696    130,197        4,146      4,434    158,561       15,115         338,149 
---------------------------  ---------  ---------  -----------  ---------  ---------  -----------  -------------- 
 

Balance Sheet

 
 at 30 September                                       2020       2019 
                                                   GBP'000s   GBP'000s 
------------------------------------------------  ---------  --------- 
 Fixed assets 
 Investments                                        284,843    343,066 
------------------------------------------------  ---------  --------- 
 Current assets 
 Debtors                                                731      1,275 
 Cash and cash equivalents                            1,183      4,229 
------------------------------------------------  ---------  --------- 
 Total current assets                                 1,914      5,504 
------------------------------------------------  ---------  --------- 
 Current liabilities 
 Creditors: amounts falling due within one year       (362)      (421) 
 Loans                                             (20,000)   (10,000) 
------------------------------------------------  ---------  --------- 
 Total current liabilities                         (20,362)   (10,421) 
------------------------------------------------  ---------  --------- 
 Net current liabilities                           (18,448)    (4,917) 
------------------------------------------------  ---------  --------- 
 Net assets                                         266,395    338,149 
------------------------------------------------  ---------  --------- 
 
 Capital and reserves 
 Share capital                                       26,677     25,696 
 Share premium account                              139,814    130,197 
 Capital redemption reserve                           4,146      4,146 
 Special reserve                                      4,434      4,434 
 Capital reserve                                     79,475    158,561 
 Revenue reserve                                     11,849     15,115 
------------------------------------------------  ---------  --------- 
 Total Shareholders' funds                          266,395    338,149 
------------------------------------------------  ---------  --------- 
 
 Net asset value per ordinary share - pence          249.65     328.99 
------------------------------------------------  ---------  --------- 
 

Statement of Cash Flows

 
 for the year ended 30 September                    2020       2019 
                                                GBP'000s   GBP'000s 
---------------------------------------------  ---------  --------- 
 Cash flows from operating activities before 
  dividends received and interest                (1,111)    (1,569) 
 Dividends received                               10,649     15,125 
 Interest received                                    11         38 
 Interest paid                                     (282)      (332) 
---------------------------------------------  ---------  --------- 
 Cash flows from operating activities              9,267     13,262 
---------------------------------------------  ---------  --------- 
 Investing activities 
 Purchase of investments                        (48,257)   (34,874) 
 Sale of investments                              27,395     36,849 
 Other capital charges                               (2)        (3) 
---------------------------------------------  ---------  --------- 
 Cash flows from investing activities           (20,864)      1,972 
---------------------------------------------  ---------  --------- 
 Cash flows before financing activities         (11,597)     15,234 
---------------------------------------------  ---------  --------- 
 Financing activities 
 Equity dividends paid                          (12,024)   (11,505) 
 Net proceeds from issuance of new shares         10,598      5,248 
 Drawdown/(repayment) of loan                     10,000   (10,000) 

 Cash flows from financing activities              8,574   (16,257) 
---------------------------------------------  ---------  --------- 
 Net movement in cash and cash equivalents       (3,023)    (1,023) 
 Cash and cash equivalents at the beginning 
  of the year                                      4,229      5,246 
 Effect of movement in foreign exchange             (23)          6 
---------------------------------------------  ---------  --------- 
 Cash and cash equivalents at the end of 
  the year                                         1,183      4,229 
---------------------------------------------  ---------  --------- 
 
 Represented by: 
 Cash at bank                                         43        399 
 Short term deposits                               1,140      3,830 
---------------------------------------------  ---------  --------- 
                                                   1,183      4,229 
=============================================  =========  ========= 
 
 
 

Notes

   1   Return per ordinary share 

Revenue return

The revenue return per share of 8.34p (2019: 13.12p) is based on the revenue return attributable to Shareholders of GBP8,758,000 profit (2019: GBP13,426,000 profit).

Capital return

The capital return per share of -75.33p (2019: 3.43p) is based on the capital return attributable to Shareholders of GBP79,086,000 loss (2019: GBP3,508,000 profit).

Total return

The total return per share of -66.99p (2019: 16.55p) is based on the total return attributable to Shareholders of GBP70,328,000 loss (2019: GBP16,934,000 profit).

Weighted average ordinary shares in issue

The returns per share are based on a weighted average of 104,977,759 (2019: 102,301,049) ordinary shares in issue during the year.

   2   Dividends 

The Directors have declared a fourth interim dividend in respect of the year ended 30 September 2020 of 3.75 pence per share, payable on 17 December 2020 to all Shareholders on the register at close of business on 4 December 2020, ex-dividend 3 December 2020.

   3   Financial risk management 

The Company is an investment company, listed on the London Stock Exchange, and conducts its affairs so as to qualify in the United Kingdom ("UK") as an investment trust under the provisions of section 1158 of the CTA. In so qualifying, the Company is exempted in the UK from corporation tax on capital gains on its portfolio of investments.

The Company's investment objective is to secure long-term capital and income growth from a portfolio consisting mainly of FTSE All-Share companies. The Company can also have exposure to leading overseas companies, with the value of the non-UK portfolio not exceeding 10% of the Company's gross assets. In pursuing this objective, the Company is exposed to financial risks which could result in a reduction of either or both of the value of the net assets and the profits available for distribution by way of dividend. These financial risks are principally related to the market (currency movements, interest rate changes and security price movements), liquidity and credit. The Board, together with the Manager, is responsible for the Company's risk management.

The full details of financial risks are contained in note 21 of the Report and Accounts.

   4    Annual general meeting 

The Annual General Meeting ("AGM") of the Company will be held at 11.30am on 16 February 2021 at Quartermile 4, 7a Nightingale Way, Edinburgh EH3 9EG. Mindful of the potential for travel and gathering restrictions arising from the COVID-19 pandemic the Board has taken the difficult decision to amend the format of this year's AGM.

Shareholders will not be permitted to attend this year's AGM physically but will be able to view proceedings at the meeting electronically. Voting will occur in advance with Shareholders encouraged to utilise their Form of Proxy or Form of Direction, appointing the Chairman of the AGM as your proxy. The formal meeting will then be followed by a presentation by the Company's Fund Manager. Shareholders are requested to direct any questions they may have with regard to the resolutions proposed at the AGM or the performance of the Company, in advance of the meeting to [e-mail].

The Fund Manager's presentation will also be available on the Company's website www.bmocapitalandincome.com accompanied with a regularly updated Questions and Answers Schedule. Access details for the AGM will be included on the Form of Proxy or Form of Direction.

The Board has always valued the opportunity that the AGM provided to meet the Company's Shareholders. The Board looks forward to a resumption of our normal practices in 2022 and if possible, with the additional facility of online attendance for those Shareholders unable to travel.

   5    Report and accounts 

The report and accounts for the year ended 30 September 2020 will be posted to Shareholders and made available on the website www.bmocapitalandincome.com shortly. Copies may also be obtained by mailing the Company's registered office, Exchange House, Primrose Street, London EC2A 2NY.

By order of the Board

BMO Investment Business Limited, Secretary

25 November 2020

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November 26, 2020 02:00 ET (07:00 GMT)