RIGHTS AND ISSUES INVESTMENT TRUST PLC

For the six months ended 30th June 2021

 

A copy of the Company's Half Yearly Financial Report for the six months ended 30th June 2021 will shortly be available to view and download from www.maitlandgroup.com/investments-trusts/rights-and-issues-investment-trust-plc/.  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 made available 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 2021 to shareholders on the register as at 27th August 2021 (ex-dividend 26th August 2021).

 

The following text is copied from the Half Yearly Financial Report.

 

HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2021

 

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

Central Square

10th Floor

29 Wellington Street

Leeds

LS1 4DL

BROKERS 

SHORE CAPITAL LTD

Cassini House

57-58 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

 

HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2021

CHAIRMAN'S STATEMENT

The outcome of the post BREXIT trade negotiations with the EU is ongoing, particularly with respect to the trading status of Northern Ireland, some issues around fishing rights and border security. Many believed that exiting the EU would adversely affect the UK economy but so far it has grown at an encouraging rate. The Board closely monitors related developments to inform decision making on behalf of the Company.

The COVID19 pandemic, which arrived in the UK and mainland Europe in early 2020, had an unprecedented and immediate negative impact on markets, throughout 2020 and into 2021. COVID19 will be part of our lives for some time therefore governments, organisations and business must adopt long term strategies to cope with the 'new normal'.

The FTSE All-Share Index increased by 9.3% during the first six months and the Company's portfolio had an encouraging six months with net asset value increasing by 23.0% to 2777.5p.

The Directors did not authorise the repurchase of any shares under the Company's established share buy-back programme in the half year. The issued share capital therefore remained unchanged as at 30th June 2021 at 7,540,321 Ordinary shares.

The interim dividend is being maintained at 10.75p reflecting the Directors' awareness of the importance of dividend income to the Company's investors and its robust underlying financial position.

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 has remained stable throughout the half year, and myself and my board colleagues look forward to overseeing implementation of the Company's investment strategy and improving returns for shareholders in the future.

Dr D. M. BRAMWELL

Chairman

2nd August 2021

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.

The Board is mindful of the continuing uncertain outlook for the global economy arising from the effects of the COVID-19 pandemic and governmental interventions both to restrict the spread of the virus and to support businesses, individuals and communities. The Company's assets and the potential level of revenue derived from the portfolio have recovered but remain exposed to macro-economic deteriorations. The Directors, having considered the nature and liquidity of the portfolio, the Company's investment objectives and projected income and expenditure, are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and is financially sound.

The Board believes that the Company and its key third party service providers have in place appropriate business continuity plans and will be able to maintain service levels to support the Company's operational performance.

STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30th June 2021

Notes		Six months ended 30th June 2021				Six months ended 30th June 2020
		Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment income	2	2,541	-	2,541	315	-	315
Other operating income	2	-	-	-	-	-	-
Total income		2,541	-	2,541	315	-	315
Gains/(losses) through fair value		-	38,957	38,957	-	(34,137)	(34,137)
Gains/(losses) on subsidiary holding		-	(411)	(411)	-	-	-
		2,541	38,546	41,087	315	(34,137)	(33,822)
Expenses
Investment management fee		-	-	-	-	-	-
Other expenses		360	-	360	367	-	367
		360	-	360	367	-	367
Profit/(loss) before tax		2,181	38,546	40,727	(52)	(34,137)	(34,189)
Tax			-	-	-	-	-
Profit/(loss) for the period		2,181	38,546	40,727	(52)	(34,137)	(34,189)
Earnings per share
Return per Ordinary Share		28.9p	511.2p	540.1p	(0.7)p	(452.7)p	(453.4)p

 

Return per share is calculated using the weighted average number of Ordinary shares in issue during the period ended 30th June 2021 of 7,540,321 (2019: 7,540,321).

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 (2020: 10.75p) per share and amounting to £810,585 (calculated as at 22nd July 2021) (2020: £810,585) is payable on 27th September 2021 to shareholders on the register as at 27th August 2021 (ex-dividend 26th August 2021).

Notes			Year ended 31st December 2020
		Revenue £'000	Capital £'000	Total £'000
Investment income	2	1,603	-	1,603
Other operating income	2	3	-	3
Total income		1,606	-	1,606
Gains through fair value		-	349	349
Gains on subsidiary holding		-	-	-
		1,606	349	1,955
Expenses
Investment management fee		-	-	-
Other expenses		749	-	749
		749	-	749
Profit/(loss) before tax		857	349	1,206
Tax		-	-	-
Profit/(loss) for the period		857	349	1,206
Earnings per share
Return per Ordinary Share		11.4p	4.6p	16.0p

 

Return per share is calculated using the weighted average number of Ordinary shares in issue during the year ended 31st December 2020 of 7,540,321.

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 2021 and 30th June 2020 has not been audited.

The information for the year ended 31st December 2020 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 2021 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 2021

Non-current assets	30th June 2021 £'000	30th June 2020 £'000	31st December 2020 £'000
Investments - fair value through profit or loss	169,877	123,519	158,005
	169,877	123,519	158,005
Current assets
Trade and other receivables	937	33	681
Amounts due from Group undertakings	-	78	-
Cash and cash equivalents	38,666	12,158	12,474
	39,603	12,269	13,155
Total assets	209,480	135,788	171,160
Current liabilities
Trade and other payables	45	43	73
Amounts due to Group undertakings	-	-	758
	45	43	831
Total assets less current liabilities	209,435	135,745	170,329
Net assets	209,435	135,745	170,329
Equity
Called up share capital	1,885	1,885	1,885
Capital redemption reserve	370	370	370
Retained reserves:
Capital reserve	84,596	63,842	63,842
Revaluation reserve	120,403	68,347	102,833
Revenue reserve	2,181	1,301	1,399
Total equity	209,435	135,745	170,329
Net asset value per share
Ordinary shares	2,777.5p	1,800.3p	2258.9p

STATEMENT OF CHANGES IN EQUITY

for the six months ended 30th June 2021

For the six months ended 30th June 2020 Balance at	Share capital £'000	Capital redemption reserve £'000	Capital reserve £'000	Revaluation reserve £'000	Revenue reserve £'000	Total £'000
31st December 2019	1,885	370	64,742	101,584	2,974	171,555
Loss for the period Total recognised income and expense Ordinary shares bought back and cancelled	-	-	(900)	(33,237)	(52)	(34,189)
	1,885 -	370 -	63,842 -	68,347 -	2,922 -	137,366 -
Dividends (Note 3) Balance at 30th June 2020	-	-	-	-	(1,621)	(1,621)
	1,885	370	63,842	68,347	1,301	135,745

 

For the year ended 31st December 2020 Balance at	Share capital £'000	Capital Redemption reserve £'000	Capital reserve £'000	Revaluation reserve £'000	Revenue reserve £'000	Total £'000
31st December 2019 Changes in equity for 2020	1,885	370	64,742	101,584	2,974	171,555
Profit for the year Total recognised income and expense Ordinary shares bought back and cancelled	-	-	(900)	1,249	857	1,206
	1,885 -	370 -	63,842 -	102,833 -	3,831 -	172,761 -
Dividends (Note 3) Balance at 31st December 2020	-	-	-	-	(2,432)	(2,432)
	1,885	370	63,842	102,833	1,399	170,329

 

For the six months ended 30th June 2021 Balance at	Share capital £'000	Capital redemption reserve £'000	Capital reserve £'000	Revaluation reserve £'000	Revenue reserve £'000	Total £'000
31st December 2020	1,885	370	63,842	102,833	1,399	170,329
Profit for the period Total recognised income and expense Ordinary shares bought back and cancelled	-	-	20,976	17,570	2,181	40,727
	1,885 -	370 -	84,818 -	120,403 -	3,580 -	211,056 -
Dividends (Note 3) Balance at 30th June 2021	-	-	(222)	-	(1,399)	(1,621)
	1,885	370	84,596	120,403	2,181	209,435

STATEMENT OF CASH FLOWS

for the six months ended 30th June 2021

Cashflows from operating activities	30th June 2021 £'000	30th June 2020 £'000	31st December 2020 £'000
Profit/(loss) before tax	40,727	(34,189)	1,206
Adjustments for:
(Gains)/losses on investments	(38,546)	34,137	(349)
Purchases of investments	-	(6,697)	(6,697)
Proceeds on disposal of investments	26,674	4,742	4,742
Operating cash flows before movements in working capital	28,855	(2,007)	(1,098)
(Increase)/decrease in receivables	(256)	501	(147)
Decrease in payables	(28)	(37)	(7)
(Decrease)/increase in amounts payable to group undertakings	(758)	-	836
Net cash from operating activities	27,813	(1,543)	(416)
Cashflows from financing activities
Ordinary shares bought back and cancelled	-	-	-
Dividends paid	(1,621)	(1,621)	(2,432)
Net cash used in financing activities	(1,621)	(1,621)	(2,432)
Net (decrease)/increase in cash and cash equivalents	26,192	(3,164)	(2,848)
Cash and cash equivalents at beginning of period	12,474	15,322	15,322
Cash and cash equivalents at end of period	38,666	12,158	12,474

NOTES TO THE HALF YEARLY FINANCIAL REPORT

for the six months ended 30th June 2021

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 Total income comprises:	30th June 2021 £'000	30th June 2020 £'000	31st December 2020 £'000
Dividends	1,783	315	1,603
Interest	-	-	3
Total income	1,783	315	1,606
3.            Dividends
	30th June	30th June	31st December
	2021	2020	2020
	£'000	£'000	£'000
Amounts recognised as distributions to equity holders in the relevant period:
Interim dividend for the year ended 31st December 2020 of 10.75p per share	-	-	811
Final dividend for the year ended 31st December 2020 of 21.5p per share (year ended 31st December 2019: 21.5p)	1,621	1,621	1,621
	1,621	1,621	2,432

 

30th June

     2021

     £'000

Income

Proposed interim dividend of 10.75p per share ____811_

        811

This proposed interim dividend was approved by the Board on 2nd August 2021, has been calculated based on shares in issue at 22nd July 2021, and has not been included as a liability at 30th June 2021.

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 2020.

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 2021 Financial assets at fair value through profit or loss	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
UK Equity Listed	143,761	-	-	143,761
AIM traded stocks	26,114	-	-	26,114
Delisted stock	-	2	-	2
Investment in subsidiary undertaking	-	-	-	-
Net fair value	169,875	2	-	169,877
30th June 2020	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000
Financial assets at fair value through profit or loss
UK Equity Listed	98,621	-	-	98,621
AIM traded stocks	24,138	-	-	24,138
Delisted stock	-	2	-	2
Investment in subsidiary undertaking	-	-	758	758
Net fair value	122,759	2	758	123,519

 

31st December 2020 Financial assets at fair value through profit or loss	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
UK Equity Listed	123,654	-	-	123,654
AIM traded stocks	33,591	-	-	33,591
Delisted stock	-	2	-	2
Investment in subsidiary	-	-	758	758
Net fair value	157,245	2	758	158,005

 

There were no transfers between Level 1 and Level 2 during the periods.

A reconciliation of fair value measurements in Level 3 is set out in the following table.

	30th June 2021 £'000	30th June 2020 £'000	31st December 2020 £'000
Opening Balance	758	758	758
Purchases	-	-	-
Sales	-	-	-
Total gains or losses included in gains on investments in the Income Statement:
- on assets sold	-	-	-
- on assets held at period end	(758)	-	-
Closing Balance	-	758	758

 

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, the value of which was £2 as at 30th June 2021.

5.       Related Party Transactions

Under IAS 24, the Directors have been identified as related parties. Their fees and interests for the year ended 31st December 2020 have been disclosed in the Directors' Annual Remuneration Report within the 2020 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

 2021 2020 2020

 £'000 £'000 £'000

Dividends received 758 - -

 758 - -

Amounts owed by/(due to) subsidiary undertaking - 78 (758)

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.

Based on the above, the Board is satisfied that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 31st December 2020.

In the view of the Board, the outbreak of an infectious respiratory illness caused by coronavirus known as COVID-19 has fundamentally altered the nature of the risks reported in the Annual Report and Financial Statements. COVID-19 has resulted in travel restrictions, closed international borders, disrupted supply chains and adversely affected consumer demand. The impact of COVID-19 has severely affected the economies of many nations across the entire global economy and capital markets and could continue with extents that cannot necessarily be foreseen.

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 2nd August 2021.

Dr D. M. BRAMWELL
Chairman

PORTFOLIO STATEMENT

Details of the investments held within the portfolio as at 30th June 2021 are given below by market value:

UK Investments		Holdings		Market Value
	30th June 2021	31st December 2020	30th June 2021 £'000	31st December 2020 £'000
Treatt	2,500,000	3,500,000	29,125	28,490
Hill & Smith	1,434,230	1,434,230	21,427	20,194
Macfarlane	17,250,000	17,250,000	20,010	14,869
Vp	1,800,000	1,800,000	16,488	13,500
Spirax-Sarco Engineering	120,714	120,714	16,423	13,635
Electrocomponents	1,300,000	1,300,000	13,364	11,317
Colefax	2,365,000	2,365,000	11,352	9,696
Renold	30,000,000	30,000,000	6,330	3,600
Eleco	4,520,781	4,520,781	5,967	3,526
Vitec	400,000	400,000	5,600	3,656
IMI	275,000	275,000	4,727	3,204
Morgan Advanced Materials	1,000,000	1,000,000	3,530	3,110
Menzies (John)	882,142	882,142	2,748	2,276
Bellway	80,000	80,000	2,591	2,364
Carr's	1,750,000	1,750,000	2,424	2,223
Titon	1,265,000	1,265,000	1,670	1,139
Castings	400,000	400,000	1,576	1,448
National Grid	137,500	137,500	1,266	1,189
GlaxoSmithKline	70,000	70,000	994	939
Dialight	238,095	238,095	760	600
Santander UK 10.375% Non Cumulative Preferred	400,000	400,000	708	640
LPA	650,000	650,000	455	520
Coral Products	2,000,000	2,000,000	250	170
Chamberlin	1,000,000	1,000,000	90	60
Dyson	1,000,000	1,000,000	2	2
Costain	41	41	-	-
Discretionary Unit Fund Managers	2	93,600	-	758
Scapa	-	8,000,000	-	14,880
			169,877	158,005

 

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 2021 which comprise 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 2021 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

Chartered Accountants London EC2A 4DJ

2nd August 2021