MANCHESTER AND LONDON INVESTMENT TRUST PLC
(the “Company”)
The Company today announces its Half-yearly report for the six months ended 31 January 2022. A copy of the Half-Yearly Report can be accessed via the Company’s website at www.mlcapman.com/manchester-london-investment-trust-plc or by contacting the Company Secretary by email on MLITCoSec@linkgroup.co.uk.
Summary of Results
| At 31 January 2022 |
At 31 July 2021 |
Change | |
| Net assets attributable to Shareholders (£000) | 247,783 | 269,686 | (8.1)% |
| Net asset value (“NAV”) per Ordinary Share (pence) | 614.92 | 665.43 | (7.6)% |
| Six months to 31 January 2022 |
|
| Total return to Shareholders* | (6.6)% |
| Benchmark – MSCI UK Investable Market Index (MXGBIM)* | 6.2% |
* Total NAV return including dividends reinvested, as sourced from Bloomberg.
| Six months to 31 January 2022 |
Six months to 31 January 2021 |
Change | |
| Interim dividend per Ordinary Share (pence) | 7.00 | 7.00 | 0.00 |
| Special dividend per Ordinary Share (pence) | 7.00 | 0.00 | 7.00 |
Dates for the interim dividend
| Ex-dividend date | 14 April 2022 |
| Record date | 19 April 2022 |
| Payment date | 4 May 2022 |
CHAIRMAN’S STATEMENT
Results for the half year ended 31 January 2022
During the half year under review, the NAV per Share total return was -6.6 per cent, compared to an increase in the benchmark of 6.2 per cent.
The Company entered the period with 22.7 per cent of its portfolio listed on the Hong Kong market. Whilst the Hang Seng Tech index saw a total return (GBP) of -17.6 per cent over the period, the remainder of the portfolio is predominantly listed on Nasdaq which saw a total return (GBP) of 0.7 per cent. In addition, we did not own Apple Inc. or Tesla Inc. which combined provided a contribution of 3.4 per cent to the Nasdaq return.
Looking at it another way, the North American Software sector’s total return was -8.5 per cent for the period and the software classification is the most common for our portfolio’s holdings. The Manager’s preference remains to hold software stocks rather than hardware stocks which explains the lack of holdings in Tesla Inc and Apple Inc. The Manager’s Report sets out in detail the stock specific contributions to this performance.
The portfolio has remained focused on large capitalisation stocks with profitable and cash generative business models that are aligned with some of the most exciting forward-looking themes.
Dividends
With these results, we have announced an ordinary interim dividend of 7.0 pence per Ordinary Share. This is the same level as the prior year (31 January 2021: 7.0 pence per Ordinary Share). The Company was initially admitted to the London Stock Exchange in January 1972, so in celebration of our 50th anniversary, we are also announcing a special dividend of 7.0 pence per Ordinary Share to be paid at the same time as the ordinary dividend.
Share buy backs
During the period the Company has bought back 233,183 shares into Treasury at an average discount of 17.3 per cent. We will continue to buy back shares when the circumstances appear attractive.
Board Succession
David Harris retired from the Board during the period after over 12 years of service. We are all highly appreciative of David’s contribution to the company’s growth from a Net Asset Value of approximately £42.1m when he joined the Board to £285m when he resigned from the Board. We welcome Daren Morris to the Board following his appointment as Audit Committee Chairman in December 2021. Daren is a seasoned financial and PLC practitioner and brings a wealth of knowledge and experience to our Board.
Other matters
The Manager has reviewed the Shareholder Register and estimates that over 99.5 per cent of shareholders have addresses located within the United Kingdom. As previously reported, over our history, we have decided to apply our benchmark to the location of our shareholders rather than what would happen to be the best fit for our portfolio at any such time.
Outlook
Key variables for our second half performance are likely to be movements in the US sovereign yield curve and inflation expectations, how the Federal Reserve and other Central Banks respond to the aforementioned, whether there is any further material shakeout in certain crowded trades (such as unprofitable Technology stocks, cryptocurrencies), and the regulation of Technology companies globally (especially with regulation impending in Europe).
Whilst geopolitical, inflationary and energy transition pressures have recently weighed on markets, we remain confident that our investment approach, focused on software, digitalisation, data management and AI offers more pricing power to ward off inflationary threats and more significant secular growth than more traditional sectors.
We remain confident in our dynamic investment framework and the quality of the resultant underlying portfolio.
Please do not forget to consider the fund for this year’s ISA allowance.