Coronavirus Update

The Investment Company Plc - Half Year Report

This content has been sourced from:

The Investment Company plc

Half Year Report Announcement (Unaudited) for the six months ended 31 December 2020

Summary of Results


At 31 December 2020 


At 30 June





Change %

Equity shareholders' funds (£)




Number of ordinary shares in issue




Net asset value per ordinary share




Ordinary share price (mid)




Discount to NAV









6 months to

 31 December 2020


12 months to

 30 June 2020



Total return per ordinary share *




Dividends paid per ordinary share


12.25 p






* The total return per ordinary share is based on total income after taxation as detailed in the Condensed consolidated income statement and in note 3.

Investment Objective

At the Annual General Meeting on 4 November 2020, shareholders voted to amend the Company's Investment Objective and Policy to that shown below.

The Company's investment objective is to protect the purchasing power of its capital in real terms, and to participate in enduring economic activities which lend themselves to genuine capital accumulation and wealth creation. 

Investment Policy 

The Company will seek to acquire and hold, with no predetermined investment time horizon, a collection of assets which, in the Directors' judgement, are well-suited to the avoidance of a permanent loss of capital. These assets will be comprised of minority participations in the equity, debt or convertible securities of quoted businesses which the Directors believe are led by responsible and like-minded managers and suitable for the long-term compounding of earnings. In addition, to protect its capital as well as to maintain liquidity for future investments, the Company will keep reserves in (a) liquid debt instruments such as cash in banks or securities issued by governments and/or (b) liquid, non-debt, tangible assets such as gold bullion, whether held indirectly or in physical form. 

The Company has no predetermined maximum or minimum levels of exposure to asset classes, currencies or geographies, and has the ability to invest globally. These exposures will be monitored by the Board in order to ensure an adequate spreading of risks. No holding in an individual company or debt instrument will represent more than 15 per cent. by value of the Company's total assets at the time of acquisition (such restriction does not, however, apply to gold bullion or cash balances). The Company's holdings of gold bullion may be as high as 35 per cent. of total assets at the time of investment. 

Given the Company's investment objective, asset mix and time horizon, the portfolio will not seek to track any benchmark or index. The Company will not invest more than 10 per cent. of its total assets in other listed closed-ended investment funds. The Company will not use derivative instruments for speculative purposes, nor will it use currency hedges to manage returns in any currency. 

The Company's gearing will not exceed 20 per cent. of net assets at the time of drawdown.

No material change will be made to the investment policy without the approval of shareholders by ordinary resolution.

Chairman's Statement

Dear fellow shareholders,

On 4 November 2020, the Company's shareholders approved a change of Investment Policy, details of which are set out above. Effective from that date the responsibility of implementing the new policy became the sole responsibility of the board of directors. The board takes this opportunity to thank Fiske Plc for its significant contribution and efforts as investment manager since their appointment in 2018. We are delighted to maintain a working relationship with them as our custodian.

We have made significant progress in adopting the new investment policy and details of the portfolio as at 31 December 2020 are set out below.


During the six-month period ended 31 December 2020 the Group's net assets increased by 7.31 pence per share to 322.42 pence per share. Including the 2.00 pence in dividends paid during the half year this represents a total return of 3.0%. The details of this return are outlined in the table below. Owing to the substantial changes to the portfolio following the change of Investment Policy, further discussion of returns is not meaningful, except to say the Group benefited modestly from the increase in share prices as markets recovered during the period.


6 months to

31 December 2020

Year ended

30 June 2020


Pence per share


Pence per share


Opening net assets





Gain/(loss) on portfolio valuations 





Investment income










Dividends paid





Closing net assets





In the six months to 31 December 2020 the Group recorded extraordinary expenses of approximately £155,000 (3.2 pence per share) related to the change in Investment Policy and conversion to the Company being directly managed by the board. These one-off costs are the main reason for the increase in expenses during the period. The directors believe expenses will reduce to nearer previous levels in future periods.