Witan Investment Trust Plc - Final Results


·    NAV total return of 19.0%, outperforming the benchmark's return of 15.1% by 3.9%

·    5 year NAV total return of 115%, 28% ahead of the benchmark

·    Share price discount to NAV reduced to 1.6% at year-end (2016: 4.0%)

·    £30m of long-term debt issued at a fixed rate of 2.74% 

·    2.8m shares bought back, helping to narrow the discount to 1.6%

·    Dividend increased by 10.5% to 21.0p, more than double the level in 2007 and the 43rd consecutive annual rise



Witan has been operating a multi-manager approach since 2004. Over this period we have beaten the returns on our equity benchmark and raised the dividend significantly faster than the rate of inflation. We will strive to extend this record.


Global economic growth strengthened and became more broadly based during 2017 and corporate earnings followed suit. In the UK the Brexit negotiations and political uncertainties affected corporate confidence but in Europe political developments were generally helpful to sentiment. Steady growth in the US allowed the Federal Reserve to continue gradually raising interest rates and to begin reducing its bond holdings, accumulated during the quantitative easing period.


With inflation subdued, interest rates low and corporate earnings rising, the backdrop for equity markets was generally positive. Our investment portfolio benefited from this environment, outperforming the benchmark. The net asset value (NAV) total return was 19.0%, 3.9% ahead of our benchmark's total return of 15.1 %. The share price total return, enhanced by a narrower discount, was 22.1 %.


A fourth interim dividend of 6.75 pence was declared in February 2018, payable on 29 March 2018. As a result, the dividend for the year increased by 10.5% to 21.0 pence per share (2016: 19.0 pence), fully covered by revenue earnings, with £5.5m added to the Company's revenue reserves. This is the 43rd consecutive year of rising dividends at Witan, with the dividend more than double that paid in 2007.


Taking a longer perspective, over the past 5 years Witan has achieved a NAV total return of 115%, compared with the benchmark's 87% return over this period. During the 10 years to the end of 2017, shareholders have had a NAV total return of 155%, compared with the benchmark's return of 114%.


Witan's shares in the market

During 2017, the Company bought back a total of 2.8m shares at discounts between 6% and 1.5%, adding £0.9m to the net asset value for remaining shareholders and contributing to a reduction in the discount from 4% at the end of 2016 to 1.6% at the end of 2017.





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            Annual Financial Report for the year ended 31 December 2017


Chairman's Report continued


It remains a long-term objective to create sustainable liquidity in Witan's shares at or near to net asset value.


Issue of long-term debt

The Company issued £30m of long-term (37 year) debt at a fixed rate of 2.74%, which is the lowest long-term borrowing rate secured by an investment trust for many years and well below the historical average level of interest rates. The Board believes that borrowing at such a low rate will benefit shareholder returns. This issue, together with the low cost debt issued in 2015, has reduced the average interest rate on the Company's fixed-rate borrowings from 7% in 2014 to 4.3% as at the end of 2017.


Board changes

Robert Boyle will be standing down at the AGM, after serving on the Board since 2007 and as Chairman of the Audit Committee since 2008. Catherine Claydon will also be standing down having served on the Board and as Chairman of the Remuneration and Nomination Committee since 2009. On behalf of shareholders, I thank them both warmly for their valued service on behalf of Witan's shareholders.


Jack Perry, who joined the Board in January 2017, will take over as Chairman of the Audit Committee, following the AGM, while Richard Oldfield will succeed Catherine as Remuneration and Nomination Committee Chairman.



Our Annual General Meeting will be held at Merchant Taylors' Hall on Wednesday 2 May 2018 at 2.30 pm. Formal notice of the meeting will be sent to shareholders when the Annual Report is published. We look forward to the opportunity to meet you then for the Company's 110th AGM.



Harry Henderson


12 March 2018