The Edinburgh Investment Trust plc
HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS TO 30 SEPTEMBER 2024
19 November 2024 – The Directors of the Edinburgh Investment Trust plc (“the Company”) have today announced the half year results for the six-month period ended 30 September 2024.
Highlights
· Net asset value (“NAV”) per share (with debt at fair value) on a total return basis increased by 8.3%, exceeding the 6.1% return of the FTSE All-Share Index. The share price total return was 10.8%
· First interim dividend declared of 6.9p per share, a 3.0% increase on the 6.7p per share dividend paid at the same stage last year
· Net gearing (debt at fair value) at 30 September 2024 of 2.1%, compared with 3.1% at 31 March 2024 and 4.1% at this time last year
· The share price discount to NAV narrowed to 9.7% from 11.5% over the six months.
Strategic Report / Financial Information and Performance Statistics
| Six months to 30th September 2024 | ||||
| Total Return(1)(3)(4) (all with dividends reinvested) | % Change | |||
| Net asset value(1) (NAV) – debt at fair value | +8.3 | |||
| Share Price(2) | +10.8 | |||
| FTSE All-Share Index(2) | +6.1 | |||
| The Company’s benchmark is the FTSE All-Share Index | ||||
| Capital Return(1)(4) | At 30th September 2024 | At 31st March 2024 | % Change | |
| Net asset value – debt at fair value | 830.39p | 779.97p | +6.5 | |
| Share price(2) | 750.00p | 690.00p | +8.7 | |
| FTSE All-Share Index(2) | 4,511.00 | 4,338.05 | +4.0 | |
| Discount(1)(3)(4) – debt at fair value | (9.7%) | (11.5)% | ||
| Gearing (debt at fair value) (1)(3)(4) | – gross gearing | 5.9% | 6.2% | |
| – net gearing | 2.1% | 3.1% | ||
| Revenue Return and Dividends(3) | Six months to 30th September 2024 | Six months to 30th September 2023 | % Change | |
| Revenue return per ordinary share | 13.08p | 11.54p | +13.3 | |
| First interim dividend(5) | 6.90p | 6.70p | +3.0 | |
| Consumer Price Index(2)(4) – annual change | 1.7% | 6.7% | ||
Notes:
(1) These terms are defined in the Glossary of Terms and Alternative Performance Measures. NAV with debt at fair value is widely used by the investment company sector for the reporting of performance, premium or discount, gearing and ongoing charges. Further details are provided in the Alternative Performance Measures on pages 84 to 87 of the Company’s 2024 Annual Financial Report.
(2) Source: LSEG Data & Analytics.
(3) Key Performance Indicator.
(4) Alternative Performance Measures.
(5) Dividends declared in respect of the financial year.
Elisabeth Stheeman, Chair, said: “The majority of the NAV outperformance has come from stock selection. More generally, over one, three, five and ten years, the financial performance of your Company has been strong: both in absolute terms and compared against the FTSE All-Share Index, and both in NAV and share price terms.
“The Company’s shares continue to trade at a discount, which has narrowed slightly. Over the period we bought back 2% of the Company’s shares to help manage the volatility of the discount and enhance NAV for shareholders.
“In addition to the AGM, we recently hosted a popular event for retail investors, with videos of the day’s presentations available on the Company’s website. Other promotional activities are also underway.
“With Imran and Emily’s feet firmly under their Edinburgh Investment Trust desks, and with investment returns remaining among the best in the Company’s sector, we believe we are building on the Company’s reputation as a ‘core’ equity investment for savers in the UK and beyond. With a strong management team and a repeatable investment process, together with the Board’s other initiatives noted above, we are confident that we can make further strides forward in the years ahead.”
Imran Sattar, Portfolio Manager, said: “As Emily and I complete our first full year managing your Company, we would like to remind you that we take a total return approach to meet the Company’s investment objectives, identifying and investing in businesses we expect to deliver a combination of capital and income growth.
“The UK market performed solidly with UK consumer exposed names generally performing strongly. The total return for the portfolio over the reporting period was pleasingly positive, with the NAV rising by 8.3% and the share price up 10.8% – both ahead of our benchmark FTSE All-Share Index.
“After strong performances from NatWest and Tesco, the most significant stock contributor was Baltic Classifieds, the leading online classifieds platform in eastern Europe.
“Stock detractors Rentokil and Spirax, have suffered, we believe, temporary setbacks in growth and execution.
“The biggest transactions were additions to attractive long-term growth opportunities in the portfolio, including London Stock Exchange Group, outsourced caterer Compass and insurance sector data supplier Verisk.
“Post budget, UK consumers can plan their finances with greater certainty. Political stability combined with lower levels of inflation should promote higher levels of corporate investment. We are finding many opportunities to invest in high quality businesses in the UK market at attractive valuations. While keeping an eye on the macroeconomic outlook, we remain focused on bottom-up stock selection and constructing a diversified portfolio.”