WITAN INVESTMENT TRUST PLC
Financial Report for the Half Year ended 30 June 2024
SUMMARY
• Proposed combination with Alliance Trust to create a leading multi-manager trust, with lower costs, a proven investment strategy and likely to become a member of the FTSE 100 index with c£5 billion of net assets
• Witan’s NAV total return was +11.0%, which compares with the return from our composite global benchmark of +11.7%
• The discount narrowed, resulting in a shareholder total return of 14.3%; 4.0% of our shares were bought into treasury, at an average discount of 8.9%
• A second interim dividend of 1.75 pence per ordinary share will be paid in September
• Assuming shareholders approve the proposed combination with Alliance Trust, total dividends for the year are expected to amount to the equivalent of not less than 6.28 pence per share for current Witan/continuing Alliance Witan shareholders, a 4% increase on the 6.04 pence per share paid in respect of 2023.
| Key data(4) | ||
| (Unaudited) 30 June 2024 | (Audited) 31 December 2023 | |
| Share price | 268.0p | 237.5p |
| Net asset value per ordinary share (debt at fair value) (3) | 282.6p | 257.6p |
| Discount (NAV including income, debt at fair value) (3) | 5.2% | 7.8% |
| Dividend per share | 3.26p | 2.90p |
| Revenue earnings per share(2) | 2.79p | 2.90p |
| Total earnings per share | 26.43p | 18.51p |
| Net Assets (£’000) | 1,642,287 | 1,579,729 |
| Total return performance | ||||
| 6 months return% | 1 year return% | 5 years return% | 10 years return% | |
| Share price total return (1)(3) | 14.3 | 21.4 | 42.5 | 140.6 |
| Net asset value total return (1)(3) | 11.0 | 15.0 | 44.5 | 146.6 |
| Witan benchmark (1) | 11.7 | 19.5 | 64.7 | 166.9 |
| MSCI ACWI Index(2) | 12.5 | 20.6 | 71.8 | 219.8 |
| MSCI UK IMI Index(2) | 7.3 | 13.3 | 29.1 | 74.0 |
| (1) | Source: Witan/Morningstar. |
| (2) | Source: Witan/Morningstar. See also MSCI for conditions of use (www.msci.com). |
| (3) | Alternative performance measuresThe financial statements (on pages 10 to 19) set out the required statutory reporting measures of the Company’s financial performance. In addition, the Board assesses the Company’s performance against a range of criteria which are viewed as particularly relevant for investment trusts. Definition of the terms used and the Witan benchmark are set out in the Annual Report. |
| (4) | 30 June 2024 data is unaudited. |
INTERIM MANAGEMENT REPORT
Proposed combination with Alliance Trust to form Alliance Witan PLC
Although this report is primarily a record of Witan’s performance and results for the first half of 2024, it would be remiss not to begin by highlighting the proposed combination with Alliance Trust to form Alliance Witan PLC, which was announced in late June. This is clearly a highly significant event for shareholders, in the year we mark the 100th anniversary of the Company’s listing on the London Stock Exchange, on 5 August 1924.
The combination will create a company with net assets of c£5 billion, potentially joining the FTSE 100 index. It will be managed in accordance with Alliance Trust’s current proven multi-manager approach, while delivering better liquidity and lower costs for both companies’ shareholders. The details of the scheme will be set out in documents likely to be published in early September, seeking shareholders’ approval in early October.
Outlook
Investors have largely shrugged off disappointments in the timing of interest rate cuts, unwelcome developments in global conflict hotspots and uncertainty generated by 2024’s wide swathe of national elections. Notwithstanding a sharp bout of volatility in early August, equity markets as a whole seem to have taken the view that, whatever flies there may be in their proverbial soup, they are focused on the substance, not the swimmer.
This insouciance, complacency to some, is helped by the increased proximity of easier monetary policy, after the prospect of rate cuts retreated for much of early 2024. The European Central Bank, with a relatively weak continental economy, has led the way, followed by the Bank of England in early August. The US Federal Reserve, while holding rates steady at the end of July, indicated that a September cut was on the cards, as long as the incoming data on inflation and the labour market remained supportive.
Whilst politics remain in flux in some countries in Europe and ahead of the US presidential election, resolution of the uncertainty in the UK has been greeted by a positive initial reaction. The pre-election tendency for the news to highlight every problem as a half-empty glass has abated, while the absence of fiscal room for manoeuvre aligns the country’s need for improved productivity with the incoming government’s need for resources to fund reforms to public services, from health to defence. If the government lives up to its “New New Labour” credentials the low valuation of the UK market could find the catalyst it needs to be more positively rated.
In coming weeks, Witan will be seeking its shareholders’ approval for the proposed combination with Alliance Trust, to form Alliance Witan PLC. Further details will be sent to shareholders in early September. This offers a very exciting future for our shareholders, retaining a multi-manager approach to investment in global equities, with a proven investment strategy and lower costs, in a Company with net assets post-combination of c£5 billion.
Assuming shareholders approve the proposed combination, this will be the last time I write to you formally as Chairman of Witan. I would like to thank our employees for their contributions to the Company and for their steadfastness during what for them has been a short period of personal uncertainty. I would particularly like to thank Andrew Bell who has led the Company in such an exemplary fashion for the last fourteen years. As I mentioned above, recent times have seen a pandemic, wars, rising inflation, higher interest rates and worries about recession, not a helpful background for investors. Andrew has navigated these with a cool head and sound judgement. I wish him well for his retirement. Finally, I would like to thank the non-executive members of the Board, including Gabrielle Boyle who stood down earlier in the year, and our company secretary, Eleanor Cranmer of Frostrow Capital. Their support and counsel during my time as Chairman have been invaluable, as have their hard work and wisdom during the recent process. I believe that this rigorous process has identified an excellent solution for the Company which will stand shareholders in good stead for many years to come.
Andrew Ross
Chairman