Annual Financial Report
18/09/2024 07:00
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RNS Number : 5829E City of London Investment Trust PLC 18 September 2024
Legal Entity Identifier: 213800F3NOTF47H6AO55
THE CITY OF LONDON INVESTMENT TRUST PLC
Annual financial results for the year ended 30 June 2024
This announcement contains regulated information
CHAIRMAN'S COMMENT
"City of London's total return of 15.6% outperformed the FTSE All-Share Index.
The dividend was increased for the 58(th) consecutive year and fully covered
by earnings per share."
INVESTMENT OBJECTIVE
The Company's objective is to provide long-term growth in income and capital,
principally by investment in equities listed on the London Stock Exchange. The
Board fully recognises the importance of dividend income to shareholders.
PERFORMANCE AT 30 JUNE
2024 2023
Total Return Performance:
Net asset value ("NAV") per ordinary share(1, 5) 15.6% 4.5%
Share price(2, 5) 11.3% 4.1%
FTSE All-Share Index (Benchmark) 13.0% 7.9%
AIC UK Equity Income sector(3) 12.6% 8.1%
IA UK Equity Income OEIC sector 14.6% 4.0%
2024 2023
NAV per ordinary share(5) 424.3p 385.2p
NAV per ordinary share (debt at fair value)(5) 429.6p 391.2p
Share price 420.0p 397.0p
(Discount)/premium(5) (1.0)% 3.1%
(Discount)/premium (debt at fair value)(5) (2.2)% 1.5%
Gearing at year end(5) 7.1% 6.2%
Revenue earnings per share 20.9p 20.1p
Dividends per share 20.6p 20.1p
Ongoing charge for the year(4, 5) 0.37% 0.37%
Revenue reserve per share(5) 9.4p 8.9p
1 Net asset value per ordinary share total return with debt at fair value
(including dividends reinvested)
2 Share price total return using mid-market closing price
3 AIC UK Equity Income sector size weighted average NAV total return
(shareholders' funds)
4 Calculated using the methodology prescribed by the Association of Investment
Companies ("AIC")
5 Alternative Performance Measure
Sources: Morningstar Direct, Janus Henderson, Refinitiv Datastream
DIVIDEND YIELDS AT 30 JUNE
2024 2023
City of London 4.9 5.1
FTSE All-Share Index (Benchmark) 3.7 3.7
AIC UK Equity Income sector 4.2 4.3
IA UK Equity Income OEIC sector 4.3 4.8
CHAIRMAN'S STATEMENT
City of London produced a net asset value ("NAV") total return of 15.6%
outperforming the FTSE All-Share Index total return of 13.0%. City of London's
NAV total return has exceeded the FTSE All-Share Index over 1, 3, 5 and 10
years. The dividend was increased for the 58(th) consecutive year and fully
covered by earnings per share.
The Markets
Inflation fell in the main developed economies, but hopes that interest rates
would be cut in the US and UK, in the first half of 2024, were disappointed.
Central banks remained cautious given labour market strength and upward
pressure on wages. The US economy, helped by its fiscal stimulus, showed
stronger growth than the UK and Europe, but the outturn from China was weaker
than expected. Despite the continuing war in Ukraine and rising tension in the
Middle East, the prices of oil and other important commodities remained
relatively stable.
Globally, stock markets were led higher by a small number of large US
technology companies, especially those expected to benefit from the
development of artificial intelligence ("AI"). The US S&P 500 Index
returned 24.5% during the year, with a major element driven by AI
considerations. The UK stock market, which has a relatively low exposure to
technology stocks, produced a total return of 13.0%, as measured by the FTSE
All-Share Index. The perceived low and therefore attractive valuation of UK
equities, together with London's relatively open system for corporate control,
prompted a number of takeovers from overseas buyers for UK companies. Merger
and acquisition activity was particularly prevalent among medium-sized and
small companies. The FTSE 250 Index of medium-sized companies, with a return
of 13.9%, and the FTSE Small Cap Index, which returned 14.6%, slightly
outperformed the FTSE 100 Index, comprising the largest companies, which
returned 12.8%.
Performance
Earnings and Dividends
City of London's earnings per share increased by 3.6% to 20.9p. The growth in
dividends from our holdings in bank shares was the most important positive
contributor. Special dividends, accounted as revenue, amounted to
£1.0 million, down from £1.9 million in the previous year and reflecting
the corporate trend for effecting distributions through share buybacks rather
than dividend payments.
City of London's annual dividend grew by 2.5% to 20.60p per share, slightly
ahead of UK CPI inflation, and was covered by earnings per share. Over ten
years, City of London's dividend has grown by 39.6% compared with a cumulative
increase in UK CPI inflation of 33.8%. The Board fully understands the
importance of growing the dividend in real terms through the economic cycle.
Expenses remained under tight control, with our ongoing charge of 0.37% being
very competitive compared with other actively managed funds. The Board agreed
with the Company's Manager, Janus Henderson, to reduce the investment
management fee rate from 0.325% to 0.300% with effect from 1 January 2024. The
result of this lower management fee over 12 months is expected to reduce the
ongoing charge in our current financial year.
The revenue reserve increased by £2.3 million to £46.6 million, with revenue
reserves per share increasing by 5.8% to 9.43p. The Board considers that
maintaining a revenue reserve surplus is important, particularly given the
varied timing of dividend receipts throughout the year from investee
companies. It is also mindful of the experience during the Covid pandemic
when, in response to sudden dividend cuts and suspensions, it became necessary
to draw on reserves to cover dividends paid to shareholders. It should be
noted that the capital reserve arising from capital gains on investments sold,
which could help fund dividend payments, rose by £1.7 million to £346.3
million.
NAV Total Return
City of London's NAV total return of 15.6% was 2.6% ahead of the FTSE
All-Share Index. Gearing, which contributed positively by 0.25%, was financed
mainly by our secured debt. The £30 million 2.67% secured notes (maturing in
2046) and the £50 million 2.94% secured notes (maturing in 2049) provide
low-cost debt financing over the next quarter of a century for investment in
equities.
Stock selection contributed by 2.6%. The biggest stock contributor to relative
performance compared with the FTSE All-Share Index was 3i, the investor in
private companies, whose biggest investment is in Action, a fast-growing
discount retailer in Europe. The second biggest contributor was BAE Systems,
the defence company, followed by NatWest, the bank. Wincanton, the logistics
company, and Round Hill Music Royalties Fund, which were both taken over, were
also notable contributors. The biggest detractor to relative performance was
not owning Rolls Royce, the aero engine manufacturer which did not pay a
dividend during the 12 months. The second biggest detractor was St. James's
Place, which announced changes in the structure of its customer fees and a
provision for compensation to those who had not had annual reviews. The third
biggest detractor was Shell, where the portfolio was underweight relative to
the Index.
During the year, taking account of the attraction of UK equities relative to
comparable companies in other markets and as explained in more detail in the
Fund Manager's Report, City of London's portfolio weighting in overseas listed
stocks was reduced from 15% to 10%.
As mentioned in the introduction, City of London's NAV total return was ahead
of the FTSE All-Share Index over 1, 3, 5 and 10 years. Against the AIC UK
Equity Income sector average, City of London was ahead over 1, 3 and 5 years
but behind over 10 years. Against the IA UK Equity Income OEIC average, City
of London was ahead over 1, 3, 5 and 10 years.
Share Issues and Buybacks
City of London's share price traded at a premium to NAV in the third quarter
of 2023 and 5.3 million shares were issued for proceeds of £20.9 million.
During the first half of 2024, City of London's shares traded at a discount to
NAV and 8.3 million shares were bought back into treasury at a net cost of
£34.4 million. Issuing shares at a premium and buying back at a discount
enhances NAV. The Board's aim, subject to prevailing market conditions, is for
the Company's share price to reflect closely its underlying net asset value
while smoothing volatility and encouraging a liquid market in the shares. Over
the past ten years, City of London has issued 218 million shares at a premium
to NAV, increasing our share capital by 76%.
Environmental, Social and Governance
The Fund Manager and Deputy Fund Manager, supported by specialists at Janus
Henderson, give careful consideration to environmental, social and governance
("ESG") related risks and opportunities when selecting stocks for the
portfolio. The Board recognises that these risks are highly relevant to the
long-term performance of City of London and of increasing concern to
shareholders. An analysis by MSCI, a company widely used in the review of ESG
factors, shows that City of London's portfolio as at 30 June 2024 had a lower
weighted score for ESG risks than the FTSE All-Share Index. ESG related issues
receive careful consideration at each Board meeting, including how
shareholdings have been voted at investee company meetings. Further details of
how ESG considerations are taken into account in the investment decision
making process are provided in the Annual Report.
The Board
Having served nine years on the Board, Samantha Wren will retire at our Annual
General Meeting on 31 October 2024. Samantha has been an outstanding Chair of
the Audit and Risk Committee and I would like to thank her for her wise
counsel. Sally Lake, who joined the Board on 1 August 2024, will succeed
Samantha in this important role. Sally was Group Finance Director of Beazley
plc, the FTSE 100 specialist insurance company, from 2019 to 2024.
Annual General Meeting
The 2024 Annual General Meeting ("AGM") will be held at the offices of Janus
Henderson, 201 Bishopsgate, London EC2M 3AE on Thursday, 31 October 2024 at
2.00pm. The meeting will include a presentation by our Fund Manager, Job
Curtis, and Deputy Fund Manager, David Smith. Any shareholder who is unable to
travel is encouraged to join virtually by Zoom, the conference software
provider. There will, as usual, be live voting for those physically present at
the AGM, but we cannot offer live voting via Zoom because of technical
restrictions. We therefore request all shareholders, and particularly those
who cannot attend physically, to submit their votes by proxy to ensure their
vote counts at the AGM.
Outlook
The US has been the engine of world economic growth over the last year, but
there have been recent signs of weakness, for example in new jobs creation,
which have introduced a degree of volatility into stock market confidence.
There is scope for the US Federal Reserve to cut interest rates, but it is
unclear how far the Federal government can maintain its current high
expenditure funded from borrowings given that the fiscal deficit is already at
record levels relative to GDP. Neither of the two US Presidential candidates
seem likely to focus on cutting the deficit, but its continuing increase is
only feasible if the dollar's status as the world's reserve currency
continues.
UK economic growth has picked up during the second half of 2024 following a
"technical" recession, with two quarters of declining GDP, in the second half
of 2023. The recent General Election has ended a period of political
uncertainty, delivering a majority government in contrast to the instability
facing various European countries. The new government is aiming to increase
economic growth, but will need to address major challenges which include
static productivity and significant underinvestment in infrastructure. Recent
public sector pay awards, which do not appear to be linked to productivity
improvements, may in the short term make it more challenging to keep inflation
at the 2% Bank of England target.
Geopolitical tensions remain heightened. The war in Ukraine continues and the
conflict in the Middle East has the potential to escalate more widely.
Relations between China and the western developed countries remain
adversarial, with China's excess manufacturing capacity in areas such as
electric vehicles becoming an increasing source of tension. The outcome of the
US Presidential election in November, which clearly will have considerable
implications for global markets, is currently very uncertain.
Although there has been some improvement in the performance of UK equities
relative to their overseas equivalents, they continue to trade at a valuation
discount. It is therefore not unreasonable to expect that the trend of
takeover bids for UK companies by overseas buyers and private equity investors
will continue.
The dividend yield from UK equities remains attractive relative to the main
alternative investment options, particularly with UK bank deposit savings
rates starting to decline. It is also notable that there have been
satisfactory dividend increases announced during the recent half-year results
season. Investors continue to be "paid to hold on" to UK equities.
City of London's portfolio is well diversified, with 64% of investee
companies' revenues earned from overseas. The portfolio's core holdings
include good quality and cash generative companies which can be expected to
deliver reliable and competitive returns.
Sir Laurie Magnus CBE
Chairman
17 September 2024
FUND MANAGER'S REPORT
Investment Background
The UK equity market, as measured by the FTSE All-Share Index, produced a
total return of 13.0% over the 12 months. The UK economy entered a technical
recession in the second half of 2023, with GDP declining for two quarters. The
slowdown was mild, and the UK economy emerged at the beginning of 2024 to grow
in line with Europe, but behind economic growth experienced in the US.
Globally, two of the investment themes which most excited investors were
artificial intelligence and weight-loss drugs. The narrow range of companies
benefiting tended to be listed overseas with low or zero dividend yields.
The Bank of England increased the base rate to 5.25% in August 2023 when UK
consumer price inflation stood at 6.7%. The base rate was unchanged for the
rest of the 12-month period under review and inflation fell back to the 2%
target in May 2024. The 10-year gilt yield, which fell to 3.6% at the end of
December on premature hopes for interest rate cuts, ended the 12 months at
4.2%. The dividend yield of the FTSE All-Share Index was 3.7% at the end of
June 2024, below the 10-year gilt yield and base rate, but with equities
offering the prospect of dividend growth.
In recent years, during the period of exceptionally low interest rates, the
Company was able to fix cheap rates of borrowing for long periods using the
following secured notes: £35 million 4.53% 2029, £30 million 2.67% 2046 and
£50 million 2.94% 2049. These borrowings remained almost completely invested
in equities throughout the year. The HSBC overdraft facility, which is priced
off the base rate, was either unutilised or drawn down by less than £10
million until February 2024, after which it was drawn down between £40
million to £45 million to take advantage of opportunities in equities.
In contrast to the previous 12 months, when sterling fell to 1.07 against the
US dollar during the short period when Liz Truss was Prime Minister, it was a
quiet year on the foreign exchange market. Sterling's exchange rate against
the US dollar started the 12 months at 1.27, fell to a low of 1.21 in October
2023 and recovered back to 1.26 by the end of June 2024. Against the euro,
sterling was in a range of 1.14 to 1.19 over the 12 months.
Despite the continuing war in Ukraine and rising tensions in the Middle East,
the oil price was in a range of $73/bbl to $97/bbl over the 12 months. Russia
continued to export oil to some countries, such as China and India. Saudi
Arabia restricted some of its output to prevent excess supply.
Performance Review
Estimated performance attribution (relative to FTSE All-Share Index total
return)
2024 2023
% %
Stock selection +2.64 -4.32
Gearing +0.25 +1.13
Expenses -0.37 -0.37
Share issues/buybacks +0.07 +0.18
Total +2.59 -3.38
Source: Janus Henderson
The Company produced a net asset value total return of 15.57%, which was 2.59
percentage points ("pp") better than the FTSE All-Share Index total return of
12.98%. Gearing contributed to performance by 0.25pp and stock selection by
2.64pp.
The biggest stock contributor to performance relative to the FTSE All-Share
Index was 3i, the investor in private companies, which benefited from the
outstanding growth of its investment in Action, a discount retailer in Europe.
The second biggest contributor was BAE Systems, which is experiencing strong
demand from many countries for defence equipment given the external threats.
The third biggest contributor was NatWest, whose profitability was better than
market expectations. The fourth and fifth biggest contributors were Wincanton
and Round Hill Music Royalties, which were both taken over.
In contrast, the biggest stock detractor to performance relative to the FTSE
All-Share Index was not holding Rolls Royce, the aero engine manufacturer,
whose share price recovered well but still did not pay a dividend. The second
biggest detractor was St. James's Place, which announced changes in the
structure of its customer fees and a provision for compensation to those
customers who had not had annual reviews. The third biggest detractor was
being underweight in Shell, despite it ending the year as the second largest
holding. The fourth and fifth biggest detractors were Schroders, the fund
management company, and Nestlé, the food manufacturer.
Large companies, as represented by the FTSE 100 Index, produced a total return
of 12.8% over the 12 months, which was slightly behind medium-sized companies,
with the FTSE 250 returning 13.9%, and small companies, with the FTSE Small
Cap returning 14.6%. A factor behind the outperformance of medium-sized and
small companies was the large number of takeovers in this area of the market.
Higher yielding shares had a good year, as the chart in the Annual Report
shows. The FTSE 350 Higher Yield Index (the higher dividend yielding half of
the largest 350 companies listed in the UK) returned 16.8%. The FTSE 350 Lower
Yield Index (the lower yielding half of the largest 350 shares listed in the
UK) returned 9.2%. Notably outperforming sectors offering above average
dividend yields included banks and oil and gas.
Portfolio Changes
In our view, UK shares were better value than overseas equivalents, possibly
due to lack of demand from domestic institutional and retail investors. Some
market strategists have estimated the UK valuation discount to have been
around 20%. Evidence for this view could be seen in the large number of
takeovers of UK companies from overseas corporates. Therefore, over the 12
months, the proportion of the portfolio invested in companies with their prime
listing overseas was reduced from 15% to 10%. The proceeds were reinvested in
UK equities, with the proportion in large UK-listed companies (included in the
FTSE 100 Index) rising by three percentage points to 78%. The proportion in
UK-listed medium-sized and small companies rose by two percentage points to
12%.
Distribution of the portfolio as at 30 June 2024
% of the portfolio
Large UK-listed companies (constituents of the FTSE 100 Index) 78
Medium-sized and small UK-listed companies 12
Overseas-listed companies 10
Source: Refinitiv Datastream, as at 30 June 2024
Financial companies (banks, insurers and financial services) remained the
largest part of the portfolio and rose from 26.3% of the total to 29.3% over
the 12 months. In the banks sector, significant additions were made to
NatWest, where the share price valuation did not seem to discount our
expectations of the level of profitability. In particular, structural hedges
taken out when interest rates were low should be reset, when they mature, at
higher interest rates supporting greater profits.
In the life insurance sector, a new holding was bought in Aviva, which is the
largest general insurer and a leading life and pensions provider in the UK and
the second largest general insurer in Canada. In our view, Aviva has scope to
grow both volumes and margins in UK property and casualty insurance while its
life insurance business provides a strong source of free cash flow as the
required capital backing this business is released over time.
In the financial services sector (confusingly named in the index sector
breakdown as "Investment Banking and Brokerage Services"), the holding in St.
James's Place was reduced given the profit warnings and dividend cut. A
smaller holding has been retained in the company, which is the UK's largest
wealth manager, because it continues to have net inflows of new funds and may
have significant share price recovery potential.
The portfolio's exposure to industrial companies was reduced over the year
from 12.3% to 11.4%. The holding in Ferguson, the US building products
distributor, was sold following its rerating after moving its prime listing
from the London Stock Exchange to New York. We also sold Holcim, the building
materials company listed in Switzerland, which rerated after it announced its
intention to demerge and list its US operations on the New York Stock
Exchange. A complete sale was made of Siemens, the industrial conglomerate,
which in our view appeared fully valued, especially with the potential for a
slowdown in demand from China. Wincanton, the logistics company, was sold
after the agreed takeover from GXO of the US, following an earlier bid at a
lower price from CME of France. A new holding was bought in Dowlais, which was
spun out of Melrose, and is the former GKN auto components and powder
metallurgy business. It is the world's leading supplier of drive systems,
which transmit power to the wheels, required for both petrol and electric
cars. In paper and packaging, DS Smith was bid for by Mondi before agreeing to
be taken over by International Paper of the US. DS Smith and Mondi are both
held in the portfolio.
In the oil and gas sector, a new holding was bought in ENI, which is
headquartered in Italy, with global operations and, in our view, particularly
good prospects for oil production growth. In contrast, the holding in Woodside
was sold because of its focus on liquified natural gas where the market
appeared well supplied, putting downward pressure on prices.
In the mining sector, the main development was a takeover approach for Anglo
American, held in the portfolio, from BHP. Anglo American decided to focus on
its own recovery plan rather than agree to a takeover from BHP, because it
considered the structure of the bid to be flawed. The iron ore price, which is
dependent on demand from China and a key factor in profits for our holding in
Rio Tinto, traded in a relatively narrow range over the 12 months.
In the telecommunications sector, a new holding was bought in BT, where strong
free cash flow growth is expected as its fibre network is built up. Orange was
sold given the potential for disruptive competition and price cutting in the
French telecommunications market.
In the pharmaceuticals sector, the holding in Sanofi was sold after it
downgraded profit expectations, possibly indicating previous underinvestment
in research and development. The proceeds were reinvested in additions to the
holdings in AstraZeneca and GSK.
Three other new holdings were purchased. Hilton Food processes, packs and
distributes meat and fish for food retailers. The business was started in the
UK and now has operations in Continental Europe and Australasia. Hilton's
supply chain expertise and category knowledge enables it to be cost
competitive. Inchcape is a motor distributor in 40 countries with
long-standing partnerships with some of the world's leading car manufacturers.
It provides services such as logistics from port to showroom and distribution
of parts. A small holding was bought in Burberry, the British fashion company,
probably best known for its trench coats. The market for luxury fashion items
has faced recent headwinds, especially with lower demand from Chinese
customers. Burberry has made mistakes in its strategy of moving to higher
priced products, but the brand has a long history. In our view, Burberry has
significant recovery potential as its markets improve and the new management
team develops a better strategy.
There were three other complete sales of holdings during the 12 months. La
Française des Jeux, the French national lottery operator, was sold after it
made a large acquisition of an online betting operator which, in our view,
increased its risk profile. Cisco was sold on concern about a potential
slowdown in sales to office campus networks. A complete sale was also made of
Round Hill Music Royalties Fund following its agreed takeover, achieving a
capital gain of 61% on a shareholding which was bought in June 2023.
Portfolio Outlook
Revenue exposure
% of the portfolio
United Kingdom 36
North America 22
Europe ex UK 15
Asia Pacific (inc Japan) 16
Emerging Markets 11
Source: Refinitiv Datastream, as at 30 June 2024
The portfolio remains well diversified with 64% of investee companies'
revenues coming from overseas. The detailed split of revenue is UK 36%, North
America 22%, Asia Pacific 16%, Europe 15% and Emerging Markets 11%.
Largest sector weightings
Portfolio FTSE All-Share Index Relative to the FTSE All-Share Index
% % %
Banks 11.0 10.0 +1.0
Investment Banking and Brokerage Services 9.4 3.1 +6.3
Oil, Gas and Coal 8.8 11.1 -2.3
Pharmaceuticals and Biotechnology 7.8 11.4 -3.6
Personal Care, Drug and Grocery Stores 7.3 7.3 -
Total 44.3 42.9 +1.4
Banks is the largest sector with a good flow of profits and dividends expected
as they continue to benefit from the higher level of interest rates compared
with most of the period since the global financial crisis of 2007 to 2009.
Banks will always be vulnerable to economic shocks, but they have strengthened
their capital ratios significantly over the last fifteen years. HSBC, where
the majority of profits comes from Asia Pacific, is the largest bank holding
and the fourth largest in the portfolio. In addition, NatWest (12(th)
largest), Lloyds Banking (14(th) largest) and Barclays (21(st) largest) are
also held.
The second largest sector is investment banking and brokerage services, which
would be better described as financial services. The largest holding in this
sector is 3i, the investor in private companies, which is the seventh largest
holding in the portfolio. Its largest investment is in Action, the discount
retailer in Europe, which has scope to continue opening new stores as well as
lifting sales in existing stores. Also in this sector is M&G (16(th)
largest), which is valued on a high dividend yield despite the cash generation
from its life insurance business.
The third largest sector is oil and gas where the two largest holdings are
Shell (second largest in the portfolio) and BP (10(th) largest). After the
savage cuts in their dividends in 2020, both companies have grown their
dividends from the reset lower bases and also bought back shares. They are
also showing greater discipline in their investment in renewable energy. Key
for both companies is the level and direction of the oil price. The world will
still need oil for many years and natural gas will be an important transition
fuel towards a lower carbon future. In the utilities sectors, National Grid
(15(th) largest) and SSE (19(th) largest) are well placed to benefit from the
electrification of energy infrastructure and the growth of renewable power.
Pharmaceuticals is the fourth largest sector, with AstraZeneca the sixth
largest in the portfolio. AstraZeneca continues to be very successful in
discovering and gaining approval for new medicines, especially for cancer. Its
dividend yield is below average but has started to grow again. GSK is the
20(th) largest holding. It continues to be successful with vaccines and HIV
medicines and has promising new drugs under development in other areas.
The fifth largest sector is personal care, drug and grocery stores where the
largest holdings are Unilever (fifth largest in the portfolio) and Tesco
(ninth largest). Unilever, the consumer products and food group, has a
substantial presence in both developed and emerging markets. In recent years,
it has divested some lower growth operations, improving its mix of businesses.
Tesco, the UK's largest food retailer, is price competitive and a substantial
cash generator.
The largest holding in the portfolio at the end of June 2024 was BAE Systems,
the defence company. BAE's biggest market is the US followed by the UK and
Saudi Arabia. It also has smaller but fast-growing sales with countries such
as Japan, Australia and in Eastern Europe. Given the rising external threats,
demand for the sophisticated products, equipment and systems made by BAE is
likely to remain robust. RELX, the third largest holding, also enjoys
structural growth characteristics as the provider of information and analytics
for businesses, professionals and scientists. Both BAE and RELX are lower
dividend yielding shares, which are balanced by the high yield and strong cash
generation of British American Tobacco, which is pivoting to less harmful
nicotine products.
Overall, the portfolio is designed to continue growing City of London's
dividend and provide a competitive total return, including capital
appreciation. It has a tilt towards stocks with an above average dividend
yield, but some lower yielders are included within the mix for their growth
potential. The portfolio is diversified both by geography and by sector. We
are encouraged by the quality of the companies and their prospects.
Job Curtis
Fund Manager
David Smith
Deputy Fund Manager
17 September 2024
FORTY LARGEST INVESTMENTS AS AT 30 JUNE 2024
The 40 largest investments, representing 80.68% of the portfolio, are listed
below.
Market value Portfolio
Position Company Sector £'000 %
1 BAE Systems Aerospace and Defence 96,360 4.29
2 Shell Oil, Gas and Coal 95,233 4.24
3 RELX Media 92,836 4.13
4 HSBC Banks 91,628 4.08
5 Unilever Personal Care, Drug and Grocery Stores 81,451 3.63
6 AstraZeneca Pharmaceuticals and Biotechnology 75,977 3.37
7 3i Investment Banking and Brokerage Services 74,351 3.31
8 British American Tobacco Tobacco 64,395 2.87
9 Tesco Personal Care, Drug and Grocery Stores 60,548 2.70
10 BP Oil, Gas and Coal 59,875 2.67
Top 10 792,654 35.29
11 Imperial Brands Tobacco 58,161 2.59
12 NatWest Banks 55,327 2.46
13 Rio Tinto Industrial Metals and Mining 54,860 2.44
14 Lloyds Banking Banks 51,456 2.29
15 National Grid Gas, Water and Multi-utilities 49,922 2.22
16 M&G Investment Banking and Brokerage Services 48,960 2.18
17 Diageo Beverages 48,783 2.17
18 Phoenix Life Insurance 45,110 2.01
19 SSE Electricity 42,936 1.91
20 GSK Pharmaceuticals and Biotechnology 41,679 1.86
Top 20 1,289,848 57.42
21 Barclays Banks 40,527 1.80
22 Legal & General Life Insurance 38,573 1.72
23 Aviva Life Insurance 35,745 1.59
24 IG Investment Banking and Brokerage Services 35,196 1.57
25 TotalEnergies Oil, Gas and Coal 31,708 1.41
26 Land Securities Real Estate Investment Trusts 28,629 1.28
27 Munich Re Non-life Insurance 28,496 1.27
28 Glencore Industrial Metals and Mining 27,066 1.20
29 Schroders Investment Banking and Brokerage Services 26,906 1.20
30 Nestlé Food Producers 24,218 1.08
Top 30 1,606,912 71.54
31 Merck Pharmaceuticals and Biotechnology 23,983 1.07
32 Severn Trent Gas, Water and Multi-utilities 23,790 1.06
33 Novartis Pharmaceuticals and Biotechnology 22,254 0.99
34 Anglo American Industrial Metals and Mining 21,267 0.94
35 Swire Pacific General Industrials 20,973 0.93
36 British Land Real Estate Investment Trusts 19,336 0.86
37 Persimmon Household Goods and Home Construction 19,325 0.86
38 Sage Software and Computer Services 18,605 0.83
39 Taylor Wimpey Household Goods and Home Construction 18,260 0.81
40 Britvic Beverages 17,716 0.79
Top 40 1,812,421 80.68
All classes of equity in any one company are treated as one investment.
PRINCIPAL RISKS
The Board, with the assistance of the Manager, has carried out a robust
assessment of the principal and emerging risks and uncertainties facing the
Company, including those that would threaten its business model, future
performance, solvency or liquidity and reputation.
The Board regularly considers the principal and emerging risks facing the
Company and has drawn up a register of these risks. The Board has also put
in place a schedule of investment limits and restrictions, appropriate to the
Company's investment objective and policy. The principal risks which have been
identified and the steps taken by the Board to mitigate these are set out in
the table below. The principal financial risks are detailed in note 16 to the
financial statements in the Annual Report. Details of how the Board monitors
the services provided by Janus Henderson and its other suppliers, and the key
elements designed to provide effective internal control, are explained further
in the internal controls section of the Corporate Governance Report in the
Annual Report.
In addition to the principal risks facing the Company, the Board also
regularly considers emerging risks, which are defined as potential trends,
sudden events or changing risks which are characterised by a high degree of
uncertainty in terms of the probability of them happening and the possible
effects on the Company. Should an emerging risk become sufficiently clear, it
may be moved to a significant risk.
Principal risks Trend Mitigating measure
Portfolio and market price ↔ The Board reviews the portfolio at the seven Board meetings held each year and
receives regular reports from the Company's brokers. A detailed liquidity
Although the Company invests almost entirely in securities that are listed on report is considered on a regular basis.
recognised markets, share prices may move rapidly. The companies in which
investments are made may operate unsuccessfully, or fail entirely. A fall in
the market value of the Company's portfolio would have an adverse effect on
equity shareholders' funds. The Fund Managers closely monitor the portfolio between meetings and mitigate
this risk through diversification of investments. The Fund Managers
periodically present the Company's investment strategy in respect of current
market conditions. Performance relative to the FTSE All-Share Index, other UK
equity income trusts and IA UK Equity Income OEICs is also monitored.
The majority of the Company's investments are multi-national companies with
operations in local markets.
Dividend income ↔ The Board reviews income forecasts at each meeting. The Company has revenue
reserves of £46.6 million (before payment of the fourth interim dividend) and
A reduction in dividend income from investee companies could adversely affect distributable capital reserves of £346.3 million.
the Company's ability to maintain its record of paying a growing dividend to
shareholders each year.
Investment activity, gearing and performance ↔ At each meeting, the Board reviews investment performance, the level of
gearing, the level of premium/discount, income forecasts and a schedule of
An inappropriate investment strategy (for example, in terms of asset expenses. It also has an annual meeting focused on strategy at which these
allocation or the level of gearing) may result in underperformance against the matters are considered in more depth.
Company's benchmark.
Investment performance could be affected over the longer term by the impact of
sudden potentially catastrophic events, whether man-made (for example extreme
political tensions, conflict, poor trade relations, wide scale financial
markets disruption), or natural disasters, whether arising from climate
change/adverse weather events or disease.
Tax and regulatory ↔ The Manager provides its services, inter alia, through suitably qualified
professionals and the Board receives internal control reports produced by the
Changes in the tax and regulatory environment, including the Company failing Manager on a quarterly basis, which confirm legal and regulatory compliance.
to identify and implement any necessary regulatory change, could adversely The Fund Managers also consider tax and regulatory change in their monitoring
affect the Company's financial performance, including the return on equity. of the Company's underlying investments.
These may also include government measures which damage the market appeal of
investment trusts for investors.
A breach of Section 1158/9 of the Corporation Tax Act 2010 as amended could
lead to a loss of investment trust status, resulting in capital gains realised
within the portfolio being subject to corporation tax. A breach of the UK
Listing Rules could result in suspension of the Company's shares, while a
breach of the Companies Act 2006 could lead to criminal proceedings, or
financial or reputational damage.
Operational ↔ The Board monitors the services provided by the Manager and its other
suppliers and receives reports on the key elements in place to provide
The disruption or failure of technology systems used by the Manager or its effective internal control.
Administrator (BNP Paribas), whether through inter alia, cyber attacks, failed
software updates or data breaches, could profoundly impact the accurate
reporting and monitoring of the Company's financial position. The Company is
also exposed to the operational risk that one or more of its suppliers may not Cyber security is closely monitored and the Audit and Risk Committee receives
provide the required level of service. regular presentations from Janus Henderson's Chief Information Security
Officer.
The Board considers the loss of the Fund Manager as a risk but this is
mitigated by the experience of the team at Janus Henderson as detailed in the
Annual Report.
BORROWINGS
The Company has a borrowing facility of £120.0 million (2023: £120.0
million) with HSBC Bank plc, of which £41.0 million was drawn at the year
end (2023: £9.0 million).
The Company has £114.3 million (2023: £114.2 million) of secured notes in
issue (fair value of the loan notes: £87.1 million (2023: £83.3 million)).
The level of borrowing at 30 June 2024 was 7.5% of net asset value with debt
at par (2023: 6.5%) and 6.2% with debt at fair value (2023: 4.9%).
VIABILITY STATEMENT
The AIC Code of Corporate Governance includes a requirement for the Board to
assess the future prospects for the Company, and to report on the assessment
within the Annual Report.
The Board considers that certain characteristics of the Company's business
model and strategy are relevant to this assessment:
• The Board seeks to deliver long-term performance by the Company.
• The Company's investment objective, strategy and policy, which are subject to
regular Board monitoring, mean that the Company is invested mainly in readily
realisable, UK-listed securities and that the level of borrowings is
restricted.
• The Company is a closed end investment company and therefore does not suffer
from the liquidity issues arising from unexpected redemptions.
• The Company has an ongoing charge of 0.37%, which is lower than other
comparable investment trusts.
Also relevant were a number of aspects of the Company's operational
agreements:
• The Company retains title to all assets held by the Custodian under the terms
of formal agreements with the Custodian and Depositary.
• Long-term borrowing is in place, being 4.53% secured notes 2029, 2.94% secured
notes 2049 and 2.67% secured notes 2046 which are subject to formal
agreements, including financial covenants with which the Company complied in
full during the year. The value of long-term borrowing is relatively small in
comparison to the value of net assets, being 5.5%.
• Revenue and expenditure forecasts are reviewed by the Directors at each Board
meeting. This includes stress testing of the forecast under different
scenarios.
• Cash is held with approved banks.
Three model scenarios are considered which evaluate the impact on revenue
reserves. These range from a worst case scenario which includes low consensus
estimates, significant dividend cuts of up to 50% in specific sectors and
specific investee companies, to a best case scenario with high consensus
estimates, no dividend cuts in any specific sector and limited dividend cuts
in specific investee companies. Increasing dividend payments to shareholders
could continue under all three scenarios whether through revenue, or supported
by distributable capital reserves. None of the results from the three
scenarios would therefore threaten the viability of the Company.
Covenant limits are tested to ascertain the level that net assets would need
to fall by to breach any covenant conditions. Net assets would need to fall by
amounts in excess of £1.7 billion to breach covenants, with all other factors
remaining constant. The Board considers this to be highly unlikely and
therefore does not threaten the viability of the Company.
In addition, the Directors carried out a robust assessment of the principal
risks and uncertainties which could threaten the Company's business model,
including future performance, liquidity and solvency and considered emerging
risks that could have a future impact on the Company.
The principal risks identified as relevant to the viability assessment were
those relating to investment portfolio performance and its effect on the net
asset value, share price and dividends, and threats to security over the
Company's assets. The Board took into account the liquidity of the Company's
portfolio, the existence of the long-term fixed rate borrowings, the effects
of any significant future falls in investment values and income receipts on
the ability to repay and renegotiate borrowings, grow dividend payments and
retain investors and the potential need for share buybacks to maintain a
narrow share price discount.
The Directors assess viability over five-year rolling periods, taking account
of foreseeable severe but plausible scenarios. In coming to this conclusion,
the Directors have considered the current geopolitical and macroeconomic
uncertainties and the potential for sudden catastrophic events such as
pandemics, conflict and climate events, in particular the impact on income and
the Company's ability to meet its investment objective. The Directors do not
believe that they will have a long-term impact on the viability of the Company
and its ability to continue in operation, notwithstanding the short-term
uncertainty these events could cause in the markets and specific short-term
issues such as energy, supply chain disruption, inflation and labour
shortages.
The Directors believe that a rolling five-year period best balances the
Company's long-term objective, its financial flexibility and scope with the
difficulty in forecasting economic conditions affecting the Company and its
shareholders.
Based on their assessment, and in the context of the Company's business model,
strategy and operational arrangements set out above, the Directors have a
reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the five-year period.
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were with the
Directors and the Manager. There were no material transactions between the
Company and its Directors during the year and the only amounts paid to them
were in respect of expenses and remuneration for which there were no
outstanding amounts payable at the year end. Directors' shareholdings are
disclosed in the Annual Report.
In relation to the provision of services by the Manager, other than fees
payable by the Company in the ordinary course of business and the provision of
marketing services, there were no material transactions with the Manager
affecting the financial position of the Company during the year under review.
More details on transactions with the Manager, including amounts outstanding
at the year end, are given in the Annual Report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Each of the Directors, who are listed below, confirms that, to the best of his
or her knowledge:
• the Company's financial statements, which have been prepared in accordance
with UK Accounting Standards on a going concern basis, give a true and fair
view of the assets, liabilities, financial position and return of the Company;
and
• the Strategic Report and financial statements include a fair review of the
development and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties that it
faces.
On behalf of the Board
Sir Laurie Magnus CBE
Chairman
17 September 2024
INCOME STATEMENT
Year ended 30 June 2024 Year ended 30 June 2023
Notes Revenue Capital Total Revenue Capital Total
return
return
return
return
return
£'000
£'000 return
£'000
£'000
£'000
£'000
Gains/(losses) on investments held at fair value through profit or loss - 200,864 200,864 - (27,111) (27,111)
2 Income from investments held at fair value through profit or loss - 109,335 101,747 - 101,747
109,335
3 Other interest receivable and similar income 371 - 371 224 - 224
Gross revenue and capital gains/(losses) 109,706 200,864 310,570 101,971 (27,111) 74,860
4 Management fee (1,927) (4,497) (6,424) (1,844) (4,304) (6,148)
Other administrative expenses (1,009) - (1,009) (860) - (860)
Net return/(loss) before finance costs and taxation 106,770 196,367 303,137 99,267 (31,415) 67,852
Finance costs (1,666) (3,520) (5,186) (1,621) (3,416) (5,037)
Net return/(loss) before taxation 105,104 192,847 297,951 97,646 (34,831) 62,815
Taxation (533) - (533) (1,406) - (1,406)
Net return/(loss) after taxation 104,571 192,847 297,418 96,240 (34,831) 61,409
5 Return/(loss) per ordinary share - basic and diluted 20.87p 38.48p 59.35p 20.14p (7.29p) 12.85p
The total columns of this statement represent the Company's Income Statement.
The revenue return and capital return columns are supplementary to this and
are prepared under guidance published by the Association of Investment
Companies. All revenue and capital items in the above statement derive from
continuing operations. The Company has no recognised gains or losses other
than those recognised in the Income Statement.
STATEMENT OF CHANGES IN EQUITY
Notes Year ended Called up share capital £'000 Share premium account £'000 Capital redemption reserve £'000 Other capital reserves £'000 Revenue reserve £'000 Total
30 June 2024 £'000
At 1 July 2023 124,339 1,053,061 2,707 691,463 44,322 1,915,892
Net return after taxation - - - 192,847 104,571 297,418
8 Buyback of 8,301,867 ordinary shares for treasury - - - (34,400) - (34,400)
8 Issue of 5,310,000 new ordinary shares 1,327 19,563 - - - 20,890
7 Dividends paid - - - - (102,272) (102,272)
At 30 June 2024 125,666 1,072,624 2,707 849,910 46,621 2,097,528
Notes Year ended Called up share capital £'000 Share premium account £'000 Capital redemption reserve £'000 Other capital reserves £'000 Revenue reserve £'000 Total
30 June 2023 £'000
At 1 July 2022 114,910 909,143 2,707 726,294 43,603 1,796,657
Net (loss)/return after taxation - - - (34,831) 96,240 61,409
8 Issue of 37,715,000 new ordinary shares 9,429 143,918 - - - 153,347
7 Dividends paid - - - - (95,521) (95,521)
At 30 June 2023 124,339 1,053,061 2,707 691,463 44,322 1,915,892
STATEMENT OF FINANCIAL POSITION
Notes 30 June 2024 30 June 2023
£'000 £'000
Fixed assets
Investments held at fair value through profit or loss
Listed at market value in the United Kingdom(1) 1,657,638 1,653,748
Listed at market value overseas(1) 216,147 259,339
Investments on loan(1) 372,460 121,213
Investment in subsidiary undertakings 347 347
2,246,592 2,034,647
Current assets
Debtors 12,911 10,823
12,911 10,823
Creditors: amounts falling due within one year (46,307) (13,956)
Net current liabilities (33,396) (3,133)
Total assets less current liabilities 2,213,196 2,031,514
Creditors: amounts falling due after more than one year (115,668) (115,622)
Net assets 2,097,528 1,915,892
Capital and reserves
8 Called up share capital 125,666 124,339
Share premium account 1,072,624 1,053,061
Capital redemption reserve 2,707 2,707
Other capital reserves 849,910 691,463
Revenue reserve 46,621 44,322
6 Total shareholders' funds 2,097,528 1,915,892
6 Net asset value per ordinary share - basic and diluted 424.29p 385.22p
(1) Prior year comparatives have been restated as explained further in note 1
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
Basis of accounting
The Company is a registered investment company as defined in Section 833 of
the Companies Act 2006 and is incorporated in the UK. It operates in the UK
and is registered at the address below.
The financial statements have been prepared in accordance with the Companies
Act 2006, FRS 102, the Financial Reporting Standard applicable in the UK and
Republic of Ireland, and with the Statement of Recommended Practice: Financial
Statements of Investment Trust Companies and Venture Capital Trusts ("the
SORP") issued in July 2022 by the Association of Investment Companies.
The principal accounting policies applied in the presentation of these
financial statements are set out in the Annual Report. These policies have
been consistently applied to all the years presented.
As an investment fund the Company has the option, which it has taken, not to
present a cash flow statement. A cash flow statement is not required when an
investment fund meets all the following conditions: substantially all of the
entity's investments are highly liquid, substantially all of the entity's
investments are carried at market value, and the entity provides a Statement
of Changes in Equity. The Directors have assessed that the Company meets all
of these conditions.
The financial statements have been prepared under the historical cost basis
except for the measurement at fair value of investments. In applying FRS 102,
financial instruments have been accounted for in accordance with Sections 11
and 12 of the standard. All of the Company's operations are of a continuing
nature.
The financial statements of the Company's three subsidiaries have not been
consolidated on the basis of immateriality and dormancy. Consequently, the
financial statements present information about the Company as an individual
entity. The Directors consider that the values of the subsidiary undertakings
are not less than the amounts at which they are included in the financial
statements.
The preparation of the Company's financial statements on occasion requires the
Directors to make judgements, estimates and assumptions that affect the
reported amounts in the primary financial statements and the accompanying
disclosures. These assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets or liabilities
affected in the current and future periods, depending on circumstance.
The decision to allocate special dividends as income or capital is a judgement
but not deemed to be material. The allocation of expenses to income or capital
is a judgement as well, but also is not deemed to be material. The Directors
do not believe that any accounting judgements or estimates have been applied
to this set of financial statements that have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities within
the next financial year. In line with UK GAAP, investments are valued at fair
value which are quoted prices for the investments in active markets and
therefore reflect participants' views of climate change risk.
The investment disclosures in the Statement of Financial Position previously
included the value of investments on loan within the values of investments
listed at market value in the United Kingdom (£80,947,000) and listed at
market value overseas (£40,266,000). In the current year, the value of
investments on loan has been disclosed separately and the prior year
comparatives restated on the same basis. These changes in presentation have no
impact on the Company's net assets or Income Statement.
Going concern
The assets of the Company consist of securities that are readily realisable.
As set out in the Viability Statement, the Directors consider three model
scenarios that stress test the revenue reserves. None of the results from
these scenarios would threaten the viability of the Company and its ability to
continue as a going concern. The Directors have also considered the current
geopolitical and macroeconomic uncertainties and the potential for sudden
catastrophic events such as pandemics, conflict and climate events, including
cash flow forecasting, a review of covenant compliance including the headroom
above the most restrictive covenants and an assessment of the liquidity of the
portfolio. They have concluded that the Company is able to meet its financial
obligations, including the repayment of the bank overdraft, as they fall due
for a period to 17 September 2025, which is at least 12 months from the date
of approval of the financial statements. Having assessed these factors, the
principal risks and other matters discussed in connection with the viability
statement, the Board has determined that it is appropriate for the financial
statements to be prepared on a going concern basis.
2. Income from investments held at fair value through profit or loss
2024 2023
£'000 £'000
UK dividends:
Listed - ordinary dividends 94,307 82,884
Listed - special dividends 985 1,949
95,292 84,833
Other dividends:
Dividend income - overseas investments 10,678 13,727
Dividend income - overseas special dividends 59 568
Dividend income - UK REIT 3,306 2,619
14,043 16,914
109,335 101,747
3. Other interest receivable and similar income
2024 2023
£'000 £'000
Bank interest 84 -
Underwriting commission (allocated to revenue)(1) 45 -
Stock lending revenue 242 224
371 224
(1) During the year the Company was not required to take up shares in respect
of its underwriting (2023: none)
Stock lending revenue has been shown net of brokerage fees of £61,000 (2023:
£56,000).
4. Management fee
2024 2023
Revenue return Capital return Total return Revenue return Capital return Total return
£'000 £'000 £'000 £'000 £'000 £'000
Management fee 1,927 4,497 6,424 1,844 4,304 6,148
A summary of the terms of the Management Agreement is given in the Annual
Report. Details of apportionment between revenue and capital can be found in
the Annual Report.
5. Return per ordinary share - basic and diluted
The return per ordinary share is based on the net return attributable to the
ordinary shares of £297,418,000 (2023: £61,409,000) and on 501,134,608
ordinary shares (2023: 477,932,402), being the weighted average number of
ordinary shares in issue during the year.
The return per ordinary share is analysed between revenue and capital as
below:
2024 2023
£'000 £'000
Net revenue return 104,571 96,240
Net capital return/(loss) 192,847 (34,831)
Net total return 297,418 61,409
Weighted average number of ordinary shares in issue during the year 501,134,608 477,932,402
2024 2023
Pence Pence
Revenue return per ordinary share 20.87 20.14
Capital return/(loss) per ordinary share 38.48 (7.29)
Total return per ordinary share 59.35 12.85
The Company does not have any dilutive securities, therefore the basic and
diluted returns per share are the same.
6. Net asset value per ordinary share - basic and diluted
The net asset value per ordinary share is based on the net assets attributable
to the ordinary shares of £2,097,528,000 (2023: £1,915,892,000) and on
494,363,001 (2023: 497,354,868) shares in issue on 30 June 2024.
An alternative net asset value per ordinary share can be calculated by
deducting from the total assets less current liabilities of the Company the
preference and preferred ordinary stocks and secured notes at their market (or
fair) values rather than at their par (or book) values. The net asset value
per ordinary share at 30 June 2024 calculated on this basis was 429.57p (2023:
391.24p). See the Annual Report for further details of the Alternative
Performance Measure and how it is calculated.
The movements during the year of the assets attributable to the ordinary
shares were as follows:
£'000
Total net assets attributable to the ordinary shares at 30 June 2023 1,915,892
Total net return after taxation 297,418
Dividends paid on ordinary shares in the year (102,272)
Buyback of shares (34,400)
Issue of shares 20,890
Total net assets attributable to the ordinary shares at 30 June 2024 2,097,528
The Company does not have any dilutive securities.
7. Dividends paid on ordinary shares
Record date Payment date 2024 2023
£'000 £'000
Fourth interim dividend (5.00p) for the year ended 30 June 2022 04 August 2022 31 August 2022 - 23,140
First interim dividend (5.00p) for the year ended 30 June 2023 27 October 2022 30 November 2022 - 23,518
Second interim dividend (5.00p) for the year ended 30 June 2023 26 January 2023 28 February 2023 - 23,910
Third interim dividend (5.05p) for the year ended 30 June 2023 27 April 2023 31 May 2023 - 24,953
Fourth interim dividend (5.05p) for the year ended 30 June 2023 27 July 2023 31 August 2023 25,374 -
First interim dividend (5.05p) for the year ended 30 June 2024 26 October 2023 30 November 2023 25,385 -
Second interim dividend (5.05p) for the year ended 30 June 2024 25 January 2024 29 February 2024 25,385 -
Third interim dividend (5.25p) for the year ended 30 June 2024 25 April 2024 31 May 2024 26,200 -
Unclaimed dividends over 12 years old (72) -
102,272 95,521
In accordance with FRS 102, interim dividends payable to equity shareholders
are recognised in the Statement of Changes in Equity when they have been paid
to shareholders.
All dividends have been paid or will be paid out of revenue reserves or
current year revenue profits and at no point during the year did the revenue
reserve move to a negative position.
The total dividends payable in respect of the financial year which form the
basis of the test under Section 1158 of the Corporation Tax Act 2010 are set
out below.
2024 2023
£'000 £'000
Revenue available for distribution by way of dividend for the year 104,571 96,240
First interim dividend of 5.05p (2023: 5.00p) (25,385) (23,518)
Second interim dividend of 5.05p (2023: 5.00p) (25,385) (23,910)
Third interim dividend of 5.25p (2023: 5.05p) (26,200) (24,954)
Fourth interim dividend of 5.25p (2023: 5.05p) paid on 30 August 2024¹ (25,953) (25,374)
Transfer to/(from) revenue reserve² 1,648 (1,516)
1 Based on 494,334,723 ordinary shares in issue at 17 July 2024 (the
ex-dividend date) (2023: 502,464,868)
2 The surplus of £1,648,000 (2023: deficit of £1,516,000) has been taken
to/(from) the revenue reserve
Since the year end, the Board has announced a first interim dividend of 5.25p
per ordinary share, in respect of the year ending 30 June 2025. This will be
paid on 29 November 2024 to holders registered at the close of business on 25
October 2024. The Company's shares will go ex-dividend on 24 October 2024.
8. Called up share capital
Number of shares entitled to dividend Total number of shares in issue Nominal value of total shares in issue
£'000
Number of shares held in treasury
Allotted and issued ordinary shares of 25p each
At 1 July 2023 - 497,354,868 497,354,868 124,339
Buy back of shares for treasury 8,301,867 (8,301,867) - -
Issue of new ordinary shares - 5,310,000 5,310,000 1,327
At 30 June 2024 8,301,867 494,363,001 502,664,868 125,666
Number of shares entitled to dividend Total number of shares in issue Nominal value of total shares in issue
£'000
Number of shares held in treasury
Allotted and issued ordinary shares of 25p each
At 1 July 2022 - 459,639,868 459,639,868 114,910
Issue of new ordinary shares - 37,715,000 37,715,000 9,429
At 30 June 2023 - 497,354,868 497,354,868 124,339
The Company issued 5,310,000 (2023: 37,715,000) ordinary shares with total
proceeds of £20,890,000 (2023: £153,347,000) after deduction of issue costs
of £31,000 (2023: £393,000). The average price of the ordinary shares that
were issued was 396.5p (2023: 407.7p). During the year 8,301,867 shares were
bought back into treasury for a net payment of £34,400,000 (2023: no shares
bought back).
9. 2024 financial information
The figures and financial information for the year ended 30 June 2024 are
extracted from the Company's annual financial statements for that period and
do not constitute statutory accounts. The Company's annual financial
statements for the year to 30 June 2024 have been audited but have not yet
been delivered to the Registrar of Companies. The Independent Auditor's Report
on the 2024 annual financial statements was unqualified, did not include a
reference to any matter to which the Auditor drew attention without qualifying
the report, and did not contain any statements under Sections 498(2) or 498(3)
of the Companies Act 2006.
10. 2023 financial information
The figures and financial information for the year ended 30 June 2023 are
compiled from an extract of the published financial statements for that year
and do not constitute statutory accounts. Those financial statements have been
delivered to the Registrar of Companies and included the report of the
auditors which was unqualified, did not include a reference to any matter to
which the auditors drew attention without qualifying the report, and did not
contain any statements under Sections 498(2) or 498(3) of the Companies Act
2006.
11. Annual Report
The Annual Report will be posted to shareholders in late September 2024 and
will be available on the Company's website www.cityinvestmenttrust.com
(http://www.cityinvestmenttrust.com) . Copies will be available thereafter in
hard copy format from the Company's registered office, 201 Bishopsgate,
London, EC2M 3AE.
12. Annual General Meeting
The Annual General Meeting will be held on Thursday, 31 October 2024 at 2.00pm
at the Company's registered office. The Notice of Meeting will be sent to
shareholders with the Annual Report.
13. General Information
Company Status
The City of London Investment Trust plc is a UK domiciled investment trust
company.
ISIN number / SEDOL: ordinary shares: GB0001990497 / 0199049
London Stock Exchange (TIDM) Code: CTY
Global Intermediary Identification Number (GIIN): S55HF7.99999.SL.826
Legal Entity Identifier (LEI): 213800F3NOTF47H6AO55
Company Registration Number
00034871
Registered Office
201 Bishopsgate, London EC2M 3AE
Directors and Secretary
The Directors of the Company are Sir Laurie Magnus (Chairman), Samantha Wren
(Audit and Risk Committee Chair), Clare Wardle (Senior Independent Director),
Ominder Dhillon, Robert (Ted) Holmes and Sally Lake.
The Corporate Secretary is Janus Henderson Secretarial Services UK Limited,
represented by Sally Porter, ACG.
Website
Details of the Company's share price and net asset value, together with
general information about the Company, monthly factsheets and data, copies of
announcements, reports and details of general meetings can be found at
www.cityinvestmenttrust.com (http://www.cityinvestmenttrust.com) .
For further information please contact:
Job Curtis
Fund Manager
The City of London Investment Trust plc
Telephone: 020 7818 4367
Dan Howe
Head of Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 4458
Harriet Hall
PR Director, Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 2919
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