CT UK High Inc Tst CT UK High Inc-CHIB - Half-year Report
29/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241129:nRSc0905Oa&default-theme=true
RNS Number : 0905O CT UK High Income Trust PLC 29 November 2024
To: RNS
From: CT UK High Income Trust PLC
Date: 29 November 2024
LEI: 213800B7D5D7RVZZPV45
Unaudited Half-Year Results
The Board of CT UK High Income Trust PLC (the 'Company') announces the
unaudited half-year results of the Company for the six month period to 30
September 2024.
Financial Highlights for the six months
· Net asset value total return((1)) per share for the six months was
+6.8%, compared to the total return of the Benchmark((2)) of +6.1%.
· Ordinary share price total return for the six months was +9.4%
compared to the total return of the Benchmark of +6.1%.
· B share price total return for the six months was +6.7% compared to
the total return of the Benchmark of +6.1%.
· Distribution yield((1)) of 6.3% on Ordinary shares and 6.5% on B
shares at 30 September 2024, compared to the yield on the FTSE All-Share Index
of 3.6%.
Notes:
1. Yield and total return - see Alternative Performance Measures.
2. Benchmark - FTSE All-Share Index.
Chairman's Statement
Investment performance
For the six months to 30 September 2024 the net asset value ("NAV") total
return for both the Ordinary shares and B shares was +6.8%, which outperformed
the +6.1% total return for the FTSE All-Share Index, the Company's benchmark
index.
Equity markets globally have been positive in 2024 and the UK has joined in,
albeit at a slower pace than other major markets, producing a total return of
just over 6% in the six months to 30 September 2024. As is now the norm,
market sectors have been volatile within this as they reacted to newsflow
whether geo-political, macro-economic and on occasion even stock specific.
Perhaps surprisingly, the continuing war in Ukraine, the conflict in the
Middle East and the potential for this to expand into a wider regional war
have had, in the main, limited impact on equity markets. The bigger focus once
again has been on inflation and interest rates. When I wrote this statement a
year ago, I noted that inflation had been stubborn but had begun to fall. This
continued, possibly faster than many had anticipated, and stands now at around
2%. At last, the Bank has now begun to cut interest rates, rather belatedly in
my view. They are still higher than most other major country, but the path is
clear and equity markets responded positively.
The other major event in the last six months was of course the UK election and
the resounding victory of the Labour party was at first seen very positively.
Whatever the politics, investors were relieved at least, by the certainty that
the UK would be led by the same party and probably the same individuals for
the next five years which, after the chaos of recent times, is indeed a big
positive. Unfortunately, the positivity and enthusiasm ebbed away over the
following months as the new government seemed to go out of its way to be
increasingly negative on the inherited fiscal situation.
Despite all of this, David Moss, our portfolio manager, does remain positive
on the future of investing in UK equities. We will have a period of stable
government - rather unusual in the context of our European trading partners -
which, of itself, should encourage vital foreign direct investment to help our
economy to grow. The anticipated cuts in interest rates will help reduce the
cost of borrowing for all but particularly the cost of borrowing on mortgages.
As I said a year ago, though, our portfolio manager continues to believe that
while the cost of borrowing will continue to fall, we are in a regime more in
common with the 1990s than the period post-financial crisis and interest
rates, wherever they settle, will remain positive in real terms, likely in the
3-4% range. He remains of the view this is a positive backdrop for borrowers
and savers and the efficient allocation of capital.
Trading activity by the portfolio manager has been much less in the last six
months to 30 September 2024, driven primarily by increasing the quality of the
portfolio or the ability to generate sustainable and growing income.
Performance has been good during this period with the NAV total return
out-performance of the benchmark coming from stock selection. Irish
housebuilder Cairn Homes was one of the top contributors as the shares
performed very strongly on the back of strong results and cash generation
enabling them to continue returning cash to shareholders through an ongoing
share buyback and growing dividend. Likewise, NatWest has delivered much
better than expected results, despite the weak UK economic backdrop, which has
enabled them to increase the dividend and continue to buy back shares from the
government. In contrast, UK brickmaker Ibstock has delivered fairly weak
results hurt by levels of UK housebuilding below 2009. They have continued to
invest through this period leaving them very well positioned for the recovery
which the Investment Manager is highly confident will come, as the UK
continues to have a clear shortage of housing and increasing this is a very
clear policy of the new Labour government.
Share price performance
Over the six month period, the discount to NAV at which the Company's Ordinary
shares traded, narrowed from -10.6% to -8.8% at 30 September 2024 and
consequently, the Ordinary share price total return for the period was +9.4%.
The discount of the B shares to NAV widened slightly from -11.6% to -12.2% at
the period end, thus generating a B share price total return of +6.7% for the
period under review.
During the period, 250,000 B shares were bought back for treasury at an
average discount of approximately 12% to the prevailing NAV. No Ordinary
shares were bought back in the period under review. It continues to be the
Board's strategy to buy back shares in line with the Company's stated policy,
which helps to enhance the NAV per share for continuing shareholders,
especially if a mismatch of demand and supply causes the discount to widen.
Earnings, dividends and capital repayments
In the period under review, your Company's revenue earnings per share has
risen by 14.7% from 2.31p per share to 2.65p per share in comparison to the
six months to 30 September 2023.
As I have previously stated, it is a key objective of the Board and Investment
Manager to return to a covered dividend and rebuild the revenue reserve. Now
that the changes made by the portfolio manager over the last year are coming
to fruition, we believe the Company's revenue position at the half-year stage
is in a much-improved position.
In the absence of unforeseen circumstances, it is the Board's current
intention that the aggregate dividend and capital repayment for the current
financial year to 31 March 2025 will be at least 5.62p per Ordinary share and
B share respectively. Three quarterly interim dividends and capital repayments
have so far been declared, each of 1.35p per share.
At 30 September 2024, this aggregate distribution represented a yield of 6.3%
and 6.5% on the Ordinary share price and B share price respectively, as
compared with the yield on the FTSE All-Share Index of 3.6%.
Borrowing
At 30 September 2024, the Company had fully drawn down its £15 million
revolving credit facility ("RCF") with The Royal Bank of Scotland
International Limited. This facility provides flexibility for the Board and
Investment Manager to utilise borrowing when investment opportunities arise
or, conversely, reduce borrowing dependent on market conditions and outlook.
Outlook
I talked earlier about the portfolio manager's positive view on investing in
UK equities and in the context of this and looking forward, I must mention the
UK budget. There had been a lot of leaks and even more speculation on its
content but we have finally now seen the first budget from Rachel Reeves, the
Chancellor of this new Labour government. The initial judgement from investors
was positive with bond yields falling and domestic UK shares rising.
Unfortunately, this lasted only until we saw the detailed numbers as the
Office for Budget Responsibility revised up borrowing numbers and revised down
growth. As investors digested this information and the sheer amount of debt
the government intends to issue, sentiment turned more negative with bond
yields rising sharply and shares falling. Even if this looks like a classic
left-wing tactic of tax and spend, investment in UK infrastructure and housing
is desperately needed. Businesses at least now know the rules under which they
have to operate and the ultimate impact remains to be seen.
We probably all have a view on the pros and cons of borrowing more to invest
and raising taxes but I think arguments will persist for some time as to
whether pre-election promises have been broken and the right taxes have been
raised. Whilst I think this debate will rumble on, the fact that we will have
a period of stable government intending to invest more has to be beneficial
for the long-term future of the country, helpful for economic growth and
positive for those businesses that are exposed to infrastructure and housing
in particular.
Without acknowledging it, this new Labour Government has actually inherited
one of the fastest growing European economies and with fiscal clarity now here
and interest rates still likely to fall further, our portfolio manager remains
constructive on the UK and positive on UK domestic companies where dividends
and valuations remain very attractive.
The landslide election victory by President-elect Trump in America defied
prediction but is being taken particularly well by equity markets. His
pre-election rhetoric is yet to be tested but, as the UK's largest
single-country trading partner, we should take the early signs as encouraging.
We shall see.
As ever, your support of this Company is very much appreciated.
Andrew Watkins
Chairman
28 November 2024
Condensed Unaudited Statement of Comprehensive Income
For the six month period to 30 September 2024
Six months to 30 September 2024
Notes Revenue Capital Total
£'000 £'000 £'000
Gains on investments held at fair value - 4,831 4,831
Exchange losses - (4) (4)
Income 3,529 - 3,529
2
Investment management fee (100) (233) (333)
3
Other expenses (222) - (222)
Profit before finance costs and taxation 3,207 4,594 7,801
Net finance costs
Interest on bank loans (144) (336) (480)
Total finance costs (144) (336) (480)
Profit before tax 3,063 4,258 7,321
Tax on ordinary (46) - (46)
activities 4
Profit for the period 3,017 4,258 7,275
Total comprehensive income for the period 3,017 4,258 7,275
Earnings per 2.65p 3.73p 6.38p
share
5
The total column of this statement represents the Company's Profit and Loss
Account. The supplementary revenue return and capital return columns are both
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations.
All of the profit and comprehensive income for the period is attributable to
the owners of the Company.
Condensed Unaudited Statement of Comprehensive Income
Six months to 30 September 2023 Year to 31 March 2024*
Notes Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Losses)/ gains on investments held at fair value - (3,694) (3,694)
- 7,674 7,674
Exchange gains - 15 15 1 9 10
Income 3,141 - 3,141 5,603 - 5,603
2
Investment management fee (91) (213) (304) (186) (435) (621)
3
Other expenses (223) - (223) (518) - (518)
Profit/(loss) before finance costs and taxation 2,827 (3,892) (1,065) 4,900 7,248 12,148
Net finance costs
Interest on bank loans (122) (283) (405) (269) (627) (896)
Total finance costs (122) (283) (405) (269) (627) (896)
Profit/(loss) before tax 2,705 (4,175) (1,470) 4,631 6,621 11,252
Tax on ordinary (38) - (38) (30) - (30)
activities 4
Profit/(loss) for the period 2,667 (4,175) (1,508)
4,601 6,621 11,222
Total comprehensive income for the period 2,667 (4,175) (1,508) 4,601 6,621 11,222
Earnings per 2.31p (3.62)p (1.31)p 4.01p 5.77p 9.78p
share
5
The total column of this statement represents the Company's Profit and Loss
Account. The supplementary revenue return and capital return columns are both
prepared under guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations.
All of the profit and comprehensive income for the period is attributable to
the owners of the Company.
*audited figures
Condensed Unaudited Statement of Financial Position
Notes 30 September 30 September 31 March
2024 2023 2024*
£'000 £'000 £'000
Non-current assets
Investments held at fair value through 125,626 112,301 121,267
profit or
loss
9
125,626 112,301 121,267
Current assets
Receivables 513 970 1,203
10
Cash and cash equivalents 787 282 1,086
1,300 1,252 2,289
Total assets 126,926 113,553 123,556
Current liabilities
Payables (534) (506) (790)
11
Bank (15,000) (15,000) (15,000)
loans
12
Total liabilities (15,534) (15,506) (15,790)
Net assets 111,392 98,047 107,766
Capital and reserves
Share 134 134 134
capital
13
Share premium 153 153 153
Capital redemption reserve 5 5 5
Buy back reserve 78,806 79,022 79,022
Special capital reserve 7,395 9,131 8,320
Capital reserves 20,702 5,648 16,444
Revenue reserve 4,197 3,954 3,688
Equity shareholders' funds 111,392 98,047 107,766
Net asset value per Ordinary share 97.90p 85.98p 94.51p
14
Net asset value per B share 97.90p 85.98p 94.51p
14
Approved by the Board, and authorised for issue, on 28 November 2024 and
signed on its behalf by:
Andrew Watkins, Chairman
*audited figures
Condensed Unaudited Statement of Changes in Equity
for the six months to 30 September 2024
Capital Redemption Reserve Buy Back Reserve Special Capital Reserve
Share Capital Share Premium Capital Reserves Revenue Reserve
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 April 2024 134 153 5 79,022 8,320 16,444 3,688 107,766
Profit for the period - - - - - 4,258 3,017 7,275
Shares bought back for treasury - - - (216) - - - (216)
Dividends paid on Ordinary shares - - - - - - (2,508) (2,508)
Capital returns paid on B shares - - - - (925) - - (925)
Balance as at 30 September 2024 134 153 5 78,806 7,395 20,702 4,197 111,392
for the six months to 30 September 2023
Capital Redemption Reserve Buy Back Reserve Special Capital Reserve
Share Capital Share Premium Capital Reserves Revenue Reserve
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 April 2023 134 153 5 80,315 10,012 9,823 3,729 104,171
(Loss)/profit for the period - - - - - (4,175) 2,667 (1,508)
Shares bought back for treasury - - - (1,293) - - - (1,293)
Dividends paid on Ordinary shares - - - - - - (2,442) (2,442)
Capital returns paid on B shares - - - - (881) - - (881)
Balance as at 30 September 2023 134 153 5 79,022 9,131 5,648 3,954 98,047
for the year to 31 March 2024 *
Capital Redemption Reserve Buy Back Reserve Special Capital Reserve
Share Capital Share Premium Capital Reserves Revenue Reserve
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 April 2023 134 153 5 80,315 10,012 9,823 3,729 104,171
Profit for the period - - - - - 6,621 4,601 11,222
Shares bought back for treasury - - - (1,293) - - - (1,293)
Dividends paid on Ordinary shares - - - - - - (4,642) (4,642)
Capital returns paid on B shares - - - - (1,692) - - (1,692)
Balance as at 31 March 2024 134 153 5 79,022 8,320 16,444 3,688 107,766
*audited figures
Condensed Unaudited Cash Flow Statement
Six months to Six months to Year to
30 September 2024 30 September 2023 31 March
2024*
£'000 £'000 £'000
Cash flows from operating activities
Profit/(loss) before tax 7,321 (1,470) 11,252
Adjustments for:
(Gains)/losses on investments held at fair value through profit or loss (4,831) 3,694
(7,674)
Exchange losses/(gains) 4 (15) (10)
Interest income (34) (36) (84)
Interest received 34 36 84
Dividend income (3,495) (3,105) (5,519)
Dividend income received 4,140 3,576 5,727
Decrease/(increase) in receivables 9 (2) 1
(Decrease)/increase in payables (37) (22) 45
Finance costs 480 406 896
Overseas tax suffered (20) (97) (69)
Cash flows from operating activities 3,571 2,965 4,649
Cash flows from investing activities
Purchases of investments (30,519) (37,247) (62,065)
Sales of investments 30,782 34,270 61,699
Cash flows from investing activities 263 (2,977) (366)
Cash flows from financing activities
Dividends paid on Ordinary shares (2,508) (2,442) (4,642)
Capital returns paid on B shares (925) (881) (1,692)
Interest on bank loans (480) (393) (1,293)
Shares purchased for treasury (216) (1,293) (868)
Drawdown of bank loans - 3,000 3,000
Cash flows from financing activities (4,129) (2,009) (5,495)
Net decrease in cash and cash (295) (2,021) (1,212)
equivalents
Effect of movement in foreign exchange (4) 15 2,288
Opening net cash and cash equivalents 1,086 2,288 10
Closing cash and cash equivalents 787 282 1,086
Represented by:
Cash at bank 47 73 176
Short term deposits 740 209 910
787 282 1,086
*audited figures
Notes to the Condensed Financial Statements (unaudited)
1. Accounting Policies
The condensed unaudited financial statements have been prepared on a going
concern basis and in accordance with UK-adopted International Accounting
Standard 34 "Interim Financial Reporting" and the accounting policies set out
in the statutory financial statements of the Company for the year ended
31 March 2024. Where presentational guidance set out in the Statement of
Recommended Practice ("SORP") for investment trusts issued by the Association
of Investment Companies is consistent with the requirements of UK-adopted
International Accounting Standards, the Directors have sought to prepare the
condensed financial statements on a basis compliant with the recommendations
of the SORP. The condensed financial statements do not include all of the
information required for full annual financial statements and should be read
in conjunction with the financial statements of the Company for the year ended
31 March 2024, which were prepared under UK-adopted International
Accounting Standards.
2. Income
30 September 2024 30 September 2023 31
March 2024
Income comprises: £'000 £'000 £'000
UK dividend income 2,773 2,575 4,653
UK dividend income - special dividends - - 46
Overseas dividend income 552 464 632
Overseas dividend income - special dividends - 25 25
Property income distributions 170 41 163
3,495 3,105 5,519
Other income
Interest on cash and cash equivalents 34 36 84
3,529 3,141 5,603
3. The Company's investment manager Columbia Threadneedle Investment
Business Limited receives an investment management fee of 0.60 per cent per
annum of the net asset value of the Company payable quarterly in arrears.
4. The taxation charge for the period represents withholding tax
suffered on overseas dividend income.
5. The earnings per share are based on the net profit/(loss) for the
period and on 114,005,447 shares (period to 30 September 2023 - 115,437,141;
year to 31 March 2024 - 114,734,272), being the weighted average number of
shares in issue during the period.
6. Earnings for the six months to 30 September 2024 should not be taken
as a guide to the results of the full year.
7. The Board has considered the requirements of IFRS 8 'Operating
Segments'. The Board is of the view that the Company is engaged in a single
segment of business, of investing in equity, and that therefore the Company
has only a single operating segment. The Board of Directors, as a whole, has
been identified as constituting the chief operating decision maker of the
Company. The key measure of performance used by the Board to assess the
Company's performance is the total return on the Company's net asset value as
calculated under UK-adopted International Accounting Standards and therefore
no reconciliation is required between the measure of profit or loss used by
the Board and that contained in the condensed financial statements.
8. Dividends and capital repayments
Six months to Six months to Year
Payment 30 Sept 2024 30 Sept 2023 to
Date 31 March 2024
Dividends
£'000 £'000 £'000
In respect of the previous period:
Fourth interim dividend at 1.66p (2023: 1.55p) per Ordinary share
3 May 2024 1,383 1,319 1,319
In respect of the period under review:
First interim dividend at 1.35p (2024: 1.32p) per Ordinary share
2 Aug 2024 1,125 1,123 1,123
Second interim dividend (2024: 1.32p) per Ordinary share
- - 1,100
Third interim dividend (2024: 1.32p) per Ordinary share
- - 1,100
2,508 2,442 4,642
A second interim dividend for the year to 31 March 2025, of 1.35p per Ordinary
share, was paid on 1 November 2024 to Ordinary shareholders on the register on
4 October 2024.
Six months to Six months to Year
Payment 30 Sept 2024 30 Sept 2023 to
Date 31 March 2024
Capital repayments
£'000 £'000 £'000
In respect of the previous period:
Fourth capital repayment at 1.66p (2023: 1.55p) per B share
3 May 2024 510 476 476
In respect of the period under review:
First capital repayment at 1.35p (2024: 1.32p) per B share
2 Aug 2024 415 405 405
Second capital repayment (2024: 1.32p) per B share
- - 406
Third capital repayment (2024: 1.32p) per B share
- - 405
925 881 1,692
A second capital repayment for the year to 31 March 2025, of 1.35p per B
share, was paid on 1 November 2024 to B shareholders on the register on 4
October 2024.
Although the above referenced payments on 1 November 2024 relate to the period
ended 30 September 2024, under UK-adopted International Accounting Standards
they will be accounted for in the six months to 31 March 2025, being the
period during which they are paid.
9. Investments held at fair value through profit or loss
Listed/ Subsidiary/
Quoted Unlisted
(Level 1) (Level 3) Total
£'000 £'000 £'000
Cost brought forward 105,822 250 106,072
Gains brought forward 15,195 - 15,195
Fair value of investments at 31 March 2024 121,017 250 121,267
Movement in the period:
Purchases at cost 30,310 - 30,310
Sales proceeds (30,782) - (30,782)
Gains on investments sold in the period 5,227 - 5,227
Losses on investments held at 30 September 2024 (396) - (396)
Fair value of investments at 30 September 2024 125,376 250 125,626
Cost at 30 September 2024 110,577 250 110,827
Gains at 30 September 2024 14,799 - 14,799
Fair value of investments at 30 September 2024 125,376 250 125,626
Accounting standards recognise a hierarchy of fair value measurements for
financial instruments which gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3). The classification of
financial instruments depends on the lowest significant applicable input, as
follows:
· Level 1 - quoted (unadjusted) prices in active markets for identical
assets or liabilities.
· Level 2 - other techniques for which all inputs that have a
significant effect on the recorded fair value are observable, either directly
or indirectly. The Company held no such instruments during the period under
review.
· Level 3 - techniques that use inputs that have a significant effect
on the recorded fair value that are not based on observable market data. The
Company's investment in its subsidiary undertaking, Investors Securities
Company Limited, is included in Level 3 and is valued at its net asset value.
There were no transfers between levels of the fair value hierarchy during the
six months ended 30 September 2024.
10. Receivables
30 Sept 30 Sept 31 March
2024 2023 2024
£'000 £'000 £'000
Income receivable from shares and securities 322 704 967
Withholding tax recoverable 153 199 179
Sundry debtors and prepayments 38 67 57
513 970 1,203
11. Payables
30 Sept 30 Sept 31 March
2024 2023 2024
£'000 £'000 £'000
Loan from subsidiary undertaking repayable on 250 250 250
demand
Investment management fee payable to the 168 148 161
investment manager
Amounts due to brokers in settlement of purchase of investments - - 209
Loan Interest - 2 10
Accrued expenses 116 106 160
534 506 790
12. Bank Loans
The Company has an unsecured revolving credit facility ('RCF') with The Royal
Bank of Scotland International Limited for £15 million which is available
until 28 September 2025. At 30 September 2024, £15 million was drawn down (30
September 2023: £15 million; 31 March 2024: £15 million).
The loan agreement contains certain financial covenants with which the Company
must comply. These include a financial covenant with respect to the ratio of
the Adjusted Portfolio Value (as defined in the loan agreement) to the level
of debt and also that the Adjusted Portfolio Value does not fall below £50
million. The Company complied with the required financial covenants throughout
the period since drawdown.
13. Share Capital
Allotted, issued and fully paid
Listed Held in Treasury In Issue
Number £ Number £ Number £
Ordinary Shares of 0.1p each
Balance at 1 April 2024 102,067,144 102,067 (18,744,491) (18,744) 83,322,653 83,323
Balance at 30 September 2024 102,067,144 102,067 (18,744,491) (18,744) 83,322,653 83,323
B Shares of 0.1p each
Balance at 1 April 2024 32,076,703 32,077 (1,367,953) (1,368) 30,708,750 30,709
Repurchased to be held in treasury - - (250,000) (250) (250,000) (250)
Balance at 30 September 2024 32,076,703 32,077 (1,617,953) (1,618) 30,458,750 30,459
Total at 30 September 2024 134,143,847 134,144 (20,362,444) (20,362) 113,781,403 113,782
During the period the Company bought back nil Ordinary shares and bought back
250,000 B shares at a cost of £216,000 to hold in treasury (period to 30
September 2023 - 1,750,000 Ordinary shares and nil B shares; year to 31 March
2024 - 1,750,000 Ordinary shares and nil B shares).
At 30 September 2024 the Company held 18,744,491 Ordinary shares and 1,617,953
B shares in treasury (30 September 2023 - 18,744,491 Ordinary shares and
1,367,953 B shares; 31 March 2024 - 18,744,491 Ordinary shares and 1,367,953 B
shares).
14. The net asset value per share is based on shareholders' funds
at the period end and on 83,322,653 Ordinary shares and 30,458,750 B shares,
being the number of shares in issue at the period end (30 September 2023 -
83,322,653 Ordinary shares and 30,708,750 B shares; 31 March 2024 - 83,322,653
Ordinary shares and 30,708,750 B shares).
15. The fair values of the Company's financial assets and
liabilities are not materially different from their carrying values in the
financial statements.
The Company's financial risk management objectives and policies are consistent
with those disclosed in the Company's financial statements for the year ended
31 March 2024.
16. Changes in liabilities arising from financing activities
Six months to Six months to 30 September Year to
30 September 2023 31 March
2024 2024
£'000 £'000 £'000
Opening net debt at beginning of 15,000 12,000 12,000
period/year
Cash flows:
Drawdown of revolving credit facility - 3,000 3,000
Closing net debt at end of period/year 15,000 15,000 15,000
17. Going concern
In assessing the going concern basis of accounting, the Directors have had
regard to the guidance issued by the Financial Reporting Council and have
undertaken a rigorous review of the Company's ability to continue as a going
concern. The Board has, in particular, considered the outlook for inflation
and ongoing macroeconomic and geopolitical concerns.
The Company's investment objective and policy, which is subject to regular
Board monitoring processes, is designed to ensure that the Company is invested
mainly in liquid, listed securities. The value of these investments exceeds
the Company's liabilities by a significant margin. The Company retains title
to all assets held by its custodian, and has an agreement relating to its
borrowing facility with which it has complied. Cash is held only with banks
approved and regularly reviewed by the Investment Manager.
As part of the going concern review, the Directors noted that a borrowing
facility of a £15 million revolving credit facility is committed to the
Company until 28 September 2025 and loan covenants are reviewed by the Board
on a regular basis. It is expected that a new borrowing facility could be
entered into when the current arrangement expires, but, if not, or should the
Board decide not to renew it, any outstanding borrowings would be repaid
through the use of cash and, if required, from the proceeds of the sale of
the Company's investments.
The Directors believe, having assessed the principal risks and other matters,
in light of the controls and review processes noted and bearing in mind the
nature of the Company's business and assets and revenue and expenditure
projections, that the Company has adequate resources to continue in
operational existence for a period of at least twelve months from the date of
approval of the financial statements. Accordingly, they continue to adopt the
going concern basis in preparing the financial statements.
The Company does not have a fixed life. However, in the event that the net
asset value total return performance of the Company is less than that of the
FTSE All-Share Index over the relevant three year period, in accordance with
the Company's articles of association, shareholders will be given the
opportunity to vote on whether the Company should continue in existence, by
ordinary resolution at the Company's Annual General Meeting. The current three
year period for this purpose will run from 1 April 2022 to 31 March 2025.
18. Related party transactions
The Directors of the Company are considered a related party. Under the FCA UK
Listing Rules, the Manager is also defined as a related party. However, the
existence of an independent Board of Directors demonstrates that the Company
is free to pursue its own financial and operating policies and therefore under
the AIC SORP, the Manager is not considered a related party for accounting
purposes.
The Directors receive aggregated remuneration for services as Directors and
for which there were no outstanding balances at the period end. There have
been no transactions with related parties during the first six months of the
current financial year that have materially affected the financial position or
performance of the Company during the period and there have been no changes in
the related party transactions described in the last Annual Report and
Financial Statements that could do so.
19. The Company's auditor, Deloitte LLP, has not audited or
reviewed the Half-Year Report and the results for the six months to
30 September 2024 and 30 September 2023 pursuant to the Auditing Practices
Board guidance on 'Review of Interim Financial Information'. These are not
full statutory financial statements in terms of Section 434 of the Companies
Act 2006 and are unaudited. Statutory financial statements for the year ended
31 March 2024, which received an unqualified audit report and which did not
contain a statement under Section 498 of the Companies Act 2006, have been
lodged with the Registrar of Companies. The condensed financial statements
shown for the year ended 31 March 2024 are an extract from those financial
statements. No full statutory financial statements in respect of any period
after 31 March 2024 have been reported on by the Company's auditor or
delivered to the Registrar of Companies.
The Half-Year Report to 30 September 2024 is available on the website
maintained on behalf of the Company at ctukhighincome.co.uk
Statement of Principal Risks and Uncertainties
As an investment company, investing primarily in listed securities, most of
the Company's principal risks and uncertainties that could threaten the
achievement of its objective, strategy, future performance, liquidity and
solvency are market related.
These risks, and the way in which they are managed, are described under the
heading 'Principal Risks and Uncertainties and Viability Statement' within the
Strategic Report in the Company's Annual Report and Financial Statements for
the year ended 31 March 2024.
The principal risks identified in the Annual Report were:
• Investment performance risk;
• Legal and regulatory risk; and
• Third party service delivery and Cyber risks.
The Board continues to review the key risk summary for the Company which
identifies the risks that the Company is exposed to, the controls in place and
the actions being taken to mitigate them. The Board has also considered the
outlook for inflation and ongoing macroeconomic and geopolitical concerns.
The Board considers that the Company's principal risks and uncertainties have
not changed materially since 30 May 2024, the date that the Company's Annual
Report and Financial Statements was approved, and are not expected to change
materially for the remainder of the Company's financial year. The Board has
also considered these principal risks in relation to going concern, as set out
in note 17.
Statement of Directors' Responsibilities in Respect of the Half-Year Report
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in
accordance with UK-adopted International Accounting Standard 34 "Interim
Financial Reporting" and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;
· the Chairman's Statement and the Statement of Principal Risks and
Uncertainties (together constituting the Interim Management Report) include a
fair review of the information required by the Disclosure Guidance and
Transparency Rule ('DTR') 4.2.7R, being an indication of important events that
have occurred during the first six months of the financial year and
their impact on the condensed set of financial statements;
· the Statement of Principal Risks and Uncertainties is a fair review
of the principal risks and uncertainties for the remainder of the financial
year; and
· the Half-Year Report includes a fair review of the information
required by DTR 4.2.8R, being related party transactions that have taken place
in the first six months of the current financial year and that have materially
affected the financial position or performance of the Company during that
period, and any changes in the related party transactions described in the
last Annual Report that could do so.
On behalf of the Board
Andrew Watkins
Chairman
28 November 2024
Alternative Performance Measures ('APMs')
The Company uses the following APMs:
Discount/premium - the share price of an investment company is derived from
buyers and sellers trading their shares on the stock market. This price is not
identical to the net asset value (NAV) per share of the underlying assets less
liabilities of the Company. If the share price is lower than the NAV per
share, the shares are trading at a discount. This usually indicates that there
are more sellers of shares than buyers. Shares trading at a price above NAV
per share are deemed to be at a premium usually indicating there are more
buyers of shares than sellers.
30 September 2024 31 March 2024
Ordinary Shares B Shares Ordinary Shares B Shares
Net asset value per share (a) 97.90p 97.90p 94.51p 94.51p
Share price (b) 89.25p 86.00p 84.50p 83.50p
Discount (c=(b-a)/(a)) (c) -8.8% -12.2% -10.6% -11.6%
Gearing - represents the excess amount above shareholders' funds of total
investments, expressed as a percentage of the shareholders' funds. If the
amount calculated is negative, this is a 'net cash' position and no gearing.
30 September 2024 31 March 2024
£'000 £'000
Investments held at fair value through profit or loss (a) 125,626 121,267
Net assets (b) 111,392 107,766
(Net cash)/gearing (c=(a/b)-1)% (c) 12.8% 12.5%
Total Return - the theoretical return to shareholders calculated on a per
share basis by adding dividends/capital repayments paid in the period to the
increase or decrease in the share price or NAV in the period. The
dividends/capital repayments are assumed to have been re-invested in the form
of shares or net assets, respectively, on the date on which the shares were
quoted ex-dividend.
The effect of reinvesting these dividends/capital repayments on the respective
ex-dividend dates and the NAV total returns and Share price total returns are
shown below.
30 September 2024 31 March 2024
Ordinary shares/B shares Ordinary shares/B shares
NAV per share at start of period/year 94.51p 89.97p
NAV per share at end of period/year 97.90p 94.51p
Change in the period/year +3.6% +5.0%
Impact of dividend/capital repayment reinvestment(†) +3.2% +6.8%
NAV total return +6.8% +11.8%
(†) During the six months to 30 September 2024 dividends/capital repayments
totalling 3.01p (Ordinary shares/B shares) went ex-dividend. During the year
to 31 March 2024 the equivalent figures were 5.51p (Ordinary shares/B shares).
30 September 2024 31 March 2024
Ordinary Shares B Shares Ordinary Shares B Shares
Share price per share at start of period/year 84.50p 83.50p 82.00p 84.50p
Share price per share at end of period/year 89.25p 86.00p 84.50p 83.50p
Change in the period/year +5.6% +3.0% +3.0% -1.2%
Impact of dividend/capital repayment reinvestment(†) +3.8% +3.7% +7.2% +6.7%
Share price total return for the period/year +9.4% +6.7% +10.2% +5.5%
(†) During the six months to 30 September 2024 dividends/capital repayments
totalling 3.01p (Ordinary shares/B shares) went ex-dividend. During the year
to 31 March 2024 the equivalent figures were 5.51p (Ordinary shares/B shares).
Yield - The total annual dividend/capital repayment expressed as a percentage
of the period end share price.
30 September 2024* 31 March 2024
Ordinary Shares B Shares Ordinary Shares B Shares
Annual dividend/capital repayment 5.62p 5.62p 5.62p 5.62p
(a)
Share price (b) 89.25p 86.00p 84.50p 83.50p
Yield (c=a/b) (c) 6.3% 6.5% 6.7% 6.7%
*Based on expected minimum annual dividend/capital repayment of 5.62 pence per
share in respect of the year ending 31 March 2025.
For further information, please contact:
David Moss, Columbia Threadneedle Investment Business Limited 0131 573 8300
Ian Ridge, Columbia Threadneedle Investment Business
Limited 0131 573 8300
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FLFLDLDLTFIS
Recent news on CT UK High Income Trust
See all newsRCS - CT UK High Inc Tst - Kepler Trust Intelligence: New Research
CT UK High Inc Tst CT UK High Inc-CHIB - Compliance with Market Abuse Regulation
RCS - CT UK High Inc Tst - Investor Presentation
CT UK High Inc Tst CT UK High Inc-CHIB - Directorate change
Brief: CT UK High Income Trust Plc Appoints Stephen Mitchell As Chairman