Annual Financial Report
08/08/2023 07:00
THE DIVERSE INCOME TRUST PLC
ANNUAL REPORT AND ACCOUNTS FOR THE YEAR TO 31 MAY 2023
AND
NOTICE OF ANNUAL GENERAL MEETING
The Diverse Income Trust plc (the “Company”, “Diverse” or the
“Trust”) announces its annual results for the year ended 31 May 2023 and
the publication of its annual report and accounts for the same period, which
includes the notice of Annual General Meeting.
HIGHLIGHTS
SUMMARY OF RESULTS FOR THE YEAR TO 31 MAY 2023
* NAV total return* to shareholders of -16.2%. This includes the change in
NAV, plus the dividends paid during the year and compares with a decrease in
the Numis All-Share Index of -0.4% on a total return basis over the year to 31
May 2023.
* 4.05p of ordinary dividends for the year. The three interim dividends and
the proposed final dividend for the year amount to 4.05p, compared with 3.90p
in the previous year, an increase of 3.8%.
* Share price total return* to shareholders of -15.37%. The share price total
return was -15.37%, reflecting a slightly narrower discount at the end of May
2023 than a year earlier.
* Revenue reserves were £16.1m. The Company’s revenue return after taxation
was £14.4m, which exceeded the £14.2m in dividends distributed to
shareholders during the year. Accordingly, at the year-end there were £16.1m
of revenue reserves (2022: £15.9m) which are available to help fund future
dividend payments to shareholders.
31 May 2023 31 May 2022 Change
NAV per ordinary share* 88.87p 110.55p (19.6)%
Ordinary share price 83.40p 103.00p (19.0)%
(Discount)/premium to NAV* (6.20%) (6.83%)
Revenue return per ordinary share* 4.05p 4.01p
Ordinary dividends per ordinary share 4.05p 3.90p 3.8%
Ongoing charges* 1.09% 1.05%
Ordinary shares in issue 355,870,647 361,920,105
KEY PERFORMANCE INDICATORS
The Board has the following Key Performance Indicators (KPIs) that are used to
gauge the success of the Company’s strategy and its outcome for
shareholders.
NAV total return* – Over the year, the NAV total return of the Trust was
-16.2% (2022: -3.4%), which compares to 0.8% for the Peer Group** and -0.4%
for the Numis All-Share Index. Since launch to 31 May 2023, its NAV total
return including compounded dividend income was 175.1% which compares to
146.5% for the Peer Group** and 89.4% for the Numis All-Share Index.
Growth of ordinary dividends to shareholders – Over the year, the four
dividends to shareholders have increased from 3.90p to 4.05p. The Trust has
maintained an unbroken good and growing dividend record without distributing
capital.
Discount* – Over the year to 31 May 2023, the share price discount averaged
at 5.0% (2022: 1.4%). Over the twelve years since listing, the Company’s
share price has largely matched its NAV.
Ongoing charges* – The ongoing charges for the year to 31 May 2023 are 1.09%
of NAV (2022: 1.05%), which compares with 0.57% for the Peer Group**. The
Board pays careful attention to expenses and believes that the Trust’s
overall costs are justifiable in the context of its wide investment universe
and premium returns it has delivered since launch. Further details of the
ongoing charges are provided in the full Annual Report.
* Alternative performance measure. Details provided in the Glossary in the
full Annual Report.
** The Peer Group is also defined in the Glossary.
CHAIRMAN’S STATEMENT
To combat a surge in inflation that had been generally underestimated, the
period since the end of 2021 has seen global interest rates rise. This
precipitated falls in bond markets, where yields rose from absurdly low
levels. Equities now have to contend with the competing attractions of higher
deposit rates and bond yields, amid fears of an economic downturn.
In the UK, bearish market conditions were compounded by political instability
during the first half of our financial year, which saw three Prime Ministers
and four Chancellors of the Exchequer. A fall of 10% in the UK market in the
period to the end of the Truss Premiership in October 2022 was reversed by the
end of May 2023, as a semblance of policy stability was restored and the UK
avoided the recession that had been widely forecast.
The earlier fall in confidence was worst felt by smaller companies, seen as
both more exposed to the UK domestic economy and more dependent on
increasingly expensive bank borrowings, whereas the share prices of large cash
generative companies outperformed. Although a second half recovery was seen
across the size spectrum, the differential performance remained. The Numis
Large Cap Index (consisting mainly of equity income stocks), as well as
outperforming smaller UK stocks, began to perform better against major
international indices, despite fund redemptions by domestic investors.
In the year to 31 May 2023, the Numis Large Cap Index (ex ICs) delivered a
total return of +1.7% (including 4% of dividend income). In contrast, the
share prices of many smaller listed and AIM-quoted income stocks were weak in
the year under review. In their case ongoing UK OEIC redemptions were not
offset by global investor buying. Over the year to May 2023 the total return
on the Numis Small Cap Plus AIM Index (ex ICs) was -11.1%.
Performance, and Dividends to shareholders
The majority of the Trust’s portfolio is typically invested in mid and small
cap income stocks. With just over a quarter of the portfolio invested in
larger UK stocks, the Trust’s NAV total return was down 16.2% over the year
to May 2023, affected by the weak returns from smaller companies. This
compares with the total return of +1.7% from the Numis Large Cap Index (ex
ICs) at one end of the spectrum and -18.9% from the Numis Alternative Markets
Index (ex ICs) (covering AIM-quoted stocks) at the other.
Despite the disappointing outcome over the past year, taking a longer-term
perspective, the Trust’s NAV total return since issue is +175.1%, well ahead
of the total returns from the Numis Large Cap Index (ex ICs) +85.3%, the
Numis Small Cap Plus AIM Index (ex ICs) +87.5% and the Numis Alternative
Markets Index -4.6%. No complacency is implied by this, but the past two years
have been notable for the decoupling between the UK’s larger companies,
which attract international attention, and their smaller siblings which have
suffered from the relative sidelining of the UK market.
Total returns of the Trust and various Numis indices between April 2011 and
May 2023
%
The Diverse Income Trust Plc 175.1
Numis Large Cap Index ex ICs 85.3
Numis Small Cap Plus AIM Index ex ICS 87.5
Numis Alternative Markets Index ex ICs -4.6
Source: Morningstar
“ICs”: Investment Companies
The Trust’s income performance has continued to improve. Having avoided the
worst of the wide-ranging dividend cuts during the pandemic, the Trust’s
Revenue per Share increased by 1% this year to 4.05p. This is 2.5% higher than
the Trust’s pre-pandemic Revenue per Share, in contrast to the wider UK
market whose income level remains more than 10% lower than in May 2019. The
Trust increased its dividend to shareholders this year from 3.9p to 4.05p,
which includes the three interim payments already declared and a recommended
final dividend of 1.20p to be approved at the AGM.
Market valuation and share redemptions
Given the unsettled stock market background the Trust’s share price traded
at an average 5% discount to its NAV over the year, while narrowing marginally
from -6.8% at 31 May 2022 to -6.2% at 31 May 2023. This compares well with the
widespread deterioration in discounts across the investment company sector
during the year. Since the Trust was launched, the share price has on average
traded at a minimal discount of -0.7% to its NAV.
However, in order to keep any discount to a modest level, each year the Board
offers shareholders a voluntary redemption. At the end of April, 37,330,005
shares were offered for redemption, representing 10.49% of the Trust’s
equity. The Board redeemed these for cash that had built up in the portfolio
in part due to the takeover of K3 Capital plc. The redemption price was
89.35p, being the Net Asset Value at the close of business on 30 May 2023.
Prospects
Underlying stock market trends often persist for many years, but then change
without fanfare. In the late 1960s and early 1970s, as the decades of low
inflation came to an end, certain US mega cap stocks (known at the time as the
Nifty Fifty) outperformed, with their perceived growth credentials attracting
ever-rising valuations. The enthusiasm for US technology stocks in recent
years (tempered by a setback in 2022) shows some parallels.
In that earlier era, when central banks faced high inflation, interest rates
rose sharply and economic growth was disappointing and volatile. This put
pressure on profit margins and led to a derating of the most optimistically
valued stocks. Some went on to further success while others fell by the
wayside.
At such times, investors may be driven to find something more reassuring than
adrenaline. Equity earnings visibility and cash income count for more if 4-5%
can be earned on cash deposits, whereas zero rates encourage investment in
more speculative ideas, not all of which will come true. Growth has a major
part to play in human progress and economic productivity but, when there is
less liquidity around, enthusiasm is likely to be allocated more sparingly.
The UK market fell out of favour in recent decades, partly due to perceptions
that it consisted of dull, mature companies and was under-represented in
faster growth sectors. International investors were also deterred by the
uncertainty over Brexit, with the UK economy and politics yet to adjust fully
to be comfortable with the new structures. In addition, over the longer-term,
regulatory changes encouraged progressive equity disinvestment by the UK
pension fund industry, reducing its UK equity holdings from around 50% of fund
assets twenty-five years ago to 6% in 2021. This removed a key domestic source
of support from companies’ growth plans. As a result, the UK has become both
lowly-rated and under-owned. When this will change is open to debate but there
are some signs of hope from recent policy announcements encouraging investment
in growing UK companies and reviewing potential obstacles to companies
deciding to list in the UK.
The Trust’s approach of building a diversified portfolio of cash-generative
and attractively valued companies is inherently contrarian. With UK mid-cap
and smaller stocks currently cheaply rated compared with a UK market that is
itself lowly rated internationally, our Managers are particularly excited
about the opportunity.
As the past two years reminds us, going against the crowd is not always
rewarded in the short-term but the longer-term is more reassuring. It is worth
recalling Warren Buffett’s aphorism that in the short run the stock market
is a voting machine but in the long run it is a weighing machine.
Andrew Bell
Chairman
7 August 2023
MANAGER’S REPORT
When access to debt and risk capital becomes scarcer...
The UK stock market has started outperforming.
During globalisation, the best performing stocks are often those drawing upon
cash abundance to accelerate their growth rate.
When interest rates increase however, they suppress demand and usher in a
scarcity of risk capital. UK equity income stocks have a real advantage when
risk capital is scarce because they generate surplus cash. After a long period
of under-performance during globalisation, the UK majors have started
outperforming over the last two and half years.
If UK quoted companies other than the UK majors were to outperform as they
have in the past, then a multicap equity income strategy that includes both
may be set to outperform international stock markets in the future.
When risk capital is scarce, quoted companies have an advantage.
Daily transactions on the stock exchange provide insight. The live interface
between willing buyer and seller helps every management team to keep aware of
their cost of capital. When they review transactions, they can use this metric
to determine those with the greatest commercial upsides in the context of the
cost of any additional capital.
When market conditions are easy, the returns on corporate transactions are
hampered by wide-ranging competition. When capital is restricted however,
quoted companies paying a stream of dividend income retain access to
institutional capital. In short, when risk capital is scarce quoted companies
often get much higher returns on transactions because other companies are
unable to compete for lack of risk capital.
When acquisition costs are low, the prospects for a multicap strategy are
enhanced compared with the majors alone.
During economic recessions, the prospects for quoted companies are sometimes
enhanced by acquiring overleveraged but otherwise viable businesses from the
receiver, debt-free and at very low prices.
When the acquiring business is large relative to the scale of the acquisition,
the scale of the improvement tends to be incremental. If the acquirer is a
quoted smallcap however, the same acquisition offers much greater upside
potential, as the value uplift is a much greater proportion of its market
capitalisation.
In short, during recessions when access to additional debt and risk capital is
scarce, there is opportunity for AIM-listed stock to enhance their returns.
UK smallcaps have a long history of delivering premium returns.
Since 1955, UK-listed companies in the bottom ten per cent in market
capitalisation terms (typically known as "smallcaps" in the UK) have
generated much higher returns than those in all other size bands. Furthermore,
if this factor is combined with those that stand on overlooked valuations as
they
often are when they stand on premium yields, then their returns have been even
greater.
Finally, when interest rates are elevated, the returns on the global exchanges
are often more limited, and hence any source of outperformance becomes more
important. In summary, the prospect for a strategy dedicated to UK quoted
multicap equity income stocks, such as that of the Diverse Income Trust
portfolio, may have greater opportunity to add value when access to debt
and capital becomes scarcer.
...counterintuitively, UK quoted multicap prospects often improve.
Furthermore, when addressing the environmental, social and governance
agenda…
Any organisation that knowingly operates contrary to the interests of the
wider public, would in time find that its social licence to operate suffered.
Hence, well managed investment portfolios need to invest with an authentic
sense of purpose, as well as employing a successful commercial strategy.
Mainstream stocks have vast numbers of shareholders, so typically their
leadership teams only meet a small proportion. Alongside, with their long list
of shareholders, they are offered an extraordinarily wide range of advice
regarding their stance on environmental, social and governance issues. The
bottom line is that institutional investors have fewer opportunities either to
gauge the authenticity of the management team’s sense of purpose or to
influence their corporate agenda significantly.
In contrast, there are fewer institutional smallcap investors. So, most
smallcap management teams are keen to meet a significant portion of them,
even if they are not shareholders. Smallcap investors therefore have greater
opportunity to address and influence their environmental, social and
governance issues.
AIM-listed companies do issue formal reports covering non-financial metrics
such as sustainability, although these are typically less comprehensive. Even
so, the Manager can compare the content of the sustainability reports with the
detail of the senior management’s actions. When variance is identified, it
can imply potential inauthenticity.
Many mining management teams our Manager meets for example, say they start
every meeting with safety. And yet, in far too many cases, their safety data
isn’t covered by the first slide in their corporate presentation and safety
isn’t the first matter of substance in their annual report.
Furthermore, as smallcap leadership teams are smaller, they have scope to be
more agile than the majors. Typically, this is reflected in a somewhat
stronger sense of corporate purpose and motivation than some majors.
To conclude, whilst the formal reports from a multicap portfolio are often
less comprehensive than the majors alone, the Manager tends to stand at an
advantage when addressing the environmental, social and governance agenda.
…a UK multicap portfolio has numerous advantages.
Inflation and higher interest rates are potentially more problematic beyond
globalisation. If the current trends are sustained, we outline below why they
can drive an improved trajectory for the Trust relative to others.
Investor interest in returns generated by the compounding of equity dividends
has increased, and hence the UK stock market has started outperforming.
During globalisation, the best performing stocks have often been those drawing
upon the abundance of credit and risk capital to accelerate their growth rate.
When interest rates rise however, they suppress demand and usher in a scarcity
of risk capital. Companies generating surplus cash have major advantages when
risk capital is scarce as those that are short of cash suffer. After a long
period of underperformance during globalisation, many of the UK’s largest
cash generative stocks have started outperforming over recent years.
If UK smallcaps were to outperform the UK majors as they have in the past,
then a multicap equity income strategy that includes both may be set to
perform much better relative to international stock markets than they have
during the period of globalisation.
It is worth highlighting that quoted smallcap returns are not necessarily in
sync with the fluctuations of the mainstream stock market indices. This risk
can be moderated by investing in mainstream and smallcap stocks together, as
in the Diverse Income Trust portfolio.
In summary, when access to credit and risk capital are scarcer – as at
present - counterintuitively we believe that the prospects for the Trust’s
strategy may actually have better opportunities to deliver premium returns.
The following Q&A provide details of the portfolio positioning, why it has
declined in market value over the year under review and why we are so upbeat
about its prospects.
In the light of the Trust’s declining NAV over the year to May, to what
degree have the prospects of various portfolio holdings deteriorated?
Over the year to May, the total return on the Numis All-Share Index was -0.4%,
which compares with a 0.8% return for the Peer Group. When these figures are
set alongside the return of the Trust’s NAV that declined by 16.2%, then
many might assume that the prospects for the Trust portfolio of stocks have
deteriorated relative to those over the very largest UK quoted companies.
Interestingly, we disagree with this conclusion.
Specifically, although the Trust’s NAV total return has underperformed that
of the Numis All-Share Index and Peer Group significantly over the last two
years, it is notable that the Trust’s revenue from portfolio dividends has
continued to increase steadily. Indeed, when the numerous dividend cuts
announced during 2020 are included in the analysis, the Trust’s Revenue per
Share has recovered following the setback in 2020, whereas the UK’s stream
of dividends remains below previous highs. In short, we ascribe the main
reason for the underperformance of UK mid and small cap equity income share
prices relative to their larger comparatives over the last two years to a
decline in their valuation rather than to a period of inferior trading
performance and dividends.
As noted in the Chairman’s statement, over the last two years, sales of
UK-invested OEICs have been very significant, as portfolios have been adjusted
to reflect the increase in the yields on UK bonds and cash deposits compared
with their previous ultra-low levels. Alongside, global investors have started
to reweight their equity portfolios back into stocks that pay good and growing
dividends, and in doing so have boosted the demand for mainstream UK equity
income stocks. This pattern has not extended down the market capitalisation
bands, so the share prices of mid and small cap equity income stocks have
reflected the marginal sellers, and greatly underperformed the returns of the
UK mainstream equity income stocks.
How has the Trust performed over the twelve years since listing in April 2011?
Despite the Trust’s NAV total return underperforming that of the Numis
All-Share Index over the last two years, this pattern differs from its returns
since listing in April 2011, of 175.1%. Over that period, the Numis Large Cap
Index (ex ICs) has generated a total return of 85.3%, the Numis Small Cap Plus
AIM Index (ex ICs) has returned 87.5% whilst the Numis Alternative Markets
Index (which are those stocks listed on the AIM exchange) has fallen by 4.6%.
Countering this, UK investors have become more cautious, initially worried
that the UK could leave the EU in a chaotic manner without an agreement and,
subsequently, given the uncertainty of the global pandemic, and more recently
increasing with inflation and interest rate rises, regarding the prospect of
global recession.
It was always anticipated that a large part of the return on Diverse Income
Trust would be generated from the receipt of good and growing dividends. But
alongside, if these grew well, it was anticipated they might drag up the
relevant share prices. Overall, the Trust’s NAV has appreciated by 90% in
capital terms. In addition, the aggregate value of all the dividends paid has
added a further 45% of return, so the NAV total return of the Trust is 175.1%.
The returns of the comparative indices are shown in the table below.
Total returns of the Trust and various Numis indices between April 2011 and
May 2023
%
The Diverse Income Trust Plc 175.1
Numis LargeCap Index ex ICs 85.3
Numis Small Cap Plus AIM Index ex ICS 87.5
Numis Alternative Markets Index ex ICs -4.6
Source: Morningstar
“ICs”: Investment Companies
As interest rate rises suppress demand, which stocks can sustain profit
margins, when others are cutting prices to retain customers?
During globalisation, abundant imports of low-cost goods – which typically
exceeded local demand – subdued inflationary pressures. During these
decades, when economic growth slowed, central banks were able to engineer an
economic recovery through reducing interest rates or more latterly via
Quantitative Easing* that boosted demand. Inflation remained subdued, as the
prices of additional goods remained determined by their plentiful
global supply.
Following the global pandemic and the Ukrainian invasion, global economic
supply was compromised, and hence the economic stimulus was accompanied by
renewed inflation. To bring this mismatch back into balance, central banks
have increased interest rates rapidly to choke off demand.
As demand moderates, suppressing demand represents a major business challenge,
as there are fewer sales to go around. Hence, when demand declines, it often
sparks price wars that drive down profit margins as well. The outcome is that
corporate profitability often comes under pressure, so that over-levered
companies risk insolvency.
In our view, businesses with poor customer service are vulnerable to the loss
of sales, and reduced profit margins. Conversely, companies delivering not
only good, but outstanding levels of customer service are more likely to
retain customers even when others are offering similar services at lower
prices.
With this in mind, we question management teams closely about whether they
collect data on customer service, so that we can select for those delivering
outstanding customer service. Whilst such companies may not be immune to an
adverse economic trend, it is anticipated that they will show greater
resilience than others.
*The definition of Quantitative Easing can be found in the Glossary in the
full Annual Report.
What is the outlook for the Trust?
As outlined on the inside cover of the full Annual Report, following the
Diverse Income Trust’s recent underperformance, most of the holdings appear
to be standing on exceptionally low valuations. But just how out of line are
they?
One way to gauge valuation is via the Price/Book ratio. After some decades of
underperformance, the UK market is already standing at a ratio of around 1.6x,
which is a substantial discount compared to US exchanges for example.
Price to Book* ratio of the Diverse Income Trust, the UK market and the US
market as at 31 May 2023
US Market1 4.0
UK Market2 1.6
Diverse Income Trust 1.2
1 as represented by the ishares S&P500 ETF
2 as represented by the FTSE All Share Index.
*The definition of Price to Book ratio can be found in the Glossary in the
full Annual Report.
After the recent underperformance of the Diverse Income Trust earlier this
year, its price/book ratio had fallen to just 0.85x by the end of November
2022.
In short, whereas the UK stock market is lowly valued, the Diverse Income
Trust’s portfolio appears exceptionally lowly valued relative to
international stock markets such as the US.
Some presume that these low valuations are justified by an unfavourable
outlook for UK equities. But such arguments don’t stand up to scrutiny.
Numerous UK-quoted stocks are capital-intensive in nature. When capital is
abundant, as during globalisation, new participants are often quick to compete
away premium returns. But when capital is more costly, and the supply/demand
curves are steeper, it is more difficult to raise new capital, and premium
returns in some capital-intensive areas can persist.
Many capital-intensive businesses typically produce a large part of their
returns via a stream of good and growing dividends. Cash compounding
strategies such as these are much less reliant on stock market appreciation to
deliver return.
Companies generating cash surpluses have the advantage during recessions, as
they can use their cash to acquire overindebted but otherwise viable
businesses from the receiver, debt-free at knockdown valuations. As with Next
plc that recently acquired Made.com for £3.4m versus its previous peak market
valuation of £700m, these deals tend to accelerate earnings and dividend
growth.
Even if UK equities were similarly valued to international comparatives, for
risk diversification reasons we would anticipate increased capital
allocations. With them being so lowly valued, we believe that UK equity
capital allocations are about to move from a trickle into a flood.
The bottom line is that we believe the Diverse Income Trust’s strategy now
has the potential not only to outperform the mainstream indices in the UK, as
it has done since issue, but also to outperform international markets - as the
UK stock market itself outperforms. When the asset class in question
(UK-quoted multicap equity income stocks) starts at a particularly low
valuation, along with very modest institutional allocations, such favourable
trends can persist over very long time periods. We believe the prospects for
the Trust’s strategy are the greatest they have been for thirty years.
Gervais Williams and Martin Turner came together as a team in April 2011 and
are responsible for the day-to-day management of the Trust’s portfolio.
Gervais Williams
Gervais joined Miton in March 2011 and is now Head of Equities in Premier
Miton. He has been an equity fund manager since 1985, including 17 years at
Gartmore. He was named Fund Manager of the Year by What Investment? in 2014.
Gervais is also a board member of the Quoted Companies Alliance and a member
of the AIM Advisory Council.
Martin Turner
Martin joined Miton in May 2011. Martin and Gervais have had a close working
relationship since 2004, with complementary expertise that led them to back a
series of successful companies. Martin qualified as a Chartered Accountant
with Arthur Anderson and had senior roles and extensive experience at Merrill
Lynch and Collins Stewart.
Gervais Williams and Martin Turner
7 August 2023
PORTFOLIO INFORMATION
As at 31 May 2023
Rank Company Sector & main activity Valuation £000 % of net assets Yield(1)%
1 Kenmare Resources Basic Materials 7,881 2.5 9.8
2 I3 Energy2 Energy 6,567 2.1 11.5
3 Mears Industrials 5,896 1.9 4.4
4 XPS Pensions Financials 5,859 1.8 4.6
5 CMC Markets Financials 5,516 1.7 6.9
6 MAN Financials 5,255 1.7 5.8
7 BT Telecommunications 5,095 1.6 5.2
8 Phoenix Financials 5,007 1.6 9.2
9 Just Financials 4,981 1.6 2.1
10 Galliford Try Industrials 4,934 1.5 4.9
Top 10 investments 56,991 18.0
11 Legal & General Financials 4,834 1.5 8.5
12 Hostelworld Consumer Discretionary 4,739 1.5 -
13 Tesco Consumer Staples 4,734 1.5 4.2
14 Sainsbury (J) Consumer Staples 4,568 1.5 4.8
15 Vanquis Banking Financials 4,453 1.4 7.1
16 Savannah Energy2 Energy 4,407 1.4 -
17 Drax Utilities 4,338 1.4 3.8
18 TP ICAP Financials 4,204 1.3 8.2
19 Bloomsbury Publishing Consumer Discretionary 4,137 1.3 2.9
20 Admiral Financials 3,997 1.3 4.8
Top 20 investments 101,402 32.1
21 BAE Systems Industrials 3,922 1.2 2.9
22 Diversified Energy Energy 3,861 1.2 16.6
23 Sabre Insurance Financials 3,762 1.2 3.2
24 Paypoint Industrials 3,700 1.2 9.4
25 Plus500 Financials 3,633 1.2 5.3
26 Conduit Holdings Financials 3,630 1.1 6.0
27 Accrol2 Consumer Staples 3,589 1.1 -
28 National Grid Utilities 3,325 1.1 5.0
29 DWF Industrials 3,241 1.0 7.9
30 ME Group international Consumer Discretionary 3,213 1.0 9.2
Top 30 investments 137,278 43.4
31 Rio Tinto Basic Materials 3,183 1.0 8.3
32 Centamin Basic Materials 3,164 1.0 6.0
33 AVIVA Financials 3,117 1.0 7.9
34 FRP Advisory2 Industrials 3,077 1.0 4.1
35 Kitwave2 Consumer Staples 3,064 1.0 3.5
36 BP Energy 3,024 0.9 4.5
37 Concurrent Technologies2 Technology 2,923 0.9 2.2
38 Vistry Consumer Discretionary 2,891 0.9 7.6
39 M&G Financials 2,859 0.9 9.9
40 Lords Group Trading2 Industrials 2,858 0.9 3.1
Top 40 investments 167,438 52.9
Balance held in 81 equity investments 111,495 35.3
Total equity investments 278,933 88.2
Fixed interest investments - -
Total equity and fixed interest investments 278,933 88.2
Listed Put OptionUKX – December 2023 5,700 Put 848 0.3
Total investment portfolio 279,781 88.5
Other net current assets 36,494 11.5
Net assets 316,275 100.0
A copy of the full portfolio of investments as at 31 May 2023 is available on
the Company’s website, www.diverseincometrust.com.
1 Source: Refinitiv. Based on historical yields and therefore not
representative of future yields. Includes special dividends where applicable.
2 AIM/AQUIS listed.
Portfolio exposure by sector (%) £279.8 million
%
Financials 30.1
Industrials 18.3
Basic Materials 10.6
Energy 10.6
Consumer Discretionary 9.8
Consumer Staples 6.8
Real Estate 4.1
Telecomms 2.9
Technology 2.9
Utilities 2.7
Health Care 1.2
Actual income by sector (%) £15.8 million
%
Financials 39.0
Industrials 16.7
Basic Materials 11.3
Energy 8.3
Consumer Discretionary 7.9
Consumer Staples 4.5
Utilities 4.3
Telecomms 3.4
Real Estate 3.3
Technology 0.7
Health Care 0.6
Source: Thomson Reuters.
NOTICE OF ANNUAL GENERAL MEETING
The twelfth Annual General Meeting of the Company will be held on Tuesday, 17
October 2023 at 11.30 am at the offices of Stephenson Harwood LLP, 1 Finsbury
Circus, London EC2M 7SH. The formal Notice of AGM can be found within the
Annual Report.
FURTHER INFORMATION
The Diverse Income Trust Plc’s annual report and accounts for the year ended
31 May 2023 (which includes the notice of meeting for the Company's AGM) will
be available today on www.diverseincometrust.com.
It will also be submitted shortly in full unedited text to the Financial
Conduct Authority's National Storage Mechanism and will be available for
inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) in accordance with
DTR 6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
ENDS
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