REG-Invesco Global Equity Income Trust Plc: Half-year Report
26/02/2025 07:15
LEI: 549300JZQ39WJPD7U596
INVESCO GLOBAL EQUITY INCOME TRUST PLC
HALF-YEARLY FINANCIAL REPORT
SIX MONTHS ENDED 30 NOVEMBER 2024
Unless noted below all page numbers refer to the Half-Yearly Financial Report
on the Company’s website.
Investment Objective
The Company’s investment objective is to provide an attractive level of
predictable income and capital appreciation over the long term, predominately
through investment in a diversified portfolio of equities worldwide.
Total Return Statistics(1) (dividends reinvested)
Six Months to Year Ended
30 November 31 May
2024 2024
Net asset value (NAV) total return (2) 10.7% 21.0%
Share price total return (2) 10.1% 26.9%
Benchmark index total return 11.4% 21.6%
Capital Statistics
At At
30 November 31 May
2024 2024 % Change
Net assets (£’000) 214,200 197,555 8.4
NAV per share 340.27p 313.30p 8.6
Share price (1) 308.00p 286.00p 7.7
Discount (2) per ordinary share (9.5)% (8.7)%
Gearing (2) :
– gross gearing 1.4% nil
– net gearing 0.9% nil
– net cash nil 0.9%
(1) Source: LSEG Data & Analytics.
(2) Alternative Performance Measures (APMs), see pages 16 to 17 for the
explanation and reconciliations of APMs. Further details are provided in the
Glossary of Terms and Alternative Performance Measures in the Company’s 2024
Annual Financial Report.
Chair’s Statement
Dear Shareholder
I am pleased to present your Company’s half-yearly financial report for the
six-month period ended 30 November 2024.
Market Overview
The six months ended 30 November 2024 were marked by volatile global equity
markets. Key factors influencing markets included: inflationary pressures
with inflation remaining higher than expected albeit appearing to have passed
its peak and restricting the scope for central banks to cut interest rates;
the outcome of political elections and the subsequent rhetoric from some of
the winners (including the now second term President Trump and the UK labour
party); and ongoing geopolitical tensions, particularly in Ukraine and the
Middle East. Even with these challenges, the US equity market performed
strongly over the period, continuing to be driven by a small number of
mega-cap tech-related stocks, while other major equity market returns were
more muted.
Performance
Despite the challenging global equity market conditions, your Portfolio
Managers’ rigorous process around bottom-up stock selection again resulted
in strong investment performance. The NAV total return per shares was +10.7%,
compared with the Company’s benchmark, the MSCI World Index (£), total
return of +11.4%, over the period. Although your Company marginally
underperformed its benchmark, it still achieved top quartile performance out
of the 18 companies in the AIC’s Global and Global Equity Income sectors
over the period. A review of your Company’s performance during the period,
and changes in the portfolio positioning, can be found in the Portfolio
Managers’ Report.
The share price total return was +10.1%, with the discount at which the shares
trade relative to their NAV having widened from –8.7% at the beginning of
the period to –9.5% at the period end. The average discount over the period
was -10.7%.
Your Company’s strong longer-term performance was recognised in November
2024 when, for the second consecutive year, it won the ‘Best International
Income Trust’ category at the annual Citywire Investment Trust Awards, which
are given to investment companies judged to have delivered the best underlying
return in terms of NAV growth in the three years to 31 August (companies
investing in publicly-listed equities are ranked on risk-adjusted performance
against their benchmark indices).
Gearing
Your Company has a £40 million revolving credit bank loan facility, which
your Portfolio Managers can use tactically to add more risk to the portfolio
when they consider this appropriate with the aim of enhancing the returns to
shareholders. At 30 November 2024, £2.95 million, equivalent to 1.4% of net
assets, had been drawn down under the facility and net gearing (being
borrowings less cash and cash equivalents) was 0.9% of net assets.
Income and Dividends
Net revenue earnings per share for the six months amounted to 1.81p.
A core objective of your Company is to provide shareholders with an attractive
level of predictable income. With effect from the current financial year, we
seek to achieve this by paying an annual dividend of at least 4% of the
unaudited previous year-end NAV, which is paid quarterly in equal amounts.
Dividends are paid from the Company’s revenues and, if needed, its capital
reserves.
Your Company has paid three interim dividends, each of 3.13p per share, in
respect of the year ending 31 May 2025. The yield on the shares at 30 November
2024 was 4.1%, based on the projected annualised dividend of 12.52p per share
for the year ending 31 May 2025.
Discount Management
During the period, the Company bought back 107,000 of its own shares at a cost
of £0.31 million and an average discount of -10.4%. All shares bought back
are held in treasury and may be sold at a premium to the NAV per share.
Your Board intends to continue to use ad hoc share buybacks with the aim of
maintaining a single digit discount in normal market conditions.
Portfolio Management Team
Stephen Anness has been the Portfolio Manager responsible for your Company’s
global equity income strategy since January 2020 and has been assisted by Joe
Dowling over that time. To better reflect Joe’s work and contribution to the
management of your Company’s portfolio, Joe was appointed as your
Company’s Deputy Portfolio Manager with effect from 1 September 2024.
Board Succession
I joined the Board on 10 October 2024 and succeeded Victoria Muir as Chair of
the Board following Victoria’s retirement, having served nine years as a
Director, at the Annual General Meeting on 21 November 2024. Davina Curling
also retired at the AGM, having joined the Board in 2021 when your Company
merged with Invesco Income Growth Trust plc. On behalf of the Board, I thank
both Victoria and Davina for their valued contributions to your Company and
wish them all the best for the future.
Helen Galbraith joined the Board on 1 December 2024 and it is expected that
she will succeed Craig Cleland as Chair of the Audit Committee in due course.
Details of Helen’s and my backgrounds and experience can be found on the
Company’s website
(www.invesco.com/uk/en/investment-trusts/invesco-global-equity-income-trust.html).
Annual General Meeting
Each resolution at the AGM was passed by a very substantial majority and, on
behalf of the Board, I thank shareholders for their ongoing support.
Post-period End Update
Since the period end, the NAV total return per share and share price total
return were +2.3% and +13.5% respectively, compared with the Company’s
benchmark total return +1.4% (to 24 February 2025).
Since 30 November 2024, the Company has bought back 1,235,282 shares at a cost
of £3.93 million and an average discount of -9.2%. The shares were trading at
a premium of 0.3% as at 24 February 2024 and the yield on the shares at that
date was 3.6%, based on the projected annualised dividend for the year ending
31 May 2025.
Outlook
Looking ahead, we remain cautious yet optimistic about your Company’s
prospects. Further interest rate cuts are anticipated but inflationary
pressures remain. These factors are well known and should have been priced in
by equity markets. More difficult for equity markets to price in is the
ramifications of President Trump’s unpredictable approach to policy making,
and, as a result, global equity markets are likely to remain volatile.
We are confident, however, in our Portfolio Managers’ investment approach
and their ability to identify quality companies where returns are driven by
stock-specific factors rather than determined by a particular macro or
economic environment and their focus will remain on high-conviction
investments, maintaining a diversified portfolio and actively managing risks.
Sue Inglis
Chair
25 February 2025
Portfolio Managers’ Report
Q How has the portfolio performed over the period?
A Over the last six months, the Company’s net asset value returned +10.7%
(total return, in sterling terms), behind its benchmark, MSCI World Index
(total return, in sterling terms), which delivered +11.4% over the same
period.
Below is an analysis of the main contributors and detractors during the
period:
30 Nov 2024
Performance Portfolio
Key Impact Weight
Contributors % %
3i 1.06 5.44
Herc Holdings 0.84 1.94
KKR & Co 0.74 1.79
Broadcom 0.60 2.85
UnitedHealth 0.50 4.43
30 Nov 2024
Performance Portfolio
Key Impact Weight
Detractors % %
Verallia –1.56 2.10
Universal Music –0.96 2.21
LVMH –0.86 2.16
Aker BP –0.68 1.78
Tesla –0.65 0.00
Source: Invesco, Bloomberg.
On the positive side, the portfolio’s largest holding 3i was a top
contributor to relative performance as the private equity company continued to
benefit from its investment in European discount retailer Action, which
continues to perform well. Also in the private equity space, KKR & Co saw its
advancements underpinned by positive earnings and revenue for the second and
third quarters of 2024.
Herc Holdings gained during the period with industrial rental supplier
reporting third quarter rental revenue that surpassed estimates whilst also
boosting its growth outlook for fiscal 2024. Chipmaker Broadcom continued to
benefit from demand for AI-related products, while UnitedHealth, the
portfolio’s second largest holding, gained on stronger-than-expected second
quarter adjusted profits.
On the other hand, Verallia, a glass-packaging company, lost ground in July
after the company cut its annual earnings guidance citing a slow recovery in
demand. However, in October the company reported that volume growth had
returned in the third quarter which led to shares regaining some of the lost
ground. We remain optimistic about the long-term prospects of the business,
which is a market leader in European glass packaging.
Universal Music’s second quarter revenue beat was overshadowed by a slowdown
in the subscription and streaming segment of the business which led to a
selloff in July. We continue to believe that they can steady the ship and
compound at an attractive rate over the long run.
Weakness in LVMH was driven largely by concerns that demand for luxury goods
may be fading, particularly in China which has been a key growth driver for
the sector. We increased our exposure following the selloff as expectations
have been reset and the risks feel more skewed to the upside.
Not holding Tesla in the portfolio had a negative impact over the period,
while Norway’s Aker BP gave up some ground following weakness in oil prices.
Q Has the positioning of the portfolio changed significantly over the period?
A Some notable examples of buys and sells can be found below.
Bought:
• Amentum is a market leading US/UK government infrastructure outsourced
services provider formed from the merger of Amentum and Jacobs Solutions’
critical mission solutions (CMS) segment. Due to industry structure (10-20
year contracts), there is low risk way for Amentum to not only deliver on
guidance, but significantly beat it over time. The company trades at a
significant discount to peers despite much more favourable exposure to fast
growing end markets (Energy).
• Corpay is a Global provider of digital payment solutions, enabling
businesses to control purchases and make payments. The CEO Ron Clarke is seen
as an exceptionally good capital allocator, who has managed to double
profitability of the acquired business within 12 months. Revenues have
compounded at 20% and earnings 18% pa since 2010. At 14x forward
Price-to-earnings (P/E), this provided a very attractive entry point.
Sold:
• Apple shares have rebounded strongly – up c40% since our purchase in
April – and we felt there were better risk/ reward opportunities elsewhere.
• Home Depot was a low conviction (small) position for some time in the
portfolio. Strong performance between August-October gave us the opportunity
to recycle into higher conviction ideas.
Q What are your thoughts on portfolio structure?
A Our philosophy has always been to deliver a portfolio yield above the
benchmark index, but not all stocks in our portfolio need to provide a yield.
This flexibility allows us to select stocks from across the market, offering
diverse opportunities for growth and risk management. We categorise our
investments as follows (the percentage ranges refer to the Company’s gross
assets):
Dividend Compounders (70%-100%): companies with attractive yields that have
consistently grown over time.
Faster Growth, Low/No Yield (0-20%): typically tech companies with high growth
potential but low or no yield.
Dividend Restoration (0-10%): special situations where dividends have been cut
but are expected to be restored soon.
This diversified approach sets us apart from our peers. We strive to identify
market opportunities that will grow your income and capital over the long
term, even if it means not having the highest yield in the sector. With the
Company’s new policy of paying an annual dividend of at least 4% of the
previous year-end NAV, shareholders can enjoy predictable income without any
compromising of the investment team’s philosophy.
Q What are your thoughts on gearing?
A We remain thoughtful around gearing due to some caution on adding
additional risk to the portfolio at a point when expectations are already
quite high in the market. However, this can change quickly if there are any
notable market events, and we see an opportunity to scale up our risk.
Q Can you provide a brief summary of your approach to ESG?
A We view analysing ESG risks as a key part of our investment process. As
active, fundamental managers we consider every key aspect of a company’s
true worth, including material ESG considerations because we believe that the
most sustainable way to make money is to buy companies for less than they are
worth.
Establishing an estimated ‘fair value’ of a company is therefore essential
and this entails incorporating ESG aspects into our investment methodology. We
take a holistic approach where a company’s ESG credentials are scrutinised
alongside traditional financial and qualitative aspects to derive a fair
value. All companies face challenges regarding ESG and therefore we must
consider materiality (the impact of ESG factors on fair value) and ESG
momentum (the potential for ESG improvement over time). Both can influence a
stock’s potential returns and our conviction levels in an investment. As
shareholders we actively engage with companies to enhance the value of our
investments.
We encourage companies to create sustainable value and mitigate risks in
relation to their corporate activities. This can include prompting them to
improve governance structures, make better asset allocation decisions,
instilling sustainable practices and policies and providing better disclosure.
This reinforces our fundamental belief that responsible investing demands a
long-term view and that a stakeholder-centric culture of ownership and
stewardship is at the heart.
Q What is your outlook for 2025?
A Perhaps the biggest risk investors face is that both 2023 and 2024
surpassed expectations from a macro point of view as a hard economic landing
never materialised and markets performed very strongly as a result. As a
consequence, it has raised the bar, in terms of delivering another year of
outperformance in 2025. Markets are already pricing some benign outcomes when
it comes to further rate cuts from the Fed and the ECB. So given what is
already priced in, the bar for 2025 outperformance is much harder on paper
than it was going into the last two years. With current valuations in mind, we
are conscious that we keep our expectations in check for share re-ratings, and
we expect returns to be predominantly delivered from earnings growth and
dividends. This remains a focus of our work.
Given the current market conditions, we continue to have conviction in our
portfolio. We believe it stands out from the market, containing many strong
companies trading at attractive prices, capable of thriving independently of
broader trends. This has always been our approach, but this year the gap
between our portfolio and the benchmark feels more pronounced than usual. We
continue to focus on bottom-up research focussing on attractive dividend and
dividend growth characteristics.
Stephen Anness Joe Dowling
Portfolio Manager Deputy Portfolio Manager
25 February 2025
List of Investments
AT 30 NOVEMBER 2024
Ordinary shares unless stated otherwise
Market
Value % of
Company Sector† Country £’000 Portfolio
3i Financial Services United Kingdom 11,783 5.4
UnitedHealth Health Care Equipment & Services United States 9,587 4.4
Microsoft Software & Services United States 9,132 4.2
Rolls-Royce Capital Goods United Kingdom 8,963 4.1
Texas Instruments Semiconductors & Semiconductor Equipment United States 8,133 3.8
Coca-Cola Europacific Partners Food, Beverage & Tobacco United Kingdom 8,048 3.7
Union Pacific Transportation United States 7,756 3.6
London Stock Exchange Financial Services United Kingdom 7,699 3.6
Standard Chartered Banks United Kingdom 6,799 3.1
Azelis Capital Goods Belgium 6,524 3.0
Top Ten Holdings 84,424 38.9
AIA Insurance Hong Kong 6,364 3.0
Broadcom Semiconductors & Semiconductor Equipment United States 6,174 2.9
Recordati Pharmaceuticals, Biotechnology & Life Sciences Italy 5,469 2.5
American Tower Equity Real Estate Investment Trusts (REITs) United States 5,236 2.4
Zurich Insurance Insurance Switzerland 5,182 2.4
Corpay Financial Services United States 5,094 2.4
Old Dominion Freight Line Transportation United States 4,982 2.3
Infrastrutture Telecommunication Services Italy 4,882 2.3
Universal Music Media & Entertainment Netherlands 4,796 2.2
Progressive Insurance United States 4,784 2.2
Top Twenty Holdings 137,387 63.5
LVMH Consumer Durables & Apparel France 4,687 2.2
Verallia Materials France 4,542 2.1
CME Financial Services United States 4,221 1.9
Herc Holdings Capital Goods United States 4,212 1.9
KKR & Co Financial Services United States 3,880 1.8
Intercontinental Exchange Financial Services United States 3,872 1.8
Taiwan Semiconductor Manufacturing Semiconductors & Semiconductor Equipment Taiwan 3,864 1.8
Coca-Cola Food, Beverage & Tobacco United States 3,850 1.8
Aker BP Energy Norway 3,847 1.8
Canadian Pacific Kansas City Transportation Canada 3,736 1.7
Top Thirty Holdings 178,098 82.3
Ferguson Capital Goods United States 3,710 1.7
Abbott Laboratories Health Care Equipment & Services United States 3,697 1.7
Analog Devices Semiconductors & Semiconductor Equipment United States 3,668 1.7
Royal Unibrew Food, Beverage & Tobacco Denmark 3,592 1.7
RELX Commercial & Professional Services United Kingdom 2,790 1.3
Amazon Consumer Discretionary Distribution & Retail United States 2,689 1.2
Medpace Pharmaceuticals, Biotechnology & Life Sciences United States 2,651 1.2
Tractor Supply Consumer Discretionary Distribution & Retail United States 2,277 1.1
Howden Joinery Capital Goods United Kingdom 2,222 1.0
Novo-Nordisk – B Shares Pharmaceuticals, Biotechnology & Life Sciences Denmark 2,144 1.0
Top Forty Holdings 207,538 95.9
O’Reilly Automotive Consumer Discretionary Distribution & Retail United States 2,131 1.0
Amentum Commercial & Professional Services United States 1,898 0.9
Prosus Consumer Discretionary Distribution & Retail Netherlands 1,811 0.8
Danaher Pharmaceuticals, Biotechnology & Life Sciences United States 1,629 0.7
Estee Lauder – A Shares Household & Personal Products United States 1,513 0.7
Sberbank* – ADR Banks Russia – –
Harbinger – Streamline Offshore Fund + Hedge Funds Cayman Islands – –
Total Holdings 47 (2024: 42) 216,520 100.0
ADR American Depositary Receipts – are certificates that represent shares
in the relevant stock and are issued by a US bank. They are denominated and
pay dividends in US dollars.
† MSCI and Standard & Poor’s Global Industry Classification Standard.
* The investment in Sberbank – ADR has been valued at zero as secondary
listings of the depositary receipts on Russian companies have been suspended
from trading.
+ The hedge fund investments are residual holdings of the previous investment
strategy, transferred from the Balanced Risk Allocation Portfolio as part of
the Company’s restructure in May 2024, which are awaiting realisation of
underlying investments. Given lack of availability of recent valuation, the
market value has been written-down to zero.
Governance
Principal risks and uncertainties
The principal risks and uncertainties facing the Company fall into the
following broad categories: market risk, geopolitical risk, investment
objective and strategy risk, discount risk, performance risk, ESG including
climate risk, currency fluctuation risk, information technology
resilience and security risk, operation resilience risk and regulatory and tax
related risk. An explanation of these risks (as well as emerging risks)
and how they are managed is set out on pages 39 to 41 of the Company’s
Annual Report and Financial Statements for the year ended 31 May 2024 which is
available on the Company’s website:
www.invesco.com/uk/en/investment-trusts/invesco-global-equityincome-trust.html.
In the view of the Board, the principal risks and uncertainties have not
materially changed since the date of that report and are as applicable to the
remaining six months of the financial year as they were to the six months
under review.
Going Concern
The financial statements have been prepared on a going concern basis. The
Directors consider this to be appropriate as the Company has adequate
resources to continue in operational existence for the foreseeable future,
taken as twelve months from the signing of the financial statements for this
purpose. This conclusion is consistent with the longer term viability
statement on pages 41 to 42 of the Company’s Annual Report and Financial
Statements for the year ended 31 May 2024 and in reaching it the Directors
took into account: the value of net assets; the Company’s investment policy;
its risk management policies; the diversified portfolio of readily realisable
securities which can be used to meet funding commitments; the credit facility
and the overdraft which can be used for short-term funding requirements; the
liquidity of the investments which could be used to repay the credit facility
in the event that the facility could not be renewed or replaced; the
Company’s revenue; the current economic outlook; and the ability of the
Company in the light of these factors to meet all its liabilities and ongoing
expenses.
Related Party Transactions
Under United Kingdom Generally Accepted Accounting Practice (UK Accounting
Standards and applicable law), the Company has identified the Directors and
their dependents as related parties. No other related parties have been
identified during the period. No transactions with related parties have taken
place which have materially affected the financial position or the performance
of the Company.
Statement of Directors’ Responsibilities
(in respect of the preparation of the half-yearly financial report)
The Directors are responsible for preparing the half-yearly financial report
using accounting policies consistent with applicable law and
UK Accounting Standards.
The Directors confirm that, to the best of their knowledge:
– the condensed set of financial statements contained within the half-yearly
financial report has been prepared in accordance with the FRC’s FRS 104
Interim Financial Reporting;
– the interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R of the FCA’s Disclosure Guidance and
Transparency Rules; and
– the interim management report includes a fair review of the information
required on related party transactions.
The half-yearly financial report has not been audited or reviewed by the
Company’s auditor.
Signed on behalf of the Board of Directors.
Sue Inglis
Chair
25 February 2025
Condensed Income Statement
For the Six Months Ended 30 November 2024 For the Six Months Ended 30 November 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Gains on investments held at fair value – 20,183 20,183 – 6,765 6,765
(Losses)/gains on derivative instruments – – – (3) 58 55
Losses on foreign exchange – (19) (19) – (10) (10)
Income – note 2 1,803 – 1,803 3,710 – 3,710
Investment management fees – note 3 (165) (384) (549) (167) (387) (554)
Other expenses (322) 10 (312) (293) (5) (298)
Net return before finance costs and taxation 1,316 19,790 21,106 3,247 6,421 9,668
Finance costs – note 3 (12) (27) (39) (92) (214) (306)
Return before taxation 1,304 19,763 21,067 3,155 6,207 9,362
Tax on ordinary activities – note 5 (163) – (163) (120) 32 (88)
Return after taxation for the financial period 1,141 19,763 20,904 3,035 6,239 9,274
Return per ordinary share (basic and diluted) – note 4:
– Global Equity Income (formerly Global Equity Income 1.81p 31.36p 33.17p 2.06p 19.97p 22.03p
Share Portfolio)
– UK Equity Share Portfolio (1) n/a n/a n/a 3.51p 1.65p 5.16p
– Balanced Risk Allocation Share Portfolio (1) n/a n/a n/a 2.33p 1.46p 3.79p
– Managed Liquidity Share Portfolio (1) n/a n/a n/a 2.14p 0.69p 2.83p
(1) This Share class was closed on 7 May 2024, as such, only comparative
figures are shown.
The total columns of this statement represent the Company’s profit and loss
account, prepared in accordance with UK Accounting Standards. The return on
ordinary activities after taxation is the total comprehensive income and
therefore no additional statement of other comprehensive income is presented.
The supplementary revenue and capital columns are presented for information
purposes in accordance with the Statement of Recommended Practice issued by
the Association of Investment Companies. All items in the above statement
derive from continuing operations of the Company. No operations were acquired
or discontinued in the period.
Condensed Statement of Changes in Equity
Capital
Share Redemption Special Capital Revenue
Capital Reserve Reserve Reserve Reserve Total
£’000 £’000 £’000 £’000 £’000 £’000
Six months ended 30 November 2024
At 31 May 2024 800 1,285 113,296 82,072 102 197,555
Shares bought back and held in treasury – – (315) – – (315)
Return after taxation per the income statement – – – 19,763 1,141 20,904
Dividends paid – note 6 – – (2,803) – (1,141) (3,944)
At 30 November 2024 800 1,285 110,178 101,835 102 214,200
Six months ended 30 November 2023
At 31 May 2023 1,707 377 137,424 60,129 102 199,739
Cancellation of deferred shares – 4 (4) – – –
Shares bought back and held in treasury – – (2,157) – – (2,157)
Share conversions (3) – 3 – – –
Return after taxation per the income statement – – – 6,239 3,035 9,274
Dividends paid – note 6 – – (285) – (2,841) (3,126)
At 30 November 2023 1,704 381 134,981 66,368 296 203,730
Condensed Balance Sheet
Registered Number 5916642
AS AT 30 NOVEMBER 2024
At At
30 November 31 May
2024 2024
£’000 £’000
Fixed assets
Investments held at fair value through profit or loss 216,520 195,824
Current assets
Debtors 612 1,639
Cash and cash equivalents 1,017 1,859
1,629 3,498
Creditors: amounts falling due within one year
Other creditors (999) (1,767)
Bank facility (2,950) –
(3,949) (1,767)
Net current (liabilities)/assets (2,320) 1,731
Net assets 214,200 197,555
Capital and reserves
Share capital 800 800
Other reserves:
Capital redemption reserve 1,285 1,285
Special reserve 110,178 113,296
Capital reserve 101,835 82,072
Revenue reserve 102 102
Total shareholders’ funds 214,200 197,555
Net asset value per ordinary share 340.27p 313.30p
Signed on behalf of the Board of Directors.
Sue Inglis
Chair
25 February 2025
Condensed Statement of Cash Flows
For the For the
six months six months
ended ended
30 November 30 November
2024 2023
£’000 £’000
Cash flows from operating activities
Net return before finance costs and taxation 21,106 9,668
Tax on overseas income (163) (88)
Adjustments for:
Purchase of investments (40,593) (38,147)
Sale of investments 40,373 36,785
Sale of futures – (87)
(220) (1,449)
Gains on investments (20,183) (6,765)
Gains on derivatives – (55)
(Increase)/decrease in debtors (20) 343
Decrease in creditors (6) (1)
Net cash inflow from operating activities 514 1,653
Cash flows from financing activities
Interest paid on bank borrowings (47) (294)
Increase in bank facility 2,950 3,300
Shares bought back and held in treasury (315) (2,157)
Dividends paid – note 6 (3,944) (3,126)
Net cash outflow from financing activities (1,356) (2,277)
Net decrease in cash and cash equivalents (842) (624)
Cash and cash equivalents at the start of the period 1,859 1,094
Cash and cash equivalents at the end of the period 1,017 470
Reconciliation of cash and cash equivalents to the Balance Sheet is as follows:
Cash held at custodian 457 470
Invesco Liquidity Funds plc – Sterling, money market fund 560 –
Cash and cash equivalents 1,017 470
Cash flow from operating activities includes:
Dividends received 1,577 3,641
Interest received 18 23
At At
1 June Cash 30 November
2024 flows 2024
£’000 £’000 £’000
Reconciliation of net debt
Cash and cash equivalents 1,859 (842) 1,017
Bank facility – (2,950) (2,950)
Total 1,859 (3,792) (1,933)
Notes to the Condensed Financial Statements
1. Accounting Policies
The condensed financial statements have been prepared in accordance with
applicable United Kingdom Accounting Standards and applicable law (UK
Generally Accepted Accounting Practice), including FRS 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland, FRS 104
Interim Financial Reporting and the Statement of Recommended Practice
Financial Statements of Investment Trust Companies and Venture Capital Trusts,
issued by the Association of Investment Companies in July 2022. The financial
statements are issued on a going concern basis.
The accounting policies applied to these condensed financial statements are
consistent with those applied in the Company’s 2024 Annual Financial Report
for the year ended 31 May 2024.
2. Income
Six Months to Six Months to
30 November 30 November
2024 2023
£’000 £’000
Income from investments:
UK dividends 468 2,508
Overseas dividends – ordinary 1,219 1,001
Overseas dividends – special 98 122
1,785 3,631
Other income:
Deposit interest 18 23
Rebates of management fee – 1
Interest from Treasury bills – 55
1,803 3,710
No special dividends have been recognised in capital during the period (2023:
£nil).
3. Management Fee and Finance Costs
Investment management fee and finance costs on any borrowings are charged 70%
to capital and 30% to revenue. A management fee is payable quarterly in
arrears and is equal to 0.55% per annum of the value of the Company’s net
assets at the end of the relevant quarter and 0.50% per annum for any net
assets over £100 million.
4. Return per Ordinary Share
Revenue, capital and total return per ordinary share is based on each of the
returns after taxation shown by the income statement for the applicable share
class and on the following numbers of shares being the weighted average number
of shares in issue throughout the period for each applicable share class:
Weighted Average Number Of Shares
Six Months to Six Months to
30 November 30 November
2024 2023
Share:
Global Equity Income (formerly Global Equity Income Share Portfolio) 63,014,375 25,230,982
UK Equity Share Portfolio (1) – 68,231,832
Balanced Risk Allocation Share Portfolio (1) – 4,158,733
Managed Liquidity Share Portfolio (1) – 1,262,789
(1) This Share class was closed on 7 May 2024, as such, only comparative
figures are shown.
5. Investment Trust Status and Tax
It is the intention of the Directors to conduct the affairs of the Company so
that it satisfies the conditions for approval as an investment trust company.
As such, the Company has not provided any UK corporation tax on any realised
or unrealised capital gains or losses.
The tax charge represents withholding tax suffered on overseas income for the
period.
6. Dividends Paid on Ordinary Shares
Six months to 30 November 2024 Six months to 30 November 2023
Rate (Pence) £’000 Rate (Pence) £’000
Global Equity Income (formerly Global Equity Income Share Portfolio)
First interim 3.13 1,974 1.60 402
Second interim 3.13 1,970 1.60 402
6.26 3,944 3.20 804
Combined closed share classes (1)
First interim – – 3.60 1,156
Second interim – – 1.60 1,083
Special dividend – – 2.00 83
– – 7.20 2,322
Total dividends 6.26 3,944 10.40 3,126
(1) The combined closed share class dividends were those paid by UK Equity,
Balanced Risk Allocation and Managed Liquidity shares along with a special
dividend on Balanced Risk Allocation prior to the Company restructure on 7 May
2024.
On 4 December 2024 the Company announced the third quarterly interim dividend
for the year ending 31 May 2025. The dividend declared of 3.13p was paid on 14
February 2025 to shareholders on the register on 17 January 2025.
7. Share Capital, Including Movements
Global
Equity
For the six months to 30 November 2024 Income
Number of ordinary shares in issue
At 31 May 2024 63,056,464
Shares bought back into treasury (107,000)
At 30 November 2024 62,949,464
Number of treasury shares held
At 31 May 2024 16,930,122
Shares bought back into treasury 107,000
At 30 November 2024 17,037,122
Total shares in issue at 30 November 2024 (1) 79,986,586
(1) Following shareholder approval at the Annual General Meeting held on 21
November 2024, the Company’s Global Equity Income Shares of £0.01 each were
redesignated as ordinary shares of £0.01 each.
Global
Equity UK Balanced Managed
For the year ended 31 May 2024 Income Equity Risk Allocation Liquidity
Number of ordinary shares in issue
At 31 May 2023 25,135,742 68,881,153 4,138,995 1,251,360
Shares bought back into treasury (153,963) (1,510,343) – –
Arising on share conversion 565,132 (800,197) (129,244) 65,932
Tender offer in respect of the share class reclassification – (9,985,591) (714,610) (417,453)
Share class reclassification 37,509,553 (56,585,022) (3,295,141) (899,839)
At 31 May 2024 63,056,464 – – –
Number of treasury shares held
At 31 May 2023 16,776,159 38,515,775 6,547,218 9,393,678
Shares bought back into treasury 153,963 1,510,343 – –
Treasury shares cancelled – (40,026,118) (6,547,218) (9,393,678)
At 31 May 2024 16,930,122 – – –
Total shares in issue at 31 May 2024 (1) 79,986,586 – – –
(1) Following shareholder approval at the Annual General Meeting held on 21
November 2024, the Company’s Global Equity Income Shares of £0.01 each were
redesignated as ordinary shares of £0.01 each.
During the period the Company bought back, into treasury, 107,000 ordinary
shares at a total cost of £315,000 (31 May 2024: 1,664,306 ordinary shares at
a total cost of £2,702,000).
Subsequent to the period end, 1,235,282 ordinary shares were bought back into
treasury at a total cost of £3,929,000.
8. Classification Under Fair Value Hierarchy
FRS 102 sets out three fair value levels. These are:
Level 1 – The unadjusted quoted price in an active market for identical
assets that the entity can access at the measurement date.
Level 2 – Inputs other than quoted prices included within Level 1 that are
observable (i.e. developed using market data) for the asset or liability,
either directly or indirectly.
Level 3 – Inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
The fair value hierarchy analysis for investments and related forward currency
contracts held at fair value at the period end is as follows:
30 November 31 May
2024 2024
£’000 £’000
Financial assets designated at fair value through profit or loss:
Level 1 216,520 195,824
Level 2 – –
Level 3 – –
Total for financial assets 216,520 195,824
Level 3 investments comprise any unquoted securities and the remaining hedge
fund investments transferred from the Balanced Risk Allocation Portfolio as
part of the Company’s restructure in May 2024.
9. Status of Half-Yearly Financial Report
The financial information contained in this half-yearly report does not
constitute statutory accounts as defined in section 434 of the Companies Act
2006. The financial information for the half years ended 30 November 2024 and
30 November 2023 has not been audited. The figures and financial information
for the year ended 31 May 2024 are extracted and abridged from the latest
audited accounts and do not constitute the statutory accounts for that year.
Those accounts have been delivered to the Registrar of Companies and included
the Report of the Independent Auditor, which was unqualified and did not
include a statement under section 498 of the Companies Act 2006.
By order of the Board
Invesco Asset Management Limited
Company Secretary
Date: 25 February 2025
Glossary of Terms and Alternative Performance Measures
(Discount)/Premium
Discount is a measure of the amount by which the mid-market price of an
investment company share is lower than the underlying net asset value (NAV) of
that share. Conversely, premium is a measure of the amount by which the
mid-market price of an investment company share is higher than the underlying
net asset value of that share. In this half-yearly financial report the
discount is expressed as a percentage of the net asset value per share and is
calculated according to the formula set out below. If the shares are trading
at a premium the result of the below calculation will be positive and if they
are trading at a discount it will be negative.
Gearing
The gearing percentage reflects the amount of borrowings that a company has
invested. This figure indicates the extra amount by which net assets, or
shareholders’ funds, would be expected to move if the value of a company’s
investments were to rise or fall. A positive percentage indicates the extent
to which net assets are geared; a nil gearing percentage, or ‘nil’, shows
a company is ungeared. A negative percentage indicates that a company is not
fully invested and is holding net cash as described in the Alternative
Performance Measures section below.
Net Asset Value (NAV)
Also described as shareholders’ funds, the NAV is the value of total assets
less liabilities. The NAV per share is calculated by dividing the net asset
value by the number of ordinary shares in issue. The number of ordinary shares
for this purpose excludes those ordinary shares held in treasury.
Volatility
Volatility refers to the amount of uncertainty or risk about the size of
changes in a security’s value. It is a statistical measure of the dispersion
of returns for a given security or market index measured by using the standard
deviation or variance of returns from that same security or market index.
Commonly, the higher the volatility, the riskier the security.
Total Return
Total return is the theoretical return to shareholders that measures the
combined effect of any dividends paid, together with the rise or fall in the
share price or NAV. In this half-yearly financial report these return figures
have been sourced from LSEG Data & Analytics who calculate returns on an
industry comparative basis. The figures calculated below are six month and one
year total returns; however the same calculation would be used for three, five
and ten year total returns where quoted in this report, taking the respective
net asset values and share prices period for the opening and closing periods
and adding the impact of dividend reinvestments for the relevant periods.
NAV Total Return
Total return on net asset value per share, assuming dividends paid by the
Company were reinvested, without transaction costs, into the shares of the
Company at the NAV per share at the time the shares were quoted ex-dividend.
Share Price Total Return
Total return to shareholders, on a mid-market price basis, assuming all
dividends received were reinvested, without transaction costs, into the shares
of the Company at the time the shares were quoted ex-dividend.
Benchmark Total Return
The benchmark of the Company is the MSCI World Index (total return in sterling
terms). Total return on the benchmark is on a mid-market value basis, assuming
all dividends received were reinvested, without transaction costs, into the
shares of the underlying companies at the time the shares were quoted
ex-dividend.
Alternative Performance Measure
An APM is a measure of performance or financial position that is not defined
in applicable accounting standards and cannot be directly derived from the
financial statements. The calculations shown in the corresponding tables are
for the six months ended 30 November 2024 and the year ended 31 May 2024. The
APMs listed here are widely used in reporting within the investment company
sector and consequently aid comparability.
(Discount)/Premium (APM)
30 November 31 May
Page 2024 2024
Share price 1 a 308.00p 286.00p
Net asset value per share 1 b 340.27p 313.30p
Discount c = (a–b)/b (9.5)% (8.7)%
Gross Gearing (APM)
This reflects the amount of gross borrowings in use by a company and takes no
account of any cash balances. It is based on gross borrowings as a percentage
of net assets.
30 November 31 May
2024 2024
Page £’000 £’000
Gross borrowings – bank facility 11 a 2,950 –
Net asset value 11 b 214,200 197,555
Gross gearing c = a/b 1.4% nil
Net Gearing or Net Cash (APM)
Net gearing reflects the amount of net borrowings invested, i.e. borrowings
less cash and cash equivalents (incl. investments in money market funds). It
is based on net borrowings as a percentage of net assets. Net cash reflects
the net exposure to cash and cash equivalents, as a percentage of net assets,
after any offset against total borrowings.
30 November 31 May
2024 2024
Page £’000 £’000
Bank facility 11 2,950 -
Less: cash and cash equivalents including margin 11 (1,017) (1,859)
Net borrowings a 1,933 (1,859)
Net asset value 11 b 214,200 197,555
Net gearing/(net cash) c = a/b 0.9% (0.9)%
Total Return (APM)
Net Asset
Six months ended 30 November 2024 Page Value Share Price
As at 30 November 2024 1 340.27p 308.00p
As at 31 May 2024 1 313.30p 286.00p
Change in period a 8.6% 7.7%
Impact of dividend reinvestments (1) b 2.1% 2.4%
Total return for the period c = a+b 10.7% 10.1%
Net Asset
Year ended 31 May 2024 Page Value Share Price
As at 31 May 2024 1 313.30p 286.00p
As at 31 May 2023 265.53p 232.00p
Change in period a 18.0% 23.3%
Impact of dividend reinvestments (1) b 3.0% 3.6%
Total return for the period c = a+b 21.0% 26.9%
(1) Total dividends paid during the six months to 30 November 2024 of 6.26p
(year to 31 May 2024: 7.35p). NAV or share price falls subsequent to the
reinvestment date consequently further reduce the returns, vice versa if the
NAV or share price rises.
Directors, Investment Manager and Administration
Directors
Sue Inglis (Chair of the Board and Nomination Committee)
Craig Cleland (Chair of the Audit Committee)
Tim Woodhead (Senior Independent Director and Chair of the Management
Engagement Committee)
Mark Dampier (Chair of the Marketing Committee)
Helen Galbraith
All the Directors are, in the opinion of the Board, independent of the
management company.
All Directors are members of the Audit Committee, Management Engagement,
Nomination and Marketing Committees.
Registered Office and Company Number
Perpetual Park
Perpetual Park Drive
Henley-on-Thames
Oxfordshire
RG9 1HH
Registered in England and Wales Number 05916642
Alternative Investment Fund Manager (Manager)
Invesco Fund Managers Limited
Company Secretary
Invesco Asset Management Limited
Company Secretarial contact: James Poole
Tel: 020 7543 3559
email: James.Poole@invesco.com
Correspondence Address
43-45 Portman Square
London W1H 6LY
Tel: 020 3753 1000
email: investmenttrusts@invesco.com
Depositary and Custodian
The Bank of New York Mellon (International) Limited
160 Queen Victoria Street, London EC4V 4LA
Corporate Broker
Cavendish Capital Markets Limited
1 Bartholomew Close
London EC1A 7BL
General Data Protection Regulation
The Company’s privacy notice can be found at
www.invesco.co.uk/investmenttrusts
Invesco Client Services
Invesco has a Client Services Team, available to assist you from 8.30am to
6.00pm Monday to Friday (excluding UK Bank Holidays). Please note no
investment advice can be given. Tel: 0800 085 8677.
www.invesco.co.uk/investmenttrusts
Registrar
MUFG Corporate Markets (formerly known as Link Group)
Central Square
29 Wellington Street
Leeds LS1 4DL
Tel: 0371 664 0300
If you hold your shares directly as a paper share certificate and not through
an investment platform or savings scheme and have queries relating to your
shareholding you should contact the company’s Registrar, MUFG Corporate
Markets, via email on shareholderenquiries@cm.mpms.mufg.com or on: Tel: 0371
664 0300.
Calls are charged at the standard geographic rate and will vary by provider.
MUFG Corporate Markets provides an on-line and telephone share dealing service
for paper share certificates to existing shareholders who are not seeking
advice on buying or selling. This service is available at
dealing.cm.mpms.mufg.com or (Tel: 0371 664 0445. Calls are charged at the
standard geographic rate and will vary by provider. Calls from outside the UK
will be charged at the applicable international rate. Lines are open 9.00am to
5.30pm Monday to Friday (excluding Bank Holidays in England and Wales).
Shareholders holding paper share certificates can also access their holding
details via the Investor Centre app or the website at
https://uk.investorcentre.mpms.mufg.com.
MUFG Corporate Markets is the business name of MUFG Corporate Markets (UK)
Limited.
Investor Warning
The Company, Invesco and the Registrar would never contact members of the
public to offer services or require any type of upfront payment. If you
suspect you have been approached by fraudsters, please contact the FCA
consumer helpline on 0800 111 6768 and Action Fraud on 0300 123 2040.
Further details for reporting frauds, or attempted frauds, can be found below.
The Association of Investment Companies
The Company is a member of the Association of Investment Companies. Contact
details are as follows:
Tel: 020 7282 5555
Email: enquiries@theaic.co.uk
Website: www.theaic.co.uk
Website
Information relating to the Company can be found on the Company’s section of
the Manager’s website at
www.invesco.com/uk/en/investment-trusts/invesco-global-equity-income-trust.html.
The contents of websites referred to in this document, or accessible from
links within those websites, are not incorporated into, nor do they form part
of, this document.
The Company’s ordinary shares qualify to be considered as a mainstream
investment product suitable for promotion to retail investors.
National Storage Mechanism
A copy of the Half-Yearly Financial Report will be submitted shortly to the
National Storage Mechanism ("NSM") and will be available for inspection at the
NSM, which is situated
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Hard copies of the Half-Yearly Financial Report will be posted to shareholders
and can be requested from the Company Secretary by email
at investmenttrusts@invesco.com or at the Company’s correspondence
address, 2nd Floor, 43-45 Portman Square, London W1H 6LY.
For further information, please contact:
James Poole
For and on behalf of Invesco Asset Management Limited
Corporate Secretary to Invesco Select Trust plc
Email: investmenttrusts@invesco.com
Will Ellis
Head of Specialist Funds - Invesco
Email: will.ellis@invesco.com
Invesco Asset Management Limited
Corporate Company Secretary
25 February 2024
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