REG-Rights and Issues Investment Trust PLC Rights and Issues Investment Trust PLC: IR-Half-yearly Results
01/08/2023 16:30
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Rights and Issues Investment Trust PLC (RIII)
Rights and Issues Investment Trust PLC: IR-Half-yearly Results
01-Aug-2023 / 16:25 GMT/BST
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RIGHTS AND ISSUES INVESTMENT TRUST PLC
For the six months ended 30th June 2023
A copy of the Company's Half Yearly Financial Report for the six months ended 30th June 2023
will shortly be available to view and download from 1 www.jupiteram.com/rightsandissues.
Neither the contents of this website nor the contents of any website accessible from
hyperlinks on this website (or any other website) is incorporated into or forms part of this
announcement.
Printed copies of the Report will be made available to shareholders shortly. Additional
copies may be obtained from the Corporate Secretary – Apex Fund Administration Services (UK)
Limited, Hamilton Centre, Rodney Way, Chelmsford, Essex CM1 3BY.
INTERIM DIVIDEND
An interim dividend of 11.75p per share has been approved by the Board and is payable on
25th September 2023 to shareholders on the register as at 25th August 2023 (ex-dividend 24th
August 2023).
The following text is copied from the Half Yearly Financial Report.
HALF YEARLY FINANCIAL REPORT
for the six months ended 30th June 2023
Financial Highlights
Financial Highlights for the six months to 30th June 2023
Capital Performance
30th June 31st December
2023 2022
Total assets less current liabilities 137,081 140,783
(£’000
Ordinary Share Performance
30th June 31st December
2023 2022 % change
Mid market price (p) 2,020.0 1,890.0 +6.9
Net asset value (p) 2,333.8 2,283.2 +2.2
FTSE All-Share Index 4,096.4 4,075.1 +0.5
Dividends per share (p) 11.75 40.0
Discount to net asset value (%)* 13.5 17.2
Ongoing charges ratio (%)* 0.8 0.5
*For definitions of the above Alternative Performance Measures please refer to the Glossary
of Terms in the Half Yearly Report
Market Data
30th June
2023
Issued share capital (Ordinary shares of 5,873,611
25p each)
Total investment return+ 3.5%
Total shareholder return++ 8.4%
Annualised dividend yield 2.0%
+Source: Jupiter, Morningstar
++Source: Trustnet
Chairman’s Statement
Market backdrop
Market conditions in the first six months of 2023 can probably be best described as weak and
volatile; against the background of the devastating war in Ukraine, we have seen other
geopolitical tensions emerge on a regular basis and we are frequently reminded that the path
to recovery from the pandemic will not be simple. Whilst energy prices seem to be easing,
the UK is facing a number of unique challenges not seen in other developed economies with
borrowing costs at a 16 year high, record wage growth and persistently high core inflation.
Net asset value and share price returns
Against this background, the Company’s net asset value per share increased from 2283.2p to
2333.8p, an increase of 2.2% over the six- month period, compared with an 0.5% increase in
the FTSE All Share index. Including dividends, the Company has delivered a total investment
return of 3.5% for the period.
Portfolio changes
Dan Nickols and Matt Cable, our portfolio managers at Jupiter, have made a number of
significant changes to the Company’s investment portfolio in terms of holdings and
concentration since they were appointed, and in the last six months they added four new
positions to the portfolio whilst disposing of the four ‘tail’ positions. The full details
of the changes are provided in the Investment Manager’s Review.
Jupiter’s appointment
Whilst it is still less than 12 months since the appointment of Jupiter as investment
manager, the Board is pleased with the level of engagement with the managers and with the
progress made in repositioning the portfolio. The first formal review of Jupiter’s
performance will take place during the Management Engagement Committee following the
anniversary of their appointment on 3rd October 2022.
Discount control
At 30th June 2023, the discount to net assets stood at 13.5%, an improvement from the 17.2%
at year-end. That said, discounts across the sector continue to be volatile and on 26th
July, being the latest practicable date prior to publication of this report, the Company’s
discount has widened to 16.6%. During the period, the Company bought back 292,378 shares for
cancellation, which added an estimated 0.8% to net asset value per share.
Having discussed possible alternative discount management mechanisms, the Board has
concluded that the continuation of the existing buyback arrangement for a period of 12
months will be in the best interests of shareholders, providing liquidity for those
shareholders seeking to sell, whilst delivering a modest economic uplift to those
shareholders wishing to remain invested. It is hoped that the Company’s inclusion in the
FTSE Russell Index, effective from 19th June, will similarly help improve liquidity.
Share split
Conscious that shareholders were not able to vote on a resolution to approve a proposed 10:1
share split at this year’s AGM, the Board has consulted with, and received feedback from,
certain key shareholders and has concluded that, whilst the merits of such a scheme are
unlikely to have universal support, it is appropriate to offer all shareholders a vote on
this issue. Therefore, it intends to do so when most economically cost effective and this is
likely to be at the 2024 AGM.
Dividends
The Directors are equally conscious of the importance of income to shareholders and
therefore the Company will be paying an interim dividend of 11.75p per share, an increase of
9.3%, payable to shareholders on 25th September 2023.
Board succession
I was appointed to the Board in May 2011 and have now served for 12 years. Due to a change
in my own personal circumstances I shall retire from the Board on 31st August 2023. Upon
retirement I am delighted to report that Dr Andrew Hosty will become Chair; Andrew has been
a director since July 2017 and brings a wealth of experience and knowledge to the position.
Outlook
Inflation is proving more persistent than expected and interest rates will likely continue
at higher levels for longer, dampening consumer confidence. Such macro-economic headwinds
can impact upon share prices in the short term but fundamental value should be reflected
across a longer timeframe as quality companies will deliver superior performance. The
Company’s long-term record is strong and the Directors believe Jupiter is well placed to
continue to deliver the Board’s successful high conviction strategy.
David M Best
Chairman
1st August 2023
You can view or download copies of the Half Yearly and the Annual Reports from the Company’s
website at 2 www.jupiteram.com/rightsandissues
The Half Yearly Report will also be made available to shareholders and copies are available
at the registered office of the Company on request.
Investment Manager’s Review
Introduction
We are pleased to present our investment report for the first half of 2023 to shareholders
of the Company. As mentioned in the Chairman’s statement above it has been another period of
heightened volatility in global markets, with the FTSE All-Share index ending the half
broadly flat but experiencing significant gains and losses along the way. With that backdrop
we are pleased to have generated a positive investment return for the period as well as
strong shareholder returns as the Company’s discount has narrowed. We have also made good
progress in adjusting the structure of the portfolio in the way we highlighted in the annual
report and as further discussed below.
Market backdrop
The UK equity market enjoyed a strong start to the year as investors took the view that
inflation was likely to moderate and central banks would therefore take a less hawkish
approach to interest rates. As the outlook for inflation deteriorated through the half this
view became less credible and markets gave up their earlier gains. In addition, the market
had to digest the fallout from the collapse of Silicon Valley Bank in the US and the rescue
of Credit Suisse in Switzerland.
While the direct effects of these developments on companies and earnings appear to be
limited so far, the market seems to be increasingly convinced that a period of lower growth
or even outright recession is likely in the UK.
Performance
In the context of a weak and volatile market we are pleased that the Company has delivered a
total investment return (NAV return with dividends added back of 2.1%) of 3.5% (Source:
Jupiter, Morningstar) for the period. Furthermore, a narrowing of the Company’s discount
resulted in a total shareholder return (share price return with dividends added back of
6.6%) of 8.4% (Source: Trustnet).
Given the concentrated nature of the portfolio, investment performance is generally a
consequence of stock selection. Over the period there were a number of positive and negative
contributors to performance, including:
Hill & Smith (+30%)
As a provider of infrastructure-related products and services, Hill & Smith is well placed
to benefit from increased government spending across its regions, in particular the USA. The
market’s anticipation of higher profits was confirmed in a trading statement in May which
pointed to a stronger than expected outlook for the year.
Renold (+31%)
Manufacturer of industrial chains and transmissions, Renold experienced a period of strong
trading and issued two positive trading statements during the half. In addition, rising
interest rates are expected to help reduce Renold’s pension deficit, which has previously
been seen as a negative for the share price.
Carr’s Group (+24%)
Following a period of significant change which saw Carr’s dispose of its distribution
business to focus on agricultural supplies and engineering, the market has taken a more
positive view of the company’s prospects. The shares were suspended for a time early in the
year due to audit delays but have performed strongly since.
Videndum (-34%)
Manufacturer of products for the content creation markets, Videndum has seen significant
levels of de-stocking in its retail-oriented channels and, more recently, weakness in
professional markets resulting from the writers’ strikes in Hollywood. While these issues
are frustrating, we view both as ultimately transitory and are therefore retaining our
holding in Videndum.
Spirent (-40%)
A recent addition to the portfolio (see below), Spirent is exposed to strong medium to long
term growth drivers from the transition to newer mobile technologies (5G) and higher network
data speeds. Unfortunately, these longer term trends have been interrupted by a period of
caution among Spirent’s customers which will result in lower short term growth. While this
is negative for the share price in the near term, we remain positive on the longer-term
opportunity.
Portfolio changes
In the last annual report we said that we planned to retain the Company’s concentrated
approach but reduce the proportion of the portfolio in the very largest positions. We also
said that we wanted to introduce new holdings which would improve the portfolio’s balance
from a sector perspective.
At the start of the year the Company held positions in 22 stocks with the top five positions
accounting for 50% of NAY and the top ten for 76%. On 30th June the Company held 21 stocks
with the top five accounting for 41% of NAY and the top ten for 67%. While portfolio
construction is always a dynamic process and further changes are likely, we are now broadly
happy with the shape of the portfolio.
As part of the portfolio restructuring we have reduced the size of some of our largest
positions. For example the largest position in the portfolio is now 10.6% of NAY, down from
12.6% at the start of the year. We have also disposed of some of the ‘tail’ of holdings with
very low market capitalisations, including Titon Holdings (£8m market cap) and Coral
Products (£14m market cap). We also sold the Company’s tiny residual holding in Costain and
some preference shares issued by Santander which we felt did not fit the Company’s stated
objectives. Finally, we disposed of the holding in Castings which we felt offered limited
valuation upside.
We have added four new positions to the portfolio over the first half of the year.
OSB Group (£2bn market cap)
OSB is the UK’s largest specialist buy-to-let mortgage lender. It benefits from a
state-of-the-art lending platform, strong deposit base and a balance sheet free of legacy
pre-financial crisis loans. OSB is very well capitalised and consistently generates
excellent returns, allowing the company to return capital to shareholders through ordinary
and special dividends as well as a share buy-back programme. As well as a compelling growth
and valuation case, OSB brings exposure to financial services and UK consumer cyclicality,
which was previously a significant underweight in the portfolio.
Spirent (£1bn market cap)
As referenced above, Spirent is a global provider of testing equipment and software for the
telecommunications industry. Its structural growth drivers include the expansion of 5G
technology and the ever-higher demands for speed in networks and data centres. Some
short-term disruption to the 5G market, especially in the US, has resulted in a moderation
to immediate growth expectations, but we see the long-term drivers as fully intact. Spirent
is very well capitalised, with over $200m of net cash on its balance sheet.
Gresham Technologies (£118m market cap)
Gresham is a software business tightly focussed on the market for advanced data
reconciliation. Selling primarily into the financial services sector, Gresham addresses the
ever-increasing need to fully reconcile large, complex datasets, often across multiple
systems and in real time. This has allowed them to consistently take market share with their
long-term subscription-based products around the world. We see the growth and valuation case
as highly attractive and, along with Spirent (above), an important source of exposure to
technology for the portfolio.
Marshalls (£610m market cap)
Marshalls is one of the UK’s leading providers of heavy building materials such as blocks,
stone and concrete roofing tiles. It sells into the new-build housing, commercial,
infrastructure and repair and maintenance markets. The well publicised challenges in some of
these markets in recent months have led to a significant decline in Marshalls’ share price
which we believe now represents a significant opportunity for long-term investors to invest
in an excellent business at a very attractive valuation. The inherent uncertainty in timing
the bottom of the cycle means we have started the holding at a modest position size, with a
view to building it as the path of recovery becomes clearer.
Summary and Outlook
While inflation in the UK remains stubbornly high, it is hard to see a short-term catalyst
to bring the market back into favour with investors. However the UK, and smaller companies
in particular, remain very modestly valued compared to both international peers and their
own history. Meanwhile economic conditions do not appear to be causing significant problems
for companies beyond moderately weaker growth rates in the near term. As such, we see the
current valuation environment as an opportunity for investors with a longer investment
horizon and the patience to wait for the market to change.
We are pleased with progress on adjusting the shape of the portfolio and introducing a
greater degree of sectoral balance. Over the coming months we will continue this process at
a considered pace while looking for further opportunities to invest in good businesses at
attractive valuations.
Dan Nickols
Lead Manager
Matt Cable
Fund Manager
1st August 2023
Portfolio Statement
30th June 2023 31st December 2022
Market
Market Value Value % of Net
% of Net Assets
£’000 Assets £’000
Holdings Holdings
UK Investments
Vp 2,450,000 14,333 10.46 2,450,000 16,170 11.49
Macfarlane 12,680,653 13,695 9.99 17,250,000 17,509 12.44
Colefax 1,605,000 11,636 8.49 1,606,500 9,639 6.85
Treatt 1,281,009 7,994 5.83 2,012,000 12,535 8.90
Hill & Smith 522,465 7,847 5.72 1,246,286 14,606 10.37
Renold 28,745,000 7,819 5.70 30,000,000 6,240 4.43
Telecom Plus 459,113 7,759 5.66 263,070 5,774 4.10
Gamma Communications 640,919 7,319 5.34 640,919 6,935 4.93
Alpha Group International 336,513 7,067 5.16 98,611 1,824 1.30
Carr's 4,750,000 6,840 4.99 4,750,000 5,629 4.00
OSB 1,401,694 6,725 4.91 – – –
Spirax-Sarco Engineering 59,668 6,182 4.51 94,415 10,022 7.12
IMI 292,263 4,790 3.49 292,263 3,764 2.67
Morgan Advanced Materials 1,500,000 4,110 3.00 1,500,000 4,718 3.35
RS 464,401 3,530 2.58 838,870 7,512 5.34
Eleco 4,520,781 3,481 2.54 4,520,781 3,029 2.15
Videndum 479,791 3,320 2.42 500,000 5,370 3.81
Gresham Technologies 2,360,303 3,186 2.32 – – –
Spirent Communications 1,322,052 2,163 1.58 – – –
Marshalls 780,016 1,877 1.37 – – –
Dyson 1,000,000 41 0.03 1,000,000 41 0.03
Castings* – – – 400,000 1,384 0.98
Titon* – – – 1,265,000 886 0.63
Santander UK 10.375% Non – – – 400,000 540 0.38
Cumulative Preferred*
Coral Products * – – – 2,000,000 320 0.23
Costain* – – – 41 – –
Total Investments 131,714 96.09 134,447 95.50
Net current assets 5,367 3.91 6,336 4.50
Net Assets 137,081 100.00 140,783 100.00
Unless otherwise specified, the actual holdings are, in each case, of ordinary shares or
stock units and of the nominal value for which listing has been granted.
*Sold during the period to 30th June 2023.
Risks and uncertainties
Principal risks
The principal and emerging risks and uncertainties that could have a material impact on the
Company's performance have not changed from those set out on pages 22 and 23 of the Annual
Report for the year ended 31st December 2022.
Cautionary statement
This Half Yearly Report contains forward-looking statements that involve risk and
uncertainty. These have been made by the Directors in good faith based on the information
available to them at the time of their approval of this Report.
The Board is mindful of the continuing uncertain outlook for the global economy arising from
the effects of the COVID-19 pandemic and, more recently, the conflict between Russia and
Ukraine and significant increases in inflation. The Company’s assets and the potential level
of revenue derived from the portfolio remain exposed to macroeconomic deteriorations. The
Directors, having considered the nature and liquidity of the portfolio, the Company’s
investment objectives and projected income and expenditure, are satisfied that the Company
has adequate resources to continue in operational existence for the foreseeable future and
is financially sound.
Directors’ Statement of Responsibility for the Half Yearly Financial Report
The Directors are responsible for preparing the Half Yearly financial report in accordance
with applicable law and regulations.
The Directors confirm that to the best of their knowledge:
• the condensed set of financial statements has been prepared in accordance with UK
adopted International Accounting Standard 34 “Interim Financial Reporting”; and
• the Half Yearly management report includes a fair review of the information required by
DTR 4.2.7R and 4.2.8R. This report was approved on 1st August 2023.
David M Best
Chairman
Statement of Comprehensive Income
for the six months ended 30th June 2023
Six months ended 30th Six months ended 30th Year ended 31st December
June 2023 June 2022 2022
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment 2 2,606 – 2,606 2,473 – 2,473 3,633 – 3,633
income
Other
operating 2 40 – 40 1 – 1 19 – 19
income
Total income 2,646 – 2,646 2,474 – 2,474 3,652 – 3,652
Gains/(losses)
through fair – 1,912 1,912 – (43,713) (43,713) – (56,774) (56,774)
value
2,646 1,912 4,558 2,474 (43,713) (41,239) 3,652 (56,774) (53,122)
Expenses
Investment 423 – 423 – – – 175 – 175
management fee
Other expenses 175 107 282 377 38 415 767 181 948
598 107 705 377 38 415 942 181 1,123
Profit/(loss) 2,048 1,805 3,853 2,097 (43,751) (41,654) 2,710 (56,955) (54,245)
before tax
Tax – – – – – – – – –
Profit/(loss) 2,048 1,805 3,853 2,097 (43,751) (41,654) 2,710 (56,955) (54,245)
for the period
Earnings per
share
34.1p 30.1p 64.2p 28.9p (603.0)p (574.1)p 38.9p (818.2)p (779.3)p
Return per
Ordinary Share
Return per share is calculated using the weighted average number of Ordinary shares in issue
during the period ended 30th June 2023 of 5,999,351 (30th June 2022: 7,255,868, 31st
December 2022: 6,960,445).
The total column of this statement represents the Statement of Comprehensive Income,
prepared in accordance with International Financial Reporting Standards as adopted by the
UK. The supplementary revenue return and capital return columns are both prepared under
guidance published by the Association of Investment Companies. All items in the above
statement are those of the single entity and derive from continuing operations.
The gain for the period disclosed above represents the Company’s total Comprehensive Income.
The Company does not have any other Comprehensive Income.
An interim dividend of 11.75p (2022: 10.75p) per share and amounting to £682,555 (calculated
as at 26th July 2023) (2022: £761,191) is payable on 25th September 2023 to shareholders on
the register as at 25th August 2023 (ex-dividend 24th August 2023).
The financial information contained in this Half Yearly Financial Report does not constitute
statutory accounts as defined in Sections 434 – 436 of the Companies Act 2006. The
information for the six months to 30th June 2023 has not been audited.
The information for the year ended 31st December 2022 has been extracted from the latest
published audited accounts which have been filed with the Registrar of Companies. The report
of the auditors on those accounts contained no qualification or statement under Section 498
(2) or (4) of the Companies Act 2006.
Statement of Financial Position
as at 30th June 2023
30th June 30th June 31st December
2023 2022 2022
£'000 £'000 £'000
Non-current assets
Investments – fair value through profit or loss 131,714 162,608 134,447
131,714 162,608 134,447
Current assets
Other receivables 1,098 1,312 561
Cash and cash equivalents 4,755 11,156 6,039
5,853 12,468 6,600
Total assets 137,567 175,076 141,047
Current liabilities
Other payables 486 184 264
486 184 264
Total assets less current liabilities 137,081 174,892 140,783
Net assets 137,081 174,892 140,783
Equity attributable to equity holders
Called up share capital 1,468 1,786 1,542
Capital redemption reserve 787 469 713
Capital reserve 85,247 75,938 67,191
Revaluation reserve 46,993 94,246 69,032
Revenue reserve 2,586 2,453 2,305
Total equity 137,081 174,892 140,783
Net asset value per share
Ordinary shares 2,333.8p 2,447.9p 2283.2p
The number of Ordinary shares in issue as at 30th June 2023 was 5,873,611 (30th June 2022:
7,144,458, 31st December 2022: 6,165,989).
Statement of Changes in Equity
for the six months ended 30th June 2023
Capital redemption
Share reserve Capital Revaluation Revenue
capital reserve reserve reserve
£'000 Total
£'000 £'000 £'000 £'000
£'000
For the six months ended 30th
June 2023
Balance at 31st December 2022 1,542 713 67,191 69,032 2,305 140,783
Profit for the period – – 23,844 (22,039) 2,048 3,853
Total recognised income and 1,542 713 91,035 46,993 4,353 144,636
expense
Ordinary shares bought back (74) 74 (5,788) – – (5,788)
and cancelled
Dividends (Note 3) - – - – (1,767) (1,767)
Balance at 30th June 2023 1,468 787 85,247 46,993 2,586 137,081
Capital redemption
Share reserve Capital Revaluation Revenue
capital reserve reserve reserve
£'000 Total
£'000 £'000 £'000 £'000
£'000
For the six months ended
30th June 2022
Balance at 31st December 1,842 413 81,410 137,959 2,108 223,732
2021
Loss for the period – – (38) (43,713) 2,097 (41,654)
Total recognised income and 1,842 413 81,372 94,246 4,205 182,078
expense
Ordinary shares bought back (56) 56 (5,434) – – (5,434)
and cancelled
Dividends (Note 3) - – - – (1,752) (1,752)
Balance at 30th June 2022 1,786 469 75,938 94,246 2,453 174,892
Capital redemption
Share reserve Capital Revaluation Revenue
capital reserve reserve reserve
£'000 Total
£'000 £'000 £'000 £'000
£'000
For the six months ended
31st December 2022
Balance at 31st December 1,842 413 81,410 137,959 2,108 223,732
2021
Loss for the period – – 11,972 (68,927) 2,710 (54,245)
Total recognised income and 1,842 413 93,382 69,032 4,818 169,487
expense
Ordinary shares bought back (300) 300 (10,838) – – (10,838)
and cancelled
Tender offer - – (15,111) - – (15,111)
Tender offer costs - – (242) - – (242)
Dividends (Note 3) - – - – (2,513) (2,513)
Balance at 31st December 1,542 713 67,191 69,032 2,305 140,783
2022
Statement of Cash Flows
for the six months ended 30th June 2023
30th June 30th June 31st December
2023 2022 2022
£'000 £'000 £'000
Cashflows from operating activities
Profit/(loss) before tax 3,853 (41,654) (54,245)
Adjustments for:
Gains/(losses) on investments (1,912) 43,713 56,774
Purchases of investments (25,309) (9,924) (24,439)
Proceeds on disposal of investments 29,954 – 29,615
Operating cash flows before movements in working capital 6,586 (7,865) 7,705
(Increase)/decrease in receivables (537) (671) 80
Increase in payables 222 117 197
Net cash flows from operating activities 6,271 (8,419) 7,982
Cashflows from financing activities
Ordinary shares bought back and cancelled (5,788) (5,434) (10,838))
Tender offer - - (15,111)
Tender costs paid - - (242)
Dividends paid (1,767) (1,752) (2,513)
Net cash used in financing activities (7,555) (7,186) (28,704)
Net decrease in cash and cash equivalents (1284) (15,605) (20,722)
Cash and cash equivalents at beginning of period 6,039 26,761 26,761
Cash and cash equivalents at end of period 4,755 11,156 6,039
Notes to the Half Yearly Financial Report
for the six months ended 30th June 2023
1. Accounting Standards
The half yearly financial statements for the period ended 30th June 2023 have been prepared
in accordance with the Disclosure and Transparency Rules sourcebook of the Financial Conduct
Authority and with the UK adopted International Accounting Standard 34 “Interim Financial
Reporting”. The accounting policies applied and methods of computation in this interim
statement are consistent with those used in the Company’s latest published annual financial
statements.
Significant accounting policies
a. Accounting convention
The accounts are prepared under the historical cost basis, except for the measurement of
fair value of investments.
b. Adoption of new IFRS standards
There have been minor amendments to IAS 16, 37 and 41 and IFRS 4, 7, 9 and 16 which were
effective for annual periods beginning on or after 1st January 2022 and have not had any
material impact on the accounts. Amendments to IAS 1 (Disclosure of Accounting Policies),
IAS 8 (Definition of Accounting Estimates), IFRS 4 (Extension of IFRS 9 Deferral) and IFRS
17 (Insurance Contracts) are effective for annual periods beginning on or after 1st January
2023 and are not anticipated to have any material impact on the accounts.
c. Income
Dividend income is included in the financial statements on the ex-dividend date. All other
income is included on an
accruals basis.
d. Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the
revenue account except as
follows:
• Expenses which are incidental to the acquisition of an investment are included within
the cost of the investment.
• Expenses which are incidental to the disposal of an investment are deducted from the
disposal proceeds of the investment
e. Taxation
The charge for taxation is based on the net revenue for the year. Deferred taxation is
recognised in respect of all timing differences that have originated but not reversed at the
statement of financial position date. Investment trusts which have approval under section
1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains.
f. Dividends
Dividends payable to shareholders are recognised in the financial statements when they are
paid or, in the case of
final dividends, when they are approved by the shareholders.
g. Cash and cash equivalents
Cash comprises cash in hand and deposits payable on demand. Cash equivalents are short-term
highly liquid investments that are readily convertible to known amounts of cash.
h. Investments
Investments are classified as fair value through profit or loss as the Company’s business is
investing in financial assets
with a view to profiting from their total return in the form of interest, dividends or
capital growth.
Changes in the value of investments held at fair value through profit or loss and gains and
losses on disposal are recognised in the Statement of Comprehensive Income as “Gains or
losses on investments held at fair value through profit or loss”. Also included within this
heading are transaction costs in relation to the purchase or sale of investments.
All investments, classified as fair value through profit or loss, are further categorised
into the following fair value hierarchy:
Level 1 – Unadjusted prices quoted in active markets for identical assets and liabilities.
Level 2 – Having inputs other than quoted prices included within Level 1 that are observable
for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 – Having inputs for the asset or liability that are not based on observable data.
Investments traded on active stock exchange markets are valued at their fair value, which is
determined by the quoted market bid price at the close of business at the statement of
financial position date. Where trading in a security is suspended, the investment is valued
at the Board’s estimate of its fair value.
Unquoted investments are valued by the Board at fair value using the International Private
Equity and Venture Capital Valuation Guidelines.
2. Income
30th June 30th
June 31st December
2023 2022
2022
£'000 £'000
£'000
Income from investments:
Franked investment income 2,606 2,473 3,633
Interest 40 1 19
Total income 2,646 2,474 3,652
3. Dividends
30th June 30th
June 31st December
2023 2022
2022
£'000 £'000
£'000
Amounts recognised as distributions to equity holders in the relevant period:
Interim dividend for the year ended 31st December 2022
of 10.75p per share
- - 761
Final dividend for the year ended 31st December 2022
of 29.25p per share (year ended 31st December 2021:
24.0p) 1,767 1,752 1,752
1,767 1,752 2,513
30th June
2023
£'000
Proposed interim dividend of 11.75p per share 683
This proposed interim dividend was approved by the Board on 1st August 2023, has been
calculated based on shares in issue at 26th July 2023, being the latest practicable date
prior to publication of this report and has not been included as a liability at 30th June
2023.
4. Valuation of financial instruments
IFRS 13 requires the Company to classify fair value measurements using a fair value
hierarchy that reflects the significance of inputs used in making the measurements. The
valuation techniques used by the Company are explained in the accounting policies note 1
Investments, as set out in the Company’s Annual Report and Financial Statements for the year
ended 31st December 2022.
The fair value hierarchy has the following levels:
Level 1 – Unadjusted prices quoted in active markets for identical assets and liabilities.
Level 2 – Having inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
Level 3 – Having inputs for the asset or liability that are not based on observable data.
Level 1 Level 2 Level 3 Total
30th June 2023
£’000 £’000 £’000 £’000
Financial assets at fair value through profit
or loss
UK Equity Listed 94,351 - - 94,351
AIM traded stocks 37,32s2 - - 37,322
Unlisted stock - 41 - 41
Net fair value 131,673 41 - 131,714
Level 1 Level 2 Level 3 Total
30th June 2022
£’000 £’000 £’000 £’000
Financial assets at fair value through profit
or loss
UK Equity Listed 135,871 - - 135,871
AIM traded stocks 26,735 - - 26,735
Unlisted stock - 2 - 2
Net fair value 162,606 2 - 162,608
Level 1 Level 2 Level 3 Total
31st December 2022
£’000 £’000 £’000 £’000
Financial assets at fair value through profit
or loss
UK Equity Listed 105,533 - - 105,533
AIM traded stocks 28,873 - - 28,873
Unlisted stock - 41 - 41
Net fair value 134,406 41 - 134,447
There were no transfers between Level 1 and Level 2 during the periods.
5. Related Party Transactions
Under IAS 24, the Directors have been identified as related parties. Their fees and
interests for the year ended 31st December 2022 have been disclosed in the Directors' Annual
Remuneration Report within the 2022 Annual Report and Financial Statements.
6. Going Concern
The Company’s assets comprise mainly realisable equity securities and cash and the value of
its assets is greater than its liabilities. Additionally, after reviewing the Company’s
budget, including the current financial resources and projected expenses for the next twelve
months and its medium-term plans, the Directors believe that the Company's resources are
adequate to continue in business for the foreseeable future.
Based on the above, the Board is satisfied that it is appropriate to continue to adopt the
going concern basis in preparing the financial statements. The Board reported on the
principal risks and uncertainties faced by the Company in the Annual Report and Financial
Statements for the year ended 31st December 2022.
Company Information
DIRECTORS D. M. BEST (Chairman)
Dr A. J. HOSTY
S. J. B. KNOTT
J. B. ROPER
M. H. VAUGHAN
REGISTERED OFFICE Hamilton Centre
Rodney Way
Chelmsford CM1 3BY
WEBSITE 3 www.jupiteram.com/rightsandissues
JUPITER UNIT TRUST MANAGERS LIMITED
INVESTMENT MANAGER/ALTERNATIVE The Zig Zag Building
INVESTMENT FUND MANAGER
70 Victoria Street
London SW1E 6SQ
4 investmentcompanies@jupiteram.com
SECRETARY/ADMINISTRATOR APEX FUND ADMINISTRATION SERVICES (UK) LIMITED
(FORMERLY MAITLAND ADMINISTRATION SERVICES LTD)
Hamilton Centre
Rodney Way
Chelmsford CM1 3BY
SOLICITORS EVERSHEDS SUTHERLAND
1 Wood Street
London EC2V 4DJ
AUDITOR BEGBIES
9 Bonhill Street
London EC2A 4DJ
REGISTRARS LINK GROUP
Central Square
29 Wellington Street
Leeds LS1 4DL
BROKER FINNCAP LIMITED
One Bartholomew Close
London EC1A 7BL
CUSTODIAN/DEPOSITARY NORTHERN TRUST COMPANY
50 Bank Street
Canary Wharf
London E14 5NT
Registration Details
Company Registration Number: 00736898 (Registered in England)
SEDOL number: 0739207
ISIN number: GB0007392078
London Stock Exchange (EPIC) Code: RIII
Global Intermediary Identification I2ZVNY.99999.SL.826
Number (GIIN)
Legal Entity Identifier (LEI): 2138002AWAM93Z6BP574
════════════════════════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
════════════════════════════════════════════════════════════════════════════════════════════
ISIN: GB0007392078
Category Code: IR
TIDM: RIII
LEI Code: 2138002AWAM93Z6BP574
OAM Categories: 1.2. Half yearly financial reports and audit
reports/limited reviews
Sequence No.: 261671
EQS News ID: 1693187
End of Announcement EQS News Service
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