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FCT - Unaudited Statement of Results - Half Year Ended 30.06.23

Friday 4th August 2023

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F&C Investment Trust PLC ('FCIT' /the 'Company') today announces its results for the six months ended 30 June 2023.


• The Net Asset Value (‘NAV’) total return was +4.7%; behind the +7.5% return from the benchmark, the FTSE All-World Index.

• The share price total return was -2.6%, in part due to a widening of the discount during the period.

• Over one year’s worth of dividends is held in the revenue reserve and the Board aims to increase the total dividend again this year. The first interim dividend of 3.4 pence for 2023 was paid on 1 August.


The Chairman, Beatrice Hollond, said:


“The valuation excesses in markets overall appear relatively contained and it now seems likely that the US may avoid recession.…Against this background your Manager will continue to adopt a diversified approach and remain focused on the longer term opportunities as they emerge.”


Commenting on the markets, Paul Niven, Fund Manager of FCIT, said:


“Looking forward, while we remain uncertain of the unfolding economic environment, we do expect that

performance within equities will broaden and that relative value will be an important consideration for prospective returns. We have a relatively balanced approach within our portfolio between the cheaper, but more cyclically exposed areas of the market, and the higher growth, more expensive segments which have exciting prospects but appear fully priced. A narrow market presents both opportunities and risks and we believe that a diversified approach will, in due course, provide better returns, with lower risk, for shareholders.”


The full results statement is attached.


Past performance should not be seen as an indication of future performance. The value of investments and income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested.




Paul Niven – Fund Manager

020 3530 6396


Campbell Hood

07860 911 622


FTI Consulting

020 3727 1888


About FCIT:

• Founded in 1868 – the oldest collective investment trust

• A diversified portfolio provides exposure to most of the world's stock markets, with exposure to over 400 individual companies across the globe

• Its aim is to generate long-term growth in capital and income by investing primarily in an international portfolio of listed equities


Chairman’s Statement


Markets and Performance

Equity markets were remarkably strong in the first half of 2023 despite further rises in interest rates, higher than forecast inflation and a crisis which led to the collapse of three regional banks in the US and the forced takeover of Credit Suisse. Technology stocks drove returns, with the Nasdaq Index gaining 32% in US dollar terms. A narrow cohort of mega-cap names were responsible for the majority of US equity market gains helped in part by investor enthusiasm for the perceived benefits of Artificial Intelligence. The total return from our benchmark, the FTSE All-World, was +7.5% over the period while the Company produced a net asset value (‘NAV’) total return of +4.7%. There was a marked widening in the discount level of investment trust companies across the sector and the Company’s discount moved out from 3.0% to 9.8%. This led to a negative shareholder total return of -2.6%.


The NAV per share ended the period at 964.7 pence compared with 932.1 pence at the end of 2022. The return from our investment portfolio, i.e. before fees and other effects, of +4.8% lagged the benchmark return, while a further rise in market interest rates reduced the fair value of our outstanding debt, adding 0.4% to our NAV return.


The Company’s gearing rose from 7.3% at the start of the year to 8.2% at the end of the period. We held £208.5m in cash and £98m in short dated UK Government bonds.


In response to growth that was better than feared, stubbornly high inflation and a hawkish Bank of England, sterling rose by 5.1% against the US dollar over the six months. This had the effect of reducing the return from our investments in overseas assets. For our Private Equity holdings, the value of our investments declined by 4.1%, partly reflecting the impact of these currency movements. The near-term backdrop for the Private Equity area remains challenging, though we have made good returns from our investments in this area over longer time periods.


Income, Expenses and Dividends

We paid a third interim dividend of 3.2 pence per share for the year ended 31 December 2022 in February 2023 and a final dividend of 3.9 pence in May. Our full year 2022 dividend of 13.5 pence per share was fully covered by earnings of 13.92 pence per share and represented an increase of 5.5% on the previous year.


Our net revenue return per share over the first six months of the year rose by 16.2% to 8.69p, compared to 7.48p over the corresponding period last year. Although sterling strengthened in the first six months of 2023 it was still trading at a lower level than in the first half of 2022 and this added £1.6m to the return. Special dividends totalled £2.2m, up from £1.0m in the first half of 2022.


Our income has risen substantially from the pandemic-induced downturn of 2020 and we anticipate that our earnings will also cover our full year dividend in 2023. It remains the aspiration of the Board to continue the Company’s track record of delivering rises in dividends which exceed inflation rates over the long-term and we retain a substantial revenue reserve to help meet this objective if required. We have declared a first interim dividend for the current year of 3.4 pence per share payable on 1 August 2023. The Board plans to deliver another rise in our total dividend for this year, which will be the 53rd consecutive annual rise.


Following the launch of our new branding last year, we are continuing with our marketing campaign to

increase awareness of the benefits of investing in the Company and to attract new investors. Early

indications are that the campaign is having a positive effect, however, the Company's cost ratio is likely to

to increase marginally this year as a result.


The Board

Francesca Ecsery retired from the Board at the conclusion of the AGM in April this year, after almost 10 years’ service as a Director. She made a considerable contribution to the effective promotion of the Company’s investment proposition through her marketing expertise. I am delighted that Anu Chugh has replaced Francesca with effect from 1 July 2023. Anu is the Chief Executive of Pukka Herbs where she is responsible for governance and strategy. Anu is a Marketing professional with more than 25 years’ experience in the consumer-packaged goods industry, having formerly been Managing Director of Ben & Jerry’s Europe, Global Marketing Director of Unilever and Marketing Director of Pepsi Lipton International.



While equity markets have delivered strong gains in recent months investors may have become too complacent about the potential near term risks. Although it appears that inflation rates are moderating, we may not have yet seen the peak in interest rates in most developed markets. In addition, the recent economic resilience may not last given the long lag time associated with monetary policy tightening. Furthermore, the enthusiasm for the big technology stocks in the US suggests that valuations there give limited room for disappointment. All these factors may give rise to some near-term caution for equity markets but looking further out there are grounds for optimism. The valuation excesses in markets overall appear relatively contained and it now seems likely that the US may avoid recession. In addition, although there is clearly some near term hype around the immediate benefits of AI, in the longer term there are likely to be significant benefits from the adoption of technology which will benefit both productivity and profitability. Of course disruptive trends create the potential for tremendous gains for the corporate winner as well as substantial challenges. Against this background your Manager will continue to adopt a diversified approach and remain focused on the longer term opportunities as they emerge.

 Unaudited Statement of Results - Half Year ended 30.06.2023

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