TIDMUKT
RNS Number : 3702T
Threadneedle UK Select Trust Ltd
19 November 2013
Threadneedle UK Select Trust Limited (the "Company")
Interim Management Statement
This interim management statement ("IMS") covers the period from
1 July 2013 up to the date of publication of this IMS, unless
otherwise specified. It has been produced for the sole purpose of
providing the information to the Company's shareholders in
accordance with the requirements of the FCA's Disclosure and
Transparency Rules. It should not be relied upon by any other party
or for any other purpose.
Investment Objective
The Company's investment objective is to provide shareholders
with a total return in excess of the total return on the FTSE
All-Share Index, together with a progressive dividend policy.
Cumulative Performance
As at 31 October 2013 1 Mth (%) 3 Mth Year to Date
(%) (%)
----------------------------- ---------- ------ -------------
NAV (Total Return) +4.54 +3.65 +25.70
----------------------------- ---------- ------ -------------
Share Price (Total return) +3.24 +4.96 +23.65
----------------------------- ---------- ------ -------------
FTSE All-Share Index (Total
Return) +4.29 +3.12 +19.47
----------------------------- ---------- ------ -------------
Source: Threadneedle/Datastream
Financial Position
1 July 2013 31 October
2013
--------------------- ------------ -----------
Ordinary Shares
--------------------- ------------ -----------
NAV (p) 163.39p 176.79p
--------------------- ------------ -----------
Share Price (p) 164.00p 175.50p
--------------------- ------------ -----------
Premium/ (Discount)
(%) 0.37% (-0.73%)
--------------------- ------------ -----------
Total net assets GBP 36.15 M GBP39.7 M
--------------------- ------------ -----------
Source: Threadneedle/Bloomberg
Material Events
At the Company's Annual General Meeting held on 15 August 2013,
all resolutions were passed, including a resolution to allow the
Company to satisfy dividends in scrip as well as in cash.
Dividend
On 22 August 2013 the Board of directors declared a first
interim dividend of 1.80 pence per share in respect of the year
ending 31 December 2013, payable on Tuesday, 5 November 2013.
Shares were marked ex-dividend on Wednesday, 4 September 2013 and
the record date for the interim dividend was Friday, 6 September
2013. As stated in the Company's half-yearly financial report for
the period ended 30 June 2013, the Company intends to continue with
the policy of paying a second interim dividend each year to
shareholders in May of the following year in place of a final
dividend. The objective is to rebalance the proportion of the
dividends paid by the Company between two interim dividends, so
that shareholders will receive a greater portion of the Company's
dividend distribution earlier. Although this will obviously result
in a lower second interim dividend, the total level of dividends
for the current financial year is expected to be no less than last
year.
Material Transactions
Over the period, the Company bought back a total of 115,000
shares to hold in treasury. On 5 November 2013, 106,763 shares were
issued out of treasury to satisfy elections under the scrip
dividend scheme.
Total Voting Rights
As at today's date the Company has 21,914,053 shares in issue,
of which 24,322 shares are held in treasury.
There were no other significant events or transactions which
have occurred during the period from 1 July 2013 to the date of
publication of the IMS which would have a material impact on the
Company.
Investment Manager's Commentary - Provided by Threadneedle Asset
Management Limited
Market Background
Broadly reassuring economic data in the UK and mainland Europe,
coupled with relief over the short-term US political agreement to
raise the debt ceiling and re-open the federal government, helped
UK equities to push steadily higher in October. Optimism that the
US Federal Reserve's tapering plan will remain on hold against the
backdrop of some more mixed US economic data further underpinned
global risk-based asset prices during the month. Data released
mid-month showed that the UK economy grew by 0.8% during the third
quarter, its fastest growth in three years, with the construction
sector showing strong growth amid signs that house building is
picking up. A Nationwide survey suggested that house price growth
accelerated in October, helped by government-backed incentives and
low interest rates. However, retail sales data disappointed,
weighed by a drop in supermarket sales, although the CBI noted that
many retailers see this as a short-term blip. Nevertheless, market
research released at the end of the month showed that consumer
confidence slipped for the first time this year in October. In
sector terms, health care, financials, oil & gas and telcos
were among the leading gainers, while consumer staples also
outperformed. Technology, utilities and materials were among the
main underperforming sectors.
Recent Activity
We raised the Company's holding in DS Smith as we believe that
the valuation does not adequately reflect the recycled packaging
maker's improving trading outlook. Meanwhile, the Company's
purchase of Royal Mail reflected our view that the IPO was
attractively priced, given the broad base of the company's assets.
We initiated a position in jeweller Signet, which is attractively
valued, with a strong balance sheet and improving returns. We added
to the Company's existing investment in Smiths Group on the basis
that the share price does not adequately reflect the engineering
technology group's on-going strong trading, particularly in
emerging markets. We topped up the Company's existing holdings
across a range of large cap stocks paying attractive levels of
dividend that have underperformed over recent months, including
pharmaceutical GlaxoSmithKine, food & household products firm
Unilever and energy firm BP. Recent sales activity was relatively
limited; we disposed of the Company's holdings in oilfield services
company Hunting and Fidessa while reducing our investment in
speciality plastics manufacturer Essentra following strong
year-to-date returns.
Outlook
Further signs are emerging that the trading environment is
improving in the UK and the Eurozone. However, we believe that
near-term sentiment towards global equities remains overly reliant
on the provision of liquidity, with recent central bank action
suggesting that the recoveries in the UK, the Eurozone and the US
are not yet self-sustaining and remain dependent on stimulus
measures. We believe that the outlook remains more certain at the
UK company level, and therefore continue to focus on well managed,
fundamentally strong businesses that have realistic potential to
deliver positive earnings surprises, helped by selected exposure to
growing global markets. Many of the Company's highest conviction
holdings also offer scope to support total returns to shareholders
through attractive and sustainable levels of dividend payouts.
Following recent activity in the telecoms sector, we see further
scope for merger & acquisition activity to pick up as companies
seek to take advantage of historically-low financing costs to grow
earnings by reducing costs and strengthening their market
positions.
Gearing
The Company did not utilise any borrowings during the period
under review.
Top 10 Holdings (as at 31 October 2013
Company Portfolio
Weight (%)
----------------------------- ------------
BP p.l.c. 3.9
----------------------------- ------------
GlaxoSmithKline plc 3.8
----------------------------- ------------
BT Group plc 3.8
----------------------------- ------------
Unilever PLC 2.7
----------------------------- ------------
AstraZeneca PLC 2.3
----------------------------- ------------
Royal Dutch Shell Plc Class
B 2.3
----------------------------- ------------
BG Group plc 2.2
----------------------------- ------------
Rio Tinto plc 2.0
----------------------------- ------------
Breedon Aggregates Limited 2.0
----------------------------- ------------
Reckitt Benckiser Group plc 2.0
----------------------------- ------------
Source: Threadneedle
Sector exposure relative FTSE All Share (as at 31 October
2013)
Top 5 Overweight/ Underweight Active weight
Subsectors (%)
------------------------------- --------------
Support Services +5.0
------------------------------- --------------
Household Goods +3.3
------------------------------- --------------
General Industrials +2.5
------------------------------- --------------
Fixed Line Telecoms +2.2
------------------------------- --------------
Travel & Leisure +1.5
------------------------------- --------------
Beverages -2.2
------------------------------- --------------
Mining -2.8
------------------------------- --------------
Oil & Gas Producers -4.2
------------------------------- --------------
Mobile Telecoms -5.4
------------------------------- --------------
Banks -7.6
------------------------------- --------------
Source: Threadneedle
Further information
Further information regarding the Company, including factsheets,
can be found at the investment manager's website
www.threadneedle.com. Neither the content of the Company's website
nor the contents of any website accessible from hyperlinks on the
Company's website (or any other website) is incorporated into or
forms part of this announcement.
Enquiries:
Secretary
Kleinwort Benson (Channel Islands) Fund Services Limited
Telephone 01481 727111
Investment Manager
Threadneedle Asset Management Limited
Michael Bateman
Telephone 0207 464 5000
This information is provided by RNS
The company news service from the London Stock Exchange
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