UK Select Trust Ld (UKT) - Interim Management Statement RNS Number : 4567R UK Select Trust Limited 19 November 2012 UK Select Trust Limited (the "Company") Interim Management Statement This interim management statement ("IMS") covers the period from 1 July 2012 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 FSA'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 2012 1 Mth 3 Mth (%) (%) NAV (Total Return) +1.16% +4.41% Share Price (Total return) +5.36% +11.02% FTSE All-Share Index (Total Return) +1.03% +4.39% Source: Threadneedle/Datastream Financial Position 31 July 2012 31 October 2012 Ordinary Shares NAV (p) 137.73p 143.73p Share Price (p) 120.50p 132.75p Discount (%) -12.51% -7.64% Total net assets (£'000) £ 28,625,505 £29,641,308 Source: Threadneedle/Bloomberg Material Events Threadneedle Asset Management Limited ("Threadneedle") was appointed as the Company's investment manager with effect from 31 July 2012. Simon Brazier, head of Threadneedle's UK Equities Team, is responsible for the Company's portfolio and manages it in accordance with his successful UK Equity Alpha strategy. The Company's portfolio was realigned with Threadneedle's UK Equity Alpha Strategy on 1 August 2012. At the Company's Annual General Meeting held on 15 August 2012, all resolutions were passed, including a resolution to allow the Company to satisfy dividends in scrip as well as in cash. Market Background Over the period, the UK equity market remained volatile against the backdrop of ongoing uncertainty over the global economic outlook, but generally followed an upward path on the back of policy moves by the ECB and the Federal Reserve. At the sector level, higher-beta areas of the market, such as IT, were supported by an improvement in risk appetite, while financials performed strongly as the probability of an immediate break-up of the eurozone began to ease, owing to the announcement of the ECB's Outright Monetary Transactions (OMT) programme. The consumer discretionary sector also performed well supported by strength in a number of media and consumer cyclical stocks. Notable laggards at the sector level included defensive areas such as utilities and telecoms, while energy also underperformed despite resilience in Brent crude oil prices following Royal Dutch Shell's results disappointment. At the capitalisation level, small caps outperformed large caps. Performance Up to 31 October 2012 the Company outperformed its benchmark index, with both sector allocation and stock selection contributing. Stock level highlights included the Company's large positions in house builder Persimmon and airline easyJet, and the Company also benefited from not holding certain poorly performing large cap names, such as Vodafone. At the sector level, an overweight in industrials worked well, although the underweight in financials detracted. Outlook Threadneedle continues to focus on reliable growth, attractive yields and financial stability, which it believes should stand the Company's portfolio in good stead given the ongoing macroeconomic problems in the developed world and the well-flagged political and policy uncertainties in the eurozone. Threadneedle's overall strategy has not changed. Threadneedle continues to acknowledge the tough domestic economic conditions and the likelihood of further volatility as the market digests the latest news flow from Europe and China. However, Threadneedle prefers to look past this news flow and to focus on finding strong businesses with healthy cash flows and the ability to grow their dividends over the long term. Threadneedle is finding such businesses in a wide range of sectors. Threadneedle retains its cautious view on the banking sector. While banking shares have rallied, Threadneedle continues to expect the sector to struggle, given the weak domestic economy and the ongoing macro uncertainties in the eurozone. Balance sheet strength remains a key theme within the Company's portfolio. As well as providing protection in tough economic times, a strong balance sheet affords companies the ability to use cash in shareholder-friendly ways. Corporate activity looks set to continue as cash-rich companies at home and abroad acquire quality assets at attractive prices and dividend increases and share buybacks are also likely to continue. Gearing The Company's borrowing facility of £2,000,000, expired on 20 September 2012. The Board is currently seeking to put in place a new facility. The Company did not utilise any borrowingsduring the period under review. Dividend On 24 August 2012 the Board of directors declared a first interim dividend of 0.95 pence per share in respect of the year ended 31 December 2012, payable on 5 November 2012. Shares were marked ex-dividend on 5 September 2012 and the record date for the interim dividend was 7 September 2012. As stated in the Company's half-yearly financial report for the period ended 30 June 2012, 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. Material Transactions Over the period, the Company bought back a total of 150,000 shares to be placed ion treasury. On 5 November 2012, 73,879 shares were issued out of treasury to satisfy elections under the scrip dividend scheme. Total Voting Rights The Company now has 20,830,484 shares in issue, of which 171,032 are held in treasury. There were no other significant events or transactions which have occurred during the period from 1 July 2012 to the date of publication of the IMS which would have a material impact on the Company. Top 10 Holdings (as at 31 October 2012) Company Portfolio Weight (%) BP 3.9 GlaxoSmithKline 3.7 Royal Dutch Shell 3.2 Rio Tinto 2.8 Unilever 2.7 BT 2.6 AstraZeneca 2.5 BG 2.4 Sage 2.0 HSBC 2.0 Source: Threadneedle Sector exposure relative FTSE All Share (as at 31 October 2012) Top 5 Overweight/ Underweight Subsectors Active weight (%) Support Services +6.2 Travel & Leisure +4.1 Household Goods & Home Construction +3.2 Media +3.1 Oil Services +2.7 Beverages -2.1 Mining -4.2 Oil & Gas -4.8 Mobile telecoms -4.9 Banks -6.7 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 Simon Brazier / Michael Bateman Telephone 0207 464 5000 This information is provided by RNS The company news service from the London Stock Exchange END IMSBDBDBUBBBGDC -0- Nov/19/2012 12:17 GMT
UK Select Trust Ld UKT Interim Management Statement
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