Witan Investment Trust announces Half Year results

Thursday, 11 August 2016

During the six months ending 30 June 2016, Witan Investment Trust achieved a net asset value (NAV) total return of 6.4%, compared with the benchmark* performance of 7.7% - underperformance of 1.3%. Stripping out the effect of lower gilt yields on Witan’s debt valuation, the underlying NAV total return was 7.5%.

Published today, the key features of the 2016 half year results are:

  • A net asset value (NAV) total return of 6.4%, underperforming the Trust’s benchmark* return of 7.7%.
  • The share price total return was -2.4% as Witan’s shares moved to a discount of 8.5% from one of 0.2% at the end of 2015.
  • The Company bought back 14.4m of its shares on 27 May at a 6.5% discount to NAV and has continued to buy back during the volatile conditions before and after the EU referendum.
  • A second interim quarterly dividend of 4.25p per ordinary share will be paid in September. Total dividends paid in respect of the period are 8.5p per ordinary share (2015: 7.7p).
  • Ben Rogoff, Portfolio Manager of the Polar Capital Technology Trust plc will join the Witan Board as a non-Executive Director with effect from October 2016.

Few could have predicted the events of the first half of 2016 and, even with perfect foresight, it would have been difficult to anticipate the outcomes for financial markets. This period of fluctuating expectations closed with gains for both equities and fixed interest, boosted by weakness in sterling.

Over the six months to the end of June, Witan’s NAV total return was 6.4%, or 7.5% taking the par value of debt, less than the 7.7% total return of our equity benchmark. Over the longer term, performance remains ahead of our benchmark but the first half of 2016 proved to be a testing period. The share price total return was -2.4% owing to a widening discount. Discounts across the sector widened early in the year and became more stretched in the period after the EU referendum vote. At the time of writing, the discount had narrowed to 7.4%. 

In May, we sought shareholders’ authority to buy back 31.6m shares (16% of the Company) from our largest shareholder, following a change in the management of the insurance business which owned the stake. In the event, we purchased 14.4m of the shares into Treasury at a discount of 6.5%, the balance having been purchased by other investors. We continue to make regular purchases of Witan shares in the market as we believe that the wide discount has offered an opportunity to use share buybacks to benefit the NAV per share. Our long term objective remains to create sustainable liquidity in Witan shares, at or near to NAV. 

Following a review of the skills represented on the board, I am delighted to announce the appointment of Ben Rogoff - Portfolio Manager of the Polar Capital Technology Trust – with effect from 1 October 2016. Ben’s 18 year experience in the technology sector, in addition to knowledge of the investment trust sector, will be very helpful in understanding the disruptive impact of technology and assessing how our investment managers factor these trends into the construction of their portfolios.

I am pleased that since the period end our net asset value has reached a new record high and at the time of writing the NAV underperformance experienced during the first half had been reversed. Uncertainties remain, both economic (the effects of the EU referendum result on the UK and Europe) and political (the US election will be closely watched for signs of the US becoming more inward looking at a time when international economic cooperation appears more necessary than ever). Against this backdrop, Witan’s managers will continue to seek to invest selectively, in companies that are able to grow by their own efforts, without relying unduly on a following wind from the global economy.

Harry Henderson, Chairman of Witan Investment Trust

 

– ENDS –

*The Witan Investment Trust benchmark is a composite of the following four equity regions: UK 40%, North America 20%, Europe (ex UK) 20% and the Asia Pacific 20%.

For further information please contact:

Andrew Bell, Chief Executive Officer
Witan Investment Trust plc
Tel: 020 7227 9770
[email protected]

Hannah Philp. Director of Marketing 
Witan Investment Trust plc
Tel. 020 7227 9770
[email protected]

Notes to Editors

Witan Investment Trust plc

Established in 1909, Witan is one of the UK's largest investment trusts, managing £1.7bn gross assets (as at 30 June 2016) on behalf of over 30,000 investors. Witan operates a multi-manager structure and currently has 10 third party delegated managers. For further details please visit www.witan.com.