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Diverse Inc Trust  -  DIVI   

Half-year Report

Released 07:00 31-Jan-2017

Half-year Report

THE DIVERSE INCOME TRUST PLC

HALF-YEARLY FINANCIAL REPORT

The Directors present the Half-Yearly Financial Report of the Company for the period to 30 November 2016.


RESULTS FOR THE HALF YEAR TO 30 NOVEMBER 2016

Increased dividend per share The first interim dividend for the year, payable in February 2017, was increased from 0.65p to 0.70p per share. Subsequent to the half-year end, a second interim dividend of 0.70p per share, payable in May 2017, has been declared, increasing from 0.65p per share last year.

Revenue reserves increased to £13.4m The revenue reserves of the Group increased to £13.4m at the half-year end, exceeding the £10.7m annual cash cost of the four dividends paid out to shareholders in 2016.

Total return to shareholders of +1.5% This includes the movement in net asset value (“NAV”) plus the third interim and final dividends for 2016, which went ex-dividend during the period, and compares with an increase in the FTSE All-Share Index of 7.7% in the six months to 30 November 2016. After dividend payments, the NAV per share fell from 91.02p to 90.89p in the period.

Summary of Results

At 30 November     
 2016     
At 31 May    
 2016    
  
Change     
NAV per ordinary share 90.89p    91.02p   (0.14)%
Ordinary share price (mid) 92.00p    93.75p   (1.87)%
Premium to NAV 1.22%   3.00% 
Revenue return per ordinary share 2.07p*   3.33p  
Ongoing charges 1.18%** 1.18% 

*        For six months ended 30 November 2016. Note: comparative figure is for the full year ended 31 May 2016.

**      Estimated as at 30 November 2016. Ongoing charges are the Company’s annualised revenue and capitalised expenses (excluding finance costs and certain non-recurring items) expressed as a percentage of the average monthly net assets of the Company during the year.


CHAIRMAN’S STATEMENT
Half-Year to 30 November 2016

This Report covers the six-month period ended 30 November 2016 for The Diverse Income Trust plc.

Half-year returns
Movements in the mainstream equity markets were dominated by the UK’s decision to withdraw from the European Union. The subsequent devaluation of sterling by 15% boosted the share prices of those companies with overseas earnings or that pay dividends directly in a foreign currency. The FTSE All-Share Index rose 7.7% in the half year to 30 November 2016 and many of the resource stocks recovered strongly in the period. By comparison, the FTSE SmallCap (excluding Investment Companies) Index was up 3.6% and the FTSE AIM All-Share Index was up 10.8%. Smaller dividend stocks were out of the limelight in the period under review, despite their ongoing potential to deliver dividend growth and as a result, the Company’s NAV fell slightly by 0.1% over the half year.

Dividends
The underlying revenues of the Company have grown progressively since launch and this trend continued in the half year. As a result, we will pay a first interim dividend of 0.70p on 28 February 2017 and have declared a second interim dividend of 0.70p payable on 31 May 2017. This brings the total of the last four dividends to 2.90p, which compares to annualised dividends of 2.02p in the Company’s first year (2011/12). The pattern of dividends is now in keeping with the Board's previously stated intention to pay quarterly dividends more equal in quantum through the year, as shown in the table below:

Year ending
31 May 2017
pence
Year ended
31 May 2016
pence

First interim dividend

0.70

0.65
Second interim dividend 0.70 0.65
Third interim dividend 0.75
Final dividend 0.75

Returns since issue
Although many mainstream market indices have performed well during the half year, their performance since the Company was set up in April 2011 has been much more measured. For example, the FTSE All-Share Index has only appreciated by 17.0% in the five-and-a-half-year period. Many smaller quoted companies have performed rather better, with the FTSE SmallCap (excluding Investment Companies) Index rising 60.4% in the five-and-a-half-year period, although the FTSE AIM All-Share Index is still down 11.1% over the same period. In comparison, the NAV of the Company has increased by 81.8% in the period since launch, with the Company being amongst the best performing of its peer group.

Borrowing
In September 2016, the Company entered into a £25m unsecured revolving loan facility agreement with The Royal Bank of Scotland, replacing the previous overdraft facility with The Bank of New York Mellon. The facility is available for three years and provides the scope in certain circumstances to raise the level of borrowing to £50m. Further details of the facility can be found in the Manager’s Report below. The facility was undrawn as at 30 November 2016.

The Board
As announced on 20 December 2016, Calum Thomson has joined the Board as a non-executive Director and chairman of the Audit Committee. We welcome Calum to the Board and believe that his extensive experience auditing investment trusts will make him a good chairman of the Audit Committee.

Outlook
The principal focus of Diverse has always been to generate a meaningful and growing dividend for shareholders through investing in both larger and smaller quoted companies. Alongside this, the Company seeks to limit stock-specific risk, through investing via a longer list of modestly-sized holdings across a wide universe of stocks.

Whilst the long-term advantages of this strategy may have been overshadowed by the abrupt market movements during the half year, it still remains promising for the future. Strategies with a wider opportunity set have the potential to access all of the businesses with the greatest vibrancy, irrespective of size. It gives the portfolio more scope to navigate a period of elevated political uncertainty and any further reversal of bond yields.

Michael Wrobel
Chairman
30 January 2017


MANAGER’S REPORT

Details of the Manager
The Company’s Manager is Miton Trust Managers Limited, a wholly-owned subsidiary of Miton Group plc.

Miton Group plc is a quoted company listed on AIM and is characterised by its independent thinking. This is important at all times, but it may be particularly important currently given the fact that the underlying market trends may change with our new economic policies after the UK’s decision to withdraw from the EU.

Miton has a team of four fund managers researching UK-quoted stocks. The day-to-day management of the Company’s portfolio is carried out by Gervais Williams and Martin Turner, who have a particular focus on researching many of the smaller quoted stocks.

Gervais Williams
Gervais joined Miton in March 2011 and is Senior Executive Director of the group. He has been an equity portfolio manager since 1985, including 17 years as Head of UK Smaller Companies and Irish Equities at Gartmore.

He won the Grant Thornton Investor of the Year Award in 2009 and 2010, and was awarded Fund Manager of the Year 2014 by What Investment?

Martin Turner
Martin joined Miton in May 2011. Martin and Gervais have had a close working relationship since 2004, and their complementary expertise and skills led to their backing a series of successful companies.

Martin qualified as a Chartered Accountant with Arthur Andersen and also has extensive experience at Rothschild, Merrill Lynch and Collins Stewart, where as Head of Small/Mid Cap Equities, his role covered their research, sales and trading activities.

The overall objective of the Company
Over recent decades, equity markets have suffered occasional setbacks, but typically these have been followed by stronger recoveries shortly thereafter. Whilst there is always risk, it is easy to overlook longer-term downsides at a time when equity markets are generally appreciating well. During these decades, the main metric of success has been almost solely the relative return of the fund compared with a mainstream index, with little consideration of the scale of the downside risks along the way.

Uniform fund benchmarks tend to lead to uniformity in portfolio holdings too, since these are often selected with reference to index weightings. In equity income funds, the natural limits to the income stock universe have led these funds to invest in a particularly narrow range of holdings, often forcing funds to have 5% to 10% of their portfolios in their largest holdings. In addition, many of these holdings are often duplicated in other competitor funds as well.

Whilst markets have appreciated well, the advantages of these strategies are obvious. However, there are serious downsides with monocultures. At a time when the political and economic trends are changing, we believe that market participants should become more wary about sizeable stock specific risk.

Diverse was set up with this background in mind. Overall, it has the aim to invest in a more wide-ranging portfolio offering an attractive dividend yield and the prospect of dividend growth in the future. Rather than measuring the success of Diverse with regard to the return of an equity index, our aim is to generate a premium return through investing in a portfolio of holdings that has a greater focus on the sustainability and organic growth of the underlying income over time.

Implementing the investment strategy
There is good academic evidence that over time the ultimate return on an individual stock is principally determined by the initial yield at the time of investment and the changes to that dividend thereafter. Specifically, if the company pays growing dividends, then over time this is normally reflected in a sustained rise in its share price. In contrast, those that suffer dividend cuts are often subject to share price setbacks.

Generally, we believe it is those companies with the best ongoing productivity improvements that have the best chances to sustain and improve corporate cash flow going forward. After all, companies with strong cash flow are not just in a position to fund the current dividend, but equally importantly are also in a good position to grow the dividend going forward.

The portfolio holdings are therefore selected for the prospect of cash paybacks on capital expenditure and, by implication, their dividend growth. We find the following five factors helpful to identify those with the most attractive risk/reward ratios and the potential for generating a sustained and growing stream of dividends:

- Turnover growth – Although some companies can succeed in growing their profits without much turnover growth, in general, durable dividend growth over time comes from those that progressively expand their turnover.
Companies investing for productivity improvement can often increase sales via an innovative new service or through introducing a better product. Indeed, even in times of economic stagnation, this type of improvement can sometimes keep turnover improvement coming through when others are struggling.
- Sustained margins – A company that generates ongoing turnover growth may find it does not grow its cash flow much if its profit margins fall back at the same time. The best kinds of productivity improvement should reduce the cost of goods, whilst also justifying some improvement to the market price.
Ideally, we are looking for companies that have the potential to sustain or improve their profit margins through outstanding customer service. This may be especially important should the competitive environment become more severe.
- Management of risk – All investment carries risks, but often those moving the fastest are obliged to take the greatest risks. In general, we aim to moderate portfolio risk by investing in companies where the management team limit their risks, even though this may hold back growth to a steadier pace. Such companies still carry plenty of potential to deliver an attractive return for their shareholders over time.
- Better balance sheets – Many corporates have taken on extra debt over the past decade given the exceptionally low interest rates. However, we prefer investments with net cash balances or those with modest debt relative to the headroom on the facility.
In a world that is uncertain, companies with stronger balance sheets are better positioned to continue to pay good dividends even if their underlying profitability dips temporarily. Over time, those with under-geared balance sheets can take more advantage of any economic setbacks to disproportionately improve their market position, whereas those more fully drawn on their facilities tend to have fewer options.
- Low entry valuations – The upside potential on an investment is often greater when the valuation on entry is modest. In general, we favour stocks where the overall market capitalisation reflects some issues in the past since sometimes there is plenty of upside should things improve as they are not reflecting the potential for the future.
With few institutional investors actively researching the full range of big and small quoted companies, we believe there are still plenty of stocks with low entry valuations, even after the recent mainstream index appreciation.

Progress over the period
Generally, world growth expectations continued to decline and equity markets have remained volatile during the period under review. The market returns during the half year under review were predominately driven by the UK’s decision in June 2016 to leave the European Union. The devaluation of sterling boosted the share prices of many multi-national companies during the half-year period. For example, five of the top ten companies in the FTSE 100 Index pay their dividends in overseas currencies and the devaluation of sterling enhanced their apparent rate of dividend growth. Alongside this, most commodity stocks were amongst the best performers over the half year, as oil and commodity prices staged a strong recovery. In general, both of these factors were dominant in many of the largest weightings in the FTSE 100 Index, greatly boosting the index returns over the half year. 

A similar trend was evident amongst some of the AIM All-Share Index constituents too. For example, the major recovery of the ASOS share price, along with its large weighting, added more than 2% to the return of the FTSE AIM All-Share Index. In addition, GW Pharmaceuticals added almost 2% on a US listing and the strong performances of Fevertree and Boohoo.com also added another 2.4% of Index return between them.

The Company minimises stock specific risk through limiting portfolio holdings to around 1% each. Even the stocks where the Manager has the highest conviction rarely exceed 1.5% at the time of purchase. Only two holdings in the Company were 2% or more of the portfolio at the end of November, with all the other holdings progressively smaller. Stock specific risk remains limited, with 149 stocks across a wide range of industry sectors.

The principal reason for the wide differential in the performance of the Company and the mainstream indices is down to the diversification of the portfolio. Although the Company had holdings in many of the largest and best performing FTSE 100 stocks over the six-month period, the weightings in the Company’s portfolio were just a tiny fraction of their combined weightings in the FTSE 100 Index and that of the mainstream indices.

Several other holdings that have been a significant part of the portfolio for some years did continue to perform strongly in the period. For example, IG Design rose 66% and Burford Capital appreciated 45% in the period. In contrast, the share price of Fairpoint disappointed after the government decided that the small claims courts should adjudicate on a wider range of cases. In addition, the FTSE 100 Put option detracted from returns in the period as its value fell in line with strong rise in the FTSE 100 Index.

Current market trends and outlook
Although many of the mainstream stocks recovered well during the latter part of the half year, there are still many small and micro cap stocks whose share prices have not much improved from the price setbacks they suffered after the Brexit vote.

The globalisation of trade, along with the adoption of debt, may have enhanced the long period of world growth in the past. Although there was some recovery after 2008, the momentum in world growth has moderated over recent years in spite of interest rates being sustained at remarkably low levels. Perhaps more worryingly, productivity improvement, which is the long-term driver of wealth generation, has marginally declined in the four years to the end of 2015. The figures are not yet known for 2016.

Over much of the last five years, the principal driver of equity return has therefore been rising equity valuations based upon bond yields moving to ultra-low levels. We believe the nature of the companies in the portfolio is very different. Generally, they have been selected on the basis that they are well placed to generate attractive returns on their investment over recent years. As this comes through in a rising stream of cash payback, we are hopeful that this will continue to drive ongoing dividend growth, in spite of the potential for changes in the political and economic trends.

Diverse’s strategy for managing the portfolio through any potential market setbacks
Over the period under review, equity markets have been quite volatile, mainly on the upside for now, but in future there is always the outside risk that markets could surprise on the downside with a significant setback. As an investment trust, Diverse has two strategies that can help the Company to generate a better return for shareholders through any potential period of volatility.

A FTSE 100 Put option
The first is via the purchase of a Put option. This means the Company can sell the FTSE 100 Index at a certain level (6,000 in our case) after the stock market has sold off. An option like this is not dissimilar to purchasing car or house insurance, in that it adds a degree of insurance to the Company’s portfolio so that the Company itself could benefit from an additional capital sum, with its size determined by the scale of the FTSE 100 setback.

However, options like this come with a cost – a bit like an insurance premium. Specifically, the time value of the Put option will gradually decay over the insured period (to March 2018 in our case), irrespective of whether the markets suffer any fluctuations or not. The initial cash cost of any Put option is therefore very important, since its resale value generally falls over time (assuming markets are relatively flat) and ultimately becomes worthless if the FTSE 100 Index does not fall significantly below 6,000.

With this in mind, the Company has been careful to find ways in which it could keep the initial cost of the Put option at the lowest possible level. It has done this in two ways:

The key advantage for shareholders is that, should the FTSE 100 Index suffer a significant setback, then the resale value of the Put option would be expected to rise proportionately. The full level of that appreciation would be related to the duration of the remaining term of the option as well as the scale of the market setback. If the Put option were to be sold after a market setback, the cash proceeds could then be used to purchase additional equities for the portfolio at a time when share prices were depressed. The increased holdings in the portfolio would have greater recovery potential thereafter. Alongside this, the Company would benefit from extra income from the new holdings added during this period.

In summary, Diverse has greater scope to take advantage of any major market setback through participating in FTSE 100 Put options, albeit that the strategy does have a modest adverse cost if markets do not drop back significantly in the period through to March 2018.

The debt facility
The Company has put in place a committed debt facility of £25m, with scope in certain circumstances to raise this to £50m, up to a maximum of 15% of NAV. The Company pays commitment fees to have the facility which gives the Company access, at a modest cost, to significant borrowings, which we can deploy when we judge the time to be right. However, normally the Company does not utilise the facility. This is because the key risk with debt is that, if there was a severe market sell-off, then the covenants on the debt facility could force the Company to repay some, or potentially all, of the outstanding debt after the market had dropped. This has the disadvantage of obliging the Company to liquidate some of its portfolio holdings just at a time when share prices would be depressed. In short, a geared fund can end up at a disadvantage during a setback, whereas an ungeared portfolio can at least continue to hold its portfolio throughout the period of volatility and thereby fully participate in any subsequent market recovery.

Importantly, we believe the Company has plenty of scope to generate an attractive long-term return without relying on debt so the fund has a geared return over the longer term. Therefore, the plan is to ensure the Company is not significantly borrowed at a time when markets are at risk of a setback.

The great advantage of this strategy is that the under-utilised debt facility should normally be available to buy additional stocks after the market setback at hopefully unusually attractive entry prices. Following the market bottom, the portfolio would then have extra recovery potential – funded by the debt facility. If the market were to go on and recover, then shareholders would benefit from the appreciation of the extra shares purchased during the market setback, as well as the associated extra dividend income (offset in part by the interest costs on the debt).

Conclusions
Both the FTSE 100 Put option and the debt facility aim to help the Company to have additional strategies to buy extra shares close to a market bottom, so that the Company’s returns would be enhanced were the markets to recover after a period of severe volatility.

Gervais Williams and Martin Turner
Miton Asset Management Limited
30 January 2017


PORTFOLIO INFORMATION
as at 30 November 2016


Rank

Company

Sector & main activity
Valuation
£’000
% of net
assets
Yield1
1 Charles Taylor Industrials 7,547 2.2 4.0 
2 Stobart Industrials 6,814 2.0 7.5 
3 Burford Capital2 Financials 6,763 1.9 1.3 
4 IG Design2 Consumer Goods 6,489 1.9 1.2 
5 4Imprint Consumer Services 6,454 1.8 1.9 
6 Amino Technologies2 Technology 5,535 1.6 3.3 
7 Safestyle UK2 Consumer Services 5,505 1.6 6.5 
8 Lok’n Store2 Financials 5,389 1.5 2.2 
9 Mucklow (A&J) Financials 4,794 1.4 4.6 
10 Shoe Zone2 Consumer Services 4,674 1.3 5.4 
Top 10 investments 59,964 17.2
11 Novae Financials 4,501 1.3 3.3 
12 Phoenix Financials 4,402 1.3 7.5 
13 Conviviality2 Consumer Services 4,285 1.2 4.6 
14 RPC Industrials 4,265 1.2 1.8 
15 Aviva Financials 4,175 1.2 4.8 
16 Royal Dutch Shell ‘B’ Oil & Gas 4,096 1.2 7.1 
17 Park2 Financials 4,085 1.2 4.5 
18 Macfarlane Industrials 4,044 1.2 3.2 
19 Kier Industrials 4,010 1.1 4.6 
20 BP Oil & Gas 4,004 1.1 6.9 
Top 20 investments 101,831 29.2
21 Randall & Quilter2 Financials 3,984 1.1 6.6 
22 Beazley Financials 3,911 1.1 2.7 
23 Hostelworld Consumer Services 3,891 1.1 5.0 
24 SQS Software Quality Systems2 Technology 3,879 1.1 1.8 
25 Legal & General Financials 3,801 1.1 5.9 
26 Direct Line Insurance Financials 3,778 1.1 6.9 
27 Morses Club2 Financials 3,768 1.1 1.7 
28 Safecharge International2 Industrials 3,766 1.1 4.8 
29 Lloyds Banking Financials 3,753 1.1 4.4 
30 Dairy Crest Consumer Goods 3,582 1.0 3.9 
Top 30 investments 139,944 40.1
31 Provident Financial Financials 3,567 1.0 4.3 
32 Zotefoams Basic Materials 3,550 1.0 2.3 
33 Costain Industrials 3,490 1.0 3.3 
34 Hiscox Financials 3,486 1.0 2.3 
35 Royal Mail Industrials 3,394 1.0 4.8 
36 Imperial Brands Consumer Goods 3,374 1.0 4.5 
37 Bloomsbury Publishing Consumer Services 3,331 1.0 4.0 
38 Bioventix2 Health Care 3,321 1.0 4.7 
39 CML Microsystems Technology 3,302 0.9 1.9 
40 Treatt Basic Materials 3,223 0.9 1.7 
Top 40 investments 173,982 49.9
Balance held in 93 equity investments 151,704 43.5
Total equity investments 325,686 93.4
Sirius Minerals Finance 8.5% 28/11/2023 Notes 2,395 0.7
600 Group 8% Convertible Loan Notes 14/02/2020 2,356 0.7
St. Modwen Properties 6.25% 07/11/2019 Bonds 847 0.3
Aggregated Micro Power 8% 31/03/2021 Notes 465 0.1
Fixed interest and convertible investments 6,063 1.8
Total investments 331,749 95.2
Listed Put option
FTSE 100 – March 2018 6,000 Put 6,679 1.9
Total investment portfolio 338,428 97.1
Other net assets 10,126 2.9
Net assets 348,554 100.0 

¹ Source: Interactive Data. Based on historical yields and therefore not representative of future yield. Includes special dividends where known.

² AIM/ISDX listed.


PORTFOLIO INFORMATION
as at 30 November 2016

Invested portfolio capital by sector
Financials 27.6%
Industrials 19.2%
Consumer Services 19.0%
Consumer Goods 8.6%
Technology 6.4%
Basic Materials 6.1%
Telecommunications 3.5%
Oil & Gas 2.9%
Other 2.6%
Cash and Fixed Interest 1.8%
Health Care 1.5%
Utilities 0.8%
100.0%

   

Invested portfolio capital by Index or Exchange
FTSE 100 Index 13.9%
FTSE 250 Index 14.4%
FTSE SmallCap Index 18.4%
FTSE Fledgling Index 4.6%
AIM/ISDX Exchanges 38.0%
International Equities 0.9%
Other 8.0%
Cash and Fixed Interest 1.8%
100.0%

   

Portfolio investment income received in the period by Index or Exchange
FTSE 100 Index 16.2%
FTSE 250 Index 15.1%
FTSE SmallCap Index 15.5%
FTSE Fledgling Index 3.5%
AIM/ISDX Exchanges 42.2%
Other 5.6%
Cash and Fixed Interest 1.9%
100.0%

   

Estimated annual income by sector¹
Financials 35.3%
Industrials 19.7%
Consumer Services 18.6%
Consumer Goods 4.5%
Basic Materials 4.5%
Telecommunications 4.4%
Oil & Gas 3.8%
Technology 3.4%
Cash and Fixed Interest 3.3%
Other 1.0%
Health Care 0.9%
Utilities 0.6%
100.0%

¹ Projected income based on portfolio as at 30 November 2016.

Source: Interactive Data.


INTERIM MANAGEMENT REPORT AND DIRECTORS’ RESPONSIBILITY STATEMENT

Interim Management Report
The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal risks and uncertainties for the remaining six months of the financial year are set out in the Chairman’s Statement and the Manager’s Report above.

The principal risks facing the Group are substantially unchanged since the date of the Annual Report and Accounts for the year ended 31 May 2016 and continue to be as set out in that report on pages 20 to 22.

Risks faced by the Group include, but are not limited to, investment and strategy, smaller companies, sectoral diversification, dividends, share price volatility and liquidity/marketability risk, gearing, key man risk, market risk and credit and counterparty risk.

Responsibility Statement
The Directors confirm that to the best of their knowledge:

  1. DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
     
  2. DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions that could do so.

This Half-Yearly Financial Report was approved by the Board of Directors on 30 January 2017 and the above responsibility statement was signed on its behalf by Michael Wrobel, Chairman.


CONDENSED CONSOLIDATED INCOME STATEMENT
for the period to 30 November 2016

Period to
30 November 2016
Period to
30 November 2015
Year ended
31 May 2016*


Note
Revenue 
return 
£’000 
Capital 
return 
£’000 

Total 
£’000 
Revenue 
return 
£’000 
Capital 
return 
£’000 

Total 
£’000 
Revenue 
return 
£’000 
Capital 
return 
£’000 

Total 
£’000 
Gains on investments held at fair value through profit or loss







4,213 




4,213 








21,821 




21,821 








16,876 




16,876 
(Losses)/gains on derivative contracts



(5,602)


(5,602)




955 


955 




(1,087)


(1,087)
Foreign exchange (losses)/gains

(12)

(12)


(4)

(4)



Income 8,788  8,788  6,549  6,549  14,368  14,368 
Management fee (415) (1,244) (1,659) (424) (1,273) (1,697) (851) (2,554) (3,405)
Other expenses (396) (396) (330) (330) 667  667 
Return on ordinary activities before finance costs and taxation



7,977 




(2,645)




5,332 




5,795 




21,499 




27,294 




12,850 




13,240 




26,090 
Finance costs (6) (20) (26) (3) (8) (11) (13) (39) (52)
Return on ordinary activities before taxation

7,971 


(2,665)


5,306 


5,792 


21,491 


27,283 


12,837 


13,201 


26,038 
Taxation – irrecoverable withholding tax

(45)




(45)


(37)




(37)


(48)




(48)
Return on ordinary activities after taxation

7,926 


(2,665)


5,261 


5,755 


21,491 


27,246 


12,789 


13,201 


25,990 
pence  pence  pence  pence  pence  pence  pence  pence  pence 
Basic and diluted return:
Per ordinary share

2.07 

(0.69)

1.38 

1.50 

5.60 

7.10 

3.33 

3.44 

6.77 

* Audited.

The total column of this statement is the Income Statement of the Group prepared in accordance with International Financial Reporting Standards (“IFRS”), as adopted by the European Union. The supplementary revenue and capital columns are presented in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies (“AIC SORP”).

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

There is no other comprehensive income and therefore the return on ordinary activities after tax is also the total comprehensive income.

The accompanying notes are an integral part of these financial statements.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY




Note

Share 
capital 
£’000 
Share 
premium 
account 
£’000 

Special
reserve
£’000

Capital 
reserve 
£’000 

Revenue 
reserve 
£’000 


Total 
£’000 
As at 1 June 2016* 434  192,244  45,775 99,342  11,250  349,045 
Total comprehensive income:
Net return for the period - (2,665) 7,926  5,261 
Transactions with shareholders
recorded directly to equity:
Equity dividends paid - (5,752) (5,752)
As at 30 November 2016 434  192,244  45,775 96,677  13,424  348,554 
As at 1 June 2015* 387  192,244  48,558 86,141 9,199  336,529 
Total comprehensive income:
Net return for the period - 21,491 5,755  27,246 
Transactions with shareholders
recorded directly to equity:
Cancellation of ordinary shares (3) (2,783) - (2,786)
Equity dividends paid - - (5,752) (5,752)
As at 30 November 2015 384  192,244  45,775 107,632 9,202  355,237 

   

As at 1 June 2015* 387  192,244  48,558  86,141  9,199  336,529 
Total comprehensive income:
Net return for the year 13,201  12,789  25,990 
Transactions with shareholders recorded directly to equity:
Management shares 50  50 
Cancellation of ordinary shares (3) (2,783) (2,786)
Equity dividends paid (10,738) (10,738)
As at 31 May 2016* 434  192,244  45,775  99,342  11,250  349,045 

* Audited.

The accompanying notes are an integral part of these financial statements.


CONDENSED CONSOLIDATED BALANCE SHEET



Note
30 November 
2016 
£’000 
30 November 
2015 
£’000 
31 May 
2016*
£’000 
Non-current assets:
Investments held at fair value
through profit or loss

331,749 

347,686 

339,313 
Current assets:
Derivative instruments 6,679  7,026  8,026 
Trade and other receivables 1,292  5,564  2,064 
Cash at bank and cash equivalents 9,280  75  2,983 
17,251  12,665  13,073 
Current liabilities:
Bank overdraft** (1,120)
Trade and other payables (446) (3,994) (3,341)
(446) (5,114) (3,341)
Net current assets 16,805  7,551  9,732 
Total net assets 348,554  355,237  349,045 
Capital and reserves:
Share capital – ordinary shares 384  384  384 
Share capital – management shares  50  50 
Share premium account 192,244  192,244  192,244 
Special reserve 45,775  45,775  45,775 
Capital reserve 96,677  107,632  99,342 
Revenue reserve 13,424  9,202  11,250 
Shareholders’ funds 348,554  355,237  349,045 
pence  pence  pence 
Net asset value per ordinary share 90.89  92.63  91.02 

* Audited.

** Normally, the Company does not have an overdraft, but on occasions when the timing of the settlement of purchase and sales is mismatched, there is need to use the bank overdraft in modest scale for a short period.

The accompanying notes are an integral part of these financial statements.


CONDENSED CONSOLIDATED CASH FLOW STATEMENT

Period to 
30 November 
2016 
£’000 
Period to 
30 November 
2015 
£’000 
Year ended 
31 May 
2016*
£’000 
Operating activities:
Net return before taxation 5,306  27,283  26,038 
Decrease/(increase) in investments and derivatives 1,389  (22,776) 15,789 
Purchase of investments (21,867) (38,229) (62,216)
Sale of investments 33,644  35,614  66,022 
Purchase of derivative instruments (7,445) (5,747) (17,243)
Sale of derivative instruments 3,190  4,776  10,237 
Exchange losses on capital items (5)
Decrease/(increase) in trade and other receivables 772  (3,499)
(Decrease)/increase in trade and other payables (2,895) 3,037  2,384 
Withholding tax paid (45) (37) (48)
Net cash inflow from operating activities 12,049  422  9,381 
Financing:
Management shares 50 
Cancellation of shares (2,786) (2,786)
Equity dividends paid (5,752) (5,752) (10,738)
Net cash (outflow)/inflow from financing (5,752) (8,538) 13,474 
Increase/(decrease) in cash and cash equivalents 6,297  (8,116) 4,093 
Reconciliation of net cash flow movements in funds:
Cash and cash equivalents at the start of the period 2,983  7,071  7,071 
Exchange movements
Net cash inflow/(outflow) from cash and cash equivalents 6,297  (8,116) (4,093)
Cash/(net debt) at the end of the period 9,280  (1,045) 2,983 

* Audited.

The accompanying notes are an integral part of these financial statements.


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 General Information
The consolidated financial statements, which comprise the unaudited results of the Company and its wholly-owned subsidiary, DIT Income Services Limited (together referred to as the “Group”) for the period ended 30 November 2016, have been prepared in accordance with IFRS, as adopted by the European Union, and with the AIC SORP, where the AIC SORP is consistent with the requirements of IFRS. The comparatives cover the period from 1 June 2015 to 30 November 2015 and for the year from 1 June 2015 to 31 May 2016.

The financial statements have been prepared on the basis of the accounting policies set out in the Annual Report and Accounts for the year ended 31 May 2016.

The financial information contained in this Report does not constitute full statutory accounts as defined in the Companies Act 2006. The financial statements for the periods to 30 November 2016 and 30 November 2015 have not been either audited or reviewed by the Company’s Auditor. The information for the year ended 31 May 2016 has been extracted from the latest published Annual Report and Accounts, which have been filed with the Registrar of Companies. The Report of the Auditor on those financial statements contained no qualification or statement under Section 498(2) or (3) of the Companies Act 2006.

The Directors consider that it is appropriate to adopt the going concern basis in preparing the financial statements. Cash flow projections have been reviewed and show that the Group has sufficient funds to meet both its contracted expenditure and its discretionary cash outflows in the form of the dividend policy. After making enquiries, and bearing in mind the nature of the Group’s business and assets, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date that these financial statements were approved. In arriving at this conclusion, the Directors have considered the liquidity of the portfolio and the Group’s ability to meet obligations as they fall due.

2 Income


Period to
30 November
2016
£’000

Period to 
30 November 
2015 
£’000 
Year 
ended 
31 May 
2016 
£’000 
Income from investments:
UK dividends 5,750 4,938  10,816 
UK REIT dividend income 144 74  256 
Unfranked dividend income 2,595 1,330  2,746 
UK fixed interest 167 112  274 
8,656 6,454  14,092 
Other income:
Underwriting income 60 25  43 
Exchange gains/(losses) 13 (3) (5)
Net dealing profit of subsidiary 59 73  238 
Total income 8,788 6,549  14,368 

3 Return per Share
Returns per share are based on the weighted average number of shares in issue during the period. Normal and diluted return per share are the same as there are no dilutive elements on share capital.

Ordinary Shares:

Period to
30 November 2016
Period to
30 November 2015
Year ended
31 May 2016
Net 
 return 
£’000 
Per 
share 
pence 
Net 
return 
£’000 
Per 
share 
pence 
Net
return
£’000
Per
share
pence
Revenue return 7,926  2.07  5,755 1.50 12,789 3.33
Capital return (2,665) (0.69) 21,491 5.60 13,201 3.44
Total return 5,261  1.38  27,246 7.10 25,990 6.77
Weighted average number of ordinary shares

383,487,239 


383,679,588


383,583,414

4 Dividends per Ordinary Share
Amounts recognised as distributions to equity holders in the period.

Period to
30 November 2016
Period to
30 November 2015
Year ended
31 May 2016
£’000 pence £’000 pence £’000 pence
In respect of the previous period:
Third interim dividend 2,876 0.75 - -
Fourth interim dividend - - 3,835 1.00 3,835  1.00 
Final dividend 2,876 0.75 1,917 0.50 1,917  0.50 
In respect of the period under review:
First interim dividend - - - - 2,493 0.65
Second interim dividend - - - - 2,493 0.65
5,752 1.50 5,752 1.50 10,738 2.80

The Board has declared a first interim dividend of 0.70p per ordinary share, payable on 28 February 2017 to shareholders registered at the close of business on 30 December 2016. The ex-dividend date was 29 December 2016. The Board has also declared a second interim dividend of 0.70p per ordinary share, payable on 31 May 2017 to shareholders registered at the close of business on 31 March 2017. The ex-dividend date will be 30 March 2017. In accordance with IFRS, these dividends have not been included as a liability in these financial statements.

5 Called-up Share Capital
The Company, which is a closed-ended investment company with an unlimited life, has a redemption facility through which shareholders are entitled to request the redemption of all or part of their holding of ordinary shares annually on 31 May in each year. The Board may, at its absolute discretion, elect not to operate the annual redemption facility in whole or in part. In respect of the 31 May 2016 Redemption Point, the Company received requests for 265,744 ordinary shares. All of these shares were matched with buyers and sold at a calculated Redemption Price of 90.97p per share.

The issued share capital consisted of 383,487,239 ordinary shares and 50,000 management shares as at 30 November 2016.

6 Net Asset Value

Ordinary Shares
The NAV per ordinary share and the net assets attributable at the period end were as follows:

30 November 2016 30 November 2015 31 May 2016
NAV
per share
pence
 Net assets
attributable
£’000
NAV
per share
pence
Net assets
attributable
£’000
NAV
per share
pence
Net assets
attributable
£’000
Ordinary shares:
Basic and diluted 90.89 348,554 92.63 355,237 91.02 349,045

NAV per ordinary share is based on net assets at the period end and 383,487,239 ordinary shares, being the number of ordinary shares in issue at the period end (30 November 2015: 383,487,239 and 31 May 2016: 383,487,239 ordinary shares).

Management Shares
The NAV of £1 (30 November 2015: £1 and 31 May 2016: £1) per management share is based on net assets at the period end of £50,000 (30 November 2015: £50,000 and 31 May 2016: £50,000) and 50,000 (30 November 2015: 50,000 and 31 May 2016: 50,000) management shares. The shareholders have no right to any surplus or capital or assets of the Company.

7 Transaction Costs
During the period, expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Income Statement. The total costs were as follows:

Period to
30 November 2016
£’000
Period to
30 November 2015
£’000
Year ended
31 May 2016
£’000
Costs on acquisitions 74 139 235
Costs on disposals 45 50 95
119 189 330

These transaction costs are dealing commissions paid to stockbrokers and stamp duty, a government tax paid on transactions (which is zero when dealing on the AIM/ISDX exchanges). A breakdown of these costs is set out below:


Period to
30 November 2016
£’000


% of average
monthly net assets

Period to
30 November 2015
£’000


% of average monthly net assets
Year ended
31 May 2016
£’000


% of average monthly net assets
Costs paid in dealing commissions
72

0.02

91

0.03

164

0.05
Costs of stamp duty 47 0.01 98 0.03 166 0.05
119 0.03 189 0.06 330 0.10

The average monthly net assets for the six months to 30 November 2016 was £342,936,000 (30 November 2015: £343,615,000 and 31 May 2016: £345,686,000).

8 Management Fee
The management fee is calculated at the rate of one-twelfth of 1.0% per calendar month on the average market capitalisation of the Company’s shares up to £300m and one-twelfth of 0.8% per calendar month on the average market capitalisation above £300m, payable monthly in arrears. In addition to the basic management fee, and for so long as a Redemption Pool is in existence, the Manager is entitled to receive from the Company a fee calculated at the rate of one-twelfth of 1.0% per calendar month of the NAV of the Redemption Pool on the last business day of the relevant calendar month.

At 30 November 2016, an amount of £278,000 was outstanding and due to Miton Trust Managers Limited in respect of management fees (30 November 2015: £293,000 and 31 May 2016: £283,000).

9 Fair Value Hierarchy
The Group is required to classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used. The fair value hierarchy has the following levels:

Level 1 – Valued using quoted prices, unadjusted in active markets.

Level 2 – Valued by reference to valuation techniques using observable inputs for the asset or liability, other than quoted prices included in Level 1.

Level 3 – Valued by reference to valuation techniques using inputs that are not based on observable market data for the asset or liability.

The valuation techniques used by the Group are explained in the Annual Report.

The tables below set out the fair value measurements of financial assets in accordance with the fair value hierarchy into which the fair value measurements are categorised.

Financial assets at fair value through profit or loss at 30 November 2016 Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 323,489 2,197 - 325,686
Derivative contracts 6,679 - - 6,679
Fixed interest bearing securities 3,242 - 2,821 6,063
333,410 2,197 2,821 338,428

   

Financial assets at fair value through profit or loss at 30 November 2015 Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 341,443 - - 341,443
Derivative contracts 7,026 - - 7,026
Fixed interest bearing securities 1,597 - 4,646 6,243
350,066 - 4,646 354,712

   

Financial assets at fair value through profit or loss at 31 May 2016 Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 330,342 2,962 - 333,304
Derivative contracts 8,026 - - 8,026
Fixed interest bearing securities 846 1,237 3,926 6,009
339,214 4,199 3,926 347,339

The value of the subsidiary held at fair value is £1 (30 November 2015: £1 and 31 May 2016: £1) and is classified as a Level 3 investment.

The Company’s subsidiary completes trading transactions. The value of the investments held for trading in the subsidiary at 30 November 2016 are £nil (30 November 2015: £nil and 31 May 2016: £nil). The difference between the sale and purchase of assets is trading income recognised in the Income Statement.

Reconciliation of Level 3 Investments
The following table summarises the Company's Level 3 investments that were accounted for at fair value:

As at 
30 November 
2016 
Level 3 
£’000 
As at 
30 November 
2015 
Level 3 
£’000 
As at 
31 May 
2016 
Level 3 
£’000 
Opening fair value investments 3,926  3,142  3,142 
Purchase at cost 1,513  2,548 
Sale proceeds (1,351) (1,608)
Transfer from Level 1 179 
Movement in investment holding gains:
Movement in unrealised 67  (9) (156)
Closing fair value of investments 2,821  4,646  3,926 

10 Transactions with the Manager and Related Parties
The amounts paid and payable to the Manager pursuant to the management agreement are disclosed in note 8. There were no other identifiable related parties at the half-year end.


INVESTMENT OBJECTIVE AND POLICY

Investment Objective
The Company’s investment objective is to provide shareholders with an attractive and growing level of dividends coupled with capital growth over the long term.

Investment Policy
The Company invests primarily in quoted or traded UK companies with a wide range of market capitalisations, but a long-term bias towards small and mid cap equities. The Company may also invest in large cap companies, including FTSE 100 constituents, where it is believed that this may increase shareholder value.

The Manager adopts a stock specific approach in managing the Company’s portfolio and therefore sector weightings are of secondary consideration. As a result of this approach, the Company’s portfolio does not track any benchmark index.

The Company may utilise derivative instruments including index-linked notes, contracts for differences, covered options and other equity-related derivative instruments for efficient portfolio management, gearing and investment purposes. Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company’s direct investments, as described below. The Company will not enter into uncovered short positions.

Risk Diversification
Portfolio risk is mitigated by investing in a diversified spread of investments. Investments in any one company shall not, at the time of acquisition, exceed 15% of the value of the Company’s investment portfolio. Typically it is expected that the Company will hold a portfolio of between 80 and 160 securities, predominantly most of which will represent no more than 1.5% of the value of the Company’s investment portfolio as at the time of acquisition.

The Company will not invest more than 10% of its gross assets, at the time of acquisition, in other listed closed-ended investment funds, whether managed by the Manager or not, except that this restriction shall not apply to investments in listed closed-ended investment funds which themselves have stated investment policies to invest no more than 15% of their gross assets in other listed closed-ended investment funds. In addition to this restriction, the Directors have further determined that no more than 15% of the Company’s gross assets will, at the time of acquisition, be invested in other listed closed-ended investment funds (including investment trusts) notwithstanding whether or not such funds have stated policies to invest no more than 15% of their gross assets in other listed closed-ended investment funds.

Unquoted Investments
The Company may invest in unquoted companies from time to time subject to prior Board approval. Investments in unquoted companies in aggregate will not exceed 5% of the value of the Company’s investment portfolio as at the time of investment.

Borrowing and Gearing Policy
The Board considers that long-term capital growth can be enhanced by the use of gearing which may be through bank borrowings and the use of derivative instruments such as contracts for differences. The Company may borrow (through bank facilities and derivative instruments) up to 15% of NAV (calculated at the time of borrowing).

The Board oversees the level of gearing in the Company, and reviews the position with the Manager on a regular basis.

In the event of a breach of the investment policy set out above and the investment and gearing restrictions set out therein, the Manager shall inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification will be made to the LSE.

No material change will be made to the investment policy without the approval of shareholders by ordinary resolution.


SHAREHOLDER INFORMATION

Capital Structure
The Company’s share capital consists of redeemable ordinary shares of 0.1p each with one vote per share (“ordinary shares”) and non-voting management shares of £1 each (“management shares”). From time to time, the Company may issue C ordinary shares of 1p each (“C shares”) with one vote per share.

As at 30 November 2016 and the date of this Report, there are 383,487,239 ordinary shares in issue, none of which are held in treasury, and 50,000 management shares.

Redemption of Ordinary Shares
The Company has a redemption facility through which shareholders are entitled to request the redemption of all or part of their holding of ordinary shares on 31 May each year. Redemption Request forms are available upon request from the Company’s Registrar.

Shareholders submitting valid requests for the redemption of ordinary shares will have their shares redeemed at the Redemption Price or the Company may arrange for such shares to be sold in the market at the NAV (including current period revenue) (the “Dealing Value”) prevailing at the end of May (subject to the Directors’ discretion). The Directors may elect, at their absolute discretion, to calculate the Redemption Price applying on any redemption point by reference to a separate Redemption Pool, when the Redemption Price will be calculated by reference to the amount generated upon the realisation of the Redemption Pool.

The Board may, at its absolute discretion, elect not to operate the annual redemption facility on any given Redemption Point, or to decline in whole or part any redemption request, although the Board does not generally expect to exercise this discretion, save in the interests of shareholders as a whole.

A redemption of ordinary shares may be subject to income tax and/or capital gains tax. In particular, private shareholders that sell their shares via the redemption mechanism could find they are subject to income tax on the gains made on the redeemed shares rather than the more usual capital gains tax on the sale of their shares in the market. However, individual circumstances do vary, so shareholders who are in any doubt about the redemption or the action that should be taken should consult their stockbroker, accountant, tax adviser or other independent financial adviser.

The relevant dates for the May 2017 Redemption Point are:

2 May 2017 Latest date for receipt of Redemption Requests and certificates for certificated shares
3.00pm on 2 May 2017 Latest date and time for receipt of Redemption Requests and TTE instructions for uncertificated shares via CREST
5.00pm on 31 May 2017 The Redemption Point
On or before 14 June 2017 Company to notify Redemption Price and dispatch redemption monies; or

If the redemption is to be funded by way of a Redemption Pool, Company to notify the number of shares being redeemed. Notification of Redemption Price and dispatch of redemption monies to take place as soon as practicable thereafter
On or before 28 June 2017 Balance certificates to be sent to shareholders

Further details of the redemption facility are set out in the Company’s Articles of Association or are available from the Company Secretary.

Historic Dividend Record

Period/year ended 31 May: 2012 
pence 
2013 
pence 
2014
pence
2015  
pence  
2016
pence
2017
pence

First interim dividend

0.30 

0.30

0.30

0.40  

0.65

0.70
Second interim dividend 0.50  0.50 0.50 0.50   0.65 0.70
Third interim dividend 0.46  0.46 0.50 0.50   0.75
Fourth interim dividend 0.76* 0.84 0.95 1.00   -
Final dividend - - 0.50   0.75

2.02 

2.10

2.25

2.90**

2.80

1.40

* The fourth interim dividend for the period ended 31 May 2012 was 0.93p but this included the benefit of the initial 13-month period. As shown above, on an annualised basis, the fourth interim dividend would have been 0.76p.

** In order to allow shareholders to vote on the dividend, a final dividend was introduced in the year ended 31 May 2015, resulting in the payment of five dividends for that year. Since then, the Company has paid three interim dividends and a final dividend in respect of each year. There has been no interruption in the dividend payment timetable as a result of this change.

Share Dealing
Shares can be traded through your usual stockbroker.

Share Prices
The Company’s ordinary shares are listed on the LSE. The mid-market prices are quoted daily in the Financial Times under ‘Investment Companies’.

Share Register Enquiries
The register for the ordinary shares is maintained by Capita Asset Services. In the event of queries regarding your holding, please contact the Registrar on 0871 664 0300 or on +44 (0)208 639 3399 from outside the UK (calls cost 12p per minute plus your phone company’s access charge; calls outside the UK will be charged at the applicable international rate). Lines are open 9.00am to 5.30pm, Monday to Friday, excluding public holidays in England and Wales. You can also email ssd@capitaregistrars.com.

Changes of name and/or address must be notified in writing to the Registrar: Capita Asset Services, Shareholder Services, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.

Manager: Miton Trust Managers Limited
The Company’s Manager is Miton Trust Managers Limited, a wholly-owned subsidiary of Miton Group plc. Miton Group is listed on the AIM market for smaller and growing companies.

As at 31 December 2016, the Miton Group had £2.91 billion of assets under management.

Members of the fund management team invest in their own funds and are significant shareholders in the Miton Group.

Investor updates in the form of monthly factsheets are available from the Company’s website, www.mitongroup.com/dit.


DIRECTORS AND ADVISERS

Directors (all non-executive) Custodian
Michael Wrobel
Paul Craig
Lucinda Riches
Calum Thomson
Jane Tufnell
Bank of New York Mellon SA/NV
London Branch
One Canada Square
London E14 5AL
Secretary and Registered Office Depositary
Capita Sinclair Henderson Limited
(trading as Capita Asset Services)
Beaufort House
51 New North Road
Exeter EX4 4EP

Telephone: 01392 477500
BNY Mellon Trust & Depositary (UK)  Limited
BNY Mellon Centre
160 Queen Victoria Street
London EC4V 4LA
Alternative Investment Fund Manager or Manager Registrar and Transfer Office
Miton Trust Managers Limited
Paternoster House
65 St Paul’s Churchyard
London EC4M 8AB
Capita Asset Services
Shareholder Services Department
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU

Telephone: 0871 664 0300
(+44 (0)208 639 3399 from outside the UK)
(calls will cost 12p per minute plus phone company’s access charge; calls from outside the UK will be charged at the applicable international rate).

Lines are open 9.00am to 5.30pm, Monday to Friday, excluding public holidays in England and Wales.

Email: ssd@capitaregistrars.com
Website: www.capitaassetservices.com
Investment Manager
Miton Asset Management Limited
Paternoster House
65 St Paul’s Churchyard
London EC4M 8AB

Telephone: 020 3714 1525
Website: www.mitongroup.com
Company website
www.mitongroup.com/dit
Auditor Solicitor
Ernst & Young LLP
25 Churchill Place
Canary Wharf
London E14 5EY
Stephenson Harwood LLP
1 Finsbury Circus
London EC2M 7SH
Banker Stockbroker
Bank of New York Mellon
One Piccadilly Gardens
Manchester M1 1RN
Cenkos Securities plc
6.7.8 Tokenhouse Yard
London EC2R 7AS

An investment company as defined under Section 833 of the Companies Act 2006.

Registered in England No. 7584303.

A member of the Association of Investment Companies.

The Half-Yearly Financial Report will be posted to shareholders shortly. The Report will also be available for download from the Company’s website: www.mitongroup.com/dit or on request from the Company Secretary.

National Storage Mechanism
A copy of the Half-Yearly Report will be submitted to the National Storage Mechanism ("NSM") and will be available for inspection at the NSM, which is situated at: www.morningstar.co.uk/uk/nsm.

Neither the contents 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.


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Half-year Report - RNS