THE DIVERSE INCOME TRUST
PLC
ANNUAL REPORT AND ACCOUNTS
FOR THE YEAR TO 31 MAY
2023
AND
NOTICE OF ANNUAL GENERAL
MEETING
The Diverse Income Trust
plc (the “Company”, “Diverse” or the “Trust”) announces its annual
results for the year ended 31 May
2023 and the publication of its annual report and accounts
for the same period, which includes the notice of Annual General
Meeting.
HIGHLIGHTS
SUMMARY OF RESULTS FOR THE
YEAR TO 31 MAY
2023
-
NAV total return* to
shareholders of -16.2%. This includes the change
in NAV, plus the dividends paid during the year and compares with a
decrease in the Numis All-Share Index of -0.4% on a total return
basis over the year to 31 May
2023.
-
4.05p of ordinary
dividends for the year. The three interim
dividends and the proposed final dividend for the year amount to
4.05p, compared with 3.90p in the previous year, an increase of
3.8%.
-
Share price total return*
to shareholders of -15.37%. The share price total
return was -15.37%, reflecting a slightly narrower discount at the
end of May 2023 than a year
earlier.
-
Revenue reserves were
£16.1m. The Company’s revenue return after taxation was
£14.4m, which exceeded the £14.2m in dividends distributed to
shareholders during the year. Accordingly, at the year-end there
were £16.1m of revenue reserves (2022: £15.9m) which are available
to help fund future dividend payments to
shareholders.
|
31 May
2023 |
31 May
2022 |
Change |
NAV per ordinary
share* |
88.87p |
110.55p |
(19.6)% |
Ordinary share
price |
83.40p |
103.00p |
(19.0)% |
(Discount)/premium to
NAV* |
(6.20%) |
(6.83%) |
|
Revenue return per
ordinary share* |
4.05p |
4.01p |
|
Ordinary dividends per
ordinary share |
4.05p |
3.90p |
3.8% |
Ongoing
charges* |
1.09% |
1.05% |
|
Ordinary shares in
issue |
355,870,647 |
361,920,105 |
|
KEY PERFORMANCE
INDICATORS
The Board has the
following Key Performance Indicators (KPIs) that are used to gauge
the success of the Company’s strategy and its outcome for
shareholders.
NAV total
return* – Over the year, the NAV total return of
the Trust was -16.2% (2022: -3.4%), which compares to 0.8% for the
Peer Group** and -0.4% for the Numis All-Share Index. Since launch
to 31 May 2023, its NAV total return
including compounded dividend income was 175.1% which compares to
146.5% for the Peer Group** and 89.4% for the Numis All-Share
Index.
Growth of ordinary dividends to
shareholders – Over the year, the four dividends to
shareholders have increased from 3.90p to 4.05p. The Trust has
maintained an unbroken good and growing dividend record without
distributing
capital.
Discount*
– Over the year to 31 May 2023, the
share price discount averaged at 5.0% (2022: 1.4%). Over the twelve
years since listing, the Company’s share price has largely matched
its NAV.
Ongoing
charges* – The ongoing charges for the year to
31 May 2023 are 1.09% of NAV (2022:
1.05%), which compares with 0.57% for the Peer Group**. The Board
pays careful attention to expenses and believes that the Trust’s
overall costs are justifiable in the context of its wide investment
universe and premium returns it has delivered since launch. Further
details of the ongoing charges are provided in the full Annual
Report.
* Alternative performance measure. Details
provided in the Glossary in the full Annual
Report.
** The Peer Group is also defined in the
Glossary.
CHAIRMAN’S
STATEMENT
To combat a surge in
inflation that had been generally underestimated, the period since
the end of 2021 has seen global interest rates rise. This
precipitated falls in bond markets, where yields rose from absurdly
low levels. Equities now have to contend with the competing
attractions of higher deposit rates and bond yields, amid fears of
an economic downturn.
In the UK, bearish market
conditions were compounded by political instability during the
first half of our financial year, which saw three Prime Ministers
and four Chancellors of the Exchequer. A fall of 10% in the UK
market in the period to the end of the Truss Premiership in
October 2022 was reversed by the end
of May 2023, as a semblance of policy
stability was restored and the UK avoided the recession that had
been widely forecast.
The earlier fall in
confidence was worst felt by smaller companies, seen as both more
exposed to the UK domestic economy and more dependent on
increasingly expensive bank borrowings, whereas the share prices of
large cash generative companies outperformed. Although a second
half recovery was seen across the size spectrum, the differential
performance remained. The Numis Large Cap Index (consisting mainly
of equity income stocks), as well as outperforming smaller UK
stocks, began to perform better against major international
indices, despite fund redemptions by domestic
investors.
In the year to
31 May 2023, the Numis Large Cap
Index (ex ICs) delivered a total return of +1.7% (including 4% of
dividend income). In contrast, the share prices of many smaller
listed and AIM-quoted income stocks were weak in the year under
review. In their case ongoing UK OEIC redemptions were not offset
by global investor buying. Over the year to May 2023 the total return on the Numis Small Cap
Plus AIM Index (ex ICs) was
-11.1%.
Performance, and Dividends
to
shareholders
The majority of the
Trust’s portfolio is typically invested in mid and small cap income
stocks. With just over a quarter of the portfolio invested in
larger UK stocks, the Trust’s NAV total return was down 16.2% over
the year to May 2023, affected by the
weak returns from smaller companies. This compares with the total
return of +1.7% from the Numis Large Cap Index (ex ICs) at one end
of the spectrum and -18.9% from the Numis Alternative Markets Index
(ex ICs) (covering AIM-quoted stocks) at
the other.
Despite the disappointing
outcome over the past year, taking a longer-term perspective, the
Trust’s NAV total return since issue is +175.1%, well ahead of the
total returns from the Numis Large Cap Index (ex ICs) +85.3%,
the Numis Small Cap Plus AIM Index (ex ICs) +87.5% and the Numis
Alternative Markets Index -4.6%. No complacency is implied by this,
but the past two years have been notable for the decoupling between
the UK’s larger companies, which attract international attention,
and their smaller siblings which have suffered from the relative
sidelining of the UK
market.
Total returns of the Trust
and various Numis indices between April
2011 and May
2023
|
% |
The Diverse Income Trust
Plc |
175.1 |
Numis Large Cap Index ex
ICs |
85.3 |
Numis Small Cap Plus AIM
Index ex ICS |
87.5 |
Numis Alternative Markets
Index ex ICs |
-4.6 |
Source:
Morningstar
“ICs”: Investment
Companies
The Trust’s income
performance has continued to improve. Having avoided the worst of
the wide-ranging dividend cuts during the pandemic,
the Trust’s Revenue per
Share increased by 1% this year to 4.05p. This is 2.5% higher than
the Trust’s pre-pandemic Revenue per Share, in contrast to the
wider UK market whose income level remains more than 10% lower than
in May 2019. The Trust increased its
dividend to shareholders this year from 3.9p to 4.05p, which
includes the three interim payments already declared and a
recommended final dividend of 1.20p to be approved at the
AGM.
Market valuation and share
redemptions
Given the unsettled stock
market background the Trust’s share price traded at an average 5%
discount to its NAV over the year, while narrowing marginally from
-6.8% at 31 May 2022 to -6.2% at
31 May 2023. This compares well with
the widespread deterioration in discounts across the investment
company sector during the year. Since the Trust was launched,
the share price has on average traded at a minimal discount of
-0.7% to its NAV.
However, in order to keep
any discount to a modest level, each year the Board offers
shareholders a voluntary redemption. At the end of April,
37,330,005 shares were offered for redemption, representing 10.49%
of the Trust’s equity. The Board redeemed these for cash that had
built up in the portfolio in part due to the takeover of K3 Capital
plc. The redemption price was 89.35p, being the Net Asset Value at
the close of business on 30 May
2023.
Prospects
Underlying stock market
trends often persist for many years, but then change without
fanfare. In the late 1960s and early 1970s, as the decades of low
inflation came to an end, certain US mega cap stocks (known at the
time as the Nifty Fifty) outperformed, with their perceived growth
credentials attracting ever-rising valuations. The enthusiasm for
US technology stocks in recent years (tempered by a setback in
2022) shows
some parallels.
In that earlier era, when
central banks faced high inflation, interest rates rose sharply and
economic growth was disappointing and volatile. This put pressure
on profit margins and led to a derating of the most optimistically
valued stocks. Some went on to further success while others fell by
the wayside.
At such times, investors
may be driven to find something more reassuring than adrenaline.
Equity earnings visibility and cash income count for more if 4-5%
can be earned on cash deposits, whereas zero rates encourage
investment in more speculative ideas, not all of which will come
true. Growth has a major part to play in human progress and
economic productivity but, when there is less liquidity around,
enthusiasm is likely to be allocated more
sparingly.
The UK market fell out of
favour in recent decades, partly due to perceptions that it
consisted of dull, mature companies and was under-represented in
faster growth sectors. International investors were also deterred
by the uncertainty over Brexit, with the UK economy and
politics yet to adjust fully to be comfortable with the new
structures. In addition, over the longer-term, regulatory changes
encouraged progressive equity disinvestment by the UK pension fund
industry, reducing its UK equity holdings from around 50% of fund
assets twenty-five years ago to 6% in 2021. This removed a key
domestic source of support from companies’ growth plans. As a
result, the UK has become both lowly-rated and under-owned. When
this will change is open to debate but there are some signs of hope
from recent policy announcements encouraging investment in growing
UK companies and reviewing potential obstacles to companies
deciding to list in the
UK.
The Trust’s approach of
building a diversified portfolio of cash-generative and
attractively valued companies is inherently contrarian. With UK
mid-cap and smaller stocks currently cheaply rated compared with a
UK market that is itself lowly rated internationally, our Managers
are particularly excited about the
opportunity.
As the past two years
reminds us, going against the crowd is not always rewarded in the
short-term but the longer-term is more reassuring. It is worth
recalling Warren Buffett’s aphorism that in the short run the stock
market is a voting machine but in the long run it is a weighing
machine.
Andrew
Bell
Chairman
7 August
2023
MANAGER’S
REPORT
When access to debt and risk capital becomes
scarcer...
The UK stock market has started
outperforming.
During globalisation, the best performing
stocks are often those drawing upon cash abundance to accelerate
their growth
rate.
When interest rates increase however, they
suppress demand and usher in a scarcity of risk capital. UK equity
income stocks have a real advantage when risk capital is scarce
because they generate surplus cash. After a long period of
under-performance during globalisation, the UK majors have started
outperforming over the last two and half
years.
If UK quoted companies other than the UK
majors were to outperform as they have in the past, then a multicap
equity income strategy that includes both may be set to outperform
international stock markets in the
future.
When risk capital is scarce, quoted
companies have an
advantage.
Daily transactions on the stock exchange
provide insight. The live interface between willing buyer and
seller helps every management team to keep aware of their cost of
capital. When they review transactions, they can use this metric to
determine those with the greatest commercial upsides in the context
of the cost of any additional
capital.
When market conditions are easy, the returns
on corporate transactions are hampered by wide-ranging competition.
When capital is restricted however, quoted companies paying a
stream of dividend income retain access to institutional capital.
In short, when risk capital is scarce quoted companies often get
much higher returns on transactions because other companies are
unable to compete for lack of risk
capital.
When acquisition costs are low, the
prospects for a multicap strategy are enhanced compared with the
majors
alone.
During economic recessions, the prospects
for quoted companies are sometimes enhanced by acquiring
overleveraged but otherwise viable businesses from the receiver,
debt-free and at very
low prices.
When the acquiring business is large
relative to the scale of the acquisition, the scale of the
improvement tends to be incremental. If the acquirer is a quoted
smallcap however, the same acquisition offers much greater upside
potential, as the value uplift is a much greater proportion of its
market
capitalisation.
In short, during recessions when access to
additional debt and risk capital is scarce, there is opportunity
for AIM-listed stock to enhance
their returns.
UK smallcaps have a long history of
delivering premium
returns.
Since 1955, UK-listed companies in the
bottom ten per cent in market capitalisation terms
(typically known as "smallcaps" in the UK) have generated much
higher returns than those in all other size bands. Furthermore, if
this factor is combined with those that stand on overlooked
valuations as they
often are when they stand on premium yields,
then their returns have been even
greater.
Finally, when interest rates are elevated,
the returns on the global exchanges are often more limited, and
hence any source of outperformance becomes more important. In
summary, the prospect for a strategy dedicated to UK quoted
multicap equity income stocks, such as that of the Diverse Income
Trust portfolio, may have greater opportunity to add value when
access to debt and capital becomes
scarcer.
...counterintuitively, UK quoted multicap
prospects often
improve.
Furthermore, when addressing the
environmental, social and governance
agenda…
Any organisation that knowingly operates
contrary to the interests of the wider public, would in time find
that its social licence to operate suffered. Hence, well managed
investment portfolios need to invest with an authentic sense of
purpose, as well as employing a successful commercial
strategy.
Mainstream stocks have vast numbers of
shareholders, so typically their leadership teams only meet a small
proportion. Alongside, with their long list of shareholders, they
are offered an extraordinarily wide range of advice regarding their
stance on environmental, social and governance issues. The bottom
line is that institutional investors have fewer opportunities
either to gauge the authenticity of the management team’s sense of
purpose or to influence their corporate
agenda significantly.
In contrast, there are fewer institutional
smallcap investors. So, most smallcap management teams are
keen to meet a significant portion of them, even if they are not
shareholders. Smallcap investors therefore have greater opportunity
to address and influence their environmental, social and governance
issues.
AIM-listed companies do issue formal reports
covering non-financial metrics such as sustainability, although
these are typically less comprehensive. Even so, the Manager can
compare the content of the sustainability reports with the detail
of the senior management’s actions. When variance is identified, it
can imply potential
inauthenticity.
Many mining management teams our Manager
meets for example, say they start every meeting with safety. And
yet, in far too many cases, their safety data isn’t covered by the
first slide in their corporate presentation and safety isn’t the
first matter of substance in their annual
report.
Furthermore, as smallcap leadership teams
are smaller, they have scope to be more agile than the majors.
Typically, this is reflected in a somewhat stronger sense of
corporate purpose and motivation than some
majors.
To conclude, whilst the formal reports from
a multicap portfolio are often less comprehensive than the majors
alone, the Manager tends to stand at an advantage when addressing
the environmental, social and governance
agenda.
…a UK multicap portfolio has
numerous advantages.
Inflation and higher interest rates are
potentially more problematic beyond globalisation. If the current
trends are sustained, we outline below why they can drive an
improved trajectory for the Trust relative to
others.
Investor interest in returns generated by
the compounding of equity dividends has increased, and hence the UK
stock market has
started outperforming.
During globalisation, the best performing
stocks have often been those drawing upon the abundance of credit
and risk capital to accelerate their growth
rate.
When interest rates rise however, they
suppress demand and usher in a scarcity of risk capital. Companies
generating surplus cash have major advantages when risk capital is
scarce as those that are short of cash suffer. After a long period
of underperformance during globalisation, many of the UK’s largest
cash generative stocks have started outperforming over recent
years.
If UK smallcaps were to outperform the UK
majors as they have in the past, then a multicap equity income
strategy that includes both may be set to perform much better
relative to international stock markets than they have during the
period
of globalisation.
It is worth highlighting that quoted
smallcap returns are not necessarily in sync with the fluctuations
of the mainstream stock market indices. This risk can be moderated
by investing in mainstream and smallcap stocks together, as in the
Diverse Income Trust
portfolio.
In summary, when access to credit and risk
capital are scarcer – as at present - counterintuitively we believe
that the prospects for the Trust’s strategy may actually have
better opportunities to deliver premium
returns.
The following Q&A provide details of the
portfolio positioning, why it has declined in market value over the
year under review and why we are so upbeat about its
prospects.
In the light of the Trust’s declining NAV
over the year to May, to what degree have the prospects of various
portfolio holdings
deteriorated?
Over the year to May, the total return on
the Numis All-Share Index was -0.4%, which compares with a 0.8%
return for the Peer Group. When these figures are set alongside the
return of the Trust’s NAV that declined by 16.2%, then many might
assume that the prospects for the Trust portfolio of stocks have
deteriorated relative to those over the very largest UK quoted
companies. Interestingly, we disagree with this
conclusion.
Specifically, although the Trust’s NAV total
return has underperformed that of the Numis All-Share Index and
Peer Group significantly over the last two years, it is notable
that the Trust’s revenue from portfolio dividends has continued to
increase steadily. Indeed, when the numerous dividend cuts
announced during 2020 are included in the analysis, the Trust’s
Revenue per Share has recovered following the setback in 2020,
whereas the UK’s stream of dividends remains below previous highs.
In short, we ascribe the main reason for the underperformance of UK
mid and small cap equity income share prices relative to their
larger comparatives over the last two years to a decline in their
valuation rather than to a period of inferior trading performance
and dividends.
As noted in the Chairman’s statement, over
the last two years, sales of UK-invested OEICs have been very
significant, as portfolios have been adjusted to reflect the
increase in the yields on UK bonds and cash deposits compared with
their previous ultra-low levels. Alongside, global investors have
started to reweight their equity portfolios back into stocks that
pay good and growing dividends, and in doing so have boosted the
demand for mainstream UK equity income stocks. This pattern has not
extended down the market capitalisation bands, so the share prices
of mid and small cap equity income stocks have reflected the
marginal sellers, and greatly underperformed the returns of the UK
mainstream equity income
stocks.
How has the Trust performed over the twelve
years since listing in April
2011?
Despite the Trust’s NAV total return
underperforming that of the Numis All-Share Index over the last two
years, this pattern differs from its returns since listing in
April 2011, of 175.1%. Over that
period, the Numis Large Cap Index (ex ICs) has generated a total
return of 85.3%, the Numis Small Cap Plus AIM Index (ex ICs)
has returned 87.5% whilst the Numis Alternative Markets Index
(which are those stocks listed on the AIM exchange) has fallen by
4.6%.
Countering this, UK investors have become
more cautious, initially worried that the UK could leave the EU in
a chaotic manner without an agreement and, subsequently, given the
uncertainty of the global pandemic, and more recently increasing
with inflation and interest rate rises, regarding the prospect of
global
recession.
It was always anticipated that a large part
of the return on Diverse Income Trust would be generated from the
receipt of good and growing dividends. But alongside, if these grew
well, it was anticipated they might drag up the relevant share
prices. Overall, the Trust’s NAV has appreciated by 90% in capital
terms. In addition, the aggregate value of all the dividends paid
has added a further 45% of return, so the NAV total return of the
Trust is 175.1%. The returns of the comparative indices are shown
in the table
below.
Total returns of the Trust and various Numis
indices between April 2011 and
May
2023
|
% |
The Diverse Income Trust
Plc |
175.1 |
Numis LargeCap Index ex
ICs |
85.3 |
Numis Small Cap Plus AIM
Index ex ICS |
87.5 |
Numis Alternative Markets
Index ex ICs |
-4.6 |
Source:
Morningstar
“ICs”: Investment
Companies
As interest rate rises
suppress demand, which stocks can sustain profit margins, when
others are cutting prices to retain
customers?
During globalisation,
abundant imports of low-cost goods – which typically exceeded local
demand – subdued inflationary pressures. During these decades,
when economic growth slowed, central banks were able to engineer an
economic recovery through reducing interest rates or more latterly
via Quantitative Easing* that boosted demand.
Inflation remained subdued, as the prices of additional goods
remained determined by their plentiful
global supply.
Following the global
pandemic and the Ukrainian invasion, global economic supply was
compromised, and hence the economic stimulus was accompanied by
renewed inflation. To bring this mismatch back into balance,
central banks have increased interest rates rapidly to choke off
demand.
As demand moderates,
suppressing demand represents a major business challenge, as there
are fewer sales to go around. Hence, when demand declines, it often
sparks price wars that drive down profit margins as well. The
outcome is that corporate profitability often comes under pressure,
so that over-levered companies risk
insolvency.
In our view, businesses
with poor customer service are vulnerable to the loss of sales, and
reduced profit margins. Conversely, companies delivering not only
good, but outstanding levels of customer service are more likely to
retain customers even when others are offering similar services at
lower prices.
With this in mind, we
question management teams closely about whether they collect data
on customer service, so that we can select for those delivering
outstanding customer service. Whilst such companies may not be
immune to an adverse economic trend, it is anticipated that they
will show greater resilience than
others.
*The definition of Quantitative Easing can be found
in the Glossary in the full Annual
Report.
What is the outlook for
the Trust?
As outlined on the inside
cover of the full Annual Report, following the Diverse Income
Trust’s recent underperformance, most of the holdings appear to be
standing on exceptionally low valuations. But just how out of line
are they?
One way to gauge valuation
is via the Price/Book ratio. After some decades of
underperformance, the UK market is already standing at a ratio of
around 1.6x, which is a substantial discount compared to US
exchanges for
example.
Price to Book* ratio of
the Diverse Income Trust, the UK market and the US market as at
31 May 2023
|
|
US Market1 |
4.0 |
UK Market2 |
1.6 |
Diverse Income
Trust |
1.2 |
1 as represented by the
ishares S&P500
ETF
2 as represented by the
FTSE All Share
Index.
*The definition of Price
to Book ratio can be found in the Glossary in the full Annual
Report.
After the recent
underperformance of the Diverse Income Trust earlier this year, its
price/book ratio had fallen to just 0.85x by the end of
November
2022.
In short, whereas the UK
stock market is lowly valued, the Diverse Income Trust’s portfolio
appears exceptionally lowly valued relative to international stock
markets such as the
US.
Some presume that these
low valuations are justified by an unfavourable outlook for UK
equities. But such arguments don’t stand up to scrutiny. Numerous
UK-quoted stocks are capital-intensive in nature. When capital is
abundant, as during globalisation, new participants are often quick
to compete away premium returns. But when capital is more costly,
and the supply/demand curves are steeper, it is more difficult to
raise new capital, and premium returns in some capital-intensive
areas can persist.
Many capital-intensive
businesses typically produce a large part of their returns via a
stream of good and growing dividends. Cash compounding strategies
such as these are much less reliant on stock market appreciation to
deliver return.
Companies generating cash
surpluses have the advantage during recessions, as they can use
their cash to acquire overindebted but otherwise viable businesses
from the receiver, debt-free at knockdown valuations. As with Next
plc that recently acquired Made.com for £3.4m versus its previous
peak market valuation of £700m, these deals tend to accelerate
earnings and dividend
growth.
Even if UK equities were
similarly valued to international comparatives, for risk
diversification reasons we would anticipate increased capital
allocations. With them being so lowly valued, we believe that UK
equity capital allocations are about to move from a trickle into a
flood.
The bottom line is that we
believe the Diverse Income Trust’s strategy now has the potential
not only to outperform the mainstream indices in the UK, as it has
done since issue, but also to outperform international markets - as
the UK stock market itself outperforms. When the asset class in
question (UK-quoted multicap equity income stocks) starts at a
particularly low valuation, along with very modest institutional
allocations, such favourable trends can persist over very long time
periods. We believe the prospects for the Trust’s strategy are the
greatest they have been for thirty
years.
Gervais Williams and Martin Turner came together as a team in
April 2011 and are responsible for
the day-to-day management of the
Trust’s portfolio.
Gervais
Williams
Gervais joined Miton in March 2011 and is now Head of Equities in Premier
Miton. He has been an equity fund manager since 1985, including 17
years at Gartmore. He was named Fund Manager of the Year by What
Investment? in 2014. Gervais is also a board member of the Quoted
Companies Alliance and a member of the AIM Advisory
Council.
Martin
Turner
Martin joined Miton in May 2011. Martin and Gervais have had a close
working relationship since 2004, with complementary expertise that
led them to back a series of successful companies. Martin qualified
as a Chartered Accountant with Arthur
Anderson and had senior roles and extensive experience at
Merrill Lynch and Collins
Stewart.
Gervais
Williams and Martin
Turner
7 August
2023
PORTFOLIO
INFORMATION
As at 31 May
2023
Rank Company |
Sector & main
activity |
Valuation
£000 |
% of net
assets |
Yield1% |
1 Kenmare
Resources |
Basic
Materials |
7,881 |
2.5 |
9.8 |
2 I3
Energy2 |
Energy |
6,567 |
2.1 |
11.5 |
3 Mears |
Industrials |
5,896 |
1.9 |
4.4 |
4 XPS
Pensions |
Financials |
5,859 |
1.8 |
4.6 |
5 CMC
Markets |
Financials |
5,516 |
1.7 |
6.9 |
6 MAN |
Financials |
5,255 |
1.7 |
5.8 |
7 BT |
Telecommunications |
5,095 |
1.6 |
5.2 |
8 Phoenix |
Financials |
5,007 |
1.6 |
9.2 |
9 Just |
Financials |
4,981 |
1.6 |
2.1 |
10 Galliford
Try |
Industrials |
4,934 |
1.5 |
4.9 |
Top 10
investments |
|
56,991 |
18.0 |
|
11 Legal
& General |
Financials |
4,834 |
1.5 |
8.5 |
12 Hostelworld |
Consumer
Discretionary |
4,739 |
1.5 |
- |
13 Tesco |
Consumer
Staples |
4,734 |
1.5 |
4.2 |
14 Sainsbury
(J) |
Consumer
Staples |
4,568 |
1.5 |
4.8 |
15 Vanquis
Banking |
Financials |
4,453 |
1.4 |
7.1 |
16 Savannah
Energy2 |
Energy |
4,407 |
1.4 |
- |
17 Drax |
Utilities |
4,338 |
1.4 |
3.8 |
18 TP
ICAP |
Financials |
4,204 |
1.3 |
8.2 |
19 Bloomsbury
Publishing |
Consumer
Discretionary |
4,137 |
1.3 |
2.9 |
20 Admiral |
Financials |
3,997 |
1.3 |
4.8 |
Top 20
investments |
|
101,402 |
32.1 |
|
21
BAE Systems |
Industrials |
3,922 |
1.2 |
2.9 |
22 Diversified
Energy |
Energy |
3,861 |
1.2 |
16.6 |
23 Sabre
Insurance |
Financials |
3,762 |
1.2 |
3.2 |
24 Paypoint |
Industrials |
3,700 |
1.2 |
9.4 |
25 Plus500 |
Financials |
3,633 |
1.2 |
5.3 |
26 Conduit
Holdings |
Financials |
3,630 |
1.1 |
6.0 |
27 Accrol2 |
Consumer
Staples |
3,589 |
1.1 |
- |
28 National
Grid |
Utilities |
3,325 |
1.1 |
5.0 |
29 DWF |
Industrials |
3,241 |
1.0 |
7.9 |
30 ME
Group international |
Consumer
Discretionary |
3,213 |
1.0 |
9.2 |
Top 30
investments |
|
137,278 |
43.4 |
|
31 Rio
Tinto |
Basic
Materials |
3,183 |
1.0 |
8.3 |
32 Centamin |
Basic
Materials |
3,164 |
1.0 |
6.0 |
33 AVIVA |
Financials |
3,117 |
1.0 |
7.9 |
34 FRP
Advisory2 |
Industrials |
3,077 |
1.0 |
4.1 |
35 Kitwave2 |
Consumer
Staples |
3,064 |
1.0 |
3.5 |
36 BP |
Energy |
3,024 |
0.9 |
4.5 |
37 Concurrent
Technologies2 |
Technology |
2,923 |
0.9 |
2.2 |
38 Vistry |
Consumer
Discretionary |
2,891 |
0.9 |
7.6 |
39 M&G |
Financials |
2,859 |
0.9 |
9.9 |
40 Lords
Group Trading2 |
Industrials |
2,858 |
0.9 |
3.1 |
Top 40
investments |
|
167,438 |
52.9 |
|
Balance held in 81 equity
investments |
|
111,495 |
35.3 |
|
Total equity
investments |
|
278,933 |
88.2 |
|
Fixed interest
investments |
|
- |
- |
|
Total equity and fixed
interest
investments |
|
278,933 |
88.2 |
|
Listed Put
OptionUKX – December 2023 5,700
Put |
|
848 |
0.3 |
|
Total investment
portfolio |
|
279,781 |
88.5 |
|
Other net current
assets |
|
36,494 |
11.5 |
|
Net
assets |
|
316,275 |
100.0 |
|
A copy of the full
portfolio of investments as at 31 May
2023 is available on the Company’s website,
www.diverseincometrust.com.
1 Source: Refinitiv. Based
on historical yields and therefore not representative of future
yields. Includes special dividends where
applicable.
2 AIM/AQUIS
listed.
Portfolio exposure by
sector (%) |
£279.8
million |
|
% |
Financials |
30.1 |
Industrials |
18.3 |
Basic
Materials |
10.6 |
Energy |
10.6 |
Consumer
Discretionary |
9.8 |
Consumer
Staples |
6.8 |
Real
Estate |
4.1 |
Telecomms |
2.9 |
Technology |
2.9 |
Utilities |
2.7 |
Health
Care |
1.2 |
Actual income by sector
(%) |
£15.8
million |
|
% |
Financials |
39.0 |
Industrials |
16.7 |
Basic
Materials |
11.3 |
Energy |
8.3 |
Consumer
Discretionary |
7.9 |
Consumer
Staples |
4.5 |
Utilities |
4.3 |
Telecomms |
3.4 |
Real
Estate |
3.3 |
Technology |
0.7 |
Health
Care |
0.6 |
Source: Thomson
Reuters.
NOTICE OF ANNUAL GENERAL
MEETING
The twelfth Annual General Meeting of the
Company will be held on Tuesday, 17 October
2023 at 11.30 am at the
offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH. The formal Notice of AGM
can be found within the Annual
Report.
FURTHER
INFORMATION
The Diverse Income Trust
Plc’s annual report and accounts for the year ended 31 May 2023 (which includes the notice of meeting
for the Company's AGM) will be available today on
www.diverseincometrust.com.
It will also be submitted
shortly in full unedited text to the Financial Conduct Authority's
National Storage Mechanism and will be available for inspection
at data.fca.org.uk/#/nsm/nationalstoragemechanism
in accordance with DTR
6.3.5(1A) of the Financial Conduct Authority's Disclosure Guidance
and Transparency
Rules.
ENDS
Neither the contents of
the Company's website nor the contents of any website accessible
from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this
announcement.
LEI: 2138005QFXYHJM551U45