SHIRES INCOME PLC

HALF YEARLY FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024

Legal Entity Identifier (LEI): 549300HVCIHNQNZAYA89

INVESTMENT OBJECTIVE

The Company's investment objective is to provide shareholders with a high level of income, together with the potential for growth of both income and capital from a diversified portfolio substantially invested in UK equities but also in preference shares, convertibles and fixed income securities.

BENCHMARK

The Company's benchmark is the FTSE All-Share Index (total return).

DIVIDENDS

The Company pays dividends to Ordinary shareholders on a quarterly basis.

Performance Highlights

Financial Calendar and Financial Highlights

Financial Calendar

Financial Highlights

Performance (total return)

For further information, please contact:

Paul Finlayson

abrdn Investments Limited

0131 372 2200

Chairman's Statement

Highlights

-     Company delivers on its objective of providing a high level of income and capital growth.

-     Net Asset Value ("NAV") total return of 6.8%.

-     Share price total return of 14.5%.

-     Dividend yield of 5.9% (based on the period end share price). 

Review of the Period

In my first statement to shareholders as Chairman of your Company, I am pleased to report a period of positive performance, with the Company delivering on its objective of providing a high level of income and capital growth.

The Net Asset Value ("NAV") total return was 6.8%, which compares to a wider market return of 6.1% as measured by the FTSE All-Share Index. The share price total return was 14.5%, resulting from a narrowing of the discount of share price to NAV, which was 7.4% at the end of the period.

Based on the current annual rate of dividend, the dividend yield on the share price at the end of the period was 5.9%, a material premium to the FTSE All-Share Index which yields approximately 3.7%.

Following a period of relatively high inflation and increased interest rates, there were signs of economic improvement during the period under review. Inflation has moderated and interest rates have started to fall, with further reductions expected in the months ahead. This backdrop has been helpful to equity markets and the UK market in particular, which remains undervalued relative to other developed markets. The positive factors are, however, over-shadowed by a number of continuing global geo-political risks, most notably the continuing conflicts in Ukraine and the Middle East.  The recent UK budget will also impact on savers and their choice of savings, with increasing taxes (including National Insurance, Capital Gains Tax and Inheritance Tax) all having an unquantifiable impact on the UK market.

A detailed review of performance and investment activity is contained in the Investment Manager's Review.

Earnings and Dividends

The revenue earnings per share for the period were 8.15p, an increase of 6.4% compared to the 7.66p of earnings generated in the equivalent period last year.

As stated in the recent Annual Report, with effect from 1 April 2024 management fees and finance costs have been charged 40% to Revenue and 60% to Capital in the Statement of Comprehensive Income (compared to an historic allocation of 50% to Revenue and 50% to Capital), which accords with the anticipated long term split of returns from the portfolio. This resulted in a benefit to revenue earnings of 0.20p per share for the period, with some additional cost being applied against capital.

A first interim dividend of 3.2p per Ordinary share in respect of the year ending 31 March 2025 was paid on 31 October 2024 (2024: first interim dividend 3.2p).  The Board is declaring a second interim dividend of 3.2p per Ordinary share, payable on 31 January 2025 to shareholders on the register at close of business on 3 January 2025. Subject to unforeseen circumstances, it is proposed to pay a further interim dividend of 3.2p per Ordinary share prior to the Board deciding on the rate of final dividend at the time of reviewing the full year results. From time to time the Company recalibrates the level of interim dividend payable, but typically has three equal interim dividends and a higher balance being applied to the final dividend, which is subject to shareholder approval at the AGM.

The Company continues to generate a high level of income and to deliver a material yield premium to the market. The current annual rate of dividend is 14.40p per Ordinary share which represented a dividend yield of 5.9% based on the share price at the end of the period. The Board considers the Company's high level of dividend to be one of its key attractions and recognises that, in the current economic environment, with a falling yield on cash investments, there is likely to be a continuing demand for an attractive and reliable level of income. We have a very high proportion of our investors invested through retail platforms and many of those will be 'tax protected' in ISAs or SIPPs.  Some will have elected for periodic saving into the shares of the Company and some for reinvestment of dividends, both historically good ways of obtaining a long-term return on investments made in income funds, especially if held through ISAs.

Discount and Share Buy Backs

As stated above, the discount at which the price of the Company's Ordinary shares traded relative to the NAV narrowed during the period, to 7.4% as at 30 September 2024 (31 March 2024: 13.3%). With the discount narrowing during the period, the Company did not buy back any shares. The Board will, however, continue to monitor the discount level carefully and make use of the share buyback authority granted by shareholders at the Company's last AGM, if we consider it in the best interests of shareholders to do so.  It has been disappointing to see the entire investment company sector de-rated, including income funds, but it does potentially provide a buying opportunity where shares are trading materially below their intrinsic NAV, if there is a prospect of the discount narrowing at some point in the future.

Gearing

The Company has a £20 million loan facility of which £19 million was drawn down at the period end. Net of cash, this represented gearing of 16.4%, unchanged since the start of the period. The weighted average borrowing cost at the period end was 5.2% (31 March 2024 - 5.3%).

The Board monitors the level of gearing regularly. Although the absolute level of gearing may look high relative to some other investment trusts, strategically we take the view that the borrowings are notionally invested in the less volatile fixed income part of the portfolio which generates a high level of income (namely the preference share part of the portfolio), giving the Investment Manager greater ability to invest in a range of equity stocks with lower yields and higher growth prospects. The Board believes that this combination should enable the Company to achieve a high and potentially growing level of dividend, and also deliver some capital appreciation for shareholders - as has been the case in the past.

Cancellation of Share Premium Account

Following shareholder approval at the Company's AGM on 5 July 2024, the Company received court approval by way of a court order dated 13 August 2024 for cancellation of the Share Premium Account. The court order was registered at Companies House on 16 August 2024 at which point cancellation of the Share Premium Account became effective. Consequently, the amount of approximately £50 million previously standing to the credit of the Share Premium Account has been transferred to a newly created distributable reserve which is available to fund the cost of share buy backs and dividend payments. The Board considers that it is in shareholders' interests for the Company to have this flexibility, although it has no current intention of making use of the new reserve for dividend payments which will continue to be resourced through net revenue and revenue reserves.

Board

The Company focuses on having a relatively small and engaged board of individuals with experience in the closed-ended sector and more widely. This works well, as has the succession planning in introducing new members to the Board over recent years, without impairing the chemistry and cohesion of the Board.  I want to pay tribute to Robert Talbut's chairmanship during my tenure on the Board and his oversight of various constructive changes in how the Company operates, as well as during the combination with abrdn Smaller Companies Income Trust, which completed last year.  We wish Robert well in his other roles and thank him for his contribution to the Company.

Outlook

With inflation now seemingly under control and interest rates starting to fall, there are reasons to be optimistic about the prospects for economic stability. However, the conflicts in the Middle East and Ukraine continue to create significant geopolitical risk, and the recent UK budget and result of the US presidential election both create economic uncertainties that could have an impact on financial markets.

Further reductions in interest rates should be beneficial for equity markets and the investment company sector, and the UK Equity Income sector in particular. However, as always, good stock selection will be key and the Board has confidence in the ability of the Manager to continue to deliver the Company's objective of delivering a high level of income for shareholders, together with the potential for growth of both income and capital.

Robin Archibald
Chairman
20 November 2024

Investment Manager's Review

Market Background

The first half of our financial year was a period of elevated geopolitical risk and uncertainty globally, and of political change in the UK. A Labour government was elected in July for the first time since 2010, winning a significant majority, although this perhaps flattered a more modest share of the popular vote. After campaigning with a pro-growth agenda, the government now has the hard work of balancing economic growth and stability with commitments to improve public services and invest in infrastructure.  Overseas, the US election in November, after the end of the period, produced a Republican victory and an initial rise in the US Dollar. There has been no end to conflict in Ukraine and in the Middle East, with recent escalation of tensions between Israel and Iran, a concerning development.

Economically, after a period of high inflation and rapidly rising interest rates, the six months to the end of September saw these macro-economic forces moderate. Inflation in most regions has come back towards target, with the latest CPI prints in the US, Europe and the UK significantly below recent peaks. The drop in headline inflation reflects lower commodity costs being passed through to goods, and although services and wage inflation remain above target, risks of persistent high inflation seem to have lessened for now. Lower inflation has allowed central banks the opportunity to start bringing interest rates back down towards a more normalised level, and we have seen the first rate cuts in the US, Europe and the UK already. These probably came slightly later than expected and the path of rate cuts from here will not be linear and will remain very dependent on economic data, especially signals from the labour market. While timing is uncertain, we should expect a continued moderation in interest rates and we expect to see steady economic growth from developed market economies in the next few years, with a recession avoided.

This economic backdrop has helped markets to continue a strong run in the six-month period, with the MSCI World Index increasing in value by 8%. Performance was again led by US technology stocks, with the US S&P 500 Index up by 10%. Europe and the UK lagged, with the MSCI Europe Index up 2% and the FTSE All-Share Index returning just over 6%.  Emerging markets were strong, however, with the MSCI Emerging Markets Index up by 12.5%. Returns were boosted by a bounce in Chinese stocks after the Chinese government announced a broad stimulus package at the end of the period. That news also boosted commodities, although performance over the six months has been mixed - for example, the Brent crude oil price fell from $80/bbl to $72/bbl, despite the increase in tensions in the Middle East.

Within the UK market, we saw defensive sectors generally outperform - partially in reaction to increased macro uncertainty, but also because these sectors tend to perform well in falling interest rate environments. Telecoms increased in value by 19%, Consumer Staples by 13% and Utilities by 10%. Financials also performed particularly well, with banks continuing to benefit from higher interest rates but also as investors belatedly begin to understand that their practice of hedging interest rates creates a lagged benefit from rate increases and will protect cash generation for some years to come. Unsurprisingly, with a falling oil price, the Energy sector was the most notable laggard, falling by 10% over the six month period.

Investment Performance

Over the first half of the financial year, the Company delivered a net asset value ("NAV") total return of 6.8% and the share price (with dividends reinvested) returned 14.5%, helped by a closing of the discount which ended the period at 7.4% (31 March 2024: 13.3%). The revenue earnings per share also increased, growing by 6.4% over the comparable period in the prior year. The Company therefore delivered on its targets of generating a high level of income and capital growth for shareholders. Sector allocation detracted 0.2% from relative performance, largely due to the overweight position in the Energy sector, but this was more than offset by positive stock selection. On a sectoral basis, we saw strong returns from the positions in Industrials (+16%), due to our conviction overweight exposure to UK construction companies. There were also good returns from Financials (+11%), Telecoms (+16%), Basic Materials (+17%) and Utilities (+11%).

Performance on an individual stock basis reflected that sectoral mix. Morgan Sindall (Industrials) continues to deliver earnings upgrades and is well exposed to increased construction and infrastructure investment in the UK. Its shares rose 37% in the period and it was the top contributor to portfolio returns. In the same sector, Balfour Beatty and Kier also performed well. In the Financials sector, NatWest was a standout performer, increasing in value by 32%, reflecting a robust outlook for returns over the next few years. Utilities delivered very encouraging returns, and in the portfolio Drax (+34%), Enel (+18%), SSE (+17%) and Telecom Plus (+16%) all performed well. The peak in interest rates also allowed the preference shares in the portfolio to perform well, and the position in the Royal & Sun Alliance preference shares gained 14%, following a tender offer.

On the negative side, we saw some of the Energy holdings lag the market as commodity prices dipped. Although the Energy positions are designed to be less commodity price sensitive than the market as a whole, they are not immune. Energean (-13%) delivered stable cashflows due to its fixed price gas contracts but was understandably impacted by the increased risk in the Middle East given its main operations are in offshore Israel. Other disappointing performers included Melrose Industrials (Industrials) (-31%) which has been impacted by slowing activity in the aerospace sector - we continue to believe in the strength of long-term service agreements and the attraction of these long duration cashflows. The position in 4Imprint Group (Consumer Discretionary) also gave back some gains from earlier in the calendar year, dipping 19%. Some of the overseas holdings were also weak, with ASML Holdings (Technology) falling 13%, Novo-Nordisk (Health Care) 13% and Mercedes-Benz (Consumer Discretionary) down 17%. While we continue to see significant attraction in the long-term growth potential of Novo-Nordisk and ASML, we exited the position in Mercedes-Benz before a recent profit warning.

Portfolio Activity

It was an active period for the portfolio as we reacted to the changing outlook, with interest rates starting to decline and increased economic uncertainty. In April, we added a new position in construction contractor Kier. The company has delivered significant balance sheet improvement in recent years and is now approaching resumption of its dividend. We like the company, given structurally supportive industry trends, high cash generation and still a low valuation despite a period of outperformance. The free cash flow yield at close to 20% supports dividend growth and continued deleveraging, while the opportunity to acquire more distressed smaller companies in adjacent areas is under appreciated by the market. It trades on a 6x price to earnings multiple compared to peers on 9-10x.

We switched the holding in Mondi into Smurfit Westrock. This was simply reflecting our preference in the paper and packaging sector. Although we continue to like Mondi, we see greater upside in the medium term from Smurfit Westrock as it delivers on a significant acquisition in the US market. There is material self-help potential here and the share price fell somewhat on the deal, giving us a chance to buy a high-quality operator at a reasonable price.

In May we initiated a new position in Reckitt Benckiser Group. The portfolio has generally been underweight Consumer Staples categories in recent years, given unattractive valuations, low yields and limited genuine growth. A recent sell-off in Reckitt offered an opportunity to gain sector exposure at a material discount to the peer group and with a yield of over 4.5%. The company has struggled operationally in recent years, but we see signs of a turnaround under new management and the underlying brands remain high quality. Given a relatively cautious view on market levels and the economic outlook there is also an appeal to adding more defensive exposure.

We sold out of IT distributor Softcat in May. We have held the stock for a number of years and have seen it grow strongly over that time. The shares have re-rated and trade in excess of 25x price to earnings, while the dividend yield has compressed to just 2%. It remains a well-run company with growth potential, but we see more value elsewhere.

We also exited one position in June: Greggs. The company has performed very well since we added it to the portfolio in November last year, and we continue to like the business model and the potential for strong medium-term growth as it expands its offering and rolls out more stores. However, with the yield now compressed and the shares trading at over 21x earnings, we see the company as now being more fairly valued.  

In July we started a new position in UK reinsurance company Conduit Holdings. This is a relatively new reinsurance business which is set to deliver earnings growth as its book matures and it benefits from positive market trends. Recent quarters have demonstrated strong premium growth and improved underwriting profitability. The shares had a 6% dividend yield at the time of purchase and the position helps diversify the portfolio. We reduced exposure to Engie, where dividends have already been paid for the year and sold out of AXA. The French insurer has performed very well since purchase, but with no further income this financial year we chose to reallocate capital. The other exit from the portfolio in July came in the preference share portfolio, where issuer Royal & Sun Alliance tendered its preference shares. This created an attractive premium and allowed us to reinvest at a higher yield, with the proceeds used to purchase bonds issued by Nationwide, with a 10.25% coupon and a yield of around 7.3% on the purchase price.

In August we sold out of the position in Lloyds Banking, a company we still like, but given the need to generate income through the year we chose to allocate to other names given there is no income remaining this financial year, instead maintaining a position in NatWest. We also topped up the position in Assura, a high yielding company which will benefit from the lower interest rates we expect to see over the next few months.

A more meaningful trade in August was to start a position in Dutch technology company ASML. When adding overseas companies we generally look for something we can't find in the UK market, and ASML is a prime example of this. The company designs and manufactures the lithography machines essential in the production of today's cutting edge semiconductors. It is a company with extremely high technical barriers to entry, making products that are essential for one of the highest growth parts of the market. While it screens as relatively expensive, a recent pullback in the share price means it has de-rated in the last few months and we expect growth to make it look much more reasonably priced a few years from now. It is the top-rated stock globally by our technology analysts. We funded the purchase by selling the position in French utility company Engie. This has been an excellent performer since its introduction into the portfolio but is not due to pay any more dividends this year, and so we chose to take the profit.

At the other end of the market cap spectrum, we initiated a new position in ME Group. This UK mid-cap company operates automated photo booths and laundromats. A somewhat niche market, but one with high returns on capital and plenty of room for growth as it rolls out the laundry model into Eastern Europe and Asia.

In August, we also added a new position in UK property REIT LondonMetric. This is a company with a high-quality management team and a solid performance through the economic cycle. It has an excellent track record of delivering dividend growth and the recent 19% year on year increase in its dividend takes it to a very attractive 5.9% yield. We funded the purchase by selling the holding in Dutch bank ING. Since its purchase in April 2023, the holding has delivered a total return of 65%, outperforming the market by 50%. However, with no income in the next six months we chose to prioritise other opportunities. Another overseas exit this month was Mercedes-Benz. Again, the driver was a lack of income in the near term, but also combined with some difficult trends in auto markets which make us less optimistic for now.

We only made one meaningful trade in September, switching the holding in UK housebuilder Berkeley Group into peer Barratt Developments. The move came ahead of Barratt's shares going ex-dividend, so captured some additional income, but primarily reflects the fact that Barratt has lagged the sector recently following its deal to buy Redrow. However, it should be able to extract synergies from the transaction, its land position is improved and it now trades on a notably low price to book value multiple compared to its peers. We see more upside in Barratt and it is also more aligned with government intentions to increase housing volumes in a way Berkeley isn't.

Investment Income

The revenue earnings per share for the period were 8.15p, which compares to 7.66p for the equivalent period last year, an increase of 6.4%.

The currency impact on dividend income has been marginally negative, with a slightly higher Sterling putting some downward pressure on any US Dollar denominated payments. We estimate that around 35% of the portfolio income is denominated in overseas currencies. Another trend impacting income is that companies are increasingly allocating excess cash to share buybacks rather than special dividends, although we would hope that lower shares in issue translate into dividend per share growth in future years.

Looking at individual sectors, there was also some downward pressure from the mining companies, which follow stable payout ratios. With somewhat weaker commodity prices this year, this resulted in lower dividend payments. For example, Anglo American's interim dividend in July was around 25% below the prior year. By contrast, energy companies have continued to deliver dividend growth. The majors have increased payments by high single digit percentages: Although energy prices have not been strong, we are seeing the benefit of lower numbers of shares as these companies continue to buyback equity, allowing for modest per share increases. We also saw significant dividend growth in the sector from Energean as its main project in Israel reached target volumes. Not all energy companies delivered robust income, however, and Diversified Energy had to reduce its dividend in response to a US gas price that has stayed very low for a prolonged period.

Another area delivering dividend growth was the banking sector. A period of higher interest rates combined with significant buybacks has allowed for increased distributions from UK banks, and we saw growth from NatWest, Lloyds Banking, Standard Chartered and HSBC. We expect to see continued dividend growth from the sector as income rises over the next few years. Partially offsetting this, Close Brothers suspended its dividend to protect capital after an unexpected review by the regulator into historic motor finance business.

Finally, we have continued to see dividend growth from UK mid-cap names in the portfolio. Many smaller companies do not have the highest headline yields but deliver dividend growth as they grow. Examples such as Morgan Sindall, Balfour Beatty, Intermediate Capital Group and Bytes Technology have delivered consistent year on year increases as earnings have grown.

Outlook

Starting the second half of our financial year, the direction, if not the pace, of change seems well set. Interest rates are falling, inflation is under control and global economies are predicted to have a period of consistent, if unspectacular, growth. That should be a good set up for investors - but we should not be complacent. As mentioned above, there is a large amount of risk in the market at the current time. The conflict in the Middle East is an obvious source of risk, given its potential to impact global energy prices and return inflation to the top of the agenda. The US election in November has also introduced increased uncertainty. We would expect Republican policies to increase tariffs and lower taxes - both of which are inflationary changes. The current concentration of markets into US technology stocks also creates a risk if they fail to deliver on expectations for high growth. Any recent shortfall to high expectations in this sector has led to quite significant share price reactions and, given the high weighting, this has created market volatility. It is also worth noting that valuation at purchase can be a strong driver of future returns - cheap entry points can lead to higher forward returns and vice versa. Historically, when the US market has traded at this level, ten year forward returns have been close to zero.

That last point in particular is important for our approach. Equity income has been out of favour for some time. There are some good reasons for this - market growth has been driven by technology stocks with low dividend payments and investors have been able to take advantage of attractive yields on cash and bonds to generate income. However, in a world where market levels are flatter (which seems likely after a period of rapid growth) income naturally makes up a greater proportion of investors' total return and again returns to prominence. With the yield on cash investments also falling the value of a resilient income strategy becomes much clearer.

After a period of market concentration, we may also see some dispersion, and allocators should look to diversify. The UK, in particular, screens as undervalued, with discounts to US or global equities still close to record levels. The income outlook for the market remains positive. UK companies have healthy balance sheets, with the net debt / EBITDA ratio, a standard measure of balance sheet risk, at less than 1x, which compares to an average over the last twenty years of nearer 2x. Payout ratios, at just under 0.5x, are also lower than average. And while an increasing amount of excess cashflow is directed to share buybacks, that shouldn't be seen as a negative factor given it will spread future cashflows over fewer shares and allow for dividends to increase on a per share basis over time.

In summary, while the outlook is benign, we should not be complacent. But we see plenty of opportunities in an inexpensive UK equity market to invest in great companies at reasonable prices, allowing the portfolio to deliver on the twin goals of generating a high level of income and long-term capital growth.

Iain Pyle and Charles Luke
abrdn Investments Limited
20 November 2024

Interim Management Statement

Directors' Responsibility Statement

The Directors are responsible for preparing the Half Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

-       the condensed set of financial statements within the Half Yearly Financial Report has been prepared in accordance with IAS 34 'Interim Financial Reporting'; and

-       the Interim Board Report (constituting the Interim Management Report) includes a fair review of the information required by rules 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 financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could so do).

Principal and Emerging Risks and Uncertainties

The Board regularly reviews the principal and emerging risks and uncertainties faced by the Company together with the mitigating actions it has established to manage the risks. These are set out within the Strategic Report contained within the Annual Report for the year ended 31 March 2024 and comprise the following risk headings:

-       Strategic objectives and investment policy

-       Investment performance

-       Failure to maintain, and grow the dividend over the longer term

-       Share price and shareholder relations

-       Gearing

-       Accounting and financial reporting

-       Regulatory and governance

-       Operational

-       Exogenous risks such as health, social, financial, economic, climate and geo-political

In addition to these risks, the conflicts in Ukraine and the Middle East and other geo-political tensions have created uncertainty which has further increased market risk. The most significant direct issue that the Company has faced is the increasing discounts to net asset value that have affected the entire investment company sector, including income funds, resulting from selling pressure and lack of investor demand.

In all other respects, the Company's principal and emerging risks and uncertainties have not changed materially since the date of the Annual Report and are not expected to change materially for the remaining six months of the Company's financial year.

Going Concern

The Company's assets consist mainly of equity shares in companies listed on the London Stock Exchange. The Board has performed stress testing and liquidity analysis on the portfolio and considers that, in most foreseeable circumstances, the majority of the Company's investments are realisable within a relatively short timescale.

The Board has set limits for borrowing and regularly reviews actual exposures, cash flow projections and compliance with banking covenants, including the headroom available. The Company has a £20 million loan facility which matures in May 2027. £9 million of this amount is drawn down on a short-term basis through a revolving credit facility and can be repaid without incurring any financial penalties.

Having taken these factors into account, the Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future and has the ability to meet its financial obligations as they fall due for the period to 30 November 2025, which is at least twelve months from the date of approval of this Report. For these reasons, they continue to adopt the going concern basis of accounting in preparing the financial statements.

On behalf of the Board
Robin Archibald
Chairman
20 November 2024

Investment Portfolio - Equities

Investment Portfolio - Other Investments

Distribution of Assets and Liabilities

Condensed Statement of Comprehensive Income

Condensed Balance Sheet

Condensed Statement of Changes in Equity

Condensed Cash Flow Statement

Notes to the Financial Statements

For the six months ended 30 September 2024

Alternative Performance Measures

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise.  Investors may not get back the amount they originally invested

By order of the Board

abrdn Holdings Limited

Company Secretary

20 November 2024

* Neither the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.