Over the six months to the end of April 2015, BlackRock Income & Growth delivered a total return on net assets of 13.1% and a return to shareholders of 14.6%, both well ahead of the 9.2% return posted by the FTSE All-Share Index for the period. The shares moved to trade at a discount of 0.8%. The interim dividend is being increased from 2.2p to 2.4p.
The manager’s report says the largest contributor to performance came from Essentra (formerly Filtrona) which reported strong revenue growth for 2014, giving confidence that management can deliver on their goal to double revenues by
2020. Another strong performer was Domino Printing Sciences which rose significantly as the company received a bid approach from Japan’s Brother Industries. Cineworld Group reported full year pre-tax profits which more than doubled, boosted by the purchase of Cinema City International in 2014, and Howdens Joinery Group issued a good trading update for the second half of the year after successfully navigating through their key trading period, resulting in further upgrades. Friends Life rallied after Aviva agreed to buy the company and subsequently synergies from the combination became apparent and Wolseley continued to deliver strong revenue growth, particularly in the USA, whilst maintaining margins. Other contributions to performance came from holdings in Imperial Tobacco Group, DS Smith, Burberry Group, Hays and Direct Line Insurance.
On the downside, not owning Tesco was a detractor from performance, they remain sceptical of the company’s ability to turn itself around. Other detractors included AstraZeneca and British American Tobacco which both lagged the strong market rally and Rio Tinto underperformed due to the significant fall in the iron ore price.
BRIG : BlackRock Income reports long list of outperforming investments