BlackRock Income and Growth says stock selection aided performance – BlackRock Income and Growth Investment Trust has published its annual report for the year ended 31 October 2017. During the year the NAV returned 13.8% and the share price returned 14.8%. By comparison, the benchmark, the All-Share Index, returned 13.4%. The board has declared total dividends for the year of 6.60 pence per share. This represents a 4.8% increase over the prior year.
The manager says that fund saw a significant performance contribution from several stock specific positives during the year. This was led by Rentokil Initial where they say that they continue to see strong structural drivers in pest control and a favourable industry backdrop where innovation, scale and investment in technology can make a difference. Forterra, a supplier of building products for the UK construction industry, also continues to perform well and is supported by a strong dynamic for UK brick manufacturers as sterling weakness limits imports. Elsewhere in the portfolio were positive contributions from Premier Asset Management, Unilever and the paper and packaging business DS Smith. From a sector perspective, overweight positions in consumer services and industrials contributed to performance.
On the negative side, BT was the largest detractor from performance after the company quantified the impact of a fraud issue in Italy. In addition, the company highlighted a weaker revenue performance in parts of its UK business which will impact near term profit growth. Provident Financial shares were badly hit after a profit warning from the sub-prime lender indicated a fall in debt collection rates from 90% to 57% which led to a significant drop in profits. Other detractors from performance include Babcock, Kier Group and an underweight position to the mining sector which has performed strongly over the year. The managers continue to have concerns around the mining industry due to the volatility in Chinese demand and signs that the industry will need to enter
into a phase of capital expenditure investment which would bring cash flow under strain.
BRIG : BlackRock Income and Growth says stock selection aided performance