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RIII is off to a strong start under Jupiter’s management

Rights and Issues Investment Trust (RIII) has released its half year results for the six month period ending 30 June. This is the first set of results to cover RIII’s performance under the management of Jupiter Asset Management.

  • Over the six months RIII generated a NAV total return of 3.5% and share price total return of 8.4%. Ex-dividends, RIII’s NAV increased by 2.2%, compared to the 0.5% increase of the FTSE All Share. RIII’s largest contributors were Hill & Smith, Renold, and Carr’s Group.
  • RIII has seen a heightened amount of turnover in recent months, as Jupiter brings RIII’s portfolio in line with its own vision. Four of the tail-end portions in RIII were disposed of, and replaced with Spirent, a telecoms testing provider, Gresham Technologies, a data softer developer, Marshalls, a heavy building materials provider, and OSB group, the UK’s largest specialist buy-to-let mortgage lender.
  • An interim dividend of 11.75p per share was paid so far this year, a 9.3% increase on the prior year’s interim dividend.
  • RIII’s discount narrowed from 17.2% (at the 2022 year end) to 13.5% at the end of June. The board repurchased 0.8% of the outstanding shares over the period. Discounts have widened since the end of June however, with RIII now trading on a 16.8% discount.
  • David M Best, RIII’s current Chair, has announced he will step down following his 12 years of service. He will be replaced by Dr Andrew Hosty, a current director of RIII.
  • The vote on a possible 10:1 share split has been pushed back to the 2024 AGM.

Dan Nickols, RIII’s lead manager, commented:

“While inflation in the UK remains stubbornly high, it is hard to see a short-term catalyst to bring the market back into favour with investors. However the UK, and smaller companies in particular, remain very modestly valued compared to both international peers and their own history. Meanwhile economic conditions do not appear to be causing significant problems for companies beyond moderately weaker growth rates in the near term. As such, we see the current valuation environment as an opportunity for investors with a longer investment horizon and the patience to wait for the market to change.

“We are pleased with progress on adjusting the shape of the portfolio and introducing a greater degree of sectoral balance. Over the coming months we will continue this process at a considered pace while looking for further opportunities to invest in good businesses at attractive valuations.”

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