Value & Income Trust - OLIMOLIM Limited is authorised and regulated by the Financial Conduct Authority. Data All data is for periods ending 31 March 2019 unless otherwise stated. Contact

A specialist Investment company

Patrick Harrington

OLIM Investment Management

5th July 2019

Value & Income TrustAGM Presentation

https://www.albion.capital/https://www.albion.capital/http://www.russell.com/uk/http://www.russell.com/uk/


2 OLIM Investment Managers

Agenda

• Year to 31/3/19 review

• Performance highlights

• Top 10 stocks

• Dividend outlook

• Market outlook

https://www.albion.capital/https://www.albion.capital/



Market Review – FTSE All Share Index (capital Return)

Source: Bloomberg, data to 30/6/19




Market Review – World Markets

Capital Only – 31/3/18 – 31/3/19 Local Currency GBP

UK - FTSE All Share Index 2.2% 2.2%

FTSE World Index ($) 0.6% 8.2%

USA – S&P 500 ($) 7.3% 15.4%

Germany – Dax (Euro) -4.7% 2.4%

France – CAC 40 (Euro) 3.5% 11.3%

Japan – Nikkei (Yen) -1.2% 6.3%

FTSE Emerging Markets Index -8.1% -1.2%

Source: Bloomberg




Market Review – World Markets

31/3/18 31/3/19

GBP/USD 1.40 1.30

GBP/EUR 1.14 1.16

10 Yr Gilt yield 1.4% 1.0%

20 Yr Gilt Yield 1.7% 1.5%

US 10 Yr Yield 2.7% 2.4%

Oil Price ($) $70.27 $68.39

Source: Bloomberg




Economics Review

Two distinct periods – 9 mths to 31/12/18 and thereafter

First period – globalTightening monetary conditions

China/USA trade war rhetoric deteriorates

Economic growth expectations fall

First period - UKGrowth reasonable driven by high levels of job creation

Continuing fiscal & monetary squeeze

Brexit




Economics Review

Two distinct periods – 9 mths to 31/12/18 and thereafter

Second period – globalUS Federal Reserves halts tightening, now moving towards easingChina/USA trade war rhetoric still a concernIran

Second period - UKBank of England has stopped raising rates – inflation at targetGrowth still OK but slowingContinuing fiscal squeeze, Brexit




Performance Review

VIT Equity Portfolio Total Return +5.5%

FTSE All Share Index Total Return +6.4%

Stock selection positive, asset allocation between sectors negative

Sectors

Positives: U/W Banks, Tobacco

Negatives: U/W Mining, Oil & Gas, O/W Life Assurance

Stocks

Positives: Cineworld, Legal & General, Go-Ahead, Croda International

Negatives: Restaurant Group, Babcock, Beazley, N Brown

Source: Bloomberg




Portfolio Changes

Purchases: £21m Sales: £22m

Complete Sales: Halma, British Land, N Brown, Wood Group, Daily Mail & General

Principal Reductions: Beazley, Informa, Unilever, Cineworld

New Holdings: Phoenix Group, DS Smith, Devro, Lloyds Banking Group, ITV

Additions: Marston’s, Restaurant Group




Top 10 Stocks

Stock % of Equity

Portfolio*

Forecast Dividend

Yield**

Forecast Dividend

Growth

Unilever 6.0 3.3% 6.9%

Beazley 5.6 2.2% 5.1%

BP 5.4 5.9% 2.5%

GlaxoSmithKline 4.8 5.0% 0.0%

Croda 4.8 1.8% 8.0%

Royal Dutch Shell 4.2 5.5% 0.0%

HSBC 3.8 6.2% 0.0%

Spectris 3.8 2.3% 8.0%

Legal & General 3.7 6.6% 7.2%

Cineworld 3.2 5.5% 16.5%

• As at 31/3/19, ** As at 26/6/19Source: OLIM




Outlook

• Economic growth slowing

• UK reasonably robust, Brexit notwithstanding

• £ should act as a safety valve in the event of a difficult Brexit

• Real dividend growth expected

• UK shares have lagged world markets

• Significant income opportunity in UK equities




Outlook

Source: Capita UK Dividend Monitor

40

50

60

70

80

90

100

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

UK Dividends Paid

UK Dividends Paid (£bn)




Outlook

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

1987 1992 1997 2002 2007

FTSE All Share Index Ten Year Annual Compound Total Return


Source: Bloomberg




Outlook

Source: Bloomberg

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

1987 1992 1997 2002 2007

Returns versus Dividend Yield


FTSE All Share Index Dividend Yield (%) (RHS)




Outlook

Source: Bloomberg

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0%

Sta

rtin

g D

ivid

en

d Y

ield

10 Yr. Annual Compound Return

FTSE All Share Index Ten Year Returns




Outlook

Source: Bloomberg

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

1985 1990 1995 2000 2005 2010 2015

UK Stock Market Dividend Yield

FTSE All Share Index Dividend Yield




Outlook

Source: BNP Paribas

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1987 1992 1997 2002 2007 2012 2017

Value & Income Trust Plc Annual Dividend

Dividend (p) RPI (re-based)




Outlook

Value & Income Trust income opportunity:

• Modest real underlying dividend growth

• Portfolio recycling

• Brexit inspired sterling weakness

• Property rental growth

• Refinancing of 11% 2021 debenture




Disclaimer

This document is issued by OLIM Limited. Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and an investor may not get back the original amount invested. OLIM is portfolio manager for the Fund and nothing in this presentation constitutes investment advice. OLIM Limited is authorised and regulated by the Financial Conduct Authority.

Data

All data is for periods ending 31 March 2019 unless otherwise stated.

Contact

Patrick Harrington, OLIM Ltd, 1 Benjamin Street London EC1M 5QL

(0)20 7367 5660

[email protected]

www.olim.co.uk
https://www.albion.capital/https://www.albion.capital/mailto:[email protected]://www.olim.co.uk/

Documents

Value & Income Trust - OLIMOLIM Limited is authorised and regulated by the Financial Conduct Authority. Data All data is for periods ending 31 March 2019 unless otherwise stated. Contact