This report is an updated version of the report published on 6 October 2022 at 4:44 PM (GMT +13)

F&C Investment Trust PLC

FCT Details

Launched in 1868, F&C Investment Trust PLC (NZX: FCT) is the world’s oldest collective investment scheme. The Trust is highly diversified and cautiously managed, with exposure to global companies.

Financial Results for the 1H’FY22

• The company reported a Net Asset Value (NAV) total return of -9.6% in 1H’FY22 versus the benchmark, the FTSE All-World Index, which fell by 10.7%. The NAV per share closed at 892.8 pence in 1H’FY22 versus 998.7 pence at the end of 2021.
• The gearing level stood at 6.5% for 1H’FY22. Meanwhile, the company drew £140 million of additional long-dated borrowings from long-term private placement loans.
• The company paid a third interim dividend of 3.0 pence per share for FY2021 in February 2022 and a final dividend of 3.8 pence in May.
• The net revenue return grew 27.6% YoY to 7.48 pence in 1H’FY22 versus 5.86 pence the previous year.

Key Updates

• On 7 October 2022, the company released its net asset value as of 5 October 2022. Net assets per ordinary share (prior charges at market value) - ex income stood at 950.41 pence, while Net assets per ordinary share (prior charges at market value) - cum income reported at 955.85 pence.

Outlook

The resultant blend of moderating earnings growth and interest rates is expected to challenge equity markets in 2022 and beyond. Meanwhile, the company will remain focused on the long-term delivery of development in both capital and income for its shareholders. Its flexible as well as practical method of capital allocation has benefitted the company. It will further adapt and seek profitable opportunities within the listed and private markets.

Key Risks

Failure to access the targeted market or fulfil investor requirements or expectations would result in substantial pressure on the share price. Inappropriate asset allocation, sector and stock selection, currency exposure and use of gearing and derivatives would lead to under-performance and impact dividend-paying capacity.

Stock Recommendation

Over the last three months, the stock has given a return of ~10.72%. The stock is trading higher than the average price of 52-week low-high range for the stock at NZD14.85-NZD18.51, respectively.

Considering the resistance and target level achievement, current trading levels and risks associated, it is prudent to book profits at the current levels. Hence, a ‘Sell’ rating has been provided on the stock at the current price of $18.03 per share as of 6 October 2022 (New Zealand Time: 12:22 PM (GMT +13)). 

Technical Overview:

Daily Price Chart

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for share price chart is based on October 6, 2022, and all other data such as stock price performance as of October 7, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Disclaimer

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