Shires Income PLC
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Investor Warning

Please be aware of scams that can affect investors.

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NMPI Status

The Company currently conducts its affairs so that securities issued by Shires Income PLC can be recommended by financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream Pooled investment products (NMPIs) and intends to continue to do so for the foreseeable future.

The Company’s securities are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are securities in an investment trust.

 
 

Morningstar Rating

Fund Rating

4 star Rating
 
 

Risk Warning

The value of investments and the income from them may go down as well as up and investors may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Please refer to the Key Facts documents contained in the ISA/Share Plan Brochure & Application form for general and specific investment risks attaching to the individual trusts.

Read the detailed Risk Warning
 

Past Performance

Past performance is not a guide to future results.
See latest monthly factsheet below for performance history.

 
 

Daily Data

At close 16-Apr-2014

Ord
Price246.50p
NAV241.06p
Prem/-Disc2.26%
Net Dividend Yield4.87%


Source: Morningstar, NAV = Net Asset Value, excluding income.

 
 
 
 
 

Trust Details

Shires Income PLC

Registered Office:
Bow Bells House
One Bread Street
London
EC4M 9HH

Registered in England as an Investment Company Number 386561

 

Shires Income PLC

Objective

To provide for shareholders a high level of income, together with growth of both income and capital from a portfolio of investments substantially invested in UK Equities

 

Shires Income PLC Annual Report for the six months ended 30 September 2013
Ed Beal, Senior Investment Manager

In this webcast, Ed Beal gives an update on a wide range of subjects including performance, a sector breakdown, the twenty largest investments and an outlook for the Trust.

Click here to listen to the presentation.

 
 

Shire Income PLC
In search of high income
May 2013

 
 

 

Manager's Monthly Report

February 2014

After a weak start to the year, markets rebounded during February with the FTSE All-Share Index delivering a total return of 5.2%. Recovery in developed markets continued with the US posting a fourth quarter GDP reading of 2.4%. Although this was a marked slowdown from the 3.2% witnessed in the previous quarter it still suggested an economy that was settling into a period of reasonable growth. Inflation continued to fall in the UK, declining to 1.9%. This was the first time that it had been below the Bank of England’s upper target since late 2009. One of the stand out features of a month that saw such strong gains was the weakness of the banks with many of them recording disappointing results.

In the portfolio there were a couple of negative surprises. Rolls-Royce caught many investors off guard when they indicated that they were not expecting to grow over 2014. Although much of the business is performing well this will not be sufficient to offset the impact of slower orders from the US Department of Defense. Pearson also disappointed with a reduction to their guidance for 2014. In both instances we believe that the long term attractions of the businesses remain intact, with the current travails being transient issues.

The two most important pieces of portfolio activity during February were our decision to exit AMEC and the sale of the holding in Verizon Communications. In the case of AMEC we were concerned about a deteriorating outlook allied to a weakening balance sheet. Verizon Communication shares were received by the Trust as part of Vodafone’s return of capital following their successful disposal of their stake in Verizon Wireless. We also top-sliced the holding in Prudential following strong share price performance. This was achieved through the sale and subsequent exercise of call options. The proceeds of the disposals were re-invested into higher yielding businesses, especially those where their shares had been weaker. These included BHP Billiton, Unilever, BG and Pearson.

We have commented for some time that companies will need to deliver on earnings expectations if the current relatively high valuation multiples are to be justified. We are now in the midst of reporting season and by and large, in the context of the holdings in the portfolio this is happening. However, sterling has strengthened against many other currencies and the impact of this is being felt in analysts’ forecasts. 2013 results were not materially impacted due to the timing of the moves but if rates stay where they are 2014 will experience a much bigger impact. Consequently profit forecasts are typically being downgraded, even though underlying trading is broadly fine. One measure of this is the revisions monitor which for the FTSE100 Index currently stands at 25%. That means that for every four revisions analysts make to their forecasts, three of them are downwards. Investors are being quite forgiving of these cuts but it does mean that multiples are expanding further. We remain focused on identifying businesses that we believe have sufficiently strong business models to deliver growth in profits over the medium term.

 

After a weak start to the year, markets rebounded during February with the FTSE All-Share Index delivering a total return of 5.2%. Recovery in developed markets continued with the US posting a fourth quarter GDP reading of 2.4%. Although this was a marked slowdown from the 3.2% witnessed in the previous quarter it still suggested an economy that was settling into a period of reasonable growth. Inflation continued to fall in the UK, declining to 1.9%. This was the first time that it had been below the Bank of England’s upper target since late 2009. One of the stand out features of a month that saw such strong gains was the weakness of the banks with many of them recording disappointing results.

In the portfolio there were a couple of negative surprises. Rolls-Royce caught many investors off guard when they indicated that they were not expecting to grow over 2014. Although much of the business is performing well this will not be sufficient to offset the impact of slower orders from the US Department of Defense. Pearson also disappointed with a reduction to their guidance for 2014. In both instances we believe that the long term attractions of the businesses remain intact, with the current travails being transient issues.

The two most important pieces of portfolio activity during February were our decision to exit AMEC and the sale of the holding in Verizon Communications. In the case of AMEC we were concerned about a deteriorating outlook allied to a weakening balance sheet. Verizon Communication shares were received by the Trust as part of Vodafone’s return of capital following their successful disposal of their stake in Verizon Wireless. We also top-sliced the holding in Prudential following strong share price performance. This was achieved through the sale and subsequent exercise of call options. The proceeds of the disposals were re-invested into higher yielding businesses, especially those where their shares had been weaker. These included BHP Billiton, Unilever, BG and Pearson.

We have commented for some time that companies will need to deliver on earnings expectations if the current relatively high valuation multiples are to be justified. We are now in the midst of reporting season and by and large, in the context of the holdings in the portfolio this is happening. However, sterling has strengthened against many other currencies and the impact of this is being felt in analysts’ forecasts. 2013 results were not materially impacted due to the timing of the moves but if rates stay where they are 2014 will experience a much bigger impact. Consequently profit forecasts are typically being downgraded, even though underlying trading is broadly fine. One measure of this is the revisions monitor which for the FTSE100 Index currently stands at 25%. That means that for every four revisions analysts make to their forecasts, three of them are downwards. Investors are being quite forgiving of these cuts but it does mean that multiples are expanding further. We remain focused on identifying businesses that we believe have sufficiently strong business models to deliver growth in profits over the medium term.