Interim Management Statement
May 18 2009 - 2:00AM
UK Regulatory
TIDMDDIT
The Directors' Dealing Investment Trust Plc
Interim Management Statement for the period from 1 January 2009 to 15 May 2009
Performance Summary
As at 30 April As at 31 December
2009 2008
`000 `000
Gross assets 26,609 58,655
Net assets 26,609 58,655
Value of 22,605 23,367
investments (not
including Gilts/
Treasury Bills)
Gilts/ Treasury 0 33,185
Bills
Cash 4,376 1,904
Net asset value 302.65p 265.12p
per share
Share price 225.75p 182.00p
Discount (25.41%) (31.35%)
Investment Manager's Review
Your Company has undergone considerable change since the publication of the
last half yearly report in February 2009. At the general meeting of
shareholders of the Company held on 11 March 2009 (the "General Meeting" or
"GM") pursuant to a circular issued to shareholders on 18 February 2009 (the
"Circular"), shareholders approved proposals that included a tender offer for
58% of the outstanding shares in issue, a change in the Company's investment
policy and a change in the Company's name.
Following the General Meeting, the tender offer was completed on 3 April 2009
with GBP32,886,098.98 being paid to shareholders. In accordance with the terms
and conditions of the tender offer, a total of 12,831,877 shares were purchased
from shareholders. Shareholders who tendered all of their shares had 68.5% of
their shares purchased at the tender price of 256.2844 pence per share. This
represented a premium of 25.2% to the average share price over the five days
prior to the GM.
During the four month period under review, your Company's net asset value per
share ("NAV") increased by 14.2%. This was both due to the holding of cash
balances by the Company prior to the tender offer and the general rise in the
market. Over the twelve months ended 31 March 2009, your Company's NAV
outperformed that of its Association of Investment Companies ("AIC") peer group
by 20.6%. In addition the Company was ranked second out of 23 trusts in its AIC
peer group over one year (Source: AIC).
The Company's change of name to The Directors' Dealing Investment Trust Plc
("DDIT") has been effective since 11 March 2009 and the Company has commenced
implementation of the new investment policy. This is to achieve returns for
shareholders, primarily through capital appreciation by investing in companies
listed on regulated exchanges in the United Kingdom. This policy will be
achieved through investment in companies identified by the Company's investment
manager, Knox D'Arcy Asset Management ("KAM" or the "Manager") as having
patterns of directors' trading which suggest that the Company could achieve
attractive returns.
As a result of the change in policy we are currently realigning the investment
portfolio. During the realignment process the Company's investments will be
managed as two distinct portfolios. These are the Legacy Portfolio, being those
investments made pursuant to the previous investment policy and which are in
the process of being realised; and the Directors' Dealing Portfolio being those
investments made pursuant to the new investment policy.
The market for the smaller/micro capitalisation companies, in which the Legacy
Portfolio is predominantly invested remains very illiquid. Even on the
assumption that the Company could carry out 50% of the 10 day average volume
traded in the market, then over half of the Legacy Portfolio holdings would
still require in excess of 240 trading days to sell. In order to achieve
disposals in such circumstances at close to NAV, the Company has pursued an
activist approach to certain of the portfolio holdings where value could be
realised from such an approach. Notwithstanding market conditions, between 1
January 2009 and 30 April 2009 the Company has realised a number of holdings
generating proceeds of GBP5.8m at an aggregate premium to NAV of 2.02%. As stated
in the Circular, 50% of the cash realised as a result of the disposal of
investments in the Legacy Portfolio will be held in cash or near cash pending
the tenders referred to in the Circular.
Following the completion of the cash tender on 3 April 2009, the Company began
investing pursuant to the new investment policy and had invested GBP1.97m in ten
Directors' Dealing Portfolio holdings as at 30 April 2009. These investments
comprise holdings in five FTSE Small Cap companies and five FTSE 250 companies,
each with a market cap in excess of GBP150m at the time of investment. Whilst it
is too soon to draw definite conclusions, the early indications for this
portfolio are encouraging.
Knox D'Arcy Asset Management Limited
15 May 2009
Top Ten Holdings as at 30 April 2009
Company Sector % of Net
Assets
Abcam Pharmaceuticals & Biotechnology 22.88
Harvey Nash Group Support Services 13.79
Concateno Health Care Equipment & Services 12.89
Nationwide Accident Repair Support Services 4.74
Services
Property Recycling Real Estate 3.58
Rapid Realisations Equity Investment Instruments 3.04
Driver Group Support Services 2.58
Fountains Support Services 1.98
Advance AIM Value Realisation Equity Investment Instruments 1.88
Glisten Food Producers 1.87
Sector Breakdown
Sector % of Net Assets
Support Services 27.45
Pharmaceuticals & Biotechnology 22.88
Health Care Equipment & Services 13.58
Equity Investment Instruments 4.93
Real Estate 4.59
Food Producers 3.09
Software & Computer Services 2.90
Media 1.65
General Retailers 1.18
Industrial Engineering 0.81
General Industrials 0.81
Beverages 0.77
General Financial 0.27
Non Life Insurance 0.05
Total 84.96
This interim management statement and up to date NAV and Share Price will be
available at www.directorsdealing.co.uk
Contact details:
Knox D'Arcy Asset Management Limited
Kay Cregeen
01624 623 994
Smithfield PR
Reg Hoare
0207 903 0629
Andrew Wilde
0207 903 0661
END
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