murray-income.co.uk
Murray Income Trust PLC
Annual Report 30 June 2023
An investment trust founded in 1923 aiming
for high and growing income with capital growth
For more information visit murray-income.co.uk
abrdn.com
Murray Income Trust PLC 113
Directors
Neil Rogan (Chair)
Peter Tait (Senior Independent Director)
Stephanie Eastment (Audit Committee Chair)
Alan Giles
Merryn Somerset Webb
Nandita Sahgal Tully
Company Secretaries, Registered Office and
Company Number
abrdn Holdings Limited
(formerly Aberdeen Asset Management PLC)
1 George Street
Edinburgh EH2 2LL
Registered in Scotland under company number SC012725
Website
murray-income.co.uk
Legal Entity Identifier
549300IRNFGVQIQHUI13
United States Internal Revenue Service
FATCA Registration Number (“GIIN”)
8Q8ZFE.99999.SL.826
Points of Contact
The Chair or Company Secretaries at the Registered
Office of the Company
Email: murray.income@abrdn.com
Customer Services Department and
Enquiries for the abrdn Children’s Plan, Share
Plan and ISA
abrdn Investment Trusts
PO Box 11020
Chelmsford
Essex CM99 2DB
Freephone: 0808 500 0040
(open Monday to Friday from 9.00am to 5.00pm,
excluding public holidays)
Email: inv.trusts@abrdn.com
Please see page 99 for information on the closure of
the abrdn Children’s Plan, Share Plan and ISA in
December 2023.
Alternative Investment Fund Manager
abrdn Fund Managers Limited
Authorised and regulated by the Financial
Conduct Authority
Investment Manager
abrdn Investments Limited
(formerly Aberdeen Asset Managers Limited)
Authorised and regulated by the Financial
Conduct Authority
Registrar (for direct shareholders)
The Share Portal, operated by Link Group, is a secure
online website where shareholdings can be managed
quickly and easily, including changing address or
arranging to pay dividends directly into a bank account, or
to receive electronic communications. To register,
shareholders will need their Investor Code which may be
found on their share certificate or by contacting the
Registrar at: signalshares.com
Alternatively, please contact the Registrar –
By email, via the above website
By phone, Tel: 0371 664 0300
(UK calls cost 10p per minute plus network extras)
From overseas: +44 208 639 3399
(open Monday to Friday, from 9.00am to 5.30pm,
excluding public holidays)
By post -
Link Group
PXS 1
Central Square
29 Wellington Street
Leeds
LS1 4DL
Independent Auditor
PricewaterhouseCoopers LLP
Depositary
BNP Paribas Trust Corporation UK Limited
Solicitors
Dickson Minto W.S.
Stockbroker
Investec Bank plc
Additional Shareholder Information
Murray Income Trust PLC 1
Neil Rogan, Chair
Charles Luke and Iain Pyle,
Investment Manager
Investment Objective
The Company aims for a high and growing
income combined with capital growth through investment
in a portfolio principally of UK equities.
Overview
Performance Highlights 2
Strategic Report
Chair’s Statement 4
Investment Manager’s Report 9
Performance 14
Financial Highlights and Dividends 16
Overview of Strategy 17
Promoting the Success of the Company 24
Portfolio
Ten Largest Investments 27
Portfolio 28
Sector Comparison with the Benchmark 30
Summary of Investment Changes During the Year 31
Governance
Board of Directors 34
Directors’ Report 37
Statement of Corporate Governance 46
Directors’ Remuneration Report 47
Audit Committee Report 51
Statement of Directors’ Responsibilities 54
Independent Auditors’ Report to the Members
of Murray Income Trust PLC 55
Financial Statements
Statement of Comprehensive Income 64
Statement of Financial Position 65
Statement of Changes in Equity 66
Statement of Cash Flows 67
Notes to the Financial Statements 68
Corporate Information
Information about the Manager including
Investment Process 90
How the Investment Manager approaches ESG 93
Investor Information 98
AIFMD Disclosures (Unaudited) 101
General
Alternative Performance Measures 103
Glossary of Terms 107
Notice of Annual General Meeting 108
Additional Shareholder Information 113
Contents
2 Murray Income Trust PLC
Net asset value total return
ABC
Share price total return
AB
+8.8% +4.9%
2022: (3.5)% 2022: (0.7)%
Benchmark total return
AD
Ongoing charges
B
+7.9% 0.50%
2022: +1.6% 2022: 0.48%
Earnings per share (revenue) Dividend per share
38.7
p
37.50
p
2022: 40.5p 2022: 36.00p
Discount to net asset value
BC
Dividend yield
B
8.2% 4.5%
2022: 4.5% 2022: 4.3%
A
Total return as defined on page 105.
B
Considered to be an Alternative Performance Measure. Further details can be found on pages 103 and 106.
C
With debt at fair value.
D
The Company’s benchmark is the FTSE All-Share Index.
Net Asset Value per share
c
Dividends per share Mid-market price per share
At 30 June – pence Year ended 30 June – pence At 30 June – pence
887.8
807.7
935.7
871.0
911.7
19 20 21 22 23
34.00
34.25
34.50
36.00
37.50
19 20 21 22 23
850.0
768.0
871.0
832.0
837.0
19 20 21 22 23
Performance Hi
g
hli
g
hts
Murray Income Trust PLC 3
Strategic Report
Research & development
undertaken by Genus
(a portfolio company
purchased this year)
combines biology and
genetics to deliver
ground-breaking
innovation technologies in DNA
to support a more
sustainable food system.
4 Murray Income Trust PLC
Highlights
· We are celebrating both Murray Income’s centenary
and our record of 50 consecutive years of dividend
growth
· Our objective is to achieve a high and growing income
combined with capital growth from a portfolio
principally of UK equities
· The dividend yield is 4.5%, based on the year end share
price of 837p
· Total dividends per share increased by 4.2% to 37.5p, the
50th consecutive year of dividend growth
· NAV per share total return
AB
was +8.8%, ahead of the
FTSE All-Share Index at +7.9% but the share price total
return was +4.9% as the discount widened
A
Total return (see page 105)
B
With debt at fair value (see page 107)
Introduction
Welcome to the 100th annual report of Murray Income
Trust. In my last year as Chair, it is a pleasure to be able to
report that the Company is in good health and has had a
good year. In this report we will review the year just ended,
look back over our 100-year history, look forward to our
centenary events and assess the long-term outlook.
First, the headline numbers for the year to 30 June 2023.
Helped by a strong second half, NAV (net asset value per
share, with debt at fair value) total return was 8.8% over
the year, outperforming the FTSE All-Share Index total
return of 7.9%. Your share price total return at 4.9% lagged
the NAV as the discount (based on NAV with debt at fair
value) widened from 4.5% to 8.2% over the year. We
announced on 2 August 2023 a fourth interim dividend of
12.75p which takes the full year dividend up 4.2% to 37.5p
per share, marking the 50
th
consecutive year of dividend
increases, and representing a dividend yield of 4.5% at the
30 June 2023 share price.
Centenary and History
Your Company was founded in Glasgow on 8 June 1923
as The Second Scottish Western Investment Company,
Limited with an initial share capital of £500,000. The
Company’s NAV at 30 June 2023 was nearly £1bn. That’s
quite some appreciation over 100 years although we don’t
know the exact figures for shares issued and cancelled
over the early years so we cannot calculate a reliable
annual return. Back in 1923, the Company’s objective was
to invest in shares, stocks, debentures, bonds, mortgages,
obligations and securities of any kind, issued or generated
by any company, corporation or undertaking of whatever
nature, constituted or carrying on business in the United
Kingdom or in any colony or dependency or province
thereof, or in the United States of America or in any other
foreign country. That investment remit was exceptionally
broad and similar to many other generalist investment
trusts of the era. The portfolio was mainly invested into
bonds and preference shares. The move into equities or
ordinary shares appears to have started in the 1930s,
probably prompted by rising defaults on bond holdings
during the 1930s depression.
The Company changed its name to The Caledonian Trust
Company Limited in 1960 and was administered by
Brown, Fleming and Murray, Glasgow chartered
accountants, until the formation of Murray Johnstone in
1968. In 1979 the Company added its Manager’s name to
become Murray Caledonian Investment Trust Limited but
remained a generalist equity trust. With discounts wide
and reflecting a shareholder desire for investment trusts
to specialise, in 1984 it changed to its current name of
Murray Income Trust PLC and to its remit of investing for a
high and growing income from a portfolio predominantly
of UK equities. Murray Johnstone was taken over by
Aberdeen Asset Management in 2000 and Murray Income
has been part of the abrdn stable ever since. Most of the
older records were destroyed by a serious flood in Murray
Johnstone’s offices in the late 1970s. Facsimile records at
Companies’ House are in many cases illegible so, sadly, it is
not possible to construct any long term performance
records with a sufficient level of confidence.
Chair’s Statement
Murray Income Trust PLC 5
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
One thing that we can confirm is the now fifty-year record
of consecutive dividend increases. It was the autumn of
1973 when your Company last did not raise its dividend;
the year of the miners’ strike and three-day week, the
Arab-Israeli war and the oil price shock. The Company’s
dividend per share has grown from 0.47p then to 37.5p in
2023, representing a compound annual growth rate of
9.2%. A more realistic comparison is the 6.0% compound
annual growth rate since the change to a UK equity
income remit in 1984.
The Association of Investment Companies (the “AIC”)
accords Dividend Hero status to investment trusts which
have raised their annual dividend consecutively for twenty
years or more. Maintaining that Dividend Hero status and
with a starting dividend yield level of over 4% is both a
source of pride for the Board and a priority for the future.
Dividend
As outlined above, the Board announced on 2 August 2023
its 50
th
consecutive increase in the annual dividend to
37.5p. Revenue per share for the year was 38.7p, down
4.4% from the previous year’s 40.5p. However, the 37.5p
dividend was 103% covered by net income earned during
the year and the Company was able to transfer the
excess to bolster its revenue reserves, taking them from
17.5p per share to 20.2p, equivalent to 54% (2022: 48%) of
the current annual dividend of 37.5p (2022: 36.0p). The
Board gave extensive consideration to how much to grow
the dividend and how much to add to reserves. Two
factors influenced us in our decision. First is that we prefer
revenue reserves per share to be in the range of one-half
to a full year’s dividend per share. Second is that although
our Manager projects that revenue per share may fall for
another year, dividend cover for UK companies has
already recovered to a very healthy 2.0x for calendar
2023 from 1.5x in calendar 2021.
Investment Performance
Over the twelve months ended 30 June 2023, the
Company’s NAV per share (with debt at fair value) rose
8.8% in total return terms, as compared to the FTSE All-
Share Index (the “Benchmark”) return of 7.9%. The share
price total return was 4.9% reflecting the discount
widening from 4.5% to 8.2% (measured based on NAV
with debt at fair value).
Positive contributors over the year included the
Company’s long-term borrowings, sector allocation and
individual holdings such as Aveva and Sage. The largest
positive contributor was the favourable movement in the
fair (or market) value of the Company’s long-term
gearing: as interest rates rose, the market value of this
liability fell. The main negative contributors over the year
were stock-specific; Watkin Jones, Marshalls and Direct
Line. Charles Luke and Iain Pyle discuss performance in
more detail in the Investment Manager’s Report on
pages 9 to 13.
Looking over longer periods ended 30 June 2023, the
annualised NAV (debt at fair value) performance is
behind the Benchmark over three years but ahead over
five and ten years.
3 years ended 5 years ended 10 years ended
30 June 2023
(
annualised
)
30 June 2023
(
annualised
)
30 June 2023
(
annualised
)
Performance (total return) % % %
Share price
AB
7.3 5.6 5.7
Net asset value per Ordinary share
ABC
8.3 5.3 6.4
FTSE All-Share 10.0 3.1 5.9
Source: abrdn & Morningstar
A
Total return as defined on page 105.
B
Considered to be an Alternative Performance Measure. Further details may be found in pages 103 and 106.
C
With debt at fair value.
6 Murray Income Trust PLC
Investment Process
Our Manager’s investment process is best summarised as
a search for good quality companies at attractive
valuations. The Manager defines a quality company as
one capable of strong and predictable cash generation,
sustainably high returns on capital and with attractive
growth opportunities. These typically result from a sound
business model, a robust balance sheet, good
management and strong environmental, social and
governance characteristics. These qualities helped avoid
the worst of the dividend shocks during the pandemic.
Investment People
abrdn is our appointed investment management
company. Charles Luke has been our lead portfolio
manager since 2006 and works alongside Rhona Millar
and Co-Manager Iain Pyle, as members of abrdn’s 43-
strong Developed Markets Equities team.
Driving Environmental, Social and
Governance (“ESG”) Change
ESG considerations are deeply embedded into the
company analysis carried out by our Manager which is
able to draw on the expertise of more than 60 in-house
ESG specialists. The aim is to mitigate risk and enhance
returns and this results in frequent dialogue with investee
companies and helps to ensure that the companies in the
portfolio are acting in the best long-term interests of their
shareholders and society at large. The objective is to drive
ESG change.
It is important to note that the policy pursued by our
Manager on our behalf is dynamic rather than static. ESG
conclusions change if the inputs change: For example, one
might look at Russia’s invasion of Ukraine and conclude
that the social factor of security and safety is more
important now than previously considered. Similarly, one
might consider energy security be given a higher weight
relative to carbon dioxide emissions and come to a
different conclusion on holding an oil or gas stock.
The Investment Manager’s Report contains further
information on how ESG factors are incorporated into the
Managers’ investment approach. For more detailed
information we would refer you to the Sustainable
Investment Report on our website at:
murray-income.co.uk.
Share Buybacks and Discount
Discounts across the investment trust sector have
widened in the past twelve months, including within the UK
equity income sector. The Board has thus decided to
make more extensive use of its buyback capability. Over
the year, the discount widened from 4.5% to 8.2% while the
average discount was 7.4% and the range was between
4.5% and 12.2% (all based on NAV with debt at fair value).
The Company bought back 5.0m shares during the year,
representing 4.3% of shares in issue at the start of the year.
No shares were issued or sold from treasury.
The Board monitors the discount level closely and will
again be requesting shareholders’ approval at the AGM to
renew the Company’s buyback and issuance powers. As
at 30 June 2023, there were 111,720,001 (2022:
116,690,472) Ordinary 25p shares in issue with voting
rights and 7,809,531 (2022: 2,839,060) shares held
in Treasury.
Ongoing Charges
Our largest cost is the investment management fee
payable to abrdn which is calculated on a sliding scale
with a marginal rate of 0.25% on assets over £450m. The
effect of expanding the Company in 2020 and keeping
tight control of costs generally has resulted in an overall
ongoing charges rate of 0.50%, which the Board considers
good value compared to past history and also to other
funds in the closed- and open-ended industry.
Gearing
The Company has £100m of long-term borrowings with
£40m due in 2027 and £60m due in 2029 at a blended cost
of 3.6%. Together with a £50m short-term multicurrency
facility with Bank of Nova Scotia Limited, the Company has
up to £150m of borrowing facilities available representing
15.0% of net asset value. With the beta of the investment
portfolio (its sensitivity to changes in the Benchmark)
currently running at 0.9 (typical of the Investment
Manager’s style), the Board believes that the appropriate
neutral gearing rate is 10%. At the year end the actual
gearing rate was 10.4% (2022: 9.4%). The annualised cost
of the Company’s current borrowings was 0.26% of NAV
(2022: 0.23%).
Chair’s Statement
Continued
Murray Income Trust PLC 7
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Board Composition
As previously announced and after completing nearly ten
full years of service, I shall be retiring from the Board at the
conclusion of the centenary Annual General Meeting
(“AGM”). Peter Tait, currently Senior Independent Director,
will take over as Chair. Alan Giles will replace Peter as
Senior Independent Director. The other senior board
position is Audit Committee Chair, a post held by
Stephanie Eastment since 2018.
Merryn Somerset Webb has informed us that she does not
wish to stand for re-election as a Director and so will retire
from the Board at the end of the AGM. This is to allow her
to be able to pursue conference hosting roles with
interactive investor and others. We will miss her
knowledge of private investors and marketing and
markets in general. She leaves with our thanks and
best wishes.
The remaining Board members have started a
recruitment exercise. Sadly, I have to report that Jean Park
passed away in May - Jean was a much loved colleague
and a former Director of this Company until 2021.
Online Shareholder Presentation
The Company will hold an online shareholder presentation
for shareholders and other interested parties at 11.00am
on 3
November 2023. This will feature your Chair and
Investment Manager discussing the outlook for the
Company and answering your questions live. Please
submit questions in advance to
murray.income@abrdn.com or on the day via the event
page which is also where you may register:
https://www.workcast.com/register?cpak=
6223673361069891
Centenary Annual General Meeting
The Company will hold its centenary AGM in the city of our
incorporation, at 12.30pm on Tuesday 7 November 2023
in The Glasgow Royal Concert Hall. We hope to mark our
centenary in style. One of the advantages of investing via
investment trusts is that all shareholders have the
opportunity to meet their Manager and the Directors at
the AGM. This year’s meeting will commence with a
presentation on the Company and market outlook from
Charles Luke. There will then be the formal part of the
AGM where shareholders get to ask questions about the
AGM resolutions and thereafter cast their votes via a poll.
After this will be a centenary lunch at which shareholders
will be able to chat to the Manager and Directors.
Shareholders may bring a guest with them to the meeting.
Action to be Taken
If you wish to attend and are unsure how to register,
please send an email to: murray.income@abrdn.com.
Shareholders will find enclosed with this Annual Report an
Invitation Card and Form of Proxy for use in relation to the
AGM. Whether or not you propose to attend the AGM, you
are encouraged to complete the Form of Proxy in
accordance with the instructions printed on it and return it,
with the Invitation Card if you wish, in the prepaid envelope
as soon as possible but in any event so as to be received
no later than 12.30pm on 3 November 2023. Completion
of a Form of Proxy does not prevent you from attending
and voting in person at the AGM if you wish to do so.
If you hold your shares in the Company via a share plan or
a platform and would like to attend and/or vote at the
AGM, then you will need to make arrangements with the
administrator of your share plan or platform. For this
purpose, investors who hold their shares in the Company
via the abrdn Investments Plan for Children, the abrdn
Share Plan and/or the abrdn Investments Trust ISA will find
a Letter of Direction and Invitation Card enclosed.
Shareholders are encouraged to complete and return
both the Letter of Direction and Invitation Card in
accordance with the instructions printed thereon.
Further details on how to attend and vote at company
meetings for holders of shares via share plans and
platforms can be found at: www.theaic.co.uk/aic/
how-to-vote-your-shares
I always welcome questions from our shareholders at the
AGM. Alternatively, shareholders may submit questions to
the Board prior to the meeting by sending an email to:
murray.income@abrdn.com.
Update
From 30 June 2023 to 15 September 2023, being the latest
practicable date prior to approval of this Report, the NAV
per share (with debt at fair value) returned 2.6%
underperforming the FTSE All-Share Index which returned
3.3%, both figures on a total return basis.
8 Murray Income Trust PLC
A personal outlook
Over my term as a Director, I have invested around the
same amount buying Murray Income shares as I have
been paid in Directors’ remuneration. I intend to keep the
shares for the long-term. Why? Firstly, the starting yield is
important to me. My long-term financial planning targets
an overall compound annual growth rate of 4%-5%. If I
can achieve most of that from the starting yield of 4.5%
then the rest of the decision-making becomes easier. If
the dividend payments grow every year, that’s even
better. How about inflation protection? If inflation remains
high, the value of my future income will be eroded. That’s
one reason I favour Murray Income over long-term bonds.
Bonds, by definition, do not increase their dividend
payments. Equities can, and abrdn’s quality bias means
that I would expect Murray Income’s holdings to be more
resilient in such a scenario. Not total protection, but
enough to keep me from worrying.
What about the outlook for capital growth? Obviously, this
is harder to predict given the number and scale of known
and unknown scenarios. But as Charles and Iain argue in
their Investment Manager’s Report (see page 13), UK
equity valuations currently look unusually cheap in
absolute terms and relative to both their own history and
to world markets. The factors that have depressed UK
valuations (take your pick from politics, Covid, Brexit,
productivity, austerity, banks, quantitative easing and
inflation) are not necessarily permanent. The quality
companies within the UK market are to some extent
insulated from these factors and have, in certain cases,
been going from strength to strength, helping explain why
so many have been taken over by foreign companies. If
these quality companies in the portfolio can keep on
achieving revenue growth, the outlook for capital growth
is much improved.
In closing I’ll just focus on the investment numbers: the
Murray Income portfolio is presently trading on a price to
earnings multiple of 13.9x current year earnings. Average
dividend cover for those holdings is 2.0x. The current
dividend yield for the Company is 4.5% with that dividend
having increased every year for the past 50 years. All this
for an annual ongoing charges rate of around 0.50%.
May I thank you all for your support to me as Chair and for
your loyalty to the Company. It has been a great pleasure
and privilege to serve the Company. Murray Income will
be in good hands under Peter’s leadership and I trust that
you will share in its ongoing success.
Neil Rogan
Chair
19 September 2023
Chair’s Statement
Continued
Murray Income Trust PLC 9
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Background
For the UK economy, the year to 30 June 2023 (“the Year”)
has been characterised by high levels of inflation,
monetary policy tightening and concerns around a
potential recession. Equity markets have generally been
more robust than might have been expected against this
backdrop. The UK equity market ended the year +7.9%
higher on a total return basis, although with the path to
that level less than smooth. In September 2022, it was UK
politics that influenced domestic market performance.
The new Chancellor Kwarteng’s “mini budget” sparked a
wave of selling of UK gilts and a substantial weakening of
the pound which led to the Bank of England (“BoE”)
stepping in with emergency measures to stabilise
markets. UK government bond prices rose and the pound
recovered somewhat as first Chancellor Kwarteng and
then Prime Minister Truss resigned and many of their
previously announced tax cut proposals were reversed.
Then, in March 2023, the banking sector created volatility,
first in the US when Silicon Valley Bank collapsed and later
in the month when concerns grew over the viability of
Credit Suisse which was ultimately acquired by UBS.
Less transitory than these events have been the
persistently high level of inflation and the ongoing
response from central banks. UK inflation, as measured by
the Consumer Prices Index, reached 11.1% in October, the
highest level in more than four decades. Annual inflation
fell below 10% for the first time since the summer of 2022
in April when the reading was 8.7%, but data for May
showed that core inflation, which excludes volatile fuel
and unprocessed food costs, continued to rise. The BoE
acted to control inflation by raising interest rates multiple
times over the period, with the policy rate increasing from
1.25% at the start of the Year to 4.5% by the end of June
2023. After the year end, the BoE subsequently surprised
markets by hiking a further 0.5% in July, and then again by
an additional 0.25% in August, as inflation exceeded
expectations, although maintaining their forecast that
inflation will fall rapidly in the second half of 2023.
Despite rising interest rates, the UK has so far avoided a
technical recession (defined as two consecutive quarters
of negative growth in real GDP) and updated forecasts at
the start of the calendar year from the UK’s Office for
Budget Responsibility showed they now expect the
country to avoid a recession in 2023. Economic data for
the UK has been mixed over the period. GDP fell by -0.3%
in the quarter to September, followed by 0.1% increases in
the subsequent quarters to December and March.
Purchasing Managers’ Index data continued to show the
Services sector performing better than Manufacturing.
Labour markets have remained tight and there was
widespread strike action across multiple sectors.
Consumer confidence was reported to be at its lowest
level since records began in 1974, albeit retail sales
remained relatively robust.
This picture of high inflation and interest rate rises is
generally consistent across other developed markets.
Compared to the UK, inflation has softened more in the US
and the Eurozone in recent months and our view is that we
are nearing the end of hiking cycles in those economies. In
the US, although growth has so far fared better than
anticipated in the face of rate tightening and banking
sector concerns, we continue to forecast negative GDP
growth in 2024. China moved away from their zero-covid
policy in the final quarter of 2022. The policy change
initially led to a rise in covid cases which weighed on
growth, followed by a benefit to activity from the
reopening of the economy. However, the reopening
tailwind faded quicker than had been widely expected,
which prompted the government in Beijing to introduce
new measures intended to stimulate the economy. Oil and
other commodity prices declined over the Year over fears
of weakening demand. European gas prices fell sharply
from the mid-2022 highs reached following the Russian
invasion of Ukraine.
Global equity markets performed well over the Year, with
the MSCI World Index returning 19.2% over the period on a
total return basis in US dollar terms. In the UK, the FTSE All-
Share index (the Company’s “Benchmark”) lagged global
markets, rising by 7.9% with the FTSE 100 Index which has
more international exposure increasing by 8.9% and
outperforming the 3.0% rise in the FTSE 250 Index which
has more domestic exposure. From a factor perspective,
broadly-speaking ‘Value’ and ‘Momentum’ outperformed
while ‘Quality’ and ‘Growth’ stocks underperformed on a
relative basis.
Although a relatively small sector, the technology sector
performed strongly over the year mostly for individual
stock specific reasons. On the other hand the weakest
performance was seen in the telecoms sector as its main
constituents BT and Vodafone struggled operationally. In
a broad reversal of the prior year’s performance, some of
the more defensive areas of the market such as
healthcare and consumer staples underperformed while
perhaps surprisingly a number of the more cyclical,
economically-sensitive areas of the market such as
consumer discretionary and industrials outperformed.
Investment Mana
g
er’s Report
10 Murray Income Trust PLC
Performance
The Company generated a positive Net Asset Value per
share total return of 8.8% for the Year (based on debt at
fair value) outperforming the benchmark FTSE All-Share
Index which returned 7.9% over the Year. Changes in the
fair value of the Company’s long term debt aided
performance by approximately 1.3% reflecting the
favourable movement in the fair (or market) value of the
Company’s long-term gearing; as interest rates rose, the
market value of this liability fell. On a total return basis, the
Company’s share price increased by 4.9% which reflected
a widening of the discount to Net Asset Value (debt at fair
value) at which the shares traded from 4.5% to 8.2%.
Our investment process encompasses a patient buy and
hold approach and longer term returns also remain very
positive compared to the Benchmark. For example, over
five years, the share price and Net Asset Value per share
(based on debt at fair value) have outperformed the FTSE
All-Share Index by approximately 15% and 13%
respectively on a total return basis.
In absolute terms, taking account of the £60m of senior
secured fixed rate notes 2029, £40m of senior secured
fixed rate notes 2027, as well as £6.4m drawn down from
an unsecured multi-currency revolving credit loan facility
agreement with The Bank of Nova Scotia Limited, debt
was £106.5m at the end of the Year. The net gearing was
10.4% at the end of the Year as compared to 9.4% at the
end of the prior year.
Performance benefited from good stock selection in the
technology and consumer staples sectors offset by the
underweight exposure to energy and poor stock selection
in the consumer discretionary and industrials sectors.
Turning to the individual holdings, there were numerous
companies that demonstrated strong share price
increases. The share prices of VAT Group and Sage both
increased by over 45% during the Year. Non-held
companies British American Tobacco and Vodafone, and
the holdings in technology companies Sage and Aveva
generated the greatest stock level outperformance. As
we mentioned last year, we believed the portfolio was
vulnerable to corporate and takeover activity and during
the year bids were forthcoming for Euromoney, Aveva,
Industrials REIT, Dechra Pharmaceuticals and Countryside
Properties in aggregate benefiting relative performance.
The poorest share price performances were from
domestic companies exposed to higher inflation and/or
rising interest rates including Watkin Jones, Marshalls and
Direct Line. Marshalls, Direct Line and non-held HSBC and
Flutter provided the most significant negative relative
return over the Year.
Performance Attribution for the
year ended 30 June 2023
%
Net Asset Value total return for year per Ordinary share
(fair value)
+8.8
FTSE All Share Index total return
+7.9
Relative return
+0.9
Relative return
Stock selection
Energy
+0.1
Basic Materials
-0.5
Industrials
-1.5
Health Care
+0.2
Consumer Staples
+1.1
Consumer Discretionary
-0.9
Telecommunications
+0.5
Utilities
+0.1
Technology
+0.9
Financials
-0.7
Real Estate
+0.1
Total stock selection (equities)
-0.6
Asset allocation (equities)
Energy
-0.4
Industrials
+0.5
Health Care
+0.1
Consumer Staples
+0.1
Telecommunications
+0.1
Technology
+0.5
Financials
-0.1
Real Estate
-0.2
Total asset allocation (equities)
0.6
Management fees
-0.4
Administrative expenses
-0.1
Tax
-0.1
Cash & options
-0.5
Gearing – finance costs
+0.5
Gearing - difference between fair value and par value
returns
+1.3
Share buybacks
+0.3
Residual effect
-0.1
Total
+0.9
Notes: Stock Selection - measures the effect of equity selection relative to the
benchmark. Asset allocation – measures the impact of over or underweighting
each industry basket in the equity portfolio, relative to the benchmark weights.
Cash & options effect – measures the impact on relative returns of these
categories. Gearing – measures the impact on relative returns of net
borrowings. Management fees, administrative expenses and tax – these reduce
total assets and therefore reduce performance. Source - abrdn.
Investment Mana
g
er’s Report
Continued
Murray Income Trust PLC 11
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Portfolio Activity and Structure
Turnover of approximately 18% was the same as the prior
year. The pattern of trades reflected the ongoing desire to
improve, where possible, the quality of the portfolio and
maintaining the focus on attractive capital and dividend
growth. Active share (the proportion of the portfolio that
differs from the benchmark) remained stable at
approximately 70%.
The portfolio added five new holdings in the Year. Two of
these, Games Workshop and Genus, were UK mid-cap
company introductions. Games Workshop is a hobby
miniatures company which we see as a unique asset with
strong quality credentials and an attractive dividend yield.
Genus is a global leader in genetics and breeding,
contributing to improving sustainable food production. We
see Genus as having an attractive market position and
long-term growth potential from the development of
virus-resistant pigs.
The Company can invest up to 20% of gross assets in
overseas listed companies. This has three main benefits:
firstly, to provide access to industries not available to UK-
only investors; secondly, to diversify risk in concentrated
sectors in the UK market; and thirdly, to enable investment
in better quality proxies of UK listed companies. During the
year, three overseas holdings were added to the portfolio.
The first was Swiss-listed pharmaceutical company,
Roche, which has a healthy balance sheet and a pipeline
which we believe to be undervalued. The second was
LVMH, the luxury goods company listed in Paris which
offers strong long-term growth potential through its
portfolio of well-known brands. The final new overseas
holding added to the portfolio was Paris-listed cosmetics
and skincare company L’Oréal
which we see as having
strong quality characteristics, in particular: well-known
brands, appealing market growth dynamics and
attractive financial characteristics.
We increased exposure to several of our existing holdings
which we believe have high quality characteristics with
attractive growth prospects at appealing valuations
including Howden Joinery, Kone, Nestlé, Oversea-Chinese
Banking Corp, Oxford Instruments, London Stock Exchange
Group, RELX, Sage, and Unilever.
Fifteen holdings were sold during the Year, of which five
stocks were exited following takeover bids: Aveva, Dechra
Pharmaceuticals, Euromoney, Industrials REIT and
Countryside Partnerships (where we continue to have a
holding in the acquirer, Vistry). In the second half of 2022
we reduced the portfolio’s exposure to the real estate
sector. Watkin Jones was sold following a profit warning
which led to a change in confidence in the company’s
business model and concern about the risk of further
downgrades. Concern around high levels of leverage and
potential risk to dividends given rising discount rates and
higher interest charges also resulted in the sales of small
holdings in Assura, Sirius Real Estate, and Unite Group. The
residual position in Haleon, the consumer healthcare
business which was spun-out from GSK, was exited. XP
Power was exited as the outlook appeared increasingly
uncertain and the company has high leverage. The small
holding in Mowi was sold as call options written over the
holding were assigned. Finally, the small positions in
Ashmore, Bodycote and Weir were sold given more
attractive opportunities elsewhere.
In addition, we reduced the exposure to a number of
holdings where we have higher conviction in other names
in their respective sectors or to manage position sizes in
the portfolio. Positions in stocks including AstraZeneca,
Novo Nordisk, BHP, M&G, Standard Chartered and
TotalEnergies were trimmed.
Overall, the net effect of the purchases and sales has
been to reduce the number of holdings from 61 down to
52, providing a sharper focus to the portfolio.
We continued our measured option-writing programme
which is based on our fundamental analysis of the
holdings in the portfolio. The option-writing strategy has
been of benefit to the Company by diversifying and
increasing the level of income generated. It also provides
headroom to invest in companies with lower starting yields
but better dividend and capital growth prospects. Income
from writing options of £2.8m represented 5.6% of total
income earned in the Year.
Our aspiration in terms of portfolio construction is simple:
to invest in good quality companies with attractive growth
prospects through a sensibly diversified portfolio with
appealing dividend characteristics. Furthermore, the
ability to invest up to 20% of gross assets overseas is
helpful in achieving these aims with 13 overseas-listed
companies in the portfolio at the period end representing
approximately 18% of gross assets.
12 Murray Income Trust PLC
Environmental, Social and Governance
In line with our longer-term investment horizon, we
continue to put significant effort into engagement with the
companies in the portfolio to ensure that they are run in
shareholders’ best interests. Examples of the subjects of
our engagement during the Year have included topics
such as board composition, capital allocation, mergers
and acquisitions activity, and risk management (including
issues such as climate change, regulatory risk, and
management succession planning). We pursue these
issues through meetings with the executive management
of the companies as well as with the non-executives,
particularly the chairs of the board and remuneration
committees. MSCI independently rate the portfolio as AA
for its ESG characteristics and further detailed information
can be found in the Sustainable Investment Report on the
Company’s website at; murray-income.co.uk.
A small selection of examples include our
engagements with Games Workshop, Safestore and
Hiscox outlined below.
Having relatively recently initiated a position in Games
Workshop we chose to engage with the company more
actively on ESG-related matters. Of particular note, we
have flagged to the company that we believe that
enhancing diversity across the business should help
Games Workshop achieve a number of its goals, including
the sustaining of its strong culture and ambitions to further
develop their intellectual property and grow the customer
base through expanding geographically. We have written
to the company outlining our views and provided
examples of practices to support diversity we have
observed among our investee companies.
For a number of years we have voted against approval of
Safestore’s Remuneration Report owing to concerns
about a very generous incentive scheme introduced in
2017. However, we are supportive of the current board
and therefore, as one of Safestore’s largest shareholders,
this year we have engaged actively with the board on the
structure of a new remuneration policy. We have provided
feedback on multiple aspects of the policy proposal,
including striking a more balanced approach to base
salary and long-term incentives, incentivising and
retaining management of this high-performing company
and avoiding base salary growth for executive directors
ahead of the wider workforce.
We engaged with Hiscox in order to gain additional insight
into the company’s approach to ESG. The principal focus
of our engagement was the integration of climate-related
risks into underwriting. We were encouraged by the
company’s open dialogue on the areas of strength and
weakness in current datasets and modelling with respect
to climate-related risks and Hiscox’s approach to
enhancing its capabilities and generating opportunities for
new products. We have asked the company to enhance
disclosures with regards to social indicators, in particular
on human capital, and suggested that Hiscox consider
including social considerations into its Exclusions Policy
and set group sustainability targets beyond Greenhouse
Gas emissions reductions.
Income
For the Year, the Company witnessed a decrease in the
level of income due to lower dividends from the mining
sector holdings and a smaller amount of special dividends,
partly offset by higher interest income. Two special
dividends (paid by TotalEnergies and OSB Group) were
included in income from investments and were treated as
revenue items. We believe that this recognition is
appropriate given that, in each case, the return of cash
was from a build-up of profits generated by ongoing
operations rather than from a sale of assets.
The Company’s earnings per share decreased by 4.4%
from 40.5p to 38.7p. Paying a full year dividend of 37.5p per
share has allowed £2.2m to supplement the revenue
reserves which now represent 54% of the full year
dividend. We view the portfolio’s exposure to attractive
and enduring earnings trends as providing the potential
for appealing income growth over the long term.
Outlook
Recent data points provide a less than clear picture
around current conditions and future direction. However,
in most developed economies growth appears to be more
robust than might be expected in light of the meaningful
monetary policy tightening over the past 12 months. On
the other hand, the momentum of China’s reopening has
faded and more stimulus is likely to feature. Underlying
price pressures have been sticky reflecting excess
demand across various sectors and economies
prompting central banks to remain hawkish. We believe
that the current tightening cycle will ultimately restrict
economic growth with the resulting downturn in demand
helping to engineer a relatively rapid fall in inflationary
pressures allowing significant interest rate cuts over the
next 18 months.
Investment Mana
g
er’s Report
Continued
Murray Income Trust PLC 13
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
The portfolio is jam-packed with high quality,
predominantly global businesses capable of delivering
appealing long term earnings and dividend growth at a
modest aggregate valuation. Our focus on quality
companies should provide protection through a downturn:
those companies with pricing power, high margins and
strong balance sheets are better placed to navigate a
more challenging economic environment and emerge in
a strong position. Furthermore, these quality
characteristics are helpful in underpinning the portfolio’s
income generation.
The valuations of UK-listed companies remain attractive
on a relative and absolute basis. Apart from the global
financial crisis, the UK’s market multiple is nearing its
lowest point for 30 years. It is cheap in absolute terms,
relative to history and also relative to global equities.
Investors are benefitting from global income at a knock-
down price. Moreover, the dividend yield of the UK market
remains at an appealing premium to other regional equity
markets. In summary, we feel optimistic that our long-
term focus on investments in high quality companies with
robust competitive positions and strong balance sheets,
which are led by experienced management teams will
be capable of delivering premium earnings and
dividend growth.
Charles Luke and Iain Pyle
Investment Manager
19 September 2023
14 Murray Income Trust PLC
Performance (total return, including reinvested dividends)
1 year return 3 year return 5 year return 10 year return
% % % %
Share price
A
+4.9 +23.4 +31.6 +73.2
Net asset value per Ordinary share (debt at fair value)
A
+8.8 +26.9 +29.7 +85.7
Net asset value per Ordinary share (debt at par value)
A
+7.5 +24.5 +27.2 +82.3
Benchmark
B
+7.9 +33.2 +16.5 +78.0
A
Considered to be an Alternative Performance Measure. Further details can be found on pages 105 and 106.
B
FTSE All-Share Index.
Source: abrdn & Morningstar
Ten Year Financial Record
Year end 30 June 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Income (£’000) 23,926 25,476 24,838 26,667 25,987 25,597 22,804 35,979 51,018 48,879
Shareholders’ funds (£’000) 547,652 515,888 515,036 576,462 570,929 587,150 534,361 1,093,859 1,009,255 999,184
Per Ordinary share (p)
Net revenue return 30.5 33.1 32.0 34.9 33.6 34.9 30.5 33.7 40.5 38.7
Dividends
A
31.25 32.00 32.25 32.75 33.25 34.00 34.25 34.50 36.00 37.50
Net asset value (capital only) 805.2 757.1 766.5 860.1 856.3 888.1 808.3 934.6 864.9 894.4
A
The figures for dividends per share reflect the years to which their declaration relates and not the years they were paid.
Performance
Murray Income Trust PLC 15
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Total Return of NAV with debt at fair value and Share Price vs FTSE All-Share Index
Five years ended 30 June 2023 (rebased to 100 at 30 June 2018)
70
80
90
100
110
120
130
140
30/06/18 30/06/19 30/06/20 30/06/21 30/06/22 30/06/23
Source: Morningstar & Lipper
Share Pri ce
NAV (debt at
fair value)
NAV (debt at
par)
FTSE All
Share
Share Price Discount to NAV with debt at fair value
Five years ended 30 June 2023
-12%
-10%
-8%
-6%
-4%
-2%
0%
30/06/2018 30/06/2019 30/06/2020 30/06/2021 30/06/2022 30/06/2023
Sou rce: abrdn & Lipper
16 Murray Income Trust PLC
Financial Highlights
30 June 2023 30 June 2022 % change
Shareholders’ funds (£’000) 999,184 1,009,255 –1.0
Net asset value (“NAV”) per Ordinary share – debt at fair value 911.7p 871.0p +4.7
NAV per Ordinary share – debt at par 894.4p 864.9p +3.4
Market capitalisation (£’000) 935,096 970,865 –3.7
Share price of Ordinary share 837.0p 832.0p +0.6
Discount to NAV on Ordinary shares – debt at fair value
A
8.2% 4.5%
Discount to NAV on Ordinary shares – debt at par
A
6.4% 3.8%
Gearing (ratio of borrowing to shareholders’ funds)
Net gearing
A
10.4% 9.4%
Dividends and earnings
Revenue return per share 38.7p 40.5p –4.4
Dividends per share
B
37.50p 36.00p +4.2
Dividend cover
A
1.03 times 1.13 times
Dividend yield
A
4.5% 4.3%
Revenue reserves (£’000)
Prior to payment of fourth interim dividend
C
36,664 33,491
After payment of fourth interim dividend 22,576 20,363
Operating costs
Ongoing charges ratio
A
0.50% 0.48%
A
Considered to be an Alternative Performance Measure. Further details can be found on pages 103 and 105.
B
The figures for dividends per share reflect the years in which they were earned (see note 7).
C
Per the Statement of Financial Position on page 65.
Dividends
Rate XD date Record date Payment date
First interim 8.25p 17 Nov 2022 18 Nov 2022 15 Dec 2022
Second interim 8.25p 16 Feb 2023 17 Feb 2023 16 Mar 2023
Third interim 8.25p 18 May 2023 19 May 2023 15 Jun 2023
Fourth interim 12.75p 17 Aug 2023 18 Aug 2023 14 Sep 2023
Total dividends 37.50p
Financial Hi
g
hli
g
hts and Dividends
Murray Income Trust PLC 17
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Business Model
Murray Income Trust PLC (the “Company”) is an
investment trust whose Ordinary shares are listed on the
premium segment of the London Stock Exchange.
The Company is governed by a Board of Directors (the
“Board”), all of whom are non-executive, and has no
employees. The Board is responsible for determining the
Company’s investment objective and investment policy.
Like other investment companies, the day-to-day
investment management and administration of the
Company is outsourced by the Board to an investment
management group, abrdn, and other third party
providers. The Company has appointed abrdn Fund
Managers Limited (see ‘Manager’ in Glossary on page
107) as its alternative investment fund manager, which
has in turn delegated certain functions, including
administration of the investment policy, to abrdn
Investments Limited (formerly Aberdeen Asset Managers
Limited). The Manager has delegated the company
secretarial function to abrdn Holdings Limited (formerly
Aberdeen Asset Management PLC).
The Company complies with Section 1158 of the
Corporation Tax Act 2010 which permits the Company to
operate as an investment trust.
Investment Objective
The Company aims for a high and growing income
combined with capital growth through investment in a
portfolio principally of UK equities.
Investment Policy
In pursuit of the Company’s investment objective, the
Company’s investment policy is to invest in the shares of
companies that have potential for real earnings and
dividend growth, while at the same time providing an
above-average portfolio yield. The emphasis is on the
management of risk and on the absolute return and yield
from the portfolio as a whole rather than the individual
companies which the Company invests in, which is
achieved by ensuring an appropriate diversification of
stocks and sectors within the portfolio, with a high
proportion of assets in strong, well-researched companies.
The Company makes use of borrowing facilities to enhance
shareholder returns when appropriate.
Delivering the Investment Policy
The Company maintains a diversified portfolio of the
equity securities of UK and overseas companies with an
emphasis on investing in quality companies with good
management, strong cash flow, a sound balance sheet
and which are generating a reliable earnings stream.
The Investment Manager follows a bottom-up investment
process based on a disciplined evaluation of companies,
including through direct visits by its fund managers. Stock
selection is the major source of added value,
concentrating on quality first, then price. Top-down
investment factors are secondary in the Investment
Manager’s portfolio construction with diversification rather
than formal controls guiding stock and sector weights.
Board Investment Limits
The Board sets additional investment guidelines within
which the Investment Manager must operate :
· the portfolio typically comprises between 40 and 70
holdings (but without restricting the Company from
holding a more or less concentrated portfolio from time
to time);
· the Company may invest up to 100% of its gross assets
in UK-listed equities and other securities and is permitted
to invest up to 20% of its gross assets in other overseas-
listed equities and securities;
· the Investment Manager may invest in any market
sector, however, the top five holdings may not exceed
40% of the total value of the portfolio and the top three
sectors represented in the portfolio may not exceed
50%; and
· the Company may invest no more than 15% of its gross
assets in other listed investment companies (including
investment trusts).
The Company may use derivatives for the purpose of
enhancing portfolio returns and for hedging purposes in a
manner consistent with the Company’s broader
investment policy. The Investment Manager is permitted
to invest in options and in structured products, provided
that any structured product issued in the form of a note or
bond has a minimum credit rating of “A”.
Gearing
The Board is responsible for setting the gearing policy of
the Company and for the limits on gearing. The Manager
is responsible for gearing within the limits set by the Board.
The Board has set its gearing limit at a maximum of 25% of
NAV at the time of draw down. Gearing - borrowing
money - is used selectively to leverage the Company’s
portfolio in order to enhance returns where this is
considered appropriate. Particular care is taken to ensure
that any financial covenants permit maximum flexibility of
investment policy. Significant changes to gearing levels
are communicated to shareholders.
Overview of Strate
g
y
18 Murray Income Trust PLC
Key Performance Indicators
At each Board meeting, the Directors consider a number of Key Performance Indicators (“KPIs”) to assess the
Company’s success in achieving its objectives, and these are described below, with those also categorised as Alternative
Performance Measures marked with an asterisk (see also pages 103 to 106):
KPI Description
NAV (total return) * relative to
the Company’s benchmark
The Board considers the Company’s NAV (total return), relative to the FTSE All-Share Index, to be
the best indicator of performance over different time periods. A graph showing NAV total return
performance against the FTSE All-Share Index over the past five years is shown on page 15.
Share price (total return) * The Board monitors share price performance relative to open-ended and closed-ended
competitor products, taking account of differing investment objectives and policies pursued by
those products.
The figures for share price (total return) for the Year and for the past three, five and ten years, as
well as for the NAV (total return) per share, are shown on page 14. A graph showing share price
total return performance against the FTSE All-Share Index over the past five years is shown on
page 15.
Discount/premium to NAV * The discount/premium at which the Company’s share price trades relative to the NAV per share is
closely monitored by the Board. A graph showing the discount/premium over the last five years is
shown on page 15.
Earnings and dividends per
share
The Board aims to meet the ‘high and growing’ element of the Company’s investment objective by
developing revenue reserves sufficient to support the payment of a growing dividend; figures may
be found in Financial Highlights and Dividends on page 16 in respect of earnings and dividends per
share, together with the level of revenue reserves, for the Year and previous year.
Ongoing charges* The Board monitors the Company’s operating costs and their composition with a view to limiting
increases wherever possible. Ongoing charges are disclosed on page 16 for the Year and the
previous year and include look through costs. The increase in ongoing charges from 0.48% to
0.50% reflects the lower average net assets over the Year, as compared to the prior year.
Principal Risks and Uncertainties
There are a number of risks and uncertainties which, if
realised, could have a material adverse effect on the
Company’s business model, future performance and
solvency. The Board, through the Audit Committee, has
put in place a robust process to identify, assess and
monitor these by means of a risk assessment and internal
controls system. This system was reviewed during the
year, as explained in the Audit Committee Report on
pages 51 and 52. As noted therein, the committee has a
risk register and uses a post-mitigation heat risk map to
identify principal, and emerging, risks.
Macroeconomic uncertainty has again been a significant
risk during the year due to rising interest rates and higher
inflation. The Board does not consider that the principal risks
and uncertainties identified have changed during the Year.
The Audit Committee and the Board both consider
emerging risks as part of their normal review of factors
which could affect the Company, both in the short and
longer term. For example, the emergence of negative
climate change impacts, high inflation and interest rates,
and potential conflicts (China and Taiwan tension) form a
part of Directors’ discussions with input from the Manager
and broker.
The following table sets out the Company’s principal risks
and uncertainties and the Company’s mitigating actions
and comments if the post-mitigation risk assessment has
changed, together with the reason why.
Overview of Strate
g
y
Continued
Murray Income Trust PLC 19
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Principal Risk Mitigating Action
STRATEGIC AND MARKET
The Company’s investment objective and policy are no longer
meeting investors’ requirements (unchanged)
Lack of a robust strategic review, failure to understand the
market/investor demand. Failure to analyse and react to
changes or uncertainty, unclear dividend policy.
The Company's investment objective and policy (“IOP”) are
reviewed regularly by the Board to ensure they remain
appropriate and effective. The Board holds an annual strategy
meeting at which strategy and approach is reviewed; this
includes consideration of distributions; both dividends and share
buy backs.
Discount control risk (unchanged)
Investment trust shares tend to trade at discounts to their
underlying NAVs, although they can also trade at premium.
Discounts and premiums can fluctuate considerably leading to
more volatile returns for shareholders.
The Board monitors the discount at which the Company’s
shares trade and will buy back or issue shares to try to minimise
the impact of any discount or premium volatility. Whilst these
measures seek to reduce volatility, they are not guaranteed to
do this.
As was the case in the prior year, the Board has assessed the
discount control risk as elevated due to the discount at which
the Company’s shares are trading as compared to their
underlying NAV.
Market risk (increased)
Market risk arises from the volatility in prices of the Company’s
investments and the potential loss the Company could suffer
through realising investments following negative market
movements.
Changes in general geopolitical, economic or market conditions,
such as interest rates, exchange rates and rates of inflation, as
well as global political events and trends could substantially and
adversely affect the prices of securities and, as a consequence,
the value of the Company’s investment portfolio, its prospects
and share price.
Current geopolitical risks include the ongoing Russian invasion of
Ukraine, rising tension between China and Taiwan.
The longer term emergence of the effects on investee
companies of climate change, and the regulatory environment
around this present a further risk.
The Company’s investment policy and its approach to risk
diversification may be found on page 17, both of which serve to
mitigate the effect of market risk on the portfolio. The Board
considers the diversification of the portfolio, asset allocation,
stock selection and levels of gearing on a regular basis. The
Board also monitors the Company’s relative performance as
compared to peers and the Company’s benchmark.
The Board assesses climate change as an emerging risk in terms
of how it develops, including how investor sentiment is evolving
towards climate change within investment portfolios, and will
consider how the Company may mitigate this risk, any other
emerging risks, if and when they become material.
The Board engages with the Manager, at each Board meeting,
as part of its ESG oversight, to understand how climate change,
and environmental factors are being assessed . Both are key
considerations within the Manager’s investment process
(see also pages 93 to 97 for further information on the
Manager’s approach to ESG).
During the Year, the Board evaluated market risk as elevated
due to the limit on the Company’s ability to mitigate the effect of
external factors such as the uncertainty caused by geopolitical
factors, rising inflation and cost pressures.
20 Murray Income Trust PLC
Overview of Strate
g
y
Continued
Gearing risk (increased)
The Company uses credit facilities. These arrangements
increase the funds available for investment. While this has the
potential to enhance investment returns in rising markets, in
falling markets the impact could be detrimental.
Credit facilities may not be available at an acceptable rate, term
or amount. The Company’s three year £50 million facility
matures on 27 October 2024.
Gearing is monitored and strict restrictions on borrowings are
imposed: gearing continues to operate within pre-agreed limits
so as not to exceed 25% of NAV at the time of draw down.
The Board and the Manager monitors the lending market and
will address at a germane time to enable the availability of
appropriate facilities if required.
INVESTMENT MANAGEMENT
Underperformance risk (unchanged)
Consistent underperformance by the Investment Manager over
short, medium and long term.
The Investment Manager’s style may result in the portfolio being
significantly over or under weight positions in stocks and sectors
compared to the benchmark and the Company’s performance
may deviate significantly from that of the benchmark and peers,
possibly for extended periods.
The Board evaluates performance at each board meeting on
both an absolute and relative basis, against the Company’s
benchmark and peers, and across various periods: short,
medium and long term. Performance is also reviewed at the
annual strategy meeting.
The Company has a set of investment limits and Board
guidelines which ensure diversification of the portfolio.
Risk of loss of key staff (increased)
Loss of key staff though natural loss, or Manager reorganisation
and/or redundancy. Loss of investor confidence if lead
manager lost.
Charles Luke has been the lead portfolio manager for the
Company since 2006. His co-manager is Iain Pyle who has been
with the Manager since 2015, and Rhona Millar, with five years’
experience, also works alongside them. All work within the
Manager’s 43-strong Developed Markets Equities team.
MARKETING
General marketing risk (increased)
Failure to implement the Board’s marketing policy. Failure to
address shareholder concerns or complaints, including of abrdn
Investment Trust Saving plans holders.
Issues could arise from the lack of process ownership, poor
procedures or the failure to appropriately manage distribution,
concerns or complaints of shareholders.
The Manager’s investor relations team works closely with the
Board on institutional shareholder contact. In addition, quarterly
updates are provided to the Board by the broker. All
correspondence addressed to the Board is circulated to
Directors while any complaints relating to the Company’s
savings plans are reviewed by the Board quarterly.
OPERATIONAL
Service provider risk (unchanged)
In common with most other investment companies, the
Company relies on the services provided by third parties and is
dependent on the control systems of the Manager (who acts as
investment manager, company secretary and maintains the
Company’s assets, dealing procedures and accounting
records); BNP Paribas Trust Corporation UK Limited (who acts
as Depositary and Custodian); and the registrar. The security of
the Company’s assets, dealing procedures, accounting records
and adherence to regulatory and legal requirements depend
on the effective operation of the systems of these third party
service providers.
Contracts with third party providers are entered into after
appropriate due diligence. Thereafter the performance of each
provider is subject to an annual review by the Audit Committee.
The Depositary reports to the Audit Committee at least
annually, including on the Company’s compliance with AIFMD.
The Manager also regularly reviews the performance of
the Depositary.
Global assurance reports are obtained from the Manager, BNP
Paribas Trust Corporation UK Limited and the registrar. These
are reviewed by the Audit Committee. The reports include an
independent assessment of the effectiveness of risks and
Murray Income Trust PLC 21
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Failure by any service provider to carry out its obligations could
have a material adverse effect on the Company’s performance.
Disruption, including that caused by information technology
breakdown or a cyber-related issue, could prevent, for example,
the functioning of the Company; accurate reporting to the
Board or shareholders; or payment of dividends in accordance
with the announced timetable.
internal controls at the service providers including their planning
for business continuity and disaster recovery scenarios, together
with their policies and procedures designed to address the risks
posed to the Company’s operations by cyber-crime. The Audit
Committee receives an annual update on the Manager’s
IT resilience.
The Company’s assets are subject to a strict liability regime and,
in the event of a loss of assets, the Depositary must return assets
of an identical type or the corresponding amount, unless able to
demonstrate the loss was a result of an event beyond its
reasonable control.
The Board has assessed the risk posed by cyber-crime as
elevated, despite the available mitigation, reflecting the potential
disruption which might be caused to the Company’s operations
by a cyber-attack.
The following are other risks identified by the Board which could have a major impact on the Company, but due to
mitigation are not deemed to be principal risks:
Other Risks Mitigating Action
Dividend risk
There is a risk that the Company fails to generate sufficient
income from its investment portfolio to meet the Company’s
dividend requirements.
A cut in the dividend of the Company would likely cause a
drop in the share price and would end the Company’s
“Dividend Hero” status.
The Board reviews estimates of revenue income and
expenditure prepared by the Manager.
The Company’s level of revenue reserves is monitored and can
be added to in years of surplus, or used to support the dividend in
years where there is a revenue deficit. Dividends can also be
paid from capital, though use of capital reserves for dividends is
expected to be rare.
Financial risk
The Company’s investment activities expose it to a variety of
financial risks which include market risk (which is identified as a
principal risk and is covered earlier in this section on page 19),
liquidity risk and credit risk (including counterparty risk).
Details of these risks and the policies and procedures for their
monitoring and mitigation are disclosed earlier in this section
and in note 18 on pages 81 to 87.
Regulatory risk, including change of existing rules and regulation
The Company is required to comply with relevant rules and
regulations. Failure to do so could result in loss of investment trust
status, fines, suspension of the Company’s shares, criminal
proceedings or financial or reputational damage.
The Manager provides investment, company secretarial,
administration and accounting services through qualified third
party professional providers.
The Board receives regular reports from its broker, depositary,
registrar and Manager as well as the industry trade body (the
Association of Investment Companies (“AIC”) on changes to
regulations which could impact the Company and its industry.
Emerging risk
Failure to have in place procedures that assist in identifying
emerging risks. This may cause reactive actions rather than
being pro-active and, in the worst case, could cause the
Company to become unviable or otherwise fail.
The Board regularly reviews all risks to the Company, including
emerging risks, which are identified by a variety of means,
including advice from AIC, the Company’s professional advisors,
Directors’ knowledge of markets, changes and events.
22 Murray Income Trust PLC
Overview of Strate
g
y
Continued
The principal risks associated with an investment in the Company’s shares can be found in the pre-investment disclosure
document (“PIDD”) published by the Manager, which is available from the Company’s website: murray-income.co.uk.
Promotional Activities
The Board recognises the importance of promoting the
Company to existing and prospective investors both for
improving liquidity and enhancing the rating of the
Company’s shares. The Board believes one effective way
to achieve this is through subscription to, and participation
in, the promotional programme run by the Manager on
behalf of a number of investment trusts under its
management. The Company also supports the Manager’s
investor relations programme which involves regional
roadshows, promotional and public relations campaigns.
The Manager’s promotional and investor relations teams
report to the Board on a quarterly basis giving analysis of
their activities as well as updates on the shareholder
register and any changes in the make-up of that register.
Communicating the long-term attractions of the
Company is key. The promotional programme includes
commissioning independent paid for research on the
Company, most recently from Edison Investment
Research Limited; a copy may be found on the
Company's website.
The UK Stewardship Code and Proxy Voting
The Company supports the UK Stewardship Code 2020,
and seeks to play its role in supporting good stewardship
of the companies in which it invests. Responsibility for
actively monitoring the activities of portfolio companies
has been delegated by the Board to the Manager
which has sub-delegated that authority to the
Investment Manager.
The Manager is a tier 1 signatory of the UK Stewardship
Code 2020 which aims to enhance the quality of
engagement by investors with investee companies in
order to improve their socially responsible performance
and the long term investment return to shareholders. The
Manager’s Annual Stewardship Report 2022 may be found
at abrdn.com. While delivery of stewardship activities has
been delegated to the Manager, the Board acknowledges
its role in setting the tone for the effective delivery of
stewardship on the Company’s behalf.
The Board has also given discretionary powers to the
Manager to exercise voting rights on resolutions proposed
by the investee companies within the Company’s portfolio.
The Manager reports to the Board on a six monthly basis
on stewardship (including voting) issues and additional
information may be found on page 97.
Global Greenhouse Gas Emissions and
Streamlined Energy and Carbon Reporting
(“SECR”)
All of the Company’s activities are outsourced to third
parties. The Company therefore has no greenhouse gas
emissions to report from the operations of its business, nor
does it have responsibility for any other emissions
producing sources under the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations
2013. For the same reason as set out above, the
Company considers itself to be a low energy user under
the SECR regulations and therefore is not required to
disclose energy and carbon information. Further
information on the Manager’s obligatory disclosures under
the Taskforce on Climate-related Financial Disclosures
(“TCFD”) may be found on page 96.
Viability Statement
The Company does not have a fixed period strategic plan
but the Board does formally consider risks and strategy on
at least an annual basis. The Board regards the Company,
with no fixed life, as a long term investment vehicle but for
the purposes of this viability statement has decided that a
period of five years (the “Review Period”) is an appropriate
timeframe over which to report. The Board considers that
this Review Period reflects a balance between looking out
over a long term horizon and the inherent uncertainties of
looking out further than five years.
In assessing the viability of the Company over the
Review Period the Directors have focused upon the
following factors:
· the Company’s principal risks and uncertainties as set
out in the Strategic Report on pages 18 to 22;
· the relevance of the Company’s investment objective;
· the demand for the Company’s shares as indicated by
the level of premium and/or discount;
· the level of income generated by the Company’s
portfolio as compared to its expenses;
· the overall liquidity of the Company’s investment
portfolio;
· the likelihood of the Company being able to continue to
meet the covenants under its current borrowing
arrangements, and the covenants attaching to any
replacement borrowing arrangements, over the next
five years;
Overview of Strate
g
y
Continued
Murray Income Trust PLC 23
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
· the £40m senior loan notes and £60m senior loan notes,
which are repayable in 2027 and in 2029, respectively;
and
· any requirement for the Company to repay or refinance
the drawn-down element of its three year £50 million
bank loan facility prior to, or at, its maturity in
October 2024.
In making this assessment, the Board has considered in
particular a large economic shock, such as a further
global pandemic, a period of increased stock market
volatility and/or markets at depressed levels, a significant
reduction in the liquidity of the portfolio, or persistent
inflationary pressures, or changes in investor sentiment or
regulation, and how these factors might affect the
Company’s prospects and viability in the future. The Board
undertook scenario analysis, incorporating income
forecasting, in reaching its conclusions, but recognising
that the Company’s expenses are significantly lower than
its total income.
Taking into account the Company’s current position and
the potential impact of its principal risks and uncertainties,
the Directors have a reasonable expectation that the
Company will be able to continue in operation and meet
its liabilities as they fall due for a period of five years from
the date of this Report.
Performance, Financial Position and Outlook
A review of the Company’s activities and performance
during the Year, including future developments, is set out in
the Chair’s Statement and in the Investment Manager’s
Report. These cover market background, investment
activity, portfolio strategy, dividend policy, gearing and
investment outlook. A comprehensive analysis of the
portfolio is provided on pages 27 to 31 while the full
portfolio of investments is published monthly on the
Company’s website. The Company’s Statement of
Financial Position on page 65 shows the assets and
liabilities at the year end. Borrowing facilities at the year
end comprised a mix of fixed and floating debt: a three
year £50 million bank loan, £40 million of senior loan notes
due for repayment in 2027 and £60 million of senior loan
notes due for repayment in 2029. Details of these are
shown in notes 13 and 14 respectively.
The future strategic direction and development of the
Company is regularly discussed as part of Board meeting
agendas. The Board also considers the Manager’s
promotional strategy for the Company, including effective
communications with shareholders. The Board intends to
maintain, for the year ending 30 June 2024, the strategy
set out in the Strategic Report as it believes that this is in
the best interests of shareholders.
Environmental, Community, Social and
Human Rights Issues
The Company has no employees and, accordingly, there
are no disclosures to be made in respect of employees. In
relation to the investment portfolio, the Board has
delegated assessment of these issues to the Investment
Manager, responsibility and further information may be
found on pages 93 to 97.
Modern Slavery Act
Due to the nature of its business, being a company that
does not offer goods and services to customers, the Board
considers that the Company is not within the scope of the
Modern Slavery Act 2015 because it has no turnover. The
Company is therefore not required to make a slavery and
human trafficking statement. The Board considers the
Company’s supply chains, dealing predominantly with
professional advisers and service providers in the financial
services industry, to be low risk in relation to this matter.
Board Diversity
At 30 June 2023, there were three male Directors and
three female Directors (2022 – three male Directors and
three female Directors). Further information on Board
diversity may be found in the Directors’ Report on pages
38 and 39.
The Strategic Report has been approved by the Board and
signed on its behalf by:
Neil Rogan
Chair
19 September 2023
24 Murray Income Trust PLC
The Board is required to report how it has discharged its
duties and responsibilities under section 172 of the
Companies Act 2006 during the Year. Under this
requirement, the Directors have a duty to promote the
success of the Company for the benefit of its members
(shareholders) as a whole, taking into account the likely
long term consequences of decisions, the need to foster
relationships with the Company’s stakeholders, and the
impact of the Company’s operations on the environment.
In addition the Directors must act fairly between
shareholders and be cognisant of maintaining the
reputation of the Company.
The Purpose of the Company and Role
of the Board
The Company has been established as an investment
vehicle for the purpose of delivering its investment
objective which is set out on the inside front cover of this
Report. Investment trusts, such as the Company, are long-
term investment vehicles that are typically externally-
managed, have no employees, and are overseen by an
independent non-executive board of directors.
The Board is responsible for all decisions relating to the
Company’s investment objective and policy, gearing,
corporate governance and strategy, and for monitoring
the performance of the Company’s third party service
providers, including the Manager.
The Board’s philosophy is that the Company should foster
a culture where all parties are treated with respect. The
Directors provide mutual support combined with
constructive challenge. Integrity, openness and diligence
are defining characteristics of the Board’s culture. The
Company has a number of policies and procedures in
place to aid a culture of good governance, such as those
relating to Director’s conflicts of interests and dealings in
the Company’s shares, annual evaluation of Directors,
anti-bribery and anti-tax evasion. At its regular meetings,
the Board engages with the Manager to understand its
culture and receives regular reporting and feedback from
the other key service providers.
The Company’s primary stakeholders have been
identified as its shareholders, the Manager, other key
third party service providers, lenders and investee
companies and the following table sets out details of
the Company’s engagement.
Shareholders The Directors place great importance on communication with shareholders. Further details on the
Company’s relations with Shareholders, including its approach to the Annual General Meeting, and
investor relations can be found in the Directors’ Report on page 43.
In addition, the Chair and Investment Manager are holding an online shareholder presentation on 3
November 2023, further details of which may be found in the Chair’s Statement on page 7.
Manager The Investment Manager’s Report on pages 9 to 13 details the key investment decisions taken during
the Year. The Board engages with the Investment Manager at every Board meeting and receives
presentations from the Investment Manager to help it to exercise effective oversight of the Investment
Manager and delivery of the Company’s strategy. The Board also receives regular updates from the
Manager outside of these meetings.
The Management Engagement Committee’s monitoring of the performance of the Manager over the
Year is detailed on pages 40 and 41.
Other Key Third Party
Service Providers
The Board ensures that it promotes the success of the Company by engaging specialist third party
suppliers with the resources, controls and performance records to deliver the service required. The
Board seeks to maintain constructive relationships with its key service providers (the Company’s
registrar, depositary and broker) either directly, or through the Manager, with ongoing dialogue and
formal regular meetings. The Audit Committee conducts an annual assessment of key service providers
as set out in the Committee’s report on page 52. The Board seeks regular assurance that key third party
service providers have in place appropriate business continuity plans and which are expected to allow
them to maintain service levels in the face of disruption.
Promotin
g
the Success of the Company
Murray Income Trust PLC 25
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Investee Companies The Board is committed to investing in a responsible manner and actively monitors the activities of
investee companies through its delegation to the Investment Manager. In order to achieve this, the
Investment Manager has discretionary powers to exercise voting rights on resolutions proposed by the
investee companies and reports quarterly to the Board on stewardship issues, including voting. The
Board monitors investments made and divested and questions the rationale for exposures taken and
voting decisions made.
Information on how the Investment Manager engages with investee companies may be found on
pages 12 and 97.
Lenders to the Company On behalf of the Board, the Manager maintains a positive working relationship with the provider of the
Company’s multi-currency loan facility and the holders of the Company’s Senior Loan Notes, assuring
compliance with lenders’ covenants and providing regular updates on business activity.
Specific Examples of Stakeholder
Consideration During the Year
While the importance of giving due consideration to the
Company’s stakeholders is not a new requirement, and is
considered as part of every Board decision, the Directors
were particularly mindful of stakeholder considerations
during the following decisions reached during the Year.
Dividends Paid to Shareholders
The level, frequency and timing of dividends paid are key
considerations for the Board, taking into account net
earnings for the year and the Company’s objective of
providing shareholders with a high and growing income,
combined with the Company’s Dividend Hero status.
The total dividend per share of 37.5p in respect of the
Year, representing an increase of 4.2% on the prior year,
and the Company’s dividend policy to make four equally-
spaced payments to shareholders throughout the Year,
reflects these considerations.
Share Buy Backs
During the Year the Company bought back 4,970,471
Ordinary shares to be held in treasury, representing a
significant increase on the 356,015 Ordinary shares
bought back in the previous year, providing a small
accretion to the NAV and a degree of liquidity to the
market at times when the discount to the NAV per share
had widened during normal market conditions. It is the
view of the Board that this policy remains in the best
interests of all shareholders.
Board Succession
The Board, via the Nomination Committee, reviewed its
succession plan in light of Directors’ retirement at the AGM
on 7 November 2023. Further information may be found in
the Directors’ Report on page 41.
Shareholder Communication
The Chair hosted an online event for shareholders on 2
November 2022. This event was arranged to allow those
shareholders who may have been unable to attend the
AGM in person on 1 November 2022 to pose questions to
both the Chair and the Investment Manager. A similar
event will be held on 3 November 2023, as described in the
Chair's Statement on page 7.
26 Murray Income Trust PLC
Portfolio
A world leader in luxury, LVMH
(a portfolio company purchased
this year) drives long-term
momentum to develop its 75
brands, including Moet Chandon,
respecting their distinctive identities.
Murray Income Trust PLC 27
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 30 June 2023
RELX
AstraZeneca
RELX is a global provider of information
and analytics for professionals and
businesses across a number of
industries including scientific, technical,
medical and law. The company offers
resilient earnings combined with long
term structural growth opportunities.
AstraZeneca researches, develops,
produces and markets
pharmaceutical products. With a
significant focus on oncology and rare
diseases, the company offers
appealing growth potential over the
medium term.
Unilever
Diageo
Unilever is a global consumer goods
company supplying food, home and
personal care products. The company
has a portfolio of strong brands
including: Dove, Knorr, Axe and Persil.
Over half of the company’s sales are to
developing and emerging markets.
Diageo produces, distills and markets
alcoholic beverages including vodkas,
whiskies, tequilas, gins and beer. The
company should benefit from
attractive long term drivers such as
population and income growth, and
premiumisation. The company has a
variety of very strong brands and faces
limited private label competition.
SSE
TotalEnergies
SSE is a utility company mostly focused
on networks and renewables. The path
to net zero will require significant
investment in distribution networks
and the company should also benefit
from its strong position in offshore
wind generation.
TotalEnergies is a broad energy
company that produces and markets
fuels, natural gas and electricity. It is a
leader in the sector’s energy transition
with an attractive pipeline of
renewable assets
BHP Group
London Stock Exchange
BHP Group (formerly BHP Billiton) is a
diversified resources group with a
global portfolio of high quality assets
particularly iron ore and copper. The
company provides an appealing
dividend yield combined with a strong
balance sheet.
London Stock Exchange is a diversified
global financial markets infrastructure
and data business. The company is
highly cash generative and very well
placed to benefit from increased
spend on data services.
BP
Sage Group
BP is a fully integrated energy
company involved in exploration,
production, refining, transportation and
marketing of oil and natural gas. We
believe the industry is currently in a
sweetspot with robust prices and
benign costs. The company provides
an attractive dividend yield and is well
placed for the energy transition.
Sage Group is a market leading
software business focused on
accounting, payroll and payments. The
company has a strong product suite
and is well placed to benefit from the
software automation of its small and
mid-sized customers over the
medium term.
Ten Lar
g
est Investments
28 Murray Income Trust PLC
Portfolio
As at 30 June 2023
Valuation Total Valuation
2023 investments 2022
Investment FTSE All-Share Sector Country £’000 % £’000
RELX Media UK 61,856 5.6 45,388
AstraZeneca Pharmaceuticals and Biotechnology UK 60,904 5.6 69,318
Unilever Personal Care, Drug and Grocery Stores UK 56,200 5.1 34,656
Diageo Beverages UK 52,951 4.8 55,310
SSE Electricity UK 37,940 3.5 35,431
TotalEnergies Oil, Gas and Coal France 34,369 3.1 37,496
BHP Group Industrial Metals and Mining UK 33,932 3.1 36,349
London Stock Exchange Finance and Credit Services UK 33,912 3.1 17,862
BP Oil, Gas and Coal UK 32,387 3.0 27,437
Sage Group Software and Computer Services UK 30,020 2.7 13,676
Top ten investments 434,471 39.6
Coca-Cola HBC Beverages UK 29,787 2.7 23,144
Experian Industrial Support Services UK 29,324 2.7 20,282
Rentokil Initial Industrial Support Services UK 26,708 2.4 20,624
Close Brothers Banks UK 26,700 2.4 21,839
Inchcape Industrial Support Services UK 25,899 2.4 23,151
Anglo American Industrial Metals and Mining UK 25,065 2.3 26,093
National Grid Gas, Water and Multi-utilities UK 24,156 2.2 24,423
Novo-Nordisk Pharmaceuticals and Biotechnology Denmark 22,239 2.0 20,888
Safestore Real Estate Investment Trusts UK 21,600 2.0 23,659
Oversea-Chinese Banking Banks Singapore 21,124 1.9 14,833
Top twenty investments 687,073 62.6
Intermediate Capital Investment Banking and Brokerage Services UK 20,793 1.9 10,929
Howden Joinery Retailers UK 20,155 1.8 15,780
Microsoft Software and Computer Services United States 17,865 1.6 11,452
Oxford Instruments Electronic and Electrical Equipment UK 17,179 1.6 7,962
Nordea Bank Banks Sweden 16,694 1.5 14,075
Genus Pharmaceuticals and Biotechnology UK 16,314 1.5 –
Croda International Chemicals UK 15,982 1.5 18,387
Games Workshop Leisure Goods UK 15,579 1.4 –
Convatec Medical Equipment and Services UK 15,569 1.4 17,025
Vistry Household Goods and Home Construction UK 15,219 1.4 12,639
Top thirty investments 858,422 78.2
Portfolio
Murray Income Trust PLC 29
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
As at 30 June 2023
Valuation Total Valuation
2023 investments 2022
Investment FTSE All-Share Sector Country £’000 % £’000
M&G Investment Banking and Brokerage Services UK 14,862 1.4 17,707
OSB Finance and Credit Services UK 14,469 1.3 14,469
Smith & Nephew Medical Equipment and Services UK 14,091 1.3 8,946
Hiscox Non-life Insurance UK 13,985 1.3 8,922
Nestlé Food Producers Switzerland 13,694 1.3 15,523
Kone Industrial Engineering Finland 13,653 1.2 9,047
GSK Pharmaceuticals and Biotechnology UK 12,630 1.1 20,068
Drax Electricity UK 12,568 1.1 13,933
VAT Group Electronic and Electrical Equipment Switzerland 12,447 1.1 7,486
LVMH Personal Goods France 12,325 1.1 –
Top forty investments 993,146 90.4
Standard Chartered Banks UK 12,085 1.1 29,465
Roche Pharmaceuticals and Biotechnology Switzerland 9,919 0.9 –
Direct Line Insurance Non-life Insurance UK 9,445 0.9 17,493
Telenor Telecommunications Service Providers Norway 9,323 0.9 12,742
Mondi General Industrials UK 9,251 0.8 11,227
L’Oréal Personal Goods France 9,181 0.8 –
Marshalls Construction and Materials UK 8,779 0.8 16,346
RS Group Industrial Support Services UK 8,771 0.8 10,027
Genuit Construction and Materials UK 8,519 0.8 10,162
Chesnara Life Insurance UK 7,138 0.6 7,389
Top fifty investments 1,085,557 98.8
Accton Technology Telecommunications Equipment Taiwan 7,051 0.7 5,273
Moonpig Retailers UK 5,703 0.5 7,278
Total investments 1,098,311 100.0
Ordinary shares unless otherwise stated.
30 Murray Income Trust PLC
Investments held at 30 June 2023 (percentage of portfolio)
0% 5% 10% 15% 20% 25%
Basic Materials
Consumer Discretionary
Consumer Staples
En e rgy
Financials
Health Care
In dus trials
Real Estate
Technology
Telecomm unications
Utilities
Company
FTSE All-Share
Investments held at 30 June 2022 (percentage of portfolio)
0% 5% 10% 15 % 20% 25%
Basic Materials
Consumer Discretionary
Consu mer Staples
Ene rgy
Financials
Health Care
In dus trials
Real Estate
Technology
Telecomm unications
Utilities
Company
FTSE All-Share
Sector Comparison with the Benchmark
Murray Income Trust PLC 31
Strategic Report Governance Overview General Portfolio Corporate Information Financial Statements
Valuation Valuation
30 June 2022 Transactions Gains/(losses) 30 June 2023
£’000 % £’000 £’000 £’000 %
Equities
UK 942,138 85.7 (56,917) 13,206 898,427 81.8
Denmark 20,888 1.9 (5,434) 6,785 22,239 2.0
Finland 9,047 0.8 3,581 1,025 13,653 1.3
France 37,496 3.4 12,068 6,311 55,875 5.1
Norway 20,582 1.9 (5,491) (5,768) 9,323 0.9
Singapore 14,833 1.4 5,718 573 21,124 1.9
Switzerland 23,009 2.1 10,892 2,159 36,060 3.3
Sweden 14,075 1.3 – 2,619 16,694 1.5
Taiwan 5,273 0.5 – 1,778 7,051 0.6
United States 11,452 1.0 2,499 3,914 17,865 1.6
Total investments 1,098,793 100.0 (33,084) 32,602 1,098,311 100.0
Summary of Investment Chan
g
es Durin
g
the Year
32 Murray Income Trust PLC
Governance
Murray Income Trust PLC 33
Games Workshop was introduced to the portfolio
in the year under review. This unique mid-cap
company owns strong intellectual property
through its fantasy wargame ‘Warhammer’
series. The Manager’s engagement with the
company is described on page 12.
34 Murray Income Trust PLC
Neil Rogan
Independent Chair
Length of service
9 years; appointed Chair on 6 November 2017
Experience and other public
company directorships:
Neil Rogan, who was appointed a Director on 26
November 2013, is former Head of the Global Equities
Teams at both Gartmore and Henderson and former
Head of International Equities as well as a former member
of the Investment Division Executive Committee at
Gartmore. He previously managed Fleming Far Eastern
Investment Trust. He is non-executive chairman of Invesco
Asia Trust plc and a non-executive director of JPMorgan
Global Growth & Income plc.
Committee Membership:
Management Engagement Committee (Chair),
Nomination Committee (Chair) and Remuneration
Committee.
Contribution:
The Nomination Committee has reviewed the contribution
of Neil Rogan and has concluded that he continues to
chair the Company expertly, fostering a collaborative
spirit between the Board and Manager while ensuring that
meetings remain focussed on the key areas of
stakeholder relevance. Neil Rogan will retire as a Director
at the conclusion of the AGM on 7 November 2023.
Peter Tait
Senior Independent Non-Executive Director and Chair of
the Remuneration Committee
Length of service
5 years; appointed Senior Independent Director on 2
November 2021
Experience and other public
company directorships:
Peter Tait, who was appointed a Director on 7 November
2017, retired from the Nestlé Group where he was initially
Head of Investments for the Nestlé UK Pension Fund and
then CEO & CIO of Nestlé Capital Management. Prior to
Nestlé he worked for many years in the investment
management industry managing portfolios for investment
trusts, pension funds and charitable foundations. During
that time he was a managing director at BlackRock
International and, before that, a director of Dunedin Fund
Managers and a portfolio analyst at Scottish Widows Life
Assurance Fund.
Committee Membership:
Audit Committee, Management Engagement Committee,
Nomination Committee and Remuneration Committee
(Chair).
Contribution:
The Nomination Committee has reviewed the contribution
of Peter Tait in light of his proposed re-election as a
Director, and his appointment as Chair of the Company at
the conclusion of the forthcoming AGM, and considers
that he continues to bring to the Board his knowledge of
investment management as well as experience of
investment companies.
Board of Directors