BlackRock Income and Growth Investment Trust delivers strong NAV returns in H1

BlackRock Frontiers Investment Trust (LON:BRFI)
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BlackRock Income and Growth Investment Trust plc (LON:BRIG) has announced its half-year report for the Six Months Ended 30 April 2024.

Performance record



 
As at 
30 April 
2024 
As at 
31 October 
2023 
Net assets (£’000)143,809 40,156 
Net asset value per ordinary share (pence)217.79 194.90 
Ordinary share price (mid-market) (pence)186.50 178.00 
Discount to net asset value214.4% 8.7% 
FTSE All-Share Index9611.01 8413.70 
 ========= ========= 


 
For the six 
months ended 
30 April 2024 
For the 
year ended 
31 October 2023 
Performance (with dividends reinvested)  
Net asset value per share214.4% 5.2% 
Ordinary share price27.6% 8.1% 
FTSE All-Share Index14.2% 5.9% 
 ————— ————— 
Performance since 1 April 20123 (with dividends reinvested)  
Net asset value per share2130.0% 101.1%
Ordinary share price2118.9% 103.5%
FTSE All-Share Index128.2% 99.8%
 ========= ========= 


 
For the six 
months ended 
30 April 2024 
For the six 
months ended 
30 April 2023 

Change 
Revenue   
Net profit on ordinary activities after taxation (£’000)806 722 11.6 
Revenue earnings per ordinary share (pence)43.94 3.44 14.5 
 ————— ————— ————— 
Dividends (pence)   
Interim2.70 2.60 3.8 
 ========= ========= ========= 

1 The change in net assets reflects portfolio movements, the purchase of the Company’s own shares and dividends paid.

2 Alternative Performance Measures, see Glossary within the Half Yearly Financial Report.

3 Since BlackRock’s appointment as Investment Manager on 1 April 2012.

4 Further details are given in the Glossary within the Half Yearly Financial Report.

For more information on the BlackRock Income and Growth Investment Trust, please visit: www.blackrock.com/uk/brig

Chairman’s statement

Overview
I am pleased to report that our portfolio has performed well during the six months to 30 April 2024, delivering strong absolute NAV returns, and marginally outperforming the Benchmark Index, which also performed well as UK equity markets rose.

Overall market sentiment was once again heavily influenced by the path of inflation and interest rates. In the US, the anticipated easing of monetary policy at the start of 2024 did not materialise as the Federal Reserve grappled with the challenge of deteriorating growth and a possible recession, while also seeking to quell stubborn price inflation. Following a shallow technical recession in the second half of 2023, UK GDP returned to growth in 2024, although to date progress remains relatively muted.  However, the market was buoyed by declining inflation, attractive valuations, and the prospect of a cut in interest rates in the summer.

Demand for UK equities appeared to improve during the period, with investors’ interest in UK assets aided by a combination of attractive valuations, relatively high yields and steadily reducing inflation. The rate of inflation for the 12-months to May 2024 came in at 2.0%, the lowest level since July 2021 and hitting the Bank of England’s inflation target.

Performance
The Company’s net asset value per share (NAV) returned 14.4%, compared with the Company’s Benchmark Index, the FTSE All-Share Index (total return), which returned 14.2%. The Company’s share price returned 7.6% as the discount widened from 8.7% at the start of the period to 14.4% as at 30 April 2024. (All percentages in Pound Sterling with dividends reinvested).

Subsequent to the period end and as at 19 June 2024, the net asset value per share of the Company has increased by 2.2% from 217.79 pence per share to 222.59 pence per share and the Company’s share price has risen by 6.4% from 186.50 pence per share to 198.50 pence per share. By comparison, the Company’s Benchmark Index has increased by 1.6% over the same period.

Further information on the significant components of overall performance and the changes to portfolio composition are set out in the Investment Manager’s report below.

Revenue profit and dividends
Revenue profit for the period was 3.94 pence per share (six months to 30 April 2023: 3.44 pence per share), a year on year increase of 14.5%. The Board is declaring an increased interim dividend of 2.70 pence per share which will be paid on 3 September 2024 to shareholders on the Company’s register at the close of business on 26 July 2024 (the ex-dividend date is 25 July 2024). I am pleased to report that our interim dividend is fully covered by the revenue generated during the six-month period to 30 April 2024.

Share capital

The Directors recognise the importance to investors that the Company’s share price should not trade at a significant discount to NAV, and therefore, in normal market conditions, looks to use the Company’s share buy back, sale of shares from treasury and share issuance powers to seek to ensure that the share price does not differ excessively from the underlying NAV. We used our powers to buy back almost half a million shares during the period, despite which the discount proved stubborn, having traded at an average level of 12.7% throughout and ending the period at 14.4%. Following the end of the period, at the close of business on 19 June 2024 the discount was 10.8%.

A total of 488,228 ordinary shares were bought back and cancelled during the period at an average price of 181.68 pence and for a total consideration of £887,000.

Fees and charges
The Board is mindful of the need to ensure that shareholders receive good value from the Company and regularly reviews its costs and charges. Following the discussion below, effective from 1 November 2023, the Company is entitled to a rebate from the investment management fee charged by the Manager in the event the Company’s ongoing charges exceed 1.15% per annum of average daily net assets. Further information is set out within the Half Yearly Financial Report.

Gearing
The Company operates a flexible gearing policy which depends on prevailing conditions and the outlook for the market. Gearing is subject to a maximum level of 20% of net assets at the time of investment. As at 30 April 2024 the Company had net gearing of 5.5%. Gearing levels and sources of funding are reviewed regularly to ensure that the Company has access to the most competitive borrowing rates available to it. The Company has a one-year unsecured Sterling Revolving Credit Facility of £8,000,000 with The Bank of New York Mellon (International) Limited, of which £4,000,000 is currently drawn.

Shareholder communication
The Board appreciates how important access to regular information is to our shareholders. To supplement our Company website, we now offer shareholders the ability to sign up to the Trust Matters newsletter which includes information on the Company as well as news, views and insights.

Further information on how to sign up is included on the inside cover of the Half Yearly Financial Report

Outlook
Following the period end, the Government’s announcement of an early General Election took many by surprise. There has since been a great deal written on the potential economic ramifications of an incumbent or opposition victory, analysis of the respective monetary and fiscal policies, and the potential impact on various sectors of the UK market. What we do know is that whichever political party is elected, the resulting political certainty should be broadly positive for UK equities.

As you will read in their report which follows below, your portfolio managers believe the UK stock market continues to offer an attractive value, both in absolute terms and relative to other developed markets. They are excited about the opportunities available and have added several new positions in both domestic large-cap and mid-cap companies during the period. With UK equity valuations at historical lows, and with an improving macroeconomic backdrop providing a more fertile environment for growth, they believe the outlook for the remainder of the year and beyond is positive.

Your Board remains fully supportive of our portfolio managers’ investment philosophy. Their consistent investment approach focuses on identifying high-quality, well-capitalised, cash generative companies that can compound returns over time. We trust they will continue to generate long term capital growth and an attractive level of income for the Company’s shareholders.

GRAEME PROUDFOOT
Chairman
20 June 2024

Investment Manager’s report

Performance
For the six months to 30 April 2024, the Company’s NAV returned 14.4%, performing broadly in-line with its benchmark, the FTSE All-Share Index (the Benchmark Index), which returned 14.2% over the same period. (All percentages are in Pound Sterling with dividends reinvested.)

Investment approach
In assembling the Company’s portfolio, we adopt a concentrated investment approach to ensure that our best ideas contribute significantly to returns. We believe that it is the role of the portfolio overall to generate an attractive and growing yield alongside capital growth rather than every individual company within the portfolio. This gives the Company increased flexibility to invest where returns are most attractive. This approach results in a portfolio which differs substantially from the index and in any individual year the returns will vary, sometimes significantly from those of the index. Our objective is to achieve returns greater than the index through time. The foundation of the portfolio, approximately 70%, is in ’income generators’ that we believe will sustain strong cash generation and pay an attractive and growing dividend whilst aiming to deliver a double-digit total return. Additionally, we look to identify and invest 20% of the portfolio in ‘growth’ companies that have significant barriers to entry and scalable business models that enable them to grow consistently. We also look for turnaround companies, accounting for up to 10% of portfolio value, which represent those companies that are out of favour with the market, facing temporary challenges yet offer significant recovery potential.

Market overview
Despite the late euphoria of 2023, US interest rates have remained higher than initially forecasted with policy makers faced with a challenging situation of having to balance the risk of an impending recession with persistent high levels of inflation. In the US, the Federal Reserve (Fed) held interest rates steady as inflation remained sticky but assuaged market concerns towards the end of the period as it signalled the intention to cut and revise up growth and inflation forecasts. In the Eurozone, inflation eased but remained above the European Central Bank’s (ECB) target of 2%. The ECB held interest rates steady as policymakers balanced concerns over a looming recession with persistently elevated underlying inflationary pressures.

The UK market showed resilience as signs of easing inflation, expectations of early interest rate cuts by the Bank of England and attractive prices have helped boost investor interest in UK equities. The FTSE 100 rose steadily over the period, before reaching a record high of 8,147 points in April, buoyed by the substantial exposure to mining and energy sectors which benefitted from the strength in oil, copper, and precious metals. The health care and consumer staples sectors, which are significant US Dollar earners, also contributed to the UK market’s strong relative performance, aided by Pound Sterling’s weakness against the US currency. The strong performance also trickled down to UK small and mid-caps, although not to the same extent as blue-chip stocks.

Contributors to and detractors from performance
The Company benefitted from its large position in 3i Group whose annual results provided welcome news on both current trading and the future prospects of its largest asset, Action, the European discount retailer. Like-for-like growth continues to exceed expectations as customers benefit from reinvestment in prices and as the group continues to open stores in existing and new countries. With 2,566 stores in existence at the end of 2023 and potential to open a further 4,000+ stores in Europe, we continue to see sustainable like-for-like growth and growing returns to investors. Intermediate Capital Group performed well during the period as returning risk appetite and continued strong fund-raising led to a positive re-evaluation of its prospects. Similarly, good execution of their strategy at Next led to strong performance in the shares. Despite a fairly patchy backdrop for the UK consumer, the investments Next has made in online capabilities, including its Label platform serving third parties and in small brand acquisitions, are paying dividends. The portfolio also benefitted from not owning Diageo or Prudential as weaker trading in both saw the share prices fall.

The Company’s holding in Reckitt performed poorly over the period. The company’s results for 2023 were worse than expected: volume weakness was compounded by a product recall and an understatement of trade spend in the Middle East led to a further shortfall. The news flow deteriorated as the quarter progressed with an adverse jury ruling in the US. The company has staunchly defended its position and intends to appeal. However, we have seen that litigation can create an overhang for many months and the shares are likely to remain optically cheap whilst this remains. Similarly, Hays, the staffing company, issued a profit warning following a deceleration in activity in December with net fees falling c. 15% in December versus 7-8% in September-November due to weakness in their permanent placements division alongside a muted seasonal pick- up in temporary placements. The shares have been derating for some time in anticipation of this downturn. Hays remains cash generative and operates with a net cash balance sheet and we believe the company should emerge in a strong competitive position when the macroeconomic backdrop improves. We continue to own Hays as we see significant long-term value. The Company’s overweight position in Centrica also suffered as the shares gave up some of the strong gains it made during the early part of 2023. Not owning Rolls Royce was also a headwind given the shares saw very strong performance during the period as fears of further capital raising were eased by strong trading and cash generation.

Transactions
The Company purchased a new holding in Weir Group. This is a mining equipment supplier with a well-established installed base which generates significant aftermarket revenue and profit. The outlook for mining capex looks reasonable, especially in their key commodities (copper, gold, iron ore) which should allow original equipment orders to improve from a low base. Offering attractive free-cash-flow generation with a robust balance sheet and modest valuation, we perceive a very attractive risk reward.

We also started a new position in SGS. This is a global testing business with a new and well-regarded CEO. We would expect the new CEO to reinvigorate the organic and inorganic prospects of the organisation and to improve operational effectiveness. We view this as an attractive industry and company which have both struggled, with the new CEO as a potential catalyst for a turnaround.

The Company increased its positions in both NatWest and HSBC as we expect the outlook for earnings and returns to continue to positively surprise. We also took part in the placing at Segro to enable it to execute on its exciting growth prospects.

To fund these purchases the Company sold its positions in Schneider Electric and Centrica. Schneider Electric has been a hugely successful holding for the portfolio since purchase. With the shares up 35% in 2023 and with recent expectations raised again, we felt the risk-reward was now more balanced with better opportunities elsewhere. Centrica has performed strongly since its purchase in 2021 and again we have higher conviction elsewhere following its +c. 80% move.

Our investment case for Watches of Switzerland has been impacted by several factors including the weaker-than-expected demand recovery in China along with the Rolex acquisition of Bucherer. At this point, we believe there are more questions than answers for the company, therefore, we have decided to exit the position.

Reckitt was reduced following the emergence of potential litigation: Unfortunately, this development is an overhang that is likely to persist for some time and we moderated our position to manage this expected dynamic. We also reduced our position in 3i Group and Shell, following the strong run in the shares.

Gearing
Historically, we have managed the Company with a modest and consistent level of gearing, typically between 5-8% to enhance income generation and capital growth. However, as market volatility has picked up, we have been more active over the last 2 years, varying both the level of gearing and using a broader range (0-10%) depending on the opportunities or risks presenting themselves at the time. As at 30 April 2024, the Company had employed net gearing of 5.5%.

Outlook
Equity markets entered 2024 in a buoyant mood following a strong and broad rally in the latter part of 2023. The outlook, and optimism, is a far cry from 12 months ago, when supply chains were hugely disrupted, and inflation was in double digits and well ahead of central banks’ targets prompting rapid and substantial interest rates hikes despite an uncertain demand environment. Despite this, equities had one of their best years on record outperforming bonds with double digit increases, in US Dollar terms, across most of the developed world and some emerging markets. In the US, the Nasdaq was the standout rising 54% driven by the largest seven companies that rebounded strongly (+c. 70%) after a poor 2022, when they had fallen 39% as a group. The FTSE All-Share Index returned 7.9% in 2023. Whilst China was the surprise negative in 2023, with no noticeable COVID-19 re-opening recovery and lacklustre growth despite government attempts to stimulate.

As we pass the first quarter of 2024, we believe markets have shifted into ‘goldilocks’ territory whereby slowing inflation has signalled the peak for interest rates while broad macroeconomic indicators that have been weak are not expected to deteriorate further. This is also helpful for the cost and availability of credit which has recently improved having been deteriorating through most of 2023. During December, bond markets had begun to price in 130bps of easing in the US and a not dissimilar amount in the UK and Europe. We believed that this quantum of cuts will prove to be overly aggressive without a significant deterioration in the economy which we don’t expect. That said, despite these expectations moderating significantly during Q1, stock markets have continued to make progress in the developed world. Labour markets remain resilient for now with low levels of unemployment while real wage growth is supportive of consumer demand albeit presenting a challenge to corporate profit margins.

Notably in 2024, geopolitics will play a more significant role in asset markets. This year will see the biggest election year in history with more than 60 countries representing over half of the world’s population going to the polls. While most, such as the UK’s are unlikely to have globally significant economic or geopolitical ramifications, others, such as the US elections in November, could have a material impact. We believe political certainty may be helpful for the UK and address the UK’s elevated risk premium that has persisted since the damaging Autumn budget of 2022. Whilst we do not position the portfolios for any particular election outcome, we are mindful of the potential volatility and the opportunities that may result.

The UK stock market continues to remain depressed in valuation terms relative to other developed markets offering double-digit discounts across a range of valuation metrics. This valuation ‘anomaly’ saw further reactions from UK corporates with the buyback yield of the UK, at the end of 2023, standing at a respectable c. 2.5%. Combining this with a dividend yield of c. 3.7% (FTSE All Share Index yield as at 30 April 2024. Source: The Investment Association) the cash return of the UK market is attractive in absolute terms and comfortably higher than other developed markets. Although we anticipate further volatility ahead as earnings estimates moderate, we know that in the course of time risk appetite will return and opportunities are emerging. We have identified a number of opportunities with new positions initiated throughout the year in both UK domestic and midcap companies.

We continue to focus the portfolio on cash generative businesses with durable, competitive advantages as we believe these companies are best placed to drive returns over the long-term. Whilst we anticipate economic and market volatility will persist throughout the year, we are excited by the opportunities this will likely create; by identifying the companies that strengthen their long-term prospects as well as attractive turnaround situations.

ADAM AVIGDORI and DAVID GOLDMAN
BlackRock Investment Management (UK) Limited
20 June 2024

For more information on the BlackRock Income and Growth Investment Trust, please visit: www.blackrock.com/uk/brig

Ten largest investments

Together, the Company’s ten largest investments represented 46.6% of the Company’s portfolio as at 30 April 2024 (31 October 2023: 48.0%)

1 ▲ AstraZeneca (2023: 2nd)
Sector: Pharmaceuticals & Biotechnology
Market value: £3,670,000
Share of investments: 7.9% (2023: 7.2%)

AstraZeneca is an Anglo-Swedish multinational pharmaceutical group with its headquarters in the UK. It is a science-led biopharmaceutical business with a portfolio of products for major disease areas including cancer, cardiovascular infection, neuroscience and respiration.

2 ▼ Shell (2023: 1st)
Sector: Oil & Gas Producers
Market value: £3,566,000
Share of investments: 7.7% (2023: 8.9%)

Shell is a global oil and gas company. The company operates in both upstream and downstream industries. The upstream division is engaged in searching for and recovering crude oil and natural gas, the liquefaction and transportation of gas. The downstream division is engaged in manufacturing, distribution and marketing activities for oil products and chemicals.

3 ▲ RELX (2023: 4th)
Sector: Media
Market value: £2,470,000
Share of investments: 5.3% (2023: 5.5%)

RELX is a global provider of professional information solutions that includes publication of scientific, medical, technical and legal journals. It also has the world’s leading exhibitions, conference and events business.

4 ▼ Rio Tinto (2023: 3rd)
Sector: Mining
Market value: £2,281,000
Share of investments: 4.9% (2023: 5.9%)

Rio Tinto is a metals and mining group operating in approximately 36 countries around the world, producing iron ore, copper, diamonds, gold and uranium.

5 ▲ 3i Group (2023: 6th)
Sector: Financial Services
Market value: £2,222,000
Share of investments: 4.8% (2023: 4.2%)

3i Group is a leading international investor focused on mid-market private equity and infrastructure.

6 ▲ HSBC (2023: 15th)
Sector: Banks
Market value: £2,010,000
Share of investments: 4.3% (2023: 2.2%)

HSBC, a bank and financial services institution, has a multinational footprint with a meaningful presence in Asia. It operates through retail banking and wealth management, commercial banking, global banking and markets, and global private banking businesses.

7 ► Unilever (2023: 7th)
Sector: Personal Goods
Market value: £1,475,000
Share of investments: 3.2% (2023: 3.5%)

Unilever is a consumer staples business operating in food, home and personal care and has strong positions in emerging markets, where long-term growth trends in various countries that currently generate the majority of revenues.

▲ Tate & Lyle (2023: 11th)
Sector: Food Producers
Market value: £1,393,000
Share of investments: 3.0% (2023: 2.5%)

Tate & Lyle is a British-headquartered, global supplier of food and beverage products to food and industrial markets.

▲ Segro (2023: 21st)
Sector: Real Estate Investment Trusts
Market value: £1,282,000
Share of investments: 2.8% (2023: 1.8%)

Segro is an industrial real estate investment trust with a high-quality portfolio of assets.

10 ▼ Reckitt (2023: 5th)
Sector: Household Goods & Home Construction
Market value: £1,271,000
Share of investments: 2.7% (2023: 4.7%)

Reckitt is a global leader in consumer health, hygiene and household products. Its products are sold in 200 countries and its 19 most profitable brands are responsible for the majority of net revenues.

All percentages reflect the value of the holding as a percentage of total investments.

Percentages in brackets represent the value of the holding as at 31 October 2023.

Distribution of investments as at 30 April 2024

Analysis of portfolio by sector

 % of investments by market valueBenchmark
Index
Financial Services10.64.8
Banks10.69.9
Pharmaceuticals & Biotechnology9.411.4
Oil & Gas Producers9.311.6
Support Services8.53.4
Media6.83.9
Mining6.30.3
Household Goods & Home Construction6.01.2
General Retailers4.43.1
Real Estate Investment Trusts4.02.5
Non-Life Insurance3.50.9
Travel & Leisure3.43.2
Personal Goods3.20.2
Food Producers3.00.7
Industrial Engineering2.70.6
Life Insurance2.42.1
Tobacco1.72.6
Electronic & Electrical Equipment1.61.0
Health Care Equipment & Services1.40.5
Leisure Goods1.10.2
General Industrials0.11.6

Sources: BlackRock and Datastream.

Investment size

 Number of investments% of investments by market value
<£1m2940.7
£1m to £2m924.4
£2m to £3m419.3
£3m to £4m215.6

Source: BlackRock.

Investments as at 30 April 2024



 
Market 
value 
£’000 

% of 
investments 
Financial Services  
3i Group2,222 4.8 
London Stock Exchange Group941 2.0 
Intermediate Capital Group820 1.8 
Ashmore Group567 1.2 
Premier Asset Management Group383 0.8 
 ————— ————— 
 4,93310.6
 ========= ========= 
Banks  
HSBC2,010 4.3 
Standard Chartered1,147 2.5 
NatWest959 2.1 
Lloyds Banking Group791 1.7 
 ————— ————— 
 4,90710.6
 ========= ========= 
Pharmaceuticals & Biotechnology  
AstraZeneca3,670 7.9 
GSK712 1.5 
 ————— ————— 
 4,3829.4
 ========= ========= 
Oil & Gas Producers  
Shell3,566 7.7 
BP Group747 1.6 
 ————— ————— 
 4,3139.3
 ========= ========= 
Support Services  
Mastercard11,261 2.7 
Hays1,138 2.5 
Rentokil Initial844 1.8 
SGS1671 1.5 
 ————— ————— 
 3,9148.5
 ========= ========= 
Media  
RELX2,470 5.3 
Pearson718 1.5 
 ————— ————— 
 3,1886.8
 ========= ========= 
Mining  
Rio Tinto2,281 4.9 
Anglo American627 1.4 
 ————— ————— 
 2,9086.3
 ========= ========= 
Household Goods & Home Construction  
Reckitt1,271 2.7 
Taylor Wimpey803 1.7 
Berkeley Group758 1.6 
 ————— ————— 
 2,8326.0
 ========= ========= 
General Retailers  
Next865 1.9 
Howden Joinery587 1.3 
WH Smith576 1.2 
 ————— ————— 
 2,028 4.4 
 ========= ========= 
Real Estate Investment Trusts  
Segro1,282 2.8 
Big Yellow Group533 1.2 
 ————— ————— 
 1,815 4.0 
 ========= ========= 
Non-Life Insurance  
Admiral Group824 1.8 
Hiscox765 1.7 
 ————— ————— 
 1,589 3.5 
 ========= ========= 
Travel & Leisure  
Compass Group1,185 2.6 
Fuller Smith & Turner – A Shares363 0.8 
Patisserie Holdings2– – 
 ————— ————— 
 1,548 3.4 
 ========= ========= 
Personal Goods  
Unilever1,475 3.2 
 ————— ————— 
 1,475 3.2 
 ========= ========= 
Food Producers  
Tate & Lyle1,393 3.0 
 1,393 3.0 
 ========= ========= 
Industrial Engineering  
Weir Group771 1.7 
Spirax-Sarco Engineering469 1.0 
 ————— ————— 
 1,240 2.7 
 ========= ========= 
Life Insurance  
Phoenix Group1,100 2.4 
 ————— ————— 
 1,100 2.4 
 ========= ========= 
Tobacco  
British American Tobacco778 1.7 
 ————— ————— 
 778 1.7 
 ========= ========= 
Electronic & Electrical Equipment  
Oxford Instruments721 1.6 
 ————— ————— 
 721 1.6 
 ========= ========= 
Health Care Equipment & Services  
Smith & Nephew638 1.4 
 ————— ————— 
 638 1.4 
 ========= ========= 
Leisure Goods  
Games Workshop495 1.1 
 ————— ————— 
 495 1.1 
 ========= ========= 
General Industrials  
Coats Group29 0.1 
 ————— ————— 
 29 0.1 
 ========= ========= 
Total investments46,226 100.0 
========= ========= 

1 Non-UK listed investments.

2 Company under liquidation.

All investments are in ordinary shares unless otherwise stated. The total number of investments held at 30 April 2024 was 44 (31 October 2023: 46).

As at 30 April 2024, the Company did not hold any equity interests comprising more than 3% of any company’s share capital.

Interim Management Report and Responsibility Statement

The Chairman’s Statement and the Investment Manager’s Report above give details of the important events which have occurred during the period and their impact on the financial statements.

Principal risks and uncertainties
The principal risks faced by the Company can be divided into various areas as follows:

· Investment performance;

· Income/dividend;

· Gearing;

· Legal & regulatory compliance;

· Operational;

· Political;

· Market; and

· Financial.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 31 October 2023. A detailed explanation can be found in the Strategic Report on pages 35 to 38 and in note 16 on pages 97 to 103 of the Annual Report and Financial Statements which are available on the website maintained by BlackRock at: www.blackrock.com/uk/brig.

Certain financial markets have been negatively impacted by the ongoing geopolitical tensions arising from the hostilities in the Middle East and Russia’s invasion of Ukraine and the impact of the subsequent range of sanctions, regulations and other measures which impaired normal trading in Russian securities. The Board and the Investment Manager continue to monitor investment performance in line with the Company’s investment objectives, and the operations of the Company and the publication of net asset values are continuing.

In the view of the Board, other than those matters noted above, there have not been any material changes to the fundamental nature of these risks since the previous report and these principal risks and uncertainties, as summarised, are as applicable to the remaining six months of the financial year as they were to the six months under review.

Going concern
The Board remains mindful of the ongoing uncertainty surrounding the extent of the hostilities in the Middle East and the potential duration of the war in Ukraine and its longer-term effects on the global economy and the current heightened geopolitical risk. Nevertheless, the Directors, having considered the nature and liquidity of the portfolio, the Company’s investment objective and the Company’s projected income and expenditure, are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and is financially sound.

For this reason, they continue to adopt the going concern basis in preparing the financial statements. The Company has a portfolio of investments which are considered to be readily realisable and is able to meet all of its liabilities from its assets and income generated from these assets. Ongoing charges (calculated as a percentage of average daily net assets and based on the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation, prior year expenses written back and certain non-recurring items) for the year ended 31 October 2023 were approximately 1.28%. Effective 1 November 2023 the ongoing charges of the Company are capped at the rate of 1.15% per annum of average daily net assets.

Related party disclosure and transactions with the Manager
BlackRock Fund Managers Limited (BFM) was appointed as the Company’s Alternative Investment Fund Manager (AIFM) with effect from 2 July 2014. BFM has, with the Company’s consent, delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Both BFM and BIM (UK) are regarded as related parties under the Listing Rules. Effective from 1 November 2023, the Company is entitled to a rebate from the investment management fee charged by the Manager in the event the Company’s ongoing charges exceed the cap of 1.15% per annum of average daily net assets. Details of the management fee payable are set out in note 3 and note 12 below. The related party transactions with the Directors are set out in note 11 below.

Directors’ responsibility statement
The Disclosure Guidance and Transparency Rules of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge that:

· the condensed set of financial statements contained within the Half Yearly Financial Report has been prepared in accordance with the applicable UK Accounting Standard FRS 104 ‘Interim Financial Reporting’; and

· the Interim Management Report, together with the Chairman’s Statement and Investment Manager’s Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA’s Disclosure Guidance and Transparency Rules.

The Half Yearly Financial Report has not been audited or reviewed by the Company’s Auditors.

The Half Yearly Financial Report was approved by the Board on 20 June 2024 and the above responsibility statement was signed on its behalf by the Chairman.

GRAEME PROUDFOOT
For and on behalf of the Board
20 June 2024

For more information on the BlackRock Income and Growth Investment Trust, please visit: www.blackrock.com/uk/brig

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