Murray Income Trust PLC

The Board of Murray Income are thrilled to have won a highly competitive tender run by the board of Perpetual Income and Growth Investment Trust plc for a combination of the two companies to be implemented by way of a scheme of reconstruction under section 110 of the Insolvency Act 1986. It is a recognition of the strength of the people, process and performance of our management team led by Charles Luke, supported by Iain Pyle and the rest of their UK team at Aberdeen Standard Investments. Combined with a projected 0.38% blended management fee, which compares to pre-combination blended fee rates of 0.48% for the Company and 0.55% for PLI, our proposal proved compelling. The two companies have very similar objectives, delivering high and growing income combined with capital growth. If approved by shareholders, the proposed combination with PLI will create a company with gross assets in excess of £1 billion. Further details can be found below:

An update from our investment manager, Charles Luke - 28 September 2020

The coronavirus crisis represents an highly unusual episode for equity markets given that it represents a combination of a demand and supply shock leading to significant concerns about the financial viability of companies. Although there are some exceptions due to the unusual circumstances of the crisis, in general companies with robust business balance sheets and strong business models are best placed to navigate these very challenging times. These are the types of companies that we focus on in the Murray Income Trust portfolio and although it is little consolation given the falls in the market since the start of 2020, on a gross assets basis, we are pleased with the performance of the portfolio in the current conditions.

We have sold a number of companies that are particularly exposed to the coronavirus and are surveying the market closely for opportunities to add to holdings where we believe the market reaction has been too severe. We remain in close dialogue with our holdings to understand their thoughts.

Although the trajectory of an economic recovery will be dependent on a range of factors including further government support, whether we witness a second wave of the virus, the timing and availability of a vaccine, and behavioural changes, it seems likely that the post-coronavirus environment will be characterised by a long period of subpar growth, limited inflation, low interest rates and high corporate debt. In addition, the end of the transition period for Brexit adds a further layer of ambiguity regarding our future relationship with the EU and as a consequence of those negotiations, the rest of the world.  Furthermore, the outcome of the upcoming US election is too close to call. In these difficult circumstances we believe that companies with attractive dividend yields, sound growth prospects and strong balance sheets are likely to be prized more highly than ever. Therefore it seems eminently sensible to maintain our careful and measured approach to these high quality companies that should be able to thrive in this challenging environment and emerge in a stronger competitive position.