Half-year Report

Legal Entity Identifier: 213800IYHGJTZJ3MO642

Regulated Information Classification: Half Yearly Financial Report.

The following information is disclosed in accordance with DTR 4.2 of the UKLA Listing Rules (half-yearly financial reports).

The Company's objective is to provide good absolute returns over long periods by investing the great majority of its assets in UK and international quoted securities and, if appropriate, index futures. The portfolio is constructed without reference to the composition of any stockmarket index. Although its investment policy allows gearing, including the use of derivatives, the Company is not permitted to employ gearing whilst it continues to be a small registered UK Alternative Investment Fund Manager (AIFM). When appropriate, the directors will sanction a relatively concentrated portfolio structure and, depending on its AIFM status, relatively high levels of gearing.

The principal risks facing the Company, which have not changed since the date of the Company's Annual Report and financial statements for the year to 30 November 2020, are financial risk, investment strategy risk, regulatory risk, custody risk, operational risk, discount risk, political risk and resource risk. An explanation of these risks and how they are being managed or mitigated is set out on pages 10 to 12 of that report, which is available on the Company's website: independentinvestmenttrust.co.uk. The Company's policy is designed to allow the Company an unusually high degree of freedom to exploit the directors' judgement. To the extent that the directors' judgement is flawed, future results could be unusually poor.

We confirm that to the best of our knowledge:

a) the condensed set of financial statements has been prepared in accordance with FRS 104 'Interim Financial Reporting';

b) the Chairman's Statement includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year, their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year); and

c) the Interim Financial Report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

On behalf of the board

Douglas McDougall

Chairman

9 July 2021

* For a definition of terms see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

† Source: Baillie Gifford/Refinitive and relevant underlying data providers. See disclaimer at the end of this announcement.

# Alternative performance measure, see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Past performance is not a guide to future performance.

The six month period ending 31 May 2021 saw our company produce a net asset value total return of 16.8%. The total returns notionally attributable to the FTSE All-Share Index and the FTSE World Index were 15.2% and 9.8% respectively. Our net asset value per share rose from 547.1p to 633.7p over the period, and the share price from 505.0p to 564.0p, causing the discount to net asset value to rise from 7.7% to 11.0%. The share price total return for the period was 12.8%.

Earnings for the half year amounted to 5.17p (2020 - 0.85p). As we had hoped, there has been a strong recovery in our revenue account, making the decision to declare an unchanged interim dividend of 3.00p an easy one. It will be paid on 20 August 2021 with an ex-dividend date of 29 July 2021. The usual uncertainty attends the outlook for the full year, but the underlying picture is more encouraging than we had feared at the beginning of the year.

During the period we were able to buy back 911,769 shares at an average discount of 10.4%. We remain happy to buy back shares on terms that are in the interests of continuing shareholders.

Once again this has been a period when the economic background has been dominated by the development of the Covid-19 pandemic. Early optimism prompted by the start of the vaccination programme gave way to concern over the scale and duration of restrictions needed to curb further waves of infection. More recently, growing evidence that economies have been more resilient to the second lockdown than to the first has led to upgrades to forecasts for growth. For those economies, such as the UK and the USA, that have enjoyed good progress in their vaccination programmes, these upgrades have been significant. Stockmarkets have also been boosted by the continuing programmes of monetary and fiscal stimulation. Particularly helpful to sentiment has been the determination of central bankers to regard any signs of inflationary pressure as temporary.

The most striking feature of portfolio activity during the period was the re-emergence of the market for initial public offerings (IPOs) as a source of investment ideas: we invested a total of £27.3m in three IPOs (Bytes Technology, Moonpig and tinyBuild) and the aggregate value of these investments had climbed to £41m by 31 May 2021. We are impressed by the quality of these businesses and we believe we have paid reasonable prices for them. Our cash balances fell from 19.2% of our net assets at 30 November 2020 to 14.4% at 31 May 2021. They had reduced further to 11.2% by 8 July.

With a valuation of £63.6m at 31 May 2021, after net sales of £17.7m, our technology holdings maintained their position as our biggest sector exposure, albeit down from their valuation of £69.8m at 30 November 2020. The three stars of the show were the same three as featured in our last Annual Report: Seeing Machines, which continued its strong recovery from an unduly depressed valuation as investors began to recognize the strength of its technology; Herald Investment Trust, where a strong portfolio performance comfortably offset a disappointing rise in the discount; and Gamma Communications, which simply continued its exemplary record since our original purchase in 2014. We sold out of Zoo Digital on grounds of valuation after a strong recovery in its share price and made a big reduction in the Blue Prism holding following disappointing trading news. We also reduced our holding in FDM on grounds of valuation. The Alfa Financial share price ran out of steam despite further encouraging trading news.

We commented last year on the outperformance of our computer games companies and the underperformance of our traditional travel and leisure holdings. In the current period this pattern was reversed with our traditional holdings performing strongly and our historical holdings in the computer games industry tending to struggle. Paradoxically, however, it was our new computer games holding, tinyBuild, that delivered the best individual performance following its successful IPO. tinyBuild has two particularly interesting features: first, a huge social media following through which it is able to test and amend its games before they are released and secondly, a major cost advantage resulting from its big operations in eastern Europe. Coupled with a strong pipeline and a successful track record, these presented a compelling investment case. Frontier Developments and Team 17 also have strong pipelines and successful track records, but their share prices have suffered in recent months from a shift in investor sentiment. Of our traditional holdings, Loungers performed particularly well on the back of very strong trading when it was allowed to open while the recovery in the On The Beach share price faded towards the end of the period as travel restrictions were tightened once again. A new holding in Jet2 made a strong start, but also faded in May. Overall, a stake worth £47.6m at 30 November 2020 had grown in value to £60.3m by 31 May 2021, after net purchases of £8.6m.

Aided by pent up demand and the stamp duty holiday, the housing market went from strength to strength over the period and the share prices of our housebuilding holdings benefited accordingly. In the belief that investors were proving slow to recognize the scale of the buoyancy of demand, we made a well timed addition to our Persimmon holding. The current rate of increase in house prices is clearly unsustainable and raises the risk of a bout of turbulence in the market, but our holdings are well placed to cope with this and we believe the longer term outlook is underpinned by the chronic shortage of supply. We continue to think that the sector represents excellent long term value. Our position in the sector rose in value from £28.6m at 30 November 2020 to £43.7m at 31 May 2021, after net purchases of £6.3m.

Business Services has re-emerged as an important sector for us with purchase of Bytes Technology, a software distributor with a strong record of organic growth stretching back over many years. Its sparkling post IPO performance led to its ending the period as our largest holding. Its sector colleague, the audio visual distributor Midwich, recouped some of the ground lost last year as the momentum in its business began to pick up. When account is taken of their generous dividends, our two tobacco companies produced satisfactory investment returns, while our two healthcare holdings performed strongly despite the premature sale of Oxford Biomedica.

Elsewhere in the portfolio, the decision to repurchase Ashtead proved a rewarding, if psychologically painful, one and the performance of our new retail purchase, the online cards retailer Moonpig, went some way towards offsetting a disappointing showing from Motorpoint. Most of the return from the motor insurer Direct Line came from its generous final dividend, but our old favourite Fever-Tree produced a solid capital gain, as did the property company Derwent London before its sale. Finally, the unit price of our longstanding holding, Polar Capital Insurance, had a subdued six months.

With both central banks and governments committed to stimulative policies, the immediate outlook for economic growth appears bright. This is reflected in the fact that many of the world's stockmarkets are trading close to their all time highs and at levels of valuation that are stretched by historical standards. This is less true of the UK than of other countries, but it is unlikely that the UK would escape a general setback in markets. The most immediate threat to markets appears to be that of unexpectedly high inflation becoming embedded, but in the longer term the problem of global indebtedness resulting from the financial crisis and the covid pandemic also poses a threat to the stability of the global financial system. These concerns counterbalance the optimism we feel about the long term prospects of the businesses we own.

The principal risks facing the Company are set out above. We draw your attention, in particular, to the unusually important role of the directors' judgement in the success or failure of the Company's policy. We should also like to remind shareholders, despite the decision by the Association of Investment Companies to classify us as a UK trust, that we are free to invest in quoted equities wherever they are listed.

Douglas McDougall

9 July 2021

All holdings are in equities domiciled in the UK unless otherwise stated.

The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in this statement derive from continuing operations.

A Statement of Comprehensive Income is not required as the Company does not have any other comprehensive income and the net return on ordinary activities after taxation is both the profit and comprehensive income for the period.

For the six months ended 31 May 2021

For the six months ended 31 May 2020

* The Capital reserve balance at 31 May 2021 includes investment holding gains on fixed asset investments of £122,409,000 (31 May 2020 - gains of £62,440,000).

Third party data provider disclaimer

No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data.

No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom. No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.

Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.

FTSE Index data

FTSE International Limited ('FTSE')© FTSE 2021. 'FTSE®' is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data and no party may rely on any FTSE indices, ratings and/or underlying data contained in this communication. No further distribution of FTSE Data is permitted without FTSE's express written consent. FTSE does not promote, sponsor or endorse the content of this communication.

Automatic Exchange of Information

In order to fulfil its obligations under UK Tax Legislation relating to the automatic exchange of information, the Company is required to collect and report certain information about certain shareholders.

The legislation will require investment trust companies to provide personal information to HMRC on certain investors who purchase shares in investment trusts. Accordingly, the Company must provide information annually to the local tax authority on the tax residencies of a number of non-UK based certificated shareholders and corporate entities.

Shareholders, excluding those whose shares are held in CREST, who come on to the share register will be sent a certification form for the purposes of collecting this information.

For further information, please see HMRC's Quick Guide: Automatic Exchange of Information - information for account holders gov.uk/government/publications/exchange-of-information-account-holders.

RISK WARNINGS

Past performance is not a guide to future performance.

The Independent Investment Trust PLC is a listed UK company. As a result, the value of its shares and any income from those shares can fall as well as rise and investors may not get back the amount invested.

As Independent invests in overseas securities, changes in the rates of exchange may also cause the value of investments (and any income it may pay) to go down or up.

Market values for securities which have become difficult to trade may not be readily available, and there can be no assurance the value assigned to such securities will accurately reflect the price the Company might receive upon their sale.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment. The Independent Investment Trust PLC, as a listed company, is subject to the requirements of the Listing Rules of the Financial Conduct Authority (FCA). It is a small registered UK Alternative Investment Fund Manager (AIFM) under the Alternative Investment Fund Managers Regulations 2013. Its employees are not registered with the FCA as authorized persons. If you are in any doubt about the Company's regulatory status, you should consult your stockbroker or financial adviser.

Glossary of Terms and Alternative Performance Measures (APM)

Total Assets

The total value of all assets held less all liabilities (other than liabilities in the form of borrowings).

Net Asset Value

Also described as shareholders' funds. Net Asset Value (NAV) is the value of all assets held less all liabilities. The NAV per share is calculated by dividing this amount by the number of ordinary shares in issue.

(Discount)/Premium (APM)

As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, it is said to be trading at a premium.

Net Liquid Assets

Net liquid assets comprise current assets less current liabilities.

Total Return (APM)

The total return is the return to shareholders after reinvesting the dividend on the date that the share price goesex-dividend.

* The dividend adjustment factor is calculated on the assumption that the dividends of 5.00p paid by the Company in the six months to 31 May 2021 (year to 30 November 2020 - 13.00p) were reinvested into shares of the Company at the cum income NAV per share/share price, as appropriate, at the ex-dividend date.

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets. The level of gearing can be adjusted through the use of derivatives which affect the sensitivity of the value of the portfolio to changes in the level of markets.

Available Cash

Cash and cash equivalents as adjusted for investment and share buy-back transactions awaiting settlement.

The printed version of the Interim Financial Report will be sent to shareholders and will be available on independentinvestmenttrust.co.uk† on or around 27 July 2021. None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

† Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

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