Half-yearly Report
NEW STAR INVESTMENT TRUST PLC
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
FINANCIAL HIGHLIGHTS
31st 30th %
December June
2009 2009 Change
PERFORMANCE
Net assets (£'000) 66,685 58,746 13.5
Net asset value per Ordinary share 93.89p 82.71p 13.5
Mid-market price per Ordinary share 70.00p 58.00p 20.7
Discount of share price to net asset value 25.4% 29.9% -
FTSE World Index (total return, sterling 523.73 415.61 26.0
adjusted)
FTSE All-Share Index (total return) 3,590.71 2781.88 29.1
Six months ended Six months ended
31st December 31st December
2009 2008
REVENUE
Return per Ordinary share (0.13p) 1.13p
Dividend per Ordinary share - -
TOTAL RETURN
Net assets 14.8% (34.7%)
FTSE All-Share Index 29.1% (21.1%)
CHAIRMAN'S STATEMENT
The six months to 31st December 2009 was a period of positive returns for your
Company, with net assets rising 13.5% to £66.7 million. This gain, however,
lagged the FTSE All-Share Price Index, which rose 29.1%. At the period end, the
net asset value per Ordinary share was 93.89p. This compares with the launch
price of 100p in May 2000. The FTSE All-Share Price Index over the same period
fell 7.2%.
The net revenue loss before tax for the period was £129,000. In common with
previous years, your Directors are not recommending payment of an interim
dividend to shareholders.
Change of investment manager
On 1st January 2010, Brompton Asset Management LLP commenced acting as the
Company's investment manager, replacing New Star Asset Management Limited.
Market review
Global equities gained 22.5% in sterling terms during the period. Having
bounced from their March 2009 bear-market low, shares maintained their upward
momentum in late 2009 in response to central bank quantitative easing, the
restoration of bank balance sheets and evidence of a global economic recovery
from the third quarter, fuelled by growth in emerging markets. Investors were
cheered, in particular, by central bank signals that the priority was to
restore monetary expansion to entrench economic growth and official short-term
interest rates were held at historically low levels.
Latin American markets were strongest, returning 43.2% in sterling as a result
of rising commodity prices and recovering risk appetite among investors. Over
the half year, the Thomson Reuters industrial commodities index gained 38.3% in
dollar terms, gold gained 16.8% and oil rose 11.2%. Other relatively strong
areas included Europe excluding the UK, 30.2% ahead in sterling, Asia excluding
Japan, up 29.5%, and the UK, up 29.1%, while US equities returned 25.0%. By
contrast, Japanese equities lagged, rising 5.7%.
Economic recovery also had a significant impact on sector returns. Basic
materials outperformed, rising 41.8%. Other strong sectors included technology,
up 31.4%, industrial stocks, up 28.9%, and financial stocks, up 26.8%. As might
be expected in a rally after a deep bear market, defensive sectors
underperformed, with telecommunications rising 16.2% and utilities gaining
19.8%.
Increased investor risk appetite and concerns about fiscal deficits and
inflation were apparent in bond markets, where the total return on gilts was
just 0.98%. By contrast, UK BBB-rated corporate bonds returned 17.3% as
measured by Barclays Capital.
Portfolio review
Your Company invested a significant proportion of its cash in equity markets
during the period. The largest new investment was in the New Star European
Special Situations Fund, a new fund investing in Europe excluding the UK. The
other new investments were in Atlantis China and in Polar Capital Global
Technology. Among disposals, your Company took partial profits on its holding
in an exchange-traded fund (ETF) invested in gold.
Your Company ended the period with 70.5% of its assets in retail funds, 5.6% in
ETFs, 3.5% in investment trusts, 1.0% in hedge funds, 2.0% in other securities
and 17.4% in cash. Geographically, the biggest non-cash exposures were the UK,
at 15.2%, emerging markets, at 15.1%, and Asia excluding Japan, at 7.4%. In
asset class terms, the biggest non-cash holdings were in equities, at 48.1%,
commodities, at 16.2%, and fixed income, at 8.8%.
Outlook
At the period end, investors were confident that profits and dividends would
revive in response to economic recovery. As a result, global equities were
trading at 31 December on a trailing multiple of 19.1 as measured by Datastream
against an 8.9 low in March 2009. The dividend yield on equities had,
meanwhile, shrunk from a 4.57% high in March to 2.47%.
Statistics announced at the turn of the year showed that industrial output in
the Group of Seven (G7) industrial economies and the Emerging Seven (E7)
economies of Brazil, China, India, Mexico, Russia, South Korea and Taiwan had
recovered 9% between February and November 2009, retracing more than half the
peak-to-trough fall from late 2007. While G7 output was still below its
long-term trend, E7 output was moving above trend. This suggests the E7
economies may overheat later in 2010 but G7 monetary trends suggest the reverse
- that developed world growth may slow from the spring. A modest growth
slowdown may not, however, prevent a turn upwards in the monetary policy cycle
later in 2010, with G7 inflation moving above short-term interest rates.
The impact of recovery on markets may depend on liquidity conditions. In the
rally beginning in March 2009, equities benefited from the fact that the
inflation-adjusted money supply had outpaced industrial output. In the second
half of 2009, however, the gap narrowed and may close this year as inflation
rises. Sentiment will also be affected by the timing of the withdrawal of
quantitative easing. These factors suggest that volatility may increase and
sustained gains may require that investors pull cash out of other asset
classes.
In such conditions, the dispersion of returns between stocks and sectors may
remain significant and careful security selection will be important in
generating performance.
The unaudited net asset value at 31st January 2010 was 92.36p per Ordinary
share.
On 30th October 2009 James Roe retired as a Director due to ill health. The
Board will miss his guidance and we thank him for his valuable contribution
over a number of years.
Geoffrey Howard-Spink
Chairman
26th February 2010
INTERIM MANAGEMENT REPORT
Performance
In the six months to 31st December 2009 the net asset value per Ordinary share
increased by 13.5% to 93.89p. In the same period the share price increased by
20.7% to 70.00p. This compares to increases of 29.1% and 26.0% respectively in
the FTSE All-Share Index and the FTSE World Index. Further details of the
Company's performance may be found in the Chairman's Statement.
Investment objective
The Company's investment objective is to achieve long-term capital growth.
Investment policy
The Company's investment policy has been to allocate assets to global
investment opportunities through investment in equity, bond, commodity, real
estate, currency and other markets. The Company's assets may have significant
weightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded funds,
futures, options, limited partnerships and direct investments in relevant
markets. The Company may invest up to 15% of its net assets in direct
investments in relevant markets.
The Company will not follow any index with reference to asset classes,
countries, sectors or stocks. Aggregate asset class exposure to any one of the
United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or
Emerging Markets and to any individual industry sector will be limited to 50%
of the Company's net assets, such values being assessed at the time of
investment and for funds by reference to their published investment policy or,
where appropriate, their underlying investment exposure.
The Company may invest up to 20% of its net asset value in unlisted securities
(excluding unquoted pooled investment vehicles) such values being assessed at
the time of investment.
The Company will not invest more than 15% of its net assets in any single
investment, such values being assessed at the time of investment.
Derivative instruments and forward foreign exchange contracts may be used for
the purposes of efficient portfolio management and currency hedging.
Derivatives may also be used outside of efficient portfolio management to meet
the Company's investment objective. The Company may take outright short
positions in relation to up to 30% of its net assets, with a limit on short
sales of individual stocks of up to 5% of its net assets, such values being
assessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or
long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company's total assets may
be invested in other closed-ended investment funds except where such funds have
themselves published investment policies to invest no more than 15% of their
total assets in other listed closed-ended investment funds.
Share capital
At 31st December 2009, the Company had 71,023,695 Ordinary shares of 1p nominal
each in issue. There were no changes to the issued share capital of the Company
during the period.
Risk management
The principal risks associated with the Company that have been identified by
the Board together with the steps taken to mitigate them are as follows:
Investment strategy: inappropriate long-term strategy, asset allocation and
manager selection might lead to the underperformance of the Company. The
Company's strategy is kept under regular review by the Board.
Business conditions and general economy: the Company's investment returns are
influenced by general economic conditions in the UK and globally. Factors such
as interest rates, inflation, investor sentiment and the availability and cost
of credit could adversely affect investment returns. The portfolio is managed
with a view to mitigating risk by investing in a spread of different asset
classes and geographic areas.
Portfolio risks: market price, foreign currency and interest rate risks: the
downward movement of investments contained in the portfolio would lead to a
reduction in the Company's net asset value. A proportion of the Group's
portfolio is invested in investments denominated in foreign currencies and
movements in exchange rates can significantly affect their sterling value. It
is the Board's policy to hold an appropriate spread of investments in order to
reduce the risk arising from factors specific to a particular investment or
sector. The Investment Manager takes account of foreign currency risk and
interest rate risk when making investment decisions.
The Company does not normally hedge against foreign currency movements
affecting the value of the investment portfolio, although hedging techniques
may be employed in appropriate circumstances.
Investment Manager: the quality of the management team employed by the
Investment Manager is an important factor in delivering good performance and
the loss by the Investment Manager of key staff could adversely affect
investment returns. The Investment Manager usually attends board meetings and
the Board is kept informed of any personnel changes to the investment team
employed by the Investment Manager.
Tax and regulatory risks: a breach of section 842 ICTA 1988 could lead to a
loss of investment trust status, resulting in capital gains realised within the
portfolio being subject to corporation tax. A breach of the UKLA Listing Rules
could result in suspension of the Company's shares, while a breach of company
law could lead to criminal proceedings, or financial or reputational damage.
The Board employs experienced third parties to help manage the Company's legal
and regulatory obligations. The Board receives a monthly financial report which
includes information on the Company's compliance with Section 842.
Operational: disruption to, or failure of, the Investment Manager's and
Administrator's accounting, dealing or payment systems or the Custodian's
records could prevent the accurate reporting and monitoring of the Company's
financial position. The Company is also exposed to the operational risk that
one or more of its suppliers may not provide the required level of service.
Investment Management Arrangements
The Company's investments were managed by New Star Asset Management Limited
('New Star') a subsidiary of Henderson Global Investors Plc, throughout the
period. The Company's investments during the period included funds managed by
subsidiaries of Henderson Global Investors Plc.
On 1st January 2010 Brompton Asset Management LLP ('Brompton') replaced New
Star as Investment Manager. The portfolio manager, Simon Akroyd, transferred
from New Star to Brompton. Mr Duffield is the Senior Partner of Brompton.
Change of Custodian and Administrator
On 1st January 2010 Brown Brothers Harriman & Co was appointed as the
independent custodian and Phoenix Administration Services Limited was appointed
the Company's independent administrator.
Change of Company Secretary
On 1st January 2010 Phoenix Administration Services Limited was appointed
Secretary to the Company.
Auditors
The half-yearly financial report has been reviewed, but not audited, by Ernst &
Young LLP pursuant to the Auditing Practices Board guidance on the Review of
Interim Financial Information.
Responsibility statement
The Directors (Mr G Howard-Spink (Chairman), Mr J Duffield and Mr M Gregson)
confirm that to the best of their knowledge:
• The condensed set of financial statements contained within the half-yearly
report to 31st December 2009 has been prepared in accordance with International
Financial Reporting Standards.
• The interim management report includes a fair review of important events that
have occurred during the first six months of the financial year and their
impact on the financial statements.
• The interim management report includes a description of the principal risks
and uncertainties for the remaining six months of the year.
• The interim management report includes a fair review of the information
concerning related party transactions as required by DTR 4.2.8R of the FSA's
Disclosure and Transparency Rules.
By order of the Board
Phoenix Administration Services Limited - Secretary
26th February 2010
INDEPENDENT REVIEW REPORT TO NEW STAR INVESTMENT TRUST PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31st
December 2009 which comprises the consolidated income statement, consolidated
statement of changes in equity, consolidated balance sheet, consolidated cash
flow statement and related explanatory notes 1 to 9. We have read the other
information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies with
the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained
in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company, for our work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31st December 2009 is not prepared,
in all material respects, in accordance with International Accounting Standard
34 as adopted by the European Union and the Disclosure and Transparency Rules
of the United Kingdom's Financial Services Authority.
Ernst & Young LLP
London
26th February 2010
SCHEDULE OF TWENTY LARGEST INVESTMENTS
at 31st December 2009
Bid-market Value
Holding Activity £'000 Percentage of Portfolio
BlackRock Gold & General Income Fund Investment Fund 5,229 10.13
Occam Umbrella Asia Focus Fund Investment Fund 4,006 7.76
Natixis Loomis Sayles Multisector Income Fund Investment Fund 3,848 7.45
Investec Africa Fund Investment Fund 3,573 6.92
New Star European Special Situations Fund Investment Fund 3,060 5.93
Skandia UK Strategic Best Ideas Fund Investment Fund 3,002 5.82
Atlantis China Fund Investment Fund 2,545 4.93
M&G Optimal Income Fund Investment Fund 2,437 4.72
Polar Capital Global Technology Fund Investment Fund 2,377 4.60
Trojan Investment Fund Investment Fund 2,368 4.59
Artemis UK Special Situations Fund Investment Fund 2,291 4.44
Prusik Asia Fund Investment Fund 2,252 4.36
iShares FTSE/Xinhua China 25 ETF Exchange Traded Fund 2,093 4.05
Lyxor Gold Bullion Securities ETF Exchange Traded Fund 1,852 3.59
Neptune Russia & Greater Russia Fund Investment Fund 1,580 3.06
Henderson Private Equity Investment Trust Investment Company 1,393 2.70
GWI Brazil Fund Investment Fund 1,122 2.17
BH Global Investment Limited Investment Company 1,065 2.06
The Sierra Investment Fund Investment Fund 1,000 1.94
Corndon Limited Equity 1,000 1.94
48,093 93.16
Balance held in 14 investments 3,530 6.84
Total investments 51,623 100.00
The investment portfolio can be further analysed as follows:
Equities 2,981
Convertible securities 458
Investments funds, investment companies and ETFs 48,184
51,623
CONSOLIDATED INCOME STATEMENT
for the six months to 31st December 2009
Six months
ended
31st December 2009
(unaudited)
Revenue Capital Total
Return Return Return
Notes £'000 £'000 £'000
INCOME
Investment income 232 - 232
Other operating income 12 - 12
Total income 2 244 - 244
GAINS AND LOSSES ON INVESTMENTS
Gains / (losses) on
investments at fair value
through profit or loss - 8,175 8,175
Gains / (losses) on index
future contracts - - -
Losses on forward currency
contracts - - -
Other exchange gains /
(losses) - 257 257
Trail commission - 78 78
244 8,510 8,754
EXPENSES
Management fees 3 (235) - (235)
VAT recovery - - -
Other expenses (138) - (138)
PROFIT/(LOSS) BEFORE FINANCE COSTS
AND TAX (129) 8,510 8,381
Finance costs - - -
PROFIT/(LOSS) BEFORE TAX (129) 8,510 8,381
Tax 36 19 55
PROFIT/(LOSS) FOR THE PERIOD (93) 8,529 8,436
EARNINGS/ (LOSS) PER SHARE
Ordinary shares (pence) 4 (0.13) 12.01 11.88
The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS. The supplementary revenue return and capital
return columns are both prepared under guidance published by The Association of
Investment Companies. All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
All income is attributable to the equity holders of the parent company.
There are no minority interests.
CONSOLIDATED INCOME STATEMENT
for the six months to 31st December 2008 (unaudited) and the year ended 30th
June 2009
Six months ended Year ended
31st December 2008 30th June 2009
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
Return Return Return Return Return Return
Notes £'000 £'000 £'000 £'000 £'000 £'000
INCOME
Investment income 918 - 918 1,049 - 1,049
Other operating income 163 - 163 223 - 223
Total income 2 1,081 - 1,081 1,272 - 1,272
GAINS AND LOSSES ON INVESTMENTS
Gains / (losses) on investments
at fair value through profit or loss (34,928) (34,928) - (36,822) (36,822)
Gains / (losses) on index future contracts - 25 25 - (672) (672)
Losses on forward currency contracts - (302) (302) - (302) (302)
Other exchange gains / (losses) - 285 285 - (167) (167)
Trail commission - - - - 129 129
1,081 (34,920) (33,839) 1,272 (37,834) (36,562)
EXPENSES
Management fees 3 (88) - (88) (311) - (311)
VAT recovery 170 - 170 170 - 170
Other expenses (103) (1) (104) (268) (2) (270)
PROFIT/(LOSS) BEFORE FINANCE
COSTS AND TAX 1,060 (34,921) (33,861) 863 (37,836) (36,973)
Finance costs (71) - (71) (77) - (77)
PROFIT/(LOSS) BEFORE TAX 989 (34,921) (33,932) 786 (37,836) (37,050)
Tax (184) - (184) (131) 40 (91)
PROFIT/(LOSS) FOR THE PERIOD 805 (34,921) (34,116) 655 (37,796) (37,141)
EARNINGS/(LOSS) PER SHARE
Ordinary shares (pence) 4 1.13 (49.17) (48.04) 0.92 (53.22) (52.3)
The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS. The supplementary revenue return and capital
return columns are both prepared under guidance published by The Association of
Investment Companies. All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
All income is attributable to the equity holders of the parent company. There
are no minority interests.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2009 (unaudited)
Share Share Special Retained
capital premium reserve earnings Total
£'000 £'000 £'000 £'000 £'000
AT 30TH JUNE 2009 710 21,573 56,908 (20,445) 58,746
Profit for the period - - - 8,436 8,436
Dividend paid - - - (497) (497)
AT 31ST DECEMBER 2009 710 21,573 56,908 (12,506) 66,685
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2008 (unaudited)
Share Share Special Retained
capital premium reserve earnings Total
£'000 £'000 £'000 £'000 £'000
AT 30TH JUNE 2008 710 21,573 56,908 17,214 96,405
Loss for the period - - - (34,116) (34,116)
Dividend paid - - - (518) (518)
AT 31ST DECEMBER 2008 710 21,573 56,908 (17,420) 61,771
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th June 2009 (audited)
Share Share Special Retained
capital premium reserve earnings Total
£'000 £'000 £'000 £'000 £'000
AT 30TH JUNE 2008 710 21,573 56,908 17,214 96,405
Loss for the year - - - (37,141) (37,141)
Dividend paid - - - (518) (518)
AT 30TH JUNE 2009 710 21,573 56,908 (20,445) 58,746
CONSOLIDATED BALANCE SHEET
at 31st December 2009
31st December 31st December 30th June
2009 2008 2009
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
NON-CURRENT ASSETS
Investments at fair value through profit or loss 51,623 48,440 39,228
CURRENT ASSETS
Other receivables 173 8,744 94
Cash and cash equivalents 15,626 6,728 20,189
15,799 15,472 20,283
TOTAL ASSETS 67,422 63,912 59,511
CURRENT LIABILITIES
Other payables (448) (1,715) (421)
TOTAL ASSETS LESS CURRENT LIABILITIES 66,974 62,197 59,090
NON-CURRENT LIABILITIES
Deferred tax liability (289) (426) (344)
NET ASSETS 66,685 61,771 58,746
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Called-up share capital 710 710 710
Share premium 21,573 21,573 21,573
Special reserve 56,908 56,908 56,908
Retained earnings 5 (12,506) (17,420) (20,445)
TOTAL EQUITY 66,685 61,771 58,746
NET ASSET VALUE PER ORDINARY SHARE (PENCE)
6 93.89 86.97 82.71
The interim report was approved and authorised for issue by the Board on 26th
February 2010.
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2009
Six months Six months Year
ended ended ended
31st December 31st December 30th June
2009 2008 2009
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before finance costs
and tax 8,381 (33,861) (36,973)
Adjustments for:
(Gains) / losses on investments (12,395) 37,128 46,340
Operating cash flows before movements in
working capital (4,014) 3,267 9,367
(Increase) / decrease in
receivables (74) (8,635) 8
Increase/(decrease) in payables 28 1,026 (347)
Net cash from operating activities before
finance costs and tax (4,060) (4,342) 9,028
Taxation (6) (175) (78)
NET CASH FROM OPERATING ACTIVITIES 7 (4,066) (4,517) 8,950
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (497) (518) (518)
Interest paid - (71) (77)
NET CASH USED IN FINANCING
ACTIVITIES (497) (589) (595)
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (4,563) (5,106) 8,355
Cash and cash equivalents at beginning of
period 20,189 11,834 11,834
CASH AND CASH EQUIVALENTS AT END OF
PERIOD 15,626 6,728 20,189
NOTES TO THE INTERIM FINANCIAL REPORT
1 Accounting policies
The consolidated Interim Financial Report on pages 12 to 20 comprise the
unaudited results of the Company and its subsidiary, JIT Securities Limited,
for the six months to 31st December 2009, and do not constitute statutory
accounts under the Companies Act 2006. Full statutory accounts for the year to
30th June 2009 included an unqualified audit report, did not contain any
statements under section 498 of the Companies Act 2006 and have been filed with
the Registrar of Companies.
The interim financial report has been prepared in accordance with International
Financial Reporting Standards (IFRS). These comprise standards and
interpretations approved by the International Accounting Standards Board
adopted by the European Union and are presented in pounds sterling, as this is
the principal currency in which the Group's transactions are undertaken.
The same accounting policies have been followed in the interim financial report
as compared to the accounts for the year ended 30th June 2009, which are
prepared in accordance with IFRSs as adopted by the European Union.
2 Total income
For the six For the six For the
months ended months ended year ended
31st December 31st December 30th June
2009 2008 2009
£'000 £'000 £'000
Income from investments
UK net dividend income - 308 319
UK unfranked investment
income 86 555 570
Fixed interest income 118 27 105
Interest on convertible loan
stock 28 28 55
232 918 1,049
Other Operating Income
Bank interest receivable 12 155 188
HMRC interest received - 8 35
12 163 223
Total Income Comprises
Investment Income 232 918 1,049
Other income 12 163 223
244 1,081 1,272
Other Operating Income for the six months ended 31st December 2008 and the year
ended 30th June 2009 include interest relating to the final recovery of VAT on
past management fees.
3 Management fees
For the six For the six For the
months ended months ended Year ended
31st December 31st December 30th June
2009 2008 2009
£'000 £'000 £'000
Investment management 235 88 311
Performance fee - - -
235 88 311
The management fee is payable in arrears and is calculated at a rate of 3/16%
per quarter of the total assets of the Company and its subsidiary after the
deduction of the value of any New Star managed investments (as defined in the
management agreement). With effect from 1st September 2008, the investment
manager has also been entitled to a performance fee of 15% of the growth in net
assets over a hurdle of 3-month Sterling LIBOR plus 1% per annum, payable six
monthly in arrears, subject to a high water mark. The aggregate of the
Company's management fee and any performance fee are subject to a cap of 4.99%
of net assets in any financial year (with any performance fee in excess of this
cap capable of being earned in subsequent periods). The performance fee will
be charged 100% to capital, in accordance with the board's expectation of how
any out performance will be generated.
4 Return per Ordinary share
For the six For the six For the
months ended months ended year ended
31st December 31st December 30th June
2009 2008 2009
£'000 £'000 £'000
Revenue
return (93) 805 655
Capital
return 8,529 (34,921) (37,796)
Total return 8,436 (34,116) (37,141)
Weighted average number of
Ordinary
shares 71,023,695 71,023,695 71,023,695
Revenue
return (0.13)p 1.13p 0.92p
Capital
return 12.01p (49.17)p (53.22)p
Total return 11.88p (48.04)p (52.30)p
5 Retained earnings
The components of retained earnings are set out below:
31st December 31st December 30th June
2009 2008 2009
£'000 £'000 £'000
Capital reserve
- realised (8,856) 498 (5,165)
Capital reserve -
revaluation (4,229) (19,237) (16,449)
Revenue reserve 579 1,319 1,169
(12,506) (17,420) (20,445)
6 Net asset value per Ordinary share
31st December 31st December 30th June
2009 2008 2009
£'000 £'000 £'000
Net assets attributable to Ordinary
shareholders 66,685 61,771 58,746
Ordinary shares in issue at end of period 71,023,695 71,023,695 71,023,695
Net asset value per Ordinary share 93.89p 86.97p 82.71p
7 Notes to the cash flow statement
Cash and cash equivalents comprise cash at bank and other short-term highly
liquid investments with a maturity of three months or less.
Cash flows from operating activities
Included within the cash flows from operating activities are the cash flows
associated with the purchases and sales of investments as these are not
considered to be investing activities given the objective of the Company.
Cash flows from operating activities can therefore be further analysed as
follows:
31st 31st
December December 30th June
2009 2008 2009
£'000 £'000 £'000
Proceeds on disposal of investments at fair
value through profit and loss 4,854 41,202 69,304
Purchase costs of investments at fair value
through profit and loss (9,074) (46,252) (59,786)
Net cash flows from investment transactions (4,220) (5,050) 9,518
Cash flows from other operating activities 154 533 (568)
Net cash from operating activities (4,066) (4,517) 8,950
8 Related party transactions
There have been no related party transactions that have materially affected the
financial position or performance of the Group.
9 Comparative information
The financial information contained in the interim report to 31st December 2009
does not constitute statutory accounts under the Companies Act 2006. The
financial information for the six months to 31st December 2009 and 2008 has not
been audited. The information for the year ended 30th June 2009 has been
extracted from the latest published audited financial statements. The audited
financial statements for the year ended 30th June 2009 have been filed with the
Registrar of Companies. The report of the auditors on those accounts was
unqualified and did not contain any statements under section 498 of the
Companies Act 2006.
10 Availability of Report
Printed copies of this Interim Report will be sent to shareholders shortly.
The Interim Report will be available to view and download from the Company's
website at www.nsitplc.com
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