Final Results

PREMIER UTILITIES TRUST PLC Preliminary unaudited announcement in respect of the year ended 31 December 2006 INCOME STATEMENT (Unaudited) Year ended 31 December 2006 Revenue Capital Total £000 £000 £000 Gains on investments: realised - 10,441 10,441 unrealised - 1,751 1,751 Income: Dividends 2,142 - 2,142 Interest 225 - 225 Management fee (624) (1,420) (2,044) Other expenses (316) - (316) Net return before finance costs and taxation 1,427 10,772 12,199 Finance costs (4) (1,551) (1,555) Net return on ordinary activities before taxation 1,423 9,221 10,644 Taxation on ordinary activities (158) - (158) Net return on ordinary activities after taxation attributable to equity shares 1,265 9,221 10,486 Total Return per ordinary share (pence): 57.79 INCOME STATEMENT (Audited) Year ended 31 December 2005 Revenue Capital Total £000 £000 £000 Gains/(losses) on investments: realised - 5,061 5,061 unrealised - (148) (148) Gains on foreign exchange - 27 27 Income: Dividends 2,318 - 2,318 Interest 157 - 157 Management fee (531) (271) (802) Other expenses (393) - (393) Net return before finance costs and taxation 1,551 4,669 6,220 Finance costs (14) (1,449) (1,463) Net return on ordinary activities before taxation 1,537 3,220 4,757 Taxation on ordinary activities (228) - (228) Net return on ordinary activities after taxation 1,309 3,220 4,529 Total Return per ordinary share (pence): 24.96 BALANCE SHEET as at 31 December 2006 (Unaudited) (Audited) Year Year ended ended 31 31 December December 2006 2005 £000 £000 Non current assets Investments held at fair value through the Income statement 60,789 48,988 Current assets Debtors 1,346 404 Cash at bank 1,465 1,472 2,811 1,876 Creditors - amounts falling due within one year Creditors (2,306) (382) Net current assets 505 1,494 Total assets less current liabilities 61,294 50,482 Creditors - amounts falling due after more than one year: Zero dividend preference shares (23,719) (22,168) Net assets 37,575 28,314 Capital and reserves Equity share capital 181 181 Redemption reserve 10 10 Capital reserve - realised 10,681 3,211 Capital reserve - unrealised 8,588 6,837 Special reserve 17,474 17,474 Revenue reserve 641 601 Total shareholders' funds 37,575 28,314 NAV per ordinary share (pence) 207.10 156.06 NAV per zero dividend preference share (pence) 123.90 115.80 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 31 December 2006 (Unaudited) Capital Capital Share Redemption reserve reserve Special Revenue capital reserve realised unrealised reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 December 2005 181 10 3,211 6,837 17,474 601 28,314 Return on ordinary activities after taxation - - 7,470 1,751 - 1,265 10,486 Dividend paid - - - - - (1,225 ) (1,225 ) Balance at 31 December 2006 181 10 10,681 8,588 17,474 641 37,575 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 31 December 2005 (Audited) Capital Capital Share Redemption reserve reserve Special Revenue capital reserve realised unrealised reserve reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 December 2004 (restated) 181 10 (157 ) 6,985 17,474 516 25,009 Return on ordinary activities after taxation - - 3,368 (148 ) - 1,309 4,529 Dividends paid - - - - - (1,224 ) (1,224 ) Balance at 31 December 2005 181 10 3,211 6,837 17,474 601 28,314 CASH FLOW STATEMENT for the year ended 31 December 2006 (Unaudited) (Audited) Year Year ended ended 31 31 December December 2006 2005 £000 £000 Operating activities Income received from investments 2,336 2,394 Interest received 213 161 Other income received - 9 Investment management fees paid (878) (1,699) Other cash payments (305) (402) Net cash inflow from operating activities 1,366 463 Servicing of finance Interest paid (4) (14) Taxation Overseas tax paid (149) (221) Financial investments Purchases of investments (67,999) (50,527) Sales of investments 68,930 51,469 Liquidation of futures and options (1,198) 1,073 Net cash (outflow)/inflow from financial investments (267) 2,015 Equity dividends paid (953) (1,224) (Decrease)/increase in cash (7) 1,019 NOTES 1. These financial statements are prepared in accordance with United Kingdom Generally Accepted Accounting Practice ("UK GAAP') and with the Statement of Recommended Practice 2003, revised in December 2005 regarding the Financial Statements of Investment Trust Companies ("SORP") issued by the AIC. These accounts are unaudited and do not constitute statutory accounts. The preliminary announcement is prepared on the same basis as set out in the previous year's annual accounts. 2. The Directors have declared a fourth interim dividend of 2.40p net per Ordinary share payable on 30 March 2007 to holders of Ordinary shares on the register at 9 March 2007. 3. The total return per Ordinary share is based on 18,143,433 Ordinary shares in issue during the year (2005: 18,143,433 Ordinary shares in issue during the year). 4. The net asset value per Zero Dividend Preference share of 123.90p at 31 December 2006 has been calculated in accordance with the Articles of Association. 5. At 31 December 2006 there were 18,143,433 Ordinary shares of 1p each and 19,143,433 Zero Dividend Preference shares of 1p each in issue. 6. The annual report will be mailed to shareholders on or around 19 March 2007. It will not be advertised in newspapers, but copies will be available from that date at the Company's Registered Office at Eastgate Court, High Street, Guildford, Surrey GU1 3DE. 7. The Annual General Meeting will be held at the offices of Premier Asset Management PLC, Eastgate Court, High Street, Guildford GU1 3DE on Thursday 19 April 2007 at 2.00pm. 8. Statutory accounts for the year ended 31 December 2005 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. CHAIRMAN'S STATEMENT The year under review has, once again, been a favourable one for investment in utility and infrastructure shares, in spite of continued rises in interest rates and some build-up of inflationary pressures. As last year, corporate activity dominated the news most particularly in Europe where consolidation in the power sector has gathered momentum. Performance Over the period from 1 January 2006 to 31 December 2006, the total assets of your Company rose from £50.01 million to £60.86 million. Both these amounts include the provision for the last dividends for the respective periods (2.40p per Ordinary share for 2006 and 2.25p per Ordinary share for 2005), which are now only recognised in the Company's financial statements when they are declared. When the £1.25m of dividends that relate to the year ended 31 December 2006 are included, the Company's total return for the year was 24.2%. The Investment Manager's performance is assessed not against a formal benchmark but rather against a set of reference points. These are more general in nature but are intended to be representative of the broad spread of assets into which your Company is able to invest. As can be seen from this, the performance of total assets over the period under review was highly satisfactory, both in absolute and relative terms. After allowing for the accrual on the Company's Zero Dividend Preference shares ("ZDP") of 123.9p per share, net assets attributable to the Company's Ordinary shares rose from £28.31 million to £37.57 million, or an increase of 32.7%. As a result net asset value per Ordinary share rose from 156.06p to 207.10p. All of your Company's management and administration expenses are charged against the revenue account with the exception of any performance fee payable to the Investment Manager, which is charged to capital. Terminal asset value per Ordinary share (i.e. the residual value of each share after allowing for the full accrual of the ZDP's at the proposed winding up date being the 31 December 2010), assuming no change in the gross assets of the Company, was £ 1.64, an increase of 56.8% since 31 December 2005 and 346% since the Company's launch. The hurdle rate is the amount by which the total assets of the Company need to increase (or decline) in order to achieve predetermined values for the Ordinary shares. Thus the hurdle rate required to achieve the 100p initial value of the Company's Ordinary shares at 31 December 2006 was -5.2% whilst to achieve the year end share price of 174p was +0.5%. The Company's Ordinary shares generally reflected the sound performance of its assets, the share price increasing from 122p to 170.75p at the period end, an increase of 40%. The ZDP shares rose from 124.5p to 128.0p. The package discount of Ordinary and ZDP shares ended the year at 9.17%. Revenue and dividends. Revenue was relatively strong over the period with net revenue per Ordinary share of 6.97p. Given the strong asset performance of the Company and also the robust outlook for dividends from the sector, your Board feels that a small increase in the dividend is appropriate. Thus, the fourth interim dividend will rise from 2.25p last year to 2.40p for this year, an increase of around 2%. The small revenue surplus for the year will be added to the Company's revenue reserve, which at the year end stood at £641,000 but will reduce to just under £200,000 after the payment of the fourth interim dividend in March 2007. Shareholder relations The Board and the Investment Manager welcome contacts not only with existing shareholders but also with potential new investors. The Investment Manager met most of the Company's largest shareholders during 2006 and a number of new shareholders joined the register. Annual General Meeting The Annual General Meeting is being held on Thursday 19 April 2007 at 2.00pm at the offices of Premier Asset Management plc, Eastgate Court, High Street, Guildford GU1 3DE. In addition to the formal business of the meeting there will, depending on shareholder numbers, be a presentation from the Investment Manager. Shareholders will have an opportunity to meet with the Directors and the Investment Manager informally after the meeting. I hope to see as many of the shareholders as possible at the meeting. Investment policy The Company's investment strategy as set out in the 2003 prospectus contains certain restrictions on the type of investments that can be purchased. With the changing character of the utilities and infrastructure sectors some of these restrictions are beginning to impinge on our Manager's ability to take full advantage of the available investment opportunities. The Board feel that it is an appropriate time to restate the policy in a manner that allows our manager greater scope to broaden the global spread of the portfolio and to invest in a wider range of infrastructure companies. Whilst there is no intention to change the principal investment objectives in any material way, the Directors consider it appropriate to ask shareholders to approve the restated investment policy by voting on a special resolution at the AGM as follows: "The restating of the Company's investment objectives as set out below is hereby approved: The Company's objectives are to achieve a high income from its portfolio and to realise long term growth in the capital value of the portfolio. The Company will seek to achieve these objectives by investing principally in equity and equity related securities of companies operating in the utilities and infrastructure sectors. In seeking to achieve its investment objective, the Company may invest up to 15% in other investment companies provided they themselves invest in utilities and infrastructure. Up to 15% of the portfolio can be invested in unquoted investments." Approval of the new policy will remove the limits on investment in non OECD countries and unregulated markets, allowing greater scope to invest in AIM stocks in the UK and in emerging markets globally. The restated policy will also permit investment in other investment companies that are themselves investing in utilities or infrastructure but with a limit of 15%. This creates the possibility of achieving an exposure to markets or sectors where direct holdings might not be appropriate or efficient. The remit for infrastructure investment will allow investment in companies that are unregulated or only partially regulated whereas the current policy requires these companies to be regulated. A 15% limit on investment in unquoted securities is retained. The Directors believe that this adjustment to the investment mandate will benefit shareholders by allowing a broader geographic spread and a wider range of infrastructure investment. A shift away from the European and UK utility stocks is already evident from the geographic breakdown at the year end. The UK, France and Germany accounted for 66.8% of the portfolio in December 2005; this had fallen to 42.3% at 31 December 2006. Shareholders should be aware that global diversification may involve an increase in exposure to emerging markets. Such markets can be more volatile and may include an element of political as well as economic risk. However, the increased risks associated with individual investments can be mitigated by greater market and sector diversification within the portfolio, and our manager is aware of the importance of maintaining liquidity in the portfolio. Outlook Stock markets generally have risen strongly over the last four years and valuations appear full. However, the utility sector is still very much in favour with investors and corporate activity shows little sign of slowing. Balance sheets are also healthy, allowing plenty of scope for equity friendly moves such as share buybacks and special dividends. If inflation and interest rates remain under control and global growth reasonable, there is the potential for the sector to have another sound period of performance. Geoffrey Burns Chairman 7 March 2007 Premier Utilities Trust PLC Eastgate Court, High Street, Guildford, Surrey GU1 3DE Enquiries: Andrew Whalley (Telephone: 01483 400400) Kevin Scutt (Telephone: 01483 400431) Nigel Sidebottom (Telephone: 01483 400465)

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