Half-yearly Report
PREMIER UTILITIES TRUST PLC
Preliminary unaudited announcement
in respect of the six months ended 30 June 2007
Company Highlights for 31 December 2006 to 30 June 2007
• Total assets +10.6% (total return)
• Ordinary shares:
Net Asset Value +13.2%
Mid price +26.8%
Discount narrowed from 17.6% to 7.6%
• Zero Dividend Preference shares:
Net Asset Value +3.4%
Mid price +5.4%
• Change in Investment Policy:
At the last AGM the shareholders agreed to a change in investment policy which
allowed investment into a broader range of regions and markets. This has led to
good performance over the period both in absolute and relative terms.
INCOME STATEMENT
(Unaudited)
Six months ended 30 June 2007
Revenue Capital Total
£000 £000 £000
Gains on investments:
- realised - 3,108 3,108
- unrealised - 2,585 2,585
Income:
- Dividends 1,616 - 1,616
- Interest 48 - 48
Management fee (357) (187) (544)
Other expenses (188) - (188)
Net return before interest payable & taxation 1,119 5,506 6,625
Finance costs (1) (810) (811)
Net return on ordinary activities before taxation 1,118 4,696 5,814
Taxation on ordinary activities (150) - (150)
Net return on ordinary activities after taxation 968 4,696 5,664
Total
Return per ordinary share (pence): 31.22
INCOME STATEMENT
(Unaudited)
Six months ended 30 June 2006
Revenue Capital Total
£000 £000 £000
Gains/(losses) on investments:
- realised - 6,422 6,422
- unrealised - (1,851) (1,851)
Income:
- Dividends 1,475 - 1,475
- Interest 77 - 77
Management fee (297) (157) (454)
Other expenses (152) - (152)
Net return before finance costs and taxation 1,103 4,414 5,517
Finance costs (4) (756) (760)
Net return on ordinary activities before taxation 1,099 3,658 4,757
Taxation on ordinary activities (111) - (111)
Net return on ordinary activities after taxation
attributable to equity shares 988 3,658 4,646
Total
Return per ordinary share (pence): 25.61
INCOME STATEMENT
(Audited)
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
BALANCE SHEET
as at 30 June 2007
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2007 2006 2006
£000 £000 £000
Fixed assets
Investments held at fair value through profit or loss 63,440 49,317 60,789
Current assets
Debtors 364 399 1,346
Cash at bank 4,592 5,738 1,465
4,956 6,137 2,811
Creditors - amounts falling due within
one year
Creditors (1,336) (250) (2,306)
Net current assets 3,620 5,887 505
Total assets less current liabilities 67,060 55,204 61,294
Creditors - amounts falling due after
more than one year:
Zero dividend preference shares (24,528) (22,924) (23,719)
Net assets 42,532 32,280 37,575
Capital and reserves
Equity share capital 181 181 181
Redemption Reserve 10 10 10
Capital reserve - realised 12,792 8,720 10,681
Capital reserve - unrealised 11,173 4,986 8,588
Special reserve 17,474 17,474 17,474
Revenue reserve 902 909 641
Total shareholders' funds 42,532 32,280 37,575
NAV per ordinary share (pence) 234.42 177.92 207.10
NAV per zero dividend preference
share (pence) 128.13 119.75 123.90
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the six months ended 30 June 2007
(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
1 January
2007 181 10 10,681 8,588 17,474 641 37,575
Return on
ordinary
activities
after
taxation - - 2,111 2,585 - 968 5,664
Dividend
paid - - - - - (707) (707)
Balance at
30 June
2007 181 10 12,792 11,173 17,474 902 42,532
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the six months ended 30 June 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
1 January
2006 181 10 3,211 6,837 17,474 601 28,314
Return on
ordinary
activities
after
taxation - - 5,509 (1,851) - 988 4,646
Dividends
paid - - - - - (680) (680)
Balance at
30 June
2006 181 10 8,720 4,986 17,474 909 32,280
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the year ended 31 December 2006
(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
1 January
2006 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
Dividends
paid - - - - - (1,225) (1,225)
Balance at
31
December
2006 181 10 10,681 8,588 17,474 641 37,575
CASH FLOW STATEMENT
for the six months ended 30 June 2007
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31
30 June to 30 June December
2007 2006 2006
£000 £000 £000
Operating activities
Income received from investments 1,485 1,489 2,336
Interest received 45 61 213
Investment management fees paid (1,801) (716) (878)
Other cash payments (210) (30) (305)
Net cash (outflow)/inflow from
operating activities (481) 804 1,366
Servicing of finance
Interest paid (1) (4) (4)
Taxation
Overseas tax paid (154) (96) (149)
Financial investments
Purchases of investments (19,255) (35,398) (67,999)
Sales of investments 23,523 39,640 68,930
Liquidation of futures and options 475 - (1,198)
Net cash inflow/(outflow) from
financial investments 4,743 4,242 (267)
Equity dividends paid (980) (680) (953)
Increase/(decrease) in cash 3,127 4,266 (7)
NOTES
1.These financial statements are prepared under the historical cost
convention as modified by the revaluation of fixed asset investments and in
accordance with applicable accounting standards and with the Statement of
Recommended Practice 2003, revised in December 2005 regarding the Financial
Statements of Investment Trust Companies ("SORP") and in accordance with the
Companies Act, 1985.
2.The figures and financial information for the period ended 31
December 2006 are an extract from the latest published accounts and do not
constitute statutory accounts. Full accounts for that period have been
delivered to the Registrar of Companies and included the report of the auditors
which was unqualified. The accounts for the six months ended 30 June 2007 and
the six months ended 30 June 2006 are unaudited and do not constitute statutory
accounts.
3.On 9 August 2007 the Directors declared a second interim dividend of
1.5p per Ordinary shares for the year ending 31 December 2007 to holders of
Ordinary Shares on the Register on 31 August 2007. The Ordinary shares will be
marked ex-dividend on 29 August 2007 and the dividend will be paid on 28
September 2007.
4.The total return per Ordinary share is based on the return on
ordinary activities after taxation of £5,664,000 (six months ended 30 June
2006: £4,646,000; year ended 31 December 2006 £10,486,000) and on 18,318,433
Ordinary shares in issue during the six months ended 30 June 2007 (six months
ended 30 June 2006: 18,143,433 shares; year ended 31 December 2006: 18,143,433
shares).
5.At 30 June 2007 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 net asset value per Zero Dividend Preference share of 128.13p at
30 June 2007 (119.75p at 30 June 2006 and 123.90p at 31 December 2006) has been
calculated in accordance with the Articles of Association.
7.The interim report will be mailed to shareholders towards the end of
August, 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.
CHAIRMAN'S STATEMENT
Dear Shareholder
The first half of 2007 was encouraging despite further interest rate rises in
some key economies. Global equity markets rose modestly over the period and
shares in utility and infrastructure companies achieved similarly positive
returns, as did those of your Company.
Performance
Over this period the total assets of your Company have made good progress,
increasing by 10.6% on a total return basis. The net asset value for the
Company's Ordinary shares has risen from 207.10p to 234.42p or an increase of
13.2%. The terminal value of the Ordinary shares has thus risen from 164p to
198p allowing for the accrual on the Company's Zero Dividend Preference ("ZDP")
shares. Terminal asset cover for the ZDP shares has risen from 1.97x to 2.16x,
making the shares one of the best-covered issues in the split capital sector.
The price of the Ordinary shares has risen from 170.75p at the end of December
to 216.5p, an increase of 26.8%, whilst the price of the ZDP shares has risen
from 129p to 136p. The package discount, that is to say the market
capitalisation of the Company versus its total asset value, has narrowed from
9.2% to 5.1%.
The Investment Manager's performance is not assessed 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. The performance of total or gross assets over
the period under review can be considered good, both in absolute and relative
terms.
Your Company's portfolio continues to be tilted towards European utilities
although the Investment Manager is shifting the balance of assets towards US
and Asian regions. To date this has been helpful to the Company's performance.
At the AGM held in April, an adjustment to the Company's investment objectives
was approved and the revised mandate allows the Investment Manager greater
flexibility when assessing in which regions and markets to invest. An example
of this is the holding which has recently been established in Tata Power, the
Indian power company based in Mumbai.
Dividends
Following the payment of the Company's fourth interim dividend of 2.4p (an
increase on last year's 2.25p) in March of this year the Company has declared
and paid a first interim dividend of 1.5p per Ordinary share. A second interim
dividend for year ending 31 December 2007 of 1.5p per Ordinary share was
declared on 9 August 2007 and will be paid on 28 September 2007.
Shareholder relations
The Board and the Investment Manager welcome contact not only with the
Company's existing investors but also potential investors. The Investment
Manager has met with many of the Company's major investors over the period as
well as a number of potential investors. I and my fellow Directors would be
delighted to meet with any substantial shareholders who are unable to attend
the AGM or have matters to be raised at other times of the year.
Outlook
Higher bond yields and increased inflationary pressures in some major markets
are likely to lead to further volatility amongst global equity markets. In
particular the recent problems of the sub-prime debt markets in the US may have
greater implications than at first thought, and could lead to significant
tightening of the easy credit conditions seen over the last three years. On the
other hand global equity valuation levels are not demanding and current global
economic growth supports consensus profit expectations. Merger and acquisition
activity remains at near record levels and whilst this activity will subside,
it will take some time to so do. In addition, the demand for infrastructure
investment is strong, particularly in emerging economies
In summary, therefore, whilst we are cautiously optimistic regarding the
prospects for the utilities and infrastructure sectors we recognise that we
have seen exceptional returns over recent years. In the light of this and
current volatility it would be optimistic to expect future returns to continue
at such high levels
Geoffrey Burns
Chairman
9 August 2007
Premier Utilities Trust PLC
Eastgate Court,
High Street,
Guildford,
Surrey
GU1 3DE
Enquiries: Andrew Whalley or Kevin Scutt (Telephone: 01483 400400)
Friday, 22nd November 2024
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