Half-yearly Report
PREMIER ENERGY AND WATER TRUST PLC
IN ACCORDANCE WITH DTR 6.3 THE COMPANY RELEASES THE FULL TEXT OF ITS INTERIM REPORT FOR THE SIX
MONTHS ENDED 30 JUNE 2008. THE INTERIM REPORT IS AVAILABLE ON THE INTERNET AT
www.premierassetmanagement.co.uk
Investment objectives and policy
The Company's investment 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 the equity and equity related securities of companies operating
primarily in the energy and water sectors, as well as other infrastructure
investments. In seeking to achieve its investment objectives, the Company may
invest up to 15% in other investment companies provided they themselves invest
in the same sectors, and up to 15% of its gross assets in unquoted securities.
The Company's accounts will be maintained in sterling. Whilst many of the
Company's investments are likely to be denominated in currencies other than
sterling, the Investment Manager does not intend to deploy active hedging
against exchange rate fluctuations.
Derivative instruments may be used for the purpose of efficient portfolio
management.
WINNER OF THE BEST HIGH INCOME SECURITY AWARD IN THE
MONEY OBSERVER INVESTMENT TRUST AWARDS 2008
Registered in England No. 4897881
A member of the Association of Investment Companies
COMPANY HIGHLIGHTS
Capital
30 June 31 December
2008 2007 %change
Total assets (£000)(i) 67,288 75,383 -10.7%
Total return performance
Six months to
30 June 2008
% change
Total assets(ii) -9.8%
FTSE Global Utilities (£)(iii) -4.8%
FTSE All World (£)(iv) -10.7%
FTSE 100(v) -10.8%
Share price and NAV(vi) returns
30 June 31 December
2008 2007 %change
Zero Dividend Preference share NAV 137.10p 132.57p +3.4%
Mid price 140.50p 137.50p +2.2%
Ordinary share NAV 226.21p 275.60p -17.9%
Mid price 196.50p 236.00p -16.7%
Net revenue per Ordinary share 4.80p 7.40p
Net dividend per Ordinary share 3.00p 7.00p
(i) Total assets less current liabilities.
(ii) Total return performance, adjusted for any dividends distributed.
(iii)Source: FTSE.
(iv) Source: Bloomberg.
(v)Source: Fundamental Data Ltd (all rights reserved).
(vi)Calculated in accordance with FRS21.
COMPANY SUMMARY
Launch Date 4 November 2003
Domiciled UK
Year-end 31 December
Shareholders' Funds £67.29 million
Market Capitalisation £62.55 million
Bank Loan Nil
Zero Dividend Preference shares 19,143,433: aiming to redeem at 162.41p on 31 December 2010
Ordinary shares 18,143,433
Dividends Paid on Ordinary shares
Dividend History In respect of year
ended 31 December Total dividends declared
2007 7.00p
2006 6.90p
2005 6.75p
2004 7.875p*
Investment Manager Premier Fund Managers Limited
Management Fee 1.0% per annum, charged 100% to revenue, plus
performance fee, allocated between capital and revenue based on the out
performance attributable to capital and revenue respectively
AIC Member of the Association of Investment Companies
* This dividend was for the 14 month period from launch, representing an
annualised dividend of 6.75p.
FINANCIAL CALENDAR
Company's year-end 31 December
Annual results announced early March
Annual General Meeting late April
Company's half-year end 30 June
Half-year results announced early August
Dividend payments quarterly 31 March, 30 June,
30 September and 31 December
CHAIRMAN'S STATEMENT
Dear Shareholder,
The first half of the year has been one of the most difficult for equity
investors in many years. The collapse in sub prime mortgages in the US at the
end of last year has triggered possibly the worst crisis in financial markets
in living memory, manifested most visibly in the UK by the collapse of Northern
Rock. The general inaccessibility of credit, allied to increases in long term
inflation and interest rate expectations has caused institutions to reduce
gearing, exacerbating already tight lending markets. The root of the increase
in inflationary expectations lies in the massive rise in commodity prices
around the world including oil, gas and coal. The increase in food prices is
partially the result of misguided policies aimed at promoting the growth of bio
fuels, in the process displacing agricultural land used for food production.
This toxic mix within the global economy is likely to get worse before it gets
any better. The credit crunch has yet sustainably to hit larger companies, and
a further significant deterioration in asset prices is likely in housing and
commercial property in particular. This will add up to an extended period of
poor performance for global stock markets although given that the FTSE 100
Index had already fallen by 10.8% (total return) during the six months ended 30
June 2008 the question is how much further is there to go. The answer may be
not a great deal, although volatility will abound.
Performance
Within the context of the current market declines, the energy and water sectors
have been relatively robust performers. Whilst their businesses are less
susceptible to slowdown than most, share prices have still been affected as
investors apply generally higher discount rates to earnings and dividends.
Nonetheless your Company's portfolio has been a relatively good performer this
year compared to the general stockmarket indices and during the six months
ended 30 June 2008 the assets declined by 9.8% (total return) compared to a
fall in the FTSE 100 Index in the UK of 10.8% (total return) and the FTSE All
World Index (£) of 10.7% (total return). Although it is disappointing to report
a fall in Ordinary share price over this recent period, it should be remembered
that since launch in 2003 the share price has nearly doubled. I am however,
pleased to note that, despite difficult market conditions, Premier Energy and
Water Trust plc recently won the "Best High Income Security" category in the
Money Observer Investment Trust Awards 2008.
The net assets attributable to your Company's Ordinary shares are geared
through the capital structure. Whilst the total assets have fallen by 10.7%, so
the net assets attributable to Ordinary shares fell from £50.0m to £41.0m, a
decline of 18.0%. Thus the net asset value per Ordinary share declined from
275.6p to 226.21p and the terminal value of the Ordinary shares has declined
from 244.12p to 199.51p allowing for the full accrual on the Company's Zero
Dividend Preference ('ZDP') shares. Terminal asset cover for the ZDP shares has
fallen from 242% to 216%, albeit the zeros remain one of the best covered
issues in the market, reflected in their sound share price performance over the
period.
The price of the Ordinary shares fell from 236.0p at 31 December 2007 to 196.5p
at 30 June 2008, a decline of 16.7%, whilst the share price of the ZDP shares
has increased from 137.5p to 140.5p during the same period. Despite the fall
in the Company's investment portfolio, the package discount, that is to say the
market capitalisation of the Company versus its total asset value, has narrowed
from 8.2% to 7.0%.
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 and can be found in Company highlights above.
The Company has been generally very underweight in US utilities in favour of
European utility companies. This has hurt relative performance. However, the
Investment Manager now considers European utilities to offer significant long
term value and has recently started selling the portfolio's holdings of certain
US stocks, reinvesting the proceeds into European energy and water shares, some
of which have fallen by over 30% in recent weeks. The Manager expects this move
will deliver sound capital performance and should have a beneficial impact on
the Company's revenue account: European energy and water shares offer generally
higher yields than their US counterparts.
Change of Company Name
At the Annual General Meeting held on 29 April 2008 shareholders approved the
change of the name of the Company to Premier Energy and Water Trust plc. The
name change became effective on 2 May 2008 when the Registrar of Companies
issued the Certificate of Incorporation on Change of Name. The intention is
that the new name should reflect the prime focus of the trust more accurately.
Dividends
Following the payment of the Company's fourth interim dividend of 2.5p (an
increase on last year's fourth interim dividend of 2.4p) 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 of 1.5p per ordinary share will be paid on 30
September 2008 to holders on the register on 29 August 2008.
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.
Issue of New Shares / Repurchase of Shares
At the Annual General Meeting held on 29 April 2008, the Directors were granted
authority to allot up to an aggregate nominal amount of £18,143 of Ordinary
shares (representing 10% of the Company's issued Ordinary share capital)
without first offering them to existing shareholders in proportion to their
existing holding. Up to the date of this report no shares have been issued. In
addition, the Directors were authorised to repurchase up to 2,719,700 Ordinary
shares and 2,869,600 Zero Dividend Preference shares (representing 14.99% of
each class of the Company's issued share capital). Up to the date of this
report no shares have been repurchased.
VAT on Management Fees
The Board is in discussions with the Investment Manager about the recovery of
VAT on past management fees but a number of procedural matters need first to be
resolved. Therefore no amount is, as yet, being recognised in the asset value.
Outlook
In my last report to you I noted that it would be unwise to consider that
future equity returns would be as robust as they have been over the last few
years. This has proven to be the case. Nonetheless, whilst the global economy
will continue to endure a period of significant volatility, some value is
emerging, notably amongst European stocks. Shares in well managed companies
like EDF and Iberdrola now offer sound prospects, and the recent decision by
the Investment Manager to shift asset allocation away from the US in favour of
Europe looks promising. Whilst volatility will continue to dominate markets,
the asset class into which your Company is invested is less sensitive than most
to the current credit and asset woes and thus our portfolio should continue to
generate sound earnings and dividends notwithstanding the volatile economic
circumstances.
Geoffrey Burns Chairman
6 August 2008
INVESTMENT MANAGER'S REPORT
Overview
Whilst energy and water shares have held up better than overall stockmarket
indices, this being due to their generally less economically sensitive
businesses, they are nonetheless susceptible to rising interest rates. This has
caused weakness notably amongst water stocks as forecasts for near term
profitability are reduced. Although some stocks held performed poorly during
the period, the impact of weak sterling impacted the relative performance given
the high level of sterling based assets held.
Portfolio Activity
The portfolio remains more geographically diversified than is usual and it is
our intention to maintain a fairly high exposure to emerging markets where
demand for essential services is likely to be greater. Over the period, several
of the US stocks, such as Dynegy, AES and NRG were sold and part of the cash
raised was reinvested in the Asian region.
Electricity still forms the largest component of the overall portfolio.
Wholesale power prices have been rising globally, sustained by rising fossil
fuel prices notably gas and oil, although the price of coal too has been
increasing. This has generally produced better profitability for power
generators although many countries' governments/regulators make use of tariff
controls as a means of influencing returns and in some cases stemming local
inflation. Companies which use non-fossil fuels, for example, wind, nuclear,
and biomass, will take market share from the fossil fuel generators over the
coming years and remain an attractive area for investment. A new addition to
the portfolio in this area is the French company EDF.
Telecoms have been particularly hard hit due to an element of cyclicality in
their earnings but the sector has a cash flow profile that supports an
attractive dividend yield. We have reduced exposure to telecoms in favour of
the water sector. Water scarcity in many areas of the world is not a new
phenomenon but it is being exacerbated by population growth and movement of
people to urban areas within emerging economies. China has a particularly acute
problem in this regard and we have increased the portfolio's exposure to water
distribution and supply, water treatment and purification and water
infrastructure companies. Recently acquired holdings in companies that operate
in these industries are Epure International Ltd, Hyflux Ltd and Thai Tap Water.
Portfolio Strategy
We are not optimistic on the outlook for the global economy. The unpleasant
confluence of rising inflation, falling demand, over-priced assets and more
stringent lending conditions from poorly capitalised banks contains all the
ingredients for a sustained and possibly very unpleasant downturn.
We are currently holding a relatively high level of cash in the portfolio in
order to both reduce volatility and give us the ability to buy equities during
what is likely to be a prolonged period of uncertainty for equity markets. We
believe the power, water and related infrastructure and service companies offer
investors attractive long term returns. In the short term, the relative
predictability of profits from utility type companies should mean the sector
finds favour with investors given the current concerns surrounding corporate
profitability in the wider market.
Premier Fund Managers Limited
6 August 2008
INVESTMENT PORTFOLIO
at 30 June 2008
Holdings in descending order as at 30 June 2008
2008 Valuation
Company Activity Country £000 %of total
E.ON Electricity generation & supply Germany 4,081 7.0%
Centrica Gas & electricity supply UK 3,005 5.1%
SUEZ Water & waste services and electricity generation France 2,739 4.7%
Veolia Environnement Water & waste and services France 2,397 4.1%
BT Group Telecommunication services UK 2,348 4.0%
Enel Electricity generation & supply Italy 2,247 3.8%
RWE Electricity generation & supply Germany 2,222 3.8%
Embarq Corp Telecommunication services USA 2,090 3.6%
United Utilities Electricity & water distribution UK 2,058 3.4%
Williams Gas and electricity supply USA 2,024 3.5%
China Power New Energy Electricity generation Hong Kong 1,705 2.9%
KSK Emerging India Energy Fund lectricity generation & supply UK 1,648 2.8%
FPL Group Electricity generation & supply USA 1,646 2.8%
EDF Electricity generation & supply France 1,551 2.6%
Dominion Resources Electricity & gas supply USA 1,478 2.5%
Scottish & Southern Energy Electricity generation & supply UK 1,403 2.4%
Telefonica Telecommunication services Spain 1,335 2.3%
Puncak Niaga Water infrastructure Malaysia 1,284 2.2%
Northeast Utilities Electricity & gas distribution USA 1,283 2.2%
Electricty Generating E lectricity generation & supply Thailand 1,262 2.2%
Bangkok Expressway Toll roads Thailand 1,232 2.1%
Cable & Wireless Telecommunication services UK 1,131 1.9%
Starhub Ltd Telecommunication services Singapore 1,075 1.8%
Guangdong Investment Water supply Hong Kong 1,018 1.7%
ITI Energy Ltd* R enewable electricity generation UK 1,004 1.7%
De Indian Energy* Renewable electricity generation India 1,000 1.7%
Hydrodec Convertible Loanstock* Transformer oil recycling UK 996 1.7%
Transurban Group Toll roads Australia 913 1.6%
Autostrada Torino-Milano Toll roads Italy 867 1.5%
First Energy Corp Electricity generation & supply USA 826 1.4%
Energybuild Group Coal production UK 826 1.4%
Renewable Energy Generation Renewable electricity generation UK 810 1.4%
Tenaga Nasional Electricity generation & distribution Malaysia 752 1.3%
Acciona Energy & water infrastructure Spain 739 1.3%
Kyushu Electric Power Electricity generation & supply Japan 733 1.3%
Greenko Group Renewable electricity generation UK 679 1.2%
Novera Energy Renewable electricity generation UK 678 1.2%
Harbin Power Equipment Power equipment manufacturers China 546 0.9%
Epure International Water treatment Singapore 490 0.8%
Premier Renewable Renewable electricity generation UK 484 0.8%
Iberdrola Renovables Renewable electricity generation Spain 451 0.8%
Hyflux Water treatment Singapore 441 0.8%
Freepower Plc* Renewable electricity generation UK 420 0.7%
LOH & LOH Corp Water infrastructure Malaysia 316 0.5%
Thai Tap Water Water treatment Thailand 177 0.3%
Hydrodec Transformer oil recycling UK 159 0.3%
Total Portfolio 58,569 100.0%
*Unquoted investment.
FINANCIAL SUMMARY
CAPITAL
Premium/
(discount)%
30 June 31 December % 30 June
2008 2007 change 2008
Net Asset Value per Zero Dividend
Preference share* 137.10p 132.57p +3.4% -
Mid-market price per Zero Dividend
Preference share 140.50p 137.50p +2.2% 2.5%
Net Asset Value per Ordinary share* 226.21p 275.60p -17.9% -
Mid-market price per Ordinary share 196.50p 236.00p -16.7% (13.1%)
* Net asset values calculated in accordance with Articles of Association.
REVENUE
30 June 30 June %
2008 2007 change
Net revenue per Ordinary share 4.80p 5.34p -10.1
Net dividend per Ordinary share 3.00p 3.00p -
HURDLE RATESâ€
30 June 2008
Zero Dividend Preference shares:
Hurdle rate return to current share price of 140.50p -30.7%
Hurdle rate to redemption price of 162.41p on 31 December 2010 -26.6%
Ordinary shares:
Hurdle rate return to current share price of 196.50p -0.4%
†The compound rate of growth of the total assets required each year until the
wind-up date for shareholders to receive either a predetermined redemption
price, or in some cases, a return of the amount originally invested.
Source: Fundamental Data Limited (all rights reserved).
TOTAL RETURN PERFORMANCE
Six months to Year to
30 June 31 December
2008 2007
Total return on gross assets(i) -9.8% +25.0%
FTSE Global Utilities Index (£)(ii) -4.8% +22.5%
FTSE All World Index (£)(iii) -10.7% +10.9%
FTSE 100 Index(iv) -10.8% +7.4%
At At
30 June 31 December
2008 2007
£/$ exchange rate 1.9900 1.9906
£/q exchange rate 1.2630 1.3615
(i) Total return performance calculated, adjusted for any dividends distributed.
(ii) Source: FTSE.
(iii)Source: Bloomberg.
(iv) Source: Fundamental Data Limited (all rights reserved).
INCOME STATEMENT
for the six months ended 30 June 2008
(Unaudited)
Notes Revenue Capital Six months ended
30 June 2008
£000 £000 £000
Gains on investments
- realised held at fair
value through profit or loss - 3,256 3,256
(Losses)/gains on investments
- unrealised held at fair value
through profit or loss - (11,480) (11,480)
Income:
Dividends 1,383 - 1,383
Interest 129 - 129
Management and performance fee (341) (15) (356)
Other expenses (162) - (162)
Return before finance costs and taxation 1,009 (8,239) (7,230)
Finance costs (868) (868)
Return on ordinary activities before taxation 1,009 (9,107) (8,098)
Taxation on ordinary activities (139) - (139)
Return on ordinary activities after
taxation attributable to equity shares 870 (9,107) (8,237)
Total
Return per Ordinary share (pence) - (45.39)
INCOME STATEMENT (continued)
for the six months ended 30 June 2007
(Unaudited)
Notes Revenue Capital Six months ended
30 June 2007
£000 £000 £000
Gains on investments
- realised held at fair
value through profit or loss - 3,108 3,108
(Losses)/gains on investments
- unrealised held at fair value
through profit or loss - 2,585 2,585
Income:
Dividends 1,616 - 1,616
Interest 48 - 48
Management and performance fee (357) (187) (544)
Other expenses (188) - (188)
Return before finance costs and taxation 1,119 (5,506) (6,625)
Finance costs (1) (810) (811)
Return on ordinary activities before taxation 1,118 4,696 5,814
Taxation on ordinary activities (150) - (150)
Return on ordinary activities after
taxation attributable to equity shares 968 4,696 5,664
Total
Return per Ordinary share (pence) - 31.22
INCOME STATEMENT (continued)
for the year ended 31 December 2007
(Audited)
Notes Revenue Capital Year ended
31 December 2007
£000 £000 £000
Gains on investments
- realised held at fair
value through profit or loss - 10,298 10,298
(Losses)/gains on investments
- unrealised held at fair value
through profit or loss - 5,361 5,361
Income:
Dividends 2,424 - 2,424
Interest 194 - 194
Management and performance fee (733) (1,161) (2,394)
Other expenses (337) - (337)
Return before finance costs and taxation 1,548 13,998 15,546
Finance costs (19) (1,660) (1,679)
Return on ordinary activities before taxation 1,529 12,338 13,867
Taxation on ordinary activities (186) - (186)
Return on ordinary activities after
taxation attributable to equity shares 1,343 12,338 13,681
Total
Return per Ordinary share (pence) - 75.40
The total column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
The supplementary revenue and capital columns are both prepared under guidance
published by the Association of Investment Companies.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the above statement.
BALANCE SHEET
as at 30 June 2008
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2008 2007 2007
£000 £000 £000
Non current assets
Investments held at fair
value through profit or loss 58,569 63,440 71,758
Current assets
Debtors 286 364 413
Cash and cash equivalents 8,544 4,592 6,139
8,830 4,956 6,552
Current liabilities
Creditors - amounts falling due
within one year (111) (1,336) (2,927)
Net current assets 8,719 3,620 3,625
Total assets less current liabilities 67,288 67,060 75,383
Creditors - amounts falling due
after more than one year
Zero Dividend Preference shares (26,247) (24,528) (25,379)
Total net assets 41,041 42,532 50,004
Capital and reserves
Equity share capital 181 181 181
Redemption reserve 10 10 10
Capital reserve - realised 20,031 12,792 17,658
Capital reserve - unrealised 2,469 11,173 13,949
Special reserve 17,474 17,474 17,474
Revenue reserve 876 902 732
Total equity shareholders' funds 41,041 42,532 50,004
NAV per share - Ordinary shares (pence) 226.21 234.42 275.60
- ZDP shares (pence)†137.10 128.13 132.57
†–Zero Dividend Preference shares are classified as financial liabilities.
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
For the six months ended 30 June 2008
(Unaudited)
Capital Capital
Share Redemption reserve reserve Special Revenue
capital reserve realised unrealised reserve reserve Total
£000 £000 £000 £000 £000 £000 £000
For the six months
ended 30 June 2008
Balance at
1 January 2008 181 10 17,658 13,949 17,474 732 50,004
Return on ordinary
activities after
taxation- - - 2,373 (11,480) 870 (8,237)
Dividends paid - - - - - (726) (726)
Balance at
30 June 2008 181 10 20,031 2,469 17,474 876 41,041
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
For the six months
nded 30 June 2007
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
Dividends paid - - - - - (707) (707)
Balance at
30 June 2007 181 10 12,792 11,173 17,474 902 42,532
For the year ended 31 December 2007
(Audited)
Capital Capital
Share Redemption reserve reserve Special Revenue
capital reserve realised unrealised reserve reserve Total
£000 £000 £000 £000 £000 £000 £000
For the year ended
31 December 2007
Balance at
1 January 2007 181 10 10,681 8,588 17,474 641 37,575
Return on ordinary
activities
after taxation - - 6,977 5,361 - 1,343 13,681
Dividends paid - - - - - (1,252) (1,252)
Balance at
31 December 2007 181 10 17,658 13,949 17,474 732 50,004
CASH FLOW STATEMENT
For the six months ended 30 June 2008
(Unaudited) (Unaudited)
Six months Six months (Audited)
ended ended Year ended
30 June 30 June 31 December
2008 2007 2007
£000 £000 £000
Operating activities
Income received from investments 1,469 1,485 2,230
Interest received 165 45 173
Investment management fees paid (2,179) (1,801) (2,095)
Other cash payments (130) (210) (254)
Net cash (outflow)/inflow from
operating activities (675) (481) 54
Servicing of finance
Interest paid - (1) (19)
Taxation
Overseas tax paid (154) (154) (190)
Financial investments
Purchases of investments (25,203) (19,255) (47,667)
Sales of investments 29,163 23,523 53,558
Liquidation of futures and options - 475 462
Net cash inflow from financial investments 3,960 4,743 6,353
Equity dividends paid (726) (980) (1,524)
Increase in cash 2,405 3,127 4,674
NOTES TO THE FINANCIAL STATEMENTS
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"). The accounting policies applied to these
interim accounts are consistent with those applied in the accounts for the year
ended 31 December 2007.
2.The figures and financial information for the year ended 31 December 2007
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 2008 and for the six
months ended 30 June 2007 are unaudited and do not constitute statutory
accounts.
3.On 29 July 2008 the Directors declared a second interim dividend of 1.5p
per Ordinary share for the year ending 31 December 2008 to holders of Ordinary
shares on the Register on 29 August 2008. The Ordinary shares will be marked
ex-dividend on 27 August 2008 and the dividend will be paid on 30 September
2008.
4.The total return per Ordinary share is based on the return on ordinary
activities after taxation of £(8,237,000) (six months ended 30 June 2007: £
5,664,000; year ended 31 December 2007 £13,681,000) and on 18,143,433 Ordinary
shares in issue during the six months ended 30 June 2008 (six months ended 30
June 2007: 18,143,433 shares; year ended 31 December 2007: 18,143,433 shares).
5.At 30 June 2008 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 137.10p at 30
June 2008 (128.13p at 30 June 2007; 132.57p at 31 December 2007) has been
calculated in accordance with the Articles of Association.
7.The taxation charge of £139,000 (31 December 2007: £186,000 and 30 June
2007: £150,000) relates to irrecoverable overseas taxation.
8.Reconciliation of total return on ordinary activities before finance costs
and taxation to net cash (outflow)/inflow from operating activities:
(Unaudited) (Unaudited)
Six months Six months (Audited)
ended ended Year ended
30 June 30 June 31 December
2008 2007 2007
£000 £000 £000
Net revenue before interest
payable and taxation 1,009 1,119 1,548
Other debtors 20 40 72
Accrued income and prepayments 122 (134) (215)
Other creditors (36) (62) 310
Performance fee capitalised (1,790) (1,444) (1,661)
Net cash (outflow)/inflow
from operating activities (675) (481) 54
9.The investment management fee for the six months to 30 June 2008,which
includes an under accrual for the performance fee for the year ending 31
December 2007, comprises:
£000
Basic fee (charged to revenue) 341
Performance fee (charged to capital):
Under accrual for the year ending 31 December 2007 15
356
10. It is the intention of the Directors to conduct the affairs of the Company
so that they satisfy the conditions for approval as an investment trust company
set out in section 842 of the Income and Corporation Tax Act 1988.
INTERIM MANAGEMENT REPORT
Premier Energy and Water Trust plc is required to make the following
disclosures in its half year report:
Principal Risks and Uncertainties
The Board believes that the principal risks and uncertainties faced by the
Company continue to fall into the following categories:
- Structure of the Company and gearing.
- Dividend levels.
- Currency risk.
- Liquidity risk.
- Market price risk.
- Discount volatility.
- Operational.
- Accounting, legal and regulatory.
Information of each of these is given in the Report of the Directors in the
Annual Report for the year ended 31 December 2007.
Related Party Transactions
The Investment Manager is regarded as a related party and details of the
management fee payable during the six months ended 30 June 2008 are set out in
note 9 to the financial statements. There have been no other related party
transactions during the six months ended 30 June 2008.
Directors' Responsibility Statement
The Directors are responsible for preparing the half-yearly financial report,
in accordance with applicable law and regulations. The Directors confirm that,
to the best of their knowledge:
- The condensed set of financial statements within the half-yearly financial
report has been prepared in accordance with the Accounting Standards Board's
statement "Half-Yearly Financial Reports"; and
- The Interim Management Report includes a fair review of the information
required by 4.2.7R (indication of important events during the first six months
of the year) and 4.2.8R (disclosure of related party transactions and changes
therein) of the FSA's Disclosure and Transparency Rules.
For and on behalf of the Board
Geoffrey Burns
Chairman
6 August 2008
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