Interim Results
Standard Life UK Small.Co's Tst PLC
08 February 2008
STANDARD LIFE UK SMALLER COMPANIES TRUST PLC
Investment Objective
To achieve long term capital growth by investment in UK quoted smaller
companies.
Investment Policy
The Directors intend to achieve the investment objective by investing in a
diversified portfolio consisting mainly of UK quoted smaller companies. The
portfolio will normally comprise around 50 individual holdings representing the
Manager's highest conviction investment ideas. In order to reduce risk in the
Company without compromising flexibility:
- no holding within the portfolio will exceed 5% of total assets;
- and the top ten holdings will not, in aggregate, exceed 50% of total assets
The Directors expect that, in normal market conditions, gearing will be between
0% and 20% of net assets. The Directors have delegated responsibility to the
Manager for the operation of the gearing level within the above range.
The Manager's investment process combines asset allocation, stock selection,
portfolio construction, risk management, and dealing. The investment process is
research intensive and is driven by the Manager's distinctive 'focus on change'
which recognises that different factors drive individual stocks and markets at
different times in the cycle. This flexible, but disciplined process ensures
that the Manager has the opportunity to perform in different market conditions.
HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
For further information, please contact:
Richard England
Press Manager, Standard Life Investments Tel. 0131 245 2750
-END-
STANDARD LIFE UK SMALLER COMPANIES TRUST PLC
INTERIM MANAGEMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
CHAIRMAN'S STATEMENT
May I thank shareholders for their continued support of the Company at the
shareholder meetings held in August 2007 and October 2007 where all resolutions
were approved. As a result the Company has changed its name to Standard Life UK
Smaller Companies Trust plc and share buy back authorities have not only been
renewed but also extended to allow shares bought back to be held in treasury.
Consistent with a more focussed approach, the investment portfolio now
represents the Manager's 50 or so best UK smaller company investment ideas. In
addition the long term debenture was repaid in August 2007 and replaced with a
more flexible banking facility.
Performance
The first six months of the current financial year proved to be a difficult
period for stock markets in general and smaller companies in particular. The
FTSE All-Share Index (capital return) fell by 3.5% over this period while the
Company's benchmark, the Extended Hoare Govett Smaller Companies Index
(excluding investment trusts), fell by 13.2%. The domestic economy has started
to slow down particularly for companies in the consumer and cyclical sectors,
and in the financial sector banks have been applying more selective lending
criteria as a result of the impact of the credit crunch that started in July
2007. Against this more difficult environment, the Company has continued to
outperform against its benchmark over the six months ended 31 December 2007.
The Company's net asset value per share (diluted with debt at market value)
decreased by 9.7% to 132.54 pence per share compared with a 13.2% decrease in
the benchmark over the period.
The Company continues to have an excellent record since the Board's decision to
appoint Standard Life Investments as Managers, on 1 September 2003, as
illustrated in the table below:
Per ordinary share 1 year 2 years 3 years
% % %
Net asset value (diluted, debt at market value) -5.5 +29.7 +65.4
Share price -11.7 +24.9 +70.9
Extended Hoare Govett Smaller Companies Index -10.2 +12.0 +39.3
(excluding investment trusts)
Source: Thomson Datastream, all capital returns only
Additional information on the economic background and on the changes to the
Company's investment portfolio in the period may be found in the Manager's
Report.
Gearing
The Manager has been given discretion to vary the level of the net gearing
between 0% and 20% depending on its view of the outlook for smaller companies.
The level of gearing over the reporting period ranged from approximately 4% to
10%. Actual gearing as at 31 December 2007 stood at 4.3% and reflects the
Manager's cautiously optimistic outlook for the portfolio. Currently £3.5m of
the £10m banking facility is drawn down.
Share Buy Backs and Discount Level
Not surprisingly, as the outlook for the smaller companies' universe became more
uncertain the discount to net asset value widened for UK smaller company
investment trusts with the size weighted average discount widening from 14% at
30 June 2007 to 19% at 31 December 2007 (source: The Association of Investment
Companies). Disappointingly, the widening in the Company's discount was more
pronounced ending the reporting period on 21.2%. The Company's discount
averaged 14% for the first five months of the period and widened to over 20% in
December 2007.
175,000 shares were bought back into treasury in December 2007 at a discount to
net asset value of 21.8% while a further 40,000 shares were bought back into
treasury in January 2008 at a discount of 16.4%. The Company will endeavour to
apply share buy backs to provide a material reduction in the discount level of
the Company's shares and remains conscious of the long term target of having a
discount level close to the 5% level indicated by the Trust in October 2006.
Earnings and dividend
The revenue return per share was 0.60 pence for the period compared to a revenue
loss of 0.22 pence for the six months ended 31 December 2006. As in previous
years no interim dividend is payable.
Warrants
A total of 12,970 warrants were exercised and an equivalent number of ordinary
shares issued by the Company on 29 October 2007.
Marketing
The level of marketing activities has continued with particular focus upon
private client managers as well as institutional investors. The Board believe
that the shares currently represent an attractive buying opportunity with the
discount to net asset value of over 18% given the Manager's excellent long term
investment performance track record. For shares purchased through the Manager's
savings plans over the period from 1 February 2008 until 31 May 2008 the initial
charge of 1.25% will be waived. Further details about investing in the
Manager's savings plans may be found online at www.standardlifeinvestments.co.uk
/its.
The Board
The Board remain confident in the Manager's capability to add value over the
long term by generating out-performance against the Company's benchmark. As a
measure of this confidence, the directors have purchased an additional 250,000
shares in the Company bringing their combined holding to 590,000 shares or 1.8%
of the shares in issue.
The Board continues to review its composition as part of its strategic planning;
further details will follow in the Annual Report.
Prospects
The economic outlook for 2008 is uncertain at present. Economic growth in the
UK and USA is likely to be slower than in recent years as credit issues
besetting financial markets spill over into the real economy. Smaller
companies' corporate results, particularly in consumer facing sectors, are
unlikely to escape some impact.
In the short term, smaller companies remain subject to periods of volatility as
investors react to the fast changing outlook. Decisive action on interest rates
in the USA and directors increasingly buying back shares in their companies
suggests valuations are becoming extremely attractive giving significant
optimism for the future.
The Manager's risk-averse focus on growth companies with robust business models
is wholly appropriate for current market conditions. The Company is well-placed
for when market conditions do improve. The Board remains steadfastly up-beat
about the prospects for smaller companies and in general for Standard Life UK
Smaller Companies Trust plc in particular.
Events during the period
As at the date of this Report, the Board was aware of the following shareholders
with an interest of 3% of more in the Company's shares in issue with voting
rights (excluding treasury shares):
Name of shareholder Number of Ordinary Shares % of Ordinary
held Shares held
Standard Life Investments 6,425,711 19.8
Royal London Asset Management 2,583,887 8.0
East Riding of Yorkshire 2,550,000 7.9
British Airways Pensions 1,917,155 5.9
Rathbones 1,629,203 5.0
West Yorkshire Pension Fund 1,504,000 4.6
Lazard Asset Management LLC Group 1,467,850 4.5
Progressive Asset Management 1,325,000 4.1
Brewin Dolphin 1,203,892 3.7
Aberdeen Asset Management - retail plans 1,177,212 3.6
PRINCIPAL RISKS AND UNCERTAINTIES
Management of Risk
The Board regularly reviews the major strategic risks which the Board and the
Manager have identified and the Board sets out delegated controls designed to
manage those risks. Key risks within investment and strategy, for example,
inappropriate stock selection or gearing, are managed through investment policy,
guidelines and restrictions and by the process of oversight at each Board
meeting, as outlined below.
The Board has identified the key risks, which will affect its business in the
second half of the financial year, as follows:
• Resource risk: in common with most investment trusts, the Company has no
employees. The Company therefore relies upon services provided by third
parties, including the Manager in particular, to whom responsibility for the
management of the Company has been delegated under an investment management
agreement. The Board reviews the performance of the Manager on a regular basis.
• Investment and market risk: The Company is exposed to the effect of variations
in share prices due to the nature of its business. A fall in the value of its
investment portfolio will have an adverse effect on the value of shareholders'
funds. Uncertainty over market prices and the Manager's ability to outperform
the Company's benchmark and peer group with due attention given to the
preservation of shareholders' funds are prerequisites to the continued existence
of the Company.
• Capital structure and gearing risk: The Company's capital structure at 31
December 2007 consisted of equity share capital comprising ordinary shares and
ordinary share subscription warrants. The Company operates a revolving credit
facility with Lloyds TSB Bank plc for up to £10m at an interest rate of 0.35%
above LIBOR. In rising markets, the effect of the borrowings would be beneficial
but in falling markets the gearing effect would adversely affect returns to
shareholders. The Manager is able to increase or decrease the gearing level by
repaying or drawing down periodically from the bank facility subject to Board
restrictions on gearing remaining between 0% and 20% of net assets.
• Income and dividend risk: In view of the Company's investment objective, to
achieve long term capital growth by investment in UK quoted smaller companies,
the Manager is required to strike a balance more in favour of capital growth
than income return. The Board has adopted an accounting policy for the year to
30 June 2008 which permits 75% of the aggregate of the finance costs and
investment management fees to be charged to the capital account within the
Income Statement as opposed to the revenue account. This policy, which is
reviewed regularly by the Board in light of the expected long term split of
returns between income and capital, enables a higher dividend per share to be
paid to shareholders than would otherwise be the case. The Board receives
frequent updates as to the progress made by the Manager towards the achievement
of the income requirements of the Company.
• Regulatory risk: The Company operates in a complex regulatory environment and
faces a number of regulatory risks. A breach of Section 842 of the Income and
Corporation Taxes Act 1988 would result in the Company being subject to capital
gains tax on portfolio investments. Breaches of other regulations, including the
UKLA Listing Rules or the UKLA Disclosure and Transparency Rules, could lead to
a number of detrimental outcomes and reputational damage. Breaches of controls
by service providers such as the Manager and Company Secretary could also lead
to reputational damage or loss.
The Directors have adopted a robust framework of controls which is designed to
monitor the principal risks facing the Company and to provide a monitoring
system to enable the Directors to mitigate these risks as far as possible.
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 have 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 general
conditions required by 4.2.7R and 4.2.8R of the Financial Services Authority's
Disclosure and Transparency Rules.
The Half-Yearly Financial Report, for the six months ended 31 December 2007,
comprises an Interim Management Report in the form of the Chairman's Statement,
the Directors' Responsibility Statement and a condensed set of Financial
Statements and has not been audited or reviewed by the auditors pursuant to the
APB guidance on Review of Interim Financial Information.
For and on behalf of Standard Life UK Smaller Companies Trust PLC
Donald MacDonald
Chairman
8 February 2008
____________________________________________________________________________________________
MANAGER'S REPORT
UK economy and equity market
The UK smaller companies sector as represented by the Extended Hoare Govett
Smaller Companies Index (excluding investment trusts) fell by 13.2% over the
period. This compares with a 9.7% fall in the net asset value ('NAV') of the
Company (fully diluted with debt at market value). The share price fell by
20.4% in the period in question.
The issues over US sub-prime lending and inter-bank lending spilled over into
the real economy with the troubles at Northern Rock. Market falls were, not
surprisingly, most apparent in interest-rate-sensitive sectors such as
financials, real estate, housebuilders, media and retailers. Declines spread
widely to include software and capital goods and indeed anything considered
remotely cyclical.
However, there were some areas of strength, including oil and gas companies as
well as defensive stocks less exposed to the economic cycle, such as food
manufacturers. Merger and acquisition activity, which had supported valuations,
was generally weaker as financial buyers fell away. Late in the year there were
bids among medium and smaller company stocks mainly from trade buyers.
Highlights included bids for Tradus, Foseco and NTL Instruments.
Performance review
The Company outperformed the benchmark during the period under review primarily
on the back of positive stock selection. The NAV of the Company (diluted, debt
at market value) fell by 9.7%, while the share price return was -20.4% during
the last six months (source: Thomson Financial Datastream and Standard Life
Investments). This divergence reflects a significant widening of the discount,
as smaller companies generally fell from favour.
The Company benefited from its focus on defensive growth, particularly favouring
companies with internet and on-line business models. ASOS, the online clothing
retailer for example, gained 129% in the period in question. An overweight
position in the oil & gas sector also helped, in particular stocks such as the
new holding in Wellstream, which has risen by 47% since it was purchased. The
overweight position in restaurant companies however detracted from performance.
The sector came under pressure even though trading has generally been positive.
Restaurant Group and Clapham House in particular have been weak. Another weak
stock was Care UK which warned about deferrals of NHS contracts.
Dealing and activity
Dealing was influenced by our planned reduction in the number of holdings from
around 70 to 50 stocks. The Company has concentrated on the Manager's 50
highest conviction ideas. Consequently there has been considerably more selling
than buying. We also continue to stick to our robust investment process,
incorporating our proprietary stock selection matrix, which emphasises high
quality growth and momentum stocks with high levels of recurring revenue.
New holdings include Imperial Energy, Wellstream and Bowleven in oil & gas, the
UK's leading milk company Robert Wiseman Dairies, Dignity the funeral specialist
and Telecom Plus in multi-utility services. A new issue was bought from
hospital software company Craneware.
Sales include Speedyhire, Detica, Clapham House, Restaurant Group, Candover,
Galliford Try, Northgate, Clinphone, Styles & Wood and New Star Asset
Management. A cash bid for the long-standing and previously largest holding
Datamonitor returned significant profits to the Company. The made the original
purchase was made in November 2003 at around 85p, while the cash bid in 2007 was
for 650p. Domestic & General also received a cash bid which proved beneficial.
In sector terms, the biggest change in the quarter was the increase in exposure
to oil & gas with a corresponding reduction in exposure to construction and
restaurant companies.
Gearing was reduced early in the period, reflecting caution on the outlook for
the rest of 2007, but was increased to 4.3% by 31 December 2007.
Outlook
The economic backdrop for 2008 is somewhat opaque at present. Most economists
are cutting back significantly their forecasts for UK economic growth.
Expectations for the housing market are that at very best, house prices will be
flat. Retailing, real estate, housebuilders and general financials are likely
to continue to struggle in this environment. The vast majority of stocks in the
Company are reporting robust trading however the upcoming March/April reporting
season is likely to be the weakest for a couple of years as the more cyclical
sectors face continued pressure.
In the short term, smaller companies remain susceptible to bouts of volatility
and risk aversion as they also tend to be more exposed to the domestic economy
than their larger peers. The prospect of lower interest rates should trigger a
wider market recovery later in the year. Directors are beginning to buy their
own shares in larger numbers and valuations have started to look very
attractive. Before a turn in the market can be decisive though, there is likely
to be significantly more earnings disappointment in the market.
Our investment process, continues to focus on high quality growth stocks with
visible recurring revenue and exhibiting both earnings and price momentum. We
use our proprietary stock screening tool to generate investment ideas and
support our stock selection process. Given the appearance of high quality
companies at low valuations we continue to be very positive about the long term
outlook for the Company.
In general, the holdings are somewhat defensive and will do well even without
the help of a positive macro environment. The gearing was 4.3% at 31 December
2007 which is lower than usual for this time of year where, in a more positive
environment, we would normally employ more gearing to take advantage of the
traditional first quarter seasonal bounce in smaller company stocks.
Harry Nimmo
Standard Life Investments
Manager
8 February 2008
___________________________________________________________________________________________
INCOME STATEMENT
Six months ended 31 December 2007
Revenue Capital Total
£'000 £'000 £'000
Net (losses)/gains on investments at fair value - (4,529) (4,529)
Currency losses - - -
Income 398 - 398
Investment management fee (47) (141) (188)
Tender offer expenses - - -
Other corporate expenses - - -
Administrative expenses (165) - (165)
NET RETURN BEFORE ___________ ___________ ___________
FINANCE COSTS AND TAXATION 186 (4,670) (4,484)
Premium on repayment of Debenture Stock - - -
Finance Costs 12 36 48
RETURN ON ORDINARY ACTIVITIES ___________ ___________ ___________
BEFORE TAXATION 198 (4,634) (4,436)
Taxation (2) - (2)
RETURN ON ORDINARY ACTIVITIES ___________ ___________ ___________
AFTER TAXATION 196 (4,634) (4,438)
___________ ___________ ___________
Return per ordinary share
Basic 0.60p (14.22p) (13.62p)
___________ ___________ ___________
Diluted 0.59p (14.04p) (13.45p)
___________ ___________ ___________
The total column of this statement represents the profit and loss account of the
Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all
gains or losses are recognised in the Income Statement.
No operations were acquired or discontinued in the year.
All revenue and capital items in the above statement derive from continuing
operations.
The accompanying notes are an integral part of the financial statements.
____________________________________________________________________________________________
Six months ended 31 December 2006
Revenue Capital Total
£'000 £'000 £'000
Net (losses)/gains on investments at fair value - 13,530 13,530
Currency losses - (3) (3)
Income 1,027 - 1,027
Investment management fee (192) (192) (384)
Tender offer expenses (245) (245) (490)
Other corporate expenses (328) - (328)
Administrative expenses (181) - (181)
NET RETURN BEFORE ___________ ___________ ___________
FINANCE COSTS AND TAXATION 81 13,090 13,171
Premium on repayment of Debenture Stock - (3,335) (3,355)
Finance Costs (204) (198) (402)
RETURN ON ORDINARY ACTIVITIES ___________ ___________ ___________
BEFORE TAXATION (123) 9,537 9,414
Taxation (3) - (3)
RETURN ON ORDINARY ACTIVITIES ___________ ___________ ___________
AFTER TAXATION (126) 9,537 9,411
___________ ___________ ___________
Return per ordinary share
Basic (0.22p) 16.39p 16.17p
___________ ___________ ___________
Diluted - - -
___________ ___________ ___________
________________________________________________________________________________________________________
Year ended 30 June 2007
Revenue Capital Total
£'000 £'000 £'000
Net (losses)/gains on investments at fair value - 17,987 17,987
Currency losses - (7) (7)
Income 1,662 - 1,662
Investment management fee (328) (328) (656)
Tender offer expenses (229) (229) (458)
Other corporate expenses (306) - (306)
Administrative expenses (372) - (372)
NET RETURN BEFORE ___________ ___________ ___________
FINANCE COSTS AND TAXATION 427 17,423 17,850
Premium on repayment of Debenture Stock - - -
Finance Costs (382) (377) (759)
RETURN ON ORDINARY ACTIVITIES ___________ ___________ ___________
BEFORE TAXATION 45 17,046 17,091
Taxation - - -
RETURN ON ORDINARY ACTIVITIES ___________ ___________ ___________
AFTER TAXATION 45 17,046 17,091
___________ ___________ ___________
Return per ordinary share
Basic 0.10p 36.88p 36.98p
___________ ___________ ___________
Diluted 0.10p 36.55p 36.65p
___________ ___________ ___________
_______________________________________________________________________________________________________
BALANCE SHEET
As at As at As at
31 December 31 December 30 June
2007 2006 2007
£'000 £'000 £'000
Non-current assets
Investments at fair value through profit or loss 47,053 55,795 57,600
Current assets
Debtors and prepayments 55 1,128 216
AAA money market funds 1,610 3,351 1,622
Cash at bank and in hand 18 1,867 3,139
___________ ___________ ___________
1,683 6,346 4,977
Creditors: amounts falling due within one year
Other creditors (1,323) (2,105) (11,009)
___________ ___________ ___________
Net current assets/(liabilities) 360 4,241 (6,032)
___________ ___________ ___________
Total assets less current liabilities 47,413 60,036 51,568
Creditors: amounts falling due after more than one year (3,500) (9,908) -
___________ ___________ ___________
Net assets 43,913 50,128 51,568
___________ ___________ ___________
Capital and reserves
Called-up share capital 8,105 8,695 8,146
Share premium account 68 58 58
Capital redemption reserve 593 - 549
Warrant reserve 743 746 746
Special reserve 21,364 21,364 21,364
Capital reserve - unrealised 12,542 22,505 22,124
Capital reserve - realised (33) (3,665) (2,015)
Revenue reserve 531 425 596
___________ ___________ ___________
Equity Shareholders' funds 43,913 50,128 51,568
___________ ___________ ___________
Net asset value per Ordinary share
Basic 135.44p 144.89p 159.01p
Diluted 132.54p 141.42p 154.17p
__________________________________________________________________________________________________________________
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Six months ended 31 December 2007
Share Capital Capital Capital
Share premium redemption Warrant Special reserve reserve Revenue
capital account reserve reserve reserve unrealised realised reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 June 2007 8,146 58 549 746 21,364 22,124 (2,015) 596 51,568
Return on ordinary - - - - - (9,582) 4,948 196 (4,438)
activities after
taxation
Dividends paid - - - - - - - (261) (261)
Exercise of warrants 3 10 - (3) - - 3 - 13
Buyback of ordinary (44) - 44 - - - (178) - (178)
shares
Repayment of debenture - - - - - - (2,791) - (2,791)
_______ __________ ___________ ___________ ________ __________ _______ __________ _________
Balance at 31 December 8,105 68 593 743 21,364 12,542 (33) 531 43,913
2007
_______ __________ ___________ ___________ ________ __________ _______ __________ _________
Six months ended 31 December 2006
Share Capital Capital Capital
Share premium redemption Warrant Special reserve reserve Revenue
capital account reserve reserve reserve unrealised realised reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 June 2006 16,851 56 17,219 777 28,618 24,563 (9,878) 1,090 79,296
Return on ordinary - - - - - (2,058) 11,595 (126) 9,411
activities after
taxation
Dividends paid - - - - - - - (539) (539)
Exercise of warrants 1 2 - (1) - - 1 - 3
Conversion of capital - - (17,219) - 17,219 - - - -
redemption reserve
Tender offer for (8,157) - - (30) (24,473) - (5,383) - (38,043)
purchase of own shares
(including warrants)
_______ __________ ___________ ___________ ________ __________ _______ __________ _________
Balance at 31 December 8,695 58 - 746 21,364 22,505 (3,665) 425 50,128
2006
_______ __________ ___________ ___________ ________ __________ _______ __________ _________
Year ended 30 June 2007 Share Capital Capital Capital
Share premium redemption Warrant Special reserve - reserve- Revenue
capital account reserve reserve reserve unrealised realised reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 June 2006 16,851 56 17,219 777 28,618 24,563 (9,878) 1,090 79,296
Return on ordinary - - - - - (2,439) 19,485 45 17,091
activities after
taxation
Dividends paid (see - - - - - - - (539) (539)
note 4)
Exercise of warrants 1 2 - (1) - - 1 - 3
Conversion of capital - - (17,219) - 17,219 - - - -
redemption reserve
Buyback of ordinary (549) - 549 - - - (2,888) - (2,888)
shares
Tender offer for (8,157) - - (30) (24,473) - (8,735) - (41,395)
purchase of own shares
(including warrants)
_______ __________ ___________ ___________ ________ __________ _______ __________ _________
Balance at 30 June 2007 8,146 58 549 746 21,364 22,124 (2,015) 596 51,568
_______ __________ ___________ ___________ ________ __________ _______ __________ _________
______________________________________________________________________________________________________________________
CASHFLOW STATEMENT
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
£'000 £'000 £'000
Net return on ordinary activities before finance costs and (4,484) 13,171 17,850
taxation
Adjustment for:
Gains/(losses) on investments 4,529 (13,530) (17,987)
Currency (losses) - 3 7
___________ ___________ ___________
Revenue before finance costs and taxation 45 (356) (130)
___________ ___________ ___________
Decrease/(increase) in accrued income 107 (82) 65
Decrease in other debtors 4 9 8
Increase/(decrease) in creditors 14 211 (55)
___________ ___________ ___________
Net cash inflow/(outflow) from operating activities 170 (218) (112)
Net cash outflow from servicing of finance (389) (849) (741)
Net overseas tax (3) (3) (5)
Net cash inflow from financial investment 6,454 41,163 43,385
Equity dividends paid (261) (539) (539)
___________ ___________ ___________
Net cash inflow before management of liquid resources and 5,971 39,554 41,988
financing
Net cash inflow from management of liquid resources 12 6,849 8,578
___________ ___________ ___________
Net cash inflow before financing 5,983 46,403 50,566
Financing
Share buy back (177) (37,854) (40,916)
Share buy back expenses (1) (189) (14)
Exercise of warrants 13 3 3
Repayment of debenture stock (9,648) (9,052) (9,052)
Premium on repayment of debenture stock (2,791) (3,355) (3,353)
Net drawdown of loan 3,500 - -
___________ ___________ ___________
Net cash outflow from financing (9,104) (50,447) (53,332)
___________ ___________ ___________
Decrease in cash (3,121) (4,044) (2,766)
___________ ___________ ___________
Reconciliation of net cash flow to movements in net debt
Decrease in cash as above (3,121) (4,044) (2,766)
Net cash inflow from management of liquid resources (12) (6,849) (8,578)
Net drawdown of loan (3,500) - -
Repayment of debenture stock 9,648 9,052 9,052
Other non-cash movements 244 272 282
___________ ___________ ___________
Movement in net debt in the period 3,259 (1,569) (2,010)
Opening net debt (5,131) (3,121) (3,121)
___________ ___________ ___________
Closing net debt (1,872) (4,690) (5,131)
Represented by: ___________ ___________ ___________
Cash at bank and in hand 1,628 5,218 4,761
Bank loan (3,500) - -
Debenture stock - (9,908) (9,892)
___________ ___________ ___________
(1,872) (4,690) (5,131)
___________ ___________ ___________
_____________________________________________________________________________________________________
NOTES:
1. Accounting policies
(a) Basis of accounting
The accounts have been prepared under the historical cost convention, as
modified to include the revaluation of investments and in accordance with
applicable UK Accounting Standards, with pronouncements on half-yearly reporting
issued by the Accounting Standards Board and with the Statement of Recommended
Practice for 'Financial Statements of Investment Trust Companies' (December
2005). They have also been prepared on the assumption that approval as an
investment trust will continue to be granted.
The financial statements and the net asset value per share figures have been
prepared in accordance with UK Generally Accepted Accounting Principles (UK
GAAP) and using the same accounting policies as the preceding annual accounts.
With effect from 1 July 2007, the Directors have determined that 75% of the
finance costs, including the investment management fees, are to be charged to
capital for the year to 30 June 2008.
(b) Dividends payable
Interim and final dividends are recognised in the period in which they
are paid.
2. Financial information
The financial information contained in this Half-Yearly Financial Report is not
the Company's statutory financial statements. The financial information for the
six months ended 31 December 2007 and 31 December 2006 is not for a financial
year and has not been audited. The statutory financial statements for the
financial year ended 30 June 2007 have been delivered to the Registrar of
Companies and received an audit report which was unqualified, did not include a
reference to any matters to which the auditors drew attention by way of emphasis
without qualifying the report, and did not contain statements under section 237
(2) and (3) of the Companies Act 1985.
3. Interim Report
The Interim Report will be posted to shareholders in March 2008 and additional
copies may be obtained by download from the website of the Company's Manager,
Standard Life Investments (www.standardlifeinvestments.co.uk/its) or by calling
the Manager's Investor Services team on 0845 60 24 247 between 9am and 5pm,
Monday to Friday.
For Standard Life UK Smaller Companies Trust plc
Aberdeen Asset Management PLC, Secretary
END
This information is provided by RNS
The company news service from the London Stock Exchange
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