Interim Results

Artemis Alpha Trust PLC 21 December 2007 ARTEMIS ALPHA TRUST PLC (the 'Company') Interim Results for the six months ended 31st October 2007 Chairman's Statement Performance Over the six months to 31st October 2007 your Company's diluted net asset value rose marginally by 0.4%, ending the period at 237.50p, and by 0.9% after adjusting for dividends paid out. The FTSE All-Share Index, the Company's benchmark, produced a total return over the six months of 4.6%. During the six months under review, world stockmarkets experienced a marked increase in volatility. This was driven in no small part by investor concern over credit market liquidity as the impact of the sub prime crisis in the US mortgage market became more evident. The continuing high price of oil and evidence of a slowing global economy are two additional factors which have given stockmarkets cause for concern. Investors' appetite for large caps over small caps has continued, with small caps (FTSE Small Cap ex IT Index) showing a negative return of more than 8%, compared to the return from large caps (FTSE 100 Index) of almost 6%. This feature of the market has not helped your Company's relative performance as it has a bias towards small caps. There were two particular events of note in the period relating to the unlisted portfolio. The first was an increase in the carrying value of Artemis Asset Management to £6 million, following the completion of an independent valuation. This resulted in an uplift of just over £1 million, equivalent to 3.2p per share. The other notable contributor was Central Rand Gold (formerly Rand Quest Syndicate), the South African gold miner, which successfully raised £75 million of new money ahead of its listing. At the IPO price of £1.25, the Company's holding showed an uplift in value of in excess of £1.8 million adding more than 5.5p per share to the net asset value. At 31st October 2007 the value of the Company's unlisted investments represented 27.9% of net assets. Dividends Your Board is pleased to declare a first interim dividend for the year to 30th April 2008 of 1.05p per ordinary share, an increase of 5% over the equivalent dividend last year. This dividend will be paid on 8th February 2008, to those shareholders on the register at close of business on 11th January 2008. The increase reflects the Board's intention to seek to provide shareholders with a growing income stream from their investment in the Company. VAT on Management Fees In June 2007, the European Court of Justice ('ECJ') ruled against HM Revenue & Customs ('HMRC') in a test case concerning the exemption of investment trusts from the payment of VAT on management fees. In November 2007, HMRC acknowledged this and confirmed that claims for the repayment of VAT overpaid in the past would be processed in due course. Your Manager has confirmed that protective claims have been submitted to HMRC and will seek to make a recovery of the VAT charged on management fees, which in turn will be returned to the Company. The position is complicated by the change of manager in 2003 and best endeavours will be made to recover VAT incurred prior to that date. Information for Shareholders The Board aims to ensure that shareholders are kept up to date with the Company's developments and does this principally through the interim and annual reports and a daily announcement of the net asset value to the London Stock Exchange. In addition a monthly fact sheet is prepared by the Manager which can be found on its web site at www.artemisonline.co.uk. Interim Management Statements Following the implementation in the UK of the European Union's Transparency Directive in January 2007, a number of new requirements were introduced for listed companies. The Company is now required to prepare an Interim Management Statement during the six month period between the annual and interim reporting periods. These will be announced to the London Stock Exchange and available on the Manager's web site at the address above. These will contain details of any material events or transactions which affect the Company as well as certain financial information. Investment Plan The Company's shares can be acquired through an Investment Plan ('Plan') operated by Artemis Investment Management. Your Board believes that the Plan provides a straightforward and low cost way of investing in the Company, which can be done via a regular monthly contribution or by one off lump sum investment. Further details of the Plan and documentation can be obtained from the Manager's web site or by contacting the Manager on 0800 092 2051. Outlook Against a volatile background, your Board has a cautious view of markets. It continues to believe that investment in equities is a long-term process and considers that the Company's wide investment remit will result in the Manager generating sound performance over the longer term. I look forward to reporting to you again following the Company's year end at 30th April 2008. Simon Miller Chairman 21st December 2007 Investment Manager's Report Review of the period There has been no change to our investment strategy during the period. The portfolio is managed as a best ideas fund, with input from the whole of the Artemis management team, and remains focussed on oil exploration and resources, which has helped greatly given the current stock market turmoil. The portfolio has no exposure to the UK banking sector and is significantly underweight in the consumer and UK property sectors. The oil price remains at historically high levels, which continues to attract investment. Our main new holding in the sector is world leading oil services company, Expro International, which specialises in all areas of well flow management. It is a technological leader and we believe that its focus on rig-less intervention will be a major driver for its profits. We have had positive contributions from a number of other oil and gas focussed companies, namely: Solana Resources -- Columbian based, with a new management who have had a commercial discovery; Geopark -- Chilean operator, with gas discoveries in the Magallanes Basin; and Revus Energy -- Norwegian based, focussed on the Norwegian continental shelf. On the negative side, Petrohunter's short lived success has hit the buffers as it ran out of money for completions. Although there is no exposure to the UK banking sector, some of the smaller financials, such as ACP Capital, have been heavily de-rated. We have taken advantage of the current turnaround to buy a holding in the German based Hypo Real Estate Bank Group, which was identified by our SmartGARPTM* process as a very attractive investment opportunity. Within the unlisted section of the portfolio, we have made a new investment in Valiant Petroleum, whose focus is to build up a portfolio of development, appraisal and low risk exploration assets in the northern North Sea. We expect the reserve base to increase significantly during the next year with first production scheduled in 2009. Outlook To say things look ''tricky'' is a bit of a cop out at this stage. The recent interest rate reductions and the concerted central bank intervention appear to have had little impact on confidence. The scale of the problems within the banking sector will take some time to be fully understood. Economic growth is being questioned and at this stage there is nothing more we can add. This portfolio will continue to have a focus on oil exploration, which appears to have strong fundamental attractions. We also believe that there latent value within our unlisted portfolio and hope that we will see positive returns over the next year. John Dodd Artemis Investment Management Limited Investment Manager 21st December 2007 * SmartGARP is Artemis' proprietary stock selection tool. Consolidated Income Statement For the six months ended 31st October 2007 Six months ended Six months ended Year ended 31st October 2007 31st October 2006 30th April 2007 (Audited) (Unaudited) (Unaudited) Revenue Capital Total Revenue Capital Total Revenue Capital Total Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment income 694 -- 694 663 -- 663 1,268 -- 1,268 Other income 198 -- 198 121 -- 121 848 -- 848 ---------- -------- -------- -------- -------- -------- --------- -------- -------- Total revenue 892 -- 892 784 -- 784 2,116 -- 2,116 ---------- -------- -------- -------- -------- -------- --------- -------- -------- Gains/(losses) on investments -- 911 911 -- (13,240) (13,240) -- 3,234 3,234 (Losses)/gains on current asset investments (188) -- (188) (93) -- (93) (295) -- (295) Currency (losses)/gains -- (21) (21) -- 23 23 -- 5 5 ---------- -------- -------- -------- -------- -------- --------- -------- -------- Total income 704 890 1,594 691 (13,217) (12,526) 1,821 3,239 5,060 ---------- -------- -------- -------- -------- -------- --------- -------- -------- Expenses Investment management fees (28) (272) (300) (27) (246) (273) (57) (515) (572) Other expenses (143) -- (143) (186) -- (186) (359) -- (359) ---------- -------- -------- -------- -------- -------- --------- -------- -------- Profit/(loss) before finance costs and tax 533 618 1,151 478 (13,463) (12,985) 1,405 2,724 4,129 ---------- -------- -------- -------- -------- -------- --------- -------- -------- Finance costs (39) (355) (394) (32) (283) (315) (64) (577) (641) ---------- -------- -------- -------- -------- -------- --------- -------- -------- Profit/(loss) before tax 494 263 757 446 (13,746) (13,300) 1,341 2,147 3,488 ---------- -------- -------- -------- -------- -------- --------- -------- -------- Tax -- -- -- (13) 10 (3) (173) 167 (6) ---------- -------- -------- -------- -------- -------- --------- -------- -------- Profit/(loss) for the period 494 263 757 433 (13,736) (13,303) 1,168 2,314 3,482 ---------- -------- -------- -------- -------- -------- --------- -------- -------- Earnings per ordinary share (basic) 2 1.49p 0.79p 2.28p 1.30p (41.18)p (39.88)p 3.51p 6.95p 10.46p Earnings per ordinary share (diluted) 2 1.36p 0.73p 2.09p 1.20p (38.12)p (36.92)p 3.24p 6.43p 9.67p ---------- -------- -------- -------- -------- -------- --------- -------- -------- The total column of this statement represents the Income Statement of the Group, prepared in accordance with International Financial Reporting Standards. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity shareholders of Artemis Alpha Trust plc. There are no minority interests. Consolidated Balance Sheet As at 31st October 2007 31st October 31st October 2006 30th April 2007 Note 2007 £'000 £'000 £'000 (Unaudited) (Audited) (Unaudited) Non-current assets Investments 97,146 77,744 95,411 --------------- ----------------- --------------- Current assets Investments held by subsidiary 372 818 1,167 Other receivables 202 874 506 Cash 1,293 2,332 1,119 --------------- ----------------- --------------- 1,867 4,024 2,792 --------------- ----------------- --------------- Total assets 99,013 81,768 98,203 --------------- ----------------- --------------- Current liabilities Other payables (856) (388) (371) Bank loan (11,500) (11,500) (11,500) --------------- ----------------- --------------- (12,356) (11,888) (11,871) --------------- ----------------- --------------- Net assets 86,657 69,880 86,332 --------------- ----------------- --------------- Equity attributable to equity holders Share capital 333 333 333 Share premium 23,984 23,984 23,984 Special reserve 7,974 7,974 7,974 Warrant reserve 1,299 1,299 1,299 Capital redemption reserve 3 3 3 Retained earnings -- revenue 2,037 1,573 1,975 Retained earnings -- capital 5 51,027 34,714 50,764 --------------- ----------------- --------------- Total Equity 86,657 69,880 86,332 --------------- ----------------- --------------- Net asset value per ordinary share (basic) 3 260.75p 210.27p 259.77p Net asset value per ordinary share (diluted) 3 237.50p 195.06p 236.69p --------------- ----------------- --------------- Consolidated Statement of Changes in Equity For the six months ended 31st October 2007 Six months ended 31st October 2007 (unaudited) Capital Retained Share Share Special Warrant redemption earnings capital premium reserve reserve reserve Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1st May 2007 333 23,984 7,974 1,299 3 1,975 50,764 86,332 Profit for the period -- -- -- -- -- 494 263 757 Dividends paid and -- -- -- -- -- - (432) declared (432) -------- -------------- -------------- ------------- ------------- ------------- ------------- ------------- At 31st October 2007 333 23,984 7,974 1,299 3 2,037 51,027 86,657 --------- -------------- -------------- ------------- ------------- ------------- ------------- ------------- Six months ended 31st October 2006 (unaudited) Capital Retained Share Share Special Warrant redemption earnings capital premium reserve reserve reserve Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1st May 334 23,984 8,208 1,299 2 1,540 48,450 83,817 2006 Profit/(loss) for the period -- -- -- -- -- 433 (13,736) (13,303) Repurchase of own shares (1) -- (234) -- 1 -- -- (234) Dividends paid and declared -- -- -- -- -- (400) -- (400) ---------- ------------- ------------- ------------- ------------- ------------- -------------- ------------- At 31st October 2006 333 23,984 7,974 1,299 3 1,573 34,714 69,880 -------- ------------- ------------- ------------- ------------- ------------- -------------- ------------- Year ended 30th April 2007 (audited) Capital Retained Share Share Special Warrant redemption earnings capital premium reserve reserve reserve Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1st May 334 23,984 8,208 1,299 2 1,540 48,450 83,817 2006 Profit for -- -- -- -- -- 1,168 2,314 3,482 the year Repurchase of own shares (1) -- (234) -- 1 -- -- (234) Dividends paid and -- -- -- -- (733) -- (733) declared -- -------- ------------ ------------- ------------- -------------- ------------ -------------- ------------- At 30th April 2007 333 23,984 7,974 1,299 3 1,975 50,764 86,332 ------- ------------ ------------- ------------- -------------- ------------ -------------- ------------- Consolidated Cash Flow Statement For the six months ended 31st October 2007 Six months ended Six months ended Year ended 31st October 31st October 30th April 2007 2006 2007 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating activities Profit/(loss) before tax 757 (13,303) 3,488 Interest payable 394 315 641 (Gains)/losses on investments (911) 13,240 (3,234) Loss/(gain) on foreign exchange 21 (23) (5) Net movement in current asset investments 188 93 295 Decrease/(increase) in other receivables 26 (160) 210 Increase/(decrease) in other payables 38 (187) (10) ---------------- ---------------- -------------- Net cash inflow/(outflow) from operating activities before interest 513 (25) 1,385 and tax ---------------- ---------------- -------------- Interest paid (374) (309) (633) Corporation tax refunded -- 24 21 ---------------- ---------------- -------------- Net cash inflow/(outflow) from operating activities 139 (310) 773 ---------------- ---------------- -------------- Investing activities Purchases of investments (13,727) (21,144) (44,811) Sales of investments 14,215 16,403 38,135 ---------------- ---------------- -------------- Net cash inflow/(outflow) from investing activities 488 (4,741) (6,676) ---------------- ---------------- -------------- Financing activities Repurchase of own shares -- (234) (234) Dividends paid (432) (400) (733) ---------------- ---------------- -------------- Net cash outflow from financing activities (432) (634) (967) ---------------- ---------------- -------------- Net increase/(decrease) in cash and cash equivalents 195 (5,685) (6,870) ---------------- ---------------- -------------- Cash and cash equivalents at start of period (10,381) (3,506) (3,506) Effect of foreign exchange rate changes (21) 23 (5) ---------------- ---------------- -------------- Cash and cash equivalents at the end of period (10,207) (9,168) (10,381) ---------------- ---------------- -------------- Bank Loans (11,500) (11,500) (11,500) Cash 1,293 2,332 1,119 ---------------- ---------------- -------------- (10,207) (9,168) (10,381) ---------------- ---------------- -------------- Notes 1. Accounting Policies The Group's Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', the provisions of the Companies Act 1985 and with the guidance set out in the Statement of Recommended Practice for investment trusts issued by the Association of Investment Companies in December 2005. The Half-Yearly Financial Report has been prepared under the same accounting policies as the annual financial statements for the year ended 30th April 2007. The principal activity of the Company is that of an investment trust company within the meaning of Section 842 of the Income and Corporation Taxes Act 1988. 2. Earnings per ordinary share The basic revenue earnings per ordinary share is based on the revenue profit for the period of £494,000 (30th April 2007: £1,168,000; 31st October 2006: £433,000) and on 33,233,488 (30th April 2007: 33,294,789; 31st October 2006: 33,355,091) ordinary shares, being the weighted average number of ordinary shares in issue during the period. The basic capital earnings per ordinary share is based on the capital profit for the period of £263,000 (30th April 2007: profit of £2,314,000; 31st October 2006: loss of £13,736,000) and on 33,233,488 (30th April 2007: 33,294,789; 31st October 2006: 33,355,091) ordinary shares, being the weighted average number of ordinary shares in issue during the period. For the purposes of calculating diluted revenue and capital earnings per ordinary share, the number of ordinary shares is the weighted average used in the basic calculation plus the number of ordinary shares deemed to be issued for no consideration on exercise of all warrants by reference to the average share price of the ordinary shares during the period. The exercise of warrants would result in an increase in the weighted average number of ordinary shares of 3,031,690 (30th April 2007: 2,771,003; 31st October 2006: 2,673,185). 3. Net asset value per ordinary share The basic net asset value per ordinary share is based on net assets of £86,657,000 (30th April 2007: £86,332,000; 31st October 2006: £69,880,000) and on 33,233,488 (30th April 2007: 33,233,488; 31st October 2006: 33,233,488) ordinary shares, being the number of ordinary shares in issue at the period end. The diluted net asset value per ordinary share has been calculated on the assumption that 6,671,697 manager warrants (30th April 2007: 6,671,697; 31st October 2006: 6,118,689) in issue, were exercised, resulting in a total number of ordinary shares in issue at 31st October 2007 of 39,905,185 (30th April 2007: 39,905,185; 31st October 2006: 39,352,177). 4. Dividends Six months ended Six months ended Year ended 31st October 31st October 30th April 2007 2006 2007 £'000 £'000 £'000 Second interim dividend for year ended 30th April 2006 - 1.2p -- 400 400 First interim dividend for year ended 30th April 2007 - 1.0p -- -- 333 Second interim dividend for year ended 30th April 2007 - 1.3p 432 -- -- -------------------------- ------------------------ ----------------------- 432 400 733 -------------------------- ------------------------ ----------------------- A first interim dividend for the year ending 30th April 2008 of £348,951 (1.05p per ordinary share) has been declared. This will be paid on 8th February 2008 to those shareholders on the register at close of business on 11th January 2008. 5. Analysis of retained earnings - capital 31st October 31st October 30th April 2007 2006 2007 £'000 £'000 £'000 Retained earnings - capital (realised) 33,569 27,605 30,515 Retained earnings - capital (unrealised) 17,458 7,109 20,249 -------------------------- ------------------------ ----------------------- 51,027 34,714 50,764 -------------------------- ------------------------ ----------------------- 6. Comparative information The financial information for the six months ended 31st October 2007 and 31st October 2006 has not been audited and does not constitute statutory financial statements as defined in Section 240 of the Companies Act 1985. The information for the year ended 30th April 2007 has been extracted from the audited financial statements for the year ended 30th April 2007. These financial statements contained an unqualified auditor's report and have been lodged with the Registrar of Companies and did not contain a statement required under Section 237 (2) and (3) of the Companies Act 1985. 7. Copies of the Half-Yearly Financial Report will be sent to shareholders in early January 2008 and will be available from the registered office at Cassini House, 57 St James's Street, London SW1A 1LD Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report We confirm that to the best of our knowledge: • the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting issued by the International Accounting Standards Board as adopted by the EU; • the interim management report includes a fair review of the information required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. For and on behalf of the Board Simon Miller Chairman 21st December 2007 Artemis Investment Management Limited Company Secretary For further information, please contact: Billy Aitken at Artemis Investment Management Limited Telephone: 0131 225 7300 This information is provided by RNS The company news service from the London Stock Exchange

Companies

Artemis Alpha Trust (ATS)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today