Interim Results

AURORA INVESTMENT TRUST plc Results for the six months ended 31 August 2005 CHAIRMAN'S REVIEW Net Asset Value Returns: NAV 218.10p p sh (- 5.16%) The first half of the current year has not been a good one for your Company, the net asset value having declined by 5% to 218.1p per share. It is our stated objective to make money for our shareholders and that we did not do. Of course we cannot expect to make money every year yet alone every half-year period but it is nevertheless disappointing when we don't. It adds to the disappointment when we lose money at the same time as the stock market rises, which it did; the FTSE All-share index, our benchmark, rose 6.6%. The period has been dominated by the Oil & Gas Sector; the FTSE Oil & Gas sub-sector index rose by 13.8% and was by far the largest influence on the performance of the benchmark index. The rest of the market by contrast performed a lot less well. We had rather too little exposed to the sector, resulting in our rather poor performance. There were other reasons for it which included the performance of the shares of our smaller companies - particularly those involved in the technology sector - and our exposure to growth stocks as opposed to defensive ones. I should draw to the attention of shareholders note 3 of this report, which explains the consequences for the Company of the change to International Financial Reporting Standards (IFRS), with which we must now comply, in common with all listed companies producing consolidated accounts. It means that the net asset values per share we are reporting in this half year and for last year's corresponding period are respectively 1.98p and 2.34p lower - at 218.10p and 172.47p per share - than they would have been or actually were under the standards that applied previously. As Shareholders are aware, our investment strategy centres on our belief that we live in a deflationary world. However, like the course of true love, the course of deflation, or inflation for that matter, never runs true. There will always be times when there are periods of reaction to the longer-term trend and such is the case now. At present we are in a period of rising inflation and it is not an environment that suits our strategy. Nevertheless, providing central banks generally - and in the USA and China particularly - keep control of the supply of money, rising prices and rising interest rates will act like tax increase, slow economies down and encourage rather than discourage deflation. However even if we are in a period that doesn't suit our strategy, we could have had better stock selection. Our share price fell by 8.0% to 194.5p, that fall causing the discount to rise from 8.0% (as restated under IFRS) to 10.8%. It is hardly surprising that this would happen, given that we are going through a "soft patch". Prospects: The prospects for the economy would appear to be rather mixed. The economy's growth is clearly slowing down with the difficulties of the high street, consumer expenditure being the main reason for it. Consumers and companies are being hit with higher petrol prices, higher energy costs generally, higher interest rates and higher taxes, all of which detract from their ability to afford an increase in the real consumption of goods and services. However, companies in the UK are able to manage their businesses in the interest of profitability; indeed over half of the profits of quoted British companies are earned abroad (and are benefiting from the fall in the value of the Pound). Despite the economic difficulties and the slow down, corporate cash flow is strong, balance sheet strength is rising and profits and dividends are increasing. It may or may not be a great environment for the economy but it seems to be one that companies can thrive in. In any event, James Barstow's stock selection concentrates on choosing companies for investment that are not overly exposed to the UK economy. He has proved in the past that he can choose sectors and companies that perform well in the portfolio; indeed the stocks that have not performed well in this six month period are expected to do well in the longer-term. His colleagues on the Board believe that they will do so, that the period of "soft" performance will pass and that we will go on to make significant returns for shareholders. Alex Hammond-Chambers Chairman 28 October 2005 CONSOLIDATED INCOME STATEMENT 6 months to 6 months to 6 months to 6 months to 6 months to 6 months to 31 Aug. 31 Aug. 31 Aug. 31 Aug. 31 Aug. 31 Aug. 2005 2005 2005 2004 2004 2004 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (restated) (restated) (restated) Revenue Capital Total Revenue Capital Total Notes £'000 £'000 £'000 £'000 £'000 £'000 Gains and losses on investments Gains/(losses) (375) (632) (1,007) (47) (1,594) (1,641) on fair value through profit or loss investments Income Investment 335 - 335 414 - 414 income Other 4 5 - 5 3 - 3 operating income 340 - 340 417 - 417 Expenses Investment (85) (85) (170) (73) (73) (146) management fees Other expenses (142) (48) (190) (91) (17) (108) (227) (133) (360) (164) (90) (254) (Loss)/Profit (262) (765) (1,027) 206 (1,684) (1,478) before finance costs and tax Finance costs (104) (104) (208) (72) (72) (144) Exchange - (115) (115) - (67) (67) differences on overdraft (104) (219) (323) (72) (139) (211) (Loss)/Profit (366) (984) (1,350) 134 (1,823) (1,689) before tax Tax (6) - (6) - - - (Loss)/Profit (372) (984) (1,356) 134 (1,823) (1,689) for the period Earnings per 5 (8.97) (11.18p) share The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of the parent company. There are no minority interests. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Six months Six months ended Ended Year ended 31 August 31 August 28 February 2005 2004 2005 Notes (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Opening balance 3 34,743 28,175 28,175 Profit/(loss) for the financial period/year 3 (1,356) (1,689) 6,999 Dividends paid or legally committed to be paid on ordinary shares 6 (438) (431) (431) Closing balance 32,949 26,055 34,743 CONSOLIDATED BALANCE SHEET At 31 August At 31 August At 28 February 2005 2004 2005 (restated) (restated) (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Non-current assets Investments - fair value 39,619 32,437 41,531 through profit or loss Current assets Investments 1,238 143 - Other receivables 116 79 507 Cash and cash 40 108 745 equivalents 1,394 330 1,252 Current liabilities Bank loan (7,942) (6,578) (6,751) Other payables (122) (134) (1,289) (8,064) (6,712) (8,040) Net current liabilities (6,670) (6,382) (6,788) Net assets 32,949 26,055 34,743 Equity attributable to equity holders Share capital 3,777 3,777 3,777 Share premium account 10,997 10,997 10,997 Capital reserves 17,759 10,481 18,743 Revenue reserve 416 800 1,226 32,949 26,055 34,743 CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 August 2005 2005 2004 £'000 £'000 Cash flows from Operating Activities Operating loss (1,027) (1,427) Movement in non-current operating assets 1,912 2,060 Movement in receivables (847) (148) Movement in payables (1,167) (798) Interest paid (208) (85) Tax paid (6) (7) Net cash from operating activities (1,343) (405) Financing Equity dividends Paid (438) (431) Net cash from financing activities (438) (431) Net increase/(decrease) in cash and cash (1,781) (836) equivalents Cash and cash equivalents at beginning of period (6,006) (5,567) Effect of foreign exchange rate changes (115) (67) Cash and cash equivalents at end of period (7,902) (6,470) NOTES 1. Status of the financial statements These financial statements are not the Group's statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the half years ended 31 August 2005 and 31 August 2004 has not been audited. The information for the year ended 28 February 2005 has been extracted from the latest published audited financial statements, as restated to comply with IFRS (see note 3). The audited financial statements for the year ended 28 February 2005 have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under section 237(2) or (3) of the Companies Act 1985. The directors approved the interim report on 28 October 2005. This interim report is being sent to shareholders and copies will be made available to the public at the registered office of the Group. 2. Accounting policies The interim financial information has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS), which are the accounting policies to be used in the Report and Financial Statements of the Group for the year ended 28 February 2006, as required for the consolidated financial statements of listed companies. Previously, the consolidated financial statements were prepared in accordance with United Kingdom Generally Accepted Accounting Principles (UK GAAP) up to and including the year ended 28 February 2005. UK GAAP differs in some respects from IFRS. In accordance with the rules of IFRS, the date of transition to IFRS is deemed to be 1 March 2004, so that the comparative information is also prepared under IFRS and has been restated where necessary. The accounting policies are unchanged from those used in the last annual financial statements except where otherwise stated. The relevant changes of accounting policies are as follows: (a) The Group has elected to treat its investments as assets held at fair value through profit or loss. Under IFRS, the fair value for quoted investments is deemed to be the market bid price. Under UK GAAP, investments were valued at mid market prices. (b) When investments are treated as assets held at fair value through profit or loss, transaction costs on acquisition such as brokers' commissions and stamp duty are recognised under IFRS as an item of expense rather than, as in UK GAAP, being added to cost. Transaction costs on sales of investments are recognised as an item of expense rather than, as in UK GAAP, being deducted from realised gains. This has no overall effect on net assets. (c) Dividends payable are no longer treated as liabilities until a legal obligation to pay them has arisen, which is deemed to be when the dividend is declared. Final dividends, which are approved and thus declared by the Company in general meeting, are not therefore reflected in the financial statements until the time of the Annual General Meeting. The Company does not pay interim dividends and therefore no restatement is necessary in respect of interim dividends. 3. IFRS transition reconciliation The restatements required by the changes in accounting policy, as set out in note 2 above, are as follows: (a) Profit after taxation Six months ended Year ended 31 August 2004 28 February 2005 (unaudited) (unaudited) £'000 £'000 Profit / (loss) for the financial period/year, as previously stated under UK GAAP (1,638) 7,001 Revaluation of investments to bid prices (51) (2) As reported under IFRS (1,689) 6,999 (b) Net assets At 31 August At 28 February At 29 February 2004 2005 2004 (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 Opening net assets, as previously stated 26,409 34,610 28,047 under UK GAAP Effect of valuation of (354) (305) (303) investments at bid prices Proposed dividends - 438 431 written back (see note 2) As reported under IFRS 26,055 34,743 28,175 (c) Transaction costs Six months ended Year ended 31 August 2004 28 February 2005 (unaudited) (unaudited) £'000 £'000 Transaction costs added back to 18 70 gains on investments and included in other expenses (with no net effect) 4. Other operating income Other operating income comprises bank interest. 5. Earnings per share Earnings per share are based on 15,107,250 shares in issue throughout the period and at the Balance Sheet date (2004: 15,107,250 shares). 6. Dividends In accordance with the stated policy of the Group, the directors do not recommend an interim dividend. The final dividend in respect of the year ending on 28 February 2005 was declared by the Annual General Meeting on 29 June 2005 and was paid on 12 July 2005. As explained in notes 2 and 3 above, this dividend is no longer reflected in the financial statements as at 28 February 2005, but is reflected in the financial statements as at 31 August 2005. 7. Net assets per share At 31 August At 31 August 2005 2004 Net asset value per ordinary share 218.10 172.47p Secretary and registered office: Cavendish Administration Limited Crusader House 145-157 St John Street London EC1V 4RU ---END OF MESSAGE---

Companies

Aurora Investment Trust (ARR)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today