Interim Results

RNS Number : 4008E

Witan Pacific Investment Trust PLC

26 September 2008

 



WITAN PACIFIC INVESTMENT TRUST PLC

Preliminary announcement of unaudited interim results for the six months ended 31 July 2008

Financial Highlights

Summary of Unaudited Results attributable to equity shareholders

	31 July 2008	31 January 2008	% change
Share price	152.00p	161.75p	(6.0)
Net asset value per share (including income)	174.44p	188.88p	(7.6)
Discount	12.9%	14.4%

Cumulative Performance (Total Returns) to 31 July 2008

	6 months	1 year	3 years	5 years
	%	%	%	%
Share price (with dividends reinvested)#	(5.1)	(11.3)	19.9	67.7
Net asset value per share#	(6.6)	(10.2)	23.9	66.3
MSCI AC Asia Pacific Free Index (£)*	(6.1)	(10.8)	23.5	71.0

# -Source: AIC Services Ltd

* -Source: Datastream

Chairman's Statement

The six months under review have been an extremely volatile and testing period for Asian markets. Over the period the MSCI AC Asia Pacific Free Index returned -6.1%. Of the markets in which your Company is invested, returns ranged from +4.7% in the case of Singapore to -26.7% in India (one of last year's top performers). By contrast, last year's worst performer, Japan, returned a relatively respectable -4.0%.

Against this difficult background the Company's share price returned -5.1%, with dividends reinvested, and the net asset value ('NAV') total return was -6.6% (Source: AIC Services Ltd).  Whilst these are negative numbers, in the context of the market background it is a reasonable outcome.  

Underlying this return the Aberdeen portfolio returned -5.3% and the Nomura portfolio returned -6.2% during the six months under review. Aberdeen's out-performance was mainly due to stock selection in Singapore and India. Throughout the volatility, Aberdeen has made few changes to the portfolio as they consider their investments to be innately conservative. Aberdeen remains very underweight in Japan but is overweight in the relatively defensive Singapore stock market. Nomura's slight underperformance was primarily due to stock selection in India.  During the six months ended 31 July 2008, Nomura has increased their Japanese weighting, reducing the overall underweight position to the benchmark as they see Japan as a more defensive market. Exposure to Australia was reduced, where financial holdings were sold in response to ongoing concerns over global credit markets, Nomura has, however, maintained a significant exposure to the resource sector which provided good returns. The running costs of the Company, including tax, accounted for the difference between the Investment Managers' underlying performance and the final NAV change.

During the six months the Company bought back 718,883 shares representing 1.1% of the share capital which enhanced the NAV by 0.1%. It is the Board's policy to continue to manage the discount through share buy backs. We have always applied this policy flexibly. We will continue to do so.

In these difficult market conditions it is impossible to predict how long the problems we are facing in global financial markets will take to solve. It is, however, likely that the impact from the slowdown in global growth and high inflation in the region will continue to dominate market sentiment for a while and there is also a continued risk of further volatility in equity markets.  Both our Investment Managers are well placed to ride out the storm as they have a relatively conservative approach to investment, focussing largely on stable companies with strong balance sheets and promising long term futures.  This should stand the Company's portfolio in good stead in these markets particularly as, with many market benchmarks back to levels last seen a year ago, our Investment Managers are starting to see interesting buying opportunities.

Gillian Nott

Chairman

26 September 2008

  Income Statement

for the six months ended 31 July 2008

		(Unaudited)			(Unaudited)			(Audited)
		Six months ended 31 July 2008			Six months ended 31 July 2007			Year ended 31 January 2008
		Revenue Return	Capital Return	Total	Revenue Return	Capital Return	Total	Revenue Return	Capital Return	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Total (losses)/gains from  investments held at fair value through  profit or loss		-	(9,461)	(9,461)	-	9,760	9,760	-	4,262	4,262
Exchange gains/(losses)		-	92	92	-	(108)	(108)	-	(71)	(71)
Income from investments  held at fair value through  profit or loss	2	1,900	-	1,900	1,626	-	1,626	3,183	-	3,183
Management fee	3	(156)	-	(156)	(172)	-	(172)	(335)	-	(335)
Performance-related  management fee	3	-	(278)	(278)	-	(35)	(35)	-	(165)	(165)
Other expenses		(317) ---------	(18) ---------	(335) ---------	(336) ---------	(23) ---------	(359) ---------	(603) ---------	(37) ---------	(640) ---------
Net return/(loss)  before finance charges  and taxation		1,427	(9,665)	(8,238)	1,118	9,594	10,712	2,245	3,989	6,234
Finance charges		(103) ---------	- ---------	(103) ---------	(86) ---------	- ---------	(86) ---------	(189) ---------	- ---------	(189) ---------
Return/(loss) on  ordinary activities  before taxation		1,324	(9,665)	(8,341)	1,032	9,594	10,626	2,056	3,989	6,045
Taxation on  ordinary activities		(407) ----------	79 ---------	(328) ----------	(341) ---------	11 ----------	(330) ----------	(649) ----------	49 ---------	(600) ---------
Net return/(loss)  on ordinary activities  after taxation		917 ======	(9,586) =====	(8,669) ======	691 =====	9,605 ======	10,296 ======	1,407 ======	4,038 =====	5,445 =====
Return/(loss) per  ordinary share - pence	5	1.36 ======	(14.24) =====	(12.88) ======	0.96 =====	13.39 ======	14.35 ======	2.00 ======	5.74 =====	7.74 =====

The columns of this statement headed 'total' represent the Company's Income Statement, prepared in accordance with UK GAAP. The revenue and capital columns are supplementary to this and are published under guidance from the Association of Investment Companies. 

The Company had no recognised gains or losses other than those disclosed in the Income Statement and Reconciliation of Movements in Shareholders' Funds.

All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.

  Reconciliation of Movements in Shareholders' Funds

for the six months ended 31 July 2008

Six months ended  31 July 2008 (Unaudited)	Called up   share capital	Share premium account	Capital redemption reserve	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31 January 2008	16,887	5	40,684	61,091	8,916	127,583
Net (loss)/return from  ordinary activities after taxation	-	-	-	(9,586)	917	(8,669)
Dividend paid in  respect of year ended  31 January 2008	-	-	-	-	(1,109)	(1,109)
Purchase of  own shares for cancellation	(180) ----------	- ----------	180 ----------	(1,231) ----------	- ----------	(1,231) ----------
At 31 July 2008	16,707 ======	5 ======	40,864 ======	50,274 ======	8,724 ======	116,574 ======
Six months ended  31 July 2007 (Unaudited)	Called up share capital	Share premium account	Capital redemption reserve	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
As at 31 January 2007	18,223	5	39,348	66,387	8,586	132,549
Net return  from ordinary  activities after taxation	-	-	-	9,605	691	10,296
Dividend paid in  respect of year ended  31 January 2007	-	-	-	-	(1,077)	(1,077)
Purchase of  own shares for cancellation	(561) ----------	- ----------	561 ----------	(3,773) ----------	- ----------	(3,773) ----------
At 31 July 2007	17,662 ======	5 ======	39,909 ======	72,219 ======	8,200 ======	137,995 ======

Year ended 31 January 2008 (Audited)	Called up share capital	Share premium account	Capital redemption reserve	Capital reserves	Revenue reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31 January 2007	18,223	5	39,348	66,387	8,586	132,549
Net return  from ordinary  activities after taxation	-	-	-	4,038	1,407	5,445
Dividend paid in  respect of year  ended 31 January 2007	-	-	-	-	(1,077)	(1,077)
Purchase of  own shares for cancellation	(1,336) -----------	- -----------	1,336 -----------	(9,334) ------------	- ----------	(9,334) -----------
At 31 January 2008	16,887 ======	5 ======	40,684 ======	61,091 ======	8,916 ======	127,583 ======

Purchase transaction costs for the six months ended 31 July 2008 were £33,000 (six months ended 31 July 2007: £30,000; year ended 31 January 2008: £63,000). Sale transaction costs for the six months ended 31 July 2008 were £40,000 (six months ended 31 July 2007: £39,000; year ended 31 January 2008: £92,000).

Balance Sheet

at 31 July 2008

		(Unaudited) 31 July 2008	(Unaudited) 31 July 2007	(Audited) 31 January 2008
	Note	£'000	£'000	£'000
Fixed assets Investments designated as held at fair value through profit or loss		117,235 ------------	137,561 ------------	128,721 ------------
Current assets
Debtors		1,153	574	1,434
Cash at bank and short term deposits		2,669 -----------	4,074 -----------	2,311 -----------
		3,822 -----------	4,648 ----------	3,745 ----------
Creditors: amounts falling  due within one year
Loans		(3,193)	(3,000)	(3,000)
Other		(1,220) -----------	(1,174) -----------	(1,840) -----------
		(4,413) -----------	(4,174) -----------	(4,840) -----------
Net current (liabilities)/assets		(591) -----------	474 -----------	(1,095) -----------
Total assets less current liabilities		116,644	138,035	127,626
Provision for liabilities		(70) -----------	(40) -----------	(43) -----------
Net assets		116,574 =======	137,995 =======	127,583 =======
Capital and reserves
Called up share capital		16,707	17,662	16,887
Share premium account		5	5	5
Capital redemption reserve		40,864	39,909	40,684
Capital reserves		50,274	72,219	61,091
Revenue reserve		8,724 -----------	8,200 ------------	8,916 -----------
Equity shareholders' funds		116,574 =======	137,995 =======	127,583 =======
Net asset value per ordinary  share - pence	6	174.44 =======	195.33 =======	188.88 =======

Cash Flow Statement

for the six months ended 31 July 2008

			(Unaudited)	(Unaudited)	(Audited)
		Six months ended 31 July 2008		Six months ended 31 July 2007	Year ended 31 January 2008
	Note	£'000		£'000	£'000
Net cash inflow from operating activities	7	1,253		851	1,913
Interest paid		(193)		-	(159)
Net tax paid		(324)		(329)	(607)
Net cash inflow from financial investment		1,677		5,612	8,748
Equity dividends paid		(1,109) -----------		(1,077) -----------	(1,077) ----------
Net cash inflow before  financing		1,304		5,057	8,818
Net cash outflow from financing		(1,038) -----------		(3,778) -----------	(9,339) -----------
Increase/(decrease) in cash during the period		266 -----------		1,279 -----------	(521) -----------
Reconciliation of net cash  flow to movement in net funds
Increase/(decrease) in cash		266		1,279	(521)
Foreign exchange movements		92		(108)	(71)
Cash inflow from movement in debt financing		(193)		-	-
		-----------		-----------	-----------
Movement in net funds/(debt)		165		1,171	(592)
Net debt at the  beginning of the period		(689) ----------		(97) ----------	(97) -----------
Net (debt)/funds at the  end of the period			(524) =======	1,074 =======	(689) =======
Represented by
Cash at bank			2,669	4,074	2,311
Loans - short term			(3,193) -----------	(3,000) -----------	(3,000) -----------
Net (debt)/funds at the  end of the period			(524) ======	1,074 =======	(689) ======

Notes to the Accounts

for the six months ended 31 July 2008

1    Accounting policies

The accounts have been prepared under the historical cost convention, modified to include the revaluation of investments and in accordance with applicable Accounting Standards, pronouncements on interim reporting issued by the Accounting Standards Board and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (SORP) revised December 2005. 

All of the Company's operations are of a continuing nature.

    The same accounting policies used for the year ended 31 January 2008 have been applied.

2    Income

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended 31 July 2008	Six months ended 31 July 2007	Year ended 31  January 2008
	£'000	£'000	£'000
Overseas dividends	1,788	1,534	2,975
UK dividends	36	18	40
Overseas scrip dividends	11	7	14
Interest on cash and deposits	50	51	121
Stock lending fees	15 ---------	16 ---------	33 ---------
	1,900 =====	1,626 =====	3,183 =====

3        Management fee and performance-related management fee

On 27 May 2005, your Board appointed Witan as Executive Manager and

Aberdeen and Nomura as the Investment Managers. Each of the Investment Managers

is entitled to a base management fee, calculated according to the value of the

assets under their management, and a performance fee. The performance fee is

calculated according to investment performance over a three year rolling period and

is subject to a cap. Each Management Agreement can be terminated at one

month's notice. The base management fees range from 0.2% to 0.25% per

annum and the performance fees range from 10% to 15% per annum of the

relevant outperformance.

The provisions included in the Income Statement at 31 July 2008, are calculated

based on the performance of each Investment Manager relative to the benchmark

index. Each provision assumes that both the benchmark and each Investment

Manager's assets under management remain unchanged to 31 May 2009, being

the date the performance period ends.

4     Dividends per ordinary share

    No interim dividend payment will be proposed for the six months ended 31 July 2008 (six months ended 31 July 2007: nil; year ended 31 January 2008: final of 1.65p per share).

5     Return per ordinary share

The return per ordinary share is based on the net loss attributable to the

ordinary shares of £8,669,000 (six months ended 31 July 2007: return £10,296,000;

year ended 31 January 2008: return £5,445,000) and on 67,323,640 ordinary shares

(six months ended 31 July 2007: 71,755,548; year ended 31 January 2008: 70,319,982)

being the weighted average number of ordinary shares in issue during the period.

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended 31 July 2008	Six months ended 31 July 2007	Year ended 31 January  2008
	£'000	£'000	£'000
Net revenue return	917	691	1,407
Net capital (loss)/return	(9,586) ----------	9,605 -----------	4,038 -----------
Net total (loss)/return	(8,669) ======	10,296 ======	5,445 ======
Weighted average number of  ordinary shares in issue during  the period	67,323,640	71,755,548	70,319,982
Revenue return per ordinary share - pence	1.36	0.96	2.00
Capital (loss)/return per ordinary  share - pence	(14.24) ----------	13.39 ----------	5.74 ----------
Total (loss)/return per ordinary  share - pence	(12.88) ======	14.35 ======	7.74 ======

6     Net asset value per ordinary share

    Net asset value per ordinary share is based on 66,826,968 ordinary shares of 25p each in issue at 31 July 2008 (31 July 2007: 70,646,851 and 31 January 2008: 67,545,851).

7        Reconciliation of revenue return before finance costs and taxation to net cash 

       inflow from operating activities

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended 31 July 2008	Six months ended 31 July 2007	Year ended 31 January  2008
	£'000	£'000	£'000
Total (loss)/return before  finance charges and taxation	(8,238)	10,712	6,234
Less capital loss/(return) before  finance charges and taxation	9,665 -----------	(9,594) ----------	(3,989) ----------
Revenue return before  finance costs and taxation	1,427	1,118	2,245
(Increase)/decrease in accrued income	(10)	58	(27)
Decrease/(increase) in debtors of a revenue nature	3	(4)	18
Decrease in creditors of a revenue nature	(108)	(260)	(187)
Management fee rebate	(48)	(54)	(122)
Scrip dividends	(11) --------	(7) --------	(14) --------
Net cash inflow from operating activities	1,253 =====	851 =====	1,913 =====

8    Principal Risks and Uncertainties

 The principal risks faced by the Company include those of investment strategy, investment management resources, regulatory requirements, operational structure and the external economic and financial environment. These risks and the way in which they are managed, are described in more detail in the Annual Report for the year ended 31 January 2008. The Report is available on the website www.witanpacfic.com.

   9    Results

    The results for the six months ended 31 July 2008 and 31 July 2007, which are

    unaudited and were not reviewed by the Auditors, constitute non-statutory accounts within the 

    meaning of Section 435 of the Companies Act 2006 and Section 240 of the Companies Act 

    1985 respectively. The latest published accounts which have been delivered to the Registrar

    of Companies are for the year ended 31 January 2008, the report of the Auditors thereon was unqualified and did not contain a statement under Section 237 of the Companies Act 1985. The comparative figures for the year ended 31 January 2008 have been extracted from those accounts.

Copies of the Interim Report will be sent to shareholders in October and will be available from the Company Secretary at the registered office.

Responsibility Statement of Directors

In respect of the Interim Report and Accounts for the six months ended 31 July 2008

We confirm that to the best of our knowledge:

The Interim Report has been prepared consistently with pronouncements issued by the Accounting Standards Board;

The Interim Report includes a true and 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

Gillian Nott

Chairman

26 September 2008

For further information contact:

BNP Paribas Secretarial Services Limited

Secretary

Tel: [phone]

 

END

 

 

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