Interim Results

Blue Planet Financials Grwth&Inc IT 19 December 2001 Blue Planet Financials Growth and Income Investment Trust No 1 plc Blue Planet Financials Growth and Income Investment Trust No 2 plc Blue Planet Financials Growth and Income Investment Trust No 3 plc Blue Planet Financials Growth and Income Investment Trust No 4 plc Blue Planet Financials Growth and Income Investment Trust No 5 plc Blue Planet Financials Growth and Income Investment Trust No 6 plc Blue Planet Financials Growth and Income Investment Trust No 7 plc Blue Planet Financials Growth and Income Investment Trust No 8 plc Blue Planet Financials Growth and Income Investment Trust No 9 plc Blue Planet Financials Growth and Income Investment Trust No 10 plc Each of the investment trusts is a separate limited company, but otherwise they are to all intents and purposes identical. The information contained in this Interim Report including the financial statements applies equally to each of the ten Trusts. Trading in the shares and warrants of the Trusts The trusts' shares and warrants can be traded in share or warrant units. Each unit comprises 10 shares or warrants respectively, 1 in each of the 10 trusts. Generally it is cheaper for investors to trade in the units rather than the underlying shares or warrants. Objective The ten Blue Planet Financials Growth and Income Investment Trusts offer investors a high level of income combined with capital growth and the opportunity to profit from the ongoing rationalisation of the Financial Services sector, including conversion of Building Societies. Financial Highlights Six months Six months Year ended ended ended 31 March 30 September 30 September 2001 2001 2000 (unaudited) (unaudited) Pence per ordinary share Net asset 128.39 128.56 139.43 value-basic Net asset 123.83 124.04 133.08 value-diluted Dividend 1.50 1.50 4.30 Earnings 3.22 2.96 3.87 Capital Return (12.74) (1.54) 10.28 Total (9.52) 1.42 14.15 Return-basic Dividend An interim dividend of 1.5p net per ordinary share has been declared, payable on 29 January 2002, to shareholders on the register on 31 December 2001. The Trusts' shares will be quoted ex-dividend 27 December 2001. Capital Gains Tax Apportionment for capital gains tax between ordinary shares and warrants based on mid-market prices on the first day (25 April 1996) of dealings in the ordinary shares and the warrants: Each ordinary share 95.24p Each warrant 23.80p Chairman's Report At the Trusts Annual General Meetings in August, special resolutions were passed to change their names from the Cairngorm Building Societies Investment Trusts to the Blue Planet Financials Growth & Income Investment Trusts. Interim Results This interim report covers a period, the latter stages of which, were severely affected by the decline in equity markets which followed the tragic attack on the New York World Trade Centre. Over the period the Trust's net asset value fell 7.9% to 128.4p per share, or expressed another way, to £12.84 per ordinary share unit. For understandable reasons, investors never like to see the value of their investments fall but it is worth noting that our performance has been significantly better than that of the FTSE 100 index which fell 13.0% over the same period. Given the difficult market conditions, I am pleased with our outperformance which once again vindicates the defensive attractions of our portfolio. I am also pleased to recommend an unchanged interim dividend of 1.5p per share. Despite the bear market the price of the Trusts' ordinary share units increased slightly, by 0.8% to 997.5p over the period. Indeed, the price performance of the Trusts' ordinary share units has been amongst the best of all investment trusts over the last year as figures from Trustnet (www.trustnet.com) show. These put Blue Planet Financials Growth and Income in the top quartile of all 302 conventional investment trusts. Prospects Financial markets generally have regained confidence following the World Trade Centre attack. This has largely been provoked by co-ordinated worldwide cuts in interest rates. Nevertheless, economic indicators from the United States are suggesting that a rapid slowdown in activity is occurring in that country. That will have an impact on the UK and European economies where we expect it to manifest itself either as very low growth or a mild recession. The recent 0.25% cut in US interest rates takes its benchmark federal funds rate to 1.75% - the lowest in 40 years. Coincidentally, UK inflation in November was running at an annualised rate of 0.9% - again the lowest rate in 40 years. In the UK, the Chancellor's recent budget speech announced increased expenditure, and in the case of the Public Health Service significantly higher expenditure. This concerns us as we anticipate reduced tax revenues being available to the Exchequer as the economy slows down. This is likely to lead to a rise in government borrowings as it attempts to fund its spending plans. This in turn will increase interest rates and have an adverse impact on the long end of the yield curve where many of our bond investments are. For this reason, we are now realising some of the substantial profits we have made on these investments with a view to reinvesting the monies in equities which offer better returns over the medium term. From the point of view of stockmarkets, low interest rates have a beneficial effect. Savers who have seen interest rates on deposit accounts fall are now more encouraged to invest money in equities. In many cases, including Blue Planet Financials Growth and Income, investors receive a better annual dividend return than they would receive from savings accounts with banks or building societies. Lower interest rates are also likely to stimulate the economy as they encourage investment and expenditure. As regards the banking sector, the main area of concern over coming months will be increasing provisions for bad debts. This can be expected to negatively affect their earnings over the next six months. However, this has to a large extent already been priced into the shares of banks and we expect the sector to continue to outperform in the coming years and to provide a solid basis for any good portfolio. Our ordinary share units provide investors who want an exposure to this sector with just that. The Trust has recently successfully refinanced its long-term loans with a new £750,000 facility which will commence in January 2002. This facility carries an interest rate of 5.99% and the rate is fixed for 10 years. This is a very attractive rate of interest for 10 year money and we believe that the new facility will be of great benefit to investors over the coming years. Shareholders may also be pleased to know that the net asset value per share has risen by 8.5%, to 139.3p, in the two months since the end of the interim period although the share price discount to net asset value has risen to 33%. This increased discount arising because investors are either unaware, or have been slow to react to this growth. The Trust is well placed to take advantage of the current weakness in equity markets, we have correctly predicted and profited from the interest rate cycle and we now look forward to profiting from an upturn in equities over the coming years. The outlook for 2002 is good and we look forward to it. Finally, may I thank all shareholders for their loyal support and wish them a happy and a prosperous 2002. Philip Court Chairman 18 December 2001 Statement of Total Return (incorporating the revenue account) For the six months ended For the six months ended 30 September 2001 30 September 2000 (unaudited) (unaudited) Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Capital (losses)/gains on investments Net realised gains - - - - 14,510 14,510 Unrealised (164,093)(164,093) - (29,885) (29,885) (losses)/appreciati on on investments Total capital - (164,093)(164,093) - (15,375) (15,375) gains/(losses) on investments Gross revenue Income from 91,017 - 91,017 83,318 - 83,318 investments Other interest 2,317 - 2,317 7,173 - 7,173 receivable Gross revenue and 93,334 (164,093) (70,759) 90,491 (15,375) 75,116 capital losses Administrative (24,973) (7,990) (32,963) (21,836) (3,994) (25,830) expenses Net return on 68,361 (172,083)(103,722) 68,655 (19,369) 49,286 ordinary activities before interest payable and taxation Interest payable (11,050) (11,050) (22,100) (16,603) (5,534) (22,137) Net return on 57,311 (183,133)(125,822) 52,052 (24,903) 27,149 ordinary activities before taxation Taxation on net (12,397) 5,241 (7,156) (9,373) 2,740 (6,633) revenue on ordinary activities Net return 44,914 (177,892)(132,978) 42,679 (22,163) 20,516 attributable to ordinary shareholders Dividends in respect of equity shares Interim dividend (20,961) - (20,961) (21,394) - (21,394) of 1.5p (2000 - 1.5 p) per share Final dividend of - - - - - - 2.8p (2000 - 2.8p) per share (21,394) - (21,394) Transfer to 23,953 (177,892)(153,939) 21,285 (22,163) (878) reserves Return per 3.22p (12.74)p (9.52)p 2.97p (1.54)p 1.43p ordinary share - basic Return per 3.19p (12.54)p (9.45)p 2.97p (1.54)p 1.43p ordinary share - diluted The Revenue column of the statement represents the revenue account of the Company. Statement of Total Return (incorporating the revenue account) For the year ended 31 March 2001 Revenue Capital Total £ £ £ Capital (losses)/gains on investments Net realised gains - 55,968 55,968 Unrealised (losses)/appreciation on - 105,308 105,308 investments Total capital gains/(losses) on investments - 161,276 161,276 Gross revenue Income from investments 144,897 - 144,897 Other interest receivable 7,579 - 7,579 Gross revenue and capital losses 152,476 161,276 313,752 Administrative expenses (49,034) (7,836) (56,870) Net return on ordinary activities before 103,442 153,440 256,882 interest payable and taxation Interest payable (36,249) (12,083) (48,332) Net return on ordinary activities before 67,193 141,357 208,550 taxation Taxation on net revenue on ordinary (12,039) 5,259 (6,780) activities Net return attributable to ordinary 55,154 146,616 201,770 shareholders Dividends in respect of equity shares Interim dividend of 1.5p (2000 - 1.5 p) (21,394) - (21,394) per share Final dividend of 2.8p (2000 - 2.8p) per (39,096) - (39,096) share (60,490) - (60,490) Transfer to reserves (5,336) 146,616 141,280 Return per ordinary share - basic 3.87p 10.28p 14.15p Return per ordinary share - diluted 3.87p 10.28p 14.15p The Revenue column of the statement represents the revenue account of the Company. Balance Sheet At 30 At 30 At 31 March September 2001 September 2000 2001 (unaudited) (unaudited) £ £ £ Fixed asset investments Listed on a recognised investment 2,457,081 2,347,534 2,581,182 exchange Current assets 125,228 273,876 175,049 Creditors: amounts falling due (788,251) (787,774) (809,354) within one year Net current liabilities (663,023) (513,898) (634,305) Net assets 1,794,058 1,833,636 1,946,877 Capital and reserves Called-up share capital 139,740 142,628 139,628 Share premium account 1,168,061 1,166,787 1,166,787 Other reserves Capital reserve - realised 126,656 135,786 140,455 Capital reserve - unrealised 247,813 276,713 411,906 Capital redemption reserve 4,500 1,500 4,500 Warrant reserve 63,518 63,784 63,784 Revenue reserve 43,770 46,438 19,817 Ordinary Shareholders' Funds 1,794,058 1,833,636 1,946,877 Net Asset Value per Ordinary 128.39p 128.56p 139.43p Share - basic Net Asset Value per Ordinary 123.90p 124.04p 133.08p Share - diluted Cashflow For the For the For the six months period year ended ended ended 31 March 30 30 2001 September September 2001 2000 (unaudited) (unaudited) £ £ £ Operating activities Cash received from 65,892 62,042 131,273 investments Interest received 1,728 628 7,579 Investment management and (15,752) (15,186) (30,662) secretarial fees paid Cash paid to and on behalf - (2,190) (2,700) of directors Other cash payments (18,308) (12,191) (24,252) Net cash inflow from 33,560 33,103 81,238 operating activities Servicing of finance Interest paid (27,084) (25,320) (46,313) Taxation Tax recovered - 16,204 16,204 Capital expenditure and financial investment Purchase of investments (39,994) - (214,554) Sale of investments - 147,175 304,732 Equity dividend paid (39,096) (46,112) (67,507) Financing Purchase of own shares for - (14,204) (43,120) cancellation Proceeds from share issue 1,120 260 260 (Decrease)/increase in cash (71,494) 111,106 30,940 Notes 1. The Company has adopted the recommendations of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (SORP). A statement of total return is presented on page 3 which combines the revenue account and the statement of realised and unrealised capital gains to give a 'total return'. A separate revenue account is therefore not required. 2. All expenses are charged to the revenue account with the exception of management fees and interest charges on borrowings, one half of which, less the appropriate tax, are charged to capital. 3. The return per ordinary share is based upon the following figures: 30 Sept 30 Sept 31 March 2001 2000 2001 Revenue return £44,914 £42,679 £55,154 Capital return £(177,892) £(22,163) £146,616 Weighted average number of ordinary shares in issue during the period - basic 1,396,467 1,438,563 1,426,399 Weighted average number of ordinary shares in issue during the period - diluted 1,407,755 1,438,563 1,426,399 4. The net asset value per ordinary share is calculated on 1,397,400 ordinary shares being the number of ordinary shares in issue at the end of the period. At 30 September 2001 there were 266,880 warrants in issue. Each warrant confers the right, exercisable normally on 31 July in any of the years 1999 to 2010 inclusive, to subscribe for one new ordinary share at £1.00 per share. Net asset dilution arises from the potential exercise of outstanding warrants and is assumed only to take place if the net assets exceed the exercise price of £1.00. 5. The figures and financial information for the year ended 31 March 2001 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for the period. Those accounts have been delivered to the Registrar of Companies and include the report of the auditors which was unqualified and did not contain a statement either under section 237 (2) or 237(3) of the Companies Act 1985. Portfolio Information Top 10 Holdings At 30 September 2001 Valuation % of Total Portfolio Equities 7,760 Credit Lyonnais Ordinary NPV Shares £164,134 6.7 3,745 Erste Bank Der Oesterreichisen Sparkassen Shares £125,003 5.1 16,000 Alliance & Leicester Ordinary 50p Shares £120,000 4.9 Other £545,748 22.2 £954,885 38.9 Debt Securities £90,000 Leeds & Holbeck Building Society 13 3/8% PIBS £162,732 6.6 £85,000 Britannia Building Society 13% PIBS £149,335 6.1 £100,000 BUPA Finance 10 1/2% Subordinated Bonds 2018 £127,063 5.2 £76,500 Coventry Building Society 12 1/8% PIBS £126,082 5.1 £70,000 Skipton Building Society 12 7/8% PIBS £122,632 5.0 £70,000 Bradford & Bingley Building Society 13% Perpetual £122,150 5.0 Subordinated Bonds £80,000 First Active 11 3/4% Subordinated Bonds £114,800 4.7 Other £577,402 23.4 £1,502,196 61.1 £2,457,081 100.0 (PIBS - Permanent Interest Bearing Shares) Company Information Directors Stockbrokers Philip Court (Chairman) Credit Lyonnais Securities Bryan J Rankin Broadwalk House Victoria W Killay 5 Appold Street London EC2A 2DA Investment Manager Registrars Blue Planet Investment Management Lloyds TSB Registrars Scotland Ltd P O Box 28448 20 Coates Crescent Finance House Edinburgh EH3 7AF Orchard Brae Telephone No: 0131 226 6040 Edinburgh EH4 1WQ Facsimile No: 0131 226 6041 Shareholder Helpline No: 0870 601 5366 e-mail: info@blueplanet.ac www.blueplanet.ac www.shareview.co.uk Blue Planet Investment Management Ltd is regulated by the FSA. Secretary and Registered Office Registered Numbers Blue Planet Investment Management Registered in Scotland - Ltd 20 Coates Crescent No. 1 Trust No. SC162796 Edinburgh EH3 7AF No. 2 Trust No. SC162797 No. 3 Trust No. SC162798 No. 4 Trust No. SC162799 No. 5 Trust No. SC162800 No. 6 Trust No. SC162801 No. 7 Trust No. SC162802 No. 8 Trust No. SC162803 No. 9 Trust No. SC162804 No. 10 Trust No. SC162805 Auditors Custodians Deloitte & Touche The Royal Bank of Scotland (Retail Nominees) 39 George Street Ltd Edinburgh 67 Lombard Street EH2 2HZ London EC3P 3DL Bankers LloydsTSB Scotland Plc Henry Duncan House 120 George Street Edinburgh EH2 4TS

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