Interim Results
Capital Gearing Trust PLC
09 November 2005
CAPITAL GEARING TRUST plc
INTERIM REPORT
FOR THE SIX MONTHS ENDED 5 OCTOBER 2005
CONTENTS PAGE
Chairman's Interim Statement 1
Distribution of Invested Funds at 5 October 2005 2
Investments of the Company at 5 October 2005 3
Statement of Total Return 4
Balance Sheet 5
Cash Flow 6
Notes 7
CHAIRMAN'S INTERIM STATEMENT
The Trust recorded a positive return during the half year to 5th October 2005.
Over this period, the net asset value per share has increased by 8.1% to 1815p
excluding accrued income of 9.3p. This performance is consistent with our stated
investment objective of delivering capital growth in absolute terms rather than
relative to any particular stock market index. As a matter of record, it
compares with rises in the FTSE Investment Companies Index of 16.7%, the FTSE
All Share Index of 9.8% and the FTSE Government All Stocks Index of 2.6%.
After a weak April, equity markets moved ahead strongly up to the end of
September. It is therefore not surprising that the equity content, representing
approximately a third of the underlying investment portfolio, was the main
performance driver. In particular, our investments in venture capital funds
Rutland Trust, Eurovestech and Martin Currie Capital Return performed well. The
European and South African trusts held in the portfolio benefited from strong
asset performances coupled with a narrowing of discounts relative to their share
prices. Our bond and zero preference shareholdings also produced reasonable
returns but less than the equity markets.
Looking ahead, we believe that equity markets are likely to become more volatile
with the positive short-term impact of seemingly abundant liquidity, increasing
takeover and merger activity and exceptionally high levels of financial
speculation being counter-balanced by further monetary tightening in the US and
Europe and a general slow-down in economic and corporate profits growth. Perhaps
one of the biggest concerns and in our view a major market risk is that the US
housing market bubble is now showing tentative signs of coming to an end. When
it finally bursts the negative impact on US consumption as the saving rate
recovers from its current negative levels will, in the absence of offsetting
demand elsewhere, lead to recessionary pressures throughout the world economy.
Against this background, index linked and some conventional bonds should do well
and this is reflected in our cautious investment stance and our relatively high
exposure to these securities.
Shareholders will recall that at the last Annual General Meeting held on 7th
July 2005, the Directors were granted limited powers to issue shares on a non
pre-emptive basis provided this was to the benefit of existing shareholders. I
am pleased to report that in order to satisfy investor demand, a total of 40,000
shares were issued in September in two tranches at issue prices that
represented a 15% premium to the then prevailing net asset value.
Finally, the Board and I am sure long standing shareholders were very sorry to
learn of the recent death of Alan Tyser who served for 17 years as both a
Director and subsequently Chairman of Capital Gearing Trust plc until his
retirement in 1998. He will be sadly missed by us all.
Tony Pattison
9th November 2005
-1-
DISTRIBUTION OF INVESTED FUNDS
Distribution of investment funds of £50,790,000 (5 April 2005 -£46,271,000 as
restated)
As at As at
5/10/05 5/4/05
North
UK America Europe Elsewhere Total Total
Investment Trust Assets: % % % % % %
Ordinary Shares 24.2 3.2 4.4 1.7 33.5 29.5
Endowment funds 3.7 - - - 3.7 4.3
Zero Dividend Preference 15.2 - 2.7 - 17.9 23.5
Shares
Other assets:
Fixed interest stocks 0.8 - 17.4 - 18.2 18.9
Index linked 8.1 5.1 8.3 - 21.5 21.6
Cash 5.2 - - - 5.2 2.2
57.2 8.3 32.8 1.7 100.0 100.0
- 2 -
INVESTMENTS OF THE COMPANY AT 5 OCTOBER 2005
MARKET VALUE GREATER THAN £500,000 £'000
INVESTMENT TRUST ORDINARY SHARES
Rutland Trust 1,559
Allianz Dresdner 2nd Endowment Policy Trust 2006 1,409
Life Offices Opportunities Trust 1,374
Eurovestech 1,176
Active Capital Trust 1,119
North Atlantic Smaller Companies 934
TR Property Investment Trust 813
American Opportunities Trust 689
F&C Private Equity 'A' 657
Invesco English & Intl 644
London & St Lawrence Investment Company 595
Henderson Euro Trust 537
Falcon Investment Trust 516
Other (34 investments) 6,912
18,934
INDEX LINKED SECURITIES AND FIXED INTEREST
Sweden (Kingdom of) 3.5% Bonds 01/12/28 3,343
France (Govt of) 5.5% OAT 25/04/29 2,651
Germany (Fed Rep) 4.75% Bunds 04/07/28 2,399
Treasury 2.5% Index Linked 2013 2,279
Canada (Govt of) 4% Index-Linked 01/12/31 1,707
Germany (Fed Rep) 4.0% Bunds 04/07/09 1,424
Treasury 2.5% Index Linked 2011 1,073
Switzerland (Govt of) 3.0% Bonds 2018 971
Germany (Fed Rep) 4.75% Bunds 04/07/34 900
USA Treasury 3.625% TIPS 15/04/28 890
Treasury 2.5% Index Linked 2016 766
France (Govt of) 3.15% BD 25/07/2032 502
Other (5 investments) 1,245
20,150
INVESTMENT TRUST ZERO DIVIDEND PREFERENCE
ADC Units 1,660
Utilico Investment Trust 1,264
Premium Trust 1,170
European Utilities Trust 1,015
Premier Utilities Trust 968
NFS Securities 601
Other (9 investments) 2,403
9,081
Cash 2,625
Total investment funds 50,790
-3-
STATEMENT OF TOTAL RETURN (UNAUDITED)
FOR THE SIX MONTHS ENDED 5 OCTOBER 2005
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
6 months to 5 October 2005 6 months to 5 October 2004 Year to 5 April 2005
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on - 3,787 3,787 - 2,451 2,451 - 5,817 5,817
investments
Income from 449 - 449 459 - 459 876 - 876
investments
Bank interest 29 - 29 23 - 23 - - -
GROSS RETURN 478 3,787 4,265 482 2,451 2,933 876 5,817 6,693
Management (73) (171) (244) (63) (147) (210) (131) (308) (439)
expenses
Other (116) - (116) (119) - (119) (234) - (234)
administrative
expenses
(189) (171) (360) (182) (147) (329) (365) (308) (673)
RETURN ON
ORDINARY
ACTIVITIES
BEFORE TAX
289 3,616 3,905 300 2,304 2,604 511 5,509 6,020
Tax on ordinary
activities (31) 31 - (24) 24 - (50) 50 -
RETURN
ATTRIBUTABLE
TO EQUITY
SHAREHOLDERS 258 3,647 3,905 276 2,328 2,604 461 5,559 6,020
DIVIDENDS (358) - (358) (344) - (344) (344) - (344)
TRANSFER TO (100) 3,647 3,547 (68) 2,328 2,260 117 5,559 5,676
RESERVES
RETURN PER
ORDINARY
SHARE (NOTE 2) 141.42p 94.52p 218.52p
The results for the year ended 5 April 2005 and the six months ended 5 October
2004 have been restated in accordance with Financial Reporting Standards 21, 22
and 26. More details are given in note 1 on page 7.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
The total column of this statement is the profit and loss account of the
Company.
-4-
BALANCE SHEET (UNAUDITED)
AS AT 5 OCTOBER 2005
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
5 October 5 October 5 April
2005 2004 2005
£'000 £'000 £'000
FIXED ASSETS
Investments 48,165 40,866 45,258
CURRENT ASSETS
Debtors 2,902 2,328 1,378
Bank 91 164 151
2,993 2,492 1,529
CREDITORS: amounts falling due within one year (171) (162) (175)
NET CURRENT ASSETS 2,822 2,330 1,354
NET ASSETS 50,987 43,196 46,612
CAPITAL EMPLOYED
Called up share capital (note 3) 699 689 689
Share premium account 8,114 7,296 7,296
Capital redemption reserve 16 16 16
Capital reserve 41,368 34,490 37,721
Revenue reserve 790 705 890
TOTAL EQUITY SHAREHOLDERS' FUNDS 50,987 43,196 46,612
NET ASSETS PER ORDINARY SHARE 1,824.3p 1,568.0 p 1,692.0p
p
Certain figures for the year ended 5 April 2005 and the six months ended 5
October 2004 have been restated in accordance
with Financial Reporting Standards 21, 22 and 26. More details are given in note
1 on page 7.
-5-
CASH FLOW (UNAUDITED)
FOR THE SIX MONTHS ENDED 5 OCTOBER 2005
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
5 October 5 October 5 April
2005 2004 2005
£'000 £'000 £'000
Cash inflow from operating activities (see below) 203 177 186
Capital expenditure and financial investment:
Purchase of investments (9,105) (5,385) (15,634)
Sales of investments 9,985 7,022 16,245
Equity dividends paid (358) (344) (344)
Management of liquid resources - cash with brokers
awaiting investment
(1,613) (1,437) (433)
Financing - issue of new shares 828 - -
(Decrease)/increase in cash (60) 33 20
Cash and cash equivalents:
Balance at beginning of period 151 131 131
Net cash movement (60) 33 20
Balance at end of period 91 164 151
Operating cash flows:
Profit before tax 289 300 511
Expenses charged to capital (171) (147) (308)
Change to accrued income and sundry debtors 89 32 (22)
Change to sundry creditors (4) (8) 5
203 177 186
-6-
NOTES
1. Status of financial statements
The financial information for the six months to 5 October 2005
and 5 October 2004, which is unaudited and does not constitute statutory
accounts, has been prepared using accounting policies consistent with those set
out in the Company's 5 April 2005 statutory accounts, except as stated below.
The abridged financial information for the year ended 5 April
2005, which has been restated for the matters described below, has been
extracted from the Company's statutory accounts for that year, which have been
filed with the Registrar of Companies. The report of the auditors on those
accounts was unqualified and did not contain a statement under either Article
245(2) or Article 245(3) of the Companies (Northern Ireland) Order 1986.
Modifications to UK GAAP as a result of the issue of new
Financial Reporting Standards ('FRS') have been applied to all periods being
reported in these accounts. The effects of the restatements of prior results are
as follows:
Valuation of investments
FRS 26: 'Financial Instruments: Measurement' requires that
investments are valued at their fair value. Listed investments, which were
formerly valued at middle market prices, have been valued at bid price. As a
result, prior year's figures have been adjusted and this has resulted in (a) a
reduction of net assets attributable to shareholders at 5 October 2004 and 5
April 2005 of £435,000 and £351,000 respectively and (b) an increase in net
return to shareholders for the 6 months ended
5 October 2004 and the year ended 5 April 2005 of £4,000 and
£88,000 respectively.
Dividends
FRS 21: 'Events after the Balance Sheet Date' states that final
dividends declared and approved by the Company after the balance sheet date
should not be recognised as a liability of the Company at the balance sheet
date, and interim dividends cannot be included in the accounts until paid. Prior
results have accordingly been restated and this has led to an increase in net
assets attributable to shareholders of £358,000 for the year ended 5 April 2005.
As a result, the dividends shown on page 4 are those actually paid in the
period, the pay date being the date on which the money was sent to the
Registrars in order to fund the dividend.
In respect of the year ended 5 April 2005, the Company declared
a dividend of 13.00 pence per share (£358,000). No dividends were declared in
respect of the periods ended 5 October 2004 and 5 October 2005.
Return per Ordinary Share
Under FRS 22: 'Earnings per share' the Company is only permitted
to show one return per share on the Statement of Total Return. The revenue and
capital returns per share for the periods to 5 October 2005, 5 October 2004 and
the year ended 5 April 2005 are shown below:
6 months to 5 October 6 months to 5 October Year to
2005 2004 5 April 2005
Revenue 9.34p 10.02p 16.73p
Capital 132.08p 84.50p 201.79p
2. Return per ordinary share
The calculations of return per share are based on results after
tax divided by the weighted average number of shares in issue during the period
of 2,761,300 (2004: 2,754,906; 2005: 2,754,906).
-7-
NOTES
3. Issue of new shares
In order to satisfy market demand, new ordinary shares of 25p were issued as
follows:
Consideration
Date Number of shares £
2 September 2005 30,000 620,000
20 September 2005 10,000 208,000
-8-
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 22nd November 2024
COMPANIES COVERED:
Latest directors dealings
- 2 days ago Cerillion
- 2 days ago Associated British Foods
- 2 days ago B&M European Value Retail S.A. (DI)
- 2 days ago B&M European Value Retail S.A. (DI)
- 2 days ago Haleon