Interim Results
Finsbury Growth & Income Trust PLC
03 May 2006
For immediate release
3 May 2006
To: City Editors
Finsbury Growth & Income Trust PLC
Announces Interim Results for the six months to 31 March 2006
Financial Highlights: (Unaudited) *Restated % change
31 March 2006 (Audited)
30 September
2005
Share price 301.5p 260.3p 15.8
Net Asset Value per
share 296.9p 257.8p 15.2
Premium/(discount) 1.5% 1.0% -
Shareholders' Funds £143.4m £115.9m 23.7
Market capitalisation £145.6m £117.0m 24.4
Six months to Six months to
31 March 2006 31 March
2005
Dividend 4.2p 4.0p 5.0
Six months to One year to
31 March 2006 30 September
2005
Share price (total
return #) +17.5% +37.2% -
Net Asset Value per
share (total return #) +16.6% +31.5% -
FTSE All-Share Index
(total return) +12.7% +24.9% -
* Restated - see note 1d
# Source - Fundamental Data for the AITC
For and on behalf of
Close Finsbury Asset Management Limited, Secretary
3 May 2006
- ENDS -
The following are attached:
* Chairman's Statement
* Income Statement
* Reconciliation of Movements in Shareholders' Funds
* Balance Sheet
* Cash Flow Statement
* Notes to the interim accounts
For further information please contact:
Alastair Smith/Tracey Lago, Close Finsbury Asset Management Limited
020 7426 6240/6219
Jo Stonier/Eleanor Clarke, Quill Communications
020 7758 2230
Nick Train, Lindsell Train Limited
020 7225 6400
Chairman's Statement
In the six months to 31 March 2006 your Company continued to grow in size and
value. 3,337,930 new Ordinary shares were issued (increasing the issued share
capital by 7.4%) at an average price of £2.73 per share, all of which were
issued at a premium to net asset value per share of at least 1.5%. The market
value of your shares increased from 260.3p on 30 September 2005 to £301.5p on 31
March 2006, an increase of 15.8% and the market capitalisation of your Company
increased by 24.4% to £145.6m.
At an Extraordinary General Meeting on 12 April 2006 shareholders approved a
resolution to increase the authorised share capital to £25m, renewed the
authority to allot new Ordinary shares and to disapply pre-emption rights in
respect of the allotment of up to a further 10.0% of the issued share capital of
the Company. In order to maintain compliance with the Prospectus Rules, a
Prospectus was published to enable new shares to be issued.
Return and Dividends
The Income Statement shows a total return per share of 43.35p made up of a
revenue return of 5.14p and a capital return of 38.21p.
An interim dividend of 4.2p per share (2005: 4.0p) was declared on 9 March 2006
and paid on 18 April 2006 to shareholders on the register at the close of
business on 17 March 2006.
Investments
In the six months ended 31 March 2006 the net asset value (total return)
increased by 16.6% compared with that of the FTSE All-Share Index (total
return), the Company's benchmark, of 12.7%. The Board is delighted with this
outperformance of 3.9%.
Major contributors to this outperformance were your Company's investments in the
London Stock Exchange, Bradford & Bingley, Rathbone Brothers and Royalblue which
showed increases in total return in the period of 87.0%, 49.9%, 42.3% and 45.1%
respectively. In fact only one investment showed a loss during the period,
namely Shell with a total return of minus 2.8%.
Borrowings
Your Company has a committed revolving credit facility of £20million for a fixed
term expiring in December 2008 which is subject to a variable rate of interest
but which is capable of being fixed at any time. Your Company also has a further
uncommitted facility of £5million.
At 31 March 2006, all the committed facility was drawn down.
Outlook
In my statement accompanying last year's Annual Report and Accounts I said that
it would not be easy for your Company to repeat the substantial progress that it
made in that year. In the six months under review, although the rate of progress
has slowed, substantial progress has been made. Your Board intend to continue to
issue new shares at a premium to net asset value per share as demand for your
Company's shares requires. Such demand will be a reflection of a continuing good
investment performance.
Michael Reeve
Chairman
3 May 2006
Income Statement
For the six months ended 31 March 2006
(Unaudited) Restated* Restated*
Six months (Unaudited) (Audited)
ended Six months Year ended
31 March 2006 ended 30 September
31 March 2005 2005
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
------------- ------- ------ ------ ------- ------- ------- ------- ------- -------
Investments
held at fair
value through
profit or loss - 18,699 18,699 - 13,019 13,019 - 21,224 21,224
Income from
investments
held at fair
value through
profit or loss
(note 2) 3,002 - 3,002 1,821 - 1,821 4,369 - 4,369
Management fee
(note 3) (164) (331) (495) (107) (218) (325) (246) (499) (745)
Other
administration
expenses (237) (80) (317) (215) - (215) (458) - (458)
------------- ------- ------ ------ ------- ------- ------- ------- ------- -------
Net return on
ordinary
activities
before finance
charges and
taxation 2,601 18,288 20,889 1,499 12,801 14,300 3,665 20,725 24,390
Finance (197) (400) (597) (161) (326) (487) (334) (677) (1,011)
charges
------------- ------- ------ ------ ------- ------- ------- ------- ------- -------
Net return on
ordinary
activities
before
taxation 2,404 17,888 20,292 1,338 12,475 13,813 3,331 20,048 23,379
Taxation on - - - - - - - - -
ordinary
activities
------------- ------- ------ ------ ------- ------- ------- ------- ------- -------
Net return on
ordinary
activities
after taxation 2,404 17,888 20,292 1,338 12,475 13,813 3,331 20,048 23,379
------------- ------- ------ ------ ------- ------- ------- ------- ------- -------
Return per
Ordinary share
(note 4) 5.14p 38.21p 43.35p 3.56p 33.16p 36.72p 8.21p 49.41p 57.62p
------------- ------- ------ ------ ------- ------- ------- ------- ------- -------
*Restated - see note 1
Reconciliation of Movements in Shareholders' Funds
Six months ended 31 March 2005
----------------- ------- ------- ------ -------- ------- ------- -------
Capital Other
Called up Share Special Redemption Capital Revenue
Share Capital Premium Reserve Reserve Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
----------------- ------- ------- ------ -------- ------- ------- -------
At 30 September
2004 (as
previously stated) 9,614 121 12,424 3,453 47,451 1,167 74,230
Add final dividend
of 4.1p per share
accrued but not
paid in respect of
the year ended 30
September 2004 - - - - - 1,496 1,496
----------------- ------- ------- ------ -------- ------- ------- -------
At 30 September
2004 (restated) 9,614 121 12,424 3,453 47,451 2,663 75,726
Net return
from ordinary
activities - - - - 12,475 1,338 13,813
Dividend of 4.1p
per share paid in
respect of
year ended 30
September 2004 - - - - - (1,496) (1,496)
Treasury
shares sold - 721 3,514 - - - 4,235
----------------- ------- ------- ------ -------- ------- ------- -------
At 31 March 2005 9,614 842 15,938 3,453 59,926 2,505 92,278
----------------- ------- ------- ------ -------- ------- ------- -------
Year ended 30 September 2005
----------------- ------- ------- ------ -------- ------- ------- -------
Capital Other
Called up Share Special Redemption Capital Revenue
Share Capital Premium Reserve Reserve Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
----------------- ------- ------- ------ -------- ------- ------- -------
At 30 September
2004 (as
previously stated) 9,614 121 12,424 3,453 47,451 1,167 74,230
Add final dividend
of 4.1p per share
accrued but not paid
in respect of the
year ended 30
September 2004 - - - - - 1,496 1,496
----------------- ------- ------- ------ -------- ------- ------- -------
At 30
September 2004
(restated) 9,614 121 12,424 3,453 47,451 2,663 75,726
Net return
from ordinary
activities 20,048 3,331 23,379
Dividend paid
in respect of
the year ended
30 September
2004 - - - - - (1,496) (1,496)
Less first interim
dividend (4.0p per
share) for the year
ended 30 September
2005 - - - - - (1,565) (1,565)
Ordinary
shares issued 1,623 14,000 - - - - 15,623
Treasury
shares sold - 722 - - 3,479 - 4,201
----------------- ------- ------- ------ -------- ------- ------- -------
At 30
September 2005 11,237 14,843 12,424 3,453 70,978 2,933 115,868
----------------- ------- ------- ------ -------- ------- ------- -------
Six months ended 31 March 2006
----------------- ------- ------- ------- -------- ------- ------- -------
Capital Other
Called up Share Special Redemption Capital Revenue
Share Capital Premium Reserve Reserve Reserve Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
----------------- ------- ------- ------- -------- ------- ------- -------
At 30 September
2005 (as restated) 11,237 14,843 12,424 3,453 70,978 2,933 115,868
Net return
from ordinary
activities - - - - 17,888 2,404 20,292
Final dividend of
4.0p paid in respect
of year ended 30
September 2005 - - - - - (1,796) (1,796)
Issue of ordinary
shares 835 8,190 - - - - 9,025
----------------- ------- ------- ------- -------- ------- ------- -------
At 31 March 2006 12,072 23,033 12,424 3,453 88,866 3,541 143,389
----------------- ------- ------- ------- -------- ------- ------- -------
Balance Sheet
As at 31 March 2006
-------------
(Unaudited) Restated* Restated*
(Unaudited) (Audited)
31 March 2006 31 March 2005 30 September
2005
£'000 £'000 £'000
---------------- ------------ ----------- -------------
Investments held at fair value
through profit or loss 161,848 107,810 132,911
---------------- ------------ ----------- -------------
Current assets
Investments - 645 645
Debtors 1,919 1,194 1,313
Bank balances and short term
deposits 226 287 218
---------------- ------------ ----------- -------------
2,145 2,126 2,176
Creditors
Amounts falling due within one
year (20,604) (17,658) (19,219)
---------------- ------------ ----------- -------------
Total assets less current
liabilities (18,459) (15,532) (17,043)
---------------- ------------ ----------- -------------
Total net assets 143,389 92,278 115,868
---------------- ------------ ----------- -------------
Capital and reserves
Called up share capital 12,072 9,614 11,237
Share premium 23,033 842 14,843
Special reserve 12,424 15,938 12,424
Capital redemption reserve 3,453 3,453 3,453
Capital reserve - realised 45,119 40,918 45,931
Capital reserve - unrealised 43,747 19,008 25,047
Revenue reserve 3,541 2,505 2,933
---------------- ------------ ----------- -------------
Equity shareholders' funds 143,389 92,278 115,868
---------------- ------------ ----------- -------------
Net asset value per Ordinary share
(note 5) 296.9p 240.0p 257.8p
---------------- ------------ ----------- -------------
*Restated - see note 1
Cash Flow Statement
For the six months ended 31 March 2006
(Unaudited) (Unaudited) (Audited)
31 March 2006 31 March 2005 30 September
2005
£'000 £'000 £'000
------------------ ----------- ------------ -------------
Net cash inflow from
operating activities 1,142 503 2,573
Servicing of finance
Loan and bank overdraft
interest paid (571) (188) (1,020)
Financial investment
Purchase of investments (9,486) (3,403) (40,111)
Sale of investments - 3,212 19,006
------------------ ----------- ------------ -------------
Net cash outflow from
financial investment (9,486) (191) (21,105)
Equity dividends paid (1,796) (1,243) (3,061)
------------------ ----------- ------------ -------------
Net cash outflow before
financing (10,711) (1,119) (22,613)
Financing
Issue of new shares 8,819 - 15,494
Treasury shares sold - - 4,236
Drawdown of loans 1,900 300 2,850
------------------ ----------- ------------ -------------
Net cash inflow from
financing 10,719 300 22,580
------------------ ----------- ------------ -------------
Increase/(decrease) in
cash 8 (819) (33)
------------------ ----------- ------------ -------------
Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in
cash resulting from
cashflows 8 (819) (33)
Increase in debt (1,900) (300) (2,850)
------------------ ----------- ------------ -------------
Movement in debts (1,892) (1,119) (2,883)
Net debt at start of
period/year (17,882) (7,715) (14,999)
------------------ ----------- ------------ -------------
Net debt at end of
period/year (19,774) (8,834) (17,882)
------------------ ----------- ------------ -------------
Notes to the interim accounts
1. Accounting Policies
a) Changes in presentation
The Company has adopted the provisions of the Revised SORP and revised UK
Accounting Standards which has resulted in some changes to the presentation
of the Company's accounts.
The Statement of Total Return is now called the Income Statement. Dividends
payable to equity shareholders are no longer reflected in the Income
Statement, although they continue to be shown in the Reconciliation of
Movements in Shareholders' Funds which is now presented as a primary
statement.
b) Changes in accounting policies
The Company has changed its accounting policy for the valuation of listed
investments and the recognition of dividends payable to equity shareholders
in accordance with the provisions of FRS 26 - Financial instruments:
Recognition and Measurement ('FRS 26') and FRS 21 - Events after the
balance sheet date ('FRS 21') respectively. These changes in policy and the
associated impact on the results of the Company are referred to below. As
permitted by FRS 26, comparatives have not been restated for the change in
basis of valuation from mid to bid.
c) Valuation of fixed asset investments
Following the introduction of FRS 26, listed investments have been
designated by the Board as held at fair value through profit or loss and
accordingly are valued at fair value, deemed to be bid market prices. The
market value of listed investments for previous periods have not been
restated.
Changes in the fair value of investments held at fair value through profit
or loss and gains and losses on disposal are recognised in the Income
Statement as 'Gains or losses on investments held at fair value through
profit or loss'. Also included within this caption are transaction costs in
relation to the purchase or sale of investments, including the difference
between the purchase price of an investment and its bid price at the date
of purchase. Purchase transaction costs for the period to 31 March 2006
were £65,965 (30 September 2005: £233,456 and 31 March 2005: £90,301),
which comprise stamp duty and commission. Sale transaction costs for the
period to 31 March 2006 were nil, (30 September 2005: £674 and 31 March
2005: nil). All purchases and sales are accounted for on a trade date
basis.
d) Dividends payable to equity shareholders
Under FRS 21 dividends should not be accrued in the accounts unless they
have been approved by shareholders before the Balance Sheet date. The final
dividend payable to equity shareholders is recognised in the
Reconciliations of Movement in Shareholders' Funds when it has been
approved by shareholders and becomes a liability to the Company; whereas an
interim dividend will be recognised when it is paid.
The effect of this change is to increase net assets at 30 September 2005 by
£1,796,000 (or 4.0p per share) (31 March 2005: £1,565,000 or 4.0p per
share).
2. Income
Six months Six months Year ended
ended ended 30 September
31 March 2006 31 March 2005 2005
£'000 £'000 £'000
Investment income 2,320 1,788 4,296
Dividend paid from subsidiary 645 - -
Bank interest 37 33 73
------------ ---------- -----------
Total 3,002 1,821 4,369
------------ ---------- -----------
3. Management fees
Six months Six months Year ended
ended ended 30 September
31 March 2006 31 March 2005 2005
£'000 £'000 £'000
Management fee 421 277 634
Irrecoverable VAT thereon 74 48 111
----------- ---------- -----------
Total 495 325 745
----------- ---------- -----------
4. Return per Ordinary share
The revenue return per Ordinary share is calculated by dividing the net
revenue return of £2,404,000 (six months ended 31 March 2005: return of
£1,338,000; year ended 30 September 2005: return of £3,331,000) by
46,805,418 (six months ended 31 March 2005: 37,616,627; year ended 30
September 2005: 40,573,992), being the weighted average number of Ordinary
shares in issue. The capital return per Ordinary share is calculated by
dividing the net capital gains attributable to Ordinary shareholders of
£17,888,000 (six months ended 31 March 2005: £12,475,000; year ended 30
September 2005: gain of £20,048,000) by the weighted average number of
Ordinary shares in issue as above.
For the six months ended 31 March 2006, using the actual number of shares
in issue of 48,286,573 the total return per Ordinary share is 42.02p, split
between revenue 4.98p and capital 37.04p.
5. Net asset value per share
The net asset value per Ordinary share is based on net assets attributable
to Ordinary shares of £143,389,000 (28 March 2005: £92,278,000 and 30
September 2005: £115,868,000) and on 48,286,573 Ordinary shares in issue
(31 March 2005: 38,456,430 and 30 September 2005: 44,948,643).
6. 2005 Accounts
The figures and financial information for the year ended 30 September 2005
as restated are extracted from the latest published accounts of the Company
and do not constitute statutory accounts for the year.
Those accounts have been delivered to the Registrar of Companies and
included the Report of the Auditors which was unqualified and did not
contain a statement under either Section 237(2) or 237(3) of the Companies
Act 1985.
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