Half Yearly Report

RNS Number : 6800R

Hansa Trust PLC

08 November 2011

 



HANSA TRUST PLC

Announcement of Half-Yearly Results

for the six months ended 30 September 2011

Hansa Trust PLC announces its Half-Yearly Results for the six months ended 30 September 2011.

Financial Highlights	Six months ended 30 September 2011 (unaudited)	Year ended 31 March 2011 (audited)
Net Asset Value - Total Return	(1.5%)	23.3%
Performance Benchmark	2.3%	5.3%
Capital return per equity share	(30.8p)	204.6p
Revenue return per equity share	14.1p	3.5p
Net asset value per equity share	1,083.8p	1,100.5p
Dividend per equity share	3.5p	3.5p
Total income (£000's)	4,688	3,009
Revenue before taxation (£000's)	3,418	836

An interim dividend of 3.5p per share (amounting to £840,000) is to be paid.

Ex-dividend date: 16 November 2011

Record date: 18 November 2011

Payment date: 2 December 2011

The following are attached:

·              Chairman's Statement

·              Condensed Group Income Statement

·              Condensed Statement of Changes in Equity

·              Condensed Group Balance Sheet

·              Condensed Group Cash Flow Statement

·              Notes

For further information please contact:

Peter Gardner                        Hansa Capital Partners LLP                                020 7647 5750

Chairman's Statement

THE ASSET VALUE (at 30 September 2011):             

NAV: 1,083.8p per share (- 16.7p; - 1.5%)

Against a background of much troubled stock markets, our net asset value declined modestly over the six months to the 30 September 2011, falling by circa 17p (1.5%) to 1,083.8p per ordinary and 'A' ordinary share.  I say modestly because stock markets generally did a lot worse with declines ranging from circa 11% for Japan to circa 25% for France amongst the major global stock markets.  Our own stock market, as measured by the FTSE All-share Index, fell by 13.5%, being one of the less bad global performers.

The world's stock markets are clearly linked to each other but each one has its own set of problems - be it those European bourses with their banking and sovereign debt problems, the US and the UK stock markets with their economies struggling as their over-indebted consumers begin to repay their debts and the stock markets of the emerging market economies with their inflation.

The main driver behind the first half year's returns was the performance of our holding in Ocean Wilsons, the value of which rose by circa £12 million or 11.5% to £118 million.  As John Alexander points out in his Investment Manager's Report, the company continues to make excellent progress, with both revenues and profits rising in its half year to 30 June 2011.  This is a particularly good performance against a background of weakness in the Brazilian stock market, which declined by 31% (in £ Sterling) over the last six months. Much as might be expected, given the dreadful state of stock markets, the rest of the portfolio lost some value, declining by circa £16 million or 10% to £142 million.  John's report details the events within and the progress of the portfolio during the first half year and is, as always, a good read.

Returns earned over six months are of transitory interest and are soon forgotten.  Nevertheless it is always disappointing to lose money, even if only a little over a short period of time.  Our benchmark, against which we compare our returns, increased by 2.3%.  The longer-term returns, however, are rather more encouraging.  Even over the last twelve months - still a time period, which should be regarded as short-term - the net asset value has risen by a respectable (in the current circumstances) 6.9% (the benchmark increased by 4.8%) while over the last five years, which we regard as a proper measure of the long-term, the net asset value rose by 34.3% (the benchmark by 30.4%).  For those interested in how the UK stock market performed, its FTSE All-share index fell by 7.4% and 13.0% respectively, demonstrating (amongst other things) that our absolute return benchmark is a better and a tougher one against which to compare long-term returns.

THE SHARE PRICES

Ordinary shares: 882.5p (- 68.5p; - 7.2%)

"A" Ordinary shares: 885.0p (- 45.0p; - 4.8%)

I am afraid that both the two share prices - of the ordinary and the A ordinary shares - fell as the discount at which they traded at in relation to the underlying net asset value per share rose.  On top of the 1.5% decline emanating from the fall in the net asset value, the two share prices suffered a further 5.7% and 3.4% decline respectively as the discounts widened to 18.6% and 18.3%.

While I do not wish to sound complacent about the level of the discount, which is high relative to some other investment trusts' shares, I should point out that the main driver of returns over the long-term is the net asset value return.  We think that, as long as we can produce good net asset value returns over the longer term, shareholders will enjoy good share price returns.

THE INTERIM DIVIDEND

Our Income Statement  shows revenues from investments and other sources to be £4,688m and the revenue profit for the period to be £3,380m.  The figures are much greater than those of the previous year (56% and 306%) respectively because of the incidence of dividend payments received from Ocean Wilsons in the two previous years.  On the back of these revenue results, the Board of Directors has declared an interim dividend of 3.5p per share (the same as that of a year ago) to be paid to shareholders on 2 December 2011 to shareholders on the Register of Members on 18 November 2011.

PROSPECTS

Before making a few comments on the outlook and thence our prospects I should say, as I always do, that our prospects ultimately depend on ourselves.  John Alexander has topped and tailed his report with some comment on the events that have transpired over the last six months and provided a view on what might happen in relation to the current crisis, the epicentre of which is in Europe.

It is, as we have said many times in our reports to shareholders, extremely difficult to forecast how the current crises are going to play out.  In truth nobody really knows, least of all us.  What we do know is that for various different reasons there are huge debt problems on both sides of the Atlantic Ocean.  In Europe the debt has been caused by most governments and individuals living beyond their means - in part because they believed that membership of the Euro Club effectively underwrote their profligacy.  The solution to the crisis will involve more than just writing off some Greek debt and may yet involve fiscal integration of the Eurozone, as John suggests. It may even be that they cannot be dealt with short of a breakup of the Eurozone.  There is still a long way to go on this matter.

Outside Europe things appear to be calmer but that is only because the Euro crisis is hitting the headlines.  America is as deeply in debt as most other countries once its federal government's debts and other long-term commitments, its individual states debts, its consumer debt and its external debts are taken into consideration.  It has the advantage and ability to print money internationally and is using it but  it is surely a policy that could spark off a crisis at some point.  Japan too has problems although it is sitting within the area of the world whose economy is most likely to grow over the foreseeable future.

Meanwhile Emerging Market countries - notably the BRIC ones - are having to deal with inflation,   but by and large they are dealing with it, and once brought under control,  should be able to resume economic growth , even if not at quite the hectic rate of the last decade or so. While their economic growth will not deal with the debt problems of the industrialised countries, it will provide support to world trade and hence provide some help to the industrialised countries' economies.

In the UK we have similar debt problems to those of America.   However, our stock market is heavily exposed to the international economy and to the corporate profits that derive from it.  So the revenues, profits and dividends of the many companies have prospects of growth emanating from their exposure to the growth areas of the global economy.  Their shares can and should make good investments over the longer-term.  In the shorter-term, however, it is anyone's guess as to what might happen.  What seems reasonable to assume is that in the US, in Europe and in the UK their respective central banks will continue to print money; they appear to have no idea of what else to do.  If so, stock markets may well do surprisingly well - just as they have done in the last two and a half years.  Although many argue that stock markets are cheap, it is important to remember that cheap price earnings ratios do not drive markets - only money and confidence do.  Periods of calm will support confidence and quantitative easing will provide the money.  So stock markets may well surprise us - even if the solutions to our problems still seem a long way off.

Alex Hammond-Chambers
Chairman
4  November 2011

Condensed group income statement

                                                                                                                                                for the six months ended 30 September 2011

	(Unaudited) Six months ended 30 September 2011			(Unaudited) Six months ended 30 September 2010			(Audited) Year ended 31 March 2011
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£000	£000	£000	£000	£000	£000	£000	£000	£000
(Losses)/gains on investments	-	(7,398)	(7,398)	-	28,369	28,369	-	49,127	49,127
Loss on derivatives	-	-	-	-	(16)	(16)	-	(16)	(16)
Currency exchange losses	-	(2)	(2)	-	(4)	(4)	-	(4)	(4)
Investment income (see note 2)	4,688	12	4,700	1,889	-	1,889	3,009	-	3,009
	4,688	(7,388)	(2,700)	1,889	28,349	30,238	3,009	49,107	52,116
Investment management fees	(798)	-	(798)	(639)	-	(639)	(1,386)	-	(1,386)
Write back of prior years' VAT	-	-	-	51	-	51	51	-	51
Other expenses	(415)	-	(415)	(351)	-	(351)	(724)	-	(724)
	(1,213)	-	(1,213)	(939)	-	(939)	(2,059)	-	(2,059)
Profit/(loss) before finance costs and taxation
	3,475	(7,388)	(3,913)	950	28,349	29,299	950	49,107	50,057
Finance costs	(57)	-	(57)	(37)	-	(37)	(114)	-	(114)
Profit/(loss) before taxation	3,418	(7,388)	(3,970)	913	28,349	29,262	836	49,107	49,943
Taxation	(38)	-	(38)	(4)	-	(4)	(4)	-	(4)
Profit/(loss) for the period	3,380	(7,388)	(4,008)	909	28,349	29,258	832	49,107	49,939
Return per Ordinary and
'A' non-voting Ordinary share
(see note 3)	14.1p	(30.8p)	(16.7p)	3.8p	118.1p	121.9p	3.5p	204.6p	208.1p

The Company does not have any income or expense that is not included in the profit for the period. Accordingly the "Profit for the period" is also the "Total comprehensive income for the period", as defined in IAS 1 (revised) and no separate Statement of Comprehensive Income has been presented.

All of the profit and total comprehensive income for the period is attributable to the Company's shareholders.

The total column of the statement is the Income Statement of the Company prepared in accordance with IFRS. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies.

The Statement above is regarded as being in a condensed form due to the fact that fewer explanatory notes are included than would be the case in the Annual Report.

Condensed Statement of Changes in Equity

                                                                                                                                for the six months ended 30 September 2011 (Unaudited)

	Share Capital	Capital redemption reserve	Retained Earnings	Total
	£000	£000	£000	£000
Net assets at 1 April 2011	1,200	300	262,613	264,113
Loss for the period	-	-	(4,008)	(4,008)
Dividends paid	-	-	-	-
Balance at 30 September 2011	1,200	300	258,605	260,105

Condensed Statement of Changes in Equity

                                                                                                                                for the six months ended 30 September 2010 (Unaudited)

	Share Capital	Capital redemption reserve	Retained Earnings	Total
	£000	£000	£000	£000
Net assets at 1 April 2010	1,200	300	213,514	215,014
Profit for the period	-	-	29,258	29,258
Dividends paid	-	-	-	-
Balance at 30 September 2010	1,200	300	242,772	244,272

Condensed Statement of Changes in Equity

                                                                                                                                                for the year ended 31 March 2011 (Audited)

	Share Capital	Capital redemption reserve	Retained Earnings	Total
	£000	£000	£000	£000
Net assets at 1 April 2010	1,200	300	213,514	215,014
Profit for the period	-	-	49,939	49,939
Dividends paid	-	-	(840)	(840)
Balance at 31 March 2011	1,200	300	262,613	264,113

The Statements above are regarded as being in a condensed form due to the fact that fewer explanatory notes are included than would be the case in the Annual Report.

Condensed Group Balance Sheet

                                                                                                                                                                                as at 30 September 2011

	(Unaudited)	(Unaudited)	(Audited)
	30 September	30 September	31 March
	2011	2010	2011
	£000	£000	£000
Non-current investments
Investments held at fair value through profit and loss	268,081	254,655	266,435
Current Assets
Trade and other receivables	402	688	281
Cash and cash equivalents	404	176	8,295
	806	864	8,576
Current Liabilities
Trade and other payables falling due within one year	(8,782)	(11,247)	(10,898)
Net current assets	(7,976)	(10,383)	(2,322)
Net assets	260,105	244,272	264,113
Equity
Called up share capital	1,200	1,200	1,200
Capital redemption reserve	300	300	300
Retained earnings	258,605	242,772	262,613
Total equity shareholders' funds	260,105	244,272	264,113
Net asset value per Ordinary and
'A' non-voting Ordinary share (see note 5)	1,083.8p	1,017.8p	1,100.5p

The Statement above is regarded as being in a condensed form due to the fact that fewer explanatory notes are included than would be the case in the Annual Report.

Condensed Group Cash Flow Statement

for the six months ended 30 September 2011

	(Unaudited)	(Unaudited)	(Audited)
	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2011	2010	2011
	£000	£000	£000
Cash flows from operating activities
(Loss)/profit before finance costs and taxation	(3,913)	29,299	50,057
Adjustments for:
Realised gains on investments	-	(939)	(3,689)
Unrealised losses/(gains) on investments	7,398	(27,430)	(45,438)
Effect of foreign exchange rate changes	2	4	(4)
(Increase)/decrease in trade and other receivables	(121)	(57)	350
(Decrease)/increase in trade and other payables	(150)	(3)	182
Taxes paid	(38)	(4)	(4)
Purchase of non-current investments	(9,134)	(12,050)	(24,688)
Sale of non-current investments	24	2,073	23,755
Net cash (outflow)/inflow from operating activities	(5,932)	(9,107)	521
Cash flows from financing activities
Interest paid on bank loans	(57)	(37)	(114)
Dividends paid	-	-	(840)
(Repayment)/drawdown of loans	(1,900)	7,500	6,900
Net cash (outflow)/inflow from financing activities	(1,957)	7,463	5,946
(Decrease)/increase in cash and cash equivalents	(7,889)	(1,644)	6,467
Cash and cash equivalent at 1 April	8,295	1,824	1,824
Effect of foreign exchange rate changes	(2)	(4)	4
Cash and cash equivalents at end of period	404	176	8,295

The Statement above is regarded as being in a condensed form due to the fact that no explanatory notes are included as would be the case in the Annual Report.

Notes:

1.     This Announcement is not the Company's Half-Yearly accounts. It is an abridged version of the Company's full Half-Yearly accounts for the six months ended 30 September 2011, which have not yet been approved or distributed to shareholders.

2.     The full Half-Yearly accounts for the six months ended 30 September 2011 have been prepared in accordance with International Financial Reporting Standards ("IFRS") and using the same accounting policies as those in the last published annual accounts, being those to 31 March 2011.

3.     Statutory accounts for the 12 months ended 31 March 2011 have been delivered to the Registrar of Companies and received an audit report which was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain statements under Section 498 of the Companies Act 2006.

Hansa Capital Partners LLP - Company Secretary

8 November 2011

 

END

 

 

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