Final Results

Edinburgh US Tracker Trust plc 15 March 2007 15 March 2007 EDINBURGH US TRACKER TRUST PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2007 Edinburgh US Tracker Trust aims to achieve long term growth of capital and income by tracking the performance of the S&P Composite 500 Index. HIGHLIGHTS • NAV rose by 2.5% compared to a rise of 2.0% in the S&P Composite 500 Index • Share price rose by 2.9% to 586.5p • Total dividends for year up 15.0% to 6.9p (2006 -6.0p) • Total expense ratio of 0.29% (2006 - 0.28%) For further information, please contact: David McCraw Edinburgh Fund Managers plc 0131 313 1000 Ian Massie Edinburgh Fund Managers plc 0131 313 1000 EDINBURGH US TRACKER TRUST PLC The Company continues to meet the objective of tracking the performance of the S &P 500 Composite Index. In the 12 months to 31 January 2007, the net asset value per share (NAV) rose by 2.5% to 615.34p, compared to an increase of 2.0% in the Index (in sterling terms). Since the investment objective of the Company was revised in June 1997, the capital performance has matched that of the Index to within 0.4% per annum. The annualised returns for the Company's net asset values per share for the period 31 July 1997 to 31 January 2007 were 2.82% per annum compared to an annualised return of 2.47% per annum for the Index. US equity markets struggled to make progress in the first half of the year. Corporate profits were ahead of expectations but investors remained cautious about the impact of higher oil prices on economic activity and the continuing rise in US interest rates. By June, the Federal Reserve had increased short term interest rates to 5.25%. From that point however investors began to anticipate that the risks to growth and inflation were over-stated and US equity markets rose strongly in the second half of the year. There have no been further increases to US interest rates since June 2006. Over the financial year, the US dollar/sterling exchange rate fell from $1.78 to $1.96 which translated the rise of 12.4% in the S&P 500 Composite Index in US currency to 2.0% in sterling terms. The revenue return per share over the year rose by 10.5% to 6.92p, benefiting from dividend increases from underlying investments which more than offset adverse movements in the US dollar/sterling exchange rate. Your Board is recommending a final dividend of 4.45p which will take total dividends for the year to 6.90p, an increase of 15.0% from last year. The discount at which the Company's shares trade has been volatile in recent years and, in May 2006, the Board announced that, in order to contain this volatility, it intended to continue to buy-back the Company's shares with the aim of establishing a long term level of the discount to the NAV of no greater than 3%. The effect of this commitment was reflected in the Company's share price which rose by 2.9% over the 12 months to 31 January 2007 to 586.5p, compared to an increase in the Index of 2.0%. The Company bought back 9,152,922 of its own shares for cancellation during the year to 31 January 2007 enhancing the NAV for continuing shareholders by 2.13p. The Board believes that this discount management policy should provide both existing shareholders, and potential new investors, with greater confidence that there will, in future, be less variation in movement between the Company's share price and its benchmark Index. Marketing Your Board continues to promote the Company through the Manager's marketing initiative which provides a series of savings schemes through which savers can invest in Edinburgh US Tracker Trust in a low cost and convenient manner. The Company contributed £100,000 to this initiative during the past year. Up to date information about the Company is available on the Company's website on www.edinburghustracker.com. Corporate Governance The Board reviews annually the performance of the Manager, the Chairman and the Board as a whole. The Board has assessed the performance of the Manager, the investment process and risk controls. The portfolio has tracked closely the performance of the Index and the discount at which the Company's shares trade relative to the net asset value has reduced over the past year. The Board has reviewed the terms of the management agreement during the year and believes that the continuing appointment of the Manager, on the terms agreed, is in the interests of shareholders. Annual General Meeting The Company's Articles of Association require shareholders to vote on the continuation of the Company at every Annual General Meeting. Accordingly, a resolution to this effect will be proposed as Special Business at the Annual General Meeting to be held on Thursday 17 May 2007. If this resolution is not passed, a resolution to liquidate the Company will be proposed later this year. Liquidation would result in a disposal of the Company's shares for taxation purposes and therefore shareholders should consider carefully whether they wish the Company to be wound up. There will be another opportunity to consider the future of the Company at the same time next year. I believe that our investment performance, aided by low management and administration costs, as evidenced by the total expense ratio of 0.29%, underlines the attractions of the Index tracking approach to investors. Your Board therefore strongly recommends all shareholders to vote in favour of the resolution. The Directors are also seeking shareholder approval to renew the authority to issue new shares for cash, to meet investor demand provided the subscription price is not below the net asset value per share. Your Board also has the authority to purchase the Company's shares for cancellation were the shares to trade persistently at a level in excess of the Company's stated discount policy. Special resolutions proposing an extension of these facilities will be put to shareholders in the Annual General Meeting. Following a review of the Company's Articles of Association, the Board is proposing the following amendments to the Company's Articles: - to take advantage of enhanced procedures for the use of electronic communications introduced by the Companies Act 2006 - to bring up to date the provisions in the Articles dealing with the rights of the Directors to indemnification - to remove the age 70 limit to Directors which is consistent with provisions under the Companies Act 2006. In the event that this change is approved, I will not be required to vacate the office of Chairman at the conclusion of the 2007 Annual General Meeting by virtue of my attaining the age of 70 years by that time. An explanation of the proposed changes to the Articles is set out in the circular accompanying the Company's report and accounts. Outlook The size of the economy and stock market, the mobility of the nation's labour force and the country's entrepreneurial culture have enabled a large number of US companies to emerge as world leaders in many industries. Edinburgh US Tracker Trust provides shareholders with a broadly diversified portfolio which covers the top 500 listed companies in the United States. Sir Angus Grossart Chairman INCOME STATEMENT (audited) for the year ended 31 January 2007 Year ended 31 January 2007 Year ended 31 January 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains on investments - 11,384 11,384 - 4,136 4,136 Unrealised (losses)/ gains on investments - (3,965) (3,965) - 59,302 59,302 Foreign exchange movements - (680) (680) - 371 371 Income 8,857 - 8,857 8,631 - 8,631 Investment management fee (902) - (902) (926) - (926) Administrative expenses (420) - (420) (357) - (357) _______ _______ _______ _______ _______ _______ Return on ordinary activities before taxation 7,535 6,739 14,274 7,348 63,809 71,157 Taxation (2,258) - (2,258) (2,205) - (2,205) _______ _______ _______ _______ _______ _______ Return on ordinary activities after taxation 5,277 6,739 12,016 5,143 63,809 68,952 _______ _______ _______ _______ _______ _______ Return per share (pence) 6.92 8.84 15.76 6.26 77.62 83.88 _______ _______ _______ _______ _______ _______ The total column of this statement represents the profit and loss account of the Company. No Statement of Total Recognised Gains and Losses has been prepared as all gains and losses have been reflected in the Income Statement. All revenue and capital items in the above statement derive from continuing operations. The accompanying notes are an integral part of the financial statements. Proposed final dividend The Board is proposing a final dividend of 4.45p per share (£3,211,000) making a total dividend of 6.90p (£5,011,000) for the year to 31 January 2007 which, if approved, will be payable on 21 May 2007. BALANCE SHEET (audited) as at 31 January As at 31 January 2007 As at 31 January 2006 £'000 £'000 £'000 £'000 Non-current assets Investments at fair value through profit or loss 442,446 485,539 Current assets Debtors 500 1,075 Cash and short term deposits 4,654 5,437 ________ ________ 5,154 6,512 Creditors: amounts falling due within one year (1,194) (1,477) Net current assets ________ 3,960 ________ 5,035 ________ ________ Total assets less current liabilities 446,406 490,574 Provision for liabilities and charges (62) (63) ________ ________ Net assets 446,344 490,511 ________ ________ Capital and reserves Called up share capital 18,134 20,422 Share premium account 32,643 32,643 Capital redemption reserve 3,961 1,673 Capital reserve - realised 281,041 321,756 Capital reserve - unrealised 105,106 109,071 Revenue reserve 5,459 4,946 ________ ________ Equity Shareholders' funds 446,344 490,511 ________ ________ Net asset value per share (pence) 615.34 600.46 ________ ________ Reconciliation of movements in shareholders' funds (audited) For the year ended 31 January 2007 Share Capital Capital Capital Share premium redemption reserve reserve Revenue capital account reserve realised unrealised reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 January 2006 20,422 32,643 1,673 321,756 109,071 4,946 490,511 Return on ordinary activities - - - 10,704 (3,965) 5,277 12,016 after taxation Dividends paid - - - - - (4,764) (4,764) Purchase of Ordinary shares for (2,288) - 2,288 (51,419) - - (51,419) cancellation ________ ________ ________ ________ ________ ________ ________ Balance at 31 January 2007 18,134 32,643 3,961 281,041 105,106 5,459 446,344 ________ ________ ________ ________ ________ ________ ________ For the year ended 31 January 2006 Share Capital Capital Capital Share premium redemption reserve reserve Revenue capital account reserve realised unrealised reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 January 2005 as 20,733 32,643 1,362 323,606 49,769 1,685 429,798 originally reported Restatement - - - - - 2,529 2,529 ________ ________ ________ ________ ________ ________ ________ Balance at 31 January 2005 20,733 32,643 1,362 323,606 49,769 4,214 432,327 (restated) Return on ordinary activities - - - 4,507 59,302 5,143 68,952 after taxation Dividends paid - - - - - (4,411) (4,411) Purchase of Ordinary shares for (311) - 311 (6,357) - - (6,357) cancellation ________ ________ ________ ________ ________ ________ ________ Balance at 31 January 2006 20,422 32,643 1,673 321,756 109,071 4,946 490,511 ________ ________ ________ ________ ________ ________ ________ CASHFLOW STATEMENT (audited) for the year ended 31 January Year ended Year ended 31 January 2007 31 January 2006 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 7,485 7,333 Taxation UK corporation tax paid (987) (1,137) Overseas tax paid (1,257) (1,240) Net tax paid ________ (2,244) ________ (2,377) Financial investment Purchases of investments (13,678) (17,010) Sales of investments 64,182 22,570 Net cash inflow from financial investment ________ 50,504 ________ 5,560 Equity dividends paid (4,764) (4,411) ________ ________ Net cash inflow before financing 50,981 6,105 Financing Buy back of Ordinary shares (including expenses) (51,084) (6,357) ________ ________ Decrease in cash (103) (252) ________ ________ Reconciliation of net cash flow to movement in net funds Decrease in cash as above (103) (252) Exchange movements (680) 371 ________ ________ Movement in net funds in the year (783) 119 Opening net funds 5,437 5,318 ________ ________ Closing net funds 4,654 5,437 ________ ________ NOTES : 1. Accounting policies A summary of the principal accounting policies, all of which have been consistently applied throughout the year and the preceding year is set out below. (a) Basis of preparation and going concern The accounts have been prepared under the historic cost convention, modified to include the revaluation of investments and accordance with applicable UK Accounting Standards, with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (issued January 2003 and revised in December 2005) and on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis. (b) Investment Income, interest receivable, expenses and interest payable Income from Investments (other than special dividends), including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend. Special dividends are credited to capital or revenue, according to the circumstances. Short term deposits, expenses and interest payable are dealt with on an accruals basis. All expenses are charged to revenue except where they directly relate to the acquisition or disposal of an investment, in which case, they are added to the cost of the investment or deducted from the sale proceeds. (c) Deferred taxation Deferred taxation is provided on all timing differences, that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more or a right to pay less tax in future have occurred at the balance sheet date, measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods. Due to the Company's status as an investment trust company, and the intention to continue to meet the conditions required to obtain approval for the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. (d) Investments Listed investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned and are initially measured at fair value. Transaction costs on purchases and sales are expensed through the Income Statement. Subsequent to initial recognition, investments are valued at fair value. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the Income Statement and are ultimately recognised in the unrealised reserve. (e) Dividends payable Interim and final dividends are recognised in the period in which they are paid. (f) Capital reserve Realised Gains or losses on investments realised in the year that have been recognised in the income statement are transferred to the realised capital reserve. In addition, any prior unrealised gains or losses on such investments are transferred from the unrealised capital reserve to realised capital reserve on disposal of the investment. The cost of share buybacks are deducted from this reserve. Unrealised Increases and decreases in the fair value of investments are recognised in the income statement and are then transferred to the unrealised capital reserve. (g) Foreign currencies Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the balance sheet date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Gains and losses on the realisation of foreign currencies are recognised in the income statement and are then transferred to the realised capital reserve. 2. The proposed final dividend of 4.45p per share, subject to shareholder approval, will be paid on 21 May 2007 to shareholders on the register at the close of business on 20 April 2007. The ex-dividend date is 18 April 2007. 3. The income statement, balance sheet, reconciliation of movement in shareholders' funds and the cashflow statement set out above do not represent full accounts in accordance with Section 240 of the Companies Act 1985. The financial information for the year ended 31 January 2006 has been extracted from the Annual Report and Accounts of the Company which have been filed with the Registrar of Companies. The auditors' report on those accounts as originally filed was unqualified. The statutory accounts for 2007 are unqualified and will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at Donaldson House, 97 Haymarket Terrace, Edinburgh EH12 5HD on 17 May 2007 at 11.00am 4. The Annual Report and Accounts will be posted to shareholders in early April 2007 and copies will be available from the investment manager. Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested. For Edinburgh US Tracker Trust plc Edinburgh Fund Managers plc, Secretary END This information is provided by RNS The company news service from the London Stock Exchange

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