Interim Results

Edinburgh US Tracker Trust plc 13 September 2006 NEWS RELEASE 13 September 2006 EDINBURGH US TRACKER TRUST PLC Edinburgh US Tracker Trust aims to achieve long term growth of capital and income by tracking the performance of the S&P Composite Index. Edinburgh US Tracker Trust is the only UK investment trust with the objective of tracking the performance of the S&P Composite Index. INTERIM RESULTS FOR THE SIX MONTHS TO 31 JULY 2006 • Company continues to track the performance of the S&P Composite Index • Interim dividend increased to 2.45p per share (2005 - 2.30p) • Discount management policy introduced during period resulting in narrowing of discount - END - For further information, please contact:- David McCraw Edinburgh Fund Managers plc 0131 313 1000 Ian Massie Edinburgh Fund Managers plc 0131 313 1000 CHAIRMAN'S STATEMENT The company continues to meet the objective of tracking the performance of the S &P 500 Composite Index. In the six months ended 31 July 2006, the net asset value per share (NAV) fell by 4.8% to 571.40p and this compares with a fall of 5.1% in the index (in sterling terms). US equity markets struggled to make progress in the first half of the year. Corporate profits were ahead of expectations but investors continued to be cautious about the impact of higher oil prices on economic activity and the continuing rise in US interest rates. The Federal Reserve increased short term interest rates on three further occasions to combat inflation pressures and the Federal Funds Rate now stands at 5.25%. Over the period, the US dollar/sterling exchange rate weakened from $1.78 to $1.87 which translated the fall of 0.3% in the S&P Composite Index in US currency to 5.1% in sterling. The revenue return per share rose by 10.6% to 3.35p benefiting from dividend increases from underlying investments which more than offset adverse movements in the US dollar/sterling exchange rate. The directors have therefore increased the interim dividend by 6.5% to 2.45p per share for the year to 31 January 2007 payable on 20 October 2006 to shareholders on the register on 22 September 2006. The discount at which the company's shares trade has been volatile in recent years and, in May, 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 fell by only 3.5% over the six month period to 31 July 2006 to 550.0p, compared to a fall in the index of 5.1%. At the start of the new financial year, the share price was standing at a discount of 5.1%. The company bought back 5,518,500 shares for cancellation during the six month period at a cost of £30.9 million, enhancing the NAV for continuing shareholders by 1.39p. 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. The level of activity within the portfolio was higher than in recent periods and this was attributable to changes to the constituents of the index and the sale of investments to finance the purchase of the company's own shares. The changes to the constituents of the index in the period were mostly the result of takeover activity with the new holdings including Google, Legg Mason, Dean Foods, Juniper Networks, SanDisk and Barr Pharmaceuticals. The total value of purchases amounted to £7.8 million while sales totalled £45.1 million. Edinburgh US Tracker Trust is the only UK investment trust to track the performance of the S&P Composite Index and provides shareholders with a diversified portfolio which is invested in the leading 500 companies across the main industries within the US economy. The method employed by the company to track the index involves a full replication of the index constituents. This means that the company's portfolio holds every stock making up the index in an amount that equals the stock's proportionate weight in the index. Sir Angus Grossart, Chairman INCOME STATEMENT Six months ended 31 July 2006 (unaudited) Revenue Capital Total £'000 £'000 £'000 (Losses)/gains on investments - (23,629) (23,629) Currency (losses)/gains - (398) (398) Income from investments 4,366 - 4,366 Interest receivable 176 - 176 Investment management fee (459) - (459) Administrative expenses (206) - (206) _________ _________ _________ Return on ordinary activities before taxation 3,877 (24,027) (20,150) Taxation (1,233) - (1,233) _________ _________ _________ Return on ordinary activities after taxation 2,644 (24,027) (21,383) _________ _________ _________ Return per Ordinary share (pence): 3.35 (30.43) (27.08) _________ _________ _________ 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. Interim Dividend An interim dividend of 2.45p per share (£1,801,442) is declared for the year to 31 January 2007 and is payable on 20 October 2006. In accordance with UK GAAP this dividend is not recognised in these financial statements. INCOME STATEMENT Six months ended 31 July 2005 (unaudited) Revenue Capital Total £'000 £'000 £'000 Gains on investments - 50,561 50,561 Currency gains - 377 377 Income from investments 4,099 - 4,099 Interest receivable 83 - 83 Investment management fee (448) - (448) Administrative expenses (145) - (145) _________ _________ _________ Return on ordinary activities before taxation 3,589 50,938 54,527 Taxation (1,083) - (1,083) _________ _________ _________ Return on ordinary activities after taxation 2,506 50,938 53,444 _________ _________ _________ Return per Ordinary share (pence): 3.03 61.71 64.74 _________ _________ _________ 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. INCOME STATEMENT Year ended 31 July 2006 (audited) Revenue Capital Total £'000 £'000 £'000 Gains on investments - 63,438 63,438 Currency gains 371 371 Income from investments 8,452 - 8,452 Interest receivable 179 - 179 Investment management fee (926) - (926) Administrative expenses (357) - (357) _________ _________ _________ Return on ordinary activities before taxation 7,348 63,809 71,157 Taxation (2,205) - (2,205) _________ _________ _________ Return on ordinary activities after taxation 5,143 63,809 68,952 _________ _________ _________ Return per Ordinary share (pence): 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. BALANCE SHEET At At At 31 July 31 July 31 January 2006 2006 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Fixed assets Investments at fair value through profit or loss 424,370 473,908 485,539 _________ _________ _________ Current assets Debtors 408 553 1,075 Cash and short term deposits 11,816 4,767 5,437 _________ _________ _________ 12,224 5,320 6,512 Creditors: amounts falling due within one year (1,290) (742) (1,477) _________ _________ _________ Net current assets 10,934 4,578 5,035 _________ _________ _________ Total assets less current liabilities 435,304 478,486 490,574 Provisions for liabilities and charges (63) (88) (63) _________ _________ _________ Net assets 435,241 478,398 490,511 _________ _________ _________ Capital and reserves Called-up share capital 19,043 20,490 20,422 Capital redemption reserve 3,052 1,605 1,673 Share premium account 32,643 32,643 32,643 Reserves 380,503 423,660 435,773 _________ _________ _________ Equity Shareholders' funds 435,241 478,398 490,511 _________ _________ _________ Net asset value per share (pence): 571.40 583.70 600.46 _________ _________ _________ Reconciliation of Movements in Shareholders' Funds Six months ended 31 July 2006 (unaudited) Capital Share Capital Capital Share Redemption Premium Reserve Reserve Revenue Capital Reserve Account Realised Unrealised Reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 January 2006 20,422 1,673 32,643 321,756 109,071 4,946 490,511 Net return on ordinary activities - - - 8,440 (32,467) 2,644 (21,383) after taxation Dividends paid (see note 2) - - - - - (2,965) (2,965) Purchase of own shares for (1,379) 1,379 - (30,922) - - (30,922) cancellation _______ _______ _______ _______ _______ _______ _______ Balance at 31 July 2006 19,043 3,052 32,643 299,274 76,604 4,625 435,241 _______ _______ _______ _______ _______ _______ _______ Six months ended 31 July 2005 (unaudited) Capital Share Capital Capital Share Redemption Premium Reserve Reserve Revenue Capital Reserve Account Realised Unrealised Reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 January 2005 20,733 1,362 32,643 323,606 49,769 4,214 432,327 Net return on ordinary activities - - - 2,775 48,163 2,506 53,444 after taxation Dividends paid (see note 2) - - - - - (2,526) (2,526) Purchase of own shares for (243) 243 - (4,847) - - (4,847) cancellation _______ _______ _______ _______ _______ _______ _______ Balance at 31 July 2005 20,490 1,605 32,643 321,534 97,932 4,194 478,398 _______ _______ _______ _______ _______ _______ _______ Year ended 31 January 2006 (audited) Capital Share Capital Capital Share Redemption Premium Reserve Reserve Revenue Capital Reserve Account Realised Unrealised Reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 January 2005 20,733 1,362 32,643 323,606 49,769 4,214 432,327 Net return on ordinary activities - - - 4,507 59,302 5,143 68,952 after taxation Dividends paid (see note 2) - - - - - (4,411) (4,411) Purchase of own shares for (311) 311 - (6,357) - - (6,357) cancellation _______ _______ _______ _______ _______ _______ _______ Balance at 31 January 2006 20,422 1,673 32,643 321,756 109,071 4,946 490,511 _______ _______ _______ _______ _______ _______ _______ CASHFLOW STATEMENT Six months ended Six months ended Year ended 31 July 31 July 31 January 2006 2006 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Net return on ordinary activities before taxation (20,150) 54,527 71,157 Adjustment for: Losses/(gains) on investments 24,027 (50,938) (63,809) Decrease/(increase) in accrued income 4 (229) (61) (Increase)/decrease in other debtors (16) (6) 10 (Decrease)/increase in other creditors (31) (26) 36 UK corporation tax paid (499) (619) (1,137) Withholding tax deducted from foreign income (644) (570) (1,240) ___________ ___________ __________ Net cash inflow from operating activities 2,691 2,139 4,956 Financial investment Purchases of investments (8,001) (7,219) (17,010) Sales of investments 45,777 11,525 22,570 Index Futures payments 197 - - ___________ ___________ __________ Net cash inflow from financial investment 37,973 4,306 5,560 Equity dividends paid (2,965) (2,526) (4,411) ___________ ___________ __________ Net cash inflow before financing 37,699 3,919 6,105 Financing Buyback of Ordinary Shares (inclusive of expenses) (30,922) (4,847) (6,357) ___________ ___________ __________ Net cash outflow from financing (30,922) (4,847) (6,357) ___________ ___________ __________ Increase/(decrease) in cash 6,777 (928) (252) ___________ ___________ __________ Reconciliation of net cash inflow to movement in net funds Increase/(decrease) in cash as above 6,777 (928) (252) Exchange movements (398) 377 371 ___________ ___________ ___________ Movement in net funds in the year 6,379 (551) 119 Opening net funds 5,437 5,318 5,318 ___________ ___________ __________ Closing net funds 11,816 4,767 5,437 ___________ __________ __________ NOTES: 1. Basis of accounting The accounts have been prepared under the historical cost convention, modified to include the revaluation of investments and in accordance with applicable Accounting Standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies'. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements and the net asset value per share figures have been prepared in accordance with UK Generally Accepted Accounting Practice (GAAP). The interim accounts have been prepared using the same accounting policies as the preceding annual accounts. Dividends payable Interim and final dividends are recognised in the period in which they are paid. Foreign currencies Assets and liabilities on foreign currencies are translated at the rates of exchange ruling on the balance sheet date. Transactions involving foreign currencies are recognised in the Income Statement and are then transferred to the realised capital reserve. 2. An interim dividend of 2.45p (2005 -2.30p) will be paid on 20 October 2006 to shareholders on the register at the close of business on 22 September 2006. The ex-dividend date is 20 September 2006. In accordance with UK GAAP this is not recognised in these financial statements. 3. 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 was unqualified. The statement of total return and balance sheet do not represent full accounts in accordance with section 240 of the Companies Act 1985. 4. The Interim Report will be posted to shareholders in late September 2006 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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