Final Results
Pacific Horizon Investment Tst PLC
31 August 2006
PACIFIC HORIZON INVESTMENT TRUST PLC
Results for the year to 31 July 2006
The Company's net asset value per share rose by 20.8% while the MSCI All Country
Far East ex Japan Index in sterling terms gained 6.8%. In this period, the
Company's share price rose by 18.4%.
• During the second half of the Company's year, net asset value per share
rose by 8.7% compared to a 5.9% decline in the comparative index.
• Over the year, both stock selection and the re-introduction of short term
gearing contributed to performance. The portfolio has remained heavily
weighted in energy related companies, shipping and shipbuilding companies
and Real Estate Investment Trusts. As at year end actual gearing stood at
6% of shareholders' funds.
• An unchanged dividend of 1.10p is being recommended by the Board. Revenue
earnings per share for the year rose 2.7%.
• At this year's Annual General Meeting the Directors will be seeking
shareholder approval to extend the life of the Company for a period of five
years and to widen the Company's investment remit to include the markets of
the Indian Sub-Continent. A fuller explanation of these proposals and
their rationale will be included in a circular to shareholders along with
details of the Annual General Meeting.
Past performance is no guarantee of future performance. The value of an
investment and any income from it is not guaranteed and may go down as well as
up and investors may not get back the amount invested. The Company has borrowed
money to make further investments. This is commonly referred to as gearing. The
risk is that, when this money is repaid by the Company, the value of these
investments may not be enough to cover the borrowing and interest costs, and the
Company makes a loss. If the Company's investments fall in value, gearing will
increase the amount of this loss. The more highly geared the Company, the
greater this effect will be. Investment in investment trusts should be regarded
as medium to long-term.
Pacific Horizon Investment Trust PLC (Pacific Horizon) aims to achieve capital
growth through investment in the stockmarkets of the Asia-Pacific region
(excluding Japan). The Company has total assets of £89.0 million (before
deduction of bank loans of £7.6 million).
Pacific Horizon is managed by Baillie Gifford & Co, the Edinburgh based fund
management group with around £45 billion under management and advice as at 30
August 2006.
30 August 2006
- ends -
For further information please contact:
Gerald Smith, Fund Manager,
Baillie Gifford & Co 0131 275 2000
Mike Lord, Director
Broadgate 020 7726 6111
PACIFIC HORIZON INVESTMENT TRUST PLC
The following is the unaudited preliminary statement for the year to 31 July
2006 which was approved by the Board on 30 August 2006. The Directors of
Pacific Horizon Investment Trust PLC are recommending to the Annual General
Meeting of the Company to be held on 24 October 2006 the payment of a final
dividend of 1.10p net (31 July 2005 - 1.10p net) per ordinary share for the year
ended 31 July 2006.
INCOME STATEMENT*
(unaudited)
For the year ended For the year ended
31 July 2006 31 July 2005
Revenue Capital Total Revenue Capital Total
Restated+ Restated+
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 13,286 13,286 - 19,614 19,614
Currency gains/(losses) - 411 411 - (464) (464)
Income (note 2) 2,887 - 2,887 2,384 - 2,384
Investment management fee (765) - (765) (580) - (580)
Other administrative expenses (241) - (241) (189) - (189)
Net return before finance costs
and taxation 1,881 13,697 15,578 1,615 19,150 20,765
Finance costs of borrowings (257) - (257) (7) - (7)
Return on ordinary activities
before taxation 1,624 13,697 15,321 1,608 19,150 20,758
Tax on ordinary activities (464) - (464) (485) - (485)
Return on ordinary activities
after taxation 1,160 13,697 14,857 1,123 19,150 20,273
Return per ordinary share
(note 3) 1.51p 17.91p 19.42p 1.47p 25.04p 26.51p
+ Various changes in accounting policies, as described in note 1, have had the
cumulative effect of increasing reported net assets by £573,000 for the year
ended 31 July 2005.
* The total column of this statement is the profit and loss account of the
Company.
All revenue and capital items in this statement derive from continuing
operations.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the above statement.
PACIFIC HORIZON INVESTMENT TRUST PLC
SUMMARISED BALANCE SHEET
at 31 July 2006
(unaudited)
31 July 2006 31 July 2005
Restated+ Restated+
£'000 £'000 £'000 £'000
FIXED ASSETS
Investments held at fair value 86,433 66,739
CURRENT ASSETS
Debtors 387 636
Cash and short term deposits 2,960 653
3,347 1,289
CREDITORS:
Amounts falling due within one year (note 5) (8,334) (577)
NET CURRENT (LIABILITIES)/ASSETS (4,987) 712
TOTAL ASSETS LESS CURRENT LIABILITIES 81,446 67,451
PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation (56) (77)
81,390 67,374
CAPITAL AND RESERVES
Called-up share capital 7,649 7,649
Share premium 965 965
Special distributable reserve 13,233 13,233
Capital redemption reserve 17,964 17,964
Capital reserve - realised 13,512 5,276
Capital reserve - unrealised 25,145 19,684
Revenue reserve 2,922 2,603
EQUITY SHAREHOLDERS' FUNDS 81,390 67,374
NET ASSET VALUE PER ORDINARY SHARE 106.41p 88.09p
Ordinary shares in issue (note 6) 76,487,002 76,487,002
+ See note 1.
PACIFIC HORIZON INVESTMENT TRUST PLC
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 31 July 2006 (unaudited)
Share Share Special Capital Capital Capital Revenue Total
capital premium distributable redemption reserve - reserve - reserve shareholders'
reserve reserve realised unrealised funds
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Shareholders'
funds at 1
August 2005 as
previously
reported 7,649 965 13,233 17,964 5,276 19,952 1,762 66,801
Prior year adjustments:
Revaluation of
investments at
bid prices - - - - - (268) - (268)
Reversal of
provision of
final dividend - - - - - - 841 841
Shareholders'
funds at 1
August 2005
restated 7,649 965 13,233 17,964 5,276 19,684 2,603 67,374
Return on
ordinary
activities
after taxation - - - - 8,236 5,461 1,160 14,857
Dividends paid
during the
year - - - - - - (841) (841)
Shareholders'
funds at 31
July 2006 7,649 965 13,233 17,964 13,512 25,145 2,922 81,390
For the year ended 31 July 2005 (unaudited)
Share Share Special Capital Capital Capital Revenue Total
capital premium distributable redemption reserve - reserve - reserve shareholders'
reserve reserve realised unrealised funds
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Shareholders'
funds at 1
August 2004 as
previously
reported 7,649 965 13,233 17,964 1,921 4,093 1,480 47,305
Prior year adjustments:
Revaluation of
investments at
bid prices - - - - - (204) - (204)
Reversal of
provision of
final dividend - - - - - - 535 535
Shareholders'
funds at 1
August 2004
restated 7,649 965 13,233 17,964 1,921 3,889 2,015 47,636
Return on
ordinary
activities
after taxation - - - - 3,355 15,795 1,123 20,273
Dividends paid
during the
year - - - - - - (535) (535)
Shareholders'
funds at 31
July 2005 7,649 965 13,233 17,964 5,276 19,684 2,603 67,374
PACIFIC HORIZON INVESTMENT TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
For the year ended For the year ended
31 July 2006 31 July 2005
£'000 £'000
Net cash inflow from operating activities 1,747 1,502
Net cash outflow from financial investment (169) (7)
Total tax paid (337) (205)
Net cash outflow from financial investment (6,175) (549)
Equity dividend paid (841) (535)
NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING (5,775) 206
Financing
Loans drawn down 23,723 -
Loans repaid (15,641) -
Net cash inflow from financing 8,082 -
INCREASE IN CASH 2,307 206
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET
(DEBT)/FUNDS
Increase in cash in the year 2,307 206
Cash inflow from movement in bank loans (8,082) -
Exchange movement 501 -
MOVEMENT IN NET (DEBT)/FUNDS IN THE YEAR
(5,274) 206
NET FUNDS AT 1 AUGUST 653 447
NET (DEBT)/FUNDS AT 31 JULY (4,621) 653
RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND
TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Net return on ordinary activities before finance costs
and taxation 15,578 20,765
Gains on investments (13,697) (19,150)
Changes in debtors and creditors 90 (34)
Realised currency (loss)/gain (90) 19
Overseas tax suffered (134) (98)
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,747 1,502
PACIFIC HORIZON INVESTMENT TRUST PLC
DISTRIBUTION OF ASSETS
at 31 July 2006
(unaudited)
31 July 2006 31 July 2005
Restated+
% %
Equities*: Hong Kong and China 35.0 37.7
Taiwan 15.0 9.0
Korea 14.4 15.9
Singapore 12.1 13.6
Thailand 7.9 4.8
Malaysia 5.3 8.9
Indonesia 3.6 7.5
Philippines 1.9 1.7
Vietnam 1.9 -
Total equities 97.1 99.1
Net liquid assets 2.9 0.9
Total assets ++ 100.0 100.0
* Equities includes warrants and put options.
+ See note 1.
++ Total assets less current liabilities and deferred tax, before deduction of
bank loans.
PACIFIC HORIZON INVESTMENT TRUST PLC
NOTES
(unaudited)
1. A number of new UK Financial Reporting Standards have been introduced with which the Company must
comply this year. These standards are part of the UK convergence programme with International
Accounting Standards and as such have required most UK listed companies to restate prior year
figures to reflect the new accounting treatment. The financial statements for the year to 31 July
2006 have been prepared on the basis of the accounting policies set out in the Company's Annual
Financial Statements at 31 July 2005 except as detailed below:
a) investments have been valued at fair value through profit or loss in accordance with FRS 26,
'Financial Instruments: Measurement'. The effect is to move from a mid price to a bid price basis
of valuation, resulting in a reduction in the value of investments and unrealised capital reserves
of £312,000 (31 July 2005 - £268,000);
b) in compliance with FRS 21, 'Events after the Balance Sheet Date', dividends declared after
the period end are no longer treated as a liability at the period end. The effect is to reduce
creditors and increase revenue reserves by £841,000 (31 July 2005 - £841,000).
the implementation of FRS 25 and the revision of the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies' (SORP) in 2005 has resulted in changes in the presentation
of total returns. Previously dividend distributions in respect of a year were disclosed on the face
of the Statement of Total Return and the revenue column of that statement was deemed to be the
profit and loss account of the Company. We now present an Income Statement which does not show the
distribution in respect of equity shares and, whilst it still shows information on capital and
revenue returns, it is the total column which is regarded as the profit and loss account of the
Company. Dividend distributions are now shown in the Reconciliation of Movements in Shareholders'
Funds and in the Notes to the Accounts.
The overall effect each year of these changes on shareholders' funds is detailed below:
31 July 2006 31 July 2005
£'000 £'000
Investments/Capital reserve - unrealised (312) (268)
Creditors: dividends payable/Revenue reserve 841 841
529 573
2. Income
Income from investments and interest receivable 2,887 2,384
Other income Nil Nil
3. Return per ordinary share
Revenue return 1,160 1,123
Capital return 13,697 19,150+
Return per ordinary share is based on the above totals for revenue and capital and on 76,487,002
ordinary shares, being the number of ordinary shares in issue during each year.
+ Restated see note 1.
PACIFIC HORIZON INVESTMENT TRUST PLC
NOTES (Ctd)
(unaudited)
31 July 2006 31 July 2005
£'000 £'000
4. Dividends
Amounts recognised as distributions in the
period:
Final dividend for the year ended 31 July 2005
of 1.10p (2004 - 0.70p) paid 17 October 2005 841 535
If approved, the proposed final dividend of 1.10p per ordinary share for the year ended 31 July 2006
will be paid on 30 October 2006 to shareholders on the register at the close of business on 6 October
2006. The ex-dividend date is 4 October 2006. The total cost of the dividend for the year is
£841,000 (31 July 2005 - £841,000).
5. A one year £9 million multi-currency facility has been arranged with the Bank of New York which
expires on 6 December 2006. In addition the Company has a £5 million multi-currency loan facility
with the Royal Bank of Scotland plc which expires on 31 March 2006. At 31 July 2006 there were
outstanding drawings of HK$110 million (£7,581,000). The Company had no borrowings at 31 July 2005.
6. At the Extraordinary General Meeting in April 2001 the Company was first granted authority to buy
back its own ordinary shares (equivalent to 14.99% of its issued share capital at that date). The
authority was renewed at the Annual General Meeting on 12 October 2005. In the year to 31 July 2006
no ordinary shares were bought back. As a result at 31 July 2006 the Company's authority to buy back
shares remains unchanged at 11,465,401 ordinary shares.
7. The financial information set out above does not constitute the Company's statutory accounts for the
year ended 31 July 2006. The financial information for 2005 is derived from the statutory accounts
for 2005 and restated as disclosed in note 1. Those accounts have been delivered to the Registrar of
Companies. The Auditors have reported on the 2005 accounts, their report was unqualified and did not
contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts
for 2006 will be finalised on the basis of the financial information presented in this preliminary
announcement and will be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
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