Results for the year to 31 Ju

RNS Number : 4357Y

Pacific Horizon Investment Tst PLC

03 September 2009

 



PACIFIC HORIZON INVESTMENT TRUST PLC

Results for the year to 31 July 2009

For the year to 31 July 2009, the Company's net asset value rose 0.6% while the MSCI All Country Far East ex Japan Index in sterling terms gained 8.3%.  In this period the Company's share price declined by 3.5%.

·	During the second half of the Company’s year, net asset value per share rose by 48.8% compared to 37.7% for the comparative index.
·	Performance in the first half of the financial year suffered due to positions in companies exposed to shipping, shipbuilding and offshore oil & gas exploration along with some stock specific issues.  The majority of companies that fell the most in this period performed strongly subsequently and accounted for much of the positive returns in the second half of the financial year.
·	The Company was ungeared throughout the year and positions in convertible bonds were bought and subsequently sold, at a profit, following strong performance.
·	An increased dividend of 1.80p is being recommended by the Board (2008 - 1.30p).  Earnings per share for the year rose 27.7%.
·	The Asia Pacific region is one with great potential and the number and quality of companies we can invest in is increasing.  With valuations remaining at supportive levels the Board and Managers are optimistic about the long term outlook.

Past performance is not a guide to 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. Investment in investment trusts should be regarded as 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) and in the stockmarkets of the Indian Sub-continent. The Company has total assets of £106 million.

Pacific Horizon is managed by Baillie Gifford & Co, the Edinburgh based fund management group with over £48 billion under management and advice as at 2 September 2009.

3 September 2009

- ends -

For further information please contact:

Anzelm Cydzik,

Baillie Gifford & Co                                                                                  0131 275 2000

Roland Cross, Account Director,

Broadgate Marketing                                                                                 020 7726 6111

PACIFIC HORIZON INVESTMENT TRUST PLC

Chairman's Statement

Performance

In the year to 31 July 2009 net asset value per share rose by 0.6%, compared with a rise of 8.3% in the MSCI All Country Far East ex Japan Index in sterling terms. 

Performance over the Company's year was, on the whole, disappointing, although the result hides a great deal of volatility during the period. Early in the year the Company's positions in companies exposed to shipping, shipbuilding and offshore oil & gas exploration were particularly damaging. This exposure and some stock specific issues were the main reasons for the very disappointing result announced at the half year stage and more than offset the favorable impact of the purchase of some convertible bonds during the period, where valuations appeared attractive. On a positive note, performance in the second half of the Company's year has been more encouraging, with net asset value rising 48.8% against a rise of 37.7% in the comparative index. The main contributors to this strong result have been those companies that fell the most in the previous period, as well as some notable individual stock performances. The Managers' report in the Annual Report contains a more detailed explanation, together with a summary of the performance of the principal markets in which the Company is invested and the Managers' comments on them.

As mentioned above, the Company invested in some convertible bonds during the year. These were purchased at what was believed to be distressed prices caused by forced sellers, where the underlying businesses were known to be sound and capable of repaying the bonds when required. Subsequent strong performance of these bonds during the year has reduced their attractions and profits have been taken. At the year end the Company did not hold any convertible securities.  

The Company was ungeared during the year and at the year end net current assets were equal to 1.9% of shareholders' funds.  

Earnings per share rose by 27.7% to 2.44p from 1.91p for last year. The Board is recommending that a dividend of 1.80p should be paid.

Share Buy-Backs and Issuance 

During the year we did not buy back any shares but market conditions may change and it may be the case that it will at some point in the future be to the advantage of shareholders for the Company to repurchase and cancel shares. We will therefore be asking shareholders to renew the mandate to repurchase up to 14.99% of the outstanding shares at the forthcoming Annual General Meeting.  

Your Board, as in previous years, is seeking shareholder approval to renew the 10% non-pre-emptive issuance authority which is sought annually.  Issuance would only be undertaken at a premium to net asset value. This authority, if utilised, enhances net asset value per share for existing shareholders and improves liquidity in the Company's shares.

  PACIFIC HORIZON INVESTMENT TRUST PLC

Chairman's Statement (Continued)

Changes to the Board

One new Director has joined the Board during the year. As foretold in last year's Annual Report, in February we were joined by Gerald Smith, the Deputy Chief Investment Officer at Baillie Gifford & Co and the Company's former portfolio manager. His experience and expertise will strengthen the breadth and depth of your Board and I invite shareholders to ratify his appointment at the AGM. He will be subject to annual re-election.

Annual General Meeting

At the Annual General Meeting to be held on 2 November 2009, we are asking shareholders to approve a number of amendments to the Company's memorandum and articles of association. Details of the changes are given in the Appendix to the Notice of Meeting in the Annual Report.

Outlook

Unlike much of the developed world, the Asia Pacific region is largely in a position of strength and not weakness. Leverage, in aggregate, remains low and government actions appear to have been very sensible to date. Monetary and fiscal policies have been altered rapidly to accommodate the changing environment, and growth looks to be firmly on the agenda. Liquidity is ample and consumer confidence - the missing element noted at the interim results stage - appears to be recovering. Clearly there are still risks to the outlook in the short term. External demand remains weak, and recovery here is likely to take time. Corporate profitability has been hit and some companies are struggling in the current environment. However, even with these factors in mind, it does appear that the region is over the worst.

 The longer term prospects for the Asia Pacific region remain encouraging. Structural factors underpinning future growth remain in place: urbanisation, industrialisation, further infrastructure build, the demographic profile and the likelihood of steadily increasing consumer demand, are individually and severally the likely drivers in the region. At the same time consumer, corporate and government balance sheets are in good shape, with savings levels remaining high. The number and quality of companies we can invest in is increasing all the time, and we see no shortage of investment prospects. With valuations remaining at attractive levels, we remain optimistic about the long term outlook.

Peter Mackay

Chairman

PACIFIC HORIZON INVESTMENT TRUST PLC

The following is the unaudited preliminary statement for the year to 31 July 2009 which was approved by the Board on 2 September 2009. The Directors of Pacific Horizon Investment Trust PLC are recommending to the Annual General Meeting of the Company to be held on 2 November 2009 the payment of a final dividend of 1.80p net (31 July 2008- 1.30p net) per ordinary share for the year ended 31 July 2009.

INCOME STATEMENT

(unaudited)

	For the year ended 31 July 2009				For the year ended 31 July 2008
	Revenue £'000	Capital £'000	Total £'000		Revenue £'000	Capital £'000	Total £'000
Losses on investments	-	(1,017)	(1,017)		-	(26,078)	(26,078)
Currency gains/(losses)	-	803	803		-	(51)	(51)
Income from investments and interest receivable	3,579	-	3,579		3,602	-	3,602
Investment management fee  (note 2)	(814)	-	(814)		(1,249)	-	(1,249)
Recovered VAT	-	-	-		9	-	9
Other administrative expenses	(249)	-	(249)		(263)	-	(263)
Net return on ordinary activities before taxation	2,516	(214)	2,302		2,099	(26,129)	(24,030)
Tax on ordinary activities	(601)	-	(601)		(608)	-	(608)
Net return on ordinary activities after taxation	1,915	(214)	1,701		1,491	(26,129)	(24,638)
Net return per ordinary share (note 3)	2.44p	(0.27p)	2.17p		1.91p	(33.49p)	(31.58p)

 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. No operations were acquired or discontinued during the year.

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

BALANCE SHEET

 (unaudited)

	At 31 July 2009		At 31 July 2008
	£'000	£'000	£'000	£'000
FIXED ASSETS Investments held at fair value through profit or loss		103,831		99,696
CURRENT ASSETS
Debtors	350		382
Cash and short term deposits	2,119		5,709
	2,469		6,091
CREDITORS:  Amounts falling due within one year	(449)		(541)
NET CURRENT ASSETS		2,020		5,550
TOTAL ASSETS LESS CURRENT LIABILITIES		105,851		105,246
PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation		-		(78)
		105,851		105,168
CAPITAL AND RESERVES
Called-up share capital		7,829		7,829
Share premium		3,166		3,166
Special distributable reserve		13,233		13,233
Capital redemption reserve		17,964		17,964
Capital reserve		58,923		59,137
Revenue reserve		4,736		3,839
SHAREHOLDERS' FUNDS		105,851		105,168

NET ASSET VALUE PER ORDINARY SHARE	135.21p	134.34p
ORDINARY SHARES IN ISSUE (note 6)	78,287,002	78,287,002

PACIFIC HORIZON INVESTMENT TRUST PLC

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

(unaudited)

For the year ended 31 July 2009 

	Note	Called-up share capital £’000	Share premium £’000	Special distributable reserve £’000	Capital redemption reserve £’000	Capital reserve £’000	Revenue reserve £’000	Shareholders’ funds £’000
Shareholders’ funds at 1 August 2008		7,829	3,166	13,233	17,964	59,137	3,839	105,168
Net return on ordinary activities after taxation		-	-	-	-	(214)	1,915	1,701
Dividends paid during the year	4	-	-	-	-	-	(1,018)	(1,018)
Shareholders’ funds at 31 July 2009		7,829	3,166	13,233	17,964	58,923	4,736	105,851

For the year ended 31 July 2008 

	Note	Called-up share capital £’000	Share premium £’000	Special distributable reserve £’000	Capital redemption reserve £’000	Capital reserve £’000	Revenue reserve £’000	Shareholders’ funds £’000
Shareholders’ funds at 1 August 2007		7,794	2,615	13,233	17,964	85,266	3,205	130,077
Net return on ordinary activities after taxation		-	-	-	-	(26,129)	1,491		(24,638)
Shares issued in the year	6	35	551	-	-	-	-		586
Dividends paid during the year	4	-	-	-	-	-	(857)		(857)
Shareholders’ funds at 31 July 2008		7,829	3,166	13,233	17,964	59,137	3,839		105,168

PACIFIC HORIZON INVESTMENT TRUST PLC

CASH FLOW STATEMENT (unaudited)
		For the year ended 31 July 2009			For the year ended 31 July 2008
	Note	£'000	£'000		£'000		£'000
NET CASH INFLOW FROM OPERATING ACTIVITIES				2,886			1,740
TAXATION
Corporation tax paid		(632)				(549)
TOTAL TAX PAID				(632)			(549)
FINANCIAL INVESTMENT
Acquisitions of investments		(39,589)				(67,549)
Disposals of investments		34,763				70,620
NET CASH (OUTFLOW)/INFLOW FROM FINANCIAL INVESTMENT				(4,826)			3,071
EQUITY DIVIDEND PAID	4			(1,018)			(857)
NET CASH (OUTFLOW)/ INFLOW BEFORE FINANCING				(3,590)			3,405
FINANCING
Shares issued	6	-				586
NET CASH INFLOW FROM FINANCING				-			586
(DECREASE)/INCREASE IN CASH				(3,590)			3,991
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(Decrease)/increase in cash in the year				(3,590)			3,991
MOVEMENT IN NET FUNDS IN THE YEAR				(3,590)			3,991
NET FUNDS AT 1 AUGUST				5,709			1,718
NET FUNDS AT 31 JULY				2,119			5,709
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				2,302			(24,030)
Losses on investments - securities				1,017			26,078
Currency (gains)/losses				(803)			51
Amortisation of fixed interest book cost				(326)			-
Decrease/(increase) in accrued income				39			(151)
Increase in debtors				-			46
Decrease in creditors				(6)			(77)
Realised currency gain/(loss)				803			(51)
Overseas tax suffered				(140)			(126)
NET CASH INFLOW FROM OPERATING ACTIVITIES				2,886			1,740

  PACIFIC HORIZON INVESTMENT TRUST PLC  

THIRTY LARGEST EQUITY HOLDINGS at 31 July 2009 (unaudited)

Name	Country	Business	Value £'000	% of total assets‡
CNPC Hong Kong	Hong Kong	Oil and gas exploration and production	6,746	6.4
Samsung Electronics	Korea	Semiconductor manufacturer	4,900	4.6
Taiwan Semiconductor Manufacturing	Taiwan	Semiconductor manufacturer	3,591	3.4
Singapore Exchange	Singapore	Stock exchange	3,068	2.9
ASM Pacific Technology	Hong Kong	Semiconductor equipment manufacturer	3,018	2.8
ZTE	China	Telecommunications equipment provider	2,833	2.7
PT Telekomunikasi	Indonesia	Diversified telecommunications provider	2,763	2.6
Parkson Holdings	Malaysia	Department store owner and operator	2,619	2.5
China Unicom	China	Diversified telecommunications provider	2,499	2.4
Hon Hai Precision Industries	Taiwan	Electronic manufacturing services company	2,338	2.2
Li & Fung	Hong Kong	Supply chain management	2,178	2.1
Hang Seng Bank	Hong Kong	Banking services	2,090	2.0
CNOOC	China	Oil and gas exploration and production	2,039	1.9
China Resources Enterprise	Hong Kong	Consumer conglomerate	1,839	1.7
Dongfang Electric	China	Power equipment manufacturer	1,795	1.7
China National Building Material	China	Building materials manufacturer	1,765	1.7
CapitaMall Trust	Singapore	Real estate investment trust	1,655	1.6
Pacific Basin Shipping	Hong Kong	Shipping company	1,619	1.5
Hidili Industry International    Development	Hong Kong	Coal producer	1,567	1.5
Samsung Fire & Marine	Korea	Non-life insurance provider	1,480	1.4
Hong Kong Exchanges and Clearing	Hong Kong	Stock exchange	1,411	1.3
China Mobile	Hong Kong	Wireless telecommunications provider	1,401	1.3
Yuanta Financial	Taiwan	Financial holding company	1,393	1.3
Ayala Corp	Philippines	Investment holding company	1,355	1.3
China Shenhua Energy	China	Coal producer	1,334	1.3
Kuala Lumpur Kepong	Malaysia	Palm oil producer and refiner	1,307	1.2
MobileOne	Singapore	Wireless telecommunications provider	1,290	1.2
Prime View International	Taiwan	Electronic components	1,262	1.2
Wumart Stores	China	Supermarket	1,238	1.2
Mermaid Maritime	Thailand	Oil services	1,204	1.1
			65,597	62.0

All stocks are listed overseas.

‡ Total assets less current liabilities and deferred tax.

PACIFIC HORIZON INVESTMENT TRUST PLC

DISTRIBUTION OF ASSETS

 (unaudited)

		At 31 July 2009 %		At 31 July 2008 %
Equities:	Hong Kong and China	43.6		30.4
	Taiwan	11.4		9.0
	Korea	11.3		16.1
	Singapore	10.2		14.3
	Indonesia	5.6		4.7
	Malaysia	5.5		7.9
	Thailand	5.0		5.7
	India	3.2		3.6
	Philippines	1.3		1.7
	Vietnam	1.0		1.4
Total equities		98.1		94.8
Net liquid assets		1.9		5.2
Total assets at fair value‡		100.0		100.0

‡ Total assets less current liabilities and deferred tax.

PACIFIC HORIZON INVESTMENT TRUST PLC

NOTES (unaudited)
1.	The financial statements for the year to 31 July 2009 have been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 July 2008. The Directors consider the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment.
2.	Related party transactions
	The Directors' fees for the year are detailed in the Directors' Remuneration Report contained within the Annual Report. No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006. Mr Gerald Smith, who was appointed as a Director of the Company on 1 February 2009, is a partner of Baillie Gifford & Co. Baillie Gifford & Co are employed by the Company as Managers and Secretaries under a management agreement which is terminable on not less than twelve months' notice, or on shorter notice in certain circumstances. The fee in respect of each quarter is 0.25% of the total assets less current liabilities.
			2009 £'000					2008 £'000
3.	Net return per ordinary share
	Revenue return		1,915					1,491
	Capital return		(214)					(26,129)
	Total return		1,701					(24,638)
	Weighted average number of ordinary shares in issue		78,287,002					78,025,936
	Net return per ordinary share figures are based on the above totals for revenue and capital and the weighted average number of ordinary shares in issue each period. There are no dilutive or potentially dilutive shares in issue.
			2009	2008			2009		2008
							£'000		£'000
4.	Ordinary Dividends
	Amounts recognised as distributions in the period:
	Previous year's final (paid 31 October 2008)		1.30p	1.10p			1,018		857
	We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 842 of the Income and Corporation Taxes Act 1988 are considered. The revenue available for distribution by way of dividend for the year is £1,915,000 (2008 - £1,491,000).
			2009	2008			2009		2008
							£'000		£'000
	Dividends paid and proposed in respect of the financial year:
	Proposed final dividend per ordinary share (payable 4 November 2009)		1.80p	1.30p			1,409		1,018
	If approved, the proposed final dividend of 1.80p per ordinary share for the year ended 31 July 2009 will be paid on 4 November 2009 to shareholders on the register at the close of business on 9 October 2009. The ex-dividend date is 7 October 2009.

PACIFIC HORIZON INVESTMENT TRUST PLC

NOTES (Continued) (unaudited)
5.	The Company had no borrowings at 31 July 2009 or 31 July 2008.
6.	The Company has authority to allot shares under section 80 of the Companies Act 1985. The Board has authorised the use of this authority to issue new shares at a premium of not less than 5% in order to enhance the net asset value per share for existing shareholders and improve the liquidity of the Company's shares. In the year to 31 July 2009 no shares were issued. In the year to 31 July 2008 a total of 350,000 ordinary shares of 10p each fully paid were issued for cash amounting to £586,000 of which £35,000 has been applied in increasing the share capital and £551,000 in increasing the share premium account. The Company has authority to buy back its ordinary shares. The authority was last renewed at the Annual General Meeting on 29 October 2008 in respect of 11,735,221 shares (equivalent to 14.99% of its issued share capital at that date). In the year to 31 July 2009 no ordinary shares were bought back. As a result at 31 July 2009 the Company's authority to buy back shares remains unchanged at 11,735,221 ordinary shares.
7.	The Company incurred transaction costs on purchases of £84,000 (2008 - £129,000) and on sales of £79,000 (2008 - £173,000).
8.	Principal risks and uncertainties
	The principal risks facing the Company relate to the Companies investment activities. These risks are market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Company's exposures to these risks but does so in order to reduce the likelihood of a permanent loss of capital rather than to minimise the short term volatility. Further information on these risks and how they are managed is contained in the Annual Report. In addition, breach of section 842 of the Income and Corporation Taxes Act 1988 could lead to the Company being subject to capital gains tax. The Managers monitor investment movements and the level of forecast income and expenditure to ensure the provisions of section 842 are not breached.
9.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 July 2009. The financial information for 2008 is derived from the statutory accounts for 2008. Those accounts have been delivered to the Registrar of Companies. The Auditors have reported on the 2008 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 2009 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.
10.	None of the views expressed in this document should be construed as advice to buy or sell a particular investment.
11.	The Report and Accounts will be available on the Managers' website www.pacifichorizon.co.uk on or around 23 September 2009.

 

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