Interim Results
Personal Assets Trust PLC
29 November 2005
PERSONAL ASSETS TRUST PLC
To: RNS
From: Personal Assets Trust plc
Date: 29 November 2005
Interim Results (unaudited) for the six months to 31 October 2005
The Directors of Personal Assets Trust ('PAT') are pleased to announce the
Group's unaudited interim results for the six months to 31 October 2005.
Financial Highlights
• Personal Assets Trust plc ('PAT') is an independently managed
investment trust run for private investors.
• Over the six months to 31 October 2005 PAT's net asset value
per share ('NAV') rose by 6.8% to £236.41 compared to a rise of 11.2% in our
benchmark, the FTSE All-Share Index. PAT's share price rose by £13.25 to £238
over the same period, representing a premium of 0.7% to the Company's NAV at
that date.
• The Board measures PAT's performance over rolling three-year
periods. Over the three years to 31 October 2005 the NAV rose by 30.5% compared
to the FTSE All-Share Index's rise of 37.4%.
• This is the first time in 15 years that we have underperformed
our benchmark over our chosen three year period and it results from our having
maintained a liquidity level of over one third during a period when the index
rose by over 37%. The Board's policy is to give preservation of capital a higher
priority than seeking relative return against a rising index at a time of
increasing risk and low future expected returns.
• We continue to believe that in present circumstances it is
appropriate to maintain a level of liquidity of around one-third of
shareholders' funds. At 31 October 2005 PAT had effective liquidity of 36.2% (30
April 2005: 35.3%).
• On 29 June 2005 Collective Assets Trust plc ('CAT') amalgamated with
PAT. PAT issued 55,612 new ordinary shares at NAV (increasing our capital by
£12.9 million) to acquire the assets of CAT.
• Over the six months PAT's shares continued to trade close to NAV. We
issued a further 15,635 new ordinary shares (adding just under £3.7 million of
new capital) at a small premium to satisfy continuing demand for the Company's
shares, principally through its zero-charge Investment Plans. At 31 October
2005, 44.2% of the Company's share capital was held in these plans.
• Revenue earnings for the period were £1.85 per share (2004: £1.10).
Earnings for the first six months should not be taken as a guide for the full
year.
• The first interim dividend of £1.80 per ordinary share (2004: £1.60)
was paid to shareholders on 28 October 2005. The Board's stated policy is never
to cut the dividend rate, so that shareholders can be confident that each
half-yearly payment will at least equal the previous one. Therefore, the second
interim dividend for the year ended 30 April 2006, expected to be paid in April
2006, will be at least £1.80 per share and the total dividend for the year will
be not less than £3.60, an increase of at least 5.9% compared to the previous
year.
Portfolio Valuation
31 October Purchases/ 30 April
Percentage 2005 (Sales) 2005
of Fund Restated
% £'000 £'000 £'000
BP 8.2 14,216 3,259 9,398
Royal Dutch Shell 7.7 13,255 4,855 7,363
RBS Group 5.4 9,237 - 9,296
HBOS 4.8 8,215 - 7,604
GlaxoSmithKline 4.3 7,345 1,748 4,851
Barclays 3.6 6,261 - 6,009
BT Group 3.2 5,531 3,214 2,394
Scottish & Newcastle 2.2 3,825 - 3,717
Scottish Investment Trust 1.2 2,146 598 1,268
Foreign & Colonial Investment Trust 1.2 2,048 316 1,410
Other holdings (17) 7.8 13,475 3,481 8,748
Exposure to FTSE 100 Future 14.3 24,751 - 34,809
___ _______ ______ ______
Total equity exposure 63.8 110,305 17,471 96,867
US 0% 15 November 2005 31.7 54,726
Standard Life Sterling Fund 12.5 21,573
Liability to FTSE 100 Future (14.5) (24,995)
Net current assets 6.5 11,166
Net liquidity 36.2 62,470
Ordinary shareholders' funds 100.0 172,775
Condensed Group Income Statement
for the six months ended 31 October 2005
(Unaudited) (Unaudited)
Six months ended Six months ended Six months ended
31 October 2005 31 October 2004 30 April 2005
Restated (see note 8) Restated (see note 9)
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment 2,028 - 2,028 934 - 934 2,667 - 2,667
income
Other 238 - 238 250 - 250 430 - 430
income
Gains on
investments
held
at fair - 15,595 15,595 - 1,671 1,671 - 4,150 4,150
value
Foreign - (5,088) (5,088) - 1,159 1,159 - 3,824 3,824
exchange
differences
2,266 10,507 12,773 1,184 2,830 4,014 3,097 7,974 11,071
Expenses (931) - (931) (440) (435) (875) (775) (837) (1,612)
Profit 1,335 10,507 11,842 744 2,395 3,139 2,322 7,137 9,459
before tax
Taxation (21) - (21) (36) 22 (14) (76) 41 (35)
Profit for 1,314 10,507 11,821 708 2,417 3,125 2,246 7,178 9,424
the period
Earnings 2 £1.85 £14.79 £16.64 £1.10 £3.73 £4.83 £3.41 £10.88 £14.29
per
ordinary
share
In respect of the year ending 30 April 2006 the Board has declared a first
interim dividend of £1.80 per ordinary share which was paid on 28 October 2005.
In respect of the year ended 30 April 2005 the Board declared a first interim
dividend of £1.60 per ordinary share and a second interim dividend of £1.80 per
ordinary share. This gave a total dividend for the year ended 30 April 2005 of
£3.40 per ordinary share.
The total column of this statement represents the Group's Income Statement,
prepared in accordance with International Financial Reporting Standards
('IFRS'). The revenue return and capital return columns are supplementary to
this and are prepared under guidance published by the Association of Investment
Trust Companies. All items in the above statement derive from continuing
operations.
Condensed Group Balance Sheet
as at 31 October 2005
(Unaudited) (Unaudited)
31 October 31 October 30 April
2005 2004 2005
Restated Restated
(see note 8) (see note 9)
£'000 £'000 £'000
Non current assets
Investments held at fair value 161,853 132,345 146,115
Net current assets 10,922 7,483 4,882
Net assets 172,775 139,828 150,997
Equity shareholders' funds 172,775 139,828 150,997
Net asset value per ordinary £236.41 £214.94 £222.98
share
Condensed Group Cash Flow Statement
for the six months ended 31 October 2005
(Unaudited) (Unaudited)
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2005 2004 2005
Restated Restated
(see note 8) (see note 9)
£'000 £'000 £'000
Net cash inflow from operating activities 1,460 732 1,352
Net cash inflow/(outflow) from investing 3,483 1,793 (4,825)
activities
Net cash inflow/(outflow) before financing 4,943 2,525 (3,473)
Net cash inflow from financing activities 4,398 963 3,021
Net increase/(decrease) in cash and cash 9,341 3,488 (452)
equivalents
Cash and cash equivalents at the start of the 5,875 6,201 6,201
period
Realised (losses)/gains on foreign currency (3,999) (2,181) 126
Cash and cash equivalents at the period end 11,217 7,508 5,875
Condensed Group Statement of Changes in Equity
for the six months ended 31 October 2005
(Unaudited)
Six months ended 31 October 2005
Ordinary
share Share Redemption Capital Retained
capital premium reserve reserve earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 30 April 2005 8,465 70,813 219 44,843 26,657 150,997
(Restated)
Profit for the period - - - 10,507 1,314 11,821
Ordinary dividend paid - - - - (2,525) (2,525)
Issue of ordinary shares 890 15,680 - - - 16,570
Buy-backs of ordinary (220) - 220 - (4,088) (4,088)
shares
Balance at 31 October 9,135 86,493 439 55,350 21,358 172,775
2005
Notes to the Financial Statements
1 Accounting policies
The financial statements of the Group have been prepared on the basis of the
recognition and measurement requirements of International Financial Reporting
Standards ('IFRS') issued by the International Accounting Standards Board ('IASB
'), and interpretations issued by the International Financial Reporting
Interpretations Committee of the IASB ('IFRIC').
These are the first financial statements prepared on this basis. Previously the
financial statements were prepared in accordance with UK Generally Accepted
Accounting Principles ('UK GAAP') including the Statement of Recommended
Practice 'Financial Statements of Investment Trust Companies'. UK GAAP differs
in certain respects from IFRS. When preparing the financial statements for the
period to 31 October 2005 the Directors have amended certain accounting and
valuation methods applied in the UK GAAP financial statements.
The disclosures required by IFRS1 concerning the transition from UK GAAP to IFRS
are given in notes 7, 8 and 9. The Company does not comply with IAS34 'Interim
Financial Statements'.
2 Earnings per ordinary share
The earnings per ordinary share figure is based on the net gain for the six
months of £11,821,000 (six months ended 31 October 2004: £3,125,000 as
restated; year ended 30 April 2005: £9,424,000 as restated) and on 710,511 (six
months ended 31 October 2004: 646,505; year ended 30 April 2005: 659,358)
ordinary shares, being the weighted average number of ordinary shares in issue
during the period.
With effect from 1 May 2005 management expenses have been allocated 100%
to revenue. Prior to this date these costs were allocated 35% to revenue and 65%
to capital.
3 Ordinary share capital
At 31 October 2005 there were: 730,832 ordinary shares in issue (31 October
2004: 650,533; 30 April 2005: 677,185). During the six months ended 31 October
2005 the Company issued 71,247 ordinary shares and bought 17,600 ordinary shares
to be held in Treasury. Of the 71,247 ordinary shares issued during the period,
2,166 were issued from Treasury. There were 15,434 ordinary shares held in
Treasury at the period end. The cost of the share buy-backs, including stamp
duty, amounted to £4,088,000.
4 First interim dividend
On 29 September 2005 the Board declared a first interim dividend of £1.80 (2004:
£1.60) per ordinary share. This was paid on 28 October 2005 to shareholders
registered on 7 October 2005.
5 Comparative information
The financial information contained in this interim report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
financial information for the six months ended 31 October 2005 and 31 October
2004 has not been audited.
The information for the year ended 30 April 2005 has been extracted from the
latest published audited financial statements, as restated to comply with IFRS
(see note 9). The audited financial statements for the year ended 30 April
2005 have been filed with the Registrar of Companies. The report of the auditors
on those accounts contained no qualification or statement under section 237(2)
or (3) of the Companies Act 1985.
6 Net asset value per ordinary share
The net asset value per ordinary share is based on the net assets attributable
to the equity shareholders of £172,775,000 (31 October 2004: £139,828,000 as
restated; 30 April 2005: £150,997,000 as restated) and on 730,832 (31 October
2004: 650,533; 30 April 2005: 677,185) ordinary shares, being the number of
ordinary shares in issue at the period end.
7 Restatement of opening balances as at 30 April 2004
At 1 May 2005 the Company adopted International Financial Reporting Standards.
In accordance with IFRS 1 (First Time Adoption of International Financial
Reporting Standards) the following is a summary of the results as at and for the
year ended 30 April 2004, previously reported under the applicable UK
Accounting Standards and the SORP, to the restated IFRS results.
Investments are designated as held at fair value under IFRS and are carried at
bid prices which total their fair value of £132,251,000. Previously, under UK
GAAP, they were carried at mid prices. The aggregate differences, being a
revaluation downwards of £60,000.
No provision has been made for the second interim dividend on the ordinary
shares for the year ended 30 April 2004 of £1.60 per share. The second interim
dividend paid in respect of the year ended 30 April 2003 of £1.50 per share is
now provided for in this period. Under IFRS, dividends are not recognised until
paid.
The previous headings of Capital reserve - realised and Capital reserve -
unrealised are now included under the heading Capital reserve.
8 (a) Restatement of balances as at and for the six months ended 31
October 2004
At 1 May 2005 the Company adopted International Financial Reporting Standards.
In accordance with IFRS 1 (First Time Adoption of International Financial
Reporting Standards) the following is a summary of the results as at and for the
period ended 31 October 2004 previously reported under the applicable UK
Accounting Standards and with the SORP, to the restated IFRS results.
Investments are designated as held at fair value under IFRS and are carried at
bid prices which equate to their fair value of £132,345,000. Previously, under
UK GAAP, they were carried at mid prices. The aggregate differences, being a
revaluation downwards of £44,000.
No provision has been made for the first interim dividend on the ordinary shares
for the period ended 31 October 2004 of £1.60 per share. The second interim
dividend paid in respect of the year ended 30 April 2004 of £1.60 per share is
now provided for in this period. Under IFRS, dividends are not recognised until
paid.
The previous headings of Capital reserve - realised and Capital reserve -
unrealised are now included under the heading Capital reserve.
(b) Reconciliation of the Statement of Total Return to the Income
Statement for the six months ended 31 October 2004
Under IFRS the Income Statement is the equivalent of the Statement of
Total Return reported previously.
2004 EPS
impact
Notes £'000 in pence
Total transfer to reserves per the Statement of Total 2,065 -
Return
Add back dividends paid and declared 1 1,044 -
Investments held at fair value changed from
mid to bid basis at 30 April 2004 2 60 0.09
Investments held at fair value changed from
mid to bid basis at 31 October 2004 2 (44) (0.07)
Net profit per the Income Statement 3,125 0.02
Notes to the reconciliation
1. Ordinary dividends paid during the period are dealt with through the
Statement of Changes in Equity.
2. The portfolio valuations at 30 April 2004 and 31 October 2004 are required
to be valued at fair value under IFRS. These values are lower than the previous
valuations by £60,000 and £44,000 respectively.
(c) Restatement of balances of the Cash Flow Statement for the six
months ended 31 October 2004
Tax refunded of £7,000 is now allocated to operating activities under IFRS.
Previously, under UK GAAP, taxation was shown separately.
Ordinary dividends paid of £1,030,000 are now allocated to financing under IFRS.
Previously under UK GAAP, dividends were shown separately.
9 (a) Restatement of balances as at and for the year ended 30 April 2005
At 1 May 2005 the Company adopted International Financial Reporting Standards.
In accordance with IFRS 1 (First Time Adoption of International Financial
Reporting Standards) the following is a summary of the results as at and for the
year ended 30 April 2005, previously reported under the applicable UK
Accounting Standards and the SORP, to the restated IFRS results.
Investments are designated as held at fair value under IFRS and are carried at
bid prices which total their fair value of £146,115,000. Previously, under UK
GAAP, they were carried at mid prices. The aggregate differences, being a
revaluation downwards of £56,000.
No provision has been made for the second interim dividend on the ordinary
shares for the year ended 30 April 2005 of £1.80 per share. The second interim
dividend paid in respect of the year ended 30 April 2004 of £1.60 per share is
now provided for in this period. Under IFRS, dividends are not recognised until
paid.
The previous headings of Capital reserve - realised and Capital reserve -
unrealised are now included under the heading Capital reserve.
(b) Reconciliation of the Statement of Total Return to the Income
Statement for the year ended 30 April 2005
Under IFRS the Income Statement is the equivalent of the Statement of
Total Return reported previously.
2005 EPS
impact
Notes £'000 in
pence
Total transfer to reserves per the Statement of Total 7,157 -
Return
Add back dividends paid and declared 1 2,263 -
Investments held at fair value changed from
mid to bid basis at 30 April 2004 2 60 0.09
Investments held at fair value changed from
mid to bid basis at 30 April 2005 2 (56) (0.09)
Net profit per the Income Statement 9,424 -
Notes to the reconciliation
1. Ordinary dividends paid during the period are dealt with through
the Statement of Changes in Equity.
2. The portfolio valuations at 30 April 2004 and 30 April 2005 are
required to be valued at fair value under IFRS. These values differ from the
previous valuations by £60,000 and £56,000 respectively.
(c) Restatement of balances of the Cash Flow Statement for the year
ended 30 April 2005
Tax paid of £20,000 is now allocated to operating activities under IFRS.
Previously, under UK GAAP, taxation was shown separately.
Ordinary dividends paid of £2,070,000 are now allocated to financing under IFRS.
Previously under UK GAAP, dividends were shown separately.
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